NASDAQ:TIGO Millicom International Cellular Q3 2023 Earnings Report $32.77 -0.35 (-1.06%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$33.05 +0.28 (+0.85%) As of 04/25/2025 04:07 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Millicom International Cellular EPS ResultsActual EPS-$0.03Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AMillicom International Cellular Revenue ResultsActual Revenue$1.42 billionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AMillicom International Cellular Announcement DetailsQuarterQ3 2023Date10/26/2023TimeN/AConference Call DateThursday, October 26, 2023Conference Call Time8:00AM ETUpcoming EarningsMillicom International Cellular's Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Millicom International Cellular Q3 2023 Earnings Call TranscriptProvided by QuartrOctober 26, 2023 ShareLink copied to clipboard.There are 10 speakers on the call. Operator00:00:00Hello, everyone. Thanks for taking the time to connect to our Q3 2023 results conference call. This event is being recorded. Our speakers today will be our CEO, Mauricio Ramos our CFO, Sheldon Bruja and our President and COO, Maxime Lombardini. And following their prepared remarks, we will have a Q and A session. Operator00:00:21By now, you should have received the copy of our earnings release, which is available on our website, along with the slides that we will be referencing during today's presentation. Now, if you please turn to Slide 2, you can see our Safe Harbor disclosure. We will be making forward looking statements, which involve risks and uncertainties and could have a material impact on our results. We will also be referring to many non IFRS metrics throughout this presentation and we define these metrics on Slide 3, where you can also find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me turn the call over to our CEO, Mauricio Ramos. Operator00:00:58Mauricio Ramos Speaker 100:01:01Ramos? Good morning and good afternoon, everyone. Thanks for joining us today. As usual, I will go over the highlights of the quarter and Let's start on slide 5 with a recap of our 4 key priorities for 2023 and our progress to date. [SPEAKER STAVROS VIZIRGIANAKIS:] And around pricing for our services. Speaker 100:01:43You can see the results of these efforts starting to pay off in this Q3. Our quarter in Colombia had very strong EBITDA and And we're not done yet. We have now agreed with our partner to inject additional equity capital into the business in Colombia, So we can focus now on executing on the rest of the plan, which includes continued mobile growth, further cost discipline and as you know, some much needed inorganic solutions. 2nd, in Guatemala, we are creating the conditions for a healthy and very sustainable long term industry structure. In the last 6 months, we took part in 2 transparent and successful spectrum auctions in which both players were able to acquire all of the spectrum That was offered by the government. Speaker 100:02:25These were the country's 2 first auctions in more than 15 years. As a result, both competitors now Similar and much larger amounts of spectrum. We think the conditions are now set to return to a more rational pricing environment. 3rd, we continue to improve our operational efficiency across the business more than ever before. We're simplifying product offerings and operations, We are digitalizing processes, we are reducing headcount, and we are automating platforms. Speaker 100:02:52And across the board, we're driving new opportunities to further reduce costs During Q3, we began to implement Phase 2 of Project Everest, which we spoke about last quarter. We expect this Phase 2 to significantly increase the overall savings we can expect from Project Everest overall. 4th and finally, we have continued to make great progress towards carving out Latti, our tower portfolio. Earlier this month, we began transferring The new legal entities, we're now preparing to launch the monetization process. So let's review each of these points in more detail beginning with Colombia on slide 6. Speaker 100:03:30As most of you know by now, our mobile business has been growing rapidly since we acquired Critical Spectrum in the 700 MHz band in 2020. Back then, we embarked on a multi year plan to expand our mobile network and to extend the reach of our commercial distribution. Since then, we have steadily gained market share, especially in the postpaid segment, where we have doubled our customer base since acquiring the spectrum. The shift in mix towards postpaid has been lifting ARPU and driving mobile service revenues, which increased 8% this Q3. The scale we're gaining in our mobile business combined with efficiencies from Project Everest drove EBITDA margin to a record this quarter, as you can see on the middle chart. Speaker 100:04:12EBITDA grew almost 10% in the quarter and by close to 20% if we exclude the one offs. We And we are converting that EBITDA growth into operating cash flow growth, as you can see on the chart on the right. [SPEAKER ANDREW WIECHMANN Operator00:04:32MSCI, INC.:] OCF in Colombia Speaker 100:04:32is also benefiting from lower levels of capital investment in our home business. This is largely because we're choosing to remain disciplined on price. We're charging installation fees and implementing price increases and staying the course even when competitors don't follow and even if this means sacrificing subscriber volume, But gaining profitability. As we have told you many times, a significant portion of our CapEx is variable in nature and is directly linked to the number of new customers who signed up, Given the high cost of equipment that we install in their homes. So with higher prices, we're selling less, but we're also investing less and attaining a better return on capital. Speaker 100:05:07Going forward, we expect that our Colombia operation can continue to sustain lower levels of capital intensity than in the past for two reasons. 1, because our 700 megahertz network deployment is now largely complete and 2, because of the very material synergies we expect from the combination of our mobile network Spectrum with those of Telefonica. As you may have seen, this transaction has now received regulatory approval just a couple of weeks ago. Finally, as you may have heard, we recently agreed with a partner to each invest approximately $75,000,000 of equity into our Colombia operation. Despite all the noise that you may have heard on this topic, this equity injection had been planned for quite some time, and its key purpose is to provide Long term funding for all the long term investments that we have made in the business over the past several years. Speaker 100:05:53There's tons and tons of work to still do in Colombia, no doubt, But we made real good, good progress this quarter. Now please turn to slide 7 to look at Guatemala. As you know, competition has been intense in the prepaid mobile market since the end of the pandemic in Guatemala. As you also know, we took a variety of important strategic steps [SPEAKER ANDREW WIECHMANN:] And we remain convinced that this is the right strategy to preserve and grow the long term value of our business. And we see signs already that this strategy is beginning to pay off. Speaker 100:06:27The chart on the left shows evolution of our mobile customer base and market share in Guatemala over the last 4 years. As you can see, we picked up quite a bit of market share during the pandemic. We've been able to hold on to these gains and to our customer base even as our competitor began offering access to the most No doubt defending our customer base, which is definitely the right thing to do for the long run, Has had an impact on ARPU, service revenue and the overall profitability of the business. You can see this on the chart on the right, showing the evolution of our total service revenue growth in Guatemala over the last Several quarters. Yet, 2 important and positive events are relevant in the last few months in Guatemala. Speaker 100:07:061, after 2 consecutive spectrum auctions, Spectrum positions in the marketplace have been increased and stabilized. We no longer have a spectrum deficiency or a spectrum disadvantage in Guatemala. This has an important positive effect on our network efficiency and costs as well as on our service and product offerings. And 2, We took some price increases in prepaid in mid September. As a result, while the revenue growth remained negative in Q3, there were clear signs of stabilization compared to Q2 and we're encouraged by the trends we saw during the quarter. Speaker 100:07:38It's too early to tell whether this price increase will stick for the long run, But we are encouraged by the response at our points of sales and we're optimistic. And we do see the makings of a healthier industry structure in the making in Guatemala as we had anticipated earlier. We want to remain cautious on the commercial outlook and also flag that there have been some mass protests on the streets in Guatemala since the presidential elections a couple of months ago, and this may carry on until the new president takes office in January. So we remain cautiously optimistic in Guatemala. Now let's go to Slide 8 to discuss Project Everest. Speaker 100:08:14As many of you will recall, we began implementing our efficiency program earlier this year and we communicated an ambition of achieving run rate savings of more than $100,000,000 by year end 2024. We are on track to achieve those savings. In addition, early in the summer, we began working on Phase 2 of the program as we mentioned on our Q2 call. Indeed, in September, we began implementing important headcount reductions and new cost saving initiatives, starting with our centralized functions. We expect this first phase of Phase 2 to produce approximately $35,000,000 in additional savings on top of the initial $100,000,000 target. Speaker 100:08:50We also expect to finalize the scooping for the full Phase 2 along with our high note budget plan. So our ambition is actually much broader We have already identified very meaningful opportunities that we expect to implement mostly before year end. Sheldon will give you additional details about the cost of the program in a minute. On slide 9, let's review our progress on Latti. Latti is already a separate company and a separate brand. Speaker 100:09:14New legal entities have now been created in every country. Earlier this month, we started transferring our assets from Tigo to Latti and we expect to complete this process in November. This means that we're ready now to Launch process to monetize this important infrastructure asset in Q4. Yes, showtime is coming up soon. As we have said in the past, have certain preferences on the transaction that we envision with best maximized value. Speaker 100:09:38But as we have also said, we kind of keep other options open until we can evaluate and compare the options that are brought to the table. So stay tuned, opening date is indeed coming soon. With that, I will hand over to Sheldon to discuss the financials for the quarter. Speaker 200:09:54Thank you, Mauricio. Before we review the financials, let me quickly recap the macro context on Slide 11. As you can see on the slide, inflation across most of our markets has followed closely the trend we have seen in the U. S. With inflation back to a more reasonable level of around 4%, With the exception of Colombia, where inflation is still in the double digits. Speaker 200:10:14The good news, though, is that the Colombian peso has strengthened significantly this year And in fact, you will see that FX was a small tailwind for us during Q3. And in terms of economic activity, our markets are generally proving quite resilient With some countries like Panama and Paraguay expected to grow real GDP in the range of 4% to 5% this year. Now let's look at our Q3 performance beginning on Slide 12. Service revenue was $1,320,000,000 in the quarter, Which is up 3.2 percent on a reported basis from $1,280,000,000 a year ago. For the first time in more than a year, our service revenues benefited from favorable FX trends this quarter primarily due to the Colombian peso as I just mentioned. Speaker 200:10:56Excluding the impact of FX, organic growth was 1.8 percent in the Q3, very similar to the growth we reported in Q2. Our mobile business continues to perform well and accounted for nearly all of the growth in the quarter. Meanwhile, our fixed businesses were flat and this is consistent with our broader capital allocation strategy over the past year as I'll discuss later. Going down further on Slide 13 to the service revenue by country, as you can see, most of the countries experienced positive service revenue growth in the quarter. The two exceptions were Guatemala, which Mauricio already discussed, and Bolivia, which was down less than 1% in Q3. Speaker 200:11:37This is a significant improvement for Bolivia compared to last quarter as we've begun to lap the regulatory changes that have impacted results since August of 2022. Our mobile business had positive growth in the quarter and the decline is coming from our home business where we are choosing to be very disciplined on price to drive better cash flow from this market given the more volatile macro backdrop in this country. Colombia and Panama had low single digit growth and this is largely the result of our commercial Capital allocation decisions to focus on mobile in these countries. On the positive side, we've had solid mid single digit growth in the 4 countries on the bottom part of this page with all three business units contributing to growth in these countries. Okay, turning to Slide EBITDA of $533,000,000 was down 1.2% from $539,000,000 from a year earlier. Speaker 200:12:30This is a cleaner quarter than first half of the year, but there are still a few items to unpick here to provide a fuller picture of the performance. First, ForEx, primarily from Colombia, provided a small tailwind of about $4,000,000 this quarter. 2nd, we had 2 large one offs. The first was $22,000,000 for severance related to Project Everest, which I'll talk about later. The second one was for $11,000,000 and was the result of an adverse legal ruling in Colombia. Speaker 200:13:00Excluding FX and these one offs in this quarter as well as another in Q3 of last year, EBITDA would have grown 2.6% during the quarter with positive growth in most countries as you can see on Slide 15. On this page, you can see that EBITDA tells a similar story as our service revenue growth with positive growth everywhere except Guatemala and Bolivia. As Mauricio discussed previously, we are seeing some signs of stabilization in Guatemala. EBITDA declined 3% year over year, But it has been stable at $199,000,000 for the 3rd consecutive quarter. Bolivia was down 2.2%. Speaker 200:13:36This is a big improvement from the last three quarters as we began to lap the regulatory change that went into effect in August of last year And we've seen improvement in our mobile business there. On the positive side, Colombia stood out with EBITDA growth of 9.1% And almost 20% excluding the legal one off. As Mauricio mentioned already, our margins have been expanding over the past few years And we think there is still more upside here, thanks to Project Everest and other initiatives that we have been implementing in order to drive better profitability and cash flow from our business in this country. Panama grew 2%, which is consistent with the 1.4% service revenue growth we saw in the quarter. Remember also that we have made investments in our sports content offering that hurt our EBITDA growth this year but that investment strengthens our home business and help us maintain our leading market share in this business. Speaker 200:14:30You will also notice a lower margin in the quarter and this is due to higher equipment sales related to the large B2B contract that we expect will start generating service revenue beginning in Q4. Paraguay had impressive EBITDA growth of 8.1% And it was 11.6% excluding the Everest related severance. The strong performance is consistent with the strong service revenue growth we are seeing. In El Salvador, EBITDA growth of 16.1 percent benefited from a lower than usual level of bad debt that flatted performance this quarter. On a year to date basis, EBITDA is up just under 7%, which is more consistent with the mid single digit service revenue growth in that country. Speaker 200:15:11Nicaragua EBITDA grew 3.6% as our business and the broader economy continued to grow despite the volatile political environment. And that is largely thanks to remittances from the United States, which continue to grow very rapidly. Finally, Honduras, which we do not consolidate, Had another strong quarter with growth of 7.9 percent reflecting the improved revenue trends during the quarter. Now please turn to Slide 16 to review our efficiency program Project Everest. Mauricio already gave you the highlights, but I want to help unpack the various puts and takes. Speaker 200:15:46In terms of savings, we are accelerating our plans. For Phase 1, we remain on track to deliver more than $100,000,000 by year end 2024 and are in fact accelerating our plans. On a run rate basis, we now to achieve more than 75% of these savings by end of 2023. This is up from our previous estimate of more than 50%. As Mauricio told you, we have decided to significantly expand the scope of the project which we refer to as Phase 2. Speaker 200:16:19During the quarter, we incurred $22,000,000 of implementation costs. Dollars 19,000,000 of this was related to new actions and initiatives we took We're concentrated in our headquarters and other centrally managed and shared service activities, including approximately 30% of our Miami based population. This will result in additional run rate savings of approximately $35,000,000 above and beyond the Phase 1 savings of $100,000,000 In total, since the beginning of this year, we will have reduced our Miami based population by approximately 40% through a number of separate restructuring decisions. Over the next several weeks, we'll be finalizing our 2024 budget and we expect to take additional measures across all our geographies as part of that process where we expect additional severance charges to drive additional savings for the business. We will provide further information at our full year results in February. Speaker 200:17:16Now please turn to Slide 17. In addition to organizational savings, we have also had significant savings in capital expenditures this year. Through the 1st 9 months, our CapEx spend is about $150,000,000 lower than prior year. I've mentioned in prior calls the source of these savings, which is a combination of 3 key components of roughly equal size. Firstly, earlier this year, we conducted 3 year renewals with our largest mobile vendors where we have received multi year discounts. Speaker 200:17:46As you can see on the left hand side of this chart, our level of mobile build activity has remained constant Well, we are also able to absorb the impact of activating the new 726 100 Megahertz spectrum we obtained in Guatemala. Secondly, we've reduced our home footprint expansion in light of tougher competitive and macro environments in Colombia and Bolivia in particular. And lastly, home installations are down again primarily in Colombia and Bolivia as we are being more disciplined in pricing and promotions given the more challenging environments there. On top of this, we continue to scrutinize all other CapEx spending and are finding other opportunities to lower spend and contribute to this year on year savings. Now please turn to Slide 18 for our usual net debt bridge. Speaker 200:18:35Net debt declined $74,000,000 in the quarter to just over $6,000,000,000 Net debt to EBITDA after leases was 3.32 times. That's down from 3.34 times at Q2. If we include lease obligations of just over $1,000,000,000 our leverage was 3.34 times. The decline of the net debt during the quarter was primarily due to strong equity free cash flow of $100,000,000 which was partially offset by the ForEx impact from the translation of local currency debt as the Colombian peso strengthened this quarter. Regarding our equity free cash flow, I want to remind you that there is a lot of seasonality here. Speaker 200:19:10Q1 is usually negative and then we see improving cans throughout the year. The strong cash flow in Q3 reflects typical seasonal patterns As well as some of the benefits of Project Everest and of our capital allocation decisions over the past year. Looking ahead to Q4 which is usually the strongest quarter of the year I want to caution you that this year should be a bit different. This is because we're expecting more than $100,000,000 of spectrum payments in Q4. This is for the renewal of the 1900 megahertz spectrum in Colombia and the acquisition of the new spectrum of 700 megahertz band in Guatemala. Speaker 200:19:48Items that we flagged for you when we revised our equity free cash flow targets in June. Also in Q4, we have to pay a lot of the severance that we booked in Q3 and that we expect to book in Q4. Let me hand the call over to Maxim who is joining us for the first time in this earnings call. Speaker 300:20:06Thank you, Sheldon. It is my pleasure to be here today. As you may know, I joined the company on the 1st September, so little less than 2 months ago. At this time of year, the Company begins planning the budget for next year and this has given me the perfect opportunity to interact with each Of the country teams and with the leadership teams in Miami and Luxembourg. I have also had the opportunity to travel In our 3 biggest countries of operations, Guatemala, Colombia and Panama, and I have more visits planned before year end. Speaker 300:20:42[SPEAKER JEAN FRANCOIS VAN BOXMEER:] As you can imagine, I am still learning about the Company. But today, I can share some of my first impressions and my priorities. Firstly, Tigo is an incredible company with a strong brand and market leadership position, run by a talented team, A team with a strong culture and can do attitude, ready to take on any challenge when the target is clear. [SPEAKER JEAN FRANCOIS PRUNEAU:] But we do business in countries with volatile macroeconomic and political environments, and we do not generate enough cash. This means that we must de risk the Company by operating efficiently and with lower leverage. Speaker 300:21:27And we must ensure that the business can generate much higher equity free cash flow every year. With that in mind, one of my first priorities has been to significantly expand the push on costs. We started immediately in September by decreasing drastically HQ costs in Miami. And currently, as part of the budget process, I am challenging each country team on their costs and CapEx. On a day to day basis, I am personally reviewing each purchase order and every dollar that we spend. Speaker 300:22:06So short term, a strong focus on cost control is the clear priority. And as we strive to deliver on the free cash flow target that we are reiterating today, I will be equally that TIGO customers have come to expect. I will report back to you next quarter on our progress with more details. Operator00:22:41Thank you, Maxim. With that, we're going to now go to the Q and A session. As a reminder, if you'd like to ask We'll take the first question from Oskar Ronkowitz from ABG. Oskar, the line is yours. Speaker 400:22:58Thank you and good morning. Even though it's in the middle of the day for me in Stockholm. Just two questions, if that's okay, please. Just First one on Guatemala. You say that signs of improvement or an improving market is visible. Speaker 400:23:13So how should we think about Timing, you remain at around 1% to 2% decline in service revenue, like the last few quarters. So just Wanted to get a sense of if you should see that delta improving already in Q4 or if you expect that to take a bit longer. My second question is just on CapEx. I think you have been around $180,000,000 each quarter for the last 3 months. And you say that, I mean, you're holding Back a bit on home, right? Speaker 400:23:41And then also you are looking at efficiencies. So just the 180 figure over the last three quarters, I guess That's a bit low maybe on the sort of run rate on an annualized basis. Just if you could elaborate on the timing or Any quantification on the new run rate, please? Thank you. Speaker 100:24:01All right. Hello, Oscar, and welcome. Thank you. I'll take the first one on Guate, timing, etcetera, and the market. And, I'll Give Sheldon a little bit of time to prepare some numbers for you on the CapEx question. Speaker 100:24:20On Watte, I think We've played it really, really well. And the timing, which is the core of your question, is happening Pretty much as we expected it would happen. And with that, I'll give you some color. As you recall, over the last Year or so, we faced a tremendous amount of competitive pressure on prepaid. We set out to basically hold our market share position, a very strong market share position. Speaker 100:24:55And we've been able to do that, Not without some pain on the revenue for sure, but certainly holding on to our market share and our subscriber base. And we did that knowing that we could and we would revamp, re stabilize both the spectrum position and the network position. And we have done that. That was the long game. That was the long strategy that we were playing. Speaker 100:25:20And over the course of the quarters this year, we have seen that play out. 2 consecutive spectrum auctions. We no longer have any network disadvantage. We no longer have any service disadvantage. We no longer have any spectrum disadvantage. Speaker 100:25:33So So quite frankly, we were playing the long game and it has worked out as we expected it would. Subsequently to that, we took a price increase on prepaid, to a percentage of the prepaid base, in mid to late September. So you don't actually see it in the quarterly numbers yet. But as we look forward, this was the timing that we were expecting, Strong network position, strong spectrum position so that we could now focus on the commercial actions. So far, as I said, we are Cautiously optimistic, cannot guarantee ever, can ever guarantee that price increases will stick, But we're certainly playing a cautious, well played game here. Speaker 100:26:21So the answer to your question is things have been playing out as we We wanted to play them out. We're also just mathematically lapping pretty much The initial effects of the push on competition, but we are playing the long game here, Oscar. And that's why we use the term Cautiously optimistic. Things are better in the market. They're more rational in the market as compared to what they were before. Speaker 100:26:49We're playing the long game and we're playing a very strategic game here. So we're cautiously optimistic. Going into Q4, just to manage your expectations, remember we had Very good Q4 last year because of the World Cup that we had. So we're not going to have that this year. So again, long term means q4 will have some, you know, some difficult comps vis a vis the World Cup. Speaker 100:27:15Ramiz, anything guys? Operator00:27:17I think, Oscar, we should also just flag that there's been some significant protests in the street in Guatemala these last several weeks since the presidential election, so that has created a little bit of a disruption in terms of economic activity. But, the new president takes office in early January, So that could continue for some time, but still a little too early to know what what kind of impact that might have. Speaker 100:27:40Yeah. Guatemala has a very lengthy time frame In elections, an actual handover is over 6 months. So that's created a little bit of political turmoil there. So come January, our hope would be, I think, we'll be on the quiet side politically. Speaker 400:27:57Harshad. Speaker 200:27:58Okay. On the CapEx question you had, look, I mentioned a lot in the presentation around what was driving some of the reductions in CapEx This year, I mean, really around basically majority of CapEx decline really related to 2 Colombia and Libya where I think it's absolutely appropriate some of the steps were taken in terms of Around our homespan given the situations in both those countries. But look, going forward, I would say, you would have heard it kind of in Maxim's comments, in addition to the things that's been happening this year, we are being very disciplined And scrutinizing sort of CapEx spend across the business, I would not expect CapEx spends to be higher than what you're seeing Right now, as we go into 2024, I would expect us to be slightly lower than those levels on a going forward basis. So that's how, you know, if you're asking sort of where we see the trendings going, it's, you know, levels lower than what you're seeing currently. Speaker 400:29:04Understood. Thank you very much. Operator00:29:06Thank you, Asar. Okay. Next, we're going to go to Fani Kanumuri from HSBC. Fani, The line is yours. Speaker 500:29:16Yeah. Thanks everyone for taking my questions. My first question is on Colombia. You seem to have had a good margin accretion this quarter. How sustainable is the margin accretion? Speaker 500:29:28And Once you complete Project Everest, where do you expect the margins to trend in Colombia? And again, the second question is again in Colombia. You had a recent equity infusion into Colombia. Do you see any potential equity infusions in 2024 or 2025 into Colombia? Speaker 100:29:49Alright. I'll take, the first one and perhaps a little bit of the second one. And as always, give Sheldon a little bit of time to get the numbers right. So the things, Fani, that have been driving, our record margins in Colombia this quarter are a combination of activities. First, as you recall, there was a ton of network investment and commercial expansion that happened in the years prior Right after we had bought 700 megahertz spectrum. Speaker 100:30:21That's behind us. So now we are more on the Efficiency phase of those network investments and commercial expansions. The second element is that, as you know, mobile is a game of And we have been gaining scale, particularly in postpaid in Colombia. So obviously, that helps the margin on a Fixed cost based business. The 3rd element in Colombia is Project Everest, Phase 1 of Project Everest, which we started very early on this year. Speaker 100:30:53And as we've been talking, there's a Phase 2 that will help Maintain sustainability of that margin expansion going forward. The 4th element is that there's been, And I use these words with a degree of cautiousness, more price rationality in the market in the last few quarters. And particularly, we've been able to sustain or drive service revenue on postpaid, both on volume and on our business as well. And Also, we've been very, very disciplined on the home business as we alluded during the call, TP prices are charging installation and if need be sacrificing volume over profitability. And that's what you see in the results. Speaker 100:31:38Going forward, Profitability will also be enhanced by the mobile network and spectrum contribution agreement that we talked about in the prior quarter and this quarter. And all of this combined lead to the one single focus that we have in Colombia, Which is to make Colombia equity free cash flow positive. As you recall me saying a number of times, it's the only operation in the portfolio That has not been equity free cash flow. And our drive has been to make that business equity free cash flow. And I'll tell you at The risk of not giving you specifics that we're really focused on making that happen as soon as possible. Speaker 100:32:22And that gives you an idea as to why we're driving hard with the expectation of not having any additional equity And with that, I'll hand it over to Sheldon. Yes. No, Mauricio, you really Speaker 200:32:35hit the key points. I mean, I think EBITDA is I think And EBITDA margins are important metrics to be tracking. But most importantly and more importantly is it's the equity free cash flow performance we're trying to drive out of that business And getting that business to equity free cash flow breakeven first initially and ultimately equity free cash flow positive. And Of course, that once that's achieved, that's going to certainly address your second question about will more capital be needed from the shareholders. I mean, the answer would be no once we get to that business So that's where the focus is. Speaker 200:33:08Look, I think we're going to make a lot of progress on that in 2024 in terms of Achieving that objective and, that's kind of where the focus is right now for that business. Speaker 500:33:20So in the best case scenario, when do we expect to achieve a kind of breakeven, at least a broad timeline for EcoColombia? Speaker 100:33:33There's this thing that happens on a yearly basis called the budget, Right. That's all I'll say. That's a non answer, Fanny. As soon as we possibly can, there's nothing we You can just imagine how focused we are on this, Fani, right? As soon as we can. Speaker 100:33:50We've done everything in Colombia. Again, back to the Guatemala question, buy the playbook. This is the game we're playing with a single objective, which is to get Colombia equity free, cash flow positive as soon as possible. And just about every action has been driven in that direction. We put Everest Phase 1 early on in Colombia, early this year. Speaker 100:34:10We're obviously focused on Colombia for Phase 2 of Everest. And all you can take away from without forcing us into Specifics on guidance is that we're very focused on making Colombia accretive free cash flow. Speaker 500:34:24Okay, sure. Thanks a lot for that. Operator00:34:26Thank you, Fanny. All right. Next, we're going to go to Marcelo Santos from JPMorgan. Hey, Marcelo. Speaker 100:34:31Hi. Hello. Good morning. Thanks for taking my questions. The first question is just if you had any update on Tigo Money strategic alternatives. Speaker 100:34:39So you disclosed that in the Investor Day, so I just wanted to know how this is going. And the second question is actually for Maxime. You mentioned that you're going to do the right investments to capture the long term revenue growth Could you expand a bit on what do you see as the main long term revenue growth opportunities? If you could give some color, it would be great. All right. Speaker 100:35:00I'll take the first one and give, Maxime a little bit of time to, prepare a couple of brilliant IPAs There, for sure. So listen, on Tivo Money, we continue to grow the business quite positively. Geographically, as you may recall, we're very strong in Paraguay, very strong in Bolivia. We've relaunched this year in Guatemala. Tico Money existed in Guatemala, but it didn't have the full suite of products in there. Speaker 100:35:32So we relaunched in Guatemala. We've also attained line synthesis and launched in Panama, and we're happy with the progress that we're making then operationally. Our second area of focus is making sure that we complete the delivery and implementation of The full suite of the service offering, so the Wallet app, but also continue to increase the merchant community And also begin piloting, which successfully delivering in Bolivia and also in Guatemala. And we continue to find very important ways of making the telecom business work really closely with the Fintech business in the eyes of the consumer, which we think is a win win for everybody. And we're also now beyond this investment phase We put for the last couple of years very focused again going back to our cash flow agencies for 2024 on making sure TIGO money is With all of these investments and launches behind it, OCF breakeven. Speaker 100:36:36And we're very happy with that result, which leaves us then with Plenty of flexibility to then figure out in these very difficult fintech markets, Marcelo, when is the best Time to maximize and how is the best time to maximize the value of that asset. And that is the punchline to your question. And, Maxime, short time for you. Speaker 300:37:01Thank you. Good morning and good afternoon. Thank you, Marcelo, for your question. You know, I joined the company something like 7 weeks ago, so it's a bit early to Describe a full strategy for the future. What I wanted to say with a few words about the future is that the future of a company cannot be only on cost cutting. Speaker 300:37:23COS continues today a clear need to be back to cash generation but that's not The sole project for the company. We are working a lot also on capex optimization, meaning where to invest properly in mobile, Densification coverage and more importantly probably where to invest and what to do on home. Well, you know, The margins are a bit stretched. So those I would say will probably comment a bit more next But today it's a bit too early. And then there are many, many other options within each one of the On the geography where on the home business, as you can see, there are many networks overbuilding and probably Intelligent solution that could be worked on. Speaker 100:38:21Wonderful. Thank you very much for the answers. Operator00:38:26Thank you, Marcelo. So next we're going to go to Stephane Gauffin of DNB. Speaker 600:38:39So can you hear me now? Yes. Great. So a couple of questions. First On the network JV with Telefonica in Colombia, if you can somehow Quantify what kind of savings you could get from that on both OpEx and CapEx and when those can materialize? Speaker 600:39:09And secondly, a question for Maxim. You mentioned in your remarks that given volatility in these markets, you believe The leverage is a bit high, which I think all of us agree to. But now given The strategic initiatives with the sale of, Latvia, etcetera. So my question is, where would you see Leverage to go to be comfortable and if it's totally preferred to pay down debt rather than have Some sort of shareholder remuneration from sale of Lati, etcetera. Thank you. Speaker 100:40:07JV briefly. And then I'll hand over the second one, if it's okay, to you, with you, to our CFO, Sheldon, So that we provide you with the full institutional I got to do this in my role as I can see your smile as interim chair So that we provide you with the full institutional view on leverage from the Board. On the network JV, I think the 2 key areas with our ability to give you specific details. Obviously, there is the OpEx and CapEx savings of running a single network, right? That's the nature of a network JRB on mobile. Speaker 100:40:51In addition to that, there is the synergies of running a single pool of spectrum. And this is important, particularly in Colombia, because the cost of spectrum in Colombia is significantly higher than in most other regions. So the ability to run not only a single network from the CapEx and OpEx side, but also to pull your network is an important part of the savings And on the question of leverage, you will be happily reassured We have coincidence on our targets institutionally. Sheldon? Speaker 200:41:30Sure. Look, on leverage, I think What we've said before, Stephane, on this point, our intermediate target remains 2.5x EBITDA. We haven't made the progress towards that objective this year for a variety of reasons. Some of them were in our control, some that There weren't, but we've got several one offs this period, things that were unusual items, but also things that we're doing in driving the business around the severance costs. We see us making a lot of progress next year on this leverage reduction. Speaker 200:42:05Next year is going to be a big year for us for cash flow generation. As we said, it's going to be the highest of the 3 years in our 3 year targets, in terms of what we're going to be delivering. It's also going to be sort of cleaner of a lot of the one off charges we've been taking, This year, with regard to the severance charges, I will point out, we're expecting, as you've heard in my prepared remarks, more severance charges in Q4 the benefits will be accruing in 2024. And currently this year, there's kind of a lot of unusualness, a little bit around That's also ticked our leverage up a bit higher. In particular, Colombia has appreciated from a currency standpoint, now a lot of that appreciation has happened more recently. Speaker 200:42:55And so, in terms of the benefit on EBITDA, that hasn't really slowed through our LTM EBITDA, last 12 months of it, but it has hit us pretty quickly on marking to market the Colombian debt on a higher basis On the debt situation, so that should roll off assuming that trends kind of remain constant on the currency, that should also Benefit us into 2024. So look, I think we're going to be making progress on the deleveraging certainly in 2024. We told you On a previous call that we expect to get to that 2.5x level in by 2026, 1 year later than previous given some of the adjustments we've made on our equity free cash flow outlook. But look, we're going to make a lot of progress on that And really seeing meaningful progress in 2024. As it pertains to Lati, quite frankly, I think we're going to kind of hold off and sort of [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Talking about proceeds from Lati until we have proceeds from Lati, right? Speaker 200:43:57So, but we're launching a process and we'll have to see how that process evolves in terms of what we are able And then we'll assess the situation at that point in time, I think, in terms of what's the best way to allocate those proceeds. Speaker 600:44:11Yes, yes, agree. Better to wait until the bear is shot before we sell the skin. Speaker 100:44:21That sounds like the Scandi way of saying it, Stefan. The priority remains to reduce leverage. That's the short answer. Operator00:44:32Thank you, Stefan. So next we'll go to Eduardo Nieto of JPMorgan. Speaker 700:44:37Eduardo? Yes. Thank you, guys. So part of my question was already answered, but I wanted to follow-up on the capital allocation strategies. Moody's recently put you on a negative watch, basically because of challenges in Colombia, but also because of high leverage and governance concerns potentially having more aggressive financial policies, you partly addressed that, but curious on what your plan is to address those concerns, avoid The downgrade, and my second question would be in Colombia, in terms of the 5 gs auction. Speaker 700:45:09Obviously, I'm just curious about how you will translate the EBITDA performance into cash flows and how you expect spectrum costs and All those items to behave going forward. If you see any other opportunities, you talked about inorganic solutions. So curious if you can give any more color on that. Speaker 100:45:30Yeah. Listen, on on the part, Eduardo, that, that has a little bit of the noise on Colombia. As you very well know, there was just a lot of noise there, but the reality is we came out of that process with a well capitalized business, a business that has expanding margins, Revenue growth, OCF growth and has, as we discussed earlier, a significant focus on driving the business So I think there was a lot of noise there, but the reality is the business in Colombia is improving significantly At all levels, including its strategic optionality going forward. And as that relates to the group, as we just discussed, And I'll hand it over to Sheldon for additional. Our focus remains on cash flow generation next year, as we have said A number of times and we'll repeat that today. Speaker 100:46:21We think 2024 is a year of our cash flow. And with that, I think we We reiterate our focus on reducing leverage as we have done this number of times. 5 gs on Colombia, We're reviewing the terms. They just came out last night. Obviously, we've been very involved in the process. Speaker 100:46:42We understand a lot of it. But I'd rather answer that question once we have full information on exactly what the details of that. It's an ongoing process. Those processes do tend to move around and shift around as they are being finalized with the authorities. Sheldon, anything? Speaker 200:47:00Well, not too much more to add. I think in terms of terms of the Moody's, you know, concerns that they're highlighted, I think are the exact items that we probably have as our four priorities in terms of what we're addressing as a So, look, we need to deliver stronger cash flow. We believe next year and stronger deleveraging. We believe next It's going to be a big year for us on that front and go a long way towards addressing a lot of things that you guys have been highlighting to us and Moody's has been highlighting to us. So I think We've kind of highlighted exactly what we expect from a cash flow perspective and a deleveraging perspective. Speaker 200:47:35And I think now we just Deliver on that and to address those issues. Speaker 700:47:41Understood. Thank you very much. Operator00:47:43Thank you, Eduardo. Okay. Next up, I think we have Andre Salas from UBS on the line. Andre, are you there? Speaker 800:47:54Yes, Simon. Sorry about my camera because I am being technical difficulties here To make it work, sorry. So hi, everyone. First of all, thanks for the presentation and for taking my question here. Actually, I have 2 on my end. Speaker 800:48:10The first one is more like on a cash flow basis with soft positive contribution here of working capital to free cash flow in this quarter. Operator00:48:19Could you Speaker 800:48:19please give us a little more color on that? What has driven this positive impact? And if we should expect the same trend to go in the following quarters? And the second question is regarding a broad timeline here in the Guatemala business. So when do you expect that the improved Spectrum capabilities that you now have would translate into better efficiency and if it could mean Investments here in the country in the upcoming quarters. Speaker 800:48:50That will be all from my side. Thank you. Speaker 100:48:53Sure. I'll be brief on number 2 and give Sheldon a little Time to look at the numbers in detail. We've been working, as I said, for the long run, long game as I I'm on the ready for a question, Guatemala. So we were readying up the network and getting ready for the use of the new spectrum pretty quickly. So a lot of that has been done. Speaker 100:49:17And as a result of that, we have started the subsequent commercial activities, as I said, on September 18th. So now really it comes down to the marketplace, Andrea, and stabilization of the commercial activities in the marketplace. And as I alluded also, Some of the political last few weeks issues also to stabilize. So it's less of a Network and the spectrum issue and more of a commercial stabilization going forward. And as I said earlier, we took a Prepaid price increase, we're optimistic about it and commercially we're cautiously optimistic. Speaker 100:49:58That's the full answer on that one. Sheldon? Speaker 200:50:01Sure. On the equity free cash flow performance for this quarter, I mean, look, I mean, you highlighted working capital. I mean, I would highlight, I think, Strong performance come across the board. I mean, OCF was a big contributor to us this quarter in terms of driving equity free cash flow. Taxes, I think, was a contributor for us in terms of driving free cash flow this quarter. Speaker 200:50:23Interest costs actually was not, as we've been talking about, just some of the higher Interest rate environment in some of our countries. Working capital contributed as well, but to some degree, a couple of items I would highlight there for you though. We took our severance provisions, here about $22,000,000 this quarter. That's going to be paid in future quarters, right? So that's probably that's one of the contributors to The working capital benefit, the same on this legal provision we took in Colombia that was cash out at least this period. Speaker 200:50:54So that was Also a contributor to working capital, we did have a large B2B project in Panama that we were that Benefited us a bit on working capital, sort of the timing of sort of payments received versus payments going out to some subcontractors and some of the equipment providers who are providing Some of the information or some of the aspects of that project. So that benefit us a little bit as well on working capital. Those are probably the key items I would highlight. But look, I think it was a good quarter overall from equity free cash I was cautious in terms of making sure you have in terms of forward looking, I did pull out and highlight a few items on a forward looking basis on equity free cash flow, particularly Spectrum in Q4, which is going to be a big uptick for us. We highlighted in June, in terms of a full year perspective of Higher spectrum costs this year, but particularly it's going to be pronounced in Q4 for us this year, on the spectrum costs as well as then just paying for some of the items that we took, We booked here from a severance perspective this quarter as well as what we expect to be booking next quarter. Operator00:52:10All right. Thank you, Andre. Speaker 800:52:12Thank you. And sorry once again for the camera. Operator00:52:17No worries. Thank you, Andre. All right. So next we'll take our last question from Fredrik Lythels from Handelsbanken. Fredrik, good to see you. Speaker 900:52:24Good to see you. Thank you very much. Thank you for taking my questions as well. Maybe just a little bit of a housekeeping, Sheldon, you think you mentioned earlier about severance costs also in Q4. Was that correctly understood? Speaker 900:52:38Or did we see a peak here in Q3 3 on severance costs. That's the first one really. The second is on the Everest 1, 2 and possibly Number 3, enlargement of all sort of that project as well. I'm just curious to get an elaboration on how Deep, you can cut in cost before it starts to hamper your ability to push growth At the same time, I'm just curious how you balance that going forward so you don't get Poor scores on customer care or you're not setting up the next base station or whatever it might be. I'm just curious to Have a sort of a reasoning around that balance would be interesting to hear. Speaker 100:53:27Yeah. I'll start with the second one. Obviously, Frederic, we'll be very, very careful, very, very conscientious. And obviously, we start with the areas That are less revenue generating and protect those definitely as part of the process. So You can rest assured that we are surgical in our approach, but everything gets reviewed with a payback analysis And we certainly protect the areas that are long term revenue generating as part of the process. Speaker 100:54:01But there is room To be more and more efficient, the ambition on Everest was Always significantly high and we're emboldened and supported by our new largest shareholder to take that opportunity. And as we've been discussing some of the markets that are part of the question, we should also highlight that part of the reason why we see a path To better cash flow in many of those markets is because we see efficiencies, significant efficiencies there at all levels as well. [SPEAKER MARTIN KITS VAN HEYNINGEN:] So that's the full answer to your question. Speaker 200:54:40Yeah. I would just add, I mean, I think in addition to that, I mean, I think, you know, through these cost savings, we're trying to take complexity out of the business And that's simplification, which I think quite frankly can be beneficial from a customer perspective as well, fewer product offerings, fewer Complications in terms of how they interact with us, etcetera. So some of the cost savings actually, hopefully, it will be I would expect to be beneficial as well to the top line, Not to sort of cut if you're trying to purchase or are we cutting fat and muscle out of the business, I think quite frankly, I think we're trying to improve the way we operate as a company. [SPEAKER THOMAS MONROE PATTERSON:] In terms of additional severance costs, I mean, yes, we're going as I alluded to, we're going through our budgeting process right now. And we know as we've [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We've taken the actions around the headquarters this quarter in terms of this Phase 2. Speaker 200:55:27We're finalizing our plans [SPEAKER MIHAEL POLYMEROPOULOS:] For the countries here, as we finalize the budgeting, and there will be charges here in Q4 related to that. We're not going to [SPEAKER MIHAEL POLYMEROPOULOS:] Give you essentially size and guidance on that at this point in time, but it will be tens of 1,000,000 of dollars of severance costs, I would In Q4, and we'll be giving you much more color on that once we complete our budgeting process here and at the full year results in February. Speaker 900:55:57Perfect. Thank you very much. Operator00:55:59And consistent with that, Frederic, you should assume that that 135,000,000 number will also increase commensurately. Speaker 200:56:06Right. Thank you. Operator00:56:08All right. Okay. Thank you very much, Frederic. So I think that wraps up the Q and A session. Maoisto, back to you. Speaker 100:56:15I just want to give you the 32nd wrap up just to make sure that the big points are clear. And they should be pretty obvious on our call today. Tons of work in Colombia and that work is in progress. But we made a lot of progress this quarter and we're heading in the right direction. As we alluded during the call, we have a clear objective ahead of us. Speaker 100:56:46In Guatemala, as you have heard us for a number of quarters, our market leadership has been sustained. Spectrum positions have now been equalized. So we no longer have a spectrum or a network disadvantage and we're putting that to use. And there are initial signs of a healthy environment after we took some price increases in prepaid in mid September. So as I said, we're cautiously optimistic in Guatemala. Speaker 100:57:11And as you've heard, our cost savings and our ambitions on efficiency have been increased with a broader phase 2 of Project Everest. And most importantly, all of these efforts are aimed at a single thing, which we have alluded to before. And that is to make 2024 the year of our strongest cash flow delivery. So hopefully those points are clear and thank you for joining us today.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallMillicom International Cellular Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report Millicom International Cellular Earnings HeadlinesMillicom Completes SDR Delisting and Share SaleApril 25 at 5:19 PM | tipranks.comMillicom International Cellular S.A.: SEB informs Millicom (Tigo) it has completed the sale of sharesApril 24 at 11:20 PM | finanznachrichten.deTrump’s tariffs just split the AI market in twoTrump’s tariff just split the AI market – among others – in two. One group of AI companies—the ones relying on cheap foreign hardware—just saw their costs shoot through the roof. For the other group of AI companies, they were just handed a massive competitive advantage. Make no mistake, AI as a whole is still a game-changer for the global economy. But within the AI sector, Trump’s tariffs have created a huge divergence.April 26, 2025 | Traders Agency (Ad)Millicom International Cellular SA (TIGO) Completes Delisting of Swedish Depositary Receipts | ...April 23 at 5:42 PM | gurufocus.comMillicom International Cellular SA (TIGO) Completes Delisting of Swedish Depositary Receipts | ...April 23 at 5:19 PM | gurufocus.comSEB informs Millicom (Tigo) it has completed the sale of sharesApril 23 at 4:30 PM | globenewswire.comSee More Millicom International Cellular Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Millicom International Cellular? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Millicom International Cellular and other key companies, straight to your email. Email Address About Millicom International CellularMillicom International Cellular (NASDAQ:TIGO) provides cable and mobile services in Latin America. It offers mobile services, including mobile data and voice, and short message services; and mobile financial services, such as payments, money transfers, international remittances, savings, real-time loans, and micro-insurance. The company also operates TIGO Sports for local entertainment; Tigo Money that allows its customers to send and receive money without the need for a bank account; and TIGO ONEtv for pay TV. In addition, it provides fixed services, including broadband and fixed voice; and fixed-voice and data telecommunications services, managed services, cloud and security solutions, and value-added services; and tower infrastructure and services. The company serves small, medium, and large businesses, as well as residential consumers and governmental entities. It markets its products and services under the Tigo and Tigo Business brands. The company was founded in 1990 and is headquartered in Luxembourg.View Millicom International Cellular ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 10 speakers on the call. Operator00:00:00Hello, everyone. Thanks for taking the time to connect to our Q3 2023 results conference call. This event is being recorded. Our speakers today will be our CEO, Mauricio Ramos our CFO, Sheldon Bruja and our President and COO, Maxime Lombardini. And following their prepared remarks, we will have a Q and A session. Operator00:00:21By now, you should have received the copy of our earnings release, which is available on our website, along with the slides that we will be referencing during today's presentation. Now, if you please turn to Slide 2, you can see our Safe Harbor disclosure. We will be making forward looking statements, which involve risks and uncertainties and could have a material impact on our results. We will also be referring to many non IFRS metrics throughout this presentation and we define these metrics on Slide 3, where you can also find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me turn the call over to our CEO, Mauricio Ramos. Operator00:00:58Mauricio Ramos Speaker 100:01:01Ramos? Good morning and good afternoon, everyone. Thanks for joining us today. As usual, I will go over the highlights of the quarter and Let's start on slide 5 with a recap of our 4 key priorities for 2023 and our progress to date. [SPEAKER STAVROS VIZIRGIANAKIS:] And around pricing for our services. Speaker 100:01:43You can see the results of these efforts starting to pay off in this Q3. Our quarter in Colombia had very strong EBITDA and And we're not done yet. We have now agreed with our partner to inject additional equity capital into the business in Colombia, So we can focus now on executing on the rest of the plan, which includes continued mobile growth, further cost discipline and as you know, some much needed inorganic solutions. 2nd, in Guatemala, we are creating the conditions for a healthy and very sustainable long term industry structure. In the last 6 months, we took part in 2 transparent and successful spectrum auctions in which both players were able to acquire all of the spectrum That was offered by the government. Speaker 100:02:25These were the country's 2 first auctions in more than 15 years. As a result, both competitors now Similar and much larger amounts of spectrum. We think the conditions are now set to return to a more rational pricing environment. 3rd, we continue to improve our operational efficiency across the business more than ever before. We're simplifying product offerings and operations, We are digitalizing processes, we are reducing headcount, and we are automating platforms. Speaker 100:02:52And across the board, we're driving new opportunities to further reduce costs During Q3, we began to implement Phase 2 of Project Everest, which we spoke about last quarter. We expect this Phase 2 to significantly increase the overall savings we can expect from Project Everest overall. 4th and finally, we have continued to make great progress towards carving out Latti, our tower portfolio. Earlier this month, we began transferring The new legal entities, we're now preparing to launch the monetization process. So let's review each of these points in more detail beginning with Colombia on slide 6. Speaker 100:03:30As most of you know by now, our mobile business has been growing rapidly since we acquired Critical Spectrum in the 700 MHz band in 2020. Back then, we embarked on a multi year plan to expand our mobile network and to extend the reach of our commercial distribution. Since then, we have steadily gained market share, especially in the postpaid segment, where we have doubled our customer base since acquiring the spectrum. The shift in mix towards postpaid has been lifting ARPU and driving mobile service revenues, which increased 8% this Q3. The scale we're gaining in our mobile business combined with efficiencies from Project Everest drove EBITDA margin to a record this quarter, as you can see on the middle chart. Speaker 100:04:12EBITDA grew almost 10% in the quarter and by close to 20% if we exclude the one offs. We And we are converting that EBITDA growth into operating cash flow growth, as you can see on the chart on the right. [SPEAKER ANDREW WIECHMANN Operator00:04:32MSCI, INC.:] OCF in Colombia Speaker 100:04:32is also benefiting from lower levels of capital investment in our home business. This is largely because we're choosing to remain disciplined on price. We're charging installation fees and implementing price increases and staying the course even when competitors don't follow and even if this means sacrificing subscriber volume, But gaining profitability. As we have told you many times, a significant portion of our CapEx is variable in nature and is directly linked to the number of new customers who signed up, Given the high cost of equipment that we install in their homes. So with higher prices, we're selling less, but we're also investing less and attaining a better return on capital. Speaker 100:05:07Going forward, we expect that our Colombia operation can continue to sustain lower levels of capital intensity than in the past for two reasons. 1, because our 700 megahertz network deployment is now largely complete and 2, because of the very material synergies we expect from the combination of our mobile network Spectrum with those of Telefonica. As you may have seen, this transaction has now received regulatory approval just a couple of weeks ago. Finally, as you may have heard, we recently agreed with a partner to each invest approximately $75,000,000 of equity into our Colombia operation. Despite all the noise that you may have heard on this topic, this equity injection had been planned for quite some time, and its key purpose is to provide Long term funding for all the long term investments that we have made in the business over the past several years. Speaker 100:05:53There's tons and tons of work to still do in Colombia, no doubt, But we made real good, good progress this quarter. Now please turn to slide 7 to look at Guatemala. As you know, competition has been intense in the prepaid mobile market since the end of the pandemic in Guatemala. As you also know, we took a variety of important strategic steps [SPEAKER ANDREW WIECHMANN:] And we remain convinced that this is the right strategy to preserve and grow the long term value of our business. And we see signs already that this strategy is beginning to pay off. Speaker 100:06:27The chart on the left shows evolution of our mobile customer base and market share in Guatemala over the last 4 years. As you can see, we picked up quite a bit of market share during the pandemic. We've been able to hold on to these gains and to our customer base even as our competitor began offering access to the most No doubt defending our customer base, which is definitely the right thing to do for the long run, Has had an impact on ARPU, service revenue and the overall profitability of the business. You can see this on the chart on the right, showing the evolution of our total service revenue growth in Guatemala over the last Several quarters. Yet, 2 important and positive events are relevant in the last few months in Guatemala. Speaker 100:07:061, after 2 consecutive spectrum auctions, Spectrum positions in the marketplace have been increased and stabilized. We no longer have a spectrum deficiency or a spectrum disadvantage in Guatemala. This has an important positive effect on our network efficiency and costs as well as on our service and product offerings. And 2, We took some price increases in prepaid in mid September. As a result, while the revenue growth remained negative in Q3, there were clear signs of stabilization compared to Q2 and we're encouraged by the trends we saw during the quarter. Speaker 100:07:38It's too early to tell whether this price increase will stick for the long run, But we are encouraged by the response at our points of sales and we're optimistic. And we do see the makings of a healthier industry structure in the making in Guatemala as we had anticipated earlier. We want to remain cautious on the commercial outlook and also flag that there have been some mass protests on the streets in Guatemala since the presidential elections a couple of months ago, and this may carry on until the new president takes office in January. So we remain cautiously optimistic in Guatemala. Now let's go to Slide 8 to discuss Project Everest. Speaker 100:08:14As many of you will recall, we began implementing our efficiency program earlier this year and we communicated an ambition of achieving run rate savings of more than $100,000,000 by year end 2024. We are on track to achieve those savings. In addition, early in the summer, we began working on Phase 2 of the program as we mentioned on our Q2 call. Indeed, in September, we began implementing important headcount reductions and new cost saving initiatives, starting with our centralized functions. We expect this first phase of Phase 2 to produce approximately $35,000,000 in additional savings on top of the initial $100,000,000 target. Speaker 100:08:50We also expect to finalize the scooping for the full Phase 2 along with our high note budget plan. So our ambition is actually much broader We have already identified very meaningful opportunities that we expect to implement mostly before year end. Sheldon will give you additional details about the cost of the program in a minute. On slide 9, let's review our progress on Latti. Latti is already a separate company and a separate brand. Speaker 100:09:14New legal entities have now been created in every country. Earlier this month, we started transferring our assets from Tigo to Latti and we expect to complete this process in November. This means that we're ready now to Launch process to monetize this important infrastructure asset in Q4. Yes, showtime is coming up soon. As we have said in the past, have certain preferences on the transaction that we envision with best maximized value. Speaker 100:09:38But as we have also said, we kind of keep other options open until we can evaluate and compare the options that are brought to the table. So stay tuned, opening date is indeed coming soon. With that, I will hand over to Sheldon to discuss the financials for the quarter. Speaker 200:09:54Thank you, Mauricio. Before we review the financials, let me quickly recap the macro context on Slide 11. As you can see on the slide, inflation across most of our markets has followed closely the trend we have seen in the U. S. With inflation back to a more reasonable level of around 4%, With the exception of Colombia, where inflation is still in the double digits. Speaker 200:10:14The good news, though, is that the Colombian peso has strengthened significantly this year And in fact, you will see that FX was a small tailwind for us during Q3. And in terms of economic activity, our markets are generally proving quite resilient With some countries like Panama and Paraguay expected to grow real GDP in the range of 4% to 5% this year. Now let's look at our Q3 performance beginning on Slide 12. Service revenue was $1,320,000,000 in the quarter, Which is up 3.2 percent on a reported basis from $1,280,000,000 a year ago. For the first time in more than a year, our service revenues benefited from favorable FX trends this quarter primarily due to the Colombian peso as I just mentioned. Speaker 200:10:56Excluding the impact of FX, organic growth was 1.8 percent in the Q3, very similar to the growth we reported in Q2. Our mobile business continues to perform well and accounted for nearly all of the growth in the quarter. Meanwhile, our fixed businesses were flat and this is consistent with our broader capital allocation strategy over the past year as I'll discuss later. Going down further on Slide 13 to the service revenue by country, as you can see, most of the countries experienced positive service revenue growth in the quarter. The two exceptions were Guatemala, which Mauricio already discussed, and Bolivia, which was down less than 1% in Q3. Speaker 200:11:37This is a significant improvement for Bolivia compared to last quarter as we've begun to lap the regulatory changes that have impacted results since August of 2022. Our mobile business had positive growth in the quarter and the decline is coming from our home business where we are choosing to be very disciplined on price to drive better cash flow from this market given the more volatile macro backdrop in this country. Colombia and Panama had low single digit growth and this is largely the result of our commercial Capital allocation decisions to focus on mobile in these countries. On the positive side, we've had solid mid single digit growth in the 4 countries on the bottom part of this page with all three business units contributing to growth in these countries. Okay, turning to Slide EBITDA of $533,000,000 was down 1.2% from $539,000,000 from a year earlier. Speaker 200:12:30This is a cleaner quarter than first half of the year, but there are still a few items to unpick here to provide a fuller picture of the performance. First, ForEx, primarily from Colombia, provided a small tailwind of about $4,000,000 this quarter. 2nd, we had 2 large one offs. The first was $22,000,000 for severance related to Project Everest, which I'll talk about later. The second one was for $11,000,000 and was the result of an adverse legal ruling in Colombia. Speaker 200:13:00Excluding FX and these one offs in this quarter as well as another in Q3 of last year, EBITDA would have grown 2.6% during the quarter with positive growth in most countries as you can see on Slide 15. On this page, you can see that EBITDA tells a similar story as our service revenue growth with positive growth everywhere except Guatemala and Bolivia. As Mauricio discussed previously, we are seeing some signs of stabilization in Guatemala. EBITDA declined 3% year over year, But it has been stable at $199,000,000 for the 3rd consecutive quarter. Bolivia was down 2.2%. Speaker 200:13:36This is a big improvement from the last three quarters as we began to lap the regulatory change that went into effect in August of last year And we've seen improvement in our mobile business there. On the positive side, Colombia stood out with EBITDA growth of 9.1% And almost 20% excluding the legal one off. As Mauricio mentioned already, our margins have been expanding over the past few years And we think there is still more upside here, thanks to Project Everest and other initiatives that we have been implementing in order to drive better profitability and cash flow from our business in this country. Panama grew 2%, which is consistent with the 1.4% service revenue growth we saw in the quarter. Remember also that we have made investments in our sports content offering that hurt our EBITDA growth this year but that investment strengthens our home business and help us maintain our leading market share in this business. Speaker 200:14:30You will also notice a lower margin in the quarter and this is due to higher equipment sales related to the large B2B contract that we expect will start generating service revenue beginning in Q4. Paraguay had impressive EBITDA growth of 8.1% And it was 11.6% excluding the Everest related severance. The strong performance is consistent with the strong service revenue growth we are seeing. In El Salvador, EBITDA growth of 16.1 percent benefited from a lower than usual level of bad debt that flatted performance this quarter. On a year to date basis, EBITDA is up just under 7%, which is more consistent with the mid single digit service revenue growth in that country. Speaker 200:15:11Nicaragua EBITDA grew 3.6% as our business and the broader economy continued to grow despite the volatile political environment. And that is largely thanks to remittances from the United States, which continue to grow very rapidly. Finally, Honduras, which we do not consolidate, Had another strong quarter with growth of 7.9 percent reflecting the improved revenue trends during the quarter. Now please turn to Slide 16 to review our efficiency program Project Everest. Mauricio already gave you the highlights, but I want to help unpack the various puts and takes. Speaker 200:15:46In terms of savings, we are accelerating our plans. For Phase 1, we remain on track to deliver more than $100,000,000 by year end 2024 and are in fact accelerating our plans. On a run rate basis, we now to achieve more than 75% of these savings by end of 2023. This is up from our previous estimate of more than 50%. As Mauricio told you, we have decided to significantly expand the scope of the project which we refer to as Phase 2. Speaker 200:16:19During the quarter, we incurred $22,000,000 of implementation costs. Dollars 19,000,000 of this was related to new actions and initiatives we took We're concentrated in our headquarters and other centrally managed and shared service activities, including approximately 30% of our Miami based population. This will result in additional run rate savings of approximately $35,000,000 above and beyond the Phase 1 savings of $100,000,000 In total, since the beginning of this year, we will have reduced our Miami based population by approximately 40% through a number of separate restructuring decisions. Over the next several weeks, we'll be finalizing our 2024 budget and we expect to take additional measures across all our geographies as part of that process where we expect additional severance charges to drive additional savings for the business. We will provide further information at our full year results in February. Speaker 200:17:16Now please turn to Slide 17. In addition to organizational savings, we have also had significant savings in capital expenditures this year. Through the 1st 9 months, our CapEx spend is about $150,000,000 lower than prior year. I've mentioned in prior calls the source of these savings, which is a combination of 3 key components of roughly equal size. Firstly, earlier this year, we conducted 3 year renewals with our largest mobile vendors where we have received multi year discounts. Speaker 200:17:46As you can see on the left hand side of this chart, our level of mobile build activity has remained constant Well, we are also able to absorb the impact of activating the new 726 100 Megahertz spectrum we obtained in Guatemala. Secondly, we've reduced our home footprint expansion in light of tougher competitive and macro environments in Colombia and Bolivia in particular. And lastly, home installations are down again primarily in Colombia and Bolivia as we are being more disciplined in pricing and promotions given the more challenging environments there. On top of this, we continue to scrutinize all other CapEx spending and are finding other opportunities to lower spend and contribute to this year on year savings. Now please turn to Slide 18 for our usual net debt bridge. Speaker 200:18:35Net debt declined $74,000,000 in the quarter to just over $6,000,000,000 Net debt to EBITDA after leases was 3.32 times. That's down from 3.34 times at Q2. If we include lease obligations of just over $1,000,000,000 our leverage was 3.34 times. The decline of the net debt during the quarter was primarily due to strong equity free cash flow of $100,000,000 which was partially offset by the ForEx impact from the translation of local currency debt as the Colombian peso strengthened this quarter. Regarding our equity free cash flow, I want to remind you that there is a lot of seasonality here. Speaker 200:19:10Q1 is usually negative and then we see improving cans throughout the year. The strong cash flow in Q3 reflects typical seasonal patterns As well as some of the benefits of Project Everest and of our capital allocation decisions over the past year. Looking ahead to Q4 which is usually the strongest quarter of the year I want to caution you that this year should be a bit different. This is because we're expecting more than $100,000,000 of spectrum payments in Q4. This is for the renewal of the 1900 megahertz spectrum in Colombia and the acquisition of the new spectrum of 700 megahertz band in Guatemala. Speaker 200:19:48Items that we flagged for you when we revised our equity free cash flow targets in June. Also in Q4, we have to pay a lot of the severance that we booked in Q3 and that we expect to book in Q4. Let me hand the call over to Maxim who is joining us for the first time in this earnings call. Speaker 300:20:06Thank you, Sheldon. It is my pleasure to be here today. As you may know, I joined the company on the 1st September, so little less than 2 months ago. At this time of year, the Company begins planning the budget for next year and this has given me the perfect opportunity to interact with each Of the country teams and with the leadership teams in Miami and Luxembourg. I have also had the opportunity to travel In our 3 biggest countries of operations, Guatemala, Colombia and Panama, and I have more visits planned before year end. Speaker 300:20:42[SPEAKER JEAN FRANCOIS VAN BOXMEER:] As you can imagine, I am still learning about the Company. But today, I can share some of my first impressions and my priorities. Firstly, Tigo is an incredible company with a strong brand and market leadership position, run by a talented team, A team with a strong culture and can do attitude, ready to take on any challenge when the target is clear. [SPEAKER JEAN FRANCOIS PRUNEAU:] But we do business in countries with volatile macroeconomic and political environments, and we do not generate enough cash. This means that we must de risk the Company by operating efficiently and with lower leverage. Speaker 300:21:27And we must ensure that the business can generate much higher equity free cash flow every year. With that in mind, one of my first priorities has been to significantly expand the push on costs. We started immediately in September by decreasing drastically HQ costs in Miami. And currently, as part of the budget process, I am challenging each country team on their costs and CapEx. On a day to day basis, I am personally reviewing each purchase order and every dollar that we spend. Speaker 300:22:06So short term, a strong focus on cost control is the clear priority. And as we strive to deliver on the free cash flow target that we are reiterating today, I will be equally that TIGO customers have come to expect. I will report back to you next quarter on our progress with more details. Operator00:22:41Thank you, Maxim. With that, we're going to now go to the Q and A session. As a reminder, if you'd like to ask We'll take the first question from Oskar Ronkowitz from ABG. Oskar, the line is yours. Speaker 400:22:58Thank you and good morning. Even though it's in the middle of the day for me in Stockholm. Just two questions, if that's okay, please. Just First one on Guatemala. You say that signs of improvement or an improving market is visible. Speaker 400:23:13So how should we think about Timing, you remain at around 1% to 2% decline in service revenue, like the last few quarters. So just Wanted to get a sense of if you should see that delta improving already in Q4 or if you expect that to take a bit longer. My second question is just on CapEx. I think you have been around $180,000,000 each quarter for the last 3 months. And you say that, I mean, you're holding Back a bit on home, right? Speaker 400:23:41And then also you are looking at efficiencies. So just the 180 figure over the last three quarters, I guess That's a bit low maybe on the sort of run rate on an annualized basis. Just if you could elaborate on the timing or Any quantification on the new run rate, please? Thank you. Speaker 100:24:01All right. Hello, Oscar, and welcome. Thank you. I'll take the first one on Guate, timing, etcetera, and the market. And, I'll Give Sheldon a little bit of time to prepare some numbers for you on the CapEx question. Speaker 100:24:20On Watte, I think We've played it really, really well. And the timing, which is the core of your question, is happening Pretty much as we expected it would happen. And with that, I'll give you some color. As you recall, over the last Year or so, we faced a tremendous amount of competitive pressure on prepaid. We set out to basically hold our market share position, a very strong market share position. Speaker 100:24:55And we've been able to do that, Not without some pain on the revenue for sure, but certainly holding on to our market share and our subscriber base. And we did that knowing that we could and we would revamp, re stabilize both the spectrum position and the network position. And we have done that. That was the long game. That was the long strategy that we were playing. Speaker 100:25:20And over the course of the quarters this year, we have seen that play out. 2 consecutive spectrum auctions. We no longer have any network disadvantage. We no longer have any service disadvantage. We no longer have any spectrum disadvantage. Speaker 100:25:33So So quite frankly, we were playing the long game and it has worked out as we expected it would. Subsequently to that, we took a price increase on prepaid, to a percentage of the prepaid base, in mid to late September. So you don't actually see it in the quarterly numbers yet. But as we look forward, this was the timing that we were expecting, Strong network position, strong spectrum position so that we could now focus on the commercial actions. So far, as I said, we are Cautiously optimistic, cannot guarantee ever, can ever guarantee that price increases will stick, But we're certainly playing a cautious, well played game here. Speaker 100:26:21So the answer to your question is things have been playing out as we We wanted to play them out. We're also just mathematically lapping pretty much The initial effects of the push on competition, but we are playing the long game here, Oscar. And that's why we use the term Cautiously optimistic. Things are better in the market. They're more rational in the market as compared to what they were before. Speaker 100:26:49We're playing the long game and we're playing a very strategic game here. So we're cautiously optimistic. Going into Q4, just to manage your expectations, remember we had Very good Q4 last year because of the World Cup that we had. So we're not going to have that this year. So again, long term means q4 will have some, you know, some difficult comps vis a vis the World Cup. Speaker 100:27:15Ramiz, anything guys? Operator00:27:17I think, Oscar, we should also just flag that there's been some significant protests in the street in Guatemala these last several weeks since the presidential election, so that has created a little bit of a disruption in terms of economic activity. But, the new president takes office in early January, So that could continue for some time, but still a little too early to know what what kind of impact that might have. Speaker 100:27:40Yeah. Guatemala has a very lengthy time frame In elections, an actual handover is over 6 months. So that's created a little bit of political turmoil there. So come January, our hope would be, I think, we'll be on the quiet side politically. Speaker 400:27:57Harshad. Speaker 200:27:58Okay. On the CapEx question you had, look, I mentioned a lot in the presentation around what was driving some of the reductions in CapEx This year, I mean, really around basically majority of CapEx decline really related to 2 Colombia and Libya where I think it's absolutely appropriate some of the steps were taken in terms of Around our homespan given the situations in both those countries. But look, going forward, I would say, you would have heard it kind of in Maxim's comments, in addition to the things that's been happening this year, we are being very disciplined And scrutinizing sort of CapEx spend across the business, I would not expect CapEx spends to be higher than what you're seeing Right now, as we go into 2024, I would expect us to be slightly lower than those levels on a going forward basis. So that's how, you know, if you're asking sort of where we see the trendings going, it's, you know, levels lower than what you're seeing currently. Speaker 400:29:04Understood. Thank you very much. Operator00:29:06Thank you, Asar. Okay. Next, we're going to go to Fani Kanumuri from HSBC. Fani, The line is yours. Speaker 500:29:16Yeah. Thanks everyone for taking my questions. My first question is on Colombia. You seem to have had a good margin accretion this quarter. How sustainable is the margin accretion? Speaker 500:29:28And Once you complete Project Everest, where do you expect the margins to trend in Colombia? And again, the second question is again in Colombia. You had a recent equity infusion into Colombia. Do you see any potential equity infusions in 2024 or 2025 into Colombia? Speaker 100:29:49Alright. I'll take, the first one and perhaps a little bit of the second one. And as always, give Sheldon a little bit of time to get the numbers right. So the things, Fani, that have been driving, our record margins in Colombia this quarter are a combination of activities. First, as you recall, there was a ton of network investment and commercial expansion that happened in the years prior Right after we had bought 700 megahertz spectrum. Speaker 100:30:21That's behind us. So now we are more on the Efficiency phase of those network investments and commercial expansions. The second element is that, as you know, mobile is a game of And we have been gaining scale, particularly in postpaid in Colombia. So obviously, that helps the margin on a Fixed cost based business. The 3rd element in Colombia is Project Everest, Phase 1 of Project Everest, which we started very early on this year. Speaker 100:30:53And as we've been talking, there's a Phase 2 that will help Maintain sustainability of that margin expansion going forward. The 4th element is that there's been, And I use these words with a degree of cautiousness, more price rationality in the market in the last few quarters. And particularly, we've been able to sustain or drive service revenue on postpaid, both on volume and on our business as well. And Also, we've been very, very disciplined on the home business as we alluded during the call, TP prices are charging installation and if need be sacrificing volume over profitability. And that's what you see in the results. Speaker 100:31:38Going forward, Profitability will also be enhanced by the mobile network and spectrum contribution agreement that we talked about in the prior quarter and this quarter. And all of this combined lead to the one single focus that we have in Colombia, Which is to make Colombia equity free cash flow positive. As you recall me saying a number of times, it's the only operation in the portfolio That has not been equity free cash flow. And our drive has been to make that business equity free cash flow. And I'll tell you at The risk of not giving you specifics that we're really focused on making that happen as soon as possible. Speaker 100:32:22And that gives you an idea as to why we're driving hard with the expectation of not having any additional equity And with that, I'll hand it over to Sheldon. Yes. No, Mauricio, you really Speaker 200:32:35hit the key points. I mean, I think EBITDA is I think And EBITDA margins are important metrics to be tracking. But most importantly and more importantly is it's the equity free cash flow performance we're trying to drive out of that business And getting that business to equity free cash flow breakeven first initially and ultimately equity free cash flow positive. And Of course, that once that's achieved, that's going to certainly address your second question about will more capital be needed from the shareholders. I mean, the answer would be no once we get to that business So that's where the focus is. Speaker 200:33:08Look, I think we're going to make a lot of progress on that in 2024 in terms of Achieving that objective and, that's kind of where the focus is right now for that business. Speaker 500:33:20So in the best case scenario, when do we expect to achieve a kind of breakeven, at least a broad timeline for EcoColombia? Speaker 100:33:33There's this thing that happens on a yearly basis called the budget, Right. That's all I'll say. That's a non answer, Fanny. As soon as we possibly can, there's nothing we You can just imagine how focused we are on this, Fani, right? As soon as we can. Speaker 100:33:50We've done everything in Colombia. Again, back to the Guatemala question, buy the playbook. This is the game we're playing with a single objective, which is to get Colombia equity free, cash flow positive as soon as possible. And just about every action has been driven in that direction. We put Everest Phase 1 early on in Colombia, early this year. Speaker 100:34:10We're obviously focused on Colombia for Phase 2 of Everest. And all you can take away from without forcing us into Specifics on guidance is that we're very focused on making Colombia accretive free cash flow. Speaker 500:34:24Okay, sure. Thanks a lot for that. Operator00:34:26Thank you, Fanny. All right. Next, we're going to go to Marcelo Santos from JPMorgan. Hey, Marcelo. Speaker 100:34:31Hi. Hello. Good morning. Thanks for taking my questions. The first question is just if you had any update on Tigo Money strategic alternatives. Speaker 100:34:39So you disclosed that in the Investor Day, so I just wanted to know how this is going. And the second question is actually for Maxime. You mentioned that you're going to do the right investments to capture the long term revenue growth Could you expand a bit on what do you see as the main long term revenue growth opportunities? If you could give some color, it would be great. All right. Speaker 100:35:00I'll take the first one and give, Maxime a little bit of time to, prepare a couple of brilliant IPAs There, for sure. So listen, on Tivo Money, we continue to grow the business quite positively. Geographically, as you may recall, we're very strong in Paraguay, very strong in Bolivia. We've relaunched this year in Guatemala. Tico Money existed in Guatemala, but it didn't have the full suite of products in there. Speaker 100:35:32So we relaunched in Guatemala. We've also attained line synthesis and launched in Panama, and we're happy with the progress that we're making then operationally. Our second area of focus is making sure that we complete the delivery and implementation of The full suite of the service offering, so the Wallet app, but also continue to increase the merchant community And also begin piloting, which successfully delivering in Bolivia and also in Guatemala. And we continue to find very important ways of making the telecom business work really closely with the Fintech business in the eyes of the consumer, which we think is a win win for everybody. And we're also now beyond this investment phase We put for the last couple of years very focused again going back to our cash flow agencies for 2024 on making sure TIGO money is With all of these investments and launches behind it, OCF breakeven. Speaker 100:36:36And we're very happy with that result, which leaves us then with Plenty of flexibility to then figure out in these very difficult fintech markets, Marcelo, when is the best Time to maximize and how is the best time to maximize the value of that asset. And that is the punchline to your question. And, Maxime, short time for you. Speaker 300:37:01Thank you. Good morning and good afternoon. Thank you, Marcelo, for your question. You know, I joined the company something like 7 weeks ago, so it's a bit early to Describe a full strategy for the future. What I wanted to say with a few words about the future is that the future of a company cannot be only on cost cutting. Speaker 300:37:23COS continues today a clear need to be back to cash generation but that's not The sole project for the company. We are working a lot also on capex optimization, meaning where to invest properly in mobile, Densification coverage and more importantly probably where to invest and what to do on home. Well, you know, The margins are a bit stretched. So those I would say will probably comment a bit more next But today it's a bit too early. And then there are many, many other options within each one of the On the geography where on the home business, as you can see, there are many networks overbuilding and probably Intelligent solution that could be worked on. Speaker 100:38:21Wonderful. Thank you very much for the answers. Operator00:38:26Thank you, Marcelo. So next we're going to go to Stephane Gauffin of DNB. Speaker 600:38:39So can you hear me now? Yes. Great. So a couple of questions. First On the network JV with Telefonica in Colombia, if you can somehow Quantify what kind of savings you could get from that on both OpEx and CapEx and when those can materialize? Speaker 600:39:09And secondly, a question for Maxim. You mentioned in your remarks that given volatility in these markets, you believe The leverage is a bit high, which I think all of us agree to. But now given The strategic initiatives with the sale of, Latvia, etcetera. So my question is, where would you see Leverage to go to be comfortable and if it's totally preferred to pay down debt rather than have Some sort of shareholder remuneration from sale of Lati, etcetera. Thank you. Speaker 100:40:07JV briefly. And then I'll hand over the second one, if it's okay, to you, with you, to our CFO, Sheldon, So that we provide you with the full institutional I got to do this in my role as I can see your smile as interim chair So that we provide you with the full institutional view on leverage from the Board. On the network JV, I think the 2 key areas with our ability to give you specific details. Obviously, there is the OpEx and CapEx savings of running a single network, right? That's the nature of a network JRB on mobile. Speaker 100:40:51In addition to that, there is the synergies of running a single pool of spectrum. And this is important, particularly in Colombia, because the cost of spectrum in Colombia is significantly higher than in most other regions. So the ability to run not only a single network from the CapEx and OpEx side, but also to pull your network is an important part of the savings And on the question of leverage, you will be happily reassured We have coincidence on our targets institutionally. Sheldon? Speaker 200:41:30Sure. Look, on leverage, I think What we've said before, Stephane, on this point, our intermediate target remains 2.5x EBITDA. We haven't made the progress towards that objective this year for a variety of reasons. Some of them were in our control, some that There weren't, but we've got several one offs this period, things that were unusual items, but also things that we're doing in driving the business around the severance costs. We see us making a lot of progress next year on this leverage reduction. Speaker 200:42:05Next year is going to be a big year for us for cash flow generation. As we said, it's going to be the highest of the 3 years in our 3 year targets, in terms of what we're going to be delivering. It's also going to be sort of cleaner of a lot of the one off charges we've been taking, This year, with regard to the severance charges, I will point out, we're expecting, as you've heard in my prepared remarks, more severance charges in Q4 the benefits will be accruing in 2024. And currently this year, there's kind of a lot of unusualness, a little bit around That's also ticked our leverage up a bit higher. In particular, Colombia has appreciated from a currency standpoint, now a lot of that appreciation has happened more recently. Speaker 200:42:55And so, in terms of the benefit on EBITDA, that hasn't really slowed through our LTM EBITDA, last 12 months of it, but it has hit us pretty quickly on marking to market the Colombian debt on a higher basis On the debt situation, so that should roll off assuming that trends kind of remain constant on the currency, that should also Benefit us into 2024. So look, I think we're going to be making progress on the deleveraging certainly in 2024. We told you On a previous call that we expect to get to that 2.5x level in by 2026, 1 year later than previous given some of the adjustments we've made on our equity free cash flow outlook. But look, we're going to make a lot of progress on that And really seeing meaningful progress in 2024. As it pertains to Lati, quite frankly, I think we're going to kind of hold off and sort of [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Talking about proceeds from Lati until we have proceeds from Lati, right? Speaker 200:43:57So, but we're launching a process and we'll have to see how that process evolves in terms of what we are able And then we'll assess the situation at that point in time, I think, in terms of what's the best way to allocate those proceeds. Speaker 600:44:11Yes, yes, agree. Better to wait until the bear is shot before we sell the skin. Speaker 100:44:21That sounds like the Scandi way of saying it, Stefan. The priority remains to reduce leverage. That's the short answer. Operator00:44:32Thank you, Stefan. So next we'll go to Eduardo Nieto of JPMorgan. Speaker 700:44:37Eduardo? Yes. Thank you, guys. So part of my question was already answered, but I wanted to follow-up on the capital allocation strategies. Moody's recently put you on a negative watch, basically because of challenges in Colombia, but also because of high leverage and governance concerns potentially having more aggressive financial policies, you partly addressed that, but curious on what your plan is to address those concerns, avoid The downgrade, and my second question would be in Colombia, in terms of the 5 gs auction. Speaker 700:45:09Obviously, I'm just curious about how you will translate the EBITDA performance into cash flows and how you expect spectrum costs and All those items to behave going forward. If you see any other opportunities, you talked about inorganic solutions. So curious if you can give any more color on that. Speaker 100:45:30Yeah. Listen, on on the part, Eduardo, that, that has a little bit of the noise on Colombia. As you very well know, there was just a lot of noise there, but the reality is we came out of that process with a well capitalized business, a business that has expanding margins, Revenue growth, OCF growth and has, as we discussed earlier, a significant focus on driving the business So I think there was a lot of noise there, but the reality is the business in Colombia is improving significantly At all levels, including its strategic optionality going forward. And as that relates to the group, as we just discussed, And I'll hand it over to Sheldon for additional. Our focus remains on cash flow generation next year, as we have said A number of times and we'll repeat that today. Speaker 100:46:21We think 2024 is a year of our cash flow. And with that, I think we We reiterate our focus on reducing leverage as we have done this number of times. 5 gs on Colombia, We're reviewing the terms. They just came out last night. Obviously, we've been very involved in the process. Speaker 100:46:42We understand a lot of it. But I'd rather answer that question once we have full information on exactly what the details of that. It's an ongoing process. Those processes do tend to move around and shift around as they are being finalized with the authorities. Sheldon, anything? Speaker 200:47:00Well, not too much more to add. I think in terms of terms of the Moody's, you know, concerns that they're highlighted, I think are the exact items that we probably have as our four priorities in terms of what we're addressing as a So, look, we need to deliver stronger cash flow. We believe next year and stronger deleveraging. We believe next It's going to be a big year for us on that front and go a long way towards addressing a lot of things that you guys have been highlighting to us and Moody's has been highlighting to us. So I think We've kind of highlighted exactly what we expect from a cash flow perspective and a deleveraging perspective. Speaker 200:47:35And I think now we just Deliver on that and to address those issues. Speaker 700:47:41Understood. Thank you very much. Operator00:47:43Thank you, Eduardo. Okay. Next up, I think we have Andre Salas from UBS on the line. Andre, are you there? Speaker 800:47:54Yes, Simon. Sorry about my camera because I am being technical difficulties here To make it work, sorry. So hi, everyone. First of all, thanks for the presentation and for taking my question here. Actually, I have 2 on my end. Speaker 800:48:10The first one is more like on a cash flow basis with soft positive contribution here of working capital to free cash flow in this quarter. Operator00:48:19Could you Speaker 800:48:19please give us a little more color on that? What has driven this positive impact? And if we should expect the same trend to go in the following quarters? And the second question is regarding a broad timeline here in the Guatemala business. So when do you expect that the improved Spectrum capabilities that you now have would translate into better efficiency and if it could mean Investments here in the country in the upcoming quarters. Speaker 800:48:50That will be all from my side. Thank you. Speaker 100:48:53Sure. I'll be brief on number 2 and give Sheldon a little Time to look at the numbers in detail. We've been working, as I said, for the long run, long game as I I'm on the ready for a question, Guatemala. So we were readying up the network and getting ready for the use of the new spectrum pretty quickly. So a lot of that has been done. Speaker 100:49:17And as a result of that, we have started the subsequent commercial activities, as I said, on September 18th. So now really it comes down to the marketplace, Andrea, and stabilization of the commercial activities in the marketplace. And as I alluded also, Some of the political last few weeks issues also to stabilize. So it's less of a Network and the spectrum issue and more of a commercial stabilization going forward. And as I said earlier, we took a Prepaid price increase, we're optimistic about it and commercially we're cautiously optimistic. Speaker 100:49:58That's the full answer on that one. Sheldon? Speaker 200:50:01Sure. On the equity free cash flow performance for this quarter, I mean, look, I mean, you highlighted working capital. I mean, I would highlight, I think, Strong performance come across the board. I mean, OCF was a big contributor to us this quarter in terms of driving equity free cash flow. Taxes, I think, was a contributor for us in terms of driving free cash flow this quarter. Speaker 200:50:23Interest costs actually was not, as we've been talking about, just some of the higher Interest rate environment in some of our countries. Working capital contributed as well, but to some degree, a couple of items I would highlight there for you though. We took our severance provisions, here about $22,000,000 this quarter. That's going to be paid in future quarters, right? So that's probably that's one of the contributors to The working capital benefit, the same on this legal provision we took in Colombia that was cash out at least this period. Speaker 200:50:54So that was Also a contributor to working capital, we did have a large B2B project in Panama that we were that Benefited us a bit on working capital, sort of the timing of sort of payments received versus payments going out to some subcontractors and some of the equipment providers who are providing Some of the information or some of the aspects of that project. So that benefit us a little bit as well on working capital. Those are probably the key items I would highlight. But look, I think it was a good quarter overall from equity free cash I was cautious in terms of making sure you have in terms of forward looking, I did pull out and highlight a few items on a forward looking basis on equity free cash flow, particularly Spectrum in Q4, which is going to be a big uptick for us. We highlighted in June, in terms of a full year perspective of Higher spectrum costs this year, but particularly it's going to be pronounced in Q4 for us this year, on the spectrum costs as well as then just paying for some of the items that we took, We booked here from a severance perspective this quarter as well as what we expect to be booking next quarter. Operator00:52:10All right. Thank you, Andre. Speaker 800:52:12Thank you. And sorry once again for the camera. Operator00:52:17No worries. Thank you, Andre. All right. So next we'll take our last question from Fredrik Lythels from Handelsbanken. Fredrik, good to see you. Speaker 900:52:24Good to see you. Thank you very much. Thank you for taking my questions as well. Maybe just a little bit of a housekeeping, Sheldon, you think you mentioned earlier about severance costs also in Q4. Was that correctly understood? Speaker 900:52:38Or did we see a peak here in Q3 3 on severance costs. That's the first one really. The second is on the Everest 1, 2 and possibly Number 3, enlargement of all sort of that project as well. I'm just curious to get an elaboration on how Deep, you can cut in cost before it starts to hamper your ability to push growth At the same time, I'm just curious how you balance that going forward so you don't get Poor scores on customer care or you're not setting up the next base station or whatever it might be. I'm just curious to Have a sort of a reasoning around that balance would be interesting to hear. Speaker 100:53:27Yeah. I'll start with the second one. Obviously, Frederic, we'll be very, very careful, very, very conscientious. And obviously, we start with the areas That are less revenue generating and protect those definitely as part of the process. So You can rest assured that we are surgical in our approach, but everything gets reviewed with a payback analysis And we certainly protect the areas that are long term revenue generating as part of the process. Speaker 100:54:01But there is room To be more and more efficient, the ambition on Everest was Always significantly high and we're emboldened and supported by our new largest shareholder to take that opportunity. And as we've been discussing some of the markets that are part of the question, we should also highlight that part of the reason why we see a path To better cash flow in many of those markets is because we see efficiencies, significant efficiencies there at all levels as well. [SPEAKER MARTIN KITS VAN HEYNINGEN:] So that's the full answer to your question. Speaker 200:54:40Yeah. I would just add, I mean, I think in addition to that, I mean, I think, you know, through these cost savings, we're trying to take complexity out of the business And that's simplification, which I think quite frankly can be beneficial from a customer perspective as well, fewer product offerings, fewer Complications in terms of how they interact with us, etcetera. So some of the cost savings actually, hopefully, it will be I would expect to be beneficial as well to the top line, Not to sort of cut if you're trying to purchase or are we cutting fat and muscle out of the business, I think quite frankly, I think we're trying to improve the way we operate as a company. [SPEAKER THOMAS MONROE PATTERSON:] In terms of additional severance costs, I mean, yes, we're going as I alluded to, we're going through our budgeting process right now. And we know as we've [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] We've taken the actions around the headquarters this quarter in terms of this Phase 2. Speaker 200:55:27We're finalizing our plans [SPEAKER MIHAEL POLYMEROPOULOS:] For the countries here, as we finalize the budgeting, and there will be charges here in Q4 related to that. We're not going to [SPEAKER MIHAEL POLYMEROPOULOS:] Give you essentially size and guidance on that at this point in time, but it will be tens of 1,000,000 of dollars of severance costs, I would In Q4, and we'll be giving you much more color on that once we complete our budgeting process here and at the full year results in February. Speaker 900:55:57Perfect. Thank you very much. Operator00:55:59And consistent with that, Frederic, you should assume that that 135,000,000 number will also increase commensurately. Speaker 200:56:06Right. Thank you. Operator00:56:08All right. Okay. Thank you very much, Frederic. So I think that wraps up the Q and A session. Maoisto, back to you. Speaker 100:56:15I just want to give you the 32nd wrap up just to make sure that the big points are clear. And they should be pretty obvious on our call today. Tons of work in Colombia and that work is in progress. But we made a lot of progress this quarter and we're heading in the right direction. As we alluded during the call, we have a clear objective ahead of us. Speaker 100:56:46In Guatemala, as you have heard us for a number of quarters, our market leadership has been sustained. Spectrum positions have now been equalized. So we no longer have a spectrum or a network disadvantage and we're putting that to use. And there are initial signs of a healthy environment after we took some price increases in prepaid in mid September. So as I said, we're cautiously optimistic in Guatemala. Speaker 100:57:11And as you've heard, our cost savings and our ambitions on efficiency have been increased with a broader phase 2 of Project Everest. And most importantly, all of these efforts are aimed at a single thing, which we have alluded to before. And that is to make 2024 the year of our strongest cash flow delivery. So hopefully those points are clear and thank you for joining us today.Read morePowered by