Millicom International Cellular S.A.’s Q4 and FY 2015 Results

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We announce the results of the fourth quarter and highlight our achievements for the full year ended December 31, 2015, as we continue to connect new customers to the internet, drive smartphone penetration and grow our cable footprint.

The fourth quarter delivered organic service revenue growth at 6%. Like most multinationals operating in emerging markets, our topline performance has been marred by the impact of currency depreciation and weakening economies but we are resilient and this remains a very creditable performance.

2015 was a good year operationally, as we focused on profitable and responsible growth, combined with efficiency measures to enhance margins and improve cash flow. Adjusting for adverse currency movements we were in the lower end of our guidance range on revenue but in the top half of our range on EBITDA. I am particularly pleased that we started to increase margins in 2015 with the Adjusted EBITDA margin improving by 0.7% to 33.7%. I am also very pleased with our improved equity free cash flow metrics, which saw a material improvement year-on-year. Improving our cash flow further in 2016 is a major focus for the Group through a combination of improving margins and lower capital expenditure to further reinforce the balance sheet.

We are delivering on our ambitious plans for Latin America. Tigo-UNE in Colombia is a clear success story in an increasingly competitive market. Across the wider region, we have seen volatile currencies, slowing growth rates and softened consumer spending. However the appetite for smartphone adoption remains strong and a significant contributor to the Group, driving Q4 data growth up 30% year-on-year, whilst the rapid expansion of our cable footprint has seen the fixed Home business outperform strongly, growing 18% in the quarter.

We have a clear operational roadmap for 2016 aimed at achieving a leadership role in fixed-mobile services. Looking ahead, highlights will include rolling out 4G in Paraguay, satellite pay-TV launch in Colombia and the introduction of Tivo across all our Latin American countries. We will also continue to emphasize Tigo Business, customer acquisition and leading the mobile financial services industry with further product innovation.

In Africa, we are employing stringent capital allocation disciplines. We have sold the DRC business and in 2016 we intend to deliver a significantly improved cash profile from this region. To that end we believe that rationalization is beneficial both to customers and key to the development of the market. In 2016, we intend to deliver a significantly improved cash profile from the Africa businesses. To that end we have rapidly restructured the regional leadership and country operations in order to accelerate growth in the core business and mitigate challenges in the macro economy.

In 2015, we made good progress in aligning employee resource in several markets and tightening our internal controls and processes. We expect uncertainty to continue to prevail in emerging market economies in 2016, which is why we will continue to strengthen the fundamentals of our business whilst continuing our focus on improving cash flow further. Our capital structure is in good shape with a long average maturity on our debt, significant local currency borrowing, and we have a line of sight to reduce leverage. Cash generation is set to improve in 2016 aided by an improvement in EBITDA and reduction in capex plus disciplined capital allocation to divest or improve underperforming businesses.

We have the right strategy and market positions to support our ambitions. Our Digital Lifestyle strategy, which we redefined in 2015, is simple: expand our cable footprint and improve data monetization. This will form a sound basis on which to drive the business forward in 2016.”

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