Key highlights of FY 2015
· A year of strong operational momentum
· Mobile subscriber base increased almost 6 million to 63 million in 2015 –
30% data penetration
· 7.6 million homes passed - 5.4 million RGU’s
· Revenue of $6.73 billion - organic growth(i) of 7.4%
· Adjusted EBITDA(ii) at $2.27 billion - organic growth of 9.2% and margin up
by 0.7%
· Equity Free Cash Flow(iii) grows strongly to $235 million
· Year-end net debt at $4,295 million - in line with previous quarters
· Board to propose a dividend of $2.64 per share
Key highlights of Q4 2015
· 1.4 million new mobile data users; 143,000 new Home RGUs
· Revenue of $1.68 billion - organic service revenue up 5.9%(i) on mobile data
and cable growth
· Adjusted EBITDA(ii) at $551 million - margin improvement of 0.9% on
efficiency measures
· Disposal of DRC announced
Key financial indicators
$m Q4 2015 Q4 2014 % change FY 2015 FY 2014 % change
Revenue 1,677 1,860 (9.8%) 6,730 6,386 5.4%
Organic growth 4.4% 10.8% 7.4% 9.4%
Adjusted EBITDA 551 595 (7.4%) 2,266 2,110 7.4%
Adjusted EBITDA margin 32.9% 32.0% 33.7% 33.0%
Capex(iv) 443 449 (1.4%) 1,273 1,206 5.5%
Net debt(v) 4,295 3,997 7.4%
Adjusted EPS ($)(vi) (0.33) 0.41 NM 0.05 1.82 NM
·
Latam: Q4 reported organic revenue growth of 2.8% to $1,415 million reflecting
some slowdown in Colombia and macro conditions in Paraguay. Service revenue
slowed a little but still grew 4.4%. EBITDA was $513 million after $33 million
one-off charges relating to Colombia integration costs and a bad debt charge.
·
Africa: Q4 reported organic revenue growth of 13.4% to $258 million. EBITDA was
$17 million after $26 million of restructuring and one-off items.
·
Corporate costs: Reduction to $45 million compared to $50 million in Q3 15 and
$63 million in Q4 14.
(i) Organic growth represents year-on year-growth in local currency (includes
regulatory changes and UNE from Q4 15, excludes the impact of exchange rate
changes). Service revenue is defined as Group revenue excluding telephone &
equipment sales
(ii) Adjusted EBITDA is defined as reported EBITDA excluding restructuring and
integration costs and other one-off items – See page 8 for reconciliation.
(iii) Excludes spectrum, licence costs
(iv) Balance sheet capital expenditure, excludes spectrum and license costs
(v) Guatemala and Honduras businesses fully consolidated
(vi) Basic EPS adjusted for non-operating items see page 16 for reconciliation
CEO’s Statement
#MonetizingData #BuildingCable
Luxembourg, 10 February 2016
“Today we announce the results of the fourth quarter and highlight our
achievements for the full year ended December 31, 2015, as we continue to
connect new customers to the internet, drive smartphone penetration and grow our
cable footprint.
The fourth quarter delivered organic service revenue growth at 6%. Like most
multinationals operating in emerging markets, our topline performance has been
marred by the impact of currency depreciation and weakening economies but we are
resilient and this remains a very creditable performance.
2015 was a good year operationally, as we focused on profitable and responsible
growth, combined with efficiency measures to enhance margins and improve cash
flow. Adjusting for adverse currency movements we were in the lower end of our
guidance range on revenue but in the top half of our range on EBITDA. I am
particularly pleased that we started to increase margins in 2015 with the
Adjusted EBITDA margin improving by 0.7% to 33.7%. I am also very pleased with
our improved equity free cash flow metrics, which saw a material improvement
year-on-year. Improving our cash flow further in 2016 is a major focus for the
Group through a combination of improving margins and lower capital expenditure
to further reinforce the balance sheet.
We are delivering on our ambitious plans for Latin America. Tigo-UNE in Colombia
is a clear success story in an increasingly competitive market. Across the wider
region, we have seen volatile currencies, slowing growth rates and softened
consumer spending. However the appetite for smartphone adoption remains strong
and a significant contributor to the Group, driving Q4 data growth up 30% year
-on-year, whilst the rapid expansion of our cable footprint has seen the fixed
Home business outperform strongly, growing 18% in the quarter.
We have a clear operational roadmap for 2016 aimed at achieving a leadership
role in fixed-mobile services. Looking ahead, highlights will include rolling
out 4G in Paraguay, satellite pay-TV launch in Colombia and the introduction of
Tivo across all our Latin American countries. We will also continue to emphasize
Tigo Business, customer acquisition and leading the mobile financial services
industry with further product innovation.
In Africa we are employing stringent capital allocation disciplines. We have
sold the DRC business and in 2016 we intend to deliver a significantly improved
cash profile from this region. To that end we believe that rationalization is
beneficial both to customers and key to the development of the market. In 2016,
we intend to deliver a significantly improved cash profile from the Africa
businesses. To that end we have rapidly restructured the regional leadership and
country operations in order to accelerate growth in the core business and
mitigate challenges in the macro economy.
In 2015, we made good progress in aligning employee resource in several markets
and tightening our internal controls and processes. We expect uncertainty to
continue to prevail in emerging market economies in 2016, which is why we will
continue to strengthen the fundamentals of our business whilst continuing our
focus on improving cash flow further. Our capital structure is in good shape
with a long average maturity on our debt, significant local currency borrowing,
and we have a line of sight to reduce leverage. Cash generation is set to
improve in 2016 aided by an improvement in EBITDA and reduction in capex plus
disciplined capital allocation to divest or improve underperforming businesses.
We have the right strategy and market positions to support our ambitions. Our
Digital Lifestyle strategy, which we redefined in 2015, is simple: expand our
cable footprint and improve data monetization. This will form a sound basis on
which to drive the business forward in 2016.”
Mauricio Ramos
CEO, Millicom
2015 financial year guidance delivered
Based on the guidance at constant currency and constant perimeter, 2015 revenue
adjusted for currency was $7.2 billion in line with the $7.1 to $7.5 billion
range set in February 2015. On the same basis, our reported EBITDA was $2.29
billion in line with the $2.20 to $2.35 billion range whilst our capex was $1.28
billion in line with the $1.25 to $1.35 billion range.
2016 outlook for improving cashflow
Basis Outlook
Service revenue(a) To grow mid-single digit
Adjusted EBITDA(b) To grow mid to high-single digit
Capex(c) Between $1.15 and $1.25 billion
(a) Service revenue is Group revenue excluding telephone & equipment sales
(b) Adjusted EBITDA excludes restructuring and integration costs and other one
-off items
(c) Capex excludes the impact of spectrum and licences costs
The outlook for 2016 is based on constant currency, at a constant perimeter with
Guatemala and Honduras fully consolidated and on our current assessment of the
emerging markets macroeconomic outlook. For service revenue this is a 2015
currency adjusted basis of $5.73 billion and for Adjusted EBITDA a currency
adjusted basis of $2.09 billion.
Shareholder remuneration
At the AGM to be convened on 17th May 2016, the Board will propose an ordinary
dividend payment of $2.64 per share.
We reiterate our dividend policy for no less than $2 per share, and at least 30%
of adjusted net profit(i).
Guatemala & Honduras
On 31 December 2015, the existing call options with local partners lapsed and
under IFRS 10 and 11, Millicom deconsolidated its investments in Comcel
(Guatemala) and Celtel (Honduras). This has resulted in a non-cash charge of
$391 million, which is recorded under “Other non-operating items”.
From 31 December 2015 onwards, Millicom will account for its investments in
Comcel and Celtel under the equity method and thus will report its share of the
net income of each of these businesses in the income statement in the caption
“Income (loss) from joint ventures” starting 1 January 2016. For the purpose of
comparison and to provide users of this report a full understanding of the
financial condition of the Group, the financial information presented in this
earnings release is and will continue to be on a pro forma basis as if the
Honduran and Guatemalan businesses continue to be fully consolidated.
Further information on the accounting implications of the deconsolidation are
provided in the notes to the financial statements.
(i) Adjusted net profit is defined as reported net profit excluding 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)’.
Millicom to sell its Democratic Republic of Congo business to Orange
Millicom announced on 8 February 2016 that it has signed an agreement for the
sale of its Tigo business in the Democratic Republic of Congo (DRC) to Orange
S.A. The transaction is subject to regulatory approvals.
Millicom will sell 100% of the share capital in Oasis SA for a total cash
consideration of $160 million.
Conference call details
An analyst and investor presentation to discuss results of the quarter will take
place in London at 14.00 Stockholm / 14.00 Luxembourg / 13.00 London / 08.00 New
York, on Wednesday 10February 2016. For those unable to attend, Millicom will
also provide a conference call. Dial-in numbers: + 46 (0) 850 65 3938, + 352 342
080 8654, + 44 203 427 1913, +1 646 254 3366. Access code: 4444181
A live audio stream of the analyst presentation can also be accessed
at www.millicom.com. Please dial in / log on 10 minutes prior to the start of
the conference call to allow time for registration. Slides to accompany the
conference call are available at www.millicom.com.
Significant events of the quarter
Corporate news
6 Oct New Nomination Committee is announced
2015:
21 Oct Millicom reports to authorities potential
2015: improper payments on behalf of its Guatemalan
JV
22 Oct Millicom completes Zantel Acquisition
2015:
11 Dec Millicom celebrates its 25th birthday
2015:
Business news
19 Oct Tigo launches online remittance service in
2015: UK, European Union and Canada
20 Oct Tigo Rwanda is first to offer customers 4G
2015: internet accessible on all enabled
smartphones
20 Oct Mobile licence renewed in Bolivia for 15
2015: years
16 Dec Tigo Paraguay won 4G spectrum in auctions
2015:
Financial news
7 Oct Millicom receives a 24% stake in leading African towers company (HTA)
2015:
22 Oct Millicom Q3 2015 results
2015:
1 Dec Telecel (Paraguay) upgraded to BB+ by Fitch
2015:
Subsequent events
8 Jan Fitch affirms Millicom at BB+
2016:
12 Jan Tigo Paraguay to offer customers 4G
2016: internet accessible on all enabled
smartphones
8 Feb Millicom to sell its Democratic Republic
2016: of Congo business to Orange
10 Feb Millicom board to recommend a $2.64
2016: dividend at the 2016 AGM
Agenda
26 Apr 2016: Q1 2016 results
17 May 2016: 2016 AGM
Contacts
Press Enquiries
Tabitha Aldrich-Smith, Interim Communications Director
Tel: +352 277 59084 (Luxembourg) / +44 7971 919 610 / press@millicom.com
Investor Relations
Nicolas Didio, Director, Head of Investor Relations
Tel: +352 277 59125 (Luxembourg) / +44 203 249 2220 / investors@millicom.com
Risks and uncertainty factors
Millicom operates in a dynamic industry characterized by rapid evolution in
technology, consumer demand, and business opportunities. Combined with a focus
on emerging markets in various geographic locations, the Group has a proactive
approach to identifying, understanding, assessing, monitoring and acting on
balancing risks and opportunities. For a description of risks and Millicom’s
approach to risk management, refer to the 2014 Annual Report
(http://www.millicom.com/media/2379621/Millicom-Annual-Report-2014.pdf). In
addition to the information in the 2014 Annual Report and the information
provided in this release, please refer to Millicom’s press release, dated
October 21, 2015, entitled “Millicom reports to authorities potential improper
payments on behalf of its Guatemalan joint venture.” At this time, Millicom’s
investigation remains on-going, and Millicom cannot predict the outcome or
consequences of this matter.
Millicom is a leading telecom and media company dedicated to emerging markets in
Latin America and Africa. Millicom sets the pace when it comes to providing
innovative and customer-centric digital lifestyle services to the world’s
emerging markets. The Millicom Group employs more than 16,000 people and
provides mobile services to over 63 million customers. Founded in 1990, Millicom
International Cellular SA is headquartered in Luxembourg and listed on NASDAQ
OMX Stockholm under the symbol MIC. In 2015, Millicom generated revenue of USD
6.7 billion and EBITDA of USD 2.2 billion.
This press release 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 forward-looking statements depending on
various important factors, including those included in this release. All forward
-looking statements in this press release 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., and 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.
#MonetizingData #BuildingCable
| Source: Millicom International Cellular S.A.
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