- Underlying local currency revenue growth of 8.4% YoY to $1,199 million (in local currency but excluding a one-off reclassification of $7 million and Online revenue of $2.5 million)
- EBITDA constant at $507 million, including the one-off reclassification and the losses from Online ($2.3 million in Q3) pointing to an EBITDA margin of 42.3%
- Capex of $183 million, or 15.3% of revenue, including $15 million for 3G spectrum in DRC
- Operating Free Cash Flow of $252 million (21.0% of revenue)
9 Month Highlights
- Underlying local currency revenue growth of 8.5% to $3,548 million
- EBITDA of $1,537 million and EBITDA margin of 43.3%
- Capex of $619 million (17.4% of revenue), including $51 million for spectrum
- Operating Free Cash Flow of $702 million (19.8% of revenue)
- 2.1 million shares bought back for $190 million
- The Board will propose an extraordinary dividend of $3 per share to an EGM to be convened in Q4
Financial summary for the quarters ended September 30, 2012 and 2011
|YoY% change (underlying local currency) (v)
|YoY% change (underlying local currency) (v)
|Normalized Net Profit(ii)
|Operating FCF (iv)
(i) EBITDA: operating profit before interest, tax, depreciation and amortization; derived by deducting cost of sales, sales and marketing costs and general and administrative expenses from revenue and adding other operating income
(ii) Net profit adjusted for items such as foreign exchange movements, movements in valuation of the Honduras put option, Colombian deferred tax asset, and revaluation of previously held interests.
(iii) Excluding towers sold to, and leased back from tower companies
(iv) Operating Free Cash Flow: EBITDA – Capex - Tax +/- working capital movements and includes proceeds from tower monetization
(v) Underlying local currency growth means in Q3 excluding one off items and Online revenue
2012 forward looking statements (unchanged)
In 2012 we aim again to strike the right balance between top line growth, profitability, cash flow generation and return on invested capital. We expect the full year EBITDA margin to be around 43% and operating free cash flow margin of around 20% of revenue. In 2012, we expect capex, excluding spectrum acquisition, to increase but to remain below 20% of revenue, as we add further data capacity and invest in IT and billing platforms.
Mikael Grahne, President and CEO of Millicom commented:
“The third quarter of the year was very similar to the first two quarters of the year. Sustained investments for future growth diluted EBITDA margin but enabled us to maintain high single digit organic revenue growth, in line with our expectations and reiterated outlook for FY 2012.
In Latin America, revenue grew again in the third quarter by 9% in local currency, despite continued pricing pressure in El Salvador and a decline in international incoming revenue in Guatemala weighing negatively on year-on-year growth. In South America growth rebounded on the back of our proactive approach to voice-to-data transition. In Africa, top line growth in local currency accelerated mildly at close to 7% in Q3. In Ghana, revenue and the customer base stabilized in what remains a challenging market.
The Information category was again the strongest contributor to growth in the third quarter of 2012, representing 53% of our underlying revenue growth in local currency. By the end of September, over 16% of our Latin American customers were users of mobile data services.
We will continue to innovate and seize new growth opportunities, leveraging on the strengths we have built as a mobile operator. In the third quarter, we generated over 38% of recurring revenue from Value Added Services in Latin America and over 19% in Africa while continuing to grow voice revenue. We are on track to exceed 50% in Latin America and 25% in Africa by 2015.
In the third quarter, we invested in online service and e-commerce businesses by acquiring stakes in Rocket Internet businesses in both Latin America and Africa. These investments will further enhance and broaden our innovation capabilities into the Online sector, a promising but nascent sector in emerging markets. In addition, on October 2 we completed the acquisition of Cablevision Paraguay, strengthening our product offering in the Information and Entertainment categories.
We have now executed two thirds of the previously announced share buyback program. In conjunction with our Q3 results, the Board will propose to an EGM, to be convened in due course, an extraordinary dividend of $3.00 per share. There will be no further share buyback program in 2012 as it will bring our total shareholder return for the year to close to $735 million.
With our increased focus on innovation and sustainable investment, I am confident that we have the right action plan to deliver ongoing profitable growth. The past 10 years have been a fantastic journey for me. I would like to thank everyone, inside Millicom, in our markets, and in the financial community who made it such a unique experience. I am pleased to now pass the torch to Hans-Holger Albrecht, who I have known for a long time. I trust he will take the Millicom Group to new heights to the benefit of us all. "
Conference call details
A presentation and conference call to discuss results of the quarter will take place at 14.00 Stockholm / 13.00 London /08.00 New York, on Wednesday, October 17, 2012. Dial-in numbers: +46 (0)8 5853 6965, +44 (0)20 7136 6283, or +1 646 254 3388. Access code: 7014033#.
A live audio stream of the conference call can also be accessed at www.millicom.com. Please dial in / log on 10 minutes prior to the start of the conference call to allow time for registration.
Slides to accompany the conference call are available at www.millicom.com.