Q4 2022 Millicom International Cellular SA Earnings Call
And three five for the full year <unk>.
As expected growth slowed in the second half with the changing macroeconomic conditions. When you look at the full year picture on this page you can appreciate how strong our business is with every business line in almost every country growing despite a much more challenging macro environment.
As I mentioned last quarter, there are some shifts in the way, we're achieving our growth and this is consistent with the general trends in our markets, it's still a growth and home offset by stronger growth in mobile and we believe this is at least partly related to increased mobility and that's dependent on home broadband Skus have gone back to in person learning and primes have returned to their off.
And this is happening in the context of a weaker economy, where consumers are having to cut some of their spending.
And yet Meanwhile, we to be continues to perform very very well as you can see more detail on the next slide.
Service revenue from our <unk> business grew more than 5% in 2022 accelerating from only 1% in 2021 as a reminder, we revamped <unk> our strategy and refocus our protocol things where people businesses just a few years ago.
And with him endemic now behind US this is paying off with stronger customer growth, especially in the SME area and very rapid revenue growth with about 40% coming from high end digital services that make up close to 20% of our overall <unk> business now.
This part of our business has continued to perform strongly in the second half of the year.
Created a strong pipeline of new projects, which gives me a lot of confidence that we can continue to drive solid growth in beta will be going forward now, let's look at our mobile business on slide eight as I mentioned earlier, our consumer mobile business grew more than 3% for the year and postpaid has been the main driver of this growth.
We added three quarters of a million new postpaid subscribers, drawing austere and this drove 9% service revenue growth for the year, but half of these customers are migrations from our prepaid base would do this with selected segmentation in basin consumption reloads and payment histories, and we will continue to increasingly use data to drive our personal.
<unk> offerings to drive op postpaid penetration.
Postpaid still accounts for only 16% of our overall mobile customer base, but it now contributes 35% to our mobile service revenue and 20% to our overall total services revenue.
Final point I want to make on mobile is that we continue to implement price increases in most of our markets to catch up with inflation and we're encouraged by the competitor response, so far we're starting to see this translate into improvements in some countries ARPA improvements in data would be a very important area for us focus in 2020.
Now, let's talk a bit more about home on slide nine as I said earlier the softer net adds that we saw in Q3 continued in Q4.
This was caused by one the postman demick shifting demand from home back to the office as I described earlier.
The more difficult macroeconomic environment importantly, including sealants strikes in both EMEA during the quarter and throughout the year and three were choosing to remain disciplined on price. We continue to implement price increases enter charge installation fees, even if some competitors do not these dampens net adds in the short term it builds a much better and stronger business for the long.
Right, which is what we're all about because we remain very optimistic about the long term growth potential for residential broadband in our markets and that's what we continue to invest to expand our network into strengthen our Compton differing as you can see on this page. This year, we accelerated our homebuilder to add more than 800000 homes passed and about 40% of those were after.
Th on the content side, we told you last quarter about our deal with VIX, which gives us access to Spanish League of sports content, we're very satisfied by the RV resorts, where she particularly now that the World Cup is over on our customers focused shift back to the local and international soccer leagues.
Now, let's look at two of our largest markets starting with what the mine on the left we continued to invest in sales marketing content on our network to maintain our market share, especially in the prepaid market where competition picked up some intensity last year.
We're very pleased with our results are prepaid market share remained unchanged from a quarter ago and Meanwhile, all of our subscription businesses postpaid homeland <unk> continue to perform very well.
<unk> acceleration in the quarter compared to Q3, and we also have some positive help from the World Cup. This quarter. So overall another year of solid performance from our largest operation with very robust and sustained market share positions and strong free cash flow generation.
In Colombia, the story hasn't changed much since Q3, we continued to gain share in mobile, especially in postpaid <unk>.
Shift in mixed to postpaid he is driving <unk> higher and the good news is that alcohol for our prepaid segment is now also growing nicely and contributing to the 15% mobile service revenue growth. We're now seeing in Colombia as we saw in Q3 the growth in mobile more than offset the sulfur trends in home as we discussed previously and overall service revenue growth was almost 7% for the year in <unk>.
<unk> a strong performance considering the challenging macro environment, we have been facing.
Now please turn to slide 11 for a summary of our network investment in 2022 and the recent years.
On the left you can see that we have now operated and modernized all of our mobile networks at all of our markets are now tied NSA ready and in fact, we already launched our gene let them out of that and during the year because of this as we've said before launching pad GSA in our markets when that happens we'll be within our existing capex envelope as we just stated.
And about how over the past year.
On the fixed side, our network is very new and fiber deep and increasingly so we now have over 12 million home passes with HFC.
Already including 730000 or almost passed with F. T th across six of our markets and last week, we announced the completion of our new fiber network that connects Paraguay and Bolivia. Importantly, this provides a new key fiber at Lincoln The Pacific and Atlantic Oceans. This is the culmination of a multiyear project that will improve quality and lower the cost of <unk>.
<unk> in South America.
All of this investment as being undertaken within our stated capex in political by about $1 billion per year, which translates into a healthy capex to sales ratio of around 18% on average over the last three years.
Now look at Teco money on Slide 12, 2022 was a breakthrough year for this business over the past two years, we've invested in the business first by building a strong team at bringing the new an expert clean tech talent during the past year. The team was very busy redesigning rebuilding a new more robust digital platform that can fully scale.
We launched a new up and have been rolling it out across the footprint to drive adoption and we're now starting to see the results.
Little users that is those people, who transact online using the new op almost tripled and we're monetizing that growth revenue from this digital users more than doubled it is still early days in our digital user base is still small, but we're very satisfied by the ear you take.
Meanwhile, we're also working on driving increased engagement with our digital user base rolling out our new merchant classroom and in the last several months, we have signed up about 45000, new merchants, that's up from close to zero, one year ago, and expect to add a lot more merchants in 2023, leveraging our tea business relationships with.
Over the last several months, we have been piloting a new lending business originating more than 100000 nano loans average loan size is about 40 to $50 and the average maturities only about 20 days clearly theres a big opportunity for us in this area and we're using this pilot to fine tune our algorithms before bringing these out more broadly later this.
Here.
And finally, we also signed an alliance with visa, even tivo money customers access to the table money visa card, allowing them to use their teco money awarded balances anywhere visa is accepted.
Now please turn to slide 13 to review the progress of our tower company carve out by now you all know the reasons why doing this can create a lot of shareholder value. We've made a ton of progress over the past year and the key message here is that we're on track with the timetable we shared with you one year ago. We continue to expect the transaction towards the end of this year.
The project in the company now has a mean as it's coming to life, it's sloppy, which will see the light of day very soon.
Last but not least on to take a moment to comment on the important progress we made on the ESG front. During 2022 as you can see on slide 14 on.
And societal programs, we continue to focus on providing tools for employment in the digital economy training key social economic sectors, such as women children and teachers on the environmental side, we validated and announce our science based targets, meaning to reducing scope, one and two greenhouse gas emissions by 50% by 2030 and to achieve net zero over the long term.
Our achievements in 2022 were made possible through the indication and the effort of our 20000 employees and I have no doubt that their continued hard work will contribute to either more success for our business in 2023 and with that I will turn it over to Sheldon.
Thank you Mauricio.
Before we review the financials, let's recap the macro context on slide 16.
We continue to closely monitor the macroeconomic situation in our countries on the left you can see how inflation has been tracking over the past year or so it peaked at eight 5% in July and has fallen to about 8% in December .
And on the right you can see the latest GDP growth forecast from the World Bank.
Our markets on average are expected to grow about 3% with all of our largest cash generative markets in excess of 3%.
This is faster than regional peers, like Mexico, and Brazil, which are expected to grow less than 1%.
Which I think speaks to the resiliency of our markets in the face of a potential global recession.
Now, let's look at our Q4 performance beginning on slide 17.
Service revenue was $1 $3 billion in the quarter, that's up nearly 11% year on year due to the Guatemala acquisition.
Excluding the acquisition and the impact of FX organic growth was two 3%.
Our mobile business grew just over two 5% and contributed about two thirds of the overall growth in the quarter and for a second consecutive quarter all of the mobile growth came from postpaid which has had its best performance of the year growing at nine 6%.
Investments, we've made in some of our mobile businesses and networks in recent years, especially in Colombia continued to yield positive results.
Adverse FX trends impacted our revenue growth negatively this quarter largely due to the Colombian peso depreciated, 18% on average during the quarter compared to a year ago as well as the Paraguayan bahrani, which depreciated about 5%.
Drilling down further on slide 18 to service revenue by country.
<unk> already talked about Colombia, and Guatemala, So I won't cover those again.
Elsewhere, our performance in most of our other markets was solid.
El Salvador continued its strong performance during 2022 and was up seven 5% in the quarter with every business line contributing to this growth.
Nicaragua also maintained their strong momentum with growth of about 5%.
Paraguay grew for a seventh consecutive quarter and was up 4% with solid performance in mobile and B to B.
Panama have flat growth against a tough comparison due to some large <unk> contracts in Q4 of last year.
Olivia was down four 5% as we felt the impact of a change of regulation on mobile overage rates that went into effect in August as well as the strike in Santa Cruz region, which impacted economic activity and our install capabilities during the quarter.
Honduras, which we don't consolidate has had its strongest quarter of the year growing almost 5% with growth across all business units.
Okay, turning to EBITDA on slide 19.
EBITDA of $548 million was up 19% year on year due to the consolidation of Guatemala.
Organically EBITDA was up one 8% as revenue growth was partially offset by the net effect of higher direct costs and lower opex.
Direct costs increased due to the higher content costs related to items, such as soccer rights, both our new agreements with VIX and the World Cup.
And we also saw our bad debt expense increased over the past year is this largely reflects growth in our postpaid and <unk> subscription businesses.
Operating expenses declined due to lower selling and marketing spend which offset the impact of inflation on our energy and labor costs.
Now looking more closely at EBITDA performance by country on slide 20.
El Salvador, Nicaragua, both had very strong EBITDA growth from operating leverage and we saw margins expand roughly 200 basis points over the past year.
Paraguay returned to positive growth this quarter, posting an almost 7% growth.
As <unk> mentioned previously Guatemala had a stronger Q4 with EBITDA growth of two 6% although revenue from the World Cup contributed to some of the sequential improvement.
Colombia was up 4% and margins were just shy of 31%, which is our highest level since the entrance of a new competitor in Q2 of 2021.
We remain very focused on improving profitability in our second largest market.
We continue to gain scale in mobile and we are also taking steps to adjust your cost structure and mitigate the effect of the 16% increase in minimum wage that went into effect in January in that country.
Panama EBITDA was down slightly in Q4 again this is because of some large b to b contracts in Q4 of 2021, our full year performance is more representative of the trends, we're seeing there and on a full year basis, Panama EBITDA was up more than 6%, which was a good result in a year, where our main competitor was not allowed to raise.
<unk> under the terms of their merger approval.
And our <unk> increased over 20%.
During the year in a dollarized market.
Olivia EBITDA declined almost 12% as we saw a full quarter impact of the regulatory change from last quarter, which dropped straight to the EBITDA line.
Additionally results were impacted by the strike in Santa Cruz region with slow commercial activity during the quarter.
Honduras, which we do not consolidate had impressive growth of 13%, reflecting both improved revenue trends in Q4 of 2022.
And an easy comparison against a muted performance in Q4 of 'twenty to 'twenty one.
<unk> is the one country, where we recently upgraded our mobile network is ratio outlined earlier and we have seen revenue growth accelerated nicely in the second half of the year in this market.
Looking at EBITDA margins on slide 21 margins were broadly stable and even improved compared to last year's Christmas selling season of Q4 of 2021, we.
We achieved this despite the investments in our carve outs and the tougher macro situation.
Energy costs were up almost 11% on average during the quarter.
We have seen higher minimum wage increases in our footprint given the inflationary environment.
We continue to invest in preparing for carve outs of arteaga money and telecom businesses. Although this impact moderated somewhat in Q4 as we begin to lap some of that earlier investments and teco money in particular.
Meanwhile, we continued to implement price increases across our businesses in Q4, and we will continue to focus on price increases in 2023.
Finally, we are starting to implement our efficiency program project Everest, which we expect will help us achieve our financial targets let.
Let me spend a moment, providing more details on Everest.
As you can see from this slide Everest has a very broad based efficiency program that will touch every part of the business and in every country, including our headquarters.
This will include revenue initiatives around convergence.
Commercial opex savings from improved churn and customer based management and truck roll costs.
Network Opex savings from energy optimization and not consolidation.
Savings from simplifying platforms.
And capex avoidance with improved reverse logistics.
So this is not simply a cost cutting exercise, but improving the way in which we operate.
We've been working on this for the past several months and the program is the result of a very detailed bottom up assessment of all of our operations and we are now implementing phase one.
We expect savings from project ever to ramp up to an annual run rate of more than $100 million by the end of 2024. So it will be a key pillar of our EBITDA and <unk> growth over the next couple of years as we focus on delivering our equity free cash flow targets.
Moving to slide 23, you can see our operating cash flow that as EBITDA less capex.
Formed in 2022 compared to 2021.
<unk> more than doubled during the year to $1 264 billion mainly.
Mainly due to the consolidation of Guatemala.
Organic <unk> growth was eight 4%, which adjusts for both the acquisition of Guatemala as well as for the the OCI that we spent in Africa prior to exiting in April 2022.
Excluding the one offs, we called out in the previous quarters in both 'twenty, one and 'twenty two organic OCI growth would've been eight 6%.
This organic growth was due to organic EBITDA during the year as well as lower Capex as we completed some key investment projects that began during the pandemic.
Slower home customer growth also means that we spend less than expected on installs in customer premise equipment, which typically is one of the biggest components of our annual Capex spend.
Now, let's look at equity free cash flow on slide 24.
As <unk> outlined we generated $171 million during the year in line with the guidance that we gave you during our third quarter call.
This was the first year that we provided guidance on et cetera. So I wanted to provide you a bit more visibility on all of the main line items that go into our equity free cash flow was ratio describes as being after everything.
Starting with EBITDA of $2 $25 billion.
We then deduct cash capex of about $960 million.
This was a bit below our guidance of around $1 billion, which.
Flex the variable nature of a portion of our capex related to CPE is for customer home additions.
There was about $1 billion of fixed charges for financing leases and taxes.
There is another $200 million for working capital and spectrum and these items can vary somewhat from year to year.
Finally, we add back repatriation from Honduras joint venture, which was just north of $80 million in 2022.
I should point out that we own Tanzania through early April so all of the numbers about include about three months of Africa. So we removed the net effect of that down at the bottom to give your equity free cash flow from our current footprint.
Now please turn to slide 25 for our usual that bridge.
Net debt is down $1 billion in 2022 with a reduction of more than $200 million in Q4 due to the very strong equity free cash flow generation during the quarter.
We ended 2022 with $5 $8 billion of net debt.
And net debt to EBITDA after leases of 294 times.
This is down more than 30 basis points from $3 two eight times at the end of 2021.
If we include lease obligations of just over $1 billion. Our leverage was 3.04 times at the end of Q4, well aligned with our deleveraging targets.
With that we are now ready for your questions.
Thanks Kelvin.
Well now move to the Q&A portion of the call.
As a reminder, analyst and investors would like to ask a question should contact the IR team via email and investors at Millicom Dot Com and we will add you to the queue.
Now before we begin let me also provide some additional ground rules for today's Q&A session.
As most of you are aware, we published a press release on January 25, and which we confirm that we are having discussions with Apollo global management anxiety about.
About a possible potential acquisition of all outstanding shares in Millicom and that there is no certainty that the transaction will materialize, nor as to the terms timing or form of any potential transaction and we had no new updates on this topic today and for legal reasons that should be cleared to most of you we cannot and will not be.
Taking any questions on this topic.
That will take the first question today from <unk> <unk> of.
From JP Morgan.
Please go ahead.
Hey, guys. Thank you very much for taking my question. So you you mentioned that the average project.
Efforts to increase prices across the regions. We wants to understand what are the key levers, Florida further free cash flow acceleration into next year. What is the main source of that acceleration and if we could expect similar seasonality as the one that we saw in 2022 and the second question.
Would be if you could give any additional color on the competitive environment in Guatemala mobile market and what has the impact been on prices. Thank.
Thank you so much.
Thank you Bryan Michelle you use currently more than older loaded.
Your days with those comments.
So we've got our CFO here, who has been around now for over a year.
So again fully tackle number one.
Sure.
Okay great.
Good afternoon.
Yes first of all just on professional network, we're not giving guidance specifically answer.
Three four.
So your range by <unk> <unk>.
What's your take on what's what's underlying underpinning.
Our three year equity cash flow target is ultimately are 10% organic <unk> growth.
We expect to open over that three year period.
And the key levers there.
We are picking up and then ultimately what we do on the top line or can we expect on the top line price increases will be a data component of that is something we started introducing in the second half of 2022.
The focus.
In 2023 and beyond so that will be a key piece.
What's driving that as well as that of course, and we drive margins product Everest is going to be one of that.
We'll get to as I said exiting 2024 and 100.
That's a $100 million.
<unk>.
2023, well.
We will be ramping towards that.
It can be a straight line ramp there will be some one off costs as you get more.
In the beginning of this.
The size.
Versus what frequency in 2024, so we expect a straight line.
$100 million exit that.
So that will be worked out.
Both years.
So that 10% organic growth.
<unk>.
Thank you Andy.
And the same on the Giulia full commentary on what the model.
Their history to provide a context quarters as you all know.
Okay and then.
The auto market share.
Active on investing as we did the acquisition of the asset and novel 15 months or so ago, we had expected that our competitor would want some of that box.
The budget for that.
Investors over a year in sales and marketing.
G <unk> make sure that.
Hello.
Now so that is on that list.
Consistently slowly.
The specific question is.
We will go on Q4.
Knowledge information.
Yeah.
Please proceed with your question.
As a result.
Yeah.
For the year so marketing.
For seasonal.
We responded with a smart long term L business.
Danger to.
<unk> be in a position where they need us.
So we've returned to a more sustainable model.
As a reminder.
The second one the other businesses called into subscription licenses on the postpaid <unk>.
And our owners.
<unk>.
They are growing very very well.
Yes.
<unk>.
Key initiatives.
During our.
The year end call.
Just kind of take stock of the year.
And it's also been about 15 months since we are on it.
Tom.
Hello.
Point number one on that assessment is we have sustained market should see mortgage.
Number two we've actually improved.
If anything we've seen before.
We launched <unk> throughout the year.
First thing to do.
Is <unk> <unk>.
Capital.
Okay.
We have improved our spectrum position.
Eric.
We have launched our model allows us to provide options and Andrew.
Sustained market share.
Much improved spectrum positions and most importantly sustained.
<unk>.
Yes.
With the ability to keep our debt down which of course is increasing market.
Okay.
So we're very very happy outcome.
Outcomes of the year.
Yes.
And there is three themes that are also important for the long term future.
<unk>, 90% of the powerful portfolio there.
<unk> <unk> C <unk>.
Business is strong.
Emphasis on and now <unk>.
Yes.
Paul staring to see 100% of it.
And launching.
<unk>.
Again easier.
On the business.
And incorporate evidence in more steam.
All of those things were part of the acquisition.
Did you say 15 years seems to be some bumps into these.
Working out according to the acquisition.
So that's fundamental.
In the onshore market.
Thank you so much guys.
<unk> got many questions I got nothing.
Thanks Duane.
Next we're going to go into a defined goldstein of engaged upon.
Okay.
Oh.
Hum.
Oh, yes.
Yes.
Yes.
I was gonna.
Gordon touched upon.
Paul.
Yes.
Uh huh.
Sure.
Flat.
Can you.
Right.
Yeah Bill.
Comparable power.
Path.
Around the world.
Uh huh.
Okay.
Uh huh.
Wait in Delaware.
Yes.
I know there's some high.
Back to work.
Yeah.
Sure.
Right.
And we'll leave out better.
Okay.
Slowing down your neck.
Ah.
In that model.
Thanks.
I'll I'll stop with that.
Kenmore short question.
Okay.
I think the.
The connection was not helping as good as my Swedish is right now.
English is far better systems. So I think the connection was not helping you out but I think we got the gist of the question is around whole field of nutrition.
Mid and long term so I think we got most of that.
So.
Short term sooner what we're seeing this year.
Why.
The slowdown in the net.
And how that makes sense in the context of our loss from continuing to build for the long term.
So this slowdown is due to one market.
And you can see that because of a slowdown how concerned in the second half of the year.
<unk> people are watching their consumption number anymore.
And number two that's also consistent with what I call the ebbs and flows.
Or more one versus home economy saw coming out of <unk>.
Shifting from home.
Towards development.
Before the conference call.
On slower macro and watch the walnuts and theirs.
Also some.
Different country issues.
Which which relates to believe.
Where the strides we're not just the last quarter for the year.
Meaningful installed disciplined operators.
A few.
Some 40000 per cent.
And then most importantly water all of these issues.
Streaming devices.
Uh huh.
Some of our competitors, who may have more price increases.
Where are some of our major EMEA.
Save a lot and installation costs.
Uh huh.
And we think this is a free service and long term softness of the business.
Patient short term pain on mortgage coming to you on the net adds include shareholdings indication bodybuilding business going forward and.
And that gives you an idea on why do we keep these homes as we think you can see for loan.
On home.
One is on the normal review on all those.
Those penetration will come.
The underlying.
Factors that build facility.
Joan.
Population adopting detail household formation middle class formation.
Nutrition with all generate increasing demand for.
For broadband services in the long term and one of the other networks, we have been doing that.
Peter.
So we're very happy with.
Now do we need to according to the demand yes in the short term yes.
The slowdown according to the demand for media.
Our very nice on paper for media news, but overall, we will see is.
As you can see now for a few years.
We manage the business so that we sustain.
All right.
The residential broadband which is.
30% to 35% yet nutrition, we're always are justified given their non got ahead of ourselves or behind it.
And we're happy with what we're seeing.
In terms of deploying our 800000 is a good win.
40% of that is already.
Pretty good.
Logistics work last night.
I think the logistics work and six of them are people, who now between fiber and of course, as we've said going forward.
And tissue by either and we get to the 90 day period.
All of this.
We remain extremely bullish and confident deploying fiber on.
Residential door uncertainties indirectly through business, one even go into FMC, which will remain grid.
Sure.
Since our call to your questions.
Perfect.
Yes.
Hi, Stefan.
Yeah.
You are.
Yes.
Yes.
Bob.
Okay.
Yeah.
<unk>.
Yes.
All told.
Yeah.
Please go ahead.
Thank you.
I didn't get the kind of how to go out I think theres has been aware of where we are in U S. Revenues are saying this year versus what we've been talking about historically.
$50 million.
<unk>.
Yeah, Okay. Okay. So we haven't had to disclose the numbers.
We're growing sort of high single high single digits to low double digits a.
Our year over year at this point in time.
Point to note Ron in the past.
We've essentially spent a lot of this year and recently in the prepared comment on establishing a new platform.
Enrolling out the new platform. This year that rollout was really happening during the second half frankly, the latter part of the second half of the year. So all of the benefits.
On that we Havent really been which you haven't realized at this point in time.
So we've been encouraged by some of the digital adoption and.
And the likelihood of this platform and it hasnt translated into within the year revenues in 2022.
Sure.
This is one where I would have wanted to give you a Q4 numbers on revenue.
During the presentation.
Hi, Donald.
Full year and Q4, because it's really in Q4 actually November sooner.
At this time, because we've seen a dealer subscribers, meaning the emergent <unk> to revenue.
And significantly the NPS really staying on very very high.
And some of them are really very good results.
Our trials.
Any anomalies.
All seem to say that we're happy with the ramp up in the last quarter.
On the insurance me a whole bunch of the program.
During the full year.
Okay.
Okay. Thank.
Thank you Stefan and I will now go to class Danielson, our Dan.
Yes.
Okay.
Question on mute, Yeah, I saw that sorry submissions with the mute button sorry in Stockholm. So.
No I was only going to ask questions on the acquisition, but Michel scared rabbit.
Can I avoid that.
Adjusted compliance guys gave me a bank card.
It kind of goes online and just shows why okay that works.
Cool.
It's a good good gesture I think for sure.
A couple of follow ups, I guess I'm Stephens questions on Capex levels.
I mean, you had cash capex of roughly $960 million in the 2022.
Got it for 1 billion previously I guess thats been the kind of headline numbers I guess.
That's kind of despite the inflation being what it is to a certain degree and just the impact of that is having so I guess, it's partly due to a slowing momentum in home. During this year, but I think with project average I mean, you're guiding for kind of additional capex cuts, but then on the data on the flipside, you still want to invest in the home business could you maybe talk about some.
The kind of puts and takes within the Capex told there is.
Is this a sustainable level in the long term or what should we be expecting an absolute capex spend over the next few years.
So I'll give you some color around maybe Sheldon can bring a guy who wants to as to some more specifics in a minute.
Yes.
We've been investing as we showed in the presentation.
You should see around $1 billion to give us.
Number obviously will come in below that number.
With fund remains extremely healthy capex acceleration of Capex intensity in the last few years.
And that's because we've been investing in.
In the business.
Right.
Students, David and Hulu.
We're coming out of our 18 vessels.
Most of them.
<unk>.
Im very bullish on <unk>.
Hi.
It's important it's one of those things we modernized.
GAAP will shortly all of them in the last three years.
We put five quarters small moana NSA tours every operation that's important not only for the quarter there.
Because it is our view.
It would be energy savings in Egypt.
That's a very important one.
Because it means that the capex associated with it is similar to consistent with what we would expect our students.
<unk>.
We've also spent the last few years expanding coverage at 80% coverage is important because what it means going forward gives us coverage.
Sure.
More variable capex for capacity Capex in <unk> generic revenues machines a year.
Of course sure.
No.
We are almost done with the Columbus.
Which is in December .
Yes.
And on FX, we actually got a bit of a <unk> question.
Deal in continues to be heavy.
In these states we're now.
<unk>.
700 of those are already Pfizer and then.
Sure.
The most important thing that we said in our Investor day.
Existing network is fiber.
Deep deep capacity.
All of the copper outreach remember those are done.
We've got we need to do.
So we offer that.
You said frequently we can triple banner.
So on fees is needed and we've ramped up the <unk> machine, which means we're going to get our reverse logistics to star Wars and so on.
For lack of a better word fixed heavy lifting if you will on.
On Capex is sort of behind us from here on and becomes a lot more than we even did this year and on a station on the pilot line Alleviant fiber, which we're very happy about it not only relevant for us.
Always having invested first in.
In the network in the business.
Yes.
I would just add as we bid on.
On project at risk from a Capex perspective.
The effects.
Savings from the Capex side of it in terms of what ends up being a bottom line number that we're reporting I mean.
There are some opportunities in our Capex I think that also just need some more.
From a from what we're spending then.
And then actually a reduction in spend so we'll be getting more out of them. The more bang for our dollar on the Capex side and then just the other onetime capex spend we've been Mexican I'd wrap the call I think they are variable on our spend for next year is going to really come down to the demand and a smart home and net adds.
That's a little bit lower this year, therefore, I am seeing solid but lower spend on that.
While we book this year.
And interest is all about doing things more efficiency better more digitally.
When you would expect us to be doing over the long term, it's not about comps as apartments.
Tissues to going forward.
Alright, very good and then just a quick follow up also on that side, but the other line I guess on the spectrum and license is part because there are also tracking a bit with lower down than what we were kind of expecting since this is this the kind of for love them or.
And what should we kind of expect on that side.
I think we said.
Spectrum.
Under our Investor day.
Tract, 150, and where we were.
Before I will turn the client spectrum is very very.
Greg on any given year.
Depends on where something didn't happen.
You get delayed so.
So don't read too much into any given year in Butler.
The averages.
Some time I'm.
I'm sure part of your question has to do with the Columbia spectrum.
I would imagine there is a large chunk of that.
Hum.
I'll just.
The questions later and users is a good segue to go into we're into medical issues. This year.
Everyone aware.
So I'd, rather not comment too much.
Only to say that we're not really expecting energy prices again.
Our partners over the long term.
We remain uncertain.
In that regard as we should.
It does not mean to say class spectrum policy, Colombia don't remain high.
This should be international versions.
This means.
We are conservative and realistic.
Our approach to forecasting were sold one.
Yes.
Alright, Thank you very much gentlemen.
Thank you.
So next we're going to go to next year, but beyond that Barclays has matured.
Hi, Good morning, Good afternoon can you hear me well.
Yes, great.
Thank you.
I had three questions. Please the first one was if you could give a bit of color in terms of your pricing activity in the different markets you've talked about some of them already.
When I take a step back look at the inflation look at your service revenue growth. It seems that it's hard to catch up with inflation. So maybe if you could help us understand a bit more how that's playing out on.
The price increases front book back book are you seeing spin down so that's the first question.
The second question was on Everest.
Just wanted to clarify the $100 million annual saving up something that should enable you to reach the guidance.
Essentially even go above the guidance.
And within that maybe not part of project Everest I imagine that your financing costs due to the high interest rates could also have an impact on your free cash flow. So maybe you can comment on that and then the last question, which may give mortgage for the opportunity to use its red card.
Will it be safe regarding shelter, if there is a notion that FNF, but.
But the question is when you consider the deal are you do you need to follow the U S rules, the Swedish rules, both well how is the context there. Thank you.
Definitely.
There's going to be used to that point.
Got it.
Going there.
Note that the first three are good for your loan sale.
Alright, sorry about it.
And over the years the address through our efforts expert right you may actually in downtown areas by the way.
So I'll hand that one and I'll take the highest one right after that I'm not sure what is their revenues.
What's the regulatory attitude and decide.
Now I'll never say you were asking.
And that is that kind of propel us beyond sort of what we're talking about leverage recaps our range or.
I think I kind of mentioned on the earlier comments.
It helps underpin the 10% organic operating cash flow growth that we've been talking about so.
That is.
That just helps support the economy.
That target is not to the supplemental to that target and use of our to the interest expense costs.
From that perspective.
A record we're pretty well positioned.
In this environment.
Of increasing interest rates.
More than 80% of our debt is fixed rate.
So we have a very low volume thats excellent floating and as most of that we don't have a lot of debt maturities here in the near term, which you're experiencing new shown are in our non maturity profile. So there's not a lot of need for actually going out and repricing desk. This current environment. So that's positive and of course, even even better than that.
We've generated some good cash year, there can be used to two.
Not to reduce leverage and even probably even reduce our need to go out in the capital markets for four financings are a deleveraging standpoint tablets.
Which is different from that perspective too so.
Sure.
So we're I think we're pretty insulated and well positioned I think as far as leisure demand.
Yes, So let me, let me try that pricing Matthew in a constructive manner with limited detail analysis on the fixture associated with it so atlas.
The question in this segment.
You get a better feel for what's going on with Stifel.
Sure.
Eventually.
No.
Retail because its dynamic NUPLAZID treatment.
<unk> I'll ask some of our new office engine comprise market largely is done of course on on the <unk>.
In most of the markets we've been at.
Adjusting as much as we can issue, there where closeness ice Institute.
Hmm.
Susan.
Function are also markets, where we're being more careful whatnot already talk tomorrow of course.
And Bolivia.
NHL as chip competition significant.
We've not been able to do that so with the exception of those two markets everywhere else on ebay.
Rising up to the new offer as much as we can in general terms.
When you post the same is true we focus.
The price increases.
Paul on the new offers rather than on the days, where a lot more carefully matched with you more.
A big thank you.
And generally we've been very good at doing that differently Salvador wind shear zones.
We've actually been able to do that in Guatemala, as well and we've held back on <unk>.
Sheldon engines.
We are also being a little bit more careful for the same reasons.
So that gives you an idea on that.
And then on the home.
I talked about as being very price disciplined.
So we've been slowly putting price increases.
And we do a baseline.
To everyone on the same day with you are slowly.
And this is a cross.
The region.
Uh huh.
Measured way.
With some delay in Bolivia will get into political box.
Now.
Your question <unk>.
What was the mismatch is a worthy use at least one I wrote down if there is a niche on timing so inflation, which is part of your question it hits the cost base needs and.
And it just rattle and we've shown you the energy to be able to observe.
On labor.
Serge on the bottom line.
We're not able to pass on inflation on pricing with the same level of experience in terms of timing. So there is a mismatch economy are.
National research, whilst managing our accrual although more into next year, that's harder to manage invest in the future.
Now being careful with expectation, we all know is <unk>.
Not now.
<unk> tier one two times inflation.
A huge swing.
Meanwhile, there are some affordability issues before and Thats just part of the submission.
So I hope it gives me a lot of color.
Point on the <unk>.
Timing of it and some expectations.
This is difficult to model.
So just to follow up on the home just to make sure I understand clearly you are also increasing the front book.
Back book.
Okay.
Alright.
Based on that growth.
Thank you.
Thank you Micha.
So next we're going to go to Fannie at HSBC.
Yeah, Hi, Thanks for taking my question. So I have a couple of questions. So it's been an area is things like you went to the Investor day and gave some guidance I wanted to understand.
They they stand on the couple of issues that but we expect the debt.
We expected with organic service revenue growth to be mid single digits in the student.
Liable now or is it that the project out that should offset any weakness dish.
One is the thought that the share buybacks would be the typical ensign clinically integrated with what we had at the time.
Is that.
In the plant.
Nicotine.
I'll ask other question Peter.
I was having a lot of fun today. These are both for him so talk about fiber.
And in just the first one on a year to SaaS in terms of the underlying.
Some of that some of the targets we have in the capital markets day in <unk>.
Thanks Rhonda.
Sure.
We are reiterating that I think are the key ones. We mentioned were just the ones in the press release, and we mentioned earlier on the call right. The operating cash flow of organic cash flow growth.
Up 10% over the three years per year and.
And of course, the equity free cash flow.
Over the three years of the hundreds of million dollars. So those those are the ones that are.
Hum.
It targets, which went into there's also the deleveraging target.
Also b can we drive striving towards that two five times by by year.
By 2025, and then you are down to two times thereafter.
We get comments side, the capital markets day about.
About our intention to do share buybacks in 2023, I would say that's still our ambition.
Clearly a lot has changed in the world over the last 12 months.
Now operating at a higher risk environment.
Capital markets and higher interest rates and the like.
February was let's see how the year plays out.
And in the immediate term, we're going to continue to prioritize deleveraging and paying down our debt because we think thats the appropriate allocation of capital for the business to ensure we meet our deleveraging targets, but near term buybacks remain on remain our ambition.
Soccer coaches to say never forget that soccer games have around 90 minutes.
Holiday is going to be more on a new rules and make sure you play all the way until the end of the muscle.
Yeah.
Okay.
So the other question that I had is regarding the repatriation from Honduras.
Just kind of making more than 50 people and don't feel that our equity free cash flow I think you know we had $88 million a peak.
As seen from Mohan dress evidence.
So is that sustainable going forward and what's the what are what's the what's.
Whats your target for the next couple of years.
Yeah.
Well, we're not giving guidance for a revaluation for specific segments.
I would point out, but I think your your comment it's about an 870% of our equity free cash flow.
We've talked about in the past.
Guatemala actually generates $450 million plus of equity free cash flow. So.
You can't isolate one single country's contribution but there is also interest costs and cost essentially that's been at the center of that.
It has to be absorbed so.
<unk> cautions you against that.
And tried to try to think thats overly our operating cash flow is not really dependent on Honduras, but frankly, that's not the only looks flat rig count right at home in growth at 6%, but in reality every country is a contributor as we work with exceptional Columbia and network at <unk> and <unk> in the headquarter costs, although this looks like.
Thanks Lee.
That's just weight loss.
Reality.
In Nevada.
It's 10%.
Okay.
Okay got that.
Just help us clarify that we were worried at the warehouse by the window.
Awesome.
And I guess a final question on I know the fixed competition unless you said that the competition. The competition not disappointing deal pricing is this is there any specific markets that are not responding or is it a broad based kind of response from the operators.
In specific markets for competitors.
Thanks.
Yes, just a general questions are more funding is good.
That's good questions are good.
So we've talked about working on that Lee.
Colombia, which is very important and we've talked about this.
The market has already talked about fixed in Colombia, So mobile in Colombia as being re composing in pricing significantly.
In the last few quarters and you see it.
Prepaid article LNG.
Currency is.
Mainly about 6%.
Postpaid is also up.
And both of those lines of businesses prepaid and postpaid are now contributing to our mobile in Colombia, which is 13% to 18%.
Both volume and bottles with pricing some mobile advertising in Colombia as being equal.
Importantly, operating income.
Wow.
You will see a new node as well.
Fair amount of.
Good behavior in the market, which is consistent with.
And the notion that agent to the market in which market shares.
Healthy 60 40.
We expect on <unk>.
That will be a continued healthy market share market.
We talked about.
Well in the sands is that theres been a pull back on any price movements.
I will have some level of market.
So we'll see what 2020 us to offer in that regard.
Other by very.
<unk>.
In a normal pricing levels.
All new constructive on pricing list pricing, we've seen that now otherwise.
Six or seven consecutive quarters of steady revenue growth.
Margin expansion and reconstructing and engines.
Why don't I missing I believe you talked about some of the kind of go back there. So I think I covered them all.
Sure.
Yeah. Thank you.
Thank you Tony.
That is that was our last question most of that to you. If you want to make any final remarks.
No.
This used to work as we are on track okay.
We had an investor call about a year ago, we laid out a number of initiatives.
We gave you.
Look that is composed of three key targets, 10% of operating cash flow growth and average for that period cumulative equity free cash flow was 102 billion and reducing leverage to $2 five by 'twenty five two times by long term all I'm going to say is that the first year of that which is on track.
And that's really the summary on this the second point is we made a couple of big acquisitions last few years' worth of Akamai lens Anima.
<unk> are working as I hope you can see after a year of Akamai.
By my math about three years in Panama.
Our own shop.
Our acquisition plan.
Okay.
So with that that's really needed to closing remarks.
And thanks for joining today. Thank you.
Okay.
Yeah.
Yeah.
They are recording has stopped.