SEC Form 6-K filed by Millicom International Cellular S.A.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2024.

Commission File Number: 001-38763

MILLICOM INTERNATIONAL CELLULAR S.A.

(Exact Name of Registrant as Specified in Its Charter)

2, Rue du Fort Bourbon,

L-1249 Luxembourg

Grand Duchy of Luxembourg

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F x Form 40-F ¨

MILLICOM INTERNATIONAL CELLULAR S.A.

INDEX TO FURNISHED MATERIAL

Item
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Earnings Release  Q2 2024

  

Item 1

Luxembourg, August 2, 2024

Millicom (Tigo) Q2 2024 Earnings Release

Q2 Highlights*

*See page 10 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.

Millicom Chief Executive Officer Marcelo Benitez commented:

"Millicom has undergone an important transformation aimed at significantly increasing the company's equity free cash flow generation. These efforts began to pay off in Q2, with EBITDA up almost 20% organically, EFCF of $268 million and leverage down significantly to 2.77x, putting the company on track to achieve its 2024 targets.

Meanwhile, we are streamlining our product offerings and internal processes, which is enhancing productivity and generating cost savings beyond the initial targets of the efficiency project Everest. Additionally, we are prioritizing ARPU growth in Mobile, reducing churn in Home, and accelerating growth in B2B. We are also making return-focused investments to sustain our market leadership and drive customer growth in the second half of 2024. All these actions are designed to ensure continued EFCF growth in 2025 and beyond, in line with our long-term plan.

As we wrap up my initial quarter as CEO, I want to express my gratitude to the entire Millicom team for their tremendous energy and dedication, even amid significant challenges and uncertainties. Together, we are transforming into a more agile and efficient platform to fulfill our mission of building digital highways that connect people, improve lives, and develop our communities.”

2024 Financial Targets

Millicom targets Equity free cash flow above $600 million in 2024, excluding proceeds for the previously-announced tower sale in Colombia. Millicom also targets leverage to near 2.5x at year-end 2024. Excluded from both targets are cash proceeds and related taxes stemming from any potential future tower transaction.

Earnings Release  Q2 2024

  

Subsequent Events

On July 1, 2024, Atlas Luxco S.à r.l. announced public offers in Sweden and the United States to the shareholders in Millicom to tender all of their common shares and SDRs, for $24.00 per common share and SDR. The offers will expire on August 16, 2024, unless extended. On July 15, 2024, Millicom announced that a committee of independent members of its Board of Directors unanimously recommends that shareholders reject the offers and not tender their shares and SDRs as the Offer Price significantly undervalues Millicom.

During July 2024, we continued to repurchase bonds in the secondary markets. The aggregate principal value repurchased during the month was $19 million of MICSA 2028s, $14 million for MICSA 2029s and $2.3 million of the Telecel 2027s.

On July 31, 2024, we announced that we have signed a non-binding memorandum of understanding with Telefonica for the potential acquisition of Telefonica’s stake in Telefonica Colombia (Coltel), as part of a broader intended combination of Coltel and TigoUne, Millicom's 50%-owned operation in Colombia. Millicom intends to offer to purchase La Nación’s and other minority interests in Coltel for cash at the same purchase price per share offered to Telefonica, as well as Empresas Públicas de Medellin’s (EPM) 50% interest in TigoUne for cash at a valuation multiple comparable to the one implied by the Coltel acquisition. The total investment by Millicom would be approximately $1 billion, and the transaction would be subject to negotiation of definitive agreements and receipt of regulatory approvals.

On August 1, 2024, we signed a binding agreement with Liberty Latin America to combine our operations in Costa Rica in a cashless merger in which Millicom would retain a minority equity ownership of approximately 14%. The transaction is subject to regulatory approvals and is expected to close in H2 2025.

Group Quarterly Financial Review - Q2 2024

Earnings Release  Q2 2024

  

In Q2 2024, revenue increased 4.7% year-on-year, reflecting organic growth in most countries and the appreciation of the Colombian peso (+14%) and Costa Rican colon (+6%) over the past year. Excluding the effect of changes in foreign exchange rates, service revenue increased 2.1% organically.

Equipment, programming and other direct costs declined 7.2% due primarily to lower programming costs, as we streamlined our linear channel offerings and experienced a decline in Pay TV customers. In addition, other direct costs in Q2 2023 included a one-time charge related to a legal ruling. Operating expenses declined $26 million, or 5.3% year-on-year, due to savings from our efficiency program.

Depreciation decreased 4.3% year-on-year to $228 million due to a longer assumed useful life for tower and fiber assets. Amortization declined 14.9% to $77 million due to the mobile network sharing agreement in Colombia, as we stopped amortizing the related assets held for sale.

Share of profit in our Honduras joint venture increased 15.4% to $12 million, due to improved profitability in that country. Other operating income of $4 million reflects the release of a tax escrow related to the prior sale of our stake in Helios Towers. As a result of these and other factors, operating profit increased $147 million, or 74.1%, year-on-year to $345 million.

Net financial expenses increased by $6 million year-on-year to $180 million, largely due to the impact of commissions on the purchase of U.S. dollars in Bolivia, which increased to $12 million in Q2 2024 from $3 million in Q2 2023, partially offset by financial income on debt repurchases.

Other non-operating expenses of $9 million related to foreign exchange losses, mostly in Colombia. Although the Colombian peso has appreciated 14% on average over the past year, the currency depreciated during Q2 and ended the quarter 7% below the level at the end of March 2024.

Net tax expense of $78 million in Q2 2024 was relatively stable compared to $81 million in Q2 2023. Non-controlling interests were zero in Q2 2024, which compares to a $26 million loss in Q2 2023, due to the improved profitability in our Colombian operation.

As a result of the above items, net profit attributable to owners of the company was $78 million ($0.46 per share), compared to a net loss of $22 million ($0.13 per share) in Q2 2023. The weighted average number of shares outstanding during the quarter was 171.30 million. As of June 30, 2024, there were 172.10 million shares issued and outstanding, including 0.84 million held as treasury shares.

Earnings Release  Q2 2024

  

Cash Flow

* See page 10 for a description of non-IFRS measures discussed in the above table.

Due to seasonal fluctuations, commentary in this section focuses on H1 performance.

Equity Free Cash Flow (EFCF) in H1 2024 was $269 million, compared to an outflow of $157 million in H1 2023. The $426 million improvement in EFCF over the past year is explained primarily by the following items:

Positives:

Detractors:

Earnings Release  Q2 2024

  

Debt

* Net Debt, EBITDAaL and Leverage are non-IFRS measures and are IFRS consolidated figures. See page 10 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.

During the quarter, gross debt declined $139 million to $6,391 million as of June 30, 2024, compared to $6,530 million as of March 31, 2024, as a result of debt repayments and repurchases. During the quarter, we repurchased and cancelled approximately $177 million aggregate principal value of our bonds¹ for approximately $172 million, consistent with our deleveraging goals.

As of the end of Q2 2024, 39% of gross debt was in local currency², while 82% of our debt was at fixed rates³ with an average maturity of 4.7 years. Approximately 59% of gross debt was held at our operating entities, while the remaining 41% was at the corporate level. The average interest rate on our debt was 6.4%. On our dollar-denominated debt⁴, the average interest rate was 5.7% with an average maturity of 5.1 years.

Cash was $792 million as of June 30, 2024, up $171 million compared to $622 million as of March 31, 2024, and 76% was held in U.S. dollars. As a result, our net debt was $5,650 million as of June 30, 2024, a reduction of $325 million during the quarter, reflecting the EFCF generation, and the impact of the 7% depreciation of the Colombian peso during the quarter. Leverage (net debt to EBITDAaL) was 2.77x as of June 30, 2024, down sharply from 3.10x as of March 31, 2024, due to the significant increase in EBITDAaL over the last 12 months, as well as the reduced net debt.

¹ Including MICSA '28, MICSA '29 and TELECEL '27 bonds.

² Or swapped for local currency

³ Or swapped for fixed rates

⁴ Including SEK denominated bonds that have been swapped into US dollars.

Earnings Release  Q2 2024

  

Operating performance

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.

Business units

We discuss our performance under two principal business units:

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

2. Fixed services, 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

The macroeconomic environment remained relatively stable during Q2. The Colombian peso was somewhat volatile, ending June approximately 7% lower than at the end of March, but it was down only 1% on average for the period, and it remains above levels seen in Q2 of 2023. In Bolivia, the central bank maintained the foreign exchange rate unchanged at 6.91, but our purchases of U.S. dollars at the official rate required the payment of commissions that averaged approximately 29% during Q2, reflecting an acute shortage of U.S. dollars available at the official rate. Meanwhile, political uncertainty in the country increased, as evidenced by a recent coup attempt. Bolivia’s next Presidential election is planned for 2025. Foreign exchange rates and movements are presented on page 14.

Key Performance Indicators

Our mobile customer base declined by 40,000 during Q2 to end at 40.6 million, flat (+0.1%) year-on-year. However, postpaid continued to perform very strongly, with net additions of 178,000. Mobile ARPU increased 7.1% year-on-year (4.7% organically), with every country except Bolivia experiencing positive ARPU growth in local currency terms.

At the end of Q2, our fixed networks passed 13.5 million homes, an increase of 54,000 during the quarter. HFC and FTTH customer relationships increased 11,000 in Q2, marking our first positive quarterly net addition performance since Q4 of 2022. During the quarter, we upgraded our networks to enable faster speeds and improve customer experience, resulting in a significant reduction in monthly churn (down 0.6 p.p year-on-year) and positive net additions in most countries. Home ARPU increased 5.2% year-on-year (0.7% organically).

* KPIs exclude our joint venture in Honduras, which is not consolidated in the Group figures.

Earnings Release  Q2 2024

  

Financial indicators

In Q2 2024, revenue increased 4.7% year-on-year to $1,458 million, while service revenue increased 5.5% to $1,362 million. Excluding currency movements, organic service revenue was up 2.1% year-on-year, with Mobile up 4.7%, fueled by ARPU growth, while Fixed and other services declined 2.3%. The performance in Fixed reflects a single-digit decline in Home, partially offset by single-digit growth in B2B during the quarter.

EBITDA was $634 million, up 23.1% year-on-year. Excluding the impact of foreign exchange, EBITDA increased 19.7% organically year-on-year. Included in EBITDA were $23 million of restructuring and other one-off charges, which compares to $14 million of one-off charges in Q2 2023.

Capex was $134 million in the quarter, down 26.3% year-on-year, reflecting both efficiencies and the optimization of of capital investment in all our operations. The capex decline also reflected different phasing in our 2024 investment plans compared to 2023.

Operating Cash Flow (OCF) increased 50.2% year-on-year to $500 million in Q2 2024 from $333 million in Q2 2023.

* Service revenue, EBITDA, EBITDA margin, Capex, OCF and organic growth are non-IFRS measures. See page 10 for a description of non-IFRS measures and for reconciliations to the nearest equivalent IFRS measures.

Country performance

Commentary in this section refers to performance measured in local currency terms, unless specified otherwise.

Earnings Release  Q2 2024

  

⁵ Comprised of El Salvador, Nicaragua and Costa Rica

Earnings Release  Q2 2024

  

ESG highlights – Q2 2024

Society

In Q2, we continued implementing our digital inclusion and education programs. Through our Conectadas program aimed at bridging the digital gender gap, we trained 18,980 women, bringing the 2024 total to 51,086. Through our Maestr@s Conectad@s program, which supports the education community in acquiring digital skills, we trained 5,261 teachers, mentors, and educators, bringing the 2024 total to 6,620. Finally, our Conectate Segur@ program, which fosters creative and safe internet use, has benefited 24,830 children and adolescents, 1,405 teachers, and 13,489 parents, bringing the 2024 total to 40,617 children, 2,694 teachers, and 24,348 parents and caregivers.

These three flagship programs are available in each of the 9 countries in which Tigo operates. In addition to the digital platform at www.educacioncontigo.com, our operations run in-person events, such as a Maestr@s Conectad@s program on AI in the classroom in Bolivia, Conectate Segur@ Programs working with the First Lady of Costa Rica, and Digital and Financial Inclusion Conectadas workshops in El Salvador, among many others.

Environment

GSMA has highlighted in its publication "Mobile Net Zero: Latin America – Regional Focus on Climate Action 2024 Report" the case study of Millicom's "Return to Tigo and Protect the Planet," which provides a concise look at the importance of responsible electronic waste disposal in Colombia.

At the Annual General Meeting (AGM) in May, shareholders approved the 2024 Long Term Incentive (LTI) plan. This plan includes Performance Shares with ESG target achievement metrics, allocating a 10% weight specifically towards reducing carbon emissions.

Governance

On April 25, 2024, Millicom announced that its Board of Directors had appointed Marcelo Benitez as CEO of Millicom, effective June 1, 2024. Benitez has had a distinguished career with Millicom, having joined the company in Paraguay nearly 30 years ago and risen through the Company’s ranks to his most recent role as CEO of TIGO Panama.

On May 23, 2024, Millicom, the AGM, and EGM approved all the resolutions proposed by the Board of Directors and the Nomination Committee. The AGM set the number of directors at nine and re-elected María Teresa Arnal, Bruce Churchill, Aude Durand, Tomas Eliasson, Thomas Reynaud, Blanca Treviño de Vega and Mauricio Ramos as Directors, and elected Justine Dimovic and Maxime Lombardini as new Directors. Mauricio Ramos was elected as Chair of the Board of Directors. The Board composition reflects Millicom’s commitment to diversity and inclusion in the boardroom.

During Q2 2024, preparations began for Millicom's flagship Code of Conduct and Privacy Course, which launched in Q3, targeting all employees and contracted staff. Our communications plan emphasized Tone at the Top and our continued focus on Compliance amid the changes in our company. Communications included townhall meetings and messages from our outgoing CEO, Mauricio Ramos, who summarized the Company’s Compliance achievements in his nine-year tenure and his continuing commitment to a culture of Compliance in his role as Chair of the Board, as well as from our new CEO, Marcelo Benitez, who reinforced our adherence to law and internal Compliance policies in his first communication to employees. Mr. Benitez has continued to visibly support our Compliance program.

Video conference details

A video conference to discuss these results will take place on August 2 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. After registering, participants will receive a confirmation email containing details about joining the video conference. Alternatively, participants can join in a listen-only mode, by dialing any of the following numbers and using webinar ID number 886-2640-8960. Please dial a number base on your location:

Earnings Release  Q2 2024

  

Additional international numbers are available at the following link.

Financial calendar

2024

For further information, please contact

About Millicom

Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America. Through our TIGO^® and Tigo Business^® brands, we provide a wide range of digital services and products, including TIGO Money for mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business solutions such as cloud and security. As of June 30, 2024, Millicom, including its Honduras Joint Venture, employed approximately 15,000 people and provided mobile and fiber-cable services through its digital highways to more than 45 million customers, with a fiber-cable footprint about 14 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.

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 August 2, 2024.

Earnings Release  Q2 2024

  

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 global economic activity and inflation, the demand for Millicom's products and services, and global supply chains. The risks and uncertainties include, but are not limited to, the following:

Earnings Release  Q2 2024

  

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. 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  Q2 2024

  

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.

Non-IFRS Financial Measure Descriptions

Service revenue is revenue related to the provision of ongoing services such as monthly subscription fees for mobile and broadband, 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, installation fees 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 after lease interest expense and depreciation charge.

EBITDA Margin represents EBITDA in relation to Revenue.

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, including derivative instruments (assets and liabilities), less cash and pledged and time deposits.

Leverage is the ratio of net debt over LTM (Last twelve month) EBITDAaL, 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 EBITDA, less cash capex, less spectrum paid, working capital and other non-cash items, and taxes paid.

Equity Free Cash Flow (EFCF) is OFCF less finance charges paid (net), lease interest payments, lease principal repayments, and advances for dividends to non-controlling interests, plus cash repatriation from joint ventures and associates.

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 as (x) the total Home revenue (excluding equipment sales and TV advertising) 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 from other industry participants.

Please refer to our 2023 Annual Report for a list and description of non-IFRS measures.

Earnings Release  Q2 2024

  

Non-IFRS Reconciliations

Reconciliation from Reported Growth to Organic Growth for the Group

*Organic growth calculated by re-basing all periods to the budget FX rates of the current year. This creates small differences captured in "Other". Capex included in OCF is assumed to be in USD and is not rebased.

*Organic growth is calculated by re-basing all periods to the budget FX rates of the current year. This creates small differences captured in "Other". Capex included in OCF is assumed to be in USD and is not rebased.

EBITDA and EBITDAaL reconciliations

Earnings Release  Q2 2024

  

EBITDA margin

One-off Summary - Items above EBITDA

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.

Earnings Release  Q2 2024

  

Beginning in Q1 2023 the calculation of Home ARPU now includes equipment rental.

* 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/FTTH + Other Technologies + DTH & Wimax RGUs).

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

OCF (EBITDA- Capex) Reconciliation

Capex Reconciliation

Earnings Release  Q2 2024

  

Equity Free Cash Flow Reconciliation

Foreign Exchange rates

  

Item 2

Millicom International Cellular S.A.

Half year report at June 30, 2024

August 2, 2024

  

Contents

  

Interim Management Report

Purpose

This Interim Management Report for the six-month period ended June 30, 2024 has been prepared in accordance with the requirements of Article 4 of the Luxembourg Transparency Law of 11 January 2008, and should be read in conjunction with the annual report of Millicom International Cellular S.A. ("Millicom" or "the Company") for the year ended December 31, 2023 (including the consolidated financial statements included therein) and the unaudited interim condensed consolidated financial statements included in this half-year report.

Cautionary statement considering 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 global economic activity and inflation, the demand for Millicom's products and services, and global supply chains. 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.

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.

Group performance

Revenue

Group revenue increased 6.6% ($183 million) year-on-year to $2,945 million in H1 2024. The increase is largely due to the impact of better performance across the board as well as stronger currencies in some countries.

Equipment, programming and other direct costs

Equipment, programming and other direct costs decreased at a rate of 2.3% ($17 million) year-on-year to $735 million, mainly due to lower handset sales and programming costs, and a $10 million provision related to a legal ruling in Colombia recorded in the same period in 2023.

Operating expenses

Operating expenses decreased 4.4% ($43 million) year-on-year to $945 million, mainly due to the pay-off the Group's cost reduction project ("Everest") implemented late 2022, partially offset by additional severance costs and tax claim provisions of $52 million.

Depreciation and Amortization

Depreciation decreased 1.5% ($7 million) year-on-year to $475 million, mostly due to the foreign exchange impact and revision of the estimated useful life of fiber optic and related assets (refer to note 2). Amortization expense decreased 7.7% ($14 million) year-on-year to $163 million mainly due to the mobile network sharing agreement in Colombia, as we stopped amortizing the related assets held for sale in accordance with IFRS 5 (refer to note 4).

Share of profit in Honduras joint venture

Millicom's share of profit in joint ventures was $25 million in H1 2024, an increase of 17.8% year-on-year reflecting the better performance of our joint venture in Honduras.

Other operating income (expenses), net

Other operating income (expenses), net, increased by $13 million year-on-year mainly due to gains on tower disposals in our operation in Colombia (refer to note 4).

Financial income/(expense), net

Financial income (expenses), net increased by $4 million year-on year to $344 million mainly due to commissions on dollar purchases in Bolivia, partially offset by financial income on debt repurchase activities on secondary markets in Guatemala, Panama and HQ.

Other non-operating (expenses) income, net

Losses from other non-operating items was $16 million in H1 2024 compared to a net gain of $27 million in H1 2023 mainly driven by foreign exchange losses in Colombia and Paraguay.

  

Charges for taxes, net

Tax expense was $148 million in H1 2024, increasing from $141 million in H1 2023 primarily due to a higher profitability across the board, partially offset by the impairment of some tax credits recorded in H1 2023.

Net profit for the period

Net profit attributable to the owners of the Company was $170 million or 0.99 per share for H1 2024 compared to a net loss of $19 million or $0.11 per share in H1 2023.

Non-controlling interests share of net loss was $10 million in H1 2024 compared to a net loss of $49 million in H1 2023, reflecting the share of losses of the Group's partners in Colombia.

Share Capital

At June 30, 2024, Millicom had 172.1 million issued and paid up common shares of par value $1.50 each (2023: 172.1 million). Out of the 172.1 million issued and paid up common shares, 840 thousand were held by the Company as treasury shares (2023: 757 thousand). During H1 2024, the Company repurchased 1,717 thousand shares on the market. It also issued around 1,623 thousand shares to management and directors under the share-based compensation schemes as part of their annual remuneration and withheld approximately 376 thousand shares for the settlement of tax obligations on behalf of the employees under the same schemes.

Risks and uncertainty factors

The macroeconomic environment remained relatively stable during Q2. The Colombian peso was somewhat volatile, ending June approximately 7% lower than at the end of March, but it was down only 1% on average for the period, and it remains above levels seen in Q2 of 2023. In Bolivia, the central bank maintained the foreign exchange rate unchanged at 6.91, but our purchases of U.S. dollars at the official rate required the payment of commissions that averaged approximately 29% during Q2, reflecting an acute shortage of U.S. dollars available at the official rate. Meanwhile, political uncertainty in the country increased, as evidenced by a recent coup attempt. Bolivia’s next Presidential election is planned for 2025.

The Group continues to monitor the developments of the aforementioned events and their potential impact on performance and accounting considerations.

Financial risk management objectives and policies

Millicom’s financial risk management policies and objectives remain unchanged compared to what the Group presented in Section D. Financial risk management of the 2023 consolidated financial statements (included in Group's 2023 Annual Report).

Internal controls and Governance in the preparation of the consolidated financial statements are set out in the Governance section from pages 105 to 142 in Group's 2023 Annual Report.

Related-Party transactions

Millicom conducts transactions with certain related parties on normal commercial terms and conditions. Material related party transactions are subject to the review of the audit and compliance committee of the Company's board of directors. For further details on Millicom Group’s material related parties please refer to note G.5. of the 2023 consolidated financial statements (included in Group's 2023 Annual Report).

Outlook¹

Millicom targets Equity free cash flow above $600 million in 2024, excluding proceeds for the previously-announced tower sale in Colombia. Millicom also targets leverage to near 2.5x at year-end 2024. Excluded from both targets are cash proceeds and related taxes stemming from any potential future tower transaction.

¹ Equity Free Cash Flow ('EFCF') is a non-IFRS measures. Please refer to our 2023 Annual Report for a list and description of non-IFRS measures.

  

Subsequent events

Public offer to purchase all of Millicom's outstanding common shares and SDRs from Atlas Luxco S.à r.l.

On July 1, 2024, Atlas Luxco S.à r.l. (“Atlas”), a subsidiary of Atlas Investissement S.A.S., announced public offers in Sweden and the United States (the “Offers”) to the shareholders in Millicom to tender all of their common shares and SDRs to Atlas, for USD 24.00 per common share and SDR (the "Offer Price"). The Offers will expire on August 16, 2024, unless the Offers are extended.

On July 15, 2024, Millicom announced that a committee of independent members of its Board of Directors unanimously recommends that shareholders reject the Offers and not tender their shares and SDRs pursuant to the Offers as the Offer Price significantly undervalues Millicom

Bond Repurchases

During July 2024, Millicom continued to repurchase bonds in the secondary markets. MIC S.A. and Telefónica Celular del Paraguay, S.A.E. continued to repurchase and cancel some of the 2029 USD 6.250%, 2028 USD 5.125% and 2027 USD 5.875% Senior Notes on the open market for a total nominal amount of approximately $14 million, $19 million and $2 million, respectively.

Tigo Plaza Guatemala

On July 3, 2024, a Millicom subsidiary in Guatemala purchased a building called Plaza Tigo, which it used to lease so far, from the seller for approximately $23 million, including taxes. It will pay for the building in 3 parts: $6 million right away, $8 million on July 1, 2025 and another $8 million on July 1, 2026. Until they pay off the entire amount, Millicom's subsidiary will use the building as collateral to guarantee the outstanding payments to the seller.

New bond in Paraguay

On July 11, 2024, Telefónica Celular del Paraguay, S.A.E. issued local bonds for a total amount of PYG 370,000 million (approximately $49 million) with a maturity of 8 years and at an interest rate of 8.17%. This issuance is part of the local currency Debt Program registered in 2021 for a total amount equivalent to $150 million.

Colombia consolidation

On July 31, 2024, Millicom announced that it has signed a non-binding memorandum of understanding with Telefonica for the potential acquisition of Telefonica’s stake in Telefonica Colombia (Coltel), as part of a broader intended combination of Coltel and TigoUne, Millicom's 50%-owned operation in Colombia. Millicom intends to offer to purchase La Nación’s and other minority interests in Coltel for cash at the same purchase price per share offered to Telefonica, as well as Empresas Públicas de Medellin’s (EPM) 50% interest in TigoUne for cash at a valuation multiple comparable to the one implied by the Coltel acquisition. The total investment by Millicom would be approximately $1 billion, and the transaction would be subject to negotiation of definitive agreements and receipt of regulatory approvals.

Costa Rica merger

On August 1, 2024, we signed a binding agreement with Liberty Latin America to combine our operations in Costa Rica in a cashless merger in which Millicom would retain a minority equity ownership of approximately 14%. The transaction is subject to regulatory approvals and is expected to close in H2 2025.

/s/ Mauricio Ramos

Chair of the Board of Directors

Luxembourg, August 2, 2024

  

Responsibility Statement

The Board of Directors and the executive management of the company reaffirm their responsibility to ensure the maintenance of proper accounting records disclosing the consolidated financial position of the Group with reasonable accuracy at any time, and ensuring that an appropriate system of internal controls is in place to ensure that the Group’s business operations are carried on efficiently and transparently.

In accordance with Article 4 of the law of January 11, 2008 on transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, Millicom declares that, to the best of our knowledge, the interim condensed consolidated financial statements for the six-month period ended June 30, 2024, prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted for use in the European Union, give a true and fair view of the assets, liabilities, financial position and results of the interim period.

In addition, management’s report includes a fair review of the development and performance of the Group’s operations during the interim period and of business risks, where appropriate, faced by the Group.

Dated on August 2, 2024,

On behalf of Millicom International Cellular S.A.:

/s/ Marcelo Benitez

Chief Executive Officer

/s/ Bart Vanhaeren

Chief Financial Officer

Report on review of interim condensed consolidated financial statements

To the Shareholders of,

Millicom International Cellular S.A.

2, rue du Fort Bourbon

L – 1249 - Luxembourg

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Millicom International Cellular S.A. and its subsidiaries (the "Group") as of 30 June 2024, which comprise the condensed consolidated statement of financial position as at 30 June 2024 and the related condensed consolidated statement of income, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flow for the six-month period then ended and notes to the interim condensed consolidated financial statements. Management is responsible for the preparation and fair presentation of these interim condensed financial statements in accordance with the International Accounting Standard 34, Interim Financial Reporting, (“IAS 34”) as adopted by the European Union. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity.” A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union.

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

Unaudited interim condensed consolidated statement of income for the three and six-month period ended June 30, 2024

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

Unaudited interim condensed consolidated statement of comprehensive income for the three-month period ended June 30, 2024

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

Unaudited interim condensed consolidated statement of financial position as at June 30, 2024

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

Unaudited interim condensed consolidated statement of financial position as at June 30, 2024 (continued)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

Unaudited interim condensed consolidated statement of cash flows for the period ended June 30, 2024

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

Unaudited interim condensed consolidated statements of changes in equity for the six-month period ended June 30, 2024

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

Notes to the unaudited interim condensed consolidated financial statements

1. GENERAL INFORMATION

Millicom International Cellular S.A. (the “Company” or “MIC SA”), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures and associates (the “Group” or “Millicom”) is a provider of cable and mobile services dedicated to emerging markets in Latin America. Millicom provides high speed broadband and innovation around The Digital Lifestyle® services through its principal brand, TIGO.

On August 1, 2024, the Board of Directors authorized these unaudited interim condensed consolidated financial statements for issuance.

2. SUMMARY OF ACCOUNTING POLICIES

These interim condensed consolidated financial statements of the Group are unaudited. They are presented in US dollars ($) and have been prepared in accordance with International Accounting Standard (“IAS”) 34 ‘Interim Financial Reporting’ as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union ("EU"). In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments that are necessary for a proper presentation of the results for interim periods. Millicom’s operations are not affected by significant seasonal or cyclical patterns.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the period ended December 31, 2023, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB and in conformity with IFRS as adopted by the EU. These financial statements are prepared in accordance with consolidation and accounting policies consistent with the December 31, 2023 consolidated financial statements, except for the changes described in items III below.

We have made rounding adjustments to reach some of the figures included in these unaudited interim condensed consolidated financial statements. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them and percentage calculations using these adjusted figures may not result in the same percentage values as are shown in these unaudited interim condensed consolidated financial statements.

The following changes to standards have been adopted by the Group and did not have any significant impact on the Group’s accounting policies or disclosures and did not require retrospective adjustments:

The following changes to standards are effective for annual periods starting on January 1, 2025 and their potential impact on the Group consolidated financial statements is currently being assessed by management:

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

2. SUMMARY OF ACCOUNTING POLICIES (continued)

The following standards and amendments are effective for annual periods starting on January 1, 2026 (Amendments to IFRS 9, IFRS 7 and Annual Improvements) or January 1, 2027 (IFRS 18) and their potential impact on the Group consolidated financial statements is currently being assessed by management:

III. Change in accounting estimates

Effective in 2024, we revised the estimated useful lives of our fiber optic network assets and related equipment/software. This is considered a change in accounting estimate under IAS 8.

This change is applied prospectively, meaning there is no impact on financial statements for prior periods. Fully depreciated assets remain fully depreciated; their cost will not be reset.

For the full year 2024, this change is expected to decrease depreciation expense by approximately $48 million compared to what the depreciation charge would have been using previous estimated useful lives. Estimating the impact on future years is impractical.

While the change also affects lease right-of-use assets and asset retirement obligation provisions, the impact on these areas is considered immaterial.

3. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER NON-CONTROLLING INTERESTS

Acquisitions or disposals for the six-month period ended June 30, 2024

There were no material acquisitions or disposals during the six-month period ended June 30, 2024.

Acquisitions or disposal in 2023

There were no material acquisitions or disposals during the year ended December 31, 2023.

4. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Assets held for sale - Summary

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

4. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Continued)

Assets held for sale - Towers sale in Colombia

On January 24, 2024, Colombia Movil S.A. ESP (“Tigo Colombia”) signed an agreement to sell and lease back, under a long-term lease agreement, 1,132 telecommunication towers to Towernex Colombia S.A.S. (“Towernex”), a KKR company. The total sale consideration amounts to $77 million, out of which $19 million will be received in subsequent years. Under IFRS 16, this transaction is considered a sale and leaseback.

The transfer of the towers to Towernex is intended to happen in two batches as follows:

Assets held for sale - Mobile Network sharing agreement in Colombia

On February 26, 2024, Tigo Colombia and Telecomunicaciones S.A. ESP BIC (“ColTel”) signed an agreement to share their mobile networks. This collaboration is subject to certain third party approvals which are still in progress and will involve two new joint arrangements:

In accordance with IFRS 5, certain assets and related liabilities have been reclassified as "held for sale" and depreciation has been stopped for the following assets and liabilities

The agreement between Tigo Colombia and ColTel does not currently include how they will handle site lease agreements. Because of this, the assets and liabilities related to these leases have not been classified as "held for sale" yet.

Discontinued operations -Tanzania

As per the sale agreement, the initial sale price (which is still subject to final price adjustment) was adjusted to consider some outstanding tax and legal contingencies which management believes is sufficient to cover any future claims on pre-closing matters. Should the price adjustments not be sufficient, Millicom might be liable and need to make additional provisions that are not covered by the latter. In addition, the agreement also provided an IPO adjustment clause which expired on April 5, 2024.

As of June 30, 2024, no additional provisions have been made by management in respect of the aforementioned items.

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

5. SEGMENT INFORMATION

As further detailed in note 1, Millicom operates in a single region (Latin America), and more specifically in the following countries: Guatemala, Colombia, Panama, Honduras, Bolivia, Paraguay, El Salvador, Nicaragua and Costa Rica.

The General Managers of the operations report to the Group President and COO in the case of Guatemala and Colombia and to the Group Chief Commercial and Technology Officer in the case of the rest of the operations, who, together with the Group Chief Executive Officer (CEO) and Group Chief Financial Officer (CFO) form the ‘Chief Operating Decision Maker’ (“CODM”).

Millicom's CODM assesses performance and allocates resources based on individual countries, which are its operating segments. The Honduras joint venture is reviewed by the CODM in a similar manner as for the Group’s controlled operations and is therefore also shown as a separate operating segment at 100%. However, these amounts are subsequently eliminated in order to reconcile with the Group consolidated numbers, as shown in the reconciliations below.

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

5. SEGMENT INFORMATION (continued)

Management evaluates performance and makes decisions about allocating resources to the Group's operating segments based on financial measures, such as revenue, including service revenue, and EBITDA. Capital expenditures are also a significant aspect for management and in the telecommunication industry as a whole. Management believes that service revenue and EBITDA are essential financial indicators for the CODM and investors. These measures are particularly valuable for evaluating performance over time. Management utilizes service revenue and EBITDA when making operational decisions, allocating resources, and conducting internal comparisons against historical performance and competitor benchmarks. Additionally, these metrics provide deeper insights into the Group's operating performance. Millicom's Remuneration Committee also employs service revenue and EBITDA when assessing employees' performance and compensation, including that of the Group's executives. A reconciliation of service revenue to revenue and EBITDA to profit before taxes is provided below.

Before the organizational changes which took place in the second half of 2023 (as further explained in the 2023 Group's Annual Report), the Group reported a single segment, the Group Segment. As aforementioned, and since 2023 year-end, the Group considers the individual countries it operates in as its operating and reportable segments, and the below comparative information has been re-presented accordingly.

Revenue, Service revenue, EBITDA, capital expenditures and other segment information for the six-month periods ended June 30, 2024, and 2023 are shown on the below:

Unaudited Interim Condensed Consolidated Financial Statement for the three-month and six-month period ended June 30, 2024

  

5. SEGMENT INFORMATION (continued)