Connected
with Purpose
2020 Millicom Annual Report
We would like to take this opportunity to
honor our colleagues lost to the pandemic over
the past year. Our memories and empathy for
their families overrides all the gratitude and
contribution they gave to Millicom and their
colleagues. You and your families will always
be a part of the Tigo family.
CONNECTED WITH PURPOSE
Connectivity is essential to all
in society. Through connections,
we help bring hope—especially
during times of crisis.
Although the hardships of an unprecedented global
pandemic tested our resilience as a company in 2020,
it also reinforced our deep commitment to Millicom’s
purpose:
To build the digital highways that connect people,
improve lives and develop our communities.
More than at any other time in Millicom’s 30-year history,
in 2020 our customers relied on us to keep them digitally
connected while they were forced to be physically apart.
We rose to this challenge with unity, integrity, caring
and a willingness to give 1,000%—the hallmarks of our
Sangre Tigo culture.
We are proud to create essential connections that
equip people to thrive in the digital economy and that
empower businesses to tap new opportunities. Our
products and services are integral to 21st century work,
education, social interaction and quality of life for
millions of people in the countries where we operate.
We catalyze productive, sustainable economic growth
and bridge capital to developing markets. We create an
environment in which our employees can reach their full
potential and we lead by example through our ethical
business practices. Learn more about our Leadership,
including our Board and Executive Team in our website
and in Our Governance section starting on page 61.
Millicom is headquartered in Luxembourg with a U.S.
corporate office in Miami. Through our Tigo and Tigo
BusinessTM brands, we provide a wide range of digital
services, including high-speed data, cable TV, voice and
SMS, Mobile Financial Services and business solutions.
We serve customers in nine Latin American markets—
Bolivia, Colombia, Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, Panama and Paraguay—as well
as in Tanzania.
1
Millicom 2020 Annual Report About This Report
Our fifth integrated annual report
combines our corporate responsibility
(CR) and financial reports to provide
all our stakeholders with a clear and
comprehensive overview of our business
and activities in 2020. The report conveys
our progress against our business
strategy. It also identifies and quantifies
the ways in which our practices and
programs under our CR Framework deliver
business value, transform communities
and protect our environment as
contemplated under the UN Sustainable
Development Goals.
In 2020 we conducted a materiality
assessment to determine whether and
how COVID-19 affected stakeholder
views on our corporate responsibility
programs. We also conducted a
gap analysis against investor-based
frameworks, including the Task Force
for Climate-related Financial Disclosures
(TCFD), and investor rating agency
questions. These efforts informed the
content of this report. We will continue
to incorporate findings from these
assessments in future reports and to
seek feedback from investors, customers,
employees and community leaders
to inform our corporate responsibility
efforts. Learn more about our CR
reporting approach here.
Note: Our Latin America (Latam)
segment includes our Honduras and
Guatemala joint ventures as if they
were fully consolidated, as this reflects
the way our management reviews and
uses internally reported information to
make decisions about operating matters.
We also report in this way to provide
increased transparency to investors on
those operations.
What’s Inside
this Report
Overview
3
Chairman’s Message
4
6
7
Chief Executive
Officer’s Message
Our Year in Numbers
Our Market Leadership
8 Our Purpose:
Why We Connect
9 Our Key Stakeholders
10 Opportunities, Challenges and
Uncertainties in Our Markets
11 Tigo Heroes
61 Governance and
Business Ethics
62 Chairman’s Report
63 Corporate Governance Framework
63 Shareholders and
Shareholders' Meeting
66 Board of Directors and
Board Committees
68 Board Profile: Skills and Experience
71 Board Program
73 Board Committees
74 I. Audit Committee
80 II. Compliance and
Business Conduct Committee
82 III. Compensation Committee:
Remuneration Report
98 Millicom CEO and Executive Team
105 Directors’ Financial and
Operating Report
106 Management Responsibility
Statement
12 Our Business Strategy:
What We Connect
13 Chief Financial Officer’s
Message
15 Segment Performance
19 Advancing Our
Business Strategy
107 Disclaimers
108 Forward-Looking Statements
109 Non-IFRS Measures
111 Non-IFRS Reconciliations
22 Our Approach:
How We Connect
23 Supporting Our People
28 Our Corporate Responsibility
28 Our CR Framework
35 Our CR Fundamentals
35 Environment
37 Protecting Human Rights
38 Supply Chain
39 Compliance and Business Ethics
40 Risk Management
41 Evolution of Risk in 2020
47 CR Performance Tables
59 Assurance Letter
118 Financial Statements
Corporate Information
Millicom 2020 A nnu a l Rep or t
2
YEARS
BUILDING
OUR FUTURE
Chairman’s Message
Amid the profound upheaval of 2020, Millicom’s
fundamental purpose never wavered. We began our
30th year as a company with utmost confidence in our
business strategy. We ended the year more certain than
ever of the essential and life-changing role that our
digital highways play in connecting people, improving
lives and developing communities.
Along with our entire Board, I have always valued how
Millicom employees rise to meet every challenge and
opportunity. We thank them for taking that dedication
to new heights this past year as they adapted to
the challenges of a global pandemic and delivered
uninterrupted service for Millicom customers when they
needed us the most.
Throughout 2020, our company responded to the
economic impacts and operational setbacks from
COVID-19 with strong governance and oversight.
The Board approved difficult but necessary financial
decisions to maintain operating cash flow, preserve
jobs and maintain 24/7 connectivity for customers.
Measures such as canceling our shareholder
remuneration for the year and reducing capital
expenditures have strengthened our financial position
and allowed Millicom to bounce back quickly as market
conditions improved.
The Board also worked closely with Millicom’s
Senior Leadership Team and the Risk Management
organization to assess how the consequences from
COVID-19 have influenced Millicom’s overall risk profile.
We made tactical adjustments as needed, but the core
elements of our business strategy remained essentially
unchanged in 2020. More details about Millicom’s
approach to risk can be found starting on page 40 of
this year’s report.
The foundational values of integrity, transparency and
accountability drive long-term success for our company
as well as for the countries where we operate and
the communities we serve. We reinforced Millicom’s
commitment to doing business in the right way during
2020 through our Governance structure and Business
Ethics and Compliance program, which enable us to
balance the risks inherent in our emerging markets with
the considerable opportunities that exist there. In order to
become even more transparent for our shareholders, we
have changed how we report on executive compensation.
2020 brought severe economic hardships that threatened
to further widen disparities in access to education,
healthcare, employment and other stepping stones
to a prosperous life in our markets. Our corporate
responsibility initiatives reached even deeper and went
further to help bridge these gaps. Millicom provided direct
support to government and nonprofit organizational
relief efforts during the pandemic, in addition to the
substantial assistance given to the many customers
who experienced financial adversity during the year.
Finally, we reinforced our commitment to reducing the
environmental impact of Millicom’s operations, upholding
human rights and protecting our customers’ privacy.
These and many other accomplishments in 2020 connect
directly to the passionate and talented employees who
embody our Sangre Tigo corporate culture. We recognize
the importance of ensuring that Millicom is a place where
all of our employees feel safe, protected, supported and
rewarded. I am pleased with the strides we made in 2020 to
foster diversity and make our company even more inclusive.
I want to thank my fellow Board members for
contributing their business expertise and industry
knowledge. In particular, I extend the entire Board’s
appreciation to Janet Davidson for her invaluable
contributions over the past four years, and we welcome
our CEO, Mauricio Ramos, who joined the Board as a new
Executive Director in June 2020.
Also, I commend our Senior Leadership Team for so
capably executing Millicom’s business strategy in a
turbulent year.
Although some uncertainty remains in our industry and in
the countries that we serve, I feel confident that Millicom
is on a strong footing as we begin this new year. It is my
privilege to share this 2020 Millicom Annual Report that
celebrates the impact of our ceaseless dedication to
connecting with purpose in all that we do.
José Antonio Rios Garcia
Chairman of the Board of Directors
3
JOSÉ ANTONIO RIOS GARCIAMillicom 2020 Annual Report Chief Executive Officer’s Message
“ If anything, the events
of this past year further
validated our intrinsic
purpose and strategic
direction. We stayed true
to the values that have
fueled our success for three
decades and positioned
ourselves to continue leading
digital adoption across
our markets.”
Beyond the financial results that Millicom achieved, I
believe our greatest successes in 2020 stemmed from
putting people first when the COVID-19 pandemic hit.
Five core principles guided our decision-making:
» Protecting our employees’ safety and well-being
» Preserving their jobs and income
» Delivering continuous and consistent service to
customers
» Preserving our cash flow and reducing debt
» Fulfilling our purpose through the power of our Sangre
Tigo cultural values and practices
We kept our employees safe during the crisis by
supplying personal protective equipment to frontline
service technicians in the streets and ensuring that
others had our support to work from home. When
customers or colleagues needed them, our workforce
was ready to assist. The events of 2020 brought to light
just how heroic our people truly are, which inspired us
to create the Tigo Heroes company-wide recognition
program. See the spotlight story on page 11.
We presented our investors with a clear plan to sustain
and preserve Millicom’s liquidity through the downturn
caused by very severe widespread lockdowns in many of
the countries where we operate. Tough decisions such as
4
None of us will soon forget how 2020 altered life as
we knew it before the words “COVID-19” and “social
distancing” were imprinted on our consciousness. Yet
the pandemic is not what stands out most in my mind
when I consider what the company experienced and
accomplished this past year.
I will remember how Millicom and our more than 21,000
people joined as one to sustain essential connections
through our digital highways. We overcame challenge
after challenge to deliver results that benefited our
customers, our shareholders, our employees and the
communities we serve.
While the pandemic shaped much of our activity in
2020, it did not redefine Millicom’s identity or alter our
fundamental course. If anything, the events of this past
year further validated our intrinsic purpose and strategic
direction. We stayed true to the values that have fueled
our success for three decades and positioned ourselves
to continue leading digital adoption across our markets.
We continued to invest in expanding our cable and
4G broadband networks throughout Latin America,
further strengthening our position as the leading
telecommunications provider in our markets. Our long-
range focus on driving digital transformation across
all areas of Millicom’s business enabled us to satisfy
increased customer demand for content, e-commerce
tools and cloud services during the pandemic. I am
confident that this momentum will continue to grow in
the year ahead and enable us to create long-term value
for shareholders.
MAURICIO RAMOSMillicom 2020 Annual Report canceling our shareholder dividend payments were not
made lightly, but they provided added stability to our
cash flow and maintained business continuity.
stay safe during COVID-19 and avoid potential dangers
online so they can more fully enjoy the benefits of
technology.
We provided sustained connectivity, 24/7, to our
customers. Teams across the company ensured that our
networks could handle the surge in traffic from millions
of people using Tigo broadband at home for work,
school and entertainment.
We introduced a lifeline product to deliver uninterrupted
Internet service to customers who were unable to pay
their regular monthly Tigo bill during the crisis. We also
worked with government and community leaders to
provide broadband connectivity for medical facilities,
shelters and non-profit organizations that were helping
meet critical needs.
We overcame significant logistical challenges to
continue Millicom’s outreach and support for the most
underserved and vulnerable members of society. We
advanced our Corporate Responsibility Framework and
Five-Year Plan through flagship initiatives that include:
Promoting safe and productive Internet use among
youth. We provided thousands of children, parents,
teachers and caregivers with practical lessons on how to
Proud of our legacy and
bright future, celebrating
30 years of building digital
highways.
Narrowing the digital gender divide.
We expanded our “Conectadas” curriculum to equip
women with technology skills and financial knowledge
that they can apply immediately in small-business
ventures. We also introduced new online workshops
to help participants cope with additional challenges
brought on by the coronavirus pandemic.
Helping educators embrace digital teaching tools.
We launched Maestr@s Conectad@s, a free resource
containing educational tools and techniques designed
to help teachers engage students and build effective
lessons in an online classroom environment. More
than 137,000 educators were trained via Maestr@s
Conectad@s in 2020, and we are expanding the
program regionwide.
These and other efforts reinforce our ongoing
support of the UN Global Compact and Sustainable
Development Goals.
The Group's sustained approach also helped us gain
recognition of our strong management of ESG issues by
earning a AA ESG rating from MSCI based on our strong
performance on bridging the digital divide and our
robust anti-corruption policies and programs, a ranking
of 28 out of 201 in the industry from Sustainalytics, and
a CDP score of B, which places us above the average
global industry level.
I am proud of how our employees went above and
beyond in 2020 to exemplify our Sangre Tigo culture.
Teams across our business are transforming the
adversity of COVID-19 into an opportunity to do things
differently and better as we move forward.
I also want to thank our Board of Directors for their
dedication to fulfilling the company’s purpose and
creating value for Millicom shareholders.
I am pleased to share this annual report with you as
we embark on our fourth decade—continually growing
stronger, more agile and more aware of the value that
our digital highways create.
Mauricio Ramos
Executive Director and Chief Executive Officer
5
Millicom 2020 Annual Report Our Year in Numbers
Financial, Operational and CR Highlights
FINANCIAL RESULTS
Revenue ($m)
2018
2019
2020
Gross Profit ($m)
2018
2019
2020
$3,946
$4,336
$4,171
$2,829
$3,135
$3,000
OPERATIONAL HIGHLIGHTS
Mobile
4G Smartphone Data Users (m)
2018
2019
2020
Home
HFC Homes Passed (m)
2018
2019
2020
10.5
10.6
15.4
18.2
11.5
11.9
HFC Customer Relationships (m)
2018
2019
2020
3.1
3.5
3.7
300k+
Tigo Business
customers
21k+
Full-time employees
and approximately
20,000 contractors
CORPORATE
RESPONSIBILITY
HIGHLIGHTS
137,000+
Teachers trained through
Maestr@s Conectad@s
86%
Strategic suppliers
who signed our Supplier
Code of Conduct
2,100+
Connected schools
91,340
Women who participated
in our digital inclusion and
training programs
Financial results are presented on an IFRS basis and therefore do not consolidate the results from our Guatemala and Honduras joint ventures.
The following Indicators reflect Latam segment.
• 4G Customers
• HFC Homes Passed
• HFC Customer Relationships
Millicom 2020 A nnu a l Rep or t
6
Honduras
Mobile #1
BBI #1
Pay TV #1
Guatemala
Mobile #1
BBI #2
Pay TV #1
El Salvador
Mobile #1
BBI #2
Pay TV #2
Nicaragua
Mobile #1
BBI #3
Pay TV #3
Panama
Mobile #1
BBI #1
Pay TV #1
Costa Rica
BBI #3
Pay TV #2
Colombia
Mobile #3
BBI #2
Pay TV #2
Strengthening our leadership position
in Latam through diligent execution
of our business strategy.
Our long-term focus on converging Tigo’s fixed and mobile services
throughout Latin America continues to drive solid business results.
Millicom’s gains in recent years have been from both organically increasing
our market share and investing in key acquisitions to further consolidate our
regional footprint. As a result of our acquisitions of Cable Onda, the leading
cable operator in Panama, and of Telefonica’s telecom operations in
Panama and Nicaragua, Tigo is reshaping the industry landscape in Central
America. These new assets allowed us to add Panama to our portfolio of
countries served and accelerated our fixed-mobile convergence strategy
in the region. Thanks to the fixed investment as well as recent spectrum
roll-outs in Colombia, El Salvador, Panama and Nicaragua, we can provide
customers in these markets with the high quality fixed and mobile services
they expect. Our significant investments demonstrate Tigo’s commitment
to expanding digital highways and advancing economic prosperity in
Latam for years to come.
Bolivia
Mobile #2
BBI #1
Pay TV #1
Paraguay
Mobile #1
BBI #1
Pay TV #1
Millicom 2020 A nnu a l Rep or t
7
OUR PURPOSE:
Why We Connect
Millicom seeks to be an agent of positive change in everything that we do.
Our purpose makes this possible. The digital highways that we build in our
developing markets are a source of interconnected value for our shareholders,
customers, employees and communities.
Millicom 2020 A nnu a l Rep or t
8
Our Key Stakeholders
Our purpose, combined with our strategy and responsible
approach to doing business, drive positive outcomes for our
four stakeholder groups.
Investors: We see tremendous untapped potential
across Latam to continue strengthening Millicom’s
business. As our fixed and mobile networks reach
more communities, we aim to grow our revenue and cash flow
in a sustainable manner to create value for shareholders. For
more details on our 2020 financial results, see the section
starting on page 12.
Customers: Our digital highways supply the resources
that empower individuals and organizations to
accomplish higher goals and discover more of
what the world has to offer. We strive to keep our products
and services affordable so we can continue to open doors
to learning, employment, commerce, entertainment, social
interaction and civic involvement. As our customers succeed
through using Tigo products and services, the benefits ripple
outward and gather momentum. Incomes rise. New jobs
emerge. Innovative thinking flourishes. Society is transformed.
Communities: We depend on the communities in
Latam and Tanzania as deeply as they depend on us.
Millicom’s long-term growth hinges on our ability to
do business responsibly as well as on our progress in enabling
more people and organizations to realize the benefits of digital
connectivity. Through our strong governance and corporate
responsibility actions in areas such as reducing environmental
impact, safeguarding privacy, advancing human rights and
strengthening business ethics, we minimize significant risks and
reinforce Millicom’s standing in our markets. Similarly, through
our CR initiatives to close the digital gap, promote safer and
more productive Internet usage by young people and empower
more women with technology skills, we broaden the market for
our offerings. Learn more about our CR Framework and Five-
Year Plan on page 28.
Employees: The only way we can fulfill our purpose
is by sustaining a corporate culture that attracts
talented people, values their diversity, inspires
them to excel and rewards their accomplishments. In this
environment, Millicom cultivates what we call Sangre Tigo:
a shared belief in the purpose behind our work, a collective
passion for making our customers the center of everything we
do, a tireless commitment to doing what’s right and a deep
sense of unity. Our employees are the essence of Sangre Tigo.
They draw upon its energy daily to make a truly heroic impact
that benefits all of our stakeholders. Learn more about our Tigo
Heroes recognition program on page 11 and our Sangre Tigo
Cultural Framework, part of "Our Approach" section, starting on
page 22.
From Purpose to Impact
WHAT WE CONNECT
Business Strategy
Customer
Experience
Monetize Data
Build Cable
Convergence
B2B
Go
Digital
“ We see and feel
the power of
Sangre Tigo flowing
through our work.
Nothing happens
without it—and
everything happens
because of it.”
Mauricio Ramos
CEO
These intertwining facets of Millicom’s purpose
drove results across all areas of our business in
2020. You can also learn more about how we put
Millicom’s purpose into action in "Our Approach"
section, starting on page 22.
WHY
WE
CONNECT
Our Purpose
Build digital highways
that connect people,
improve lives and
develop communities
HOW
WE
CONNECT
Our Approach
• Sangre Tigo culture
• CR Fundamentals
• Responsible Leadership
in Action
• Risk management
• Responsible governance
Our Impact
INVESTORS
• Cash flow growth
• Maximize returns
CUSTOMERS
• Connectivity
• Affordability
COMMUNITIES
• Protect children
• Empower women
with equal access
to connectivity
• Close the digital gap
EMPLOYEES
• Great work
environment
• Recognition
and support
Millicom 2020 A nnu a l Rep or t
9
Opportunities, Challenges and
Uncertainties in Our Markets
Millicom’s future is deeply rooted in Latin America. Although
many segments of this region are still grappling with profound
economic and societal setbacks triggered by the coronavirus
in 2020, we remain convinced that Latam—and our business
investments here—will do more than simply recover. Our
company has the infrastructure, market penetration and
strategic framework to lead a resurgence across our markets.
Aligning our business strategy with our purpose enables
us to continue creating sustained value for all of our key
stakeholders, as we have done for the past 30 years.
These are some of the most prominent areas of focus for our
company as we move forward in 2021 and beyond.
OPPORTUNITIES
The COVID-19 crisis underscored that broadband and mobile
connectivity is no longer just an advantage. Digital highways
and the resources that they deliver have become essential
to our customers and our communities. Although economic
activity in Latam contracted by more than 7.2% in 2020,
according to estimates from the World Bank, a rebound
appears well underway. In its October 2020 report, the
International Monetary Fund forecasted GDP growth of 2.8%
in Latin America and the Caribbean in 2021.
As one of the largest providers of fixed and mobile broadband
Internet access in our markets, we are well-positioned to
continue accelerating the broad-scale adoption of digital tools
and content. Our mobile customer base surpassed 40 million
in Latam in 2020, fueled by record net additions in the second
half of the year. Home customer relationships also rose sharply,
and reached more than 4.5 million by year-end. We continue to
make strategic investments that will enable Tigo to both profit
from and contribute to upward momentum across the region
where demand for the services that our digital highways enable
continues to grow along with the expansion of the middle-class.
CHALLENGES
We also recognize that it will likely take a few years for the
Latam region to fully recover from the economic setback caused
by the pandemic. Latin American countries were among the last
in the world to confirm their first COVID-19 cases, and the region
has struggled at times to contain the spread of the virus.
While the pandemic highlighted the significance of digital
infrastructure to both business and society, it also accentuated
the global digital divide. In Latin America alone, school closures
have left more than 154 million children unable to transition
to e-learning because of the lack of access to online services.
And although the crisis has enabled millions to work remotely,
millions more without this privilege risk falling behind. Our
ability to help address these growing challenges was somewhat
constrained while most Millicom employees were working
remotely through the end of 2020. We are steadily ramping up
our efforts again in 2021.
UNCERTAINTIES
The ongoing impact of COVID-19 on households, businesses
and communities is a major source of uncertainty in every
market where we operate. Until the spread of this virus is truly
under control, we remain vigilant and ready to adapt should
governments change course and tighten mobility restrictions,
which could trigger additional economic hardship and
possibly also social unrest. We also see potential for increased
regulatory and tax pressure on larger corporations such as ours.
The longer-term impact of the pandemic on commodity prices
and other factors that influence currency values in some of our
markets is another area of uncertainty.
That said, the post-pandemic path to economic resilience and
growth lies in broadening digital access and the opportunities
that it brings. The broadband connectivity that Millicom
provides is essential to support private sector investment
and growth, as well as the delivery of healthcare, education,
and other government services. As such, one of our key
opportunities is to make sure that we continue to work with our
Latin American governments to have the networks of today
and of the future to be seen as a cornerstone in their long-
term effort to rapidly and efficiently boost digitalization. Each
country faces a strategic choice in the next few years to decide
to modernize their regulatory framework to have an immediate
effect on the development of their country's infrastructure
and even its national strength in the long run. We will work
with these governments to develop modernized regulatory
models that can accelerate network coverage, speed and digital
inclusion and where our investments are used to extend our
networks to every corner of society and not to cover high telecom
taxes and fees. Indeed, actions such as providing affordable
access to spectrum would incentivize long-term investment in the
costly infrastructure that these services require.
Millicom 2020 A nnu a l Rep or t
10
OUR IMPACT:
Tigo Heroes recognition program
Where: All markets
What: Millicom’s 21,000-plus employees are the reason
we excel in satisfying our customers, delivering value
to our shareholders and supporting our communities.
When the COVID-19 pandemic exploded in early 2020,
our people remained on the front lines as we maintained
uninterrupted service.
How: We launched our Sangre Tigo Heroes initiative in
April 2020 to honor employees’ extraordinary efforts.
When employees notice one of their colleagues going
above and beyond to make a positive impact, they can
post a tribute on our virtual Tigo Heroes Wall.
Criteria for recognition include:
» The story proves this person demonstrates our Sangre
Tigo Pulses
» The story shows that with sacrifice, commitment and
determination, everything is possible
» The story conveys how this person’s actions benefited
one or more of our stakeholders: customers,
colleagues, communities and investors
Results:
» Approximately 450 Wall posts through end of 2020
» Sangre Tigo ambassadors in each of our countries
nominate one post each month for additional
company-wide recognition
» Recognition enhances our ability to attract and retain
exceptional talent
» Employees’ selflessness, resourcefulness and drive
to “go the extra mile” creates greater customer
satisfaction
» Program continues going strong in 2021
Examples of Sangre Tigo Heroes:
Alfonso Artavia
Field Technician, Costa Rica:
Alfonso was assigned a critical project which he carried
out with extraordinary dedication. His days consisted of
traveling long distances to a mountainous area with a very
steep dirt road and little communication access. Amid this
challenging environment, Alfonso gave more than the extra
mile for our clients, working continuously around the clock
to deliver solutions and find ways to overcome multiple
obstacles—always maintaining a remarkable attitude.
Jose Remberto Godinez
Direct Sales Force Representative (B2C), El Salvador:
As Jose pursues his mission of increasing retail sales and
productivity, he says, “I try to inject my colleagues with
good energy and the pride of being part of Tigo.” Despite
the hard times that he and others have experienced
during the pandemic, Jose is undeterred. “I’m very grateful
to the company for caring about me and my colleagues."
Victor Heredia Callisaya
Operations and Management Engineer, Bolivia:
Victor helps maintain our lpacoma Technical Plant, which
serves a busy commercial area in La Paz. When the plant's
main generator malfunctioned at one point during the
pandemic, he and his team worked overtime to restore
services without interruption to customers.
“ My commitment is to continue
providing results to keep all
Salvadorans connected.”
Jose Remberto Godinez
Tigo Heroes employee honoree
Millicom 2020 A nnu a l Rep or t
11
“ Our Tigo Heroes are everywhere—more than 21,000 around the world. Thank you for your passion, hard work and constant commitment to excellence in these moments of uncertainty. You inspire me every day.”Susy BobenriethChief Human Resources Officer, EVP OUR BUSINESS STRATEGY:
What We Connect
Despite the difficult year and road ahead in the short term, we remain
confident in the opportunity in the region. The countries where we operate
have a combined 30 million households and approximately 120 million
people, numbers that are expected to continue growing.
Tigo Money
Tigo Sports
Tigo Music
Tigo ONE tv
Mi Tigo
Tigo Shop
Tigo Business
Tigo Sports
Tigo Music
Tigo Money
Tigo Sports
Tigo Music
Tigo Sports
Tigo Money
Tigo Music
Tigo Money
Tigo ONE tv
Mi Tigo
Tigo Shop
Tigo ONE tv
Tigo ONE tv
Mi Tigo
Mi Tigo
Tigo Shop
Tigo Shop
Tigo Business
Tigo Business
Tigo Business
Millicom 2020 A nnu a l Rep or t
12
Chief Financial Officer’s
Message
“ Our flexible approach to
managing through this crisis
proved successful in every
way. We maintained our
leadership, even extending
it in some markets.”
2020 saw the unprecedented disruption of the
COVID-19 pandemic, which impacted all aspects of
our business and forced us to rethink how we operate
and interact with our customers. As the crisis hit, we
sharpened our focus on cash flow generation and debt
reduction, with a view of weathering the storm and
positioning Millicom for a quick recovery. We set out
to sustain operating cash flow at 2019 levels. We also
suspended shareholder distributions in order to preserve
our balance sheet strength while investing in our
networks and keeping our customers connected.
Our approach to managing through this crisis proved
successful in every way. We maintained our leadership,
even extending it in some markets. We surpassed our
annual operating cash flow goal, even as we advanced
some investments in key markets such as Colombia.
These investments allowed us to grow both our mobile
and our cable customer base despite the lockdowns in
our markets. Further, we reduced our underlying net
debt by $541 million during the year. The steps we took
allowed the business to recover during the second half
of 2020 and positioned us for a better year in 2021.
GROUP HIGHLIGHTS1
Revenue for the year ended December 31, 2020
decreased 3.8% to $4,171 million due to lower
commercial activity as a result of the pandemic and
weaker currencies in some of our markets. The decrease
was partially offset by the contribution of mobile
operations in Nicaragua and Panama acquired in 2019.
Operating expenses declined 6.2%, as a result of
lower commercial activity and cost savings initiatives.
Depreciation and amortization increased 9.8%, having
been impacted by the full-year consolidation of our
acquisitions in Nicaragua and Panama as well as
accelerated amortization of some brands from the
Cable Onda acquisition in Panama and by our spectrum
purchase in Colombia. Share of net profit in our joint
ventures in Guatemala and Honduras decreased by
4.4%, as profitability was impacted by a one-time
charge related to the early redemption of the Comcel
2024 notes in Guatemala. As a result of these factors,
operating income for the year decreased 22.4% to
$446 million.
Interest expense increased 10.8% to $624 million,
mainly due to accrued interest on spectrum purchased
in Colombia as well as bond redemption fees, while
interest income decreased by 31.3% to $13 million due
to lower average cash balances during the year.
Our leverage ended 2020 at 3.20x on a proportionate
basis. Our current leverage ratios are above our long-
term target of about 2.0x, and for this reason we
sharpened our focus on reducing our net debt, which we
were able to reduce by $541 million on an underlying
basis in 2020. We plan to continue to prioritize net debt
reduction in 2021.2
Other non-operating expenses were $106 million in
2020 as compared to income of $227 million in 2019.
The expense in 2020 reflected foreign exchange losses
and the mark to market of our equity investments in
Jumia and Helios Towers, while the income in 2019 was
mainly due the fair value recognition of our stake in
Helios Towers.
More extensive details on Millicom’s financial performance can be found starting on page 15 of this year's report.
1 Financial results are presented on an IFRS basis and therefore do not consolidate the results from our Guatemala and Honduras joint ventures.
2 This paragraph includes Non-IFRS measures. Please refer to the non-IFRS disclosures in this annual report for a description and for a
reconciliation of non-IFRS measures.
13
TIM PENNINGTONMillicom 2020 Annual Report Tax expense decreased 15.5% to $102 million, mainly
due to lower profitability and higher deferred tax credit in
2020 compared to 2019.
as strong customer gains of 4 million in the second
half of the year more than offset customer losses of 2
million in the first half of the year.
As a result of the above factors, net loss for the year was
$344 million, or a loss per share of $3.40.
“ 2020 has proven the resiliency
of our cash flows as we
continued to invest in order
to capture the long-term
opportunity in our markets.”
Our 2020 Financial
Performance3
Financial performance key messages:
» Resilience of business showed recovery in service
revenue and EBITDA from Q2 lows during the year
» Flexible investment plans allowed for sustained
operating cash flow
» Reduced underlying net debt by approximately
$0.5 billion
» Lowered average cost of debt and average age of
maturities extended
OUR 2020 FINANCIAL PERFORMANCE IN
LATIN AMERICA
During 2020, we continued to execute on our capital
allocation strategy of generating organic cash flow and
integrating our recently acquired assets in Nicaragua
and Panama. Despite complications of the pandemic,
the integrations have continued smoothly, giving
us mobile and cable operations in eight of our nine
operations in Latin America.
Although activity levels gradually recovered in the
second half of the year, service revenue declined 2.5%
organically compared to 2019.
In Mobile, which generates 60% of Latin American
service revenue (59% in 2019), service revenue declined
1.1% year-over-year (1.4% growth in 2019), reflecting
a sharp initial drop in our prepaid business caused
by severe lockdowns imposed at the onset of the
pandemic, followed by a robust recovery as the mobility
restrictions eased. In postpaid, both the initial decline
and subsequent recovery were less pronounced. Aided
by our sustained investment in spectrum and network
infrastructure and continued dedication to maintaining
presence on the streets, we grew our customer base
by 1.9 million to end the year with more than 41 million
In our Cable and other fixed business, which generates
39% of Latin American service revenue (40% in 2019),
service revenue declined 4.5% in 2020, a deceleration
from 21.5% growth in 2019. The slowdown reflects the
many effects of the pandemic, including our decision to
support our customers and communities by cancelling
usual annual price increases and by providing, free of
charge, basic lifeline services to customers who could
no longer pay, as well as the depreciation of local
currencies in Colombia and Paraguay during the year.
Although some revenue was lost, these lifeline services
allowed us to maintain, and even strengthen, our
relationship with these customers, while avoiding the
significant expenses related with fully disconnecting
and reconnecting service at a later date.
Although mobility restrictions temporarily constrained
our ability to deploy construction crews, we nonetheless
managed to expand our HFC network to cover an
additional 428,000 homes, down from 901,000 in
2019 , ending the year with 11.9 million HFC homes
passed (11.5 million in 2019). Likewise, the lockdowns
also impacted our ability to reach new customers, and
yet we added 277,000 net HFC customer relationships,
down from 351,000 in 2019, ending the year with 3.7
million (3.5 million in 2019). Penetration of our HFC
network ended 2020 at 31%, up from 30% in 2019.
All of our markets were negatively impacted by lower
levels of commercial activity due to the lockdowns
related to the pandemic in the region. These difficulties
were felt across the entire region to varying degrees
depending on how restrictive the government response
was. In Guatemala, for example, restrictions were not
overly broad, meaning there was less disruption to
mobility and to the economy. In contrast, Panama saw
very strict and longer lasting restrictions, with the result
being that mobility and economic activity were greatly
curtailed.
Our performance varied greatly from country to country,
driven in large part by the severity and duration of the
mobility restrictions. Guatemala was the only country
to show positive organic service revenue growth of
3.4% (5.3% in 2019), with all three of its business
lines up year-on-year. El Salvador ended about flat,
up from a decline of 6.2% in 2019, reflecting a very
strong performance in spite of severe COVID-related
restrictions. Colombia also performed quite well, with
service revenue down only 1.1% organically, compared
to 2.8% growth in 2019, as steady growth in Home was
more than offset by declines in B2C Mobile and
3 These key messages refer to Latam (with our Honduras and Guatemala joint ventures as if they were fully consolidated) and include Non-IFRS
measures. Please refer to the non-IFRS disclosures in this annual report for a description and for a reconciliation of non-IFRS measures.
Millicom 2020 A nnu a l Rep or t
14
B2B. In contrast, performance was most affected in
Panama, Bolivia and Honduras, where the lockdowns
were generally stricter and longer. Still, performance
in all three countries improved noticeably during the
second half of the year. In Panama and Nicaragua, we
continued to execute on our integration plans, including
the re-branding of the mobile businesses, which was
completed on schedule during 2020.
EBITDA in Latam declined 3.7% organically, down from
2.1% growth in 2019 and ending the year at $2,360
million. Performance varied greatly throughout the
year and hit a low point in Q2, followed by meaningful
sequential improvement in both Q3 and Q4, as mobility
began to return to our markets. EBITDA declined year-
on-year in all countries except for Guatemala, which
grew 4.3% during the year, down only slightly from
4.7% growth in 2019, and Colombia, which grew 0.9%,
down from 3.0% growth in 2019.
Capex in Latin America totaled $941 million in 2020,
about 6.0% less than in 2019 due to our decision to
delay some projects in the early days of the pandemic,
followed by a gradual normalization of our investments
as the business recovered in the second half of the year.
In Mobile, we invested heavily in Colombia and El
Salvador to take advantage of recently-acquired
spectrum, and we deployed additional capital into
Panama and Nicaragua to modernize recently-acquired
networks ahead of the planned re-branding. In all
four countries, these investments had a meaningfully
positive impact on our operational and financial
performance for the year. Overall, our 4G network
covered approximately 76% of the population of our
markets at year-end, up from 69% at the end of 2019.
In Home, we continued to invest to expand our HFC
networks in Latam, where we passed 428,000 new
homes during year, mainly in Bolivia, Colombia and
Paraguay. More importantly, we connected 277,000
new customers, as broadband and Pay TV penetration
drove demand for our services during 2020, as remote
work, learning and entertainment became increasingly
important during the pandemic.
In summary, the Latam segment generated $1.4 billion
of Operating Cash Flow (EBITDA less capex) in 2020, in
line with the 2019 level of $1.4 billion, as cost savings
and a re-calibration of capex fully offset the decline
in revenue. In light of the challenges posed by the
impact of the pandemic on our markets, this is a strong
outcome, which speaks to the resilience of our business.
Moreover, as we navigated through a turbulent 2020, we
did not lose sight of the long-term organic opportunity
that we are pursuing, and we invested accordingly to
capture that opportunity in the years ahead.
Tim Pennington
Chief Financial Officer
Segment Performance
This section provides a summary of the financial and operating performance
of our Latin American and African segments through selected performance
indicators that are based on our management reporting. We are presenting
the Guatemala and Honduras joint ventures as if fully consolidated.
OUR 2020 FINANCIAL PERFORMANCE IN LATIN AMERICA
Latam1
($m)
9%
Paraguay
10%
Bolivia
6%
Other
7%
El Salvador
Revenue by
country
26%
Guatemala
1%
Other
$60m
Revenue by
business
36%
Cable and
other fixed
$2,097m
23%
Colombia
9%
Panama
9%
Honduras
8%
Equipment
Sales Revenue
$466m
55%
Mobile
$3,220m
Service revenue
Organic decline –2.5%
$5,377
EBITDA
Organic decline –3.7%
$2,360
OCF
Organic decline –1.4%
$1,418
1 Our Latin America (Latam) segment includes our Guatemala and Honduras joint ventures as if they were fully consolidated. Please refer to the non-IFRS disclosures
in this annual report for a description and for a reconciliation of non-IFRS measures.
Millicom 2020 A nnu a l Rep or t
15
Our Markets in Numbers
Colombia
Others
$44m
Mobile
$490m
Service
Revenue
Cable and
other fixed
$723m
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
1,740
As of year end 2020
+30
Net additions
+1.7%
YOY Growth
MOBILE (’000)
4G smartphone
data users
3,967
As of year end 2020
+397
Net additions
+11.1%
YOY Growth
Service revenue2 $m
Organic decline –1.1%
2020
2019
$1,258
$1,432
EBITDA $m
Organic growth +0.9%
2020
2019
EBITDA margins %
2020
2019
$457
$510
34.0%
33.3%
Honduras
Cable and
other fixed
$91m
Others
$4m
Service
Revenue
Mobile
$421m
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –6.0%
FIXED (’000)
Home customer
relationships1
As of year end 2020
176
––
Net additions
–0.1%
YOY Decline
4G smartphone
data users
2,114
As of year end 2020
+367
Net additions
+21.0%
YOY Growth
EBITDA $m
Organic decline –11.6%
EBITDA margins %
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –8.4%
Others
$5m
Mobile
$202m
Service
Revenue
FIXED (’000)
Home customer
relationships1
As of year end 2019
463
+25
Net additions
+5.8%
YOY Growth
4G smartphone
data users
1,003
As of year end 2020
+216
Net additions
+27.5%
YOY Growth
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
$516
$551
$247
$280
44.7%
47.1%
$567
$468
$256
$223
43.8%
46.9%
$348
$348
$137
$140
35.1%
36.2%
EBITDA $m
Organic decline –10.4%
Millicom’s acquisition of
Panama mobile was closed
in August 2019.
EBITDA margins %
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –0.1%
FIXED (’000)
Home customer
relationships1
As of year end 2020
273
–1
Net losses
–0.4%
YOY Decline
4G smartphone
data users
1,260
As of year end 2020
+336
Net additions
+36.4%
YOY Growth
EBITDA $m
Organic declline –2.5%
EBITDA margins %
Cable and
other fixed
$359m
El Salvador
Others
$1m
Cable and
other fixed
$123m
Service
Revenue
Service revenue2 $m
Organic decline –7.7%
Panama
2020
2019
EBITDA $m
Organic decline –9.7%
2020
2019
EBITDA margins %
2020
2019
$575
$624
$232
$257
39.7%
40.2%
Service revenue2 $m
Organic decline –3.2%
2020
2019
EBITDA $m
Organic decline –6.7%
2020
2019
EBITDA margins %
2020
2019
$513
$575
$252
$294
46.4%
48.2%
Mobile
$224m
Cable and
other fixed
$139m
Service
Revenue
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
239
As of year end 2020
–17
Net losses
–6.5%
YOY Decline
Service revenue2 $m
Organic growth +3.4%
Costa Rica
2020
2019
EBITDA $m
Organic growth +4.3%
2020
2019
EBITDA margins %
2020
2019
$1,273
$1,234
$778
$748
51.8%
52.2%
Bolivia
Cable and
other fixed
$227m
Others
$2m
Service
Revenue
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
564
As of year end 2020
+54
Net additions
+10.5%
YOY Growth
MOBILE (’000)
4G smartphone
data users
2,409
As of year end 2020
+238
Net additions
+11.0%
YOY Growth
Mobile
$347m
Mobile
$317m
Paraguay
Others
$1m
Cable and
other fixed
$195m
Service
Revenue
Guatemala
Cable and
other fixed
$228m
Others
$3m
Service
Revenue
Mobile
$1,042m
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
452
As of year end 2020
+16
Net additions
+3.6%
YOY Growth
MOBILE (’000)
4G smartphone
data users
1,827
As of year end 2020
+306
Net additions
+20.1%
YOY Growth
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
606
As of year end 2020
+87
Net additions
+16.7%
YOY Growth
MOBILE (’000)
4G smartphone
data users
4,612
As of year end 2020
+718
Net additions
+18.4%
YOY Growth
1 “Includes HFC, DTH, Copper and other technologies.”
2 EBITDA and EBITDA Margin and after organic growth: “Non-IFRS measure. Please refer to the non-IFRS disclosures in this annual report for a description
and for a reconciliation of non-IFRS measures.”
Millicom 2020 A nnu a l Rep or t
16
Nicaragua
Cable and
other fixed
$28m
Service
Revenue
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Home customer
relationships1
As of year end 2020
31
+11
Net additions
+53.2%
YOY Growth
4G smartphone
data users
1,050
As of year end 2020
+266
Net additions
+33.9%
YOY Growth
Mobile
$181m
Mobile
$357m
Africa
($m)
Service
Revenue
Other
Fixed
$8m
MOBILE (’000)
Mobile Customers
13,111
As of year end 2020
MFS customers
7,141
As of year end 2020
Service revenue2 $m
Organic decline –3.7%
EBITDA $m
Organic increase +2.1.%
2020
2019
2020
2019
$366
$382
$125
$117
Others
$4m
Service
Revenue
Mobile
$421m
Others
$5m
Mobile
$202m
Service
Revenue
Colombia
Others
$44m
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –1.1%
Mobile
$490m
FIXED (’000)
Home customer
relationships1
1,740
As of year end 2020
+30
Net additions
+1.7%
YOY Growth
4G smartphone
data users
3,967
As of year end 2020
+397
Net additions
+11.1%
YOY Growth
Service
Revenue
Cable and
other fixed
$723m
EBITDA $m
Organic growth +0.9%
EBITDA margins %
$1,258
$1,432
$457
$510
34.0%
33.3%
Honduras
Cable and
other fixed
$91m
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –7.7%
Panama
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Bolivia
Cable and
other fixed
$227m
Others
$2m
Service
Revenue
FIXED (’000)
Home customer
relationships1
As of year end 2020
564
+54
Net additions
+10.5%
YOY Growth
4G smartphone
data users
2,409
As of year end 2020
+238
Net additions
+11.0%
YOY Growth
EBITDA $m
Organic decline –9.7%
EBITDA margins %
Paraguay
Others
$1m
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –3.2%
FIXED (’000)
Home customer
relationships1
As of year end 2020
452
+16
Net additions
+3.6%
YOY Growth
4G smartphone
data users
1,827
As of year end 2020
+306
Net additions
+20.1%
YOY Growth
EBITDA $m
Organic decline –6.7%
EBITDA margins %
Mobile
$347m
Mobile
$317m
Cable and
other fixed
$195m
Service
Revenue
Guatemala
Cable and
other fixed
$228m
Others
$3m
Service
Revenue
Mobile
$1,042m
FIXED (’000)
Home customer
relationships1
As of year end 2020
606
+87
Net additions
+16.7%
YOY Growth
4G smartphone
data users
4,612
As of year end 2020
+718
Net additions
+18.4%
YOY Growth
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic growth +3.4%
Costa Rica
EBITDA $m
Organic growth +4.3%
EBITDA margins %
$1,273
$1,234
$778
$748
51.8%
52.2%
$575
$624
$232
$257
39.7%
40.2%
$513
$575
$252
$294
46.4%
48.2%
Cable and
other fixed
$359m
El Salvador
Others
$1m
Cable and
other fixed
$123m
Service
Revenue
Mobile
$224m
Cable and
other fixed
$139m
Service
Revenue
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
239
As of year end 2020
–17
Net losses
–6.5%
YOY Decline
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
176
As of year end 2020
––
Net additions
–0.1%
YOY Decline
MOBILE (’000)
4G smartphone
data users
2,114
As of year end 2020
+367
Net additions
+21.0%
YOY Growth
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
463
As of year end 2019
+25
Net additions
+5.8%
YOY Growth
MOBILE (’000)
4G smartphone
data users
1,003
As of year end 2020
+216
Net additions
+27.5%
YOY Growth
Millicom’s acquisition of
Panama mobile was closed
in August 2019.
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
273
As of year end 2020
–1
Net losses
–0.4%
YOY Decline
MOBILE (’000)
4G smartphone
data users
1,260
As of year end 2020
+336
Net additions
+36.4%
YOY Growth
Service revenue2 $m
Organic decline –6.0%
2020
2019
EBITDA $m
Organic decline –11.6%
2020
2019
$516
$551
$247
$280
EBITDA margins %
2020
2019
44.7%
47.1%
Service revenue2 $m
Organic decline –8.4%
2020
2019
EBITDA $m
Organic decline –10.4%
2020
2019
$567
$468
$256
$223
EBITDA margins %
2020
2019
43.8%
46.9%
Service revenue2 $m
Organic decline –0.1%
2020
2019
EBITDA $m
Organic declline –2.5%
2020
2019
EBITDA margins %
2020
2019
$348
$348
$137
$140
35.1%
36.2%
1 Includes HFC, DTH, Copper and other technologies.
2 EBITDA and EBITDA Margin and after organic growth: Non-IFRS measure. Please refer to the non-IFRS disclosures in this annual report for a description
and for a reconciliation of non-IFRS measures.
Millicom 2020 A nnu a l Rep or t
17
Nicaragua
Cable and
other fixed
$28m
Service
Revenue
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Home customer
relationships1
As of year end 2020
31
+11
Net additions
+53.2%
YOY Growth
4G smartphone
data users
1,050
As of year end 2020
+266
Net additions
+33.9%
YOY Growth
Mobile
$181m
Mobile
$357m
Africa
($m)
Service
Revenue
Other
Fixed
$8m
MOBILE (’000)
Mobile Customers
13,111
As of year end 2020
MFS customers
7,141
As of year end 2020
Service revenue2 $m
Organic decline –3.7%
EBITDA $m
Organic increase +2.1.%
2020
2019
2020
2019
$366
$382
$125
$117
Colombia
Others
$44m
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –1.1%
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic decline –6.0%
Mobile
$490m
FIXED (’000)
Home customer
relationships1
1,740
As of year end 2020
+30
Net additions
+1.7%
YOY Growth
4G smartphone
data users
3,967
As of year end 2020
+397
Net additions
+11.1%
YOY Growth
Service
Revenue
Cable and
other fixed
$723m
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Home customer
relationships1
CABLE AND OTHER
564
FIXED (’000)
As of year end 2020
Home customer
relationships1
+54
Net additions
1,740
As of year end 2020
+10.5%
YOY Growth
+30
Net additions
+1.7%
YOY Growth
4G smartphone
data users
MOBILE (’000)
2,409
4G smartphone
As of year end 2020
data users
+238
3,967
Net additions
As of year end 2020
+11.0%
+397
YOY Growth
Net additions
+11.1%
YOY Growth
Mobile
$490m
Mobile
$347m
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Home customer
relationships1
CABLE AND OTHER
452
FIXED (’000)
As of year end 2020
Home customer
+16
relationships1
Net additions
564
As of year end 2020
+3.6%
YOY Growth
+54
Net additions
+10.5%
YOY Growth
4G smartphone
data users
1,827
MOBILE (’000)
As of year end 2020
4G smartphone
data users
+306
Net additions
2,409
As of year end 2020
+20.1%
YOY Growth
+238
Net additions
+11.0%
YOY Growth
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Home customer
relationships1
CABLE AND OTHER
606
FIXED (’000)
As of year end 2020
Home customer
relationships1
+87
452
Net additions
As of year end 2020
+16.7%
+16
YOY Growth
Net additions
+3.6%
YOY Growth
4G smartphone
data users
MOBILE (’000)
4,612
4G smartphone
As of year end 2020
data users
+718
1,827
Net additions
As of year end 2020
+18.4%
+306
YOY Growth
Net additions
+20.1%
YOY Growth
Mobile
$317m
Mobile
$347m
Mobile
$317m
Bolivia
Cable and
Colombia
other fixed
$227m
Cable and
other fixed
$723m
Paraguay
Cable and
Bolivia
other fixed
$195m
Cable and
other fixed
$227m
Guatemala
Cable and
other fixed
Paraguay
$228m
Cable and
other fixed
$195m
Guatemala
Cable and
other fixed
$228m
Others
$2m
Others
$44m
Service
Revenue
Service
Revenue
Others
$1m
Others
$2m
Service
Revenue
Service
Revenue
Others
$3m
Others
$1m
Service
Revenue
Service
Revenue
Mobile
$1,042m
Others
$3m
Service
Revenue
Mobile
$1,042m
EBITDA $m
Organic growth +0.9%
EBITDA margins %
$1,258
$1,432
$457
$510
34.0%
33.3%
Service revenue2 $m
Organic decline –7.7%
$575
$624
Service revenue2 $m
2019
Organic decline –1.1%
EBITDA $m
2020
Organic decline –9.7%
$1,258
EBITDA $m
2019
Organic growth +0.9%
EBITDA margins %
2020
EBITDA margins %
Service revenue2 $m
Organic decline –3.2%
2019
Service revenue2 $m
Organic decline –7.7%
EBITDA $m
2020
Organic decline –6.7%
2019
EBITDA $m
Organic decline –9.7%
EBITDA margins %
2020
EBITDA margins %
Service revenue2 $m
Organic growth +3.4%
2019
Service revenue2 $m
Organic decline –3.2%
EBITDA $m
2020
Organic growth +4.3%
2019
EBITDA $m
Organic decline –6.7%
EBITDA margins %
2020
EBITDA margins %
$1,432
$232
$257
$457
39.7%
$510
40.2%
34.0%
33.3%
$513
$575
$575
$252
$624
$294
$232
46.4%
$257
48.2%
39.7%
40.2%
$1,273
$1,234
$513
$575
$778
$748
$252
51.8%
$294
52.2%
46.4%
48.2%
$1,273
$1,234
$778
$748
51.8%
52.2%
2020
2019
2020
2019
2020
2019
2020
2019
2020
2020
2019
2019
2020
2019
2020
2019
2020
2020
2019
2019
2020
2019
2020
2019
2020
2020
2019
2019
2020
2019
2020
2019
2020
2019
2020
2019
FIXED (’000)
Home customer
relationships1
As of year end 2020
606
+87
Net additions
+16.7%
YOY Growth
4G smartphone
data users
4,612
As of year end 2020
+718
Net additions
+18.4%
YOY Growth
EBITDA $m
Organic growth +4.3%
EBITDA margins %
FIXED (’000)
Home customer
relationships1
As of year end 2020
176
––
Net additions
–0.1%
YOY Decline
4G smartphone
data users
2,114
As of year end 2020
+367
Net additions
+21.0%
YOY Growth
Mobile
$202m
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Home customer
relationships1
CABLE AND OTHER
463
FIXED (’000)
As of year end 2019
Home customer
relationships1
+25
Net additions
176
As of year end 2020
+5.8%
YOY Growth
––
Net additions
–0.1%
YOY Decline
4G smartphone
data users
1,003
MOBILE (’000)
As of year end 2020
4G smartphone
data users
+216
Net additions
2,114
As of year end 2020
+27.5%
YOY Growth
+367
Net additions
Millicom’s acquisition of
Panama mobile was closed
+21.0%
in August 2019.
YOY Growth
Honduras
Cable and
other fixed
$91m
Panama
Honduras
Cable and
other fixed
$91m
Cable and
other fixed
$359m
El Salvador
Cable and
other fixed
Panama
$123m
Cable and
other fixed
$359m
Costa Rica
El Salvador
Cable and
other fixed
$123m
Others
$4m
Service
Revenue
Mobile
$421m
Others
$5m
Others
$4m
Service
Revenue
Service
Revenue
Mobile
$421m
Others
$1m
Others
$5m
Service
Revenue
Mobile
$202m
Service
Revenue
Mobile
$224m
Cable and
other fixed
$139m
Others
$1m
Service
Revenue
Service
Revenue
Mobile
$224m
Cable and
other fixed
$139m
Service
Revenue
EBITDA $m
Organic decline –11.6%
EBITDA margins %
$516
$551
$247
$280
44.7%
47.1%
Service revenue2 $m
Organic decline –8.4%
$567
$551
$256
Service revenue2 $m
2019
$468
Organic decline –6.0%
EBITDA $m
2020
Organic decline –10.4%
$516
EBITDA $m
2019
Organic decline –11.6%
$223
EBITDA margins %
2020
$247
EBITDA margins %
Service revenue2 $m
Organic decline –0.1%
2019
Service revenue2 $m
Organic decline –8.4%
EBITDA $m
2020
Organic declline –2.5%
2019
EBITDA $m
Organic decline –10.4%
EBITDA margins %
2020
43.8%
$280
46.9%
44.7%
47.1%
$348
$348
$567
$468
$137
$140
$256
35.1%
$223
36.2%
43.8%
46.9%
Service revenue2 $m
Organic decline –0.1%
EBITDA $m
Organic declline –2.5%
EBITDA margins %
$348
$348
$137
$140
35.1%
36.2%
2020
2019
2020
2019
2020
2019
2020
2019
2020
2020
2019
2019
2020
2019
2020
2019
2020
2020
2019
2019
2020
2019
2020
2019
2020
2019
2020
2019
Millicom’s acquisition of
Panama mobile was closed
in August 2019.
EBITDA margins %
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Home customer
relationships1
CABLE AND OTHER
273
FIXED (’000)
As of year end 2020
Home customer
relationships1
–1
Net losses
463
As of year end 2019
–0.4%
+25
YOY Decline
Net additions
+5.8%
YOY Growth
4G smartphone
data users
1,260
MOBILE (’000)
As of year end 2020
4G smartphone
data users
+336
Net additions
1,003
As of year end 2020
+36.4%
YOY Growth
+216
Net additions
+27.5%
YOY Growth
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
CABLE AND OTHER
239
FIXED (’000)
As of year end 2020
Home customer
relationships1
–17
Net losses
273
As of year end 2020
–6.5%
–1
YOY Decline
Net losses
–0.4%
YOY Decline
MOBILE (’000)
4G smartphone
data users
1,260
As of year end 2020
+336
Net additions
+36.4%
YOY Growth
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
239
As of year end 2020
–17
Net losses
–6.5%
YOY Decline
Nicaragua
Cable and
other fixed
$28m
CABLE AND OTHER
FIXED (’000)
Home customer
relationships1
31
As of year end 2020
+11
Net additions
+53.2%
YOY Growth
MOBILE (’000)
4G smartphone
data users
1,050
As of year end 2020
+266
Net additions
+33.9%
YOY Growth
Service
Revenue
Mobile
$181m
CABLE AND OTHER
MOBILE (’000)
Service revenue2 $m
Organic growth +3.4%
Costa Rica
Africa
($m)
Mobile
OUR 2020 FINANCIAL PERFORMANCE IN AFRICA
Nicaragua
$357m
Cable and
other fixed
$28m
MOBILE (’000)
Service revenue2 $m
4G smartphone
Organic decline –3.7%
We continued to execute on our strategy to improve our financial performance from our Africa segment, which has
data users
2020
historically generated lower returns on capital than our Latin America segment. In line with this strategy, we divested
1,050
2019
our holding in Jumia and sold down part of our holding in Helios Towers. As of December 31, 2020, we held only 7.6%
As of year end 2020
EBITDA $m
of Helios Towers of Africa which is traded on the London Stock Exchange.
+266
Organic increase +2.1.%
Net additions
2020
+33.9%
2019
YOY Growth
Our Africa business segment currently consists of our operations in Tanzania and represents 6% of the Group's
underlying revenue and 5% of underlying EBITDA.
CABLE AND OTHER
MOBILE (’000)
FIXED (’000)
Mobile Customers
Home customer
13,111
relationships1
As of year end 2020
31
MFS customers
As of year end 2020
+11
7,141
Net additions
As of year end 2020
+53.2%
YOY Growth
Service
Revenue
Service
Revenue
Other
Fixed
$8m
$366
$125
$117
$382
Our operation in Tanzania was not immune to the impacts of the global crisis, with organic service revenue
down 3.7% in 2020, as compared to a decline of 2.9% in 2019. Meanwhile, EBITDA grew 2.1% organically in 2020,
improving from a decline of 19.9% in 2019.
Mobile
$181m
Africa
($m)
Other
Fixed
$8m
Mobile
$357m
Service
Revenue
MOBILE (’000)
Mobile Customers
13,111
As of year end 2020
MFS customers
7,141
As of year end 2020
Service revenue2 $m
Organic decline –3.7%
2020
2019
EBITDA $m
Organic increase +2.1.%
2020
2019
$366
$382
$125
$117
1 Includes HFC, DTH, Copper and other technologies.
2 EBITDA and EBITDA Margin and after organic growth are Non-IFRS measures. Please refer to the non-IFRS disclosures in this annual report for a description
and for a reconciliation of non-IFRS measures.
Millicom 2020 A nnu a l Rep or t
18
OUR IMPACT:
Advancing Our Business Strategy
The multifaceted product and service delivery strategy that
Millicom has built over the past five-plus years provided a
solid foundation that steadied our business in 2020. We
weathered the severe economic impacts from COVID-19
and have quickly returned to a long-term, stable growth path
by accelerating our pace of digital adoption to align with
customers’ evolving needs.
When demand for mobile services declined amid the
lockdowns, we were well-prepared to meet a resulting surge in
home Internet usage and demand for content. Our strategic
investments over the past five years have enabled us to
accelerate digital transformation across the business and
strengthen our customer relationships amid unprecedented
challenges.
We drive long-term growth and reliable performance through
a business strategy grounded in six interconnected areas
Build Cable
We continued to expand the Tigo cable network, passing more
than 428,000 new HFC homes in 2020. Tigo added more
than 277,000 new home customer relationships, 146,000 in
Q3 and 103,000 in Q4, representing 8.0% growth compared
with the same periods in 2019. We kept many existing
customers connected throughout the pandemic with our
lifeline broadband offering (see related story on this page).
Home broadband adoption surged by more than 12.1% in the
second half of the year, to 3.4 million subscribers. Our network
now passes more than 12 million homes in Latam, where Tigo
Internet traffic increased by more than 50% in 2020. Our
networks handled this surge during the pandemic and beyond
with no ill effects on reliability or resiliency. As people continue
working, attending school and consuming entertainment
predominantly at home, we see sustained opportunities to
build on this momentum.
19
MONETIZE DATABUILD CABLEDRIVE CONVERGENCEACCELERATE B2BGO DIGITALPROVIDEBESTCUSTOMEREXPERIENCELifeline product leaves no customer unconnectedWhere: All marketsWhat: Driven out of work by the onset of coronavirus, millions of Latin Americans were caught in a cruel dilemma. When they most needed a digital connection to their loved ones and sources of essential information, many households could no longer afford Internet service. Starting in April 2020, Tigo preserved uninterrupted service for all customers who had unpaid balances due to hardship from the pandemic.How: We extended a minimum “lifeline” product that gave customers Internet service with no associated charges. The lifeline offering helped ensure that those who were sidelined economically by COVID-19 shutdowns would not become further isolated from their communities. Also, our lifeline service in most countries included a variety of educational web resources to help families with at-home learning while schools remained closed.Results:» No Tigo customer was disconnected because of a past-due bill during the pandemic crisis» By July 2020, most households, businesses and postpaid users that received the lifeline product had resumed their payments and were back on regular Tigo service» We maintained valuable customer relationships through a temporary crisis, strengthened our business performance and reinforced our purpose in communities» Offering lifeline service enabled us to avoid direct costs of disconnecting and later reconnecting customers, along with added expenses to recycle set-top boxes and other equipment» Tigo restored vital revenue streams that helped us return to profitability soonerMillicom 2020 Annual Report Go Digital
As countries went into lockdown for several months during
the pandemic and mobility became severely limited, Tigo
customers’ demand for digital access to our services grew
exponentially in 2020. We were ready to meet this opportunity
through digital channels that Tigo has developed over the
past several years. Digital reloads of prepaid mobile services
increased 106% and digital payment collections grew 78%
through the end of 2020. When our physical stores and service
centers had to close temporarily, we shifted approximately
50% of all customer interactions to digital e-care platforms.
Also, use of Tigo Money for bill payment, purchasing and
wire transfers over doubled in 2020, to more than 48 million
transactions in Latam (see related story below).
Drive Convergence
Although many elements of our mobile business suffered
under the pandemic as health precautions and economic
hardships suddenly confined millions of people to their homes,
we continued investing in the essential building blocks of a
convergent IT platform in 2020. We continued to expand our
4G coverage in Latam, covering 76% of the population of our
markets. We met our timelines for building new or upgraded
network infrastructure in Colombia, Panama, Nicaragua and El
Salvador despite the challenges of COVID-19. Across the Latam
region, we added more than 2,500 new points of presence to
our mobile network.
5,400+
Upgraded Points of Presence
in Latin America
Accelerate B2B
2020 proved to be a watershed year for Tigo Business as
companies in our markets rapidly pivoted their operations to
enable working from home and serving their customers and
clients through digital channels.
We rolled out extensive new cloud services and virtual private
network (VPN) capabilities for our enterprise customers to
keep their remote employees connected and productive. We
also expanded our support for e-commerce, web-enabled
communications and other digital commercial processes.
Many of our SMB customers were severely impacted by
the mobility restrictions that were imposed in response to
COVID-19, impacting our own financial performance in B2B
during 2020. However, many other SMB customers needed to
rapidly transition from in-person sales and service to digital
channels. We helped them launch new websites or expand
existing ones—in as little as 24 hours—with online ordering,
payment and fulfillment capabilities that allowed these smaller
businesses to survive through the COVID-19 shutdown.
OUR IMPACT:
Tigo Sports
Tigo Sports
Tigo Music
Tigo Music
Tigo Money
Tigo Money
Tigo ONE tv
Tigo ONE tv
Mi Tigo
Mi Tigo
Tigo Shop
Tigo Shop
Tigo Business
Tigo Business
Millicom 2020 A nnu a l Rep or t
20
Where: LatamWhat: While people felt uneasy venturing outside their homes amid the coronavirus outbreak, they still needed to take care of bills and withdraw funds. Tigo Money, our electronic-wallet platform, provided rapid and safe online access to financial resources for people in quarantine or whose local businesses had to shut down temporarily.How: Through a new Tigo Money feature launched in Honduras, users could deposit international remittances sent through Western Union and MoneyGram directly into their e-wallets instead of working through a local Tigo Money agent. Also, the government of Paraguay partnered with us to provide coronavirus relief subsidy payments via Tigo Money.Results:» More than $100 million in government subsidies distributed to approximately 500,000 Paraguayan households» Tigo Money customer base grew to more than 5 million users during 2020, an 18% increase compared with the same period in 2019 » Mobile financial digital transactions more than doubled in 2020, to approximately 12 million transactionsDisbursing subsidy payments electronically gave people faster access to their money without exposing them to health risks. OUR IMPACT:
Helping MSMEs evolve
their digital outreach
Where: Latam
What: Micro, small and midsize enterprises (MSMEs),
which comprise about 99 percent of the businesses and
61% of employment in Latin America, have suffered the
most during the coronavirus pandemic.1
How: We co-organized a series of free, bi-weekly webinars
and provided access to other learning resources geared
toward helping small-business owners and workers retool
for success in this new environment. Representatives from
the business community, academia, the legal profession
and other fields presented more than 55 virtual training
sessions from April through December 2020.
Topics included:
» Digital Transformation
» Leadership for Female Entrepreneurs in Times of
COVID-19
» Responding to the Consumer
» Post-COVID-19 Legal Issues
» Strategies to Lead in the New “Low Touch Economy”
Results:
» The series drew more than 18,600 participants from
Panama and other countries
» MSME owners gained new technologies and practices
to help evolve their businesses and serve customers
more effectively online
» Webinar participants can revisit the virtual academy
to replay sessions and view additional materials
Monetize Mobile Data
Although consumer demand for our mobile data and content
offerings initially declined in early 2020 as people spent more
time at home, we saw 4G network usage rebound through the
end of the year. Tigo mobile penetration surpassed 41 million
Latam customers in 2020, including a record 2.2 million net
additions in Q4. We continued expanding Tigo customers’
access to premium content from Amazon Prime, Netflix,
YouTube, Google Android TV and other providers.
In October 2020, we became the first mobile operator in Latin
America to introduce Amazon Prime Video Mobile Edition.
Designed exclusively for mobile devices, the service enables
customers to access the entire Prime Video catalog through
their prepaid plan or pay as they go. Tigo debuted this service
in Guatemala and has continued rolling it out to our other
operations in Latin America. We also launched a new WiFi
360 app that provides greater parental control over content
streaming on home set-up boxes, computers and mobile devices.
1 OECD et al. (2020), Latin American Economic Outlook 2020: Digital Transformation for Building Back Better, OECD Publishing, Paris,
https://www.oecd-ilibrary.org/development/latin-american-economic-outlook-2020_e6e864fb-en
21
Provide the Best Customer ExperienceWe are simplifying how people interact with us—and empowering them to meet a broader range of needs on their own—through integrated, digital-first customer service channels. In 2020, we shifted approximately 50% of all customer interactions online. Digital self-service tools enabled us to resolve issues quickly and maintain high levels of customer satisfaction while most of our stores remained closed for much of the year. Our e-care platforms helped manage a jump in customer interactions, freeing Tigo call center representatives to focus on more complex issues such as collections and network outages.We also continued implementing nine new customer service interaction evaluations to help us better understand customer needs and experiences across our various touchpoints. We use these insights in mapping ideal customer journeys in all of our product and service categories, from B2B to mobile to in-home broadband.Our Net Promoter Score (NPS)—a measurement of customers’ willingness to recommend Tigo products and services—increased by 4 points in 2020. This change reflects the acceleration of the use of our digital channels, which we constantly improved, adding new features, increased reliance on customers trusted neighborhood points of sales and positive feedback from our home installation teams who continued to provide service throughout the year.Millicom 2020 Annual Report OUR APPROACH:
How We Connect
We are intentional about the positive outcomes we seek to achieve for our
company and each of our stakeholders. We set the course and activate the
resources for fulfilling our purpose through the interconnected work of teams
across many disciplines.
Our human resources (HR) group fosters a corporate culture in which people
feel welcomed and inspired to contribute at their best. Our corporate
responsibility (CR) group leads the company’s efforts to improve economic,
social, educational and environmental conditions wherever we operate. Our
corporate governance structure instills the highest standards of integrity
and ethical behavior in all areas of Millicom’s operations, starting with our
Board and Executive Team. Our risk management group plays a critical role
in reducing uncertainty across the business and informing more successful
decisions on capital and resource allocation.
Working in concert, all of these components bring substance and momentum
to our vision of what Millicom should be.
Millicom 2020 A nnu a l Rep or t
22
“ This is one of those
moments in our lives when
you see what people are
truly made of . . . and our
leadership shows how we,
as a family, can overcome
any obstacle. Proud to have
#sangretigo!”
Yeng Young
Global Director of Business Service Delivery, following our
March 2020 virtual Town Hall with CEO Mauricio Ramos
Supporting Our People
Millicom’s purpose comes to life through the talent, energy and
dedication of our 21,000-plus employees and roughly 20,000
contractors. We rely on our people to embody Sangre Tigo—
the lifeblood that fuels our business success. In turn, we strive to
build a culture inside our company that rewards our employees’
creativity, respects their diversity, empowers them to drive
positive change and inspires them to grow personally as well as
professionally. Our Sangre Tigo culture is the foundation that
has guided our business and our people during tough times,
and will continue to drive our future success.
Although the company was tested like never before in 2020,
our support for employees—and their expression of our Sangre
Tigo heartbeats—sustained us. In a year largely defined by
unprecedented medical, economic and social challenges,
keeping employees safe was our guiding light. Also, in that
same spirit we have come together as the Tigo family that
we are to show our lasting care and support to the families
of our Tigo employees and contractors that lost the battle to
COVID-19.
Our team responded swiftly to the COVID-19 crisis and our
employees pulled together as one, enabling us to finish 2020
even more resilient and fully prepared to embrace the new
world of work.
As Millicom embarks on its fourth decade, we continue to
advance strategic priorities such as nurturing employees’
professional development, fostering greater diversity and
inclusion in our culture, and digitalizing our Human Resources
processes to better support people company-wide.
Great Place to Work®
Tigo ranked among the Top 25 Best
Multinational Workplaces in Latin
America in the 2020 Great Place
to Work® survey—our third year of
receiving this honor.
Millicom 2020 A nnu a l Rep or t
23
How Sangre Tigo Moves Our Business
We continued to bring our Sangre Tigo Cultural Framework to life across the company in early 2020 through interactive
workshops and the efforts of nearly 200 Sangre Tigo employee ambassadors. We acknowledged and celebrated all the
ways our employees embodied Sangre Tigo during the pandemic through our Tigo Heroes program (featured on page 11).
SANGRE TIGO CULTURAL FRAMEWORK
P U L S E S
We are
ONE TIGO
TIGO runs
in our veins
We make it
happen the
right way
We give 1,000%
for our
customers
B E H AV I O R S
We have one purpose
and we make an impact
We are inclusive
and united
Together we win
We value our
differences
We manage Tigo
assets as if they
were our own
We are proud of
our company and
our history
We are innovators
We are fast and we
go the extra mile
We are passionate
We care for our
communities
We lead by example
and we do what
we preach
Our customers are
at the center of
everything we do
We never compromise
our integrity
We are direct,
honest and open
We are transparent
and accountable
We always do it right,
from the first time
We find solutions
and deliver results
We make decisions
based on data insights
We see challenges
as opportunities
We think, act and
live digital
24
Millicom 2020 Annual Report Protecting employees through
COVID-19
When COVID-19 cases and ensuing business lockdowns began
to snowball worldwide in early 2020, we immediately had to
rethink almost every aspect of our operations to ensure we could
keep our employees safe. As an essential service provider, we also
knew that many of our personnel had to remain in the streets
and with customers on-site while other employees needed
additional support to shift into working remotely.
From day one of the pandemic, our people never hesitated
in giving their all to keep Millicom customers connected and
satisfied. We went all out to protect them and empower them in
this uncharted territory.
In formulating our crisis response and workforce management
plans, we divided Millicom’s workforce into five segments: retail,
office, technical/warehouse, call center and field/commercial
services. This approach helped us tailor health and safety
protocols to specific roles and work settings, as well as ensure
compliance with country- or community-specific mandates.
Cross-functional crisis management teams met daily during the
first month of the pandemic, then twice a week as conditions
around the region began to stabilize.
From providing masks, gloves and other personal protective
equipment (PPE) for employees in the field to equipping office
workers and call center representatives with laptops and
broadband connectivity at home, we had most of our operations
running again within two weeks of the shutdowns. Our HR teams
in each country helped coordinate frequent communication
and engagement with employees as they adjusted to working
remotely. (See related “Our Impact” story below.)
We also launched extensive health and safety trainings in each
country as well as regular audits to help ensure compliance with
our protocols. Employees received frequent reminders about
proper hand washing, PPE use, sanitizing their workspaces and
maintaining social distance.
Health, safety and environmental
management beyond COVID-19
Our attention to broader health and safety issues for our
workforce also remained strong in 2020. We completed the
planning process to recertify our country operations in both
ISO 14001 environmental management standards and 45001
occupational health and safety standards. We are also in the
process to move all of our Occupational Health & Safety training
programs, risk assessments, gap analysis, and incident reporting/
response documentation into a new online portal, based
on Occupational Safety and Health Administration (OSHA)
standards that will help support greater compliance.
OUR IMPACT:
25
Supporting remote employees amid coronavirusWhere: All marketsWhat: For many of our employees, the abrupt transition to working from home amid coronavirus restrictions added a host of new challenges in their professional and personal lives. We reached out early and often in 2020 to help them stay productive, engaged and encouraged.How: Managers company-wide set aside time each week for virtual check-ins to learn how their team members were feeling and what additional support they might need. Our HR teams used some of this feedback to identify common issues that we could address on a broader scale, such as offering more online social activities or connecting employees with child care resources.When employees tested positive for COVID-19 or had to quarantine because of possible exposure, local HR departments sent care packages to them with basic necessities as well as uplifting extras. We called these employees daily to provide encouragement and support. Also, the HR team distributed periodic Pulse Check surveys to gauge the value of our decisions and support on behalf of employees.Our HR portal hosted a series of presentations on working productively from home. In addition, employees could tune in for online Zumba classes and other fitness sessions with a personal trainer. Plus, we ensured that employees who were experiencing depression and anxiety could connect with a professional counselor or mental health provider during the pandemic.Results:»Maintained high levels of productivity across the company» Employees reported they felt supported and were able to stay more engaged while working from homeMillicom 2020 Annual Report What our employees say
“ Thank you for all the support you give us in the
face of this pandemic. I thank God for belonging
to this great family that is our company.”
Antonia Arias
Tigo Money Agent, San Salvador, El Salvador
“ Thank you for always training us and motivating
us to be a better team. This sharpens our
capabilities so we can be an important resource
of the company!”
Elena Monje
Tigo Money Agent, Santa Tecla, El Salvador
Shaping the Future of Work
Having persevered through the initial hardships posed by 2020,
we continue to learn valued lessons and look to new ways of
which to build better workplaces.
In January 2020, 99% of Tigo employees worked on-site; by
April 2020, just 4 months later, 70% of employees were working
remotely. Our organization and people, rapidly shifted and
adjusted to the rapid change in work and we saw encouraging
signs that some of our operations could be well-suited to this
more flexible style. And we are not alone: According to a Gartner
study1, nearly half of employees in Latin America expect to
continue working remotely after the pandemic subsides.
Led by our HR group and the Business Transformation Office,
cross-functional committees in each of our countries are
exploring how we can continue maximizing the benefits from our
COVID-19-driven investments in work-at-home arrangements,
virtual meeting platforms, online customer interactions and
other changes crafted in 2020. For example, reviewing the
opportunities to allow reduced travel time and costs for
employees in favor of a more virtual collaboration.
We also envision a more permanent “hybrid/flexible" working
model that will allow employees the opportunity to switch
dynamically between home and office based dependent on
their day-to-day tasks within their roles. Longer term this could
reduce the amount of physical work space that we maintain and
prioritizing it to individual employees or teams that most need
on-site resources or in-person collaboration.
By becoming one of the first telecommunications companies
in our markets to implement a hybrid approach, we believe
the transformation will help us create an additional edge in
attracting talent, accelerate our innovation and lead us to
become a higher-performing organization.
Building a More Diverse and
Inclusive Workplace
Respect for all people is at the core of our Sangre Tigo
cultural framework. We recognize that the strength of our
company flows from creating a supportive environment
that attracts talented professionals with a broad array of
backgrounds, experiences and perspectives. In a diverse and
inclusive workplace where every employee feels empowered
to contribute authentically, the resulting innovation helps
ensure that our business, products and services reflect the full
spectrum of interests in our markets.
We rely on candid feedback from Millicom employees,
shareholders and customers to guide our efforts. In 2020,
we approved a new corporate diversity and inclusion (D&I)
strategy and continued progressing on a two-year initiative to
instill the essential components of D&I in Sangre Tigo culture.
Using insights gathered in a 2019 company-wide survey of how
employees experience D&I in the workplace, our newly formed
Global D&I Council and country-specific councils defined three
key areas of focus within the strategy:
» We lead by example. Millicom strives to empower all
Millicom employees to lead by example in building a
more inclusive and respectful culture. We expect our
people to embrace inclusion, actively seek out differences
and encourage others to do the same. We will hold our
people managers and senior leaders to high standards of
accountability in their support for D&I progress.
» We ensure growth opportunities for all. Millicom is
committed to building a diverse work culture that attracts,
hires, promotes and develops talent based on equality. We are
examining our organization to identify processes that could
be perceived as biased or unfair by employees as well as our
customers and other stakeholders. Focal points in 2020
1 “9 Predictions for the Post-COVID Future of Work,” Gartner, May 14, 2020, https://www.gartner.com/document/3985163ref=solrResearch&refval=276847906
26
Millicom 2020 Annual Report included how we recruit and select candidates for various
positions and in different markets. Also, we continue to look for
opportunities to inspire greater D&I through our processes.
process, we identify people with strong leadership potential and
invest in opportunities for them to expand their skills through
on-the-job experiences in different areas of our company.
» We listen to every voice. Our company endeavors to be
a safe space in which employees feel encouraged to be
authentically themselves, express their viewpoints and use
their insights to drive positive change. We are reaching out to
our many diverse groups of employees to better understand
the barriers they encounter, give them a stronger voice in our
company-wide D&I efforts and provide more meaningful
support to them in the workplace.
Across all of these areas, our D&I approach centers on
raising awareness, listening to our people and using what we
learn to refine our strategy. In 2020, we began rolling out a
comprehensive communication and education program to help
all employees put the company’s D&I values into practice. We
are also working to ensure our D&I councils represent the full
spectrum of employee backgrounds and perspectives that shape
Millicom so we can continue to accurately measure our progress.
Fostering Talent, Leadership
and Career Growth
Throughout Millicom’s operations, we consistently see that
the company excels when our employees feel empowered and
motivated to perform at their best. Especially during tough times
such as the COVID-19 crisis, our ability to innovate and stay
competitive hinges on attracting, retaining and developing the
best talent in our markets. We accomplish this by continually
seeking new ways to inspire our people and nurture their
professional growth.
We continued to hone our leadership and talent development
programs in 2020 with a focus on giving team-oriented,
committed employees the chance to take on greater
responsibilities. As part of our Organizational Talent Review
Along with rewarding people for their commitment and
supporting their long-term career growth, our promote-from-
within approach also helps us reduce costly and disruptive
turnover. During 2020, we retained 91% of our employees
compared with 88% in 2019 and 86% in 2018.
Digitalizing Our HR Processes
Even before the pandemic, we set a priority to streamline and
enhance our HR resources for employees wherever they may be
working. As a result, we finished 2020 on course to implement
a single integrated HR information system (HRIS) across all of
Millicom that better supports our business strategy, delivers
consistently exceptional experiences for employees from
wherever they work and empowers company managers to
make better-informed decisions. The cloud-based technology
behind our HR transformation will support:
» Faster access to more digital self-service tools for employees
» Greater visibility of our talent company-wide to support
strategic decision making
» Enhanced security and compliance support
» Simplified, standardized and automated processes
for greater efficiency
Transactional HR processes such as payroll, benefits and
performance management are scheduled to go live in the
second half of 2021, with remaining modules launched by
early 2022. Once complete, our single HRIS will replace more
than 15 current software platforms and reduce HR teams’ data
management and reporting workload by nearly fourfold.
We finished 2020 on course to implement a single
integrated HR information system (HRIS) across all of
Millicom that better supports our business strategy.
15+
Software platforms across Millicom
that will be replaced by one integrated
HR information system in 2021
27
Millicom 2020 Annual Report Our Corporate Responsibility
Millicom’s business purpose is at the core of our corporate responsibility (CR)
actions, and always has been. As our market leadership grows through the adoption
of digital technologies, so does our ability to fuel even greater economic, social and
educational opportunities.
This entwining of Millicom’s business purpose and corporate responsibility (CR) actions
resonated even more powerfully in 2020 as COVID-19 magnified the significant barriers
that exist in our markets. As our company rose to meet the challenges of a global
pandemic, we found opportunities to amplify our deeply held CR values at virtually every
turn and to position ourselves for new business opportunities when the crisis subsides.
Our CR Framework and Five-Year Plan
We partner with regional and local organizations on channeling
Millicom products, services, financial resources and employees’
talents to make the greatest possible social and community
impact. Anchored by Millicom’s core purpose, our CR
Framework spans five CR Fundamentals within our business and
three pillars of our Responsible Leadership in Action to benefit
children, women and communities. Across each of these areas,
we have set a Five-Year Plan with specific goals for measuring
our progress.
Responsible
Leadership in Action
CR
Fundamentals
Empowering
Women
Ethics
Environment
Purpose:
Build Digital Highways
that connect people,
improve lives
and develop
communities
Inclusion
Supply
Chain
Protecting
Children
Human
Rights
Connecting
Communities
REASSESSING OUR CR STRATEGY THROUGH
COVID-19 LENS
Along with responding to the challenges raised by the
coronavirus pandemic, we also sought to learn from this
unprecedented experience and to understand whether we
should adjust our CR framework, targets or disclosures. Our CR
team spearheaded a COVID-19 Materiality Assessment that
involved in-depth conversations with over 40 Millicom business
leaders from every major operational segment and external
stakeholders. The assessment also included an online survey
that received more than 4,000 responses from B2C and B2B
customers and diverse community organizations.
We found that our CR framework provided a sound compass to
help navigate through the disruption. While all of our current
areas of focus remain of interest to our stakeholders, some
topics, such as Digital Divide, Employee and Contractor health
and Wellness and climate change increased in importance.
Our main conclusions were that Millicom has an opportunity
to more clearly link its CR goals with the company business
objectives and to better communicate that alignment to all of
our stakeholder groups.
For a more detailed overview of the process and updated
materiality graphic, click here.
OUR PROGRESS ON CR GOALS
Millicom’s strategic decision to prioritize community and
employee needs during the coronavirus pandemic shifted our
focus away from some of our shorter-term CR goals for the
year. However, we remain committed to hitting our long-range
CR goals within our Five Year Plan, set for 2023. During 2020
and continuing this year, we’ve adjusted some of our specific
environmental, social, and governance (ESG) performance
benchmarks to reflect the ways COVID-19 has affected our
incremental progress.
Detailed statistics about Millicom’s CR performance, including
how our work aligns with the United Nations Sustainable
Development Goals (SDGs), can be found in the tables starting
on page 47.
28
Millicom 2020 Annual Report Virtual Outreach During An Unprecedented Crisis
When the 2020 coronavirus pandemic triggered widespread economic shutdowns and economic contraction across Latin
America, we focused on tailoring the flagship programs within our CR Framework to continue to meet the most pressing
needs among people in our communities.
Our immediate responses included expanding access to remote education resources to help keep children safe as they
spent more hours online for school and entertainment when countries restricted mobility to help keep the coronavirus from
spreading. In addition, we shifted our digital inclusion and economic empowerment support for women from in-person to
virtual channels. We also connected thousands of teachers in nine Latin American countries with digital curricula and skills
training to help them deliver more effective online education. Related stories on each of these initiatives are included within
this section.
Lastly, Millicom also provided direct aid during this crisis, including monetary and in-kind donations as well as free or
discounted access to Tigo products and services at shelters, medical centers and other facilities serving those affected
by the coronavirus pandemic.
OUR IMPACT:
1 For additional details, see our Performance Tables beginning on page 47.
Millicom 2020 A nnu a l Rep or t
29
Financing tied to ESG targetsWhere: All marketsWhat: We believe our actions, such as sustainable investments linked to socio-economic and environmental targets, move communities forward while sustaining our own future success. Building upon the steps our company took in 2019 with the issuance of a $200 million Sustainability Bond, we secured even deeper financial support last year based on the strength of our ESG work. This is another powerful way that our commitment to operating sustainably and being an agent of positive change in society also drives Millicom’s business success.How: A five-year, $600 million ESG-linked revolving credit facility—or line of credit—that we established in October 2020 includes provisions that incentivize Millicom and some of our operating subsidiaries in Latin America to meet predetermined sustainability targets. Available funds have been used to refinance Millicom’s existing multi-currency revolving credit facility and for general corporate purposes. Results:This approach to linking financial and ESG performance targets will help to advance in objectives such as:» Reducing our environmental footprint through customer premises equipment recovery2» Training suppliers on Millicom’s core values and CR practices such as health and safety, anti-corruption, compliance, human rights and eco-efficiency» Empowering women and reducing the gender gap by training women on digital literacy and entrepreneurship through our Conectadas program» Training teachers, through our Maestr@s Conectad@s program, to deliver more effective online education for students Responsible Leadership in Action
Protecting children online
Young people have an almost limitless universe of learning, entertainment, and
social opportunities available on the Internet. But venturing online without the
tools or experience to recognize and avoid potential dangers can expose children to
considerable harm.
The potential for encountering inappropriate content, online predators, cyberbullying,
and online threats rose sharply during the pandemic as young people worldwide spent
even more unsupervised time online. UNESCO estimated that 1 billion students and
youth worldwide were affected by school closures due to the COVID-19 outbreak.3
Through our child online protection programs, Millicom and its partners throughout
Latin America have trained more than 480,000 youth on the benefits and risks
of digital technology since 2016. We teach them how to use the web safely and
productively—so they can maximize the opportunities it provides for education,
employment and innovation.
“ One of the most significant effects of the COVID-19 crisis is the
enlargement of the digital gap and its effects on education,
particularly in the developing economies. Public-private
partnerships like the one Tigo has with UNICEF can move
online so that the digital divide does not widen even more.”
Mauricio Ramos
CEO, Millicom
Partnership with UNICEF to address the Covid-19 crisis
Through our long-time partnership with UNICEF, Conéctate Segur@ is providing online access to the organization’s
Learning at Home (“Aprendo en Casa”) program and adding modules that teach about child online protection. The
Learning at Home program supports families with fun and educational activities as well as information to help keep
young people safe as they explore the web.
Working with national governments, the Aprendo en Casa campaign has been shared with more than 10 million users
in Central America. TIGO communication channels, such as SMS, social media, Cable TV and partner radio stations,
have allowed UNICEF to reach millions of children and their families with messages on health and protection measures,
especially for those who have no access to the internet.
School of Influencers in Colombia and Bolivia
With UNICEF, TIGO has developed an online safety platform for adolescents in Colombia as part of the School of
Influencers program. The program is executed through our "Ciberconscientes" (Cyber-conscious) platform which
contains videos and posts created by young leaders and foster peer-to-peer learning. In 2020, we trained 6,000 children
and adolescents as community leaders in eight Colombian cities to develop essential skills for their safe, secure and
creative use of the Internet. In all, "Ciberconscientes" has trained 8,000 influencers since 2019.
In Bolivia, the partnership is building a pioneering, scalable training module on 12 essential life skills for an initial group
of 250 adolescent leaders, based on UNICEF’s Conceptual Framework on Transferable Life Skills.
1“ Education: From disruption to recovery,” UNESCO, May 25, 2020, https://en.unesco.org/covid19/educationresponse
30
Millicom 2020 Annual Report OUR IMPACT:
Empowering Women:
Digital Programs Expand our Reach
Difficult economic downturns such as the one
brought on by the COVID-19 crisis often take
the heaviest toll on women, especially those who lack access
to digital tools, content and skills. The Consultative Group to
Assist the Poor (CGAP) noted in August 2020 that in developing
regions such as Central America, 92% of women work informally
and have been disproportionately affected by the pandemic.4
In 2020, we reinforced our commitment to integrate more
women and girls into the digital ecosystem through training
on mobile technology, entrepreneurial skills and micro-finance
resources. Working with our network of regional and local
partners, we delivered our training through online channels so
that women and girls could still participate despite the need to
socially distance.
PLAN INTERNATIONAL CAMPAIGN
In commemoration of International Day of the Girl on Oct. 11,
2020, we provided support all month for Plan International’s
regional Connected and Safe program. This campaign helps
raise awareness of online risks, such as abuse and harassment,
faced by girls. We communicated about Connected and Safe
through our social media. Female leaders from our corporate
office also conducted sessions with girls in the program to share
stories and advice.
TIGO MONEY TRAINING
Tigo Money provides women the opportunity to broaden
their own financial options while also helping others in their
communities to complete money transfers, pay bills and become
more active in local commerce.
In El Salvador, 40 women who are independent Tigo
Money sales agents, completed a customized training on
entrepreneurship tools. As a result, they increased their micro-
business revenues by an average of 28%.
Digital inclusion can create life-changing impacts. Women are
using new skills to break the cycle of poverty, build confidence,
grow more self-sufficient and even launch their own small
businesses. In turn, their economic success strengthens entire
communities while also growing the demand for Tigo products
and services.
1 CGAP, “Relief for Informal Workers: Falling through the Cracks in COVID-19,” August 2020, https://www.cgap.org/research/covid-19-briefing/relief-informal-workers-
falling-through-cracks-covid-19
31
Conéctate Segur@ volunteers take on social mediaWhere: LatamWhat: To keep our volunteers engaged and continue our educational work on child online protection while observing measures established to fight the pandemic, we developed safe ways to communicate our content digitally through social media.How: We invited our Sangre Tigo volunteers to reach out through their personal social media to spread our Conéctate Segur@ content. Working with our colleagues in communications and other departments, we created a ripple effect by developing content and audiovisual pieces for volunteers to share. Although the pandemic prevented us from delivering these valuable tools and information in person to those who need them the most, we look forward to returning to face-to-face interactions soon.Results:» Strong region-wide response with over 13,700 estimated volunteering hours, including:» 707 registered volunteers in Colombia dedicating 6,811 hours» 568 registered volunteers in Panama, dedicating 2,142 hours» 187 registered volunteers in El Salvador dedicating 3,416 hours Millicom 2020 Annual Report “ The trainings have been excellent. My Tigo Money sales
have increased and so has my income. I learned a lot about
financial planning, cost and salary management. At first it
was very hard for me. But now I understand and know how
these aspects are beneficial for my business.”
Antonia Arias
Tigo Money Agent, San Salvador, El Salvador
“ I was afraid of using digital tools to sell my products but the
truth is, as the trainer said, we need to be decisive and use
digital tools especially during the pandemic.”
Elena Monje
Tigo Money Agent, Santa Tecla, El Salvador
OUR IMPACT:
Millicom 2020 A nnu a l Rep or t
32
Conectadas helps women and girls develop digital skillsWhere: LatamWhat: Our Conectadas program trains women and girls in Latin America on digital literacy and entrepreneurship as a springboard to greater opportunity.How: Working with our partners Sheva in Guatemala, Ideas en Acción in Costa Rica and Fundemas, we continued expanding the Conectadas curriculum in 2020. We adapted content through online tools to help participants continue to acquire key skills that have become especially relevant given the challenges brought on by the coronavirus pandemic.In the second semester of 2020, with our partner Fundemas, we launched a digital skills training platform for women in El Salvador, Nicaragua, Colombia and Paraguay.Results:From 2017 to 2020, more than 415,000 adolescent girls and women have been trained through the Conectadas program» By the end of 2020, more than 2,500 women had accessed the digital skills trainings offered through Fundemas» We distributed content on the empowerment of women through technology, advice in emergencies and other topics Connecting Communities
We witness the life-changing power of digital connectivity
throughout all aspects of Millicom’s business. However, such
benefits remain frustratingly out of reach for millions of people
in developing areas who are on the wrong side of the digital
divide because of disparities in education, income, and access to
in-home or mobile technology networks.
Millicom has partnered with local and regional leaders for
many years to help narrow the opportunity gaps by broadening
Internet access for underserved people through schools,
community centers and other institutions. These efforts became
more challenging in 2020 as health precautions tied to the
COVID-19 outbreak left millions of Latin Americans cut off from
publicly accessible computers and other resources that they rely
upon for digital connections.
COVID-19 hit teachers hard. From one day to the next, they
had to adapt to a new reality. We responded by creating a
new program, Maestr@s Conectad@s (Connected Teachers), to
support teachers in their great vocation and train them on the
use of digital tools, the Internet and educational applications
which can help them continue to educate their students.
We also expanded our outreach to educators, government
agencies and nonprofits that connect underserved households
with technology.
In many instances, our regional offices provided Internet
access at no cost to support governments and community
organizations in keeping the public informed about coronavirus-
related issues. Tigo services also played a central role in
distributing messages on hygiene and social distancing
practices along with providing Wi-Fi to critical premises like
shelters, quarantine centers and hospitals. In our role as a
leading provider of content, connectivity and services to these
communities, we are committed to extending digital lifelines
that enable greater inclusion and open more opportunities for all
people to thrive.
MEETING THE CHALLENGES AHEAD
COVID-19 placed a magnifying glass on the wide gaps in access
to technology. However, we recognize the opportunities that
technology provides. We are committed to a sustained and
coordinated effort with business, government and community
leaders to bring the benefits of the digital lifestyle within reach
of all people as part of our broader commitment to helping
achieve the UN Sustainable Development Goals.
Millicom 2020 A nnu a l Rep or t
33
“ Now that face-to-face
educational work has been
suspended, we hope that the
virtual programs we have
developed and our experience
in facilitating teachers, families
and students will respond to the
needs of this new reality and
reach all levels of education.”
Arlei Villegas
AYHU Director of Production
“ This crisis has pushed us
toward a scenario we had never
experienced: education in the
virtual world. The (Maestr@s
Conectad@s) program helped
me to continue acquiring skills
in the use of new technologies.”
Humberto Falcón
Maestr@s Conectad@s participant in Paraguay
34
OUR IMPACT:
Supporting teachers through
digital training
Where: Latam
What: Teachers make an impact in the classroom that
resonates throughout students’ lifetimes and influences
the vitality of entire communities. To help fill the urgent
need for effective digital education tools and techniques
in many Latin American school districts, we created
Maestr@s Conectad@s (Connected Teachers) as a free
online resource for teachers throughout the region.
How: Launched by Tigo Bolivia in alliance with the
nonprofit organization AHYU, Maestr@s Conectad@s
offers online workshops geared toward helping educators
adapt the soft and technical skills required for online
teaching. AHYU designed the content for Maestr@s
Conectad@s, and we are working with the ministries of
education in each country to introduce this program in
other Latin American countries. As of December 2020,
we had expanded the Maestr@s Conectad@s program
to Nicaragua, Guatemala and, with UNICEF's support, to
Paraguay.
Through another partnership with BIIA LAB Foundation
and AHYU, we also helped organize an international
online conference on delivering digital education amid
the COVID-19 crisis. The event, Inzpira Online, featured 10
education experts from eight countries sharing tools and
best practices to help teachers throughout Latin America
navigate in this new era of online learning.
Results:
» More than 137,000 teachers completed Maestr@s
Conectad@s training in 2020
» Inzpira Online drew more than 400,000 participants
Millicom 2020 Annual Report Our CR Fundamentals
We work with teams across the company to reflect CR values
such as environmental stewardship, integrity, inclusivity and
respect for human rights in every facet of our business. These
are not altruistic values to us, but rather the prerequisites for
conducting our business in the right way to maximize its positive
impact, manage risks, reduce costs and build lasting trust with all
of our key stakeholders.
ENVIRONMENT
We recognize that minimizing our operating waste, reducing
the carbon intensity of our networks and taking other ambitious
steps to shrink our environmental footprint are keys to
optimizing our business and delivering improved connectivity
and services to our customers. We work collaboratively across
business functions to address our environmental impacts and
risks in ways that help us fulfill our purpose.
Our environmental management systems are based on the ISO
14001 standard and are subject to external audits to ensure
consistent compliance and alignment. Within the management
system, we include controls around vetting contracted services,
vendors, waste management, energy initiatives and carbon
reduction measures. Although the pandemic-driven demands
involved in protecting our employees and maintaining service for
our customers took highest priority through much of 2020, we
are no less committed to fulfilling our environmental objectives.
In order to strengthen our collaborative approach and set
a strong message from the top of the organization, we
formalized our Environmental Leadership Steering Group
(ELSG) in 2020 with involvement by our CEO and members of
our Executive Team who are responsible for key environmental
and climate risks. The ELSG oversees company-wide efforts
to embed sustainable practices and values in our business
operations. It also tracks the company’s progress against
our 2023 Environmental Goals in areas such as greenhouse
gas emissions, electricity and fuel consumption, and e-waste
recovery and recycling.
To manage our climate risks and related actions, we have used
TCFD as a framework for CDP (formerly Carbon Disclosure
Project) reporting and internal management since 2018. In the
fourth quarter of 2020, we conducted a gap analysis with a key
partner in order to assess the level of alignment of our current
tools, processes and disclosures. The assessment found partial
alignment in 9 out of 11 TCFD’s recommended disclosures, with
a clear governance structure, identification and description of
climate risks and opportunities, and key metrics regularly and
consistently reported.
We have developed a detailed roadmap to enhance our
capabilities in all four areas of TCFD recommendations, with
particular focus on fulfilling our commitment to set new emissions
reduction targets. The roadmap is also a necessary step toward
our comprehensive climate strategy to become an even more
resilient operator that can keep our communities connected and
bring low-carbon solutions to our customers and communities.
» Reverse Logistics in an atypical year: Like in many other aspects
and ongoing programs, COVID-19 put the customer premise
equipment (CPE) recovery to the test. In the face of the
disruption and the need to be connected even for activities that
previously would not have required a connection, our commercial
home team made the decision to avoid service termination,
providing customers unable to pay with a lifeline product.
Furthermore, especially between April and August, we faced
issues, such as:
» Skewed recollection rates, pushing higher volumes to end of
year or early 2021.
» Reduced lab capacity during the lockdowns due to abrupt
closures and/or absenteeism.
» Limited device recollection due to circulation restrictions
during quarantine.
Despite the above, we achieved a 64% recovery rate and with a
higher capital expenditure avoidance than in 2019 due to new,
more expensive CPE models being recovered as well as more
units retrieved despite the percentage diminishing, as a result
of the inclusion of our Panama operation to the program and a
spike in Colombia.
This resulted in estimated:
» 1,770.3 tons of CO2 emissions avoided
» 1,098.4 tons of plastic waste diverted from landfill
» 1.2 million cubic meters of water saved
We work with teams across the company to reflect CR values
such as environmental stewardship, integrity, inclusivity and
respect for human rights in every facet of our business.
Millicom 2020 A nnu a l Rep or t
35
OUR IMPACT:
Increasing energy efficiency
of our Datacenters
Modernizing the network in our
newly acquired Operations
Connected with: Customers, Shareholders
Where: Latam
Where: Latam
What: We handled a 50%+ surge of Internet traffic on
Tigo networks in 2020 without significantly increasing
energy usage in Tigo data centers.
How: Starting with our datacenters in Honduras, we
deployed new data center virtualization software in place
of older, power-hungry racks of servers. The upgrades
also eliminated many of the local hub sites that formerly
supported our network. We also brought this technology
into our Panama and Guatemala facilities in 2020, with
plans to expand it to other operations in 2021.
Results:
» Increased our points of presence by 40% while our
total energy costs rose just 5%
» These and other improvements will enable us to
continue expanding our customer base and fulfilling
increasingly sophisticated data needs while effectively
shrinking the square footage required for data centers
and other facilities
» The further we decouple network growth from energy
consumption, the more sustainably our business can grow
What: 2020 was the first full year with the mobile
networks in Nicaragua and Panama under Millicom
management. Starting in late 2019, we began network
modernization projects to bring the newly acquired
networks up to Millicom standards and realized the
efficiencies expected from the integrations, with an
investment of $40 million.
How: In Nicaragua, we have modernized over 1,100
sites and ended 2020 with 100% of the mobile network
upgraded.
Results:
» 20%-25% lower electricity consumption vs the previous
technology at sites in Nicaragua; 1.5 million KwH saved
through the end of 2020, well above our expectations.
» 900,000 KwH saved at sites in Panama with the
upgraded network.
» New network requires fewer maintenance visits, which
greatly reduces our fuel consumption.
36
Millicom 2020 Annual Report PROTECTING HUMAN RIGHTS
Information Security
As one of the largest providers of digital services and content
in our markets, we take seriously our responsibility to respect
people’s dignity and safeguard their rights, including freedom of
expression (FoE) and privacy. This extends from how we handle
personal and confidential data for millions of customers to the
workplace standards we uphold with our employees and supply
chain partners.
To help us follow through on these commitments and identify
areas to improve, we regularly seek input from and share best
practices with experts, investors, NGOs, other companies and the
academic community.
Our Privacy Policy
Millicom’s global and country-specific websites provide
customers with detailed information regarding our privacy policy
and practices. Visitors can readily learn how we use, process
and protect customer data. We also provide transparent access
to channels and contact points for customers to raise privacy
concerns. Furthermore, we trained almost 12,000 employees on
Data Privacy Essentials.
During the coronavirus pandemic, some governments have
requested customer data from us to help in their efforts with
contact tracing and other follow-up actions. We adhered to our
Privacy Policy and the terms of our Law Enforcement Assistance
and Major Events Guidelines in handling all such inquiries.
Learn more in the 2020 Millicom Law Enforcement
Disclosure Report.
Employees from Latam
and HQ trained on
Data Privacy Essentials
We continued building out our comprehensive information
security function and office in 2020. Although the COVID-19
crisis spurred a dramatic rise in cybersecurity and data privacy
attacks against companies worldwide, the protective measures
that we have taken in recent years enabled Millicom to deter any
significant impact.
The ongoing deployment of the global Security Operation
Center, along with key strategic initiatives such as Identity
Management, and the Vulnerability Identification and
Mitigation program continue to mitigate technology-centric
risks throughout the enterprise. Also, our offices conduct annual
training for employees on cybersecurity and data protection
issues. In 2020, 89% of our employees participated in a
4-module Information Security Awareness training, covering key
cybersecurity threats, prevention and company procedures.
Click here for more information on our cybersecurity approach.
89%
Employees trained in
Information Security
Awareness
Implementation of GNI Principles
As part of the Global Network Initiative (GNI), Millicom
contributes to solving complex situations in which people’s
fundamental rights to FoE and privacy come into conflict with
government measures, including demands to censor content,
restrict access to communications services or hand over user data.
In 2020, we continued applying the insights gained from
Millicom’s first-ever GNI assessment (completed the previous
year) to further improve our FoE and privacy safeguards by
assessing our grievance mechanisms and conducting human
rights impact assessments in our markets.
HUMAN RIGHTS IMPACT ASSESSMENTS (HRIA)
Following the HRIA we conducted in our South American
operations during 2019, the exceptional circumstances in
2020 led us to pursue fewer HRIAs than initially planned. As
part of our Five-Year Plan benchmarks and our alignment with
the UN Guiding Principles for Business and Human Rights,
we prioritized one in Nicaragua due to our recently expanded
presence in that market. Learn more in the 2020 Millicom Law
Enforcement Disclosure Report.
Millicom 2020 A nnu a l Rep or t
37
INCLUSION
Building a More Diverse and Inclusive Workplace is one of our
CR Fundamentals. A more detailed overview of our inclusion
strategy, can be found on "Our Approach" section starting on
page 22.
SUPPLY CHAIN
We do business with over 7,500 suppliers of all sizes across all
markets where we operate in Latin America and in multiple
procurement categories (Network, IT & Platforms, Devices,
Indirect, etc.). We seek to build long-term partnerships that are
mutually beneficial at Group and local level, and in accordance
with all our legal and compliance obligations, to do business the
right way.
We seek to work with businesses that understand and share our
values and standards to promote our business purpose in every
link of our supply chain. Our Supplier Code of Conduct sets core
expectations in the areas of health and safety, environment,
fair labor, ethics and compliance. As such, it is regularly revised
to ensure its relevance. In 2020, we released an updated,
streamlined version in which we simplified the language to more
clearly state Millicom’s expectations of suppliers and help make
our standards more accessible to them.
As we help Millicom’s suppliers advance their CR and
sustainability practices, we are also investing directly in the
strength of our own reputation, stability and operational
efficiency. In the process of supporting our supply chain
partners, we gain new insights that help us generate better
results for customers, shareholders and communities.
Using the platform and methodology of EcoVadis, a third-
party ratings provider, we evaluate suppliers in key CR areas
such as environmental stewardship, labor and human rights,
ethics and sustainable procurement. The results enable us to
monitor supplier performance in these areas and how suppliers
are progressing over time. We also conducted a Sustainability
Platform Maturity Assessment with EcoVadis in 2020 to help
us improve our overall supply chain programs by identifying
our areas of strong performance and those which need
improvement.
Due to the COVID-19 pandemic and in line with our continuous
support to our suppliers, we decided to focus our 2020 efforts
on supporting suppliers that had received the CR training in past
years, encouraging them to work on their areas of opportunity
by establishing Corrective Action Plans to increase their EcoVadis
scorecards and strengthen their CR practices.
72%
of our spend on suppliers
is directed to suppliers who
completed the EcoVadis
assessment
Millicom 2020 A nnu a l Rep or t
38
COMPLIANCE AND BUSINESS ETHICS
OUR COMPLIANCE PILLARS
We are committed to our Sangre Tigo and are actively involved
in fostering a culture of ethics and compliance from the top
across all our lines of business. We believe in doing the right
things in the right way, and compliance is embedded in our daily
decisions and in everything we do.
Corruption in government and the private sector can raise
potent risks for our business that we must counter decisively
and transparently in order to protect our reputation, maintain
stakeholders’ trust, and sustain our long-term growth. Our Legal,
Ethics and Compliance Group meets these challenges by setting
the highest standards of integrity, backed by clear guidance and
support for our employees in upholding our expectations. We
maintain a zero tolerance for any form of corruption.
Along with our Board and Executive Team, the group provides
front-line protection against legal, financial, regulatory, and
reputational missteps that could interrupt our operations and
jeopardize our customer relationships. We also collaborate with
other companies and business leaders on ethics issues through
channels such as the World Economic Forum’s Partnering
Against Corruption Initiative.
One of our focal points for all Millicom employees who interact
with customers, suppliers and other stakeholders is how to
recognize and avoid potential conflicts of interest. As a result,
99% of our employees have now been trained on our Conflict
of Interest policy, in addition to our Code of Conduct, Anti-
Corruption, and AML policies.
We also want to ensure that our people feel empowered and
safe to raise any ethical concerns, and that any potential
concerns are addressed properly. More details can be found in
Governance and Business Ethics starting on page 61.
99%
Employees trained in our
conflict of interest policy
PREVENT: We foster a strong
compliance tone from the top
of our business, conduct annual
training to build employees’
compliance knowledge, and
conduct due diligence on our third-
party associates as part of the
onboarding process.
DETECT: We build systems to detect
corruption within our company,
backed by a strong Investigation
team that responds to issues and
advises the Company on addressing
risk. Employees can use our
anonymous ethics line to report
concerns, and we perform regular
internal audits of all functions,
including Compliance.
RESPOND: We move quickly to remove
or remediate compliance issues.
Our Investigation function works
efficiently to provide fair counsel
and remedies that the Company
can implement quickly. Our Internal
Audit team works with business
groups in developing and executing
action plans to address all of its
findings.
Millicom 2020 A nnu a l Rep or t
39
Our Risk Appetite
Millicom operates its business in emerging markets with
potentially volatile political and economic environments and
a higher inherent level of risk compared to mobile and cable
businesses in more mature markets.
Our broad geographical portfolio, varied customer access
points (at home, at work and on the move), as well as a suite
of products and services encompassing communication,
information, education, entertainment, financial services and
other areas, reduce our exposure to any individual country,
product or service. Our governance and oversight structure,
internal control environment, risk-based decision-making culture,
and assurance process across all aspects of our business enables
us to reduce uncertainties and contain risks in ways that many of
our peers may not be able to.
Consequently, while we have a higher inherent risk appetite
than many of our peers in the telecommunications and cable
industry, and a wider risk profile than many international
businesses, we only accept risks in our businesses and markets
to the extent that opportunities for sufficient returns exist, and
where we can design, implement and operate appropriate
systems and controls to manage those risks.
Risk Management
COVID-19 has significantly affected the global economy and
the majority of industries and businesses. Millicom’s countries,
communities, customers and employees have all felt the
impact, with a significant part of 2020 focused on tackling
the unprecedented consequences of this pandemic. However,
the core elements of our strategy, and the fundamental
risks and opportunities connected to the strategy, remain
largely unchanged. The same holds true for the underlying
characteristics of our risk landscape and our value proposition.
Our Risk Landscape
Our risk profile continues to be subject to the developing and
sometimes volatile nature of the markets and economies
in which we operate, predominantly in Latin America. At
the same time, our businesses are an increasingly central
component of digitalization and progress in our communities
and countries. Our leading positions in our markets, increasingly
subscription-based business, track record of customer growth,
and opportunities for expansion are all evidence of our sound
business model. Our digitalization initiatives in recent years—
including digital sales channels, customer care and mobile
financial services—prepared us well for the reduced mobility
and access to traditional channels that occurred during 2020.
In addition, our prudent decisions on capital allocation and cash
flow management in response to the COVID-19 pandemic have
protected Millicom and positioned us for a return to growth.
Our infrastructure has remained resilient and coped well with an
increase in demand, particularly related to data. However, many
uncertainties remain, including barriers to returning to normal
life for our customers and the communities we serve.
Our leading positions in our markets, increasingly
subscription-based business, track record of customer
growth, and opportunities for expansion are all
evidence of our sound business model.
Millicom 2020 A nnu a l Rep or t
4 0
OUR RISK MANAGEMENT APPROACH
Our enterprise-wide approach to risk has the following key goals:
» Ensure that important opportunities and related risks are
identified and actively managed
» Seek the optimal balance of risk and reward to protect
stakeholders and enhance value
» Reduce uncertainty and thereby enhance decision-making in
areas such as strategy formulation and allocation of capital
and resources to support our strategy
Our methodology includes:
» Considering the completeness and relevance of risks in
central and individual country-level risk registers
» Aligning risk ownership and responsibility with decision-
making responsibility—extending from the Board and
Executive Team to country General Managers and heads of
functions across the organization
» Aligning risk appetite with strategic and operational goals
» Quantifying target risk levels
» Determining key risks based on their likelihood or occurrence
and their importance to the business, as measured by financial
and non-financial criteria that include the potential operational,
financial, reputational and human impact of the risk
» Monitoring actual risk levels against targets
» Setting clear, specific and owned actions that target the
potential impact or likely occurrence of risks
WE CLASSIFY RISKS INTO SIX BROAD CATEGORIES:
Strategic
Financial
Operational
Activities
Political and
Regulatory
Governance,
Compliance and
Reputation
People and
Culture
Evolution of Risk in 2020
Key events of the past year had a significant impact on our risk profile. During the second quarter of the year, we performed a specific
risk reassessment to address threats and opportunities raised by the pandemic and measure them against our risk appetite. Early on,
we put mitigating actions and plans in place to protect customers and employees, maintain customer service and care, preserve cash
flow and enhance the use of digital channels.
The challenges we faced in 2020 tested the resilience and agility of our people and networks. Having successfully navigated these
uncertain times, we continue to execute our operational strategy and investor proposition plan.
Macro-economic conditions in our markets became a greater source of uncertainty during the year. By taking a number of actions
to preserve liquidity and reduce operating expenses, we successfully met our highest priorities of protecting employees, maintaining
uninterrupted service to customers and assisting hard-hit communities with recovery. We are closely watching the projections
for recovery and the lower GDP growth forecasts in Latin America to shape our financial structure, capital expenditures and debt
management approach in the coming year.
Millicom 2020 A nnu a l Rep or t
41
Government interventions in response to the pandemic had a
considerable impact on our operating and business model over
the past year. Amid certain new regulations that precluded
telecommunications providers from disconnecting non-paying
households, we adapted and introduced new products to
support our customers and continue providing service. At the
same time, government and community requests for charitable
support rose significantly, which increased our attention toward
compliance matters. We also expect additional taxation and
regulation in 2021.
We dealt with increased risks around information and network
access security amid the pandemic, such as more attacks on
customer data and privacy. But our proactive investments over
the past two years helped prevent cybersecurity threats from
disrupting Millicom operations in 2020.
In addition to these and other details provided throughout this
report, we have highlighted key areas of risk and our mitigating
actions during 2020 in a table on the pages that follow. More
details can also be found in Governance and Business Ethics
section, starting on page 61 and in our most recent 20F filing
with the SEC.
Our senior leadership team and Board remained largely
unchanged during 2020. That stability helped enable our agile
response to the coronavirus pandemic and drive our progress
on both short-term and longer-term initiatives in areas such as
our purpose, culture and crisis management.
While we manage and monitor many more risks within the
Millicom risk universe, we have highlighted below the areas of
risk that were a key focus in 2020.
The challenges we faced in
2020 tested the resilience
and agility of our people and
networks. Having successfully
navigated these uncertain
times, we continue to execute
our operational strategy and
investor proposition plan.
Millicom 2020 A nnu a l Rep or t
42
Risk
Mitigation and actions
Evolution in 2020 (likelihood
and impact of the risk
materializing)
Board Perspective
1. Strategy and strategic direction:
Uncertainty in the formulation and
governance of an appropriate and
executable strategy and strategic
direction that supports the vision
of the company. Inadequate
processes for gathering and
analyzing information in
formulation of the strategy.
2. Portfolio management
and capital allocation:
Acquisition or retention of
businesses that are poorly aligned
to strategy, are overpriced, and/or
that generate lower-than-required
return on investment. Investment
and capital management that
enable the company to meet
its strategic objectives within
its financial and operational
capabilities.
3. Macro-economic conditions:
Volatility or uncertainty in
macroeconomic conditions (e.g.,
but not limited to: currency,
inflation, remittances); underlying
drivers impacting our markets
and the disposable income of
consumers; and the currencies in
which we generate and remit cash
flows.
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Our strategy is based on our vision of
building digital highways that connect
people and communities in our target
markets. The events of 2020 have
reinforced these needs and our purpose.
We have a relentless focus on the six
key pillars of our strategy, and monitor
execution of the strategy with relevant
financial and operational KPIs as well as
external factors such as macro, political
and key demographics in our markets.
Our Board oversees and approves our
strategy and any refinements that may
be required.
Our strategy is set out starting on
page 19.
We carefully consider opportunities to
acquire, merge, or divest businesses
based on market dynamics, portfolio
balance and opportunities for long-term
value creation.
We are focused on LATAM where we see
the best opportunities for future growth
and value creation. During 2020 we
successfully completed the integration
of Cable Onda in Panama and the
Telefonica mobile businesses in Panama
and Nicaragua.
We also divested certain of our non-core
investments in Helios Towers and Jumia.
See page 7 for more on our market
leadership.
The events of 2020 have impacted
exposure toward macro-economic risks
in many of our markets, particularly
Colombia where changes in the value of
the Peso correlate with oil prices.
Uncertainty remains around longer
term macro impact on our markets
and populations, and how this affects
affordability and competition for mobile
and fixed services. However, demand
for our services continues to increase, as
demonstrated by the sequential growth
in the second half of the year.
We consider currency volatility in our
budgeting, forecasting, tax and treasury
management processes.
See page 13 for a review of the financial
performance in 2020.
Impact
Impact
Impact
While the events of 2020 have resulted
in disruption across many industries and
geographies, Millicom’s strategy and
strategic direction remain firmly focused on
serving customers and communities today
and building further for the future.
The Company delivered on its purpose
more in 2020 than any prior year, despite
restrictions and controls that were in place in
many of its markets. The company continued
to expand its geographic footprint, build its
digital capabilities, support its customers and
grow customer numbers in its key mobile and
home segments.
Building convergent enabled businesses in
growth economies in Latin America is a key
strategic focus.
The focus of 2020 was integration of the
acquisitions made in Central America in the
last two year years; and continuing roll-out,
expansion and upgrade of mobile and fixed
data networks.
The Board closely monitors capital allocation
against the organizations’ strategic goals
and financial capacity.
Currency fluctuations are a key risk inherent
to Millicom’s business and, while impacting
reporting and earnings in USD, do not impact
competitiveness or strategic aspects of
managing our local businesses.
Many of the countries in which Millicom
operate in LATAM experienced significant
economic decline in 2020. However, this
region remains on track for long-term GDP
growth, rising disposable income and levels
of prosperity.
The Board oversees management’s processes
and controls governing financial and
macroeconomic risk against pre-determined
levels of risk appetite.
43
Millicom 2020 Annual Report Risk
Mitigation and actions
Evolution in 2020 (likelihood
and impact of the risk
materializing)
Board Perspective
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4. Political, civil and regulatory
environments:
Instability, unrest, or lack of
predictability in regulation or rule
of law in the countries in which
we conduct business. Uncertainty
in regulatory and tax rulings,
including indirect taxation and
regulatory pressure through tariffs,
taxes and service penalties.
We have both local and central teams
monitoring elections in the countries
where we operate and review potential
changes in regulations on an ongoing
basis.
We implement efficiency programs in
all aspects of our business to offset
the impact of newly introduced
or expected changes in taxes and
regulations. For example, in 2020 we
introduced our lifeline product in many
countries in support of our customers
and communities and in response
to government mandated service
requirements.
There has been no repeat of the civil
unrest seen in Bolivia at the end of
2019 in any of our markets despite
unprecedented hardship caused by
the pandemic.
5. Technical transformation and
convergence
Failure to identify / anticipate
drivers of technological change
together with adaptability and
resource to implement change.
Threat of cross-industry
convergence and further
commoditization of existing
products and services. Strategic
risk of ‘betting on the wrong
technology’ or ‘missing the
technology of the future’.
With fixed and mobile businesses in each
of our strategic markets, we now have
the necessary building blocks for fixed /
mobile convergence, and in future 5G.
In 2020 we deployed nearly $1 billion in
expanding, developing and modernizing
our networks and infrastructure,
and strategic partnerships to enable
customer growth and enhance customer
experience.
To learn more about our business
strategy and convergence goals see
section starting on page 19.
6. Competition and customer
experience:
Market structure, market position,
actions taken by competitors,
and customer experience have a
significant impact on attracting
and retaining customers. Lack of
attention to market and customer
needs or poor customer experience
negatively impact the subscriber
base, and operator reputation.
Competition for mobile and
home subscribers continues to
increase, while prepaid customers
remain a large and important
contributor to revenue. Quality of
service, innovation and converged
offerings as key differentiating
factors.
With a focus on home penetration
and 4G subscriptions, Millicom also
has partnerships with key content and
service providers such as Netflix and
Amazon, as well as exclusive broadcast
rights including football in many of
our markets.
In recent years we have implemented
processes and tools to continuously
track customer satisfaction across all our
markets and services, and use this data
to refine and enhance our customers’
experiences. These operational KPIs
now form a fundamental part of
our performance management and
employee reward programs.
See section starting on page 19 to learn
more about tools, partnerships and
processes we have invested in to improve
customer experience and gain insights.
See page 7 for a summary of the
competitive landscape in our markets
and our position.
Impact
Impact
Impact
Political and regulatory risks for Millicom’s
businesses remain relatively high in many of
the countries in our footprint.
We expect this trend to continue as a
consequence of COVID-19 with governments
seeking to increase sources and levels of
income to combat declining economic
activity and the increase in government
spending.
The Board oversees Millicom’s interaction
with key governmental and regulatory
agencies, and promotes transparency and
predictability in regulation.
Advancements in technology, and increasing
demand for more data and higher quality
services, are trends that continue to define
the telecommunications and media
industries. In 2020, mobility restrictions
accelerated these trends, highlighting the
importance of digital offerings and resilient
networks.
Millicom’s strategy seeks to balance its
short-term operating and financial goals
with key technological and transformational
investments that will ensure the business
remains strong and prepared for the medium
and long term.
In a world where demand for content,
access to information and communication
services is increasingly critical in enhancing
and improving lives, positive customer
experience is a vital attribute. This has been
further evidenced in 2020 with disruptions in
physical movement and interactions.
"Best Customer Experience" is one of the
key pillars of Millicom’s strategy and a key
differentiator in customer choice of operator.
Millicom’s comprehensive customer
satisfaction program in place facilitates a
continuous cycle of improvement across all
facets of customer experience in all operating
markets.
44
Millicom 2020 Annual Report Risk
Mitigation and actions
Evolution in 2020 (likelihood
and impact of the risk
materializing)
Board Perspective
7. Financial structure and
capacity
Millicom may be at a disadvantage
compared to competitors in
access and cost of capital. Risk
that financial limitations such
as debt covenants, debt service
requirements and credit ratings
could negatively impact ability to
execute the organic and inorganic
growth strategy.
8. Networks and infrastructure
resilience:
Disruptions to service, or
compromised ability to restore
services to customers in acceptable
time frames, can cause loss
of revenue, increase expenses
and have a negative impact on
customer experience.
We carefully manage our sources
and uses of capital to enable us
to responsibly meet the operating,
investing and financing needs of the
business.
We manage our debt maturity and
monitor opportunities for lowering
our cost of debt and increasing our
debt efficiency on an ongoing basis.
We diligently monitor and manage
headroom against our key covenants
and key aspects related to our credit
rating.
In 2020 we successfully refinanced a
number of our long-term bonds reducing
our average cost of debt and extending
maturities. We reduced our underlying
net debt by approximately $0.5 billion.
Our network resilience controls and
mitigating activities include ongoing
vulnerability assessments, simulation
exercises and business continuity
management plans, which are tested
on a regular basis. This includes physical
risk resulting from the effects of climate
change in the form of natural disasters,
such as extreme weather events. Risk
surveys are performed in each country
every three years on a rotational basis.
Internally, the infrastructure is assessed
annually.
We develop our investment programs
with consideration of elements including
outage risks, external dependencies, and
network redundancy.
During 2020 our networks proved their
resiliency and capability to manage a
significant increase in data traffic. Our
network and infrastructure support
teams, through their hard work and
commitment in the face of adversity,
worked tirelessly to ensure our customers
lives and their communities were
always connected, especially during the
toughest times.
9. Cybersecurity
and data protection:
Intrusion into systems or
networks and inappropriate
access to sensitive data could
have significant operational,
regulatory, legal and reputational
implications.
Failure to implement systems and
processes to prevent, detect and
respond to information security
threats, and properly manage data
requests (e.g., from governments
and regulatory authorities).
Our Global Information Security Office
and Global Security Operations Center
centrally manages and coordinates risk
mitigation related to cybersecurity and
data protection. We have implemented
processes to regularly assess threats and
test vulnerabilities to security breaches,
and training programs in place to raise
awareness and control consciousness
of employees. Learn more on page 37
about the initiatives we implemented
in 2020 to improve protection of critical
systems, and ensure compliance with
relevant data protection rules.
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Impact
Impact
Impact
Millicom’s financial structure is both a key
facilitator and inhibitor of its ability to grow
its business and create value.
The recent acquisitions in Central America
combined with decline in economic activity in
2020 have resulted in leverage being above
long-term target levels, but well within the
tolerance levels set by the Board, and aligned
with the overall strategy.
The Board closely monitors balance sheet
structure and the sources and uses of funds
in the business. Operating and equity
free cash flow, leverage, and shareholder
remuneration are key areas of focus of the
Board in approving the strategy, annual
budgets and monitoring results.
Millicom’s vision of building digital highways
that connect people, improving lives and
developing our communities, relies heavily
on the quality and availability of its networks
and infrastructure.
Capital allocation in expanding, modernizing,
maintaining and protecting networks are
vital in the successful execution of Millicom’s
strategy.
The Board encourages acceleration or
increased investment in networks in
pursuit of opportunities. For example, in
2020 the Board approved accelerated
capital expenditure in mobile coverage
opportunities.
Cybersecurity attacks have emerged as a
significant threat to the successful operation
of any organization, particular those that
rely on information systems to collect,
process and manage data. These threats
have exacerbated during 2020. Innovation,
technological advancements and ever
increasingly regulatory requirements to
capture and process data, heighten risks
in this area. Millicom has responded by
dedicating resources and allocating capital to
strengthen and continually improve its cyber
control environment.
45
Millicom 2020 Annual Report Risk
Mitigation and actions
Evolution in 2020 (likelihood
and impact of the risk
materializing)
Board Perspective
10. Licenses and spectrum:
The availability of licenses and
spectrum is limited, closely
regulated, and increasingly
expensive. Inability to obtain
the required quantity or band
of spectrum from regulators or
third parties at a price we deem
to be commercially acceptable,
could have significant negative
consequences for the operation of
our businesses.
11. People, workplace
and well-being:
Our geographical footprint
sometimes exposes our employees
and contractors to situations which
may subject them to physical,
psychological or emotional harm.
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We have a carefully formulated spectrum
and license strategy and management
plan for each of our markets.
We actively monitor and engage with
government and regulatory bodies on
spectrum and license related matters.
We often negotiate renewals/retention
in the initial allocation contracts and
we carefully consider opportunities
to acquire new spectrum based on
spectrum quality, fit with network needs,
and customer demand.
During 2020, we successfully obtained
and renewed the spectrum we need
to continue to operate our businesses,
including acquiring new spectrum in
Colombia and El Salvador.
We manage the health, safety and well-
being of staff based on international
standards, industry best practices,
and advice and support from local
authorities. We have rolled out a
comprehensive proactive diversity and
inclusion program that promotes and
celebrates Sangre Tigo culture.
In 2020 employee, as well as customer
health and well-being was at the
forefront of everything we have done,
and continue to do as we navigate
through the pandemic. We have adapted
working environments and ‘gone’ digital
and virtual in many business areas to
protect our people and support efforts to
contain and eliminate COVID-19 from
our communities.
Learn more about our approach to
employee health, safety, and security
starting on page 22.
12. Conduct:
Actions and behaviors of our
employees, business partners and
other stakeholders impact the
Company’s reputation, compliance
with rules and regulations and may
impact our ability to operate our
businesses.
Through clear policies, training and
monitoring activities, we ensure that all
our staff remain aware of the risks to
them as individuals and to the company
and know how to act if faced with risk in
these areas.
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In 2020 we have continued to roll-out
and strengthen our compliance culture
programs and initiatives.
See page 39 for more business ethics
action items in 2020.
Impact
Impact
Impact
The landscape related to spectrum and
licenses to operate is constantly changing,
particularly in our markets as governments
seek higher financial and consumer benefits
from spectrum auctions, competition
for lower spectrum bands, and industry
consolidation.
The Board oversees Millicom spectrum
strategy and is responsible for reviewing
business cases for all significant spectrum
and license purchases.
Millicom actively engages with regulators
and governments, and promotes fair and
transparent allocation and pricing of
spectrum and licenses.
It is our people that bring our vision to
life. Every day, thousands of Millicom
employees and contractors work toward
building the digital highways and providing
the services that benefit our customers
and their communities. In 2020 they have
continued to do so, in challenging times, in
particular our front-line "Tigo Heroes" who
have continued to keep our customers and
communities connected in times of need.
We recognize the importance of ensuring
that Millicom is a place where our people
can feel safe, protected and supported in
ways that enable them to do well, and that
enhance their lives and the lives of those
around them.
Doing business in the right way is a
fundamental driver embodied in the tone
from the top through the organization.
The Board’s Compliance and Business
Conduct Committee maintains oversight
of Millicom’s Compliance program and
initiatives that strengthen controls and
enhance the culture of compliance in its
business and with its business partners.
46
Millicom 2020 Annual Report Corporate Responsibility
Performance Tables
We report our progress against the Millicom CR Framework and Five-Year
CR plan, which were built on our 2018 Materiality Assessment and adjusted
as per our ongoing engagements with internal and external stakeholders.
Goals that have been revised due to the pandemic are flagged in the tables
on the following pages.
Our Support for the UN Sustainable Development Goals
Millicom supports the United Nations Sustainable Development Goals (SDGs) as part of our commitment to a business strategy that
is aligned with the objective of shared and sustainable growth. Our CR framework prioritizes and helps us focus on the SDGs that
intersect most directly with Millicom’s resources, expertise and ability to add the greatest value in addressing societal needs. The
performance tables on the following pages indicate how our efforts connect with, and help advance, specific UN SDGs.1
1 This corporate responsibility report includes the Honduras and Guatemala joint ventures as if fully consolidated in accordance with our management reporting.
Our acquired Telefonica operations in Nicaragua and Panama are included in the CR performance Tables for the first time in this report. Reported indicators exclude
Emtelco. Additional exclusions, where applicable, are detailed in footnotes. The majority of our performance data beginning on page 47 is for the period from October
1, 2019 to September 30, 2020, except where noted.
47
Millicom 2020 Annual Report CR FUNDAMENTALS OVERVIEW
Our Goals
5-Y
What we did in 2020
Our performance
SDG
relevance
COVID-19 Revision
16
16
16
16
16
16
Build a strong corporate
culture that seeks
compliance excellence;
build an ethical business
culture in which employees
at all levels are committed
to doing what is right and
upholding the Company’s
values and standards.
100% of GMs and executive
teams with compliance
KPI built into remuneration
package by 2020.
100% of the above group
plus their direct reports with
compliance KPI built into
remuneration package by
2021.
This is the third year we have
tied the GM Compliance
objectives with their bonuses.
We want to create the right
incentives where integrity is
recognized, rewarded and
encouraged. Heatmap and
KPIs scorecards have been
presented to the Board
of Directors as a way to
assess progress towards
Compliance objectives.
100% of GMs have
compliance KPIs built
into remuneration
package.1
95% of Compliance & Ethics
training for active employees
yearly.
All operations and HQ
employees deployed the
annual mandatory training
on Code of Conduct.
99% of active
employees completed
the Ethics &
Compliance Training.
The current
mechanism allows
for visibility to the
date an allegation
is submitted to the
hotline and the date
on which a response
is logged. Our current
average response
time to Ethics Line
allegations is within
3 business days of
being submitted
through the hotline.
Where a concern
or allegation is
substantiated,
investigation
findings and
recommendations
for corrective action
are provided to the
appropriate review
committee.
Both the forms and
the Third Party Due
Diligence tool are
standardized and
accessible for our
Operations.
Respond within 3 business
days to each Ethics Line
allegation submitted
through hotline.
Responded within 3 business
days to each Ethics Line
allegations submitted
through hotline.
Provide corrective action
recommendations for each
Ethics Line case
substantiated through the
investigation process.
Provided corrective action
recommendations for
each Ethics Line case
substantiated through the
investigation process.
Have a Compliance & Ethics
Program that is central to
business strategy; effectively
embedded in the business
processes and procedures;
and focused on the actual
impact the company’s
program has in the countries
where it operates as well
as on our employees,
customers, stakeholders and
communities.
100% of operations with
online platform deployed
and functional for a
high-quality program that
integrates preventive
measures, key controls,
reporting mechanisms and
due diligence processes
capable of detecting and
correcting misconduct and
wrongdoing.
This year we designed
the automation of the
Sponsorships, Donations,
and Government Official
Interaction forms for HQ.
We have a Third Party
Due Diligence platform
that serves both as a
repository as well as a
process management tool
to vet vendors before being
onboarded. This tool also
runs background checks
on existing vendors, based
on automated watch lists,
adverse media, and law
enforcement searches.
1This calculation considers Tigo Tanzania and Zantel as two different operations.
Millicom 2020 A nnu a l Rep or t
48
Our Goals
5-Y
What we did in 2020
Our performance
Extend related training to
procurement team.
Train 100% of procurement
staff in responsible supply
chain management issues
related to our core risks by
2023.
Enhance due diligence
processes by including
sustainable procurement
criteria for Global strategic
suppliers.
Vet all Global strategic
suppliers through our
sustainable procurement
platform.
Ensure that 100% of Global
strategic suppliers obtain
sustainability assessment
scores of 45 or greater by
2023.
Train all suppliers with
Group spend >$1.0m by
2023, and measure their
progress on corrective action
plans through sustainable
procurement platform and
audits.
Train all suppliers with
Group spend >$1.0m by
2023, and measure their
progress on corrective action
plans through sustainable
procurement platform and
audits.
The responsible supply
chain management training
was delivered in the form
of e-learning during the
month of December, being
available to all corporate
offices Procurement
employees.
We refreshed our Strategic
Supplier lists in March 2020.
Moreover, we postponed
all new assessments in
consideration of our
suppliers' priorities during
COVID-19. Because of
the above reasons, the
percentage of vetted
suppliers has gone down.
We will be incorporating new
suppliers to the platform as
2021 progresses.
We suspended the 2020
Supplier Training program
due to challenges, and travel
and local mobility restrictions
related to COVID-19.
83% of our Latam
and HQ Procurement
teams received
Responsible Supply
Chain training in
2020.
39% of the strategic
suppliers in our
updated list have
been vetted on
our sustainable
procurement
platform.
29% of suppliers
with scores 45 or
higher.
We conducted a
Maturity Assessment
of our Sustainable
Procurement Platform
which yielded
opportunities for
enhanced external
reporting on our
program.
COVID-19 Revision
SDG
relevance
7
2021 Program will
be assessed under
health and safety
COVID-19 guidelines.
49
Millicom 2020 Annual Report
Our Goals
5-Y
What we did in 2020
Our performance
COVID-19 Revision
SDG
relevance
13
Environmental impact
assessments of all operations
executed by 2021, including
issue prioritization and
remediation plans.
Environmental impact
assessments executed,
reviewed, revised,
standardized and with
action plans consolidated
for regional execution by
January 2021.
Develop and implement a
comprehensive strategy for
climate change mitigation
and resilience for Tigo
operations and customers.
Design one pilot project for
emissions reduction and
one for offsetting / carbon
pricing by 2020.
Comprehensive strategy for
climate change mitigation
and resilience for Tigo
operations and customers
approved and announced by
Q2 2022.
Enhance data quality
and standardization of
calculation and reporting
of baselines and targets to
reduce carbon footprint and
achieve costs savings and
reduce carbon footprint.
2018 energy consumption,
Scope 1 and Scope 2
baselines identified and
published by 2019.
Fossil fuel consumption
and energy consumption
reduction targets set by
2021.
Manage and measure
waste streams, and reuse
and recycling of consumer
devices.
Reach 78% of Consumer
Premise Equipment (CPE)
end to end recovery by
2023.1
Conduct an inventory of
all waste generated at
operations and publish
related targets by 2020.
With the certifications of
Bolivia and Nicaragua during
2020, we achieved ISO
14001 standard certification
in all our corporate offices
as well as our operations.
As part of the standard's
requirements, environmental
issues and aspects were
identified, along with action
plans to close identified
gaps.
In 2020 a 3-year Power
Purchase Agreement
("PPA") was negotiated
for our Panama operation
to provide partial supply
of renewable energy for
both the mobile and fixed
networks, avoiding the
emission of more than 1,200
tonnes of CO2 per year.
During 2020 we took the
following steps:
Trained over 90 key
subject- matter experts
from technical, regulatory
and commercial areas in
corporate offices and Latam
operations.
Conducted a TCFD gap
assessment and set a
roadmap to address key
findings.
Baselines have been
identified for energy
consumption and scope
1 and scope 2 emissions,
against which we are
initiating the target-setting
process.
Target-setting process is
underway. We worked across
the organization to develop
a plan and presented
recommendations to the
ELSG for target-setting
work in 2021. More details
can be found in Our CR
Fundamentals, starting on
page 35.
The CPE recovery efforts
were temporarily on hold
to meet commercial goal
of maintaining equipment
in homes and customer
locations to provide
lifeline products with
24/7 connectivity despite
non-payment. Moreover,
the COVID-19 restrictions
on mobility precluded
the retrieval of CPE. The
inclusion of Panama to the
program along with a spike
in Colombia compensated
the temporary slowdown.
Work has been done
company-wide in line with
ISO 14001. However, data
standardization and target-
setting efforts were slowed
down due to the urgency of
the pandemic.
While the regional
action plan is
delayed, gaps are
identified and action
plans to close them
are in place in all our
operations.
13
For the second year in
a row, we achieved a
CDP score of B.
13
Completed.
13
13
12
We are on track to
meeting
this commitment.
We achieved an
average of 64%
CPE E2E recovery in
the Latam region.
Operations like Costa
Rica, Bolivia and
Colombia are today
above 72%. This is
equivalent to 2.8 M
recovered devices.
Target of 78%
modified to 76% by
2024. That said, the
revised percentage
is on a larger base
and therefore the
number of retrieved
devices will be higher
in absolute terms
12
2021 Program will
be assessed under
health and safety
COVID-19 guidelines.
1End-to-end recovery excludes obsolete equipment that cannot be reinserted.
5 0
Millicom 2020 Annual Report
Our Goals
5-Y
What we did in 2020
Our performance
SDG
relevance
COVID-19 Revision
Completed
Ranked 17 out of
100 ICT companies
which included
39 of the Fortune
500 companies by
World Benchmarking
Alliance.
Our human rights
policies and
practices, particularly
those related to
Privacy, Freedom
of Expression,
Supply Chain and
vulnerable groups
are aligned with
the United Nations
Guiding Principles on
Business and Human
Rights. Plan to cover
gap related to the
implementation
of Human Rights
Impact Assessments
established.
We trained 11,955
employees in our
organization on
Privacy.
Trainings that were
deferred will be
set according to
COVID-19 health and
safety guidance.
We are in the
process of evaluating
results of the HRIA
conducted in
Nicaragua.
HRIAs for GT, PA,
CR and SV will be
set according to
COVID-19 health and
safety guidance.
Conduct Corporate and
operations Gap Assessment
by Q3 2019.
Consolidate and enhance
human rights policies and
practices covering privacy,
freedom of expression,
supply chain and vulnerable
groups to meet standards
of United Nations Guiding
Principles on Business and
Human Rights.
Corporate and operations
Gap Assessment of
operations policies and
processes against UNGPs
conducted by Q3 2019.
Furthermore, we participated
in inaugural World
Benchmarking Alliance
assessment of our policies
and practices relative to
Privacy, Cybersecurity and
Digital Inclusion.
Develop remediation plan
to cover gaps by Q4 2020
for implementation under
5-year plan.
Developed remediation plan
to cover gaps by Q4 2020
for implementation under
five-year plan.
Roll out training on human
rights in all Latam markets
by 2020.
Human rights training to
CR Team by Q4 2019 and
extended to designated
business teams by Q4 2020.
Develop and deploy Human
Rights Impact Assessment
(HRIA) toolkit in all Latam
markets.
Training on HRIA toolkit
conducted in all operations
by Q4 2019.
Conduct HRIAs in all
operations by Q4 2020.
Protect customer rights to
privacy and freedom of
expression in accordance
with Global Network
Initiative’s (GNI) Principles
and obtain positive
assessments of our policies
and practices.
Develop remediation plan to
cover findings of HRIAs by
Q2 2021.
Develop Grievance
Mechanisms for customer
privacy or freedom of
expression issues by Q4
2019.
Develop web-based, one-
stop Privacy Center for
customers on company
policies, terms and
conditions, and practices
relative to privacy and
freedom of expression by
Q4 2019.
Human rights training to CR
Team completed in 2019.
During 2020 conducted
online privacy trainings in to
raise employees' awareness
about the importance of
data privacy and the risks of
not following data protection
guidelines and policies.
Training deferred to meet
business priorities due to
COVID-19 and to travel
restrictions.
Completed HRIA in CO, PY
and BO with associated
report. Conducted virtual
HRIA in Nicaragua in Q4.
HRIAs for GT, PA, CR and SV
deferred due to COVID-19
and travel restrictions.
No material issues were
raised in the CO, PY and
BO HRIAs which required a
remediation plan.
Framework for grievance
mechanisms for HQ and
Operations levels completed.
We centralized our Global
Privacy Policy, which provides
information on customer
rights and how to access
company representatives
on a single site for more
convenient access.
51
Millicom 2020 Annual Report
COVID-19 Revision
SDG
relevance
5
Our Goals
5-Y
What we did in 2020
Our performance
Build an inclusive work
environment that is
representative of our
workforce, the markets
where we operate and the
customers who we serve.
Track progress on inclusive
work environment by our
employee engagement
survey and Tigo culture
diagnostic.
Increase employee
participation in positive work
environment trainings and
programs.
Promote a culture of
inclusion through policies,
procedures and regular
training; and through
activities that foster
employee collaboration.
Enhance employee wellness
and growth through policies,
programs and practices
designed to support their
aspirations professional and
personal development.
During 2020, in
addition to the D&I
survey conducted
the previous year,
we conducted a
Great Place to
Work and a Culture
Survey in HQ and
country operations to
continue enhancing
and refining our D&I
actions.
250 leaders from
all our operations,
along with all Latam
and HQ recruiting
and selection teams
received D&I training.
The plan will continue
in 2021.
D&I Councils are
being created in
HQ and Latam
operations.
We approved the new
corporate D&I Strategy,
building on research and
benchmarking conducted in
2019, putting in place the
governance structure and
training key positions to
continue the roll-out in 2021.
The Executive Team is
responsible for definition
and alignment of the
strategy and, in turn,
country managers have
local implementation of
the D&I plan among their
performance goals, with
status and progress to be
reported to the Board of
Directors.
During 2020 we focused on
creating and implementing
a communication strategy
to create awareness
of D&I as part of our
culture. The leaders of the
organization had a central
role sharing this message
with employees across the
region. Furthermore, we
reviewed our recruiting and
selection processes with the
goal of minimizing possible
biases and bring a more
diverse workforce in the
organization.
52
Millicom 2020 Annual Report
RESPONSIBLE LEADERSHIP OVERVIEW
Our Goals
Our targets
What we did in 2020
Our performance
By 2023 reach through our
COP programs:
Continue our Child Online
Protection education
program to reach more
children, adolescents,
parents, teachers and
caregivers.
70,000 teachers
200,000 parents and
caregivers
700,000 children and
adolescents
Online training platform live
in all our operations by 2020.
By 2023 reach 120,000
volunteering hours from
COP-related programs.
All countries complete
research on use of
technology by children and
adolescents by Q4 2020.
All countries implement
action plans based on results
of the research by 2020.
All operations implement
CSAM blocking mechanism
by 2020.
All operations conduct
assessments focused on
socioeconomic conditions
and technological
capabilities of women and
girls by 2023.
Close the digital gap in our
Latam operations by 2020
in line with the acquired
commitments through
GSMA´s Connected Women
initiative.
400,000 women trained
through our digital inclusion
program by 2023.
Expand Child Online
Protection training program
for our employee volunteer
program by creating online
training platform in all our
operations.
Conduct research programs
in each market on the use of
technology by children and
adolescents to tailor content
and adapt Child Online
Protection training based on
results and insights.
Continue our efforts to
prevent access to online
Child Sexual Abuse Material
through our networks by
continuously implementing
blocking mechanisms region-
wide and advancing industry
initiatives.
Conduct assessments in
Latam markets on socio-
economic conditions and
technological capabilities
of women and girls who
are the beneficiaries of
our programs to measure
benefits achieved through
trainings.
Continue our programs to
reduce the gender gap in the
use of mobile technology.
Implement regional strategy
to advance digital literacy
with educational programs
on basic and advanced
digital knowledge and
entrepreneurial skills.
SDG
relevance
COVID-19
Revision
4, 16
Trainings in
schools will be
set according
to COVID-19
health and
safety guidance.
4, 16
4, 16
Lockdowns in our countries
prevented our continuing
training programs as schools
were closed in all our
operations.
We worked to transition our
trainings to online modules
with our volunteers and
started a pilot in Colombia
with the intention to
replicate in other countries
until schools reopen in 2021.
Leveraged our partnership
with UNICEF to reach
families and children on
lockdown on personal and
online health and safety
during COVID-19.
Our in-person training
conducted by volunteers was
suspended due to school
closures and restrictions
on mobility resulting from
COVID-19 lockdown orders.
However, volunteers took
on to social media to
disseminate COP content.
Based on our Colombia
study, desktop research and
stakeholder engagement
on current and emerging
trends, work with UNICEF
is currently in progress
to advance effective and
innovative content, and
outreach mechanisms in lieu
of research programs in each
market.
Our efforts were focused
on a new program –
Connected Teachers –
which seeks to close the
digital gap in education by
training teachers on how
to provide meaningful and
effective online and digital
education to their students.
This is reflected in the total
number of trained teachers
below.
137,019 teachers
28,122 parents and
caregivers
62,779 children and
adolescents
13,400 virtual volunteering
hours from COP-related
activities
The inaugural World
Benchmarking Alliance
(WBA) assessment of
our policies and practices
relative to Digital Inclusion
recognized Millicom as “a
leader in child protection
initiatives.”
We initiated the migration
to a new platform to block
CSAM; however, progress
attained was lower than
expected due to resource
constraints resulting from
the pandemic.
4 out of our 9 Latam
operations currently have
new systems in place that
incorporated the blocking
of CSAM sites. Migration to
new system is underway for
all operations.
4, 16
Project is
delayed but we
aim at meeting
this target.
The WBA Assessment
recognized Millicom as
“top ranked” in digital
skills development for
women, girls and children
and a “leading example
of support for digital
inclusivity”.
Completed.
91,340 women trained
for a cumulative total of
415,699 since 2017.
As we continue the
expansion of the
Conectadas program, we
assess the socioeconomic
and educational profile
of participants to further
optimize our program,
gathering the information
from all operations and
conducting desktop research
regarding our markets.
GSMA extended the
Connected Women initiative
until 2023, Millicom as the
only operator in Latam to
have signed to commitment
agreed to the extension in
November 2019.
Because of COVID-19, in-
person trainings were not
possible. We transitioned
our program to online and
digital platforms to train
participants in most of our
markets.
5
5
5
53
Millicom 2020 Annual Report
9
We will revise
this target and
the need for
adjustments
in the face of
the post-covid
emerging
scenarios.
137019 teachers
completed the training in
2020.
4, 9, 16
New Target
2163 schools and
583 public institutions
connected in our Latam
operations.
9
Design and roll out to
operations a regional impact
measurement methodology
by 2020.
Measure impacts of
connectivity in communities
targeted by our programs
to assess improvements in
socioeconomic conditions of
beneficiaries, and optimize
program content and
resource allocation.
Continue bringing internet
connections to schools
and public institutions in
vulnerable communities
throughout Latin America
through collaborative
partnerships with local
government and NGOs.
All countries implement
an impact measurement
methodology related to
connectivity and digital
inclusion by 2022.
Train 84,000 teachers
through our Maestr@s
Conectad@s program from
2021-2023.
Provide internet to
1300 schools and
public institutions by
2023 reaching our set
commitment with the OAS
ICT Alliance.
Provide with digital platforms
and empowerment
programs through the use of
technology to 1000 public
institutions and community
development institutions
by 2023.
We conducted a pilot
program in Paraguay
to create an impact
measurement methodology
for our computer centers
in schools. The study
conducted with the
pilot demonstrated that
students who had access
to computer centers with
skilled instructors gained
measurable increases in their
technological skills compared
to the control group in
schools without computer
centers.
Our new program –
Connected Teachers – seeks
to close the digital gap
in education by training
teachers on how to provide
meaningful and effective
online and digital education
to their students.
Operations have ongoing
programs that include
provision of internet access
to public institutions and
schools, having already
surpassed the OAS 2030
goal.
We worked with UNICEF
to expand our digital
platform and empowerment
programs for adolescents
who served as ambassadors
for the responsible
and productive use of
technology. The robotics
program was on hold in
2020 due to COVID-19.
5 4
Millicom 2020 Annual Report
OUR PERFORMANCE
1. Human Rights
KPI
Total number of law enforcement requests (Latam)1
Number of major events
Law enforcement requests per type
Interception
Customer metadata
Mobile Financial Services ("MFS")
Content Takedown
Overview of Major Events by Type2
KPI
Shutdown or restriction of services
Proposals for significant changes in local laws
Proposals for significant changes in technical or operational procedures
Disproportionate interception or customer data requests
Politically motivated messages
Other
2018
2019
2020
45,666
40,132
37,007
20
10
15
2,116
2,121
2,304
33,868
37,497
34,203
523
0
514
0
500
0
2018
2019
2020
7
5
2
2
1
3
8
1
1
0
0
0
8
2
0
3
0
2
2. Ethics3
KPI
% of employees who acknowledged the Code of Conduct
% of employees who have completed the Code training
% of procurement staff trained on Anti-Corruption4
% of senior managers trained on Anti-Corruption
% of employees who filled and signed the conflict of interest declaration form
% revenue from MFS represented by operations audited for AML controls
% of operations (where) we conducted a compliance risk assessment or audit
Turnover of procurement staff (%)
2017
2018
2019
2020
96
96
96
98
90
27
45
17
91
90
97
99
92
97
30
28
96
94
94
93
94
95
90
13
99
99
935
996
98
97
100
67
1 We classify law enforcement requests into three categories: interception, customer metadata, and customer financial data (related to the mobile money services or MFS
services we provide). These three categories encompass the vast majority of requests we receive. We report all other requests outside of the definitions as major events.
2Data reported for calendar year.
3Ethics metrics are reported on calendar year basis, with the exception of “Turnover of procurement staff”
4Formerly ABAC.
5This percentage does not include the Costa Rica, Tanzania and Zantel operations.
6This percentage does not include the Tanzania and Zantel operations.
7This percentage does not include the Costa Rica operation.
55
Millicom 2020 Annual Report
3. Environment
e-waste recycled through responsible waste management program
(tonnes)
KPI
Bolivia
Colombia
Costa Rica
El Salvador
Guatemala
Honduras
Nicaragua
Paraguay
Panama
Tanzania
Energy use2
Total Energy Consumption / Sources of energy by asset type
Base station and fixed network sites
Fuel (000 l)
Energy from fuel (MWh)
Electricity (MWh)
Our fleet
Fuel (000 l)
Energy from fuel (MWh)
Data centers and offices3
Fuel (000 l)
Energy from fuel (MWh)
Electricity (MWh)
Shops
Fuel (000 l)
Energy from fuel (MWh)
Electricity (MWh)
2017
2018
2019
20201
474
77
45
162
1,037
4
8
587
310
147
400
0
5,586
431
118
123
1,303
10
Not included
in 2017
Not included
in 2018
Not included
in 2019
236
105
Not included
in 2017
Not included
in 2018
0.2
138
462
400
8,800
0
1,373
0
118
181
162
0
75
527
0
2017
2018
2019
2020
14,732
147,073
354,949
10,435
104,456
450,131
4,247
42,685
4,680
46,721
441,336
459,496
6,335
60,756
4,064
38,609
3,257
31,230
5,696
53,630
988
24,082
55,885
332
3,312
450
4,490
293
2,926
323
3,220
89,688
74,598
124,808
23
234
72
717
63
626
15,509
16,811
11,618
16,538
1Due to COVID-19 related mobility restrictions, some operations saw their normal e-waste functioning slowed down or interrupted.
2 Zantel omitted from the following energy metrics: Fuel for Offices and Datacenters, Energy from Fuel for Offices and Datacenters, Fuel, Energy from Fuel and Electricity for Shops.
3Many of our datacenters are co-located with our offices. Therefore, they often do not have separate meters to enable us to report on datacenter consumption separately.
5 6
Millicom 2020 Annual Report
Total Energy Consumption (MWh)
Electricity (MWh)
Fuel (000 L)
Energy from fuel (MWh)
Total Energy Consumption (MWh)
Emissions and e-waste overview
416,343
553,330
527,553
600,304
22,387
14,922
7,869
10,765
235,223
147,789
77,557
104,229
711,566
701,119
605,111
704,533
Total weight of e-waste recycled through our responsible e-waste
management program (tonnes)
Scope 1 emissions (Tonnes of CO2e)1
Scope 2 emissions (Tonnes of CO2e)2
Scope 3 emissions (Tonnes of CO2e)3
% of operations set up on global responsible e-waste recycling program
Tonnes of CO2e emissions per $1,000 of revenue
2,496
1,957
58,787
39,181
16,509
20,553
2,436
27,339
114,883
140,605
137,754
165,197
N/A
91
0.029
N/A
91
0.03
3,994
100
0.026
258
100
0.03
4. Diversity and Inclusion
KPI
% of women in senior management positions4
% of women across our employee base
5. Supply Chain
KPI
2017
2018
2019
2020
33
40
28
41
36
37
38
38
2017
2018
2019
20205
% of strategic suppliers who signed the supplier code6
% of all suppliers who have signed the supplier code
% of spend represented by suppliers who completed assessments on EcoVadis to date
% of procurement teams trained on responsible supply chain management
89
61
47
96
89
65
42
81
90
68
59
88
Number of suppliers trained on Millicom's CR strategy and requirements
121
108
117
79
467
72
75
08
1 Emissions from fuel are calculated using World Resources Institute (2015) GHG Protocol tool for stationary combustion, version 4.1. For Scope 1 emissions we consider
gasoline and diesel consumption.
2 Emissions from electricity are calculated using Electricity Emission Factors from IEA, version 2016, except in the case of Paraguay and, in 2017 and 2018, Chad,
where other official sources were used. Because our energy supply has come largely from the local grid, we do not currently subtract the emissions avoided by the use
of renewables, as their weight has been considered immaterial. This is also true for 2020, despite the existing PPA in Panama. We are revising our GHG accounting
methodologies for 2021.
3 Where reported, we only consider air travel for Scope 3 emissions. As we standardize and build up our scope 3 calculation and reporting capabilities, we will expand this
scope accordingly.
4 This metric is reported on a calendar year basis.
5 Costa Rica omitted for the following Supply Chain metrics: Strategic Suppliers who signed the CoC, Suppliers who signed the COC and Procurement Staff trained in
Responsible Supply Chain management.
6 A supplier is considered strategic if they follow one or more of the following: significant spend, multi-year relationship in place or expected, products and services in a
strategic spend category, direct impact on delivery capability, potential impact on brand and reputation and difficulty of switching to alternative suppliers.
7 As of 2020, we are incorporating Tigo Nicaragua and Telefónica Panama to the CR reporting scope. Given that the latter is still in the process of integration, a significant
proportion of their local supplier base has not yer transitioned to Millicom's Supplier Code of Conduct, hence the decrease in this metric.
8 Supplier Training Program put on hold due to the COVID-19 pandemic.
57
Millicom 2020 Annual Report
6. Protecting Children
KPI
% of operations with child risk impact assessments
conducted to date
2017
57
2018
100
2019
87
2020
781
Volunteering hours from COP-related programs
New KPI for 2019
New KPI for 2019
18,542
13,710
Number of children reached by COP training (´000)
% of operations in Latam blocking child sexual
abuse content
189
71
360
71
480
75
543
442
7. Empowering Women
KPI
2017
2018
2019
2020
Women enrolled in digital inclusion programs3
New KPI for 2018
117,340
207,019
91,340
8. Connecting Communities
KPI
2017
2018 (NOTE: Latam
only)
2019
2020
Monetary value of employee volunteering
170,000
235,000
405,503
346,863
Total cash contributions ($th)
In-kind giving (at cost) ($th)
Schools and public institutions connected to the
Internet
Teachers who completed 100% of Maestr@s
Conectad@s program
3,203
6,399
1,259
3,776
6,737
1,361
2,686
6,139
1,416
New KPI for 2020
1,754
7,286
2,745
137,019
Number of volunteering hours
14,841
24,732
51,425
30,3234
9. Health & Safety
KPI
2017
2018
% of operations certified against ISO 45001
New KPI for 2019
New KPI for 2019
Number of employee fatalities
Number of contractor fatalities
Number of H&S incidents reported
Lost-time injury rate per 1000 workers
Absentee rate8
1
9
387
2.6
0.8
0
2
369
0.54
1.29
2019
100
0
6
460
1.77
1.34
2020
100
15
2
496
1.557
1.45
1 The percentage has decreased in the past two reporting cycles as two additional operations were added to the reporting scope where, due to COVID-19 restrictions, it
has not yet been possible to conduct the assessments.
2Percentage decreased due to new platform being rolled out.
3Latam only
4 Total volunteering hours. From 2019 onwards this includes the hours from COP-related programs as reported on above.
5 Unfortunately an employee fatality occurred in Q4 2019 and therefore not included in the previous AR. It was, however, reported in our Q4 2019 earnings release and
footnoted in our 2019 Annual Report (see 2019 Annual Report, p 63).
6 In 2020 we presented a significant reduction in incidents since over 50% of our employees working from home.
7 The increase in this rate as of 2019 is due to the addition of Panama to the scope. In this country, the legal incident classification considers a broader definition of the
incidents that require time off.
8 The absentee rate is the number of unplanned absences versus the average number of workdays in in the reporting period, expressed as a percentage.
5 8
Millicom 2020 Annual Report Independent Assurance Statement to
Millicom International Cellular S.A
ERM Certification and Verification Services (ERM CVS) was engaged by Millicom International Cellular S.A (further ‘Millicom’)
to provide limited assurance in relation to specified information in the section ‘Corporate Responsibility Performance Tables’
pages 55–58 within Millicom’s 2020 Integrated Annual Report and on Millicom’s website as set out below.
[metric tonnes CO2e]
[metric tonnes CO2e]
59
Millicom 2020 Annual Report 10 Mar 2021
6 0
Millicom 2020 Annual Report Governance:
Governance and
Business Ethics
Millicom 2020 A nnu a l Rep or t
61
Governance: Managing through adversity and
building for the future.
Chairman’s Report
Millicom’s Board of Directors (“the Board”) and its committees
dealt with many significant strategic, operational and compliance
matters in 2020. These included:
• Analysis and oversight of responses to the impacts and consequences of COVID-19,
including financial structure, shareholder remuneration, and cash flow preservation
• Responses to government requests including relief efforts to transmit public health
and safety messages, as well as maintaining customer connectivity
• Review and confirmation of strategic direction, and related risks and opportunities
• Employee retention in times of uncertainty
• Overseeing the management of cybersecurity threats and control environment
improvements
• Consideration of sustainability issues and responses
Introduction
The Board is responsible for approving Millicom’s strategy,
financial objectives and operating plans as well as overseeing
risk, compliance and governance matters. The Board also
plans for CEO succession and reviews plans for other senior
management positions.
I would like to thank all of our Board members for their
commitment, dedication and significant contributions in
serving Millicom in 2020.
Board Changes
In June, following election at the annual general meeting of
the Company, we welcomed Mr. Mauricio Ramos to the Board
as an Executive Director. The appointment of Mr. Ramos
further aligned our governance structure as we continue
Millicom’s transformation as a U.S.-listed company. This
appointment also recognizes the strategic and operational
importance of the CEO role.
I would like to thank Ms. Janet Davidson, who stepped down in
2020, for her service and significant work on the Board.
Ms. Davidson formerly served as Chair of the Compliance and
Business Conduct Committee and was a member of the Board
since 2016.
Tigo Heroes: commitment to excellence in
times of adversity
The Board and I would like to pay special tribute and
appreciation to the front-line employees and contractors
who went above and beyond the call of duty in 2020. These
special people across all our operating countries were there
for our customers and communities during difficult times. We
are truly thankful for their dedication and commitment during
these times.
Diversity and Inclusion
The diverse people in our operating countries, offices and
headquarters comprise a key strength for Millicom. We
encourage and promote different perspectives, the sharing of
alternate viewpoints and equal opportunity. These remain core
elements that contribute to our Sangre Tigo corporate culture.
We are proud of our success in fostering strong workplace
environments and of the accolades that Millicom has received
in this respect.
Compliance and Business Ethics
During 2020, we continued developing and expanding our
compliance program. Led by our Executive Team, our Legal,
Ethics and Compliance team, and our culture of doing the right
things in the right way, compliance is embedded in our daily
decisions and in everything we do. Our Board believes this
culture is a vital strength that contributes to the success of our
business and meets the expectations of all our key stakeholder
groups. We are proud to be a leader on ethics and compliance
in our markets.
In our 30th year, we thank you for being part of Millicom's
success story and look forward to continuing this journey
with you.
José Antonio Ríos García
Chairman of the Board of Directors
62
Millicom 2020 Annual Report Corporate Governance Framework
Background
Millicom International Cellular S.A. (“Millicom” or the “Company”) is a public limited liability company (société anonyme) governed
by the Luxembourg law of August 10, 1915 on Commercial Companies (as amended). The Company was incorporated on June 16,
1992, and registered with the Luxembourg Trade and Companies’ Register (Registre du Commerce et des Sociétés de Luxembourg)
under number B 40 630. The Millicom Group comprises Millicom and its subsidiaries, joint ventures and associates.
Millicom’s shares are listed on Nasdaq Stockholm, in the form of Swedish Depository Receipts; and on the Nasdaq Stock Market in
the U.S. since January 9, 2019, where Millicom is registered as a foreign private issuer.
Millicom’s Corporate Governance Framework is primarily based on the following legislation, principles and regulations:
Publication
Authority
Swedish Code of Corporate Governance
Guiding Principles
Philosophy
Comply or Explain
Luxembourg Law
EU Directives and Regulations
Nasdaq Stockholm Issuer Rule Book
Nasdaq Stock Market Rules
U.S. Securities Laws
Legislation
Legislation
Regulation
Regulation
Regulation
Comply
Comply
Comply
Comply
Comply
Good Stock Market Practice
Guiding Principles
Corporate Citizenship
Within these frameworks, Millicom's
Board develops and continuously
evaluates internal guidelines and
procedures, as further described below,
to ensure the quality and transparency
of Millicom's corporate governance
practices.
Swedish Corporate Governance Code
The Swedish Corporate Governance
Code (“Swedish Code”) promotes
positive development of corporate
governance. The Code complements
laws and regulations and sets voluntary
good practices which go beyond
regulatory requirements. The Swedish
Corporate Governance Board states
that self-regulation is often preferable
to mandatory legislation and therefore
allows companies to choose among
recommendations that are are fit-for-
purpose, following a “comply or explain”
philosophy.
Compliance with Applicable Stock
Exchange Rules
Neither Nasdaq Stockholm’s disciplinary
committee, the Swedish Securities
Council, nor the Nasdaq Stock Market
reported any infringement of applicable
stock exchange rules or breach of good
practice on the securities market by
Millicom in 2020.
1. Shareholders and shareholders’
meeting
The shareholders’ meeting is Millicom's
highest decision-making body and
a forum for shareholders to exercise
influence. Each shareholder has the
right to participate in the shareholders’
meeting and to vote according to the
number of shares owned. Shareholders
unable to attend in person may exercise
their rights by proxy or vote in writing (by
way of voting bulletins).
Millicom’s Articles of Association (as
amended on January 7, 2019, and
available on our website
www.millicom.com/governance/) set the
Annual General Meeting of Shareholders
(“AGM”) to be held in Luxembourg within
six months of the close of the financial
year.
Unless otherwise required under
Luxembourg law, an extraordinary
general meeting (EGM) must be
convened to amend the Articles of
Association.
At the 2020 AGM, held virtually on June 25,
2020, shareholders decided the
following key items:
• Approval of the 2019 Consolidated
Financial Statements
• To discharge the Directors for the
performance of their mandates
during the year 2019
• Election and re-election of the
Directors until the date of the 2021
AGM and approval of Director
remuneration
• Reappointment of Ernst & Young (EY)
as the external auditor and setting of
remuneration
• Determination of the instruction of the
Nomination Committee
• Approval of guidelines and policy for
senior management remuneration
• Approval of the share-based incentive
plans for Millicom employees
• Approval of a Share Repurchase Plan
Millicom governance deviated in 2020 in relation to the Swedish Code in the following areas:
Code requirement
Millicom practice
Explanation
1.4–A shareholder, or a proxy representative
of a shareholder, who is neither a member
of the board nor an employee of the
company is to be appointed to verify and
sign the minutes of the shareholders’
meeting.
9.7–Vesting of share-related incentive
programs to be no less than three years.
Minutes are signed by the chairman of
the shareholders’ meeting (who is not a
member of the Board or an employee of
the Company), the meeting Secretary and
an appointed Scrutineer.
While this represents a deviation from the
Swedish Code, Millicom follows Luxembourg
law in connection with procedures and rules
for its shareholders’ meetings.
The past performance deferred share
incentive plans (DSPs) contain vesting
of 16.5–30% of granted shares after
one year, 16.5–30% after two years and
40–67% after three years.
The Company believes that this vesting
schedule improves alignment between the
interests of the Company’s shareholders
and its employees.
63
Millicom 2020 Annual Report Share Repurchase Plans
During the period from February 28, 2020 to April 3, 2020, Millicom repurchased an aggregate amount of 350,000 shares (in the
form of Swedish Depository receipts) under the share repurchase plan approved at the 2019 AGM. No shares have been repurchased
under the share repurchase plan approved at the 2020 AGM.
Corporate Governance Structure
Millicom’s Corporate Governance structure comprises the following three levels:
1. Shareholders and representatives
of shareholders.
Shareholders’ meeting
Nomination Committee
2. Board of Directors and Committees
appointed by the Board from among
its members.
Board of Directors
Compliance and Business
Conduct Committee
Compensation Committee
Audit Committee
3. CEO and Executive management,
and its main functions managing
governance, risk, compliance and
ethics (including security),
corporate responsibility, controls.
Chief Executive Officer
Internal Audit
Executive Management Team
Compliance and
Business Ethics
Business Control
Legal and
Governance
Risk Management
Corporate
Responsibility
6 4
Millicom 2020 Annual Report Nomination Committee
From January through October 2020, Millicom's Nomination Committee comprised:
Member
Mr. John Hernander
Mr. Dan Sievers
Mr. Peter Guve
Ms. Juanjuan Niska
On behalf of:
Nordea Investment Funds
Fiduciary Management Ltd
AMF Pensionsförsäkring AB
Wellington Management
Since October 2020, Millicom's Nomination Committee comprises:
Member
Mr. John Hernander
Mr. Jan Andersson
Mr. Staley Cates
Mr. Peter Guve
On behalf of:
Nordea Investment Funds
Swedbank Robur
Southeastern Asset Management
AMF Pensionsförsäkring AB
Mr. José Antonio Ríos García
Appointed by shareholders at the 2020 AGM
Position
Chairman
Member
Member
Member
Position
Chairman
Member
Member
Member
Member
At the January 7, 2019 EGM,
shareholders resolved that the articles
of association of the company
be amended to stipulate that the
Nomination Committee rules and
procedures of the Swedish Code of
Corporate Governance shall be applied
for the election of Directors to the
Board of Directors of the Company,
as long as such compliance does not
conflict with applicable mandatory law,
with applicable regulation or with the
mandatory rules of any stock exchange
on which the Company’s shares are
listed.
The Nomination Committee is
appointed by the major shareholders
of Millicom. It is not a committee of the
Board. Its role is to propose decisions to
the shareholders’ meeting in a manner
that promotes all shareholders' common
interests. Nomination Committee
members' term of office typically begins
at the time of the announcement of
the interim report (covering the period
from January to September of each
year) and ends when a new Nomination
Committee is formed.
Under the terms of the Nomination
Committee procedure, the committee
consists of at least three members
appointed by the larger shareholders of
the Company who choose to appoint a
member, and the Chairman of the Board
of the Company.
Nomination Committee proposals to the
AGM include:
• Election and remuneration of
Directors of the Board and the
Chairman of the Board
• Appointment and remuneration of
the external auditor
• Proposal of the Chairman of the AGM
Additional information on the procedure
for appointment and role of the
Nomination Committee is available
on Millicom's website at https://www.
millicom.com/our-company/governance/
nomination-committee/.
The table below sets out beneficial
ownership of Millicom common shares,
par value $1.50 each, by each person
who beneficially owns more than 5% of
Millicom common stock at December 31,
2020.
Shareholder
Swedbank Robur Fonder AB
Number of
shares
9,954,857
%
Shareholding
9.8
Footnote: Except as otherwise indicated, the holders listed above (“holders”) have sole voting and investment power with respect to all shares beneficially owned
by them. The holders have the same voting rights as all other holders of Millicom common stock. For purposes of this table, a person or group of persons is deemed
to have “beneficial ownership” of any shares, as of a given date, which such person or group of persons has the right to acquire within 60 days after such date. For
purposes of computing the percentage of outstanding shares held by the holders on a given date, any security which such holder has the right to acquire within 60
days after such date (including shares which may be acquired upon exercise of vested portions of share options) is deemed to be outstanding, but is not deemed to
be outstanding for the purpose of computing the percentage ownership of any other person.
Promoting Board Diversity
Millicom’s Nomination Committee
recognizes the importance of diversity
for promoting strong corporate
governance, competitive advantage
and effective decision-making. The
Nomination Committee is responsible
for periodically determining the
appropriate skills, perspectives,
experiences and characteristics required
of Board candidates based on the
Company’s needs and the current
Board composition. This determination
will include knowledge, experience
and skills in areas that are critical to
understanding the Company and its
business; richness of views brought
by different personal attributes such
as gender, race, age and nationality;
other personal characteristics, such as
integrity and judgment; and candidates’
commitment to the boards of other
publicly held companies.
In its work, the Nomination Committee
applies rule 4.1 of the Swedish Corporate
Governance Code as its diversity policy.
65
Millicom 2020 Annual Report Female
25%
Gender of the
Board
Male
75%
7th year
1
1st year
1
Tenure of
Directors
2nd year
3
6th year
1
4th year
1
3rd year
1
Colombian
1
American
3
Nationalities
Brazilian
1
Danish
1
Swedish
2
2. Board of Directors and Board
committees
The Chairman convenes the Board
and leads its work. The Chairman is
accountable to the Board and acts as
a direct liaison between the Board and
the management of the Company,
through the CEO. Meeting agendas are
set with the CEO, and the Chairman
communicates Board decisions where
appropriate.
Role of the Board
The Board is responsible for approving
Millicom’s strategy, financial objectives
and operating plans, and for oversight
of governance. The Board also plans for
succession of the CEO and reviews other
senior management positions.
As set forth in the Company’s Articles
of Association, the Board must be
composed of at least six members. The
2020 AGM set the number of Directors
at eight, comprising a Chairman, a
Deputy Chairman and six members (one
of whom is an Executive Director).
The Board selects the CEO, who is
charged with daily management of
the Company and its business. The
CEO is responsible for recruiting the
senior management of the Company.
The Board reviews plans for key senior
management positions; supervises,
supports and empowers the senior
management team; and monitors senior
managers' performance. In accordance
with the Swedish Code, the division of
work between the Board and the CEO
is set out in “The Rules of Procedure,
Instructions to the CEO, and Reporting
Instructions.”
Further details on the roles and activities
of the various committees, as well as
their responsibilities and activities,
appear later in this section.
Powers and Limitations of the Board
Borrowing powers: The Board has
unrestricted borrowing powers on behalf
of, and for the benefit of Millicom.
Time and age limit: No age limit
exists for being a Director of Millicom.
Directors can be elected for a maximum
of six years before either being re-
elected or ending their service. Directors
are typically elected annually. There
are no restrictions on the maximum
continuous period that a Director
can serve. Directors hold office until a
successor is elected.
Restrictions on voting: No contract
or other transaction between the
Company and any other person shall
be affected or invalidated by the fact
that any Director, officer or employee
of the Company has a personal interest
in—or is a director, officer, or employee
of—such other person. However, the
following conditions apply:
• The contract or transaction must
be negotiated on an arm’s-length
basis on terms no less favorable to
the Company than could have been
obtained from an unrelated third
party; and, in the case of a Director,
he or she shall inform the Chairman
or his or her conflict of interst and
abstain from deliberating and voting
on any matters that pertain to
such contract or transaction at any
meeting of the Board.
• Any such personal interest shall be
fully disclosed to the Company by the
relevant Director, officer or employee
and to the extent a Director is
involved, to the next general meeting
of shareholders.
Share Ownership Requirements
Directors are not required to be
shareholders of the Company. Share
ownership of Directors is included in
the Director biographies set out on the
following pages.
Roles
Chairman of the Board
The Chairman is elected by the AGM. If
the Chairman relinquishes the position
during the mandate period, the Board
elects a new Chairman from among its
members to serve until the end of the
next AGM.
Deputy Chairman of the Board
If elected by the Board, the Deputy
Chairman acts as a sounding board
and provides support for the Chairman.
The Deputy Chairman convenes Board
meetings in accordance with the
Company’s Articles of Association and
leads the Board's work in the event the
Chairman is unavailable or is excused
from a Board meeting. The Deputy
Chairman may act as an intermediary
in any conflicts among Board members
or between the Chairman and the CEO.
The Board can designate additional
roles and responsibilities of the Deputy
Chairman.
6 6
Female25%Male75%1st year12nd year33rd year14th year16th year17th year1Gender of the BoardTenure of DirectorsNationalitiesAmerican3Swedish2Danish1Brazilian1Colombian1Millicom 2020 Annual Report Corporate Secretary
The Corporate Secretary is appointed by
the Board to ensure that Board members
have the proper advice and resources for
performing their duties. The Corporate
Secretary is also responsible for
organizing and coordinating Board and
Committee meetings and ensuring that
the minutes of those meetings reflect
the proper exercising of Board duties.
The Corporate Secretary is also
a confidante and resource to the
Board and senior management,
providing advice and counsel on Board
responsibilities and logistics.
Chief Executive Officer
Together with the management team,
the CEO leads the development and
execution of the Company’s strategy
with a view to creating shareholder value
and enacting the Company's purpose.
The CEO is responsible for day-to-day
activities and management decisions,
both operating and financial. The CEO
is a liaison between the Board and
management and communicates to the
Board on behalf of management.
The CEO also leads Millicom's
communications with shareholders,
employees, government authorities,
other stakeholders and the public.
Board Membership, Balance and
Independence
The Nomination Committee and the
Board periodically review the size and
balance of the Board to determine
whether any changes are appropriate.
At the AGM, held annually within six
months of the end of the financial
year, or at any other general meeting,
shareholders may vote for or against the
Directors proposed by the Nomination
Committee. Shareholders also may elect
different Directors.
Independence of the Board
The Board has adopted the qualification
guidelines of an “independent director”
as defined by the Swedish Code, and
with consideration of the specific
independence requirements within
the Nasdaq Stock Market rules. A
director’s independence is determined
by a general assessment of all factors
that may give cause to question the
individual Director's independence
from the Company or its Executive
Management.
Such factors include whether the
individual:
• Is or has been the CEO of the
Company or a closely related
company within the past five years
• Is or has been employed by the
Company or a closely related
company within the past three years
• Receives a not-insignificant
remuneration for advice or other
services (beyond the remit of the
Board position) from the Company, a
closely related company or a person
in the executive management of the
Company
• Has been in a significant business
relationship or had other significant
financial dealings with the Company
or a closely related company within
the past year—as a client, supplier
or partner; either individually or
as a member of the executive
management team; or as a member
of the Board or a major shareholder
in a company with such a business
relationship with the Company
• Is or has within the last three years
been a partner at, or has, as an
employee, participated in an audit
of the Company conducted by the
Company’s or a closely related
company’s current or then auditor
• Is a member of the executive
management of another company,
if a member of the board of that
company is a member of the
executive management of the
Company
• Has a close family relationship with a
person in the executive management
of the Company, or with another
person named in the points above,
if that person’s direct or indirect
business with the Company is of such
magnitude or significance as to justify
the opinion that the Board member is
not to be regarded as independent
In accordance with the Swedish Code:
• The majority of Millicom’s Board must
be independent from the Company
and its executive management team.
(Seven of Millicom's Directors meet
this criterion.)
• At least two of those independent
Directors must also be independent
from the Company’s major
shareholders. (All of Millicom’s
Directors meet this criterion.)
• Not more than one member of the
Board may be part of the executive
management team of the Company
or any of its subsidiaries. (The CEO is
also a member of the Board.)
• The majority of the members
of the Audit Committee are to
be independent in relation to
the Company and its executive
management. At least one of the
members who is independent in
relation to the Company and its
executive management is also to
be independent in relation to the
Company’s major shareholders (all of
Millicom's Audit Committee members
meet this criterion).
• The Chairman of the board may chair
the Compensation Committee. The
other members of the committee are
to be independent of the Company
and its executive management (all of
Millicom's Compensation Committee
members meet this criterion).
In addition, in accordance with Nasdaq
Stock Market rules:
• The Audit Committee must have at
least three members, all of whom
meet Nasdaq Stock Market and U.S.
Securities and Exchange Commission
definitions of independence. (The
four members of Millicom's Audit
Committee all meet this criterion.)
67
Millicom 2020 Annual Report Board Profile: Skills and Experience
Mr. José Antonio Ríos García
(American, Spanish and Venezuelan)
Chairman, Non-Executive Director
(FIRST APPOINTED: MAY 2017)
Mr. José Antonio Ríos García was re-elected as Chairman of the Board in June 2020.
Mr. Ríos (1945), a U.S. citizen, is a proven global business executive with over 30 years of sustained
leadership at key multinational companies such as Millicom, Global Crossing (Lumen Technologies),
Telefonica S.A., Hughes Electronics, DirecTV and the Cisneros Group of Companies. Until September
2020, he was Chairman and CEO of Celistics Holdings, a leading mobile payment platform and cellular
top-up distribution business providing intelligent solutions for the consumer technology industry
across Latin America. Prior to joining Celistics, Mr. Rios was the International President and Corporate
VP of Global Crossing, later acquired by Level 3 Communications and then merged with Lumen
Technologies.
Between 1999 and 2001, Mr. Ríos served on the Global Management Committee of Telefónica and
as President and CEO of Telefónica Media. Prior to joining Telefónica he served as Vice President
of Hughes Electronics Corporation, was the founding President and CEO of Galaxy Latin America
(DirecTV Latin America), and served as Chief Operating Officer and Corporate Vice President at the
Cisneros Group of Companies for 14 years.
Mr. Ríos brings to the Board his significant experience and reputation at the forefront of the
telecommunications and electronics industries in media, content and leading consumer technology
businesses.
INDEPENDENT from the Company, its Executive Management and its major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 13,427 shares.
Mr. Odilon Almeida
(Brazilian)
Non-Executive Director
(FIRST APPOINTED: MAY 2015)
Mr. Odilon Almeida was re-elected to the Board in June 2020. He is Chairman of the Compliance and
Business Conduct Committee.
Mr. Almeida (1961), a citizen of Brazil, is President and Chief Executive Officer of ACI Worldwide Inc., a
global leader in electronic payment systems.
Until September 2019, Mr. Almeida served as President of Western Union Global Money Transfer,
where he led Western Union’s global consumer omni-channel business across more than 200 countries
and territories. His global business leadership and board experience at Western Union, Millicom,
BankBoston (now Bank of America), The Coca-Cola Company and Colgate-Palmolive give him deep
knowledge of corporate governance, general management, technology platforms, regulatory and
compliance issues, and consumer insights in developed and emerging nations.
Mr. Almeida holds a Bachelor of Civil Engineering degree from the Maua Engineering School in São
Paulo, Brazil, a Bachelor of Business Administration degree from the University of São Paulo and an
MBA with specialization in Marketing from the Getulio Vargas Foundation in São Paulo. He further
advanced his education at IMD Lausanne, The Wharton School and Harvard Business School.
Mr. Almeida strengthens the Millicom Board with decades of experience in the financial services and
fintech sectors, and a leadership style anchored in growth acceleration and business turnarounds
involving retail and digital transformation, organic growth and successful M&A.
INDEPENDENT from the Company, its Executive Management and its major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 8,893 shares.
6 8
Millicom 2020 Annual Report Board Profile: Skills and Experience—continued
Mr. Tomas Eliasson
(Swedish)
Non-Executive Director
(FIRST APPOINTED: MAY 2014)
Mr. Tomas Eliasson was re-elected to the Board in June 2020. He is the Chairman of the Audit
Committee.
Mr. Eliasson (1962), a Swedish citizen, is Executive Vice President and Chief Financial Officer at
Sandvik, a multinational engineering group in mining and rock excavation, metal-cutting and
materials technology.
Previously, Mr. Eliasson served as Chief Financial Officer and Senior Vice-President at Electrolux,
a Swedish appliances manufacturer. Mr. Eliasson has also held various management positions in
Sweden and abroad, including at ABB Group, Seco Tools AB and Assa Abloy AB.
He holds a Bachelor of Science degree in Business Administration and Economics from the University
of Uppsala.
Mr. Eliasson brings to the Millicom Board his significant experience as a CFO for multinational and
global Swedish companies in roles that span governance and oversight over financial reporting,
internal control, and risk management processes and procedures within global finance functions.
INDEPENDENT from the Company, its Executive Management and its major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 9,510 shares.
Ms. Pernille Erenbjerg
(Danish)
Deputy Chair, Non-Executive Director
(FIRST APPOINTED: JANUARY 2019)
Ms. Pernille Erenbjerg was re-elected as Deputy Chair of the Board in June 2020. She is Chair of the
Compensation Committee and a member of the Audit Committee.
Ms. Erenbjerg (1967) is a Danish citizen. Until December 2018, she served as President and Group
Chief Executive Officer of TDC, the leading provider of integrated communications and entertainment
solutions in Denmark and Norway. Previously, she served as TDC’s Chief Financial Officer and as
Executive Vice President of Corporate Finance. Ms. Erenbjerg also serves on the Boards of Nordea,
the largest financial services group in the Nordic region, and Genmab, a Danish international
biotechnology company. She holds an MSc in Business Economics and Auditing from Copenhagen
Business School.
Ms. Erenbjerg brings years of experience from operating a converged provider of communication and
entertainment services as well as from driving transformational processes in complex organizations,
both organically and through M&A.
INDEPENDENT from the Company, its Executive Management and its major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 9,030 shares.
Ms. Mercedes Johnson
(American)
Non-Executive Director
(FIRST APPOINTED: MAY 2019)
Ms. Mercedes Johnson was re-elected to the Board in June 2020. She is a member of the Audit
Committee and a member of the Compliance and Business Conduct Committee.
Ms. Johnson (1954) is a U.S. citizen and currently serves on the Boards of three other Nasdaq or NYSE
listed technology companies: Synopsys, a provider of solutions for designing and verifying advanced
silicon chips; Teradyne, a developer and supplier of automated semiconductor test equipment; and
Maxim Integrated Products, an integrated circuits designer and producer.
Previously, she served as Chief Financial Officer of Avago Technologies (now Broadcom) and Chief
Financial Officer at LAM Research Corporation. Ms. Johnson holds a degree in Accounting from the
University of Buenos Aires.
She brings to the Millicom Board years of experience at technology-oriented multinational U.S. listed
companies in various capacities.
INDEPENDENT from the Company, its Executive Management and its major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 5,555 shares.
69
Millicom 2020 Annual Report Board Profile: Skills and Experience—continued
Mr. Lars-Åke Norling
(Swedish)
Non-Executive Director
(FIRST APPOINTED: MAY 2018)
Mr. Lars-Åke Norling was re-elected to the Board in June 2020. He is a member of the Compensation
Committee and the Compliance and Business Conduct Committee.
Mr. Norling (1968), a Swedish citizen, became CEO of Nordnet in September 2019 and previously
served as an Investment Director and Sector Head of TMT at Kinnevik. Prior to that, Mr. Norling was
CEO of Total Access Communications (dtac) in Thailand, where he executed a digital transformation
and led a turnaround of the company’s financial performance. He also served as EVP of Developed
Asia at Telenor, CEO of DigiTelecommunications Malaysia and CEO of Telenor Sweden. Mr. Norling
also serves as a member of the Board of Tele2 AB.
Mr. Norling holds an MBA from Gothenburg School of Economics, an MSc in Engineering Physics from
Uppsala University and an MSc in Systems Engineering from Case Western Reserve University.
He brings to Millicom’s Board his extensive experience in leading telecommunications and media
businesses and digital transformation in emerging markets.
INDEPENDENT from the Company, its Executive Management and its major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 6,643 shares.
Mr. Mauricio Ramos
(Colombian, American)
Executive Director
(FIRST APPOINTED: June 2020)
Mr. Mauricio Ramos was elected to the Board in June 2020 and has been the CEO of Milicom since
April 2015.
Before joining Millicom, he was President of Liberty Global’s Latin American division, a position he held
from 2006 until February 2015. During his career at Liberty Global, Mauricio held several leadership
roles, including positions as Chairman and CEO of VTR in Chile, Chief Financial Officer of Liberty’s
Latin American division, and President of Liberty Puerto Rico.
Mr. Ramos is also a Member of the Board of Directors of Charter Communications (U.S.), and is the
Chairman of the U.S. - Colombia Business Council.
He is a dual Colombian and U.S. citizen who received a degree in Economics, a degree in Law and a
postgraduate degree in Financial Law from Universidad de Los Andes in Bogota.
NOT INDEPENDENT from the Company and its Executive Management. INDEPENDENT from the
Company's major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 194,432 shares.
Mr. James Thompson
(American)
Non-Executive Director
(FIRST APPOINTED: JANUARY 2019)
Mr. James Thompson was re-elected to the Board in June 2020. He is a member of the Audit
Committee and the Compensation Committee.
Mr. Thompson (1961), a U.S. citizen, is a Managing Principal at Kingfisher Family Office, where he
manages a portfolio focused on value-oriented investment strategies. He is also a Non-Executive
Director at C&C Group plc and serves on its Audit Committee. Previously, he was a Managing Principal
at Southeastern Asset Management, where he was responsible for the operations of the firm and
was a senior member of the team responsible for firm-wide investment decisions. Between 2001 and
2006, Mr. Thompson opened and managed Southeastern Asset Management’s London research
office. He holds an MBA from Darden School at the University of Virginia and a Bachelor’s degree in
Business Administration from the University of North Carolina.
Mr. Thompson brings extensive investment management experience to the Millicom Board and
contributes significantly to the Board’s discussions of Millicom’s long-term strategy and capital
allocation.
INDEPENDENT from the Company, its Executive Management and its major shareholders.
MILLICOM SHAREHOLDING, INCLUDING HOLDINGS BY CLOSELY RELATED PERSONS
AT JANUARY 31, 2021: 12,962 shares.
70
Millicom 2020 Annual Report Board Program
The Board’s annual program includes:
1
Company strategy and
strategic direction
2
Operating and financial
performance review
3
Governance and
compliance matters
4
External affairs
5
Corporate culture
6
External financial
reporting
7
Risk management
8
Shareholder remuneration
policy
9
Acquisitions and
divestments
10
Evaluation of CEO
and self-evaluation
11
Human Resource matters,
including compensation,
health, safety and
well-being
12
Sustainability and
other ESG-related
matters
Summary of Board Activities in 2020
The Board of Directors has an annual program consisting of specific areas of focus on which the Board has a role to
oversee and advise the Company.
Specific projects and topics arise in the normal course of business and are added to the program of the Board, some of
these are handled by specific Board committees.
71
Millicom 2020 Annual Report Summary of Areas of Focus in 2020
Activity/issues covered
Reports of committees
Board actions
• Regularly reviewed reports from its Audit, Compliance and Business Conduct
Committee and Compensation Committee on recent activities
• Discussed Nomination Committee Director appointment proposals
Operational review
• Discussed priorities and challenges for each of the Latin American and African
businesses, including development of cable and mobile data businesses, efficiency
measures and capital expenditure allocation
• Discussed challenges, threats, opportunities and other consequences of the
coronavirus pandemic on the business and strategy
• Discussed and approved the 2021 budget
• Reviewed and approved spectrum acquisition
Strategic review
• Discussed, reviewed and approved the strategy
Organizational structure and culture
• Participated in performance reviews of the Executive Team and of the management,
• Discussed with the Executive Team industry and geographic trends and the operational
and financial strategy for each region, including the portfolio strategy
organizational and reporting structures
• Participated in recruitment processes and oversight of changes in the Executive Team
• Reviewed cultural initiatives including Sangre Tigo
Review and approval of capital structure
and dividend
• Approved refinancing of group and local bonds to extend maturity and lower average
cost of debt
Review and approval of corporate
governance
• Recommended changes to the shareholder remuneration policy
• Revisions to governance documents (including Board and
Committee charters)
• Updated the Procedural Rules and Instructions to the CEO as well as
the authority matrix
• Elected the Deputy Chair and Committee Chairs and members
Mergers, acquisitions, disposals and joint
ventures
• Discussed acquisition and disposal developments across the Group, including approval
of transactions such as sale of stakes in non-core investments
Review and approval of financial reports
• 2019 Annual Report and 20-F, including the 2019 Consolidated Financial Statements
of the Group
• Standalone 2019 financial statements of Millicom International Cellular S.A. (the
parent company)
• Quarterly earnings releases and 2020 interim consolidated financial statements
Risk management
• Participated in the annual risk reassessment and reviewed the key risks facing the
Group and its approach to managing risks
• Set the risk appetite of the Group
External affairs
• Reviewed the external affairs strategic framework and implementation activities
• Periodically reviewed the political situation by market with a specific focus on election
periods and advice on related risk management requirements
• Reviewed regulatory and engagement challenges
• Reviewed the state of government relations in our markets and internationally
Non-financial performance
• Reviewed the main non-financial performance and trends, including corporate
responsibility and sustainability issues and risks
• Recommendations for non-financial focus areas including operational KPIs
72
Millicom 2020 Annual Report Induction and Training
Millicom provides incoming Board
members with information on their
roles and responsibilities, the Board's
operating procedures, and Millicom’s
business and industry. We provide access
to governance documents, policies
and procedures; meeting materials;
and Company information through a
secure online tool, in meetings set with
the Executive Management Team,
and through ongoing dissemination of
information.
Millicom provides training on topics such
as anti-bribery and corruption, ethics,
independence and insider trading. In
addition, in Q4 2020, the full Board
received an Ethics and Compliance
training. The Board regularly receives
detailed reports on specific areas that
support Directors' understanding of
Millicom’s business and operating
environment.
Directors typically participate in at least
one annual visit to Millicom’s operations
to learn about the characteristics of the
local market, see aspects of the business
in operation, participate in social and
corporate responsibility projects, and
interact with local management. Due to
the coronavirus pandemic, market visits
planned in 2020 have been postponed
to 2021.
Board Effectiveness
The Board conducts an annual
performance review process, wherein
each Board member’s personal
performance is also reviewed. This
involves assessing Board and committee
actions and activities against the
Board’s mandate, as determined in the
Board Charter, and the mandates of its
various committees.
In 2020, the Board used a questionnaire
to assess its performance against the
Board's key duties, its composition and
processes, and the performance of
individual Board members. The results
of the evaluation were presented to the
Nomination Committee. In addition, the
Nomination Committee recruited the
services of an international consultant
to assist in an assessment of the
composition of the Board, now and for
the future.
Board Meetings/Attendance at regularly scheduled meetings of the Board in the 2020 financial year
Director
Mr. José Antonio Rios Garcia
Mr. Odilon Almeida
Mr. Tomas Eliasson
Ms. Pernille Erenbjerg
Ms. Mercedes Johnson
Mr. Lars-Åke Norling
Mr. Mauricio Ramos
Mr. James Thompson
Attendance
Former Directors (until June 2020)
Ms. Janet Davidson
Overall attendance
Meeting Attendance
11 of 11
11 of 11
10 of 11
10 of 11
11 of 11
10 of 11
6 of 6
10 of 11
79/83
5 of 5
84/88
%
100
100
91
91
100
91
100
91
95
100
95
Board Committees
Written charters set out the objectives, limits of authority, organization, and roles and responsibilities of the Board and each of its
Committees. The charters are available at www.millicom.com/our-company/governance/board-committees/. Details of Board roles
and responsibilities, activities in 2020 and Directors’ emoluments are set out on the following pages.
73
Millicom 2020 Annual Report environment. We were pleased to
witness how well the Group’s finance
community responded and adapted to
the considerable challenges presented.
The Committee was conscious that the
pandemic created new opportunities
for cyber threats and fraud and was
therefore briefed on the actions being
taken by the Group’s Information
Security team.
Thereafter, the emergence of the
COVID-19 pandemic became a key
theme that ran through much of the
Audit Committee’s work. We responded
quickly to ensure that the agenda
for meetings was focused on the
understanding and oversight of the
impact of the pandemic and performed
deep dives in key areas within the remit
of the Committee.
In coordination with the engagement
with the wider Board, management
provided briefings on the business and
commercial impact of COVID-19 across
the Group and the guiding principles
adopted by the management team
in response. This was followed by
detailed analysis for the Committee
on the impact on key accounting and
financial reporting topics, in particular
cash collections and receivables,
revenue recognition and the carrying
values of assets.
The Internal Audit team was also
quick to respond to the changes in
the risk environment and the Audit
Committee was involved in reviewing
and approving a re-prioritised program
of assurance activities.
The Committee also reviewed and
discussed actions and activities related
to the important regulatory updates
and developments in financial reporting,
treasury, tax, risk management and
revenue assurance.
Finally, as required by EU audit
regulations, the Committee led the
mandatory tendering process for the
selection of the external audit firm
to be appointed for the integrated
audit of the consolidated financial
statements of the Group for the year
ending December 31, 2022. The
Committee recommended and the
Nomination Committee accepted the
reappointment of Ernst & Young in
early 2021.
I would like to thank my fellow
Committee members for their dedication
and commitment to the activities of
the Audit Committee. I look forward to
continuing our mandate through to the
2021 AGM.
Mr. Tomas Eliasson
Chairman of the Audit Committee
I. Audit Committee
I am pleased to present the Audit
Committee’s report for 2020. We
convened six scheduled meetings
during the financial year, with one
additional unscheduled meeting
that included the organization of the
external audit tender process.
Following the U.S. listing in 2019, 2020
started with the Committee’s review
of the outcome of the first attestation
of internal controls over financial
reporting under the Sarbanes-Oxley
Act for the 2019 financial year. The
Committee was satisfied with the
results, which were the culmination of
management’s comprehensive and
intensive program of development and
enhancement of the Group’s internal
financial control framework.
We received feedback from
management about the impact of
home working on finance teams and
on the quality of the internal control
74
Millicom 2020 Annual Report Audit Committee membership and attendance at regularly scheduled meetings in 2020
Audit Committee
Position
First appointment
Mr. Tomas Eliasson
Chairman*
Ms. Pernille Erenbjerg
Member
Ms. Mercedes Johnson Member
Mr. James Thompson
Member
Overall attendance
May 2014
January 2019
May 2019
January 2019
*Designated as having specific accounting competence as per the EU Directive.
Meetings/
Attendance
6 of 6
5 of 6
6 of 6
6 of 6
23 of 24
%
100
83
100
100
96
In addition, the Chairman of the Board, Mr. José Antonio Rios Garcia, attended the majority of the meetings of the Audit Committee.
Appointment and role of the Audit
Committee
The Audit Committee is composed solely
of non-executive Directors, all of whom
were independent Directors in 2020.
Members are appointed to ensure there
is a mixture of relevant experience in
both finance and broader commercial
matters. The Board is confident that the
collective experience of the members
enables them to act as an effective
Audit Committee. The Committee is
also satisfied that it has the expertise
and resources available for it to fulfill its
responsibilities.
The Board has delegated responsibility to
the Audit Committee for overseeing the
robustness, integrity and effectiveness
of financial reporting, risk management,
internal controls, internal audit and
external audit processes, and pre-approval
of certain audit and non-audit services
provided by the external auditor. The
Audit Committee also oversees the
establishment
of accounting-related policies and
procedures, the procedure for dealing
with certain other types of complaints or
concerns, and compliance with related
laws and regulations.
Management, and representatives from
EY, the Company’s external auditor, are
invited to attend Committee meetings.
The Secretary of the Committee is the
Group Company Secretary.
The Audit Committee focuses on
compliance with financial requirements,
accounting standards and judgments;
appointment, oversight and
independence of the external auditors
and appointment and oversight of
certain other accounting firms that
may be retained from time to time;
transactions with related parties
(including major shareholders); the
effectiveness of the Internal Audit
function; the Group’s approach to risk
management; and ensuring an efficient
and effective system of internal controls.
Ultimate responsibility for reviewing and
approving Millicom’s Annual Report and
Accounts remains with the Board.
The Chief Executive Officer, Chief
Financial Officer, Chief Accounting
Officer, Head of Internal Audit, Head of
Business Controls, Head of Risk
The Audit Committee Chairman
prepares the meeting agenda in
conjunction with the Chief Financial
Officer. Regular private sessions are
held, attended only by Audit Committee
members and the external auditor,
to provide an opportunity for open
dialogue without management present.
At each regularly scheduled meeting,
the Audit Committee receives reports
from the Chief Financial Officer, the
External Auditor, the Head of Internal
Audit and the Head of Business Controls.
Additional reports come from other
officers of the Company as required.
The Audit Committee received the
required information from the external
auditor in accordance with Luxembourg
regulations.
75
Millicom 2020 Annual Report Summary of Areas of Focus and Actions in 2020
Impact of the
COVID-19 pandemic
Governance
• The pandemic has affected many areas within the remit of the Audit Committee. Deep dive sessions
held to review the impact on accounting, audit, internal controls, risk and cyber security.
• Reviewed and amended the Audit Committee Charter, Internal Audit Charter and Risk
Management Charter.
Financial reporting
• Reviewed key accounting and reporting issues at each meeting, including those related to the
COVID-19 pandemic.
• Reviewed and approved each quarter’s earnings release; the 2019 annual earnings release; the Annual
Report and 20-F together with the consolidated financial statements; the 2020 half-year earnings
release; and each quarter's interim financial statements.
• Reviewed the latest accounting developments and their effect on the financial statements.
• Reviewed the Alternative Performance Measures policy.
External auditor
• Received reports from the external auditor at each meeting in compliance with EU regulations
covering important financial reporting, accounting and audit issues. This includes receiving updates on
SEC guidelines regarding COVID-19.
• Reviewed and approved all non-audit services rendered by the external auditors.
• Approved the 2020 external audit strategy and fees and the proposed approach to address the
challenges posed by the pandemic.
• Considered the results of control testing performed by the external auditor in accordance with Section
404 of the Sarbanes-Oxley Act of 2002.
• Reviewed the performance of the external auditor and its independence, including monitoring the
nature and approving the fees of non-audit services.
• Led the tender for selection of the external auditor for the financial period ending December 31, 2022.
Internal audit activities
• Approved the 2021 Internal Audit plan and the re-prioritisation of work to address new and emerging
risks as a result of the COVID-19 pandemic.
• Reviewed Internal Audit findings arising from the delivery of the 2020 audit plan.
Financing, treasury and tax
• Reviewed the Group’s tax strategy and structure and approved the tax policy.
• Approved the updated Group treasury and related policies, including policies on hedging as well as on
financial risk management.
Risk management
• Provided guidance and oversight over risk management processes.
Business controls and SOX
• Reviewed alignment of top risks with strategy and recommended risk appetite in particular the
evolution of risks in light of COVID-19.
• Reviewed regular risk reports and risk management remediation plans.
• Reviewed the results of the Group’s first year Sarbanes-Oxley attestation and discussed proposals for
improvement. In particular, considered the Sarbanes-Oxley implementation plan for businesses in
Panama and Nicaragua.
• Considered the impact of home working and other changes brought about by the pandemic on the
robustness of the internal control environment and reviewed the actions of the Group's Information
Security team to the changing cyber risk landscape.
• Received and reviewed findings and recommendations regarding the design and operating
effectiveness of internal controls over financial reporting based on the cycle of management
testing of internal controls.
Fraud management
• Reviewed fraud policies and quarterly fraud reports, as well as proposed actions to
remediate identified cases.
Revenue assurance
• Received regular updates on revenue assurance activities.
• Reviewed trends and actions taken to minimize loss and revenue leakage.
Related party transactions
• Reviewed related party transactions.
76
Millicom 2020 Annual Report 2020 Meetings
The Audit Committee held six regular
meetings mainly coinciding with key
dates in Millicom’s external reporting.
Financial reporting
The Audit Committee reviewed earnings
releases and financial statements for
each quarter. Comprehensive reports
from management and the external
auditors highlighted the significant
judgmental accounting issues for the
attention of the Committee. Important
reporting and disclosure topics under
both EU and U.S listing requirements
were addressed.
Significant issues considered by the
Audit Committee in relation to the
financial statements for the year ended
December 31, 2020 included:
1. COVID-19 impacts
The COVID-19 outbreak and lockdown
affected the Group's operations from
March 2020. The Committee reviewed
analysis prepared by management on
the accounting and financial reporting
impacts and the additional COVID-19
accounting guidance provided to finance
teams across the Group.
The main impacts were on cash
collections from customers and revenue
recognition. This crisis also caused us to
review our assets, such as goodwill and
intangibles, for impairment.
a) Cash collections—Impairment
of trade receivables
Collections suffered a significant
decrease initially during Q2 2020 but
subsequently improved in response to
the quick actions taken by management.
By year end bad debts were back down
to pre-pandemic levels.
As of December 31, 2020, the total bad
debt provisions cover close to 100% of
the receivables overdue by more than
90 days.
b) Revenue recognition
Judgment is required in assessing the
application of revenue recognition
principles. This includes the application
of revenue between multiple
deliverables, such as the sale of handsets
with service or managed services
contracts that have complex contractual
agreements.
As such, it is a topic regularly reviewed by
the Committee and even more so during
2020 as COVID-19 resulted in changes to
products, services and collections which
required analysis against accounting
standards.
The Committee reviewed the most
significant impacts including the
Group's policy on when to continue
recognising revenue where invoices
remain unpaid and the treatment of
revenue in countries where governments
mandated continuity of service during
the pandemic.
2. Spectrum auction in Colombia—
refer to note E.1.3. of the
consolidated financial statements
In December 2019, Tigo Colombia
acquired licenses granting the right to use
a total of 40 MHz in the 700 MHz band
expiring in 2040. Notional consideration
was $710 million of which approximately
45% is to be met by coverage obligations
implemented by 2025.
Analysis of the proposed accounting
treatment and presentation in the
financial statements was presented
given the complexities of the payment
terms and nature of coverage
commitments.
The Committee reviewed and concurred
with the proposed treatment following
consideration of industry accounting
practice.
3. Finalization of the purchase
accounting of the Telefonica assets
in Nicaragua and Panama—refer
to note A.1.2. of the consolidated
financial statements
The purchase accounting of Telefonica
assets was finalized during 2020, and
the aggregate remaining goodwill
amounted to $619 million. The
Committee reviewed and agreed with
the accounting treatment proposed.
4. Equity investments in Helios
Towers—refer to note C.7.3. of the
consolidated financial statements
During June and November 2020,
Millicom disposed of two portions of
its shareholding in Helios Towers plc
for $168 million, triggering a total
net gain on disposal of $6 million.
As of December 31, 2020, Millicom’s
remaining investment of 7.6% is valued
at $160 million based on the prevailing
share price with a corresponding loss on
remeasurement of $16 million.
The Committee agreed with the
accounting treatment and presentation
of the transactions.
5. Ghana. Related party receivables
impairment—refer to note G.5.
of the consolidated financial
statements
In 2017, as a result of the merger of our
operations in Ghana with Bharti, the
Group recognized an interest-bearing
note receivable of $40 million from the
merged entity. Primarily as a result of the
deterioration in credit risk of AirtelTigo
Ghana, Millicom concluded that the loan
should be impaired in accordance with
IFRS 9.
The Committee concurred with the
decision to fully impair the loan totaling
$45 million including accrued interest.
The carrying value of the Ghana JV was
already nil.
6. Impairment testing—refer to note
E.1.6. of the consolidated financial
statements
The Committee received detailed
impairment analysis from management
including sensitivities and in reviewing
this was conscious of the impact on
trading performance caused by the
pandemic. Additional sensitivity analysis
presented by the external auditor was
also considered.
The results of impairment testing
continue to support the existing
carrying value of goodwill and other
long life assets and no impairment
was necessary. However, we disclosed
potential impairment for our operations
in El Salvador, Colombia and Nicaragua
that would have to be recorded in case
of certain reasonable changes in key
assumptions. The Committee agreed
with the conclusions.
77
Millicom 2020 Annual Report 7. Tax provisions and contingencies—
refer to note G.3.2. of the consolidated
financial statements
The Group operates in many countries
where the tax and legal system is less
mature and may be less predictable.
Therefore, a number of matters relating
to tax contingencies require judgment as
to the likely probability of cash outflow
or the potential amount of any outflow.
The Audit Committee received regular
reports from the Group Tax Director as
to the status of each of these matters,
the likely outcome, the provision
required, if any, and proposed disclosure
in the financial statements. The external
auditor also presented an analysis of
judgmental tax matters.
8. Capitalization and assets useful
lives—refer to notes E.1.1. and
E.2.1. of the consolidated financial
statements
Considerations that require judgment
include the assessment and timing of
whether assets meet the capitalization
criteria set out in the relevant accounting
standards; the estimation of appropriate
useful economic lives; the assessment of
whether any impairment indicators are
present, such as redundant assets; and
the identification of leases.
Once a year, Management presents its
conclusions to the Audit Committee.
Management Disclosure Committee
To assist with all matters related to
earnings releases, financial statements
and other market disclosures, Millicom
has a Management Disclosure
Committee comprising senior
management from Finance, Legal,
Compliance, Communications, Investor
Relations and other functions as
and when required. The Disclosure
Committee identifies and considers
disclosure matters in market releases,
including releases that may contain
material financial information.
Risk management
The Audit Committee received regular
reports on the Group’s risk management
framework and process, from the
Management Risk Committee, as well
as reports on changes to significant
risks at the operational and Group levels
and how these risks are managed.
Further information is set out in the risk
management section of this Annual
Report.
In addition, the Audit Committee
reviewed financial risk, tax risks, policy
and strategy, treasury policy and risks,
and Group insurance coverage.
Internal control
Following the U.S. listing, the Group
completed its first attestation of internal
control over financial reporting under the
Sarbanes-Oxley Act in February 2020.
The Committee received the results of
management's testing of key controls
and the testing by the external auditors.
Management concluded that the Group
had maintained effective internal
controls over financial reporting.
A debrief of the Sarbanes-Oxley
implementation program was held. The
Committee also reviewed and approved
the planned scope of the 2020 program
and approach to testing of key controls.
The impact of the COVID pandemic
and home working protocols on internal
controls were discussed. Decisive
management actions and prior
investments in technology to better
facilitate the operation of internal
controls meant that we were able to
maintain a strong control environment.
The Group Head of Business Controls
delivered progress reports on the
Sarbanes-Oxley program, including
operations in Nicaragua and Panama
acquired from Telefonica, which were in
scope for the first year in 2020.
The Committee reviewed regular reports
on the results of management testing of
key controls and the progress made to
address any control gaps.
Internal Audit
Execution of the 2020 Internal
Audit Plan provided the Executive
Management Team and the Audit
Committee with an independent view
of the effectiveness of Millicom’s
internal control environment and
governance processes. The plan was
developed to ensure alignment with
the strategic risks of the Millicom Group
as well as consideration of the overall
Group strategy, input from senior
management, external audit findings
and Internal Audit’s knowledge of the
business.
The Audit Committee approved the
2020 Internal Audit Plan, which was
composed of assurance and advisory
projects. The Internal Audit team moved
quickly to re-prioritize work to reflect
the changing risk landscape as the
pandemic unfolded.
The plan was primarily executed by
the in-house Internal Audit team,
with support from specialists at one
of the “Big 4” accounting firms. At
each meeting, the Audit Committee
received a report on Internal Audit
activities, progress against the plan
and planned updates and results of
the audits completed in the period,
including associated recommendations
and management action plans where
findings had been identified.
Information Security
As part of deep dive sessions performed
in response to the COVID pandemic, the
Audit Committee received analysis from
the Group Chief Information Security
Officer on the impact on cyber risk and
the plans enacted to protect employees
as they transitions to a remote working
model.
Fraud risk
The Audit Committee received and
reviewed quarterly fraud reports in
accordance with the Group’s Fraud policy.
78
Millicom 2020 Annual Report External Audit effectiveness
The quality and effectiveness of the
external audit matter greatly to the
Audit Committee. A detailed audit plan
outlining the key risks and proposed
geographical coverage is prepared and
discussed with the Audit Committee at
the start of each annual audit cycle. This
year the plan additionally addressed
questions from the Committee regarding
the external auditor's re-assessment of
risks in light of the pandemic and actions
taken to maintain audit quality during
home working.
The Committee assessed audit quality
by referring to the standard of the
reports received, the caliber of senior
members of the audit team and the
level of challenge provided to Executive
Management. Also, management
feedback provided to the Audit
Committee. This feedback allows the
Committee to monitor and assess the
performance of the external auditor
as part of making a recommendation
to the Board regarding the auditor’s
appointment. This was particularly
important in 2020 given the launch of
the external audit tender.
Auditor independence
The Audit Committee has policies to
maintain the independence of the
external auditor and to govern the
provision of audit and non-audit
services. The policies and approval
process of non-audit services and
audit-related services comply with SEC
independence rules and with the latest
EU and local regulations. Under these
rules, the Audit Committee pre-approves
a list of services that can be rendered by
the audit firm. If services to be rendered
are pre-approved in nature, these can
be approved by management when
requested (following an established
authority matrix) and then presented
to the Audit Committee on a quarterly
basis for formal approval. If services to
be rendered are not pre-approved, they
should be pre-approved by the Chairman
of the Audit Committee when requested
and then submitted to the next full
audit committee for formal approval. A
schedule of all non-audit services with
the external auditor is reviewed at each
meeting.
For the year ended December 31, 2020,
the Audit Committee approved fees for
audit and audit-related services of $6.2
million, together with fees for non-audit
work of $0.2 million.
In compliance with independence rules,
the previous audit partner rotated off
the audit in 2019 and the current audit
partner will rotate off for the audit of the
consolidated financial statements as of
December 31, 2025, at the latest.
Audit tendering
Millicom first appointed EY as external
auditor of the Company for the year
ended December 31, 2012, following a
competitive tender. Based on the most
restrictive EU audit regulations and
applicable Luxembourg law, EY would
have to rotate off the audit by 2032 (20
years after initial appointment) at the
latest, with a mandatory tender for the
audit to occur by 2022 (ten years after
initial appointment). In that respect,
during the fourth quarter of 2020, the
Committee led the mandatory tendering
process for the selection of the external
audit firm to be appointed for the
integrated audit of the consolidated
financial statements of the Group
for the year ending December 31,
2022. The Committee has made a
recommendation for consideration by
Nomination Committee in early 2021.
79
Millicom 2020 Annual Report Our company leadership continued its
relentless commitment to maintaining
our Sangre Tigo culture, with the
application of ethics and compliance in
our everyday interactions. Sangre Tigo
signifies high integrity, zero tolerance
for any form of corruption, and a
commitment to doing business the right
way, even in COVID times.
On behalf of the Board, I would like to
reconfirm our commitment to a culture of
ethics and strong compliance that leads
to success for the business and pride for
our company.
We are proud to be a compliance leader
in our markets and look forward to
engaging with our customers as well as
our stakeholders by making it happen the
right way.
Mr. Odilon Almeida
Chairman of the Compliance and Business
Conduct Committee
these initiatives as guideposts to pivot
to the more relevant risks the pandemic
presented. For example, we quickly
shifted communications, training, and
certain processes to directly address
those risks we determined had increased.
This included managing and monitoring
risks emanating from third-party fraud,
cybersecurity threats, and private and
public sector aid requests.
Though we focused on pivoting to
address the most pressing risks, we
did not neglect core elements of our
Compliance program, including, for
example, our Annual Training for the
entire company that covered, among
other topics, our Code of Conduct,
Anti-Bribery and Anti-Corruption, and
Anti-Money Laundering.
And despite the pandemic, during
2020, we continued to build and refine
our Ethics & Compliance Program.
We combined the Legal and Ethics &
Compliance teams, which are now under
the leadership of the Chief Legal and
Compliance Officer. These combined
forces reinforce the mission of the Ethics
& Compliance function, which is to serve
as a guardian of the company, focusing
on its protection from risks, exposure,
and claims.
II. Compliance and Business Conduct
Committee
We started 2020 with purpose and an
eye toward progressing the development
of the Ethics & Compliance program,
continuing to enhance its reach to better
help our employees do the right thing in
the right way.
As with all aspects of our business, the
COVID-19 global pandemic required us
to re-evaluate our priorities and risks.
Ethics & Compliance is a people-focused
function, and there was no question the
pandemic was going to change how our
people worked.
During the process of evaluation and
constant monitoring, we determined that
we were not facing novel risks, but rather
that the most pressing risks had shifted.
As a result, we found we did not need to
change our main strategies or strategic
initiatives, but rather used
Compliance and Business Conduct Committee Membership and Attendance 2020
Committee
Mr. Odilon Almeida
Ms. Mercedes Johnson
Mr. Lars-Åke Norling
Attendance
Position
Chairman
Member
Member
First appointment
November 2015
June 2020
May 2018
Ms. Janet Davidson
Former Chair
May 2016
Overall attendance
Meeting
Attendance
5 of 5
5 of 5
5 of 5
15 of 15
2 of 2
17 of 17
%
100
100
100
100
100
100
In addition, the Chairman of the Board, Mr. José Antonio Rios Garcia, attended all of the meetings of the Compliance and Business
Conduct Committee.
Appointment and Role of the
Compliance and Business Conduct
Committee
Millicom’s Compliance and Business
Conduct Committee oversees
the Group's Ethics & Compliance
program, and reports on and makes
recommendations to the full Board
regarding the Group’s compliance
programs and standards of business
conduct. More specifically, the
Compliance and Business Conduct
Committee:
• Monitors the Group’s Compliance
program, including the activities
performed by the Compliance Team
and its interaction with the rest of the
organization
• Monitors the investigations resulting
from cases brought through the
Group’s ethics line or otherwise
• Oversees allocation of resources and
personnel to the Compliance area
• Assesses the Group’s performance in
the Compliance area
• Ensures that the Group maintains
proper standards of business conduct
Management representatives invited
to attend the Compliance and Business
Conduct Committee include the Group
CEO, Chief Legal and Compliance
Officer, Group CFO, Chief External
Affairs Officer, VP Ethics & Compliance,
VP Internal Audit and Head of Risk
Management.
8 0
Millicom 2020 Annual Report Summary of Committee Activities in 2020
The Committee Chairman prepares the agenda in conjunction with the Chief Legal and Compliance Officer. During meetings,
the Committee reviews the status of the Ethics & Compliance Program, compliance-related issues, Strategic Responses (such as
investigations) to any alleged violations of law or policy, AML initiatives, and any Internal Audit Reports and remediation plans that
concern the Ethics & Compliance Program.
The CEO and Executive Team are committed to our Sangre Tigo and are actively involved in fostering a culture of ethics and
compliance from the top across all our lines of business.
Summary of Areas of Focus and Action Items in 2020
Program elements reviewed
• Refined third-party management through a centralized due diligence program.
• Anti-corruption program policies and automated procedures, including those covering
new and emerging areas of risk and strengthening of the overall program.
• Revision of compliance policies and procedures, and communication to the whole
organization.
• Training completion rates on company compliance policies as part of select managers'
KPIs.
• Results of continuing review of the compliance framework by Internal Audit as well as
remediation actions and status.
• Improved communication campaigns on various compliance subjects.
• Resources: Hired two new compliance officers.
• A number of GMs were given a set of compliance KPIs to meet during the year for year-
end bonus award.
• Integration of compliance program in the newly acquired entities in Central America.
• Incentive programs: Compliance factors were incorporated into executives’ incentive
programs for the third consecutive year. Bonus awards are tied to achievement of all
compliance KPIs.
Reporting & Investigations
• “SpeakUp” Campaign: Continued to encourage employees to use the system to report
Global Anti-money laundering (AML)
program
issues of perceived non-compliance with our policies and values.
• Strengthened investigations team; further developed investigations resources centrally
and in the operations, as well as designed Corrective Action Framework for all operations.
• Continued to align investigation procedures across the countries.
• Continued effective case management, including by taking reasonable steps after
detection of misconduct.
• Continued to perform enhanced AML reviews on-site in a portion of 2020 (before the
pandemic).
• Implementation of a new transaction monitoring has concluded in Paraguay, and
Bolivia is in the final stages of the implementation of the same tool. Tigo Tanzania has
implemented an enhanced version of its current transaction monitoring tool, and Tigo
Ghana has also aligned the current monitoring tool to meet the operation's transaction
monitoring needs.
• Continuing global AML training efforts; several campaigns have been deployed, including
a monthly AML Bulletin distributed globally.
• Performed the fist rounds of the AML Risk Assessments in all operations, including LATAM
and Africa.
• A new AML Risk Control Self-Assessment has been implemented and deployed in all MFS
LATAM operations.
• Continued to deploy several training initiatives including the global AML Bulletin, global
AML training, AML campaigns, and AML personnel targeted trainings.
81
Millicom 2020 Annual Report III. Compensation Committee
1. Letter to shareholders from
the Chair of the Compensation
Committee
COVID and Engaging with Employees
In 2020 the global COVID-19 pandemic
had an unprecedented impact on the
world we all live in. The impact was felt
in all the markets where we operate;
on our customers, our investors, our
partners and our employees. The
Compensation Committee faced the
challenge and addressed the issues of
the impact created on the income, job
security, engagement and retention of
our employees.
Millicom is a major direct and indirect
employer in almost all the markets
in which we operate, and we took an
early decision to preserve employment
and income for our staff. During the
most challenging period, we suspended
all restructuring programs, and we
chose not to furlough or implement
redundancies. Further, we strived
to maintain all our staff’s basic pay,
including for commission-based
employees, and implemented hazard
pay for customer facing teams where
it was deemed necessary. We did not
take any government grants or other
support in any of the markets where we
employ staff. Further we maintained
and implemented the annual increases,
which had already been agreed before
the pandemic struck, for all of the staff,
other than the senior leadership team.
This means that for approximately
120 employees, we decided not to
implement the 2020 annual salary
increases that had already been
communicated and were planned to
become effective April 1, 2020.
Remuneration policy and link to long-
term performance
The Compensation Committee has
reviewed and assessed the guidelines
and policy for senior management
remuneration, and we believe that it
maintains a strong link to Millicom’s
performance and is aligned with
Millicom’s culture. Our remuneration
policy is aimed at attracting, retaining
and incentivizing the best talent
in our markets to the benefit of all
stakeholders.
Remuneration in Millicom consists of
a base salary, various benefits and
pension arrangements. The policy
also provides for variable elements of
remuneration through an annual bonus
plan (STI) and a long-term incentive
plan (LTI). The variable elements of
remuneration are subject to stretched
performance measures (financial and
operational), and are largely settled in
shares, in order to promote alignment of
management’s interests with those of
shareholders. Share units issued under
both the STI and the LTI have a three-
year vesting period. This year, given
the unprecedented impact caused by
the COVID-19 pandemic, we have also
introduced a special one-off retention
plan for 36 of our senior executives. This
plan is described below.
To further promote alignment with
shareholders, the Company continuously
monitors its requirement that the Global
Senior Management Team maintain
a shareholding with a value of at least
50% to 400% of their annual salary.
In addition, in December the Committee
put forward, and the Board of Directors
approved, the voluntary adoption of a
claw-back provision applicable in the
case of any accounting restatement
required due to material noncompliance
with applicable financial reporting
requirements.
2020 performance and reward
outcomes
Financial performance was severely
impacted by COVID-19, and as a
consequence the Group missed the
EBITDA target but hit the minimum
threshold on the Service Revenue target,
having been comfortably ahead of both
targets at the end of Q1. Concerted
action to preserve our cashflow ensured
that the Operating Cashflow target was
more than achieved. This resulted in a
66% bonus award for the financial and
operational component. In addition,
management business objectives
typically represent a 30% of the bonus
award.
The LTI awards granted in 2018 are due
to vest in February 2021. This vesting
will be based on achievement over the
three years to 2020 of growth targets for
Service Revenue (25%) Cashflow (50%)
and a relative TSR (25%). The payout
has been assessed at 55.97% by our
independent advisers.
Remuneration changes in 2020
In 2020, the Committee made no
changes to the STI performance targets,
and there were no exceptions made to
the Executive Team bonus calculations.
Likewise, there were no changes to the
LTI plan granted in 2018 and vesting
in early 2021. The Compensation
Committee decided not to implement
any changes or make any adjustments
to our in-flight LTI plans granted in 2019
and 2020, which will vest in 2022 and
2023 respectively.
In other words, Millicom’s management
team and employees were not granted
any allowances in respect of the
impact of the COVID-19 pandemic on
their 2020 compensation, reinforcing
alignment with shareholders and focus
on dealing with the effects of the COVID
pandemic on our business.
Remuneration 2021
The Compensation Committee has
reviewed the guidelines and policy for
senior management remuneration. As
part of this review, our advisors have
supplied various analyses, including
extensive benchmarking to our peers.
The Committee has reviewed and
discussed benchmark analysis
highlighting that a very large part of
senior leadership team's compensation
is variable, more so than is the case for
our peers. While we think that a high
level of variable pay is a good thing, we
did come to the conclusion that some
re-balancing was required in order
to re-build a retention effect for key
individuals.
With a few modifications as outlined
below, we continue to believe that the
remuneration structure supports our
delivery of the strategy and the intended
value creation.
For the 2021 STI Plan (which is subject
to approval at the 2021 AGM), we
have retained the same financial
KPIs – service revenue, EBITDA and
cash flow. These will amount to 60%
of the total, while 10% is aligned to
the Net Promoter Score (NPS), and the
remaining 30% is based on individual
performance.
For the 2021 LTI grant (which is
subject to approval at the 2021 AGM),
the Committee concluded that a
modification was needed to reduce
the overall uncertainty around the
payout, while maintaining a high
level of incentive towards long-term
performance. The Committee decided
that 35% of the 2021 LTI should be in
the form of time-vested restricted
82
Millicom 2020 Annual Report share units, which will also bring us
more in line with the practice applied by
our peers, according to input from our
independent advisors. The remaining
65% would continue to be performance-
vested based on the achievement of
Service Revenue (15%) and cashflow
(30%) targets, as well as 20% from
relative Total Shareholder Return (TSR),
a distribution similar to previous LTI
plans. Thus, the introduction of a time-
vesting component to the LTI would
reduce the overall uncertainty, increasing
the perceived value by management to
the benefit of retention while reducing
the maximum payout. The LTI continues
to be subject to a three-year cliff vesting.
Since variable pay makes up a high
portion of the remuneration for our
Global Senior Management, the crisis
has eroded the retention effect that
would be associated with the LTI
programs under normal circumstances.
The COVID-19 crisis is far from over, and
improving our performance under these
circumstances will require significant
effort from all. As a result, and based on
advice and benchmarking from external
experts, the Committee determined that
it was imperative to implement a new
retention plan for our top 36 executives.
In designing a one-off retention
program, the Committee carefully
considered and balanced the need for
retention with shareholder objectives
and interests. The new one-off plan
is based on Market Stock Units (MSU)
whereby the payout will be determined
by the share price performance. The
retention awards will be granted in two
tranches in Q1 2021; the first tranche
will vest in 2022, and the second one will
vest in 2023. For additional retention
purposes, the awards are generally
payable only after an additional
12-month employment period.
In addition to these actions, we
continued to focus on reviewing
Millicom’s reward strategy to ensure
that Global Senior Management’s
compensation closely aligns with
company performance. Together
with Mercer, our external consultant,
we continued as well with our regular
review of best practices in executive
compensation and governance and
revising our policies and practices when
appropriate.
The value of the equity holdings of our
executives have decreased during 2020,
but we continue to uphold our share
ownership requirements for our top
50 roles and track the status of each
executive annually. This encourages
our top leaders to take a longer-term
view on positive business performance
in alignment with company and
shareholder interests.
Diversity and Inclusion
In addition to our competitive
compensation plans, it is TIGO‘s strong
sense of purpose, combined with the
unique culture that enables us to hire
and retain diverse talent. One of our
key foundational values is building
and promoting an inclusive work
environment. Throughout 2020, the
team has laid out a clear D&I strategy
and has trained over 250 leaders. We
reviewed our hiring and pay processes
to identify any inequities, starting with
identifying and correcting any gender
pay equity gaps that may exist.
Additionally, we provided a series of
wellness and growth workshops and
programs to help support employees,
both physically and mentally, in these
difficult times.
I would like to thank my fellow members
for their dedication and commitment
to the activities of the Compensation
Committee and look forward to
continuing our mandate through to the
2021 AGM.
Ms. Pernille Erenbjerg
Chair of the Compensation Committee
2. Compensation Committee’s role
This report describes the remuneration
philosophy, and related policy and
guidelines, as well as the governance
structures and processes in place. It also
sets out the remuneration of Directors,
as well as compensation of the Global
Senior Management for the current and
prior financial reporting years.
2.1 Role of Compensation Committee
The Compensation Committee
monitors and evaluates programs for
variable remuneration to the senior
management, both ongoing programs
and those that have ended during
the year and monitors and evaluates
the application of the guidelines for
remuneration to the Board and senior
management that the shareholders'
meeting has established, as well as the
current remuneration structures
and levels in the Company. The
Compensation Committee makes
recommendations to the Board of
Directors regarding the compensation
of the CEO and his direct reports;
approves all equity plans and grants; and
manages Executive Team succession
planning. Final approval of the CEO
remuneration requires Board approval.
The evaluation of the CEO is conducted
by the Compensation Committee. The
evaluation criteria and the results of
the evaluation are then discussed by
the Chairman with the entire Board. In
2020 the Board considered that the CEO
provided exceptional leadership for the
Company in the face of the COVID-19
crisis. In evaluating his performance as
"Exceeds" the Board took into account
the way in which he rapidly refocused
the business from revenue growth to
protecting customers, employees and
cashflow. Together with achievement
on the financial targets discussed below,
the total bonus achievement for the CEO
was at 110.9% of target ($2,602,262
compared to $2,855,020 for 2019
performance). The Chairman of the
Board conveyed the results of the review
and evaluation to the CEO.
Guidelines and policy for senior
management remuneration are
approved by the shareholders at the
AGM. For 2021, per the European Union
Shareholders Rights Directive II, a
Remuneration Report will be submitted
for approval by shareholders at the AGM
in May 2021.
2.2 Compensation Committee Charter
The Group’s Compensation Committee
charter can be found on our website
under the Board Committees section
and covers overall purpose/objectives;
committee membership; committee
authority and responsibility; and
committee’s performance evaluation.
83
Millicom 2020 Annual Report 2.3 Compensation Committee Membership and Attendance 2020
Committee
Ms. Pernille Erenbjerg
Mr. Lars-Åke Norling
Mr. James Thompson
Overall Attendance
Position
Chairman
Member
Member
First Appointment
Meeting Attendance
January-19
May-19
January-19
6 of 6
6 of 6
6 of 6
18 of 18
%
100
100
100
100
In addition, the Chairman of the Board, Mr. José Antonio Rios Garcia, attended all of the regularly scheduled meetings of the
Compensation Committee.
2.4 Areas covered in 2020
The Compensation Committee met six times in 2020 and was primarily focussed on reward and management retention in the face
of the unprecedented operating environment.
Topic
Commentary
Bonus (STI) and performance reports
• Reviewed and approved Global Senior Management Team's 2019 performance reports
and Executive Team individual payouts STI/LTI (cash /equity).
• Reviewed and approved the 2020 short-term variable compensation targets.
Compensation review
• Approved all payments for Executive Team members.
• Reviewed executive remuneration and governance trends and developments.
• Reviewed and approved the peer group for the Executive Team benchmarking.
• Approved changes to CEO and Executive Team compensation elements based on
market competitiveness.
Share-based incentive plans
• Approved the 2017 LTI (PSP) vesting.
• Reviewed and approved all equity grants.
• Reviewed and approved the 2020 share units plan (DSP and PSP) rules.
• Reviewed and approved the 2020 long-term variable compensation targets.
• Reviewed the replenishment of the treasury share balance reserved for share-based
incentive plans.
• Reviewed share ownership guidelines and the compliance of each covered employee.
• Reviewed performance and projections of outstanding LTI plans (2018, 2019 and 2020).
Global reward strategy and executive
remuneration review
• Reviewed equity plans participant turnover.
• Reviewed Remuneration/C&B Philosophy & Strategy.
Variable pay design
• Discussed and approved STI/LTI design for 2021.
Other
• Reviewed and approved exceptional items, new hire equity grants, etc.
• Reviewed and approved STI and LTI performance measures for 2021.
• Reviewed Executive Team’s severance payouts in a Change of Control.
• Reviewed STI historical targets and achievements.
• Reviewed new requirements under Shareholder Rights Directive II.
• Reviewed and approved compensation actions taken under COVID-19.
• Reviewed and approved potential solutions related retention (MSUs).
• Reviewed and approved a Clawback policy.
Compensation Committee governance
• Reviewed and approved the Compensation Committee annual meeting cycle and
calendar.
• Reviewed the Compensation Committee Charter.
• Updated Executive Compensation dashboard.
• Reviewed and approved the use of an external compensation consultant.
8 4
Millicom 2020 Annual Report
3. Our Compensation Philosophy and Core Principles The philosophy, guidelines, objectives, and policy applicable to remuneration
of the Global Senior Management Team were approved by the shareholders (item 20) of the AGM held on June 25, 2020.
3.1 Core principles.
The Compensation Committee worked using the following objectives for Global Senior Management Team's compensation.
What we strive for
Competitive and fair
Drive the right behaviors
Shareholder alignment
Pay for Performance
Transparent
What it means
Levels of pay and benefits to attract and retain the right people.
Reward policy and practices drive behaviors that support our Company strategy and business
objectives.
Variable compensation plans support a culture of entrepreneurship and performance, and
incorporate both short-term and longer-term financial and operational metrics strongly
correlated to the creation of shareholder wealth. Long-term incentives are designed to
maintain commitment over the long term, and ensure the interests of our Global Senior
Management Team are aligned with those of shareholders.
Total reward structured around pay in line with performance, providing the opportunity
to reward strong corporate and individual performance. A significant proportion of
compensation of top management is variable (at risk) and based on measures of personal
and company performance directly attributable to short-term and longer-term value creation.
Millicom is committed to expanding external transparency, including disclosure around pay
for performance, linkages to value creation, etc. We are also investing in HR information
systems in order to facilitate the measurement and internal communication related to
incentive composition including performance metrics, pay equity, goal setting, and pay for
performance relationships.
Market competitive and representative
remuneration
Compensation is designed to be market competitive and representative of the seniority
and importance of roles, responsibilities and geographical locations of individuals (with the
majority of the Global Senior Management Team roles located in the United States).
Retention of key talent
Variable compensation plans include a significant portion of share-based compensation,
pay-out of which is also conditional on future employment with the Company for three-year
rolling periods, starting on the grant date.
Executive management to be "invested"
Global Senior Management Team, through Millicom’s share ownership guidelines, are
required to reach and maintain a significant level of personal ownership of Millicom shares.
In addition, to drive the right behaviors and ensure expectations are aligned, we communicate clearly to our employees what we do
and do not do when it comes to compensation. A summary is set out in the table below:
85
Millicom 2020 Annual Report What we do
Align pay and performance.
What we don't do
No special executive perquisites.
We have a substantial majority of executive pay at risk, based on a mix of absolute and
relative financial and share price performance metrics.
No hedging of Company stock by
executives.
We impose limits on maximum incentive payouts.
Engage in a rigorous target-setting process for incentive metrics.
Threshold in our STI is set to pay only at 95% and above levels of performance.
We have robust share ownership guidelines for our top 50 executives.
“Double-trigger” change in control provisions in equity awards.
We have clawback policies that apply to our performance-based incentive plans.
Independent compensation consultant retained by the Compensation Committee.
No dividends or dividend equivalents on
unearned PSUs or RSUs.
No tax gross-ups related to change in
control.
3.2 Elements of Executive pay
Compensation for the Global Senior Management Team in 2020 comprised a Base Salary, a Short-Term Incentive (”STI”) and a
Long-Term Incentive Plan (“LTI”) together with pension contributions and other benefits (e.g. healthcare)
Salary
Pay Element
Purpose
Maximum Opportunity
Purpose and link to strategy
Designed to be market competitive to
attract and retain talent
No absolute maximum has been set for
Executive Team salaries. The Committee
considers increases on a case by case basis
based on peer comparison. Pay increases
usually reflect a combination of role and
responsibilities, local market conditions and
individual performance.
Operational Execution
Paid monthly in cash in U.S. dollars or the
home currency of the Executive
Reviewed by the Compensation Committee
every March
The Compensation Committee aims to
set salaries for the Executive Team at the
median of the peer group
8 6
Millicom 2020 Annual Report
STI
Pay Element
Purpose
Payout Opportunity
The STI links reward to key business targets (70%) and
individual contribution (30%)
Below 95% achievement of business targets the
award falls to 0%. The threshold achievement is
95% of target resulting in a payout of 80%. The
opportunity is 200% for the achievement of 110% .
Purpose and link
to strategy
The STI provides alignment with shareholders’ interests
through the provision of 50% of the payment delivered
in share units deferred over three years ("DSP") for senior
leadership team. The DSP is awarded upon achievement of
the performance targets and with 30% paid after one year,
30% after the second year and 40% after the third year of
the grant date.
The target achievement for:
CEO – 200%
CFO – 150%
These plans help to incentivize and motivate to execute
strategic plans in operational decision making to achieve
short-term performance goals impacting performance and
enhancing the value of the Company.
Maximum achievement:
CEO – 400%
CFO – 300%
The financial and operational targets are;
•
•
•
•
•
Service Revenue
EBITDA
Cashflow (OFCFaL)
Transactional Net Promoter Score (tNPS)
Personal Performance
20%
20%
20%
10%
30%
Benchmarking
Our STI is a key component of the Millicom group culture.
We benchmark to peer companies within the U.S. and Latin
America
Each year the Compensation Committee determines
the annual STI opportunity for the Executive Team.
87
Millicom 2020 Annual Report
LTI
Pay Element
Purpose
Payout Opportunity
Purpose and link
to strategy
The LTI links an important part of overall Global Senior
Management Team compensation with the interests of our
shareholders
This plan serves the purpose of aligning Global Senior
Management Team longer-term incentives with the longer-
term interests of shareholders, encouraging long-term value
creation, retention and management’s focus on long-term
value
Millicom emphasizes the One Team mentality – by
maintaining unified goals and objectives in the long-term
incentive program for the Global Senior Management Team
with the purpose of driving the successful achievement of
three-year performance goals designed to enhance long-term
value of the Company.
The LTI is a performance-based share units plan (“PSP”)
whereby share units awards granted fully vest at the end
of a three-year period, subject to achievement against
performance measures and fulfillment of conditions.
LTI payouts are typically in share units and based on
company three-year cash flow, and revenue targets approved
by the Compensation Committee and the Board, as well as to
shareholder return.
Performance Share Units Plan (PSP)
Operational
Execution
The PSP financial targets are:
• Service Revenue 25%
• OFCFaL (Operating Free Cash Flow) 50%
• Relative TSR 25%
The PSP pays out / is settled in shares at the end of 3 years.
* For 2021 LTI we plan to use OCFaL (Operating Cash Flow
after Leases) in lieu of OFCFaL (Operating Free Cash Flow
after Leases) and include a portion of the grant as Restricted
Stock Units (“RSUs”) following U.S. market practice, which will
also vest at the end of the corresponding three-year period.
Our LTI is a key component of the Millicom group culture.
We benchmark to peer companies within the U.S. and Latin
America
Benchmarking
For financial metrics, below 80% achievement
the award falls to 0%. In the event the Company
achieves between 80% and 120% of the target, the
corresponding portion of the grant will be adjusted
in linear pro rata of the achievement starting at a
payout of 0% at an achievement of 80%, up to
a maximum value of 200% if target achievement
is 120% or higher. For TSR no award is made for
performance below peer group median. Achieving
TSR performance at median or above of a pre-
determined peer the grant will be adjusted in linear
pro rata of the achievement starting at a payout of
100%, up to a maximum value of 200% if target
achievement is 120% or higher
The target achievement for:
CEO – 480%
CFO – 175%
The maximum achievement for:
CEO – 960%
CFO – 350%
Each year the Compensation Committee determines
the annual LTI opportunity for the Executive Team.
8 8
Millicom 2020 Annual Report
In addition, in order to ensure continued
retention of key individuals during
periods of uncertainty the Board also
uses retention schemes. In 2021 the
Board approved a Retention Scheme for
a selected group of top management
including the CEO and CFO.
3.3 Other Employment
terms and conditions
Notice of termination: if the
employment of a member of the
Millicom’s Executive Team is terminated,
a notice period of up to 12 months could
potentially apply. The Board regularly
reviews best practices in executive
compensation and governance and
revises policies and practices when
appropriate. In 2019 Millicom revised its
change in control agreements for eligible
executives to include "double-trigger"
provisions, which require an involuntary
termination (in addition to change
in control) for accelerated vesting of
awards.
Deviations from the policy and
guidelines: in special circumstances,
the Board may deviate from the above
policy and guidelines, for example
additional variable remuneration in the
case of exceptional performance.
3.4 Other executive
compensation policies
In 2020 the Compensation Committee
approved a Clawback Policy, where
Millicom has adopted a policy that
requires its Board of Directors’
Compensation Committee to seek
recovery of incentive compensation
awarded or paid to those officers
covered under the policy, in the event
that a restatement of Millicom’s audited
and published financial statements is
found to have resulted in the payment of
compensation in excess of what would
have been paid based on the restated
operating and financial performance.
In addition, the Company’s Insider
Trading Policy prohibits any hedging
or speculative transactions in the
Company’s shares, including the use of
options and other derivatives. It also
prohibits directors and employees from
selling the Company’s stock short.
4. Key developments for 2020
In 2020, the impact of the COVID-19
pandemic was the overriding concern
of the Compensation Committee. By
necessity management had to take
stringent actions to protect the health
of employees, customers and partners.
This inevitably meant that many of the
business plans for the year, on which the
performance targets were set, had to be
shelved. As part of the actions taken,
increases in annual pay, which were
planned to take effect from April 1, 2020
were cancelled for the CEO and 120 of
our Top Management team, and a hiring
freeze was implemented. In addition, we
implemented hazard pay, which sought
to give a supplemental compensation
to our employees who had to carry
out some work in the field exposing
themselves to additional risk.
Nonetheless, the Committee did
not change any of the performance
measures or targets for any of the “in-
flight” incentive plans. The 2018 LTI
vested in February 2021, reflected the
achievement of the metrics including the
COVID-19 impact.
With respect to the remaining in-flight
plans, the 2019 and 2020 LTI plans,
the impact of COVID-19 has made the
achievement of those financial targets
now much more uncertain and we have
therefore implemented a Retention
Plan to ensure key talent is retained
during this period. The Compensation
Committee has not implemented any
other changes or adjustments to the
targets or the metrics of our 2019 and
2020 LTI inflight plans.
4.1 Key elements of 2020 CEO and CFO pay
In 2020 the key elements of the CEO and CFO compensation, in line with the Remuneration Policy, were as follows;
Salary (USD)
Short-Term Incentive
Long-Term Incentive
Pension
Benefits
Mauricio Ramos
(CEO)
$1,173,000
Tim Pennington
(CFO)*
$669,757
200% of Base
Salary delivered:
Performance
Measures:
150% of Base
Salary delivered:
Performance
Measures:
50% in Cash Bonus
50% in Share Units
over 3 years vesting
30%/30%/40%
60% Financial
10% Customer
30% Personal
50% in Cash Bonus
50% in Share Units
over 3 years vesting
30%/30%/40%
60% Financial
10% Customer
30% Personal
PSP award of 480%
of salary with 3-year
cliff vesting
15% of
salary
PSP award of 175%
of salary with 3-year
cliff vesting
15% of
salary
Private
healthcare
Life insurance
Car Allowance
Private
healthcare
Life insurance
Car Allowance
*CFO Compensation paid in Pounds GBP and for purposes of this report converted to USD using December Closing Forex.
89
Millicom 2020 Annual Report 4.2 Summary of total CEO/CFO compensation
The compensation for the CEO and CFO is summarized in the table below:
In USD
Base Salary
Fringe Benefits**
Pension Expense
Total Fixed
Annual Bonus***
Deferred Share Units***
LTIP****
Total Variable
Total Compensation
% Fixed
% Variable
Mauricio Ramos (CEO)
Tim Pennington (CFO)*
2020
2019
2020
2019
1,173,000
1,167,250
669,757
654,327
82,225
50,463
284,520
278,914
1,539,745
1,496,627
1,301,131
1,427,510
1,301,131
1,427,510
37,600
100,464
807,821
508,896
508,896
22,725
98,149
775,201
626,375
626,375
5,630,400
4,600,000
1,200,964
1,132,957
8,232,662
7,455,020
2,218,756
2,385,707
9,772,407
8,951,647
3,026,577
3,160,908
15.76%
84.24%
16.72%
83.28%
26.69%
73.31%
24.52%
75.48%
*CFO Compensation paid in Pounds GBP and for purposes of this report converted to USD using December Closing Forex for each period.
**Fringe Benefits include Car Allowance, Life and Disability Insurance, Medical and Dental Insurance.
*** The sum of Annual Bonus and Deferred Share Units is the total for the Short-Term Incentive Award for the performance period. 2020 STI to be paid and granted in
Q1 2021.
****LTIP is Performance Share Units granted in the period granted in 2020.
The total Short-Term award for the CEO, CFO and other senior leadership team is split 50% in cash and 50% in share units deferred
over a three-year period (“DSP”). The compensation for the CEO and CFO is heavily weighted to variable compensation in the form
of share units vesting over a three-year period. As a result, total compensation as shown in the previous table may differ significantly
relative to the actual realized compensation in any given year. The table below compares CEO total compensation to his actual
realized compensation in the last three years.
2020 CEO Compensation
Reported Pay (millions)
Realized Pay (millions)
$8.9
$8.9
$9.8
$4.9
$5.3
$5.4
2018
2019
2020
2018
2019
2020
Base Pay STI–Bonus Share Awards Other Compensation
Total Cash Vesting Previous Awards
Notes
-In average approximately 70% of CEO compensation is delivered in form of share
-In average realized pay has been 56% of Reported Pay
9 0
Millicom 2020 Annual Report 4.3 Performance on STI 2020
As in previous years, the Annual Bonus is determined by a mixture of Business Performance factors and Individual Performance
factors. The Business Performance Factors included performance measures of service revenue, earnings before interest, tax,
depreciation and amortization (“EBITDA”), operating free cash flow ("OFCF") and a customer satisfaction metric based on Net
Promoter Score achievement. Use and relative weighting of financial performance target measures under the variable compensation
rules are equal to all employees regardless of seniority or area of operation. This includes the CEO and the senior leadership team.
Base
Salary
x
Target
Percentage
x
Business
Performance Factors
x
Individual
Performance Amounts
=
Annual Incentive
Amount
For the CEO and senior leadership team, a portion of the STI is paid in the form of deferred share units with a three-year pro-rated
vesting, strengthening our pay for performance and retention incentives.
For 2020 the achievement of performance targets is set out in the table below:
2020 STI—Group Results for a Meets Performance
For the CEO, the achievement of the Individual Performance is summarized below and resulted in a “Exceeds” performance rating.
Naturally a number of the original personal objectives were rapidly superseded by the onset of the pandemic, but the board
determined that the CEO transitioned the Group rapidly to deal with the impact of COVID which informed the decision to apply an
“Exceeds” performance rating.
Target
Weighting Measure
Outcome
Percentage
achievement
Protect
people
Protect
networks
Protect the
balance sheet
Protect
shareholders
25%
Protection of staff and customers
Outstanding response to the pandemic with universal
policies and practices implemented quickly
50%
Protect the networks to deliver
the broadband required by the
communities
Despite a 50% increase in traffic on the fixed network
and high spikes on the mobile network all networks
maintained high levels of resilience and connectivity
Ensure liquidity and maintain the
cashflows
Liquidity remained strong throughout and actions
taken to sustain the business delivered higher than
expected cashflow
Deliver the budget and improve
the share price
The budget was not achieved and the share price fell
during the year.
50%
50%
—%
25%
25%
25%
The CEO achieved 150% of his revised personal objectives which translated into a 45% payout in the personal performance
component, taking the full STI award including the financial and operational targets to 110.9%.
For the CEO and other eligible DSP participants, the issuance of share units under the DSP is subject to shareholder approval at
Millicom’s annual general meeting of shareholders (AGM). For those employees not participating in the DSP, or to the extent that the
DSP is not approved by the AGM, the STI will be implemented as a cash-only bonus program.
Under the 2020 STI, 2021 DSP share units are granted in Q1 2021 and will vest (generally subject to the participant still being
employed by the Millicom group) 30% in Q1 2022, 30% in Q1 2023 and 40% in Q1 2024. The vesting schedule is unchanged from
the 2020 DSP.
91
Service Revenue96%EBITDA94%OFCF111%NPS99%Personal Performance100%NPS:(Net Promoter Score) measures the willingness of customers to recommend a company’s products or services to others.Performanceratings:-ExceptionallyExceeds-Exceeds-Meets-Partially Meets-Doesn’tMeet20%20%20%10%30%OFCF:Operational Free Cash Flow = EBITDA –CapEx +/-Operating Working Capital –Tax paid.Service Revenue:Is revenue related to the provision of ongoing services, excluding telephone and equipment sales.EBITDA:Is operating profit excluding impairment losses, depreciation & amortization, and gain/losses on fixed asset disposals.STI 2019100%target range$ 5.8B$ 6.7B$ 6.1Btarget range$ 2.6B$ 3.8B$ 3.1Btarget range$ 0.9B$ 1.1B$ 0.98Btarget range95%110%100%target range0%60%30% -MeetsXXXX X95.9%Millicom 2020 Annual Report 4.4 LTI (PSP)
This section reviews the LTI 2018 performance which vested at the end Feb of 2021 and paid out in the first quarter of 2021 to 33
participants including the CEO and CFO. It also reviews the LTI 2020 plan granted in 2020 to 42 participants also including the CEO
and CFO.
Base
Salary
x
Target
Percentage
x
Performance Performance
(75%) + rTSR (25%)
=
LTI Payout
Target Opportunity
Company Performance
4.4.1 LTI (PSP) 2018 performance
The LTI 2018 Long-Term Incentive Plan vested in February 2021 with an achievement of 55.97% award. The outturn of LTI 2018 has
been audited by Ernst & Young in respect of the Financial performance measures and by Towers Watson for the TSR.
For LTI 2018 the achievement of performance targets is set out in the table below;
2018 Long-Term Incentive (LTI)—Three-Year Plan
Notes: Relative TSR considered the following peers: America Movil, Telefonica, TIM Brazil, TEF Brazil, Entel Chile, Lilac For the CEO and
CFO the PSP 2018 resulted in the following award vesting;
Type of
award
Basis of award
Face value
of award
Number of
share units
granted
End of
performance
period
Achievement
Number of
shares vested
LTI18
400% of salary
$4,600,000
69,576
Feb-21
55.97%
38,942
LTI18
175% of salary
$1,182,832
17,890
Feb-21
55.97%
10,013
Name
Mauricio Ramos
(CEO)
Tim Pennington
(CFO)
Deviations from the guidelines: In special circumstances, the Board may deviate from the above guidelines, such as additional
variable remuneration in the case of exceptional performance. In these instances, the Board of Directors will explain the reason for
the deviation at the following AGM. For the LTI in this review - PSP 2018, PSP 2019 and PSP 2020 - no discretion has been exercised
and none of the performance or other conditions have been changed.
92
74%75%0%LTI 201856%25%25%50%100%Service RevenueOFCFalOFCAL: 3year CAGR, Operational Free Cash Flow after Leases= EBITDA - Capex —lease payment - Tax change =/– change of operating working capitalService Revenue: Total Revenue - Telephone and Equipment Salesr-TSR: TCompany’s Relative TSR — Compound annual growth rate.Relative TSRMillicom 2020 Annual Report 4.4.2 Award LTI 2020
A new plan was issued in 2020 in accordance with the Remuneration Policy guidelines, designed to drive shareholder value through
a focus on service revenue growth, cashflow generation and relative total shareholder return against a relevant peer group. The
PSP2020 plan was approved by shareholders at the 2020 AGM:
Metric
Weighting
Performance target
Performance measure
Service revenue
OFCF
TSR
25%
50%
25%
Target growth
Target growth
A specific 3-year CAGR target
A specific 3-year CAGR target
The Company TSR relative to a peer group
between 2021 and 2023
At median - target payout; below median - nil;
20% above median - max
The peer group for the PSP 2020 is: America Movil, TIM Brazil, TEF Brazil, Entel Chile, Lilac, Telecom Argentina, Grupo Televisa,
Megacable.
For the CEO and CFO the award of LTI 2020 is summarized below;
Name
Type of award
Basis of award
Face value of
award
Number of
share units
granted
End of performance
period
Mauricio Ramos
(CEO)
Tim Pennington
(CFO)
PSU - 3 years
Cliff Vesting
PSU - 3 years
Cliff Vesting
480% of salary
$5,630,400
122,768
February 2023
175% of salary
$1,200,964
26,186
February 2023
5. Remuneration approach for 2021
For 2021, the Board has proposed to continue with a consistent framework of STI and LTI with a few changes explained below.
We also introduced of a Retention Plan for a selected group of top management.
For the CEO the On target and Maximum remuneration for 2021 is set out below:
Cash
28%
Cash
28%
Cash
28%
Cash
28%
At Target
At Target
At Target
At Target
Shares
71%
Shares
71%
Shares
71%
Shares
71%
Benifits
0.7%
Benifits
0.7%
Benifits
0.7%
Benifits
0.7%
Cash
16%
Cash
16%
Cash
16%
Cash
16%
At Target
At Target
At Target
At Target
Shares
84%
Shares
84%
Shares
84%
Shares
84%
Cash
22%
Cash
22%
Cash
22%
Cash
22%
Benifits
0.4%
Benifits
0.4%
Benifits
0.4%
Benifits
0.4%
At Maximum
At Maximum
At Maximum
At Maximum
Shares
71%
Shares
71%
Shares
71%
Shares
71%
Cash
9%
Cash
9%
Cash
9%
Cash
9%
At Maximum
At Maximum
At Maximum
At Maximum
Shares
91%
Shares
91%
Shares
91%
Shares
91%
At Target CEO Compensation is paid 71% in share units and 84% is variable compensation.
At Maximum CEO Compensation is paid 78% in share units and 91% is variable compensation.
93
Millicom 2020 Annual Report 5.1 Summary of key changes for 2021
We have made a number of changes to
the 2021 remuneration plans to better
focus on retention of key talent and the
incentivization of a return to growth.
For the 2021 STI, in order to incentivize
a fast return to financial performance we
have steepened the curve on Financial
Performance achievement. Financial
Performance achievement is based
on the budget approved by the Board
with the achievement of the budget
delivering 100% of the award and, at
the maximum, 200%.
For the LTI 2021, the structure of
the award remains consistent with
2020, although we have changed the
definition of the cashflow target to
Operating Cashflow after Leases.
This adjusts for the impact of lease
accounting to give a clearer view of the
underlying operating cash generation
of the business. In addition, we have
removed changes in working capital and
cash taxes as these have proved to have
higher volatility.
Base
Salary
x
Target
Percentage
x
Performance Performance
(45%) + rTSR (20%)
x
RSUs (35%)
=
LTI Payout
Target Opportunity
Company Performance
Additionally, to reflect the need for
retention and to align more with U.S.
practice (which is where the majority of
our Global Senior Management Team
are recruited) we have added time
vested Restricted Stock Units (“RSU’s”)
as a component of the LTI 2021
representing 35% of the award. The
RSU’s will vest at the end of three years.
We also increased the relative weighting
of the rTSR from 15% to 20%, measured
10 trading days before / after December
31 of the last year of the corresponding
three-year measurement period. We
will measure the actual cumulative
achievement against the 3-year
cumulative targets for Service Revenue
and Operating Cash Flow to better
reflect the performance over the three-
year period rather than simply the end
point as is the case with a compound
annual growth target.
The LTI 2021 is subject to approval by
the AGM.
As noted above, the Board believed it
necessary to introduce a Retention Plan
in the light of the impact on future LTI
awards as a consequence of the impact
of COVID-19 on our business. The
Retention Plan has been awarded to a
selected group of executives, including
the CEO and CFO. The plan is based
on Market Stock Units (“MSU”) and is a
performance-based scheme where the
outcome is dependent on the share price
at the time of vesting.
The number of MSUs are determined on
the basis of a share price at inception of
$43.09 for Tranche 2022 and $47.00 for
Tranche 2023. At the vesting date,
the value of the MSU is determined
by the 30-trading day average share
price ending on June 30, 2022 for
Tranche 2022, and the 30-trading day
average share price ending on June
30, 2023 for Tranche 2023. For each
Tranche, the payment is made in cash 12
months after those dates, provided the
participant is still employed (subject to
limited allowances for good leavers). For
every participant, payment is capped at
150% of their Target MSU Award Value
set up for each Tranche.
Participants of the Retention Plan are
required to forfeit their awards under
LTI 2019 and LTI 2020 in respect of
the Financial targets, (Service Revenue
Growth and Operating Cashflow),
provided that the TSR component will
continue to be active for these schemes.
9 4
Millicom 2020 Annual Report 6. Sundry
6.1 Summary of outstanding awards
Name
Plan Type
Mauricio
Ramos
(CEO)
Deferred
Share Plan
Performance
Share Plan
TOTAL Mauricio Ramos
(CEO)
Tim
Pennington
(CFO)
Deferred
Share Plan
Performance
Share Plan
TOTAL Tim Pennington
(CFO)
Award
Details -
Plan Name
2017 DSP
2018 DSP
2019 DSP
2020 DSP
Performance
Period
Award
Grant Date
Vesting
Date
Award
Share Price
in USD
Outstanding
Balance as
of Dec. 2019
Share Units
Granted in
2020
Shares
Vested in
2020
Forfeited in
2020
Outstanding
Balance as
of Dec. 2020
Opening
Balance
During the Year
Closing
Balance
2016
2017
2018
2019
1/1/2017
1/1/2020
$43.93
1/1/2018
1/1/2021
$66.11
1/1/2019
1/1/2022
$59.65
18,554
10,688
25,011
—
—
—
1/1/2020
1/1/2023
$45.86
—
31,126
18,554
3,527
7,503
—
—
—
—
—
34,146
11,382
2017 PSP
2017-2020
3/1/2017
3/1/2020
$43.93
2018 PSP
2018-2021
3/1/2018
3/1/2021
$66.11
2019 PSP
2019-2022
3/1/2019
3/1/2022
$59.65
45,528
69,576
77,111
—
—
—
2020 PSP
2020-2023
3/1/2020
3/1/2023
$45.86
—
122,768
2017 DSP
2018 DSP
2019 DSP
2020 DSP
2016
2017
2018
2019
1/1/2017
1/1/2020
$43.93
10,103
1/1/2018
1/1/2021
$66.11
1/1/2019
1/1/2022
$59.65
7,031
9,339
—
—
—
1/1/2020
1/1/2023
$45.86
—
13,657
246,468
153,894
—
—
—
63,730
10,103
2,320
2,802
—
—
—
—
—
—
—
—
2017 PSP
2017-2020
3/1/2017
3/1/2020
$43.93
2018 PSP
2018-2021
3/1/2018
3/1/2021
$66.11
2019 PSP
2019-2022
3/1/2019
3/1/2022
$59.65
22,480
17,890
18,992
—
—
—
2020 PSP
2020-2023
3/1/2020
3/1/2023
$45.86
—
26,186
16,860
5,620
—
—
—
—
—
—
—
7,161
17,508
31,126
—
69,576
77,111
122,768
—
4,711
6,537
13,657
—
17,890
18,992
26,186
11,382
325,250
85,835
39,843
32,085
5,620
87,973
6.2 Summary of shares owned vs. target
Millicom’s share ownership policy sets out the Compensation Committee’s requirements on the Global Senior Management Team to
retain and hold a personal holding of common shares in the Company in order to align their interests with those of our shareholders.
All Share Plan participants in the Global Senior Management Team are required to own Millicom shares to a value of a percentage of
their respective base salary as of January 1 of each calendar year.
For that purpose we continue to uphold our share ownership requirements for our top 50 roles:
Global Senior Management Level
% of Annual Base Pay
CEO
CFO
EVPs
General Managers and VPs
400
200
100
50
95
Millicom 2020 Annual Report For the CEO and CFO:
Mauricio Ramos
(CEO)
Tim Pennington
(CFO)
Awarded
unvested subject
to performance
conditions
Awarded unvested
not subject to
performance
conditions
Shares required
to be held as %
salary
Number of
shares required
to be held
Number of
beneficially
owned shares
Shareholding
requirement
met
269,455
63,068
55,795
24,905
400%
102,307
194,432
200%
29,927
58,635
Yes
Yes
Unless this requirement is met each year, no vested Millicom shares can be sold by the individual.
6.3 Details of share purchase and sale activity
During 2020 Mauricio Ramos disposed of 28,546 shares in a forced liquidation.
6.4 Historic CEO & CFO pay
CEO Remuneration*
CFO Remuneration*
Group EBITDA
Average remuneration on FTE basis of employees of parent
company**
2019 vs. 2018
2020 vs. 2019
Information Regarding 2020
(USD)
(0.6)%
0.9%
15.9%
N/A
9.2%
(4.2)%
(1.4)%
0.5%
USD$M 9.77
USD$M 3.16
USD$M 2,487
USD$ 24,399
*Year-over-Year remuneration comparison compares Total Compensation column in 4.2 Summary of total CEO/CFO compensation of this report..
**Average remuneration on a full-time equivalent basis of employees of the Millicom group other than the CEO, reported by each individual operation as of December 31st 2020.
6.5. Board Compensation
Governance of Director Remuneration
Decisions on annual remuneration of Directors (“tantièmes”) are reserved by the Articles of Association to the general meeting of
shareholders. Directors are prevented from voting on their own compensation. In accordance with resolution 16 of the AGM on June 25,
2020, the Nomination Committee of Millicom was instructed to propose Director remuneration for the period from the date of the 2020
AGM to the date of the AGM in 2021.
2020 Director Remuneration
During early 2020, in proposing Director Remuneration, the Nomination Committee, received input from an external compensation
advisor, including market and peer benchmarking, and considered the frequency of meetings and complexity of Millicom’s business
and governance structures. After consideration of these and other relevant aspects, the Nomination Committee proposed to keep the
structure and amount of remuneration for each role for the Non-Executive Directors the same as the prior year.
a) Non-Executive Director Remuneration
Remuneration of the Non-Executive Directors comprises an annual fee and shares denominated in U.S. dollars . The remuneration
is 100% fixed. Non-Executive Directors do not receive any fringe benefits, pensions or any form on variable remuneration. No
remuneration was paid to any of the Non-Executive Directors in 2020 or 2019 from any other undertakings within the Millicom Group.
b) Executive Director Remuneration
Executive Directors do not receive any remuneration in their capacity as Directors.
9 6
Millicom 2020 Annual Report Approval of 2020 Director Remuneration
The Nomination Committee’s proposal for Director remuneration was approved at the AGM on June 25, 2020.
Name of Director
Mr. José Antonio Rios Garcia
Chair of the Board
Ms. Pernille Erenbjerg A
Deputy Chair of the Board
Chair of the Compensation Committee
Mr. Odilon Almeida
Chair of the Compliance and Business Conduct
Mr. Tomas Eliasson
Chair of the Audit Committee
Ms. Mercedes Johnson A, CBE
Mr. Lars-Åke Norling C, CBE
Mr. James Thompson A, C
Former Director
Ms. Janet Davidson (until June 2020)
Mr. Roger Solé Rafols (until May 2019)
Total
Year(i)
Cash-based fee
($000's)
Share-based fee(ii)
($000's)
Total
($000's)
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2019
2019
2020(iii)
2019(iv)
100
166
122.5
200
75
73
95
111
85
73
75
106
85
142
86
16
637.5
973
200
200
150
150
100
100
100
100
100
100
100
100
100
100
100
n.a.
850
950
300
366
272.5
350
175
173
195
211
185
173
175
206
185
242
186
16
1,487.50
1,923.00
(i) Remuneration covers the period from June 25, 2020 to the date of the AGM in May 2021 as resolved at the shareholder meeting on June 25, 2020 (2019:
for the period from May 2, 2019 to June 25, 2020).
(ii) Share-based compensation for the period from June 25, 2020 to May 2021 was based on the market value of Millicom shares on July 2, 2020
and represented a total of 32,358 shares (2019: 16,607 shares).
AMember of Audit Committee
CMember Compensation Committee
CBEMember Compliance and Business Ethics Committee
(iii) Total remuneration for the period from June 25, 2020 to May 2021 after deduction of applicable withholding tax at source comprised 71% in shares and 29% in
cash (2019: 73% in shares and 27% in cash).
(iv) At the EGM of shareholders held on January 7, 2019, the shareholders resolved to increase the Directors remuneration following the Company’s listing on the
NASDAQ Stock Market in the US, and for the period from January 7, 2019 to the 2019 AGM on May 2, 2019. The increase amounted in total to $270 thousand.
6.6 2020 AGM vote
Directors Remuneration
44,672,372 99.45%
143,144
0.32%
101,749
0.23%
Senior management Remuneration Guidelines
and Policy
43,435,104 96.70%
1,383,855
3.08%
98,306
0.22%
Votes For
%
Votes Against
%
Abstentions
%
97
Millicom 2020 Annual Report Millicom CEO and Executive Team
CEO
Position
Role and responsibilities
Mr. Mauricio Ramos
CEO
• Leading the development and execution of the Company’s strategy
• Day-to-day activities and management decisions, both operating and financial
• Liaison between the Board and Management of the Company
• Leading the Executive Team
Mr. Mauricio Ramos
Chief Executive Officer and Executive Director
Mauricio Ramos, born in 1968, joined Millicom in April 2015 as CEO and was elected as an Executive
Director in June 2020. Previously he was President of Liberty Global’s Latin American division from
2006 until February 2015.
Mauricio held several leadership roles at Liberty Global, including Chairman and CEO of VTR in Chile,
Chief Financial Officer of Liberty’s Latin American division and President of Liberty Puerto Rico.
Mauricio is also a Member of the Board of Directors of Charter Communications (U.S.).
He is a dual Colombian and U.S. citizen who received a degree in Economics, a degree in Law and a
postgraduate degree in Financial Law from Universidad de Los Andes in Bogota.
MILLICOM SHAREHOLDING AT JANUARY 31, 2021: 194,432 shares
Millicom’s Executive Team members support the CEO in the day-to-day operation and management of the Group, within their specific
areas of expertise. The team meets at least monthly and more frequently when required. Millicom’s Executive Team is as follows:
Executive
Team
Role Responsibilities
Mr. Tim Pennington
Chief Financial Officer
Mr. Esteban Iriarte
Chief Operating Officer–Latam
Mr. Xavier Rocoplan
Chief Technology and Information Officer
Mr. Karim Lesina
Chief External Affairs Officer
Mr. Salvador Escalón
Chief Legal and Compliance Officer
Ms. Susy Bobenrieth
Chief Human Resources Officer
Finance and financial planning. Reporting
financial performance, including external
financial reporting. Budgeting and forecasting,
monitoring expenditures and costs.
Implementation and enhancement of related
controls. Risk management. Oversight of the
African business.
Operations and development of the Latin
American businesses.
Networks, information technology, procurement
and cybersecurity within the Group.
Government relations, regulatory affairs,
corporate communications, corporate
responsibility and corporate security.
Legal and corporate governance matters
including oversight, identification and
management of legal issues and cases of the
Group; legal aspects of mergers and acquisitions
and other corporate transactions. Compliance
matters including ethics, anti-bribery, anti-
corruption, anti-money laundering and related
compliance programs.
Human resources matters including talent
acquisition and management, compensation,
diversity and inclusion.
9 8
Millicom 2020 Annual Report The profiles of the CFO and Executive Team members are provided below:
Mr. Tim Pennington
Senior Executive Vice President, Chief Financial Officer
Tim Pennington joined Millicom in June 2014 as Senior Executive Vice President and Chief Financial
Officer.
Previously, he was the Chief Financial Officer at Cable and Wireless Communications plc, Group
Finance Director for Cable and Wireless plc and CFO of Hutchison Telecommunications International
Ltd, based in Hong Kong. Tim served as Finance Director of Hutchison 3G (UK), Hutchison Whampoa’s
British mobile business. He also has corporate finance experience: as a Director at Samuel Montagu
& Co. Limited and as Managing Director of HSBC Investment Bank within its Corporate Finance and
Advisory Department.
Tim is a Member of the Board of Directors of Euromoney Institutional Investor plc.
He is a British national and holds a BA (Honors) degree in Economics and Social Studies from the
University of Manchester.
MILLICOM SHAREHOLDING AT JANUARY 31, 2021: 58,635 shares
Mr. Esteban Iriarte
Executive Vice President, Chief Operating Officer, Latin America
Esteban Iriarte was appointed as Executive Vice President and Chief Operating Officer (COO), Latin
America in August 2016.
Previously, Esteban was General Manager of Millicom’s Colombian businesses where, in 2014, he led
the merger and integration of Tigo and the fixed-line company UNE.
Prior to leading Tigo Colombia, Esteban was head of Millicom’s regional Home and B2B divisions.
From 2009 to 2011, he was CEO of Amnet, a leading service provider in Central America for
broadband, cable TV, fixed line and data services, which Millicom acquired in 2008.
In 2016, Esteban joined the Board of Directors of Sura Asset Management, one of Latin America’s
leading financial groups.
Esteban is from Argentina. He received a degree in Business Administration from the Pontificia
Universidad Catolica Argentina (Santa Maria de los Buenos Aires), and an MBA from the Universidad
Austral in Buenos Aires.
MILLICOM SHAREHOLDING AT JANUARY 31, 2021: 29,744 shares
Mr. Xavier Rocoplan
Executive Vice President, Chief Technology and Information Officer
Xavier Rocoplan started at Millicom in 2000 and joined the Executive Team as Chief Technology and
Information Technology Officer in December 2012.
Xavier currently leads all mobile and fixed network and IT and procurement and supply chain activities
across the Group.
Xavier initially served as Millicom's CTO in Vietnam and subsequently in Southeast Asia. In 2004, he
became CEO of Paktel, Millicom's subsidiary in Pakistan, where he launched Paktel’s GSM operation
and led the process that concluded with the disposal of the business in 2007. Xavier then served
as head of Corporate Business Development, where he managed the disposal of various Millicom
operations in Asia, the monetization of Millicom infrastructure assets (towers) as well as numerous
spectrum acquisitions and license renewal processes in Africa and in Latin America.
Xavier is a French national. He holds a master's degree in engineering from Ecole Nationale Supérieure
des Télécommunications de Paris and a master's in economics from Université Paris IX Dauphine.
MILLICOM SHAREHOLDING AT JANUARY 31, 2021: 38,623 shares
9 9
Millicom 2020 Annual Report Mr. Karim Lesina
Executive Vice President, Chief External Affairs Officer
Karim joined Millicom in November 2020. Previously he held the position of Senior Vice President,
International External and Regulatory Affairs at AT&T, directing the internal international and
regulatory affairs teams, as well as the external and regulatory affairs teams across four international
affiliates: Turner, Warner Media, AT&T Latin America and Direct TV.
Prior to his term at AT&T, Karim led the corporate affairs team at Intel as the Government Affairs
Manager for Europe, Africa and the Middle East. Rounding out a strong portfolio, he acquired
extensive agency experience through his work with multinational public relations and communications
firms at the commencement of his career.
Born in Dakar (Senegal), Karim is an Italian-Tunisian national and has a master’s degree in Economics
of Development at the Catholic University of Louvain-la-Neuve.
MILLICOM SHAREHOLDING AT JANUARY 31, 2021: no shares
Mr. Salvador Escalón
Executive Vice President, Chief Legal and Compliance Officer
Salvador Escalón became Millicom’s General Counsel in March 2013, Executive Vice President in July
2015 and Chief Legal and Compliance Officer in 2020. He leads Millicom’s legal team and advises the
Board of Directors and senior management on legal, compliance and governance matters.
Salvador joined Millicom as Associate General Counsel Latin America in April 2010. From 2006 to
2010, Salvador was Senior Counsel at Chevron Corporation, with responsibility for legal matters
related to Chevron’s downstream operations in Latin America. Previously, he practiced at the law firms
Skadden, Morgan Lewis, and Akerman Senterfitt.
Salvador is an American national. He holds a J.D. from Columbia Law School and a B.B.A. in Finance
and International Business from Florida International University.
MILLICOM SHAREHOLDING AT JANUARY 31, 2021: 42,012 shares
Ms. Susy Bobenrieth
Executive Vice President, Chief Human Resources Officer
Susy Bobenrieth, a global human resource professional, joined Millicom with over 25 years of
experience in major multi-national companies that include Nike, American President Lines and IBM.
As an ex-Nike executive, she has extensive international knowledge and proven results in leading
large-scale organizational transformations, driving talent-management agendas and leading teams.
She is passionate about building great businesses and winning with high-performing teams.
Susy is one of eight children raised in the U.S. by Chilean immigrant parents. She possesses deep
international experience, having lived and worked in Mexico, the U.S., Brazil, the Netherlands and
Spain. She earned a degree from the University of Maryland, University College in 1989.
MILLICOM SHAREHOLDING AT JANUARY 31, 2021: 711 shares
10 0
Millicom 2020 Annual Report Management Governance
The Group seeks to embed governance
activities in the daily operations of
all businesses and in its corporate
functions. The role of the Group’s
governance functions is to set policies
and procedures in accordance with
our obligations and international best
practices. These functions then ensure
policies and procedures are embedded
in our businesses and serve to monitor
compliance.
Each function has clear reporting lines
through to the Executive Management
Team and the CEO. Functions report
to the Board committees, as previously
described, based on the responsibilities
of each committee. For instance, the
Group has a dedicated Internal Audit
function to provide independent
assurance over all businesses and
corporate functions through a program
of risk-based internal audits. Internal
Audit reports to the Audit Committee
of the Board with a dotted line to
Executive Management. This function
identifies areas for improvement, assigns
management actions and monitors
implementation progress.
Business Control
The Board is responsible for the Group’s
system of internal control, which is
designed to manage, rather than
eliminate, the risk of failure to achieve
business objectives. This system can
only provide reasonable, but not
absolute, assurance against material
misstatement or loss. The concept of
reasonable assurance recognizes that
the cost of control procedures should not
exceed the expected benefits.
Responsibility for maintaining effective
internal controls is delegated to the CEO
and the Executive Team with oversight
provided by the Audit Committee.
The Executive Team is supported by
a dedicated Business Control team
responsible for the Internal Control
framework. Each country also has its
own dedicated local Business Control
team responsible for monitoring and
development of the local internal control
environment.
Following the completion of the first-year
controls attestation under the Sarbanes-
Oxley Act for the 2019 financial year, we
focused in 2020 on consolidating the
significant improvements made in
internal controls over financial reporting
and ensuring that these controls are
efficient and sustainable. The updated
control framework was rolled out to our
operations in Nicaragua and Panama,
which were acquired from Telefonica.
In order to support our Sarbanes-Oxley
program, we run a Group Steering
Committee comprising members of
the Executive Team and other senior
management. The committee oversees
the program, evaluates the findings of
management testing and ensures the
availability of appropriate resources.
Business Control teams continue to
place themselves at the heart of Group
efficiency and transformation programs
to ensure that robust internal controls
are an integral consideration in each
program.
Monitoring Systems
Aligned with our Sarbanes-Oxley
program, we operate a program of
management testing of key financial
controls. Eight management testing
cycles were run during 2020 for our
largest markets, covering both business
processes and IT general controls.
The results, including remediation
actions where required, were reported
and discussed with the Executive
Management Team, the Sarbanes-Oxley
Steering Committee and the Audit
Committee. During 2020, we invested
in developing an internal Center of
Excellence for control testing based in El
Salvador. We plan to further develop and
expand this in 2021.
We completed the roll out of our
Governance, Risk and Compliance
tool to manage and monitor internal
control compliance and reporting.
This central platform, which is used by
control owners in all operations in the
Group, has improved the efficiency
and quality of our internal controls and
proved invaluable as teams moved to
working remotely during the COVID-19
pandemic.
Fraud Management and Reporting
Business Control is responsible for fraud
risk management. We continued our
education activities, including an
awareness campaign aligned with
International Fraud Awareness Week in
November 2020.
Each operation prepares a quarterly
fraud report and presents a summary
to the Audit Committee along with a
description of the key actions taken.
Quantitative and qualitative thresholds
govern the reporting of individual fraud
incidents to the Group CFO, CEO and
Audit Committee.
Internal Control over Financial
Reporting
The management of Millicom is
responsible for establishing and
maintaining adequate internal control
over financial reporting. This process
is designed to provide reasonable
assurance regarding the reliability of
financial reporting and the preparation
of financial statements for external
reporting purposes in conformity with
International Financial Reporting
Standards. Due to their inherent
limitations, internal controls over
financial reporting may not prevent or
detect misstatements.
Management has assessed the
effectiveness of internal control over
financial reporting as of December
31, 2020 and concluded that it was
effective. The foregoing assessment
does not constitute and is not meant to
be an assessment of Millicom’s internal
control over financial reporting for
purposes of the U.S. Securities Exchange
Act of 1934, as amended.
Risk Management
The risk function identifies, analyzes,
measures and monitors Millicom’s risks.
The Chief Risk Officer is responsible
for providing risk owners at the central
functional and country levels with a
methodology and tools needed to
balance risk with return. A Management
Risk Committee, comprising members
of the Executive Team and functions
responsible for key risk, meets on a
regular basis to provide oversight on the
evolution of risk and the approach taken
to manage risk. The Chief Risk Officer
also reports to the Executive Team
and the Audit Committee. The Audit
Committee, on behalf of the Board,
oversees risk management activities.
Our risk assessment processes and the
principal risks managed by the Group are
set out in the Risk Management section
of this annual report.
101
Millicom 2020 Annual Report How CR is governed
Role
As part of the External
Affairs function, CR
oversees, advises and
makes recommendations
to Management
regarding our CR
strategies and activities.
Executive Management
Team sponsors for
managing CR
Senior
Management
Ethics and Compliance
Our Corporate Ethics & Compliance
Program is central to our business
strategy and is effectively embedded in
the business processes and procedures.
Our program integrates preventive
measures, key controls, reporting
mechanisms and due diligence
processes with the aim of detecting and
correcting misconduct and wrongdoing.
We measure the actual impact of this
program on our employees, customers,
stakeholders and communities in the
countries where we operate.
Our Ethics and Compliance function
consists of global resources
responsible for the Group’s Corporate
Compliance, Anti-Money Laundering,
and Compliance Strategic Response
Programs. We also have a Compliance
Officer in each market.
Management and Governance of
Compliance Activities
Millicom strives to build a strong
corporate culture that seeks compliance
excellence, and in which employees at
all levels are committed to doing what
is right and upholding the Company’s
values and standards. As we continue
to evaluate progress every year, in 2020
we conducted a Compliance Survey to
measure the level of compliance culture
across our operations.
We enhanced Ethics and Compliance
knowledge through consolidated digital
training provided in English and Spanish.
Employees received mandatory training
on the Code of Conduct, Anti-Corruption
and Anti-Bribery, and AML policies in
order to reinforce the most important
compliance concepts, influence
employee behavior, and prevent
misconduct through practical examples.
We also provided targeted Face to
Face Training in addition to the digital
training program.
Our Compliance Communication Plan
for 2020 included weekly newsletters
that highlighted latest corporate
enforcement actions, lessons learned,
monthly campaigns on various
compliance policies, and the celebration
of the annual Corporate & Ethics
Compliance Week in November 2020.
Aligned with our motto
#IntegrityStartsWithYou, and for the
third year in a row, executive financial
incentives and rewards included
compliance goals, and clear KPIs were
built into the remuneration package of
our General Managers.
We were proactive in assessing risks
emanating from the COVID-19 crisis. We
implemented plans to address identified
risk areas, which include fraud by third
parties, requests for donations, and
more frequent government touchpoints
as they reach out to private industry to
request aid in managing the COVID-19
crisis.
102
Millicom 2020 Annual Report We did not identify any novel risks
arising from the crisis, but rather a
propensity to increase certain risks
we already monitor and address, such
as corruption in times of economic
downturn.
To manage an increased number of
government and private sector requests
for COVID-19 aid and other emergency
actions, we reinforced our cross-
functional approval process by External
Affairs, Compliance, and Legal. We also
centralized the COVID-19 requests to
ensure these cases are handled with
the same level of business conduct that
characterizes us.
Speak Up Policy and Issue
Management
Continuing with our compliance
education program, we reinforced
our Speak Up Policy, included Speak
Up in our training program, and
included a Speak Up campaign in our
communications program. We have
a team dedicated to following up on
concerns that arise through Speak Up
and are committed to addressing any
such concerns in a fair, impartial, and
efficient manner.
The Executive Team and the Compliance
& Business Conduct Committee of the
Board received regular updates on cases
raised through the Ethics Line or other
channels.
Corporate Responsibility
This is the fourth year that Millicom
has integrated corporate responsibility-
related performance data and
information into our annual report. We
do this to demonstrate how managing
responsible growth and key social
and environmental risks supports the
successful delivery of our business
strategy.
Millicom’s Corporate Responsibility (CR)
team sets CR strategy; drives best-
in-class policies and processes for CR
governance; guides and coordinates CR
performance across business functions;
and publishes CR-related performance
data and information in the annual
report. Our integrated report continues
to promote transparency toward
investors and other key stakeholders on
CR risks and opportunities.
The CR team constantly engages with
internal and external stakeholders
to ensure Millicom understands and
addresses CR issues that are important
to our business and relevant to our
stakeholders.
Stakeholder engagement occurs through
a biennial materiality assessment and
through ongoing interaction with our
key stakeholders. This year, the CR team
conducted a materiality assessment
and engaged more than 40 internal
and external stakeholders to evaluate
the impact of the pandemic on our CR
strategy and programs. The assessment
yielded the need to adapt its strategy
to the risks and opportunities presented
by the pandemic, including tailoring
our programs to help communities and
schools as they move their daily tasks in
the physical to the digital world. Guided
by its Framework, 5-Year CR plan and
associated targets, the CR function adds
value by seeking responsible leadership
opportunities to implement initiatives
that permit the Group to make the
greatest positive impact on society, the
environment and our business.
Corporate Responsibility
Governance
The Board oversees the Government
Relations, Regulatory Affairs and CR
functions, which fall under the umbrella
of External Affairs. This structure
signifies the depth and materiality
of these topics and the importance
of monitoring their interconnected
risks and opportunities. The Director
of Corporate Responsibility reports
to the Executive Vice President (EVP)
Chief External Affairs Officer, who
in turn reports directly to the CEO
and is accountable for delivering
updates on the CR strategy to the
Board. We also report progress on CR
strategy implementation and issues
management to the Executive Team on
a monthly basis, either through the EVP
Chief External Affairs Officer or directly
in specific cases.
Health, Safety, Environment and
Security Services
With the impact of the COVID-19
global pandemic on our operations,
the number-one priority of the Health
& Safety teams became protecting our
employees and creating safe working
environments. Our Health and Safety
teams responded by developing
protocols for our workforce as well as
incorporating workspace cleaning,
personal hygiene, personal protection
equipment and social distancing
recommendations from the World
Health Organization and U.S. Centers
for Disease Control (CDC). As all the
countries in which we operate declared
telecommunications as critical industries
that needed to continue during the
pandemic, we implemented additional
safety measures to protect our
employees in critical roles, our customers
and our business continuity.
During the pandemic, the Health,
Safety and Environment teams were
able to obtain recertification of ISO
45001 health and safety standards in all
countries.
The Health and Safety teams oversee
the implementation of policy and
Group standards in health, safety
and environment as well as facilities
management, fleet management, and
fuel and energy resources. The Health
and Safety teams responded quickly and
professionally to several major incidents
and events during 2020, including
Hurricanes Eta and lota, which affected
Central America in November 2020. The
Heatlh and Safety teams also provide
effective and efficient solutions to
support our Carbon Disclosure Program
(CDP) and environmental energy
efficiency plans.
Throughout 2020, we prevented any
employee fatalities or major losses to
the Group. Unfortunately, there were 4
fatalities in our contracted services.
103
Millicom 2020 Annual Report automation, tracking, and reporting of
risk throughout the enterprise.
• Centralization of Incident Reporting:
During 2020, the global team moved
from the local tracking and reporting of
security-related incidents to a global,
centralized process. All markets now
leverage a single solution to report
incidents, track resolution progress,
and store all associated incident
documentation. This new solution has
also enabled the redesigning of several
corporate controls to facilitate group-
level reviews of incident resolution
practices to ensure all markets align with
stated goals and directions.
• Global Security Operations Center
expansion: During 2020, we significantly
increased the visibility of the corporate
Security Operations Center by over 40%,
further expanding monitoring deeper
into all critical networks. Additionally,
the new Panama operation was fully
migrated to the MIC SOC to ensure
alignment to corporate polices. For 2021,
the teams are focused on continuing
the migration, with a goal to have all
identified environments fully monitored
by year end.
• Development of a Global Vulnerability
Management program: Throughout
2020, the global team continues to roll
out the program across all markets,
significantly increasing coverage and risk
reporting. Additionally, integration with
the Security Operation Center enhances
and expedites incident review and risk
management.
Our Security Teams are responsible for
the safety and protection of our people,
facilities and assets. During this period,
we implemented new initiatives focused
on protecting assets and mitigating
losses of material and equipment at
our network locations. Successful asset
protection initiatives were implemented
in Bolivia, Colombia, El Salvador,
Nicaragua, Panama and Paraguay. We
anticipate global implementation of
these initiatives by Q2 2021.
The Executive Vice President of Human
Resources oversees the Health, Safety,
Environment and Security functions.
Business Continuity and Crisis
Management
We designed our global and operational
business continuity and crisis
management system to address any
significant disruption that might affect
critical day-to-day activities. This system
continues to mature but has already
responded to events such as extreme
weather, civil unrest, and criminal
and political activities in some of the
countries where we operate.
Risk assessment is a continuous
activity that starts with a business
impact analysis of all critical services
and processes that require a disaster
recovery and business continuity plan.
After performing a risk assessment on all
critical assets identified in the analysis,
we address every relevant operational
threat in a formal risk mitigation plan.
Millicom crisis management defines the
proper response to, and management
of, an intense, unexpected and
unstable situation that disrupts normal
operations and has highly undesirable
outcomes that require extraordinary
measures to restore normal operations.
Crisis management aims to protect the
safety of our staff, our reputation, and
our ability to deliver continuous and
reliable service to customers, while also
maintaining our contractual, legal and
regulatory compliance.
In parallel, Millicom has physical security
and loss-prevention standards that set
minimum acceptable levels of critical
site protection, as defined by industry
best practices. All activities undergo
monitoring and compliance activities.
Information Security
Our Global Chief Information Security
Officer (CISO) manages the information
security program and reports to the
EVP Chief Technology and Information
Officer. The CISO is responsible for
identifying, managing and mitigating
technology-centric risks throughout the
company.
The CISO oversees regional information
security teams to ensure the
confidentiality, integrity and availability
of all business-critical systems and
assets. Other responsibilities include
identifying potentially detrimental
threats and risks and safeguarding
proprietary and personal customer
information. Additionally, the regional
teams work closely with Millicom
business and technology leaders to
ensure compliance with corporate
policies and regional information
security-related regulatory requirements
within the various countries where we
conduct business.
The CISO meets regularly with the
Compliance and Business Conduct
Committee and Audit Committee to
ensure appropriate risks are elevated
and addressed.
In 2020 we saw a significant uptick in
general attack volume with a marked
increase specifically in email-based
phishing attacks focused on COVID-19
messaging. The recently enhanced
anti-phishing solutions worked extremely
well in mitigating the attacks and we
leveraged the knowledge gained during
this time to increase our overall phishing
awareness and training initiatives,
During 2020, the global Information
Security team focused on the
10 4
Millicom 2020 Annual Report Directors’ Financial and Operating Report
Group Performance1
In 2020, total revenue for the Group
was $4,171 million and gross profit was
$3,000 million, a margin of 71.9%.
Operating expenses represented 36.1%
of revenue, a decrease compared with
the 37.0% of 2019 as a result of cost
savings initiatives implemented to
mitigate the impact of COVID-19 on our
financial performance.
Operating profit was down 22.4%,
amounting to $446 million, a 10.7%
margin, which was negatively affected
by increased amortization and
depreciation stemming from our recent
acquisitions in Nicaragua and Panama
and our spectrum purchase in Colombia,
as well as by an impairment of a loan
receivable from the joint venture in
Ghana.
Net financial expenses were $611
million, an increase of $67 million
compared with last year. This change
was mainly due to accrued interest on
spectrum purchased in Colombia as well
as one-time charges related to bond
redemptions.
Loss before taxes was $271 million,
reflecting the lower operating profit and
higher interest expense described above,
as well as other non-operating expenses
of $106 million related to the mark to
market of our equity investments in
Jumia and Helios Towers, and foreign
exchange losses.
Net tax charge was $102 million, leaving
a net loss from continuing operations of
$373 million for the year. The loss of $12
million from discontinued operations
reflects adjustments to the sales of Chad
and Senegal.
As a result, our net loss for the year was
$385 million. The share of losses of
non-controlling interests was $41 million,
reflecting our partners' share of net
results in our subsidiaries in Colombia
and Panama.
The net loss for the year attributable to
Millicom owners was $344 million. Loss
per share was $3.40.
Share Capital
At December 31, 2020, Millicom had
101.7 million issued and paid-up
common shares of par value $1.50
each, of which approximately 526,000
were held by the Company as treasury
shares (2019: approximately 580,000).
During the year, the Company acquired
350,000 shares through its share
repurchase program, and it issued
approximately 372,000 shares to
management and employees under the
LTIPs, and issued approximately 32,000
shares to Directors as part of their
annual remuneration.
Distribution to Shareholders and
Proposed Distributions
As part of its response to the pandemic,
the Group prioritized the protection of
employees' health and safety as well
as their income. With this support, our
employees ensured that customers
remained connected and cared for,
safely. In order to provide this invaluable
support to our communities, the Group
also took steps to preserve its financial
strength and liquidity, including the
shareholder-approved proposal from the
Board of Directors not to pay a dividend
in 2020 related to 2019 profits.
On February 10, 2021, the Board
approved to propose to the AGM to be
held on May 4, 2021 a share buyback
program to replace the program
approved by the shareholders at the
AGM held on June 25, 2020. Under
the terms of this proposed program,
the number of shares that may be
repurchased between May 4, 2021
and the date of the AGM to be held in
2022, would not exceed the higher of
5% of the outstanding share capital
of the Company as per April 20, 2021
or 5,000,000 shares. The purpose of
the repurchase program is to reduce
Millicom's share capital, or to use
the repurchased shares for meeting
obligations arising under Millicom´s
employee share based incentive
programs. Payment for the shares would
be made in cash.
Financial Risk Management
Objectives and Policies
Millicom’s financial risk management
policies and objectives, together with
a description of the various risks and
hedging activities undertaken by the
Group, are set out in Section D, financial
risk management, of the consolidated
financial statements.
Internal controls and risk management
on the preparation of the consolidated
financial statements are covered in Our
Governance section starting on page 61.
Non-Financial Information
Non-financial information—such as
environmental, social, human rights
and the fight against corruption—are
integrated throughout this report and
in our Disclaimers section starting on
page 107.
1Presented on an IFRS basis.
105
Millicom 2020 Annual Report Management and Employees
In recent years, the Group has
developed many key functions and
improved support to local operations,
including in the areas of procurement,
network development, marketing, IT, HR,
compliance and finance.
At December 31, 2020, the Group’s
headcount from continuing operations
reached approximately 21,000, down from
around 22,000 at December 31, 2019.
Outlook
We maintain our medium-term ambition
to deliver mid-single-digit organic service
revenue growth, mid-to-high single-digit
organic EBITDA growth, and around
10% organic OCF growth for the Latam
segment. That said, due to ongoing
uncertainty around COVID-19, we expect
that our financial performance in 2021
will likely remain below this medium-
term ambition.
Risks and Uncertainty Factors
The Group operates in an industry and
markets that are characterized by rapid
change and are subject to macro-
economic, competitive and political
uncertainty. These conditions create
opportunities as well as a degree of risk.
Many of the inherent underlying risks
in these markets—including regulatory
change (such as tariff controls and
taxation), currency fluctuations and
underlying macroeconomic conditions—
affect the level of disposable income
as well as consumers’ attitudes and
demand for our products and services.
Subsequent Events
2026, 2028 and 2029 Senior Notes.
On February 22, 2021, Millicom redeemed
10% of the principal outstanding of
its Notes due 2026, 2028 and 2029
at a price of 103%. This redemption
follows Millicom’s announcement dated
February 11, 2021.Total consideration of
approximately $180 million was funded
from cash, consistent with the company's
decision to prioritize debt reduction.
Colombia bond. On February 16,
2021, Millicom’s subsidiary UNE EPM
Telecomunicaciones S.A (“UNE”) issued,
under the approved local bond program, a
COP 485,680 million bond (approximately
$138 million) with 3 maturities: a “Serie
7 years at 5.56% fixed rate”, a “Serie 10
years at CPI plus 2.61% margin” and a "15
years at CPI plus 3.18% margin”. The use
of proceeds will be mainly for local USD
debt refinancing, to improve UNE’s natural
hedge against local currency, and also to
extend maturities.
José Antonio Ríos García
Chairman of the Board of Directors
Luxembourg, March 10, 2021
Management Responsibility
Statement
We, Mauricio Ramos, Executive Director
and Chief Executive Officer, and Tim
Pennington, Chief Financial Officer,
confirm to the best of our knowledge
that these 2020 consolidated financial
statements—which have been prepared
in accordance with the International
Financial Reporting Standards as
adopted by the European Union—give a
true and fair view of the assets, liabilities,
financial position, and profit or loss of
the Millicom Group and the undertakings
included in the consolidation taken as
a whole. We also confirm to the best
of our knowledge that the Directors’
report includes a fair review of the
development and performance of the
business; the position of the Millicom
Group; and the undertakings included
in the consolidation taken as a whole,
together with a description of the
principal risks and uncertainties that the
Group faces.
Mauricio Ramos
Executive Director and Chief Executive
Officer
Tim Pennington
Chief Financial Officer
Luxembourg, March 10, 2021
10 6
Millicom 2020 Annual Report Disclaimers and
Non-IFRS
Reconciliations
107
Millicom 2020 Annual Report Disclaimers
Forward-Looking Statements
Statements included herein that are not historical facts, including without limitation statements concerning future strategy, plans,
objectives, expectations and intentions, projected financial results, liquidity, growth and prospects, are forward-looking statements.
Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event
such risks or uncertainties materialize, Millicom’s results could be materially adversely affected. In particular, there is uncertainty
about the spread of the COVID-19 virus and the impact it may have on Millicom's operations, the demand for Millicom's products
and services, global supply chains and economic activity in general. The risks and uncertainties include, but are not limited to, the
following:
• Global economic conditions and
foreign exchange rate fluctuations as
well as local economic conditions in
the markets we serve
• Potential disruption due to diseases,
pandemics, political events, piracy
or acts by terrorists, including the
impact of the recent outbreak of
the COVID-19 virus and the ongoing
efforts throughout the world to
contain it
• Telecommunications usage levels,
including traffic and customer growth
• Competitive forces, including pricing
pressures, the ability to connect to
other operators’ networks and our
ability to retain market share in the
face of competition from existing
and new market entrants as well as
industry consolidation;
• Legal or regulatory developments and
changes, or changes in governmental
policy, including with respect to the
availability of spectrum and licenses,
the level of tariffs, tax matters, the
terms of interconnection, customer
access and international settlement
arrangements
• The level and timing of the growth and
profitability of new initiatives, start-
up costs associated with entering
new markets, and the successful
deployment of new systems and
applications to support new initiatives
• Relationships with key suppliers, and
the costs of handsets and other
equipment
• Our ability to successfully pursue
acquisitions, investments or merger
opportunities; integrate any acquired
businesses in a timely and cost-
effective manner; and achieve
the expected benefits of such
transactions
• The availability, terms and use of
capital; the impact of regulatory and
competitive developments on capital
outlays; and the ability to achieve
cost savings and realize productivity
improvements
• Technological development and
evolving industry standards, including
challenges in meeting customer
demand for new technology and
the cost of upgrading existing
infrastructure
• Adverse legal or regulatory disputes or
• The capacity to upstream cash
proceedings;
• The success of our business, operating
and financing initiatives and
strategies, including partnerships and
capital expenditure plans
generated in operations through
dividends, royalties, management
fees and repayment of shareholder
loans
• Other factors or trends affecting
our financial condition or results of
operations
A further list and description of risks,
uncertainties and other matters can
be found in Millicom’s Registration
Statement on Form 20-F, including
those risks outlined in “Item 3. Key
Information—D. Risk Factors,” and in
Millicom’s subsequent U.S. Securities
and Exchange Commission filings, all
of which are available at www.sec.
gov. To the extent COVID-19 adversely
affects Millicom's business and financial
results, it may also have the effect of
heightening many of the risks described
in Millicom's filings.
All forward-looking statements
attributable to us or any person acting
on our behalf are expressly qualified
in their entirety by this cautionary
statement. Readers are cautioned not to
place undue reliance on these forward-
looking statements that speak only as
of the date hereof. Except to the extent
otherwise required by applicable law,
we do not undertake any obligation
to update or revise forward-looking
statements, whether as a result of new
information, future events or otherwise.
10 8
Millicom 2020 Annual Report Non-IFRS Measures
This report contains financial measures
not prepared in accordance with IFRS.
These measures are referred to as “non-
IFRS” measures and include: non-IFRS
service revenue, non-IFRS EBITDA and
non-IFRS Capex, among others defined
below. Annual growth rates for these
non-IFRS measures are often expressed
in organic constant currency terms to
exclude the effect of changes in foreign
exchange rates and the adoption of new
accounting standards such as IFRS 16;
and are pro forma for material changes
in perimeter due to acquisitions and
divestitures. The non-IFRS financial
measures are presented in this report,
as Millicom’s management believes
they provide investors with additional
information for the analysis of Millicom’s
results of operations, particularly in
evaluating performance from one period
to another. Millicom’s management uses
non-IFRS financial measures to make
operating decisions, as they facilitate
additional internal comparisons of
Millicom’s performance to historical
results and to competitors' results;
and shares these non-IFRS financial
measures with investors as a supplement
to Millicom’s reported results in order to
provide additional insight into Millicom’s
operating performance. Millicom’s
Remuneration Committee uses certain
non-IFRS measures when assessing
the performance and compensation
of employees, including Millicom’s
executive directors.
The non-IFRS financial measures
used by Millicom may be calculated
differently from, and therefore may
not be comparable to, similarly titled
measures used by other companies -
refer to the section “Non-IFRS Financial
Measure Descriptions” for additional
information. In addition, these non-IFRS
measures should not be considered in
isolation as a substitute for, or as superior
to, financial measures calculated in
accordance with IFRS. Millicom’s financial
results calculated in accordance with IFRS
and reconciliations to those financial
statements should be carefully evaluated.
Alternative Performance Measure
description
Service revenue is revenue related to
the provision of ongoing services such
as monthly subscription fees, airtime
and data usage fees, interconnection
fees, roaming fees, mobile finance
service commissions and fees from
other telecommunications services
such as data services, short message
services and other value-added services
excluding telephone and equipment
sales.
EBITDA is operating profit excluding
impairment losses, depreciation and
amortization, and gains/losses on fixed
asset disposals.
EBITDA after Leases (‘EBITDAaL’)
represents EBITDA excluding lease
repayments.
EBITDA Margin represents EBITDA in
relation to Revenue.
Proportionate EBITDA is the sum of the
EBITDA in every country where Millicom
operates, including its Guatemala and
Honduras joint ventures, pro rata for
Millicom’s ownership stake in each
country, less corporate costs that are
not allocated to any country and inter-
company eliminations.
Organic growth represents year-on-year
growth excluding the impact of changes
in FX rates, perimeter, and accounting.
Changes in perimeter are the result of
acquisitions and divestitures. Results
from divested assets are immediately
removed from both periods, whereas the
results from acquired assets are included
in both periods at the beginning
(January 1) of the first full calendar year
of ownership.
Net debt is Debt and financial liabilities
less cash and pledged deposits.
Net financial obligations is Net debt
plus lease liabilities.
Proportionate financial obligations is
the sum of the net financial obligations
in every country where Millicom operates,
including its Guatemala and Honduras
joint ventures, pro rata for Millicom’s
ownership stake in each country.
Leverage is the ratio of net financial
obligations over LTM (last twelve month)
EBITDA, proforma for acquisitions made
during the last twelve months.
Leverage after leases is the ratio of
net debt over LTM (Last twelve month)
EBITDA after leases, proforma for
acquisitions made during the last twelve
months.
Proportionate leverage is the ratio of
proportionate net financial obligations
over LTM proportionate EBITDA,
proforma for acquisitions made during
the last twelve months.
Proportionate leverage after leases is
the ratio of proportionate net debt over
LTM (Last twelve month) EBITDA after
leases, proforma for acquisitions made
during the last twelve months.
Capex is balance sheet capital
expenditure excluding spectrum and
license costs and lease capitalizations.
Cash Capex represents the cash spent in
relation to capital expenditure, excluding
spectrum and licenses costs.
Operating Cash Flow (OCF) is EBITDA
less Capex.
Operating Free Cash Flow (OFCF) is
OCF less changes in working capital and
other non-cash items and taxes paid.
Equity Free Cash Flow (EFCF) is OFCF
less finance charges paid (net), less
advances for dividends to non-
controlling interests, plus dividends
received from joint ventures.
Equity Free Cash Flow after Leases
(EFCFaL) is EFCF, less lease principal
repayments.
Operating Profit After Tax displays the
profit generated from the operations of
the company after statutory taxes.
Return on Invested Capital (ROIC) is
used to assess the Group’s efficiency at
allocating the capital under its control
to and is defined as Operating Profit
After Tax, including Guatemala and
Honduras as if fully consolidated,
divided by the average invested Capital
during the period.
10 9
Millicom 2020 Annual Report Average Invested Capital is the capital
invested in the company operation
throughout the year and is calculated
with the average of opening and closing
balances of the total assets minus
current liabilities (excluding debt, joint
ventures, accrued interests, deferred and
current tax, cash as well as investments
and non-controlling interests), less assets
and liabilities held for sale.
Underlying measures, such as
Underlying service revenue, Underlying
EBITDA, Underlying equity free cash
flow, Underlying net debt, Underlying
leverage, etc., include Guatemala and
Honduras, as if fully consolidated.
Average Revenue per User per Month
(ARPU) for our Mobile customers is (x)
the total mobile and mobile financial
services revenue (excluding revenue
earned from tower rentals, call center,
data and mobile virtual network
operator, visitor roaming, national third
parties roaming and mobile telephone
equipment sales revenue) for the period,
divided by (y) the average number of
mobile subscribers for the period, divided
by (z) the number of months in the
period. We define ARPU for our Home
customers in our Latin America segment
as (x) the total Home revenue (excluding
equipment sales, TV advertising and
equipment rental) for the period, divided
by (y) the average number of customer
relationships for the period, divided by
(z) the number of months in the period.
ARPU is not subject to a standard
industry definition and our definition of
ARPU may be different to other industry
participants.
110
Millicom 2020 Annual Report Non-IFRS reconciliations
Reconciliation from Reported Growth to Organic Growth for the Latam segment
Latam Segment ($ millions)
FY 2020
FY 2019
FY 2020
FY 2019
FY 2020
FY 2019*
FY 2020
FY 2019*
Revenue
Service Revenue
EBITDA
OCF
A- Current period
B- Prior year period
5,843
5,964
5,964
5,485
5,377
5,514
5,514
5,069
2,360
2,418
2,418
2,072
1,418
1,416
1,416
1,119
C- Reported growth (A/B)
(2.0)%
8.7% (2.5)%
8.8% (2.4)% 16.7%
0.2% 26.6%
D- Accounting change impact
—
—
—
—
—
8.2%
— 16.5%
E- Change in Perimeter impact
3.9% 11.0%
4.0% 11.6%
3.8% 11.9%
5.6% 11.3%
F- FX impact
G- Other
(3.8)% (5.2)% (3.9)% (5.2)% (3.5)% (5.0)% (6.0)% (9.3)%
—
0.1% (0.1)%
0.1%
1.0% (0.5)%
2.1% (0.3)%
H- Organic Growth (C-D-E-F-G)
(2.1)%
2.8% (2.5)%
2.2% (3.7)%
2.1% (1.4)%
8.3%
*Beginning in 2020 we are allocating corporate costs to each segment based on their contribution to underlying revenue. In order to facilitate comparisons, we made
a $25 million and $5 million adjustment to 2019 and 2018, respectively, affecting Latam EBITDA/OCF.
Reconciliation from Reported Growth to Organic Growth for the Africa segment
Africa Segment ($ millions)
A- Current period
B- Prior year period
Revenue
Service Revenue
EBITDA
FY 2020
FY 2019
FY 2020
FY 2019
FY 2020
FY 2019**
366
382
382
399
366
382
382
398
C- Reported growth (A/B)
(4.0)%
(4.2)%
(4.0)%
(4.2)%
D- Accounting change impact
E- Change in Perimeter impact
F- FX impact
G- Other
H- Organic Growth (C-D-E-F-G)
—
—%
(0.5)%
0.2
(3.7)%
—
—%
(1.4)%
0.1%
(2.9)%
—
—%
(0.5)%
0.2%
(3.7)%
—
—%
(1.4)%
0.1%
(2.9)%
125
117
6.9%
—
—%
(0.3)%
5.0%
2.1%
117
98
19.2%
35.1%
—%
(1.9)%
5.9%
(19.9)%
**Beginning in 2020 we are allocating corporate costs to each segment based on their contribution to underlying revenue. In order to facilitate comparisons, we
made a $5 million and $4 million adjustment to 2019 and 2018, respectively, affecting Africa EBITDA.
Reconciliation from Reported Growth to Organic Growth for the main Latam markets
Service Revenue ($ millions)
FY 2020 FY 2019 Organic
FX
Accounting
Perimeter
Other
Reported
Guatemala
Colombia
Paraguay
Honduras
Bolivia
Panama
El Salvador
Nicaragua, Costa Rica & Eliminations
1,273
1,258
1,234
3.4% (0.3)%
1,432
(1.1)% (11.1)%
513
516
575
567
348
328
575
551
624
468
348
284
(3.2)% (7.7)%
(6.0)% (0.4)%
(7.7)%
(8.4)%
(0.1)%
—
—
—
—
—
Latam***
5,377
5,514
(2.5)%
(3.9)%
—
—
—
—
—
—
—
—
—
—
—
—
3.1%
— (12.2)%
— 0.1% (10.7)%
— 0.2%
(6.2)%
—
—
(7.7)%
32.1% (2.7)%
21.1%
—
—
—
—
(0.1)%
—
4.0% (0.1)%
(2.5)%
*** Perimeter impact on Latam segment reflects acquisition of mobile businesses in Panama and Nicaragua during 2019.
111
Millicom 2020 Annual Report
EBITDA ($ millions)
FY 2020
FY 2019****
Organic
FX
Accounting
Perimeter
Other
Reported
Guatemala
Colombia
Paraguay
Honduras
Bolivia
Panama
El Salvador
Nicaragua, Costa Rica, Corp
Costs & Eliminations
778
457
252
247
232
256
137
—
748
510
294
280
257
223
140
(33)
4.3%
(0.3)%
0.9% (11.3)%
(6.7)%
(11.6)%
(9.7)%
(10.4)%
(2.5)%
—
(7.6)%
(0.6)%
—
—
—
—
Latam*****
2,360
2,418
(3.7)%
(3.5)%
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4.0%
— (10.4)%
0.2% (14.0)%
0.4% (11.8)%
—
28.6%
(3.0)%
—
—
—
—
(9.7)%
15.2%
(2.5)%
—
3.8%
1.0%
(2.4)%
****Beginning in 2020 we are allocating corporate costs to each segment based on their contribution to underlying revenue. In order to facilitate comparisons, we
made a $25 million adjustment to 2019, affecting Latam EBITDA.
*****Perimeter impact on Latam segment reflects acquisition of mobile businesses in Panama and Nicaragua during 2019.
ARPU reconciliations
Latam Segment - Mobile ARPU Reconciliation
Mobile service revenue ($m)
Mobile Service revenue ($m) from non Tigo customers ($m) *
Mobile Service revenue ($m) from Tigo customers (A)
Mobile customers - end of period (000)
Mobile customers - average (000) (B) **
Mobile ARPU (USD/Month) (A/B/number of months)
2020
2019
3,220
(36)
3,185
41,734
39,658
6.7
3,258
(65)
3,192
39,846
36,636
7.3
*Refers to TV advertising, production services, MVNO, DVNO, equipment rental revenue, call center revenue, national roaming, equipment sales,
visitor roaming, tower rental, DVNE, and other non-customer driven revenue.
**Average of the last five quarters.
Latam Segment - Home ARPU Reconciliation
Home service revenue ($m)
Home service revenue ($m) from non Tigo customers ($m) *
Home service revenue ($m) from Tigo customers (A)
Customer Relationships - end of period (000) **
Customer Relationships - average (000) (B) ***
Home ARPU (USD/Month) (A/B/number of months)
2020
2019
1,509
(33)
1,477
4,545
4,405
27.9
1,530
(40)
1,490
4,341
4,242
29.3
*TV advertising, production services, equipment rental revenue, call center revenue, equipment sales and other non customer driven revenue.
**Represented by homes connected all technologies (HFC + Other Technologies + DTH & Wimax RGUs).
***Average of the last five quarters.
Foreign Exchange rates used to support FX impact calculations in the above Organic Growth reconciliations
Bolivia
Colombia
Costa Rica
Guatemala
Honduras
Nicaragua
Paraguay
Ghana
Tanzania
BOB
COP
CRC
GTQ
HNL
NIO
PYG
GHS
TZS
Average FX rate (vs. USD)
End of period FX rate (vs. USD)
2020
2019
YoY
2020
2019
YoY
6.91
3,695
590
7.73
24.65
34.34
6,758
5.75
2,312
6.91
—
3,296
(10.8)%
588
7.71
24.59
33.12
6,232
(0.3)%
(0.3)%
(0.2)%
(3.6)%
(7.8)%
5.33
(7.3)%
2,304
(0.3)%
6.91
3,433
617
7.79
24.20
34.82
6,900
5.87
2,319
6.91
3,277
576
7.70
24.72
33.84
6,453
5.73
2,299
—
(4.5)%
(6.6)%
(1.2)%
2.2%
(2.8)%
(6.5)%
(2.3)%
(0.9)%
112
Millicom 2020 Annual Report Reconciliation Net financial obligations to EBITDA to Proportionate net financial obligations to EBITDA as of December 31,
2020 and December 31, 2019
Debt Information - December 31, 2020
Financial obligations
$ millions
Millicom Group (IFRS)
Plus: Guatemala
Plus: Honduras
Less: Corporate Costs
Underlying Millicom Group (Non-IFRS)
Less: 50% Minority Stake in Colombia
Less: 45% Minority Stake in Guatemala
Less: 33% Minority Stake in Honduras
Less: 20% Minority Stake in Panama
Less: 1.5% Minority Stake in Tanzania
Gross
Cash
Net
EBITDA
Leverage
6,711
642
400
—
7,753
565
289
133
195
6
875
187
60
—
1,122
106
85
20
17
—
5,837
1,495
3.90x
455
339
—
778
247
(33)
6,631
2,487
2.67x
459
204
113
178
6
228
350
82
51
2
Proportionate Millicom Group (Non-IFRS)
6,565
894
5,670
1,773
3.20x
Net Underlying Financial obligations of Millicom Group (Non-IFRS) includes $1,312 of leases, as of December 31, 2020.
December 31, 2019
$ millions
Millicom Group (IFRS)
Plus: Guatemala
Plus: Honduras
Less: Corporate Costs
Financial obligations
EBITDA
Proforma
Gross
Cash
Net
Adjustments*
EBITDA
Leverage
7,068
1,172
423
—
1,166
5,903
1,530
189
40
—
983
383
—
748
280
(36)
Underlying Millicom Group (Non-IFRS)
8,664
1,395
7,269
2,522
Less: 50% Minority Stake in Colombia
Less: 45% Minority Stake in Guatemala
Less: 33% Minority Stake in Honduras
Less: 20% Minority Stake in Panama
Less: 1.5% Minority Stake in Tanzania
606
528
141
208
6
107
85
13
12
—
499
442
128
196
6
255
337
93
45
2
Proportionate Millicom Group (Non-IFRS)
7,175
1,177
5,998
1,791
* Proforma adjusted EBITDA related to mobile acquisitions in Panama and Nicaragua.
Net Underlying Financial obligations of Millicom Group (Non-IFRS) includes $1,408 of leases, as of December 31, 2019.
—
—
—
—
95
—
—
—
13
—
82
—
—
—
—
—
—
—
—
2,617
2.78x
—
—
—
—
—
—
—
—
—
—
1,873
3.20x
113
Millicom 2020 Annual Report CAPEX Reconciliation
Capex Reconciliation
Consolidated:
Additions to property, plant and equipment
Additions to licenses and other intangibles
Of which spectrum and license costs
Total consolidated additions
Of which capital expenditures related to corporate offices
Latin America Segment
Additions to property, plant and equipment
Additions to licenses and other intangibles
Of which spectrum and license costs
Latin America Segment total additions (Underlying)
Capex excluding spectrum and license costs
Africa Segment
Additions to property, plant and equipment
Additions to licenses and other intangibles
Of which spectrum and license costs
Africa Segment total additions
Capex excluding spectrum and license costs
Underlying
Latam capex excluding spectrum and license cost
Africa capex excluding spectrum and license cost
Capital expenditures related to corporate offices
Underlying capex excluding spectrum and license costs
Operating Free Cash Flow Reconciliation
Cash Flow Data
Net cash provided by operating activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets and licenses
Proceeds from sale of intangible assets
Net purchase/proceeds for property, plant and equipment and intangible assets
(Less) Proceeds from sale of towers part of tower sale and leaseback transactions
(Less) Purchase of spectrum and licenses
(Less) Finance charges paid, net
Operating free cash flow
FY 2020
FY 2019
649
520
421
1,169
7
719
202
101
921
13
FY 2020
FY 2019
816
629
504
1,445
941
879
240
117
1,119
1,002
FY 2020
FY 2019
41
—
—
41
41
42
12
12
54
42
FY 2020
FY 2019
941
41
7
989
1,002
42
13
1,056
FY 2020
FY 2019
821
(622)
9
(202)
—
(815)
—
101
551
657
801
(736)
24
(171)
—
(882)
(22)
59
470
425
114
Millicom 2020 Annual Report
Equity Free Cash Flow Reconciliation
Cash Flow Data
Net cash provided by operating activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Proceeds from sale of towers part of tower sale and leaseback transactions
Purchase of intangible assets
Proceeds from sale of intangible assets
Purchase of spectrum and licenses
Finance charges paid, net
Operating free cash flow
Interest (paid), net
Free cash flow
Dividends received from joint ventures (Guatemala and Honduras)
Dividends paid to non-controlling interests
Equity free cash flow
Lease Principal Repayments
Equity free cash flow after leases
OCF (EBITDA- Capex) Reconciliation
Latam OCF Underlying
Latam EBITDA
(-) Capex (Ex. Spectrum)
Latam OCF
Africa OCF
Africa EBITDA
(-) Capex (Ex. Spectrum)
Africa OCF
Corporate OCF
Corporate EBITDA
(-) Capex (Ex. Spectrum)
Corporate OCF
Underlying OCF
Underlying EBITDA
(-) Capex (Ex. Spectrum)
Underlying OCF
FY 2020
FY 2019
821
(622)
9
—
(202)
—
101
551
657
(551)
106
71
(5)
172
(116)
56
801
(736)
24
(22)
(171)
—
59
470
425
(470)
(45)
237
(13)
179
(107)
73
FY 2020
FY 2019
2,360
941
1,418
2,418
1,002
1,416
FY 2020
FY 2019
125
41
84
117
42
75
FY 2020
FY 2019
2
7
(5)
(13)
13
(25)
FY 2020
FY 2019
2,487
989
1,497
2,522
1,056
1,466
115
Millicom 2020 Annual Report Guatemala and Honduras Financial Information (unaudited)
Until 2015, Millicom group results included Guatemala and Honduras on a 100% consolidation basis. Since 2016, these businesses are
treated as joint ventures and are consolidated using the equity method. To aid investors to better track the evolution of the company’s
performance over time, we provide the following indicative unaudited financial statement data for the Millicom group as if our Guatemala
and Honduras joint ventures had been fully consolidated.
Income statement data FY 2020
($millions)
Revenue
Cost of sales
Gross profit
Operating expenses
EBITDA
EBITDA margin
Depreciation & amortization
Share of net profit in joint ventures
Other operating income (expenses), net
Operating profit
Net financial expenses
Other non-operating income (expenses), net
Gains (losses) from associates
Profit (loss) before tax
Net tax credit (charge)
Profit (loss) for the period
Non-controlling interests
Profit (loss) from discontinued operations
Net profit (loss) for the period
Millicom (IFRS)
Guatemala and
Honduras JVs
Eliminations
Underlying
(non-IFRS)
4,171
(1,171)
3,000
(1,505)
1,495
35.8%
(1,208)
171
(12)
446
(611)
(106)
(1)
(271)
(102)
(373)
41
(12)
(344)
2,035
(483)
1,552
(560)
992
48.7%
(453)
—
(3)
536
(119)
(3)
—
413
(102)
311
(140)
—
171
—
—
—
—
—
—
—
(171)
(4)
(175)
—
—
—
(175)
—
(175)
—
—
(175)
6,206
(1,654)
4,552
(2,065)
2,487
40.1%
(1,661)
—
(18)
807
(730)
(109)
(1)
(33)
(204)
(237)
(99)
(12)
(348)
116
Millicom 2020 Annual Report Balance Sheet data
($millions)
Assets
Intangible assets, net
Property, plant and equipment, net
Right of Use Assets
Investments in joint ventures and associates
Other non-current assets
Total non-current assets
Inventories, net
Trade receivables, net
Other current assets
Restricted cash
Cash and cash equivalents
Total current assets
Assets held for sale
Total assets
Equity and liabilities
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Debt and financing
Other non-current liabilities
Total non-current liabilities
Debt and financing
Other current liabilities
Total current liabilities
Liabilities directly associated with assets held for sale
Total liabilities
Total equity and liabilities
Cash Flow Data
($millions)
Millicom IFRS
Guatemala and
Honduras JVs
Underlying (non-
IFRS)
3,403
2,755
895
2,665
396
10,114
37
351
845
199
875
2,307
1
12,422
2,059
215
2,274
6,475
1,065
7,540
236
2,371
2,608
—
10,148
12,422
2,837
874
272
(2,642)
(35)
1,307
35
91
145
19
247
537
—
1,844
(54)
482
428
1,008
159
1,167
34
215
249
—
1,416
1,844
6,240
3,629
1,167
24
361
11,421
72
442
990
219
1,122
2,844
1
14,266
2,005
697
2,703
7,483
1,224
8,707
270
2,586
2,856
—
11,563
14,266
Profit (loss) before taxes from continuing operations
Profit (loss) for the period from discontinued operations
Profit (loss) before taxes
Net cash provided by operating activities (incl. discontinued ops)
Net cash used in investing activities (incl. discontinued ops)
Net cash from (used by) financing activities (incl. discontinued ops)
Exchange impact on cash and cash equivalents, net
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effect of cash in disposal group held for sale
Cash and cash equivalents at the end of the period
Millicom IFRS
Guatemala and
Honduras JVs
Underlying
(non-IFRS)
(271)
(12)
(283)
821
(495)
(598)
(17)
(289)
1,164
—
875
238
—
238
764
(451)
(294)
(2)
18
229
—
247
(33)
(12)
(45)
1,585
(945)
(891)
(19)
(271)
1,393
—
1,122
117
Millicom 2020 Annual Report Financial Statements
118
Millicom 2020 Annual Report INDEX TO FINANCIAL STATEMENTS
Audited Consolidated Financial Statements of Millicom International Cellular S.A. at December 31,
2020 and 2019 and for the Years Ended December 31, 2020, 2019 and 2018........................................
Independent auditor’s report....................................................................................................................................................
Consolidated statement of income for the years ended December 31, 2020, 2019 and 2018.........................
Consolidated statement of comprehensive income for the years ended December 31, 2020, 2019 and
2018....................................................................................................................................................................................................
Consolidated statement of financial position at December 31, 2020 and 2019....................................................
Consolidated statement of cash flows for the years ended December 31, 2020, 2019 and 2018...................
Consolidated statement of changes in equity for the years ended December 31, 2020, 2019 and 2018....
Notes to the audited consolidated financial statements....................................................................................................
120
126
127
128
130
132
134
119
119
Millicom 2020 Annual Report
Independent auditor’s report
To the Shareholders of
Millicom International Cellular S.A.
2, rue du Fort Bourbon
L-1249 Luxembourg
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of Millicom International Cellular S.A. (“the Group”) included on
page126 to page 213, which comprise the consolidated statement of financial position as at December 31, 2020, the
consolidated statement of income, the consolidated statement of comprehensive income, the consolidated statement of
cash flows and the consolidated statement of changes in equity for the year then ended, and a summary of significant
accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial
position of Millicom International Cellular S.A. as at December 31, 2020, and of its consolidated financial performance and
consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”) as
adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession
(the “Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the
“Commission de Surveillance du Secteur Financier” (“CSSF”). Our responsibilities under the EU Regulation Nº 537/2014,
the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the “Responsibilities of
the “réviseur d’entreprises agréé” for the audit of the consolidated financial statements” section of our report. We are also
independent of the Group in accordance with the International Code of Ethics for Professional Accountants, including
International Independence Standards, issued by the International Ethics Standards Board for Accountants (“IESBA Code”)
as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the
consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of the audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
120
120
Millicom 2020 Annual Report 1. Revenue recognition
Risk Identified
The Group’s revenue consists of mobile and data telephony services, corporate solutions, fixed-line broadband, fixed-line
telephone, cable TV and mobile financial services to retail and business customers. Revenue from these services is
considered a significant risk due to both the bundling of these services and the complexity of the Group’s systems and
processes used to record revenue. Also, the application of revenue recognition accounting standards is complex and
involves a number of key judgments and estimates, especially in the light of the IFRS 15 application.
Our answer
Our audit procedures over revenue included, among others:
◦ We obtained an understanding of and evaluating the design and tested the operating effectiveness of controls over the
accounting for bundled offers (including identification of separate performance obligations and allocation of the
transaction price to those obligations) and Principal vs. Agent considerations.
◦ We assessed the overall IT control environment and the IT controls in place, assisted by our information technology
professionals.
◦ We evaluated the design and tested the operating effectiveness of controls around access rights, system development,
program changes and IT dependent business controls to establish that changes to the system were appropriately
authorized, developed, and implemented including those over: set-up of customer accounts, pricing data, segregation
of duties and the linkage to usage data that drives revenue recognition.
• We tested the end-to-end reconciliation from the billing systems to the general ledger.
• We tested journal entries processed between the billing systems and general ledger.
• We assessed the assumptions used by management to determine the allocation of the transaction price, after
consideration of these credits and discounts, to telecom services and handsets and tested the stand-alone selling
prices.
• We obtained a sample of customer contracts, including modifications to the contracts, and compared customer contract
terms to the revenue systems.
• We evaluated management’s Principal vs. Agent considerations and conclusions.
• We assessed the adequacy of the Group’s disclosures included in Note B.1.1. in respect to the accounting policies on
revenue recognition.
2. Uncertain tax positions
Risk Identified
The Group’s operations are subject to income taxes in various jurisdictions resulting in different subjective and complex
interpretation of local tax laws as uncertainty prevails in the emerging market economies in which Millicom is operating. In
addition, the global tax environment worldwide continues to evolve and becomes more complex. Management exercises
judgment in assessing the level of provision required for taxation when such taxes are based on the interpretation of
complex tax laws. The future actual outcome of the decisions concerning these tax exposures may result in materially
higher or lower amounts than the accrual included in the accompanying consolidated financial statements.
121
121
Millicom 2020 Annual Report Our answer
Our procedures included, amongst others:
• We obtained an understanding of and evaluating the design and testing the operating effectiveness of the Group’s
controls relating to uncertain tax positions.
• We tested controls over management’s identification of uncertain tax positions and its application of the recognition and
measurement principles, including management’s review of the inputs and calculations of uncertain tax positions.
• We evaluated the assumptions the Group used to develop its uncertain tax positions and related unrecognized income
tax benefit amounts by jurisdiction.
• We compared the estimated liabilities for unrecognized tax positions to similar positions in prior periods and assessed
management’s consideration of current tax treatments and litigation and trends in similar positions challenged by tax
authorities.
• We assessed the historical accuracy of management’s estimates of its unrecognized tax positions by comparing the
estimates with the resolution of those positions.
• We involved our tax professionals to assist us in evaluating the application of relevant tax laws and the Group’s
interpretation of such laws in its recognition determination
• We tested the completeness and accuracy of the underlying data used by the Group to calculate its uncertain tax
positions.
• We evaluated the adequacy of the Group’s disclosures included in Note G.3.2. in relation to these tax matters.
3. Impairment testing of Goodwill
Risk Identified
Under EU-IFRSs, the Group is required to annually test the amount of goodwill for impairment. This annual impairment test
was significant to our audit because the balance of USD 1,659 million as of December 31, 2020 is material to the
consolidated financial statements. In addition, the Group’s assessment process includes significant judgments and is based
on assumptions derived from the Group’s business plans, which are affected by expected future market or economic
conditions. The impairment testing was especially challenging in the light of the current uncertainty resulting from the
coronavirus pandemic and involved complex auditor judgment due to the significant assumptions used to determine the
recoverable values of each of the Group’s cash-generating units
Our answer
Our audit procedures included, amongst others:
• We obtained an understanding of and evaluating the design and testing the operating effectiveness of the Group’s
controls over its impairment testing.
• We tested controls over management’s evaluation of the significant assumptions used in the discounted cash flows to
develop the recoverable values of each of the Group’s cash-generating units.
• We inspected the business plans and evaluating the methodology used.
• We involved our valuation specialists to assist with our audit procedures to test the discounted cash flows and
management’s valuation methodologies and assumptions discussed above which were used to determine the
recoverable values of the Group’s cash-generating units.
• We asked our valuation specialists to assist us in assessing whether the underlying assumptions used by management
were consistent with publicly available information and external market data.
• We assessed the completeness and accuracy of the underlying data through our inspection of and comparison to
historical information.
• We evaluated the adequacy of the Group’s disclosures included in Note E.1.5. in relation to goodwill.
122
122
Millicom 2020 Annual Report Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in
the consolidated management report on page 105 and the accompanying corporate governance statement on pages 61 to
104 but does not include the consolidated financial statements and our report of “réviseur d’entreprises agréé” thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report this fact.
We have nothing to report in this regard.
Responsibilities of the Board of Directors and of those charged with governance for the consolidated financial
statements
The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRS as adopted by the European Union, and for such internal control as the Board of Directors
determines is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative
but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Responsibilities of the “réviseur d’entreprises agréé” for the audit of the consolidated financial statements
The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises
agréé” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and with the ISAs as adopted for
Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these consolidated financial statements.
123
123
Millicom 2020 Annual Report As part of an audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for
Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our report of the “réviseur d’entreprises agréé” to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our report of the “réviseur d’entreprises agréé”. However, future events or
conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the consolidated financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence and communicate to them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter.
124
124
Millicom 2020 Annual Report
Report on other legal and regulatory requirements
We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the Shareholders on June 25, 2020
and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 9 years.
The consolidated management report on page 105 is consistent with the consolidated financial statements and has been
prepared in accordance with applicable legal requirements.
The accompanying corporate governance statement on pages 61 to 104 is the responsibility of the Board of Directors. The
information required by article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002 on the commercial and
companies register and on the accounting records and annual accounts of undertakings, as amended, is consistent with the
consolidated financial statements and has been prepared in accordance with applicable legal requirements.
We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent.
We confirm that the prohibited non-audit services referred to in EU Regulation No 537/2014 were not provided and that we
remained independent of the Group in conducting the audit.
Other matter
The corporate governance statement includes the information required by article 68ter paragraph (1) of the law of 19
December 2002 on the commercial and companies register and on the accounting records and annual accounts of
undertakings, as amended.
Ernst & Young
Société anonyme
Cabinet de révision agréé
Bruno di Bartolomeo
Luxembourg, 10 March 2021
125
125
Millicom 2020 Annual Report
Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Consolidated statement of income for the years ended December 31, 2020,
2019 and 2018
Notes
2020
2019
2018 (i)
Revenue............................................................................................................................................
Cost of sales.....................................................................................................................................
Gross profit.........................................................................................................
Operating expenses.....................................................................................................................
B.1.
B.2.
B.2.
Depreciation....................................................................................................................................
E.2.2., E.3.
Amortization...................................................................................................................................
Share of profit in the joint ventures in Guatemala and Honduras..............................
Other operating income (expenses), net..............................................................................
Operating profit.................................................................................................
E.1.3.
A.2.
B.2.
B.3.
Interest and other financial expenses....................................................................................
C.3.3., E.3.
Interest and other financial income.......................................................................................
Other non-operating (expenses) income, net....................................................................
B.5., C.7.3.
Profit (loss) from other joint ventures and associates, net.............................................
Profit (loss) before taxes from continuing operations....................................
Tax (charge) credit, net................................................................................................................
Profit (loss) from continuing operations..........................................................
A.3.
B.6.
Profit (loss) from discontinued operations, net of tax.....................................................
E.4.2.
Net profit (loss) for the period..........................................................................
Attributable to:
Owners of the Company............................................................................................................
Non-controlling interests...........................................................................................................
Earnings (loss) per common share for profit (loss) attributable to the owners
of the Company:
A.1.4.
Basic and diluted (US$ per common share) (ii)
— from continuing operations................................................................................................
— from discontinued operations............................................................................................
— Total................................................................................................................
B.7.
4,171
(1,171)
3,000
(1,505)
(890)
(318)
171
(12)
446
(624)
13
(106)
(1)
(271)
(102)
(373)
(12)
(385)
(344)
(41)
(3.28)
(0.12)
(3.40)
(i)
2018 was not restated for the application of IFRS 16, as the Group elected the modified retrospective approach.
(ii)
There are no dilutive potential ordinary shares
The accompanying notes are an integral part of these consolidated financial statements.
(US$ millions)
4,336
(1,201)
3,135
(1,604)
(825)
(275)
179
(34)
575
(564)
20
227
(40)
218
(120)
97
57
154
149
5
0.92
0.56
1.48
3,946
(1,117)
2,829
(1,616)
(662)
(140)
154
75
640
(367)
21
(39)
(136)
119
(112)
7
(33)
(26)
(10)
(16)
0.23
(0.33)
(0.10)
126
126
Millicom 2020 Annual Report Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Consolidated statement of comprehensive income for the years ended
December 31, 2020, 2019 and 2018
2020
2019
2018 (i)
(US$ millions)
Net profit (loss) for the year........................................................................................................................................
(385)
154
Other comprehensive income (to be reclassified to statement of income in subsequent
periods), net of tax:
Exchange differences on translating foreign operations................................................................................
Change in value of cash flow hedges, net of tax effects..................................................................................
Other comprehensive income (not to be reclassified to the statement of income in
subsequent periods), net of tax:
Remeasurements of post-employment benefit obligations, net of tax effects.......................................
Total comprehensive income (loss) for the period....................................................................
Attributable to
Owners of the Company..............................................................................................................................................
Non-controlling interests............................................................................................................................................
Total comprehensive income for the period arises from:
Continuing operations.................................................................................................................................................
Discontinued operations.............................................................................................................................................
(19)
(1)
(2)
(407)
(360)
(48)
(395)
(12)
(i)
2018 was not restated for the application of IFRS 16, as the Group elected the modified retrospective approach.
(4)
(16)
—
133
131
3
76
57
(26)
(81)
(1)
—
(108)
(78)
(30)
(102)
(7)
The accompanying notes are an integral part of these consolidated financial statements.
127
127
Millicom 2020 Annual Report Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Consolidated statement of financial position at December 31, 2020 and 2019
Notes
December 31,
2020
December 31,
2019 (i)
(US$ millions)
ASSETS
NON-CURRENT ASSETS
Intangible assets, net..............................................................................................................................................
Property, plant and equipment, net..................................................................................................................
Right of use assets....................................................................................................................................................
Investments in joint ventures..............................................................................................................................
Investments in associates......................................................................................................................................
Contract costs, net...................................................................................................................................................
Deferred tax assets...................................................................................................................................................
Derivative financial instruments.........................................................................................................................
Amounts due from non-controlling interests, associates and joint ventures....................................
Other non-current assets.......................................................................................................................................
E.1.
E.2.
E.3.
A.2.
A.3.
F.5.
B.6.
D.1.2.
G.5.
3,403
2,755
895
2,642
24
5
197
27
90
77
3,195
2,899
1,012
2,797
25
5
200
—
39
66
TOTAL NON-CURRENT ASSETS...............................................................................................
10,114
10,238
CURRENT ASSETS
Inventories..................................................................................................................................................................
Trade receivables, net.............................................................................................................................................
Contract assets, net..................................................................................................................................................
Amounts due from non-controlling interests, associates and joint ventures....................................
Prepayments and accrued income....................................................................................................................
Current income tax assets.....................................................................................................................................
Supplier advances for capital expenditure.....................................................................................................
F.2.
F.1.
F.5.
G.5.
Equity investments..................................................................................................................................................
C.7.3.
Other current assets................................................................................................................................................
Restricted cash...........................................................................................................................................................
Cash and cash equivalents....................................................................................................................................
C.5.
C.5.
TOTAL CURRENT ASSETS........................................................................................................
Assets held for sale...................................................................................................................................................
E.4.2.
TOTAL ASSETS.........................................................................................................................
37
351
31
206
149
96
21
160
181
199
875
2,307
1
12,422
32
371
41
29
156
119
22
371
192
155
1,164
2,652
5
12,895
(i)
The consolidated statement of financial position at December 31, 2019 has been restated after finalization of the purchase accounting of our
acquisitions in Nicaragua and Panama (note A.1.2.).
The accompanying notes are an integral part of these consolidated financial statements.
128
128
Millicom 2020 Annual Report Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Consolidated statement of financial position at December 31, 2020 and 2019
Notes
December 31, 2020 December 31, 2019 (i)
(US$ millions)
EQUITY AND LIABILITIES
EQUITY
Share capital and premium..................................................................................................................
C.1.
Treasury shares..........................................................................................................................................
Other reserves...........................................................................................................................................
C.1.
Retained profits.........................................................................................................................................
Profit (loss) for the period attributable to equity holders.........................................................
Equity attributable to owners of the Company.......................................................
Non-controlling interests......................................................................................................................
A.1.4.
TOTAL EQUITY............................................................................................................
LIABILITIES
NON-CURRENT LIABILITIES
Debt and financing..................................................................................................................................
Lease liabilities..........................................................................................................................................
C.3.
C.4.
Derivative financial instruments.........................................................................................................
D.1.2.
Amounts due to non-controlling interests, associates and joint ventures.........................
Payables and accruals for capital expenditure..............................................................................
Provisions and other non-current liabilities...................................................................................
Deferred tax liabilities.............................................................................................................................
TOTAL NON-CURRENT LIABILITIES............................................................................
CURRENT LIABILITIES
Debt and financing..................................................................................................................................
Lease liabilities..........................................................................................................................................
Put option liability....................................................................................................................................
Derivative financial instruments.........................................................................................................
Payables and accruals for capital expenditure..............................................................................
Other trade payables..............................................................................................................................
G.5.
E.1.
F.4.2.
B.6.
C.3.
C.4.
C.7.4.
D.1.2.
Amounts due to non-controlling interests, associates and joint ventures.........................
G.5.
Accrued interest and other expenses...............................................................................................
Current income tax liabilities...............................................................................................................
Contract liabilities....................................................................................................................................
Provisions and other current liabilities.............................................................................................
TOTAL CURRENT LIABILITIES.....................................................................................
F.5.
F.4.1.
Liabilities directly associated with assets held for sale...............................................................
E.4.2.
TOTAL LIABILITIES......................................................................................................
TOTAL EQUITY AND LIABILITIES................................................................................
630
(30)
(562)
2,365
(344)
2,059
215
2,274
5,578
897
14
29
485
328
209
7,540
113
123
262
1
345
334
311
445
71
90
511
2,608
—
10,148
12,422
633
(51)
(544)
2,222
149
2,410
271
2,680
5,786
988
17
337
61
322
285
7,797
186
107
264
—
348
289
161
432
75
82
474
2,417
—
10,215
12,895
(i)
The consolidated statement of financial position at December 31, 2019 has been restated after finalization of the purchase accounting of our
acquisitions in Nicaragua and Panama (note A.1.2.).
The accompanying notes are an integral part of these consolidated financial statements.
129
129
Millicom 2020 Annual Report Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Consolidated statement of cash flows for the years ended December 31, 2020,
2019 and 2018
Notes
2020
2019
2018 (i)
(US$ millions)
Cash flows from operating activities (including discontinued operations)
Profit (loss) before taxes from continuing operations ....................................................
Profit (loss) before taxes from discontinued operations.................................................
E.4.2.
Profit (loss) before taxes........................................................................................
Adjustments to reconcile to net cash:
Interest expense on leases.........................................................................................................
Interest expense on debt and other financing...................................................................
Interest and other financial income........................................................................................
Adjustments for non-cash items:
Depreciation and amortization ...............................................................................................
Share of net profit in Guatemala and Honduras joint ventures...................................
A.2.
(Gain) on disposal and impairment of assets, net .............................................................
B.2., E.4.2.
Share based compensation .....................................................................................................
Transaction costs assumed by Cable Onda..........................................................................
Loss from other joint ventures and associates, net...........................................................
Other non-cash non-operating (income) expenses, net ................................................
C.1.
A.1.2.
A.3.
B.5.
Changes in working capital:..............................................................................
Decrease (increase) in trade receivables, prepayments and other current assets,
net.......................................................................................................................................................
Decrease (increase) in inventories ..........................................................................................
Increase (decrease) in trade and other payables, net.......................................................
Increase (decrease) in contract assets, liabilities and costs, net...................................
Total changes in working capital .....................................................................
Interest paid on leases.................................................................................................................
Interest paid on debt and other financing...........................................................................
Interest received ...........................................................................................................................
Taxes paid.........................................................................................................................................
Net cash provided by operating activities ...........................................................
Cash flows from (used in) investing activities (including discontinued
operations):
Acquisition of subsidiaries, joint ventures and associates, net of cash acquired ..
A.1.
Proceeds from disposal of subsidiaries and associates, net of cash disposed........
Purchase of intangible assets and licenses .........................................................................
Purchase of property, plant and equipment ......................................................................
Proceeds from sale of property, plant and equipment ..................................................
Proceeds from disposal of equity investments, net of costs.........................................
E.1.4.
E.2.3.
E.3.
Dividends and dividend advances received from joint ventures ..............................
A.2.2.
Settlement of financial derivative instruments..................................................................
Cash (used in) provided by other investing activities, net ...........................................
D.1.2.
(271)
(12)
(283)
156
468
(13)
1,208
(171)
20
24
—
1
106
(43)
(6)
40
8
(2)
(151)
(411)
11
(142)
821
10
10
(202)
(622)
9
197
71
—
32
218
59
276
157
408
(20)
1,111
(179)
(40)
30
—
40
(227)
(119)
11
(61)
(2)
(172)
(141)
(344)
15
(114)
801
(1,014)
111
(171)
(736)
24
25
237
—
20
119
(29)
91
91
282
(21)
830
(154)
(37)
22
30
136
40
(128)
2
69
(9)
(66)
(89)
(229)
20
(153)
792
(953)
176
(148)
(632)
154
—
243
(63)
24
Net cash used in investing activities ....................................................................
(495)
(1,502)
(1,199)
130
130
Millicom 2020 Annual Report Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Notes
2020
2019
2018 (i)
Cash flows from financing activities (including discontinued operations):
Proceeds from debt and other financing .............................................................................
Repayment of debt and other financing ..............................................................................
Loan advance to joint venture for repayment of debt....................................................
Lease capital repayment.............................................................................................................
C.6.
C.6.
G.5.
Advances and dividends paid to non-controlling interests
A.1./A.2.
Share repurchase program........................................................................................................
Dividends paid to owners of the Company.........................................................................
C.2.
Net cash provided by (used in) financing activities.............................................
Exchange impact on cash and cash equivalents, net.......................................................
Net (decrease) increase in cash and cash equivalents ........................................
Cash and cash equivalents at the beginning of the year................................................
Effect of cash in disposal group held for sale......................................................................
E.4.2.
Cash and cash equivalents at the end of the year................................................
1,470
(1,744)
(193)
(116)
(5)
(10)
—
(598)
(17)
(289)
1,164
—
875
(i)
2018 was not restated for the application of IFRS 16, as the Group elected the modified retrospective approach.
2,900
(1,157)
—
(107)
(13)
—
(268)
1,355
(8)
645
528
(9)
1,164
1,155
(530)
—
(17)
(2)
—
(266)
341
(33)
(98)
619
6
528
The accompanying notes are an integral part of these consolidated financial statements.
131
131
Millicom 2020 Annual Report Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Consolidated statement of changes in equity for the years ended December 31,
2020, 2019 and 2018
Number
of
shares
(000’s)
Number of
shares held
by the Group
(000’s)
Share
capital
(i)
Share
premium
(i)
Treasury
shares
Retained
profits(ii)
Other
reserves
(iii)
Total
Non-
controlling
interests
Total
equity
(US$ millions)
Balance on January 1, 2018... 101,739
(1,195)
153
484
(106)
3,035
(472)
3,096
185
3,281
Adjustment on adoption of
IFRS 15 and IFRS 9 (net of tax)
(viii)......................................................
Total comprehensive income
for the year.......................................
Dividends (iv)...................................
Dividends to non controlling
interest...............................................
Purchase of treasury shares.......
Share based compensation (v).
Issuance of shares under
share-based payment schemes
Effect of acquisition of Cable
Onda (vii)...........................................
Put option reserve (vii).................
—
—
—
—
—
—
—
—
—
Balance on December 31,
2018......................................... 101,739
Total comprehensive income
for the year.......................................
Dividends (iv)...................................
Dividends to non controlling
interest...............................................
Purchase of treasury shares.......
Share based compensation (v).
Issuance of shares under
share-based payment schemes
Effect of restructuring in
Tanzania(vi)......................................
—
—
—
—
—
—
—
Balance on December 31,
2019......................................... 101,739
—
—
—
—
(70)
—
351
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(2)
—
—
—
—
—
—
(6)
—
31
—
—
10
—
10
(4)
6
(10)
(266)
(68)
—
(78)
(266)
—
—
—
(5)
—
(239)
—
—
22
(22)
—
—
—
(6)
22
2
—
(239)
(30)
—
(13)
—
—
—
113
—
(108)
(266)
(13)
(6)
22
2
113
(239)
(914)
153
482
(81)
2,525
(538)
2,542
251
2,792
—
—
—
(132)
—
465
—
—
—
—
—
—
—
—
—
—
—
—
—
(2)
—
—
—
—
(12)
—
41
—
149
(267)
(19)
—
131
(267)
—
4
—
(12)
(27)
—
—
29
—
(8)
29
(25)
1
9
(18)
3
—
(1)
—
1
—
18
133
(267)
(1)
(8)
30
1
—
(581)
153
480
(51)
2,372
(544)
2,409
271
2,680
132
132
Millicom 2020 Annual Report Consolidated financial statements for the years ended
December 31, 2020, 2019 and 2018
Number
of
shares
(000’s)
Number of
shares held
by the Group
(000’s)
Share
capital
(i)
Share
premium
(i)
Treasury
shares
Retained
profits(ii)
Other
reserves
(iii)
Total
Non-
controlling
interests
Total
equity
Balance on December 31,
2019......................................... 101,739
Total comprehensive income
for the period...................................
Dividends to non controlling
interests.............................................
Purchase of treasury shares(ix).
Share based compensation(v)..
Issuance of shares under
share-based payment schemes
—
—
—
—
—
Balance on December 31,
2020......................................... 101,739
Share capital and share premium – see note C.1.
(581)
153
480
(51)
2,372
(544)
2,409
271
2,680
—
—
(467)
—
521
—
—
—
—
—
—
—
—
—
(2)
—
(344)
(15)
(360)
(48)
(407)
—
(19)
—
40
—
3
—
—
—
24
—
(16)
24
(11)
(26)
1
(8)
—
—
—
(8)
(16)
24
1
(526)
153
478
(30)
2,020
(562)
2,059
215
2,274
Retained profits – includes profit for the year attributable to equity holders, of which $310 million (2019: $306 million; 2018: $324 million) are not
distributable to equity holders.
(i)
(ii)
(iii) Other reserves – see note C.1.
(iv) Dividends – see note C.2.
(v)
Share-based compensation – see note C.1.
(vi)
Effect of the restructuring in Tanzania A.1.2.
(vii) Effect of the acquisition of Cable Onda S.A. See notes A.1.2. and C.7.4. for further details.
(viii) “IFRS 15, “Revenue from contracts with customers” and IFRS 9, “Financial Instruments” were adopted effective January 1, 2018 using the modified
retrospective method. The impact of adoption was recorded as an adjustment to retained profits.
(ix) During the year ended December 31, 2020, Millicom repurchased 350,000 shares for a total amount of $10 million and withheld approximately
117,000 shares for settlement of tax obligations (2019: 132,162 ) on behalf of employees under share-based compensation plans.
The accompanying notes are an integral part of these consolidated financial statements.
133
133
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Introduction
Corporate Information
Millicom International Cellular S.A. (the “Company” or “MIC S.A.”), a Luxembourg Société Anonyme, and its subsidiaries, joint
ventures and associates (the “Group” or “Millicom”) is an international telecommunications and media group providing digital
lifestyle services in emerging markets, through mobile and fixed telephony, cable, broadband, Pay-TV in Latin America (Latam) and
Africa.
The Company’s shares are traded as Swedish Depositary Receipts on the Stockholm stock exchange under the symbol TIGO SDB
(formerly MIC SDB) and, since January 9, 2019, on the Nasdaq Stock Market in the U.S. under the ticker symbol TIGO. The Company
has its registered office at 2, Rue du Fort Bourbon, L-1249 Luxembourg, Grand Duchy of Luxembourg and is registered with the
Luxembourg Register of Commerce under the number RCS B 40 630.
On November 14, 2019, Millicom's historical principal shareholder, Kinnevik AB, distributed its entire (approximately 37% of
Millicom's outstanding shares) shareholding in Millicom to its own shareholders through a share redemption plan. Since that date,
Kinnevik is no longer a related party or shareholder in Millicom.
On March 9, 2021, the Board of Directors authorized these consolidated financial statements for issuance.
Business activities
Millicom operates its mobile businesses in Latin America (Bolivia, Colombia, El Salvador, Guatemala, Honduras, Nicaragua, Panama
and Paraguay), and in Africa (Ghana and Tanzania).
Millicom operates various cable and fixed line businesses in Latin America (Bolivia, Colombia, Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, Panama and Paraguay). Millicom also provides direct to home satellite service in most of its Latam countries.
On December 31, 2015, Millicom deconsolidated its operations in Guatemala and Honduras which are, since that date and for
accounting purposes, under joint control. However, when preparing and disclosing its segment information, the Group includes
Honduras and Guatemala in the Latin America (Latam) segment figures as if they are fully consolidated by the Group, as this reflects
the way management reviews and uses internally reported information to make decisions (see note B.3. Segmental information).
Millicom holds investments in online/e-commerce businesses in several countries in a tower infrastructure company in Africa (Helios
Towers), as well as other small minority investments in other businesses such as micro-insurance (Milvik).
COVID-19 - Qualitative and quantitative assessment on business activities, financial situation and economic
performance
On March 11, 2020, the World Health Organization declared the coronavirus outbreak a pandemic. Most countries globally, including
a majority of the countries where we operate, reacted by implementing severe restrictions on travel and public gatherings, including
the closing of offices, businesses, schools, retail stores and other public venues, and by instituting curfews or quarantines. These
restrictions, as well as the dangers posed by the virus, produced a significant reduction in mobility and a severe disruption in global
economic activity, the effect of which was felt in our markets beginning in mid-March 2020.
Impact on our markets and business
Most governments in our markets implemented restrictions beginning in mid-March, and these were generally maintained
throughout April, with some gradual relaxation of measures beginning in late May and June. According to data compiled by the
University of Oxford, the lockdowns in the vast majority of our markets were among the most stringent in the world. As a result,
many of our stores and distribution channels were forced to close temporarily and a majority of our markets experienced very sharp
reductions in mobility during the second quarter. This produced an immediate and significant decline in our prepaid mobile
business. Since then, most of the governments in the countries in which we operate have gradually eased these restrictions and we
have seen a corresponding increase in the mobility of people. Our prepaid mobile business was affected much faster than postpaid,
and recovery has also been significantly quicker.
134
134
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
COVID-19 - Qualitative and quantitative assessment on business activities, financial situation and economic
performance (continued)
Impact of the crisis on accounting matters
As a consequence of this crisis, Millicom identified potential significant accounting implications in the following areas:
•
Impairment of non-financial assets/goodwill/investments in joint ventures
As a result of this crisis, Millicom has noticed reduced economic activity across the countries where it operates, and its
operations have been suffering lower revenues, EBITDA and margins, which might have indicated potential impairments.
In the second half of the year, our operations have shown encouraging signs of recovery and are actually over performing
the forecasts used by management to carry out the impairment test as of June 30, 2020. The discount rates have also
significantly decreased since the declaration of the outbreak and they have gradually returned to pre-pandemic levels.
There were therefore no such indicators requiring management to carry out another impairment test for the second half of
the year. With that said, in accordance with IFRS, management carried out its annual goodwill impairment test during the
fourth quarter of 2020, using the Group's latest forecasts and again concluded that no impairment should be recorded in
the Group Consolidated Financial Statements.
•
Impairment of trade receivables
During Q2 2020, and as a result of worsening collections, the Group had recognised additional bad debt provisions for an
amount of $32 million compared to the level of provisions recorded during Q1 2020 (pre-pandemic level) and $33 million
compared to Q2 2019. However, collections have significantly improved during second half of 2020 and bad debt levels
have returned to their pre-pandemic level comparing to Q1 2020. As of December 31, 2020, the total bad debt provisions
cover close to 100% of the receivables overdue by more than 90 days.
•
Revenue recognition
For countries restricted from disconnecting non paying customers at the beginning of the pandemic , such as El Salvador
and Bolivia, the Group established a policy whereby operations stopped recognizing revenue after a certain number of
invoices remained unpaid (usually 3 invoices - as these customers would be disconnected after 3 unpaid invoices in normal
circumstances). The Group believed it was unlikely that it would collect the overdue invoiced amounts from these
subscribers i.e. the 'Covid subscribers'. From that moment onwards after consideration of the guidance under IFRS 15.13,
for 'Covid subscribers' the Group had only recognized revenue up to an amount equal to the consideration (cash) as and
when received. Noteworthy, all our operations were finally allowed to apply free "lifeline" services for non-paying
customers, with El Salvador and Bolivia being the latest to be able to apply it as from mid-2020.
As mentioned above, our markets and operations showed encouraging signs of recovery, and therefore any unrecognized
revenue during second half of 2020 has been offset with the invoicing effect of prior unrecognized revenue. For the year
ended December 31, 2020, the Group invoiced but unrecognized revenue amounts to $3.9 million.
IFRS Consolidated Financial Statements
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the IASB
(IFRS). They are also compliant with International Financial Reporting Standards as adopted by the European Union. This is in
accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council of July 19, 2002, on the application of
international accounting standards for listed companies domiciled in the European Union.
The financial statements have been prepared on an historical cost basis, except for certain items including derivative financial
instruments (measured at fair value) and financial instruments that contain obligations to purchase own equity instruments
(measured at the present value of the redemption price).
This section contains the Group’s significant accounting policies that relate to the financial statements as a whole. Significant
accounting policies specific to one note are included within that note. Accounting policies relating to non-material items are not
included in these financial statements.
135
135
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Consolidation
The consolidated financial statements of the Group comprise the financial statements of the Company and its subsidiaries as of
December 31 of each year. The financial statements of the subsidiaries are prepared for the same reporting year as the Company,
using consistent accounting policies.
All intra-group balances, transactions, income and expenses, and profits and losses resulting from intra-group transactions are
eliminated.
Foreign currency
Financial information in these financial statements are shown in the US dollar presentation currency of the Group and rounded to
the nearest million (US$ million) except where otherwise indicated. The financial statements of each of the Group’s entities are
measured using the currency of the primary economic environment in which each entity operates (the functional currency). The
functional currency of each subsidiary, joint venture and associate reflects the economic substance of the underlying events and
circumstances of these entities. Except for El Salvador where the functional currency is US dollar, the functional currency in other
countries is the local currency.
The results and financial position of all Group entities (none of which operate in an economy with a hyperinflationary environment)
with functional currency other than the US dollar presentation currency are translated into the presentation currency as follows:
(i) Assets and liabilities are translated at the closing rate on the date of the statement of financial position;
(ii)
Income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
dates of the transactions); and
(iii) All resulting exchange differences are recognized as a separate component of equity (currency translation reserve), in the
caption “Other reserves”.
On consolidation, exchange differences arising from the translation of net investments in foreign operations, and of borrowings and
other currency instruments designated as hedges of such investments, are recorded in equity. When the Group disposes of or loses
control or significant influence over a foreign operation, exchange differences that were recorded in equity are recognized in the
consolidated statement of income as part of gain or loss on sale or loss of control and/or significant influence.
Goodwill and fair value adjustments arising on acquisition of a foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
The following table presents functional currency translation rates for the Group’s locations to the US dollar on December 31, 2020,
2019 and 2018 and the average rates for the years ended December 31, 2020, 2019 and 2018.
Exchange Rates to the
US Dollar
Functional Currency
2020 Year-
end Rate
2019 Year-
end Rate
Change %
2020
Average
Rate
2019
Average
Rate
Change %
2018
Average
Rate
Bolivia.............................. Boliviano (BOB)
Chad................................. CFA Franc (XAF)
Colombia........................ Peso (COP)
Costa Rica....................... Costa Rican Colon (CRC)
El Salvador..................... US dollar
Ghana.............................. Cedi (GHS)
Guatemala..................... Quetzal (GTQ)
Honduras....................... Lempira (HNL)
Luxembourg................. Euro (EUR)
Nicaragua....................... Cordoba (NIO)
Panama........................... Balboa (B/.) (i)
Paraguay........................ Guarani (PYG)
Sweden........................... Krona (SEK)
Tanzania......................... Shilling (TZS)
United Kingdom.......... Pound (GBP)
6.91
n/a
3,432.50
617.30
n/a
5.87
7.79
24.20
0.82
34.82
n/a
6,900.11
8.23
2,318.95
0.73
(i) the balboa is tied to the United States dollar at an exchange rate of 1:1.
6.91
n/a
3,277
576
n/a
5.73
7.70
24.72
0.89
33.84
n/a
6,453
9.37
2,299
0.75
136
—
n/a
4.7 %
7.1 %
n/a
2.4 %
1.2 %
(2.1) %
(8.2) %
2.9 %
n/a
6.9 %
(12.1) %
0.9 %
(3.0) %
6.91
n/a
3,695
590
n/a
5.75
7.73
24.65
0.87
34.34
n/a
6,758
9.16
2,312
0.77
6.91
n/a
3,296
588
n/a
5.33
7.71
24.59
0.89
33.12
n/a
6,232
9.43
2,304
0.78
— %
n/a
12.1 %
0.3 %
n/a
7.9 %
0.3 %
0.2 %
(2.1) %
3.7 %
n/a
8.4 %
(2.9) %
0.3 %
(1.2) %
6.91
571
2,973
578
n/a
4.63
7.52
23.99
0.85
31.55
n/a
5,743
8.71
2,274
0.75
136
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
New and amended IFRS accounting standards
The following changes to standards effective for annual periods starting on January 1, 2019 have been adopted by the Group:
IFRS 16 "Leases" primarily affects the accounting for the Group’s operating leases. The commitments for operating leases are now
recognized as right of use assets and lease liabilities for future payments. As a result, on adoption, on January 1, 2019, an additional
lease liability of $545 million has been recognized. The application of the new standard decreased operating expenses by $149
million, respectively, as compared to what our results would have been if we had continued to follow IAS 17 for year ended
December 31, 2019. The impact of the adoption of the leasing standard and the new accounting policies are further explained
below. The application of this standard also affects the Group’s depreciation, operating and financial expenses, debt and other
financing, and leverage ratios see note C.3.. The change in presentation of operating lease expenses has resulted in a corresponding
increase in cash flows derived from operating activities and a decline in cash flows from financing activities.
Below are details describing the impact of the adoption of IFRS 16 "Leases" on the Group’s financial statements. The amended
accounting policies applied from January 1, 2019 are further disclosed in note C.4.
Explanation and effect of adoption of IFRS 16
The Group adopted the standard using the modified retrospective approach with the cumulative effect of applying the new
Standard recognized in retained profits as of January 1, 2019. Its application had no significant impact on the Group's retained
profits. Comparatives for the 2018 financial statements were not restated.
On adoption of IFRS 16, the Group recognized lease liabilities in relation to leases which had previously been classified as ‘operating
leases’ under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments,
discounted using the lessee’s incremental borrowing rate as of January 1, 2019.
The right-of-use asset was measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued
lease payments relating to the leases recognized in the statement of financial position immediately before the date of initial
application.
The weighted average incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 12.3%. Each lease
commitment was individually discounted using a specific incremental borrowing rate, following a build-up approach including: risk-
free rates, industry risk, country risk, credit risk at cash generating unit level, currency risk and commitment’s maturity.
For leases previously classified as finance leases Millicom recognized the carrying amount of the lease asset and lease liability
immediately before transition as the carrying amount of the right of use asset and the lease liability at the date of initial application.
The measurement principles of IFRS 16 are only applied after that date.
$ millions
Operating lease commitments disclosed as at December 31, 2018
(Plus): Non lease components obligations..........................................................................................................................................................
(Less): Short term leases recognized on a straight line basis as an expense..........................................................................................
(Less): Low value leases recognized on a straight line basis as an expense...........................................................................................
(Less): Contract included in the lease commitments but with starting date in 2019 and not part of the IFRS 16 opening
balances...........................................................................................................................................................................................................................
(Plus/Less): Other..........................................................................................................................................................................................................
Gross lease liabilities........................................................................................................................................................
Discounted using the lessee's incremental borrowing rate at the date of the initial application.................................................
Incremental lease liabilities recognized at January 1, 2019.........................................................................................
(Plus): Finance lease liabilities recognized at December 31, 2018.............................................................................................................
Lease liabilities recognized at January 1, 2019
Of which are:
Current lease liabilities........................................................................................................................................................................................
Non-current lease liabilities...............................................................................................................................................................................
January 1, 2019
801
57
(3)
(2)
(17)
(9)
828
(283)
545
353
898
86
812
137
137
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
The application of IFRS 16 affected the following items in the statement of financial position on January 1, 2019:
FINANCIAL POSITION
$ millions
As at January 1,
2019 before
application
Effect of
adoption of
IFRS 16
As at January 1,
2019 after
application
Reason
for the
change
ASSETS.............................................................................................
Property, plant and equipment, net ..............................................................
Right-of-use asset (non-current) NEW ..........................................................
Prepayments
LIABILITIES.......................................................................................
Lease liabilities (non-current) NEW ................................................................
Debt and other financing (non-current) ......................................................
Lease liabilities (current) NEW ..........................................................................
Debt and other financing (current) ................................................................
Other current liabilities........................................................................................
3,071
—
129
—
4,123
—
458
492
(307)
856
(6)
812
(337)
86
(16)
(2)
2,764
856
123
812
3,786
86
442
490
(i)
(ii)
(iii)
(iv)
(v)
(iv)
(v)
(vi)
(i)
Transfer of previously capitalized assets under finance leases to Right-of-Use assets.
(ii)
Initial recognition of Right-of-Use assets, transfer of previously recognized finance leases and of lease prepayments to the Right-of-Use asset cost
at transition.
(iii) Transfer of lease prepayments to the Right-of-Use asset cost at transition.
(iv)
Initial recognition of lease liabilities and transfer of previously recognized finance lease liabilities.
(v)
Transfer of previously recognized finance lease liabilities to new Lease liabilities accounts.
(vi) Reclassification of provisions for onerous contracts to Right-of-Use assets.
The application of IFRS 16 has also impacted classifications within the statement of income, statement of cash flows, segment
information and EPS for the period starting from January 1, 2019.
In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:
▪
▪
▪
▪
▪
the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
reliance on previous assessments on whether leases are onerous
the accounting for operating leases with a remaining lease term of less than 12 months as at January 1, 2019 as short-
term leases
the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
the use of hindsight in determining the lease term where the contract contains options to extend or terminate the
lease.
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for
contracts entered into before the transition date the Group relied on its assessment made when applying IAS 17 and IFRIC 4
Determining whether an Arrangement contains a Lease.
The following new or amended standards became applicable for the current reporting period and did not have any significant impact on
the Group’s accounting policies or disclosures and did not require retrospective adjustments.
•
•
•
•
Amendments to the conceptual framework. The IASB has revised its conceptual framework.
Amendments to IAS 1, ‘Presentation of financial statements’, and IAS 8, ‘Accounting policies, changes in accounting estimates
and errors’.
Amendments to IFRS 9, IAS 39 and IFRS 7 - Interest Rate Benchmark Reform - Phase 1. This amendment provides certain reliefs
in relation to interest rate benchmark reforms. The reliefs relate to hedge accounting and have the effect that the reforms
should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness should continue to be
recorded in the income statement.
Amendments to IFRS 3 - definition of a business. This amendment revises the definition of a business.
138
138
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
•
Amendment to IFRS 16, 'Leases' - COVID 19 Rent Concessions - effective for annual periods starting on June 1, 2020. This
amendment provides an optional practical expedient for lessees from assessing whether a rent concession related to COVID-19
is a lease modification. Lessees can elect to account for such rent concessions in the same way as they would if they were not
lease modifications. In many cases, this will result in accounting for the concession as variable lease payments in the period(s) in
which the event or condition that triggers the reduced payment occurs.
The following changes to standards not yet effective are not expected to materially affect the Group:
•
•
Amendments to IFRS 4 'Insurance contracts' (deferral of effective date of IFRS 9) - effective for annual periods starting on
January 1, 2021- These amendments extend the effective date to apply IFRS 9 for insurance contracts to January 1, 2023 in order
to align with the effective date of IFRS 7. These amendments will not have an impact for the Group.
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform - Phase 2 - effective for annual
periods starting on January 1, 2021. The amendments provide temporary reliefs which address the financial reporting effects
when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate.
Main reliefs provided by the Phase 2 amendments relate to:
•
•
Changes to contractual cash flows: That is, when changing the basis for determining contractual cash flows for
financial assets and liabilities required by the reform this will not result in an immediate gain or loss in the income
statement but in an update of the effective interest rate (or an update in the discount rate to remeasure the lease
liability as a result of the IBOR reform), and;
Hedge accounting: That is, allowing hedge relationships that are directly affected by the reform to continue, though
additional ineffectiveness might need to be recorded.
The Group has inventoried financial assets or liabilities (including lease liabilities), as well as hedging instruments, with IBOR
features and concluded that it will not be significantly exposed to this reform. As a result, it does not expect any material effects
on its consolidated financial statements from the reform and these amendments.
•
Amendments to
◦
◦
◦
◦
IFRS 3 'Business Combinations' - Reference to Conceptual Framework
IAS 16 'Property, Plant and Equipment' - Proceeds before intended use
IAS 37 'Provisions, Contingent Liabilities and Contingent Assets' - Cost of fulfilling a contract
Annual improvements to IFRS Standards 2018-2020, affecting IFRS 1, IFRS 9, IFRS 16 and IAS 41
•
•
•
•
All of these amendments are effective for annual periods starting on January 1, 2022. These amendments have not yet been
endorsed by the EU.
Amendments to IAS 1, 'Presentation of Financial Statements' - effective for annual periods starting on January 1, 2023- This
amendment clarifies that liabilities are classified as either current or non-current, depending on the rights that exist at the end
of the reporting period. The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability. These
amendments have not yet been endorsed by the EU.
IFRS 17, ‘Insurance contracts’, including amendments - effective for annual periods starting on January 1, 2023- IFRS 17 will not
have an impact for the Group. IFRS 17 has not been yet endorsed by the EU.
Amendments to IAS 1, 'Presentation of Financial Statements' and IFRS Practice Statement 2, 'Disclosure of Accounting policies'-
effective for annual periods starting on January 1, 2023 - The amendments aim to help entities provide accounting policy
disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a
requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of
materiality in making decisions about accounting policy disclosures. These amendments have not yet been endorsed by the EU.
Amendments to IAS 8, 'Accounting policies, Changes in Accounting Estimates and Errors': Definition of accounting estimates -
effective for annual periods starting on January 1, 2023 - The amendments are designed to clarify the distinction between
changes in accounting estimates and changes in accounting policies and the correction of errors. These amendments have not
yet been endorsed by the EU.
139
139
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Judgments and critical estimates
The preparation of IFRS financial statements requires management to use judgment in applying accounting policies. It also requires
the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and
expenses during the reporting period. These estimates are based on management's best knowledge of current events, actions and
best estimates as of a specified date, and actual results may ultimately differ from these estimates. Areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in each
note and are summarized below:
Judgments
Management apply judgment in accounting treatment and accounting policies in preparation of these financial statements. In
particular, a significant level of judgment is applied regarding the following items:
•
•
•
•
•
•
•
•
•
Acquisitions – measurement at fair value of existing and newly identified assets, including the measurement of property,
plant and equipment and intangible assets (e.g. particularly the customer lists being sensitive to significant assumptions as
disclosed in note A.1.2.), liabilities, contingent liabilities and remaining goodwill; the assessment of useful lives; as well as
the accounting treatment for transaction costs (see notes A.1.2., E.1.1., E.1.5., E.2.1.);
Impairment testing – key assumptions related to future business performance, perpetual growth rates and discount rates
(see notes E.1.2., E.1.6., E.2.2.);
Revenue recognition – whether or not the Group acts as principal or as an agent, when there is one or several
performance obligations and the determination of stand alone selling prices (see note B.1.1.);
Contingent liabilities – whether or not a provision should be recorded for any potential liabilities (see note G.3.);
Leases – In determining the lease term, including the assessment of whether the exercise of extension or termination
options is reasonably certain and the corresponding impact on the selected lease term (see note E.3.);
Control – whether Millicom, through voting rights and potential voting rights attached to shares held, or by way of
shareholders’ agreements or other factors, has the ability to direct the relevant activities of the subsidiaries it consolidates,
or jointly direct the relevant activities of its joint ventures (see notes A.1., A.2.);
Discontinued operations and assets held for sale – definition, classification and presentation (see notes A.4., E.4.1.) as
well as measurement of potential provisions related to indemnities;
Deferred tax assets – recognition based on likely timing and level of future taxable profits together with future tax
planning strategies (see notes B.6.3.and G.3.2.);
Defined benefit obligations – key assumptions related to life expectancies, salary increases and leaving rates, mainly
related to UNE Colombia (see note B.4.3.).
Estimates
Estimates are based on historical experience and other factors, including reasonable expectations of future events, including the
effects of the COVID-19 pandemic. These factors are reviewed in preparation of the financial statements although, due to inherent
uncertainties in the evaluation process, actual results may differ from original estimates. Estimates are subject to change as new
information becomes available and may significantly affect future operating results. Significant estimates have been applied in
respect of the following items:
•
•
•
•
•
•
Accounting for property, plant and equipment, and intangible assets in determining fair values at acquisition dates,
particularly for assets acquired in business combinations and sale and leaseback transactions (see notes A.1.and E.2.1.);
Useful lives of property, plant and equipment and intangible assets (see notes E.1.1., E.2.1.);
Provisions, in particular provisions for asset retirement obligations, legal and tax risks (see note F.4.);
Tax liabilities, in particular in respect of uncertainty over income tax treatments (see note F.4.);
Revenue recognition (see note B.1.1.);
Impairment testing including weighted average cost of capital (WACC), EBITDA margins, Capex intensity and long term
growth rates (see note E.1.6.);
140
14 0
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
•
•
•
For leases, estimates in determining the incremental borrowing rate for discounting the lease payments in case interest
rate implicit in the lease cannot be determined (see note E.3. );
Estimates for defined benefit obligations (see note B.4.2.);
Accounting for share-based compensation in particular estimates of forfeitures and future performance criteria (see notes
B.4.1., B.4.3.).
A. The Millicom Group
The Group comprises a number of holding companies, operating subsidiaries and joint ventures with various combinations of
mobile, fixed-line telephony, cable and wireless Pay TV, Broadband Internet and Mobile Financial Services (MFS) businesses. The
Group also holds other small minority investments in other businesses such as micro-insurance (Milvik).
A.1. Subsidiaries
Subsidiaries are all entities which Millicom controls. Millicom controls an entity when it is exposed to, or has rights to variable returns
from its investment in the entity, and has the ability to affect those returns through its power over the subsidiary. Millicom has
power over an entity when it has existing rights that give it the current ability to direct the relevant activities, i.e. the activities that
significantly affect the entity’s returns. Generally, control accompanies a shareholding of more than half of the voting rights
although certain other factors (including contractual arrangements with other shareholders, voting and potential voting rights) are
considered when assessing whether Millicom controls an entity. For example, although Millicom holds less than 50 % of the shares in
its Colombian businesses, it holds more than 50 % of shares with voting rights. The contrary may also be true (e.g. Guatemala and
Honduras). In respect of the joint ventures in Guatemala and Honduras, shareholders’ agreements require unanimous consents for
decisions over the relevant activities of these entities (see also note A.2.2.). Therefore, the Group has joint control over these entities
and accounts for them under the equity method.
141
141
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Our main subsidiaries are as follows:
Entity
Latin America
Country
Activity
December
31, 2020
% holding
December
31, 2019
% holding
December
31, 2018
% holding
Telemovil El Salvador S.A. de C.V......................................... El Salvador
Mobile, MFS, Cable, DTH
Millicom Cable Costa Rica S.A............................................... Costa Rica
Cable, DTH
Telefonica Celular de Bolivia S.A.......................................... Bolivia
Mobile, DTH, MFS, Cable
Telefonica Celular del Paraguay S.A................................... Paraguay
Mobile, MFS, Cable, PayTV
Cable Onda S.A (i)...................................................................... Panama
Cable, PayTV, Internet, DTH,
Fixed-line
Grupo de Comunicaciones Digitales, S.A. (formerly
Telefonica Moviles Panama, S.A.)(ii)...................................
Panama
Mobile
Telefonia Cellular de Nicaragua sa (ii)................................ Nicaragua
Colombia Móvil S.A. E.S.P. (iii)............................................... Colombia
Mobile
Mobile
In %
100
100
100
100
80
80
In %
100
100
100
100
80
80
100
100
In %
100
100
100
100
80
—
—
50-1 share 50-1 share 50-1 share
UNE EPM Telecomunicaciones S.A.(iii).............................. Colombia
Fixed-line, Internet, PayTV, Mobile 50-1 share 50-1 share 50-1 share
Edatel S.A. E.S.P. (iii).................................................................. Colombia
Fixed-line, Internet, PayTV, Cable
50-1 share 50-1 share 50-1 share
Africa
Sentel GSM S.A.(v)..................................................................... Senegal
Mobile, MFS
MIC Tanzania Public Limited Company (vi)..................... Tanzania
Mobile, MFS
Millicom Tchad S.A. (v)............................................................ Chad
Mobile, MFS
Millicom Rwanda Limited (v)................................................ Rwanda
Mobile, MFS
Zanzibar Telecom Limited (vi).............................................. Tanzania
Mobile, MFS
Unallocated
Millicom International Operations S.A.............................. Luxembourg Holding Company
Millicom International Operations B.V.............................. Netherlands
Holding Company
Millicom LIH S.A......................................................................... Luxembourg Holding Company
MIC Latin America B.V............................................................. Netherlands
Holding Company
Millicom Africa B.V.................................................................... Netherlands
Holding Company
Millicom Holding B.V............................................................... Netherlands
Holding Company
Millicom International Services LLC................................... USA
Services Company
Millicom Services UK Ltd (iv)................................................. UK
Services Company
Millicom Spain S.L..................................................................... Spain
Holding Company
—
98.5
—
—
98.5
100
100
100
100
100
100
100
100
100
—
98.5
—
—
98.5
100
100
100
100
100
100
100
100
100
—
100
100
—
85
100
100
100
100
100
100
100
100
100
(i)
Acquisition completed on December 13, 2018. Cable Onda S.A. is fully consolidated as Millicom has the majority of voting shares to direct the relevant
activities. See note A.1.2..
(ii) Companies acquired during 2019. See note A.1.2..
(iii) Fully consolidated as Millicom has the majority of voting shares to direct the relevant activities.
(iv) Millicom Services UK Ltd with registered number 08330497 will take advantage of an audit exemption to prepare stand alone financial statements for
the year ended December 31, 2020 as set out within section 479A of the Companies Act 2006.
(v)
Companies disposed of in 2018 or 2019. See note A.1.3.
(vi) Change in ownership percentages as a result of the in-country restructuring . See note A.1.2.
A.1.1. Accounting for subsidiaries and non-controlling interests
Subsidiaries are fully consolidated from the date on which control is transferred to Millicom. If facts and circumstances indicate that
there are changes to one or more of the elements of control, a reassessment is performed to determine if control still exists.
Subsidiaries are de-consolidated from the date that control ceases. Transactions with non-controlling interests are accounted for as
transactions with equity owners of the Group. Gains or losses on disposals of non-controlling interests are recorded in equity. For
142
142
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the
carrying value of net assets of the subsidiary is also recorded in equity.
A.1.2. Acquisition of subsidiaries and changes in non-controlling interests in subsidiaries
Scope changes 2020
There were no material acquisitions in 2020.
Scope changes 2019
1. Telefonica CAM Acquisitions
On February 20, 2019, MIC S.A., Telefonica Centroamerica and Telefonica S.A. entered into 3 separate share purchase agreements
(the “Telefonica CAM Acquisitions”) pursuant to which, subject to the terms and conditions contained therein, Millicom agreed to
purchase 100% of the shares of Telefonica Moviles Panama, S.A., a company incorporated under the laws of Panama, from Telefonica
Centroamerica (the “Panama Acquisition”), 100% of the shares of Telefonica de Costa Rica TC, S.A., a company incorporated under
the laws of Costa Rica, from Telefonica (the “Costa Rica Acquisition”) and 100% of the shares of Telefonia Celular de Nicaragua, S.A., a
company incorporated under the laws of Nicaragua, from Telefonica Centroamerica (the “Nicaragua Acquisition”). While Millicom
completed both acquisitions in Nicaragua and Panama, it announced on May 2, 2020 that it had terminated the Share Purchase
Agreement in relation to the Costa Rica Acquisition (see note G.3.1.). The aggregate purchase price for the Telefonica Panama and
Nicaragua Acquisitions was $1.08 billion, which has been subject to purchase price adjustments - see below.
Acquisition related costs for Nicaragua and Panama acquisitions included in the statement of income under operating expenses
were approximately $16 million for the year 2019.
The finalization of the purchase accounting for the recent acquisitions had an effect on the following financial statements line items
of the statement of financial position as of December 31, 2019:
(in millions of U.S dollars)
STATEMENT OF FINANCIAL POSITION
ASSETS
Intangible assets, net................................................................
Property, plant and equipment, net....................................
Right-of-use asset (non-current)...........................................
Other current assets..................................................................
LIABILITIES
Lease liabilities (non-current).................................................
Lease liabilities (current)..........................................................
Deferred tax liabilities...............................................................
EQUITY
Retained profits...........................................................................
Non-controlling interests........................................................
Impact of
finalization/update
of purchase
accounting of
Nicaragua Panama
December 31,
2019
As reported
December 31,
2019
Restated
Reason for
the change
3,219
2,883
977
181
967
97
279
2,222
271
(4)
—
—
4
—
—
—
—
—
(20)
17
34
7
22
11
6
—
—
3,195
2,899
1,012
192
988
107
285
2,222
271
(i)
(ii)
(ii)
(iii)
(ii)
(ii)
(iv)
(i)
(ii)
(iii)
(iv)
Impact on goodwill resulting from the adjustments explained below for Nicaragua and Panama.
See Panama section below. Mainly relates to lease accounting policy alignment, final property, plant and equipment step-up and
final purchase price adjustment.
See Nicaragua and Panama section below. Reflects the final price adjustment agreed for Nicaragua and Panama.
Deferred tax impact of these previously explained adjustments.
143
143
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
The impact of the finalization of Nicaragua and Panama's purchase accounting on the 2019 Group statement of income is immaterial
and, therefore, no adjustments were made on comparative figures in that respect.
Further details of Nicaragua and Panama acquisitions are provided below.
a) Nicaragua Acquisition
This transaction closed on May 16, 2019 after receipt of the necessary approvals and, since that date, Millicom holds all voting rights
into Telefonia Celular de Nicaragua ("Nicaragua") and controls it. On the same day, Millicom paid an original cash consideration of
$437 million, which was adjusted to $430 million as of December 31, 2019 and finally adjusted to $426 million in 2020. For the
purchase accounting, Millicom determined the final fair values of Nicaragua's identifiable assets and liabilities based on transaction
and relative fair values. The purchase accounting was finalized by May 16, 2020 and has not materially changed since December 31,
2019, with the exception of the final price adjustment.
The final purchase accounting and differences compared to the provisional fair values reported as at December 31, 2019 are shown
below:
Intangible assets (excluding goodwill) (i)
Property, plant and equipment (ii)
Right of use assets (iii)
Other non-current assets
Current assets (excluding cash) (iv)
Trade receivables (v)
Cash and cash equivalents
Total assets acquired
Lease liabilities (iii)
Other liabilities (vi)
Total liabilities assumed
Fair value of assets acquired and liabilities assumed, net
Acquisition price
Goodwill
Provisional
Fair values
(100%)
(US$ millions)
Final Fair
values
(100%)
(US$
millions)
Changes
(US$
millions)
131
149
131
2
23
17
7
459
131
118
249
210
430
220
131
149
131
2
23
17
7
459
131
118
249
210
426
216
—
—
—
—
—
—
—
—
—
—
—
—
(4)
(4)
(i)
Intangible assets not previously recognized at the date of acquisition, are mainly customer lists for an amount of $81 million, with estimated useful
lives ranging from 4 to 10 years. In addition, a fair value step-up of $39 million on the spectrum held by Nicaragua has been recognized, with a
remaining useful life of 14 years.
(ii) A fair value step-up of $39 million has been recognized on property, plant and equipment, mainly on the core network ($25 million) and owned land
and buildings ($8 million). The expected remaining useful lives were estimated at 6-7 years on average.
(iii) The Group measured the lease liability at the present value of the remaining lease payments (as defined in IFRS 16) as if the acquired lease were a new
lease at the acquisition date. The right-of-use assets have been adjusted by $7 million to be measured at the same amount as the lease liabilities.
(iv) Current assets include indemnification assets for tax contingencies at a fair value of $11 million - see (v) below.
(v)
The fair value of trade receivables acquired was $17 million.
(vi) Other liabilities include the fair value of certain possible tax contingent liabilities for $1 million and a deferred tax liability of $50 million resulting from
the above adjustments
The goodwill is currently not tax deductible, and is attributable to expected synergies and convergence with our legacy fixed
business in the country, as well as to the fair value of the assembled work force. For convenience purposes, the acquisition date was
set on May 1, 2019 as there were no material transactions from this date to May 16, 2019. From May 1, 2019 to December 31, 2019,
Nicaragua contributed $144 million of revenue and a net profit of $5 million to the Group. If the acquisition had occurred on January
1, 2019 incremental revenue for the Group for the twelve-month period ended December 31, 2019 would have been $219 million
and incremental net loss for that period would have been $16 million, including amortization of assets not previously recognized of
$12 million (net of tax).
Key assumptions used in fixed assets valuation
The following valuation methods and key estimates were used for the valuation of the main classes of fixed assets:
144
144
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Major class of assets
Spectrum
Customer lists
Valuation method
Market approach -
Market comparable
transactions
Income approach -
Multi-Period
Excess Earnings
Method
Land and buildings
Market approach
Core network
Cost approach
b) Panama Acquisition
Key assumption 1
Key assumption 2
Key assumption 3
Discount rate : 14%
Terminal growth rate:
2.5%
Estimated duration: 14
years
Discount rate: 14-15%
Economic useful life
(range): 10-30 years
Economic useful life
(range): 5-27 years
Monthly Churn rate:
From 1.2% for B2B to
2.9% for B2C
Price per square meter:
from $2 to $57
Remaining useful life
(minimum) : 1.7
years
EBITDA margin: ~ 36%
to 41%
N/A
N/A
This transaction closed on August 29, 2019 after receipt of the necessary approvals and, since that date, Cable Onda, which is 80%
owned by Millicom, holds all voting rights in Grupo de Comunicaciones Digitales, S.A., formerly Telefonica Moviles Panama, S.A.,
("Panama") and controls it. On the same day, Cable Onda paid an original cash consideration of $594 million to acquire 100% of the
shares of Panama, finally adjusted to $587 million during Q3 2020. No non-controlling interests are recognized at acquisition date as
Cable Onda acquired 100% of the shares of Panama. However, non-controlling interests are recognized on Panama's results from the
date of acquisition.
For the purchase accounting, Millicom determined the fair value of Panama's identifiable assets and liabilities based on transaction
and relative fair values. During 2020, the Group completed the policy alignment and evaluation in respect of the right-of-use assets
and lease liabilities, the property plant and equipment, as well as their related effect on the final valuation of the other fixed assets.
The related effects of these adjustments are shown in the table below.
The updated provisional purchase accounting and differences compared to the provisional fair values reported as at December 31,
2019 are shown below:
Provisional Fair values
(100%)
Final Fair values
(100%)
Differences
(in millions of U.S dollars)
Intangible assets (excluding goodwill) (i)..................................................
Property, plant and equipment (ii)...............................................................
Right of use assets (iii).......................................................................................
Other non-current assets.................................................................................
Current assets (excluding cash).....................................................................
Trade receivables (iv).........................................................................................
Cash and cash equivalents..............................................................................
Total assets acquired....................................................................
Lease liabilities.....................................................................................................
Other debt and financing................................................................................
Other liabilities (v)...............................................................................................
Total liabilities assumed...............................................................
Fair value of assets acquired and liabilities assumed, net....................
Acquisition price.................................................................................................
Goodwill.........................................................................................
178
110
47
3
23
21
10
391
48
74
101
224
167
594
426
182
127
81
3
23
21
10
446
81
74
107
262
184
587
403
4
17
34
—
—
—
—
55
33
—
6
39
16
(7)
(23)
(i)
Intangible assets not previously recognized at the date of acquisition, are mainly customer lists for an amount of $55 million, with estimated useful
lives ranging from 3 to 17 years. In addition, a fair value step-up of $7 million on the spectrum held by Panama has been recognized, with a remaining
useful life of 17 years. Finally, a fair value step-up of $3 million has been recognised on certain software.
(ii)
A fair value step-up of $17 million has been recognized on property, plant and equipment, mainly on the core network ($11 million) and owned land
and buildings ($4 million). The expected remaining useful lives were estimated at 3 to 8 years.
(iii) The accounting policy alignment resulted in an increase in the right-of-use assets and lease liabilities of approximately $30 million. Subsequently, the
right-of-use assets have been adjusted by $4 million to be measured at an amount equal to the lease liabilities.
(iv)
The fair value of trade receivables acquired was $21 million.
(v) Other liabilities include a deferred tax liability of $21 million resulting from the above adjustments
145
145
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
The goodwill is currently not tax deductible and is attributable to expected synergies and convergence with Cable Onda, as well as
to the fair value of the assembled work force. For convenience purposes, the acquisition date was set on September 1, 2019. From
September 1, 2019 to December 31, 2019, Panama contributed $80 million of revenue and a net profit of $6 million to the Group. If
Panama had been acquired on January 1, 2019 incremental revenue for the Group for the twelve-month period ended December 31,
2019 would have been $158 million and incremental net profit for that period would have been $1 million, including amortization of
assets not previously recognized of $3 million (net of tax).
As mentioned above, the impact of the finalization of Panama's purchase accounting on the 2019 Group statement of income was
immaterial and, therefore, no adjustments were made on comparative figures in that respect.
Key assumptions used in fixed assets valuation
The following valuation methods and key estimates were used for the valuation of the main classes of fixed assets:
Major class of assets
Valuation method
Key assumption 1
Key assumption 2
Key assumption 3
Customer lists
Income approach -
Multi-Period
Excess Earnings
Method
Discount rate:
9.8-10.8%
Monthly Churn rate:
~3.8% in average
EBITDA margin: ~
41.5%
Property, plant and equipment
Cost approach
Economic useful life
(range): 3-27 years
Remaining useful life
(minimum): 3-27 years
N/A
2. Tanzania restructuring
In October 2019, with the view of listing the shares of MIC Tanzania Public Limited Company ('MIC Tanzania') on the local stock
exchange (see note H.), Millicom completed the restructuring of its investments in different operations in the country. Mainly, MIC
Tanzania acquired all the shares of Zantel, which was partially held by the Government of Zanzibar (15%). In exchange of the
contribution of its 15% shares in Zantel to MIC Tanzania, the Government of Zanzibar received 1.5% of newly issued shares in MIC
Tanzania. This restructuring did not result in the Group losing control in Zantel nor MIC Tanzania, and has therefore been recognized
as an equity transaction. As a consequence, the Group owners’ equity decreased by a net amount of $18 million as a result of the
derecognition of the 15% non-controlling interests in Zantel and the recognition of 1.5% non-controlling interests in MIC Tanzania.
3. Others
During the year ended December 31, 2019, the Group also completed minor additional acquisitions.
146
146
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
A.1.3. Disposal of subsidiaries and decreases in non-controlling interests of subsidiaries
Chad
On June 26, 2019, the Group completed the disposal of its operations in Chad for a cash consideration of $110 million. In August
2020, the Group and the buyer of our operations in Chad agreed on a final price adjustment of $8 million in favor of the buyer. In
accordance with Group practices, the Chad operation had been classified as assets held for sale and discontinued operations as from
June 5, 2019 and comparative periods restated. On June 26, 2019, Chad was deconsolidated and a gain on disposal of $77 million
was recognized (see also note E.4.).
Rwanda
On December 19, 2017, Millicom announced that it has signed an agreement for the sale of its Rwanda operations to subsidiaries of
Bharti Airtel Limited for a final cash consideration of $51 million, including a deferred cash payment for an amount of $18 million
which has been settled in January 2020. The transaction also included earn-outs for $7 million that were not recognized by the
Group as management does not believe these would be triggered. The sale was completed on January 31, 2018. In accordance with
Group practices, Rwanda operations’ assets and liabilities were classified as held for sale on January 23, 2018. Rwanda’s operations
also represented a separate geographical area and did qualify for discontinued operations presentation; results were therefore
shown on a single line in the statements of income under ‘Profit (loss) for the year from discontinued operations, net of tax’ (see also
note E.4.).
Senegal
On July 28, 2017, Millicom announced that it had agreed to sell its Senegal business to a consortium consisting of NJJ, Sofima
(managed by the Axian Group) and Teylium Group. In accordance with Group practices, Senegal operations’ assets and liabilities
were classified as held for sale on February 2, 2017. Senegal’s operations also represented a separate geographical area and did
qualify for discontinued operations. The sale was completed on April 27, 2018 in exchange of a cash consideration of $151 million.
(see also note E.4.)
Other disposals
For the years ended December 31, 2020, 2019 and 2018, Millicom did not dispose of any other significant investments.
A.1.4. Summarized financial information relating to significant subsidiaries with non-controlling interests
At December 31, 2020 and 2019, Millicom’s subsidiaries with material non-controlling interests were the Group’s operations in
Colombia and Panama.
Balance sheet – non-controlling interests
Colombia
Panama
Others
Total
December 31,
2020
2019
(US$ millions)
133
81
1
215
170
99
2
271
147
147
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Profit (loss) attributable to non-controlling interests
Colombia
Panama
Others
Total
2020
2019
2018
(US$ millions)
(23)
(18)
—
(41)
11
(6)
—
5
(5)
(8)
(3)
(16)
The summarized financial information for material non-controlling interests in our operations in Colombia and Panama is provided
below. This information is based on amounts before inter-company eliminations.
Colombia
Revenue
Total operating expenses
Operating profit
Net (loss) for the year
50% non-controlling interest in net (loss)
Total assets (excluding goodwill)
Total liabilities
Net assets
50% non-controlling interest in net assets
Consolidation adjustments
Total non-controlling interest
Dividends and advances paid to non-controlling interest
Net cash from operating activities
Net cash from (used in) investing activities
Net cash from (used in) financing activities
Exchange impact on cash and cash equivalents, net
Net increase in cash and cash equivalents
2020
2019
2018
(US$ millions)
1,346
(470)
129
(46)
(23)
2,589
2,303
286
143
(10)
133
(4)
370
(311)
(47)
(15)
(3)
1,532
(543)
164
23
11
2,256
1,891
365
183
(13)
170
(12)
363
(260)
(67)
—
36
1,661
(667)
147
(10)
(5)
1,966
1,620
346
173
(12)
161
(2)
348
(270)
(75)
(18)
(15)
148
148
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Panama
Revenue
Total operating expenses
Operating profit
Net (loss) for the year
20% non-controlling interest in net (loss)
Total assets (excluding Millicom's goodwill in Cable Onda)
Total liabilities
Net assets
20% non-controlling interest in net assets
Total non-controlling interest
Net cash from operating activities
Net cash from (used in) investing activities
Net cash from (used in) financing activities
Net increase in cash and cash equivalents
2020
2019 (ii)
2018 (i)
(US$ millions)
585
(197)
(60)
(89)
(18)
1,734
1,327
407
81
81
193
(100)
(69)
24
475
(148)
(15)
(31)
(6)
1,905
1,411
494
99
99
167
(693)
580
54
17
(8)
(39)
(39)
(8)
1,082
556
526
105
105
(2)
12
(3)
7
(i)
Cable Onda was acquired on December 13, 2018 and 2018 figures therefore only include results and cash flows from the date of acquisition.
(ii)
In 2019, Cable Onda acquired Telefonica Panama for $587 million (note A.1.2.), financed by issuing a $600 million Senior Notes due 2030 (note C.3.1.)
The 2019 figures include the full year results and cash flows of Cable Onda, as well as 4 months of Telefonica Panama which was consolidated from
September 1, 2019. Figures have been restated as a result of the finalization of the purchase accounting for Cable Onda. See note A.1.2..
149
149
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
A.2. Joint ventures
Joint ventures are businesses over which Millicom exercises joint control as decisions over the relevant activities of each require
unanimous consent of shareholders. Millicom determines the existence of joint control by reference to joint venture agreements,
articles of association, structures and voting protocols of the board of directors of those ventures.
At December 31, 2020, the equity accounted net assets of our joint ventures in Guatemala, Honduras and Ghana totaled $3,072
million (December 31, 2019: $3,346 million for Guatemala and Honduras only). These net assets do not necessarily represent
statutory reserves available for distribution as these include consolidation adjustments (such as goodwill and identified assets and
assumed liabilities recognized as part of the purchase accounting). Out of these reserves, $153 million (December 31, 2019: $142
million) represent statutory reserves that are unavailable to be distributed to the Group. During the year ended December 31, 2020,
Millicom’s joint ventures paid $71 million (December 31, 2019: $237 million) as dividends or dividend advances to the Company.
Our main joint ventures are as follows:
Entity
Comunicaciones Celulares S.A. (i)
Navega.com S.A. (i)
Telefonica Celular S.A. (i)
Navega S.A. de CV (i)
Bharti Airtel Ghana Holdings B.V.
Country
Activity
Guatemala
Guatemala
Honduras
Honduras
Ghana
Mobile, MFS
Cable, DTH
Mobile, MFS
Cable
Mobile, MFS
December 31,
2020 %
holding
December 31,
2019 %
holding
55
55
66.7
66.7
50
55
55
66.7
66.7
50
(i) Millicom owns more than 50% of the shares in these entities and has the right to nominate a majority of the directors of each of these entities. However,
key decisions over the relevant activities must be taken by a super majority vote. This effectively gives either shareholder the ability to veto any decision
and therefore neither shareholder has sole control over the entity. Therefore, the operations of these joint ventures are accounted for under the equity
method.
The carrying values of Millicom’s investments in joint ventures were as follows:
Carrying value of investments in joint ventures at December 31
Honduras operations (i)
Guatemala operations (i)
AirtelTigo Ghana operations
Total
%
2020
2019
(US$ millions)
66.7
55
50
610
2,031
—
2,642
708
2,089
—
2,797
(i)
Includes all the companies under the Honduras and Guatemala groups.
The table below summarizes the movements for the year in respect of the Group’s joint ventures carrying values:
Guatemala(i) Honduras (i)
Ghana(ii)
(US$ millions)
Opening balance at January 1, 2019
Accounting policy changes
Results for the year
Utilization of past unrecognized losses
Capital increase
Dividends declared during the year
Currency exchange differences
Closing balance at December 31, 2019
Disposal of the Group's investment in Navega to Celtel (iii)
Results for the year
Dividends declared during the year
Currency exchange differences
Closing balance at December 31, 2020
150
2,104
—
152
—
—
(170)
2
2,089
—
144
(199)
(3)
2,031
730
—
27
—
—
(37)
(12)
708
(83)
27
(55)
13
610
32
—
(40)
(5)
5
—
8
—
—
—
—
—
—
15 0
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
(i)
Share of profit (loss) is recognized under ‘Share of profit in the joint ventures in Guatemala and Honduras’ in the statement of income.
(ii)
Share of profit (loss) is recognized under ‘Income (loss) from other joint ventures and associates, net’ in the statement of income.
(iii) See note G.5.
At December 31, 2020 and 2019 the Group had not incurred obligations, nor made payments on behalf of the Guatemala, Honduras
or Ghana operations.
A.2.1. Accounting for joint ventures
Joint ventures are accounted for using the equity method of accounting and are initially recognized at cost (calculated at fair value if
it was a subsidiary of the Group before becoming a joint venture). The Group’s investments in joint ventures include goodwill (net of
any accumulated impairment loss) on acquisition.
The Group’s share of post-acquisition profits or losses of joint ventures is recognized in the consolidated statement of income and its
share of post-acquisition movements in reserves is recognized in reserves. Cumulative post-acquisition movements are adjusted
against the carrying amount of the investments. When the Group’s share of losses in a joint venture equals or exceeds its interest in
the joint venture, including any other unsecured receivables, the Group does not recognize further losses, unless the Group has
incurred obligations or made payments on behalf of the joint ventures.
Gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint
ventures. Losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting
policies of joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.
Dilution gains and losses arising in investments in joint ventures are recognized in the statement of income.
After application of the equity method, including recognizing the joint ventures’ losses, the Group applies IFRS 9 to determine
whether it is necessary to recognize any additional impairment loss with respect to its net investment in the joint venture.
A.2.2. Material joint ventures – Guatemala, Honduras and Ghana operations
Summarized financial information for the years ended December 31, 2020, 2019 and 2018 of the Guatemala Honduras and Ghana
operations is as follows. This information is based on amounts before inter-company eliminations.
151
151
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Guatemala
Revenue........................................................................................................................................
1,503
1,434
1,373
2020
2019
2018
(US$ millions)
Depreciation and amortization.................................................................................................................................
Operating profit...........................................................................................................................
Financial income (expenses), net (i).........................................................................................................................
Profit before taxes........................................................................................................................
Charge for taxes, net.....................................................................................................................................................
Profit for the year.........................................................................................................................
Net profit for the year attributable to Millicom.........................................................................
Dividends and advances paid to Millicom............................................................................................................
Total non-current assets (excluding goodwill)....................................................................................................
Total non-current liabilities.........................................................................................................................................
Total current assets........................................................................................................................................................
Total current liabilities..................................................................................................................................................
Total net assets................................................................................................................................................................
Group's share in %..........................................................................................................................................................
Group's share in USD millions....................................................................................................................................
Goodwill and consolidation adjustments.............................................................................................................
Carrying value of investment in joint venture.....................................................................................................
Cash and cash equivalents..........................................................................................................................................
Debt and financing – non-current...........................................................................................................................
Debt and financing – current.....................................................................................................................................
Net cash from operating activities...........................................................................................................................
Net cash from (used in) investing activities..........................................................................................................
Net cash from (used in) financing activities..........................................................................................................
Exchange impact on cash and cash equivalents, net........................................................................................
Net increase in cash and cash equivalents.................................................................................
(i)
In 2020, Financial expenses include a $18 million charge related to early redemption of bonds - see below.
Guatemala financing
(323)
452
(95)
347
(83)
264
144
47
2,195
751
742
523
1,662
55 %
914
1,117
2,031
188
619
24
598
(289)
(308)
(2)
(1)
(313)
429
(66)
356
(79)
277
152
209
2,517
1,216
717
251
1,767
55 %
972
1,117
2,089
189
1,152
21
588
(205)
(412)
1
(28)
(283)
387
(56)
309
(69)
240
131
211
2,280
981
718
221
1,796
55 %
988
1,116
2,104
217
928
—
545
(173)
(455)
(3)
(86)
In 2014, Intertrust SPV (Cayman) Limited, acting as trustee of the Comcel Trust, a trust established and consolidated by Comcel for
the purposes of the transaction, issued $800 million 6.875% Senior Notes to refinance existing local and MIC S.A. corporate debt. The
bond was issued at 98.233% of the principal and had an effective interest rate of 7.168%. The bond was guaranteed by Comcel and
listed on the Luxembourg Stock Exchange.
On November 18, 2020, the $800 million aggregate principal amount of its outstanding 6.875% Senior Notes due 2024 was early
redeemed at a redemption price equal to 102.292%of the principal amount of the Notes to be redeemed plus accrued and unpaid
interest of $16 million, resulting in an aggregate amount of $834 million. The redemption premium ($18 million) and additional
interest ($7 million), as well as the remaining unamortized deferred costs of $8 million were recorded as financial expenses during
the year. This early redemption was financed through local financing in local currency as well as by shareholder loans (see note G.5.).
The impact on the Group's statement of income is a $18 million expense (at 55% ownership) reported on the line "Share of profit in
the joint ventures in Guatemala and Honduras".
On October 5, 2020, Comcel executed a credit agreement with Banco Industrial for GTQ 1,697 million (approximately $218 million
using the exchange rate as of December 31, 2020) for a 5 year term to refinance other credit agreements with Banco Industrial and
to finance and refinance working capital, capital expenditures and general corporate purposes.
152
152
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Honduras
Revenue........................................................................................................................................
Depreciation and amortization.................................................................................................................................
Operating profit...........................................................................................................................
Financial income (expenses), net.............................................................................................................................
Profit before taxes........................................................................................................................
Charge for taxes, net.....................................................................................................................................................
Profit for the year.........................................................................................................................
Net profit for the year attributable to Millicom.........................................................................
Dividends and advances paid to Millicom............................................................................................................
Total non-current assets (excluding goodwill)....................................................................................................
Total non-current liabilities.........................................................................................................................................
Total current assets........................................................................................................................................................
Total current liabilities..................................................................................................................................................
Total net assets................................................................................................................................................................
Group's share in %..........................................................................................................................................................
Group's share in USD millions....................................................................................................................................
Goodwill and consolidation adjustments.............................................................................................................
Carrying value of investment in joint venture.....................................................................................................
Cash and cash equivalents..........................................................................................................................................
Debt and financing – non-current...........................................................................................................................
Debt and financing – current.....................................................................................................................................
Net cash from operating activities...........................................................................................................................
Net cash from (used in) investing activities..........................................................................................................
Net cash from (used in) financing activities..........................................................................................................
Net (decrease) increase in cash and cash equivalents...............................................................
Honduras financing
2020
2019
2018
(US$ millions)
552
(132)
77
(24)
58
(19)
39
27
24
461
533
300
236
(8)
66.7 %
(5)
615
610
60
390
10
151
(145)
14
20
594
(132)
102
(37)
60
(21)
39
27
28
516
469
312
183
176
586
(133)
91
(29)
52
(18)
34
23
32
506
386
304
226
198
66.7 %
66.7 %
117
591
708
40
384
39
169
(77)
(77)
15
132
598
730
25
298
85
147
(87)
(50)
9
On September 19, 2019, Telefónica Celular, S.A. de C.V. entered into a new credit agreement with Banco Industrial S.A. and Banco
Pais S.A for an amount up to $185 million, in tranches of $100 million, $60 million and $25 million. The Loan Agreement has a 10-
year maturity and an interest rate of LIBOR plus 3.80% per annum, subject to a floor of minimum 5.25%. The new credit agreement
has been used to consolidate the portion of a syndicated $250 million facility with Scotiabank dated March 27, 2015, and $90 million
credit agreement with Banco Industrial S.A. dated March 20, 2018.
On September 19, 2019, Navega S.A. de C.V., entered into new facility agreement with Banco Industrial S.A. for an amount of $20
million and a duration of 10 years. The new agreement bears an annual interest of LIBOR plus 3.80% , subject to a floor of 5.25%. and
will be used to refinance the portion corresponding to it as borrower under the $250 million facility with Scotiabank dated March 27,
2015.
On June 1, 2020, Telefónica Celular, S.A. de C.V. executed a $32 million bank loan agreement in equivalent amount in local currency
for a 10-year term.
153
153
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
AirtelTigo Ghana
Revenue.......................................................................................................................................
Depreciation and amortization................................................................................................................................
Operating loss.............................................................................................................................
Financial income (expenses), net............................................................................................................................
Loss before taxes.........................................................................................................................
Charge for taxes, net....................................................................................................................................................
Loss for the period......................................................................................................................
Net loss for the period attributable to Millicom.......................................................................
Total non-current assets (excluding goodwill)...................................................................................................
Total non-current liabilities.......................................................................................................................................
Total current assets......................................................................................................................................................
Total current liabilities.................................................................................................................................................
Total net assets..............................................................................................................................................................
Group's share in %........................................................................................................................................................
Group's share in USD millions..................................................................................................................................
Goodwill and consolidation adjustments............................................................................................................
Unrecognised losses....................................................................................................................................................
Carrying value of investment in joint venture....................................................................................................
Cash and cash equivalents........................................................................................................................................
Debt and financing – non-current..........................................................................................................................
Debt and financing – current....................................................................................................................................
Net cash from operating activities..........................................................................................................................
Net cash from (used in) investing activities.........................................................................................................
Net cash from (used in) financing activities........................................................................................................
Net increase in cash and cash equivalents................................................................................
2020
2019
2018
(US$ millions)
132
(42)
(30)
(41)
(85)
—
(85)
—
204
289
41
218
(263)
50 %
(132)
89
(42)
—
1
289
40
(8)
—
4
(4)
142
(69)
(72)
(77)
(123)
—
(123)
(40)
168
245
42
187
(223)
50 %
(111)
90
(22)
—
5
245
27
(5)
—
(6)
(11)
187
(110)
(100)
(42)
(135)
—
(135)
(68)
277
277
71
134
(63)
50 %
(31)
63
—
32
19
276
17
(19)
(8)
42
15
A.2.3. Impairment of investment in joint ventures
While no impairment triggers were identified for the Group’s investments in joint ventures in 2020, according to its policy,
management have completed an impairment test for its joint ventures in Guatemala and Honduras (our investment in Ghana was
not tested for impairment as its carrying value is nil since 2019).
The Group’s investments in Guatemala and Honduras operations were tested for impairment by assessing their recoverable amount
(using a value in use model based on discounted cash flows) against their carrying amounts. The cash flow projections used were
extracted from financial budgets approved by management and reviewed by the Board (refer to note E.1.6. for further details on
impairment testing). Cash flows beyond this period have been extrapolated using a perpetual growth rate of 1% (2019: 1.1%–1.2%.
Discount rates used in determining recoverable amounts were 8.6% and 9.0%, respectively (2019: 9.5% and 9.7%).
For the year ended December 31, 2020 and 2019, and as a result of the impairment testing described above, management
concluded that none of the Group’s investments in joint ventures should be impaired.
Sensitivity analysis was performed on key assumptions within the impairment tests. The sensitivity analysis determined that
sufficient headroom exists from realistic changes to the assumptions that would not impact the overall results of the testing.
154
15 4
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
A.3. Investments in associates
Millicom’s investments in Helios Towers Africa Ltd (HTA) and in the African online business (AIH) became listed companies during
2019, and Millicom resigned from its board of directors' positions in both companies, having as an effect the loss of its significant
influence. Both investments are now accounted for as equity instruments (see note C.7.3.). Millicom has significant influence over
other immaterial associates as shown below.
The Group’s associates are as follows:
Entity
Africa
Country
Activity(ies)
% holding
% holding
December 31,
2020
December 31,
2019
West Indian Ocean Cable Company Limited (WIOCC). Republic of
Latin America
MKC Brilliant Holding GmbH (LIH)
Unallocated
Mauritius
Germany
Telecommunication carriers’ carrier
Online marketplace, retail and services
9.1
9.1
35.0
35.0
Milvik AB(i).................................................................................... Sweden
Other
9.7
11.4
(i) Millicom ownership in Milvik AB has been diluted in 2020 as a result of a capital injection to which the Group did not participate.
At December 31, 2020 and 2019, the carrying value of Millicom’s main associates was as follows:
Carrying value of investments in associates at December 31
Milvik AB..............................................................................................................................................................................................................
West Indian Ocean Cable Company Limited (WIOCC).......................................................................................................................
Total
2020
2019
(US$ millions)
10
14
24
11
14
25
A.3.1. Accounting for investments in associates
The Group accounts for associates in the same way as it accounts for joint ventures.
A.3.2. Impairment of interests in associates
MKC Brilliant Holding GmbH (LIH)
Millicom’s 35.0% investment in LIH had been fully impaired in two stages (by $40 million in 2016 and $48 million in 2017) as a result
of the annual impairment test conducted back then. The impairment test performed in 2020 confirms this conclusion.
A.4. Discontinued operations
A.4.1. Classification of discontinued operations
Discontinued operations are those which have identifiable operations and cash flows (for both operating and management
purposes) and represent a major line of business or geographic area which has been disposed of, or are held for sale. Revenue and
expenses associated with discontinued operations are presented retrospectively in a separate line in the consolidated statement of
income. Millicom determined that the loss of path to control of operations by the termination of a contractual arrangement (e.g.
termination without exercise of an unconditional call option agreement giving path to control, as occurred with the Guatemala and
Honduras operations) does not require presentation as a discontinued operation.
155
155
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
A.4.2. Millicom’s discontinued operations
In accordance with IFRS 5, the Group’s businesses in Chad, Senegal and Tigo Rwanda had been classified as assets held for sale
(respectively on June 5, 2019, February 2, 2017, and January 23, 2018) and their results were showed as discontinued operations for
all years presented in these financial statements. The statement of income comparative figures presented in the notes to these
consolidated financial statements have therefore been restated accordingly and when necessary. For further details, refer to note
E.4.
B. Performance
B.1. Revenue
Millicom’s revenue comprises sale of services from its mobile business (including Mobile Financial Services - MFS) and its cable and
other fixed services, as well as related devices and equipment. Recurring revenue consists of monthly subscription fees, airtime and
data usage fees, interconnection fees, roaming fees, TV services, B2B contracts, MFS commissions and fees from other
telecommunications services such as data services, short message services and other value added services.
Revenue from continuing operations by category
Mobile.................................................................................................................................................................................
Cable and other fixed services...................................................................................................................................
Other...................................................................................................................................................................................
Service revenue............................................................................................................................
Telephone and equipment and other....................................................................................................................
Total revenue................................................................................................................................
Revenue from continuing operations by country or operation (i)
2020
2019
2018
(US$ millions)
2,116
1,803
52
3,971
201
4,171
2,150
1,928
51
4,130
206
4,336
2,126
1,565
43
3,734
212
3,946
2020
2019
2018
(US$ millions)
Colombia...........................................................................................................................................................................
1,346
1,532
1,661
Paraguay............................................................................................................................................................................
Bolivia..................................................................................................................................................................................
El Salvador.........................................................................................................................................................................
Tanzania.............................................................................................................................................................................
Nicaragua..........................................................................................................................................................................
Costa Rica..........................................................................................................................................................................
Panama...............................................................................................................................................................................
Other operations............................................................................................................................................................
Eliminations......................................................................................................................................................................
544
584
389
366
220
140
585
3
(5)
610
639
386
382
157
153
475
4
(3)
679
614
405
399
13
155
17
6
(2)
Total...................................................................................................................................................
4,171
4,336
3,946
(i)
The revenue figures above are shown after intercompany eliminations.
B.1.1. Accounting for revenue
Revenue recognition
Revenue is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for
transferring goods or services to a customer.
The Group applies the following practical expedients foreseen in IFRS 15:
156
156
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
•
•
•
•
No adjustment to the transaction price for the means of a financing component whenever the period between the transfer
of a promised good or service to a customer and the associated payment is one year or less; when the period is more than
one year the financing component is adjusted, if material.
Disclosure in the Group Financial Statements the transaction price allocated to unsatisfied performance obligations only
for contracts that have an original expected duration of more than one year (e.g. unsatisfied performance obligations for
contracts that have an original duration of one year or less are not disclosed).
Application of the practical expedient not to disclose the price allocated to unsatisfied performance obligations, if the
consideration from a customer corresponds to the value of the entity’s performance obligation to the customer (i.e, if
billing corresponds to accounting revenue).
Application of the practical expedient to recognize the incremental costs of obtaining a contract as an expense when
incurred if the amortization period of the asset that otherwise would have been recognized is one year or less.
Post-paid connection fees are derived from the payment of a non-refundable / one-time fee charged to customer to connect to the
network (e.g. connection / installation fee). Usually, it does not represent a distinct good or service, and therefore does not give rise
to a separate performance obligation and revenue is recognized over the minimum contract duration. However, if the fee is paid by
a customer to get the right to receive goods or services without having to pay this fee again over his tenure with the Group (e.g. the
customer can readily extend his contract without having to pay the same fee again), it is accounted for as a material right and
revenue should be recognized over the customer retention period.
Post-paid mobile / cable subscription fees are recognized over the relevant enforceable/subscribed service period (recurring
monthly access fees that do not vary based on usage). The service provision is usually considered as a series of distinct services that
have the same pattern of transfer to the customer. Remaining unrecognized subscription fees, which are not refunded to the
customers, are fully recognized once the customer has been disconnected.
Prepaid scratch / SIM cards are services where customers purchase a specified amount of airtime or other credit in advance. Revenue
is recognized as the credit is used. Unused credit is carried in the statement of financial position as a contract liability. Upon
expiration of the validity period, the portion of the contract liability relating to the expiring credit is recognized as revenue, since
there is no longer an obligation to provide those services.
Telephone and equipment sales are recognized as revenue once the customer obtains control of the good. That criteria is fulfilled
when the customer has the ability to direct the use and obtain substantially all of the remaining benefits from that good.
Revenue from provision of Mobile Financial Services (MFS) is recognized once the primary service has been provided to the
customer.
Customer premise equipment (CPE) are provided to customers as a prerequisite to receive the subscribed Home services and shall
be returned at the end of the contract duration. Since CPEs provided over the contract term do not provide benefit to the customer
on their own, they do not give rise to separate performance obligations and therefore are accounted for as part of the service
provided to the customers.
Bundled offers are considered arrangements with multiple deliverables or elements, which can lead to the identification of separate
performance obligations. Revenue is recognized in accordance with the transfer of goods or services to customers in an amount that
reflects the relative standalone selling price of the performance obligation (e.g. sale of telecom services, revenue over time + sale of
handset, revenue at a point in time).
Principal-Agent, some arrangements involve two or more unrelated parties that contribute to providing a specified good or service
to a customer. In these instances, the Group determines whether it has promised to provide the specified good or service itself (as a
principal) or to arrange for those specified goods or services to be provided by another party (as an agent). For example,
performance obligations relating to services provided by third-party content providers (i.e., mobile Value Added Services or “VAS”)
or service providers (i.e., wholesale international traffic) where the Group neither controls a right to the provider’s service nor
controls the underlying service itself are presented net because the Group is acting as an agent. The Group generally acts as a
principal for other types of services where the Group is the primary obligor of the arrangement. In cases the Group determines that it
acts as a principal, revenue is recognized in the gross amount, whereas in cases the Group acts as an agent revenue is recognized in
the net amount.
Revenue from the sale of cables, fiber, wavelength or capacity contracts, when part of the ordinary activities of the operation, is
recognized as recurring revenue. Revenue is recognized when the cable, fiber, wavelength or capacity has been delivered to the
customer, based on the amount expected to be received from the customer.
Revenue from operating lease of tower space is recognized over the period of the underlying lease contracts. Finance leases revenue
is apportioned between lease of tower space and interest income.
157
157
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Significant judgments
The determination of the standalone selling price for contracts that involve more than one performance obligation may require
significant judgment, such as when the selling price of a good or service is not readily observable.
The Group determines the standalone selling price of each performance obligation in the contract in accordance to the prices that
the Group would apply when selling the same services and/or telephone and equipment included in the obligation to a similar
customer on a standalone basis. When standalone selling price of services and/or telephone and equipment are not directly
observable, the Group maximizes the use of external input and uses the expected cost plus margin approach to estimate the
standalone selling price.
B.2. Expenses
The cost of sales and operating expenses incurred by the Group can be summarized as follows:
Cost of sales
Direct costs of services sold .......................................................................................................................................
Cost of telephone, equipment and other accessories .....................................................................................
Bad debt and obsolescence costs ...........................................................................................................................
(847)
(216)
(108)
(878)
(230)
(93)
(799)
(229)
(90)
Cost of sales..................................................................................................................................
(1,171)
(1,201)
(1,117)
Operating expenses, net
2020
2019
2018
(US$ millions)
Marketing expenses......................................................................................................................................................
Site and network maintenance costs......................................................................................................................
Employee related costs (B.4.).....................................................................................................................................
External and other services.........................................................................................................................................
Rentals and (operating) leases (i)..............................................................................................................................
Other operating expenses..........................................................................................................................................
2020
2019
2018
(US$ millions)
(396)
(234)
(477)
(174)
(1)
(225)
(402)
(245)
(496)
(204)
(1)
(257)
(391)
(192)
(500)
(181)
(152)
(201)
Operating expenses, net..............................................................................................................
(1,505)
(1,604)
(1,616)
(i) Decrease as from the year 2019 is due to IFRS 16 application - see further explanations above in "New and amended IFRS accounting standards"
section.
The other operating income and expenses incurred by the Group can be summarized as follows:
Other operating income (expenses), net
Notes
2020
2019
2018
(US$ millions)
Income from tower deal transactions....................................................................................
E.3.
Impairment of intangible assets and property, plant and equipment......................
Gain (loss) on disposals of intangible assets and property, plant and
equipment.......................................................................................................................................
Impairment of AirtelTigo's receivable...................................................................................
Gain (loss) on disposal of equity investments....................................................................
Other income (expenses)...........................................................................................................
Other operating income (expenses), net.........................................................
E.1., E.2.
G.5.
C.7.3.
—
—
—
(45)
25
9
(12)
5
(8)
—
—
(32)
1
(34)
61
(6)
7
—
—
13
75
158
15 8
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
B.2.1. Accounting for cost of sales and operating expenses
Cost of sales
Cost of sales is recorded on an accrual basis.
Incremental costs of obtaining a contract
Incremental costs of obtaining a contract, including dealer commissions, are capitalized as Contract Costs in the statement of
financial position and amortized in operating expenses over the expected benefit period, which is based on the average duration of
contracts with customer (see practical expedient in note B.1.1.).
Operating leases - until 2018 year-end
Operating leases were all leases that did not qualify as finance leases. Operating lease payments were recognized as expenses in the
consolidated statement of income on a straight-line basis over the lease term.
B.3. Segmental information
Management determines operating and reportable segments based on information used by the chief operating decision maker
(CODM) to make strategic and operational decisions from both a business and geographic perspective. The Group’s risks and rates of
return are predominantly affected by operating in different geographical regions. The Group has businesses in two main regions:
Latin America ("Latam") and Africa. The Latam figures below include Honduras and Guatemala as if they are fully consolidated by the
Group, as this reflects the way management reviews and uses internally reported information to make decisions. Honduras and
Guatemala are shown under the Latam segment. The joint venture in Ghana is not reported as if fully consolidated.
As from January 1, 2020, Millicom is allocating corporate costs to each segment based on their contribution to underlying revenue,
and only non-recurring costs, such as the M&A-related fees incurred in 2019, will remain unallocated going forward. This change in
presentation has no impact on Group EBITDA.
In order to facilitate comparisons of December 31, 2020 figures with prior periods, comparative figures have been re-presented to
conform with this new segment EBITDA reporting.
Revenue, operating profit (loss), EBITDA and other segment information for the years ended December 31, 2020, 2019 and 2018,
were as follows:
159
159
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Latin America
Africa
Unallocated
Guatemala
and
Honduras(vii)
Eliminations
and
Transfers
Total
(US$ millions)
Year ended December 31, 2020
Mobile revenue ..........................................................
Cable and other fixed services revenue ............
Other revenue .............................................................
Service revenue (i) .....................................................
Telephone and equipment and other
revenue (i) ....................................................................
Revenue ........................................................
Operating profit (loss) .................................
Add back:
Depreciation and amortization ............................
Share of profit in joint ventures in Guatemala
and Honduras .............................................................
Other operating income (expenses), net ..........
EBITDA (ii) .....................................................
EBITDA from discontinued operations ..............
EBITDA incl discontinued operations .........
Capital expenditure (iii) ...........................................
Changes in working capital and others (iv) .....
Taxes paid .....................................................................
Operating free cash flow (v) ........................
Total Assets (vi).............................................
Total Liabilities..............................................
3,220
2,097
60
5,377
466
5,843
803
1,561
—
(5)
2,360
—
2,360
(926)
61
(260)
1,234
13,418
8,878
357
8
1
366
—
366
36
89
—
—
125
(4)
121
(42)
11
(10)
80
926
959
—
—
—
—
—
—
(32)
11
—
23
2
—
2
(4)
(7)
(2)
(11)
4,052
3,342
(1,461)
(302)
(6)
(1,769)
(266)
(2,035)
(536)
—
(1)
(2)
(4)
—
(4)
175
2,116
1,803
52
3,971
201
4,171
446
(453)
—
1,208
—
(3)
(992)
—
(992)
258
(43)
131
(645)
(5,116)
(2,044)
(171)
(4)
—
—
—
—
—
—
—
(171)
12
1,495
(4)
1,491
(714)
22
(142)
657
(859)
(987)
12,422
10,148
160
16 0
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Latin America
Africa
Unallocated
Guatemala
and
Honduras(vii)
Eliminations
and
Transfers
Total
(US$ millions)
Year ended December 31, 2019
Mobile revenue ..........................................................
Cable and other fixed services revenue ............
Other revenue .............................................................
Service revenue (i) .....................................................
Telephone and equipment revenue (i) .............
Revenue ........................................................
Operating profit (loss) .................................
Add back:
Depreciation and amortization ............................
Share of profit in joint ventures in Guatemala
and Honduras .............................................................
Other operating income (expenses), net ..........
EBITDA (ii) .....................................................
EBITDA from discontinued operations ..............
EBITDA incl discontinued operations .........
Capital expenditure (iii) ...........................................
Changes in working capital and others (iv) .....
Taxes paid .....................................................................
3,258
2,197
60
5,514
449
5,964
980
1,435
—
2
2,418
—
2,418
(1,040)
(86)
(225)
Operating free cash flow (v) ........................
Total Assets (vi).............................................
Total Liabilities..............................................
1,067
13,859
8,413
372
9
1
382
—
382
19
99
—
(2)
117
(3)
114
(58)
14
(10)
59
936
909
—
—
—
—
—
—
(64)
9
—
42
(13)
—
(13)
(9)
(52)
(8)
(82)
(1,480)
(277)
(9)
(1,766)
(243)
(2,010)
(540)
—
—
—
—
—
—
179
2,150
1,928
51
4,130
206
4,336
575
(444)
—
1,100
—
(8)
(992)
—
(992)
261
(18)
129
(619)
(179)
—
—
—
—
—
—
—
—
(179)
34
1,530
(3)
1,527
(846)
(143)
(114)
425
3,715
3,977
(5,465)
(2,119)
(150)
(965)
12,895
10,215
161
161
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Latin America
Africa
Unallocated
Guatemala
and
Honduras(vii)
Eliminations
and
Transfers
Total
(US$ millions)
Year ended December 31, 2018
Mobile revenue...........................................................
Cable and other fixed services revenue.............
Other revenue..............................................................
Service revenue (i)......................................................
Telephone and equipment revenue (i)..............
Total Revenue...............................................
Operating profit (loss)..................................
Add back:
Depreciation and amortization.............................
Share of profit in joint ventures in Guatemala
and Honduras..............................................................
Other operating income (expenses), net...........
EBITDA (ii)......................................................
EBITDA from discontinued operations...............
EBITDA incl discontinued operations..........
Capital expenditure (iii)............................................
Changes in working capital and others (iv)......
Taxes paid......................................................................
Operating free cash flow (v).........................
Total Assets (vi).............................................
Total Liabilities..............................................
3,214
1,808
48
5,069
415
5,485
990
1,133
—
(51)
2,072
—
2,072
(872)
(42)
(264)
894
11,751
6,127
388
10
1
398
—
399
21
80
—
(3)
98
44
143
(59)
28
(24)
88
839
905
—
—
—
—
—
—
(38)
5
—
(2)
(35)
—
(35)
(2)
13
(6)
(30)
2,752
2,953
(1,475)
(253)
(6)
(1,734)
(203)
(1,937)
(488)
(416)
—
(19)
(922)
—
(922)
225
(12)
142
(568)
(5,219)
(1,814)
—
—
—
—
—
—
154
—
(154)
—
—
—
—
—
—
—
—
2,126
1,565
43
3,734
212
3,946
640
803
(154)
(75)
1,213
44
1,257
(708)
(13)
(153)
383
190
(650)
10,313
7,521
(i)
Service revenue is Group revenue related to the provision of ongoing services such as monthly subscription fees, airtime and data usage fees,
interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as data services, SMS
and other value-added services excluding telephone and equipment sales. Revenues from other sources comprises rental, sub-lease rental income and
other non recurring revenues. The Group derives revenue from the transfer of goods and services over time and at a point in time. Refer to the table
below.
(ii) EBITDA is operating profit excluding impairment losses, depreciation and amortization and gains/losses on the disposal of fixed assets. EBITDA is used
by the management to monitor the segmental performance and for capital management. EBITDA for the year ended December 31, 2018 is not fully
comparable to EBITDA for the years ended December 31, 2019 and December 31, 2020 because of the application of IFRS 16 which had a positive
impact as compared to what our EBITDA was under IAS 17 standard.
(iii) Cash spent for capex excluding spectrum and licenses of $101 million (2019: $59 million; 2018: $61 million) and cash received on tower deals of nil
(2019: $22 million; 2018: $141 million).
(iv) Changes in working capital and others include changes in working capital as stated in the cash flow statement, as well as share-based payments
expense and non-cash bonuses.
(v) Operating Free Cash Flow is EBITDA less cash capex (excluding spectrum and license costs) less change in working capital, other non-cash items (share-
based payment expense and non-cash bonuses) and taxes paid.
(vi)
Segment assets include goodwill and other intangible assets.
(vii)
Including eliminations for Guatemala and Honduras as reported in the Latam segment.
162
162
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Revenue from contracts with customers from continuing operations:
Twelve months ended
December 31, 2020
Twelve months ended
December 31, 2019
Twelve months ended
December 31, 2018
$ millions
Timing of revenue
recognition
Latin
America
Total
Group
Africa
Latin
America Africa
Total
Group
Latin
Americ
a
Africa
Total
Group
Mobile................................................ Over time
1,728
239
1,967
1,747
Mobile Financial Services............ Point in time
31
118
149
31
Cable and other fixed services.. Over time
Other................................................... Over time
1,794
51
8
1
1,803
1,919
52
51
261
112
9
1
2,007
1,701
143
37
1,928
1,556
52
42
280
108
10
1
1,981
145
1,565
43
Service Revenue
3,604
366
3,971
3,748
382
4,130
3,336
398
3,734
Telephone and equipment........ Point in time
201
—
201
206
—
206
212
—
212
Revenue from contracts with
customers
B.4. People
Number of permanent employees
3,805
366
4,171
3,954
382
4,336
3,548
399
3,946
Continuing operations(i).............................................................................................................................................
Joint ventures (Guatemala, Honduras and Ghana)............................................................................................
Discontinued operations.............................................................................................................................................
Total..............................................................................................................................................
2020
2019
2018
16,955
4,464
—
21,419
17,687
4,688
—
22,375
16,725
4,416
262
21,403
(i)
Emtelco headcount are excluded from this disclosure and any internal reporting because their costs are classified as direct costs and not employee
related costs.
Notes
2020
2019
2018
Wages and salaries........................................................................................................................
Social security.................................................................................................................................
Share based compensation.......................................................................................................
Pension and other long-term benefit costs.........................................................................
Other employees related costs................................................................................................
B.4.1.
B.4.2.
(US$ millions)
(356)
(358)
(66)
(24)
(4)
(27)
(68)
(27)
(4)
(39)
Total....................................................................................................................
(477)
(496)
(346)
(60)
(21)
(7)
(67)
(500)
B.4.1. Share-based compensation
Millicom shares granted to management and key employees includes share-based compensation in the form of long-term share
incentive plans. Since 2016, Millicom has two types of annual plans, a performance share plan and a deferred share plan. The
different plans are further detailed below.
Cost of share based compensation
2016 incentive plans
2017 incentive plans
2018 incentive plans
2019 incentive plans
2020 incentive plans
Total share based compensation
2020
2019
2018
(US$ millions)
—
—
(2)
(8)
(13)
(24)
—
(7)
(8)
(14)
—
(27)
(4)
(8)
(11)
—
—
(21)
163
163
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Deferred share plan (unchanged since 2014, except for vesting schedule)
Until 2018 deferred awards plan, participants were granted shares based on past performance, with 16.5% of the shares vesting on
January 1 of each of year one and two, and the remaining 67% on 1 January of year three. Beginning with the 2019 plan, while all
other guidelines remain the same, shares vest with 30% on January 1 of each of year one and two, and the remaining 40% on 1
January of year three. Vesting is conditional upon the participant remaining employed with Millicom at each vesting date. The cost
of this long-term incentive plan, which is not conditional on performance conditions, is calculated as follows:
Fair value (share price) of Millicom’s shares at grant date x number of shares expected to vest.
Performance share plan (for plans issued in 2016 and 2017)
Shares granted under this performance share plan vested at the end of the three-year period, subject to performance conditions,
25% based on Positive Absolute Total Shareholder Return (Absolute TSR), 25% based on Relative Total Shareholder Return (Relative
TSR) and 50% based on budgeted Earnings Before Interest Tax Depreciation and Amortization (EBITDA) minus Capital Expenditure
(Capex) minus Change in Working Capital (CWC) (Free Cash Flow).
As the TSRs measures are market conditions, the fair value of the shares in the performance share plan required consideration of
potential adjustments for future market-based conditions at grant date. For this, a specific valuation had been performed at grant
date based on the probability of the TSR conditions being met (and to which extent) and the expected payout based upon leaving
conditions.
The Free Cash Flows (FCF) condition is a non-market measure which had been considered together with the leaving estimate and
based initially on a 100% fulfillment expectation. The reference share price for this condition is the same share price as the share
price for the deferred share plan above.
Performance share plan (for plans issued from 2018)
Shares granted under this performance share plan vest at the end of the three-year period, subject to performance conditions, 25%
based on Relative Total Shareholder Return (“Relative TSR”), 25% based on the achievement of the Service Revenue target measured
on a 3-year CAGRs from year one to year three of the plan (“Service Revenue”) and 50% based on the achievement of the Operating
Free Cash Flow (“Operating Free Cash Flow”) target measured on a 3-year CAGRs from year one to year three of the plan. From 2020
onwards, the Operating Free Cash Flow target has been redefined to consider payments made in respect of leases. As a result, the
target is since then the Operating Free Cash Flow after Leases ("OFCFaL").
For the performance share plans, and in order to calculate the fair value of the TSR portion of those plans, it is necessary to make a
number of assumptions which are set out below. The assumptions have been set based on an analysis of historical data as at grant
date.
Assumptions and fair value of the shares under the TSR portion(s)
Risk-free
rate %
Dividend
yield %
Share price
volatility(i) %
Award term
(years)
Share fair
value (in US$)
Performance share plan 2020 (Relative TSR).....................................
Performance share plan 2019 (Relative TSR).....................................
Performance share plan 2018 (Relative TSR).....................................
Performance share plan 2017 (Relative TSR).....................................
Performance share plan 2017 (Absolute TSR)...................................
Performance share plan 2016 (Relative TSR).....................................
Performance share plan 2016 (Absolute TSR)...................................
0.61
(0.24)
(0.39)
(0.40)
(0.40)
(0.65)
(0.65)
1.47
3.01
3.21
3.80
3.80
3.49
3.49
24.54
26.58
30.27
22.50
22.50
30.00
30.00
2.93
2.93
2.93
2.92
2.92
2.61
2.61
55.66
49.79
57.70
27.06
29.16
43.35
45.94
(i)
Historical volatility retained was determined on the basis of a three-year historic average.
The cost of the long-term incentive plans which are conditional on market conditions is calculated as follows:
Fair value (market value) of shares at grant date (as calculated above) x number of shares expected to vest.
The cost of these plans is recognized, together with a corresponding increase in equity (share compensation reserve), over the
period in which the performance and/or employment conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award. Adjustments are made to the expense recorded for forfeitures, mainly due to management and
employees leaving Millicom. Non-market performance conditions are not taken into account when determining the grant date fair
164
16 4
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of
equity instruments that will ultimately vest.
No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market
condition. These are treated as vested, regardless of whether or not the market conditions are satisfied, provided that all other
performance conditions are satisfied. Where the terms of an equity-settled award are modified, as a minimum an expense is
recognized as if the terms had not been modified. In addition, an expense is recognized for any modification that increases the total
fair value of the share based payment arrangement, or is otherwise beneficial to the employee as measured at the date of
modification.
Plan awards and shares expected to vest
Initial shares granted
Additional shares granted(i)
Revision for forfeitures
Revision for cancellations
Total before issuances
Shares issued in 2017
Shares issued in 2018
Shares issued in 2019
Shares issued in 2020
Performance conditions
2020 plans
2019 plans
2018 plans
2017 plans
Performa
nce plan
Deferred
plan
Performa
nce plan
Deferred
plan
Performa
nce plan
Deferred
plan
Performa
nce plan
Deferred
plan
(number of shares)
341,897
370,131
257,601
297,856
237,196
262,317
279,807
438,505
—
5,928
—
43,115
—
3,290
2,868
29,406
(13,008)
(9,880)
(35,558)
(22,636)
(43,639)
(37,433)
(50,279)
(89,011)
—
—
—
—
(4,728)
—
—
—
328,889
366,179
222,043
318,335
188,829
228,174
232,396
378,900
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,686)
(97)
(18,747)
(2,724)
(99,399)
(150)
(24,294)
(3,109)
(54,971)
(19,143)
(82,486)
(3,571)
(17)
(96,629)
(304)
(35,125)
(158,394)
(194,329)
—
—
—
—
—
(52,135)
Shares still expected to vest
Estimated cost over the vesting period (US$
millions)
328,889
362,608
221,876
197,412
185,319
119,331
13
15
11
18
12
14
—
10
(i) Additional shares granted represent grants made for new joiners and/or as per CEO contractual arrangements.
B.4.2. Pension and other long-term employee benefit plans
—
—
20
Pension plans
The pension plans apply to employees who meet certain criteria (including years of service, age and participation in collective
agreements).
Pension and other similar employee related obligations can result from either defined contribution plans or defined benefit plans. A
defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. No further
payment obligations exist once the contributions have been paid. The contributions are recognized as employee benefit expenses
when they are due. Prepaid contributions are recognized as assets to the extent that a cash refund or a reduction in future payments
is available.
Defined benefit pension plans define an amount of pension benefit that an employee will receive on retirement, usually dependent
on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position
in respect of the defined benefit pension plan is the present value of the defined benefit obligation at the statement of financial
position date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service
costs. The defined benefit obligation is calculated annually by independent actuaries. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows, using an appropriate discount rate based on maturities
of the related pension liability.
Re-measurement of net defined benefit liabilities are recognized in other comprehensive income and not reclassified to the
statement of income in subsequent years.
Past service costs are recognized in the statement of income on the earlier of the date of the plan amendment or curtailment, and
the date that the Group recognizes related restructuring costs.
Net interest is calculated by applying the discount rate to the net defined benefit asset/liability.
165
165
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Long-service plans
Long-service plans apply for Colombian subsidiary UNE employees with more than five years of service whereby additional bonuses
are paid to employees that reach each incremental length of service milestone (from five to 40 years).
Termination plans
In addition, UNE has a number of employee defined benefit plans. The level of benefits provided under the plans depends on
collective employment agreements and Colombian labor regulations. There are no defined assets related to the plans, and UNE
make payments to settle obligations under the plans out of available cash balances.
At December 31, 2020, the defined benefit obligation liability amounted to $59 million (2019: $59 million) and payments expected in
the plans in future years totals $95 million (2019: $106 million). The average duration of the defined benefit obligation at December
31, 2020 is 6 years (2019: 6 years). The termination plans apply to employees that joined UNE prior to December 30, 1996. The level
of payments depends on the number of years in which the employee has worked before retirement or termination of their contract
with UNE.
Except for the UNE pension plan described above, there are no other significant defined benefits plans in the Group.
B.4.3. Directors and executive management
The remuneration of the members of the Board of Directors comprises an annual fee and shares. Director remuneration is proposed
by the Nomination Committee and approved by the shareholders at their Annual General Meeting (AGM).
Remuneration charge for the Board (gross of withholding tax)
Chairperson......................................................................................................................................................................
Other members of the Board.....................................................................................................................................
Total (i)..........................................................................................................................................
Shares beneficially owned by the Directors
2020
2019
2018
(US$ ’000)
366
1,557
1,923
300
1,188
1,488
169
774
943
Chairperson.......................................................................................................................................................................................................
Other members of the Board......................................................................................................................................................................
Total (i).....................................................................................................................................................................
2020
2019
(number of shares)
13,427
52,593
66,020
5,814
32,279
38,093
(i)
Cash compensation converted from SEK to USD at exchange rates on payment dates for 2018. In 2019 and 2020 cash compensation was denominated
in USD. Share based compensation based on the market value of Millicom shares on the corresponding AGM date (2020: in total 32,358 shares; 2019: in
total 19,483 shares-includes 2,876 additional shares that were awarded for the period from the 9 January 2019 date of listing on the Nasdaq Stock
Market in the US and the date of the 2019 AGM; 2018: in total 6,591 shares). Net remuneration comprised 71% in shares and 29% in cash (SEK) (2019:
73% in shares and 27% in cash; 2018: 51% in shares and 49% in cash).
The remuneration of executive management of Millicom comprises an annual base salary, an annual bonus, share based
compensation, social security contributions, pension contributions and other benefits. Bonus and share based compensation plans
(see note B.4.1.) are based on actual and future performance. Share based compensation is granted once a year by the
Compensation Committee of the Board.
If the employment of Millicom’s senior executives is terminated, severance of up to 12 months’ salary is potentially payable.
The annual base salary and other benefits of the Chief Executive Officer (CEO) and the Executive Vice Presidents (Executive team) are
proposed by the Compensation Committee and approved by the Board.
166
16 6
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Remuneration charge for the Executive Team
Executive
Team (8
members)(iii)
CEO
CFO
(US$ ’000)
2020
Base salary.........................................................................................................................................................................
Bonus..................................................................................................................................................................................
Pension...............................................................................................................................................................................
Other benefits..................................................................................................................................................................
Termination benefits.....................................................................................................................................................
Total before share based compensation....................................................................................
Share based compensation(i)(ii) in respect of 2020 LTIP.................................................................................
Total..............................................................................................................................................
1,173
1,301
285
82
—
2,841
7,114
9,955
670
509
100
38
—
1,317
1,834
3,151
2,612
1,837
663
303
—
5,414
3,796
9,210
CEO
CFO
(US$ ’000)
Executive
Team (9
members)
2019
Base salary.........................................................................................................................................................................
Bonus..................................................................................................................................................................................
Pension...............................................................................................................................................................................
Other benefits..................................................................................................................................................................
Termination benefits.....................................................................................................................................................
Total before share based compensation....................................................................................
Share based compensation(i)(ii) in respect of 2019 LTIP.................................................................................
Total..............................................................................................................................................
1,167
1,428
279
50
—
2,924
5,625
8,549
654
626
98
260
—
1,639
1,576
3,215
3,498
2,098
798
1,521
863
8,779
5,965
14,743
Executive
team
(9 members)
CEO
CFO
(US$ ’000)
2018
Base salary.........................................................................................................................................................................
Bonus..................................................................................................................................................................................
Pension...............................................................................................................................................................................
Other benefits..................................................................................................................................................................
Termination benefits.....................................................................................................................................................
Total before share based compensation....................................................................................
Share based compensation(i)(ii) in respect of 2018 LTIP.................................................................................
Total..............................................................................................................................................
1,112
1,492
247
66
—
2,918
5,027
7,945
673
557
101
63
—
1,393
1,567
2,960
3,930
2,445
962
805
301
8,444
4,957
13,401
(i)
(ii)
(iii)
See note B.4.1.
Share awards of 153,894 and 135,269 were granted in 2020 under the 2019 LTIPs to the CEO, and Executive Team (2019: 102,122 and 135,480,
respectively; 2018: 80,264 and 112,472, respectively).
'Other Executives' includes compensation paid in 2020 to Rachel Samren former Chief External Affairs Officer (departure August 31, 2020) and to HL
Rogers former Chief Ethics and Compliance Officer (departure January 1, 2020). Additionally other Benefits' for 'Other Executives' include medical and
dental insurance for Daniel Loria, former CHRO.
167
167
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Share ownership and unvested share awards granted from Company equity plans to the Executive team
2020
Share ownership (vested from equity plans and otherwise acquired).......................................................
Share awards not vested..............................................................................................................................................
2019
Share ownership (vested from equity plans and otherwise acquired).......................................................
Share awards not vested..............................................................................................................................................
B.5. Other non-operating (expenses) income, net
CEO
Executive
team
Total
(number of shares)
194,432
325,250
190,577
236,211
169,725
297,317
136,306
334,193
364,157
622,567
326,883
570,404
Non-operating items mainly comprise changes in fair value of derivatives and the impact of foreign exchange fluctuations on the
results of the Group.
December 31
Note
2020
2019
2018
(US$ millions)
Change in fair value of derivatives.......................................................................... C.7.2.
Change in fair value in investment in Jumia....................................................... C.7.3.
Change in fair value in investment in HT.............................................................. C.7.3.
Change in value of call option asset and put option liability........................ C.7.4.
Exchange gains (losses), net......................................................................................
Other non-operating income (expenses), net....................................................
Total
Foreign exchange gains and losses
(11)
(18)
(16)
5
(69)
3
(106)
—
(38)
312
(25)
(32)
10
227
(1)
—
—
—
(40)
2
(39)
Transactions denominated in a currency other than the functional currency are translated into the functional currency using
exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such
transactions, and on translation of monetary assets and liabilities denominated in currencies other than the functional currency at
year-end exchange rates, are recognized in the consolidated statement of income, except when deferred in equity as qualifying cash
flow hedges.
B.6. Taxation
B.6.1. Income tax expense
Tax mainly comprises income taxes of subsidiaries and withholding taxes on intragroup dividends and royalties for use of Millicom
trademarks and brands. Millicom operations are in jurisdictions with income tax rates of 10% to 35% levied on either revenue or
profit before income tax (2019: 10% to 35%; 2018: 10% to 37%). Income tax relating to items recognized directly in equity is
recognized in equity and not in the consolidated statement of income.
168
16 8
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Income tax charge
Income tax (charge) credit
Withholding tax..............................................................................................................................................................
Other income tax relating to the current year.....................................................................................................
Adjustments in respect of prior years.....................................................................................................................
Total
Deferred tax (charge) credit
Origination and reversal of temporary differences............................................................................................
Effect of change in tax rates.......................................................................................................................................
Tax income (expense) before valuation allowances.........................................................................................
Effect of valuation allowances...................................................................................................................................
Adjustments in respect of prior years.....................................................................................................................
Total
Tax (charge) credit on continuing operations.....................................................................................................
Tax (charge) credit on discontinuing operations...............................................................................................
Total tax (charge) credit...............................................................................................................
2020
2019
2018
(US$ millions)
(83)
(65)
(29)
(177)
99
(5)
94
(19)
75
—
75
(102)
(2)
(104)
(56)
(88)
(7)
(151)
58
(8)
50
(9)
41
(10)
31
(120)
(2)
(122)
(64)
(82)
1
(145)
32
(10)
22
(8)
14
19
33
(112)
(4)
(116)
169
169
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Reconciliation between the tax expense and tax at the weighted average statutory tax rate is as follows:
Income tax calculation
2020
2019
2018
Continuing
operations
Discontinued
operations
Total
Continuing
operations
Discontinued
operations
Total
Continuing
operations
Discontinued
operations
Total
Profit before tax...............
(271)
(11)
(282)
218
59
277
119
(29)
90
(US$ millions)
3
85
(37)
(11)
(48)
Tax at the weighted
average statutory rate...
Effect of:
Items taxed at a
different rate.....................
Change in tax rates on
deferred tax balances....
Expenditure not
deductible and income
not taxable........................
Unrelieved
withholding tax...............
Accounting for
associates and joint
ventures..............................
Movement in deferred
tax on unremitted
earnings..............................
Unrecognized deferred
tax assets............................
Recognition of
previously
unrecognized deferred
tax assets............................
Adjustments in respect
of prior years.....................
Total tax (charge)
credit...........................
Weighted average
statutory tax rate.............
Effective tax rate..............
82
1
(5)
(106)
(83)
42
15
(27)
8
(29)
(102)
30.3 %
(37.5) %
—
—
1
(5)
(3)
(109)
—
(83)
—
42
—
—
15
(27)
—
8
(2)
(31)
(1)
(8)
(37)
(56)
36
9
(20)
11
(17)
(1)
7
—
(1)
—
7
—
(1)
—
(8)
(10)
—
(10)
9
(28)
—
(56)
—
36
—
9
—
(20)
—
11
—
(17)
(59)
(64)
5
(2)
(8)
—
20
(2)
(61)
—
(64)
—
5
—
(2)
(2)
(10)
—
—
—
20
(2)
(104)
(120)
(2) (122)
(112)
(4)
(116)
30.1 %
(36.8) %
17.0 %
55.0 %
17.3 %
44.0 %
0.8 %
94.1 %
1.1 %
128.9 %
B.6.2. Current tax assets and liabilities
Current tax assets and liabilities for current and prior periods are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rate and tax laws used to compute the amount are those enacted or substantively enacted by the
statement of financial position date.
B.6.3. Deferred tax
Deferred tax is calculated using the liability method on temporary differences at the statement of financial position date between
the tax base of assets and liabilities and their carrying amount for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences, except where the deferred tax liability arises from the
initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither accounting, nor taxable profit or loss.
Deferred tax assets are recognized for all temporary differences including unused tax credits and tax losses, to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences can be utilized, except where the
170
170
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
deferred tax assets relate to deductible temporary differences from initial recognition of an asset or liability in a transaction that is
not a business combination, and, at the time of the transaction, affects neither accounting, nor taxable profit or loss. It is probable
that taxable profit will be available when there are sufficient taxable temporary differences relating to the same tax authority and the
same taxable entity which are expected to reverse in the same period as the expected reversal of the deductible temporary
difference.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to utilize them. Unrecognized deferred tax assets are reassessed
at each statement of financial position date and are recognized to the extent it is probable that future taxable profit will enable the
asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rate expected to apply in the year when the assets are realized or liabilities
settled, based on tax rates and tax laws that have been enacted or substantively enacted at the statement of financial position date.
Deferred tax assets and deferred tax liabilities are offset where legally enforceable set off rights exist and the deferred taxes relate to
the same taxable entity and the same taxation authority.
Deferred tax
Fixed assets
Unused tax
losses
Unremitted
earnings
Other
Offset
Total
(US$ millions)
Balance at December 31, 2018.....................
(Charge)/credit to income statement.................
Change in scope.........................................................
Exchange differences................................................
Balance at December 31, 2019.....................
Deferred tax assets.....................................................
Deferred tax liabilities...............................................
Balance at December 31, 2019.....................
(Charge)/credit to income statement.................
Change in scope.........................................................
Transfers to assets held for sale.............................
Exchange differences................................................
Balance at December 31, 2020.....................
Deferred tax assets.....................................................
Deferred tax liabilities...............................................
Balance at December 31, 2020.....................
(178)
41
(88)
2
(223)
84
(307)
(223)
81
—
—
—
(142)
97
(239)
(142)
44
(15)
5
—
34
34
—
34
150
—
—
3
187
187
—
187
(34)
8
—
1
(25)
—
(25)
(25)
15
—
—
(1)
(11)
—
(11)
(11)
134
(3)
4
(3)
129
134
(5)
129
(171)
—
—
(4)
(46)
102
(148)
(46)
—
—
—
—
—
(52)
52
—
—
—
—
—
—
(189)
189
—
(34)
31
(73)
—
(85)
200
(285)
(85)
75
—
—
(2)
(12)
197
(209)
(12)
Deferred tax assets have not been recognized in respect of the following deductible temporary differences:
Fixed assets
Unused tax
losses
Other
Total
(US$ millions)
At December 31, 2020.................................................................................................................
At December 31, 2019.................................................................................................................
57
92
4,668
4,705
218
126
4,943
4,923
Unrecognized tax losses carryforward related to continuing operations expire as follows:
Expiry:
Within one year...............................................................................................................................................................
Within one to five years................................................................................................................................................
After five years.................................................................................................................................................................
No expiry............................................................................................................................................................................
Total..............................................................................................................................................
3
3
1,089
3,573
4,668
1
2
493
4,209
4,705
—
3
493
4,390
4,886
2020
2019
(US$ millions)
2018
171
171
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
With effect from 2017, Luxembourg tax losses incurred may be carried forward for a maximum of 17 years. Losses incurred before
2017 may be carried forward without limitation of time.
At December 31, 2020, Millicom had $621 million of unremitted earnings of Millicom operating subsidiaries for which no deferred
tax liabilities were recognized (2019: $697 million; 2018: $584 million). Except for intragroup dividends to be paid out of 2020 profits
in 2021 for which deferred tax of $11 million (2019: $26 million; 2018 $34 million) has been provided, it is anticipated that intragroup
dividends paid in future periods will be made out of profits of future periods.
B.7. Earnings per share
Basic earnings (loss) per share are calculated by dividing net profit for the year attributable to equity holders of the Company by the
weighted average number of ordinary shares outstanding during the year.
Diluted earnings (loss) per share are calculated by dividing the net profit for the year attributable to equity holders of the Company
by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of dilutive
potential shares.
Net profit/(loss) used in the earnings (loss) per share computation
2020
2019
2018
(US$ millions)
Basic and Diluted
Net profit (loss) attributable to equity holders from continuing operations ..........................................
Net profit (loss) attributable to equity holders from discontinued operations ......................................
Net profit/(loss) attributable to all equity holders to determine the basic earnings (loss)
per share .......................................................................................................................................
(332)
(12)
(344)
93
57
149
23
(33)
(10)
Weighted average number of shares in the earnings (loss) per share computation
Weighted average number of ordinary shares (excluding treasury shares) for basic earnings
(loss) per share.................................................................................................................................................................
Potential incremental shares as a result of share options
Weighted average number of ordinary shares (excluding treasury shares) adjusted for
the effect of dilution
2020
2019
2018
(thousands of shares)
101,172
101,144
100,793
—
—
—
101,172
101,144
100,793
C. Capital structure and financing
C.1. Share capital, share premium and reserves
Common shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction from the proceeds.
Where any Group company purchases the Company’s share capital, the consideration paid, including any directly attributable
incremental costs, is shown under Treasury shares and deducted from equity attributable to the Company’s equity holders until the
shares are canceled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of
any directly attributable incremental costs and the related income tax effects is included in equity attributable to the Company’s
equity holders.
172
172
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Share capital, share premium
Authorized and registered share capital (number of shares)..............................................................................................
133,333,200
133,333,200
Subscribed and fully paid up share capital (number of shares).........................................................................................
101,739,217
101,739,217
Par value per share..............................................................................................................................................................................
Share capital (US$ millions)..............................................................................................................................................................
Share premium (US$ millions)........................................................................................................................................................
Total (US$ millions).......................................................................................................................................
1.50
153
478
630
1.50
153
480
633
2020
2019
Other equity reserves
As of January 1, 2018....................................
Share based compensation....................................
Issuance of shares – 2015, 2016, 2017 LTIPs.....
Remeasurements of post-employment
benefit obligations.....................................................
Cash flow hedge reserve movement..................
Currency translation reserved recycled to
statement of income.................................................
Currency translation movement...........................
As of December 31, 2018..............................
Share based compensation....................................
Issuance of shares –2016, 2017, 2018 LTIPs......
Remeasurements of post-employment
benefit obligations.....................................................
Cash flow hedge reserve movement..................
Currency translation reserved recycled to
statement of income.................................................
Currency translation movement...........................
Effect of restructuring in Tanzania.......................
As of December 31, 2019..............................
Share based compensation....................................
Issuance of shares –2017, 2018, 2019 LTIPs......
Remeasurements of post-employment
benefit obligations.....................................................
Cash flow hedge reserve movement..................
Currency translation reserved recycled to
statement of income.................................................
Currency translation movement...........................
As of December 31, 2020..............................
Equity settled
transaction
reserve
Hedge
reserve
Currency
translation
reserve
Pension
obligation
reserve
Total
Legal reserve
(US$ millions)
16
—
—
—
—
—
—
16
—
—
—
—
—
—
16
—
—
—
—
—
—
16
46
22
(22)
—
—
—
—
47
29
(25)
—
—
—
—
52
24
(26)
—
—
—
—
50
173
0
—
—
—
(1)
0
—
(1)
—
—
—
(16)
—
—
(531)
—
—
—
—
—
(68)
(599)
—
—
—
—
—
(2)
9
(18)
(593)
—
—
—
(1)
—
—
(19)
—
—
—
—
—
(12)
(605)
(3)
—
—
0
—
—
—
(3)
—
—
—
—
—
—
(2)
—
—
(2)
—
—
—
(4)
(472)
22
(22)
1
0
—
(67)
(538)
29
(25)
—
(16)
—
(2)
9
(544)
24
(26)
(2)
(1)
—
(12)
(562)
173
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.1.1. Legal reserve
If Millicom International Cellular S.A. reports an annual net profit on a non-consolidated basis, Luxembourg law requires
appropriation of an amount equal to at least 5% of the annual net profit to a legal reserve until such reserve equals 10% of the issued
share capital. This reserve is not available for dividend distribution. No appropriation was required in 2019 or 2020 as the 10%
minimum level was reached in 2011 and maintained each subsequent year.
C.1.2. Equity settled transaction reserve
The cost of LTIPs is recognized as an increase in the equity-settled transaction reserve over the period in which the performance
and/or service conditions are rendered. When shares under the LTIPs vest and are issued the corresponding reserve is transferred to
share premium.
C.1.3. Hedge reserve
The effective portions of changes in value of cash flow hedges are recorded in the hedge reserve (see note C.1. ).
C.1.4. Currency translation reserve
In the financial statements, the relevant captions in the statements of financial position of subsidiaries without US dollar functional
currencies are translated to US dollars using the closing exchange rate. Statements of income or statement of income captions
(including those of joint ventures and associates) are translated to US dollars at monthly average exchange rates during the year.
The currency translation reserve includes foreign exchange gains and losses arising from these translations. When the Group
disposes of or loses control or significant influence over a foreign operation, exchange differences that were recorded in equity are
recognized in the consolidated statement of income as part of gain or loss on sale or loss of control and/or significant influence.
C.2. Dividend distributions
On June 25, 2020, as a result of the uncertainties triggered by the COVID-19 pandemic and Group's shareholders consciousness to
protect the Group's liquidity, the shareholders decided not to proceed to the payment of a dividend related to 2019 profits.
On May 2, 2019, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2018, was approved by
the shareholders at the AGM and paid in equal portions in May and November 2019.
On May 4, 2018, a dividend distribution of $2.64 per share from Millicom’s retained profits at December 31, 2017, was approved by
the shareholders at the AGM and paid in equal portions in May and November 2018.
The ability of the Company to make dividend payments is subject to, among other things, the terms of indebtedness, legal
restrictions and the ability to repatriate funds from Millicom’s various operations. At December 31, 2020, $310 million (December 31,
2019: $306 million; December 31, 2018: $324 million) of Millicom’s retained profits represent statutory reserves that are unavailable
to be distributed to owners of the Company.
174
174
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.3. Debt and financing
Debt and financing by type (i)
Note
2020
2019
(US$ millions)
Debt and financing due after more than one year
Bonds..................................................................................................................................................................................
Banks...................................................................................................................................................................................
Other financing (ii).........................................................................................................................................................
Total non-current financing.......................................................................................................................................
Less: portion payable within one year....................................................................................................................
Total non-current financing due after more than one year......................................................
Debt and financing due within one year
Bonds..................................................................................................................................................................................
Banks...................................................................................................................................................................................
Total current debt and financing................................................................................................
Add: portion of non-current debt payable within one year...........................................................................
Total..............................................................................................................................................
Total debt and financing.............................................................................................................
See note D.1.1 for further details on maturity profile of the Group debt and financing.
C.3.1.
C.3.2.
C.3.1.
C.3.2.
4,253
1,337
41
5,631
(54)
5,578
44
15
59
54
113
5,691
4,067
1,805
43
5,915
(129)
5,786
46
11
57
129
186
5,972
In July 2018, the Company issued a COP144,054.5 million /$50 million bilateral facility with IIC (Inter-American Development Bank) for a USD indexed
to COP Note. The note bears interest at 9.450% p.a.. This COP Note is used as net investment hedge of the net assets of our operations in Colombia.
(i)
(ii)
Debt and financing by location
2020
2019
(US$ millions)
Millicom International Cellular S.A. (Luxembourg)...................................................................................................................................
2,504
2,773
Colombia.............................................................................................................................................................................................................
Paraguay.............................................................................................................................................................................................................
Bolivia...................................................................................................................................................................................................................
Panama................................................................................................................................................................................................................
Tanzania..............................................................................................................................................................................................................
Costa Rica...........................................................................................................................................................................................................
El Salvador..........................................................................................................................................................................................................
803
738
337
869
203
119
118
827
502
350
918
186
148
268
Total debt and financing........................................................................................................................................
5,691
5,972
Debt and financings are initially recognized at fair value, net of directly attributable transaction costs. They are subsequently
measured at amortized cost using the effective interest rate method or at fair value. Amortized cost is calculated by taking into
account any discount or premium on acquisition and any fees or costs that are an integral part of the effective interest rate. Any
difference between the initial amount and the maturity amount is recognized in the consolidated statement of income over the
period of the borrowing. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months from the statement of financial position date.
175
175
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.3.1. Bond financing
Bond financing
SEK Variable Rate Notes.......................................
USD 4.500% Senior Notes....................................
USD 6.625% Senior Notes....................................
USD 6.000% Senior Notes....................................
USD 6.250% Senior Notes....................................
USD 5.125% Senior Notes....................................
USD 5.875% Senior Notes....................................
PYG 8.750% Notes (tranche A)...........................
PYG 9.250% Notes (tranche B)...........................
PYG 10.000% Notes (tranche C)........................
PYG 9.250% Notes (tranche D)..........................
PYG 10.000% Notes (tranche E).........................
PYG 9.250% Notes (tranche F)...........................
PYG 10.000% Notes (tranche G)........................
BOB 4.750% Notes..................................................
BOB 4.050% Notes..................................................
BOB 5.800% Notes..................................................
BOB 4.850% Notes..................................................
BOB 3.950% Notes..................................................
BOB 4.600% Notes..................................................
BOB 4.300% Notes..................................................
BOB 4.300% Notes..................................................
BOB 4.700% Notes..................................................
BOB 5.300% Notes..................................................
BOB 5.000% Notes..................................................
UNE Bond 1 (tranches A and B).........................
UNE Bond 2 (tranches A and B).........................
UNE Bond 3 (tranche A)........................................
UNE Bond 3 (tranche B)........................................
UNE Bond 3 (tranche C)........................................
UNE Bond 6.600%...................................................
USD 4.500% Senior Notes....................................
Cable Onda Bonds 5.750%..................................
Total bond financing.................................
(i)
STIBOR – Swedish Interbank Offered Rate.
(1) SEK Notes
Note
Country
Maturity
1 Luxembourg
2 Luxembourg
3 Luxembourg
4 Luxembourg
5 Luxembourg
6 Luxembourg
7 Paraguay
7 Paraguay
7 Paraguay
7 Paraguay
7 Paraguay
7 Paraguay
7 Paraguay
7 Paraguay
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
8 Bolivia
9 Colombia
9 Colombia
9 Colombia
9 Colombia
9 Colombia
9 Colombia
10 Panama
10 Panama
2024
2031
2026
2025
2029
2028
2027
2024
2026
2029
2026
2029
2027
2030
2020
2020
2026
2023
2024
2024
2029
2022
2024
2026
2026
2020
2023
2024
2026
2036
2030
2030
2025
Interest Rate
%
STIBOR (i) +
2.350%
4.500 %
6.625 %
6.000 %
6.250 %
5.125 %
5.875 %
8.750 %
9.250 %
10.000 %
9.250 %
10.000 %
9.250 %
10.000 %
4.750 %
4.050 %
5.800 %
4.850 %
3.950 %
4.600 %
4.300 %
4.300 %
4.700 %
5.300 %
5.000 %
CPI + 5.10%
CPI + 4.76%
9.350 %
CPI + 4.15%
CPI + 4.89%
6.600 %
4.500 %
5.750 %
2020
2019
(US$ millions)
241
494
495
—
743
493
558
17
7
9
1
4
2
3
—
—
50
42
29
40
19
20
28
11
61
—
44
47
74
37
44
211
—
495
492
743
493
296
18
8
10
2
4
—
—
30
4
0
57
36
40
21
26
32
13
61
46
46
49
78
38
—
586
99
4,297
585
184
4,113
In May 2019, MIC S.A. completed its offering of a SEK 2 billion floating rate senior unsecured sustainability bond due 2024. The bond
carries a floating coupon of 3-month Stibor+235bps which we swapped with various banks to hedge its interest rate exposure,
pursuant to which it will effectively pay fixed-rate coupons in US dollars between 4.990% and 4.880% (see D.1.2.). The bond has been
listed and commenced trading on the Nasdaq Stockholm sustainable bond list on June 12, 2019. Millicom is using the net proceeds
of the bond in accordance with the Sustainability Bond Framework which includes both environmental and social investments such
as in energy efficiencies, and the expansion of its fixed and mobile networks. Cost of issuance of $2.4 million is amortized over the
five year life of the bond (the effective interest rate is 2.600%)
176
176
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
(2) USD 4.500% Senior Notes
On October 19, 2020, MIC S.A. issued $500 million aggregate principal amount of 4.500% Senior Notes due 2031. The Notes bear
interest at 4.500% p.a., payable semiannually in arrears on each interest payment date. Proceeds were used to early redeem MIC
S.A.'s $500 million 6.000% Senior Notes due 2025 - see below. Costs of issuance of $5.5 million is amortized over the eleven-year life
of the notes (the effective interest rate is 4.800%).
(3) USD 6.625% Senior Notes
In October 2018, MIC S.A. issued $500 million aggregate principal amount of 6.625% Senior Notes due 2026. The Notes bear interest
at 6.625% p.a., payable semiannually in arrears on each interest payment date. Proceeds were used to finance Cable Onda’s
acquisition. Costs of issuance of $6 million is amortized over the eight-year life of the notes (the effective interest rate is 6.750%).
(4) USD 6.000% Senior Notes
In March 2015, MIC S.A. issued a $500 million 6.000% fixed interest rate notes repayable in ten years, to repay the El Salvador 8.000%
senior notes and for general corporate purposes. The notes had an effective interest rate of 6.132%. A total amount of $9 million of
withheld and upfront costs were being amortized over the ten-year life of the bond. On April 8, 2019, the Group obtained consents
from the holders of its $500 million 6.000% notes to amend certain provisions of the indenture governing the notes. MIC S.A. made a
cash payment of $1 million (equal to $2.50 per $1,000 principal amount of Notes to holders of the Notes).
On October 19, 2020, Millicom announced the early redemption of these Senior Notes which took place on October 29, 2020 at a
redemption price equal to 103.0% of the principal amount redeemed plus accrued and unpaid interest. The early redemption
premium amounted to $15 million and the remaining unamortized deferred costs to $7 million. These were recognized under
"Interest and other financial expenses" in the Group's statement of income.
(5) USD 6.250% Senior Notes
In March 2019, MIC S.A. issued $750 million of 6.250% notes due 2029. The notes bear interest at 6.250% p.a., payable semi-annually
in arrears on March 25 and September 25 of each year, starting on September 25, 2019. The net proceeds were used to finance, in
part, the completed Telefonica CAM Acquisitions (see note A.1.2.). Costs of issuance of $8.2 million are amortized over the ten-year
life of the notes (the effective interest rate is 6.360%).
(6) USD 5.125% Senior Notes
In September 2017, MIC S.A. issued a $500 million, ten-year bond due January 2028, with an interest rate of 5.125%. Costs of issuance
of $7 million are amortized over the ten year life of the notes (effective interest rate is 5.240%).
(7) PYG Notes
In April 2019, Telefónica Celular del Paraguay S.A.E. (Telecel) issued $300 million 5.875% senior notes due 2027. The notes bear
interest at 5.875% p.a., payable semi-annually in arrears on April 15 and October 15 of each year, starting on October 15, 2019. The
net proceeds were used to finance the repurchase of the Telecel 6.750% 2022 notes. Costs of issuance of $4 million are amortized
over the eight-year life of the notes (the effective interest rate is 6.000%). On January 28, 2020, Telecel issued at a premium
$250 million of 5.875% Senior Notes due 2027 (the "New Notes"), representing an additional issuance from the Senior Notes
described above. The New Notes are treated as a single class with the initial notes, and were priced at 106.375 for an implied yield to
maturity of 4.817%. The corresponding $15 million premium received will be amortized over the Senior Notes maturity.
In June 2019, Telefónica Celular del Paraguay S.A.E. issued notes in three series under its PYG 300 billion program as follows: Series A
for PYG 115 billion (approximately $18 million), with a fixed annual interest rate of 8.750%, maturing in June 2024, series B for PYG 50
billion (approximately $8 million) with a fixed annual interest rate of 9.250%, maturing in May 2026 and series C for PYG 65 billion
(approximately $10 million) with a fixed annual interest rate of 10.000%, maturing in May 2029. On December 27, 2019, under the
same program, they issued PYG. 35 billion (Approximately $5 million) in two tranches: (i) PYG 10 billion (approximately $2 million)
which bears a fixed annual interest rate of 9.250% and matures on December 30, 2026; and (ii) PYG 25 billion (approximately $4
million) which bears a fixed annual interest rate of 10.000% and matures on December 24, 2029.
In February 2020, Telecel issued local bonds in 2 series: (i) Series 6, for an amount of PYG 15 billion (approximately $2 million) with a
9.250% interest due on January 29, 2027, and (ii) Series 7, for an amount of PYG 20 billion (approximately $3 million) with a 10%
interest due on January 31, 2030.
In May 2020, Telefónica Celular del Paraguay, S.A.E.. completed the acquisition of another Millicom subsidiary in Paraguay - Mobile
Cash Paraguay S.A , and further on June 30, 2020, the acquisition of Servicios y Productos Multimedios S.A.. Effective as of those
dates, these new entities now form part of the borrower's group for the purposes of the $550 million 5.875% Senior Notes due 2027
issued by Telefónica Celular del Paraguay, S.A.E.. In addition, as of July 7, 2020 Servicios y Productos Multimedios S.A. became
guarantor of the 5.875% Notes due 2027.
177
177
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
(8) BOB Notes
In May 2012, Telefónica Celular de Bolivia S.A. issued BOB 1.36 billion of notes repayable in installments until April 2, 2020.
Distribution and other transaction fees of BOB5 million reduced the total proceeds from issuance to BOB 1.32 billion ($191 million).
The bond has a 4.750% per annum coupon with interest payable semi-annually in arrears in May and November each year. The
effective interest rate is 4.790%. These bonds are listed on the Bolivia Stock Exchange.
In November 2015, they issued BOB 696 million (approximately $100 million) of notes in two series, series A for BOB 104.4 million
(approximately $15 million), with a fixed annual interest rate of 4.050%, maturing in August 2020 and series B for BOB 591.6 million
(approximately $85 million) with a fixed annual interest rate of 4.850%, maturing in August 2023. The bond has coupon with interest
payable semi-annually in arrears in March and September during the first two years, thereafter each February and August. The
effective interest rate is 4.840%. These bonds are listed on the Bolivia Stock Exchange.
In August 2016, Telefónica Celular de Bolivia S.A.. issued a new bond for a total amount of BOB 522 million consisting of two tranches
(approximately $50 million and $25 million, respectively). Tranche A and B bear fixed interest at 3.950% and 4.300%, and will mature
in June 2024 and June 2029, respectively. These bonds are listed on the Bolivia Stock Exchange.
In October 2017, they placed approximately $80 million of local currency bonds in three tranches, which will mature in 2022, 2024
and 2026 with a 4.300% , 4.700% and 5.300% respectively. These bonds are listed on the Bolivia Stock Exchange.
In July 2019 they issued two bonds one for BOB 420 million (approximately $61 million) with a 5.000% coupon maturing on August
2026 and another one for BOB 280 million (approximately $40 million) with a 4.600% coupon maturing on August 2024. Interest
payments is semiannual and both bonds are listed on the Bolivia Stock Exchange.
In December 2020, Telefónica Celular de Bolivia S.A. issued BOB 345 million (approximately $50 million) senior notes due 2026.
(9) UNE Bonds
In March 2010, UNE issued a COP300 billion (approximately $126 million) bond consisting of two tranches with five and ten-year
maturities. Interest rates are either fixed or variable depending on the tranche. Tranche A bears variable interest, based on CPI, in
Colombian peso and paid in Colombian peso. Tranche B bears variable interest, based on fixed term deposits, in Colombian peso
and paid in Colombian peso. UNE applied the proceeds to finance its investment plan. Tranche A matured in March 2015 and
tranche B matured in March 2020.
In May 2011, UNE issued a COP300 billion (approximately $126 million) bond consisting of two equal tranches with five and twelve-
year maturities. Interest rates are variable and depend on the tranche. Tranche A had variable interest, based on CPI, in Colombian
peso and paid in Colombian peso. Tranche B bears variable interest, based on CPI, in Colombian peso and paid in Colombian peso.
UNE applied the proceeds to finance its investment plan. Tranche A matured in October 2016 and tranche B will mature in October
2023.
In May 2016, UNE issued a COP540 billion bond (approximately $176 million) consisting of three tranches (approximately $52
million, $83 million and $41 million respectively). Interest rates are either fixed or variable depending on the tranche. Tranche A
bears fixed interest at 9.350%, while tranche B and C bear variable interest, based on CPI, (respective margins of CPI + 4.150% and
CPI + 4.890%), in Colombian peso. UNE applied the proceeds to finance its investment plan and repay one bond (COP150 billion
tranche). Tranches A, B and C will mature in May 2024, May 2026 and May 2036, respectively.
In March 2020, UNE issued local bonds for an amount of COP 150 billion (approximately $44 million) to repay an existing bond for
the same value, with a 6.600% fixed rate for 10 years.
(10) Cable Onda Bonds
In August 2015, Cable Onda issued local bonds in Panama for a total amount of $185 million. These bonds are listed on the Panama
Stock Exchange and bear a fixed annual interest of 5.750% and are due in August 2025. In December 2020, Cable Onda early repaid
$85 million on these bonds, at par.
In November 2019, Cable Onda issued $600 million aggregate principal amount of 4.500% senior notes due 2030 payable in U.S.
dollars, registered with the Superintendencia del Mercado de Valores de Panamá and listed on the Luxembourg Stock Exchange and
on the Panamá Stock Exchange. The Notes bear interest from November 1, 2019 at a rate of 4.500% per annum, payable on January
30, 2020 for the first payment and thereafter semiannually in arrears on each interest payment date. The proceeds were used to fund
the Panama Acquisition and to refinance certain local financing. Costs of issuance of $16 million, which include an original issue
discount (OID) is amortized over the ten-year life of the notes (the effective interest rate is 4.690%).
178
178
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.3.2. Bank and Development Financial Institution financing
Note
Country
Maturity range
Interest rate
2020
2019
(US$ millions)
Fixed rate loans
PYG Long-term loans................................................
1 Paraguay
USD - Long-term loans.............................................
2 Panama
BOB Long-term loans................................................
3 Bolivia
Variable rate loans
USD Long-term loans...............................................
4 Costa Rica
USD Long-term loans...............................................
5 Tanzania
TZS Long-term loans.................................................
5 Tanzania
USD Short-term loans...............................................
8 Luxembourg
USD Long-term loans(i)............................................
8 Luxembourg
COP Long-term loans...............................................
6 Colombia
USD Long-term loans...............................................
USD Credit Facility / Senior Unsecured Term
Loan Facility.................................................................
Total Bank and Development Financial
Institution financing.....................................
6 Colombia
7 El Salvador
2021-2023
2020-2026
2024-2025
2023-2025
2023
2021-2025
2021-2025
2024
2024
2025-2030
2024
Fixed
Fixed
Fixed
Variable
Variable
Variable
Libor + 3.00%
Variable
Variable
Variable
Variable
137
185
37
119
162
41
—
(5)
262
296
118
166
150
31
148
171
14
298
—
274
295
268
1,353
1,817
(i)
Relates to the amortized costs of the undrawn RCF that Micsa entered in October 2020 -see note 8,
1.
Paraguay
In October 2015, Telefónica Celular del Paraguay S.A.E. entered into a five -year loan facility with Banco Itau for PGY 257,700 million
(approximately $40 million) which bears a fixed annual interest rate. The final maturity of the loan was on September 10, 2020.
In July 2017, Telefónica Celular del Paraguay S.A.E executed a five-year loan agreement with the IPS (Instituto de Prevision Social)
and the Inter-American Development Bank, who acts as a guarantor, for a total amount of PYG $367,000 million (approximately $66
million). The loan, denominated in PYG with the final maturity in 2022. The guarantee under this facility is counter-guaranteed by
MICSA.
In July 2018, Telefónica Celular del Paraguay S.A.E. executed a seven-year loan with Regional Bank for PYG 115,000 million
(approximately $18 million with a final maturity in 2025.
In January 2019, Telefónica Celular del Paraguay S.A.E. obtained a seven-year loan from BBVA Bank for PYG 177,000 million which is
due on November, 26, 2025.
In September 2019, Telefónica Celular del Paraguay S.A.E. executed an amended and restated agreement with Banco Continental
S.A.E.C.A., to consolidate three existing loans, for a PYG 370,000 million (approximately $57 million). The new loan has a maturity of
7 years.
In January 2020, Telecel refinanced its previous loan with Banco Itaú and obtained a new long-term loan from Banco Itaú Paraguay
S.A., for Gs. 154.6 billion (approximately $24 million) , amortizing semi-annually and maturing on December 27, 2024.
In December 2020, Telecel executed a credit agreement with Banco Continental S.A.E.C.A for PYG 200,000 million (approximately
$29 million using the exchange rate as of December 31, 2020) with a duration of 2.5 years. Main aim is to refinance outstanding bank
loans with maturities from 2021 to 2023.
2.
Panama
In August 2019, Cable Onda S.A entered into two credit agreements, one with Banco Nacional de Panama S.A , for $75 million
which bears a fixed interest and has a 5 year duration and another one with the Bank of Nova Scotia (Sucursal Panama) for $75
million with a fixed interest and a five year duration to finance and refinance working capital and capital expenditures. In October
2020, $50 million have been early repaid on the $75 million credit agreement with Banco Nacional de Panama S.A..
In December 2020, Cable Onda S.A. executed a credit agreement with Bank of Nova Scotia with a 60 month duration for
$110 million divided into 2 tranches. Tranche A ($85 million) was disbursed on December 2020 to partially recall the Local Bond
($85 million) and Tranche B is expected to be disbursed in Q1 2021.
179
179
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
3.
Bolivia
In June 2018, Telefónica Celular de Bolivia S.A.. entered into a two tranche loan agreement with Banco BISA S.A for BOB 69.6 million
(approximately $10 million) each, with a fixed interest rate. The loans have a term of 7 years.
In November 2019, they executed a new loan with Banco de Crédito de Bolivia S.A for Bs. 78 million (approximately $11 million), with
semiannual payments and a fixed interest rate. The loan has a term of 4 years.
4.
Costa Rica
In April 2018, Millicom Cable Costa Rica S.A. entered into a $150 million variable rate syndicated loan with Citibank as agent. In June
2020, Millicom Cable Costa Rica S.A partially repaid an amount of $30 million of this loan.
In June 2018, Millicom Cable Costa Rica S.A. entered into a cross currency swap to hedge part of the principal of the loan against
interest rate and currency risks. Interest rate and currency swap agreements had been made on $35 million of the principal amount
and interest rate swaps for an additional $40 million. In October 2018, Millicom Costa Rica S.A. entered into a currency swap to
hedge part of the principal of the loan against currency risks. The currency swap agreement had been made on $35 million of the
principal amount. Finally on April 2019, Millicom Cable Costa Rica S.A. entered into another cross currency swap to hedge part of the
principal of the loan against interest rate and currency risks. Interest rate and currency swap agreements had been made on
$37 million of the principal amount and interest rate swaps for an additional $38 million.
5.
Tanzania
In June 2019, MIC Tanzania Public Limited Company entered into a syndicated loan facility agreement with the Standard Bank of
South Africa acting as an agent and a consortium of banks acting as the original lenders, for $174.75 million (tranche A) and
TZS103,000 million (tranche B - approximately $45 million) which bears variable interests: for Tranche A Libor plus a margin and for
Trance B T-Bill rate plus a margin. The facility agreement has an all asset debenture securing the whole amount, as well as a pledge
over the shares of the immediate holding company of the borrower. The Facility was amended and restated in December 2019 and
maturity was extended to 66 months and 100% of the USD portion and TZS 34 billion (approximately $15 million) were disbursed. In
January 2020, TZS 35 billion (approximately $15 million) were disbursed and the last tranche of TZS 34 billion (approximately
$15 million) was disbursed in February 2020.
6. Colombia
In December 20, 2019, our operation in Colombia executed an amendment to the $300 million loan between Colombia Móvil S.A.
E.S.P. as borrower and UNE EPM Telecomunicaciones S.A., as guarantor with a consortium of banks to extend the maturity for 5 years
(now due on December 20, 2024) and lower the applicable margin.
In September and November 2020, Colombia executed 4 new cross currency swaps of $25 million each with Bancolombia, JP
Morgan and BBVA to complete $100 million and hedge the exposure of a portion of the $300 million syndicated loan, fixing the
exchange rate on average to USD/COP 3.682 and interest rate of 5.35%.
7. EL Salvador
On April 15, 2016, Telemovil El Salvador, S.A. de C.V. executed a senior unsecured term loan facility up to $50 million maturing in
April 2021 and bearing variable interest per annum, which was restated and amended as of May 30, 2017, for a second tranche of
$50 million. This facility is guaranteed by MICSA.. Later on, in January 2018, Telemovil El Salvador entered into a second amended
and restated agreement with Scotiabank for a third tranche of $50 million with variable rate and with a 5-year bullet repayment, also
guaranteed by MICSA.
In addition, the company executed an interest rate swap with Scotiabank to fix interest rates for up to $100 million of the
outstanding debt.
On June 3, 2016, Telemovil El Salvador, S.A. de C.V. executed a $30 million credit facility with Citibank N.A., for general corporate
purposes maturing in June 2021 and bearing variable interest rate per annum. The facility is guaranteed by MICSA..
In March 2018, Telemovil El Salvador executed a $100 million credit facility with DNB at a variable rate facility with DNB and Nordea
with a 5-year bullet repayment.The facility is guaranteed by MICSA..
In June 2020, Telemovil El Salvador. S.A de C.V repaid in its entirety $150 million of the principal under a credit agreement dated
January 2018 entered into with the Bank of Nova Scotia, as lender, and the Company as guarantor.
8. Luxembourg
In April 2019, MICSA. entered into a $300 million term facility agreement arranged by DNB Bank ASA, Sweden Branch and Nordea
Bank Abp, Filial i Sverige. This facility has a variable interest rate and is fully drawn as at December 31, 2019 and is due on April 2024.
In November 2020, MICSA prepaid the total $300 million facility.
180
18 0
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
In March 2020, MICSA drew down $400 million from the $600 million revolving credit facility it entered into in January 2017 (the
"RCF"). $337 million was disbursed in March 2020 and the remaining $63 million in April 2020. The draw down had an initial six-
month term and Millicom had the option to extend up to January 2022 (the maturity date of the RCF). The RCF was fully repaid on
June 29, 2020.
In October 2020, MICSA. entered into a 5 year, $600 million ESG-linked revolving credit facility (the "Facility") with a syndicate of 11
commercial banks. This facility will be used to refinance the above existing multi-currency revolving credit facility which was due to
expire in 2022 and for general corporate purposes.
Right of set-off and derecognition
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if
there is a currently enforceable legal right to offset the recognized amounts and an intention to settle on a net basis, or to realize the
assets and settle the liabilities simultaneously.
A financial asset (or a part of a financial asset or part of a group of similar financial assets) is derecognized when:
•
•
Rights to receive cash flows from the asset have expired; or
Rights to receive cash flows from the asset or obligations to pay the received cash flows in full without material delay have been
transferred to a third party under a “pass-through” arrangement; and the Group has either transferred substantially all the risks
and rewards of the asset or the control of the asset.
When rights to receive cash flows from an asset have been transferred or a pass-through arrangement concluded, an evaluation is
made if and to what extent the risks and rewards of ownership have been retained. When the Group has neither transferred nor
retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to the
extent of the Group’s continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The
transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has
retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
A financial liability is derecognized when the obligation under the liability is discharged or canceled, or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognized in the statement of income.
C.3.3. Interest and other financial expenses
The Group’s interest and other financial expenses comprised the following:
December 31
2020
2019
2018
(US$ millions)
Interest expense on bonds and bank financing..................................................................................................
Interest expense on leases..........................................................................................................................................
Early redemption charges...........................................................................................................................................
Others.................................................................................................................................................................................
Total interest and other financial expenses...................................................................................
(386)
(156)
(15)
(67)
(624)
(348)
(157)
(10)
(47)
(564)
(234)
(91)
(4)
(37)
(367)
C.3.4. Guarantees and pledged assets
Guarantees
Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder
for a loss it incurs because the specified debtor fails to make payment when due in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the
expenditure required to settle the present obligation at the reporting date and the amount recognized, less cumulative
amortization.
181
181
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Liabilities to which guarantees are related are recorded in the consolidated statement of financial position under Debt and financing,
and liabilities covered by supplier guarantees are recorded under Trade payables or Debt and financing, depending on the
underlying terms and conditions.
Maturity of guarantees
Terms
At December 31, 2020
At December 31, 2019
Outstanding and
Maximum
exposure(i)(ii)
Outstanding and
Maximum
exposure(i)(ii)
(US$ millions)
0-1 year.......................................................................................................................................................................
1-3 years.....................................................................................................................................................................
3-5 years.....................................................................................................................................................................
Total........................................................................................................................................
59
227
—
287
29
134
300
464
(i)
The outstanding exposure represents the carrying amount of the related liability at December 31.
(ii)
The maximum exposure represents the total amount of the Guarantee at December 31.
Pledged assets
As at December 31, 2020, the Group’s share of total debt and financing secured by either pledged assets, pledged deposits issued to
cover letters of credit, or guarantees issued was $287 million (December 31, 2019: $464 million). Assets pledged by the Group over
these debts and financings amounted to nil at December 31, 2020 (December 31, 2019: $1 million). The remainder represented
primarily guarantees issued by Millicom S.A. to guarantee financings raised by other Group operating entities.
In addition to the above, on June 4, 2019, MIC Tanzania Public Limited Company entered into a loan facility agreement which was
further amended and restated on December 12, 2019, with the Standard Bank of South Africa acting as an agent and a consortium of
banks acting as the original lenders. The facility agreement, maturing in 2025, has an all asset debenture securing the whole amount,
as well as a pledge over the shares of the immediate holding company of the borrower.
C.3.5. Covenants
Millicom’s financing facilities are subject to a number of covenants including net leverage ratio, debt service coverage ratios, or debt
to earnings ratios, among others. In addition, certain of its financings contain restrictions on sale of businesses or significant assets
within the businesses. At December 31, 2020, there were no breaches of financial covenants.
C.4. Lease liabilities
At December 31, 2020, lease liabilities are presented in the statement of financial position as follows:
Current..............................................................................................................................................................................................
Non-Current....................................................................................................................................................................................
Total Lease liabilities...............................................................................................................................
December 31,
2020
December 31,
2019(i)
(US$ millions)
123
897
1,021
107
988
1,096
(i)
Restated as a result of the finalization of the purchase accounting of our acquisition in Panama (note A.1.2.).
As permitted under IFRS 16, Millicom has elected not to recognize a lease liability for short term leases (leases with an expected term
of 12 months or less) or for leases of low value assets. Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are rather recognized on a straight-line basis as an expense in the statement of income. Short-term leases
are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture. In
addition, certain variable lease payments are not permitted to be recognized as lease liabilities and are expensed as incurred.
The expenses relating to payments not included in the measurement of the lease liability are disclosed in operating expenses (note
B.3.) and are as follows:
182
182
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
2020
2019
(US$ millions)
Expense relating to short-term leases (included in cost of sales and operating
expenses).................................................................................................................................
(1)
(5)
The total cash outflow for leases in 2020 was $267 million (2019: $249 million). Lease liabilities split by maturity and future cash
outflows are disclosed in note D.5..
At December 31, 2020, the Group has not committed to any material leases which had not yet commenced and has no material lease
contracts with variable lease payments.
The Group's leasing activities and how these are accounted for
The Group leases various lands, sites, towers (including those related to towers sold and leased back), offices, warehouses, retail
stores, equipment and cars. Rental contracts are typically made for fixed periods but may have extension options as described
below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
Through December 31, 2018, leases of property, plant and equipment were classified as either finance or operating leases. Under IAS
17, leases which transferred substantially all risks and benefits incidental to ownership of the leased item to the lessee were
capitalized at the inception of the lease. The amount capitalized was the lower of the fair value of the asset or the present value of
the minimum lease payments. Payments made under operating leases (net of any incentives received from the lessor) were charged
to the statement of income on a straight-line basis over the period of the lease.
Still under IAS 17, the sale and leaseback of towers and related site operating leases and service contracts were accounted for in
accordance with the underlying characteristics of the assets, and the terms and conditions of the lease agreements. When sale and
leaseback agreements were concluded, the portions of assets that will not be leased back by Millicom were classified as assets held
for sale as completion of their sale was highly probable. Asset retirement obligations related to the towers were classified as
liabilities directly associated with assets held for sale. On transfer to the tower companies, the portion of the towers leased back were
accounted for as operating leases or finance leases according to the criteria set out above. The portion of towers being leased back
represented the dedicated part of each tower on which Millicom’s equipment was located and was derived from the average
technical capacity of the towers. Rights to use the land on which the towers were located were accounted for as operating leases,
and costs of services for the towers were recorded as operating expenses. The gain on disposal was recognized upfront for the
portion of towers that is not leased back, and was deferred and recognized over the term of the lease for the portion leased back.
From January 1, 2019, leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset
is available for use by the Group. Each lease payment is allocated between the reduction of the liability and finance cost. The finance
cost is charged to the statement of income over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and
the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value
of the following lease payments:
•
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payment that are based on an index or a rate
amounts expected to be payable by the lessee under residual value guarantees
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. As it is generally impracticable to determine that rate,
the Group uses the lessee’s incremental borrowing rate, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The incremental
borrowing rate applied can have a significant impact on the net present value of the lease liability recognized under IFRS 16.
The Group determines the incremental borrowing rate by country and by considering the risk-free rate, the country risk, the industry
risk, the credit risk and the currency risk, as well as the lease and payment terms and dates.
The Group is also exposed to potential future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease
liability is adjusted against the right-of-use asset by discounting the revised lease payments using either the initial discount rate or a
revised discount rate. The initial discount rate is used if future lease payments are reflecting market or index rates or if they are in
183
183
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
substance fixed. The discount rate is revised, if a change in floating interest rates occurs. The Group reassesses the variable payment
only when there is a change in cash flows resulting from a change in the reference index or rate and not at each reporting date.
According to IFRS 16, lease term is defined as the non-cancellable period for which a lessee has the right to use an underlying asset,
together with both: (a) periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option;
and (b) periods covered by an option to terminate if the lessee is reasonably certain not to exercise that option. The assessment of
such options is performed at the commencement of a lease. As part of the assessment, Millicom introduced the 'time horizon
concept': the reasonable term under which the company expects to use a leased asset considering economic incentives,
management decisions, business plans and the fast-paced industry Millicom operates in. The assessment must be focused on the
economic incentives for Millicom to exercise (or not) an option to early terminate/extend a contract. The Group has decided to work
on the basis the lessor will generally accept a renewal/not early terminate a contract, as there is an economic incentive to maintain
the contractual relationship.
Millicom considered the specialized nature of most of its assets under lease, the low likelihood the lessor can find a third party to
substitute Millicom as a lessee and past practice to conclude that, the lease term can go beyond the notice period when there is
more than an insignificant penalty for the lessor not to renew the lease. This analysis requires judgment and has a significant impact
on the lease liability recognized under IFRS 16.
Under IFRS 16, the accounting for sale and leaseback transactions has changed as the underlying sale transaction needs to be first
analyzed using the guidance of IFRS 15. The seller/lessee recognizes a right-of-use asset in the amount of the proportional original
carrying amount that relates to the right of use retained. Accordingly, only the proportional amount of gain or loss from the sale
must be recognized. The impact from sale and leaseback transactions was not material for Millicom Group as of the date of initial
application.
Finally, the Group has taken the additional following decisions when adopting the standard:
•
•
Non-lease components are capitalized (IFRS16.15)
Intangible assets are out of IFRS 16 scope (IFRS16.4)
C.5. Cash and deposits
C.5.1. Cash and cash equivalents
Cash and cash equivalents in USD............................................................................................................................................................
Cash and cash equivalents in other currencies....................................................................................................................................
Total cash and cash equivalents............................................................................................................................
2020
2019
(US$ millions)
619
256
875
834
330
1,164
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with
original maturities of three months or less.
Cash deposits with banks with maturities of more than three months that generally earn interest at market rates are classified as time
deposits.
C.5.2. Restricted cash
Mobile Financial Services..............................................................................................................................................................................
Others..................................................................................................................................................................................................................
Restricted cash........................................................................................................................................................
2020
2019
(US$ millions)
192
7
199
150
5
155
Cash held with banks related to MFS which is restricted in use due to local regulations is denoted as restricted cash. The increase is in
line with the current increase in digital transactions due to the pandemic.
184
18 4
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.5.3. Pledged deposits
Pledged deposits represent contracted cash deposits with banks that are held as security for debts at corporate or operational entity
level. Millicom is unable to access these funds until either the relevant debt is repaid or alternative security is arranged with the
lender.
At December 31, 2020, there were no non-current pledged deposits (2019: nil).
At December 31, 2020, current pledged deposits amounted to nil (2019: $1 million).
C.6. Net financial obligations
Net financial obligations
Total debt and financing...............................................................................................................................................................................
Lease liabilities (i).............................................................................................................................................................................................
Gross financial obligations....................................................................................................................................
Less:
2020
2019
(US$ millions)
5,691
1,021
6,711
5,972
1,096
7,068
Cash and cash equivalents...........................................................................................................................................................................
(875)
(1,164)
Pledged deposits.............................................................................................................................................................................................
Time deposits related to bank borrowings............................................................................................................................................
Net financial obligations at the end of the year...................................................................................................
Add (less) derivatives related to debt (note D.1.2.).............................................................................................................................
Net financial obligations including derivatives related to debt.........................................................................
—
—
5,837
12
5,849
(1)
(1)
5,902
(17)
5,885
i)
2019 figure has been restated as a result of the finalization of the purchase accounting of our acquisition in Panama (note A.1.2.).
Assets
Cash and cash
equivalents
Liabilities from financing
activities
Other
Bond and bank
debt and financing
Lease
liabilities (i)
Net financial obligations as at January 1, 2019..........................
Cash flows..............................................................................................................
Scope Changes ....................................................................................................
Recognition / Remeasurement......................................................................
Interest accretion.................................................................................................
Foreign exchange movements......................................................................
Transfers to/from assets held for sale..........................................................
Transfers..................................................................................................................
Other non-cash movements...........................................................................
Net financial obligations as at December 31, 2019....................
Cash flows..............................................................................................................
Scope changes.....................................................................................................
Recognition / Remeasurement......................................................................
Interest accretion.................................................................................................
Foreign exchange movements......................................................................
Transfers to/from assets held for sale..........................................................
Transfers..................................................................................................................
Other non-cash movements...........................................................................
Net financial obligations as at December 31, 2020....................
528
638
16
—
—
(8)
(9)
—
—
1,164
(272)
—
—
—
(17)
—
—
—
875
2
—
—
—
—
—
—
—
—
2
(2)
—
—
—
—
—
—
—
—
4,227
1,743
74
—
8
(16)
(53)
3
(14)
898
(107)
210
109
—
(6)
(8)
—
—
Total
4,596
998
269
109
8
(14)
(52)
3
(14)
5,972
(274)
1,096
(121)
5,902
(121)
—
—
16
(10)
—
(3)
(10)
—
68
1
(30)
—
6
—
—
68
17
(22)
—
3
(10)
5,691
1,021
5,837
i)
2019 figure has been restated as a result of the finalization of the purchase accounting of our acquisition in Panama (note A.1.2.).
185
185
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.7. Financial instruments
i) Equity and debt instruments
Classification
The Group classifies its financial assets in the following measurement categories:
•
•
those to be measured subsequently at fair value either through Other Comprehensive Income (OCI), or through profit or loss,
and
those to be measured at amortized cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash
flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of
initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs
of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely
payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow
characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments:
•
•
•
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments
of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss
and presented in other gains / (losses), together with foreign exchange gains and losses. Impairment losses are presented as a
separate line item in the consolidated statement of income.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash
flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken
through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses
which are recognized in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously
recognized in OCI is reclassified from equity to profit or loss and recognized in ‘Other non-operating (expenses) income, net’.
Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign
exchange gains and losses and impairment expenses are presented as ‘Other non-operating (expenses) income, net’ in the
consolidated statement of income.
FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognized in profit or loss and presented net within ‘Other non-operating (expenses)
income, net’ in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value. The Group does not hold equity instruments for trading.
Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no
subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Purchases
and sales of equity instruments are recognized as of their settlement date. Dividends from such investments continue to be
recognized in profit or loss as other income when the Group’s right to receive payments is established.
Otherwise, changes in the fair value of financial assets at FVPL are recognized in ‘Other non-operating (expenses) income, net’ in the
consolidated statement of income as applicable. Impairment losses (and reversal of impairment losses) on equity investments
measured at FVOCI are not reported separately from other changes in fair value.
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Impairment
From January 1, 2018, the Group assesses on a forward looking basis the expected credit losses associated with its financial assets
carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be
recognized from initial recognition of the trade receivables.
The provision is recognized in the consolidated statement of income within Cost of sales.
ii) Derivative financial instruments and hedging activities
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at
fair value at each subsequent closing date. The method of recognizing the resulting gain or loss depends on whether the derivative
is designated as a hedging instrument and, if so, the nature of the item being hedged. The Group designates certain derivatives as
either:
a) Hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedge); or
b) Hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow
hedge).
For transactions designated and qualifying for hedge accounting, at the inception of the transaction, the Group documents the
relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for
undertaking various hedging transactions. This is done in reference to the Group Treasury Policy as last updated and approved by
the Audit Committee in late 2020. The Group also documents its assessment, both at hedge inception and on an ongoing basis
(quarterly), of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or
cash flows of hedged items.
The full fair value of a hedging instrument is classified as a non-current asset or liability when the period to maturity of the hedged
item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12
months. Trading derivatives are classified as a current asset or liability when the remaining period to maturity of the hedged item is
less than 12 months.
The change in fair value of hedging instruments that are designed and qualify as fair value hedges is recognized in the statement of
income as finance costs or income. The change in fair value of the hedged item attributable to the risk hedged is recorded as part of
the carrying value of the hedged item and is also recognized in the statement of income as finance costs or income.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in
other comprehensive income. Gains or loss relating to any ineffective portion is recognized immediately in the statement of income
within Other non-operating (expenses) income, net. Amounts accumulated in equity are reclassified to the statement of income in
the periods when the hedged item affects profit or loss.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative
gain or loss existing in equity at that time is recycled to the statement of income within Other non-operating (expenses) income, net.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately
transferred to the statement of income within Other non-operating (expenses) income, net.
C.7.1. Fair value measurement hierarchy
Millicom uses the following fair value measurement hierarchy:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is,
as prices) or indirectly (that is, derived from prices).
Level 3 – Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment
grade ratings. Interest rate swaps and foreign exchange forward contracts are valued using valuation techniques, which employ the
use of markets observable data. The most frequently applied valuation techniques include forward pricing and swap models using
present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange
spot and forward rates, yield curves of the respective currencies, interest rate curves and forward curves.
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.7.2. Fair value of financial instruments
The fair value of Millicom’s financial instruments are shown at amounts at which the instruments could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale. The fair value of all financial assets and all financial
liabilities, except debt and financing approximate their carrying value largely due to the short-term maturities of these instruments.
The fair values of all debt and financing have been estimated by the Group, based on discounted future cash flows at market interest
rates.
Fair values of financial instruments at December 31,
Carrying value
Fair value
Note
2020
2019
2020
2019
(US$ millions)
Financial assets
Derivative financial instruments..................................................................
Other non-current assets...............................................................................
Trade receivables, net......................................................................................
Amounts due from non-controlling interests, associates and
joint venture partners......................................................................................
Prepayments and accrued income.............................................................
Supplier advances for capital expenditures............................................
Call option (ii) ....................................................................................................
Equity Investments...........................................................................................
Other current assets.........................................................................................
Restricted cash...................................................................................................
Cash and cash equivalents............................................................................
Total financial assets........................................................................................
Current..................................................................................................................
Non-current.........................................................................................................
Financial liabilities
G.5.
C.7.4.
C.7.3.
C.5.2.
C.5.1.
24
77
351
296
149
21
3
160
181
199
875
2,337
2,143
194
—
66
371
68
156
22
—
371
192
155
1,164
2,564
2,460
104
24
77
351
296
149
21
3
160
181
199
875
2,337
2,143
194
—
66
371
68
156
22
—
371
192
155
1,164
2,564
2,460
104
Debt and financing (i)......................................................................................
C.3.
5,691
5,972
5,572
6,229
Trade payables...................................................................................................
Payables and accruals for capital expenditure.......................................
Derivative financial instruments..................................................................
Put option liability............................................................................................
C.7.4.
Amounts due to non-controlling interests, associates and joint
venture partners................................................................................................
Accrued interest and other expenses........................................................
G.5.
Other liabilities...................................................................................................
Total financial liabilities..................................................................................
Current..................................................................................................................
Non-current.........................................................................................................
(i)
Fair values are measured with reference to Level 1 (for listed bonds) or 2.
(ii) Measured with reference to Level 3, using a Monte Carlo option pricing model.
334
345
16
262
339
445
885
8,317
2,145
6,173
289
348
17
264
498
432
399
8,219
1,949
6,270
334
345
16
262
339
445
885
8,198
2,145
6,054
289
348
17
264
498
432
399
8,475
1,949
6,527
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.7.3. Equity investments
As at December 31, 2020 and 2019, Millicom has the following investments in equity instruments:
Investment in Jumia........................................................................................................................................................................................
Investment in HT...............................................................................................................................................................................................
Equity investment - total........................................................................................................................................
Jumia Technologies AG (“Jumia”)
2020
2019
(US$ millions)
—
160
160
32
338
371
Jumia indirectly owns a number of companies that provide online services and online marketplaces in certain countries in Africa.
In January 2019, Millicom was diluted in the capital of the company following the entry of a new investor. This triggered the
recognition of a net dilution gain of $7 million in January 2019. In addition, during Q1 2019, in preparation of Jumia's IPO, Millicom
relinquished its seat on the board of directors, which resulted in the loss of the Group's significant influence over Jumia. As a result,
Millicom derecognized its investment in associate in Jumia and recognized it as a financial asset (equity instrument) at fair value
under IFRS 9. On April 11, 2019, Jumia completed its IPO at the offer price per share of $14.5 and shares started trading on the NYSE
on April 12, 2019. As a result, as of March 31, 2019, a net gain of $30 million had been recognized and reported under ‘Income (loss)
from associates, net’. Post IPO, Millicom held 6.31% of the outstanding shares of Jumia.
In the course of June 2020, Millicom disposed of its entire stake in Jumia for a total net consideration of $29 million, triggering a net
gain on disposal of $15 million recorded in the statement of income under ‘other operating income (expenses), net’. The changes in
fair value prior to the disposal were shown under "Other non-operating (expenses) income, net" (note B.5.).
Helios Towers plc (“HT”)
In October 2019, Helios Towers plc (a company inserted as the holding company of HTA just prior to IPO) completed its IPO on the
London Stock Exchange at a price of GBP 1.15 per share valuing the company at enterprise value of approximately $2.0 billion and a
market capitalization of $1.45 billion.
As part of the listing process, on October 17, 2019, Millicom first was diluted as HT management exercised their IPO option rights
(~4%). This event triggered the recognition of a non-cash dilution loss of $3 million recorded under ‘Income/(loss) from other joint
ventures and associates’.
On the same day, Millicom resigned from its board of directors seats, which resulted in the loss of the Group's significant influence
over HT. As a result, as from that date, Millicom derecognized its investment in associate in HT and recognized it as a financial asset
at fair value under IFRS 9. The derecognition of the investment in associate and recognition of the equity investment in HT at a fair
value of $292 million triggered the recognition of a net non-cash gain of $208 million recorded under ‘Other non-operating income
(expense), net’ in the Group's statement of income. Fair value was determined using the IPO reference share price of GBP1.15.
As a result of the IPO and the subsequent exercise of the overallotment option, Millicom disposed of a portion of its ownership (in
total ~20%) yielding $57 million in gross proceeds and $25 million in net proceeds after fees and Millicom's share in tax escrow of
$30 million which has been deducted in full from the gain given the high level of uncertainties used in assessing the potential tax
liability. These disposals triggered a loss of $32 million, as a result of the tax escrow and transaction fees, and are recorded under
‘Other operating income (expenses), net’.
During 2020, Millicom disposed of a total of 85 million shares that it owned in HT for a total net consideration of GBP 130 million
($169 million), triggering a total net gain on disposal of $6 million recorded in the statement of income under ‘Other operating
income (expenses), net’.
As a result of these transactions, at December 31, 2020, Millicom owns a remaining shareholding of 7.6% in HT (2019:16.2%), valued
at $160 million (level 1) at the December 31, 2020 share price (£1.53). The changes in fair value are shown under 'Other non-
operating (expenses) income, net' (see note B.5.).
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
C.7.4. Call and put options
Cable Onda call and put options
As part of the acquisition of Cable Onda, the shareholders agreed on certain put and call options as follows - as amended
subsequent to the acquisition of Telefonica Panama:
The 'Transaction Price' call and put options are conditional to the occurrence of certain events, such as change of control of Millicom
or at any time if Millicom's non-controlling partners’ shareholdings fall below 10%, and become exercisable on the date of the
Telefonica Panama closing (August 29, 2019) and extending until June 13, 2022. These put and call options are exercisable at the
purchase price in the Cable Onda transaction (enterprise value of $1.46 billion), plus interest at 5% per annum (put) and at 10% per
annum (call), respectively. From June 14, 2022, up to July 14, 2022, both options will be unconditional.
In addition, the parties agreed on 'Unconditional' call and put options to acquire the remaining 20% non-controlling interest in
Cable Onda becoming exercisable at any time from July 15, 2022, both, at fair market value.
Millicom determined that the 'Transaction Price' put option could be exercised as a result of events falling outside of Millicom's
control, and therefore that it met the criteria under IAS 32 for recognition as a liability and a corresponding equity decrease. The put
option liability would be payable in Millicom's shares or in cash at the discretion of the partner. Therefore, Millicom recorded a
liability for the put option at acquisition completion date of $239 million representing the present value of the redemption amount.
As of December 31, 2020, the value of the 'Transaction Price' put option is lower than the 'Unconditional' put option's value, and
therefore the Group recognized the put option liability at the higher of both valuations at $262 million (December 31, 2019: $264
million).
At December 31, 2020.The 'Transaction Price' call option has been valued at $3 million (December 31, 2019: nil) using a Monte Carlo
simulation model. At December 31, 2020, the 'Unconditional' call option will be exercisable at fair market value and has therefore no
value as at December 31, 2020 (December 31, 2019: nil).
The changes in value of the call option asset and put option liability are recorded in the Group's statement of income (see note B.5.).
D. Financial risk management
Exposure to interest rate, foreign currency, non-repatriation, liquidity, capital management and credit risks arise in the normal course
of Millicom’s business. Each year Group Treasury revisits and presents to the Audit committee updated Group Treasury policy. The
Group analyzes each of these financial risks individually as well as on an interconnected basis and defines and implements strategies
to manage the economic impact on the Group’s performance in line with its policy. This policy was last reviewed in late 2020. As part
of the annual review of the above mentioned risks, the Group agrees to a strategy over the use of derivatives and natural hedging
instruments ranging from raising debt in local currency (where the Company targets to reach 40% of debt in local currency over the
medium term) to maintain a combination of up to 75/25% mix between fixed and floating rate debt or agreeing to cover up to six
months forward of operating costs and capex denominated in non-functional currencies through a rolling and layering strategy.
Millicom’s risk management strategies may include the use of derivatives to the extent a market would exist in the jurisdictions
where the Group operates. Millicom’s policy prohibits the use of such derivatives in the context of speculative trading.
Accounting policies for derivatives is further detailed in note C.7. On December 31, 2020 and 2019 fair value of derivatives held by
the Group can be summarized as follows:
Derivatives
Cash flow hedge derivatives........................................................................................................................................................................
Net derivative asset (liability)................................................................................................................................
12
12
(17)
(17)
2020
2019
(US$ millions)
D.1. Interest rate risk
Debt and financing issued at floating interest rates expose the Group to cash flow interest rate risk. Debt and financing issued at
fixed rates expose the Group to fair value interest rate risk. The Group’s exposure to risk of changes in market interest rates relate to
both of the above. To manage this risk, the Group’s policy is to maintain a combination of fixed and floating rate debt with target
that more than 75% of the debt be at fixed rate. The Group actively monitors borrowings against this target. The target mix between
fixed and floating rate debt is reviewed periodically. The purpose of Millicom’s policy is to achieve an optimal balance between cost
of funding and volatility of financial results, while considering market conditions as well as our overall business strategy. At
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
December 31, 2020, approximately 84% of the Group’s borrowings are at a fixed rate of interest or for which variable rates have been
swapped for fixed rates with interest rate swaps (2019: 76%).
D.1.1. Fixed and floating rate debt
Financing at December 31, 2020
1 year
1–2 years
2–3 years
3–4 years
4–5 years
>5 years
Total
Amounts due within:
Fixed rate financing..................
Floating rate financing............
Total.....................................
Weighted average nominal
interest rate.................................
80
33
113
4.65 %
90
17
107
4.95 %
Financing at December 31, 2019
(US$ millions)
268
171
439
561
250
811
269
197
467
3,498
256
3,755
4,766
926
5,691
5.76 %
4.15 %
5.09 %
5.21 %
4.90 %
Fixed rate financing..................
Floating rate financing............
Total.....................................
Weighted average nominal
interest rate.................................
1 year
1–2 years
2–3 years
3–4 years
4–5 years
>5 years
Total
Amounts due within:
(US$ millions)
118
68
186
117
38
155
118
27
145
332
185
517
431
654
1,085
3,428
457
3,884
4,543
1,429
5,972
5.10 %
4.55 %
4.34 %
5.81 %
4.73 %
5.24 %
4.82 %
A 100 basis point fall or rise in market interest rates for all currencies in which the Group had borrowings at December 31, 2020
would increase or reduce profit before tax from continuing operations for the year by approximately $9 million (2019: $14 million).
D.1.2. Interest rate swap contracts
From time to time, Millicom enters into currency and interest rate swap contracts to manage its exposure to fluctuations in interest
rates and currency fluctuations in accordance with its Financial Risk Management policy. Details of these arrangements are provided
below.
MIC S.A. entered into swap contracts in order to hedge the foreign currency and interest rate risks in relation to the SEK 2 billion
(~$211 million) senior unsecured sustainability bond issued in May 2019 (note C.3.1.). These swaps are accounted for as cash flow
hedges as the timing and amounts of the cash flows under the swap agreements match the cash flows under the SEK bond. Their
maturity date is May 2024. The hedging relationship is highly effective and related fluctuations are recorded through other
comprehensive income. At December 31, 2020, the fair values of the swaps amount to an asset of $23 million. (December 31, 2019: a
liability of $0.2 million).
In addition, Colombia, El Salvador and Costa Rica operations have also entered into several swap agreements in order to hedge
foreign currency and interest rate risks on certain long term debts. These swaps are accounted for as cash flow hedges and related
fair value changes are recorded through other comprehensive income. At December 31, 2020, the fair value of El Salvador swaps
amount to a liability of $3 million (December 31, 2019: a liability of $3 million), Costa Rica swaps amount to a liability of $5 million
and an asset of $1 million (December 31, 2019: liability of $14 million) and the fair value of Colombia swaps amount to a liability of
$7 million (December 31, 2019: nil).
Interest rate and currency swaps are measured with reference to Level 2 of the fair value hierarchy
There are no other derivative financial instruments with a significant fair value at December 31, 2020.
D.2. Foreign currency risks
The Group is exposed to foreign exchange risk arising from various currency exposures in the countries in which it operates. Foreign
exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Millicom seeks to reduce its foreign currency exposure through a policy of matching, as far as possible, assets and liabilities
denominated in foreign currencies, or entering into agreements that limit the risk of exposure to currency fluctuations against the
US dollar reporting currency. In some cases, Millicom may also borrow in US dollars where it is either commercially more
advantageous for joint ventures and subsidiaries to incur debt obligations in US dollars or where US dollar denominated borrowing
is the only funding source available to a joint venture or subsidiary. In these circumstances, Millicom accepts the remaining currency
risk associated with financing its joint ventures and subsidiaries, principally because of the relatively high cost of forward cover,
when available, in the currencies in which the Group operates.
D.2.1. Debt denominated in US dollars and other currencies
Debt denomination at December 31
2020
2019
(US$ millions)
Debt denominated in US dollars................................................................................................................................................................
3,384
3,535
Debt denominated in currencies of the following countries
Colombia.............................................................................................................................................................................................................
Tanzania..............................................................................................................................................................................................................
Bolivia...................................................................................................................................................................................................................
Paraguay.............................................................................................................................................................................................................
El Salvador(i)......................................................................................................................................................................................................
Panama(i)............................................................................................................................................................................................................
Luxembourg (COP denominated).............................................................................................................................................................
Costa Rica...........................................................................................................................................................................................................
614
40
337
180
118
869
41
107
531
14
350
206
268
918
43
107
Total debt denominated in other currencies.......................................................................................................
Total debt................................................................................................................................................................
2,307
5,691
2,437
5,972
(i) El Salvador's official unit of currency is the U.S. dollar, while Panama uses the U.S. dollar as legal tender. Our local debt in both countries is therefore
denominated in U.S. dollars but presented as local currency (LCY).
At December 31, 2020, if the US dollar had weakened/strengthened by 10% against the other functional currencies of our operations
and all other variables held constant, then profit before tax from continuing operations would have increased/decreased by $45
million (2019: $17 million). This increase/decrease in profit before tax would have mainly been as a result of the conversion of the
USD-denominated net debts in our operations with functional currencies other than the US dollar.
D.2.2. Foreign currency swaps
See note D.1.2. Interest rate swap contracts.
D.3. Non-repatriation risk
Most of Millicom’s operating subsidiaries and joint ventures generate most of the revenue of the Group and in the currency of the
countries in which they operate. Millicom is therefore dependent on the ability of its subsidiaries and joint venture operations to
transfer funds to the Company.
Although foreign exchange controls exist in some of the countries in which Millicom Group companies operate, none of these
controls currently significantly restrict the ability of these operations to pay interest, dividends, technical service fees, royalties or
repay loans by exporting cash, instruments of credit or securities in foreign currencies. However, existing foreign exchange controls
may be strengthened in countries where the Group operates, or foreign exchange controls may be introduced in countries where
the Group operates that do not currently impose such restrictions. If such events were to occur, the Company’s ability to receive
funds from the operations could be subsequently restricted, which would impact the Company’s ability to make payments on its
interest and loans and, or pay dividends to its shareholders. As a policy, all operations which do not face restrictions to deposit funds
offshore and in hard currencies should do so for the surplus cash generated on a weekly basis. The Company and its subsidiaries
make use of notional and physical cash pooling arrangements in hard currencies to the extent permitted.
In addition, in some countries it may be difficult to convert large amounts of local currency into foreign currency because of limited
foreign exchange markets. The practical effects of this may be time delays in accumulating significant amounts of foreign currency
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
and exchange risk, which could have an adverse effect on the Group. This is a relatively rare case for the countries in which the
Group operates.
Lastly, repatriation most often results in taxation, which is evidenced in the amount of taxes paid by the Group relative to the
Corporate Income Tax reported in its statement of income.
D.4. Credit and counterparty risk
Financial instruments that subject the Group to credit risk include cash and cash equivalents, pledged deposits, letters of credit,
trade receivables, amounts due from joint venture partners and associates, supplier advances and other current assets and
derivatives. Counterparties to agreements relating to the Group’s cash and cash equivalents, pledged deposits and letters of credit
are significant financial institutions with investment grade ratings. Management does not believe there are significant risks of non-
performance by these counterparties and maintain a diversified portfolio of banking partners. Allocation of deposits across banks
are managed such that the Group’s counterparty risk with a given bank stays within limits which have been set, based on each
bank’s credit rating.
A large portion of revenue of the Group is comprised of prepaid products and services. For postpaid customers, the Group follows
risk control procedures to assess the credit quality of the customer, taking into account its financial position, past experience and
other factors. Accounts receivable also comprise balances due from other telecom operators. Credit risk of other telecom operators
is limited due to the regulatory nature of the telecom industry, in which licenses are normally only issued to credit-worthy
companies. The Group maintains a provision for expected credit losses of trade receivables based on its historical credit loss
experience.
As the Group has a large number of internationally dispersed customers, there is generally no significant concentration of credit risk
with respect to trade receivables, except for certain B2B customers (mainly governments). See note F.1.
D.5. Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Group
has significant indebtedness but also has significant cash balances. Millicom evaluates its ability to meet its obligations on an
ongoing basis using a recurring liquidity planning tool. This tool considers the operating net cash flows generated from its
operations and the future cash needs for borrowing, interest payments, dividend payments and capital and operating expenditures
required in maintaining and developing its operating businesses.
The Group manages its liquidity risk through use of bank overdrafts, bank loans, bonds, vendor financing, Export Credit Agencies
and Development Finance Institutions (DFI) loans. Millicom believes that there is sufficient liquidity available in the markets to meet
ongoing liquidity needs. Additionally, Millicom is able to arrange offshore funding. Millicom has a diversified financing portfolio with
commercial banks representing about 20% of its gross financing (2019: 26%), bonds 64% (2019: 58%), Development Finance
Institutions 1% (2019: 1%) and leases 15% (2019: 15%).
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Maturity profile of net financial liabilities at December 31, 2020
Total debt and financing............................................................................................................
Lease liability...................................................................................................................................
Cash and equivalents...................................................................................................................
Pledged deposits (related to back borrowings).................................................................
Refundable deposit
Derivative financial instruments..............................................................................................
Net cash (debt) including derivatives related to debt....................................
Future interest commitments related to debt and financing.......................................
Future interest commitments related to leases.................................................................
Trade payables (excluding accruals)......................................................................................
Other financial liabilities (including accruals).....................................................................
Put option liability
Trade receivables...........................................................................................................................
Other financial assets...................................................................................................................
Net financial liabilities.......................................................................................
Less than 1
year
1 to 5 years
>5yrs
Total
(113)
(123)
875
—
—
—
639
(311)
(146)
(576)
(1,185)
(262)
351
568
(922)
(US$ millions)
(1,824)
(525)
(3,755)
(373)
—
—
—
12
(2,336)
(1,069)
(410)
—
(29)
—
—
167
—
—
—
—
(4,128)
(104)
(203)
—
—
—
—
—
(5,691)
(1,021)
875
—
—
12
(5,825)
(1,484)
(759)
(576)
(1,214)
(262)
351
735
(3,676)
(4,435)
(9,034)
Maturity profile of net financial liabilities at December 31, 2019
Total debt and financing............................................................................................................
Lease liability(i)...............................................................................................................................
Cash and equivalents...................................................................................................................
Pledged deposits (related to back borrowings).................................................................
Refundable deposit......................................................................................................................
Derivative financial instruments..............................................................................................
Net cash (debt) including derivatives related to debt
Future interest commitments related to debt and financing.......................................
Future interest commitments related to leases
Trade payables (excluding accruals)
Other financial liabilities (including accruals)
Put option liability
Trade receivables
Other financial assets...................................................................................................................
Net financial liabilities.......................................................................................
Less than 1
year
1 to 5 years
>5yrs
Total
(186)
(107)
1,164
1
—
(17)
855
(308)
(157)
(510)
(1,052)
(264)
371
613
(452)
(US$ millions)
(1,902)
(490)
(3,884)
(498)
—
—
—
—
(2,392)
(1,088)
(476)
—
(337)
—
—
104
—
—
—
—
(4,383)
(106)
(295)
—
—
—
—
—
(5,972)
(1,096)
1,164
1
—
(17)
(5,920)
(1,502)
(928)
(510)
(1,389)
(264)
371
717
(4,189)
(4,784)
(9,425)
(i)
Restated as a result of the finalization of the purchase accounting of our acquisitions in Nicaragua and Panama (note A.1.2.).
D.6. Capital management
The primary objective of the Group’s capital management is to ensure a strong credit rating and solid capital ratios in order to
support its business and maximize shareholder value.
The Group manages its capital structure with reference to local economic conditions and imposed restrictions such as debt
covenants. To maintain or adjust its capital structure, the Group may make dividend payments to shareholders, return capital to
shareholders through share repurchases or issue new shares. At December 31, 2020, Millicom was rated at one notch below
194
19 4
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
investment grade by the independent rating agencies Moody’s (Ba1 stable) and Fitch (BB+ stable). The Group primarily monitors
capital using net financial obligations to EBITDA.
The Group reviews its gearing ratio (net financial obligations divided by total capital plus net financial obligations) periodically. Net
financial obligations includes interest bearing debt and lease liabilities, less cash and cash equivalents (included restricted cash) and
pledged and time deposits related to bank borrowings. Capital represents equity attributable to the equity holders of the parent.
Net financial obligations to EBITDA
Note
2020
2019
(US$ millions)
Net financial obligations (ii).........................................................................................................................................
EBITDA................................................................................................................................................................................
Net financial obligations to EBITDA (i)....................................................................................................................
C.6.
B.3.
5,837
1,495
3.90
5,902
1,530
3.86
(i) The ratio is above 3.0x on an IFRS basis. However, according to the terms of the indenture, this ratio is calculated differently, resulting in a ratio below
3.0x for covenant purposes.
(ii) 2019 figure has been restated as a result of the finalization of the purchase accounting of our acquisition in Panama (note A.1.2.).
Gearing ratio
Net financial obligations (i).........................................................................................................................................
Equity attributable to Owners of the Company..................................................................................................
C.6.
C.1.
Net financial obligations and equity.......................................................................................................................
Gearing ratio.....................................................................................................................................................................
5,837
2,059
7,896
0.74
5,902
2,410
8,312
0.71
(i) 2019 figure has been restated as a result of the finalization of the purchase accounting of our acquisition in Panama (note A.1.2.).
Note
2020
2019
(US$ millions)
E. Long-term assets
E.1. Intangible assets
Millicom’s intangible assets mainly consist of goodwill arising from acquisitions, customer lists acquired through acquisitions,
licenses and rights to operate and use spectrum.
E.1.1. Accounting for intangible assets
Intangible assets acquired in business acquisitions are initially measured at fair value at the date of acquisition, and those which are
acquired separately are measured at cost. Internally generated intangible assets, excluding capitalized development costs, are not
capitalized but expensed to the statement of income in the expense category consistent with the function of the intangible assets.
Subsequently intangible assets are carried at cost, less any accumulated amortization and any accumulated impairment losses.
Intangible assets with finite useful lives are amortized over their estimated useful economic lives using the straight-line method and
assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the
amortization method for intangible assets with finite useful lives are reviewed at least at each financial year end. Changes in
expected useful lives or the expected beneficial use of the assets are accounted for by changing the amortization period or method,
as appropriate, and treated as changes in accounting estimates.
Amortization expense on intangible assets with finite lives is recognized in the consolidated statement of income in the expense
category consistent with the function of the intangible assets.
Goodwill
Goodwill represents the excess of cost of an acquisition over the Group’s share in the fair value of identifiable assets less liabilities
and contingent liabilities of the acquired subsidiary, at the date of the acquisition. If the fair value or the cost of the acquisition can
only be determined provisionally, then goodwill is initially accounted for using provisional values. Within 12 months of the
acquisition date, any adjustments to the provisional values are recognized. This is done when the fair values and the cost of the
195
195
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
acquisition have been finally determined. Adjustments to provisional fair values are made as if the adjusted fair values had been
recognized from the acquisition date. Goodwill on acquisition of subsidiaries is included in intangible assets, net. Goodwill on
acquisition of joint ventures or associates is included in investments in joint ventures and associates. Following initial recognition,
goodwill is measured at cost, less any accumulated impairment losses. Gains or losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is
disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill disposed of in this manner is measured, based on the relative values of the
operation disposed and the portion of the cash-generating unit retained.
Licenses
Licenses are recorded at either historical cost or, if acquired in a business combination, at fair value at the date of acquisition. Cost
includes cost of acquisition and other costs directly related to acquisition and retention of licenses over the license period. These
costs may include estimates related to fulfillment of terms and conditions related to the licenses such as service or coverage
obligations, and may include up-front and deferred payments.
Licenses have a finite useful life and are carried at cost less accumulated amortization and any accumulated impairment losses.
Amortization is calculated using the straight-line method to allocate the cost of the licenses over their estimated useful lives.
The terms of licenses, which have been awarded for various periods, are subject to periodic review for, among other things, rate
setting, frequency allocation and technical standards. Licenses are initially measured at cost and are amortized from the date the
network is available for use on a straight-line basis over the license period. Licenses held, subject to certain conditions, are usually
renewable and generally non-exclusive. When estimating useful lives of licenses, renewal periods are included only if there is
evidence to support renewal by the Group without significant cost.
Trademarks and customer lists
Trademarks and customer lists are recognized as intangible assets only when acquired or gained in a business combination. Their
cost represents fair value at the date of acquisition. Trademarks and customer lists have indefinite or finite useful lives. Indefinite
useful life trademarks are tested for impairment annually. Finite useful life trademarks are carried at cost, less accumulated
amortization. Amortization is calculated using the straight-line method to allocate the cost of the trademarks and customer lists over
their estimated useful lives. The estimated useful lives for trademarks and customer lists are based on specific characteristics of the
market in which they exist. Trademarks and customer lists are included in Intangible assets, net.
Estimated useful lives are:
Estimated useful lives
Trademarks..........................................................................................................................................................................................................................................
Customer lists.....................................................................................................................................................................................................................................
Programming and content rights
Years
1 to 15
4 to 20
Programming and content master rights which are purchased or acquired in business combinations which meet certain criteria are
recorded at cost as intangible assets. The rights must be exclusive, related to specific assets which are sufficiently developed, and
probable to bring future economic benefits and have validity for more than one year. Cost includes consideration paid or payable
and other costs directly related to the acquisition of the rights, and are recognized at the earlier of payment or commencement of
the broadcasting period to which the rights relate.
Programming and content rights capitalized as intangible assets have a finite useful life and are carried at cost, less accumulated
amortization and any accumulated impairment losses. Amortization is calculated using the straight-line method to allocate the cost
of the rights over their estimated useful lives.
Non-exclusive and programming and content rights for periods less than one year are expensed over the period of the rights.
Indefeasible rights of use
There is no universally-accepted definition of an indefeasible rights of use (IRU). These agreements come in many forms. However,
the key characteristics of a typical arrangement include:
•
•
•
The right to use specified network infrastructure or capacity;
For a specified term (often the majority of the useful life of the relevant assets);
Legal title is not transferred;
196
19 6
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
•
•
A number of associated service agreements including operations and maintenance (O&M) and co-location agreements. These
are typically for the same term as the IRU; and
Any payments are usually made in advance.
IRUs are accounted for either as a lease, or service contract based on the substance of the underlying agreement.
IRU arrangements will qualify as a lease if, and when:
•
•
•
•
The purchaser has an exclusive right for a specified period and has the ability to resell (or sublet) the capacity; and
The capacity is physically limited and defined; and
The purchaser bears all costs related to the capacity (directly or not) including costs of operation, administration and
maintenance; and
The purchaser bears the risk of obsolescence during the contract term.
If all of these criteria are not met, the IRU is treated as a service contract.
An IRU of network infrastructure (cables or fiber) is accounted for as a right of use asset (see E.3.), while capacity IRU (wavelength) is
accounted for as an intangible asset.
The costs of an IRU recognized as service contract is recognized as prepayment and amortized in the statement of income as
incurred over the duration of the contract.
E.1.2. Impairment of non-financial assets
At each reporting date Millicom assesses whether there is an indication that a non-financial asset may be impaired. If any such
indication exists, or when annual impairment testing for a non-financial asset is required, an estimate of the asset’s recoverable
amount is made. The recoverable amount is determined based on the higher of its fair value less cost to sell, and its value in use, for
individual assets, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups
of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. Where no comparable market information is available, the fair value, less cost to sell, is determined based on
the estimated future cash flows discounted to their present value using a discount rate that reflects current market conditions for
the time value of money and risks specific to the asset. The foregoing analysis also evaluates the appropriateness of the expected
useful lives of the assets. Impairment losses related to assets of continuing operations are recognized in the consolidated statement
of income in expense categories consistent with the function of the impaired asset.
At each reporting date an assessment is made as to whether there is any indication that previously recognized impairment losses
may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. Other than for goodwill, a
previously recognized impairment loss is reversed if there has been a change in the estimate used to determine the asset’s
recoverable amount since the last impairment loss was recognized. If so, the carrying amount of the asset is increased to its
recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss.
After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any
residual value, on a systematic basis over its remaining useful life.
E.1.3. Movements in intangible assets
On May 20, 2019, the Group renewed 10MHz of the 1900 MHz spectrum in Colombia for a period of 10 years for an amount of
$47 million (payable in five installments from June 2019 to February 2023) and an obligation to build 45 sites during the 20-month
period following the renewal (approximately $20 million cost, that will be capitalized once the sites are built). In December 2019, the
company substituted its coverage obligation by agreeing to pay the corresponding amount of $20 million in cash in 6 installments
between January to June 2020. As a result, Management recognized an addition to spectrum assets and a liability for $20 million.
On July 9, 2019, the Tanzania Communications Regulatory Authority ('TCRA') issued a notice to cancel the license of Telesis, a
subsidiary of Millicom in Tanzania that shared its 4G spectrum with Tigo and Zantel operations in the country. The net carrying value
of the Telesis' license amounting to $8 million was therefore impaired during Q3 2019. As a consequence and in order to continue
providing 4G services in the country, our operation in Tanzania had to purchase spectrum in the 800MHz band from the TCRA for a
period of 15 years and for an amount of $12 million.
197
197
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
In December 2019, Millicom's wholly-owned subsidiary Telemovil El Salvador S.A. de C.V. ('Telemovil') acquired 50Mhz spectrum in
the AWS band and paid an advance of $14 million. On January 8, 2020, Telemovil made a final payment of $20 million and started
operating the spectrum.
In December 2019, Tigo Colombia participated in an auction launched by the Ministerio de Tecnologias de la Informacion y las
Comunicaciones (MINTIC), and acquired licenses granting the right to use a total of 40 MHz in the 700 MHz band. The 20-year license
will expire in 2040. As a result of this auction,Tigo Colombia has strengthened its spectrum position, which also includes 55 MHz in
the 1900 band and 30 MHz of AWS. Tigo Colombia agreed to a total notional consideration of COP 2.45 billion (equivalent to
approximately $710 million using the December 31, 2020 exchange rate), of which approximately 55% is payable in cash and 45% in
coverage obligations to be met by 2025.
An initial payment of approximately $33 million was made in 2020, with the remainder payable in 12 annual installments beginning
in 2026 and ending in 2037. The 55% cash portion bears interest at the Colombia-10 years Treasury Bond rate. In April and May 2020,
local management received permission to operate 40 Mhz in the 700 MHz band and accounted for the spectrum as an Intangible
asset at an amount of $388 million corresponding to the net present value of the future payments, plus other costs directly
attributable to this acquisition. The related future interest commitments will be recognized as interest expense over the next 17
years. The remaining 45% consideration due as coverage obligations are currently being estimated and will be recognized in the
statement of financial position as incurred.
Movements in intangible assets in 2020
Goodwill
Licenses
Customer
Lists
IRUs
Trademar
k
Other (i)
Total
Opening balance, net ...................................
1,684
Change in scope.........................................................
Additions ......................................................................
Amortization charge.................................................
Impairment ..................................................................
Disposals, net ..............................................................
Transfers ........................................................................
Exchange rate movements ....................................
Closing balance, net .........................................
Cost or valuation ........................................................
Accumulated amortization and impairment ...
—
—
—
—
—
—
(26)
1,659
1,659
—
Net .................................................................
1,659
468
—
421
(71)
—
—
3
49
870
1,305
(435)
870
Movements in intangible assets in 2019
(US$ millions)
470
107
—
—
(44)
—
—
—
(3)
423
630
(207)
423
—
—
(13)
—
14
(18)
(3)
86
196
(111)
86
183
—
—
(106)
—
—
—
—
77
323
(246)
77
282
3,195
—
99
(84)
—
—
(1)
(8)
289
840
(550)
289
—
520
(318)
—
13
(16)
10
3,403
4,953
(1,550)
3,403
Goodwill
Licenses
Customer
Lists
IRUs
Trademar
k
Other (i)
Total
(US$ millions)
Opening balance, net ...................................
Change in scope (ii)....................................................
Additions .......................................................................
Amortization charge..................................................
Impairment ...................................................................
Disposals, net ...............................................................
Transfers.........................................................................
Transfer to/from held for sale.................................
Exchange rate movements .....................................
Closing balance, net .....................................
Cost or valuation ........................................................
Accumulated amortization and impairment ...
1,069
623
—
—
—
—
—
—
(7)
1,684
1,684
—
Net .................................................................
1,684
89
10
—
(14)
—
—
23
—
—
107
214
(107)
107
282
—
—
(99)
—
—
—
—
—
183
325
(142)
183
218
24
101
(67)
—
—
15
(3)
(4)
282
809
(527)
282
2,346
936
202
(272)
(8)
—
33
(21)
(21)
3,195
4,647
(1,451)
3,195
371
137
—
(37)
—
—
—
—
(1)
470
688
(218)
470
318
142
101
(55)
(8)
—
(5)
(18)
(8)
468
926
(458)
468
198
19 8
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
(i)
Other includes mainly software costs
(ii) Restated as a result of the finalization of the purchase accounting of our acquisitions in Nicaragua and Panama (note A.1.2.).
E.1.4. Cash used for the purchase of intangible assets
Cash used for intangible asset additions
Additions.....................................................................................
Change in accruals and payables for intangibles.........
Cash used for additions...............................................
520
(315)
202
202
(32)
171
158
(10)
148
2020
2019
2018
(US$ millions)
E.1.5. Goodwill
Allocation of Goodwill to cash generating units (CGUs), net of exchange rate movements and after impairment
2020
2019
(US$ millions)
Panama (see note A.1.2.)(i)...........................................................................................................................................................................
El Salvador..........................................................................................................................................................................................................
Costa Rica...........................................................................................................................................................................................................
Paraguay.............................................................................................................................................................................................................
Colombia.............................................................................................................................................................................................................
Tanzania (see note E.1.6.)..............................................................................................................................................................................
Nicaragua (see note A.1.2)(i)........................................................................................................................................................................
Other....................................................................................................................................................................................................................
907
194
115
47
173
12
207
3
907
194
123
50
181
12
213
3
Total.............................................................................................................................................................................
1,659
1,684
(i) Restated as a result of the finalization of the purchase accounting of our acquisitions in Nicaragua and Panama (note A.1.2.).
E.1.6. Impairment testing of goodwill
Goodwill from CGUs is tested for impairment at least each year and more frequently if events or changes in circumstances indicate
that the carrying value may be impaired. Impairment losses on goodwill are not reversed.
Goodwill arising on business combinations is allocated to each of the Group’s CGUs or groups of CGUs that are expected to benefit
from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or
groups of units. Each unit or group of units to which the goodwill is allocated:
•
•
Represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and
Is not larger than an operating segment.
Impairment is determined by assessing the value-in-use and, if appropriate, the fair value less costs to sell of the CGU (or group of
CGUs), to which goodwill relates.
Impairment testing at December 31, 2020
Goodwill was tested for impairment by assessing the recoverable amount against the carrying amount of the CGU based on
discounted cash flows. The recoverable amounts are based on value-in-use. The value-in-use is determined based on the method of
discounted cash flows. The cash flow projections used (operating profit margins, income tax, working capital, capex and license
renewal cost) are extracted from business plans approved by management and presented to the Board, covering a fifteen-year
planning horizon. The Group uses a fifteen-year planning horizon to obtain a stable business outlook, in particular due to the long
investment cycles in the industry and the long-term planned and expected investments in licenses and spectrum. Cash flows
beyond this period are extrapolated using a perpetual growth rate. When value-in-use results are lower than the carrying values of
the CGUs, management determines the recoverable amount by using the fair value less cost of disposal (FVLCD) of the CGUs. FVLCD
is usually determined by using recent offers received from third parties (Level 1).
199
19 9
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
For the year ended December 31, 2020, management concluded that no impairment should be recorded in the Group consolidated
financial statements.
Impairment testing at December 31, 2019
For the year ended December 31, 2019, management concluded that no impairment should be recorded in the Group consolidated
financial statements.
Key assumptions used in value in use calculations
The process of preparing the cash flow projections considers the current market condition of each CGU, analyzing the
macroeconomic, competitive, regulatory and technological environments, as well as the growth opportunities of the CGUs.
Therefore, a growth target is defined for each CGU, based on the appropriate allocation of operating resources and the capital
investments required to achieve the target. The foregoing forecasts could differ from the results obtained through time; however,
the Company prepares its estimates based on the current situation of each of the CGUs. Relevance of budgets used for the
impairment test is also reviewed annually, with management performing regressive analysis between actual figures and budget/
Long Range Plans (LRPs) used for previous year impairment test.
The cash flow projections for all CGUs is most sensitive to the following key assumptions:
•
•
•
•
EBITDA margin is determined by dividing EBITDA by total revenues.
CAPEX intensity is determined by dividing CAPEX by total revenues.
Perpetual growth rate does not exceed the countries' GDP.
Weighted average cost of capital (“WACC”) is used to discount the projected cash flows.
The most significant estimates used for the 2020 and 2019 impairment test are shown below:
CGU
Average EBITDA
margin (%) (i)
Average CAPEX
intensity (%) (i)
Perpetual growth
rate (%)
WACC rate after tax
(%)
2020
2019
2020
2019
2020
2019
2020
2019
Bolivia.............................................
Colombia.......................................
Costa Rica......................................
El Salvador....................................
Nicaragua (see note A.1.2)......
Panamá (see note A.1.2)..........
Paraguay.......................................
Tanzania........................................
39.2
35.7
32.9
35.4
45.6
48.2
44.3
39.5
42.0
34.1
36.3
33.4
33.7
42.6
46.9
31.2
16.8
17.7
17.8
14.0
15.9
17.5
15.6
11.7
18.4
17.7
23.3
15.2
16.2
14.8
16.0
12.2
1.0
2.0
2.0
1.0
3.0
1.0
1.0
1.0
1.5
1.9
1.9
0.8
2.0
1.5
1.6
1.5
11.5
8.3
12.1
13.8
13.8
7.6
8.4
13.8
10.7
8.6
10.1
10.7
10.9
8.3
9.0
14.4
(i) Average is computed over the period covered by the plan.
Sensitivity analysis to changes in assumptions
Management performed a sensitivity analysis on key assumptions within the test. The following maximum increases or decreases,
expressed in percentage points, were considered for all CGUs:
Reasonable changes in key assumptions (%)
Financial variables
WACC rates............................
Perpetual growth rates.....
Operating variables
EBITDA margin.....................
CAPEX intensity...................
+/-1
+/-1
+/-2
+/-1
The sensitivity analysis shows a comfortable headroom between the recoverable amounts and the carrying values for all CGUs at
December 31, 2020, except for El Salvador, Colombia and Nicaragua CGUs (the latter includes both the legacy fixed business and the
200
20 0
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
recently acquired Telefonica's assets). The following changes in key assumptions would trigger a potential impairment, which would
mainly be due to the current political and economic turmoil caused by the pandemic:
Changes in key assumptions that would trigger a potential impairment
El Salvador
Colombia
Nicaragua
CGU
Financial variables
WACC rate
Operating variables
Average EBITDA margin
E.2. Property, plant and equipment
E.2.1. Accounting for property, plant and equipment
+86bps
+85bps
+57bps
-147bps
-160bps
-183bps
Items of property, plant and equipment are stated at either historical cost, or the lower of fair value and present value of the future
minimum lease payments for assets under finance leases, less accumulated depreciation and accumulated impairment. Historical
cost includes expenditure that is directly attributable to acquisition of items. The carrying amount of replaced parts is derecognized.
Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset and the remaining
life of the license associated with the assets, unless the renewal of the license is contractually possible.
Estimated useful lives
Duration
Buildings.......................................................................................................................... 40 years or lease period, if shorter
Networks (including civil works)............................................................................ 5 to 15 years or lease period, if shorter
Other................................................................................................................................. 2 to 7 years
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable. The assets’ residual value and useful life is reviewed, and adjusted if
appropriate, at each statement of financial position date. An asset’s carrying amount is written down immediately to its recoverable
amount if its carrying amount is greater than its estimated recoverable amount.
Construction in progress consists of the cost of assets, labor and other direct costs associated with property, plant and equipment
being constructed by the Group, or purchased assets which have yet to be deployed. When the assets become operational, the
related costs are transferred from construction in progress to the appropriate asset category and depreciation commences.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, when it is probable
that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
Ongoing routine repairs and maintenance are charged to the statement of income in the financial period in which they are incurred.
Costs of major inspections and overhauls are added to the carrying value of property, plant and equipment and the carrying amount
of previous major inspections and overhauls is derecognised.
Equipment installed on customer premises which is not sold to customers is capitalized and amortized over the customer contract
period.
A liability for the present value of the cost to remove an asset on both owned and leased sites (for example cell towers) and for
assets installed on customer premises (for example set-top boxes), is recognized when a present obligation for the removal exists.
The corresponding cost of the obligation is included in the cost of the asset and depreciated over the useful life of the asset, or lease
period if shorter.
Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost
of that asset when it is probable that such costs will contribute to future economic benefits for the Group and the costs can be
measured reliably.
201
201
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
E.2.2. Movements in tangible assets
Movements in tangible assets in 2020
Network
Equipment (ii)
Land and
Buildings
Construction in
Progress
Other(i)
Total
(US$ millions)
Opening balance, net .................................................
2,212
Additions ........................................................................................
Disposals, net.................................................................................
Depreciation charge....................................................................
Asset retirement obligations....................................................
Transfers ..........................................................................................
Transfer from/(to) assets held for sale (see note E.4).......
Exchange rate movements ......................................................
Closing balance, net ...................................................
Cost or valuation ..........................................................................
Accumulated amortization and impairment .....................
Net at December 31, 2020..........................................
Movements in tangible assets in 2019
31
31
(644)
17
588
1
(62)
2,175
6,423
(4,248)
2,175
206
—
(2)
(22)
2
5
1
(5)
185
329
(144)
185
355
606
(2)
—
—
(644)
—
(7)
308
308
—
308
127
2,899
11
(41)
(83)
—
75
—
(2)
87
407
(320)
87
649
(13)
(749)
19
24
3
(77)
2,755
7,466
(4,711)
2,755
Network
equipment
Land and
buildings
Construction in
progress
Other(i)
Total
(US$ millions)
Opening balance, net .................................................
Change in Scope (ii).....................................................................
Additions ........................................................................................
Impairments/reversal of impairment, net...........................
Disposals, net.................................................................................
Depreciation charge....................................................................
Asset retirement obligations....................................................
Transfers ..........................................................................................
Transfers from/(to) assets held for sale
(see note E.4.)(iv)...........................................................................
Exchange rate movements ......................................................
Closing balance, net ...................................................
Cost or valuation ..........................................................................
Accumulated amortization and impairment .....................
Net at December 31, 2019..........................................
2,149
201
87
—
(8)
(588)
14
444
(61)
(25)
2,212
6,655
(4,443)
2,212
175
48
4
—
(1)
(13)
5
4
(14)
(2)
206
364
(158)
206
284
14
612
—
(6)
—
—
(537)
(7)
(6)
355
355
—
355
156
2,764
9
16
1
(3)
(110)
—
64
(5)
(1)
127
477
(351)
127
272
719
1
(19)
(711)
19
(24)
(88)
(34)
2,899
7,851
(4,952)
2,899
(i)
Other mainly includes office equipment and motor vehicles.
(ii) Restated as a result of the finalization of the purchase accounting of our acquisitions in Nicaragua and Panama (note A.1.2.).
Borrowing costs capitalized for the years ended December 31, 2020, 2019 and 2018 were not significant.
202
202
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
E.2.3. Cash used for the purchase of tangible assets
Cash used for property, plant and equipment additions
Additions...........................................................................................................................................................................
Change in advances to suppliers..............................................................................................................................
Change in accruals and payables for property, plant and equipment.......................................................
Finance leases(i)..............................................................................................................................................................
Cash used for additions...............................................................................................................
2020
2019
2018
(US$ millions)
649
(4)
(22)
(1)
622
719
1
17
(1)
736
698
2
(25)
(43)
632
(i)
As a result of the application of IFRS 16 finance leases were reclassified to lease liabilities on January 1, 2019. See above in the "New and amended IFRS
accounting standards" for further information.
E.3. Right of use assets
Right-of-use assets are measured at cost comprising the following:
•
•
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs
Refer to note C.4. for further details on lease accounting policies.
Movements in right of use assets in 2020
Right-of-use assets
Land and
buildings
Sites rental
Tower rental
(US$ millions)
Other
network
equipment
Capacity
Other
Total
Opening balance, net
Change in scope.....................
Additions...................................
Modifications...........................
Impairments.............................
Disposals....................................
Depreciation.............................
Asset retirement
obligations................................
Transfers.....................................
Exchange rate movements.
Closing balance, net
Cost of valuation..........................
Accumulated depreciation
and impairment......................
Net at December 31, 2020
148
—
41
9
(1)
(10)
(38)
—
—
(3)
147
206
(59)
147
101
—
2
10
—
(1)
(17)
1
—
(2)
93
127
(34)
93
729
—
23
(27)
—
—
(88)
—
(2)
(27)
607
839
(232)
607
16
—
18
(1)
—
(1)
(8)
—
5
—
31
42
(12)
31
15
—
1
—
—
—
(1)
—
—
—
14
18
(4)
14
3
—
1
—
—
—
(2)
(1)
1
—
2
6
(3)
2
1,012
—
86
(8)
(1)
(12)
(155)
—
4
(32)
895
1,238
(343)
895
In early 2020, and following a change in regulation in Colombia, future lease payments for the use of certain public assets have been
significantly decreased. This triggered a lease modification and a decrease of the related lease liabilities (and right-of-use assets) of
approximately $45 million.
Except for the change above, there have been no other unusual significant events affecting lease liabilities (and right-of-use assets)
during the year ended December 31, 2020.
203
203
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Movements in right of use assets in 2019
Right-of-use assets
Land and
buildings
Sites rental
Tower rental
Capacity
Other
network
equipment
Other
Total
(US$ millions)
Opening balance, net
Change in scope (i).................
Additions...................................
Modifications...........................
Impairments.............................
Disposals....................................
Depreciation.............................
Asset retirement
obligations................................
Transfers.....................................
Transfers to/from assets
held for sale..............................
Exchange rate movements.
Closing balance, net
Cost of valuation.....................
Accumulated depreciation
and impairment......................
Net at 31 December 2019
154
3
25
6
(1)
(4)
(35)
—
—
(1)
—
148
181
(34)
148
67
58
4
(2)
—
(4)
(16)
—
—
(5)
(2)
101
119
(18)
101
623
130
67
7
—
(1)
(86)
—
1
(3)
(7)
729
905
(176)
729
—
13
2
—
—
—
—
—
—
—
—
15
18
(2)
15
9
8
1
—
—
—
(2)
—
—
—
—
16
19
(3)
16
4
—
1
—
—
—
(2)
—
—
—
—
3
8
(5)
3
856
212
102
11
(1)
(10)
(141)
—
1
(9)
(10)
1,012
1,250
(238)
1,012
(i)
Restated as a result of the finalization of the purchase accounting of our acquisitions in Nicaragua and Panama (note A.1.2.).
Tower Sale and Leaseback
In 2017 and 2018, the Group announced agreements to sell and leaseback wireless communications towers in Paraguay, Colombia
and El Salvador. Total gain on sale recognized in 2020 was nil (2019: $5 million, 2018: $61 million) and cash received from these sales
were nil, $22 million and $141 million, respectively.
E.4. Assets held for sale
If Millicom decides to sell subsidiaries, investments in joint ventures or associates, or specific non-current assets in its businesses,
these items qualify as assets held for sale if certain conditions are met.
E.4.1. Classification of assets held for sale
Non-current assets (or disposal groups) are classified as assets held for sale and stated at the lower of carrying amount and fair value
less costs to sell if their carrying amount is expected to be recovered principally through sale, not through continuing use. Liabilities
of disposal groups are classified as Liabilities directly associated with assets held for sale.
204
20 4
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
E.4.2. Millicom’s assets held for sale
The following table summarizes the nature of the assets and liabilities reported under assets held for sale and liabilities directly
associated with assets held for sale as at December 31, 2020 and 2019:
Assets and liabilities reclassified as held for sale ($ millions)
Towers Colombia (see note E.4.1.).............................................................................................................................................................
Towers El Salvador (see note E.4.1.)..........................................................................................................................................................
Towers Zantel....................................................................................................................................................................................................
Total assets of held for sale ...................................................................................................................................
Total liabilities directly associated with assets held for sale .............................................................................
Net assets held for sale / book value ....................................................................................................................
Chad
December 31,
2020
2019
(US$ millions)
1
—
—
1
—
1
2
1
1
5
—
5
As mentioned in note A.1.3., on June 26, 2019, the Group completed the disposal of its operations in Chad for a cash consideration of
$110 million. On the same date, Chad was deconsolidated and a gain on disposal of $77 million, net of costs of disposal of $4 million,
was recognized. Foreign currency exchange losses accumulated in equity of $8 million have also been recycled in the statement of
income accordingly. The resulting net gain of $70 million has been recognized under ‘Profit (loss) for the period from discontinued
operations, net of tax’. The operating net loss of the operation for the period from January 1, 2019 to June 26, 2019 was $5 million.
In August 2020, the Group and the buyer of our operations in Chad agreed on a final price adjustment of $8 million in favor of the
buyer. This price adjustment has been disbursed in September 2020 and recorded under the results from discontinued operations in
the Group's statement of income.
The assets and liabilities deconsolidated on the date of the disposal were as follows:
Assets and liabilities held for sale ($ millions)
Intangible assets, net...................................................................................................................................................................................
Property, plant and equipment, net......................................................................................................................................................
Right of use assets........................................................................................................................................................................................
Other non-current assets...........................................................................................................................................................................
Current assets.................................................................................................................................................................................................
Cash and cash equivalents........................................................................................................................................................................
Total assets of disposal group held for sale
Non-current financial liabilities................................................................................................................................................................
Current liabilities...........................................................................................................................................................................................
Total liabilities of disposal group held for sale
Net assets held for sale at book value
Senegal
June 26, 2019
18
89
9
8
34
9
168
8
131
140
28
As mentioned in note A.1.3. Millicom announced that it had agreed to sell its Senegal business to a consortium consisting of NJJ,
Sofima (managed by the Axian Group) and Teylium Group. The sale was completed on April 27, 2018 in exchange of a final cash
consideration of $151 million. The operations in Senegal were deconsolidated from that date resulting in a net gain on disposal of $6
million, including the recycling of foreign currency exchange losses accumulated in equity since the creation of the local operations.
This gain has been recognized under ‘Profit (loss) for the year from discontinued operations, net of tax’.
The assets and liabilities were transferred to assets held for sale in relation to our operations in Senegal as at February 7, 2017 and
therefore classified as held for sale as at December 31, 2017.
Rwanda
As mentioned in note A.1.3. on December 19, 2017, Millicom announced that it has signed an agreement for the sale of its Rwanda
operations to subsidiaries of Bharti Airtel Limited.for a final cash consideration of $51 million, including a deferred cash payment due
in January 2020 for an amount of $18 million which has been settled in January 2020. The transaction also included earn-outs for $7
million that are not recognized by the Group. The sale was completed on January 31, 2018. On that day, Millicom's operations in
Rwanda have been deconsolidated and no material loss on disposal was recognized (its carrying value was aligned to its fair value
205
205
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
less costs of disposal as of December 31, 2017). However, a loss of $32 million was recognized in 2019 corresponding to the recycling
of foreign currency exchange losses accumulated in equity since the creation of the local operation. This loss has been recognized
under ‘Profit (loss) for the year from discontinued operations, net of tax’.
In accordance with IFRS 5, the Group’s businesses in Chad (Q2 2018), Rwanda (Q1 2018), and Senegal (Q1 2017) had been classified
as assets held for sale and their results were classified as discontinued operations. Comparative figures of the statement of income
had therefore been restated accordingly. Financial information relating to the discontinued operations for the year ended December
31, 2020, 2019 and 2018 is set out below. Figures shown below are after intercompany eliminations.
Results from discontinued operations
December 31
2020
2019
2018
(US$ millions)
Revenue.............................................................................................................................................................................
Cost of sales......................................................................................................................................................................
Operating expenses......................................................................................................................................................
Other expenses linked to the disposal of discontinued operations............................................................
Depreciation and amortization.................................................................................................................................
Other operating income (expenses), net...............................................................................................................
Gain/(loss) on disposal of discontinued operations..........................................................................................
Operating profit (loss).................................................................................................................
Interest income (expense), net..................................................................................................................................
Other non-operating (expenses) income, net.....................................................................................................
Profit (loss) before taxes..............................................................................................................
Credit (charge) for taxes, net......................................................................................................................................
Net profit/(loss) from discontinuing operations.......................................................................
Cash flows from discontinued operations
—
—
(4)
(9)
—
—
—
(12)
—
—
(12)
—
(12)
50
(14)
(29)
(10)
(11)
—
74
61
(2)
—
59
(2)
57
Cash from (used in) operating activities, net........................................................................................................
Cash from (used in) investing activities, net.........................................................................................................
Cash from (used in) financing activities, net.........................................................................................................
—
—
—
(8)
5
7
December 31
2020
2019
2018
(US$ millions)
189
(51)
(83)
(10)
(27)
(9)
(29)
(21)
(6)
(2)
(29)
(4)
(33)
(38)
8
11
F. Other assets and liabilities
F.1. Trade receivables
Millicom’s trade receivables mainly comprise interconnect receivables from other operators, postpaid mobile and residential cable
subscribers, as well as B2B customers. The nominal value of receivables adjusted for impairment approximates the fair value of trade
receivables.
Gross trade receivables.................................................................................................................................................................................
Less: provisions for expected credit losses.............................................................................................................................................
Trade receivables, net............................................................................................................................................
2020
2019
(US$ millions)
649
(298)
351
636
(265)
371
206
20 6
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Aging of trade receivables
Neither past
due nor
impaired
Past due (net of
impairments)
30–90 days
>90 days
Total
(US$ millions)
2020:
Telecom operators........................................................................................................................
Own customers..............................................................................................................................
Others................................................................................................................................................
Total
2019:
Telecom operators........................................................................................................................
Own customers..............................................................................................................................
Others................................................................................................................................................
Total
15
167
34
216
23
177
40
241
7
65
19
90
9
63
15
88
3
34
8
45
8
29
5
43
25
266
60
351
40
270
60
371
Trade receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest
method, less provision for expected credit losses. The Group recognizes an allowance for expected credit losses (ECLs) applying a
simplified approach in calculating the ECLs. Therefore, the Group does not track changes in credit risk, but instead recognizes a loss
allowance based on lifetime of ECLs at each reporting date. The Group has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The
provision for expected credit losses is recognized in the consolidated statement of income within Cost of sales.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for those maturing more than 12 months after the end of the reporting period.
These are classified within non-current assets. Loans and receivables are carried at amortized cost using the effective interest
method. Gains and losses are recognized in the statement of income when the loans and receivables are derecognized or impaired,
as well as through the amortization process.
F.2. Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Net
realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
Inventories
Telephone and equipment..........................................................................................................................................................................
SIM cards.............................................................................................................................................................................................................
IRUs.......................................................................................................................................................................................................................
Other....................................................................................................................................................................................................................
Inventory at December 31,....................................................................................................................................
F.3. Trade payables
2020
2019
(US$ millions)
23
4
—
10
37
18
3
3
9
32
Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest
method where the effect of the passage of time is material.
From time to time, the Group enters into agreements to extend payment terms with various suppliers, and with factoring companies
when such payments are discounted. The corresponding amount pending payment as of December 31, 2020, is recognized in Trade
payables for an amount of $46 million (2019: $40 million).
207
207
Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
F.4. Current and non-current provisions and other liabilities
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, if it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an
insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the statement of income net of any reimbursement. If the effect of the time
value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, risks specific to
the liability. Where discounting is used, increases in the provision due to the passage of time are recognized as interest expenses.
F.4.1. Current provisions and other liabilities
Current
2020
2019
(US$ millions)
Deferred revenue.............................................................................................................................................................................................
Customer deposits..........................................................................................................................................................................................
Current legal provisions................................................................................................................................................................................
Tax payables......................................................................................................................................................................................................
Customer and MFS distributor cash balances.......................................................................................................................................
Withholding tax on payments to third parties.....................................................................................................................................
Other provisions...............................................................................................................................................................................................
Other current liabilities(i)..............................................................................................................................................................................
Total.........................................................................................................................................................................
78
14
22
72
186
6
—
133
511
(i) Includes $44 million (2019: $38 million) of tax risk liabilities not related to income tax.
F.4.2. Non-current provisions and other liabilities
Non-current
Non-current legal provisions.......................................................................................................................................................................
Long-term portion of asset retirement obligations............................................................................................................................
Long-term portion of deferred income on tower sale and leasebacks recognized under IAS 17.....................................
Long-term employment obligations........................................................................................................................................................
Other non-current liabilities........................................................................................................................................................................
Total.........................................................................................................................................................................
30
107
57
67
67
328
2020
2019
(US$ millions)
77
14
36
74
141
15
3
113
474
18
96
68
71
68
322
F.5. Assets and liabilities related to contract with customers
Contract assets, net
Long-term portion.................................................................................................................................................................................................
Short-term portion................................................................................................................................................................................................
Less: provisions for expected credit losses...................................................................................................................................................
Total..............................................................................................................................................................................
2020
2019
(US$ millions)
6
28
(2)
31
6
37
(2)
41
208
20 8
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
Contract liabilities
Long-term portion.................................................................................................................................................................................................
Short-term portion................................................................................................................................................................................................
Total..............................................................................................................................................................................
2020
2019
(US$ millions)
2
89
90
1
81
82
The Group recognized revenue for $82 million in 2020 (2019: $87 million) that was included in the contract liability balance at the
beginning of the year.
The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at December 31,
2020 is $59 million ($59 million is expected to be recognized as revenue in the 2021 financial year and the remaining $1 million in
the 2022 financial year or later) (i).
(i) This amount does not consider contracts that have an original expected duration of one year or less, neither contracts in which consideration from a
customer corresponds to the value of the entity’s performance obligation to the customer (i.e. billing corresponds to accounting revenue).
Contract costs, net (i)
Net at January 1...........................................................................................................................................................
Contract costs capitalized...................................................................................................................................................................................
Amortization of contract costs..........................................................................................................................................................................
Net at December 31.....................................................................................................................................................
2020
2019
(US$ millions)
5
1
(1)
5
4
7
(6)
5
(i)
Incremental costs of obtaining a contract are expensed when incurred if the amortization period of the asset that Millicom otherwise would have
recognized is one year or less.
G. Additional disclosure items
G.1. Fees to auditors
Audit fees...........................................................................................................................................................................
Audit related fees...........................................................................................................................................................
Tax fees...............................................................................................................................................................................
Other fees..........................................................................................................................................................................
Total..............................................................................................................................................
G.2. Capital and operational commitments
2020
2019
2018
(US$ millions)
5.8
0.5
0.1
0.1
6.4
6.8
1.3
0.1
0.6
8.8
6.7
0.4
0.2
0.6
7.7
Millicom has a number of capital and operational commitments to suppliers and service providers in the normal course of its
business. These commitments are mainly contracts for acquiring network and other equipment, and leases for towers and other
operational equipment.
G.2.1. Capital commitments
At December 31, 2020, the Company and its subsidiaries had fixed commitments to purchase network equipment, land and
buildings, other fixed assets and intangible assets of $564 million of which $400 million are due within one year (December 31, 2019:
$122 million of which $102 million were due within one year). Increase is mainly due to the newly acquired spectrum license by Tigo
Colombia and the related network coverage obligations. The Group’s share of commitments from the joint ventures is, respectively
$69 million and $52 million. (December 31, 2019: $52 million and $51 million, respectively).
209
20 9
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
G.3. Contingent liabilities
G.3.1. Litigation and legal risks
The Company and its operations are contingently liable with respect to lawsuits, legal, regulatory, commercial and other legal risks
that arise in the normal course of business. As of December 31, 2020, the total amount of claims brought against Millicom and its
subsidiaries is $288 million (December 31, 2019: $204 million). The increase is mainly due to the complaint explained below. The
Group's share of the comparable exposure for joint ventures is $14 million (December 31, 2019: $4 million).
As at December 31, 2020, $45 million has been provided by its subsidiaries for these risks in the consolidated statement of financial
position (December 31, 2019: $30 million). The Group’s share of provisions made by the joint ventures was $3 million (December 31,
2019: $3 million). While it is not possible to ascertain the ultimate legal and financial liability with respect to these claims and risks,
the ultimate outcome is not anticipated to have a material effect on the Group’s financial position and operations.
On May 25, 2020, as a result of the termination of the Costa Rica acquisition (see Note A.1.2.), Telefonica filed a complaint, followed
by an amended complaint on August 3, 2020, against us in the Supreme Court of New York. The amended complaint asserts claims
for breach of contract and alleges, among other things, that we were required to close because the closing conditions specified in
the sale and purchase agreement for the acquisition had been satisfied. The complaint seeks, among other relief, a declaration of
Telefonica’s rights, and unspecified damages, costs, and fees. We believe the complaint is without merit and that our position will
ultimately be vindicated through the judicial process.
Other
At December 31, 2020, Millicom has various other less significant claims which are not disclosed separately in these consolidated
financial statements because they are either not material or the related risk is remote.
G.3.2. Tax related risks and uncertain tax position
The Group operates in developing countries where the tax systems, regulations and enforcement processes have varying stages of
development creating uncertainty regarding the application of the tax law and interpretation of tax treatments. The Group is also
subject to regular tax audits in the countries where it operates. When there is uncertainty over whether the taxation authority will
accept a specific tax treatment under the local tax law, that tax treatment is therefore uncertain. The resolution of tax positions taken
by the Group, through negotiations with relevant tax authorities or through litigation, can take several years to complete and, in
some cases, it is difficult to predict the ultimate outcome. Therefore, judgment is required to determine liabilities for taxes.
In assessing whether and how an uncertain tax treatment affects the determination of taxable profit (tax loss), tax bases, unused tax
losses, unused tax credits and tax rates, the Group assumes that a taxation authority with the right to examine amounts reported to
it will examine those amounts and have full knowledge of all relevant information when making those examinations.
The Group has a process in place, and applies significant judgment, in identifying uncertainties over income tax treatments.
Management considers whether or not it is probable that a taxation authority will accept an uncertain tax treatment. On that basis,
the identified risks are split into three categories (i) remote risks (risk of outflow of tax payments are up to 20%), (ii) possible risks (risk
of outflow of tax payments assessed from 21% to 49%) and probable risks (risk of outflow is more than 50%). The process is repeated
every quarter by the Group.
If the Group concludes that it is probable or certain that the taxation authority will accept the tax treatment, the risks are categorized
either as possible or remote, and it determines the taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax
rates consistently with the tax treatment used or planned to be used in its income tax filings. The risks considered as possible are not
provisioned but disclosed as tax contingencies in the Group consolidated financial statements while remote risks are neither
provisioned nor disclosed.
If the Group concludes that it is probable that the taxation authority will not accept the Group’s interpretation of the uncertain tax
treatment, the risks are categorized as probable, and are presented to reflect the effect of uncertainty in determining the related
taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates by generally using the most likely amount
method – the single most likely amount in a range of possible outcomes.
If an uncertain tax treatment affects both deferred tax and current tax, the Group makes consistent estimates and judgments for
both. For example, an uncertain tax treatment may affect both taxable profits used to determine the current tax and tax bases used
to determine deferred tax.
If facts and circumstances change, the Group reassesses the judgments and estimates regarding the uncertain tax position taken.
At December 31, 2020, the tax risks exposure of the Group's subsidiaries is estimated at $339 million, for which provisions of $77
million have been recorded in tax liabilities; representing the probable amount of eventual claims and required payments related to
210
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Millicom 2020 Annual Report Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
those risks (2019: $300 million of which provisions of $50 million were recorded). The Groups' share of comparable tax exposure and
provisions in its joint ventures amounts to $69 million (2019: $49 million) and $7 million (2019: $4 million), respectively.
G.4. Non-cash investing and financing activities
Non-cash investing and financing activities from continuing operations
Note
2020
2019
2018
(US$ millions)
Investing activities
Acquisition of property, plant and equipment, including (finance) leases.............
Asset retirement obligations.....................................................................................................
Financing activities
(Finance) Leases.............................................................................................................................
Share based compensation.......................................................................................................
E.2.2.
E.2.2.
C.4.
B.4.1.
(27)
19
(1)
24
17
19
(1)
27
(65)
15
(43)
21
G.5. Related party balances and transactions
The Group’s significant related parties are:
• Until November 14, 2019, date on which Millicom SDRs were paid out to the shareholders of Kinnevik (see 'Introduction' note),
Kinnevik AB (Kinnevik) was Millicom’s previous principal shareholder;
• Helios Towers Africa Ltd (HTA), in which Millicom held a direct or indirect equity interest - until October 15, 2019, date on which
Millicom lost significant influence on HTA and started accounting for its investments at fair value under IFRS 9 (see note
A.3.1.and C.7.3.
•
EPM and subsidiaries (EPM), the non-controlling shareholder in our Colombian operations (see note A.1.4.);
• Miffin Associates Corp and subsidiaries (Miffin), our joint venture partner in Guatemala.
•
Cable Onda partners and subsidiaries, the non-controlling shareholders in our Panama operations (see note A.1.2.).
Kinnevik
Until November 14, 2019, Kinnevik was Millicom's principal shareholder, owning approximately 37% of Millicom. Kinnevik is a
Swedish holding company with interests in the telecommunications, media, publishing, paper and financial services industries.
During 2020, 2019 and 2018, Kinnevik did not purchase any Millicom shares. There were no significant loans made by Millicom to or
for the benefit of Kinnevik or Kinnevik controlled entities.
During 2019 and 2018, the Company purchased services from Kinnevik subsidiaries including fraud detection, procurement and
professional services. Transactions and balances with Kinnevik Group companies are disclosed under 'Other' in the tables below.
Helios Towers
Millicom sold its tower assets and leased back a portion of space on the towers in several African countries and contracted for
related operation and management services with HTA. The Group has future lease commitments in respect of the tower companies
(see note E.4.). As mentioned above, Helios Towers ceased to be a related party to the Group from October 15, 2019.
Empresas Públicas de Medellín (EPM)
EPM is a state-owned, industrial and commercial enterprise, owned by the municipality of Medellin, and provides electricity, gas,
water, sanitation, and telecommunications. EPM owns 50% of our operations in Colombia.
Miffin Associates Corp (Miffin)
The Group purchases and sells products and services from and to the Miffin Group. Transactions with Miffin represent recurring
commercial operations such as purchase of handsets, and sale of airtime.
Cable Onda Partners
Our partners in Panama are the non-controlling shareholders of Cable Onda and own 20% of the company, and indirectly 20% of
Grupo de Comunicaciones Digitales S.A. (formerly Telefonica Moviles Panama, S.A.), which had been acquired by Cable Onda in
211
211
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
August 2019. Additionally, they also hold interests in several entities which have purchasing and selling recurring commercial
operations with Cable Onda (such as the sale of content costs, delivery of broadband services, etc.). Transactions and balances with
Cable Onda Partners companies are disclosed under 'Other' in the tables below given their individual immateriality.
Expenses from transactions with related parties
Purchases of goods and services from Miffin.......................................................................................................
Purchases of goods and services from EPM.........................................................................................................
Lease of towers and related services from HTA(i)..............................................................................................
Other expenses...............................................................................................................................................................
Total..............................................................................................................................................
(i) HTA ceased to be a related party on October 15, 2019. See note C.7.3. for further details.
Income and gains from transactions with related parties
2020
2019
2018
(US$ millions)
(216)
(37)
—
(57)
(310)
(214)
(42)
(146)
(10)
(412)
(175)
(40)
(28)
(1)
(244)
2020
2019
(US$ millions)
2018
Sale of goods and services to Miffin........................................................................................................................
Sale of goods and services to EPM...........................................................................................................................
Other revenue..................................................................................................................................................................
Total..............................................................................................................................................
327
15
2
343
306
13
3
322
As at December 31, the Company had the following balances with related parties:
December 31
2020
2019
(US$ millions)
Liabilities
Payables to Guatemala joint venture(i)...................................................................................................................................................
Payables to Honduras joint venture(ii)....................................................................................................................................................
Payables to EPM...............................................................................................................................................................................................
Payables to Panama non-controlling interests.....................................................................................................................................
Other accounts payable................................................................................................................................................................................
Total.........................................................................................................................................................................
231
103
20
1
1
356
(i)
Shareholder loans bearing interest. Out of the amount above, $29 million are due over more than one year.
(ii) Amount payable mainly consist of dividend advances for which dividends are expected to be declared later in 2021 and/or shareholder loans.
December 31
2020
2019
(US$ millions)
Assets
Receivables from EPM....................................................................................................................................................................................
Receivables from Guatemala joint venture (i).......................................................................................................................................
Receivables from Honduras joint venture (ii)........................................................................................................................................
Receivables from Panama non-controlling interests.........................................................................................................................
Receivable from AirtelTigo Ghana (iii).....................................................................................................................................................
Other accounts receivable...........................................................................................................................................................................
Total.........................................................................................................................................................................
3
206
84
1
—
5
299
284
17
2
303
361
133
37
—
—
531
3
11
11
—
43
4
73
(i)
In October 2020, Millicom granted a shareholder loan of $193 million to Guatemala (out of which $39 million is due after more than one year as of
December 31, 2020). The loan bears interests at 4% p.a. and is repayable by January 13, 2022, at the latest. Together with other shareholder and
external financings, the proceeds were used to repay the $800 million aggregate principal amount of its outstanding 6.875% Senior Notes due 2024
(note A.2.2.).
212
212
Millicom 2020 Annual Report
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020, 2019 and 2018
(ii)
In November 2020, our operations in Honduras completed a shareholding restructuring whereby Telefonica Cellular S.A. acquired the shares of Navega
S.A. de CV from its existing shareholders. The sale consideration will be payable in several installments with a final settlement in November 2023. As of
December 31, 2020, $51 million out of a total receivable of $79 million is due after more than one year and therefore disclosed in non-current assets.
The disposal also triggered the recognition of a net gain of $ 4 million, under ‘Other operating income (expenses), net’ in the Group's statement of
income, corresponding to the portion of gain realized on the unrelated investors' interests in the joint venture (i.e. 33.33%).
(iii) In 2020, and as a result of the significant deterioration of the credit risk of AirtelTigo Ghana, combined with other unfavorable economic factors,
Millicom concluded that this related party loan was underperforming and should be impaired. As a consequence, the Group fully impaired this
receivable of $45 million during the year, disclosed under ' Other operating income (expenses), net' in the income statement.
H. IPO – Millicom’s operations in Tanzania
The Tanzanian government has implemented legislation requiring telecommunications companies to list their shares on the Dar es
Salaam Stock Exchange and offer 25% of their shares in a Tanzanian public offering. The Group is currently planning for the IPO of
our Tanzanian operation pursuant to the legislation and have filed a draft prospectus with the Tanzania Capital Market and
Securities Authority in December 2019. The Regulator has since requested the Group to retain an underwriter to ensure the success
of the IPO. Together with its investment bank advisers, the Group is seeking an underwriter active in the Tanzanian and Eastern
African markets, a process currently underway.
I. Subsequent events
2026, 2028 and 2029 Senior Notes
On February 22, 2021, Millicom redeemed 10% of the principal outstanding of its Notes due 2026, 2028 and 2029 at a price of 103%.
This redemption follows Millicom’s announcement dated February 11, 2021. Total consideration of approximately $180 million was
funded from cash, consistent with the Company's decision to prioritize debt reduction.
Colombia bond
On February 16, 2021, Millicom’s subsidiary UNE EPM Telecomunicaciones S.A (“UNE”) issued, under the approved local bond
program, a COP 485,680 million bond (approximately $138 million) with 3 maturities: a “Serie 7 years at 5.56% fixed rate”, a “Serie 10
years at CPI plus 2.61% margin” and a "15 years at CPI plus 3.18% margin”. The use of proceeds will be mainly for local USD debt
refinancing, to improve UNE’s natural hedge against local currency, and also to extend maturities.
213
213
Millicom 2020 Annual Report Corporate Information
BOARD OF DIRECTORS
AUDITOR
Ernst & Young
Société anonyme
35E Avenue John F. Kennedy
Luxembourg, L-1855
STOCK TRANSFER AGENT
Questions or requests related to stock
transfers, lost certificates, or account
changes should be directed to:
Shareholder Services
1-800-937-5449 ext. 4801
1-718-921-8200 ext. 4801
help@astfinancial.com
www.astfinancial.com
INVESTOR RELATIONS
Investors@millicom.com
MEDIA CONTACT
Press@Millicom.com
ANNUAL GENERAL MEETING
The Annual General Meeting of
Shareholders will be held on
May 4, 2021 in Luxembourg.
HEADQUARTERS
Millicom International Cellular S.A.
2 Rue du Fort Bourbon
Luxembourg, L-1249
José Antonio Ríos García
Chairman, Director
Pernille Erenbjerg
Deputy Chair
Odilon Almeida
Director
Tomas Eliasson
Director
Lars-Åke Norling
Director
Mercedes Johnson
Director
Mauricio Ramos
Director
James Thompson
Director
EXECUTIVE TEAM
Mauricio Ramos
Chief Executive Officer
Tim Pennington
Senior Executive Vice President,
Chief Financial Officer
Esteban Iriarte
Executive Vice President,
Chief Operating Officer—Latam
Xavier Rocoplan
Executive Vice President,
Chief Technology and Information Officer
Karim Lesina
Executive Vice President,
Chief External Affairs Officer
Salvador Escalón
Executive Vice President,
Chief Legal and Compliance Officer
Susy Bobenrieth
Executive Vice President,
Chief Human Resources Officer
Millicom 2020 Annual Repor t
For further information, please contact:
investors@millicom.com
millicom.com