Millicom International Cellular S.A. (TIGO) Q4 2015 Earnings Report, Transcript and Summary

Good day to all, and thanks for joining us here today. Before we get started, this presentation is covered by the Safe Harbor statement. That's up on the screen. I am here today with Tim Pennington, our CFO whom we all know, and a few other members of our senior management team, whom I would like to introduce to you. Xavier Rocoplan, our CTIO; Rachel Samrén, our Head of External Affairs; Cynthia Gordon, our Division Head for Africa and of course you all know Nico. Before we get started, I imagine that many of you would like an update on the status of the investigation to potential corporate payments on behalf of our joint venture in Guatemala. In a nutshell, there are really no developments to report. The matter remains under review with the authorities. We remain fully committed to cooperating with them, as requested. And we'll update you whenever possible. But, no news is really all there is [ph] to say on that matter at this point in time. So, let us now focus on our results. Our key messages are, what we would like to start as always with. No doubt, we are facing strong macroeconomic headwinds, markets are down, currencies have weakened and economic growth is slowing down. Nevertheless, we need to focus on what's going on in an underlying business and keep the eye on the ball to properly execute on our long-term strategies. With that in mind, this is in a nutshell, what we would like you to remember from our call today at a high level. One, we delivered strong organic growth, said differently, we hit our numbers in local currency. Two, we generated positive growing and very strong cash flow in 2015, strong enough to cover our dividend. Three, our operational momentum continued with strong underlying service revenue growth. Four, our strategy as we laid it out to you, early in Q2 is working and we have some early indications to demonstrate that. Mobile data is being monetized, cable is being built faster than ever, and subscribers are coming in with good data rates. Five, we're taking decisive steps in capital allocation, as we have seen with the sale of our DRC business. And six, we are pretty positive on our 2016 and long-term outlook. Let me now give you some details on each of these key messages. The first key message is that we delivered strong organic growth. It's up there on the chart. In 2015, we delivered $7.7 billion in revenue. This is up 7.4% year-on-year on an organic basis. Our adjusted EBITDA was $2.3 billion, up 9.2% year-on-year growth, again on an organic basis. There is pretty good operating leverage there as well. And we held CapEx at $1.3 billion. As a result, we delivered operating cash flow of just shy of $1 billion, or 10% better than last year in dollar terms. These are strong results anyway you look at them, with accelerated growth all the way from revenue to cash flow. And we're sticking to the plan. 2015 results put us on a good path towards our stated cash flow model. You may recall this slide from our Q2 call; that is our long-term cash flow model that we manage the business towards. We've added our 2015 results to it. Top [ph] growth up 7.4%, operating leverage up 46% already, EBITDA margin close to 34% already, and OCF margin now up to 15%, all of which put us on track towards that stated long-term cash flow model. We're making steps along the right way. The second key message for today is that we generated positive growing and strong cash flow in 2015. This is not a small point by the way. Our 2015 equity free cash flow was positive and strongly sold at $235 million. That is 278 up from 2014, where our equity free cash flow was negative at $43 million. This actually provides for a 90% dividend cover for 2015. Pro forma for the sale of DRC dividend cover would have actually been higher than 100%. Our Board of Directors based on our recommendation will recommend to the General Assembly, a dividend payment of $2.64 per share. Our third key message today is that our operational momentum continued with strong underlying service revenue growth There are three points, I would like to make on this slide. One, our growth momentum remains robust. We actually ended up Q4 with a bit of an uptick at 5.9% growth. The second point is that UNE, our cable and B2B business in Colombia delivered strong contribution to the good growth and is actually underpinning this pickup in underlying service revenue growth. And the third point on this slide is actually a bit of a word of caution. In 2015, we did face very tough macroeconomic environments in Colombia, very strong FX devaluations across our main currencies as well. And this will continue for some time into 2016. Therefore, we're squarely and must squarely be focused on executing a very, very solid long-term strategy. And let me just address that then as our fourth key message. Our strategy is working. If you recall, our operational strategy is pretty simple. One, we monetize data, mobile data. And two, we build a monetized cable, as simple as that. Let me address mobile first. Our strategy is paying off and we've got some early numbers to show. I am going to focus on Latin America to demonstrate this. If you look at box one on this page, we increased data users by 19%, reaching in excess of 12 million at year-end. And on box two, you see that we increased data mobile ARPU by 3% in constant dollars. We’re increasing the base and we’re getting the pricing right at the same time, and I’ll address that in a minute later. As a consequence of that on box three, you see that our data revenue in Latin America increased by 37%, or an additional $280 million. Note; that we have actually now exceeded the $1 billion mark in terms of mobile data revenue in Latin America. But, more importantly, and this is the key point here, in box four, you see that in Latin America, our data revenue is now more than compensating for the decline in the legacy business, voice and SME. This means that our mobile service revenue is growing, albeit still slowly at 1.5%, as you can see on box five. But, the growth, I strongly believe will increase as every day, we are actually sharing more and more of the legacy business, while the new mobile data business is growing strongly, it's a game of math. In slide 10, for 2016, you see that we expect to push even further our data monetization strategy by pivoting our pricing model. As of today, we are as most operators do, selling megabytes. Yet consumers do not value megabytes. They value content, and they value applications. And they all want all UKNE [ph] products. There are actually presenters with a pretty interesting opportunity to improve our strategic pricing, instead of selling megabytes, we have now started to sell time-based application packages. You can buy all UKNE [ph] access to Facebook or YouTube or the application of your choice for a day or for an hour, it’s time-based. This is a strategic shift in pricing data. And here is why? One, it increases data penetration, because it allows for a lower entry point for consumers that have not tried mobile data before. Two, early result show that it actually increases data ARPU, because consumers perceive a higher value proposition, connects by his choice. Three, because pricing is all you can hit, which is key. But it is also key that is limited in time, which effectively means that we remain control of the pricing on an all UKNE [ph] model. And fourth, it is also strategically important, because it is driving traffic to our Tigo Shop app on our phones, which is where you combine these applications, and I am sure that you all realize that that real state on the phone has strategic long term value. We use this pricing model for the first time in our customer’s promotions and resulted in an increase in price per [indiscernible] of 10% against the control group. These are the kind of things that we can do to help monetize data and demonstrate that our run rate is pretty positive in that regard. In cable, second pillar of our long-term strategy. We can also show that our strategy is indeed working already in 2015. 2015, we added about 550,000 homes passed to our footprint, that means that our network already covers 7.6 million homes, which shows you that we are well on our track to deliver our target of 10 million homes in the mid to long-term. On our subscriber basis, we added about a 140,000 new subscribing homes and we now connect in excess of 3 million homes across our footprint. More importantly, cross-selling between fixed and mobile is working. We have now increased our bundling ratio to 1.88 revenue generating units or services per each home that we connect; that's a pretty good best-in-class bundle ratio. As a result, we grew ARPU per household in dollar terms from 23 to 26 in 201, and all of this compounds in a home business that is growing at 18% in Q4, and Tim will give you more detail on that. Suffice to say that the strategy is working, and this slide is just to remind you of why we're doing this. Data penetration levels for both broadband, fixed broadband and pay-TV in our markets are well below those of the more advanced Latin American economists. We have plenty of room to grow here and remain to take advantage of that. And be mindful that this is the same network open which we can also service small offices and medium-sized businesses with B2B services. Now, I would like to give you a bit of a snapshot on our Colombian operations. In a nutshell, we can now say that our merger with UNE is delivering. Four key points here. First, in mobile, the marketing Colombia is indeed very challenging and has actually been climbing [ph]. We already know this, and you're already seeing the reports from some of our competitors. We expect that 2016 will continue to be a tough year in mobile in Colombia. The good news here however, is that we are outperforming our peers by a significant margin, that's because we have superior brand and we have a superior service. So, that is actually my second point. We have increased our revenue market share in 2015 now sitting at 18%. And the third key point here is that, we now have a very balanced and better growth profile to face the challenges in the mobile space in Colombia. Remember, in Colombia, somewhere around 50 to a little bit north of that of our business is actually a fixed business and UNE that fixed cable of B2B business is contributing strong growth to the group as a whole, leading the merged entity in Colombia to grow revenue 5% year-on-year. And the last point, which should not be a surprise to you is that we are happily have increased profitability in Colombia, with EBITDA margin increasing by about 300 basis points in the year and now sitting at just shy of 30%. And as you can expect, and as we progress through the integration process, we will continue to extract further synergies and we will continue to extract EBITDA pickup. Our fifth key message today is that we are taking decisive steps in capital allocation. We have announced recently that we've signed an SPA with Orange for the sale of our DRC operation for a total cash consideration of $160 million. Quite frankly, we were subscale in the DRC and we seize the opportunity to sell to our buyer within market synergies for a pretty good price; that is just good capital allocation. Our last key message is that we're very positive on our long-term outlook, and there are a few reasons for that. First, you've already realized that we believe that our future lies in mobile data. We're monetizing data. But we're expanding our 4G coverage and our capacity in order to further monetize data. By the end of 2016, by allocating our CapEx to 4G, we expect to cover about 40% of our Latin American footprint with 4G coverage. Second, for the same reasons, we will continue to increase our cable footprint throughout Latin America. And by the end of 2016, we expect to be just a little bit north of 8 million homes past again on our way to grabbing that opportunity in the region. Then third, we will expand our successful DTH service into Colombia, and to Paraguay when and if we get a license there. And fourth, we will continue to move into next-generation TV services, which will combine linear TV channels with OTT apps. Both on TV and on mobile, and this will keep our innovation edge in our markets. And finally, and this is my key point. We will continue to strengthen our B2B business, which is growing at double-digit rates across our entire footprint Latin America and Africa and today accounts for only about $1 billion or just 15% of our total service revenue. Another opportunity for growth. And just to close, we recognized the short-term conditions are difficult and we are prepared to deal with those by focusing on cash flow generation in 2016. But with a longer-term outlook, we must be cognizant that one, our operational strategy is working. Two, we have demonstrated a strong focus on equity cash flow and we will continue to be focused equally so, which is allowing us to cover our dividend. And three, there are large pools of opportunity that we can adapt into put further growth. And with this, I will hand it over to Tim for our financial review.

Thank you, Mauricio. So, let me take you through the Q4 numbers now. I think Q4 was pretty tough quarter in the global economy, but all business is pretty resilient and we continue to post decent organic growth on revenue, on EBITDA and particularly on cash flow. In 2015, we saw some extreme currency volatility. We were particularly affected in Colombia, Paraguay and Tanzania. They dampened the reported numbers. Revenues were close to $1 billion lower in 2015 than they would have been had we used 2014 FX rates. But as Mauricio just outlined, we ended the year inside our currency adjusted guidance range. And furthermore, our Q4 adjusted EBITDA margin improved by 90 basis points, and that delivered one of the key focus areas for us during this year. And so with better underlying EBITDA, strong working capital management, some capital discipline, our cash flow has shown good signs of improvement. In Q4, we did prepare the business for the future. We've taken restructuring charges in several markets. We've tightened up a number of historic issues. It has been paying for us. But it leaves us well-positioned to go into 2016, to reduce our leverage and improve the dividend cover. Okay. Let me start by looking at the revenue picture in Q4. Organic revenue did slow to 4.4% that was the full year to 7.4%. We saw a little bit of slowdown in Central America, but the major impact came from Colombia, where our mobile service revenue was 1% down on last year. But this is a market where we're seeing negative revenue growth from all our major competitors as Mauricio has just said. And once again FX has played a big part in reported earnings, pushing reported revenues for the group 10% lower in the quarter, compared to the same quarter of last year and this is the biggest single currency impact we've seen so far. But let me look at the bit more the drivers of our revenue growth. On the next slide, on the whole we see, we continue to see robust growth in service revenues. This excludes handset revenues and equipment sales, and it gives us a better picture of the underlying trends. It's worth touching on Colombia, underlying the 5.4% service revenue growth in Q4. We saw strong growth in the fixed business as we benefited from amongst other things, price increases. Offset by mobile as we just mentioned and we expect to see a continued weakness in the mobile market. The currency devaluation is beginning to affect, impact on purchases, our sales were 26% lower than a year ago. And of course as it is being compounded by regulatory changes in FX. So, although we continue to gain share. This is in a sharply weakening market. We saw a welcome return to double-digit growth in our cable only business in Costa Rica. Bolivia also had another good quarter driven by some extraordinary strong data performance. However, in Paraguay, it slipped back into negative growth on widespread flooding compounded by an already weakened economy. And in El Salvador, the security situation is down from some of that revenue growth. For Africa, service revenue, it continues to improve 13.5% versus 11.3% in Q3. And we saw a welcome return to growth from Chad. So, building on what Mauricio has said on this slide, we've got a few of the drivers, what we see as key drivers for our revenue growth during 2015. Mobile, we continue to see strong subscriber uptake. We had a net 1.1 million additions in Q1. Good growth in Guatemala, Colombia, Tanzania and Chad. And in fact most of the businesses has picked up subscribers in the quarter. Our total subscriber count now stands at 63 million. This is an important driver of our data revenue, which on the next slide - of the next chart, sorry. And you can see the data revenue growth has remained very positive, up 39%, driven by that rapid adoption of smartphones, plus data ARPU increasing, as we continue to innovate services like exclusive sports content or free Facebook campaigns. Our cable business performed exceptionally well last year. Revenues grew by 24%, driven by RGU growth. We now have $5.4 million RGUs. And that's been supported by some very strong and stable ARPUs for home. Finally, to highlight the B2B performance and this has been hidden a little bit in our numbers historically. But at the chart of the bottom shows, we've had a pretty strong business here, up 16% in 2015 and with there an earnings contribution, this is rapidly going to be a $1 billion business for us and this is a business you'll hear us talking more about in forthcoming quarters. Okay. So, let me turn our attention to EBITDA. As I said, adjusted EBITDA, good progress up to $551 million in the quarter, a margin of 32.9%, up 90 basis points, driven by LatAm and corporate cost reductions. In Q4, we took number of one-off charges. We took $60 million in the quarter, which makes $87 million for the full year, $33 million of that was integrating cost in Colombia, plus it was an $18 million bad debt charge in Guatemala with respect to the public contract. And I should make clear that this contract has not passed of the reporting of the group made to the U.S. and Swedish fall season in October. The balance has been incurred in Africa, as we seek to position the business for a most successful 2016. We charged $15 million to restructuring, plus as we continue to right-size several of the operations there for the future. And there were $17 million relating to tax and some other adjustments. So excluding these items, we saw 4.3% organic growth in Q4, 9.2% for the year, driven by efficiency measures. In fact we brought our corporate cost down again for the quarter. Q4 corporate cost were nearly 30% lower than they were a year ago. And we're beginning to get back into line with the industry norms here. Now, over the last 12 months, we've been focusing on improving our capital allocation and return on capital for the group. CapEx for 2015 landed at $1.27 billion, which was towards the lower end of our guidance range. Below they're representing 19% of revenues given the FX impact. Our investment is primarily directed to where we see the best returns on capital that the CapEx looks higher in 2015 than it was in 2014. But that's simply because of UNE in '15 for a full year. Ex-UNE, we invested over $1 billion in LatAm down by 5% and in Africa, we brought our investment down by 23% despite higher investments in Tanzania. We also spent $47 million on spectrum and licenses in Bolivia and Paraguay, which had around 0.7% of revenues. This is the lowest investment in spectrum, we've had for some time. 2016 could be higher if 4G spectrum in Colombia and Guatemala have issued. And then in investment in M&As has also been tightly controlled. We invested less than $200 million in the year. It was mainly focused on in-market consolidation, particularly Tanzania with [indiscernible] and cable sale in LatAm. Before going on to the cash flow, let's quickly address the number of non-cash items that appeared in the P&L. The biggest item booked was in other non-operating expenses. We took a charge totaling $411 million for the quarter, $624 million for the full year. I know if there is roughly $400 million related to the deconsolidation of Guatemala and Honduras effective on 31st of December. Loss further $300 million related to FX losses. In addition, in the joint venture associates line, we booked evaluation gains of $147 million from the slip up of Helios Towers, Africa. And finally another operating income as a charge of 57 million, most of it relating to a write-down in the value of the Senegal business. I want to emphasize, all of these are non-cash items and they are taken out of our adjusted EPS. Now, let me turn to the cash flow. Familiar structure here, showing the cash flow down to equity, free cash flow that is pre-dividend, it excludes spectrum and license fees and M&A. This is the full year picture, so you can see that EBITDA pre-one-off charges is 2.3 billion, 7.4% up from 2014. So after CapEx, working capital which was pretty much in line with last year left us with OCF of 1.1 billion. Cash taxes were below last year, on lower cash taxes in Colombia as we utilized the mobile payments in prior years. Interest a little bit higher on high levels of debt whilst dividends to minority is a little lower. This left equity free cash flow 235 million as Mauricio has said, 90% dividend cover and on a pro forma basis, ex-DRC, the dividend cover would have been positive. Net debt had increased in 2015 largely as a result of capital items, mainly M&A and spectrum, and this slide shows the net debt progression as you can see that after dividend M&A, spectrum and licensees, we ended up 4.3 billion and this is the third quarter we’ve kept the level of debt round about this point. Leverage ended the year 1.97 times and this is on a fully consolidated basis, including Guatemala and Honduras. We’ll continue to show that leverage on that basis going forward as well. And on a pro forma basis, pro forma for the sale of DRC, leverage was 1.87 times. And there has been a lot of discussion around emerging market debt, debt risks. So, I wanted to take the opportunity to outline our position, which I think is pretty solid. And fixtures recently, reconfirmed our BB plus rating. We’ve got a very good maturity profile. Our average life is just under six years. We only have $225 million at debt maturing in 2016 and it remains at fairly low levels for the following three years, well within our capacity to refund the business and further we’ve got undrawn credit facilities of $500 million. Around a third of our debt is in local currency and we are lame [ph] to move that to around 40%. Just on the two-thirds, this country level and three quarters of it is in fixed rate. To ensure, we remain comfortable, but not complacent based on that structure, we’re comfortable with our leverage targets of between one and two times EBITDA on a fully consolidated basis as well. So, that brings us to the end of our Q4 results presentation. In summary, the last quarter of the year was undeniably tougher than the preceding quarters. A weaker macro-environmental and political factors, some aggressive competition in some key markets all compounded by adverse currency movements, and plus we had a number of one-offs, which constraint the reported numbers. But despite that we saw sound operational momentum. Mobile data is growing strongly as is cable, as is B2B, margins are improving and we're being more disciplined on our capital allocation. Visibility on 2016 is not as clear as we like it, but we expect our organic service revenue to grow in mid-single-digits and vigorously pursuing the cash flow model that Mauricio outlined. We see our adjusted EBITDA growing in mid-to-high single-digits. CapEx will be lower than 2015, by some $50 million to $100 million. So we expect our operating cash flow to be stronger in 2016 than even it was in 2015. So, overall whilst 2016 will be a challenge. We believe the group is very well-positioned to meet that challenge. Thank you. And we’ll now take some questions. I think if we start questions from the room and then we’ll move to the line. Chris, you take the first question.

Sure. Thanks, guys. It’s Chris Grundberg from UBS. Just a couple, if I may. Just on the guidance, just wonder if you can flash out on the biggest drivers of the leverage, you’re implying there, maybe DRC will help, but what are the other factors that you’ve got in there? Secondly, on the CapEx, where are you planning to making the savings, especially given the depreciating the FX low dollar number, just curious to get your thoughts there. And then lastly, can you give an update on your percentage ownership of African internet [ph] group and also just on the African Tower portfolio as well as any views there on whether there might be opportunities to crystallize value in other assets any time soon.

Did you get number one?

Yeah. The guidance was striving, our guidance - the improvements you'll see in EBITDA. All right. So, luckily we have some of our team members here who can give you lot more color on some of these, I'll take a crack and I think I'll need some help in [indiscernible] and team and I'll provide you more color. Let's start from the bottom up, which probably easier to address the last conceptual ones. On HTA which is our tower portfolio in Africa, we hold 24% on a fully diluted basis and we've lift up as you may recall sometime this last year into a liquid position, which holds 24% of that tower portfolio, and we view that position as non-core to our African business or to American business. Our percentage of the Africa Internet group is around 8%?

No. It’s about 14%.

14%. Thank you.

Then the [indiscernible] has been capital raising in the last days, so we are now 14%.

It was actually confusing that with the 8% stake that was recently taken by AXA, which effectively value the company at around the billion, making it according to the financial times surprise the first African Unicom if you will and we hold 14% of that and of course this is an asset that we don't classify our score. When and how and if we may move to monetize this to assets is really just a consideration of our ability to maneuver through tactical moments appropriately and you've seen us do that with the DRC. On the CapEx question, I welcome the question because I think our presentation may have suggested that we are saving on CapEx and we're not, and we're actually more efficiently allocating CapEx. Truth of the matter is that we have unused capacity in our network that has resulted from the investment in prior years. So, before we go and invest further in new capacity, we need to make sure that we're using the existing capacity to its full potential, and Xavier will give you a bit of a [indiscernible] on that. And also going forward, our CapEx is very strictly allocated to the three buckets that make up our strategy. Monetizing data, so it fits about LTE 4G coverage increasing that in capacity. Two, is about building a fixed network footprint. And three, it is about B2B both in Latin America, to some extent in Africa. So that makes for a very, very laser-focused allocation of capital. The two things put together mean that on absolute terms as team was saying, we can actually reduce CapEx with that actually saving. And why don't you give it a shot with some more details Xavier if you have a...

My name is Xavier Rocoplan. I am the CTIO of the Group. I think the first message on CapEx and just really important that there is no change in scope compared to 2015. In other words, we are really driving the strategy that we've being pursuing in 2015, in 2016 as well, which is a rollout on mobile and home or cable that are really, really seen it out. And the efficiencies come essentially from three levels; I mean it has been a big procurement exercise on rationalization over the last two years that is paying off at group level, because we are not preparing a lot of these items centrally. I think the second level is indeed, we have a utilization opportunity on networks in 3G in particular and most of our 4G rollout is not building through a new slide actually, it's on [indiscernible] location on our sites on our competitor’s sites. And then most our CapEx, a big chunk of our CapEx now is about 40% is cable and B2B, and there is a nice upside to this, because lot of installations are actually paid in local currency now, in home and B2B. So that is also helping driving the CapEx in dollar terms a little bit lower.

Thank you. That's why we had you for that additional granularity. And I think Tim will take the first question on guidance.

Yeah. In terms of our guidance and why do we think that our EBITDA will grow at a faster rate than our revenues. I think that has been the focus on efficiency measures that we have been communicating over the last few quarters. And in 2015, we gained about 100 basis points of margin improvement asset that of a corporate center. We've done a lot of work there. This is one that now we can do there. In all of our businesses during our sort of general budget round, we talked about and we have instituted efficiency programs to make our business position it for the future. As you saw, we've taken some restructuring charges at number of African businesses for instance in order to right-size those businesses and get them sort of positioned well for what those in 2016. So, I think all of these matters are sort of weighing up in together to give us the cost on the guidance.

I think there are pulls around going in various countries as to how many times I will mention the word operating leverage in any given day.

[Indiscernible] on DNB. Couple of questions, first on Colombia. You mentioned that there is an upside in the margin. How quickly can you move in Colombia do you think? And is it possible to have the same margin in Colombia as the group level so to say? And then on taxes and perhaps dividends to minorities, what should we expect for 2016 on paid taxes and minority dividends?

I'll take the first one and then I'll let the team address the second one. We've done the hard work in the integration in Colombia and kudos to the group there it's a well-managed integration process with culture of uplift, well managed with the stakeholders and you are beginning to see the EBITDA come through. Going forward, we do intend to continue to drive that up higher as I said and over the long-term, I do expect of the margins in Colombia will rise up to the levels of the group margin. But, we will continue to make that bar higher for Colombia as the group also continues to become more efficient.

I think in terms of where we'll be in fixed [indiscernible] minorities dividend and tax and interest, minorities probably will be a little bit lower in 2016 than in 2015 in the sense that we took some capital dividends out of Guatemala in particular in 2015. So obviously work that repeated because we've now put about a $1 billion of debt on that balance sheet, so it will just get normal dividends and we - on interest, it will be a little bit higher on sort of higher average debt through the period and on tax, tax was positive surprise for, that will be a little bit higher in 2016. Simply as we sort of get back to a normalized charge. In 2015, we have some overpaid taxes in Guatemala and Colombia that we used to offset current taxes. And margin Colombia was that...

I addressed a little bit of it.

Okay. I'm going to interact.

Other than the message we just gave to our GM's in Colombia. Gonzalo?

Hi, Gonzalo from RBC. I've got two questions. One on Africa, could you give us a bit more color on the decision process for the disposal? Could we start to seeing that places where you are losing all of the money one times rev, 1.5 times is the number you'll be willing to exit market at? And then secondly, on the data bit monetization, is it mostly prepaid based or is it postpaid base or how are those subscribers evolving, was the churn and then if we could get a bit more color there?

Sure. Thank you for both questions. They are actually very good. On Africa, the overall writing point that we keep making which is very important and most of you have heard us saying this throughout the course of eight or nine months in the job. Our plan A which is as to Africa is the one we are squarely executing and that is continuing to improve on our market position and on our financial performance. That is plan A and we'll continue to be the plan that we drive in Africa. We've stated a goal of making Africa as a division operating cash flow breakeven in 2016, I have no doubt we're going to meet that goal. Cynthia, our new head for the Africa division is squarely focused on that; that’s our game plan with regards to Africa and we’ll continue to be part of the game plan and we are beginning to see improvement in our operations and I say that because we have certainly a commitment to remain very focused on good capital allocation. The second point is specifically on the DRC situation, the DRC situation was if you will a plan B, an in-country market solution that provided us with a better outcome than plan A would specifically for the DRC, why is that? Because we’re able to strike a deal with the world class buyer that has in market synergies and a result of that we were able to strike a price that is pretty good for us, but also pretty good for them. And those are the kind of capital allocation decisions that indeed will pay to make, that’s a rational behind the Africa decision. And then on the data monetization - remind me the question because I don’t --. I mean you talked about what’s driving it and whether it's prepaid and postpaid and I mean I think the answer is both, it is driven by both fair mind in our markets, postpaid is very often hybrid postpaid that is you have a base level tariff and then if you go and you topped off, so it’s not postpaid as you might sort of understand it. And we think pretty good traction in that. Churn relating to that obviously our metrics are fantastic when we sell the customer music or he takes mobile financial services or he’s involved in our sports product and a more sort of applications it takes the more our churn reduces from that. We have a very developed program of high value churn management and so to some extent, the churn numbers you will see from us sort of don't show the true underlying picture of how we manage the revenue churn, our focus really is on revenue churn rather than subscriber churn. In the markets we operate in subscriber churn is just a fact of life, what is very important to us is revenue churn and high value revenue churn which we manage extremely carefully and the data sort of migration is nothing but good things for [indiscernible].

I think your question is very good because strategically for us the markets we operate in and the type of models that we’ve been suggesting over the last few months to you, do allow us to be well-positioned for data monetization. Whether it’s prepaid or postpaid, the key difference between the voice or voice world and the new data world is that we are beginning to experience in Latin America, is that mobile data is always on. In a top up world prepaid or in a postpaid world, you cannot sit back and take that phone call and not give your service provider any revenue, a failed world. In the new world you have to be top up, you have to have some mobile data available to you in order to access or receive those interactions with your friends that you want. In order to do that being prepaid actually allows you an interesting opportunity to be the provider of choice if you provide more stickiness to your consumer. And the need for Tigo Shop where you can buy data from us and that was the point I was making earlier. Hope that’s clear.

Anymore questions in the room?

Hi Enrique [ph] from [indiscernible] Asset Management. Congrats on the results, two kinds of following questions from me, one is on the maturity profile, there’s a debt maturity in 2017. If you could give us some detail on what cash you have at the holdco level and how you plan to address that maturity and then the other question is, I see that your CapEx figures exclude, spectrum acquisitions if you could give us some color on what kind of expectations you have for that expense and how do you plan to fund those?

So, spectrum, we - it's fairly light for us this year, I mean I said in my presentation that it could be high next year depending on whether Colombia comes out with 4G with 700 spectrum or not. We don't know the answer to that at this point in time, and therefore spectrum is always a very difficult sort of calculation for us to forecast. And as to funding it, we feel that our balance sheet is very strong, you can actually see balance sheet in Colombia is very strong, the balance sheet in Guatemala is very strong, the balance sheet in all the markets where we need excessive, a strong so - you have no real concerns of our funding, it is about getting the right spectrum at the right prices at the right time. On spectrum, we think spectrum has a long-term asset that is exactly what it is, and we are laser-focused on our assessment of spectrum. We renovated our licenses in Bolivia and we acquired some spectrum in Paraguay as well as in Bolivia. But in certain other markets, we actually passed on 4G spectrum because the economics did not afford us with a good return and we believe that we were better off driving returns on our 16' 3G network for a long period of time. So we view it with the same level of capital discipline as we view M&A transactions, which is where you would expect us to do. Other maturities are not 17 maturities, Swedish bond, the Swedish kroner bond and we'll refinance that well ahead of maturity national fund.

It is Georgios Ierodiaconou from Citi. I have two questions please. The first one in Colombia, I believe during the midpoint of the year, one of your competitors reacted towards consistent loss of share. Do you think, as we move into 2016 and beyond I understand you are bound to do a bit better revenues than they have given at this current prices. But are you seeing some of the market share gains you've achieved in the past has been harder to deliver, especially without some metric MTR also eliminated overtime. And if that's the case, can you share with us, I know there are synergies with UNE and other integration benefits, but are there any other actions you are taking to improve the mobile profitability there? And then my second question is more around the balance sheet and maybe following on from the question that was just asked, at what level of payout ratio, do you feel comfortable medium-term in order to cover for their spectrum cost, maybe whether you may have to pay in Guatemala and any currency headwinds you may have to face in a normal year and I understand 50 versus excessive but obviously very normal years, there is some room for that?

Thank you. So, I'll take a little bit of a Colombia and perhaps a little bit of dividend and team will complement that. And it's no surprise to anyone, as you will face it that some of our competitors are driving pricing in Colombia and making that the mobile market growth difficult there. If that were to continue into 2016, we have prepared our budget and we have prepared our outlook with strong focus on the EBITDA growth and cash flow growth to be prepared for that situation. That is effectively what we are doing to address a situation that has been growing on for a little time. We also believe that some of the market anomalies will be corrected in the medium-term. We believe that the ability to give the consumer choice in terms of acquiring a contract with a mobile operator will be put back in the market again and as a result of that some financing will be put back in the hands of the consumer and we also believe that overtime pricing will be made nationwide in order to avoid anomalies in certain regions of the country. That's with regards to Colombia; we're pretty well positioned and pretty well braced for a tough year. And with regards to dividend as we looked into 2015, we basically looked at pretty strong cash flow, we looked at a pretty good position in terms of liquidity and we looked at a pretty strong outlook need into longer return for our business and those are three key conditions for us to recommend the dividend payout that board has now recommended or will recommend to the general assembly. We think those things will sustain in the future and we will address with that framework on decision-making in the future. Anything else Tim, add to that?

The only thing I covered it. Let's now take a question from the lines. Have we got any questions from the line?

Yes, thank you. We will take the first question from Bill Miller of JM Hartwell. Please go ahead.

Good afternoon. I'm curious to go back to cable for a second. Are you seeing the hope for benefits in the way as reduced churn and do you ever have a cable subscriber or a lot of churn in cable and does it also help you in your other assets like the mobile service, that's one. And two, is there a chance for roll up you just had cable and wireless to take on be sold to liberty. Is there a chance for a further role up by you either in cable or mobile or in expanding the geographic footprint of your business beyond your existing countries?

So, I'm going to try to go quickly here. Those are fantastic questions and we're a little tight on time here. Every subscriber that combines our fixed with our mobile subscriber while our mobile services immediately sees a reduction in churn i.e. part on partial of our strategy to provide a seamless connectivity. The benefits go beyond reduced churned for our subscribers that are either postpaid or prepaid on mobile that take up our cable which our definition has a much lower churn and a much larger stickiness. The benefits go beyond that, in markets, where we've launched DTH 70% of those subscribers have taken our DTH service because they can pay for it with our mobile Tigo cash application. So, there is actually a synergy between our mobile financial services, our cable business if you will and our mobile business, that's part and parcel of this strategy. On the role of opportunities, Bill we don't spend a lot of time thinking about those. But we spend a lot of time I mean the liberty question if you will we don't spend a lot of time into that one. But we spend a lot of time thinking about is the fact that we have organic EBITDA growth that we squarely believe is in the high single digits going forward for us were quite a bit of time because broadband penetrations both in fixed and in mobile sit below 40% in market we operate and postpaid to the penetrations sit below 40% in most of our markets and our industry structure allows us to capture that growth because we are the provider of mobile and the owners of the state-of-the-art fixing that work which we are improving and if you layer on top of that the ability with that fixed network to offer a B2B services to small offices and medium size businesses then our tremendous opportunities is on organic growth. And there are opportunities for geographic expansion that we could ourselves conduct into adjacent market. But we are squarely focused first on very disciplined capital allocation because into carried better economies of skill and because our organic growth is something that we can make us focus on. I hope that gives you a complete picture of what our focus lies on.

No, it's a wonderful answer and it sounds like a great opportunity. Thank you.

Thanks Bill. Can we take another question from the line?

We will now take Michel Morin with Morgan Stanley. Please go ahead.

Hi, everyone. I was wondering and if you could give us a bit more color on Guatemala and the relationship with your partner and specifically, if as part of your guidance and outlook for '16, what you are assuming in terms of dividends being up streamed from Guatemala and I don't know if you can give us any qualitative commentary around how the relationship with your partner is going and whether or not there is any risk to that dividend from Guatemala and whether or not you’re relying on that to fund your own dividend expectations? Thank you.

First, on the first part of the question and I appreciate and thank you very much because it’s not related to the investigation the question, so I'm happy to answer that. And I’ll let that team to address the second half of your question. Our relationship with Mario Lopez, our partner in Guatemala remains constructive. We have constructive and open dialogue that was there less than a month ago and we met for a long time and we talked helpfully about our business. And ever since we’ve been trading emails with regards to how do we best manage the business going forward. With regards to dividend…

I mean first thing to say is that our guidance is not related to the dividend, the internal dividends we get I mean our guidance is based on the group sort of revenue profile and the group EBITDA profile and incidentally that includes Guatemala and Honduras and that doesn’t change. In terms of dividend upstreaming I mean we’ve had full upstreaming of dividends as normal in 2015 and going into 2016 I think I said this to you and a few people before that Guatemala is becoming less important in terms of our internal cash flow. It will probably be no more than about 15% of our internal cash flow in 2016 as places like Colombia start to come on stream where it starts to provide sort of cash flow for us so it really doesn’t sort of factor into decision making on guidance or indeed our decision making on the group dividend. Those decisions are fashioned by our view of the outlook for the business in terms of office fundamental, a short term opportunity and as long term opportunity.

Great. Thank you very much.

Thanks Michel. Can we just take one more question on the line?

And we will take the next question from Jacob Stanford [ph] with JP Morgan. Please go ahead.

Hi. Thank you very much. I just had one quick follow-up on the question on dividend, what were your total amount of dividend that you received from upstream in 2015 and then my second question is the fall of DRC part of the broader change in the allocation of resources away from Africa towards Latin America. Thank you.

Let me quickly deal with the first question. We had upstream of round about $700 million in 2015.

What was the second question we couldn’t hear you properly over here.

Sorry, the second question was the fall of DRC part of a broader change in the allocation of resources away from Africa towards Latin America?

I think across our portfolio, we subject every one of our countries to a very strict view on how they participate in our portfolio allocation and capital allocation. So, we demand from every country to have an outlook so that provides us with the kind of return that we are looking for. In markets, where we are subscale indeed it’s easier to not have a long-term view of a fantastic return and that was precisely what we saw in DRC market, which we were sub scaling, despite a well-managed well run business and a market in which we could sell to a buyer with synergies. That’s what drove that decision and that kind of thinking is likely to inform our decisions going forward whether it’s Africa or Latin America, we do want to operate in industry structures in which we can foresee a healthy return capital going forward and that in telecoms so as you know very well typically requires a healthy market position.

Great. Thank you very much.

Thanks, Jacob. We’ve run out of time. I'm afraid I'd like to thank Chris from UBS for hosting it today and appreciate everyone turning up in the room and those as well in phone lines.

Good day.