Millicom(US:TIGO)2023-02-10 20:04Financial Data and Key Metrics Changes - Organic operating cash flow (OCF) growth was strong at 8.4%, with equity free cash flow totaling $171 million, consistent with company plans [4] - Service revenue increased by 2.3% in Q4 and 3.5% for the full year, with growth slowing in the second half due to macroeconomic conditions [5][13] - EBITDA for Q4 was $548 million, up 19% year-on-year, primarily due to the consolidation of Guatemala, while organic EBITDA grew by 1.8% [14] - Net debt decreased by $1 billion in 2022, ending the year at $5.8 billion, with a net debt to EBITDA ratio of 2.94x [18] Business Line Data and Key Metrics Changes - The mobile business grew over 3% for the year, driven by postpaid subscribers, which saw a 9% service revenue growth [6] - B2B service revenue grew more than 5% in 2022, accelerating from 1% in 2021, with a strong pipeline of new projects [26] - Home broadband experienced softer growth due to a shift in demand back to offices and a challenging macroeconomic environment [27] Market Data and Key Metrics Changes - Colombia's mobile service revenue grew by 15%, driven by a shift to postpaid and higher ARPU [8] - El Salvador and Nicaragua showed strong performance with service revenue growth of 7.5% and 5% respectively [35] - Bolivia's EBITDA declined by almost 12% due to regulatory changes and strikes affecting economic activity [95] Company Strategy and Development Direction - The company is focused on expanding its network and enhancing content offerings, including a deal with ViX for sports content [7] - Project Everest aims to achieve over $100 million in annual savings by the end of 2024, enhancing operational efficiency across all business areas [64][38] - The company plans to continue implementing price increases to catch up with inflation and improve ARPU [93] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of inflation and macroeconomic challenges but expressed confidence in the company's ability to execute plans and deliver results [24] - The company remains optimistic about long-term growth potential in residential broadband despite short-term challenges [27] - Management highlighted the importance of maintaining market share and competitive positioning in Guatemala and other key markets [69] Other Important Information - The company has made significant progress in its tower company carve-out, expecting the transaction to complete by the end of the year [11] - The company is actively monitoring macroeconomic conditions, with inflation peaking at 8.5% in July and falling to about 8% by December [12] Q&A Session Summary Question: What are the key levers for further free cash flow acceleration into next year? - Management indicated that price increases and Project Everest will be significant contributors to achieving the target of 10% organic OCF growth over the next three years [21] Question: Can you provide additional color on the competitive environment in the Guatemala mobile market? - Management noted that the competitive environment remains stable, with no significant deterioration in the prepaid market, allowing for sustained market share [69] Question: What is the company's stance on share buybacks in 2023? - Management confirmed that while share buybacks remain an ambition, the immediate focus will be on deleveraging and paying down debt due to the current economic environment [60] Question: How is the company managing pricing in different markets amid inflation? - Management acknowledged the challenges of passing on inflation to customers but emphasized ongoing efforts to adjust pricing strategies across various segments [86]