Good morning, and good afternoon, ladies and gentlemen, and welcome to the Millicom Financial Results Conference Call. Today’s call will be hosted by Mauricio Ramos, Chief Executive Officer; and Tim Pennington, Chief Financial Officer. Following the formal presentation by Millicom’s management, an interactive Q&A session will be available. I would now like to hand the call over to Nicolas Didio, Head of Investor Relations. Please go ahead.

Thank you, and welcome, everyone, to the Millicom 2015 first quarter results presentation. Today’s presentation materials can be found on our website, www.millicom.com. Before we start, I would like to remind everyone that the Safe Harbor statements apply to this presentation and the subsequent Q&A session. With me today on this one-hour call are our new CEO, Mauricio Ramos; and Tim Pennington, our CFO. I will now hand over to Tim to give an overview of our Q1 ‘15 results and operational performance, after which, we will take you through the financials, and we will finish with a Q&A session. Tim?

Thank you, Nicolas, and welcome to our Q1 earnings call. I think actually before I’m going to go through the call, I would like to ask Mauricio just to say a few words.

Thank you, Tim. Good morning to all and thank you for joining us today. Let me start by thanking Tim on behalf of the board and all our shareholders as well as the management team at Millicom for steering the company successfully over the past few months. The strength of our first quarter result is a testament to this leadership and the driving commitment that our management team across all the countries we operate in, has shown over the last few months. I imagine that many, if not, all of you would like to hear about my take on our strategy going forward. It is of course early days for this management and I as a team, and thus I do not want to go too deeply or with too much detail into that, but I am ready as is the team to underscore today four key messages for you. The first of those four messages is that Millicom is essentially its core a growth story. I'm more convinced now than I was some weeks ago, when I decided to join Millicom. Mobile business will continue to be fuelled for quite some time by the way by smartphone penetration and by the continued adoption of data usage on those smartphones. Note that only 28% of our subscribers now have a smartphone, up from about 20% a year ago. And more importantly, note that about 80% of new sales are smartphone sales with increasing levels of data usage. That is a very strong wave of growth to be riding on top of. And it is also very early days for us and B2B, cable and MFS. B2B represents today less than 10% of our income. Fixed broadband penetration sits at only 25% in the Latin American markets we operate, and yet…

Thank you, Mauricio. Let's start on Slide 3 of the presentation. And before I go into the numbers, let me highlight a couple of features of the quarter. Obviously, Mauricio’s appointment was of immense important. However, we also continued the momentum we started in 2014. In February, we capped off a growing relationship with Facebook, and we've now launched our fourth collaboration with Facebook in Guatemala. And we've found this to be one of the key services our digital customers want. And most of them - nearly a third of them convert to paying customers after the free promotion period is finished, accelerating the adoption of data usage in these markets. We also achieved a significant milestone of full interoperability for mobile payments in Tanzania. And for those of you who followed us recently, you’ll know that this is one of the key conditions we see for the liftoff of this product. So we'll a keep a close eye on how that develops. And finally, we've made Music one of the center pieces of our digital lifestyle, and that's what customers want. In Latam, we have now had more than one million customers use Tigo Music. And so we're delighted to have launched Tigo Music in Africa, first in Ghana and now in Tanzania. So Slide 4. The key themes for Q1 are continuous momentum, progress in Colombia, lower cost and FX. And overall, we saw a strong commercial performance across most of the businesses. In local currency, we were nearly 10% up organic revenue growth, and a corresponding 9% organic EBITDA growth, I think which underlines the strategy. In Colombia, we are moving quickly with the integration. We've also affected realignment of our Corporate Centre and see further reductions in the corporate costs. But all of this is being…

Thank you. [Operator Instructions]. We now take our first question from Stephen Bechade from Citi. Please go ahead. Your line is open.

Hi, good morning. I've got three questions please. The first one is to do with your partnerships with Facebook. My understanding was under these partnerships your customers got free usage of data through Facebook account towards the data usage in that contract or that they've paid for in prepayment. How does that help you in the long-term with monetization of data usage for Facebook? It's going to be one of the key drivers of increased data usage in the future. My second question is on Africa. And clearly most of the increase in EBITDA came from Tanzania. What are the main impacts that caused the increase in Tanzania? And then finally on working capital. Could you let us know what the regulatory payments consisted of, and also in terms of the movement in receivables you've indicated on page 25, but that’s to do with handset financing? Does that mainly being factoring some receivables before? Thanks.

Thank you, Stephen. It’s Mauricio. I'll take the first one, and then Tim will take the number two and number three. We think of - and me with my cable, the other world if you will, we think Facebook as a promotion, if you will. It's using the premium service if you understand me when I use that analogy as a way to drive penetration of your basic service as a promotion. So we’re using it as a promotion service. We give couple of months for free. And then after that, subscribers will stay on and buy our core service. If you think of it in those terms, our conversion ratio of 33%, a third stay on is a fantastic conversion ratio for any promotion. That’s how we tackle and that's how we view this consistent with our long-term strategy to monetize data.

So it's just two months that’s given for free in terms of data usage?

Yes, correct. That’s correct.

Okay great. Thanks.

And yes, the Tanzania did drive the EBITDA in Africa. I mean, essentially it's our biggest business. It's almost 50% of the EBITDA of the Africa business. So small improvements there have a big absolute level. So we're happy with that. That's what drove - that was subscriber adoption and MFS. MFS was particularly strong in the quarter. That said I was quite happy with the improvements we made in the other businesses and we did see some margin improvement. We’re currently talking in the past about the other businesses. Our target is just to move the margins up. Senegal, Rwanda, DRC, they're all pretty small in absolute terms, but we saw some good progress in all of those businesses in the quarter. So momentum-wise that was, if you like, as pleasing to us as the absolute growth that we saw in Tanzania. And the working capital, it has got a little bit more complicated with Colombia as a part of the group. In receivables first, we saw that with the change in the way the contracts operated in Colombia. What happens now is customers by their handsets and then they subscriber to service package independently. And we are providing some finance to support the customer purchase and that’s sort of increased our receivables by just sort of $30 million there. That isn't our long-term intention with that, long-term intention is that it’s sort of financed by a finance company and we are in discussion over that. But in the first quarter, we were financing as being old players [ph] were in the market. The regulatory payments are really just standard payments that’s paid for license payments and microwave links payments. They just tend to be a little bit sort of concentrated in higher in the first quarter than before. I mean, these were just aligned over time. So they are not particularly out of the ordinary.

Great. Thank you very much.

Thank you.

We will now take our next question from Thomas Heath from Handelsbanken. Please go ahead. Your line is open.

Thank you. Thomas Heath here with Handelsbanken. Just two questions, if I may. Firstly, you may sense a positive trend in mobile financial services. It’s been a rocky road there before particularly on the pricing side, but if you could give an update on the competitive environment on MFS, that would be really helpful, and also perhaps a few words on how you see the potential for MFS across your Latam footprint? Then secondly, given the dominance of Tanzania, how should we see Rwanda in adjacency for this market? It's fully integrated, will synergies be greater over time, or how should we view that given that Tanzania is doing? Thank you.

Well, I don't think we have a [indiscernible] to the MFS will be a linear sort of growth. I recall on my first call saying that I expected MFS to grow in sort of pits and stops. What we saw in the last quarter was relatively good performance out of particularly [indiscernible] our established businesses, but we saw some good momentum out of Honduras, El Salvador and we grew a lot of customers in 2015, but didn't drive lot of money. We're starting to see a little bit of monetization coming out of that and so generally sort of happy with it. The competitive environment continues to be market-specific. We say some markets where competitors continue to give away price rates cheaply, the call sort of P2P transfers. So those continue, and therefore I’d expect it to continue to be a little bit of sort of stopping and starting ups and downs. Sweet thing for us in this quarter is the interoperability which we got in Tanzania. And again, I'm not expecting that to sort of kick-off massively straight away. It will take a little bit of time to build, but it means now that our customers in Tanzania can send money to anyone who has got a cell phone in Tanzania regardless of network. And we think that, that will be a condition for further growth there. I think the second question on Rwanda. I mean, Rwanda is a relatively small business for us. I don’t know whether the question was getting, can we sort of get cost synergies by using Tanzania’s neighboring county to support that operation? And I think Rwanda actually has got a good market position. It's going very well. There are some cost challenges in that business that mean that the margin could improve and should improve, and whether that will involve sort of sharing services, too early for me to say at this stage. But I think everyone’s certainly heading in the right direction. That said, it's a fairly small part of the overall picture.

That was very helpful. Thank you.

Thank you.

And we now take our next question from Luigi Minerva from HSBC.

Yes, good afternoon. The first question is maybe for Mauricio, if I may, and it's about the sort of lessons that he learned in his previous experience and that can be applied to Millicom. So I’m thinking for example a parallel between Chile and Colombia. So in both markets you ran cable and mobile business. What can we learn from Chile that can help Colombia achieving, for example, the margin expansion? And the second question is going back to Africa. We notice for example on DRC in this quarter, a higher focus ARPU expansion rather than on subscribers. I'm wondering if it's one-off or if it's like the sign of a trend? Thank you.

So I'll take the first one of course, Luigi, and I'll let Tim address the second one, and thank you. Lots of lessons that can be brought into Millicom. I was, as you may be aware a strong advocate of convergence between fixed and mobile networks, and Millicom is well on its way to achieving that in its key markets. So our strategy at Millicom will be consistent with what I view of is the strategic opportunity which is to drive cost and still converge platform. We do have the networks and we're doing the infill, organic growth and acquisitions that allow us to further complement our mobile networks with underlying, underpinning fixed networks. At the more financial level, the key lesson that can certainly be implemented here at Millicom is the perfect combination of top line growth with conversion of that growth into cash flow. We have the ability to drive growth because there is growth embedded in the business, but if we focused on operational leverage going forward, driving more EBITDA out of the additional dollars into our P&L, then we will achieve margin expansion by managing in a very, very return-oriented way. The third lesson that I learned from my days over at Liberty is focus on total shareholder return. And during my conversations with the board prior to joining and certainly during the negotiation of my own contract with the board, our conversations revolved around total shareholder return. That was key to me. It was key to the board, and we drew up my compensation package along those lines. We are now well into our way of driving the compensation packages for the senior management team again linked to TSR. And we are well on our way talking to our top management team around the concept of making TSR our key metric, and it's now well embedded into our language. Those are the three key lessons that I think implemented at Millicom will help us drive our equity story quite well.

And going onto DRC, Luigi, I think the negative subscriber growth was a little bit sort of a market phenomenon. That said, we are very pleased with the performance, 27% revenue growth. We haven't seen that. We didn’t see it this time last year. We haven't seen for the most of last year. And it's been driven by really a better focus of the business. We’ve put two price rises through in the quarter and we've got a very strong market position in Chad [ph]. We’ve got a decent market position in rest of Congo, and just focusing on that and started to drive that. So it's a bit of market focus and drive the business I suppose, that's driving that.

Okay. Thank you both.

And we now take our next question from JP Davids from Barclays.

Good afternoon. I've got two questions on Colombia please. The first one relates to AMX and regulation. It's been a little bit of news flow in that market around AMX not necessarily complying with some of the asymmetric regulation that's been imposed on it. Maybe give a little bit more color around that, and I guess this is just a bit of a temporary thing and you expect it to unwind to the course of 2015, or is AMX going to sort of push for this to change and be your best? Second question again on Colombia. Maybe just if you could provide me a little bit more color around the dynamic you're seeing between customers trying to buy more expensive handsets and then potentially sacrificing a little bit on the service packages that they are buying, because I guess ordinarily what we see is when guys upgrade their handsets, they tend to upgrade their packages along with it in terms of usage. Maybe if you can just provide a little bit more color around that? Thank you.

So, I'll take first crack at it, and Tim will certainly complement what I say. On the attempts by our competitors to not comply with clearly define regulatory mandates quite clearly it's a strategy that will not work in the long-term. It is against the desires of the regulators but it’s also - and this is more important and the reason why I say it would not work, it is not consumer-centric. It is not focused on the consumer. It is alien to the consumer needs, so I don't expect that, that will have any traction in the long-term even if in the short-term, it's a fight that's been put up. On your second point, indeed the changes in the regulatory framework that have occurred in Colombia over the last few months are meaningful that mandated decoupling of the handset contract from the serving contract indeed is driving the very phenomenon that you suggest, which is indeed making it harder for us to sell higher ARPU plans as customers are focusing their purchasing decision on the price of the handset, and if you will, in the short-term, share of wallet is going towards the handset. That is quite clearly the case. But as we look at the long-term implication of the regulatory changes that are ongoing in Colombia, because we are the challenger, we actually come out on the net positive side of that, because as a result of these decoupling of the two contracts, the subsidies are disappearing, slowly vanishing in the marketplace. And that for us on long-term will alleviate a pressure on our balance sheet and more importantly, because we are the challenger and we are the high growth asset in the country is a net strategic possibility. I don't know, Tim, if you want to add something to - some color to that?

I don’t have anything.

Okay. Then we’re done.

Yes. Maybe just a quick follow-up from my side. So just maybe a little bit more boring one for then for Tim, just in terms of the accounting at the moment, [indiscernible] presumably you sort of building up a little bit of receivable in terms of mobile termination rates that you expect to receive from them or vice-versa interconnect count I guess will look different in their balance sheet versus your balance sheet.

I can't comment on their balance sheet, but we build up and pay off receivable balances with parties we interconnect with. I mean look, I reiterate and agree with Mauricio’s view on this that the regulation is very clear and it's a consumer-centric regulation.

Got it. Thanks guys.

Thank you.

We will now take our next question from Nick Brown from Goldman Sachs.

Thanks. Two questions please. Firstly, may I just clarify, you said in aggregate you want to reduce the absolute level of costs faced downwards. Is the OpEx structure in Q1 reflection of what you think you can continue to do through the rest of this year? And secondly, are there any parts of the portfolio up for review now? For example, would you still consider selectively exiting some of the African businesses that do not generate any cash, and given the online businesses that were loss-making, you considering allocating more capital here? Thanks.

Thanks Nick. We've made a feature over last couple of quarters. And I think Mauricio has really emphasize that in his opening statement that what is important to get both top line and the bottom lines so they’re heading in the right direction. I think one of the issues that we'd be focusing on in this last quarter is the central costs and just how the centre operates with the operations. And one of the things we've done is align our shared service new business and regional activities with the profit centres that exist within regions and through that we've started to see some cost savings sort of benefits coming through. And I think you saw that in our central costs which were down 5% quarter-on-quarter. And I see that as a good start but not the end of the journey on that one. In the countries it's a bit more complicated, generally how the FX all over the place, but you’ve being aware that we have started many of the countries efficiency operations and those take time. There is a lot of programs in place now across the business focused on improving our overall levels of efficiency, whether that is focused on commissions or network operations or headcount or back-office. So there is lots of things. Those will take time to come through. But I think we have the right focus now. And in the first quarter, we saw sort of sales to revenue - sorry, our OpEx to revenue I think is coming down just over 100 basis points. I think we still feel we got plenty to go from that, and this isn't sort of more look forward story. We'd expect to be focused on that going through the year.

And then, just you will curious speak and certainly that's the language that we are now certainly aligning with our general managers in the countries a lot about operational leverage as part of our desire to grow revenue and grow EBITDA in a consistent manner with cash flow generation. That is a key metric along with TSR that we are aligning our language around. On your Africa question, Nick, just to answer that one. You are on spot in the sense that we are very capital allocation focused and then very disciplined in our use of capital. On Africa specifically, it is showing strong revenue and strong EBITDA growth in the high-teens if not more locally. So we are very pleased to see that the business is positively on track with the goal that was set to drive or reach operational cash flow situation by 2016. We are squarely focused on executing that. That is what we know how to do and what we can control. Having said that of course, Africa is undergoing some consolidation and some rationalization, and if there were to be a situation that we would deem would improve our current situation, we would of course be negligent not to look at it.

So probably your question just on online, I mean we've got an obligation to put a final €5 million into the African internet holding. We've got no obligations for capital injection into a either AIH or LIH.

So can I just follow-up on the Africa point? So given those opportunities you’re saying with the market undergoing consolidation, would you look at expanding your presence in any of those markets or is it just about them scaling back? Thanks.

It would be about basically being very, very focused on participating in that consolidation in the manner that is the most accretive to our shareholders. That’s where we will be focused on exclusively. It is not a matter of size. It's a matter of accretion to our shareholder base.

Great. Thanks.

We will now take our next question from Stefan Gauffin from Nordea Bank.

Yes, hello. I have a couple of questions. The first one relates to Colombia. There you take select up on the EBITDA margin if you exclude UNE. So I believe you report 30% EBITDA margin as compared to 27% EBITDA margin in Q4. What is driving this margin improvement? Is this effect of the decoupling of the handsets, and should we expect this to be a temporary effect or something that you can build on going forward? Secondly, on with the re-organizational central activities. Does this mean that some of the earlier central costs are being pushed out to the regions, or is it more that accounting why is that the regional offers are responsible for those kind of costs? And this should come down further into [Technical Difficulty].

Thanks Stefan. On Colombia, the mobile business, we did see some margin improvements. Actually our first quarter EBITDA margin for the mobile business was 28.1%. That was 330 basis points better than the same quarter in Q1 2014. And we had a recurring revenue rate of 35.7%. So it's been what I've been saying for a while now that we've got good underlying recurring margin. It's been distorted by the handsets sort of sales that we've got that. And the decoupling, I don't think has affected too much. The handsets sales has been extremely strong, and whereas we might have been expected those to slow down a bit, they didn't. So they were pretty strong. So that's good. The final thing I'd say Stefan on this is, this will get increasingly difficult to sort of give you the sort of break-down as the synergies start coming through, they are, if you like, synergies for the group as a whole rather than the UNE business or the Tigo business. So we are focused, if you like. But the price for us is to take that group Colombia margin of 27.7% and see that move up. And happily in this quarter it was up 120 basis points, lots of different reasons for that, but it is driving in the right direction. And I think we were giving hopefully a lot of confidence that we see the integration and the synergies sort of beginning to come through, albeit the caution is it's still early days there and there is still lot moving and it's a big business. But net-net, at the end of Q1, we're pretty comfortable with that. On the second question on the central costs. We haven't pushed any costs down. What we've done is basically said, we've looked at every…

You can think of it as an exercise on capital allocation discipline. In order for us to do that, we need to have clarity on what the costs associated with a given P&L is and we need this metric in order to allocate our capital obviously to the areas with the highest growth and highest return.

Then maybe a further question. In both Q3 and Q4, you have taken restructuring charges in Africa and this quarter no restructuring charges. Should we expect you to continue to take restructuring charges in Africa to boost - to continue to boost margins, or are you more looking to drive that in other ways?

Well, just to clarify people on the call. We took restructuring charges in Q3 and Q4 because we had undertaken an outsourcing of our network operations, which took place over those two quarters. And that involves the transfer of our network operation staff to third-party providers. That activity finished at the end of Q4. So we've got no activity like that in Q1. I'm not ruling out that we wouldn't do similar types of outsourcing activities in the future which could give rise to restructuring charges, but at this point in time we don't have any on the horizon. We don't expect to see any. But I can't rule it out totally, because we continue to look at the best most optimal way of operating our businesses, not just in Africa actually but also in Latin America as well.

Okay, thank you.

Thanks Stefan.

We will now take our next question from Lena Osterberg from Carnegie. Please go ahead.

Yes, thank you. So I was wondering a little bit about this outsourcing to Ericsson that you conducted in Africa. Did you see full benefits from that in this quarter? Next question I have is, I am wondering a little bit about your - sort of that strategy and the bond strategy. Historically you strived for a while push down debt locally to, I guess a better tax shield and the Forex hedge. And now you seem to take more of the debt up to corporate level again. So I was wondering a little bit if you could say why you decided to do this. And also if you could say a little bit about the covenants on this bond in Sweden that you renegotiated from 2.3x to 3.0x. Why did you need to go as high as 3.0x? If you calculate it in a different way than we used to see it or do you just see to do in the M&A?

Okay, first one on the outsourcing to Ericsson. We've outsourced network operations to both Ericsson and Huawei in Africa. Its early days, but I think we are quite happy with what we are seeing in the initial period of this. We’d expect to improve both the operational efficiency of the business i.e., given by the service and also save money and certainly the start has been encouraging for us. But I would say Lena it is pretty early days to call a success or to raise a flat on that one. I think on tax and debt, I don't think you should view what we did in the first quarter was anything more than tactical. I mean, we basically substituted dollar debt to dollar debt except we paid 6% to the central [ph] compared to 8% down in El Salvador. There is no significant tax impact of that. And we continue to have about third of our debt in local currency. And I forgot exactly what the majority, it’s probably less than two-thirds now, but the majority of our debt remains down in the operations . So there is no real change in that if you like, it's just a bit of tactical housekeeping that we undertook. And then the Swedish bond again, it was the same type of thing. We've been trying over the course of the last six months to try and conform all of our covenants to the sale sort of package, so we don't have different outlying covenants across the group. We've got lots of different covenants. The Swedish bond was sort of out of line with our corporate and covenant levels, so we asked investors there just to realign it with covenants that we've got in the new bond for instance.

But why would you pay extra to do that if you don't have plans to go above the current level?

Well, it was a very minor fee that we paid for it, and it just sort of conforms the whole sort of covenant package and takes away any sort of concerns we might have. I would sort of take it offline with you, Lena, because the problem with the Swedish bond was there was a whole load of technical issues relating to that to deal with the way the bond was calculated vis-a-vis the bonds that we've got with the U.S. investors. So we wanted to just sort of confirm that, and we apply the same headroom that we've got. So we've got the same headroom across the group.

Okay, all right. Just trying to clarify the corporate costs that that you said. You currently had a run rate of $237 million, and you expect to see them decline quarter-over-quarter going forward?

Well, that's what we are very focused on doing. I'm not making any promises on numbers but I think you’ve seen in the last three quarters we focused hard on bringing it down with some success. And we're certainly going to be focusing hard in the future quarters to continue to bring it down.

Thank you.

Thanks.

We will now take our last question from Bill Miller from JM Hartwell. Please go ahead. Your line is open.

Good quarter. Thank you very much. Curious you're signing in Colombian now that you've had lot more time to work down there, is things are going better or worse than you expected? And when can we see the margins in Colombia for both UNE and your own regional operations get to the 35% or 36% level, EBITDA margin?

Well, thank you, Bill. Interestingly enough as many of you know I was born in Colombia. I'm a Colombian, so I have a lot of affinity and understanding of that market. Not only that, but Stefan, our GM [ph] down there and I know each other from a prior telecom and cable life. So we have a long good history together. So even before I started formally, I talked to Stefan [ph] and he invited me down. I spent a very good week down there in Colombia in Medellín and Bogotá meeting with the team, with our partners, with our regulators and of course with external parties down there. And I did that to help full understanding of our business there and I came away from that very, very reassured, not only of our market precision, the strength of our management team but our growth prospects going forward. The regulatory environment is a net positive to us. The relationship with our partners is very, very good and we will continue to work towards that end. The management team, although its early days, is coming together quite well. The synergy plan is certainly on track, and does have upside for sure. And the industry dynamics are positive to us. We are the challenger in a market that has growth and we have the ability to continue growing our fixed network down there to support our mobile, growing mobile business. So overall a very strong positive moment there long-term, even with hiccups that may occur in the short-term. With that strategic viewpoint, the question around margins for Colombia is one that you should expect us to manage very, very well in the long-term. It is a balancing act, as I think you suggest, because we have a fair amount of growth and we can invest in that growth. But at the same time we have today a margin level that is so part to our other operations and so part to what it should be in the long-term. So we have to drive a balancing act between capturing that growth and investing in our growth and driving margins up. And that is the balancing act that we discussed with the management team that we need to maximize, not squarely focused on margin growth at the expense of losing volume for the future that would drive revenue, but not focused entirely on revenue and not driving that margin up. And the way to make those two things come together is operational leverage. The key message to Stefan [ph] and the team is we want you to focus on operational leverage, so that every new dollar that you bring in from this growth comes in at a very high margin. That would drive the margins up even beyond the synergy level that is already embedded in the business map. So those are the two levers that we are using in Colombia to drive margins up, the synergies and operational leverage on the new revenue.

Thanks. That's very helpful. I appreciate it.

This would conclude the Q&A session. I would like to hand the call back to Mauricio Ramos. Please go ahead.

Well, thank you very much for joining us today. We’ve gone a little bit over time and we apologize for that, but we're happy to have had a chance to chat with you. We look forward, Tim, and the rest of the management team and I, to meet all of you in person and continue our development [ph] in Q2. Thank you very much.

This concludes Millicom’s financial results conference call. Thank you for your participation. You may now disconnect.