MICC Millicom Intl Cell (MM)

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Millicom International Cellular (NASDAQ:MICC) (STO:MIC)

Key highlights of FY 2015

· A year of strong operational momentum

· Mobile subscriber base increased almost 6 million to 63 million in 2015 – 30% data penetration

· 7.6 million homes passed - 5.4 million RGU’s

· Revenue of $6.73 billion - organic growth(i) of 7.4%

· Adjusted EBITDA(ii) at $2.27 billion - organic growth of 9.2% and margin up by 0.7%

· Equity Free Cash Flow(iii) grows strongly to $235 million

· Year-end net debt at $4,295 million - in line with previous quarters

· Board to propose a dividend of $2.64 per share

Key highlights of Q4 2015

· 1.4 million new mobile data users; 143,000 new Home RGUs

· Revenue of $1.68 billion - organic service revenue up 5.9%(i) on mobile data and cable growth

· Adjusted EBITDA(ii) at $551 million - margin improvement of 0.9% on efficiency measures

· Disposal of DRC announced

Key financial indicators

$m

     

Q4 2015

     

Q4 2014

     

% change

     

FY 2015

     

FY 2014

     

% change

   

Revenue

1,677 1,860 -9.80% 6,730 6,386 5.40%

Organic growth

4.40% 10.80% 7.40% 9.40%

Adjusted EBITDA

551 595 -7.40% 2,266 2,110 7.40%

Adjusted EBITDA margin

32.90% 32.00% 33.70% 33.00%

Capex (iv)

443 449 -1.40% 1,273 1,206 5.50%

Net debt (v)

4,295 3,997 7.40%

Adjusted EPS ($) (vi)

-0.33 0.41 NM 0.05 1.82 NM

· Latam: Q4 reported organic revenue growth of 2.8% to $1,415 million reflecting some slowdown in Colombia and macro conditions in Paraguay. Service revenue slowed a little but still grew 4.4%. EBITDA was $513 million after $33 million one-off charges relating to Colombia integration costs and a bad debt charge.

· Africa: Q4 reported organic revenue growth of 13.4% to $258 million. EBITDA was $17 million after $26 million of restructuring and one-off items.

· Corporate costs: Reduction to $45 million compared to $50 million in Q3 15 and $63 million in Q4 14.

(i) Organic growth represents year-on year-growth in local currency (includes regulatory changes and UNE from Q4 15, excludes the impact of exchange rate changes). Service revenue is defined as Group revenue excluding telephone & equipment sales

(ii) Adjusted EBITDA is defined as reported EBITDA excluding restructuring and integration costs and other one-off items – See page 8 for reconciliation.

(iii) Excludes spectrum, licence costs

(iv) Balance sheet capital expenditure, excludes spectrum and license costs

(v) Guatemala and Honduras businesses fully consolidated

(vi) Basic EPS adjusted for non-operating items see page 16 for reconciliation

CEO’s Statement

#MonetizingData #BuildingCable

Luxembourg, 10 February 2016

“Today 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.”

Mauricio Ramos

CEO, Millicom

2015 financial year guidance delivered

Based on the guidance at constant currency and constant perimeter, 2015 revenue adjusted for currency was $7.2 billion in line with the $7.1 to $7.5 billion range set in February 2015. On the same basis, our reported EBITDA was $2.29 billion in line with the $2.20 to $2.35 billion range whilst our capex was $1.28 billion in line with the $1.25 to $1.35 billion range.

2016 outlook for improving cashflow

Basis       Outlook     Service revenue (a) To grow mid-single digit Adjusted EBITDA (b) To grow mid to high-single digit Capex (c) Between $1.15 and $1.25 billion

(a) Service revenue is Group revenue excluding telephone & equipment sales

(b) Adjusted EBITDA excludes restructuring and integration costs and other one-off items

(c) Capex excludes the impact of spectrum and licences costs

The outlook for 2016 is based on constant currency, at a constant perimeter with Guatemala and Honduras fully consolidated and on our current assessment of the emerging markets macroeconomic outlook. For service revenue this is a 2015 currency adjusted basis of $5.73 billion and for Adjusted EBITDA a currency adjusted basis of $2.09 billion.

Shareholder remuneration

At the AGM to be convened on 17th May 2016, the Board will propose an ordinary dividend payment 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(i).

Guatemala & Honduras

On 31 December 2015, the existing call options with local partners lapsed and under IFRS 10 and 11, Millicom deconsolidated its investments in Comcel (Guatemala) and Celtel (Honduras). This has resulted in a non-cash charge of $391 million, which is recorded under “Other non-operating items”.

From 31 December 2015 onwards, Millicom will account for its investments in Comcel and Celtel under the equity method and thus will report its share of the net income of each of these businesses in the income statement in the caption “Income (loss) from joint ventures” starting 1 January 2016. For the purpose of comparison and to provide users of this report a full understanding of the financial condition of the Group, the financial information presented in this earnings release is and will continue to be on a pro forma basis as if the Honduran and Guatemalan businesses continue to be fully consolidated.

Further information on the accounting implications of the deconsolidation are provided in the notes to the financial statements.

(i) 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)’.

Millicom to sell its Democratic Republic of Congo business to Orange

Millicom announced on 8 February 2016 that it has signed an agreement for the sale of its Tigo business in the Democratic Republic of Congo (DRC) to Orange S.A. The transaction is subject to regulatory approvals.

Millicom will sell 100% of the share capital in Oasis SA for a total cash consideration of $160 million.

Conference call details

An analyst and investor presentation to discuss results of the quarter will take place in London at 14.00 Stockholm / 14.00 Luxembourg / 13.00 London / 08.00 New York, on Wednesday 10February 2016. For those unable to attend, Millicom will also provide a conference call. Dial-in numbers: + 46 (0) 850 65 3938, + 352 342 080 8654, + 44 203 427 1913, +1 646 254 3366. Access code: 4444181

A live audio stream of the analyst presentation 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.

Significant events of the quarter

Corporate news

6 Oct 2015: New Nomination Committee is announced

21 Oct 2015: Millicom reports to authorities potential improper payments on behalf of its Guatemalan JV

22 Oct 2015: Millicom completes Zantel Acquisition

11 Dec 2015:Millicom celebrates its 25th birthday

Business news

19 Oct 2015: Tigo launches online remittance service in UK, European Union and Canada

20 Oct 2015: Tigo Rwanda is first to offer customers 4G internet accessible on all enabled smartphones

20 Oct 2015: Mobile licence renewed in Bolivia for 15 years

16 Dec 2015: Tigo Paraguay won 4G spectrum in auctions

Financial news

7 Oct 2015: Millicom receives a 24% stake in leading African towers company (HTA)

22 Oct 2015: Millicom Q3 2015 results

1 Dec 2015: Telecel (Paraguay) upgraded to BB+ by Fitch

Subsequent events

8 Jan 2016:Fitch affirms Millicom at BB+

12 Jan 2016: Tigo Paraguay to offer customers 4G internet accessible on all enabled smartphones

8 Feb 2016: Millicom to sell its Democratic Republic of Congo business to Orange

10 Feb 2016: Millicom board to recommend a $2.64 dividend at the 2016 AGM

Agenda

26 Apr 2016: Q1 2016 results

17 May 2016: 2016 AGM

Risks and uncertainty factors

Millicom operates in a dynamic industry characterized by rapid evolution in technology, consumer demand, and business opportunities. Combined 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 2014 Annual Report (http://www.millicom.com/media/2379621/Millicom-Annual-Report-2014.pdf). In addition to the information in the 2014 Annual Report and the information provided in this release, please refer to Millicom’s press release, dated October 21, 2015, entitled “Millicom reports to authorities potential improper payments on behalf of its Guatemalan joint venture.” At this time, Millicom’s investigation remains on-going, and Millicom cannot predict the outcome or consequences of this matter.

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 63 million customers. Founded in 1990, Millicom International Cellular SA is headquartered in Luxembourg and listed on NASDAQ OMX Stockholm under the symbol MIC. In 2015, Millicom generated revenue of USD 6.7 billion and EBITDA of USD 2.2 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, including those included in this release. 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.

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MillicomPress EnquiriesTabitha Aldrich-SmithInterim Communications DirectorTel: +352 277 59084 (Luxembourg)+44 7971 919 610press@millicom.comorInvestor RelationsNicolas DidioDirector, Head of Investor RelationsTel: +352 277 59125 (Luxembourg)+44 203 249 2220investors@millicom.com