Millicom’s Q2 & H1 2016 Results, 21 July 2016


Millicom International Cellular S.A.
Key highlights of Q2 2016(i)

  · Revenue of $1.57 billion - organic service revenue up 2.1%(ii)
    · Reported service revenue 4.1% lower on currency

  · Adjusted EBITDA(iii) at $560 million - organic growth of 4.6%
    · Adjusted EBITDA margin at 35.6% - increased by 1.4 percentage points

  · Stronger cash generation - equity free cash flow of $107 million
  · Project Heat: transformation and efficiency plan targeting $200 million
savings
  · Strong subscriber growth – 2 million new smartphones users in the quarter
  · Cable footprint expansion target increased to 12 million homes passed
  · 2016 outlook revised
    · Organic service revenue growth lowered to “low to mid-single digit”
    · Adjusted EBITDA growth unchanged at “mid to high single digit”
    · Capex(iv) lowered to “around $1.10 billion” on efficiencies

Key financial indicators

          $m            Q2 2016  Q2 2015  % change  H1 2016  H1 2015  % change
Revenue                 1,572    1,666    (5.7%)    3,100    3,336    (7.1%)
Organic growth           0.5%     9.0%               1.3%     9.3%
    Service revenue     1,469    1,533    (4.1%)    2,905    3,070    (5.4%)
    Organic growth       2.1%     5.3%               3.1%     5.3%
Adjusted EBITDA          560      569     (1.6%)    1,110    1,140    (2.6%)
Adjusted EBITDA margin  35.6%    34.2%              35.8%    34.2%
Capex(iv)                222      280     (20.9%)    417      466     (10.7%)
Net debt                4,282    4,281     0.0%     4,282    4,281     0.0%
Adjusted EPS ($) (v)     0.04     0.09    (59.3%)    0.26     0.47    (45.4%)

  · Latam: Q2 reported organic revenue decline of 0.7% to $1.35 billion due to
lower handset sales whilst organic service revenue grew 0.9% held back by macro
headwinds and mobile competitive intensity in Colombia whilst data revenue
growth remained strong. The cable rollout accelerated with a further 161,000 new
HFC homes passed in the quarter. EBITDA was $514 million including $17 million
one-off charges, a margin of 38.1%.
  · Africa: Q2 reported organic revenue growth of 9.2% to $222 million with
service revenue growing 9.8%. All countries reported good growth although we
experienced a more difficult environment in Tanzania. We saw the benefit of
actions taken last year as EBITDA grew 8.7% organically on Q1 and 23.8% year-on
-year to $62 million, a margin of 28.1%.
  · Corporate Costs: Reduction to $40 million compared to $55 million in Q2 15
and $41 million in Q1 16.

(i) The financial information presented in this earnings release is with
Guatemala (55% owned) & Honduras (66.7% owned) as if fully consolidated. See
page 16 for reconciliation with IFRS numbers. The comparative 2015 financial
information in this earnings release has been represented as a result of the
classification of our operations in DRC as discontinued operations (in
accordance with IFRS 5)
(ii) Organic growth represents year-on year-growth in local currency (includes
regulatory changes)
Service revenue is defined as Group revenue excluding telephone & equipment
sales
(iii) Adjusted EBITDA is defined as reported EBITDA excluding restructuring and
integration costs and other one-off items – See page 7 for reconciliation
(iv) Balance sheet capital expenditure, excludes spectrum and license costs
(v) Basic EPS adjusted for non-operating items see page 15 for reconciliation

CEO’s Statement

Luxembourg, 21 July 2016

“Millicom is a company with tremendous potential and our belief in the long-term
future of this business has been reaffirmed as we begin to realise growth
opportunities across our data and cable revenue streams.

We need to navigate through the on-going sluggish macro-economic conditions. The
external environment continues to be very difficult in several markets, which is
exacerbating the decline of our legacy voice/SMS business. This left us with
revenue weaker than expected; organic service revenue growth of 2.1% to
$1,469 million was well below the rate we anticipated at the start of the year
so we are revising downwards the revenue outlook for the remainder of the year.
However, we are quickly adapting to this more challenging environment as we
continue to drive profitability; the Adjusted EBITDA margin was up 1.4
percentage points on last year and now sits above our medium term target of 35%.
Cash-flow generation was also robust and we now feel we can deliver the 2016
investment plan with lower capital expenditure than previously indicated.

For Millicom, the important long-term story is about how we are reconfiguring
our business towards the growth segments of data and cable. An increasing
proportion of revenue is now coming from these segments as SMS and voice revenue
is replaced by mobile data revenue, which grew by a quarter with nearly a third
of our base now using mobile data.  In this context it was pleasing that more
than 600,000 new data customers were added in this quarter. This reflects in the
adoption of smartphone whose growth continues to be very strong, with the
penetration rate of smartphone users increasing by more than ten points year-on
-year to 40.2%.

Our Cable business, representing residential Home and Fixed B2B businesses, also
very much represents the future for Millicom and already delivers over 27% of
service revenue. Most of our Home operations continued to deliver impressive
double-digit revenue growth and having accelerated the cable expansion we now
pass 7.8 million homes. Our roll out programmes are well tested and so we are
revising up our targets and now expect to reach our original goal of 10 million
homes passed by 2018, a year early. In light of this achievement, we have set
ourselves a new target of 12 million homes passed.

We continue to strengthen our customer proposition to drive demand and loyalty.
In the quarter, we announced an exciting partnership with Netflix and together
launched a compelling promotional campaign across our Latam footprint.

We are also building the foundations of our B2B business. During the quarter,
Tigo Business completed the construction of its first data centre in Paraguay,
as well as further facilities in Chad and Senegal. These data centres are a
necessary response to the growth in internet traffic that is changing the
digital landscape across every one of our markets. Tigo Business also announced
last week a partnership with Microsoft which will provide cloud computing
benefits to businesses in the Latam region, further extending our product and
service offering.

As we move to capture these exciting new areas we must also look at how we run
our business. We have been working hard on this, with 41 group initiatives to
transform and improve the efficiency of the business under the umbrella of
Project Heat. These initiatives will not just reduce costs – though we are
targeting $200 million of savings – but also make our business more adaptable to
meet challenges ahead.

As we continue to execute our strategic roadmap and stay ahead of the needs of
our customers, we also identified the need to add further strength at the
leadership level in specific areas. This quarter we are delighted to welcome
senior appointments in Operations and Compliance, and I now have the team to
deliver on our strategy.

We are building the right platform to drive momentum, accelerate data
penetration, expand our cable footprint and grow our B2B business.”

Mauricio Ramos
CEO, Millicom

Outlook revised

Our outlook for 2016 has been updated as follows:

Basis       Previous outlook                  New outlook
Service     To grow mid-single digit          To grow low to mid-single digit
revenue(a)
Adjusted    To grow mid to high-single digit  To grow mid to high-single digit
EBITDA(b)
Capex(c)    Between $1.15 and $1.25 billion   Around $1.10 billion

(a) Service revenue is Group revenue excluding telephone and equipment sales

(b) Adjusted EBITDA excludes restructuring and integration costs and other one
-off items

(c) Capex excludes the impact of spectrum and license 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.

Conference call details

A presentation and conference call to discuss results of the quarter will take
place at 14.00 Stockholm / 14.00 Luxembourg / 13.00 London / 08.00 New York, on
Thursday 21July 2016.  For those unable to attend, Millicom will also provide a
conference call. Dial-in numbers: + 46 (0) 850 65 3936, + 352 342 080 8654, + 44
203 427 1905, +1 646 254 3362. Access code: 746296.

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

4 Apr 2016:         Publication of our 2015 Annual Report and Corporate
Responsibility Report
13 Apr 2016:       Nomination Committee proposes José Miguel Garcia Fernandez as
new Board director
9 May 2016:        Discontinuation of preliminary investigation by Swedish
Prosecutor
17 May 2016:      2016 AGM
10 Jun 2016:       Appointment of HL Rogers as EVP, Chief Ethics and Compliance
Officer

Business news

21 Apr 2016:       Completion of sale of DRC
13 Jun 2016:       Millicom partners with Netflix in Latin America
28 Jun 2016:       Millicom is launching two new data centres in Chad and
Senegal

Financial news

12 Apr 2016:       Debt refinancing with offer to early purchase 2017 SEK bond
26 Apr 2016:       Millicom Q1 2016 results
28 Apr 2016:       Success of tender offers on 2017 SEK bond
26 May 2016:      Publication of prospectus & application for listing of new SEK
bond
26 May 2016:      Tigo UNE bond issuance

Subsequent events

13 Jul 2016:        Partnership with Microsoft to provide cloud services to
eight markets in Latin America

Agenda

25 Oct 2016:     Q3 16 results
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, VP, 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, 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 2015 Annual Report
(http://www.millicom.com/media/4562100/full-annual-report-millicom-2015.pdf). In
addition to the information in the 2015 Annual Report and the information
provided in this release, please refer to Millicom’s press release, dated 21
October 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 57 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.

Attachments

2016 Q2 results.pdf Financial-and-operational-data-Q2-16.xlsx 07209888.pdf