Millicom International Cellular S.A.

Hello, everyone, and welcome to our third quarter 2025 results call. This event is being recorded. Our speakers today will be our CEO, Marcelo Benitez, and Bart von Ehren, CFO of the company. The slides for today's presentations are available on our website, along with the earnings release and our financial statements. Now, please turn to slide two for the safe harbor disclosure. we will be making forward-looking statements which involve risks and uncertainties, and which could have a material impact on our results. On slide three, we define the non-IFRS metrics that we will reference throughout this presentation. And you can find reconciliation tables in the back of our earnings release and on our website. With those scammers out of the way, let me turn the call over to our CEO, Mancelo Renintes.

Good morning, everyone, and thank you for joining us. This has been another strong quarter for Millicom. Before we begin, I want to express my heartfelt appreciation to all members of the Tigo team. Your dedication and purpose-driven execution are at the heart of these results. Once again, thank you. In the third quarter, we accelerate the top-line growth while maintaining strict cost discipline. This reflects the consistent execution of our EE strategy, delivering the best customer experience with maximum efficiency. We also advance on our strategic agenda, completing the Uruguay and Ecuador acquisition and closing the SBA Tower transaction. three milestones that strengthen both our balance sheet and regional footprint. Organically, service revenue grew 3.5% year over year, supported by mobile subscriber growth and ARPU expansion in prepaid. Most importantly, we remain firmly on track to deliver our 750 million equity free cashflow target for 2025. Let's now review the key milestones from the quarter. Our relentless focus on commercial execution continues to deliver solid results, both in consumer segment and in the business segments. On B2C, we added nearly 250,000 postpaid mobile customers and about 60,000 new home subscribers. In B2B, the momentum remained strong. I'll touch on that shortly. Thanks to the discipline in capital allocation and operational efficiency, we delivered record profitability. Adjusted EBITDA reached 695 million with an all-time high 48.9% margin. This translated into equity-free cash flow of 243 million. We closed the quarter with net leverage of 2.09X or 2.33X per firma, excluding the infrastructure sale. We remain fully committed to maintaining leverage below 2.5X, even as we integrate Ecuador and Uruguay in Q4. Let's now look at performance by segment and geography. Our mobile business delivered the strongest organic growth since 2021 with mobile service revenue up 5.5% year over year. Growth was driven by ARPU expansion in prepaid as we align pricing with inflation and by steady migration from prepaid to postpaid. Our post-paid base grew 14%, reaching 8.9 million customers, while prepaid volumes remain stable. These results demonstrate the strength of our commercial model, focused on delivering the best network experience, focused on channel productivity, pre- to post-migration, and fixed mobile convergence. Turning to our home business, our second largest segment. As we mentioned a moment ago, we added 60,000 new customers, up 5.4% year over year, supported by our convergence strategy, which bundles multiple services under one plan. This approach enhances customer value and keeps churn in the low single digits. Home service revenue was essentially flat year over year, a marked improvement from the nearly 5% decline a year ago. The strong foundation built in recent quarters positioned us for positive revenue growth on the next quarter. Please turn to the next slide for a review on our B2B business. Our B2B segment continues to gain momentum. Service revenue reached 231 million, up 5.3% year on year in constant currency. Small business clients grew 10%, totaling over 400,000. Our digital services remain a key growth engine Revenue rose 10% led by cloud, cybersecurity, and SD-WAN, growing around 35% year-over-year. In short, B2B is scaling, profitable, and remains a compelling growth platform for Millicom. Let's now review our performance in our largest market in Colombia. Colombia delivered another strong quarter. Postpaid customers rose 12% year over year, while prepaid also grew. In home, customers increased 12%, reaching 1.6 million HFC and FTTH connection, driving home service revenues up 5.7%, a full turnaround from 2022. Overall, service revenue grew 6.5% and EBITDA margins expanded 447 basis points to 43.5%. This demonstrates how profitable growth is now firmly embedded in our Columbia business. Turning to Guatemala, we continue to perform exceptionally well. Guatemala continues to set the bar for operational excellence. Postpaid customers grew 20%, driving mobile service revenues up 4.6%. Exceptional efficiency led to operating cash flow growth of 22% year on year, reaching a record of $204 million, a remarkable achievement. Please turn to the next slide to look at Panama. In Panama, postpaid customers grew 15%, supporting 7.1% mobile service revenue growth. We achieved a record EBITDA margin of 52.2%, underscoring Panama's position as one of our most efficient operations. Let's now turn to slide 12. We are very proud to have completed acquisitions of Uruguay and Ecuador, two countries that share our purpose of connecting people and driving digital progress across Latin America. These acquisitions broaden our footprint to 11 countries and enhance earnings quality through greater scale and macroeconomic stability. Uruguay adds 700 sell sites, 33% market share, and 246 million in annual revenues, with 93 million of adjusted EBITDA. Ecuador brings approximately 2,500 sell sites, 30% market share, generating almost 490 million in revenues and 161 million in adjusted EBITDA. With these two additions, we integrate an investment-grade country and a dollarized economy into our portfolio, enhancing stable cash generation and unlocking meaningful synergies through a regional scale. We're energized by these opportunities. They strengthened our position as the leading pure-play telecom operator in Latin America. Before we move on to the financials, I'd like to take a few minutes to update you on where we stand with our strategic projects and legal matters. First, as we shared last quarter, we've now completed the sale of our tower companies in El Salvador and Honduras. The Lattie Tower transaction totalled about $975 million, marking a successful conclusion of our infrastructure monetization plan. With this, we've achieved what we set out to do, unlock value for our stakeholders and stay fully focused on what we do best, delivering connectivity. Turning on Costa Rica, I am pleased to share that we've settled our longstanding litigation with Telefónica. This was related to the 2020 acquisition attempt. This brings important closer and allows us to move forward with clarity and focus. Separately, the Costa Rica regulator has decided to prohibit our proposed combination with Liberty Latin America that we announced on August the 1st of 2024. SUTEL is concluding that the potential competitive effects could not be adequately mitigated by the remedies proposed by the parties or by any additional conditions that SUTEL could impose. This decision was unexpected as both parties had engaged extensively with SUTEL throughout the review of the process to develop a set of commitments that we firmly believe addressed any potential concerns. We respectfully disagree with this decision. And for this reason, we have filed a formal appeal on October 22nd, and we'll continue to pursue all available options. we remain confident that the transaction will deliver meaningful benefits to customers, enhance competition, and contribute positively to Costa Rica's digital development. Now, regarding the ongoing DOJ investigation, we recorded 118 million provisions this quarter. That figure reflects our current expectation of the financial impact of resolving the matter. Because the process is still ongoing, we cannot comment further at this stage, but we expect to share more details shortly. Finally, let me touch on Colombia. While things are moving steady on both fronts, EPM, on one hand, has officially launched the privatization process for its stake in Digounet under law 226, and everything is progressing as expected. At the same time, the regulatory process for the Coltel acquisition is advancing well. We are now waiting for the minimum price disclosure for the stake held by La Nación, and we continue to expect both EPM and Telefónica transactions to close in the first quarter of 2026. With that, I will now hand it over to Bart, who will walk you through the financials in more detail.

Thank you, Marcelo. Let's now turn to our financial performance for the quarter starting on slide 15. Service revenue for the quarter totaled 1.34 billion, representing a year-over-year decline of 0.5%. This was no surprise considering the application of IAS 21 for Bolivia, which this quarter negatively impacted service revenues by 74 million compared to last year. When excluding the FX impacts, underlying service revenue growth actually accelerated from 2.4% year-on-year growth in Q2 to 3.5% year-on-year growth in Q3, reflecting the continued momentum of our commercial initiatives and strong operational execution across our markets. We also continue to deliver solid results in our prepaid to postpaid conversion strategy, resulting in local currency double-digit postpaid growth numbers, while prepaid revenues continue to grow by low single digits year over year in local currency, supported by a stable prepaid customer base. This growth reflects our ability to attract new clients and broaden the top of the funnel, reinforcing the strength over commercial engine. Importantly, we delivered another quarter of margin expansion with organic adjusted EBITDA increasing by 23.8% year over year to reach a record $695 million. It's worth noting that the year-over-year increase in adjusted EBITDA was influenced by a one-time restructuring in M&A charges in 2024. When normalizing for this effect, adjusted EBITDA still grew by 10% year-over-year. This increase translates into an adjusted EBITDA margin of 48.9%, another all-time high for the company. As Marcelo highlighted earlier, accelerating top-line growth while maintaining cost discipline remains a core pillar of our strategy. Finally, equity-free cash flow rose by 18.1% for the last nine months when compared to the same period last year, reaching a total of $638 million, marking yet another milestone for the company. Next, I would like to walk you through our performance by region starting on slide 16. In Guatemala, local currency service revenue grew 3.6% year-over-year, reaching 366 million for acquiring. This solid performance represents a significant improvement over last year's top-line growth, driven primarily by our mobile strategy, which focused on effective customer-based management and increasing our pool through the successful migration from prepaid to postpaid plans. Colombia delivered another strong quarter, with service revenue expanding 6.5% year-over-year to $364 million, almost surpassing Guatemala for the first time in our corporate history. This growth was fueled by an expanding customer base, particularly in postpaid, robust performance in B2B, and a material turnaround in our home business, supported by intensified commercial efforts aligned with our strategic priorities. In Panama, service revenue remained largely flat year-over-year at 170 million. When compared to Q3 2024, we added nearly 65,000 postpaid subscribers to our customer base. These gains were partially offset by a decline in B2B revenue stemming from government contracts which were executed earlier in 2024. In Paraguay, we achieved 143 million in service revenue, increasing 3.5% year-on-year. This solid growth was mainly achieved through expansion in both our prepaid and postpaid customer base and relatively stable ARPUs. In Bolivia, service revenue in constant currency accelerated to 6.1% year-over-year, reaching $84 million for the quarter. And for the first time since the onset of the devaluation, we recorded a quarter-over-quarter increase in service revenue. We remain cautiously optimistic about continued currency stabilization. Service revenue in other markets increased 1.4% year-over-year, reaching 217 million for the quarter, as robust top-line growth in El Salvador and Nicaragua was partially offset by soft results in Costa Rica. As mentioned in my introduction, we're very pleased with the overall profitability achieved during the quarter, with adjusted EBITDA for the group reaching a record margin of 48.9%, as shown on the slide 17. All of our largest operations delivered year-over-year margin expansion. Let's now review the performance of each country in more detail. Starting with Guatemala, adjusted EBITDA grew 6.2% year-over-year, reaching $236 million for the quarter. This strong result was driven by a combination of service revenue growth and operational efficiencies. As a result, Guatemala reported a record adjusted EBITDA margin of 56.6%, up 147 basis points compared to the same period last year. In Colombia, adjusted EBITDA increased 17.3% year-over-year to 161 million. This performance reflects the robust top-line growth discussed earlier, coupled with disciplined OPEX management. It's worth noting that last year's EBITDA was impacted by approximately 5 million in severance payments. I want to take the opportunity to congratulate our team in Colombia for their tireless efforts and outstanding results. Panama delivered a 10.4% year-over-year increase in adjusted EBITDA. reaching 93 million, driven by cost savings from efficiency programs. As a result, adjusted EBITDA margin expanded by 480 basis points, reaching a record 52.2%. Paraguay also expanded its profitability when compared to the same period last year. The team achieved an 11.8% year-over-year increase, reaching a total of 76 million for the quarter, with adjusted EBITDA margins expanding to 51.4%. reflecting continued operational discipline and growth in our customer base. In Bolivia, adjusted EBITDA increased 21.8% on a constant currency basis year over year to 42 million for the quarter. The margin expanded by 649 basis points to 49.7%, primarily thanks to our ongoing focus on cost efficiencies and de-dollarization efforts. Finally, adjusted EBITDA in our other segments, which include El Salvador, Nicaragua, and Costa Rica, increased 7.7% to 108 million as we continue to deliver operating leverage across all three countries. As a reminder, we have here Nicaragua and Honduras with margins above 50%, making a total of five countries out of nine with margins above 50%, and Bolivia actually getting very close. Let's now turn to slide 18 for a review of our equity-free cash flow. In the third quarter of 2025, equity-free cash flow totaled $243 million to reach $638 million over the last nine months, representing an increase of 18.1% year-on-year. Now, when comparing to the same quarter last year, we see a $28 million decrease, which is primarily attributable to a mix of strategic investments and timing-related factors as we are trying to stabilize equity-free cash flow over all quarters. Positive contributors were adjusted EBDA was up 110 million year over year in line with our increased profitability and 73 million one-off impacts in 2024, mainly related to restructuring and M&A costs. Finance charges improved by 10 million thanks to lower debt levels, favorable FX movements, and reduced commissions on US dollar purchases in Bolivia. Offsetting these gains were the following detractors. Cash capex increased by 50 million, mainly due to changes in working capital. Trade working capital and others decreased 66 million, mainly due to the aforementioned litigation settlement with Telefonica related to the 2020 Costa Rica acquisition attempt, as well as timing of payables. Spectrum payments were up 12 million, reflecting the phasing of coverage obligations in Colombia, and taxes paid increased 10 million, primarily due to the higher profitability. now please turn to slide 19 for a more comprehensive view of our deleveraging during the quarter we reduced our leverage from 2.18 to 2.09 a solid improvement of nine points quarter over quarter this was primarily driven by our strong equity free cash flow generation of 243 million as just discussed On the other hand, we paid 125 million dividend in line with our approved dividend policy and recorded 80 million in exchange rate impacts due to the appreciation of our local currency debt. These items together added approximately 0.1 to our leverage. Overall, the quarter reflects disciplined capital allocation and continued progress toward our long-term balance sheet objectives. Before reviewing our financial targets, I wanted to highlight that we have finalized the LATI business divestment announced in October, 2024. As a reminder, the total consideration for the LATI divestment was approximately $975 million. Let's now review our financial targets for the year. We're very pleased with our performance year to date and remain on track to meet our year-end leverage target of below 2.5. as well as our equity free cash flow goal of around 750 million. As a reminder, this leverage target excludes the impact of any strategic M&A transactions executed during 2025. I'd also like to emphasize that we are maintaining our free cash flow target despite the adverse effects of the currency devaluation in Bolivia, as well as the one-off legal settlements discussed. We're excited about what lies ahead and remain fully committed to delivering continued top-line growth and sustainable margin expansion. With that, let me turn the call back to Luca.