Millicom(TIGO) - 2021 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported double-digit growth in service revenue and EBITDA for Q2 2021, with service revenue up more than 3% and EBITDA up more than 4% compared to Q2 2019 on an organic basis [6][8]. - EBITDA grew by 14% year on year, driven by increased revenues, with a notable increase in sales and marketing expenses [32][34]. - The overall LatAm EBITDA margin was over 40% in Q2 2021, higher than the previous year [34]. Business Line Data and Key Metrics Changes - The home or cable business grew by 15% year on year, adding over 100,000 new HFC customer relationships for the fourth consecutive quarter, totaling 4 million home customers [11][12]. - The mobile business also saw double-digit growth, with a record number of postpaid net additions, particularly in Colombia [7][19]. - B2B services returned to positive growth, driven by strong demand for digital solutions [6][7]. Market Data and Key Metrics Changes - All markets experienced growth in Q2 2021, with El Salvador achieving a remarkable 21% growth driven by mobile results [17]. - Colombia added a record 220,000 postpaid customers, with a year-on-year increase of 26% in the postpaid customer base [19]. - Nicaragua's revenue grew double digits, with EBITDA up 20% year on year [25]. Company Strategy and Development Direction - The company is focused on increasing its customer base and market share, particularly in Colombia, where it aims to leverage its improved network and commercial distribution [42][44]. - There is a strategic emphasis on investing in network upgrades and expanding coverage, particularly in the home and mobile segments [43][44]. - The company plans to continue its share buyback program, indicating confidence in its operational and financial performance [40][44]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of economic activity in Central America, with GDP growth forecasts of 3% to 5% for most countries [27]. - Despite ongoing challenges from COVID-19, the company does not anticipate a return to severe mobility restrictions, which supports a positive outlook for growth [29][98]. - The company is confident in its ability to manage through the pandemic, having demonstrated resilience in cash flows and customer acquisition [98]. Other Important Information - The company plans to increase capital expenditures by $100 to $200 million in 2021 compared to the previous year, funded by higher EBITDA [36][38]. - Net debt was reduced by $224 million, with leverage decreasing to 2.7 times [39]. Q&A Session All Questions and Answers Question: Outlook for margins in Colombia and performance in Bolivia - Management is pleased with the results in Colombia, focusing on volume growth despite lower margins, and expects Bolivia to return to pre-COVID levels soon [48][50]. Question: Network coverage in Colombia and cable investments - The company has the best network in Colombia and is focused on increasing coverage where it matters, while also expanding cable networks [60][62]. Question: Growth in Guatemala and potential for buyback limits - Guatemala's growth is attributed to a well-managed two-player market and network investments, with buyback limits potentially increasing if cash flow improves [79][82]. Question: B2B trends in Panama and future growth - Panama is positioned for growth as the economy recovers, with the company ready to capitalize on this opportunity [90][92]. Question: Operating cash flow and pandemic risks - The company is on track to meet its operating cash flow targets, with confidence in managing through the pandemic despite ongoing risks [93][98].