2013 Q1 Results Presentation Hans-Holger Albrecht, President and CEO François-Xavier Roger, CFO
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 Source: Millicom
Agenda for today Results at a glance Key Events Highlights Operational Performance Mobile Mobile Financial Services Home Online Financial Results Closing remarks Q&A Page 3
Our success will rest on five pillars Mobile Cable & MFS Online Cost & Capex Digital Media Optimization Building a Maximizing From Volume Creating a Investing in $2bn Business efficiency to Value Blockbuster Growth Building a Tapping into Leveraging Investing in Relentless sophisticated, unique LatAm consumer reach high growth focus on value-oriented TV and to lead in high internet models streamlining mobile access Broadband growth mobile in the opex & capex business opportunity financial services developing at central and world country level Source: Millicom
Results at a glance Maintaining momentum, building foundations
Q1 2013 – Maintaining momentum, building foundations Maintaining momentum: Like-for-like* revenue growth at 8.3% YoY In line with expectations: EBITDA margin of 39.7%, 40.5% excluding Online Mobile growth at 1.3% in LC, marked regulatory pressure (like-for-like growth at 4.6%) Mobile Data: Q1 a record quarter for new customers recruited New categories are increasingly contributing: Cable & Digital Media- Exclusive Negotiations with EPM in Colombia progressing well to create an integrated leader in Colombia. MFS- significant milestones achieved Total cash transferred through MFS exceeded $500 million in March 12.6% MFS penetration in markets live for over a quarter First synergies platform between Online & MFS in Ghana *Like-for-like adjusts for 1 less working day vs. Q1-12, regulatory impacts and one-offs.
8.3% Like-for-like revenue growth Contribution to Growth (LC) Revenue $1.3 bn Online 19% MFS 16% $1.2 bn Cable & Digital 13% Media $1.1 bn Mobile 52% $1.0 bn Q1 2012 Q1 2013 Like-for-Like growth at 8.3% was an acceleration versus Q4 Reported growth negatively impacted by Easter season, February impact and high regulatory pressure Millicom International Cellular S. A. 7
Digital contributing to close to 40% of recurring revenues +$99 m in incremental revenue $500 m 1% 1% 3% Online 3% 2% $400 m 21% MFS 2% 21% 2% 23% 22% 22% Cable and Digital Media $300 m 71% 72% 76% Mobile VAS 76% 76% $ 0 m $200 m Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Close to 40% of recurring revenues come from VAS Increasing contribution from Cable & Digital Media, MFS and Online Millicom International Cellular S. A. 8
Operational performance
Mobile: acceleration in transition from voice to data 1.74 RGU per user $13 ARPU ($) $12 1.72 $11 1.70 $10 $9 1.68 $8 1.66 $7 CAM SAM Africa $6 1.64 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Mobile data net adds (k) 800 Mobile revenues growing 1.3% YoY in LC and 5% on a 600 like-for-like basis (MTR cuts in Tanzania, DRC, Honduras and Colombia) 400 Highest ever mobile data net adds 200 ARPU declined by 6.8%, excluding regulatory impacts - the decline would have been 3.3% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Millicom International Cellular S. A. 10
Strong growth in mobile data traffic and revenues Traffic growth (x factor) 105 Subsidies (Net) 5 Revenue Traffic 100 4 95 LC growth 17.1% 3 90 85 2 80 1 Q1 10=1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 75 Q1 12 Q1 13 10 10 10 10 11 11 11 11 12 12 12 12 13 Revenue and traffic growth highly correlated Increase of traffic growth supported by decline in production costs Mobile information growth at 35%, with Latin America growing around 30% while Africa has achieved 115% YoY growth Millicom International Cellular S. A. 11
Cable & digital media – Building momentum 1,100 RGUs by region (000s) $31 ARPU ($) 2,200 1,000 2,000 $30 1,800 900 $29 1,600 800 1,400 $28 700 1,200 600 1,000 $27 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 SAM CAM Homes passed (right axis) Cable & Digital media growing at around 10% YoY (excluding the Cablevision acquisition) 10,000 new cable customers and 85,000 new homes passed in Q1 2013 Growth accelerated in Paraguay following the Q4 rebranding to Tigo Ongoing exclusive negotiations with EPM in Colombia – outcome expected for Q2 2013 Millicom International Cellular S. A. 12
MFS- Transfer of over $500m of cash through our networks MFS ARPU ($) $1.4 45% MFS Penetration (%) as percentage of mobile customers 40% $1.4 TZ 35% 30% $1.3 PY 25% $1.3 20% RW 15% $1.2 10% SV $1.2 5% 0% $1.1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 10 10 10 11 11 11 11 12 12 12 12 13 MFS penetration at 12.6% across footprint* ARPU at $1.29 for users and increasing 10.3% Y-o-Y in LC * Footprint: Paraguay, El Salvador, Guatemala, Tanzania, Rwanda, Ghana, and Chad and excludes countries where the service is not yet available or has just been launched Millicom International Cellular S. A. 13
Online- New launches and first synergies In Q1, the Online category generated revenue of $10.7 million and EBITDA losses of $6.2 million. Business update: Both Kanui and Tricae in Brazil continued to perform strongly. Jumia in Nigeria has also performed very well and has early taken a strong position in the attractive Nigerian Online market. New Q1 Launches: Easy Taxi in Venezuela, Chile, Argentina and Peru Hellofood in Venezuela, Brazil and Argentina Jumia (e-commerce for general merchandise) in Kenya Kaymu (marketplace) and Vamido (real estate classifieds) in Nigeria Synergies Abound: during Q1 it became possible to pay with Tigo Cash when buying on Hellofood in Ghana. Millicom International Cellular S. A. 14
Financial results
Financial results in line with the guidance Like-for-like Q1 13 Q1 12 $ growth growth Mobile 47,404 43,798 8% Customers Cable & Digital Media 796 594 34% (000s) MFS 4,352 2,901 50% Mobile 7.9 8.5 (6.8%) (3.3%) ARPU ($) Cable & Digital Media 32.8 31.8 3.1% (1.1%) MFS 1.3 1.2 8.3% 10.3% Revenue ($m) 1,246 1,168 6.6% 8.3% EBITDA ($m) 494 517 (4.4%) (7.2%) as a % of Revenues 39.7% 44.2% (4.5 pt) Capex ($m) 193 172 12.2% as a % of Revenues 15.5% 14.7% 0.8 pt 8.3% revenue growth like-for-like, 6.6% reported revenue growth EBITDA Margin in line with guidance Millicom International Cellular S. A. 16
Regional growth driven by South America in Q1 $1,300 m Revenue evolution by region $1,250 m 4 16 11 7 $1,200 m 39 1,246 1,241 1 1,225 1,214 1,208 $1,150 m 1,168 1,168 1,169 $1,100 m Q1 12 CAM SAM Africa Online Cablevision FX Q1 13 Millicom International Cellular S. A. 17
Growth resting equally on our four pillars $1,300 m Revenue evolution by category $1,250 m 4 16 14 11 $1,200 m 10 10 13 1,246 1,242 1,226 1,212 $1,150 m 1,201 1,192 1,182 1,168 1,168 $1,100 m Q1 12 Mobile Cable MFS Online Other* Cablevision FX Q1 13 *includes visitor roaming, MVNO/DVNO, and Telephone and Equipment Millicom International Cellular S. A. 18
EBITDA margin in line with expectations 45% 44% 0.5% 0.9% 1.1% 1.0% 43% 1.5% 42% 41% 0.9% Efficiencies in GM% to offset 44.2% part of the pricing pressures 0.8% 40% Investment for growth 39% 40.5% 40.5% 39.7% 39.7% 38% 37% EBITDA% Africa Pricing LatAm Gross Commercial Category Others Underlying Online EBITDA% Q4 11 Pressure Pricing Margin Mix Building (incl. one- EBITDA% Dilution Q4 12 Pressure Effect offs) Q4 12 Effect Other includes a legal case in Bolivia (-0.3 pt) Investments for growth and regulatory items driving pressure on margin Millicom International Cellular S. A. 19
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