Title

Presentation

Millicom International Cellular S.A. misses on earnings expectations. Reported EPS is $0.4477 EPS, expectations were $0.89.

Operator: Hello, everyone, and welcome to our First Quarter 2026 Results Call. This event is being recorded. Our speakers today will be our CEO, Marcelo Benitez and Bart Vanhaeren, CFO of the company. The slides for today’s presentations are available on our website, along with the earnings release and our financial statements. Now please turn to Slide 2 for the safe harbor disclosure. We will be making forward-looking statements, which involve risks and uncertainties, which could have a material impact on our results. On Slide 3, we define the non-IFRS metrics that we will be referencing throughout this presentation. and you can find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me now turn the call over to our CEO, Marcelo Benitez, Marcelo?

Marcelo Benitez: Thank you, Luca, and thank you, everyone, for joining our call today. We are off to a solid start in 2026, both operationally and from a financial perspective. From an operational standpoint, postpaid net additions amounted to $5.6 million, while home net adds amounted to $1.5 million. This significant increases reflect the relevance of the Colombia acquisition and the opportunity that lies ahead. Importantly, even excluding inorganic growth, postpaid net additions amounted to 250,000 and home net additions amounted to 46,000. This is a testament of the health of our underlying business and the strength of our customer value proposition. From the financial perspective, organic service revenue growth was a robust 4.9% year-over-year.

This not only represents a solid continuation of the momentum achieved in our seasonally strong fourth quarter in 2025, but also reinforces the expectation of our top line acceleration throughout 2026. The quarter ranks among 1 of the strongest growth performances in recent history. As a result, total service revenue for the quarter reached EUR 1.9 billion. This robust top line performance combined with our entirely focus on cost efficiency delivered expanding operating leverage. As a result, adjusted EBITDA in the quarter totaled EUR 857 million, representing a margin of 43.2%. This is a very solid outcome, particularly as it already reflects the impact of integration and restructuring charges related to the Coltel acquisition. Excluding Coltel the adjusted EBITDA margin would have reached 47.9%.

Our relentless focus on efficiencies, also improved equity free cash flow by EUR 48 million year-over-year, reaching a strong $225 million for the quarter. This is a robust entry point for the year, especially when considering that EFCF, excluding that transaction, would have increased EUR 90 million year-over-year. As we mentioned in our fourth quarter call, we acquired Telefonica Chile together with NJ, and we have started to apply the Millicom playbook in that market. During the quarter, we also took important steps to strengthen our position in Colombia. We completed the purchase of PM 50% ownership stake in Tigo Ole and Telefonica stake in Cantel. Since we acquired the majority ownership of Coltel at the beginning of the quarter, we are already fully consolidating Content’s performance in our results.

Importantly, we finalized the transaction and acquired the remaining stake in Coltel from La Nacion just 2 weeks ago. by unifying these operations, we are creating the resilience and the scale needed to move faster, invest more effectively and ensure that our infrastructure supports the long-term sustainable development of the country. I will come back to both Colombia and Chile later in the call. Now let’s turn to our mobile business performance on Slide #6. Our mobile business continued to perform very well in the quarter. Underlying customer growth was 4% year-on-year with postpaid customer increasing 25% and prepaid customers growth largely flat due to our pre-to-post migration efforts, seasonal effects and customer base cleanup initiatives.

Including acquisitions, reported growth was 38%, reflecting the addition of Coltel in Colombia. The customer base is steadily migrating to our postpaid, which now comprises roughly and 29% of our mobile customers, highlighting the substantial opportunity ahead to continue executing our pre-to-post migration strategy. In the center of this slide, you can see the progress we are making on set strategy. Today, almost 7 out of every temp postpaid sales are migration sales., ,an increase of over 10 percentage points year-on-year. This reflects the strong execution of our commercial teams and the attractive value proposition we are offering to our customers. Bringing all this together, mobile service revenue totaled $1.1 billion, including EUR 120 million contribution from 2 months of operation in Coltel.

Excluding inorganic growth, Mobile service revenue grew 7% or $63 million year-on-year. This represents a clear acceleration over previous quarter and shows that our commercial strategy continues to gain traction. Now let’s turn to our home business on Slide #7. Our efforts to provide the best network experience and higher speeds continues to resonate with customers. Our home customer base expanded 4.6% organically year-on-year, reaching 4.2 million customers. This growth was mostly driven by broad only customers, which increased 5% year-on-year. Here, too, the recent Coltel acquisition meaningfully increases our customer base, adding 1.5 million customers, reaching a total of 5.7 million customers. More importantly, the fixed networks are highly complementary.

Tigo is comparatively stronger margin, whereas Coltel is more dominant in Bogota. We have also made significant progress in fixed mobile convergence. Almost 36% of our customer base now have both fixed and at least 1 mobile line with us. This is important for 2 reasons: First, it shows that our convergent offer is compelling for customers. And second, it materially improves the customer lifetime value. As churn for convergent customers is almost 50% lower than for nonconvergent customers. We are very pleased with this progress, and we will continue working to expand our convergent customer base. As a result, Home service revenues continued its recovery trend, reaching EUR 374 million, flat year-on-year on an organic basis. We remain committed to building the right foundation to return this business to positive revenue growth in the near future.

Now let’s turn to B2B on Slide #8. Our B2B business continues to play an important role in our growth strategy. Digital service revenue, which increased almost 19% year-over-year continues to be a key growth driver, supporting mainly by strong demand for cybersecurity and cloud solutions. Both of these categories grew more than 20% year-over-year, reflecting the continued need from businesses and governments for a secure, reliable and scalable digital infrastructure. At the same time, total B2B revenue reached $306 million for the quarter, excluding Coltel. Growth was driven primarily by the entrepreneur customer segment, where the customer base increased more than 13% year-over-year. This expansion reflects the strength of our convergent fixed mobile offering, which provides small businesses with a simple, reliable and convenient connectivity solution.

Importantly, customer loyalty remains high, supported by the quality of our network, the value of our plans and the improvement that we have made in our customer service channels. Overall, B2B remains a strong platform for growth. Next, I would like to discuss our operation in Guatemala. Guatemala continues to deliver strong results. our pre-to-post conversion strategy remains an important driver for growth. Postpaid customer growth was 20% year-on-year, reaching 1.5 million customers at quarter end. Thanks to our targeted sales offers, we continue to make progress on pre to post migration. More than 85% of our new sales in postpay are coming from our existing prepaid base. This strategy improves ARPU per customer and materially enhanced customer lifetime value.

All in all, Guatemala remains a strong market for us, with mobile revenues expanding 6.6% year-on-year, reaching EUR 288 million for the quarter. Let’s now turn to Slide 10 to review our performance in Colombia. We are very pleased with the organic performance in Colombia. Postpaid customers increased almost 9% year-on-year. This combined with our streamlined commercial offering and are simple, easy to understand more from our pricing strategy allowed us to increase mobile ARPU 4.4% year-over-year. Importantly, with the Coltel acquisition, we increased by 42% or prepaid base. This creates a meaningful opportunity to apply our pre to post migration strategy, which increased 15 percentage points over the last 12 months to a much larger customer base.

Home also continues on the positive trend we have now been seeing for several quarters. Organic customer growth reached 8.3% year-on-year, bringing Tigo One base to 1.7 million customers. We also delivered improvements in fixed mobile penetration which reached 37.1% at the quarter end as our most recent commercial efforts continue to resonate with customers. We are very pleased with this addition of Coltel’s fiber network to our portfolio, which added another 1.5 million customers to our client base, which reached $3.2 million. We are particularly excited about this addition because of the complementary nature of the network. As I mentioned in my opening remarks, it has strengthened our position in key urban areas and create significant opportunities for convergence, cross-selling a more efficient network investment.

I would now like to discuss our vision for the integration in Colombia and the potential we see in the market. Since obtaining operational control, we have been working with urgency and discipline to ensure a smooth transition and rapid turnaround. Our integration plan is based on 3 key pillars. The first pillar is a reset of our cost base, and this includes a rigorous cash management a supplier payment program, debt renegotiation and liability management to align with the overall Millicom capital structure. As part of our OpEx efficiency program, we have identified more than $100 million in expected savings to be achieved in year 1. These opportunities include contract renegotiation, company rightsizing and sponsorship rationalization. The second pillar is network improvement.

We are moving on 2 strategic fronts: First, we are improving the quality of our network planning to increase 4x our 5G coverage in 2026 and to add more than 1,000 new sites during the next 24 months. Second, we are focused to efficiently improve our network operating model. The objective here is to reduce complexity, improve execution and create a more efficient and scalable platform. The third pillar is commercial uplift. This includes simplification of commercial offers with a clear focus on profitability, accelerating pre to post migration and supporting ARPU improvement. It also includes increasing cross-sell opportunities across complementary fixed networks, which should help us drive high fixed mobile convergence. We have defined near milestones together with the team in Colombia, and we are already seeing encouraging early results.

We are excited about the road ahead in Colombia. We believe this transaction gives us the scale network asset and customer base needed to create a stronger, more sustainable business in 1 of our most important markets. But this is not just hearing. We have already put this approach in play in Ecuador and Uruguay and are seeing great results. On Slide 12, you can see the tangible results of applying the Millicom playbook in Ecuador and Uruguay. We are pleased with the progress we have made in both countries in a short period of time. Adjusted EBITDA expanded meaningfully, reflecting the disciplined execution of our efficiency program. Importantly, both Ecuador and Uruguay are already operating above or in line with the milligram average adjusted EBITDA margin.

In practical terms, this means these businesses have quickly moved into what we would consider business as usual performance within our operating model. We also saw a material uplift in equity free cash flow in both countries. In Ecuador specifically, the improvement was offset by a $70 million payment related to spectrum in 700 megahertz and 3.5 gigahertz bands, which supports the long-term quality and capacity of our network and comes up for renewal in 2038. Overall, the results achieved so far are encouraging. At the same time, we continue to fine-tune our operations in both markets with a clear focus on driving sustainable margin expansion and stronger cash flow generation over time. Before turning the call over to Bart, I want to spend a moment updating you on our operations in Chile.

As you will recall, we acquired Telefonica operations in Chile jointly with NGJ on February 10. Since then, we have moved quickly. We appointed a new general manager, a new CFO and a new CTO. Within the first 2 weeks, the new leadership team began applying the Millicom playbook. This includes a significant organization restructuring with an approximately 30% head count reduction. We also took initial steps to improve the capital structure including $85 million debt reduction, which lowered leverage by approximately 0.4x. We launched our mobile network enhancement plan by optimizing the frequency layers delivering rapid improvements in coverage and service quality. Importantly, we have also identified key regional white spaces, and we are committed to increasing our physical retail presence in those areas.

Taken together, we are already seeing promising results from our turnaround plan. In the first 2 months, the business generated positive equity free cash flow before restructuring charges. We are, therefore, optimistic that Chile will meet its full year target of being neutral to equity free cash flow. With that, let me turn the call over to Bart, who will walk you through our financial performance.

Bart Vanhaeren: Thank you, Marcelo. Before we dive into the numbers, just a heads up that this quarter is a bit more complex to read, given the multiple acquisitions we’ve completed over the past 6 months. So please bear with me as I walk you through the results. With that out of the way, let’s now look at our financial performance for the quarter. Service revenue increased 45% year-on-year to nearly $1.9 billion, benefiting from the consolidation of 2 months of operations of Coltel and our acquisitions in Ecuador and Uruguay as well as the year-on-year increase across our business lines. Let me split this out for you. Coltel contributed approximately $243 million to service revenue in the quarter, as shown on this slide. Excluding this inorganic contribution, service revenue would have increased 4.9% year-on-year.

As a reminder, we are including Ecuador and Uruguay in both periods for purposes of organic growth. If we would exclude all M&A that we did including the MFS business of Paraguay that is now recorded as an asset held for sale, that parameter grew a staggering 13%, continuing the trend we saw last year. Reported adjusted EBITDA reached $857 million for the quarter, increasing 35.5% year-on-year with Cortel contributing $33 million. Organic adjusted EBITDA growth was 9.6%. All that translates to an adjusted EBITDA margin of 43.2%, a robust result particularly given that we incurred nearly $70 million in restructuring charges during the quarter, most of which related to a voluntary lease plan in Colombia. Excluding Coltel, adjusted EBITDA margin would have reached 47.9%.

We are very pleased with the performance across the region, thanks to our focus on sustainable margin improvement across all our business units and all our countries. But also here, benefiting from FX tailwinds. Equity free cash flow hits a new Millicom first quarter record of EUR 225 million. And remember, 2 years ago, when I had to report to you the first positive Q1 of Millicom with just EUR 1 million. And actually, that included some M&A. As we look at the year-on-year increase and exclude last year’s onetime asset sale proceeds, equity free cash flow increased by 66% or $90 million. This is a strong result, particularly given the increase in lease obligation following our infrastructure sales and incremental spectrum payments during the quarter, notably in Ecuador.

Let’s now review our performance country by country on Slide 16. Starting with Guatemala, service revenue reached EUR 370 million, increasing 5.5% year-on-year. Growth was mainly driven by our pre to postpaid conversion strategy, together with the price increase implemented in February and March which supported the ARPU improvement that Marcelo mentioned earlier. In Colombia, service revenue reached EUR 653 million with Coltel contributing approximately EUR 243 million, as mentioned earlier. Adjusting for this inorganic contribution, service revenue increased 8.4% year-on-year. Growth was driven by price increases in our B2C and home businesses as well as cybersecurity services provided to the government, which Marcelo discussed earlier. In Panama, service revenue was flat year-on-year at EUR 172 million for the quarter.

Growth was slower than expected, but we remain optimistic that the top line momentum will improve. In Paraguay, service revenue increased a robust 4.9% year-on-year to EUR 158 million. As mentioned before, our Paraguay and MFS business is now recorded as an asset held for sale and excluded from both reporting periods. Next, I would like to review Ecuador for the first time since our acquisition of Telefonica’s operations in the fourth quarter of 2025. Please note that we are providing 2025 results as a reference point only. Service revenue reached EUR 110 million, increasing about 1% compared to last year. We have reverted last year’s negative revenue trend under former ownership and are convinced that our disciplined approach positions the business for more sustainable and higher growth over the medium term.

Service revenue in our other markets, which now comprises an Salvador, Nicaragua, Costa Rica, Bolivia and Uruguay increased 4.8% to EUR 402 million. This was mainly due to robust top line growth in Nicaragua and Uruguay. Let’s now move to our adjusted EBITDA performance. In Guatemala, adjusted EBITDA increased 6% year-on-year to EUR 237 million, implying strong adjusted EBITDA margin of 55.4%. This was driven by service revenue expansion and continuous operating leverage. For Colombia, adjusted EBITDA reached EUR 205 million, with Coltel contributing EUR 33 million for the 2 months under our ownership. Adjusted EBITDA margin was 30%, which includes $65 million of restructuring charges. When excluding Coltel, Colombia grew adjusted EBITDA 13.7%, reaching an adjusted EBITDA margin of 41%.

Allow me a little side step here. Despite it being early days, we feel very positive about our turnaround of Coltel. As I mentioned last quarter, prior to the acquisition, we were thinking of Coltel as a risk factor and we’re taking into consideration a possible negative equity free cash flow. But at this stage, we believe it will be already a net contributor, fully offsetting the aforementioned restructuring charges as well as the acquisition financing costs. In Panama, adjusted EBITDA declined slightly to $91 million, with an adjusted EBITDA margin of 50.7%. And — turning to Paraguay. Adjusted EBITDA increased 15% year-on-year to $92 million, delivering a record adjusted EBITDA margin of 56.3%. This growth came from the team’s continued focus on operational efficiencies, some phasing and others.

So well-deserved congratulations to our Paraguayan General Manager, Roberto, and our newly internally promoted CFO floor. Besides this stellar performance, we also benefited from FX in Paraguay, increasing the year-on-year growth of reported adjusted EBITDA to almost 39%. Turning to Ecuador, we are pleased with the initial performance. Our priority has been to stabilize the operation and expand margins sustainably. Adjusted EBITDA totaled EUR 56 million in the quarter, corresponding to an adjusted EBITDA margin of 48.3%, in line with what I signaled to you already during our Q4 call. This represents a margin uplift of about 13% compared with Ecuador’s reported profitability for 2025. I’m intentionally referring to a full year number here because last year, under former ownership Ecuador had an exceptionally high margin from one-offs in the first quarter.

So here as well, I would like to congratulate our General Manager, Bobby, and our initial CFO, Paul, leading the integration, who has now been succeeded by an internally promoted CFO, Fernando. Congratulations. We are encouraged by the results achieved and continue to fine-tune the operation to deliver meaningful and sustainable margin expansion over the coming quarters. Just to manage expectations, later in the year, we will be rebranding — so there will be some margin effects during the time for one-off marketing expenses. Adjusted EBITDA in our other markets reached $202 million, increasing 11.4% year-on-year with an adjusted EBITDA margin of 47.7%. These robust results were particularly driven by Bolivia, where continued cost focus and more stable FX supported margin expansion.

Before discussing equity free cash flow, I also want to echo Marcelo’s comments on Chile. We are pleased with the initial results from our joint operation with NJJ. The Chilean business generated approximately $200 million of revenues in the first 2 months of ownership and delivered positive equity free cash flow. This is a tremendous result for an operation which was losing $500,000 per day when we were handed the keys. I initially said we were looking at Chile as a calculated bet entering the market with a low chip purchase option. We now see the operation delivering positive equity free cash flow already in year 1, despite the turnaround costs like severance and significant investments into the network as well as the retail footprint. This is a good start, and we believe the business is moving in the right direction.

Let’s now turn to Slide 18 to walk through equity free cash flow for the quarter. As we have already discussed, adjusted EBITDA for the quarter was $857 million, up $221 million year-on-year despite the restructuring charges in Coltel. Cash CapEx was $221 million up EUR 107 million year-on-year. This was mainly due to the EUR 42 million onetime impact related to last year’s Lattice sale in Nicaragua, which was accounted as negative CapEx considering an asset sale and increased CapEx execution in Colombia and Bolivia as well as incremental CapEx related to our inorganic growth projects. A nice way of saying we are investing in the networks of the acquired businesses. Spectrum paid was $99 million, increasing $63 million year-on-year. This increase was mainly related to $70 million of spectrum payments in Ecuador as Marcelo already mentioned.

Changes in working capital and other was negative $27 million for the quarter. This is coming in the first quarter when working capital is usually a drag on cash flow due to the timing of certain payments, fees, licenses and employee bonuses. That said, working capital improved by $49 million year-on-year, mostly due to payments phasing and improved collections. Taxes paid were $53 million representing a year-on-year reduction of $13 million. This was mainly because prior year taxes were elevated by one-off incremental taxes on gains from infrastructure since Finance charges were $126 million, increasing $19 million year-on-year, mainly due to incremental charges related to acquisition financing. Lease payments increased $58 million year-on-year to $140 million, consistent with last year’s tower sale, which added approximately $22 million as well as our inorganic growth, which contributed another $36 million at least.

Endures repatriation was $34 million for the quarter, improving $11 million year-on-year. As a result of these factors, equity free cash flow was a record $225 million for the first quarter of Millicom. Let me now briefly walk you through our net debt bridge on Slide 19. As just discussed, equity free cash flow was $225 million for the quarter. The opening balance sheet of cartel added approximately $1.5 billion of net debt, increasing leverage a $0.6 million. In addition, we had an increase of leverage of 0.3x related to acquisitions for about $773 million. This included the purchase of EPM’s equity stake in Tigo the acquisition of 2/3 of equity in cartel held by Telefonica and EUR 25 million from the joint acquisition of Telefonica Chile in partnership with NGJ.

We also paid $125 million in regular dividends to our shareholders during the quarter, which also added approximately 0.05x leverage. Finally, derivatives, FX and other impacts increased net debt by $67 million, mostly related to the appreciation of local currency denominated debt. Yes, FX tailwinds benefit your P&L, but it also has a negative effect on the value of local currency-denominated debt. Putting it all together, net debt for the quarter was $7.6 billion, with a total leverage of 2.76x, which is in line with the expectations we communicated on our last earnings call. We might see leverage creeping up a little bit more in Q2 due to the remaining acquisition of Coltel equity held by Lanacion, a transaction that is now closed as well as extraordinary dividends paid in April.

We remain confident that this leverage will come down again and get around 2.5x by year-end. With that, let’s now discuss our financial targets for 2026. In summary, our financial objectives for the year have not changed. We continue to target equity free cash flow of at least $900 million and leverage of around 2.5x by year-end. Regarding equity free cash flow, I mentioned this before. I would want to point out that when we introduced our 2026 guidance in our fourth quarter 2025 call, we had only recently acquired the controlling stake in Coltel — at the time — our initial assumption was that Coltel would be broadly neutral to equity free cash flow in 2026, possibly even negative due to integration costs. Since then, we’ve begun implementing our playbook and see the turnaround happening.

We are now cautiously optimistic that Cortel will be a net contributor, fully offsetting integration costs and acquisition financing charges. In addition, we are more constructive on foreign exchange assumptions for the remainder of the year and now have greater clarity around the debt associated with our recent acquisitions. All of this gives us added confidence in our 2026 targets. While we are not updating guidance today, we expect to be in a much better position to do so on our Q2 earnings call. following the completion of our integration and portfolio optimization work. Until then, we remain focused on disciplined execution and margin expansion. We will now begin the Q&A session.

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Operator: [Operator Instructions]Our first question of the day comes from Marcelo Santos, JPMorgan.

Marcelo Santos: I have 2. The first is regarding the near-term sustainability of Coltel margins. I mean, if we add back the nonrecurring expenses that you had in the quarter, we calculate around 37%, which is just close to Tigo Colombia levels at the start. So is this something recurring in the next couple of quarters? Or was there something that we need to take into consideration? That’s the first. And the second also on margins, I mean, Paraguay margins were ahead of Guatemala. Just wanted to see if also this is kind of a sustainable level. So 2 questions on sustainability of margins.

Marcelo Benitez: Marcelo. Thanks for your question. On the first 1 on Colombia, we are — as we said in the call, we are very optimistic about the early results on the integration. What we see happening is the combined company is growing the top line at the level of 8%. We see that as something sustainable during the year. Second, we are somehow offsetting the integration cost with savings, so we do believe that, that will bring us positive margins for the full year in ’26. It will be around the same the same levels that we had in the ore, including the restructuring cost. So very positive on Colombia and on our ability to sustain margins for the year to go. In Paraguay, we it is very — we are very competitive here, Marcelo.

So we are very happy that Guatemala is receiving some competition from another country. Yes. It is extraordinary what the Paraguayan team is doing in terms of keeping the cost under control despite the fact that we are growing the top line. Having said that, this also has to do with some one-offs. So we do expect more or less an uplift compared to last year in terms of margins in Paraguay, but it’s not going to be at 56%. It might be more or less between 50% and 56%. So that will be the range expected.

Marcelo Santos: Just a follow-up on the first question. When you say full year ’26 for Colombia, same levels as Tigo One, which period of Tigo One just to be 100% clear?

Marcelo Benitez: 25%.

Marcelo Santos: Okay, 25 .

Operator: Our next question will come from Gustavo Farias from UBS.

Gustavo Farias: 2 on my end. The first one, I believe in the last conference call, you commented about hotel restructuring cost is in the triple digits millions of dollars for the year. And Q1 came in at $65 million. So if you could elaborate on if there’s anything left what’s your updated view on this line. The second one on capital allocation. How could we think about the path of deleveraging going forward? And also, if you could update us on your current appetite, if any, for further inorganic moves?

Marcelo Benitez: I will take the first question. And I will pass to Bart for the second, and maybe you want to take the third — that’s just because that’s the preferred topic of our CFO. So the first question, what’s remaining? I mean, we did $65 million, as we said in the first quarter. We do believe that we do have still some restructuring costs of around $100 million for a year to go, but that will be offset by a lot of savings that we are doing as the first phase of our integration plan, that is the reset phase. So all in all, we do believe that Coltel is going to be a positive — will have a positive effect in the EFCF, as Bart said, for the full year.

Bart Vanhaeren: Yes. On the capital allocation and the debt, let me start with the debt. So you’ve seen our current leverage rates. If you think about Q2 we have the acquisition of La Nacion stake that a transaction that we announced and was closed. So we now fully own all of the different assets in Colombia. So that’s adding to leverage because there’s no incremental consolidated EBITDA, right? We’re already taking that. Additionally, there is the exceptional dividend. So that was paid in April. So Q2 might creep up a little bit just on the back of those 2 elements. And then we are still very confident that we will land around 2.5 at the end of the year. In your modeling, you might think about besides the very strong equity free cash flow that we have signaled.

You might as well think about the currency impact — we have dedollarized a lot of our costs. So whatever happens here to go, either we’re going to have more equity free cash flow and EBITDA uplift from stronger currencies or we’re going to have less debt from weaker currencies. So somewhere, this is going to — we feel we’re in a very good position at this moment in time. In terms of capital allocation, you may have seen the convenience notice for the AGM, so it’s a shareholder decision. Ultimately, what we recommended to the Board and to the AGM is that would keep our dividend policy at $3 per share until we reach that $2.5. We explicitly mentioned an approval to be able to incremental dividends in case we come below the $2.5. And we also typically ask for 10% of equity in terms of share buyback as a general policy within Millicom.

So without doing any forward-looking statements, we do open the flexibility to do additional shareholder remuneration either in the form of dividends or in share buybacks by the end of the year, depending on how the leverage is trending — in terms of inorganic growth, you heard me saying this every quarter that the focus is on execution. And I hope that we demonstrated that execution. In Q4, we had Ecuador and Uruguay that we said, yes, we’re already in run rate. We are ready in business as usual. Coltel in Chile are a little bit bigger. As you know, we go very deep into our analysis, if you analyze, I don’t know, 1,000 towers in Uruguay, it’s 10,000 towers in Colombia. So it’s just the magnitude of the asset. But we also said we’re very confident we see the transformation happening.

And we’re seeing assets being net contributors in equity free cash flow. So that’s, by far, our first priority and things seem to be on track. I’m not going to dive too deep into additional M&A. The menu of M&A remains the same. And I think in Q4, I mentioned as attractive markets, just from a menu perspective, Peru and Venezuela, which remain good targets to look at. But again, the priority should be on the execution.

Marcelo Benitez: And if I can add to that, Gustavo, the playbook we have we do believe it is very well suited to companies like to the recent acquisitions in Eguador, Uruguay, Chile and also in the verge of Colombia. The speed of execution of this playbook is accelerating. We are getting better and better. And at the same time, we are preparing the bench for any new targets, any new opportunities that may come in the future.

Operator: Our next question comes from Gabriel [indiscernible] from Morgan Stanley.

Unknown Analyst: Just wanted to ask on equity free cash flow. Your target is unchanged for the year, but you’ve been mentioning that things are running maybe a little bit better than your expectation in Colombia and Chile. So anything that you can share on our outlook for equity free cash flow on top of the guidance?

Bart Vanhaeren: So for our guidance, I always say in our industry, we make the year in Q4 and Q1 and you get risks in Q2 and Q3. So I just believe it’s too early to do any updates to the guidance as well as we’re going to start now our forecast 1 efforts — so we’ll be in a good position at the end of Q2. So with that caveat out of the way, I do believe we have a very strong start of the year. Last year, we had a number of one-offs — in our numbers, both positive and negative. Remember, we are slightly above $900, excluding LAD, let’s say, $865 million equity free cash flow — and then we have, in that number, a number of one-offs like the DOJ settlement, like restructuring charges and weaker currencies. So all those are going very well for us this year.

Currencies will be very particularly strong. One-offs seem to be covered by equity free cash flow generated by the acquired assets. And so, while we saw more risk factors at the beginning of the year, things seem to be much more constructive. So very good start of the year. We just believe it’s too early in the year to adjust guidance.

Marcelo Benitez: 2 additional comments to what Bart just said. #1 is we’re having strong tailwinds on currency. That is very difficult for us to predict, but it’s somehow unprecedented the level of appreciation of the Colombian pesos and the Paraguay and Guaranies. The Bolivian pesos, it is very still volatile. So that’s #1. #2 is bear in mind that we have been operating Hotel as a separated entity until end of April. So we are really just 1 company from the first week of May. So we are still learning or — what is the real potential to execute our playbook this year? And what will be the effect on the numbers. So as Bart said, during Q2, we are going to feel much more comfortable to predict what’s going to come for the year to go.

Operator: Thank you, Gabriel. Our next question comes from [ Tatiana ] from HSBC.

Unknown Analyst: The first 1 is regarding Colombia. If — I mean, I want to pick up on comment that the revenue growth is going to be — continue to be strong. Is that for the Tigo asset? Or is that for the coal tar asset also? And what is driving the growth in Colombia at this point of time in terms of revenues? The second one is regarding your CapEx outlook. Like how do you see that now that you have all the assets integrated? How do you see the CapEx outlook for the year and maybe in future years going forward?

Marcelo Benitez: Yes, Phani, I would take the revenue question and the CapEx question, maybe, and you can complement the rest, Mark. So the growth is — the top line growth is coming from from the 3 business units. I mean mobile is growing very strong. You saw that 8 out of 10 new postpaid customers are coming from our prepaid base. Why is that working so well is because we are profiling better and better our prepaid base, and we are defining the sweet spot on how much ARPU and allowance each customer needs. Additionally to that, so we are not forcing them to pay something they cannot afford or to buy something they will not use. Additionally to that, we are doing it very simple. I mean it’s very simple to migrate from pre to post.

It’s literally 2 clicks, right? One is to accept the offer. Second, you just need to put your name and your data information. Everything is electronic, no bills, et cetera. So that is creating a momentum and that same model we’re going to apply to the Coltel prepaid base. The Coltel prepaid is adding 50% more prepaid customers. So as you can imagine, the runway — I mean, the opportunity has expanded for us to implement our playbook. Second, in home we do believe that we can accelerate our FMC penetration because of the volume that Coltel is adding in home that is more or less the same volume we have in our existing base in Diego. So that’s also a second factor that’s going to drive growth for the future. And #3, B2B is growing very well in both companies, on the Coltel side has to do with large corporations and Indio has to do with small.

So it’s totally complementary. We are going to apply the corporate model from Coltel to Tigo or let’s say, we will merge — and we are going to accelerate the small segment growth. So the 8% that we are estimating is coming from different sources and very well, I would say, balanced. On CapEx, we are investing more in Colombia. We do believe that to compete with the main competitor with Claro there, we do need to strengthen our network. This year, we’re going to expand our 5G coverage 4 times, so we’re going to have 4x coverage of 5G, and we are going to launch or install develop, deploy 1,000 sites in the next 18 to 24 months. That additional investment will not change the total envelope because what we are doing is we are refocusing the investment into what we believe is a network we need to compete in Colombia.

Bart Vanhaeren: Yes. As it comes to CapEx, I think you can more or less apply the same CapEx percentage we had last year to the new revenue forecasted for this year. So now we get into the $1 billion territory for the total CapEx wallet. I hate that KPI, as you know, but this is how it’s going to land more or less we believe.

Unknown Analyst: Perfect. So just 1 — 1 maybe follow-up on the Colombia thing. So you see a lot of revenue synergies because of the complementary structures that how simple you can put that? Like you can see a lot more in is going forward?

Bart Vanhaeren: Yes, the synergies from the combined comes as well from less churn, et cetera. So you get the growth portion of that, but you also have how the operational leverage and ultimately the equity free cash flow will benefit from that.

Operator: Our next question comes from Andreas Joelsson from DNB.

Andreas Joelsson: Hello, everyone. Just 1 question from my side. I would like to dwell a little bit more into exact you for at least discuss a little bit what you have done in Ecuador and Uruguay to expand the margin as much as you have done and that quickly, if you can walk us through what you have done.

Marcelo Benitez: Thank you, Andreas. The first phase of our playbook and is the same playbook we applied 2.5 years ago in all the existing operations at that time is to reset all costs. And we do define a specific strategy or framework of investment. So for example, we don’t believe that sponsorships are more important than stores. right? So we focus on investing in stores, less sponsorship. We do review each and every purchase orders for not only Ecuador and Uruguay, but for all the other operations. So it’s more or less like a 0-based cost operation. So you’re always challenging the inertia. So when you are so focused on each and every spend also OpEx and CapEx, and then you start receiving very, very early results of practical savings because we are focusing on just 3 things: the network, the capillarity, the channels and our offers.

And everything else is a distraction. So basically, we put all the money where we do believe are the drivers for growth and all the rest — it’s not — it’s just eliminated from the equation. On the other hand, we simplified our operating structure. That’s why we do the organization resizing, and that simplifies the way we operate and makes it easy to implement all these efficiency programs. So additionally to that, I would say that there are other 2 factors. And it’s — we do have a very good negotiation framework with big suppliers and payment terms with big suppliers. That is something that we implemented in the existing perimeter, and we expanded to Ecuador and Uruguay. We do believe that the current EBITDA margin levels in Uruguay are sustainable.

And this is just the first phase of our playbook, then comes a second phase that has to do with top line growth contribution. We’re not there yet in Ecuador and Uruguay since we are investing in the network, and we’re preparing our commercial — our new commercial setup. In the case of Ecuador, it’s going to be a little bit less because we are planning to launch the Tigo brand at the end of the year, and that will come with additional commercial expenses. So that will come a little bit down of what we have today.

Andreas Joelsson: And just a follow-up on your comment on Colombia and cost savings. You mentioned $100 million. I assume that is because it would offset the severance?

Bart Vanhaeren: Yes.

Andreas Joelsson: Perfect. So I don’t get mixed up in frac.

Bart Vanhaeren: Both are in dollars Andreas.

Operator: Thank you, Andreas. This was our final question and concludes our question-and-answer session for today. Thank you very much for connecting everyone, and see you in our next earnings call in August. Thank you.

Marcelo Benitez: Thank you.

Bart Vanhaeren: Thank you.

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