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 revenue(a) To grow mid-single digit To grow low to mid-single digit
Adjusted EBITDA(b) To grow mid to high-single digit To grow mid to high-single digit
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 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

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


25 Oct 2016:     Q3 16 results


Press Enquiries

Tabitha Aldrich-Smith, Interim Communications Director

Tel: +352 277 59084 (Luxembourg) / +44 7971 919 610 /

Investor Relations

Nicolas Didio, VP, Head of Investor Relations

Tel: +352 277 59125 (Luxembourg) / +44 203 249 2220 /

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 ( 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.


About Us

Millicom International Cellular S.A. is a global telecommunications group with mobile telephony operations in 14 countries in Latin America, Africa and Asia. It also operates cable and broadband businesses in five countries in Central America. The Group’s mobile operations have a combined population under license of approximately 267 million people.