Millicom(US:TIGO)2022-07-30 21:14Financial Data and Key Metrics Changes - Service revenue reached $1.3 billion, up 39% year-on-year due to the Guatemala acquisition; organic growth was 4.5% [18] - EBITDA was $577 million, up 68% year-on-year due to the consolidation of Guatemala; organically, EBITDA grew 4.6% [21] - Operating cash flow (OCF) more than doubled to $322 million in Q2, with organic OCF down less than 1% [24] Business Line Data and Key Metrics Changes - Mobile business grew almost 5%, with postpaid contributing significantly, growing 9% year-on-year [18] - B2B service revenue accelerated to over 5%, with every country contributing to the strong performance [13] - Home business grew 3.5%, slightly below expectations due to a shift to broadband-only subscriptions and increased price competition [7] Market Data and Key Metrics Changes - Colombia led service revenue growth at 8.5%, driven by mobile business growth of nearly 18% [19] - El Salvador and Nicaragua maintained strong momentum with approximately 7% growth [20] - Guatemala showed 1% growth, with positive signs in handset sales growing over 20% [21] Company Strategy and Development Direction - The company is focused on creating separate entities for its infrastructure and fintech assets to unlock value [4] - Plans to invest around $1 billion annually in CapEx, with no expected spike due to 5G investments [40] - The company aims to grow organic operating cash flow by about 10% on average over the next three years [10] Management's Comments on Operating Environment and Future Outlook - Management remains confident in delivering on commitments despite macroeconomic challenges, including inflation and potential recession risks [3] - The company expects to generate cumulative equity free cash flow of $800 million to $1 billion over the next three years [4] - Management highlighted resilience in cash flow generation, even amid rising inflation and currency volatility [22] Other Important Information - The company completed a rights offering to fund the Guatemala transaction and repaid a $450 million bridge loan [25] - The company is cooperating with a Department of Justice subpoena received in April, emphasizing its commitment to compliance [45] Q&A Session All Questions and Answers Question: Cash flow outlook for H2 - Management confirmed strong OCF growth expected in H2, with incremental OCF anticipated to positively impact equity free cash flow levels [33][34] Question: CapEx and 5G investment cycle - Management indicated no significant CapEx spike expected due to 5G, with ongoing investments within the $1 billion annual CapEx envelope [39][40] Question: Update on DOJ subpoena - Management stated they are cooperating fully with the DOJ regarding the subpoena received in April, with no further developments to report [45] Question: Impact of inflation and competition in Colombia - Management expressed confidence in Colombia's performance despite inflation and competition, citing strategic shifts and new market access [46][50] Question: Changes in Bolivia's commercial strategy - Management clarified that the loss of prepaid subscribers in Bolivia was a strategic decision to focus on higher ARPU customers [53] Question: B2B growth drivers - Management noted broad-based growth in B2B across all countries, driven by cloud and digital services, particularly in the SME sector [56][60]