2018 Q3 results Cable expansion accelerating Mauricio Ramos, CEO Tim Pennington, CFO October 24 th , 2018 Millicom International Cellular S.A.
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 October 23 rd 2018 2
1. CEO review Mauricio Ramos
Q3 Highlights Cable expansion accelerating 1 Strong operating momentum continues 2 Colombia growing 3 Spotlight on Cable 4 Cable Onda 4
1 Service revenue growth in line with plan Latam service revenue growth Latam %YoY growth, Q1 16 – Q3 18 5.5% 4.7% 3.1% 2.9% 3.4% 2.3% 0.9% -0.5% -1.3% -2.0% -2.3% Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Note: Q1 2018 and Q2 2018 figures re-presented to reflect application of IFRS 15 on wholesale international traffic business in Colombia. 5
1 All three business units growing Home (25% of service revenue) B2B (16% of service revenue) Mobile B2C (58% of service rev) Home service revenue LC %YoY, Q1 17 – Q3 18 Mobile B2C service revenue LC %YoY, Q1 17 – Q3 18 B2B service revenue LC %YoY, Q1 17 – Q3 18 2.1% 0.9% 1.0% 0.2% 12.6% 12.5% -0.9% 7.5% 8.8% 6.6% 5.7% 6.5% 6.4% 7.6% 7.3% 7.3% 7.1% -3.8% 2.5% 1.4% -5.3% Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Note: Q1 2018 and Q2 2018 B2B figures re-presented to reflect application of IFRS 15 on wholesale international traffic business in Colombia. 6
1 B2C Mobile growing in 4G and postpaid Steadily growing our 4G customer base Improved performance in postpaid Latam B2C Mobile 4G subscribers (millions), Q3 16 – Q3 18 Latam B2C Mobile postpaid net additions, (000)s, 9M16 – 9M18 +52% 192% 135 8.6 46 5.6 -66 2.4 Q3 16 Q3 17 Q3 18 9M 16 9M 17 9M 18 7
1 Home growth drivers trending higher Connecting more HFC Homes Adding more HFC RGUs ARPU rising Latam HFC homes connected (000) Latam HFC RGU net additions (000) Latam Home ARPU ($/month) 9M 2016 – 9M 2018 9M 2016 – 9M 2018 Q3 2016 – Q3 2018 +2% +55% +33% 28.9 313 679 28.2 510 27.1 202 362 116 9M 16 9M 17 9M 18 9M 16 9M 17 9M 18 Q3 2016 Q3 2017 Q3 2018 8
2 Colombia investments starting to pay off in Home Colombia Home KPIs continue to improve Home ARPU rising HFC accelerating as copper churn moderates Colombia – Home ARPU $, Q3 16 – Q3 18 Colombia - LTM homes connected net additions, HFC and Other, Q316 – Q318 +26% +7.7% +20% 101 80 67 -80 -98 -115 Q3 16 Q3 17 Q3 18 Q3 16 Q3 17 Q3 18 HFC Other Net 9
2 New initiatives to accelerate growth in Mobile Simplifying postpaid offer in Colombia Simplified the offer to just 3 plans ($18, $25 and $33 per month) Focus on experience, innovation, commercial offer, and devices 10
3 Home revenue 9% CAGR in USD in last 3 years Homes Passed Homes Connected HFC Homes Passed (000), Q3 15 – Q3 18 HFC Homes Connected (000), Q3 15 – Q3 18 +16% +16% +18% +12% +10% +11% 9.387 2.642 8.107 2.277 2.038 6.848 1.851 6.177 Q3 2015 Q3 2016 Q3 2017 Q3 2018 Q3 2015 Q3 2016 Q3 2017 Q3 2018 RGUs Home Revenue HFC RGUs (000), Q3 15 – Q3 18 Home & Content service revenue ($ millions), Q3 15 – Q3 18 +20% +14% +8% +17% +6% +17% 5.046 321 282 4.204 260 246 3.607 3.073 Q3 2015 Q3 2016 Q3 2017 Q3 2018 Q3 2015 Q3 2016 Q3 2017 Q3 2018 11
3 Millicom Cable revenue annualizes to $2.2 billion 10 million Homes Passed $2.2 4 million 7 million Homes billion RGUs Connected Fixed B2B 12 12 Note: Based on annualized Millicom Q3 revenue for Home and B2B fixed, proforma for Cable Onda acquisition
3 Cable economics for Millicom 1. Standalone cable economics Unlevered Pre-tax Low cost Pricing ROI > 30% to build Power With scope to expand homes passed by 50% and grow B2B 2. Leveraging Millicom assets Brand + Network + Talent + Distribution 3. Preparing for the future Convergence + 5G Note: ROI calculation based on lifetime customer value assuming capex of $100 per home passed and $150 per home connected, penetration rate of homes passed of 33%, ARPU of $30, and Latam cable industry average churn and EBITDA margin assumptions.
4 Cable Onda Expected closing Q4 2018 14
4 Free cash flow continues to grow FCF growth is crucial to support our organic plans and pursue inorganic opportunities Equity FCF up ~$400 million in last 3 years Equity FCF up 19% YTD $m, 9M 16 – 9M 18 $m, 2014-2017 +399 +19% 356 243 269 204 235 171 -43 2014 2015 2016 2017 9M 16 9M 17 9M 18 15
2. CFO review Tim Pennington
Financial Highlights On track with our 2018 goals 1 KPIs driving sustain revenue growth 2 EBITDA growth driven by core Latam businesses 3 All P&L profit metrics improving… 4 …and cashflow continues to strengthen 5 And net debt reduces again 17
1 Key financial metrics – Q3 2018 Sustained growth EBITDA a and Margins Service Revenue a Q3 OCF and Margins b $m, Q3 17 – Q3 18 $m and %, Q3 17 – Q3 18 $m and margin, Q3 17 – Q3 18 4.2% 2.6% 1,399 564 309 309 550 1,342 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 37.0% 37.7% 20.7% 20.6% a) Q3 17 numbers are adjusted to Q3 18 FX rates and exclude Senegal, Rwanda and Ghana. Growth is presented on a like-for-like basis for the international wholesale business in Colombia 18 b) Excluding Senegal, Rwanda and Ghana, spectrum & license costs
2 EBITDA – Q3 2018 Latam biggest contributor to EBITDA growth EBITDA evolution by region $ million, Q3 17 – Q3 18 +2.6% 5 13 22 -0.4% 2 564 553 550 Ebitda Q3 17 FX and other Ebitda Q3 17 LatAm Africa Corporate Ebitda Q3 18 (constant currency) 37.0% 37.7% as % of revenue Q3 17 numbers are adjusted to Q3 18 FX rates and exclude Senegal, Rwanda and Ghana 19
2 Latam Solid growth returning to Latam Latam service revenue Latam OCF $m, Q3 17 – Q3 18 $m and margin, Q3 17 – Q3 18 +1.4% +4.7% 278 Latam EBITDA 275 $m and margin, Q3 17 – Q3 18 +4.2% 1,268 20.4% 20.4% 1,212 525 504 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 Capex / 37.2% 38.4% 16.8% 18.0% Revenue Notes: Growth rates are organic and exclude the impact of changes in FX rates and accounting changes. Q3 2017 figures have been adjusted to reflect these organic growth rates. Capex/revenue excludes 20 spectrum & license costs
2 Service revenue in our main Latam markets El Salvador Guatemala Honduras Service revenue, year-on-year (%), Q1 16 – Q3 18 5.4% 6.4% 2.6% 5.7% 2.1% 6.4% 3.5% 2.7% 0.3% 0.3% -1.6% 0.0% 3.4% -0.1% -0.6% -3.6% -1.4% 0.0% -0.8% -3.7% -0.7% -3.9% -0.8% -1.0% -4.8% -2.5% -1.6% -6.4% -7.7% -4.3% -8.7% -4.8% -2.5% Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Bolivia Colombia* Paraguay 15.7% 8.9% 6.0% 7.8% 7.1% 6.5% 6.2% 13.7% 9.1% 2.3% 4.4% 0.6% 6.5% 4.5% 6.1% 6.2% 5.5% 0.3% 5.4% 0.6% 4.7% -0.2% -0.3% 3.3% 2.9% 2.6% 2.0% 2.1% -1.9% 0.5% -2.5% -0.8% -2.9% Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 * Q1 and Q2 2018 numbers re-presented to reflect impact of IFRS 15 21
2 EBITDA progression by country Strong performance in Bolivia and a return to EBITDA growth in Colombia El Salvador Guatemala Honduras EBITDA ($m), margin and year-on-year growth, Q3 17 – Q3 18 (3.1%) +4.7% (23.0%) 3.7% Adj 75 38 171 168 71 11 7 30 63 64 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 49.2% 52.0% 36.4% 30.2% 50.5% 50.2% 44.4% Adj 44.3% Adj Bolivia Colombia Paraguay +11.2% 13.7% +7.7% 61 127 84 79 55 108 Q3 17 Q3 18 Q3 17 Q3 18 Q3 17 Q3 18 38.9% 38.1% 25.0% 30.4% 47.3% 49.4% 22 EBITDA Margins
2 Cost review and margin progression Steady upward margin trend continues Group total OPEX base Last 12 month Group EBITDA margin OPEX organic growth* YoY (in $), Q3 17 – Q3 18 Last 12-month EBITDA margin, Q3 2015 – Q3 2018 +3.1% 541 (3.0%) +400 bps Sales and Marketing 36.9% 35.6% 33.6% +9.6% General and 32.9% Adminstration Q3 17 Q3 18 Q3 15 Q3 16 Q3 17 Q3 18 * Excludes FX and IFRS 15 23
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