Millicom sets $9 billion revenue target in 5 years
- Strategy highlights growth plans for mobile data, financial services, cable and e-commerce and services
- Millicom to benefit from rapid digital take-up in Latin America and Africa
Stockholm, March 6, 2013 – Millicom, the international telecommunications and media company (Stockholmsbörsen: MIC) unveiled today its strategy to grow revenues over five years to over $9 billion annually.
The growth opportunity:
The company has identified significant opportunities to grow over the next five years. Consumers in Africa and Latin America are increasingly adopting the digital lifestyle with demand for mobile internet, pay-TV and mobile payments rising strongly against a backdrop of growing per capita GDP and population numbers. So the company will focus on widening its portfolio of digital services and is uniquely well-placed in its emerging high-growth markets.
Millicom future built on five pillars:
The company outlined five pillars on which its future direction will rest:
- Mobile: As voice markets are increasingly mature, Millicom will focus on growing its data revenues on 3G and 4G, adding up to 18m new mobile date subscribers to 2017. As a result, revenues in the mobile area are expected to grow in the mid-single digits, leveraging Millicom's number one or two market position which it occupies in twelve of its thirteen markets. Consumers will increasingly be offered bundled services, adding digital products such as music and video. Between $900m to $1,300bn of revenue could be added in five years’ time.
- Mobile Financial Services (MFS): with over 80% of the population in its markets having no access to conventional retail banking, MFS volumes are forecast to grow by more than 40% annually until 2017. Millicom is well placed to capture rapidly growing consumer demand and already has a 10% share of the mobile financial services opportunity globally today. It is expected that $600m-$1bn in revenues could be added from these products by 2017.
- Broadband cable and TV: After successfully integrating cable acquisitions in Central and South America, Millicom will now push growth in its fixed line and TV presence in Latin America. In addition to the current negotiations in Colombia with UNE, Millicom aims to grow this business by driving product penetration levels, driving footprint build-out, and pursuing consolidation opportunities. Also, Millicom will evaluate selective launches of TV platforms via DTH or OTT. Including the potential combination in Colombia, revenues could increase in the range of $1.8bn-$2.6bn.
- Digital Commerce & Services: Following the investment into LIH and AIH with Rocket, Millicom will capture emerging digital opportunities in both Africa and Latin America through a newly-established unit. Focus will be on classifieds, mobile health and mobile learning applications, leveraging strong local market presence.
- Cost and capex optimisation: Millicom focus on cost optimisation should enable the company to save $100m in opex. The company’s growth plans will be supported by best-in-class cash generation. Capex will be strictly limited to reach 15% of revenues as early as 2016. Millicom will then target a capex/revenue ratio in line with its peer industry group.
Speaking at a company event, today in London, Hans-Holger Albrecht, Millicom President and CEO, said:
“Millicom is changing – fast. Our previous strategy served the company well, but we will now build on the core mobile offering to propel Millicom into an era where it becomes a digital lifestyle brand offering a diverse range of services to meet rapidly-changing customer needs in emerging markets. Millions more are set to enjoy the benefits of digital technology. Millicom stands ready to help them achieve this. With targeted investments, robust insight, a new organisational structure focussed on execution and an ambitious business plan, we look forward to a rapid transition to achieve renewed growth, sustainable profitability and strong shareholder returns over the next few years.”
Millicom’s Capital Markets Day 2013 event will be streamed live from 10.30am-17.00pm GMT at http://www.millicom.com/investors/investors.cfm. Further information provided at the event will also be published there.
For further information, please visit www.millicom.com or contact:
President and CEO
Hans Holger Albrecht
46 856 200 012
Julian Eccles, VP, Corporate Communications
44 7720 409374
Justine Dimovic, Director, Head of Investor Relations
352 27 759479
Millicom is a leading international telecommunications and media company dedicated to emerging markets in Latin America and Africa. Millicom sets the pace when it comes to providing digital lifestyle services to the world’s emerging markets, giving access to the world, primarily through mobile devices. Operating in 15 countries, Millicom offers innovative and customer-centric products. The Millicom Group employs more than 8,000 people and provides mobile services, access to the internet, content and financial services to over 45 million customers. Founded in 1990, Millicom International Cellular SA is headquartered in Luxembourg and listed on NASDAQ OMX Stockholm under the symbol MIC. In 2012, Millicom generated revenue of USD 4.81 billion and EBITDA of USD 2.07 billion.
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