Millicom International Cellular: Major Milestones - Mobile Reaches 60 Million Whilst Cable Passes 7.5 Million Homes

L- LEUDELANGE, Sweden--()--Millicom (NASDAQ:MICC) (STO:MIC)

Key highlights of Q3 2015

· Emerging market currency volatility intensified

· Revenue of $1.64 billion, down 2.0%

· Impact from Colombia FX

· Organic growth(a) of 7.2%

· Service revenue growth of 5.8%

· EBITDA at $560 million, up 2.1% – margin of 34.1%

· Organic EBITDA up 7.9%(a)

· Ex-UNE, margin up 0.6% year-on-year, the third consecutive quarter of improvement

· Mobile customer base exceeds 60 million

· Cable footprint increases by 243,000 to 7.5 millio

Key financial indicators

$m   Q3 2015   Q3 2014   % change   9M 2015   9M 2014   % change
Revenue 1,641 1,675 -2 5,054 4,527 11.6
Organic revenue growth (a) 7.20% 8.60% 8.60% 8.70%
EBITDA 560 549 2.1 1,687 1,506 12
EBITDA margin 34.10% 32.80% 1.3 ppt 33.40% 33.30% 0.1 ppt
Capex 351 311 12.8 831 841 -1.3
Net debt 4,268 4,187 1.9 4,268 4,187 1.9
Adjusted EPS ($) (b) 0.17 0.79 -78 0.38 1.41 -72.8

· Latam: Reported revenue declined 1.4% to $1,400 million mainly due to currency movements and lower growth from mobile handset sales in Colombia. Organic revenue grew 6.2%. EBITDA was $561 million, 0.6% higher than Q3 2014. Excluding currency movements, EBITDA grew 3.8% year-on-year. Mobile data and Cable were again the main growth drivers with revenue growth of 38% and 25% respectively. Smartphone adoption increased 3.3 percentage points in the quarter to 46.2% and demand for fixed broadband and DTH both grew at a healthy pace.

· Africa: Currency also affected Africa where reported revenue fell 5.3% to $241 million. Adjusting for currency movements, organic revenue grew by 11.9% which was 3.8% higher than Q2 2015. EBITDA was $48 million, a year-on-year fall of 12.0% largely due to stronger currency movements in Tanzania and Ghana plus continued difficult trading conditions in Chad. Excluding currency movements EBITDA grew by 9.6%.

· Corporate Costs: Reduction in corporate costs to $50 million compared to $55 million in Q2 and $59 million in Q1.

(a)Organic growth represents year-on year-growth in local currency (includes regulatory changes, excludes the impact of exchange rate changes and excludes UNE)

(b) Basic EPS adjusted for non-operating items see page 14 for reconciliation

CEO’s Statement

Major milestones - Mobile reaches 60 million whilst Cable passes 7.5 million homes

Stockholm, 22 October 2015

“The third quarter saw increased currency volatility across many emerging markets. We experienced significant currency devaluations in some of our key markets such as Colombia, Paraguay and Tanzania. However we made some solid progress in converting our potential into profitable growth. Whilst reported revenue was down 2.0% in US dollars the underlying organic growth was 7.2%. EBITDA grew 2.1% in US dollars and 7.9% on an organic basis.

A major milestone was reached in Q3 when we passed the 60 million mobile customers. Furthermore our brand tracker confirms our brand’s increasing strength and affinity: Tigo is going from strength to strength, bringing the internet to new customers, driving smartphone penetration and increasing data consumption. Since the start of the year, we have added nearly 4 million new mobile customers.

I am also pleased with the progress we are making in Home, our pay-TV, fixed broadband and telephony business. We are bringing the digital lifestyle into customers’ homes. Our target is to reach 10 million homes in the medium term. This quarter, we delivered an accelerated cable build-out with 304,000 new homes passed in HFC, nearly tripling that of the second quarter. We continued to add new customers at a strong rate across our DTH and cable footprint with pay-TV contributing most to the growth. One of our core strengths continues to be our ability to provide relevant local content for customers. In Colombia we now offer the local football league (“DIMAYOR”) on our fixed network and exclusively on mobile via the Tigo Sports app.

This quarter, we saw mixed results from Colombia. On the one hand, the UNE cable business accelerated its revenue growth based on higher average revenue per line whilst good results from the integration plan were achieved. The Tigo mobile business on the other hand continued to see a more challenging environment and organic revenue growth slowed to 9% on changing consumer behaviour and price competition.

In Africa, we have strengthened the management team with the appointment of Cynthia Gordon, as Africa Division CEO. We have begun the roll out of a new brand awareness programme across all our African markets to attract more digitally active customers, increase smartphone sales and drive data penetration. Tanzania is on the verge of a major milestone as it reaches 10 million customers and the World Bank recently recognized the country as the global leader in mobile financial services, recognizing Tigo’s contribution to this achievement.

As we grow, we have also continued to develop our social responsibility strategy. In September we led the industry in creating a joint declaration to champion Child Online Protection, hosting events in El Salvador and Costa Rica in collaboration with UNICEF.

Looking towards the end of the year, we expect external market conditions to become more challenging. Whilst we have not seen any significant slowdown in the demand for our products and services as a result of currency volatility we saw over the summer, GDP growth forecasts were dampened across many of the countries we operate in. We therefore remain focussed on protecting margins and improving cashflow generation. In this respect I am pleased to note that corporate costs have declined for the fifth consecutive quarter. Further as a result of our actions, whilst we don’t have full visibility on the revenue growth because of currency volatility, we are comfortable with the EBITDA guidance range we provided in July and now expect capital expenditure to be at the lower end of the guidance range.

In addition, as noted in the press release we issued yesterday, we have self-reported to relevant authorities potential improper payments made on behalf of our joint-venture operations in Guatemala. We will cooperate fully with the authorities and are dedicated to ensuring that we resolve this matter as swiftly as possible and in the most appropriate manner. While we cannot speculate as to the possible outcome or the potential impact on our business, we are currently thoroughly reviewing and assessing strategic options and have initiated a thorough external review of our compliance program, supported by the Executive Committee and our Compliance and Business Ethics team, to further strengthen the practices we already have in place.”

Mauricio Ramos

CEO, Millicom International Cellular S.A.

2015 guidance

In July, we rebased the guidance(1) provided in February 2015 to reflect the impact of devaluation in the currency basket. No further changes to guidance have been made despite further significant currency volatility. With the exception of currency impact, the group’s guidance remains unchanged:

Guidance with FX rates prevailing in July 2015
Revenue   Between $6.8 and $7.2 billion
EBITDA Between $2.12 and $2.26 billion
Capex (2) Between $1.25 and $1.35 billion

(1) At constant foreign exchange rates and constant perimeter. July guidance rebased revenue from $7.1 billion to $7.5 billion and EBITDA from $2.20 billion to $2.35 billion. Capex remains unchanged as most capex is in US dollars.

(2) Capex excludes spectrum and license cost.

Honduras & Guatemala call and put options

No agreements have been made with our partners in Honduras and Guatemala to extend the call and put options. It is now the Board’s view that both these options will expire on 31 December 2015 unexercised. One consequence of the lapse and non-renewal is that under IFRS 10 and 11 we will be required to account for the group’s operations in Honduras and Guatemala as joint ventures from 31 December 2015.

This would require Millicom’s 66.7% investment in Honduras and 55% investment in Guatemala to be revalued to fair value.

The deconsolidation of Honduras and Guatemala would have minimal impact on the Group’s net income, dividends, and covenant compliance. See additional information on page 16 and in the IAS 34 statements.

UNE purchase price allocation (“PPA”) adjustment

During the three month period ended 30 September 2015, the purchase accounting for the acquisition of UNE was finalised. Compared to the provisional values recorded on date of acquisition, the property, plant and equipment was revalued to $1,571 million (from $1,417 million), mainly as a result of the reassessment of economic lives of the network and recognition of assets under finance leases. At acquisition date, finance lease liabilities of $118 million were recorded ($71 million at 30 September 2015), provisions of $18 million related to onerous contracts of the 4G business, and deferred tax liabilities of $9 million related to the fair value adjustments. Goodwill increased by $10 million. The effects of the above mentioned adjustments and related to the first and second quarter of 2015 were an $8 million increase in the EBITDA of this quarter.

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 22October 2015. Dial-in numbers: + 46 (0) 858 536965, + 352 342 080 8654, + 44 203 427 1904, +1 718 971 5738. Access code: 3892654

A live audio stream of the conference call can also be accessed at 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

Significant events of the quarter

Corporate news

19 Aug Tigo and WorldRemit enable easy 2015: international money transfers for the Tanzanian diaspora

26 Aug Millicom appoints Cynthia Gordon as EVP, CEO 2015: Africa Division

Business news

30 Jul 2015: Tigo El Salvador awarded "Best Mobile Service for Financial Inclusion 2015"

11 Sep 2015: Tigo DRC launched free Facebook campaign

21 Sep 2015: Agreement on the deployment of TiVo products on our pay-TV platform in Latam

22 Sep 2015: Tigo Business forum in Guatemala with 1,300 business leaders

23 Sep 2015: UNE and Tigo ranked respectively 8th and 10th most valued brand in Colombia

28 Sep 2015: TigoSports app launched in Colombia

Financial news

21 Jul 2015: Q2 15 results

31 Jul 2015: Successful completion of consent solicitation on 2020 and 2021 US$ bonds

Subsequent events

6 Oct 2015: New Nomination Committee is announced

6 Oct 2015: Millicom receives a 24% stake in leading African towers company (HTA)

19 Oct 2015: Tigo launches online remittance service in UK, European Union and Canada

20 Oct 2015: Tigo Rwanda is first to offer customers 4G internet accessible on all enabled smartphones

20 Oct 2015: Mobile licence renewed in Bolivia for 15 years

21 Oct 2015: Millicom reports to authorities potential improper payments on behalf of its Guatemalan joint venture


10 Feb 2016: FY 2015 results

26 Apr 2016: Q1 2016 results

13 May 2016: 2015 AGM

Risks and uncertainty factors

Millicom operates in a dynamic industry characterized by rapid evolution in technology, consumer demand, and business opportunities. Combine 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 ( 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 60 million customers. Founded in 1990, Millicom International Cellular SA is headquartered in Luxembourg and listed on NASDAQ OMX Stockholm under the symbol MIC. In 2014, Millicom generated revenue of USD 6.4 billion and EBITDA of USD 2.1 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.

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Press Enquiries
Tabitha Aldrich-Smith, Interim Communications Director
Tel: +352 277 59084 (Luxembourg) / +44 7971 919 610 /
Investor Relations
Nicolas Didio, Director, Head of Investor Relations
Tel: +352 277 59125 (Luxembourg) / +44 203 249 2220 /


Press Enquiries
Tabitha Aldrich-Smith, Interim Communications Director
Tel: +352 277 59084 (Luxembourg) / +44 7971 919 610 /
Investor Relations
Nicolas Didio, Director, Head of Investor Relations
Tel: +352 277 59125 (Luxembourg) / +44 203 249 2220 /