Millicom International Cellular S.A. · NASDAQ:TIGO
Millicom International Cellular — Investor Presentation (January 2009)
43 slides from Millicom International Cellular's investor presentation, January 2009
Slide 1: Millicom International Cellular S.A.
Millicom International Cellular S.A. Investor Presentation, January 2009
Slide 2: Diversified emerging market operator with a global footprint
Diversified emerging market operator with a global footprint... Amnet: 38m Guatemala 13m Central America: South America: Africa: Asia: Total pops El Salvador 7m 28 m 61 m 160 m 42 m under license: Honduras 8m 291 m Costa Rica 4m Nicaragua 6m Guatemala 13m El Salvador 7m Senegal 13m Chad 10m Laos 7m
Slide 3: Millicom: well positioned in attractive markets
Millicom: well positioned in attractive markets • Emerging market opportunity – Low penetration = high growth potential • Potential growth opportunities for Millicom – ‘Triple A’ business model – Strength of consumer brand ‘Tigo’ in voice market • Broadband opportunity • Efficient low cost operator
Slide 4: Low Telecom Penetration = High Growth Potential
Low Telecom Penetration = High Growth Potential 120% Wireless penetration* 100% 80% 60% 40% 20% 0% *Penetration rates for Millicom markets derived from Interconnect Figures shown in brackets : Country population Millicom well set to exploit J curve in penetration growth 4
Slide 5: Market share opportunity
Market share opportunity • Low market share in highly populated markets • ‘Triple A’ strategy outperforms competitors’ business models • Reaping benefit of past capex 100% 75% 50% 25% 0% 73m pops under license 218m pops under license 5
Slide 6: The Broadband Opportunity
The Broadband Opportunity • Customers in more mature markets showing strong demand for broadband services – Pyramid research has identified fixed broadband as fastest growing segment within communications sector in Latin America • Demand met with 3 pronged approach: 1. 3G – mobile broadband services
Slide 7: Amnet
Amnet Amnet footprint and Business overview subscribers • Amnet founded in 1997 • Owned by Michael Kazma and private MIC footprint New footprint investors • Amnet is leading Pay-TV service provider Guatemala Nicaragua Corporate Corporate Services in Central America Services – Leading provider of cab
Slide 8: Value Added Services (VAS)
Value Added Services (VAS) • Include SMS, Ring-Back tones, music downloads, Balance transfers etc • VAS revenues growing faster than voice revenues – VAS accounts for over 30% of recurring revenues in Paraguay • Moving subscribers up the value chain and increasing ‘share of wallet’ 8
Slide 9: Short term positioning ensuring long term prospects
Short term positioning... • Capex reduction – capex for 2008 to be slightly below $1.4bn – capex for 2009 to be around $1bn • Cash generation • Strong EBITDA margins and market share gains in 2008 • Managing currency translation effect – Data herein presented on constant exchange rate • Focus on exi
Slide 10: Capex peaks in 2008
Capex peaks in 2008 • Capex to sales ratio falls from 39% to mid teens in medium term • Continuing to reap benefits of past investment Capex of less than $1.5 bn proposed for 2008 2,631 2,700 1,500 2,600 2,500 1,400 2,400 2,300 1,300 2,200 1,200 2,100 2,000 1,100 1,900 Revenue US$m 1,800 1,576 1,000
Slide 11: Capex by Region vs. YoY Revenue Growth
Capex by Region vs. YoY Revenue Growth SAM CAM 35% CAM SAM 27% Q3 07 14% 27% Asia Africa Q3 08 6% Africa 32% Asia 48% 11% Revenue Growth Q3 07 to Q3 08 Central America 13% Capex shifting from South America 27% Latin America to Africa 55% Africa and Asia Asia 34% 11
Slide 12: Strong Balance Sheet
Strong Balance Sheet • Q3: $1 billion of cash • Net debt to EBITDA ˂ 1x • Cashflow positive in 2009 Well managed debt maturities - as at 30/9/08 (US$ ‘000) 700,000 600,000 500,000 400,000 10 % Notes* 300,000 200,000 100,000 0 within within within within within after 1 year 1-2 years 2-3 years 3-4 ye
Slide 13: Currency translation vs. $ masks better underlying performance
Currency translation vs. $ masks better underlying performance Q3 08 Revenue EBITDA US$’000 Reported numbers Q2 average Reported numbers Q2 average exchange rate exchange rate applied applied Central America 339,773 339,037 184,876 184,441 South America 273,418 276,857 96,596 94,802 Africa 189,226 1
Slide 14: Africa: The engine of growth
Click Focusto on addAfrica title Add Title The engine of growth 14
Slide 15: New market added in Africa
New market added in Africa • Millicom has won tender for 3rd national license in Rwanda • New JV created between Millicom (87.5%) and local company Marathon Corporation (12.5%) - paying US$ 60m for 15 year license • Attractive market characteristics: – A small and densely populated country with 10m
Slide 16: Africa's Growth Story – implementing Triple A strategy
Africa’s Growth Story – implementing Triple A strategy Affordability - Accessibility - Availability • Committed to bringing Africa to Millicom average margin 600,000 500,000 400,000 US $ ('000s) 300,000 200,000 100,000 0 2003 2004 2005 2006 2007 9m 2008 Revenue EBITDA 16
Slide 17: Africa – Millicom's fastest growing region
Africa – Millicom’s fastest growing region • 160 million people under license / 55% of Millicom’s potential market • Weighted average penetration of 18.5% • Seven countries: focus on leading positions • number 2 market position in Chad, Ghana, Mauritius and Senegal • number 3 in DRC and Tanzania • n
Slide 18: Africa – Capex and network expansion
Africa – Millicom’s fastest growing region Capex and network expansion in Africa USD (000’s) 386 340 264 111 Growth (%) Dec 06 – Sept 08 Cells Chad 280% DRC 214% Ghana 132% Mauritius 41% Senegal 107% Sierra Leone 102% Tanzania 106% 18
Slide 19: Network expansion in Ghana
Africa – Millicom’s fastest growing region Network expansion in Ghana 2006 2007 2008 Dec 06 Dec 07 Dec 08 No. of sites 390 703 1,320 Network capacity 31,292 56,932 142,299 19
Slide 20: Summary: attractive markets, strong balance sheet, positioning
• Well positioned in attractive markets • Strong balance sheet • Short term positioning ensuring long term prospects
Slide 21: Quarterly Results
Quarterly Results 21
Slide 22: Group Revenue, EBITDA and Total Subscribers by Cluster – Q3 2008
Group Revenue, EBITDA and Total Subscribers by Cluster – Q3 2008 Revenue EBITDA 8% 7% 17% 22% 39% 50% 26% 31% Total Subscribers 13% 35% 28% Central America South America Africa 24% Asia 22
Slide 23: Central America
Central America US$m Q3 08 Q3 07 Growth Revenues 340 300 13% EBITDA 185 161 15% EBITDA Margin 54% 54% Total Subscribers* 10,846 7,404 46% (‘000) * Total subscriber figures represent the total number of subscribers of mobile systems in which Millicom has an ownership interest 23
Slide 24: South America
South America US$m Q3 08 Q3 07 Growth Revenues 273 215 27% EBITDA 97 80 21% EBITDA Margin 35% 37% Total Subscribers* 7,192 5,305 36% (‘000) * Total subscriber figures represent the total number of subscribers of mobile systems in which Millicom has an ownership interest 24
Slide 25: Africa
Africa US$m Q3 08 Q3 07 Growth Revenues 189 122 55% EBITDA 62 34 85% EBITDA Margin 33% 28% Total Subscribers* 8,569 4,618 86% (‘000) * Total subscriber figures represent the total number of subscribers of mobile systems in which Millicom has an ownership interest 25
Slide 26: Asia
Asia US$m Q3 08 Q3 07 Growth Revenues 67 50 34% EBITDA 25 21 17% EBITDA Margin 38% 42% Total Subscribers* 3,981 2,625 52% (‘000) * Total subscriber figures represent the total number of subscribers of mobile systems in which Millicom has an ownership interest 26
Slide 27: Strong Underlying Growth for the Group
Strong Underlying Growth for the Group US$m Q3 08 Q3 07 Growth Revenues 869 686 27% EBITDA 369 296 25% EBITDA Margin 42% 43% Total Subscribers* (‘000) 30,588 19,952 53% Capex $m 328 354 -7% * Total subscriber figures represent the total number of subscribers of mobile systems in which Millicom has a
Slide 28: Strong Underlying Growth – Subscribers
Strong Underlying Growth Total Subscribers* ('000) Quarterly YoY Growth rate 33,000 100% 30,588 90% 28,000 28,451 80% 26,184 70% 23,000 23,355 60% 55% 19,952 59% 58% 18,000 56% 50% 53% 40% 13,000 30% 20% 8,000 10% 3,000 0% Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q3 2007 Growth rate excluding Colombi
Slide 29: Strong Underlying Growth – Revenues
Strong Underlying Growth Revenues (US$m) Quarterly YoY Growth rate 950 100% 850 90% 869 843 80% 750 801 768 70% 650 686 60% 550 50% 46% 40% 450 41% 42% 37% 30% 350 27% 20% 250 10% 150 0% Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q3 2007 Growth rate excluding Colombia 29
Slide 30: Strong Underlying Growth – EBITDA
Strong Underlying Growth EBITDA (US$m) Quarterly YoY Growth rate 400 90% 369 80% 350 352 336 70% 300 307 296 60% 250 50% 200 44% 40% 34% 36% 34% 30% 150 25% 20% 100 10% 50 0% Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q3 2007 Growth rate excluding Colombia 30
Slide 31: Appendices
Click to add title Appendices 31
Slide 32: Balance Sheet
Balance Sheet Asse ts Se p. 30 2008 De c. 31 2007 Equity & Liabilitie s Se p. 30 2008 De c. 31 2007 Non-curre nt asse ts Equity Intangible 412.8 467.5 Share capital & premium 642.5 417.4 Property, Plant and Equipment 2,654.2 2,066.1 Net profit for the period 451.3 697.1 Other non-current assets 135.
Slide 33: Quarterly Capex
Quarterly Capex 382 354 328 400 302 350 265 300 250 200 150 100 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Total Capex (USD m) 33
Slide 34: Quarterly Depreciation
Quarterly Depreciation 136 150 124 105 110 87 100 50 0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Total Depreciation (USD m) 34
Slide 35: Quarterly Debt
Quarterly Debt 1,834 1,827 1,805 1,900 1,735 1,800 1,642 1,700 1,600 1,500 1,400 1,300 1,200 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Total Debt (USD m) 35
Slide 36: Quarterly Interest expense
Quarterly Interest expense 72 80 70 31 60 44 42 43 42 50 40 41* 28 30 10% 10% 10% 20 9% 9% 14** 10 0 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Total Interest expense (USD m) Simple effective rate * Cost of early redemption of HY Bonds ** Due to change of estimate of HY notes early redemption costs 36
Slide 37: Q3 08 Market Overview – by Cluster
Q3 08 Market Overview – by Cluster Central South Millicom Clusters America America Africa Asia Total Market Overview Population (million)* 28 61 160 42 291 Mobile Penetration** 77.3% 76.1% 28.6% 26.9% 37.6% Operational Data Total Subscribers 10,846,076 7,191,863 8,568,926 3,980,685 30,587,550 Attrib
Slide 38: Market Overview – by Country (Latin America)
Market Overview – by Country Latin America Central America South America El Salvador Guatemala Honduras Bolivia Colombia Paraguay Shareholding 100.0% 55% (p) 66.7% (p) 100.0% 50% + 1 share 100.0% License Period (yrs) 20 yrs fr 1998 15 yrs fr 2003 25 yrs fr 1996 20 yrs fr 1995 10 yrs fr 2003 5 yrs re
Slide 39: Market Overview – by Country (Africa)
Market Overview – by Country Africa Chad DRC Ghana Mauritius Senegal Sierra Leone Tanzania Shareholding 87.5% 100.0% 100.0% 50% (p) 100.0% 100.0% 100.0% License Period (yrs) 10 yrs fr 2004 20 yrs fr 1997 15 yrs fr 2004 15 yrs fr 2000* 20 yrs fr 1998 15 yrs fr 2000 25 yrs fr 2007 Date of Expiry 2014
Slide 40: Market Overview – by Country (Asia)
Market Overview – by Country Asia Ca mbodia La os Sri La nka Shareholding 58.4% (p) 74.1% 100.0% License Period (yrs) 35 yrs from 1996 20 yrs from 2002 10 yrs fr 2008* Date of Expiry 2031 2022 2018 Marke t Overview Population (million) 14 7 21 GDP per pop (PPP) $ 1,800 1,900 4,100 Mobile Penetration
Slide 41: Amnet
Amnet Financial performance FYE 6mths US$’000 2005 2006 2007 30/6/2008 Income statement Revenue 80,294 121,259 142,875 79,617 Adjusted EBITDA* 34,807 48,592 65,381 36,307 EBITDA margin 43.3% 40.1% 45.8% 45.6% PBT -6,549 13,575 27,357 18,046 Tax -4,898 -5,395 -8,132 -4,758 PAT -11,447 8,180 19,225 13
Slide 42: Exchange Rate Analysis
Exchange Rate Analysis Average YTD Closing Exchange Rates per Dollar Sep-08 Sep-07 % var Sep-08 Sep-07 % var Bolivia/Boliviano 7.32 7.90 -7% 7.02 7.72 -9% Colombia/Peso 1897.87 2104.56 -10% 2190.70 2029.76 8% Ghana/Cedi 10459.27 9287.16 13% 11595.00 9523.81 22% Guatemala/Quetzal 7.56 7.71 -2% 7.47 7
Slide 43: Millicom International Cellular – forward-looking statements
This presentation may contain certain “forward-looking statements” with respect to Millicom’s expectations and plans, strategy, management’s objectives, future performance, costs, revenues, earnings and other trend information. It is important to note that Millicom’s actual results in the future cou
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