2015 Q3 Results Mauricio Ramos, CEO Tim Pennington, CFO 22 October 2015
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. Page 2
Self-Reporting to US and Swedish authorities Page 3
Q3 Key Messages 1 Good underlying growth against stronger FX headwinds EBITDA margin improving 2 3 Growth potential on cable materializing 4 Colombia: sustained underlying growth Optimization continues 5 Page 4
1. Good underlying growth against stronger FX headwinds Solid performance despite stronger FX pressure -2.0% YoY reported in USD, including UNE 1,641 +7% Revenue -6.3% YoY growth in USD, excluding UNE US$ million YoY organic +2.1% YoY reported in USD, including UNE 560 +8% EBITDA -4.4% YoY growth in USD, excluding UNE US$ million YoY organic Page 5
1. Good underlying growth against stronger FX headwinds Mobile: over 60 million customers Q3 net YTD net Total end of 000s additions additions Sep. 15 Mobile subscribers 816 3,869 60,146 Mobile data users 668 2,154 17,412 Cable: reaching 7.5 m Homes Passed Q3 net YTD net Total end of 000s additions additions Sep. 15 Total homes passed 243 415 7,499 Total homes connected 1 49 129 2,962 Total RGUs 2 83 232 5,251 1) Excludes a cleansing of 49,000 homes connected with no consumption in UNE base. HFC and copper lines for UNE Page 6 2) Excludes a cleansing of 72,000 RGU with no consumption in UNE base
2. EBITDA margin improving Excluding UNE, the margin is improving for the third quarter in a row EBITDA margin variation year on year Percentage point 1.3 EBITDA margin group EBITDA margin ex-UNE 0.6 0.5 0.2 -0.2 -1.0 -1.3 -1.8 -2.4 -2.6 -3.5 -4.2 -4.9 -5.6 -5.8 -6.0 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 32.8% Reported margin 34.1% Reported margin ex UNE 34.0% 33.4% Page 7
3. Growth potential of cable is materializing Our cable strategy is delivering promising results BUILD FILL MONETIZE 1 2 3 HFC Homes Passed, Homes connected / Homes passed, ARP Home, Thousands % after x months of roll out HFC only US$ at Q3 2015 FX LC growth Other technologies HFC Homes Passed 10,000 19% + 3.8% El Salvador 26 +2% 7,499 16% 1,322 5,873 5,758 29 + 8.2% +5% Honduras 6,177 + 24.0% 12% Guatemala 20 + 7.3% Costa Rica 43 Q1 15 Q2 15 Q3 15 Medium 3 months 6 months 9 months term 23 Colombia +15.1% Network Capex* / Home Passed RGU per Home Connected Order of magnitude Bolivia 31 n.a. +5% 1.87 Paraguay 35 +0.9% 1.78 27 Average** Q3 14 Q3 15 * Does not include installation & activation capex Page 8 ** Average weighted by number of HFC Homes Connected in the country
4. Colombia: sustained underlying growth Combined businesses service revenue growth accelerating in local currency Service revenue growth Tigo / UNE / TigoUNE Year-on-year in local currency 8.7% 6.3% 6.1% 5.8% 4.9% 4.7% 4.6% 3.9% 3.2% Tigo UNE TigoUNE Q1 15 Q2 15 Q3 15 Page 9
5. Optimization continues Focus on corporate costs trending in the right direction Corporate costs, US$ million 75 300 64 63 59 55 60 260 50 45 220 30 180 15 140 0 100 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Corporate Costs (lhs) Implied annual run rate (rhs) 3.2% 3.0% % Revenue 3.8% 3.4% 3.4% % EBITDA 11.7% 10.7% 10.3% 9.7% 8.9% Page 10
Conclusion During Q3 we delivered strong organic growth … we expanded our footprint & customer base in both mobile and cable … whilst increasing our efforts to enhance the margins … and improving cash flow generation Page 11
Financial review Tim Pennington 22 October 2015
Key metrics Good organic performance EBITDA Revenue 1 EBITDA - CAPEX Net debt $4.27 billion $560 million (+2.1%) 7.2 % organic growth in $856 million YTD 1.9x net debt / EBITDA Q3 15 ($209 million Q3) (2.2x proportionate) 34.1% Group margin 5.8% service revenue Up 14% YoY YTD 34.0% (+0.6% ex UNE) growth 16.9% margin YTD 1) Excluding UNE Page 13
Operating performance Service revenue and margin continue to grow • Reported Organic Solid revenue growth US$ million Q3 15 growth % growth% • 7.2% organic growth • Revenue Service revenue growth 1,641 -2.0% 7.2% improves to 5.8% Service revenue 1 1,521 -2.0% 5.8% • Reported EBITDA includes EBITDA 560 2.1% 7.9% some non-recurring items • $8 million positive one- EBITDA margin 34.1% 1.3 ppt 0.6 ppt offs at UNE (PPA adj.) EBITDA service margin 36.8% 1.5 ppt 1.0 ppt • $5 million negative in Honduras (tax on towers) 1) Group revenue excluding Telephone & Equipment sales Page 14
Earnings Lower EPS on FX adjustments US$ million Q3 15 Q3 14 % change • EPS decline mainly due to F/X losses EBITDA 560 549 +2 • Higher D&A due to UNE PPA Depreciation & Amortisation (323) (308) +5 adjustment (13M$) Operating profit 227 239 (5) • Net financial charge includes $3 Net Finance Charge (107) (101) +6 million of negative one-offs from UNE PPA adjustment Others (46) 85 NM • Losses from Associates coming from Associates & JVs (11) 22 NM AIH / LIH ventures Profit before tax 63 245 (74) • Lower non-controlling interests with Tax (39) (30) +28 Colombia net losses increasing • Non-controlling interests (12) (51) (77) Others include: • F/X losses of $108 million Net income 12 165 (93) • Tax broadly stable at $168 million year Adjusted EPS ($)* 0.17 0.79 (78) to date * Adjusted for non-operating items including changes in carrying value of put and call options, revaluation of previously held interests and similar items classified under ‘other non - operating income (expenses)’. Page 15
Revenue growth trend Consistent service revenue trend, handsets trading down due to FX Quarterly revenue growth Q3 2014 – Q3 2015 Mobile +3% 12% 10.8% Cable +25% 9.7% 9.0% MFS +23% 10% 8.6% Handsets & CPE +22% 8% 7.2% 6% Group revenue 5.9% .9% 5.8% .8% 5.7% .7% 5.7% .7% 5.6% .6% growth 4% Service revenue growth (1) 2% 0% Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 1) Group revenue growth excluding Telephone & Equipment sales Page 16
Organic growth vs. FX variation Growth pattern broadly unchanged compared to previous quarters Africa Latam 18.8% Revenue growth 17.1% 15.8% 13.7% in local currency (YoY) 9.4% 8.8% 7.7% 7.6% 7.2% 4.7% 4.2% 2.0% 2.0% (0.8%) 1.3% 0.9% - - - FX variation (4.2%) (5.4%) (quarterly average (13.5%) (18.6%) (18.6%) (24.9%) Q3 15 / Q3 14) (22.6%) (25.7%) (51.6%) Page 17
Revenue by business units Cable and MFS growing strongly Revenue evolution by Business Unit US$ million, Q3 2014 – Q3 2015 • Mobile up 2.9% organically • Colombia and Africa driving 36 7 • Voice & SMS -6.8% 34 35 243 • Data growing 38.8% (Q2: 39.3%) (201) • Cable growth continues to be strong • Ex-UNE up 25.2% 1,641 1,599 • 1,488 UNE up 7.6% 1,398 1,398 1,398 • MFS growing 23.1% • Tanzania up 30.4% • Paraguay slowing, up only +6.9% due to macro environment and competition 1) Includes visitor roaming, MVNO/DVNO, and Telephone and Equipment Page 18
Revenue by region FX headwinds offset solid organic growth Revenue evolution by Region US$ million, Q3 2014 – Q3 2015 • Hit by a 13.5% negative FX impact 30 • Major devaluations in Colombia, Tanzania, Paraguay, Ghana (even 82 243 (201) the € in Chad / Senegal) • Strong growth in Latam 1,641 • 1,599 Ex-UNE up 6.2% 1,488 • UNE saw 7.6% growth (Q2: 5.9%) 1,398 • Africa maintained 11.9% yoy organic growth Page 19
EBITDA Central America and lower Corporate Costs drive EBITDA EBITDA evolution by Region US$ million, Q3 2014 – Q3 2015 • EBITDA growth of 2.1% • Organic growth 7.9% 1 • FX impact 8 • Latam up 0.6% 15 5 • Organic growth ex UNE 3.8% 77 19 (61) • $8 million positive one-offs at UNE • $5 million negative one-offs Honduras 560 536 • Africa down 12.0% 497 475 • Organic growth 9.6% • Chad still under pressure • Tanzania contribution diluted by FX • Corporate costs down $15 million • Fifth quarter of decline in Corporate Costs 1 Like for like excluding UNE and in local currency Page 20
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