Form 6-K MILLICOM INTERNATIONAL For: Apr 29

Earnings Release Q1 2021

Operating segment performance

Our management determines operating and reportable segments based on the reports that are used by the chief operating decision maker to make strategic and operational decisions from both a business and geographic perspective. The Millicom Group’s risks and rates of return for its operations are predominantly affected by operating in different geographical regions. The Millicom Group has businesses in two main regions, Latin America and Africa, which constitute our two segments. We allocate corporate costs to each segment based on their contribution to underlying revenue, and only unusual costs, such as the M&A-related fees remain unallocated.

Our Latin America segment includes the results of Guatemala and Honduras as if they were fully consolidated, as this reflects the way our management reviews and uses internally reported information to make decisions about operating matters and to provide increased transparency to investors on those operations. Our Africa segment does not include our joint venture in Ghana because our management does not consider it to be a strategic part of the group.

Please refer to Note 4 of our Unaudited Interim Condensed Consolidated Financial Statements for more details on our segments. The information contained herein can also be accessed electronically in the Financial & Operating Data Excel file published at www.millicom.com/investors alongside this earnings release.

Latin America segment

Business units

We discuss our Latam results under two principal business units:

1. Mobile, including mobile data, mobile voice, and mobile financial services (MFS) to consumer, business and government customers;

2. Cable and other fixed, including broadband, Pay TV, content, and fixed voice services for residential (Home) customers, as well as voice, data and value-added services and solutions to business and government customers.

On occasion, we also discuss our performance by customer type, with B2B referring to our business and government customers, while B2C includes residential and personal consumer groups.

Market environment

Economic activity continued to recover gradually in our markets, as most countries continued to ease lockdowns implemented at the beginning of the pandemic, and remittances from the U.S. to Central America sustained double-digit growth. Temporary restrictions were implemented in some countries and regions, as governments took steps to prevent a spike in new cases stemming from gatherings around the year-end and Easter holidays. However, these new restrictions appear to have had a less severe impact on economic activity and on our business as compared to those implemented at the onset of the pandemic. Meanwhile, vaccinations have begun, but less than 1% of the population in our markets had been vaccinated as of the end of March. Currencies in our markets generally strengthened, with the Colombian peso and the Paraguayan guarani gaining 3.0%, and 4.4% respectively against the U.S. dollar during the quarter. Foreign exchange rates and movements are presented on page 15.

Earnings Release Q1 2021

Latam segment - Key Performance Indicators

Mobile

We ended Q1 2021 with 42.8 million customers, an increase of 1.1 million during the quarter, our strongest performance Q1 of the past decade in what is usually a seasonally-weaker quarter. Approximately one quarter of the net additions came from Colombia, where we continue to expand our network on the 700 MHz spectrum, and from Honduras, where the prepaid mobile market continued to strengthen, likely aided by robust remittances.

In postpaid, we added 140,000 customers to end the quarter with more than 5 million, just 75,000 below the pre-COVID peak reached at year-end 2019. We added 587,000 new 4G smartphone data users, and these now account for 44% of our mobile customer base, up from 38% in Q1 2020.

Tigo Money, our mobile financial services platform available in five of our nine Latam markets, saw customers increase 11.4% year-on year, ending the quarter with 4.8 million.

Mobile ARPU declined 6.6% year-on-year to $6.5, due mostly to the shift in mix from postpaid to prepaid over the past year caused by the pandemic.

Home

In Home, our residential cable business, we continued to experience very strong demand for all our services, and we added a record 166,000 HFC customer relationships in the quarter. At the end of Q1, our networks passed 12.2 million homes, an increase of 19,000 during the period, reflecting the expansion of our HFC network to 61,000 additional homes, offset by the shut down of our UHF network in Paraguay and the loss of approximately 8,000 homes in Honduras in the hurricanes of Q4 2020. As a result, penetration on our HFC network increased to 32.6%, an increase of 2.1 percentage points from 30.5% in Q1 2020.

Demand was strong across the board, with most countries registering higher customer relationship net additions in Q1 of 2021 as compared to both Q1 and Q4 of 2020. Bolivia added a record 50,000 customer relationships driven by a back-to-school campaign, while Colombia registered its strongest Q1 net additions ever. Guatemala added a record of 36,000 customer relationships, resulting in a growth of 20.6% year-on-year in Q1 2021. Home ARPU improved by $0.80 sequentially to $28.8, roughly flat year-on-year.

Earnings Release Q1 2021

Latam segment financial results

* Service revenue, EBITDA, EBITDA margin, Capex, OCF and organic growth are Non-IFRS measures. Capex is defined as capital expenditures excluding spectrum, license costs and finance lease capitalizations. See page 12 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.

In Q1 2021, revenue in our Latam segment increased 1.7% year-on-year to $1.5 billion, while service revenue increased 1.3% to $1,413 million. Adjusting for currency, organic service revenue growth was 2.2% year-on-year, the first positive service revenue growth since Q1 2020, reflecting strong business performance in both Mobile and Home.

In local currency terms, service revenue growth was the strongest in El Salvador (8.9%), Guatemala (6.1%), and Colombia (3.1%), while growth remained slightly negative in countries most affected by the pandemic, including Bolivia (-2.2%) and Panama (-1.0%). Encouragingly, Honduras service revenue was about flat year-on-year, a significant improvement from -3.4% in Q4, -6.0% in Q3 and -12.4% in Q2, at the height of the lockdowns, with the improvement coming from Mobile, which returned to positive growth for the first time since mid 2019.

For a second consecutive quarter, El Salvador registered high single-digit service revenue growth, as recent network investments have fueled very robust growth in Mobile. Guatemala sustained growth of more than 6% in Q1, as continued acceleration in Home and B2B largely offset a slight deceleration in B2C mobile, which grew at a low single-digit rate. In Colombia, Home service revenue growth accelerated to more than 7.5% in the quarter, while Mobile and B2B continued to show healthy sequential improvement but remained down slightly on a year-on-year basis. In Panama, mid-single-digit growth in our consumer businesses largely offset performance in B2B, which remains well below pre-COVID levels due to the weak macroeconomic backdrop.

By business unit, Home service revenue grew 6.4% year-on-year (7.9% organically), a significant acceleration from flat performance in Q4 (3.8% organic), fueled by customer growth and improving ARPU trends, as well as stronger foreign exchange rates. In our consumer Mobile business, organic service revenue grew 0.6% year-on-year, with every country in Central America showing positive year-on-year growth. Finally, B2B service revenue declined 3.2% organically, compared to a decline of 6.3% in Q4 2020, as performance improved in most countries.

EBITDA for our Latam segment was $638 million in Q1 2021, an increase of 6.3% year-on-year (5.9% organically) compared to $600 million in Q1 2020. Growth was positive in most countries, with El Salvador and Guatemala leading the way with double-digit growth, while performance in Nicaragua was flattered by a $8 million one-off in Q1 2020 related to a municipal withholding tax stemming from the acquisition. The EBITDA margin expanded by 1.8 percentage points year-on-year to 41.7% in Q1 2021.

Capex in Latin America was $167 million in the quarter. In mobile, we added more than 150 points of presence to our 4G network, and we ended the quarter with more than 15,100 points of presence, an increase of 19% year-on-year. At the end of Q1 2021, our 4G networks covered approximately 77% of the population (approximately 120 million in our markets), up from approximately 73% at Q1 2020.

Operating cash flow (OCF), measured as EBITDA minus Capex, increased 10.4% year-on-year to $471 million in Q1 2021, an increase of 9.7% on an organic basis.

Earnings Release Q1 2021

Africa segment - Segment financial results and Key Performance Indicators

Please refer to Note 4 of our Unaudited Interim Condensed Consolidated Financial Statements for more details on our segments.

* Service revenue, EBITDA and Capex are non-IFRS measures. See page 12 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures. 2019 EBITDA has been re-presented as a result in the change in cost allocation.

Our Africa segment comprises our Tanzania operations. On April 19, 2021, we announced that we have signed an agreement for the sale of our operations in Tanzania to a consortium led by Axian, a pan-African group that was part of the consortium that acquired Millicom’s operations in Senegal in 2018. Completion is subject to regulatory approvals.

Service revenue for our Africa segment was stable year-on-year at $89 million in Q1 2021, while EBITDA increased 3.4% year-on-year to $31 million due to continued cost control efforts.

Corporate Responsibility highlights – Q1 2021

Responsible Leadership in Action: adapting our programs to the COVID-19 pandemic

Connecting Communities

We find great opportunities for the expansion of Maestr@s Conectad@s (Connected Teachers), as ongoing uncertainties around the evolution of the pandemic in our countries present scenarios in which schools will continue to at least present hybrid modules of online and in-person classes for several months. Teachers, therefore, remain challenged by these circumstances and will require the support, tools and training this program can offer. Significant progress has been made with partner organization AYHU, with over 37,000 more teachers who have completed the training as of the end of Q1. All Latam countries will have the program implemented by Q2 of 2021.

Empowering Women

After our successful 2020 pilot in El Salvador training Tigo Money Sales Agents and entrepreneurs where 40 women participated and were able to show increased sales and income after completing the program, we relaunched the program in March, this time with the goal to reach 6,100 women of our value chain who use Tigo Money as part of their business, through trainings on digital entrepreneurship skills. This project is launched in partnership with USAID, and we are looking for other companies to participate, incorporating women from their value chains in the training.

Responsible Supply Chain Management

We have confirmed the partner for the design of the new virtual Supplier Training Program and work is currently underway in the creation of the content, based on previous years trainings and new material. The goal for 2021 is to reach 75% of Millicom's suppliers with a spend of more than $1 million.

Health, safety and sustainability

The Millicom’s Executive Team and the Health & Safety function continued working with country operations to ensure the safety of our people as well as service continuity as we adapt to the evolving needs in line with the latest COVID-19 guidelines from the World Health Organization and the U.S. Center for Disease Control at all our critical sites and operations region-wide as the situation evolves. Over half of our employees continue to work remotely from the safety of their homes.

Earnings Release Q1 2021

Compliance and anti-corruption program

During Q1 2021, we launched the 2021 Compliance KPIs applicable to all Local Operations, as part of our efforts to increase our Ethics & Compliance Program maturity level from year to year. The Legal, Ethics & Compliance Department kicked off the 2021 Communication Plan with messaging from senior and mid-level leadership and adding a new component of monthly gatherings for HQ called “Coffee with Compliance.” The aim is to remain relevant amongst company employees while working remotely and provide a forum for them to ask Compliance-related questions as well as obtain answers in real time.

The Department also conducted a communication and training campaign to make employees aware of and knowledgeable about the new Corrective Action Framework, launched at the end of 2020.

Video conference details

A video conference to discuss these results will take place on April 29th at 14:00 (Luxembourg/Stockholm) / 13:00 (London) / 08:00 (Miami). Registration for the live event is required and is available at the following link. Upon registering, participants will receive a confirmation email with personalized credentials required to join the event. Alternatively, participants can join in a listen-only mode, by dialing any of the following numbers and using webinar ID number 829-3020-3271. Please dial a number base on your location:

Additional international numbers are available at the following link.

A replay of the event will be available on the Millicom website.

Financial calendar

2021 

Earnings Release Q1 2021

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About Millicom

Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile services dedicated to emerging markets in Latin America and Africa. Millicom sets the pace when it comes to providing high-speed broadband and innovation around The Digital Lifestyle services through its principal brand, TIGO. As of December 31, 2020, Millicom operating subsidiaries and joint ventures employed more than 21,000 people and provided mobile services to approximately 55 million customers, with a cable footprint of more than 12 million homes passed. Founded in 1992, Millicom International Cellular S.A. is headquartered in Luxembourg.

Earnings Release Q1 2021

Forward-Looking Statements

Statements included herein that are not historical facts, including without limitation statements concerning future strategy, plans, objectives, expectations and intentions, projected financial results, liquidity, growth and prospects, are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Millicom’s results could be materially adversely affected. In particular, there is uncertainty about the spread of the COVID-19 virus and the impact it may have on Millicom's operations, the demand for Millicom's products and services, global supply chains and economic activity in general. The risks and uncertainties include, but are not limited to, the following:

A further list and description of risks, uncertainties and other matters can be found in Millicom’s Registration Statement on Form 20-F, including those risks outlined in “Item 3. Key Information—D. Risk Factors,” and in Millicom’s subsequent U.S. Securities and Exchange Commission filings, all of which are available at www.sec.gov. To the extent COVID-19 adversely affects Millicom's business and financial results, it may also have the effect of heightening many of the risks described in its filings.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by applicable law, we do not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

Earnings Release Q1 2021

Non IFRS Measures

This press release contains financial measures not prepared in accordance with IFRS. These measures are referred to as “non-IFRS” measures and include: non-IFRS service revenue, non-IFRS EBITDA, and non-IFRS Capex, among others defined below. Annual growth rates for these non-IFRS measures are often expressed in organic constant currency terms to exclude the effect of changes in foreign exchange rates, the adoption of new accounting standards, and are proforma for material changes in perimeter due to acquisitions and divestitures. The non-IFRS financial measures are presented in this press release as Millicom’s management believes they provide investors with an additional information for the analysis of Millicom’s results of operations, particularly in evaluating performance from one period to another. Millicom’s management uses non-IFRS financial measures to make operating decisions, as they facilitate additional internal comparisons of Millicom’s performance to historical results and to competitors' results, and provides them to investors as a supplement to Millicom’s reported results to provide additional insight into Millicom’s operating performance. Millicom’s Remuneration Committee uses certain non-IFRS measures when assessing the performance and compensation of employees, including Millicom’s executive directors.

The non-IFRS financial measures used by Millicom may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies - refer to the section “Non-IFRS Financial Measure Descriptions” for additional information. In addition, these non-IFRS measures should not be considered in isolation as a substitute for, or as superior to, financial measures calculated in accordance with IFRS, and Millicom’s financial results calculated in accordance with IFRS and reconciliations to those financial statements should be carefully evaluated.

Financial Measure Descriptions

Service revenue is revenue related to the provision of ongoing services such as monthly subscription fees, airtime and data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as data services, short message services and other value-added services excluding telephone and equipment sales.

EBITDA is operating profit excluding impairment losses, depreciation and amortization, and gains/losses on fixed asset disposals.

EBITDA after Leases (EBITDAaL) represents EBITDA excluding lease repayments.

EBITDA Margin represents EBITDA in relation to Revenue.

Proportionate EBITDA is the sum of the EBITDA in every country where Millicom operates, including its Guatemala and Honduras joint ventures, pro rata for Millicom’s ownership stake in each country, less corporate costs that are not allocated to any country and inter-company eliminations.

Organic growth represents year-on-year growth excluding the impact of changes in FX rates, perimeter, and accounting. Changes in perimeter are the result of acquisitions and divestitures. Results from divested assets are immediately removed from both periods, whereas the results from acquired assets are included in both periods at the beginning (January 1) of the first full calendar year of ownership.

Net debt is Debt and financial liabilities less cash and pledged deposits.

Net financial obligations is Net debt plus lease liabilities.

Proportionate financial obligations is the sum of the net financial obligations in every country where Millicom operates, including its Guatemala and Honduras joint ventures, pro rata for Millicom’s ownership stake in each country.

Leverage is the ratio of net financial obligations over LTM (last twelve month) EBITDA, proforma for acquisitions made during the last twelve months.

Earnings Release Q1 2021

Leverage after leases is the ratio of net debt over LTM (Last twelve month) EBITDA after leases, proforma for acquisitions made during the last twelve months.

Proportionate leverage is the ratio of proportionate net financial obligations over LTM proportionate EBITDA, proforma for acquisitions made during the last twelve months.

Proportionate leverage after leases is the ratio of proportionate net debt over LTM (Last twelve month) EBITDA after leases, proforma for acquisitions made during the last twelve months.

Capex is balance sheet capital expenditure excluding spectrum and license costs and lease capitalizations.

Cash Capex represents the cash spent in relation to capital expenditure, excluding spectrum and licenses costs.

Operating Cash Flow (OCF) is EBITDA less Capex.

Operating Free Cash Flow (OFCF) is OCF less changes in working capital and other non-cash items and taxes paid.

Equity Free Cash Flow (EFCF) is OFCF less finance charges paid (net), less advances for dividends to non-controlling interests, plus dividends received from joint ventures.

Equity Free Cash Flow after Leases (EFCFaL) is EFCF, less lease principal repayments.

Operating Profit After Tax displays the profit generated from the operations of the company after statutory taxes.

Return on Invested Capital (ROIC) is used to assess the Group’s efficiency at allocating the capital under its control to and is defined as Operating Profit After Tax, including Guatemala and Honduras as if fully consolidated, divided by the average invested Capital during the period.

Average Invested Capital is the capital invested in the company operation throughout the year and is calculated with the average of opening and closing balances of the total assets minus current liabilities (excluding debt, joint ventures, accrued interests, deferred and current tax, cash as well as investments and non-controlling interests), less assets and liabilities held for sale.

Underlying measures, such as Underlying service revenue, Underlying EBITDA, Underlying equity free cash flow, Underlying net debt, Underlying leverage, etc., include Guatemala and Honduras, as if fully consolidated.

Average Revenue per User per Month (ARPU) for our Mobile customers is (x) the total mobile and mobile financial services revenue (excluding revenue earned from tower rentals, call center, data and mobile virtual network operator, visitor roaming, national third parties roaming and mobile telephone equipment sales revenue) for the period, divided by (y) the average number of mobile subscribers for the period, divided by (z) the number of months in the period. We define ARPU for our Home customers in our Latin America segment as (x) the total Home revenue (excluding equipment sales, TV advertising and equipment rental) for the period, divided by (y) the average number of customer relationships for the period, divided by (z) the number of months in the period. ARPU is not subject to a standard industry definition and our definition of ARPU may be different to other industry participants.

Please refer to our 2020 Annual Report for a list and description of non-IFRS measures.

Earnings Release Q1 2021

Non-IFRS Reconciliations

Reconciliation from Reported Growth to Organic Growth for the Latam segment⁴

*Organic growth for EBITDA and OCF are calculated excluding the allocation of corporate costs to reflect operational growth and to align with how we manage the Latam segment. The differences that this causes are captured in "Other".

ARPU reconciliations

* Refers to production services, MVNO, DVNO, equipment rental revenue, call center revenue, national roaming, equipment sales, visitor roaming, tower rental, DVNE, and other non-customer driven revenue.

** Average QoQ for the quarterly view is the average of the last quarter.

* TV advertising, production services, equipment rental revenue, call center revenue, equipment sales and other non customer driven revenue.

** Represented by homes connected all technologies (HFC + Other Technologies + DTH & Wimax RGUs).

*** Average QoQ for the quarterly view is the average of the last quarter.

⁴ See Note 4 of our Unaudited Interim Condensed Consolidated Financial Statements for details on our segments.

Earnings Release Q1 2021

One-off Summary - Items above EBITDA only

Foreign Exchange rates used to support FX impact calculations in the above Organic Growth reconciliations

Debt reconciliation

* Net Debt and Net financial obligations are non-IFRS measures. See page 12 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures Cash includes term deposits of $0 million as of March 31, 2021.

** El Salvador's official unit of currency is the U.S. dollar, while Panama uses the U.S. dollar as legal tender. Our local debt in both countries is therefore denominated in U.S. dollars but presented as local currency (LCY).

Earnings Release Q1 2021

Reconciliation Net financial obligations to EBITDA to Proportionate net financial obligations to EBITDA as of March 31, 2021

Capex Reconciliation

Earnings Release Q1 2021

Equity Free Cash Flow Reconciliation

OCF (EBITDA- Capex) Reconciliation

Earnings Release Q1 2021

Interest Expense Detail

Amortization Expense Detail

*Amortization expense related to Guatemala and Honduras was $34 million in Q1 2021 and $33 million in Q1 2020.

Earnings Release Q1 2021

Guatemala and Honduras Financial Information (unaudited)

Until 2015, Millicom group results included Guatemala and Honduras on a 100% consolidation basis. Since 2016, these businesses are treated as joint ventures and are consolidated using the equity method. To aid investors to better track the evolution of the company’s performance over time, we provide the following indicative unaudited financial statement data for the Millicom group as if our Guatemala and Honduras joint ventures had been fully consolidated.

Earnings Release Q1 2021

Earnings Release Q1 2021

Regulatory Statement

This information was prior to this release inside information and is information that Millicom is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact person set out above, at 12:00 CET on April 29, 2021.