2018 Q1 results. Millicom International Cellular S.A. Kicking off 2018 with accelerating momentum

Transcription

1 2018 Q1 results Kicking off 2018 with accelerating momentum Mauricio Ramos, CEO Tim Pennington, CFO April 25 th, 2018 Millicom International Cellular S.A.

2 Disclaimer This presentation may contain certain forward-looking statements with respect to Millicom s expectations and plans, strategy, management s objectives, future performance, costs, revenue, earnings and other trend information. It is important to note that Millicom s actual results in the future could differ materially from those anticipated in the forward-looking statements depending on various important factors. All forward-looking statements in this presentation are based on information available to Millicom on the date hereof. All written or oral forward-looking statements attributable to Millicom International Cellular S.A., any Millicom International Cellular S.A. employees or representatives acting on Millicom s behalf are expressly qualified in their entirety by the factors referred to above. Millicom does not intend to update these forward-looking statements. This information was prior to this release inside information and is information that Millicom is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact person set out above, at 22:00 CET on April 24 th

3 1. CEO review Mauricio Ramos

4 Highlights Kicking off 2018 with accelerating momentum Latam service revenue growth accelerated to 3.9% in Q1 Strategic revenue grew 12% and now accounts for 69% of service revenue Mobile data grew 18%, fueled by 643k 4G net additions (a Q1 record) Home grew 8%, fueled by record 91k HFC homes connected added in Q1 5 Mobile now growing, driving growth in every Latam country 6 Well underway in next step of transformation journey: digitalization 4

5 1 Revenue growth accelerated to 3.9% in Q1 Fastest growth rate in more than two years %YoY growth, Q1 16 Latam service revenue growth 3.9% 2.9% 3.1% 2.3% 0.9% -0.5% -1.3% -2.0% -2.3% Q1 16 Q2 16 Q3 16 Q4 16 Q2 17 Q3 17 Q4 17 5

6 2 Strategic businesses driving growth c.70% of our revenue is strategic and growing double-digits Strategic revenue grew 12% Contribution to Latam revenue growth year-on-year, Q to c.70% of service revenue Latam strategic revenue as % of service revenue Q1 15 Strategic revenue lines 3.9% 69% Mobile data Home B2B Mobile legacy 52% Growth Weight 18% 8% 9% 27% 23% 19% -12% 31% Q Q

7 2 three strategic businesses growing steadily Strategic businesses grew 12% in aggregate in Q Mobile data Reported service revenue, $m, Home Q2 17 Q3 17 Q % 17% 17% 16% 18% B2B % Mobile Data 19% B2B 23% Home 7% 31% Legacy Q2 17 Q3 17 Q Legacy 7% 9% 7% 8% Q2 17 Q3 17 Q4 17 Q2 17 Q3 17 Q4 17 2% 1% 6% 6% 9% -16% -15% -12% -9% -10% Constant currency growth YoY 7

8 3 Mobile is growing again, driven by data Mobile revenue growing again as data growth more than offsets legacy voice decline B2C mobile service revenue growth Latam % growth in local currency, Q1 16- Mobile data Mobile data as % of Mobile B2C, - 0.2% 0.9% -1.2% -0.9% -2.9% 41% 48% -3.8% 33% -5.6% -5.3% 25% -6.5% Q1 16 Q2 16 Q3 16 Q4 16 Q2 17 Q3 17 Q4 17 Q1 15 Q1 16 8

9 3 a direct result of our investments in 4G Record 4G net additions - on track to meet FY guidance of 3m 4G network coverage Network expansion continues Latam 4G coverage in % of population covered 4G points of presence (PoP) 4G data user net additions in Latam B2C Smartphone net new data users (000s) by quarter, Q1 16 Coverage PoP 6,958 4,664 59% 48%

10 4 Home net add intake accelerating strongly 91k new homes connected in Q on track to deliver FY guidance of 300k Latam HFC homes connected, net adds by quarter, Q1 16 (000s) New HFC homes connected Q Bundling ratio on net adds

11 5 Every Latam country now growing Continued momentum in all of our largest Latam markets El Salvador (11%*) Service revenue, year-on-year (%), Q1 16 Guatemala (18%*) Honduras (10%*) 5.4% 5.7% 0.0% -0.1% 0.0% 0.3% -1.6% -1.4% -3.7% -4.8% -6.4% -8.7% 2.1% 3.5% 2.7% -0.8% -2.5% -3.9% -4.8% -4.3% 3.4% -0.6% -0.7% -1.0% -1.6% -2.5% -0.8% Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Bolivia (15%*) Colombia (23%*) Paraguay (22%*) 5.5% 6.1% 9.1% 6.5% 2.3% 0.3% 2.2% 7.1% 6.5% 8.9% 7.8% 4.7% 0.6% -0.3% -0.2% 6.2% 4.5% Q116 Q % 0.5% -0.8% Q316 Q416 Q % Q217 Q317 Q417 Q118 Q116 Q % -2.9% Q316 Q416 Q % Q217 Q317 Q417 Q118 Q116 Q % Q % Q % Q117 Q217 Q317 Q417 Q118 * Contribution to Latam proportionate service revenue in Q

12 Next steps in our journey Digital transformation will help drive sustainable EBITDA growth and FCF generation Turning opportunity into Free Cash Flow and shareholder value Opportunity Network Users Revenue EBITDA Cash Flow Leveraging our market leadership to meet pent-up demand for fixed and mobile data Building high speed data networks 15 million homes to pass Driving adoption and stimulating usage Homes Connected (m) Subscriptionbased and data-centric Digital transformation to help drive operating leverage Superior FCF growth Fixed broadband penetration* Honduras 11.0% +1m homes build per year Q1 15 Q1 16 Q1 17 Q1 18 Latam service revenue YoY EBITDA Margin 36.4% Equity FCF ($m) Bolivia 11.0% Paraguay 14.0% El Salvador 23.0% Guatemala 31.0% ~60% of population covered with 4G 4G Customers (m) % 33.7% 34.8% Costa Rica 42.0% Colombia 48.0% * Source: Dataxis Q1 15 Q1 16 Q1 17 Q

13 6 Digitalization is changing how we do business Digitalization drives customer engagement Prepaid - engagement driving transaction growth Postpaid engagement with 16% of subs 4x per month Unique Monthly Active Users Transactions (millions) (Percent of Core Prepaid Customers) 39% % 22% 44.8 Unique Monthly Active Users (Percent of Postpaid Subs) 16% 15% 10% Unique Monthly Active Users (Growth) 34% 67% 12.3 Q1 16 Q1 16 Dec-15 Dec-16 Dec-17 Q

14 2. CFO review Tim Pennington

15 1 Macro update Our markets continue to grow 2-4% with more stable FX Real GDP growth %, FY18e GDP growth projections 2018 Daily closing rate Jan 17 Apr 18 COP appreciation in early ,100 El Salvador 2.1% Guatemala 3.4% Honduras 3.6% Costa Rica 3.8% 3,000 2,900 2,800 COP USD FX 30d moving average 2,700 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Colombia inflation still declining Inflation annualized %, Jan 17 Apr 18 Bolivia 4.0% Colombia 2.8% 5.5% 5.2% 4.7% 4.7% 4.4% 4.0% 3.4% 3.9% 4.0% 4.1% 4.1% 4.1% 3.7% 3.4% 3.1% Paraguay 4.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar IMF DataMapper: Source: Bloomberg 15

16 2 Key financial metrics Q Service Revenue a Group service revenue up 3.6% EBITDA a and Margins $m, $m and %, $m, Capex b 3.6% 1.5% +$9m 1,373 1, % 36.5% a) numbers are adjusted to FX rates and exclude Senegal, Rwanda and Ghana b) Excluding Senegal, Rwanda and Ghana, spectrum & license costs 16

17 2 Latam Solid growth returning to Latam Latam service revenue $m, Latam OCF (Q1) $m and margin, +3.9% -3.1% Latam EBITDA $m and margin, % 1, % 26.3% 1, % 37.2% Capex / Revenue 10.0% 11.0% Notes: Growth rates are organic and exclude the impact of changes in FX rates, accounting, and new segmental presentation. Q figures have been adjusted to reflect these organic growth rates. Capex/revenue excludes spectrum & license costs 17

18 3 EBITDA Q Latam biggest contributor to EBITDA growth $ million, EBITDA evolution by region +1.5% +0.8% Ebitda FX and other Ebitda (constant currency) LatAm Africa Corporate Ebitda 37.1% as % of revenue 36.5% numbers are adjusted to FX rates and exclude Senegal, Rwanda and Ghana 18

19 3 EBITDA progression by country El Salvador EBITDA ($m), margin and year-on-year growth, +9.3% Guatemala +8.4% Honduras -0.8% % 35.7% 50.2% 52.1% 43.2% 42.5% Bolivia Colombia Paraguay % / +5.7% adj % % / +14% adj % 39.1%* 35.0% 30.2% 27.3% 51.3% 46.9%* 50.4% * normalized margin for one-offs EBITDA One-offs Margins 19

20 3 Cost review and margin progression Steady upward margin trend continues OPEX and growth YoY, Group total OPEX base Last 12 month Group EBITDA margin Last 12-month EBITDA margin, Q Q % bps 36.2% 35.1% 32.6% 32.9% Q1 15 Q

21 4 P&L review Q P&L Summary US$ million % Var Revenue 1,516 A 1, % EBITDA % Depreciation & amortization (317) (322) (1.8%) Other operating 0 1 (42.5%) Operating profit % Net financial expense (103) B (113) (8.9%) Others non operating % Associates (20) (14) 39.0% Profit before tax % Taxes (53) C (63) 16.6% Minority interests (38) D (32) 17.9% Discontinued operations (32) E 3 NM Net income (27.9%) A Key Observations IFRS 15 had small impact on Service Revenue (-1.3%) and EBITDA (-0.1%) Interest savings from re-financing activity, partly offset by higher financial lease expense B Lower withholding taxes due to timing of dividend payments C D E Improved profitability in Guatemala Rwanda Accumulated FX losses EPS ($ per share) (27.9%) 21

22 5 Cash flow Q We generated $45 million of equity FCF in Q1 $ million Q cash flow Ebitda including discontinued operations Cash capex (ex-spectrum and licenses) Working capital and others Cash flow from operations Taxes paid Finance charges FCF Dividend to minorities efcf 37.3% 14.0% 3.2% as % of revenue 22

23 6 Capital structure Net debt and leverage stable in Q1 Net debt evolution in 2017 $ million, 31 December March 2018 % of gross debt, 31 March 2018 Debt profile Gross debt currency exposure LC debt USD debt 41% 59% 4,071 4,100 Gross debt distribution Operations 24% Group Net debt YE 2017 Equity FCF Spectrum Lease M&A and capitalization towers FX and others Net debt Q x Net debt/ltm EBITDA 1.87x 76% Proportionate Net debt/ 2.02x 2.03x Proportionate LTM EBITDA 23

24 Recap Kicking off 2018 with accelerating momentum on track to hit full year targets Target 1 +91k HFC homes connected 10m total homes passed by year-end +300k k 4G customer net additions 10m 4G customers by year-end +3m 3 3.9% service revenue growth in Latam +2-4% 4 EBITDA growth on track +3-6% 24

25 Q&A

26 Debt profile Comfortable capital structure and liquidity with no major maturities until 2024 $ million Debt maturity profile a Average life of 5.2 years GT $800m 146 SEK $239m 221 PY $300m 25s $500m s $500m >2027 Bank and other Financings Bonds a) excluding financial leases 26

27 Gross debt by country Central America: Total debt $1,705m 25% guaranteed South America: Total debt $1,998m 4% guaranteed Africa: Total debt $279m 57% guaranteed Corporate: Total debt $1,226m 0% guaranteed Total MIC Debt: $5,208m 13% Guaranteed Honduras: $393m (51% guaranteed) Guatemala: $994m (0% guaranteed) Chad: $69m (92% guaranteed) El Salvador: $246m (92% guaranteed) Costa Rica: $72m (0% guaranteed) Colombia $1,162m (0% guaranteed) Bolivia: $352m (4% guaranteed) Paraguay: $484m (14% guaranteed) Tanzania: $114m (0% guaranteed) Zantel: $96m (100% guaranteed) Including finance leases 27

28 Net debt by country Central America: $1,231m Leverage 1.06x South America: $1,620m Leverage 1.62x Africa: $130m Leverage 0.81x Corporate $1,119m Total Net Debt: $4,100m Leverage 1.87x Honduras: $364m Leverage 1.4x Guatemala: $634m Leverage 0.9x Chad: $53m El Salvador: $167m Leverage 1.1x Costa Rica: $69m Leverage 1.2x Tanzania: $(6)m Zantel: $85m Colombia: $1,012m Leverage 2.2x Bolivia: $257m Leverage 1.2x Paraguay: $350m Leverage 1.1x Including finance leases; Leverage is Net debt / LTM EBITDA 28

29 Currency exposure of debt Dec Debt including finance leases Cash Net debt US$ Local Total Total USD Local Total Latin America* 1,724 1,979 3, ,333 1,517 2,850 47% 53% 100% 47% 53% 100% Africa % 65% 100% 70% 30% 100% Corporate 1, , , , % 0% 100% 101% -1% 100% Millicom 3,049 2,159 5,208 1,108 2,549 1,550 4,100 59% 41% 100% 62% 38% 100% *El Salvador has USD as functional currency (treated as local.) 29

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