TIGO — Millicom International Cellular S.A.

TIGO Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Total Service Revenue: EUR 1.9 billion, a 45% increase year-over-year, largely due to the consolidation of Coltel and other acquisitions.
• Organic Service Revenue Growth: 4.9% year-over-year.
• Adjusted EBITDA: EUR 857 million, up 35.5% year-over-year, with a margin of 43.2%. Excluding Coltel, the margin would have been 47.9%.
• Equity Free Cash Flow (EFCF): EUR 225 million, a record for Q1, reflecting a 66% increase year-over-year.
• Net Debt: EUR 7.6 billion, with a leverage ratio of 2.76x.

2. Strategic Updates and Business Highlights:

• Postpaid Net Additions: 5.6 million, with 250,000 organic additions, indicating strong customer growth.
• Home Net Additions: 1.5 million, with 46,000 organic additions.
• Mobile Business Performance: Mobile service revenue reached EUR 1.1 billion, with a 7% organic growth.
• B2B Growth: Digital service revenue increased by 19% year-over-year, driven by demand for cybersecurity and cloud solutions.
• Colombia and Chile Integration: Successful acquisition and integration of Coltel and Telefonica Chile, with early signs of operational improvements and positive cash flow generation.

3. Forward Guidance and Outlook:

• 2026 Financial Targets: EFCF target remains at least EUR 900 million, with a goal to reduce leverage to around 2.5x by year-end.
• Colombia's Performance: Expected to sustain revenue growth at around 8% for the year, driven by mobile and B2B segments.
• CapEx Outlook: Anticipated to be around EUR 1 billion, focusing on network improvements and expansion, particularly in Colombia.

4. Bad News, Challenges, or Points of Concern:

• Restructuring Costs: Approximately $100 million in restructuring costs anticipated for the year, which could impact margins.
• Competitive Pressures: Ongoing competition in key markets, particularly in Colombia against Claro, necessitating continued investment in network and service quality.
• Integration Risks: Potential challenges associated with the integration of Coltel and Telefonica Chile, including the need for effective execution of the Millicom playbook.

5. Notable Q&A Insights:

• Sustainability of Coltel Margins: Management expressed optimism about sustaining margins in Colombia despite restructuring costs, with expected positive contributions from Coltel.
• CapEx Strategy: The focus will be on network investment to enhance competitiveness, particularly in 5G coverage.
• Future M&A Activity: While the company remains open to further acquisitions, the priority is on executing current integrations and achieving operational efficiencies.
• Currency Impact: Favorable currency movements are expected to positively influence EFCF and EBITDA, although the volatility of local currencies remains a risk.

Overall, TIGO reported strong financial performance in Q1 2026, driven by strategic acquisitions and operational efficiencies, while maintaining a cautious outlook on integration costs and competitive dynamics.