Liberty Latin America Ltd.

Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I'll now like to turn the call over to Beverly Ray's Vice President, Securities and Corporate Governance Council of Liberty Latin America. Please go ahead.

Good morning and welcome to Liberty Latin America's third quarter 2022 investor call. At this time, all participants are in listen only mode. Today's formal presentation materials can be found under the investor 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 investor 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 quarterly report on Form 10-Q most recently 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 changes 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, Beverly, and welcome everybody to Liberty Latin America's third quarter results presentation. I'll begin with our group highlights and an overview of our operating results. Chris Noyes, our CFO, will then 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 will invite them to contribute 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.com. Starting on slide four and our highlights for the quarter, the group reported revenue of $1.2 billion in Q3. Without VTR, which was still consolidated in the period, our revenue would have been $1.1 billion and up by 3% on a rebase basis, driven by top-line growth across most ROC reporting segments, particularly our Liberty Costa Rica and our cable and wireless Caribbean businesses. Our internet and mobile post-paid subscriber bases have grown by over 400,000 over the past 12 months and by 80,000 in the third quarter. Our markets have significant penetration opportunities which will support further subscriber growth. This is the principal operational focus and driver of our financial performance. The ARPU and margins for post-paid subscribers and a fixed RGU have very similar characteristics. On October 6, we closed our joint venture with Claro Chile to create the 50-50 own Claro VTR. We now have a new management team who are working to deliver significant synergies. We are optimistic with the future of Chile. Our combination will start the consolidation and rationalization of this market. Chile is an incredible country. Our new Claro VTR leadership is putting a growth plan together for our review in the near future. Finally, we continued our buyback activity and repurchased over $150 million of stock up to the end of Q3. This reflects our view that the most compelling capital returns are in our own company. The bar in our capital allocation for any other inorganic activity is extremely high. Turning to slide five, high speed and reliable internet connectivity is the foundation of our fixed service proposition. And here we show our broadband ads by market. starting with cable and wireless in the upper left of the slide, where we continued to build momentum following a slow start to the year. Q3 performance was once again driven by Jamaica, where we added 4,000 internet RGUs in line with the prior quarter. However, there was also a stronger contribution from other markets in CWC as sales efforts and integrated Converge offerings gained traction. Moving to Liberty, Puerto Rico in the center of the slide, You can see from the chart that we've delivered steady growth here for a number of quarters, and this continued during Q3. In fact, we delivered stronger performance driven by the strength of our network and back to school demand, despite the impact of Hurricane Fiona at the end of the quarter. On the furthest right side of the top row, Costa Rica had another positive quarter. The lower third quarter additions were driven by some contemporary changes to our TV channel lineup which have since been reversed and we anticipate continuing to deliver healthy ads in future periods. Moving to the lower left and CNW Panama where we delivered an improved number of internet ads sequentially. We continue to see an opportunity to increase penetration across our homes past in Panama from the 25% level we have today. Finally, VTR continued to be challenged But as mentioned, we are very optimistic regarding the potential for recovery through operational improvements and some market repair. Overall, the group continued to deliver broadband ads. And as this chart in the lower right shows, these are particularly robust if you remove the impact of PTR, which will no longer be consolidated in LLF results from Q4 this year onwards. Moving to slide six, and our mobile performance. We have highlighted postpaid ads as this is the driver of growth in recurring revenue, which is our focus. As indicated before, the ARPU and margins for postpaid subs are similar to fixed RGU's. One of the drivers for the high margins is that we typically don't provide significant handset subsidies outside of Puerto Rico. In addition, the postpaid subs gives us better visibility to who our customers are, starting in the top left of the slide and CNW. Additions in Q3 would double the prior year amount and maintain a strong momentum sequentially. Jamaica was the largest contributor within CNW with 10,000 ads, which was its best-ever quarterly performance. Our FMC plans are working. Moving to Puerto Rico, we continued to add subscribers in the quarter. However, we were impacted by retail disruption related to Hurricane Fiona, As we'll cover later in this section, our network was the most resilient during that period, which should bode well for future performance. Next, to the right of the slide in Costa Rica, which is our largest operation by total mobile subscribers. Our net postpaid ads were consistent sequentially and doubled the prior year period as we added 31,000 customers in the quarter. On the bottom left of the slide, we present Panama's performance. Additions were similar to the prior year period, but lower sequentially as we changed our commission structure and also experienced increased churn. Lastly, in Chile, our ads were again driven by our competitively priced offers. Overall, we continue to deliver postpaid subscriber growth across all our reporting segments and a robust performance in the quarter. Next to slide seven, our B2B operations. Starting on the left of the slide in our group performance, here we show that on a rebase basis, we grew revenue by 1% in the quarter, which represents steady year-over-year improvement. In the middle of the slide, we split the B2B revenue by reporting segments to provide an overview of where revenue is generated and provide some color in the drivers for each. CNW Communications was the largest B2B segment in Q3, generating approximately 36% of our revenue. This segment contains some of our most mature B2B businesses. However, we are driving growth by leveraging our full service capabilities and delivering innovative solutions. Next, we have CNW Networks and LATAM, which we have separated into its own segment for the first time this quarter. We thought it would be helpful to show some additional detail in the next slide, but as you can see here, it is a significant part of the group, generating just under 30% of our B2B revenue. CNW Panama is the third largest B2B segment, generating 17% of our Q3 revenue. The strategy here is similar to the CNW Caribbean business in that we are looking to leverage our extensive full service network and product capabilities as the only one-stop shop for technology solutions in Panama. Liberty Puerto Rico is our fourth largest B2B operations, contributing 14% of Q3 revenue. This is predominantly comprised of the AT&T operations that we acquired. Looking forward, we intend to leverage our combined propositions to drive growth as we integrate the businesses. Finally, we are very much a challenger in Costa Rica and now have strong growth opportunities as a full-service, fixed, and mobile operator. In Chile, we should benefit from the combined product capabilities of cloud or VTR. Turning to slide eight, As we covered last quarter we've completed our strategic review of the CNW networks and laptop operations due to market conditions we have put on hold any in organic activity instead we are focused on investing and growing this business organically ourselves. In line with this ambition, we have installed new leadership and created a separate reporting segment for which we provide an overview on the slide. On the left hand side, you can see our extensive subsea footprint as well as our network's unique attributes. This is a leading and differentiated business, which has tremendous resilience and extensive point of presence. We intend to add additional routes and increase resiliency. This will expand our footprint and open new opportunities. On the right of the slide, we have pulled out a couple of the financial highlights we see in this segment. Firstly, It is a predominantly US dollar business through our subsea operations. The non-dollar revenue primarily relates to our B2B operations in Colombia. Lastly, but perhaps more importantly, the cash generation of this business is very strong. As you can see in the lower right of the slide, this segment generates close to 50% of operating free cash flow margins, driven by high adjusted OEBDA conversion and low capex intensity. This is a tremendous business for a number of reasons, and we look forward to making it even better. Turning to slide nine, we thought it would be helpful to provide a more detailed update on our largest single market, Puerto Rico. Starting with our commercial momentum, as we saw in the prior slides, this continues to be strong, with network strength underpinning our ability to add subscribers, both in fixed and mobile. We continue to invest in the network, resulting in speed increases, better coverage, and higher resiliency in both fixed and mobile. Just as a reminder, we've been awarded FCC Uniendo funding to support these improvements. In fixed, we have also added 25,000 homes so far this year, which provides an additional growth driver. Our pricing levels remain competitive, and subscriber trends show that we are providing value for our customers. In mobile, we continue to grow in postpaid by adding 69,000 subs year-to-date, and we also see a significant opportunity in prepaid. Prepaid was less of a focus for AT&T historically, and we have started trialing new propositions to grow this part of the business. Moving to the integration, we remain on track to complete the migration of customers and services to our platforms by the end of next year. This will be fantastic from a Synergy perspective. but also commercially as we will have more freedom to create and deliver our own bespoke products to cater for the needs of people in Puerto Rico. We have begun trials of our new IT stack and our new 5G core network with prepaid customers. Next, I wanted to cover the impact of Hurricane Fiona, which hit the island in September. The storm caused some damage to the islands, but nothing like the scale we saw through Hurricane Maria. The impact was felt more through power outages than impacts on our network. That said, we supported our customers through these difficult times with credits to the extent that they were without power and did not have broadband or TV service. This focus on our customers is key to our high NPS in Puerto Rico. Our decision on the credits and costs we incurred to repair the network and fuel for our generators will have a cash flow impact of about $20 million this year. The great news was that our mobile network demonstrated its resilience thanks to investments in underground fiber as well as standby generators in more than 85% of cell sites. Network coverage remained close to 100% with utilization increasing more than 20%. In fact, the network held so well that we opened it up to other carriers during the storm to help their customers. This has improved our reputation in the market and should support ads in the coming months. Lastly, on the slide, our bill in the USVI is now underway and also partly funded by the FCC. We will have the only fiber network with full coverage across the islands and are excited by the growth we can drive there. Finally, to slide 10, where we wanted to highlight the progress we are making against key strategic objectives and how this drives additional stakeholder value. Starting with the network and IT pillar, we have been making great progress with our new build and upgrade program. This year alone, excluding Chile, we have built or upgraded approximately 280,000 homes. And since we split off as a separately listed company more than four years ago, we have added or upgraded over 1.3 million homes, excluding 1 million homes in Chile. This is a key aspect of our strategy as it underpins our ability to deliver our products and services. As we look ahead, we are committed to transforming our IT platforms and simplifying our numerous systems and processes across the group. This will drive savings as well as enabling us to better serve our customers. We are also committed to upgrading our fixed network to eliminate all our twisted pair copper plants. We are also building out to expand our footprint. Next, our commercial pillar. The progress we are making should speak for itself with our consistent reported subscriber additions. On the mobile side of the business, our focus on FMC has been paying dividends, particularly as we grow our post-paid base. Including the impact of acquisitions, post-paid subscribers have gone from 14% of the total base at the start of 2018 to 30% at the end of third quarter. We are also working hard to delight our customers and thereby reducing churn in our operations. Looking ahead, we continue to innovate through products and packages with additions to date such as Wi-Fi, Android-based IPTV, B2B products, eSIM, and new low-cost handsets. We have also been investing in our digital platforms to support our sales channels. This is a common platform across all of our operations. Lastly, on this slide, the capital allocation. We made another significant stride in early October by closing the JV in Chile. As I mentioned before, we are optimistic about Chile and this joint venture. We have the opportunity to regrow this business and create value over the next few years. Both we and our partner Claro are like-minded in that future. We are also a few months into our Panama integration and have been making good progress, starting with back office integration this year before moving on to combining our brands and stores next year and completion of all processes expected in 2024. We have good visibility on over $150 million of run rate cash synergies from 2024, excluding Chile, and this is a key driver of growth for our business in the coming years. In addition, we have not made any adjustments to our reported OEBDA or free cash flow to remove integration costs, which are a headwind for us in the near term, totaling over $70 million just this year alone. This results in disenergies, as mentioned before. We are confident that we will drive significant free cash flow growth and have continued to allocate capital on buying back our stock. It is hard to contemplate any M&A with better risk-adjusted returns than the current opportunity to repurchase our own securities. We will continue to evaluate the risk-reward trade-offs for any investments in the same manner, taking into account shareholder returns, dilution considerations, and our liquidity profile accordingly. Chris will cover our thoughts on balance sheet management in his section, but in short, We feel comfortable here given our long-dated maturities, the siloed debt stack, the hedges we have in place, and the natural deleveraging as we grow EBITDA. With that, I'll pass you over to Chris Noyce, our Chief Financial Officer, who will talk you through our financial performance before we take your questions. Chris.