Q1 2025 Millicom International Cellular SA Earnings Call
Speaker Change: Hello everyone, and welcome to our first quarter, 2025 results call. This event is being recorded. Our speakers today will be our CEO , Marcelo Benitez, and our CFO , Bart Vanhaeren. The slides for today's presentation are available on our website, along with the earnings release and our financial statements.
Speaker Change: Now, please turn to slide two for the safe harbor disclosure. We will be making forward-looking statements which involve risks and uncertainties and could have a material impact on our results.
Bart Vanhaeren: On slide three, we define the non-IFS metrics that we will reference throughout the presentation, and you can find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me turn the call over to our CEO , Marcelo Benitez.
Marcelo Benitez: Thanks, Michel, and hello everyone. Thanks for joining us to review the company's performance in the first quarter. As you will see throughout today's presentation, the restructuring program that was completed in 2024 is paying off. And the benefits are visible in these Q1 results.
Marcelo Benitez: And I am pleased to say that we are on track to deliver another excellent year in 2025. This includes a strong customer growth, increased profitability and cash flow generation, and the closing of some important M&A transactions.
Marcelo Benitez: Please turn to slide five for the highlights of the quarter.
Marcelo Benitez: Post-Painette ads of 262,000 were up nearly 50,000 from a year ago, while home net ads of 62,000 compared to the decline of minus 13,000 that we saw in Q1 of last year.
Marcelo Benitez: And as you will see later, our B2B business continues to perform very well. Meanwhile, our efficiency program continues to deliver higher profitability, with the OCS margin of almost 2% at points
Marcelo Benitez: A level that is higher than many other telcos ever the margins.
Marcelo Benitez: And once again, our relentless focus on efficiency produced very strong equity free cash flow of 135 million in Q1, which is typically our weakest quarter of the year in terms of cash flow generation.
Marcelo Benitez: Leverage ended the quarter at 2.47 times. As we had told you in our last call, Leverage increased a little bit during the quarter due to the impact of the dividend and our share-by-back program.
Marcelo Benitez: These are things that Bart will talk about later. Now let's review each of these highlights in more detail, beginning with our mobile business on the next slide.
Our mobile business performed well in Q1.
Marcelo Benitez: On the right, you can see that mobile business grew just over 3% this quarter.
Marcelo Benitez: This is a bit of a slowdown compared to the last several quarters, but keep in mind that in 2024 had an extra day on February , which is very meaningful in our prepaid business. And we also benefited somewhat from the cyber attack that impacted our main competitor last year.
Marcelo Benitez: These two factors made for a tougher comparison this quarter, and this was embedded in our plans for the year.
Marcelo Benitez: In fact, when we look more closely at our mobile service revenue growth in Q1, we see that post paid accelerated, while priest prepaid was slightly negative because of the two items I just mentioned.
Marcelo Benitez: Our strong mobile post-paid growth is a direct result of the key levers at the bottom of this page. We have talked about this in recent waters, but today we are adding channel productivity to the list.
Marcelo Benitez: We have made a lot of changes in our distribution channel, traditional and digital, and we have seen a big increase in the overall sales productivity, the simplification of our service offering is also contributing to the increased productivity.
Marcelo Benitez: Meanwhile, we continue to migrate our best prepaid customers to post paid and to put your fixed mobile convergent packages.
Marcelo Benitez: All of these initiatives are increasing the lifetime customer value with a combination of high
Marcelo Benitez: Now please, turn to the next slide to look at our home business.
Marcelo Benitez: As I mentioned earlier, we added 62,000 home customers in the water, and this is consistent with the trends we saw in the second half of last year. We are very pleased to see our second largest business continue to deliver solid commercial performance.
Marcelo Benitez: Our HFC and FTTH customers is back above 4 million, and is up almost 5% year over year. As we discussed in Q4 call, many of our new customers are broadband only.
Marcelo Benitez: In fact, our broadband customer base went up almost 7% while pay TV's flat and fixed the phone is down more than 20%.
Marcelo Benitez: One year ago, only one quarter of our home customers were converted. So we have made great progress in a very short period of time and we think there is still a lot potential here.
Marcelo Benitez: In parallel, we have been reducing our exposure to our legacy DTH business where our focus has been to improve profitability of the business.
Marcelo Benitez: When you put all of this together, you see that we are building a strong foundation to drive profitable revenue growth in our home business over the long term, center it around fast and reliable fixed broadband bundle with mobile services on the best network.
Marcelo Benitez: Please turn to the next slide for a quick look at our B2B business which continues to perform well.
Marcelo Benitez: As you know, we had two very large projects in Panama last year, and this restored the year-year comparisons.
Marcelo Benitez: V2B Services declines 6.4% organically, but this is entirely due to these large projects.
Marcelo Benitez: To normalize for this, we think it's useful to look at the performance of B2B business over the past two years. And on these basis, you can see the B2B grew at 4% kegare in dollars over the past two years.
Marcelo Benitez: Again, this grow is mainly driven by digital solutions, which are up 18% over the same time frame. Now let's review our performance in our three largest countries, beginning with Colombia on the next slide.
Marcelo Benitez: Once again, the key highlight in this slide is the adjusted EB Damargin, which reached 39.1%
Marcelo Benitez: That's up more than 2% at points year-over-year as we continue to reap their rewards over for the Structuring Program.
Marcelo Benitez: And as you can also see on this slide, we continue to grow our post-paid mobile and home customer bases, which is a result of our continued investment in our networks, combined with simplified offers and channel productivity.
Marcelo Benitez: This strong commercial performance is now starting to show up in our service revenue, which accelerated to 3.6% in the quarter. This is our strongest water service revenue growth in two years.
Marcelo Benitez: Now please turn to the next slide to look at Warmala.
Marcelo Benitez: As you know, this is a market that consolidated from three to two players five years ago when our competitor bought the third largest operator of the country.
Marcelo Benitez: La Transaction has created a more robust competitive dynamic for all the country, and it allowed the government to successfully complete two spectrum options in 2023. This new spectrum has allowed us to optimize our network, which has resulted in expanded coverage and improved services.
Marcelo Benitez: And we see this reflected in our customer's data consumption which has increasing significantly period. In fact, data consumption continues to increase rapidly and we are meeting this challenge by investing to our capacity.
Marcelo Benitez: And we are pricing our services in a way that compensates us for that growing traffic consumption.
Speaker Change: As I mentioned earlier, one of our levers is a migration from pre-paid to post-paid, which is particularly relevant in Guatemala, where post-paid is still relatively small compared to the total base.
Speaker Change: You will notice that service revenue growth slowed a little bit this water but as I mentioned earlier there were some positive factors that helped us last year and made for a challenging year-to-year comparison.
Speaker Change: especially for a mobile business, but this is in line with our plans for the year. Finally, the key highlight in Guatemala is quarter is the OCS, which grew 10% and reached a new record of 190 million in the water.
Please turn to the next light to look at Panama.
Speaker Change: 2024 was a truly exceptional year for our business in Panama, as you can see here. Once again, the high like this quarter is the profitability of the business, with an adjusted EBDA margin reaching 51.2% a new record.
Speaker Change: Our post-paid business remain an important growth engine and this is helping us to sustain steady growth in our mobile business.
Speaker Change: We have more than crippled the size of our post-paid customer base since acquiring the business in 2019.
Speaker Change: Postpaid is only 16% of our customer base in Panama, compared to 34% in Colombia, so we think there is a long runway of growth potential for our postpaid mobile business in Panama.
Speaker Change: Finally, and before I turn the call over to Bart, I'd like to update you on the M&A project that we have previously announced. First, regarding the sale of Latin International to SBA, we fight anti-trust approval in every country where this was required.
Speaker Change: We received approval in Nicaragua and we closed that portion of the transaction during Q1. As for the other countries, we are still waiting for the approval, but we continue to expect to close this on either Q2 or Q3.
Speaker Change: Separately, we also recently entered into a new agreement to sell our Latte Paraguay operations to ATIS Group. This covers approximately 280 sites and we expect to close these transactions in coming weeks.
Speaker Change: Second, with respect to Colombia, this past March we signed a binding agreement with Telefónica to acquire their 67.5 stake in Coltell.
Speaker Change: We will also remain committed to offering the same price per share to their minority partner, the government of Colombia, and we are pleased to see that they have now hired financial and legal advisors who will help them to launch and manage the process to sell their stake under the privatization law 226.
Speaker Change: We are also ready to acquire our partners 50% stake in our Colombian operation.
Speaker Change: If EPM decides to sell, we will offer to pay up to the same price implied by the valuation multiple, we agree to pay for portal, which is the best possible valuation comparable for a transaction like this.
Speaker Change: Third and final. In Costa Rica, where we've agreed to combine our operations with those of Liberty Latin America, the regulatory process is ongoing. We have no other updates for you here.
Speaker Change: Now let me turn the goal over to Bart to review the financials for this quarter. Thanks Marcelo, let's look at our financial performance beginning on flight 14.
Bart Vanhaeren: Service revenue was 1.29 billion in the quarter, which is down 6.6% from 1.38 billion a year ago.
Bart Vanhaeren: The impact of weaker foreign exchange rates was very significant in this quarter due to a 40% and the evaluation of the Boliviano, resulting from our adoption of Accounting Standard IAS 21.
Excluding FX, Impact, Organic Service, Revenue, Was Flat
Bart Vanhaeren: As mentioned many times before, service revenue in Q4 2023 and Q1 2024 included a very significant contribution from two large B2B projects in Panama, as well as a smaller revenue pickup from a cyber attack that impacted our main competitor.
Bart Vanhaeren: Excluding these items, organic service revenue growth, would have been more than 2%, which is in line with recent trends and more indicative of where we expect to see service revenue on a P times Q-Base.
Bart Vanhaeren: Adjusted to eat it out was up 0.6% year-on-year to 636 million, and the margin reached 46.3% are highest ever. Excluding effects, organic growth was 6.9%.
Bart Vanhaeren: Beginning this quarter, we are using the term adjusted EBDA, instead of EBDA, to confirm with the most recent SEC guidance on this topic.
In our case, it is simply a change in label.
Bart Vanhaeren: In fact, even that without adjustments would have been more than $100 million higher this quarter due to the inclusion of non-recurring items such as the gain of NASA sales,
Bart Vanhaeren: including these kinds of items would make our EBDA more volatile from quarter to quarter and in my mind would not contribute to useful analytics.
Bart Vanhaeren: Equity Freakashlow, excluding 42 million net proceeds from Tower Disposals, was 135 million in the first quarter.
Bart Vanhaeren: This is up 172 million compared to the negative 37 million or 1 million dollar including power sales that's reported in Q1 last year.
Bart Vanhaeren: The significant portion from the year-on-year improvement comes from having a better control over the working capital. In this quarter, only a negative $77 million, a difference of $116 million compared
Bart Vanhaeren: This is a result of a deliberate and comprehensive effort to reduce the seasonality of our cash flow throughout the year.
Bart Vanhaeren: In other words, the strong performance in Q1 may revert somehow in the remaining quarters of the year and you should not extrapolate from Q1 [inaudible] and the end of the year
Bart Vanhaeren: The other relevant takeaway on the equity free cash flow is that we were able to deliver a very strong Q1 despite facing a very adverse foreign exchange impact.
Bart Vanhaeren: This is in part the result of some very specific actions we have taken over the past year to reduce RFX exposure and volatility.
Bart Vanhaeren: Specifically, we look for opportunities to replace dollar-denominated debt with more local currency
Bart Vanhaeren: We have renegotiated a lot of contracts to local currency, and we have incentivized our local country CFOs by adding a new dollar exposure KPI that we use to determine near-and-bola.
Bart Vanhaeren: We are very pleased to see all of these initiatives paying off already in Cuba.
Bart Vanhaeren: Please turn to the next slide to look at the service revenue by country.
Bart Vanhaeren: Guatemala's service revenue of 349 million represented year-and-year growth of 0.9% in local currency.
Driven primarily by mobile R2.
Bart Vanhaeren: Columbia Service Revenue of $334 million grew 3.6% year-on-year. This is a nice improvement compared to slap-performing from Q4.
Bart Vanhaeren: We're happy to see that now quarter on quarter, all three business units are growing.
Bart Vanhaeren: Panama service revenue was 170 million, some 15 million year-on-year, as sustained double-digit growth in mobile was more than upset by the decline in B2B caused by the non-recurring large government contracting Q1 of 2024.
Bart Vanhaeren: Excluding these projects on both years, there is revenue growth would have been almost 5% [inaudible]
Bart Vanhaeren: Paraguay Service Revenue was 131 million increased 3.6% year-in-year during my double-digit growth in B2B.
Bart Vanhaeren: Bolivia Service Revenue increased 3.4% in local currency, with positive growth in mobile and V2B offset by a small declining home, where we continue to prioritize profitability.
Bart Vanhaeren: In dollar turn, service revenue declined almost 40% again as we implemented IS-21 which shaved off about 60 million in the corner.
Bart Vanhaeren: Service revenue in other markets comprises of Salvador, Nicaragua and Costa Rica declined 3.1% in dollars terms. Resurrecting declines Nicaragua and Costa Rica and flap performers in El Salvador.
Bart Vanhaeren: Issac meant was the biggest beneficiary of the cyber attack that impacted our main competitor in Q1 of last year, so suffers from a tough last year comparable.
Bart Vanhaeren: Please turn to the next slide for a look at adjusted EBDA by country.
Bart Vanhaeren: I indicated already that the EBITDA margin for Q1 was 46.3% for the group.
Bart Vanhaeren: The key message on this slide will be that the margins expanded in all our largest markets over the past year.
Bart Vanhaeren: And now both Panama and Paraguay have joined Guatemala in the Club 50, as they called it last quarter.
Speaker Change: Congratulations. And actually, Honduras and Icaragua are knocking at the door.
Bart Vanhaeren: Woodensley and Seth, let's look at this country by country.
Bart Vanhaeren: Guatemala, adjusted Yvida increased 1.9% year-on-year to 222 million, reflecting service revenue growth and efficiencies.
As a marginal increase, another 90 points to 54.9%.
Bart Vanhaeren: Colombia adjusted EBDA increased 10.4% year-on-year to 133 million, and the margin expanded by 2.6% of points to 39.1% reflecting cost sales.
Bart Vanhaeren: Panama, adjusted Ivedag Group 2.8% year and year to 92 million and the margin reached another record of 51.2% thanks to our efficiency program.
Bart Vanhaeren: Paraguay, I just said either I grew 9% to 69 million in Q1 2025, and the margin was 51.2%.
Bart Vanhaeren: Bolivia adjusted EBDA, increased 12% to 43 million, and the margin increased 3.7% to 46.4, as we continue to focus on profitability in this market.
Bart Vanhaeren: I adjusted even then our other segment was flat in US dollar turns as savings from our efficiency program offsets the decline in revenue.
Bart Vanhaeren: A please turn to the next slide for a look at Equity Free Cash Flow and Loverage.
Bart Vanhaeren: As we've already discussed, adjust that EBDA for the quarter of 636 million. That's up 4 million from last year despite all the negative currency impacts.
Bart Vanhaeren: Cash Capix was $140 million and it's down 19 million from last year. Cash Capix includes proceeds from asset sales.
Bart Vanhaeren: 64 million in Q1 2025, and 39 million in Q1 2024. So excluding these items in both years, Crash Capix would have increased $7 million a year and a year. So don't take this as understanding.
Bart Vanhaeren: Spectrum was 36 million down 42 million compared to last year due to lower spending on performance bonds, life and fees, for instance in Colombia.
Changes in working capital and other was negative seventy seven million
Bart Vanhaeren: As a reminder, working capital is usually a big drag on cash flow in the first quarter due to the timing of some payments, such as taxes, fees, licenses, as well as employee bonuses.
Bart Vanhaeren: The good news is that working capital was significantly better this year with a year-on-year improvement of 116 million, as mentioned earlier, coming from deliberate effort to reduce the seasonality of cash flow throughout the year.
Bart Vanhaeren: Texas paid with 66 million. This is an increase of 28 million due to higher profitability and capital game taxes on the tower cell.
Bart Vanhaeren: Finance Chargers were 107 million, down 26 million from last year due to lower depth levels and currency.
Bart Vanhaeren: These payments were 82 million, up 10 million due to last year's sour sale in Colombia. Honduras repatriation was 23 million in the quarter that's up 8 million from 2024.
Bart Vanhaeren: As a result of all these factors, equity free cash flow for the quarter was $177 million, excluding net proceeds from towered esposals in both years, ESC was $135 million up $172 million compared to last year.
Bart Vanhaeren: On the top right portion of the slide, you can see that net depth increase 101 million during Q1. And as we had warned you on our Q4 call, leverage increased slightly to 2.47, but stayed nicely below 2.5.
This is the consequence.
Bart Vanhaeren: of Resume Chairholder of Interation, which included 170 million paid individence and 119 million used to complete the 150 million share repurchase program.
Excluding these items, leverage would have dropped below 2.35 25.
Bart Vanhaeren: Now, please turn to the next slide to review our financial target for 2025, which remain unchanged from what we communicated at our two-four results.
Bart Vanhaeren: We continue to target 2025 equity free cash flow of around 750 million, and we expect to end
Marcelo Benitez: These targets do not include the impact of any of the strategic M&A projects that Marcelo talked about.
Marcelo Benitez: Finally, as we have previously communicated, the board has proposed an annual dividend of $3 per share to be paid in four quarterly installments, with the intent to sustain or grow this dividend every year.
Marcelo Benitez: Is this subject to shareholder approval at the AGM later this month?
We are now ready for your question.
Speaker Change: Thank you very much Bart and Marcelo. We'll now begin the Q&A session. And as a reminder, if you would like to ask a question, please let us know by emailing us at investors at Millicom.com and we will add you to the queue. So our first question today is going to come from Marcelo Santos from JP Morin, Marcelo. The line is yours.
Marcelo Santos: Thank you. Thank you very much. We show good morning to all. Thanks for the opportunity. I have questions about the
Fixed Business in Central America, Andres Coffin, Mathieu Robilliard,
Speaker Change: We have been hearing America, more vocal than they believe they are below their fair share and they think they could gain more space.
Marcelo Santos: How is churn behaving for you guys in those regions and how much of your home connections are with fiber or more or less roughly?
Thank you.
Thanks for your question, Marcelo, good to see you [inaudible]
As you remember last year, we started first on.
Marcelo Santos: Investing in the networks to improve the quality of the services in the fixed business and then to focus on the quality of our new gross act. So we kept the customer base under control.
And after that we started to increase our commercial activity.
Marcelo Santos: The way we are doing that is by focusing a node by node. So the nodes that have very low penetration, we are more aggressive, the nodes with high penetration, we are more defensive.
Marcelo Santos: Having said that, as you can see, we are producing positive net ads consistently in the last three quarters.
Marcelo Santos: Those positive net ads are going to have a full effect in revenues in Q3 and we expect to turn on positive revenues.
in the last month of Q2.
Marcelo Santos: So that is on that front. On the front of Clara, yes of course they are investing in their mobile coverage and the fixed.
Marcelo Santos: But we do not see that we are being affected in our market share by those investments.
Thank you, thank you very much for the answers.
Speaker Change: Okay, thank you Marcelo, so next we'll go to Andres Joelsson from Carnegie. Andres?
Okay, maybe while we wait for Andreas to connect.
Bart Vanhaeren: Well, I did receive a question via the chat. This I think is for you, Bart. It's from Andres Coello, it's Kosha Bank who's asking about any updates on joining any new indices. And now that our shares are listed only in the US.
Bart Vanhaeren: So, yes, we've deleted from Sweden now only in the US. We're still foring private issuer reporting under IFRS.
Bart Vanhaeren: Getting into new indices is not something that is really under our control, but you will have seen that we have now declared officially our principal executive office.
Bart Vanhaeren: to Doral, here in Florida, which may result in not being qualified to enter Morin Dices, and more notably, for instance, the Russell 2000 or 1000.
Bart Vanhaeren: But it's not something we know, the rebalancing happens this month and I think by the end of the month there should be an official communication and we are looking forward to it just like anyone else.
Speaker Change: Okay, thanks, Bart. So, Andreas, I believe your line should be open now.
Andreas Jolsen: Yeah, I hope you can hear me now. Yes, perfect. Sorry, you can't see me, but I don't know what happened with the video, but follow up on the service revenue side, but moving to the mobile side.
Andreas Jolsen: Given that you are now sort of behind on maybe some tougher comparison, should...
should we expect this? [inaudible]
Andreas Jolsen: Mobile Service Revenue Growth to Accelerate, coming quarters, is that what you plan? And secondly, you highlighted several times that you have a very high profitability also from an historical point of view.
Andreas Jolsen: Should we see this level as sustainable going forward, or is it given that it is all-time high margin, some risk on the downside?
Thanks.
Thanks, Andreas, for your question.
on the first question, service revenue growth.
As I said, the comparison in Q1.
has a lot of components. [inaudible]
Andreas Jolsen: On one hand, you have the exchange rate, we can add off the Colombiano peso, the Paraguayan dollar and the Bolivianos, and also you have the governmental projects. If you exclude those factors, we are growing at a rate of 2%.
that 2% is the same rate.
Andreas Jolsen: We had in Q2 and Q3 where we didn't have this one-off or this exchange rate impact.
Andreas Jolsen: Having said that, if you see the postpaid growth which is...
Andreas Jolsen: Still today, a very small, only 20% of our customer base we believe.
Andreas Jolsen: We should be in the long-term at a 50%, so we are growing consistently the post-pay base.
Andreas Jolsen: And on the other hand, you can see home coming to positive territory in Q2 and B2B also growing consistently. We do see that in Q2, we are going to be more or less a little bit better than what we have been in the last run rate to percent.
Andreas Jolsen: And the impact is going to building this base is going to be more visible in the second half of the year. So we expect an acceleration there.
Andreas Jolsen: on the profitability side, in 2025, we do see the full effect.
Andreas Jolsen: The program has been our focus in the last two years.
Andreas Jolsen: And on the other hand, you will see that the profitability of our new gross ads
Andreas Jolsen: that has to do with BBI only, also with productivity of the channels, that's also coming with better margins.
Andreas Jolsen: So, we are not giving up on welcoming more countries to the club 50. So, that is the efficiency culture it's here to stay.
Thank you. Thank you.
Andreas Jolsen: Excellent and if I may have a question for Bart as well on the interesting topic of taxes what how should we look at that it's quite hard to predict I think it's volatile between the quarters but your best assumption for the full year
Andreas Jolsen: Yeah, so it's true, it's complicated to calculate because we have different tax regimes in some countries, we're tax on revenues in some countries, we have minimum taxes, in other words we have tax losses carried forward.
Andreas Jolsen: If you go really 2-3 levels down, you see an EDR and an effective tax rate of around 25-26% but this is hard to calculate.
Andreas Jolsen: The short thing, look at it year on year, it will be slightly up in taxes paid on the organic or excluding M&A, mostly because the increased profitability. So there is an increase, it's not an enormous amount.
but there will be a slight increase in text.
That is good enough for me. Thank you. Thank you.
Eduardo Nieto: Thank you, Andres. So next we'll go to Eduardo Nieto from JP Morgan, Eduardo. Yes, thanks, Michel, and thanks for taking my question. I think this one is for Bart.
Eduardo Nieto: I'm looking at your maturity profile. There's some bond maturity in 2026. I'm sorry, low maturity in 2026, bond maturity in 2027, you've made a comment.
Eduardo Nieto: that you would like to replace. You're a dollar debt with maybe local financing, so just curious where you see these opportunities. And if you see any opportunity to issue bonds in the dollar market again for refire for any other uses.
Eduardo Nieto: That's my first one and the second one is just you're reiterated the 2.5 times leverage for this year but I'm curious to hear if that's kind of the level where you're comfortable kind of in the longer term or if there's room to go lower than that. [inaudible]
Thank you for the question. So indeed. Thank you very much.
Eduardo Nieto: Our average maturity is now four and a half years [inaudible]
Eduardo Nieto: This is something that I would definitely would like to increase over time. I think we have an internal KPI, this is the average maturity more than five years. So there's definitely things to do. The erratic is, we have this M&A in Colombia going on, we have...
Eduardo Nieto: Revenue is coming in from Latte so at this moment we are a bit pausing decisions on what to do where to do it. [inaudible]
Eduardo Nieto: and then when we go ahead, obviously we want to, as we even mentioned, a big de-dollarization effort within the group, prioritized.
Eduardo Nieto: New Local currency debt, and then repay US dollar if we have excess cash and then obviously focusing on shorter terms.
Eduardo Nieto: Maturity, so that the overall strategy may not go into the details of our plan and the race speculation, it's also something that we need to discuss with the board in our plans. So today, there's no decisions, matters, no official plan. First, want to see about the exact timing of the MNA.
Eduardo Nieto: for the cash going out and then the cash coming in from Latif.
Eduardo Nieto: on the leverage 2.5, I think we always have in between 2 and 2.5, so personally...
Eduardo Nieto: I find we're a bit on the high side of our range, 2.47. I think if we exclude the shareholder remineration this quarter, because we did do...
Eduardo Nieto: about $300 million in Q1, and then another 125 already in April .
Eduardo Nieto: If you would have excluded that, we would have added a year closer to 2.3.
Eduardo Nieto: 35 in that area. So I'm very comfortable with the cashflow generation, I'm very comfortable with our distribution rate. And typically our first quarter is our lowest cashflow quarter. So I think this will continue to improve over the year. [inaudible]
Speaker Change: God, Bart, thanks so much. Thanks Eduardo. So next we're going to go to Gustavo Farias from UBS, Gustavo.
More than everyone, thanks for taking my questions.
Speaker Change: to all my end as well. So the first one regarding the evolution we saw in working capital, I understand there is some seasonality as you guys said.
But I'd like to know any thoughts and any comments.
Speaker Change: on what you guys expect for the whole year, if we should see some upside to...
Speaker Change: Equity-free cash flow and all the levers for improvement that you have planned for the year. Any color on that would be really helpful.
Speaker Change: The second one, I've seen B2B as a contributor for the growth of Colombia, Paraguay, Bolivia.
Speaker Change: If you could comment details on maybe the size of those contracts, how long are those contracts and anything we could use to access the sustainability of those revenues going forward. Thanks.
I'll take the first one, on working capital. [inaudible]
Speaker Change: I'm launching an effort to stabilize our cash flow among the corners. What you have seen historically is a lot of cash flow in Q4, a very negative in Q1, and then run rate in Q2 and Q3.
Speaker Change: I'm very happy that, you know, this quarter we don't have this large negative equities, sorry, the negative working capital it was around.
$77 million which is
Speaker Change: More than $100 million better than last year which was already significantly better than the year before so very happy that this effort brings more stability. Thank you very much.
and Comforto to the Catholic Generation, Overall.
Speaker Change: who are working in capital for a few years, slightly negative, which is inherent to the business of a lot of post-paid revenues as well as the structure with minorities, but it would...
relatively stable, that's the expectation.
Speaker Change: Yes, on your question of B2B, Gustavo, in B2B typically you have two sources of growth. On one side is the organic growth.
were digital solutions.
Speaker Change: are the ones with highest demand today. What is digital solutions is private and public cloud, cyber security and data center services. So there is where we are increasing the penetration of these services over our existing customer base 18% growth.
Speaker Change: In the organic you will see as well, and the small business will start to pick up [inaudible]
Speaker Change: because we are replicating the same formula we are doing in B2C on channel productivity and channel boosting.
Speaker Change: Then you have the other dimensions that are projects and mainly government, right?
Speaker Change: They have to come under some certain conditions. First is the returns, they need to be attractive. Second, they have to be projects that are close to our core competence.
Speaker Change: And third, they cannot have an impact on our ESCS targets.
Speaker Change: So, if these conditions are met, then we go and we move forward with the project. As you know, some of them we can compete and some of them we cannot.
Speaker Change: So that is the story of B2B. Overall, we do see a 4% grow kegared in the last two years and we plan to sustain that.
Speaker Change: And Gustavo, just to compliment, the vast majority of the B2B revenues are recurring, you know, more than 95% are recurring. There's really, you know, the Panama projects were a bit of an outlier, and that's why we've called them out.
All right, very clear. Thank you very much.
Speaker Change: Okay, thank you, Gustavo. Well, that was the last question for today. So thank you, everyone, for joining us and we will see you next quarter. Thank you.