Millicom (NASDAQ:MICC) (STO:MIC)
Key highlights of FY 2014
· Revenue of $6.39 billion, up 14.9%
· Excluding UNE, Group revenue of $5.89 billion - organic
growth(a) of 9.4%
· EBITDA at $2,093 million – margin at 32.8%
· Excluding UNE, EBITDA of $1,960 million – 33.3% margin
· Capex of $1,294 million
· Capex / sales of 19.0% (b)
· Adjusted EPS of $1.82
· Net debt of $4.0 billion
· Net debt / EBITDA at 1.9x
· Board to propose a dividend of $2.64 per share
Key highlights of Q4 2014
· Strong revenue growth of 27.0% to $1,860 million
· Excluding UNE, Group revenue of $1,544 million - organic
growth(a) of 10.8%
· Service revenue growth of 5.7%
· EBITDA at $588 million – 31.6% margin
· Excluding UNE, EBITDA of $507 million – 32.8% margin
· A very strong fourth-quarter commercial performance:
· 2.3 million mobile net additions(c)
· More than 1.6 million smartphones sold
· Mobile data penetration increases to 27.1%
Key financial indicators(d)
$m
Q4 2014(e) Q4 2013(f) %
change FY 2014 FY 2013(f)
% change Revenue 1,860 1,464 27.00% 6,386 5,553
14.90% Organic revenue growth(a) 10.80% 8.20% - 9.40% 5.50% - Of
which UNE(g) 316 N/A - 498 N/A - EBITDA 588 500 18.40% 2,093 1,999
5.00% Of which UNE 81 N/A - 133 N/A - EBITDA margin 31.6% 34.10%
(2.5ppt) 32.80% 36.00% (3.2ppt) EBITDA margin excl. UNE 32.80%
34.10% (1.3ppt) 33.30% 36.00% (2.7ppt) Capex / sales ratio(b)
24.10% 33.50% (9.4ppt) 18.90% 19.90% (1.0ppt) Capex / sales excl.
UNE 24.90% 33.50% (8.7ppt) 19.00% 19.90% (0.9ppt) Adjusted EPS ($)
(h) 0.41 1.04 -60.60% 1.82 3.61 (49.6%)
(a) Organic growth represents year-on year-growth in local
currency (excludes the impact of exchange rate changes) and
excludes UNE
(b) Capex ratio excluding UNE, spectrum and licenses
(c) Excluding 244,000 mobile users at UNE
(d) FY 2014 includes UNE from 14th August. Q4 2013 and FY 2013
do not include UNE
(e) Millicom fully consolidates UNE
(f) Proforma to reflect full consolidation of Guatemala, and
equity accounting for Mauritius and Online
(g) Net of eliminations
(h) Basic EPS adjusted for non-operating items see page 19 for
reconciliation
President’s Statement
A year of transformation and progress
Stockholm, 3rd February 2015
“2014 was a year of transformation and rapid progress in
executing the digital lifestyle strategy but trading conditions in
emerging markets weakened in the fourth quarter. We saw currencies
decline in a number of our countries, particularly Colombia.
Despite this, we delivered a strong Q4, with revenue growing at an
underlying rate of 10.8% - the highest quarterly rate in the
year.
This growth is a direct result of the digital lifestyle strategy
we began in 2012 and the last quarter has been the most successful
to date. Smartphone sales in Q4 exceeded 1.6 million, a further 1.5
million customers became users of our mobile financial services and
we surpassed five million revenue generating units in our cable
business in Latin America.
The merger with UNE in Colombia was the highlight of 2014. We
also launched Tigo Star in Latin America, five satellite pay-TV
services and two Tigo Sports TV channels. Tigo Music came to Africa
after its stunning success in Latin America. 4G services launched
in Chad, Bolivia, Honduras and Rwanda. Our mobile money innovations
included interoperability, returns paid on accounts and
cross-border payments with currency conversion. These are strong
achievements.
We delivered organic revenue growth of 9.4% for the year, at the
top end of our guidance for 2014. Group EBITDA (excluding
UNE) was $1,960 million, ahead of our own targets. The phenomenal
growth and acceleration in smartphone sales through the year
diluted our EBITDA margin to below Group guidance, but the margin
as a percentage of recurring revenue - a better indicator of
overall group progress - was 36.5%. Capex was very much in line
with our guidance, resulting in operating free cash flow being
slightly better than our expectation at the start of the year.
UNE’s solid start in Q3 continued in Q4, adding $498 million to
revenue, which broadly in line with our guidance in local currency.
EBITDA of $133 million was comfortably ahead of guidance given at
the Capital Markets Day 2014 and an EBITDA margin of 26.7% was also
ahead of our expectations. The integration is proceeding rapidly
and we are well advanced in our plans to integrate the two
businesses.
Our drive into Cable continued to gain momentum in Q4. Cable
revenue has grown to 22% of group revenue and we expect to see that
trend continue. The popularity of our satellite services (DTH),
maintained its momentum and we expect more to come. We now pass
over 5.6 million households with our cable network and we have over
2.6 million households connected. Close to 40% of our cable
customers are enjoying the digital lifestyle with digital TV.
2014 was a year of very strong smartphone adoption, with close
to thirteen million users by year-end, an annual growth rate of
94%. Smartphone penetration has reached 24% and, crucially, growth
of data revenue continued to outpace the decline in SMS and in
voice in certain markets.
We have much to be proud of in 2014 and enter 2015 with
confidence. We are however mindful of the more difficult operating
environment so will sharpen our focus on effective cost management
to maintain the Group’s margins and so preserve and enhance cash
flow. Progress has been made in Q4 but we will continue to manage
the cost base aggressively. The Group leverage reached 1.9x at the
end of the year; our objective remains to reduce it towards the
middle of our target range of 1.0-2.0x. We expect to increase
revenue in 2015 to between $7.1 billion and $7.5 billion,
which will generate an EBITDA of between $2.20 billion and
$2.35 billion. We remain confident in the execution of the
strategy towards our 2017 targets.”
Tim Pennington
Interim CEO
Millicom International Cellular S.A.
2015 Guidance
Millicom guidance(1) for 2015 is:
Revenue: between $7.1 and $7.5 billion
EBITDA: between $2.20 and $2.35 billion
Capex(2): between $1.25 and $1.35 billion
(1) At constant foreign exchange rates and constant
perimeter.
(2) Capex excludes spectrum and licence costs.
Shareholder remuneration
The Board will propose to the AGM to be convened on 15th May
2015, the payment of a 2014 ordinary dividend of $2.64 per
share.
We reiterate our dividend policy for no less than $2 per share,
and at least 30% of adjusted net profit(a).
We continue to have the ambition to progressively grow ordinary
dividends. However our immediate priority will be on reducing Group
leverage towards the middle of our target range of 1.0-2.0x Net
Debt/EBITDA.
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 Tuesday 3rd February 2015.
Dial-in numbers: + 46 (0) 850 336 539, + 352 342 080 8654, + 44 203
427 1916, + 1 212 444 0481. Access code: 772338
A live audio stream of the conference call can also be accessed
at www.millicom.com. 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
www.millicom.com.
Risks and uncertainty factors
Millicom operates in a dynamic industry characterized by rapid
evolution in technology, consumer demand, and business
opportunities. Combine with a focus on emerging markets in various
geographic locations, 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 2013 Annual
Report
(http://www.millicom.com/media/427498/Millicom_Annual_Report_2013.pdf).
(a) Adjusted net profit is defined as reported net profit
excluding non-operating items including changes in carrying value
of put and call options, revaluation of previously held interests
and similar items classified under ‘other non-operating income
(expenses)’.
Significant events of the quarter
Corporate news
1st Oct 2014: Uche Ofodile nominated Tigo DRC General
Manager
2nd Dec 2014: Hans-Holger Albrecht to step down as CEO of
Millicom
10th Dec 2014: Anders Borg to be nominated to Millicom board
22nd Dec 2014: Millicom’s Costa Rica subsidiary announces
agreement for the acquisition of Telecable
Business news
22nd Oct 2014: Millicom to drive data take up with smartapps
22nd Oct 2014: Millicom partners with Deezer for Tigo Music in
Africa
29th Oct 2014: Millicom Foundation launches to support digital
innovators in emerging markets
26th Nov 2014: Tigo Sports launches in Bolivia
3rd Dec 2014: Millicom supports African Union fight against
Ebola
11th Dec 2014: UNICEF and Millicom team up for a safer Internet
world for children
Financial news
22nd Oct 2014: Publication of Q3 results
Subsequent events
On the 9th of January 2015, Fitch affirmed Millicom’s rating at
BB+ with a stable Outlook.
Agenda
22nd April 2015: Q1 2015 results
15th May 2015: 2014 AGM
21st July 2015: Q2 2015 results
22nd Oct 2015: Q3 2015 results
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 56 million customers. Founded in 1990, Millicom
International Cellular SA is headquartered in Luxembourg and listed
on NASDAQ OMX Stockholm under the symbol MIC. In 2014, Millicom
generated revenue of USD 6.4 billion and EBITDA of USD 2.1
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.
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.
This information was brought to you by Cision
http://news.cision.com
Millicom International CellularPressJulian EcclesVP, Corporate
CommunicationsTel: +352 277 59084 (Luxembourg) / +44 7720 409
374press@millicom.comorMillicom International CellularInvestor
RelationsNicolas DidioDirector, Head of Investor RelationsTel: +352
277 59125 (Luxembourg) / +44 203 249 2220investors@millicom.com
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