Liberty Latin America Ltd.

Good morning, ladies and gentlemen. Thank you for standing by. Today's call is being recorded. I'll now turn the call over to Michael Coakley, VP, Head of Communications of Liberty Latin America.

Good morning, and welcome to Liberty Latin America's second quarter 2021 investor call. At this time, all participants are in listen-only mode. Today's formal presentation materials can be found under the Investors section of Liberty Latin America's website at www.lla.com. Following today's formal presentation, instructions will be given for a question and answer session. As a reminder, this call is being recorded and will be available under the Investors section of our website. Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects, and other information and statements that are not historical fact. Actual results may differ materially from those expressed or implied by these statements. For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10-K, and the most recent Form 8-K filed with the SEC, along with the associated press release. Liberty Latin America disclaims any obligation to update any forward-looking statements or information to reflect any change in its expectations or in the conditions on which any such statement or information is based. In addition, on this call, we will refer to certain non-GAAP financial measures which are reconciled to the most comparable GAAP financial measures which can be found in the appendices to this presentation, which is accessible under the Investors section of our website. I would now like to turn the call over to our CEO, Mr. Balan Nair.

Thank you, Mike, and welcome everybody to Liberty Latin America's results presentations for the second quarter and first half of 2021. I'll begin by taking you to our group highlights. and operating results before handing over to Chris Noyes, our CFO, who will follow with a review of the company's financial performance. After that, we will get straight to your questions. As always, I'm joined by my executive team from across the region, and I'll get them involved as needed during the Q&A following our prepared remarks. As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.gov. Starting on slide four and our highlights, we delivered a strong set of results in the second quarter as our markets continue to recover from the impacts of COVID-19. RGU ads of 73,000 represented continued momentum following a record quarter one performance. Cable and wireless Caribbean and networks and Puerto Rico once again drove the group with strong commercial execution. In mobile, we had our best ever quarter, adding 118,000 new subscribers. This was done by Panama, where we nearly replicated our record Q1 performance, and in Jamaica, where ads were 55,000, which was 45,000 higher than the first quarter. Our continued operational recovery, which drove 8% pre-based revenue growth, together with a disciplined focus on cost controls, resulted in a robust rebase-adjusted OEBDA growth of 10% in Q2. Liberty Puerto Rico had another strong quarter, up 21% on a rebase basis, while CNW Caribbean and Networks and CNW Panama also delivered double-digit rebase growth compared to Q2 2020, which was our quarter that was most impacted by COVID-19. We also grew sequentially from Q1, which shows our resiliency and focus. New build and upgrade plans are a core element of our growth strategy and following our most active first half ever with approximately 360,000 new homes passed or upgraded, I'm pleased to announce that we are increasing our 2021 target to now deliver over 700,000 new or upgraded homes. more than 95% of which are fiber to the home. Finally, we announced earlier this week that we have received the required authorizations to complete the acquisition of Telefonica's Costa Rican operations. We expect this transaction to close very shortly. Moving to slide five and highlights for our key markets. Note that we've provided relative revenue contributions for each market through the percentages shown. Starting with Puerto Rico, our largest single market, which contributed nearly a third of the group's $1.2 billion in revenue in the second quarter, all of which is U.S. dollar revenue. We continue to see strong growth in our Puerto Rico operations as broadband penetration increases, and we continue to deliver healthy ads in terms of the integration of Liberty Mobile, This is progressing well and remains an exciting driver of future free cash flow growth as we look to generate significant synergies from the in-market combination. Moving to Chile, which represents 18% of LLA revenue in Q2, we are progressing here by stabilizing the subscriber base and now look to build on this platform by selling to our growing high-speed footprint. Given the challenging competitive environment, We are also very focused on managing costs and are seeing some savings from actions we have taken. And we are matching our competitors' pricing. We would rather give our consumers the savings than to concede any subscribers to our competitors. Lastly, while we are seeing some easing of mobility restrictions, curfews and international travel restrictions still remain. Next to Costa Rica, where, as I mentioned, we will close our acquisition of Telefonica's business very shortly. This will create an innovative, converged scale player in the market and drive good synergies through in-market consolidation. As with many of our markets, some degree of mobility restrictions is still in place. However, Cabletica has consistently performed well through the past 18 months, driven by growing in-home broadband demand. Turning to the bottom row and Panama, which contributed 11% of groups revenue in Q2. Here we saw our mobile momentum continue in Q2 with subscribers additions driven by the TodoTorito plan. Panama is one of the most severely impacted markets by COVID-19. However, mobility restrictions have eased and the ability of vaccines is expected to increase. Next to Jamaica, which is the largest CNW Caribbean and networks market and represented 9% of LLL revenue in the second quarter. Here we have seen some very good operating and financial results despite relatively low vaccination rates. In the last 12 months, Jamaica has added 95,000 RGU's and 111,000 mobile subscribers, which is a testament to the hard work of our team. and the consumer acceptance of the new propositions we have launched. Moving to networks, which contributed 7% of LLA's Q2 revenue. As we've mentioned in recent quarters, this is a high margin and mainly US dollar business that has also benefited from increased bandwidth demand across broadband and video applications in the region. Lastly, what we've categorized as other markets. representing the rest of CNW Caribbean and networks and contributing just under a quarter of Q2 revenues for LLA. Growth for these markets is expected through higher data penetration and usage in both our fixed and mobile products. In terms of the broader backdrop, tourism is an important economic driver for these markets and an increased number of visitors is anticipated in the second half of the year, further helping recovery. Of the markets in this grouping and LLA overall, Trinidad is currently the most negatively impacted by COVID-19 restrictions. Turning to slide six and our operating performance, starting with fixed subscriber additions where the group had another strong quarter, bringing first half net ads to just under 150,000 RGUs on nearly double the prior year period. Taking each reporting segment in turn, CNW Caribbean and Networks, shown in the upper left, reported higher net ads year-over-year in the second quarter, with the largest contribution coming from Jamaica, where we added 26,000 RGUs. The Bahamas and Barbados represented the majority of the remaining ads. In Panama, we added 9,000 RGUs in the quarter, with footprint expansion and product improvement set to drive further growth through the year. ARPU was impacted by retention activities such as the use of lifeline plans, discounts, and moving customers to lower-cost plans. Liberty Puerto Rico in the Upper Center continued to increase broadband penetration and grew its subscriber base by 22,000 in the quarter. The prior year benefited from higher demand as customers adapted to working and learning from home. In Chile, we are stabilizing our subscriber base following RGU losses in the second half of 2020. The market remains very competitive and we continue to focus on customer retention as mentioned on the previous slide. Our last segment, Costa Rica, shown in the upper right, had another good quarter with net ads of 11,000 and robust ARPU development. As a group, We delivered strong Q2 ads of 73,000 RGU's with year-over-year improvements driven by CNW Panama and CNW Caribbean Air Networks. Our group ARPU per customer at $50 was up 3% year-over-year on an FX neutral basis. Moving to slide seven and a record mobile performance. Starting again with CNW Caribbean and Networks in the upper left, where we added 58,000 subscribers in the quarter, a swing of 234,000 subscribers as compared to Q2 2020. Jamaica added most of the segment subscribers in the quarter, up by 55,000. Turning to Panama, which again generated the most ads in the quarter, growing its space by 60,000 net subs. As mentioned, this was driven by our unlimited data, Todo Torito plan. Liberty Mobile grew its subscriber base modestly in the quarter. Of note, we saw improved growth in post-paid where we added 11,000 subscribers. Finally, VTR lost 7,000 mobile subscribers in the quarter. We operate as an MVNO in Chile, predominantly providing post-paid services to existing fixed service subscribers and are a small player in the market. In aggregate, as a group, we added a record 118,000 mobile subscribers in the quarter with a blended ARPU of $19. The increase of 68% year over year is driven by the inclusion of Liberty Mobile in Q2 2021. Next to slide eight and our B2B operations. Starting with a total group performance on the left side, we delivered robust rebates growth of 5% in the quarter as markets continue to recover steadily from the impacts of COVID-19. In the center, we break out the performance of both CNW Caribbean and Networks and CNW Panama. These segments include the majority of our B2B operations, representing approximately 80% of total B2B revenue. The upper graph shows stable year-over-year performance across our subsea business and LATAM B2B markets, where we have attacker competitive positions. Our incumbent Caribbean and Panamanian B2B operations have faced greater challenges over the past year primarily due to reduced tourism and the associated impacts on local economies where we operate. Due to the revenue reduction, there has been more scope to recover in these operations. However, we are yet to reach pre-COVID levels. On the right of the slide, we wanted to provide a brief update on our B2B customer segments. First, our enterprise segments, which represents approximately 40% of our B2B revenue, is recovering well, driven by improved economic visibility and business confidence in our markets. This segment benefits from the shift to remote working and associated solutions. Second, wholesale, which is mainly comprised of networks in CNW and represents about a quarter of B2B revenue overall. As bandwidth demands grow, this drives our wholesale business. Third, small and medium businesses or SMB contributed about 15% to B2B overall. Digital innovation during pandemic has provided a growth driver for this segment. Fourth, government projects and services, which also represented approximately 15% of B2B revenue. This is particularly significant customer segment in Panama, where several new projects have come to the market associated with a drive to digitalize processes, record keeping, and other related infrastructure. And lastly, hospitality, which represents less than 5% of B2B revenue. This has been the most directly impacted customer group by reduced tourist arrivals. It will also be the most positively levered to any increase in visitors. However, it's worth noting that it represents a small amount of B2B overall. Next to slide nine and an overview of our infrastructure assets. starting with our new build and upgrade activity on the left side. Here you can see the significant ramp in build year over year and the technology evolution where virtually all our new build and upgrade activity is now via fiber to the home. This provides both fast speeds and greater operating efficiency with lower energy costs required to run the network. In the center of the slide, we thought it would be helpful to provide a snapshot of homes passed by technology and mobile networks across our markets. The key takeaway from a fixed network perspective are that just under 90% of our footprint is either HSE or FTTH, and the FTTH element is growing up four percentage points as a proportion of our overall networks year to date. In mobile, We have a minimum of LTE across all our largest markets and Telefonica's operations in Costa Rica are also LTE. Puerto Rico is our first 5G market and our experience there will stand us in good stead when the time comes across all of our other markets. Finally, on the right side of this slide, we wanted to highlight our subsea business footprint and some of its key attributes. Firstly, we have a unique mesh network with four trunk submarine cable systems. This extensive network differentiates our ability to provide more resilient solutions and improve our economics. Secondly, we have significant room to grow with relatively low capital investment as we currently utilize only approximately 10% of our potential capacity across our networks. And lastly, at over 50,000 kilometers of cable, our network is the most extensive in the region with over 90% of our traffic going from the Caribbean and Central America to the U.S., Growth in demand for this connectivity is expected to continue. Finally, to slide 10, and a strategic update within the framework that we initially presented in February. Starting with the first pillar of recovery and growth. As covered earlier, effective operational execution led to strong subscriber growth in the first half. Combined with a disciplined focus on cost management, this operational improvement has driven key financial metrics and most importantly of all, adjusted free cash flow growth. Looking ahead, we're committed to maintaining this momentum and to build on the operational stabilizations achieved at VTR. Second, to our confidential pillar. As I've covered, operational execution overall has been strong in the first half of the year with consumer propositions resonating well. This is an ongoing challenge, and there are always areas where we can improve, but results and momentum are positive. Digital has also been a key focus of ours, both looking further ahead as we navigate the pandemic. As we look forward, our converged offerings are gaining traction as we introduce innovative bundles that are unique to our quad-player network. But we're still in the early innings here, so we have more scope to grow. particularly as we combine fixed and mobile operations in Puerto Rico and Costa Rica. We are also looking to increase self-installs across our markets, and this makes for a much better customer experience as well as reduced capital spending. Third, our network. In addition to our exciting new build and upgrade activity, I also wanted to highlight our successful application for FCC funding via Uniendo in Puerto Rico. We were granted $71.5 million to deploy and upgrade networks covering more than 900,000 locations in 43 out of 78 municipalities across Puerto Rico. This represents the majority of funds that were available through this fund. We plan to continue investing in our networks and, as mentioned, have raised our fixed target to over 700,000 new or upgraded homes in 2021. Cost focus is our fourth pillar. Our Panama Operations Center is now fully established. This is enabling savings to our existing group and will help drive synergies as we acquire businesses in the future and streamline our internal operations. Discipline management of our costs has helped OIBDA margins improve, notably in CNW, Caribbean, and networks. This pillar will be an area of ongoing focus and opportunity as we drive towards more centralized operations. There may be some near-term volatility related to acquisition-related integration costs, but this will be accompanied by significant synergy benefits from such combinations. Lastly, the capital allocation. This is a key competency of our group and a driver for additional shareholder returns. In-market consolidation opportunities at fair value such as that of Liberty Mobile and soon to close acquisition of Telefonica's Costa Rican operations are good examples of the potential we see in the region. If we see an opportunity in our own public market valuation, that is also something we will look to take advantage of. And in the last quarter, we resumed our buyback activity. Going forward, we are excited about the synergies we can drive from announced transactions and the potential for similarly accretive deals in the region. Our approach to capital allocation will remain consistent and disciplined. With that, I'll pass you over to Chris Noyes, our Chief Financial Officer, who will talk you through our financial performance before we take your questions. Chris.