Millicom International Cellular S.A. · NASDAQ:TIGO
Millicom International Cellular — Investor Day (November 2009)
21 slides from Millicom International Cellular's investor day presentation, Nov 4, 2009
Slide 1: Millicom International Cellular S.A.
Millicom International Cellular S.A. Mikael Grahne President and CEO Kinnevik Capital Markets Day 4 November 2009
Slide 2: Overview
: : Overview Millicom: • is a leading operator of mobile telephony services in emerging markets with 31m customers • operates in 13 countries with 260 million potential customers under license • has strong market positions having successfully grown its market share through investment • offers mainly
Slide 3: Agenda
: : Agenda • Where are we today? • Where are our markets going and how do we address them? • Cash flow and investment plans
Slide 4: Proven track record of profitable growth in emerging markets
: : Proven track record of profitable growth in emerging markets 3,500 Revenue EBITDA 3,000 US $ (millions) 2,500 2,000 43.4% 1,500 42.8% 1,000 46.1% 48.4% 500 47.5% 0 2004 2005 2006 2007 2008
Slide 5: Strong market share evolution
: : Strong market share evolution 30.0% Market share (%) MIC Total 28.7% 29.0% 28.0% 27.0% 26.0% 25.0% 24.0% 23.0% 22.0% 21.0% 20.0% Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
Slide 6: Where are we today? Number 1 and 2 market positions are key
: : Where are we today? Guatemala El Salvador Senegal Chad 1 of 3 1 of 5 2 of 3 2 of 2 Rwanda New entrant Colombia 3 of 3 Honduras 1 of 4 Ghana Mauritius Bolivia 2 of 5 2 of 3 2 of 3 DRC Tanzania Paraguay 3 of 6 2 of 6 1 of 4 Number 1 and 2 market positions are key to profitability
Slide 7: Q3 highlights
: : Q3 highlights • No improvement of trading conditions • 9% underlying constant currency revenue growth, slight recovery in foreign exchange • VAS/3G revenue +46% YoY • Focus on ARPU/value/quality rather than quantity of customers • Market share growing strongly: +0.8 percentage points • EBITDA ma
Slide 8: Where are our markets going? Voice penetration
: : Where are our markets going? Voice penetration Latam tomorrow? Africa tomorrow? Latam today Pen etratio n Africa today Time Africa voice penetration prospects are very significant, although Latam’s are lower
Slide 9: Where are our markets going? Broadband penetration
: : Where are our markets going? Current barriers to Broadband penetration mass penetration: Significant long device costs and term potential infrastructure P e ne tra tion Latam and Africa today Time Huge potential for broadband in all our markets. The barriers will be overcome, as they were for vo
Slide 10: Where are our markets going? New services
: : Where are our markets going? New services In developed economies, there are multiple, efficient routes to market
Slide 11: Where are our markets going? New services
: : Where are our markets going? New services But our markets are very different
Slide 12: Mobile will be the primary distribution platform
: : In many of our markets, mobile will be the primary distribution platform A huge long term opportunity
Slide 13: How do we position Millicom to capitalise on growth opportunities?
: : How do we position Millicom to continue to capitalise on these growth opportunities? • Two important initiatives: • New commercial organization structure supporting clearly defined product categories • New innovation teams
Slide 14: Product categories and strategic focus
: : Product categories and strategic focus Communication: access to peers Voice calls, P2P SMS, roaming Information: access to database Internet access, Info SMS Dedicated category managers Entertainment: access to content Music, video downloads, Mobile TV Solutions: access to services Insurance, ba
Slide 15: Innovation teams for the next leg of growth
: : Innovation teams for the next leg of growth Latam Africa Based Miami Dubai Headed by Miguel Garay Percy Grundy “Father” of VAS Experience Country GM Country GM • Dedicated budget for 2010 • Senior leadership • Ambitious goals: largest growth factor in 2010 • Proven execution capability
Slide 16: Innovation is already a big part of our business
: : Innovation is already a big part of our business 20% 18% 16% 14% 12% 10% 19% 8% 6% 13% 10% 4% 8% 2% 5% 2% 0% 2004 2005 2006 2007 2008 2009 VAS as % of recurring revenue
Slide 17: …and a significant revenue growth factor
: : …and a significant revenue growth factor 30% 25% 20% 15% 28% 10% 13% 13% 5% 10% 0% 2005 2006 2007 2008 VAS as % of total growth in recurring revenues VAS growth represented over a quarter of our total recurring revenue growth in 2008, and will make an even greater contribution to growth in 2009
Slide 18: Becoming strongly cash generative
: : Becoming strongly cash generative Free Cash Flow (US$m)* 150 108 100 69 59 50 1 0 (50) (100) (101) (150) Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 * EBITDA - Capex +/- WC- Interests - Taxes - Corporate costs Increasing Free Cash Flow: 14.4% of revenues in Q3 09 18
Slide 19: Disposal of Asia
: : Disposal of Asia US$m Enterprise Multiple Equity Buyer Status value 2009 Value 100% EBITDA Cambodia 605 7.1 346 Royal Group signed Sri Lanka 207 7.4 155 Etisalat completed Laos 102 7.5 65 Vimpelcom signed Total Asia 914 7.2 566 weighted 19
Slide 20: Uses of cash
: : Uses of cash Low gearing Strong financial Strong cash generation position Asian disposal proceeds OPTIONS: Pursue external growth opportunities, subject to returns criteria Not mutually exclusive – a Redeem HY bond combination of all three is possible Return funds to shareholders
Slide 21: Thank You!
Thank You!
Millicom International Cellular — Investor Day (November 2009) on 6ix