Annual Report
2023
Millicom International Cellular S.A.
2, Rue du Fort Bourbon, L-1249 Luxembourg,
R.C.S. Luxembourg: B 40630
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TABLE OF CONTENTS
CEO STATEMENT
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
FORWARD-LOOKING STATEMENTS
CONSOLIDATED MANAGEMENT REPORT
KEY INFORMATION
Risk Factors
Risk Management (including Cybersecurity)
INFORMATION ON THE COMPANY
History and Development of the Company
Business Overview
Organizational Structure and Subsidiaries
Unresolved Staff Comments
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Operating Results
Liquidity and Capital Resources
Trend Information
NON FINANCIAL INFORMATION
Stakeholders Engagement and Materiality Assessment
Environment
Society
Governance
ESG Performance Tables
Assurance Letter
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Directors and Senior Management (including Share Ownership)
Compensation
Employees
FINANCIAL INFORMATION
Consolidated Statements and Other Financial Information
Significant Changes
THE OFFER AND LISTING
ADDITIONAL INFORMATION
Related Party Transactions
Exchange Controls
Taxation
Documents on Display
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK
CONTROLS AND PROCEDURES
AUDIT AND COMPLIANCE COMMITTEE FINANCIAL EXPERT
CODE OF ETHICS
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CORPORATE GOVERNANCE
Corporate Governance Statement and Framework
Shareholders and Representation of Shareholders (Including Major Shareholders and Nomination
Committee)
Board Governance
Board Profile: Skills and Experience
Board Program
Board Committees
I. Audit and Compliance Committee
II. Compensation and Talent Committee
Millicom CEO and Executive Team
PRINCIPAL ACCOUNTANT FEES AND SERVICES
PURCHASES OF EQUITY SECURITIES
DIRECTOR'S FINANCIAL AND OPERATING REPORT
MANAGEMENT RESPONSIBILITY STATEMENT
CONSOLIDATED FINANCIAL STATEMENTS
ANNUAL ACCOUNTS (Luxembourg GAAP)
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CEO MESSAGE
When I joined Millicom as CEO in March 2015, the company was at a crossroads.
We were #1 or #2 in mobile in most of our Latin American markets, but the company had yet to deploy the 4G
networks that would be needed to protect its market leadership. Moreover, cash flow generation from Latin America
was being re-invested in Africa, where Millicom had sub-scale operations in six countries scattered across the
continent.
One of my first decisions was to exit all of our African investments, and to re-deploy this capital to protect and
extend our market leadership in Latin America. Exiting Africa was easier said than done, but over the course of several
years, we successfully divested six telecom operations and investments in two non-core assets, completing our exit
from the region.
Meanwhile, in our core Latin American markets, we stepped up our investments. We quickly deployed 4G networks
to protect and extend our mobile market leadership. We built extensive fiber networks and world-class Tier 3 data
centers to provide additional services to both residential and B2B customers. In Colombia, the 2014 merger with UNE
had left the company with a legacy copper network that we replaced with fiber-cable. In 2020, we acquired low-
frequency spectrum that had historically handicapped Tigo’s competitiveness in that mobile market. Similarly, we
acquired AWS spectrum in El Salvador, paving the way for renewed growth and increased scale and profitability from
both of these markets.
Along the way and with a clear sense of purpose, we assembled a more diverse and inclusive workforce and
became an employer of choice, we strengthened our brand and improved customer experience with robust networks
and digital tools, and we made external commitments to do our part to help mitigate climate change.
We also made a few key strategic decisions. In 2018, we entered the Panamanian market, and we are now the clear
market leader in what is arguably the fastest-growing economy and most stable country in the region. During the
pandemic, we remained steadfast in executing our investment plans, emerging with higher market shares in several
markets. In 2021, we increased to 100% our ownership in our Guatemala business, our most-profitable operation, by
far.
During 2022 however, it became increasingly clear that our work wasn’t quite done, especially as global inflation
and interest rates spiked, putting additional pressure on both our cash flow and our leverage.
We responded to these unforeseen external challenges, with three key initiatives implemented during 2023. First,
we developed Project Everest, a broad-based efficiency program aimed at simplifying internal processes to lift
productivity and reduce cost. Second, we took additional steps to improve cash flow in Colombia, reaching an
agreement with Telefonica to combine our mobile networks and spectrum in that country. Finally, in Guatemala, we re-
balanced the industry’s spectrum holdings following two successful auctions, paving the way to a more stable market
structure in the future.
Successful execution of these three initiatives in 2023, combined with the significant investments and strategic
decisions made over the last several years, position Millicom to deliver robust and sustainable equity free cash flow
going forward.
In closing, and on behalf of the entire management team, I would like to thank my fellow Board members for
contributing their business expertise and industry knowledge. I want to extend the entire Board’s gratitude to Odilon
Almeida, Lars-Johan Jarnheimer, Mercedes Johnson, James Thompson, and José Antonio Rios García for their
invaluable contributions over the past several years. And finally, the entire Tigo team express our heartfelt sorrow
following the untimely passing of Nicolas Jaeger, our esteemed Board member, colleague, and friend.
Mauricio Ramos
Executive Director, CEO and Interim Chair of the Board of Directors
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PRESENTATION OF FINANCIAL AND OTHER
INFORMATION
Financial statement information
We have included in this Annual Report the Millicom Group’s (as defined below) audited consolidated financial
statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021. The
Millicom Group’s audited consolidated financial statements included herein and the accompanying notes thereto have
been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”). We end our fiscal year on December 31. References to fiscal 2023, fiscal 2022 and
fiscal 2021 refer to the years ended December 31, 2023, 2022 and 2021, respectively.
Our management determines operating and reportable segments based on the reports that are used by the chief
operating decision maker (the "CODM") to make strategic and operational decisions from both a business and
geographic perspective. Our risks and rates of return for our operations were predominantly affected by operating in
different geographical regions. Until the divestiture of our Tanzania business in April 2022, we had businesses in two
main regions, Latin America and Africa, which constituted our two reportable segments. As a result of the sale of the
Tanzania business and its reclassification as discontinued operations, we no longer report an Africa segment in our
consolidated financial statements included elsewhere in this Annual Report. Further, during the latter half of 2023, we
implemented significant organizational changes to focus on driving profitable growth with a leaner corporate
structure. We also adopted a decentralized approach to streamline decision-making processes and enhance agility to
improve profitability and shareholder value. Due to these organizational changes, and considering the information
now being reviewed by the CODM to assess performance and allocate resources, our operating segments were
redefined to align with our countries of operation. Our reportable segments now consist of Guatemala, Colombia,
Panama, Bolivia, Honduras, Paraguay and Other, which includes Nicaragua, Costa Rica and El Salvador. See “Operating
and Financial Review and Prospects—Operating Results —Our segments.”
Presentation of data
We present operational and financial data in this Annual Report. Operational data, such as the number of
customers, unless otherwise indicated, are presented for the Millicom Group, including our subsidiaries, and excluding
our operations in Guatemala, before November 12, 2021 as explained below, and our Honduras joint venture.
Financial data is presented either at a consolidated level or at a segmental level, as derived from our consolidated
financial statements, including the notes thereto. At a consolidated level, we account for our operations in Honduras
and our operations in Guatemala up until November 12, 2021 as joint ventures using the equity method of accounting.
At a segmental level, we account for our operations in Honduras and our operations in Guatemala up until November
12, 2021 as if they were fully consolidated, as this reflects the way management views and uses internally reported
information to make decisions.
We have made rounding adjustments to reach some of the figures included in this Annual Report. Accordingly,
figures shown as totals in some tables may not be an exact arithmetic aggregation of the figures that preceded them
and percentage calculations using these adjusted figures may not result in the same percentage values as are shown in
this Annual Report.
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Certain references
Unless the context otherwise requires, references to the “Company” or “MIC S.A.” refer only to Millicom
International Cellular S.A., a public limited liability company (société anonyme) organized and established under the
laws of the Grand Duchy of Luxembourg, and the terms “Millicom,” “Millicom Group,” “our Group,” “we,” “us” and “our”
refer to Millicom International Cellular S.A. and its consolidated subsidiaries and, where applicable, our joint ventures in
Guatemala (that is, prior to the acquisition of the remaining interest) and Honduras.
Unless otherwise indicated, all references to “U.S. dollars,” “dollars” or “$” are to the lawful currency of the United
States of America; all references to “Euro” or “€” are to the lawful currency of the participating Member States in the
Third Stage of European Economic and Monetary Union of the Treaty Establishing the European Community, as
amended from time to time; and all references to “Swedish Krona” or “SEK” are to the lawful currency of the Kingdom
of Sweden. For a list of the functional currency names and abbreviations in the markets in which we operate, see the
introduction to the notes to our audited consolidated financial statements.
FORWARD-LOOKING STATEMENTS
This Annual Report contains statements that constitute “forward-looking” statements within the meaning of
Section 21E of the U.S. Securities Exchange Act of 1934, as amended. This Annual Report contains certain forward-
looking statements concerning our intentions, beliefs or current expectations regarding our future financial results,
plans, liquidity, prospects, growth, strategy and profitability, as well as the general economic conditions of the
industries and countries in which we operate. Forward-looking statements include statements concerning our plans,
objectives, goals, strategies, future events, future sales or performance, capital expenditures, financing needs, plans or
intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy and the trends we
anticipate in the industries and the economic, political and legal environments in which we operate and other
information that is not historical information.
Many of the forward-looking statements contained in this Annual Report can be identified by the use of forward-
looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,”
among others. These statements appear in a number of places in this Annual Report and include, but are not limited to,
statements regarding our intent, belief or current expectations with respect to:
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global economic conditions, foreign exchange rate fluctuations and high inflation, as well as local economic
conditions in the markets we serve, which can be impacted by geopolitical developments outside of our
principal geographic markets;
potential disruption due to diseases, pandemics (including the COVID-19 virus), political events, armed conflict
and acts by terrorists;
telecommunications usage levels, including traffic, customer growth and the accelerated transition from
traditional to digital services;
competitive forces, including pricing pressures, piracy, 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;
the achievement of our operational goals, financial targets and strategic plans, including the anticipated
efficiencies and savings of our cost-reduction project, the acceleration of cash flow growth and the expansion
of our fixed broadband network;
legal or regulatory developments and changes, or changes in governmental policy, including with respect to
the availability and terms and conditions of spectrum and licenses, the level of tariffs, laws and regulations
which require the provision of services to customers without charging, tax matters, controls or limits on the
purchase of U.S. dollars, the terms of interconnection, customer access and international settlement
arrangements;
the achievement of environmental, social and governance targets, including through the use of solar panels
and other methods that aim to lower the energy consumption of our networks, such as the increased
implementation of Fiber-to-the-Home ("FTTH"), and various diversity, equity and inclusion targets;
our ability to grow our mobile financial services business in our Latin American markets;
adverse legal or regulatory disputes or proceedings;
the success of our business, operating and financing initiatives and strategies, including partnerships and
capital expenditure plans;
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our expectations regarding the growth in fixed broadband penetration rates and the return that our
investment in broadband networks will yield;
the level and timing of the growth and profitability of new initiatives, start-up costs associated with entering
new markets, the successful deployment of new systems and applications to support new initiatives;
our ability to create a new organizational structure for the Tigo Money business and manage it independently
to enhance its value;
our ability to optimize the utilization and capital structure of our tower assets, and increase our network
coverage, capacity and quality of service by focusing capital on other fixed assets;
relationships with key suppliers and costs of handsets and other equipment;
disruptions in our supply chain due to economic and political instability, the outbreak of war or other
hostilities, public health emergencies, natural disasters and general business conditions;
our ability to successfully pursue acquisitions, investments or merger opportunities, integrate any acquired
businesses in a timely and cost-effective manner, divest or restructure assets and businesses, 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, 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;
the capacity to upstream cash 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; and
various other factors, including without limitation those described under “Key Information—Risk Factors.”
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This list of important factors is not exhaustive. You should carefully consider the foregoing factors and other
uncertainties and events, especially in light of the political, economic, social and legal environments in which we
operate. Forward-looking statements are only our current expectations and are based on our management’s beliefs
and assumptions and on information currently available to our management. Such statements are subject to risks and
uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking
statements as a result of various factors, including, but not limited to, those identified under the section of this Annual
Report entitled “Key Information—Risk Factors.”
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CONSOLIDATED MANAGEMENT REPORT
KEY INFORMATION
Risk Factors
In addition to the other information contained in this Annual Report, you should carefully consider the following risk
factors before investing in our common shares. If any of the possible events described below were to occur, the business,
financial condition and results of operations of the Millicom Group could be materially and adversely affected. If that
happens, the market price of our common shares could decline, and you could lose all or part of your investment.
Summary of Risk Factors
The following is a summary of the risk factors our business faces. The list below is not exhaustive, and investors
should read this "Risk Factors" section in full. Some of the risks we face include:
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our ability to adapt to rapid technological change and continually evolving industry standards;
our ability to generate expected returns on substantial investments;
our ability to expand our customer base and retain market share by developing and operating our mobile,
cable and broadband networks, Mobile Financial Services ("MFS") and distribution systems;
our ability to achieve the anticipated benefits following the acquisition of the remaining 45% equity interest in
our Guatemala business;
the potential adverse effects of long-term content and service commitments;
the impact of rising content and programming costs;
our dependence on the availability of an attractive selection of programming from content providers;
the impact of competition from a variety of content and programming platforms on the demand for our pay-
TV services;
our ability to acquire and renew licenses for spectrum and comply with the terms and conditions of the
licenses;
the potential adverse impact of legal proceedings, litigation, and government investigations;
the failure of our MFS product to gain sufficient market acceptance;
the impact of equipment and network systems failures, including as a result of a natural disaster, sabotage or
terrorist attack;
risks associated with the collection and processing of customer personal data;
the failure to prevent or rapidly detect and respond to cyber-attacks, and the disruption such failure could
cause to our networks and systems;
the impact of pandemics and other public health crises on our operations, business and financial condition;
our ability to compete with larger providers of telecommunications, cable and broadband services;
our dependency on key suppliers to provide us with products, devices, networks and systems;
the effect of international actions on our supply chain, including trade sanctions;
our reliance on third parties to operate and maintain parts of the networks we use;
our access to interconnection and capacity agreements that are required to transmit voice and data to and
from our networks;
the impact of the political, legal and economic risks associated with the emerging markets in which we
operate;
our ability to successfully implement our strategic priorities, including through acquisitions or mergers, and
efficiently allocate capital;
our ability to access debt and capital markets for our financing, refinancing, investing and operating needs;
our dependence on short-term mobile revenue that is generated from prepaid customers;
the effect that changes in economic, political and regulatory conditions in the United States could have on the
economies in which we operate;
the impact of fluctuations or devaluations in local currencies in the markets in which we operate;
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our ability to convert local currencies into U.S. dollars to make payments, including on our indebtedness;
the failure of our risk management and internal controls to prevent or detect fraud, violations of law or other
inappropriate conduct;
the impact of U.S. or other international sanctions laws, including restrictions on our ability to interact with
business partners or government officials;
our ability to obtain, maintain, enforce or defend the intellectual property rights required to conduct our
business;
the effect of work stoppages that result from renegotiations of our labor contracts;
our ability to generate cash in order to service our debt;
our dependency on cash flow from our operations in Guatemala; and
our ability to effectively monitor and respond to expectations regarding environmental, social and
governance matters.
Additionally, the risk factors described in this section have been separated into four separate but interrelated areas:
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Risks related to the telecommunications, cable and MFS industries
Risks related to Millicom’s business in the markets in which it operates
Risks related to Millicom’s size, structure and leadership
Risks related to share ownership, governance practices, and registration with the Securities and Exchange
Commission ("SEC")
1. Risks related to the telecommunications, cable and MFS industries
a. Evolution of the telecommunications, cable and MFS industries
The telecommunications industry is characterized by rapid technological change and continually evolving
industry standards.
The telecommunications industry is characterized by rapidly changing technology and evolving industry
standards. The technology we use is increasingly complex, which leads to higher risks of implementation
failure or service disruption. Success in the industry is increasingly dependent on the ability of operators to
adapt to the changing technological landscape. The technologies utilized today may become obsolete or
subject to competition from new technologies in the future. For example, our hybrid fiber-coaxial ("HFC")
services may become obsolete once faster and more affordable fiber-to-the-home ("FTTH") services are
available for consumers.
Growth in internet connectivity has led to the proliferation of entrants offering Voice over Internet
Protocol (“VoIP”) services, video content services, and messaging services delivered over the internet. Such
operators could displace the services we provide by using our customers’ internet access (which may or may
not be provided by us) to enable the provision of communication, entertainment and information services
directly to our customers. Failure to transform to data-driven products could have a negative impact on our
legacy services and impact our results from operations.
Our ability to attract and retain customers is, in part, dependent on our ability to meet customer demand
for new technology at the same, or at a quicker rate, than our competitors are able to do.
Failure to adapt and evolve could harm our competitive position, render our products obsolete and
cause us to incur substantial costs to replace our products or implement new technologies.
Implementing new technologies requires substantial investments which may not generate expected
returns.
The introduction of new technologies may require significant capital expenditure on infrastructure, and
there can be no guarantee that those investments will generate expected returns. For example, penetration
rates for fixed broadband services in our markets are low relative to penetration rates in other markets
globally. As the use of these services has the potential to increase substantially over time, we have expended
significant resources to deploy both HFC and FTTH networks in several of our markets. However, an
increasing number of local and regional providers of fiber connections are offering internet services with the
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same or higher data speeds at competitive prices, and competition for dedicated fiber optic services is
intense. While we continue to expand these networks with the intention of capturing the anticipated
demand, future offerings by our competitors that are aggressively priced or that offer additional services may
prevent us from achieving the expected returns on this investment. If we are required to implement new
technologies that are unable to generate sufficient returns, our profitability and ability to generate cash flow
would be negatively affected, and we may be required to scale back our investments or delay the
implementation of new technologies, which may have a negative impact on our growth and ability to attract
and retain customers.
In addition, if competitive or other factors compel the need to invest in new technologies earlier than
anticipated, previous equipment or technology may need to be impaired or written-down if replaced earlier
than originally anticipated.
If we cannot successfully develop and operate our mobile, cable and broadband networks, MFS and
distribution systems, we will be unable to expand our customer base and may lose market share and
revenue.
Our ability to increase or maintain our market share and revenue is partly dependent on the success of
our efforts to expand our business, the quality of our services and the management of our networks and
distribution systems. As new technologies are developed or upgraded, such as advanced 5G systems and
fiber optic cable networks, our equipment may need to be replaced or upgraded or we may need to rebuild
our mobile, cable or broadband network, in whole or in part. In some cases, the COVID-19 pandemic
accelerated the transition from traditional to digital services, including MFS, and the heightened customer
expectations in these areas may require us to invest greater resources in technological improvements.
The initial build-out of our networks and distribution systems, together with sustaining sufficient
network performance and reliability, is a capital-intensive process that is subject to risks and uncertainties
which may delay the introduction of services and increase the cost of network construction or upgrade. With
regard to our strategic efforts in broadband services, we seek to increase our market share in both the
residential and commercial broadband markets by investing significant resources in HFC and FTTH networks,
in addition to fixed broadband services through wireless communication networks, known as fixed wireless
access ("FWA"). The provision of broadband services is highly capital intensive, and the long-term nature of
the return on investment increases the risks to our operations. Potential difficulties include constraints on our
ability to fund additional capital expenditures, as well as external forces, such as obtaining necessary permits
from regulatory and other local authorities.
Unforeseeable technological developments may also render our services or distribution channels
unpopular with customers or obsolete. To the extent we fail to expand, upgrade and modernize our networks
and distribution systems on a timely basis relative to our competitors, we may not be able to expand our
customer base and we may lose customers to competitors. If any of these risks materialize, we may be at a
competitive disadvantage, which could result in the loss of customers or the inability to attract new
customers and maintain or grow our market share. In turn, this would impact our revenue and profitability
and our ability to generate cash to grow or sustain our businesses.
b. Content and content rights
Content and programming costs are rising (especially those with exclusivity rights), and we may not be
able to pass the increased costs on to our customers.
In recent years, the cable TV and direct-to-home satellite TV industries (together “pay-TV”) have
experienced a rapid escalation in the cost of content rights and programming. We expect these costs may
continue to increase, particularly those related to exclusive and live broadcasts of sporting and other events.
As of December 31, 2023, we had exclusivity rights over certain local soccer content in several of our markets,
including Bolivia, Costa Rica, El Salvador, Guatemala, Honduras, Panama and Paraguay, and we expect that
the costs of these rights may continue to increase significantly. If we are unable to moderate the growth in
these costs or fully pass them on to our customers in the form of price increases, we may lose our rights to
this content. Any failure to maintain such rights may reduce the desirability of our networks and negatively
affect our profitability.
In addition, content is often priced in U.S. dollars, which may result in fluctuations in costs in the
countries in which we sell content due to foreign exchange fluctuations.
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We make long-term content and service commitments in advance even though we cannot predict the
popularity of the services or ratings the programming will generate, and our mobile applications and
cable content may not be accepted or widely used by our customers.
We acquire rights to distribute certain content or services for use by our mobile, pay-TV and broadband
customers, and we have strategic partnerships with major digital players, such as Amazon. We make long–
term commitments in advance even though we cannot predict the popularity of the services or ratings the
programming will generate. In some instances, our commitments include minimum guarantees, which
means that we are required to pay a certain agreed upon amount regardless of the amount collected from
the provision of such services. The commercial success of applications or content also depends on the quality
and acceptance of other competing applications or content released into the marketplace at or near the
same time.
The success of our pay-TV services depends on our ability to access an attractive selection of television
programming from content providers.
The ability to provide movie, sports and other popular programming is a major factor that attracts
customers to pay-TV services. We may not be able to obtain sufficient high-quality programming from third-
party producers or exclusive sports content for our cable TV services on satisfactory terms or at all in order to
offer compelling cable TV services, which could result in reduced demand for, and lower revenue and
profitability from, our cable services.
Consumers are increasingly able to choose from a variety of platforms from which to receive content and
programming.
A number of content providers have begun to sell their services through alternative distribution
channels including IP-based platforms, smart-TVs and other app-compatible devices. Consumers may choose
to purchase on-demand content through these alternative transmission methods, which may lead to
reduced demand for our pay-TV services. If our customers choose to source their content through
transmission methods that we do not offer, our customer base and revenue generation from content-related
services such as pay-TV may decline, which would negatively impact our cash flow generation and return on
investment in content-related services.
We may be subject to legal liability associated with providing online services or media content.
We host and provide a wide variety of services and products that enable our customers to conduct
business, and engage in various online activities. The law relating to the liability of providers of these online
services and products for the activities of their customers is still unsettled in some jurisdictions. Claims may
be threatened or brought against us for defamation, negligence, breaches of contract, copyright or
trademark infringement, unfair competition, tort, including personal injury, fraud, or other theories based on
the nature and content of information that we use and store. In addition, we may be subject to domestic or
international actions alleging that certain content we have generated or third-party content that we have
made available within our services violates applicable law or third-party rights.
We also offer third-party products, services and content. We may be subject to claims concerning these
products, services or content by virtue of our involvement in marketing, branding, broadcasting, or providing
access to them, even if we do not ourselves host, operate, provide, or provide access to these products,
services or content. Defense of any such actions could be costly and involve significant time and attention of
our management and other resources, may result in monetary liabilities or penalties, and may require us to
change our business in an adverse manner. For example, in Colombia we have faced litigation for the
provision of services to customers that used our mobile services to attempt to extort money from third
parties.
c.
Licenses and spectrum
Available spectrum is limited, closely regulated and increasingly expensive.
The availability of spectrum is limited, closely regulated and can be expensive, and we may not be able
to obtain it from the regulator or third parties at all or at a price that we deem to be commercially acceptable
given competitive conditions. If we acquire spectrum through acquisition, regulators may require us to
surrender spectrum to secure regulatory approval. We may need to incur significant capital expenditures in
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order to acquire or renew licenses or access infrastructure needed to continue to offer services to our
customers or improve our current services.
Additional or supplemental licenses may be required to implement 5G technology in order to remain
competitive, and we may be unable to acquire such licenses on reasonable terms or at all.
We may not be able to acquire or retain sufficient quantities of spectrum in our preferred band(s) which
could impact the quality and efficiency of our networks and services and may negatively impact our
profitability.
Our licenses may be suspended or revoked and we may be fined or penalized for alleged violations of law
or regulations.
If we fail to comply with the conditions of our licenses or with the requirements established by the
legislation or if we do not obtain permits for the operation of our networks and equipment, use of
frequencies or additional licenses for broadcasting directly or through agreements with broadcasting
companies, we may not have sufficient opportunity to cure any non-compliance. In the event that we do not
cure any non-compliance, the applicable regulator may: levy fines; suspend or terminate our licenses,
frequency permissions, or other governmental permissions; or refuse to renew licenses that are up for
renewal.
Most of our licenses are granted for finite periods.
Most of our licenses are granted for specified terms, and we have no assurance that any license will be
renewed upon expiration. Licenses due to expire in the near term include our licenses for pay-TV and fixed
telephone services in Honduras (2024), certain spectrum licenses for mobile services in Colombia (2024), pay-
TV services in Panama (2024) and the general license covering all services in Costa Rica (2024).
Licenses may contain additional obligations.
Licenses may contain additional obligations, including payment obligations and requirements to cover
reduced service areas or permit a more limited scope of service (for example, around prisons in El Salvador
and Honduras). The cost of extending coverage to reduced service areas may exceed the revenue generated
from providing such services. Licenses may also contain coverage obligations, like in Colombia where 700
MHz frequency acquisitions were paid partly with cash and partly by committing to provide coverage to
1,636 districts over the course of five years. In addition, increased regulations may impose additional
obligations on operators and these obligations may affect the retention and renewal of licenses or spectrum.
For more information, see “Information on the Company—Business Overview—Regulation.”
d. Quality and resilience of networks and service
Equipment and network systems failures, including as a result of climate change, a natural disaster,
sabotage or terrorist attack, could negatively impact our business.
Our business is dependent on certain sophisticated critical systems, including exchanges, switches, fiber,
cable headends, data centers and other key network elements, physical infrastructure and billing and
customer service systems. Our technological infrastructure is vulnerable to damage and disruptions from
numerous factors, including climate change, fire, flood, windstorms and other natural disasters and extreme
weather events, power outages, terrorist acts, equipment and system failures, human errors and intentional
wrongdoings, including breaches of our network and information technology security. For example, in 2020,
our mobile network was partially affected due to storm damage in Honduras, which resulted in the
deterioration of service in certain parts of the country. Ongoing risks to our network include state-sponsored
censorship, sabotage, theft and poor equipment maintenance.
Inability to manage a crisis could harm our brand and lead to increased government obligations in the
future.
Telecommunications networks provide essential support to first responders and government authorities
in the event of natural disasters, terrorist attacks, pandemics and other similar crises. If we fail to develop and
implement detailed business continuity and crisis management plans, we may be unable to provide service
at the level that is required or perceived to be required by the government, the regulator, our customers and
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by the public at large, and this could lead to reputational harm and to new and burdensome regulatory
obligations in the future.
e. Regulation
The telecommunications and broadcasting market is heavily regulated.
The licensing, construction, ownership and operation of mobile telephone, broadband and cable TV
networks, and the grant, maintenance and renewal of the required licenses or permits, as well as radio
frequency allocations and interconnection arrangements, are regulated by national, state, regional or local
governmental authorities in the markets in which we operate, which can lead to disputes with government
regulators. For example, in 2013, the Colombian regulator challenged Colombia Móvil’s license fee, stating
that it should be a significantly higher amount than we had recorded, although Colombia Móvil prevailed.
Certain other aspects of mobile telephone operations, including rates charged to customers, resale of
mobile telephone services, and user registrations may be subject to public utility regulation in each market.
Also, because of our market share, regulators could impose asymmetric interconnection or termination rates,
which could undermine our competitive position in the markets in which we operate.
Changes in regulations may disrupt our business activities and reduce our revenue and profit margins for
mobile services.
Regulatory changes may reduce or prohibit the provision of our services on a temporary or long-term
basis. For example, since 2014, mobile operators in El Salvador and Honduras have been required to shut
down services or reduce signal capacity in and around prisons. Similar laws have been enacted in Guatemala,
although these were later nullified.
Moreover, regulations which make it commercially unviable to subsidize our mobile customers’
handsets; set an expiry date on when our customers must use their prepaid minutes, data or short message
service ("SMS") bundles; or prohibit certain automatic deductions to customer accounts, could reduce
revenue and profit margins for mobile services. For example, in 2015, the regulator in Colombia determined
that handsets and telecommunication services could not be bundled and had to be invoiced separately. This
had a direct impact on handset affordability and caused a sharp decline in our handset sales. In 2016, the
regulator in Paraguay extended the unused prepaid data allowance from 30 to 90 days, which impacted the
frequency at which a portion of our prepaid customers purchase additional data allowances from us. In 2019,
the Legislative Assembly in El Salvador made a reform to the Consumer Protection Law, which required a
change in the telecommunication companies' commercial activities. The reform called for the maintenance
of unused data allowances for up to 90 days and prohibited automatic renewals, changing our financial
results. Additionally, the reform banned broadcasts and collection activities outside business hours,
impacting our clients' churn trends and payment behavior. In 2022, the Bolivian regulator prohibited
operators from automatically making deductions to prepaid customer accounts for data usage services on an
on-demand basis unless the customer has expressly opted-in to receive on-demand data. As a result, when a
prepaid customer uses up their data allowance, the operator cannot automatically begin charging such user
on an on-demand basis and must, instead, cancel data access until such customer either purchases a new
data package or accepts on-demand data.
Our MFS product may be subject to new legislation and regulation.
We provide a broad range of MFS such as payments, money transfers, international remittances, real-
time loans and micro-insurance. In most markets in which we have launched MFS, the laws and regulations
governing our MFS are new and evolving, and, as they develop, regulations could become more onerous,
requiring licensing by or registration with local regulators, imposing additional reporting or controls or
limiting our flexibility to design new products, which may limit our ability to provide our services efficiently or
at all.
The lack of established laws and regulations may make it difficult to identify which licenses and
approvals (if any) are necessary and the processes for obtaining them, as well as the implications of holding
such licenses or receiving such approvals. For the same reason, we cannot be certain that we will be able to
maintain licenses and approvals that we previously obtained, or renew them upon their expiration. While we
currently believe that some of our MFS activities fall outside the scope of licensing requirements and do not
require certain approvals, there can be no assurance that our interpretations of the rules and their
exemptions are or will remain consistent with those of local regulators.
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We have, in most of our markets, seen that fintech legislation is evolving, particularly as it relates to anti-
money laundering and suspicious activity reporting. Any such changes may require us to make additional
investments in tools and resources to meet such requirements. If we are unable to modify our service
provision in time to comply with any new regulatory requirements, or new regulations are applied
retroactively, we may be subject to penalties and the discontinuation or restriction of our operations, which
could have a material adverse effect on our business, financial condition and results of operations.
For more information on the regulatory environment in the markets in which we operate, see
“Information on the Company—Business Overview—Regulation.”
f.
Cybersecurity and data protection
Cyber-attacks may cause equipment failures that render our networks or systems inoperable and could
cause disruptions to our customers’ operations.
Cyber-attacks, including through the use of malware, viruses, denial of services attacks, credential
harvesting, social engineering and other means for obtaining unauthorized access to or disrupting the
operation of our networks and systems and those of our suppliers, vendors and other service providers, could
have an adverse effect on our business. Cyber-attacks may cause equipment failures as well as disruptions to
our customers' operations. Cyber-attacks against companies, including Millicom, have increased in frequency,
scope and potential harm in recent years.
The inability to operate or use our networks and systems or those of our suppliers, vendors and other
service providers as a result of cyber-attacks, even for a limited period of time, may result in significant
expenses to Millicom and/or a loss of market share to other communications providers. Although we have
taken and continue to take measures designed to prevent, detect and mitigate such incidents, there can be
no assurance that we will be able to adequately anticipate or prevent them, as the techniques used are
constantly evolving. The costs associated with a major cyber-attack on Millicom could include expensive
incentives offered to existing customers and business partners to retain their business, increased
expenditures on cybersecurity measures and the use of alternate resources and lost revenue from business
interruption and litigation.
Cyber-attacks could result in data loss or other security breaches.
Our business involves the receipt, storage, and transmission of confidential information, including
sensitive personal information and payment card information, confidential information about our employees
and suppliers, and other sensitive information about Millicom, such as our business plans, transactions and
intellectual property. Unauthorized access to confidential information may be difficult to anticipate, detect,
or prevent. We have been subject in the past, and may be subject again, to unauthorized access or
distribution of confidential information by third parties or employees, errors or breaches by third-party
suppliers, or other breaches of security that compromise the integrity of confidential information.
As many companies do, Millicom has experienced occurrences of breaches, phishing, ransomware
attacks, blackmail and internal and external malicious actors targeting our systems, networks and data.
Ransomware attacks are a type of cyber-attack in which a business becomes unable to access its own
information and is presented with a demand to pay ransom in order to recover access to its information. In
recent years, we have been subject to web portal attacks, ransomware attacks or threats relating to our
operations in several Latin American countries, including El Salvador, Bolivia, Nicaragua, Guatemala, Panama,
Paraguay and Colombia. While the effect that these attacks and threats have had on our services was minimal
and resulted in limited data loss or release of customer data to date, there can be no assurance that we will
be able to prevent future cyber-attacks that result in a material loss of data or other security breaches.
Our control environment and controls may not be sufficient to prevent or rapidly detect and respond to
cyber-attacks, or identify the perpetrators of such attacks.
The perpetrators of cyber-attacks are not restricted to particular groups or persons. These attacks may be
committed by company employees or external actors operating in any geography, including jurisdictions
where law enforcement measures to address such attacks are unavailable or ineffective, and may even be
launched by or at the behest of nation states. Cyber-attacks may occur alone or in conjunction with physical
attacks, especially where disruption of service is an objective of the attacker. While we have established
security controls that are designed to detect and prevent cyber-attacks, and continue investing in improving
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our security controls, such attacks are becoming increasingly complex and sophisticated, and our control
environment may not be sufficient to address future threats.
We collect and process customer personal data.
We increasingly collect, use and store customer personal data that is protected by privacy and data
protection laws. Data privacy laws and regulations apply broadly to the collection, use, storage, disclosure
and security of personal information that identifies or may be used to identify an individual, such as names
and contact information. Many countries have additional laws that regulate the processing, retention and use
of communications data (both content and metadata), and in some countries, authorities can intercept
communications, sometimes directly or without our knowledge. These laws and regulations are subject to
frequent revisions and differing interpretations, and have generally become more stringent over time.
Requests from local law enforcement for customer data may also come into conflict with applicable
privacy and data protection laws and customer expectations, creating risks to our local businesses arising
from our responses to these requests.
Since we may offer certain services accessed by, or provided to customers within, the European Union
and the United States, we may be subject to the European Union and U.S. privacy and data protection
regulations, which impose significant penalties for non-compliance.
In addition, most of the countries in which we operate are considering or have passed legislation
imposing data privacy requirements that could increase the cost and complexity of providing our services.
Although we take precautions to protect data, we cannot guarantee that our safeguards will prevent any
leakage of certain data or any unauthorized use. If changes are made to data privacy laws and regulations,
we may need to incur additional costs to ensure that we are in compliance with such changes, which could
include investments in data processes, data collection tools or data warehouses to further protect customer
and employee data.
g. Competition
Our industry is experiencing consolidation that may intensify competition among operators.
The telecommunications and cable industry has been characterized by increasing consolidation and a
proliferation of strategic transactions. As a result, we are increasingly competing with larger competitors that
may have substantially greater resources than we do. We expect this trend of consolidation and strategic
partnering to continue. Acquisitions or strategic relationships could harm us in a number of ways. For
example:
•
•
•
competitors could acquire or enter into relationships with companies with which we have strategic
relationships and discontinue our relationship, resulting in the loss of distribution opportunities for our
services or the loss of certain enhancements or value-added features to our services; for example, if a
competitor entered into partnerships or negotiated exclusive rights to premium content, this could
result in consumers choosing to move away from our service offerings to those of our competitors;
a competitor could be acquired by a party with significant resources and experience that could increase
the ability of the competitor to compete with our services, as was the case when América Móvil acquired
the mobile business of Telefónica in Guatemala and when a subsidiary of Liberty Latin America Ltd.
acquired América Móvil's operations in Panama; and
other companies with related interests could combine to form new, formidable competition, which
could preclude us from obtaining access to certain markets or content, or which could dramatically
change the market and demand for our services, as was the case with the bankruptcy of Digicel Group
One Limited. If global companies that offer services such as information, social media or on-demand
content services obtained or entered into distribution agreements with infrastructure partners in our
markets, we could lose customers to those providers.
Consumers in our industry can change service providers relatively easily at little to no cost, which renders
the competition for subscribers between operators intense.
If new competitors enter into our markets or existing competitors offer more competitively priced
products or services, such as eliminating installation fees, subsidizing handsets, modems, wireless routers or
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set-top boxes, or offering content, channels or applications that we do not offer, our customers may move to
another operator. Most of our mobile customers are prepaid, which allows them to switch operators at any
time without monetary penalty, and some of our cable operator competitors incentivize customers to accept
longer contracts, making it difficult to subsequently switch operators.
Some of our customers use devices with dual SIM card capability, allowing them to also utilize our
competitors' services, which may negatively affect our mobile revenue. If we are unable to develop strategies
to encourage customers to retain us as their primary or sole provider, we could lose a larger percentage of
our revenue to our competitors. Mobile number portability in our markets removes a disincentive to
changing providers and increases competition and churn. As devices with eSIMs are introduced in our
markets, allowing customers to change providers without changing their SIM cards, churn and pricing
competition among providers may also increase.
If we are unable to compete effectively and match or mitigate our competitors' strategies or aggressive
competitive behavior, in pricing our services or acquiring new and preferred customers, or if we are unable to
develop strategies to encourage customers to retain us as their primary or sole provider, we could suffer
adverse revenue impacts or higher costs for customer retention, which could, individually or together, have a
material adverse effect on our business, financial condition and results of operations.
Consumers in the telecommunications industry now have many alternative means of communicating.
The proliferation of VoIP and video streaming offerings and other services delivered over the internet
(referred to as “Over-the-Top” or “OTT” services) for voice, instant messaging, and video content has
significantly increased competitive risk and has driven down revenue from legacy voice, SMS and linear TV
services. While these alternative communication methods require usage of data, there are no guarantees that
consumers will use our networks to obtain data services.
h. Environment and sustainability
Failure to comply with environmental requirements could result in monetary fines, reputation damage or
other obligations.
Certain of our business operations are subject to environmental laws and regulations since they involve
fuel consumption, carbon dioxide emission, and disposal of network equipment and old electronics.
Environmental requirements have become more stringent over time, and pending or proposed new
regulations could impact our operations or costs.
Increasing scrutiny and evolving expectations from customers, regulators, investors and other
stakeholders with respect to our environmental, social and governance practices may impose additional
costs on us or expose us to new or additional risks.
Companies are facing increasing scrutiny from customers, regulators, investors and other stakeholders
with respect to their environmental, social and governance (“ESG”) practices. Views about ESG are diverse
and rapidly changing, particularly as they relate to the environment, health and safety, diversity, labor
conditions and human rights. New regulations or guidance relating to ESG standards, as well as the
perspectives of customers, investors and other stakeholders regarding these standards, may affect our
business activities and increase disclosure requirements, which may increase costs. If investors and other
stakeholders determine that we have not made sufficient progress on or adequately addressed ESG matters,
we could be subject to negative publicity in traditional or social media, and our reputation, ability to retain
customers and employees, and financial condition and results of operations could be adversely affected.
i.
Supplier management
We are dependent on key suppliers to provide us with products and devices.
We rely on handset distributors, manufacturers and application developers to provide us with the
handsets, hardware and services demanded by our customers. The key suppliers of our handsets and set-top
boxes, in terms of both volume of sales and importance to our operations, are Apple, B-Mobile, Blu, Honor,
Motorola, Samsung, Sky, Tecno, Xiaomi and ZTE. We import directly from original equipment manufacturers
("OEMs"), or we source our handsets through their authorized distributors in each of our markets.
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We are dependent on key suppliers to provide us with networks and systems.
We seek to standardize our network equipment to ensure compatibility, ease equipment replacement
and reduce downtime of our network and contract with a limited number of international suppliers to
achieve economies of scale, which means that we rely on a limited number of manufacturers to provide
network and telecommunications equipment and technical support. The key suppliers of equipment and
software for our existing networks are Huawei, Ericsson, Nokia, Commscope, Harmonic, Kaon, Vantiva,
Juniper, Intraway and VMWare.
We have limited influence over these key suppliers, and even less over their suppliers and the continuity
of their supply chains, which could be disrupted in many ways. Therefore, we cannot assure you that we will
be able to obtain required products or services on favorable terms or at all. Any failure of key suppliers to
provide software and equipment could interfere with our operations. For example, in recent years, we
experienced significant disruptions in the supply of microchips due to a global shortage that affected our
suppliers, which we addressed by accumulating strategic inventories and substituting alternative products to
sustain our operations. While we did not experience such disruptions in 2023, there can be no assurance that
we will not be subject to future shortages or other similar disruptions, which could have a significant adverse
effect on our business.
International actions including trade sanctions could disrupt or otherwise negatively impact our supply
chain.
In May 2019, the U.S. government announced executive action aimed at addressing U.S. national security
risks arising from the use of non-U.S. technology. In furtherance of this order, the U.S. Department of
Commerce issued an interim final rule in January 2021 that allows the U.S. government to prohibit certain
information and communications technology and services (“ICTS”) transactions to address U.S. national
security threats. In June 2023, the U.S. Department of Commerce issued a final rule that amended the ICTS
interim final rule, which clarified the scope and criteria relevant to evaluating whether certain ICTS
transactions present U.S. national security threats. Although the extent and potential consequences of the
U.S. government's review of ICTS transactions remain uncertain, they may have a material adverse effect on
our ability to maintain and expand our networks and business. There are a number of alternative suppliers
available to us; however, if we are unable to obtain adequate alternative supplies of equipment or technical
support in a timely manner, on acceptable commercial and pricing terms, our ability to maintain and expand
our networks and business may be materially and adversely affected.
We rely on interconnection and capacity agreements, the terms of which could be made less favorable due
to market participants or regulatory changes.
Interconnection and capacity agreements are required to transmit voice and data to and from our
networks. Our ability to provide services would be hampered if our access to local interconnection and
international capacity was limited, or if the commercial terms or costs of interconnection and capacity
agreements with other local, domestic and international carriers of data and communications were
significantly altered, or if an operator is not able to provide interconnection due to operation and
maintenance issues or natural disasters.
We depend upon certain third parties to operate and maintain parts of the networks we use, including
certain towers and network infrastructure, and related services.
In 2023, after determining that ownership of mobile communications towers no longer confers a
competitive advantage, we began the process of moving towers at more than 9,000 sites into a separate
company, as further discussed under "Information on the Company—Business Overview—Property, Plant
and Equipment—Tower infrastructure." Although the transfer has not yet been fully completed, we
anticipate that the carved-out tower company may be ultimately owned and controlled by a third party.
Further, we have sold and leased back a significant number of our towers, and we may engage in similar
transactions in the future.
We also have entered into managed services agreements in certain of our markets to outsource the
maintenance and replacement of our network equipment. Although the contracts impose performance
obligations on the operators and tower management companies, we cannot guarantee that they will meet
these obligations or implement remedial action in a timely manner, which may result in these towers or
networks not being properly operated. If our managed services agreements terminate, we may be unable to
find a cost-effective, suitable alternative provider, and we may no longer have the necessary expertise in-
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house to perform comparable services. For example, if our tower network service provider is unable to
properly maintain our towers, we may suffer a degradation in the quality or coverage of our mobile services.
We and our customers are dependent on third-party suppliers of electricity to power transmission and
customer premise equipment.
Significant failure or disruption in the supply of power to the businesses and households that subscribe
to our services, or to the data centers that we operate, could have a negative impact on the experience of our
customers, which could result in claims against us for failure to provide services and reduce our revenue.
2. Risks related to Millicom’s business in the markets in which it operates
The outbreak of pandemics or other public health crises has had, and may again have, a significant
negative effect on our operations, business and financial condition.
The outbreak of a pandemic or similar public health crises (including COVID-19) could significantly
disrupt our business operations for an extended period. The measures taken to combat a pandemic or public
health crisis and ameliorate its effects, such as the closing of retail stores or other distribution channels, as
well as other government mandates to provide services to non-paying clients, have had, and may again have,
a significant negative effect on our operations.
The full impact of a pandemic or public health crisis cannot be predicted and depends on several factors,
including the geographic spread and duration of the illness, the resurgence or emergence of variant strains
of the illness, the availability and effectiveness of vaccines, vaccine hesitancy, the response by governments,
private sector participants and the public to contain the illness or address its impacts, and the associated
disruption to business and commerce generally, all of which are highly uncertain and could have a significant
adverse effect on our business.
a. Emerging Market Risks
Most of our operations are in emerging markets that may be subject to greater risks than more developed
markets, including in some cases significant political, legal and economic risks.
Emerging market governments and judiciaries often exercise broad, unchecked discretion, and are
susceptible to abuse and corruption and rapid reversal of political and economic policies on which we
depend. Political and economic relations among the countries in which we operate are often complex and
have resulted, and may in the future result, in conflicts, which could materially harm our business.
The economies of emerging markets are vulnerable to market downturns and economic slowdowns
elsewhere in the world. Emerging markets are also subject to adverse global political events and geopolitical
tensions, such as the ongoing conflict between Russia and Ukraine. Such events may result in sanctions,
disruptions in global supply chains, military actions and macroeconomic instability, each of which may
adversely affect the economies of emerging markets. As has happened in the past, financial problems or an
increase in the perceived risks associated with investing in emerging economies could dampen foreign
investment in these markets and materially adversely affect their economies, which may cause our business
and results of operations to suffer.
Turnover of political leaders or parties in emerging markets as a result of a scheduled election upon the
end of a term of service or in other circumstances may also affect the legal and regulatory regime in those
markets to a greater extent than turnover in established countries. Some of the emerging markets in which
we operate are susceptible to social unrest, which may lead to military conflict in some cases.
b. Strategy and strategic direction
We may not be able to successfully implement our strategic priorities.
Our strategic priorities include, among others, expansion of our high-speed data networks (4G, HFC and
FTTH), facilitation of growth in our mobile data and fixed broadband segments, implementation of 5G
technology transformation projects to improve our operating performance and efficiency, implementation of
cost efficiency programs and the creation of, and potential sale of interests in, legal entities to separate our
Tigo Money and Towers businesses from our telecommunications service operations. We also regularly
evaluate potential opportunities to consolidate or form strategic partnerships or alliances with other large
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competitors. There can be no assurance that our strategy will be successfully implemented and will not cause
changes in our operational efficiencies or structure, or that it will achieve the desired financial or operational
objectives. In addition, the implementation of our strategic priorities could result in increased costs, conflicts
with employees, local shareholders and other stakeholders, business interruptions, and difficulty in recruiting
and retaining key personnel. Further, we could enter into partnerships or strategic alliances that require
significant investment or other undertakings from us (including non-compete agreements) or that limit our
financial flexibility or pose limitations on our ability to control or exercise significant influence over
companies or businesses in which we have an ownership stake or over which we exercise control, which
could, in turn, result in our having to deconsolidate assets, liabilities and results of operations associated with
those businesses.
Lack of sufficient information or poor quality of available information regarding our industry, operations
or markets may lead to missed opportunities or inefficient capital allocation.
As the factors we consider in formulating our strategy change (including information, such as customer
data insights or new markets into which we may consider entering), we face the risk of not having access to
sufficient industry, operational or market data inputs to properly inform our decision-making or needing to
rely on poor-quality information. There is also a risk that the data to which we have access will be analyzed
improperly, if the relevant personnel lack appropriate experience, oversight, or relevant skill sets in data
analysis, including through insufficient consideration of interrelationships of key variables such as market
dynamics, trends, availability of cash and resources, agility, opportunities and risk factors affecting our
business. If we are forced to make assumptions regarding key variables and are unable to consider
alternatives to, and consequences of, strategic decisions on a fully informed basis, it may lead to missed
opportunities or inefficient capital allocation that could have an adverse effect on our business, financial
condition or results of operations.
We may not achieve the anticipated benefits following the acquisition of the remaining 45% equity
interest in our Guatemala business.
On November 12, 2021, we signed and closed an agreement to acquire the remaining 45% equity
interest in our Guatemala joint venture business from our local partner for $2.2 billion in cash. In November
2021, we obtained bridge financing to fund the acquisition, which we refinanced in part with the issuance of
equity and long-term debt. We also consolidated the indebtedness from our Guatemala joint venture
business in connection with the acquisition. Our leverage and debt service requirements may make it more
difficult for us to capitalize on changes in market conditions or other strategic opportunities. While we have
taken, and will continue to take, steps to facilitate the growth of our operations in Guatemala and improve
our operating performance and efficiency, our strategy may ultimately prove to be unsuccessful. If we are
unable to generate sufficient cash flow from our operations in Guatemala and future borrowings are not
available, we may not be able to pay our indebtedness or fund our other liquidity needs, which could have a
material adverse effect on our business, financial condition and results of operations.
c.
Industry structure, market position and competition
We face intense competition from other larger telecommunications and cable and broadband providers.
The markets in which we operate are highly competitive. Our main mobile and fixed competitors include
major international and regional telecommunication providers such as América Móvil, Telefónica and Liberty
Latin America. Many of our main competitors have substantially greater resources than we do in terms of
access to capital. Some of our competitors are state-owned entities, which may prioritize social objectives
over profitability. In some of our markets, our competitors may have access to more spectrum and provide
greater or better area coverage, and they may face fewer regulatory burdens than we do.
We have a weaker market position in mobile services and face a challenging competitive environment in
Colombia, our largest market.
Relative to our other markets, the mobile services sector in Colombia is characterized by having more
competitors, including América Móvil and Telefónica, which are larger than us, and by having more stringent
regulatory conditions. Relative to our other markets for mobile services, our competitive position is also
weaker in Colombia, where we are the third largest mobile operator. Additionally, new competitors have
been and may continue to be awarded mobile spectrum, including WOM, which entered the Colombian
market in April 2021.
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Given the importance of Colombia to our results, if we are unable to sustain or improve our position in
the mobile services sector, this could have a material impact on our consolidated financial results.
Competition is driven by a number of factors, most notably price and increasingly customer experience.
Within our markets, operators compete for customers principally on the basis of price, promotions,
services offered, advertising and brand image, quality and reliability of service, mobile coverage and overall
customer experience. Telecom services are largely commoditized services, and the ability to differentiate
these services among operators is limited. Competition may result in pricing pressure, reduced margins and
profitability, an increase in customer churn and reduced revenue and market share.
The effects of competition have been exacerbated by recent inflationary pressures, and the need to
increase prices for our products and services has become increasingly more common. Competitive pressures
could prevent us from implementing or sustaining such price increases, or implementing price increases that
are commensurate with inflation, which may have a material adverse impact on our business, financial
condition and results of operations.
There may be more mobile operators than the market is able to sustain.
Additional licenses may be awarded in already competitive markets, and regulators may incentivize
competition by offering favorable conditions to new entrants, such as holding spectrum auctions in which
certain blocks of spectrum are reserved for new entrants, or by capping the amount of spectrum that existing
players can acquire, as in Colombia's 2019 auction of licenses to use a total of 40 MHz in the 700 MHz band.
Entry by new competitors may have a significant disruptive effect on our markets.
New competitors may enter our markets with pricing or other product or service strategies, primarily
designed to gain market share, that are significantly more competitive than our offers, leading to, for
example, significant price competition and lower margins or increased churn.
In certain of our mobile markets, such as Colombia, our competitors may have a dominant market
position.
Having a dominant market position may provide our competitors with various competitive advantages
including from economies of scale, access to spectrum, the ability to significantly influence market dynamics
and market regulation.
Our competitors may be able to provide better pay-TV services than we are able to provide.
Our pay-TV services compete with other pay-TV services that may offer a greater range of channels to a
larger audience, reaching a wider area distribution (especially in rural areas) for a lower price than we charge
for our pay-TV services. We also compete with satellite distribution of free-to-air television programming,
which viewers can receive by purchasing a satellite dish and a set-top box without any physical cabling.
Furthermore, our cable networks are subject to the risk of overbuild and our pay-TV content is subject to the
possibility of wireless substitution.
Many of the mobile telecommunications markets in which we operate have high mobile penetration
levels, inhibiting growth opportunities.
The markets in which we operate have mobile phone service penetration levels that typically exceed
100% of the population. Although there are some opportunities for further growth, our efforts to develop
additional sources of revenue may not be successful. Therefore, high mobile penetration rates could
constrain future growth and produce an intensification of pricing pressures on all of our mobile services,
which could adversely affect our future profitability and return on investments.
We may not be able to achieve market acceptance of our mobile financial services.
Although the use of mobile financial services and digital payments has increased throughout the world,
there can be no assurance that this increase will result in the acceptance of our MFS across the markets in
which we operate. For example, our Tigo Money business is currently deployed in several of our markets, and,
as of December 31, 2023, we had a total of 4.0 million active users. However, we may be unable to achieve
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the required level of market acceptance in order for us to recover the investment costs involved in
developing and launching such services, and any failure to achieve such acceptance may cause us to reduce
our product offerings or exit certain of our markets.
The future market acceptance of our MFS depends on a variety of factors, including community trust in
digital financial services and companies that are not traditional financial institutions, entrenched preferences
in traditional payment methods, and the availability of alternative MFS that are more popular or widely
accepted by the population.
d. Customer base and customer experience
A significant proportion of our mobile revenue is generated from prepaid customers and is short-term in
nature.
Prepaid customers do not sign service contracts and may be more likely than postpaid customers to
switch mobile operators and take advantage of promotional offers by other operators. Many of our prepaid
mobile customers subscribe to short-term packages that are valid for only one day. As a result, we cannot be
certain that prepaid customers or short-term data package customers will continue to use our services in the
future. Prepaid customers represented 82% of our mobile customers as of December 31, 2023 and generated
approximately 61% of our mobile service revenue and 35% of our total service revenue during 2023.
The transition to more subscription-based businesses creates new challenges.
Our transition toward an increasingly subscription-based revenue model has implications for our
personnel, systems, and business procedures, as we must dedicate increasing levels of management
attention and resources toward managing and mitigating risks related to accounts receivables and
collections, as well as billing and customer care. If we are unable to implement and manage the information
systems and to properly train our employees, we could experience elevated levels of customer churn and bad
debt, which would negatively impact our financial results.
e. Political
Many of the countries in which we operate have a history of political and social instability.
Some of the countries in which we operate may be subject to greater political and economic risk than
developed countries. Some of the countries in which we operate suffer from political instability, civil unrest,
or war-like actions by anti-government insurgent groups. These problems may continue or worsen,
potentially resulting in significant social unrest or civil war. For example, Bolivia, Panama and Guatemala ,
and, to a lesser extent, Colombia, have recently experienced civil, social and political unrest.
Any political or social instability or hostilities in the markets in which we operate can hinder economic
growth and reduce discretionary consumer spending on our services, and may result in damage to our
networks or prevent us from selling our products and services.
We face a number of risks as a result of political and social instability in the countries in which we
operate, ranging from the risk of network disruption, sometimes resulting from government requests to shut
down our networks as well as forced and illegal abuse of our network by political forces, to the need to
evacuate some or all of our key staff from certain countries, in which case there is no guarantee that we
would be able to continue to operate our business as previously conducted in such countries. Any of these
events would adversely affect our results of operations.
f.
Legal and regulatory
The nature of legislation and rule of law in emerging markets may affect our ability to enforce our rights
under licenses or contracts or defend ourselves against claims by third parties.
The nature of much of the legislation in emerging markets, the lack of consensus about the scope,
content and pace of economic and political reform and the rapid evolution of the legal systems in emerging
markets, place the enforceability and, possibly, the constitutionality of, laws and regulations in doubt and
result in ambiguities, inconsistencies and anomalies. These factors could affect our ability to enforce our
rights under our licenses or our contracts, or to defend our company against claims by other parties. For
example, if we enter litigation proceedings with a third party in a country in which we operate, and within a
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legal system which may be less transparent and less robust in its judgment and rulings, we may face
penalties or decrees that compel us to cease or partially cease the provision of certain of our services or the
operation of our networks, or invalidate or suspend our licenses or rights therein.
New or proposed changes to laws or new interpretations of existing laws in the markets in which we
operate may harm our business.
We are subject to a variety of national and local laws and regulations in the countries in which we do
business. These laws and regulations apply to many aspects of our business. Violations of applicable laws or
regulations could damage our reputation or result in regulatory or private actions with substantial penalties
or damages. In addition, any significant changes in such laws or regulations or their interpretation, or the
introduction of higher standards or more stringent laws or regulations, could have an adverse impact on our
business, financial condition, results of operations and prospects. For example, in Colombia in 2017, the
regulator introduced caps to wholesale rates on mobile services, which forced us to lower our prices for both
voice and data services, and it also cut interconnection rates.
Developing legal systems in the countries in which we operate create a number of uncertainties for our
businesses.
The legal systems in many of the countries in which we operate are less developed than those in more
established markets. This creates uncertainties with respect to many of the legal and business decisions that
we make, including, among others, potential for negative changes in laws, gaps and inconsistencies between
the laws and regulatory structure, difficulties in enforcement, broad regulatory authority held by
telecommunications regulators, inconsistency and lack of transparency in the judicial interpretation of
legislation and corruption in judicial or administrative processes or systems. We may not always have access
to efficient avenues for appeal and may have to accept the decisions imposed upon us. For more information
concerning the legal proceedings to which we are subject, see “Financial Information—Consolidated
Statements and Other Financial Information—Legal Proceedings.”
g. Macro-economic and currency
The economies of emerging markets, including those in which we operate, are vulnerable to market
downturns and economic slowdowns elsewhere in the world.
Telecommunications in emerging markets in general and in our markets in particular, account for a
significant part of gross domestic product (“GDP”) and disposable income. As such, any change in economic
activity level may impact our business. Furthermore, as consumers in emerging markets have relatively lower
levels of disposable income, the demand for our products and services is significantly exposed to the risk of
economic slowdown.
As has happened in the past, financial problems or an increase in the perceived risks associated with
investing in emerging economies could dampen foreign investments in these markets and materially
adversely affect their economies. An economic downturn, a substantial slowdown in economic growth or a
deterioration in consumer spending could have an adverse effect on the level of demand for our products
and services and our growth. We are particularly susceptible to any deterioration in the economic
environment of the countries in which we have our largest operations, namely Colombia, Guatemala,
Paraguay, Honduras, Panama and Bolivia.
Changes in economic, political and regulatory conditions in the United States or in U.S. laws and policies
governing foreign trade and foreign relations could have an impact on the economies in which we
operate.
Any decision taken by the U.S. government that has an impact on the Latin American economy, such as
reducing commercial activity between the countries in which we operate and the United States, limiting
immigration, increasing interest rates or slowing direct foreign investments, could adversely affect the
disposable income of consumers. In addition, a slowdown in the U.S. economy may have an adverse impact
on the level of U.S. dollar remittances that form a large part of the GDP of many of the countries in which we
operate.
Fluctuations or devaluations in local currencies in the markets in which we operate against our U.S. dollar
reporting as well as our ability to convert these local currencies into U.S. dollars to make payments,
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including on our indebtedness, could materially adversely affect our business, financial condition and
results of operations.
A significant amount of our costs, expenditures and liabilities are denominated in U.S. dollars, including
capital expenditures and borrowings. We mainly collect revenue from our customers in local currencies, and
there may be limits to our ability to convert these local currencies into U.S. dollars. Local currency exchange
rate fluctuations in relation to the U.S. dollar may have an adverse effect on our earnings, assets and cash
flows. To the extent that our operations retain earnings or distribute dividends in local currencies, the
amount of U.S. dollars ultimately received by MIC S.A. is also affected by currency fluctuations.
A significant amount of our debt and long-term financial commitments are denominated in U.S. dollars.
Where possible and where financially viable, we borrow in local currency to mitigate the risk of exposure
to foreign currency exchange. Our ability to reduce our foreign currency exchange exposure may be limited
by a lack of long-term financing in local currencies or derivative instruments in the currencies in which we
operate. As such, there is a risk that we may not be able to finance local capital expenditure needs or reduce
our foreign exchange exposure by borrowing in local currency. For more information, see “Quantitative and
Qualitative Disclosures About Risk—Foreign currency risk.”
Due to the lack of available financial instruments in many of the countries or currencies in which we
operate, we may not be able to hedge against foreign currency exposures.
We had net foreign exchange gains of $31 million in fiscal 2023 compared to net foreign exchange losses
of $84 million in fiscal 2022 and net foreign exchange losses of $42 million in fiscal 2021. At the operational
level we seek to match the currencies of our cash inflows and outflows, but while this practice reduces, it
does not eliminate, our significant foreign exchange exposure to the U.S. dollar.
The governments of the countries in which our operations are located may impose foreign exchange
controls that could restrict our ability to receive funds from the operations.
Substantially all our revenue is generated by our local operations, and MIC S.A. is reliant on its
subsidiaries’ and joint ventures’ ability to transfer funds to it. None of the foreign exchange controls that exist
in the countries in which our companies operate significantly restricts the ability of our operating companies
to pay interest, dividends, technical service fees, and royalty fees or repay loans by exporting cash,
instruments of credit or securities in foreign currencies. However, foreign exchange controls may be
strengthened, or introduced, which could restrict MIC S.A.’s ability to receive funds.
In addition, in some countries it may be difficult to convert local currency into foreign currency due to
limited liquidity in foreign exchange markets. These restrictions may constrain the frequency for possible
upstreaming of cash from our subsidiaries to MIC S.A. in the future. These and any similar controls enacted in
the future may cause delays in accumulating significant amounts of foreign currency, and increase foreign
exchange risk, which could have an adverse effect on our results of operations.
We are exposed to the potential impact of any alteration to, or abolition of, foreign exchange which is
“pegged” at a fixed rate against the U.S. dollar.
Any “unpegging,” particularly if the currency weakens against the U.S. dollar, could have an adverse
effect on our business, financial condition or results of operations. Currently, Bolivia operates a fixed peg to
the U.S. dollar. However, in light of the recent shortage of U.S. dollars, the increased use of alternative
currencies such as the Chinese Yuan, and the increasing threat of an economic downturn, there can be no
assurance that such peg will be maintained in the future.
h. Taxation
Unpredictable tax systems give rise to significant uncertainties and risks that could complicate our tax
strategy and business decisions.
The tax laws and regulations in the markets in which we operate are complex and subject to varying
interpretations. The tax authorities in the markets in which we operate are often arbitrary in their
interpretation of tax laws, as well as in their enforcement and tax collection activities. Our interpretations and
application of the tax and regulations could differ from that of the relevant governmental taxing authority.
Tax declarations are subject to review and investigation by a number of authorities, which are empowered to
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impose fines and penalties on taxpayers, and in some cases criminal penalties on company personnel. Tax
audits may result in additional costs to our group if the relevant tax authorities conclude that entities of the
group did not satisfy their tax obligations in any given year. Such audits may also impose additional burdens
on our group by diverting the attention of management resources. The outcome of these audits could harm
our business, financial condition, results of operations, cash flows or prospects. For example, on March 28,
2022, the supreme court in one of the jurisdictions in which we operate issued a $16.2 million ruling against
our business, primarily for taxes related to incoming international calls and the deductibility of interest
expenses in 2010. We are also addressing tax disputes with local tax authorities in several jurisdictions,
further described under “Financial Information—Consolidated Statements and Other Financial Information—
Legal Proceedings—Tax disputes.”
Adverse decisions of tax authorities or changes in tax treaties, laws, rules or interpretations could have a
material adverse effect on our business, results of operations, financial conditions or cash flows.
The organizational structure and business arrangements between the various legal entities in the group
may give rise to taxation-related risks, including risks related to the pricing of services which might be
challenged if not made on an arm’s-length basis and the taxation of shell entities.
Tax authorities could argue that some of the services provided among the various legal entities in the
group are on terms more favorable than those that could be obtained from independent third parties and
assess higher taxes or fines in respect of the services MIC S.A. provides. Additionally, the Council of the
European Union (the "Council") published a proposal on December 22, 2021, further amended during 2022
and 2023, which targets shell entities to prevent their misuse for tax purposes. We are currently reviewing
whether such proposal could be deemed applicable to us if adopted and what adverse impacts it may have, if
any, on our business.
i.
Litigation and claims
Some of the litigation or claims that we face can be complex, costly, and highly disruptive to our business
operations.
From time to time, in the ordinary course of our business, we are involved in legal proceedings. Some of
these legal proceedings can be complex, costly, and highly disruptive to our business operations. Certain of
these proceedings may be spurious in nature and may demand significant energy and attention from
management and other key personnel. For example, in Tanzania in June 2016, we were served with a
complaint by a third party seeking to exert rights as a shareholder of MIC Tanzania Public Limited Company.
While this claim was eventually dismissed, it absorbed a significant amount of management time and
resulted in additional costs. The assessment of the outcome of legal proceedings, including our potential
liability, if any, is a highly subjective process that requires judgments about future events that are not within
our control. The amounts ultimately received or paid upon settlement or pursuant to final judgment, order or
decree may differ materially from amounts accrued in our financial statements. In addition, litigation or
similar proceedings could impose restraints on our current or future manner of doing business. For example,
if we enter litigation proceedings with a regulator in a country in which we operate, we may face penalties or
decrees that compel us to cease or partially cease the provision of certain of our services or the operation of
our networks.
j.
Business conduct
We may not be able to fully mitigate the risk of inappropriate conduct by our employees, business
partners and counterparties.
Millicom’s employees interact with customers, contractors, suppliers and counterparties, and with each
other, every day. All employees are expected to respect and abide by the Group's values and Code of
Conduct, commonly referred to as the “Sangre Tigo” culture. While Millicom takes numerous steps to prevent
and detect inappropriate conduct by employees, contractors and suppliers that could potentially harm the
Group's reputation, customers, or investors, such behavior may not always be detected, deterred or
prevented. The consequences of any failure by employees to act consistently with the “Sangre Tigo”
expectations could include litigation, regulatory or other governmental investigations or enforcement
actions.
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We are subject to anti-corruption and anti-bribery laws.
We are subject to a number of anti-corruption laws in the countries in which we operate and are located,
in addition to the Foreign Corrupt Practices Act (“FCPA”) in the United States and the Bribery Act in the
United Kingdom. Our failure to comply with anti-corruption laws applicable to us could result in penalties,
which could harm our reputation and harm our business, financial condition, results of operations, cash flows
or prospects. The FCPA generally prohibits covered companies, their officers, directors and employees and
their intermediaries from making improper payments to foreign officials for the purpose of obtaining or
keeping business and/or other benefits. We operate in countries which pose elevated risks of corruption
violations, and in certain of our markets, we have been and may continue to be subject to governmental
investigations that include the telecommunications sector. If we are not in compliance with anti-corruption
laws and other laws governing the conduct of business with government entities and/or officials (including
local laws), we may be subject to criminal and civil penalties and other remedial measures. Moreover,
investigations of any actual or alleged violations of such laws or policies related to us could be time
consuming, distracting to management and expensive, with the potential to harm our business, financial
condition, results of operations, cash flows or prospects. For example, in late 2015 we reported to the U.S.
Department of Justice (“DOJ”), as well as to law enforcement authorities in Sweden, potential improper
payments made on behalf of our joint venture in Guatemala. In 2016 we received notification from the
Swedish Public Prosecutor that its preliminary investigation had been discontinued. In 2018, the DOJ
informed us that it was closing its investigation without action. More recently, in April 2022, we received a
subpoena from the DOJ requesting information concerning our business in Guatemala (“Tigo Guatemala”),
including information related to the purchase in 2021 of our former joint venture partner’s interest in Tigo
Guatemala and information related to any contacts with certain Guatemalan government officials. The
subpoena also requested information concerning our operations in other countries in Latin America. In May
2023, we received a second subpoena from the DOJ requesting additional information regarding Tigo
Guatemala. We are cooperating with the DOJ. At this time, we cannot predict the ultimate scope, timing or
outcome of this matter.
Our anti-corruption policies, procedures and internal controls may not be effective in complying with anti-
corruption laws.
We regularly review and update our policies, procedures and internal controls designed to provide
reasonable assurance that we, our employees, joint ventures, distributors and other intermediaries comply
with the anti-corruption laws to which we are subject. For example, our business in Guatemala retained
external legal counsel to review its policies and procedures related to anti-corruption issues, including
examining certain allegations of improper payments made several years ago. However, anti-corruption
policies, procedures and internal controls are not always effective against this risk. We cannot assure you that
such policies or procedures or internal controls work effectively at all times or protect us against liability
under these or other laws for actions taken by our employees, joint ventures, distributors and other
intermediaries with respect to our business or any businesses that we may acquire.
Our MFS service is complex and increases our exposure to fraud and money laundering.
Our MFS product has been developed through different distribution channels, and despite measures
that we have taken or will take to adequately secure our payment systems, we remain susceptible to
potentially illegal or improper uses of our payment services. Risks may include the use of our payment
services in connection with fraudulent sales of goods or services, sales of prohibited or restricted products
and money laundering.
Our policies and procedures may not be fully effective in identifying, monitoring and managing these
risks. For example, we are not able to monitor the sources and uses of funds that flow through our MFS
application, Tigo Money, in every case. As a result, we may be held liable for fraudulent transactions or
transactions that violate trade sanctions or other legal or regulatory requirements, and an increase in
negative publicity regarding our payment systems could harm our reputation and reduce consumer
confidence in our services. In addition, we may face legal actions or regulatory sanctions as a result of any
such activity.
Our services also involve cash handling, which exposes us to the risk of fraud and money laundering. In
certain of our markets, we must keep our customers’ MFS cash in local currency demand deposits in local
banks and ensure customers’ access to MFS cash, exposing us to local banking risk.
Anti-money laundering laws are often complex. We endeavor to conform to the highest standards but
cannot be certain that we will be able to fully meet all applicable legal and regulatory requirements at all
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times. Violations of anti-money laundering laws or other regulations applicable to our MFS offerings could
expose us to monetary fines or other legal actions or regulatory sanctions, which could have a material
adverse effect on our business, financial condition and results of operations.
We may incur significant costs from fraud, which could adversely affect us.
Our high profile and the nature of the products and services that we offer make us a target for fraud.
Many of the markets in which we operate lack fully developed legal and regulatory frameworks and have low
conviction rates for fraudulent activities, decreasing deterrence for such schemes. We have been in the past
and may in the future be susceptible to fraudulent activity by our employees or third-party contractors
despite having robust internal control systems in place across our operations, which could have a material
adverse effect on our results of operations.
We also incur costs and revenue losses associated with the unauthorized or unintended use of our
networks, including administrative and capital costs associated with the unpaid use of our networks as well
as with detecting, monitoring and reducing incidences of fraud. Fraud also impacts interconnection costs,
capacity costs, administrative costs and payments to other carriers for unbillable fraudulent roaming charges.
In 2023, our most significant impact from fraudulent activity was in the Home business, where irregular
activations and reconnections led to fraud and to certain subscribers obtaining services that should not have
been activated. Any continued or new fraudulent schemes could have an adverse effect on our business,
financial condition and results of operations.
Our risk management and internal controls may not prevent or detect fraud, violations of law or other
inappropriate conduct.
If any of our customers, suppliers, or other business partners receive or grant inappropriate benefits or
use corrupt, fraudulent or other unfair business practices, we could be subject to legal sanctions, penalties
and harm to our reputation. Given our international operations, group structure, and size, our internal
controls, policies and our risk management practices may not be adequate in preventing, detecting or
responding to any such incidents which could have a material negative impact on our reputation, business
activities, financial position and results of operations.
We may be directly or indirectly affected by U.S. or other international sanctions laws, which may place
restrictions on our ability to interact with business partners or government officials.
We operate in certain countries in which international sanctions may be imposed by the U.S., the U.K. or
the European Union, and we may be required to comply with such sanctions. Such sanctions may restrict our
ability to implement our strategy or conduct our business in the manner in which we expect. For example, in
response to the November 2021 presidential election in Nicaragua, the U.S., the EU and the U.K. announced
sanctions against the Nicaraguan Public Ministry and various Nicaraguan institutions and government
officials, including the deputy director general and director general of TELCOR, the nation's principal
telecommunications regulator. In October 2022, these sanctions were subsequently expanded by the United
States, and the U.S. government also imposed visa restrictions on over 500 Nicaraguan individuals with ties to
the Nicaraguan government. Concurrently, the European Union broadened its existing sanctions to TELCOR
and seven Nicaraguan individuals, including the director of TELCOR. Finally, several Nicaraguan government
officials and other key actors are currently included on the Specially Designated Nationals and Blocked
Persons list of the U.S. Office of Foreign Assets Control, as well as the U.K. and EU sanctions lists. While it
remains uncertain what impact current and future sanctions may have on our operations in Nicaragua and
other markets, they may have a material adverse effect on our ability to maintain and expand our networks
and business.
k. People, health and safety
Threats to the safety of our employees or contractors could affect our ability to provide our services.
Heightened states of danger may exist in certain of the countries in which we operate, including as a
result of civil unrest, criminal activity, and the threat of natural or man-made disasters. Such events can pose
significant risks to the health and safety of our employees and contractors and may impede or delay our
ability to provide services to our customers or potential customers. In those locations, we may incur
additional costs to maintain the safety of our personnel, customers, suppliers, and contractors. Despite the
precautions, the safety of our personnel, customers, suppliers, and contractors in these locations may
continue to be at risk.
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Enforcement of standards of safety and the promotion of a culture of safety may not prevent the
frequency or severity of health and safety incidents.
Although we implement and provide training on health and safety matters, particularly related to the
risks of working on telecommunications towers or on TV poles, there is no guarantee that our employees or
our contractors will comply with applicable safety standards. For example, in 2023, we did not suffer any
employee fatalities or major losses to the Company, but there were unfortunately six fatalities in our
contracted services. If we fail to implement these procedures or if the procedures we implement are
ineffective, we may suffer the loss of, or injury to, our employees or contractors, as well as expose ourselves to
possible litigation and reputational harm.
l.
Brand and reputation
Failing to maintain our intellectual property rights and the reputation of our brands would adversely
affect our business.
Our intellectual property rights, including our key trademarks and domain names, including our Tigo
brand name, which is well known in the markets in which we operate, are extremely important assets and
contribute to our success in our markets. If we are unable to maintain the reputation of and value associated
with them, we may not be able to successfully retain and attract customers. Furthermore, our reputation may
be harmed if any of the risks described in this “Risk Factors” section materialize. Any damage to our
reputation or to the value associated with our Tigo brand could have a material adverse effect on our
business, financial condition and results of operations.
Impairment of our intellectual property rights would adversely affect our business.
We rely upon a combination of trademark and copyright laws, database protections and contractual
arrangements, where appropriate, to establish and protect our intellectual property rights. However,
intellectual property rights are especially difficult to protect in many of the markets in which we operate. In
these markets, the regulatory agencies charged to protect intellectual property rights are inadequately
funded, legislation is underdeveloped, piracy is commonplace, and enforcement of court decisions is difficult.
The diversion of our management's time and resources along with potentially significant expenses that could
be involved in protecting our intellectual property rights in our markets, or losing any intellectual property
rights, could materially adversely affect our business, financial condition and results of operations.
Failing to manage unauthorized access to our services and networks could adversely affect our business.
Our ability to increase or maintain our market share and revenue is partly dependent on the controlled
access to our services and networks. Sophisticated piracy techniques are continuously evolving, and
preventing unauthorized use of our services and networks is inherently difficult. Although we have taken and
continue to take measures designed to prevent unauthorized access to our services and networks, any
unauthorized use could harm our relationships with our content providers or result in a loss of revenue,
which may adversely affect our business, financial condition and results of operations.
m. Workforce
A significant portion of our workforce is represented by labor unions, and we could incur additional costs
or experience work stoppages as a result of the renegotiations of our labor contracts.
As of December 31, 2023, approximately 14% of our employees (approximately 35% of our direct
workforce in Colombia and approximately 72% of our direct workforce in Panama) participated in collective
employment agreements. While we have collective bargaining agreements in place, we could incur
significant additional labor costs and/or experience work stoppages as a result of subsequent negotiations or
new minimum wage legislation, which could adversely affect our business operations. In addition, we cannot
predict what level of success labor unions or other groups representing employees may have in further
organizing our workforce or the potentially negative impact they would have on our operations.
Furthermore, our strategic objectives may include divestitures of certain business lines, internal restructuring
and other activities that impact employees. We cannot assure you that we will be able to maintain a good
relationship with our labor unions and works council. Any deterioration in our relationship with our unions
and works council could result in work stoppages, strikes or threats to take such an action, which could
disrupt our business and operations materially and adversely affect the quality of our services and harm our
reputation.
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3. Risks related to Millicom’s size and structure and leadership
a. Size - capacity and limitations
The amount, structure and obligations connected with our debt could impair our liquidity and our ability
to expand or finance our future operations.
As of December 31, 2023, our consolidated indebtedness excluding lease liabilities was $6,697 million, of
which MIC S.A. incurred $2,388 million directly, and MIC S.A. guaranteed $505 million of indebtedness
incurred by its subsidiaries. Including lease liabilities, our consolidated indebtedness was $7,739 million as of
December 31, 2023. In addition, at December 31, 2023 our joint venture in Honduras, which is non-recourse
to MIC S.A., had $360 million of debt and lease liabilities of $61 million.
We may incur additional debt in the future. Although certain of our outstanding debt instruments
contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number
of significant qualifications and exceptions and, under certain circumstances, the amount of indebtedness
that could be incurred in compliance with these restrictions could be substantial. The acquisition of
additional debt could, among other things, require us to dedicate a substantial portion of our cash flow to
payments on our debt, place us at a competitive disadvantage compared to competitors who might have
less debt, restrict us from pursuing strategic acquisitions or reduce our ability to pay dividends or implement
share buybacks and prevent us from complying with our dividend policy.
We have incurred and assumed, and expect to incur and assume, additional indebtedness in connection
with recent acquisitions.
We funded our acquisitions in Panama and Nicaragua mainly by incurring additional indebtedness,
including through the issuance of a $750 million 6.25% bond on March 25, 2019, and the issuance by our
subsidiary Telecomunicaciones Digitales, S.A. (formerly known as Cable Onda S.A.) of a $600 million 4.5%
bond in November 2019. Additionally, during 2022, we refinanced the $2,150 million bridge loan that we
obtained to fund the acquisition of the remaining 45% equity interest in our joint venture business in
Guatemala with the issuance of new long-term debt by our local subsidiary and new equity.
Our increased indebtedness following consummation of these or other acquisitions could have the
effect, among other things, of reducing our flexibility to respond to changing business and economic
conditions as well as reducing funds available for capital expenditures or acquisitions, and creating
competitive disadvantages for us relative to other companies with lower indebtedness levels.
b. Portfolio of operations
Most of our operations are in emerging markets and may be subject to greater risks than similar
businesses in more developed markets.
Investors in emerging markets should be aware that these markets are subject to greater risks than more
developed markets, including in some cases significant political, legal and economic risks. Investors should
fully consider the significance of the risks involved in investing in a company with significant operations in
emerging markets and are urged to consult with their own legal, financial and tax advisors.
We may pursue acquisitions, investments or merger opportunities which may subject us to significant
risks, and there is no assurance that we will be successful or that we will derive the expected benefits from
these transactions.
We may pursue acquisitions of, investments in strategic partnerships or mergers with businesses
(including other providers that we compete with),, technologies, services and/or products that complement
or expand our business. Some of these potential transactions could be significant relative to the size of our
business and operations. Any such transaction would involve a number of risks and could present financial,
managerial, governance and operational challenges, including: diverting management attention from
running our existing business or from other viable acquisition or investment opportunities; incurring
significant transaction expenses; increased costs to integrate financial and operational reporting systems,
technology, personnel, customer base and business practices of the businesses involved in any such
transaction with our business; not being able to integrate our businesses in a timely fashion or at all; loss of
control or significant influence, potential exposure to material liabilities not discovered in the due diligence
process or as a result of any litigation arising in connection with any such transaction; and failure to retain key
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management and other critical employees. As an example, our joint venture in Ghana did not create the
expected synergies and benefits that we anticipated.
Moreover, we may not be able to successfully complete acquisitions, mergers and strategic partnerships,
in light of challenges such as strong competition from our competitors and other prospective acquirers who
may have substantially greater resources than we do in terms of access to capital and may be able to pay
more than we can with respect to merger or acquisition opportunities, and regulatory approvals required.
Divestitures or restructuring of assets and businesses subject us to significant risks and may not realize
expected benefits.
We may seek to divest or restructure existing operations and investments in ways that enhance the
optionality for certain assets and facilitate the attraction of growth capital, such as our plans to create new
organizational structures for our Towers and Tigo Money businesses. Any such divestiture or restructuring
could involve a number of risks and could present financial, managerial and operational challenges including:
diverting management attention from running our existing business or from pursuing other strategic
opportunities; incurring significant transaction expenses; maintaining certain liabilities or obligations to
indemnify the buyer of the divested business as part of the sale conditions; and the possibility of failing to
properly manage the newly created entity or time the exit to achieve an optimal return.
Furthermore, the timing of divestitures and restructurings of assets and businesses may not result in
optimal returns, and the amount and timing of proceeds or expected returns may be lower than our initial
investment or the corresponding carrying value on our balance sheet. For example, we were unable to obtain
any proceeds from the divestiture of our joint venture in Ghana.
Our ability to make significant decisions in certain of our operations may depend in part upon the consent
of independent shareholders.
We have local shareholders in certain markets that exercise significant control, including a non-
controlling partner in Colombia and a joint venture partner in Honduras. In these operations, our ability to
make significant strategic decisions or to receive dividends or other distributions may depend in part upon
the consent of current or future independent shareholders, and our operations may be negatively affected in
the event of disagreements with or breaches by our partners.
Further, our ability to successfully operate our business in Colombia may be hindered due to the
governance arrangements for that business, which require the approval of our local partner to make certain
decisions. For example, our operations in Colombia were constrained by the near-term maturity of a
significant amount of debt, which led us to make a joint capital contribution with our local partner in October
2023 and thereby avoid the bankruptcy of our operations in Colombia. Although we ultimately reached an
agreement with our local partner on the capital contribution, there can be no assurance that our business in
Colombia will satisfy its debt obligations in the future or that we could come to an agreement with our local
partner to satisfy such obligations or modify our agreements with our local partners as part of our strategy for
Colombia.
Millicom's central functions provide essential support and services to our operating subsidiaries and joint
ventures.
These services include, financing, procurement, technical and management services, business support
services (including a shared services center in El Salvador and a multinational corporation headquarters (SEM)
in Panama, among others), digital transformation, customer experience, procurement, human resources,
legal, information technology, marketing services and advisory services related to the construction,
installation, operation, management and maintenance of its networks. If Millicom's central functions are
unable to provide these services to our operating subsidiaries and joint ventures on a timely basis and at a
level that meets our needs, our operating subsidiaries and joint ventures may be disrupted.
The majority of Millicom's operating subsidiaries and joint ventures operate under the Tigo trademark.
We take efforts to protect the Tigo trademark, but we may not always succeed in preventing others from
using the trademark in countries in which we do not operate or from using similar trademarks, which could
dilute the value of our trademark and result in brand confusion to consumers. The Tigo trademark could also
be the subject of intellectual property infringement. Trademark protection is important because our
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trademark is what helps our customers differentiate our products and services from those of our competition,
helps build brand loyalty, and represents our goodwill and reputation.
c. Talent acquisition and retention
We may be unable to obtain or retain adequate managerial and operational resources.
Our operating results depend, in significant part, upon the continued contributions and capacity of key
senior management and technical personnel. Certain key employees possess substantial knowledge of our
business and operations. We cannot assure you that we will be successful in retaining their services or that
we would be successful in hiring and training suitable replacements without undue costs or delays. If we are
unable to retain senior leadership to operate and grow our business, we may not be able to develop our
business at the pace or with the required level of sophistication that enables us to meet our strategic and
financial objectives.
Competition for personnel in our markets and certain central functions is intense due to scarcity of
qualified individuals.
Millicom has been working with its local teams to build and implement talent development plans and to
identify high-performance individuals for future advancement or hiring, as the markets in which we operate
have limited availability of talent with advanced skill sets in key areas such as the digital and technology
fields. We cannot assure you, however, that we will be successful in these efforts.
d. Financing and cash flow generation
MIC S.A. is a holding company and is dependent on cash flow from its operating subsidiaries and joint
ventures.
MIC S.A.’s primary assets consist of shares in its subsidiaries and joint ventures and cash in its bank
accounts. MIC S.A. has no significant revenue generating operations of its own, and therefore its cash flow
and ability to service its indebtedness and pay dividends to its shareholders will depend primarily on the
operating performance and financial condition of its subsidiaries and joint ventures and its receipt of funds in
the form of dividends or otherwise.
There are legal limits on dividends that some of MIC S.A.’s subsidiaries and joint ventures are permitted
to pay. Further, some of our indebtedness imposes restrictions on dividends and other restricted payments,
which are described under “Operating and Financial Review and Prospects—Liquidity and Capital Resources
—Financing.”
Our ability to generate cash depends on many factors beyond our control, and we may need to resort to
additional external financing.
Our ability to generate cash is dependent on our future operating and financial performance. This will be
impacted by our ability to successfully implement our business strategy, as well as general economic,
financial, competitive, regulatory, and technical elements and other factors beyond our control. If we cannot
generate sufficient cash, we may, among other things, need to refinance all or a portion of our debt, obtain
additional financing, delay capital expenditure or sell assets.
We require a significant amount of capital to operate and grow our business. We fund our capital needs
in part through borrowings in the public and private credit markets. Adverse changes in the credit markets,
including increases in interest rates, could increase our cost of borrowing and/or make it more difficult for us
to obtain financing for our operations or refinance existing indebtedness. In addition, our borrowing costs
can be affected by short- and long-term debt ratings assigned by independent rating agencies, which are
based, in significant part, on our performance as measured by customary credit metrics. A decrease in these
ratings would likely increase our cost of borrowing and/or make it more difficult for us to obtain financing. A
severe disruption in the global financial markets could impact some of the financial institutions with which
we do business, and such instability could also affect our access to financing.
In particular, periods of industry consolidation require businesses to raise debt and equity capital to
remain competitive. An inability to access capital during such periods could have an adverse effect on our
business, financial condition or results of operations.
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The cash flow we generate is highly dependent on our operations in Guatemala.
Our operations in Guatemala have historically generated healthy cash flows. If the financial condition of
our operations in Guatemala deteriorates, or if we fail to diversify our sources of cash flow, our liquidity could
suffer, which could impact our capital allocation and limit our ability to reduce our leverage, reinvest in our
business or remunerate our shareholders.
Our ability to pay dividends to our shareholders, consummate share repurchase programs or otherwise
remunerate shareholders is subject to our distributable reserves and solvency requirements.
Any determination to pay dividends, adopt share repurchase programs or otherwise remunerate
shareholders in the future will be at the discretion of our board of directors (as to interim dividends) and at
the discretion of the shareholders at the annual general meeting (the "AGM") upon recommendation of the
board of directors (as to annual dividends or share repurchases) and will depend upon our results of
operations, financial condition, distributable reserves, contractual restrictions, restrictions imposed by
applicable law and other factors our board of directors and the shareholders at the AGM, respectively, deem
relevant.
We are not required to pay dividends on our shares or otherwise remunerate shareholders, and holders
of our shares have no recourse if dividends are not declared. Our ability to pay dividends or otherwise
remunerate shareholders may be further restricted by the terms of any of our existing and future debt or
preferred securities. Additionally, because we are a holding company, our ability to pay dividends on our
shares is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us,
including restrictions on our ability to repatriate funds and under the terms of the agreements governing our
indebtedness.
We have adopted, and may in the future adopt, share repurchase programs under which we are
authorized to repurchase our shares or shares represented by Swedish Depository Receipts ("SDRs").
However, there can be no assurance that any future share repurchase program will be fully consummated.
The amount, timing and execution of any share repurchase program may fluctuate based on our priorities for
the use of cash or as a result of changes in cash flows, tax laws, and the market price of our shares or SDRs.
Any reduction or discontinuance by us of dividend payments or repurchases of our shares, including shares
represented by SDRs, may cause the market price of our shares or SDRs to decline.
4. Risks related to share ownership, governance practices and registration with the SEC
a. Share price, trading volume and market volatility
The price of our common shares might fluctuate significantly, and you could lose all or part of your
investment.
Volatility in the market price of our common shares may prevent you from being able to sell our common
shares at or above the price at which you purchased such shares. The trading price of our common shares has
been and may in the future be volatile and subject to wide price fluctuations in response to various factors,
including, among others: market conditions in the broader stock market in general, or in our industry in
particular; actual or anticipated fluctuations in our financial and operating results; introduction of new
products and services by us or our competitors; entry to new markets or exit from existing markets; issuance
of new or changed securities analysts’ reports or recommendations, or the failure to receive industry analyst
coverage; sales of large blocks of our shares; additions or departures of key personnel; regulatory
developments; and litigation and governmental investigations or actions.
These and other factors may cause the market price and demand for our common shares to fluctuate
substantially, which may limit or prevent investors from readily selling common shares and may otherwise
negatively affect the liquidity of our common shares.
In addition, in the past, when the market price of a stock has been volatile, holders of that stock have
often instituted securities class action litigation against the company that issued the stock. If any of our
shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a
lawsuit could also divert the time and attention of our management from our business.
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An active trading market that will provide you with adequate liquidity may not develop.
Throughout 2023, a majority of the trading activity in our shares was in the form of SDRs listed on the
NASDAQ exchange in Stockholm. We cannot predict the extent to which investors will convert SDRs into
common shares or whether the relisting of our common shares on the Nasdaq Stock Market on January 9,
2019 will lead to the development of an active trading market in the U.S. or how liquid that market might
become. If an active trading market does not develop in the U.S., you may have difficulty selling the common
shares that you purchase, and the value of such shares might be materially impaired.
Future sales of our common shares, or the perception in the public markets that these sales may occur,
may depress our share price, and future sales of our common shares may be dilutive.
Sales of substantial amounts of our common shares in the public market, or the perception that these
sales could occur, could adversely affect the price of our common shares and could impair our ability to raise
capital through the sale of shares. In the future, we may issue our shares, among other reasons, if we need to
raise capital or in connection with merger or acquisition activity. The amount of our common shares issued in
connection with a capital raise or acquisition could constitute a material portion of our then-outstanding
share capital. Sales of shares in the future may be at prices below prevailing market prices, thereby having a
dilutive impact on existing holders and depressing the trading price of our common shares.
b. Legal and regulatory compliance and burden
The obligations associated with being a public company in the United States require significant resources
and management attention.
As a public company in the United States, we incur legal, accounting and other expenses that we did not
previously incur. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), the Sarbanes-Oxley Act, the listing requirements of the Nasdaq Stock Market
and other applicable securities rules and regulations. The Exchange Act requires that we file annual and
current reports with respect to our business, financial condition and results of operations. The Sarbanes-
Oxley Act requires, among other things, that we establish and maintain effective internal controls and
procedures for financial reporting.
Furthermore, the need to establish and maintain the corporate infrastructure demanded of a U.S. public
company may divert management’s attention from implementing our strategy. We have made, and will
continue to make, changes to our internal controls and procedures for financial reporting and accounting
systems in order to meet our reporting obligations as a U.S. public company. However, the measures we take
may not be sufficient to satisfy these obligations. In addition, compliance with these rules and regulations
has increased our legal and financial compliance costs and has made some activities more time-consuming.
For example, these rules and regulations make it more expensive for us to obtain director and officer liability
insurance.
In addition, changing laws, regulations and standards relating to corporate governance and public
disclosure are creating uncertainty for U.S. public companies. These laws, regulations and standards are
subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their
application in practice may evolve over time as new guidance is provided by regulatory and governing
bodies. This could result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices. If our efforts to comply with new
laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to
ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings
against us.
We are a foreign private issuer and, as a result, are not subject to U.S. proxy rules but are subject to
Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of
a U.S. issuer.
We report under the Exchange Act as a non-U.S. company with “foreign private issuer” status, as such
term is defined in Rule 3b-4 under the Exchange Act. Because we qualify as a foreign private issuer under the
Exchange Act and although we follow Luxembourg laws and regulations with regard to such matters, we are
exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including:
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(i)
the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in
respect of a security registered under the Exchange Act;
the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and
trading activities and liability for insiders who profit from trades made in a short period of time; and
(iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q
(ii)
containing unaudited financial and other specified information, or current reports on Form 8-K, upon the
occurrence of specified significant events.
Foreign private issuers are required to file their annual report on Form 20-F by 120 days after the end of
each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report
on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the
Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material
information. As a result of the above, even though we are contractually obligated and intend to make interim
reports available to our shareholders, copies of which we are required to furnish to the SEC on a Form 6-K,
and even though we are required to file reports on Form 6-K disclosing whatever information we have made
or are required to make public pursuant to Luxembourg law or distribute to our shareholders and that is
material to our company, you may not have the same protections afforded to shareholders of companies that
are not foreign private issuers.
If we fail to maintain an effective system of internal control over financial reporting, we may be unable to
accurately report our financial results or prevent fraud, and investor confidence in our company and the
market price of our shares may be adversely affected.
We are subject to reporting obligations under the U.S. securities laws. The SEC, as required by Section
404 of the Sarbanes-Oxley Act, adopted rules requiring every public company to include in its annual report a
management report on such company’s internal control over financial reporting containing management’s
assessment of the effectiveness of its internal control over financial reporting. In addition, an independent
registered public accounting firm must attest to and report on the effectiveness of such company’s internal
control over financial reporting except where the company is a non-accelerated filer. We currently are a large
accelerated filer.
Our management has concluded that our internal control over financial reporting was effective as of
December 31, 2023. See “Disclosure Controls and Procedures.” Our independent registered public
accounting firm has issued a report as of December 31, 2023. See “Report of Independent Registered Public
Accounting Firm on the Internal Control over Financial Reporting.” to our Annual Report on Form 20F.
However, if we fail to maintain an effective internal control over financial reporting in the future, our
management and our independent registered public accounting firm may not be able to conclude that we
have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley
Act. If we fail to achieve and maintain an effective internal control environment, we could suffer material
misstatements in our consolidated financial statements and fail to meet our reporting obligations, which
would likely cause investors to lose confidence in our reported financial information. This could in turn limit
our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our
shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of
fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which
we list, regulatory investigations and civil or criminal sanctions.
We may lose our foreign private issuer status in the future, which could result in significant additional
costs and expenses.
As a foreign private issuer, we are not required to comply with the same periodic disclosure and current
reporting requirements of the Exchange Act, and related rules and regulations, that apply to U.S. domestic
issuers. Under Rule 3b-4 of the Exchange Act, the determination of foreign private issuer status is made
annually on the last business day of an issuer’s most recently completed second fiscal quarter and,
accordingly, we will make the next determination with respect to our foreign private issuer status based on
information as of June 30, 2023.
In the future, we could lose our foreign private issuer status if, for example, a majority of our voting
power were held by U.S. citizens or residents and we fail to meet additional requirements necessary to avoid
loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. securities laws as a
domestic issuer may be significantly higher.
If we are not a foreign private issuer, we will be required to file periodic reports and registration
statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms
33
available to a foreign private issuer. We will also be required to comply with U.S. federal proxy requirements,
and our officers, directors and controlling shareholders will become subject to the short-swing profit
disclosure and recovery provisions of Section 16 of the Exchange Act. We may also be required to modify
certain of our policies to comply with good governance practices associated with U.S. domestic issuers. Such
conversion and modifications will involve additional costs. In addition, we may lose our ability to rely upon
exemptions from certain corporate governance requirements on U.S. stock exchanges that are available to
foreign private issuers.
c.
Shareholder protection
MIC S.A. is incorporated in Luxembourg, and Luxembourg law differs from U.S. law and may afford less
protection to holders of our shares.
The Company is incorporated under and subject to Luxembourg laws. Luxembourg laws may differ in
some material respects from laws generally applicable to U.S. corporations and shareholders, including the
provisions relating to interested directors, mergers, sales, amalgamations and acquisitions, takeovers,
shareholder lawsuits and indemnification of directors. Luxembourg laws governing the shares of
Luxembourg companies may not be as extensive as those in effect in the United States, and Luxembourg law
and regulations in respect of corporate governance matters might not be as protective of shareholders as
state corporation laws in the United States. Therefore, our shareholders may have more difficulty in
protecting their interests in connection with actions taken by our directors and officers or our principal
shareholders than they would as shareholders of a corporation incorporated in the United States. For
example, neither our articles of association, as amended and restated (the "Articles of Association") nor
Luxembourg law provides for appraisal rights for dissenting shareholders in certain extraordinary corporate
transactions that may otherwise be available to shareholders under certain U.S. state laws.
In addition, under Luxembourg law, by contrast to the laws generally applicable to U.S. corporations, the
duties of directors of a company are in principle owed to the company only, rather than to its shareholders. It
is possible that a company may have interests that are different from the interests of its shareholders.
Shareholders of Luxembourg companies generally do not have rights to take action themselves against
directors or officers of the company. Directors or officers of a Luxembourg company must, in exercising their
powers and performing their duties, act in good faith and in the interests of the company as a whole and
must exercise due care, skill and diligence.
Directors have a duty to disclose any personal interest in any contract or arrangement with the company
in case such interest would constitute a conflict of interest. If any director has a direct or indirect financial
interest in a matter which has to be considered by the board of directors which conflicts with the interests of
the company, Luxembourg law provides that such director will not be entitled to take part in the relevant
deliberations or exercise his or her vote with respect to the approval of such transaction. If the interest of
such director does not conflict with the interests of the company, then the applicable director with such
interest may participate in deliberations on, and vote on the approval of, that transaction. If a director of a
Luxembourg company is found to have breached his or her duties to that company, he or she may be held
personally liable to the company in respect of that breach of duty. A director may, in addition, be jointly and
severally liable with other directors implicated in the same breach of duty.
The ability of investors to enforce civil liabilities under U.S. securities laws may be limited.
MIC S.A. is a Luxembourg public limited liability company (société anonyme) and some of its directors
and executive officers are residents of countries other than the United States. Most of the Company’s assets
and the assets of some of its directors and executive officers are located outside the United States. As a result,
it may not be possible for investors in our securities to effect service of process within the United States upon
such persons or the Company or to enforce in U.S. courts or outside the United States judgments obtained
against such persons or the Company. In addition, it may be difficult for investors to enforce, in original
actions brought in courts in jurisdictions located outside the United States, liabilities predicated upon the
civil liability provisions of U.S. securities laws.
We have been advised by our Luxembourg counsel, Hogan Lovells (Luxembourg) LLP that the United
States and Luxembourg do not have a treaty providing for reciprocal recognition and enforcement of
judgments in civil and commercial matters. Therefore, a judgment for the payment of money rendered by a
U.S. federal or state court will only be recognized and enforced against MIC S.A. by a court in Luxembourg
without re-examination of the merits of the case if (i) it is a final judgment which is not subject to appeal or
any other means of contestation and (ii) it complies with the applicable enforcement procedure (exequatur)
34
conditions, as set out in the relevant provisions of the Luxembourg New Code of Civil Procedure (Nouveau
Code de Procédure Civile) and Luxembourg case law.
As a foreign private issuer and as permitted by the listing requirements of the Nasdaq, we may rely on
certain home country governance practices rather than the Nasdaq corporate governance requirements.
As a foreign private issuer and in accordance with Nasdaq Listing Rule 5615(a)(3), we may comply with
home country governance requirements and certain exemptions thereunder rather than complying with
certain of the corporate governance requirements of Nasdaq. For example, Luxembourg law does not require
that a majority of our board of directors consists of independent directors. While we currently have a board of
directors that is independent of the Company (i.e., the board members are not members of management or
employees of the Company), our board of directors may in the future include fewer independent directors
than would be required if we were subject to Nasdaq Listing Rule 5605(b)(1). For more information on our
reliance on certain home country practices and how they deviate from Nasdaq rules, see "Corporate
Governance—Corporate Governance Statement and Framework."
Risk Management
Risks and Uncertainty
Millicom operates its business in emerging markets with unpredictable political and economic environments and a
higher inherent level of risk compared to mobile and cable businesses in more mature markets. Our governance and
oversight structure help reduce uncertainties and mitigate these risks. Thus, 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 is linked with opportunity and closely aligned with strategic goals. The focus of our risk management is on the
reduction of uncertainty to enhance decision-making in strategy formulation and the allocation of capital and
resources.
Risk Management
The Board of Directors is responsible for ensuring a sound system of risk management and internal controls and
overseeing the processes that govern the identification, assessment, and prioritization of risks. The Audit and
Compliance Committee reviews risk management reports and the methodology and controls within the organization.
Risks are identified and managed by management. We prioritize risks based on likelihood of occurrence and
importance to the business. We quantify, measure, and monitor risks using risk indicators, with action plans to reduce
gaps between current and target risk levels. Millicom has a management risk committee comprised of members of the
Executive Team and central functions responsible for key enterprise risks (the "Management Risk Committee"). The
Management Risk Committee meets at least quarterly to consider the evolution of key risks, monitor risk levels against
appetite and tolerance, and consider future potential uncertainties and how they may manifest themselves as risks to
Millicom's business. The Chief Risk Officer is part of the Executive Team.
The Risk Management & Internal Audit function is responsible for the design, implementation, and monitoring of
Millicom’s enterprise risk management framework and processes.
35
Technology and Information
Information Security
Our Global Chief Information Security Officer ("CISO") manages the information security program and reports to
the EVP Chief Commercial and Technology Officer ("CCTO"). 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 information systems and assets, and the
regional information security teams work closely with business and technology leaders to ensure compliance with
corporate policies and regional information security regulatory requirements within the various countries where we
conduct business.
Cybersecurity Risk Management
Cybersecurity risk management is an integral part of our overall enterprise risk management. We manage
cybersecurity risks through our information security program, which is designed to align with the National Institute of
Standards and Technology Cybersecurity Framework ("CSF"). Our information security program manages cybersecurity
risks by creating a framework for identifying the source of cybersecurity threats and incidents (including threats
associated with the use of services provided by third-party service providers), training employees and specialized roles,
implementing measures to protect critical data and data flows, monitoring essential networks and applications,
identifying and remediating vulnerabilities and informing executive management and our board of directors of
material cybersecurity threats and incidents.
Our cybersecurity team also engages a third-party consultant for risk incident detection and vulnerability
assessment, which employs a risk management program based on Rapid7's solutions. We confer with our third-party
consultant on a weekly basis to assess the adequacy and strength of our monitoring efforts, address operational issues
and drive continuous improvement.
In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to
materially affect our business strategy, results of operations or financial condition. However, despite our efforts, we
cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an
undetected cybersecurity incident. For more information about these risks, please see "Key Information—1. Risks
related to telecommunications, cable and MFS industries—f. Cybersecurity and data protection" in this Annual Report.
Cybersecurity Risk Governance
Role of the Board of Directors
Our Board of Directors has overall oversight responsibility for our risk management and delegates cybersecurity
risk management oversight to the Audit and Compliance Committee of the Board of Directors. The Audit and
Compliance Committee is responsible for ensuring that management has processes in place that are designed to
mitigate cybersecurity risks to an acceptable level, in line with the Company's risk appetite and risk tolerance, and to:
•
•
•
•
•
monitor the Company’s information security program, including the activities performed by the information
security team;
provide oversight and direction on information security risk management, including cybersecurity and
related threats;
ensure that the Company allocates the proper level of resources to information security and cybersecurity;
monitor results and remediation of findings from audit and assurance activities related to the Company’s
information security program; and
ensure that material information security and cybersecurity issues affecting the Company’s internal control
environment are communicated to the Audit and Compliance Committee of the Company.
Role of Management
While our Board of Directors has overall responsibility for the oversight of our enterprise risk management, our
management is responsible for day-to-day risk management. Our cybersecurity risk management is under the direction
of our CCTO and CISO, and they are primarily responsible for defining and implementing our information security
program and cybersecurity risk management (which we do not engage third parties for). In particular, our CCTO and
CISO are responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis,
establishing processes and risk indicators to ensure that such potential cybersecurity risk exposures are monitored, and
implementing mitigating actions and plans to lower risks to targeted levels. In addition, our CCTO and CISO oversee
36
the design of trainings on cybersecurity risks that are provided to all employees at least annually, with specialized
trainings for executives, developers, system, network and database administrators and other key roles within the
Company. More than 90% of our employees participated in security awareness and training in 2023 covering key
threats—including but not limited to phishing risk—as well as prevention and company procedures.
Our CCTO and CISO receive reports from our cybersecurity team and monitor the prevention, detection, mitigation
and remediation of cybersecurity incidents. Under the cybersecurity incident response plan, our CISO assigns a severity
rating to each incident, and an escalation matrix is used to provide notifications to management and the Board of
Directors based on the severity and duration of the incident.
In addition, our CCTO and CISO provide a quarterly update to the Audit and Compliance Committee on Millicom's
cybersecurity risk management that includes reports on cybersecurity threats and incidents, mitigation strategies and
remediation plans, recent developments in cybersecurity and updates to the Company's cybersecurity programs. Our
CCTO and CISO provide a similar cybersecurity update to management, typically once a month.
Our CCTO and CISO are certified and experienced information systems security professionals and information
security managers. Our CCTO has more than 20 years of experience in the telecommunications industry, being in
charge of technology choices since 2000, and in charge of the cybersecurity function since 2012. His presence in the
telecommunications business in emerging markets makes him knowledgeable about the technology and cybersecurity
risks that are specific to the industry and our markets. Our CISO has over 12 years of experience in managing
technology risks and controls, including eight years managing cybersecurity risks, and is certified by ISACA as a
Certified Information Security Manager ("CISM").
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INFORMATION ON THE COMPANY
History and Development of the Company
The Company’s legal name is Millicom International Cellular S.A. ("MIC S.A." or "the Company"). The Company
uses the Tigo brand in all of the countries in which we do business. MIC S.A. is a public limited liability company
(société anonyme), organized and established under the laws of the Grand Duchy of Luxembourg on June 16, 1992.
The Company’s address is: 2, Rue du Fort Bourbon, L-1249 Luxembourg, Grand Duchy of Luxembourg. The
Company’s telephone number for the Head of Financial Reporting is: +352 691 750 960. The Company’s U.S. agent is:
C T Corporation, 28 Liberty Street, 42nd Floor, New York, New York 10005, United States.
MIC S.A. was formed in December 1990 when Kinnevik AB ("Kinnevik"), formerly named Industriförvaltnings AB
Kinnevik, a company established in Sweden, and Millicom Incorporated, a corporation established in the United
States, contributed their respective interests in international mobile joint ventures to form MIC S.A. See “Information
on the Company— Business Overview” for historical information regarding the development of our principal
geographic markets and “Operating and Financial Review and Prospects—Liquidity and Capital Resources— Group
Capital Expenditures and Expenditure Commitments” for a description of our capital expenditures.
The SEC maintains an Internet website that contains reports and other information about issuers, like us, that file
electronically with the SEC. The address of that website is www.sec.gov. The Company’s website address is
www.millicom.com. The information contained on, or that can be accessed through, the Company’s website is not
part of, and is not incorporated into, this Annual Report.
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Business Overview
Introduction
We are a leading provider of cable and mobile services dedicated to emerging markets. Through our main brands
Tigo® and Tigo Business™, we provide a wide range of digital services in nine countries in Latin America, including
high-speed data, cable TV, direct-to-home satellite TV (“DTH” and when we refer to DTH together with cable TV, we use
the term “pay-TV”), mobile voice, mobile data, SMS, MFS, fixed voice, and business solutions including value-added
services (“VAS”). We provide services on both a business-to-consumer (“B2C”) and a business-to-business (“B2B”) basis,
and we have used the Tigo brand in all our markets since 2004.
We offer the following principal categories of services:
• Mobile, including mobile data, mobile voice, and MFS to consumer, business and government customers;
•
Fixed and other services, including broadband, pay-TV, content, and fixed voice services for residential (Home)
customers, as well as voice, data and VAS and solutions to business and government customers.
We provide both mobile and cable services in eight countries: Bolivia, Colombia, El Salvador, Guatemala, Honduras,
Nicaragua, Panama and Paraguay. In addition, we provide cable services in Costa Rica. In Africa, we previously provided
mobile services in Tanzania, which we disposed of in April 2022. In 2021, we also completed the disposal of our Ghana
joint venture with Bharti Airtel. These divestitures were part of our strategy to exit Africa to better invest capital in Latin
America, and as a result of these transactions, we no longer have any operations in Africa.
Additionally, we have a large portfolio of infrastructure across Latin America and, including our Honduras joint
venture, our portfolio includes approximately 9,300 towers, 12 Tier III data centers and nearly 196,000 kilometers of
fiber. In 2022, we began the process of carving out our tower operations, and in 2023, we created a new wholly owned
tower infrastructure company ("Lati') to which we began transferring tower assets. In late 2023, we began exploring
the sale of a stake in Lati to one or more third-party investors.
We also have an MFS business, Tigo Money, which is currently operating in Paraguay, Guatemala, El Salvador,
Bolivia and Honduras.
We conduct our operations through local holding and operating entities in various countries, which are either our
subsidiaries (in which we are the sole shareholder or the controlling shareholder) or joint ventures with local partners.
For further details, see note A. to our audited consolidated financial statements. In this Annual Report, our description
of our operations includes the operations of all of these subsidiaries and joint ventures.
As of December 31, 2023, we provided services to 40.7 million mobile customers and 4.4 million customer
relationships with a subscription to at least one of our fixed services. This includes 3.9 million customer relationships on
our HFC and FTTH networks and 0.4 million DTH subscribers. The remaining customer relationships are served using
various technologies, including fixed wireless solutions as well as our legacy copper network.
For the year ended December 31, 2023, our revenue was $5,661 million and our net loss was $245 million. We had
approximately 16,500 employees, including our Honduras joint venture.
Our strategy
Our strategy is to continue to expand the reach and capacity of our networks and distribution capabilities to grow
our customer base over time. Underpinning this strategy is management’s assessment that penetration rates for both
mobile and fixed broadband services in our markets are low relative to penetration rates in other markets globally, and
that these have potential to increase over time. Based on our own subscriber data of mobile broadband penetration
rates, as measured by the number of subscribers who use a smartphone to access mobile data services on 4G networks,
were approximately 70% in Bolivia, 63% in Colombia, 61% in Panama, 60% in Paraguay, 56% in El Salvador, 55% in
Honduras, 48% in Nicaragua and 41% in Guatemala as of December 31, 2023. Based on our own customer data and
market intelligence, fixed and other services penetration rates, as measured by the number of residential broadband
customers as a percentage of households in the country, were approximately 61% in Costa Rica, 57% in Colombia, 48%
in Panama, 40% in Paraguay, 36% in El Salvador, 29% in Bolivia, 25% in Guatemala, 22% in Honduras , and 19% in
Nicaragua as of December 31, 2023. Pay-TV penetration rates, as measured by the number of pay-TV customers,
including DTH, as a percentage of households in the country, were approximately 55% in Costa Rica, 44% in Panama,
40% in Colombia, 35% in Paraguay, 33% in Guatemala, 32% in El Salvador, 24% in Honduras, 16% in Bolivia, and 15% in
Nicaragua as of December 31, 2023.
39
Our services
Our services are organized into two principal categories: (1) Mobile and (2) Fixed and other services. In addition, we
sell telephone and other equipment, comprised mostly of mobile handsets. We market these services through a variety
of channels, including owned and third-party retail outlets, direct sales, digital and internet advertising, television, and
billboards, among others.
Mobile
In our Mobile category, we provide mobile services, including mobile data, mobile voice, SMS and MFS, to
consumers, businesses, and government customers.
Mobile is the largest part of our business and generated 57% of consolidated service revenue for the year ended
December 31, 2023 and 57% of our consolidated service revenue for the year ended December 31, 2022.
Mobile data, mobile voice and SMS
We provide our mobile data, mobile voice and SMS services through 2G, 3G and 4G networks in all our mobile
markets, and we have offered 5G in Guatemala since 2022.
We provide our mobile data, mobile voice and SMS services on both prepaid and postpaid bases. In prepaid,
customers pay for service in advance through the purchase of limited-duration data packages, and they do not sign
service contracts. Among various options that our customers can choose from, we offer packages that typically begin
with a data allowance, and include a combination of voice minutes and SMS, with expiration dates varying in length
from one or more days, up to a few weeks or months. In postpaid, customers pay recurring monthly fees for the right to
consume up to a predetermined maximum amount of monthly data, voice usage and SMS.
MFS
We provide a broad range of mobile financial services such as payments, money transfers, international
remittances, savings, real-time loans and micro-insurance for critical needs through our MFS App, Tigo Money. Tigo
Money allows our customers to send and receive money, without the need for a bank account. As of December 31,
2023, we provided MFS to 4.0 million Tigo and non-Tigo customers. The service complements our Mobile and Fixed
service offerings and increases customer satisfaction and loyalty, increasing ARPU and reducing customer churn.
In 2022, we began the process of separating our Tigo Money business from our core telecommunications service
operations in order to facilitate the development of new financial and strategic partnerships aimed at accelerating Tigo
Money's growth and enhancing its value creation potential. As of year-end 2023, the separation process was well
advanced, providing us with optionality to pursue new partnerships in the future.
Fixed and other service revenue
In our Fixed and other service revenue category, we provide fixed services, including broadband, fixed voice and
pay-TV, to residential (Home) consumers and to government and business (B2B) customers. Fixed and other service
revenue generated 42% of our consolidated service revenue for the year ended December 31, 2023 and 41% of our
consolidated service revenue for the year ended December 31, 2022.
Home
Our fixed-service residential customers (a “customer relationship”) generate revenue for us by purchasing one or
more of our three fixed services, pay-TV, fixed broadband, and fixed telephony. We refer to each service that a
customer purchases as a revenue generating unit (“RGU”), such that a single customer relationship can have up to
three RGUs in countries where we are permitted to sell all three services.
We provide Home services mainly over our HFC and FTTH networks, but we also offer pay-TV services via our DTH
platform. In some markets, we also provide broadband services using fixed-wireless access and copper-based
technologies. Throughout this report, we include FTTH network and customer metrics as a subset of our HFC network
and customer metrics.
40
We provide Home services in every country where we operate. As of December 31, 2023, the Group had 4.4 million
customer relationships, of which 3.9 million were connected to our HFC and FTTH networks, and we had 8.6 million
HFC and FTTH RGUs.
B2B fixed
We offer fixed-voice and data telecommunications services, managed services and cloud and security solutions to
small, medium and large businesses and governmental entities. We offer B2B fixed services in all of the markets in
which we operate.
We have already deployed nearly 196,000 kilometers of fiber in our markets, including our Honduras joint venture,
and we are expanding our product portfolio to deliver more VAS and business solutions, such as cloud-based services
and ICT managed services. We have also established partnerships in the area of hypercloud, virtualization and Internet
of Things, to capture the growth in the adoption of these technologies and help our customers accelerate their digital
transformations.
Our markets
Overview
The nine markets we serve are Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras (through our joint
venture), Nicaragua, Panama and Paraguay. We provide Fixed and other services in each of these markets, and we
provide Mobile services in each market except for Costa Rica.
The following chart shows the relative revenue generation of each country in our Group for 2023:
41
Colombia, 23%Guatemala, 28%Paraguay, 10%Bolivia, 11%El Salvador, 9%Panama, 13%Nicaragua, 4%Costa Rica, 3% Millicom's Mobile, Broadband, and Pay-TV Operations(1)
(1)
The data presented here is based on subscriber numbers as of December 31, 2023 and reflects the Millicom's experience and our investigation of
market conditions. The number of market players in each country reflects only large national network operators and excludes smaller players, and
Millicom's position is based on total market share by subscribers. Millicom has a non-controlling partner in Colombia (50%) and a joint venture
partner in Honduras (33%), with the latter accounted for in the Group's consolidated financial statements using the equity method.
Bolivia
We provide Mobile and Fixed and other services through Telefónica Celular de Bolivia S.A., which is wholly owned
by the Millicom Group. We have operated in Bolivia since 1991.
Mobile: As of December 31, 2023, we served 3.9 million subscribers and were the second largest provider of Mobile
services in Bolivia, as measured by total subscribers.
Fixed and other: As of December 31, 2023, we were the largest provider of broadband and pay-TV services in
Bolivia, as measured by subscribers, and we had 661,000 customer relationships. We offer broadband services through
HFC and FTTH, and we provide pay-TV primarily through HFC, FTTH, and DTH in Bolivia.
Colombia
We provide Mobile and Fixed and other services in Colombia through UNE EPM Telecomunicaciones S.A. ("UNE"),
in which we own a 50% plus one voting share interest and Colombia Móvil S.A., which is a wholly owned subsidiary of
UNE. We have operated in Colombia through Colombia Móvil S.A. since 2006 and acquired our interest in UNE, with
which we had previously co-owned Colombia Móvil S.A., via a merger in 2014. See note C.7.4. to our audited
consolidated financial statements, including elsewhere in this Annual Report, for a description of the put option
42
maturing on September 30, 2024, that, if exercised, would allow Empresas Públicas de Medellín, our local partner, to
sell to Millicom its entire 50% stake in UNE for COP 330 billion.
Mobile: As of December 31, 2023, we served 11.6 million subscribers and were the third largest provider of Mobile
services in Colombia, as measured by subscribers. On February 26, 2024, Tigo Colombia finalized its agreement with
Telefonica's subsidiary in Colombia to create a jointly-owned mobile infrastructure business, which will combine some
of our mobile network infrastructure and spectrum assets with the mobile network infrastructure and spectrum assets
of Telefonica's subsidiary.
Fixed and other services: Tigo is one of the principal digital cable operators in Colombia. As of December 31, 2023,
we were the second largest provider of pay-TV and broadband internet services in Colombia, as measured by
subscribers, with 1.5 million customer relationships. Since 2022, we also have wholesale network access agreements
with Empresa de Telecomunicaciones de Bogota ("ETB") and Ufinet, giving us the ability to market Tigo fixed services in
the Bogota metropolitan area where ETB or Ufinet have deployed their FTTH networks.
Costa Rica
We provide Fixed and other services in Costa Rica through Millicom Cable Costa Rica S.A. ("Millicom Costa Rica"),
which is wholly owned by the Millicom Group. We have operated in Costa Rica since our acquisition of Amnet in 2008.
Amnet and its predecessor companies began operating in Costa Rica in 1982, and the company was the first to provide
pay-TV services in the country.
Fixed and other services: As of December 31, 2023, we had 234,000 customer relationships through our HFC
network and DTH services, and we were the second largest provider of pay-TV and the fourth largest provider of
broadband internet services in Costa Rica, as measured by subscribers.
El Salvador
We provide Mobile and Fixed and other services in El Salvador through Telemóvil El Salvador, S.A. de C.V.
(“Telemóvil”), which is wholly owned by the Millicom Group. We have operated in El Salvador since 1993.
Mobile: As of December 31, 2023, we served 3.0 million subscribers and were the largest provider of Mobile
services in El Salvador as measured by subscribers.
Fixed and other services: Telemóvil is a leading cable operator in El Salvador. As of December 31, 2023, we were the
second largest provider of pay-TV and the second largest provider of broadband internet services, as measured by
subscribers, with a total of 297,000 customer relationships on our HFC network and DTH services.
Guatemala
We provide Mobile and Fixed and other services in Guatemala, principally through Comunicaciones Celulares S.A.
("Comcel"). On November 12, 2021, we signed and closed an agreement to acquire the remaining 45% equity interest
in Comcel and the other entities that operate our Guatemala business from our local partner. As a result, Millicom owns
a 100% equity interest in the entities that operate our Guatemala business and fully consolidates them since that date
(see note A.1.2. to our audited consolidated financial statements for additional details). We have operated in
Guatemala since 1990.
Mobile: As of December 31, 2023, we provided Mobile services to 11.7 million customers and were the largest
provider of mobile services in Guatemala, as measured by subscribers. In 2022, we became the first mobile operator in
the country to launch 5G services. During 2023, we participated in two separate spectrum auctions, which allowed us
to significantly increase the total amount of spectrum available to us.
Fixed and other services: As of December 31, 2023, we were the largest provider of pay-TV and broadband internet
services in Guatemala, as measured by subscribers, and we served 720,000 customer relationships with both HFC and
FTTH networks, as well as DTH services.
Honduras
We provide Mobile and Fixed and other services in Honduras through Telefónica Celular S.A. de C.V. (“Celtel”), a
joint venture in which the Millicom Group holds a 66.67% equity interest. The remaining 33.33% of Celtel is owned by
our local partner. See “Operating and Financial Review and Prospects—Operating Results — Guatemala and Honduras
43
joint ventures” for details regarding the accounting treatment of our Honduras operations. We have operated in
Honduras since 1996.
Mobile: As of December 31, 2023, we served 5.1 million Mobile subscribers, and we were the largest provider of
Mobile services, as measured by subscribers.
Fixed and other services: As of December 31, 2023, we were the second largest provider of Pay TV and the largest
provider of broadband internet services, as measured by subscribers, with 196,000 customer relationships. We offer
triple-play services (cable TV, internet and fixed telephone) in Honduras, and we also offer DTH, expanding the reach of
our pay-TV offering to areas not covered by our fixed network. We continue to invest to expand and upgrade the
capacity of our fixed network in Honduras.
Nicaragua
In 2019, we purchased Telefonía Celular de Nicaragua, S.A., the leading provider of Mobile services in the country,
based on the number of subscribers. As of December 31, 2023, we served 3.7 million mobile subscribers.
Prior to 2019, we had a very small presence in Nicaragua, where we provided mostly B2B fixed services. We have
also provided Cable services to a small but rapidly growing customer base since 2018, and we were the second largest
provider of pay-TV and broadband services, as measured by subscribers, as of December 31, 2023.
Panama
We provide Mobile and Fixed and other services in Panama through Telecomunicaciones Digitales, S.A., formerly
known as Cable Onda S.A. ("Tigo Panama"). We have operated in Panama since our acquisition of an 80% stake in Tigo
Panama in December 2018. In June 2022, we acquired the remaining 20% stake and now own 100% of Tigo Panama.
Tigo Panama and its predecessor companies began operating in 1982, and the company was the first to provide pay-
TV services in the country. In 2019, Tigo Panama acquired Grupo de Comunicaciones Digitales S.A. (formerly Telefónica
Móviles Panamá, S.A.) and started to provide Mobile services.
Mobile: As of December 31, 2023, we had 2.6 million Mobile subscribers, and we were the largest provider of
Mobile services in Panama, as measured by total mobile subscribers.
Fixed and other services: As of December 31, 2023, we had 440,000 customer relationships on our fixed network as
well as through DTH services, and we were the largest provider of pay-TV and the largest provider of broadband
internet services in Panama, as measured by subscribers.
Paraguay
We provide Mobile and Fixed and other services in Paraguay through various subsidiaries which are all wholly
owned by the Millicom Group. Our largest subsidiary in Paraguay is Telefónica Celular del Paraguay S.A. ("Telecel"). We
have operated in Paraguay since 1992.
Mobile: As of December 31, 2023, we had 4.1 million Mobile subscribers, and we were the largest provider of
Mobile services in Paraguay, as measured by total mobile subscribers.
Fixed and other services: We are the largest provider of pay-TV and broadband internet services in Paraguay as
measured by subscribers. As of December 31, 2023, we had 487,000 customer relationships with our fixed networks,
DTH, and, to a much lesser extent, other technologies. We offer pay-TV services primarily using our fixed network, and
we use our DTH license to offer pay-TV in areas not reached by our fixed network. We offer residential broadband
internet services mostly using our fixed network, but we also employ wireless technology to provide service beyond
the reach of our fixed networks. We have exclusive rights to broadcast Paraguay’s national league championship
games through 2027, and we have exclusive sponsorship rights in telecommunications for the Paraguayan National
Soccer Team through 2026.
Regulation
The licensing, construction, ownership and operation of cable TV and mobile telecommunications networks and
the grant, maintenance and renewal of cable TV and mobile telecommunications licenses, as well as radio frequency
allocations and interconnection arrangements, are regulated by different governmental authorities in each of the
markets that Millicom serves. The regulatory regimes in the markets in which Millicom operates are less developed
44
than in other countries such as the United States and countries in the European Union, and can therefore change
quickly. See “Key Information—Risk Factors—2. Risks related to Millicom's business in the markets in which it operates
—F. Legal and regulatory—Developing legal systems in the countries in which we operate create a number of
uncertainties for our businesses.”
Typically, Millicom’s cable and mobile operations are regulated by the government (e.g., a ministry of
communications), an independent regulatory body or a combination of both. In all of the markets in which Millicom
operates, there are ongoing discussions and consultation processes involving other operators and the governing
authorities regarding issues such as mobile termination rates and other interconnection rates, universal service
obligations, interconnection obligations, spectrum allocations, universal service funds and other industry levies and
number portability. This list is not exhaustive; such ongoing discussions are a typical part of operating in a regulated
environment.
Changes in regulation can sometimes impose new burdens on the telecommunications industry and have a
material impact on our business and on our financial results. For example, regulators in our markets periodically require
that we reduce the interconnection fees that we charge other telecom operators to terminate voice traffic on our
network. At times, such measures can have a material adverse effect on our overall results of operations. For example,
in response to public health crises, governments in several of our markets have prohibited, and may again prohibit, the
disconnection of customers with past due accounts for an extended period, which impacted our revenues and
collections.
The mobile services we provide require the use of spectrum, for which we have various licenses in each country
where we provide mobile services. Spectrum licenses have expiration dates that typically range from 10 to 20 years.
Historically, we have been able to renew our licenses upon expiration by agreeing to pay additional fees. We generally
expect to continue to renew most of our current licenses as they expire, and we expect to acquire new spectrum
licenses as they become available in the future.
45
The table below summarizes our most important current mobile spectrum holdings by country:
Country
Spectrum
Blocks
Bolivia
Bolivia
Bolivia
Bolivia
Bolivia
Colombia
Colombia
Colombia
Colombia
Colombia*
El Salvador
El Salvador
El Salvador
El Salvador
Guatemala
Guatemala**
Guatemala
Guatemala**
Guatemala
Guatemala
Guatemala
Honduras
Honduras
Nicaragua
Nicaragua
Nicaragua
Nicaragua
Panama
Panama
Panama
Panama
Paraguay
Paraguay
Paraguay
Paraguay
700MHz
850MHz
AWS
1900MHz
27GHz
700MHz
AWS
1900MHz
1900MHz
3500MHz
850MHz
AWS
1900MHz
1900MHz
850MHz
700MHz
700MHz
2600MHz
2600MHz
3500MHz
3500MHz
850MHz
AWS
700MHz
850MHz
1900MHz
AWS
700MHz
850MHz
1900MHz
AWS
850MHz
700MHz
AWS
1900MHz
2x12MHz
2x12.5MHz
2x15MHz
2x10MHz
575Mhz
2x20MHz
2x15MHz
2x5MHz
2x20MHz
2x40MHz
2x12.5MHz
2x25MHz
2x5MHz
2x5MHz
2x24MHz
2x15MHz
2x10MHz
2x45MHz
1x50MHz
1x75MHz
1x50MHz
2x25MHz
2x20MHz
2x20MHz
2x12.5MHz
2x30MHz
2x20MHz
2x10MHz
2x12.5MHz
2x10MHz
2x20MHz
2x12.5MHz
2x15MHz
2x15Mz
2x15MHz
Expiration date
2028
2030
2028
2028
2031
2040
2024
2029
2043
2044
2038
2040
2041
2028
2032 - 2035
2033 - 2035
2043
2026-2032-2043
2032
2033
2033
2028
2028
2033
2033
2033
2033
2036
2036
2036
2036
2026
2024
2026
2027
* The 3.5 GHz band was jointly acquired with Colombia Telecomunicaciones S.A. ESP BIC – Telefonica.
**Spectrum blocks have regional allocations and varying expiration dates.
Below, we provide further regulatory details in respect of certain of our countries of operation.
Bolivia: We hold a license to provide telecommunication services in Bolivia until 2051, mobile service authorization
and spectrum licenses until 2030, and cable, VOIP authorizations until 2028 and internet authorizations until 2046.
46
Colombia: Colombia Móvil S.A. (Colombia Móvil) has two separate nationwide spectrum licenses in the 1900 MHz
band. In June 2013, Colombia Móvil, acquired spectrum in the AWS (1700/2100 MHz) band, which we use to offer 4G
services. In order to reduce the cost and accelerate the deployment of the 4G network, we entered into a network
sharing agreement with our competitor, Telefónica Colombia. Colombia Móvil also has an indefinite license
(Habilitación General) that allows the company to offer several nationwide telecommunication services. In August 2019,
the President of Colombia sanctioned the Law of Modernization of the Information Technology and Communications
Sector which, among other changes, changed the duration of spectrum permits from 10 to 20 years. The Colombian
government auctioned 700 MHz spectrum in 2019, and we obtained 2x20 MHz in this band, which was key for our
business to compete effectively in the market. In 2023, our 1900 MHz license was renewed until 2043, and we
requested an extension for our AWS license for an additional year. In 2019, our cable TV license was successfully
migrated to the indefinite license (Habilitación General) to provide telecommunication services in Colombia, in
accordance with the new law.
Costa Rica: We hold a general license to provide telecommunication services which expires in 2024, and a spectrum
permit to download content for cable TV services which expires in 2029.
El Salvador: We hold a license to provide TV services until 2029 (fixed), telephone services until 2030, wireless
telephone services until 2034 and several spectrum licenses until 2041.
Guatemala: Comcel operates a nationwide mobile network, and it holds spectrum licenses that begin to expire in
2026. In 2023, the government auctioned 700MHz spectrum, in which we acquired two blocks of 10 MHz each. This
increased the total amount of 700 MHz spectrum, totaling 2x25 MHz. We also secured 90 MHz spectrum in the 2.6 GHz
band, achieving 2x45MHz blocks and one block of 50 MHz nationwide.
Honduras: Celtel has spectrum licenses in the 850 MHz and AWS bands, which expire in 2028. The Honduran
government has been planning a multi-band frequency spectrum auction in the 700 MHz and 3,500 MHz bands. The
auction has been delayed several times, most recently due to the change of authorities following the introduction of a
new government. In 2024, we plan to request the renewal of pay-TV and fixed telephone licenses that are scheduled to
expire.
Panama: We hold two cable TV licenses that expire in 2024, a radio license that expires in 2025 and two
commercial data transmission licenses and an Internet for public access license that expire in 2038. In 2022, we
permanently acquired spectrum in the AWS band.
Paraguay: We own licenses in four bands of spectrum in Paraguay to provide mobile services. Our spectrum license
for 700 MHz was renewed in March 2024.
Trademarks and licenses
We own or have rights to some registered trademarks in our business, including Tigo®, Tigo Business®, Tigo
Sports®, Mi Tigo®, Tigo Shop®, Tigo Money®, Tigo OneTv ®, Millicom® and The Digital Lifestyle®, among others. Under a
number of trademark license agreements and letters of consent, certain operating subsidiaries are authorized to use
the Tigo and Millicom trademarks under the applicable terms and conditions.
Research and Development, Patents and Licenses, etc.
We do not engage in research and development activities, and we do not own any patents.
Property, Plant and Equipment
Overview
We own, or have the right to access and use through long-term leases, telecommunications sites and related
infrastructure and equipment in all of our markets. In addition, we own, or have the right to access and use through
long-term leases, tower space, warehouses, office buildings and related telecommunications facilities in all of our
markets. We are also party to several site sharing agreements whereby we share our owned telecommunications sites
and related infrastructure and equipment, or lease such property from our counterparties in an effort to maximize the
use of telecommunications sites globally. Our leased properties are owned by private individuals, corporations and
sovereign states.
47
Assets used for the provision of cable TV and mobile telephone services include, without limitation:
•
•
•
•
•
•
•
switching, transmission and receiving equipment;
connecting lines (cables, wires, poles and other support structures, conduits and similar items);
diesel generator sets and air conditioners;
real property and infrastructure, including telecommunications towers, office buildings and warehouses;
easements and other rights to use or access real property;
access roads; and
other miscellaneous assets (work equipment, furniture, etc.).
Tower infrastructure
We determined that owning passive infrastructure, such as mobile telecommunications towers, no longer confers
a competitive advantage in our markets and that utilization of these assets could be optimized.
As a result, in 2023, we began the process of identifying and transferring towers to newly created local legal
entities in each of our countries of operation in order to operate and manage these assets separately in the future. The
passive infrastructure to be transferred to the new Tower business includes more than 9,000 sites across seven
countries.
In order to optimize the capital structure of the Tower business, we have also initiated a monetization process. We
believe this will allow us to focus our capital investment on other fixed assets, such as network equipment, thereby
increasing our network coverage, capacity and the overall quality of our service, while also improving our return on
invested capital.
For additional information, see note E.3. to our audited consolidated financial statements included elsewhere in
this Annual Report.
Organizational Structure and Subsidiaries
The parent company, Millicom International Cellular S.A. ("MIC S.A."), is a Luxembourg public limited liability
company (société anonyme). The following table identifies MIC S.A.’s main subsidiaries as of December 31, 2023:
48
Activity
Ownership
Interest* (%)
50-1 share
Entity
Colombia Móvil S.A. E.S.P.
Comunicaciones Celulares S.A.
Country
Colombia
Guatemala
Distribuidora de Comunicaciones de Occidente, S.A.
Guatemala
Mobile
Mobile
Mobile
Grupo de Comunicaciones Digitales, S.A. (formerly
Telefonica Moviles Panama, S.A.)
Panama
Mobile
Lati International S.A. (i)
Millicom Cable Costa Rica S.A.
Millicom Holding B.V.
Luxembourg
Holding Company ('Lati business')
Costa Rica
Cable, DTH
Netherlands
Holding Company
Millicom International Operations B.V.
Netherlands
Holding Company
Millicom International Services LLC
USA
Services Company
MIC Latin America B.V.
Millicom LIH S.A.
Netherlands
Holding Company
Luxembourg
Holding Company
Millicom International Operations S.A.
Luxembourg
Holding Company
Millicom Spain S.L.
Spain
Holding Company
Millicom Telecommunications S.A. (ii)
Luxembourg
Holding Company ('MFS business')
Navega.com S.A.
Guatemala
Cable, DTH
Servicios Especializados en Telecomunicaciones, S.A.
Guatemala
Mobile
Servicios Innovadores de Comunicacion y
Entretenimiento, S.A.
Guatemala
Mobile
Servicios y Productos Multimedios S.A.
Paraguay
Pay-TV, Internet
Telecomunicaciones Digitales, S.A. (formerly Cable Onda
S.A.)
Telefonica Celular de Bolivia S.A.
Panama
Bolivia
Cable, Pay-TV, Internet, DTH, Fixed-line
Mobile, DTH, Cable
Telefonia Celular de Nicaragua S.A.
Nicaragua
Mobile, Cable, Internet, Fixed-line
Telefonica Celular del Paraguay S.A.
Paraguay
Mobile, Cable, Pay-TV
Telemovil El Salvador S.A. de C.V.
El Salvador
Mobile, Cable, DTH
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
UNE EPM Telecomunicaciones S.A. and subsidiaries
Colombia
Fixed-line, Internet, Pay-TV, Mobile
50-1 share
* Also reflects the voting interest, except in Colombia where voting interest is 50% + 1 share for each of the two entities.
(i) Lati International S.A. is the holding company of our tower business.
(ii) Millicom Telecommunications S.A. is the holding company of most of our MFS business.
In addition, we provide services in Honduras through Celtel, a joint venture in which MIC S.A. indirectly holds a
66.67% equity interest. We entered into our joint venture in Honduras at the inception of this business in the 1990s. At
that time, Millicom had limited sources of capital and was investing heavily to deploy mobile operations in many
countries around the world; this partner provided local market expertise and reduced Millicom’s overall capital needs.
Despite the fact that Millicom owns more than 50% of the shares of this entity and has the right to nominate a majority
of the directors, all decisions taken by the board or the shareholders in Honduras 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 our joint venture in Honduras.
Unresolved Staff Comments
Not applicable.
49
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations should be read in conjunction with our
audited consolidated financial statements for the years ended December 31, 2023, 2022 and 2021, and the notes thereto,
included elsewhere in this Annual Report.
The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results
and the timing of events may differ materially from those expressed or implied in such forward-looking statements as a result
of various factors, including those set forth in “Forward-Looking Statements” and “Key Information—Risk Factors.”
Operating Results
Factors affecting our results of operations
Our performance and results of operations have been and will continue to be affected by a number of factors and
trends, including principally:
• Macro and socio-demographic factors. These affect demand for and affordability of our services and include
consumer confidence and expansion of the middle class, as well as foreign currency exchange rate volatility
and inflation which can impact our cost structure and profitability. Growth in GDP per capita and expansion of
the middle class make our services affordable to a larger pool of consumers. The emerging markets we serve
tend to have younger populations and faster household formation, and typically have more children per
family, than developed markets, driving demand for our residential services, such as broadband internet and
pay-TV. Digitalization of societies leads to more devices connected per household and more data needs.
Exposure to inflationary pressures and foreign currency exchange volatility may negatively impact our
profitability or make our services more expensive for our customers. See “Quantitative and Qualitative
Disclosures About Risk—Foreign currency risk.”
•
•
•
•
•
Competitive intensity, which largely reflects the number of market participants and the financial strength of each,
varies over time and from market to market. Markets tend to be more price competitive and less profitable for
us when there are more market participants, and thus any future increase in the number of market
participants in any of our markets would likely have a negative effect on our business.
Changes in regulation. Our business is highly dependent on a variety of licenses granted by regulators in the
countries where we operate. Any changes in how regulators award and renew these licenses could impact our
business. In particular, our mobile services business requires access to licensed spectrum, and we expect our
business and the mobile industry in general to require more spectrum in the future to meet future mobile data
traffic needs. In addition, regulators can impose certain constraints and obligations that can have an impact on
how we operate the business and on our profitability.
Technological change. Our business relies on technology that continues to evolve rapidly, forcing us to adapt
and deploy new innovations that can impact our investment needs and our cost structure, as well as create
new revenue opportunities for both our mobile and fixed services. With respect to mobile services, the global
industry is already well advanced in the deployment of 5G, which we expect will drive continued demand for
data in the future. With respect to fixed services, the cable infrastructure we are deploying, largely based on
the DOCSIS 3.0 standard, continues to evolve, and we are deploying alternatives such as DOCSIS 3.1 and FTTH
in certain markets. Over time, 5G and other mobile technologies may also be considered as viable alternatives
for fixed services. Technological change is also impacting the capabilities of the equipment our customers use,
such as mobile handsets and set-top boxes, and potential changes in this area may impact demand or the cost
of providing our services in the future.
Changes in consumer behavior and needs. In recent years, consumption of mobile services has shifted from
voice and SMS to data services due largely to changes in consumer patterns, including for example the
adoption and growth of social media, made possible by new smartphones on 4G and 5G networks capable of
high quality live video streaming.
Political changes. The countries where we operate are characterized as having a high degree of political
uncertainty, and electoral cycles can sometimes impact business investment, consumer confidence, and
50
broader economic activity, as well as inflation and foreign exchange rates. Moreover, changes in government
can sometimes produce significant changes in taxation and regulation of the telecommunications industry
that can have a material impact on our business and financial results.
•
Cost-reduction measures. Beginning in 2022 and throughout 2023 we implemented a broad-based efficiency
program ("Project Everest"), and we incurred severance and other restructuring costs of approximately $87
million in 2023. See also note H. to our audited consolidated financial statements.
Additional factors and trends affecting our performance and the results of operations are set out in "Key
Information—Risk Factors."
Factors affecting comparability of prior periods
Acquisitions
On November 12, 2021, Millicom signed and closed an agreement to acquire the remaining 45% equity interest in
its joint venture business in Guatemala (“Tigo Guatemala”) from our local partner for $2.2 billion in cash. As a result,
Millicom owns a 100% equity interest in Tigo Guatemala. See note A.1.2. to our audited consolidated financial
statements for additional details regarding this acquisition and the accounting treatment thereof.
In the years ended December 31, 2023, 2022 and 2021, the Group also completed certain other minor acquisitions.
Discontinued operations
Tanzania
On April 19, 2021, we announced the signing of an agreement for the sale of our operations in Tanzania to a
consortium led by Axian. The transaction was completed on April 5, 2022 for initial cash consideration of approximately
$101 million (subject to final price adjustments). See note E.4. to our audited consolidated financial statements for
additional details regarding this divestiture.
Ghana
On March 3, 2017, we and Bharti Airtel Limited ("Airtel") announced that we had entered into an agreement for
MIC S.A.'s subsidiary Tigo Ghana Limited and Airtel's subsidiary Airtel Ghana Limited to combine their operations in
Ghana. As per the agreement, we and Airtel had equal ownership and governance rights in the combined entity
("AirtelTigo"). On April 19, 2021, we announced that we had signed a definitive agreement to sell our ownership in
AirtelTigo to the Government of Ghana, and the sale was subsequently completed on October 13, 2021.
Guatemala and Honduras joint ventures
Though we hold a majority ownership interest in the entities that own the Honduras joint venture, the board of
directors is composed of equal numbers of directors from Millicom and from our respective partners, and the
shareholders’ agreements for each entity require unanimous board approval for key decisions relating to the activities
of these entities. As such, we have determined that neither party controls the entities, and we therefore account for our
investments in these entities as equity method investments.
Prior to November 12, 2021, we held a majority interest in the entities that comprised the Guatemala joint venture
and accounted for our investments in these entities as equity method investments, as neither we nor our partners
controlled the entities. As a result of the acquisition of the remaining 45% equity interest in our operations in
Guatemala on November 12, 2021, we have consolidated Tigo Guatemala in our audited consolidated financial
statements since November 12, 2021.
We report our share of the net income of these joint ventures in our consolidated statement of income under the
caption “Share of profit in joint ventures.” The share of the net income of the Guatemala joint venture is reflected in this
caption up until November 12, 2021. On and after November 12, 2021, the Guatemala operations are consolidated
within our audited consolidated statement of income.
For additional details on the Guatemala and Honduras joint ventures, see note A.2. to our audited consolidated
financial statements.
51
Our segments
Our management determines operating and reportable segments based on the reports that are used by the chief
operating decision maker (the "CODM") to make strategic and operational decisions from both a business and
geographic perspective. Our risks and rates of return for our operations were predominantly affected by operating in
different geographical regions. Until the divestiture of our Tanzania business in April 2022, we had businesses in two
main regions, Latin America and Africa, which constituted our two reportable segments. As a result of the sale of the
Tanzania business and its reclassification as discontinued operations, we no longer report an Africa segment in our
financial statements included elsewhere in this Annual Report. Further, during the latter half of 2023, we implemented
significant organizational changes to focus on driving profitable growth with a leaner corporate structure. We also
adopted a decentralized approach to streamline decision-making processes and enhance agility to improve
profitability and shareholder value. Due to these organizational changes, and considering the information now being
reviewed by the CODM to assess performance and allocate resources, our operating segments were redefined to align
with our countries of operation. Our reportable segments now consist of Guatemala, Colombia, Panama, Bolivia,
Honduras, Paraguay and Other reportable segments, which includes Nicaragua, Costa Rica and El Salvador.
Our customer base
We generate revenue mainly from the mobile and fixed and other services that we provide and, to a lesser extent,
from the sale of telephone and other equipment. For a description of our services, see “Information on the Company—
Business Overview—Our services.” Our results of operations are therefore dependent on both the size of our customer
base and on the amount that customers spend on our services.
We measure the amount that customers spend on our services using a telecommunications industry metric known
as ARPU, or average revenue per user per month. We define ARPU for our Mobile customers as (x) the total mobile and
mobile financial services revenue (excluding revenue earned from tower rentals, call centers, data and mobile virtual
network operators, visitor roaming, national third parties roaming and mobile telephone equipment sales revenue) for
the period, divided by (y) the average number of Mobile subscribers for the period, divided by (z) the number of
months in the period. We define ARPU for our Home customers as (x) the total home revenue (excluding equipment
sales and TV advertising) for the period, divided by (y) the average number of customer relationships for the period,
divided by (z) the number of months in the period.
We provide certain customer data below that we believe will assist investors in understanding our performance
and to which we refer later in this section in discussing our results of operations.
Group mobile customers
Mobile Customers
Mobile customer ARPU (in U.S. dollars)
Group - 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)
As of December 31,
2021
2022
2023
(in thousands, except where noted)
40,665
40,576
39,802
$
6.0 $
6.1 $
6.3
As of December 31,
2022
2021(i)
2,957
(43)
2,914
40,576
40,041
6.1
2,933
(30)
2,903
39,802
38,393
6.3
2023
2,993
(51)
2,942
40,665
40,635
6.0
(i) Tigo Guatemala is fully consolidated since the acquisition of the remaining 45% shareholding on November 12, 2021. 2021 Figures include Tigo
Guatemala as if it was consolidated.
*Refers to production services, MVNO, DVNO, equipment rental revenue, call center revenue, national roaming, equipment sales, visitor roaming, tower
rental, DVNE and other non-customer driven revenue.
**Average of the last five quarter-end subscriber totals.
52
Mobile customers by country in our Group
Bolivia
Colombia
El Salvador
Guatemala
Nicaragua
Panama
Paraguay
2023
As of December 31,
2022
(in thousands)
2021
3,875
11,632
2,966
11,715
3,710
2,642
4,124
3,687
11,511
3,026
11,793
3,860
2,441
4,258
4,119
11,271
2,919
11,754
3,757
2,095
3,887
In addition to the above, our Honduras Joint Venture had 5,088 thousand mobile customers as of December 31,
2023, 5,152 thousand customers as of December 31, 2022 and 5,079 customers as of December 31, 2021.
Group Home customers
Total homes passed
Total customer relationships (i)
HFC / FTTH homes passed
HFC / FTTH customer relationships
HFC / FTTH RGUs
HFC / FTTH broadband internet RGUs
Home ARPU (in U.S. dollars)
As of December 31,
2023
2022
2021
(in thousands, except where noted)
13,348
4,435
13,112
3,868
8,619
3,602
12,905
4,811
12,632
4,139
8,708
3,778
$
27.1 $
26.6 $
12,083
4,704
11,810
3,988
8,360
3,637
28.4
(i) Beginning in 2023 we include only residential customer relationships and homes passed. Prior year data also include data related to B2B customers.
In addition to the above, our Honduras joint venture had 173 thousand HFC / FTTH customer relationships as of
December 31, 2023, 172 thousand as of December 31, 2022 and 160 thousand as of December 31, 2021.
Group - 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)
As of December 31,
2022
1,555
(33)
1,522
4,811
4,765
26.6
2023
1,537
(28)
1,510
4,435
4,647
27.1
2021
1,590
(29)
1,561
4,704
4,575
28.4
Beginning in 2023, the calculation of Home ARPU includes equipment rental.
*TV advertising, production services, equipment rental revenue, call center revenue, equipment sales and other non-customer-driven revenue.
**Represented by homes connected all technologies (HFC + Other Technologies + DTH & Wimax RGUs).
***Average of the last five quarters.
53
Results of operations
We have based the following discussion on our consolidated financial statements included elsewhere in this
Annual Report. You should read it along with these financial statements, and it is qualified in its entirety by reference to
them. See “Operating and Financial Review and Prospects—Operating Results —Factors affecting comparability of
prior periods.”
Group Consolidated results of operations for the years ended December 31, 2023 and 2022
The following table sets forth certain consolidated statement of income data for the periods indicated:
Revenue
Equipment, programming and other direct costs
Operating expenses
Depreciation
Amortization
Share of profit in joint ventures
Other operating income (expenses), net
Operating profit
Interest and other financial expenses
Interest and other financial income
Other non-operating (expenses) income, net
Loss from other joint ventures and associates, net
Profit (loss) before taxes from continuing operations
Tax expense
Profit (loss) from continuing operations
Profit (loss) from discontinued operations, net of tax
Net profit (loss) for the year
The following table sets forth group revenue opened by:
Year ended December 31,
2023
2022
Percentage
Change
(U.S. dollars in millions, except percentages)
5,661
(1,507)
(2,043)
(978)
(360)
42
10
826
(712)
28
36
(3)
175
(424)
(249)
4
(245)
5,624
(1,506)
(1,890)
(999)
(345)
32
(2)
915
(617)
18
(78)
—
238
(222)
16
113
129
0.7 %
(0.1) %
(8.1) %
2.1 %
(4.5) %
30.6 %
NM
(9.8) %
(15.5) %
58.0 %
NM
NM
(26.4) %
(90.8) %
NM
(96.3) %
NM
54
Year ended December 31,
2023
2022
Percentage
Change
Group
Group
Group
(U.S. dollars in millions, except percentages)
Mobile revenue .......................................................
Fixed and other service revenue ............................
Other revenue .........................................................
2,993
2,192
65
Service revenue(i) .................................................
5,250
Telephone and equipment revenue ......................
411
Revenue .................................................................
5,661
2,957
2,145
69
5,171
454
5,624
1.2%
2.2%
(4.8)%
1.5%
(9.5)%
0.7%
(i) Service revenue is revenue related to the provision of ongoing services such as monthly subscription fees for mobile and broadband, airtime and
data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as data
services, short message services, installation fees and other value added services excluding telephone and equipment sales.
Revenue
Revenue increased by 0.7% for the year ended December 31, 2023 to $5,661 million from $5,624 million for the
year ended December 31, 2022. The increase in revenue of $37 million reflects positive revenue growth in most
countries, partially offset by lower revenue in Guatemala, Colombia and Bolivia. Additionally, see "—Revenue and
EBITDA by Reportable Segments for the years ended December 31, 2023 and 2022 " below.
Equipment, programming and other direct costs
Equipment, programming and other direct costs increased by 0.1% for the year ended December 31, 2023 to
$1,507 million from $1,506 million for the year ended December 31, 2022. Equipment, programming and other direct
costs increased by less than the increase in revenue due to a change in revenue mix, as revenue from services
increased, while revenue from the sale of equipment declined during the period.
Operating expenses
Operating expenses increased by 8.1% for the year ended December 31, 2023 to $2,043 million from $1,890 million
for the year ended December 31, 2022. Of the $152 million increase, $87 million was for severance and other
restructuring costs related to Project Everest, and $19 million was related to one-off legal cases. During 2023, we also
incurred $33 million in legal costs and applicable value-added taxes related to the subpoenas that we received from
the DOJ. The remaining portion of the increase was mostly related to higher share-based compensation and non-
recurring costs related to the prior buyout discussions. Excluding these unusual items, operating expenses were about
flat year-on-year, as cost savings initiatives offset the impact of elevated inflation in some markets.
Depreciation
Depreciation decreased by 2.1% for the year ended December 31, 2023 to $978 million from $999 million for the
year ended December 31, 2022. The decline is mostly due to a 2023 prospective change in the useful lives for tower
and civil works assets.
Amortization
Amortization increased 4.5% for the year ended December 31, 2023 to $360 million from $345 million for the year
ended December 31, 2022. The increase is mostly due to the renewal of spectrum licenses in Colombia during 2023.
Share of profit in joint ventures
Share of profit in joint ventures increased by 30.6% for the year ended December 31, 2023 to $42 million from $32
million for the year ended December 31, 2022. The increased profitability of our Honduras joint venture reflects
improved operational performance and lower depreciation, partially offset by severance.
55
Other operating income (expenses), net
Other operating income (expenses), net, increased by $12 million for the year ended December 31, 2023 to an
income of $10 million from an expense of $2 million for the year ended December 31, 2022. The increase reflects the
disposal of assets (such as copper wires no longer in use) in 2023, as well as the negative impact of a software contract
termination in 2022.
Interest and other financial expenses
Interest and other financial expenses increased by 15.5% for the year ended December 31, 2023 to $712 million
from $617 million for the year ended December 31, 2022, reflecting the impact of higher interest rates on our variable
debt and commissions on the purchase of U.S. dollars by our operations in Bolivia.
Interest and other financial income
Interest and other financial income increased by 58.0% for the year ended December 31, 2023 to $28 million from
$18 million for the year ended December 31, 2022, due to a $12 million gain on the repurchase of bonds.
Other non-operating (expenses) income, net
Other non-operating (expenses) income, net, increased by $114 million for the year ended December 31, 2023 to
an income of $36 million from an expense of $78 million for the year ended December 31, 2022. The increase was
mainly due to foreign exchange gains in 2023 compared to foreign exchange losses in 2022.
Loss from other joint ventures and associates, net
Loss from other joint ventures and associates, net, increased by $2 million for the year ended December 31, 2023
to $3 million from a result of nil for the year ended December 31, 2022, that was attributable to our former operations
in Ghana.
Tax expenses
Tax expenses, increased by 90.8% for the year ended December 31, 2023 to $424 million from $222 million for the
year ended December 31, 2022. The increase is mainly due to the write-off of deferred tax assets and value-added tax
credits in Colombia.
Net profit (loss) for the year
Net profit for the year decreased by $374 million for the year ended December 31, 2023 to a loss of $245 million
from a profit of $129 million for the year ended December 31, 2022. Profit for the year from continuing operations
decreased by $265 million for the year ended December 31, 2023 to a loss of $249 million from a profit of $16 million
for the year ended December 31, 2022 for the reasons stated above. Profit (loss) for the year from discontinued
operations, net of tax decreased by $109 million for the year ended December 31, 2023 to a profit of $4 million as
compared to a profit of $113 million for the year ended December 31, 2022.
Revenue and EBITDA by Reportable Segments for the years ended December 31, 2023 and 2022
Our reportable segments consist of Guatemala, Colombia, Panama, Bolivia, Honduras, Paraguay and Other
reportable segments, which includes Nicaragua, Costa Rica and El Salvador. The Honduras segment presents the results
of our Honduras joint venture as if it were fully consolidated, as this reflects the way management reviews and uses
internally reported information to make decisions. The following table sets forth our revenue by reportable segments
for the years ended December 31, 2023 and 2022. See note B.3. to our audited consolidated financial statements for
additional details.
56
Revenue by Reportable Segments
Year ended December 31
2023
2022
(U.S. dollars in millions, except
percentages)
Percentage
Change
Guatemala ..........................................................................................................
Colombia ............................................................................................................
Panama ...............................................................................................................
Bolivia .................................................................................................................
Honduras (i) ........................................................................................................
Paraguay .............................................................................................................
Other reportable segments ...............................................................................
Inter-segment and other eliminations (i) ..........................................................
Total Group .......................................................................................................
1,564
1,313
719
613
612
568
902
(631)
5,661
1,618
1,335
651
621
586
556
861
(3.3)%
(1.6)%
10.4%
(1.4)%
4.3%
2.1%
4.8%
(605)
(4.2)%
5,624
0.7%
Guatemala represented 25%, Colombia represented 21%, Panama, Bolivia, Honduras and Paraguay each
represented between 9% and 11%, and our other reportable segments represented together 14% of our total revenue
for reportable segments for the year ended December 31, 2023. Panama experienced the highest relative increase in
revenues of $68 million or 10.4%, due to new large B2B contracts and robust growth in the Mobile business. In contrast,
the weakest performance was in Guatemala, where revenue declined 3.3% due to intense competition in prepaid
mobile. In Colombia, revenue declined 1.6%, as a decline in equipment revenue more than offset growth in service
revenue.
EBITDA by Reportable Segments
Year ended December 31
2023
2022
Percentage
Change
(U.S. dollars in millions, except
percentages)
Guatemala ................................................................................................
Colombia ..................................................................................................
Panama ....................................................................................................
Bolivia .......................................................................................................
Honduras (i)..............................................................................................
Paraguay ..................................................................................................
Other reportable segments .....................................................................
807
420
296
224
272
236
352
857
404
298
242
262
245
330
(5.8)%
4.1%
(0.7)%
(7.3)%
4.0%
(3.4)%
6.8%
(i) While the Millicom Group holds a 66.67% equity interest in the Honduras joint venture being accounted for using the equity method, its performance
is reviewed by the CODM in a similar manner as the Group's fully owned operations and is therefore also shown as a separate operating segment at 100%.
However, such amounts are then removed for reconciliation to the Group total revenue. See note B.3. to our audited consolidated financial statements for
further details on segment information.
The Guatemala, Colombia, and Panama segments generated the highest EBITDA in 2023. During 2023, each of our
segments incurred significant severance and other restructuring costs related to the implementation of Project Everest,
and this impacted comparisons to 2022. In addition to the impact of Project Everest, the following noteworthy factors
affected the comparison with 2022 for some of our segments:
•
•
Guatemala declined 5.8% due to pricing pressure caused by a more competitive environment;
Colombia increased 4.1% due to service revenue growth in our Mobile business and lower costs stemming
from reduced commercial activity in our Home business, partially offset by the impact of two adverse legal
rulings;
57
•
•
•
Panama declined 0.7%, as continued service revenue growth in mobile and new B2B contracts was more than
offset by higher selling and marketing expenses (in addition to the aforementioned severance impact), as well
as a favorable legal ruling in 2022;
Bolivia declined 7.3% due to a change in regulation which capped the overage rates on prepaid plans and
took effect in August 2022 and due to a regulatory fine for a service outage related to a prior year; and
Other reportable segments increased 6.8%, as the appreciation of the Costa Rican colon drove very strong
EBITDA growth from that country.
Group Consolidated results of operations for the years ended December 31, 2022 and 2021
The following table sets forth certain consolidated statement of income data for the periods indicated:
Revenue .................................................................................................
Equipment, programming and other direct costs ...............................
Operating expenses ..............................................................................
Depreciation ..........................................................................................
Amortization ..........................................................................................
Share of profit in joint ventures ............................................................
Other operating income (expenses), net ..............................................
Operating profit ..................................................................................
Interest and other financial expenses ...................................................
Interest and other financial income ......................................................
Revaluation of previously held interest ................................................
Other non-operating (expenses) income, net ......................................
Profit (loss) from other joint ventures and associates, net ..................
Profit before taxes from continuing operations ..................................
Tax expense ...........................................................................................
Profit from continuing operations ....................................................
Profit (loss) from discontinued operations, net of tax .........................
Net profit for the year .........................................................................
Year ended December 31
2022(ii)
2021 (i)
Percentage
Change
(U.S. dollars in millions, except percentages)
5,624
(1,506)
(1,890)
(999)
(345)
32
(2)
915
(617)
18
—
(78)
—
238
(222)
16
113
129
4,261
(1,197)
(1,546)
(804)
(310)
210
5
619
(495)
23
670
(49)
(40)
728
(158)
570
(28)
542
32.0%
(25.8)%
(22.3)%
(24.3)%
(11.4)%
(84.6)%
NM
47.9%
(24.6)%
(23.0)%
NM
(57.2)%
98.8%
(67.3)%
(41.1)%
(97.2)%
NM
(76.2)%
Re-presented for discontinued operations (see note A.4. to our audited consolidated financial statements).
(i)
(ii) 2021 financial information includes the impact of our acquisition of the remaining 45% shareholding in Tigo Guatemala (approximately 1.5 months
of statement of income data as from November 12, 2021). See note A.1.2. to our audited consolidated financial statements. As a result, 2022 figures
are not directly comparable with 2021 figures.
58
The following table sets forth group revenue opened by:
Year ended December 31,
2022
2021 (ii)
Percentage
Change
Group
Group
Group
(U.S. dollars in millions, except percentages)
Mobile revenue .......................................................
Fixed and other service revenue ............................
Other revenue .........................................................
2,957
2,145
69
Service revenue(i) .................................................
5,171
Telephone and equipment revenue ......................
454
Revenue .................................................................
5,624
2,000
1,938
60
3,997
263
4,261
47.9%
10.7%
15.3%
29.4%
72.3%
32.0%
(i) Service revenue is revenue related to the provision of ongoing services such as monthly subscription fees for mobile and broadband, airtime and
data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as data
services, short message services, installation fees and other value added services excluding telephone and equipment sales.
(ii) As further explained above, Group numbers include Guatemala (until acquisition in November 2021) and exclude Africa.
Revenue
Revenue increased by 32.0% for the year ended December 31, 2022 to $5,624 million from $4,261 million for the
year ended December 31, 2021. The increase in revenue of $1,363 million reflects the impact of the acquisition of Tigo
Guatemala, as discussed above, which was partially offset by the depreciation of currencies in Colombia and Paraguay
during the year.
Equipment, programming and other direct costs
Equipment, programming and other direct costs increased by 25.8% for the year ended December 31, 2022 to
$1,506 million from $1,197 million for the year ended December 31, 2021. Of the increase, $322 million was
attributable to the Tigo Guatemala acquisition. The remaining $14 million decline was primarily due to the impact of
the depreciation of the Colombian peso and the Paraguayan guarani on our equipment, programming and other direct
costs.
Operating expenses
Operating expenses increased by 22.3% for the year ended December 31, 2022 to $1,890 million from $1,546
million for the year ended December 31, 2021. Of the increase, $324 million was attributable to the Tigo Guatemala
acquisition. The remaining $21 million of the increase was primarily due to increased investment to support the
development and expansion of our Tigo Money and Towers businesses, increased energy and employee costs, as well
as sales and marketing costs to support growth, especially in our Colombia business.
Depreciation
Depreciation increased by 24.3% for the year ended December 31, 2022 to $999 million from $804 million for the
year ended December 31, 2021. Substantially all of the increase was attributable to the consolidation of Tigo
Guatemala and the related purchase price allocation.
Amortization
Amortization increased 11.4% for the year ended December 31, 2022 to $345 million from $310 million for the year
ended December 31, 2021. Of the increase, $88 million was attributable to the Tigo Guatemala acquisition, which offset
a decline in amortization due to the one-off accelerated brand amortization in Panama in 2021.
Share of profit in joint ventures
Share of profit in joint ventures decreased by 84.6% for the year ended December 31, 2022 to $32 million from
$210 million for the year ended December 31, 2021. The decrease reflects the impact of the Tigo Guatemala
acquisition, as Tigo Guatemala contributed $183 million to share of profit in joint ventures for the year ended
59
December 31, 2021 but was not included in the year ended December 31, 2022 due to its full consolidation. Excluding
the impact of the Tigo Guatemala acquisition, share of profit in joint ventures would have increased by $6 million, due
to increased profitability in Honduras.
Other operating income (expenses), net
Other operating income (expenses), net decreased by $7 million for the year ended December 31, 2022 to an
expense of $2 million from an income of $5 million for the year ended December 31, 2021. Of the decrease, $3 million
was attributable to the Tigo Guatemala acquisition. The decline was mainly due to $7 million in expenses related to a
software contract termination for the year ended December 31, 2022 compared to a gain from an earn-out offset by
losses from a disposal in our equity investment in Helios Towers for the year ended December 31, 2021.
Interest and other financial expenses
Interest and other financial expenses increased by 24.6% for the year ended December 31, 2022 to $617 million
from $495 million for the year ended December 31, 2021, reflecting the consolidation of Tigo Guatemala, which
contributed $89 million to the increase, and the subsequent issuance of debt by us and Tigo Guatemala.
Interest and other financial income
Interest and other financial income decreased by 23.0% for the year ended December 31, 2022 to $18 million from
$23 million for the year ended December 31, 2021. which reflects the non-recurring gain from the exchange of the
6.625% Senior Notes due 2026 for newly issued 4.500% Senior Notes due 2031. Of the increase, $37 million was
attributable to the Tigo Guatemala acquisition.
Other non-operating (expenses) income, net
Other non-operating expenses increased by $28 million for the year ended December 31, 2022 to an expense of
$78 million from an expense of $49 million for the year ended December 31, 2021. The increase was mainly due to
foreign exchange losses for the year ended December 31, 2022 compared to a revaluation charge of the put-option
liability in Panama for $26 million and losses on foreign exchange, which was partially offset by the mark-to-market
revaluation of Helios Towers for an $18 million gain for the year ended December 31, 2021. Of the increase, $2 million
was attributable to the Tigo Guatemala acquisition.
Revaluation of previously held interest
As a result of the acquisition of the remaining 45% shareholding in Guatemala, the Group had to revalue its 55%
previously held investment at the fair value implied by the transaction. This resulted in the recognition of a gain of
$670 million with a corresponding increase in goodwill in 2021.
Loss from other joint ventures and associates, net
Loss from other joint ventures and associates, net decreased by $39 million for the year ended December 31, 2022
to $0 million from a loss of $40 million for the year ended December 31, 2021 that was attributable to our former
operations in Ghana.
Tax expense
Charges for taxes increased by 41.1% for the year ended December 31, 2022 to $222 million from $158 million for
the year ended December 31, 2021. A majority of the increase, was attributable to the consolidation of Tigo Guatemala
as of November 12, 2021. The increase was also impacted by the net effect of the recognition and derecognition of
certain deferred tax assets in UNE and Colombia Móvil, respectively, as well as an amnesty settlement.
The main components of charges for taxes, net are the income tax generated by our operations and the
withholding tax we pay when cash is repatriated from our local operations. We also have net losses mainly in our
corporate entities that reduce our profit before taxes and for which no deferred tax asset is recognized due to the
history of losses in such entities. As a result, our effective tax rate is generally above our average statutory tax rate.
Moreover, due to the jurisdictional differences and mix, we do not have the opportunity to offset tax expense with
accumulated tax loss carry-forwards
Net profit for the year
Net profit for the year decreased by $413 million for the year ended December 31, 2022 to a profit of $129 million
from $542 million for the year ended December 31, 2021. Profit for the year from continuing operations increased by
$554 million for the year ended December 31, 2022 to a profit of $16 million from $570 million for the year ended
60
December 31, 2021 for the reasons stated above. Profit (loss) for the year from discontinued operations, net of tax
increased by $141 million for the year ended December 31, 2022 to $113 million as compared to a loss of $28 million
for the year ended December 31, 2021.
Revenue and EBITDA by Reportable Segment for the years ended December 31, 2022 and 2021
Our reportable segments consist of Guatemala, Colombia, Panama, Bolivia, Honduras, Paraguay and Other
reportable segments, which includes Nicaragua, Costa Rica and El Salvador. The Honduras segment presents the
results of our Honduras joint venture as if it were fully consolidated, as this reflects the way management reviews
and uses internally reported information to make decisions. The Guatemala segment also includes our operations in
Guatemala for all periods presented. The following table sets forth our revenue by reportable segments for the years
ended December 31, 2022 and 2021 . See note B.3.to our audited consolidated financial statements for additional
details.
Revenue by Reportable Segments
Year ended December 31,
2022
2021
(U.S. dollars in millions, except
percentages)
Percentage
Change
Guatemala ..........................................................................................................
Colombia ............................................................................................................
Panama ...............................................................................................................
Bolivia .................................................................................................................
Honduras (i) ........................................................................................................
Paraguay .............................................................................................................
Other reportable segments ...............................................................................
Inter-segment and other eliminations (i) ..........................................................
Total Group .......................................................................................................
1,618
1,335
651
621
586
556
861
(605)
5,624
1,601
1,414
633
623
589
555
827
(1,982)
4,261
1.1%
(5.5)%
2.9%
(0.4)%
(0.5)%
0.2%
4.1%
69.5%
32.0%
Guatemala represented 26%, Colombia represented 21%, Panama, Bolivia, Honduras and Paraguay each
represented between 9% and 10%, while other reportable segments collectively represented 14% of our total revenue
for reportable segments for the year ended December 31, 2022. Guatemala revenues of $1,618 million increased 1.1%
year-on-year, as the impact of competitive pressure in prepaid mobile was more than offset by stronger relative
performance in the other business units. Panama revenue increased $18 million, or an increase of 2.9%, due to strong
results in the Mobile business. In Colombia, revenue declined 5.5% as a result of the depreciation of the Colombian
peso which offset strong organic growth in our Mobile business driven by postpaid customers.
EBITDA by Reportable Segments
Year ended December 31
2022
2021
Percentage
Change
(U.S. dollars in millions, except
percentages)
Guatemala .......................................................................................................
Colombia .........................................................................................................
Panama ...........................................................................................................
Bolivia ..............................................................................................................
Honduras (i).....................................................................................................
Paraguay .........................................................................................................
Other reportable segments ............................................................................
857
404
298
242
262
245
330
857
441
281
249
259
242
310
—%
(8.4)%
6.2%
(3.0)%
1.1%
1.0%
6.3%
(i) While the Millicom Group holds a 66.67% equity interest in the Honduras joint venture being accounted for using the equity method, its performance
is reviewed by the CODM in a similar manner as the Group's fully owned operations and is therefore also shown as a separate operating segment at 100%.
61
However, such amounts are removed for reconciliation to the Group total revenue. See note B.3. to our audited consolidated financial statements for further
details on segment information.
Guatemala, Colombia and Panama delivered the highest EBITDA by segment in 2022. When comparing EBITDA in
2022 to 2021, Guatemala was flat, reflecting challenging competitive dynamics. Colombia declined 8.4%, as the impact
of the weaker Colombia peso more than offset organic growth in the business. Panama grew 6.2% thanks to continued
service revenue growth in our mobile business. Bolivia declined 3.0% impacted by a change in regulation that capped
overage rates on prepaid and took effect in August 2022.
Other financial data
Group:
Service revenue ......................................................................................
Telephone and equipment revenue ......................................................
Revenue ..................................................................................................
Revenue growth .....................................................................................
Revenue organic growth(2)
.....................................................................
Service revenue growth .........................................................................
Service revenue organic growth(2)
.........................................................
Net cash provided by operating activities .............................................
Net cash used in investing activities ......................................................
Net cash used in financing activities ......................................................
Operating free cash flow(1)
Free cash flow(1)
Equity free cash flow(1)
Equity free cash flow excluding Africa and Lati taxes(1)
......................................................................................
............................................................................
.....................................................................
........................
Year ended December 31,
2023
2022
(U.S. dollars in millions, except
percentages)
5,250
411
5,661
0.7%
1.5%
1.5%
2.3%
1,223
(1,116)
(377)
645
(121)
(34)
(18)
5,171
454
5,624
32.0%
3.3%
29.4%
3.5%
1,284
(1,104)
(1)
765
77
161
171
(1) Free Cash Flow Measures
Operating free cash flow, free cash flow, equity free cash flow and equity free cash flow excluding Africa and Lati taxes
are all Non-IFRS alternative performance measures. See —"Use of Non-IFRS Terms" below for more information on these
measures.
The following table shows a reconciliation from Net cash provided by operating activities to Operating free cash
flow, Free cash flow, Equity free cash flow, and Equity free cash flow excluding Africa and Lati taxes for the Millicom
Group:
62
Net cash provided by operating activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of other intangible assets
Purchase of spectrum and licenses
Finance charges paid, net
Operating free cash flow
Interest (paid), net
Lease capital repayments
Free cash flow
Repatriation from joint ventures
Advances and dividends paid to non-controlling interests
Equity free cash flow
Less: Equity free cash flow - Africa
Less: Lati carve-out taxes (i)
Equity free cash flow - ex. Africa and Lati taxes
(i) Taxes related to the Lati carve-out transaction.
(2) Revenue and Service Revenue Organic Growth
Year ended
December 31,
2023
2022
(U.S. dollars in
millions)
1,223
(814)
17
(133)
(236)
589
645
(589)
(177)
(121)
86
—
(34)
—
(17)
(18)
1,284
(800)
21
(179)
(93)
530
765
(530)
(157)
77
88
(4)
161
(10)
—
171
Revenue Organic Growth and Service Revenue Organic Growth are non-IFRS alternative performance measures.
See "—Use of Non-IFRS Terms" below for more information on these measures.
The following table shows a reconciliation from reported growth on an IFRS basis to organic growth for revenue
and service revenue:
Current period
Prior year period
Reported Growth
Change in perimeter impact(i)
Foreign exchange impact and other (ii)
Organic Growth
Revenue
Service Revenue
As of and for the year ended December 31,
2023
2022
2023
2022
(U.S. dollars in millions, except percentages)
5,661
5,624
0.7%
—%
0.8%
1.5%
5,624
4,261
32.0%
(32.2)%
3.5%
3.3%
5,250
5,171
1.5%
—%
0.7%
2.3%
5,171
3,997
29.4%
(29.4)%
3.5%
3.5%
(i)
The following changes in perimeter impact were eliminated to calculate Revenue Organic Growth and Service Revenue Organic Growth: a positive
$1,373 million revenue impact and a positive $1,174 million service revenue impact, respectively in the year ended December 31, 2022 due to
revenue generated by Tigo Guatemala, which was consolidated as of November 12, 2021.
63
(ii)
The following foreign exchange and other impacts were eliminated to calculate Revenue Organic Growth: a negative $46 million revenue impact in
the year ended December 31, 2023, and a positive $148 million revenue impact in the year ended December 31, 2022. The following foreign
exchange and other impacts were eliminated to calculate Service Revenue Organic Growth: a negative $38 million service revenue impact in the
year ended December 31, 2023, and a positive $141 million service revenue impact in the year ended December 31, 2022.
Use of Non-IFRS Terms
Non-IFRS Measures
This Annual Report contains financial measures that are not prepared in accordance with IFRS. These measures are
referred to as “non-IFRS” measures, and they are not uniformly or legally defined financial measures. Non-IFRS
measures are not substitutes for IFRS measures in assessing our overall operating performance. Because non-IFRS
measures are not determined in accordance with IFRS, and are susceptible to varying calculations, non-IFRS measures
may not be comparable to other similarly titled measures presented by other companies.
Non-IFRS measures are included in this Annual Report because they are used by our management, and we believe
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 measures to make
operating decisions, as they facilitate additional internal comparisons of Millicom’s performance to historical results,
and provides them to investors as a supplement to Millicom’s reported results for additional insight into Millicom’s
operating performance. Millicom’s Compensation Committee uses certain non-IFRS measures when assessing the
performance and compensation of employees, including Millicom’s Executive Directors.
Non-IFRS measures have limitations as an analytical tool. The non-IFRS measures used by Millicom may be
calculated differently from, and therefore may not be comparable to, similarly titled measures used by other
companies. See “—Alternative Performance Measures” 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 for mobile and
broadband, airtime and data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees
from other telecommunications services such as data services, short message services, installation fees and other value-
added services, excluding telephone and equipment sales.
EBITDA is operating profit excluding impairment losses, depreciation and amortization and gains/losses on fixed asset
disposals.
EBITDA after leases (EBITDAaL) represents EBITDA after lease expense and depreciation charge.
EBITDA margin represents EBITDA in relation to revenue.
Organic growth represents year-on-year growth excluding the impact of changes in FX rates, perimeter and accounting.
Changes in perimeter are the result of acquisitions and divestitures. Results from divested assets are immediately removed
from both periods, whereas the results from acquired assets are included in both periods at the beginning (January 1) of the
first full calendar year of ownership.
Net debt is debt and financial liabilities, including derivative instruments (assets and liabilities), less cash and pledged
and time deposits.
Leverage is the ratio of net debt over LTM (last 12 months) EBITDAaL, pro forma for acquisitions made during the last 12
months.
Capex is balance sheet capital expenditure excluding spectrum and license costs and lease capitalizations.
Cash capex represents the cash spent in relation to capital expenditure, excluding spectrum and licenses costs.
Operating cash flow (OCF) is EBITDA less Capex.
Operating free cash flow (OFCF) is EBITDA less cash capex, spectrum paid, working capital and other non-cash items and
taxes paid.
64
Equity free cash flow (EFCF) is OFCF less finance charges paid (net), lease interest payments, lease principal repayments
and advances for dividends to non-controlling interests, plus cash repatriation from joint ventures and associates.
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 and is
defined as operating profit after tax, divided by the average invested capital during the period.
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, and investments and non-controlling interests), less assets and liabilities held for
sale.
Average revenue per user per month (ARPU) for our mobile customers is (x) the total mobile and mobile financial services
revenue (excluding revenue earned from tower rentals, call center, data and mobile virtual network operator, visitor
roaming, national third parties roaming and mobile telephone equipment sales revenue) for the period, divided by (y) the
average number of mobile subscribers for the period, divided by (z) the number of months in the period. We define ARPU for
our home customers as (x) the total home revenue (excluding equipment sales and TV advertising) for the period, divided by
(y) the average number of customer relationships for the period, divided by (z) the number of months in the period. ARPU is
not subject to a standard industry definition and our definition of ARPU may be different from other industry participants.
Critical accounting policies
The preparation of our consolidated 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 described in “Introduction—
Judgments and critical estimates” in the notes to our audited consolidated financial statements, and in the notes
referenced therein.
For a description of new or amended IFRS accounting standards to which we are subject, see “Introduction— New
and amended IFRS accounting standards” in the notes to our audited consolidated financial statements.
65
Liquidity and Capital Resources
Overview
The Millicom Group’s sources of funds are cash from operations, internal and external financing as well as
proceeds from the disposal of assets. The Millicom Group finances its operations centrally at the MIC S.A. level or
alternatively, where it deems it more cost effective to do so, at the operational level.
In particular, we seek to finance the costs of deploying and expanding our fixed and mobile networks mainly at
the operating level on a country-by-country basis, utilizing credit facilities provided by banks and entering into
leases, obtaining financing from the debt capital markets, and seeking funding from export credit agencies and
development financial institutions such as the Inter-American Development Bank.
If we decide to acquire other businesses, we expect to fund these acquisitions from cash resources, borrowings
under existing credit facilities, through new borrowings, including under new credit facilities or issuances of debt
securities, and, if necessary, we may issue equity to raise funds.
As of December 31, 2023, our consolidated cash and cash equivalents balance was $775 million (of which $384
million was at the holdings level and $391 million was at the operating subsidiaries level). As of December 31, 2022
and 2021, our consolidated cash and cash equivalents balance was $1,039 million (of which $675 million was at the
holdings level and $364 million was at the operating subsidiaries level) and $895 million (of which $260 million was
at the holdings level and $635 million was at the operating subsidiaries level), respectively. If funds at the foreign
operating subsidiaries level are repatriated, taxes on each type of repatriation and each country would need to be
accrued and paid, where applicable.
As of December 31, 2023, our total consolidated indebtedness (excluding lease liabilities) was $6,697 million. As
of December 31, 2022 and 2021 our total consolidated indebtedness (excluding lease liabilities) was $6,804 million
and $7,744 million , respectively.
We believe that our available cash and cash equivalents, borrowings and funds from our operating subsidiaries
will be sufficient to meet our projected operating and capital expenditure requirements for at least the next 12
months.
Cash repatriation
Cash repatriation is dependent on operating and financial performance of our operations. Cash repatriation is
accomplished through a combination of dividends, fees and shareholder loan repayments.
The following table sets forth cash repatriated to MIC S.A. from our subsidiaries and joint ventures for the
periods presented:
December 31,
2023
2022(i)
2021
(U.S. dollars in millions)
Subsidiaries ............................................................................................
Joint ventures ........................................................................................
Total .......................................................................................................
566
86
652
1,565
85
1,651
556
49
605
(i)
Cash repatriated from subsidiaries as of December 31, 2022 includes approximately $900 million of proceeds from the issuance of the 5.125%
Senior Notes due 2032, which were used to partially refinance the bridge loan that we obtained to fund the acquisition of the remaining 45%
equity interest in our Guatemala business.
In each case, the repatriated cash was principally used to cover corporate expenses, service corporate debt and
pay corporate taxes.
Some of our operating subsidiaries and joint ventures have covenants on debt outstanding that impose
restrictions on their ability to upstream cash to MIC S.A. As a result of these restrictions, significant cash or cash
equivalent balances may be held from time to time at our operating subsidiaries and joint ventures.
66
Cash flows
Set forth below is a comparative discussion of our cash flows, which includes cash flows from discontinued
operations.
Years ended December 31, 2023 and 2022
For the year ended December 31, 2023, cash provided by operating activities was $1,223 million, compared to
$1,284 million for the year ended December 31, 2022. The decrease is mainly due to higher working capital due to
foreign exchange for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Cash used in investing activities was $1,116 million for the year ended December 31, 2023, compared to $1,104
million for the year ended December 31, 2022. In the year ended December 31, 2023, Millicom used $814 million to
purchase property, plant and equipment, $236 million to purchase spectrum and licenses and $133 million to
purchase other intangible assets, and these items were partially offset by proceeds of $63 million in dividends from
joint ventures and $17 million from the sale of property, plant and equipment such as copper wires and buildings.
For the year ended December 31, 2022, Millicom used $283 million for the acquisition of the non-controlling interest
of Tigo Panama, $800 million to purchase property, plant and equipment and $179 million to purchase intangible
assets and licenses, and these items were partially offset by proceeds of $10 million in dividends from joint ventures,
$152 million from the disposal of subsidiaries and joint ventures and $21 million from the sale of property, plant and
equipment such as towers and buildings.
Cash used in financing activities was $377 million for the year ended December 31, 2023, compared to $1 million
for the year ended December 31, 2022. For the year ended December 31, 2023, we repaid debt of $632 million and
lease capital of $177 million, while raising funds of $362 million through new financing. In 2023, our partner in
Colombia contributed $74 million to our Colombian subsidiary, we paid no dividends, and we paid $5 million for
share repurchases. For the year ended December 31, 2022 we repaid debt of $2,127 million and lease capital of $157
million while raising funds of $1,570 million through new financings. We also issued new equity for a total net
amount of $717 million. In the year ended December 31, 2022, we paid no dividends and did not repurchase shares.
Years ended December 31, 2022 and 2021
For the year ended December 31, 2022, cash provided by operating activities was $1,284 million, compared to
$956 million for the year ended December 31, 2021. The increase is mainly due to the consolidation of Tigo
Guatemala and higher working capital during due to foreign exchange for the year ended December 31, 2022
compared to the year ended December 31, 2021
Cash used in investing activities was $1,104 million for the year ended December 31, 2022, compared to $2,703
million for the year ended December 31, 2021. In the year ended December 31, 2022, Millicom used $283 million for
the acquisition of the non-controlling interest of Tigo Panama, $800 million to purchase property, plant and
equipment and $179 million to purchase intangible assets and licenses, and these items were partially offset by
proceeds of $10 million in dividends from joint ventures, $152 million from the disposal of subsidiaries and joint
ventures, and $21 million from the sale of property, plant and equipment such as towers and buildings. For the year
ended December 31, 2021, Millicom used $2,000 million in the acquisition of subsidiaries, $740 million to purchase
property, plant and equipment and $98 million to purchase intangible assets and licenses, and these items were
partially offset by proceeds of $13 million in dividends from joint ventures, $30 million from the disposal of
subsidiaries, $163 million from the disposal of equity investments and $11 million from the sale of property, plant
and equipment such as towers
Cash provided by financing activities was $1 million for the year ended December 31, 2022, compared to cash
used by financing activities of $1,777 million for the year ended December 31, 2021. For the year ended December
31, 2022, we repaid debt of $2,127 million and lease capital of $157 million while raising funds of $1,570 million
through new financing. We also issued new equity for a total net amount of $717 million. In 2022, we paid no
dividends and did not repurchase shares. In the year ended December 31, 2021, we paid no dividends, used $50
million for share repurchases, and repaid debt of $1,335 million and lease capital of $137 million while raising funds
of $3,113 million through new financings.
67
Group Capital expenditures and commitments
Our capital expenditures of property, plant and equipment, licenses and other intangibles on a consolidated basis,
including accruals for such additions at the end of the periods, for the years ended December 31, 2023, 2022, and
2021 are set out in the table below. Our capital expenditure mainly relates to the growth of the 4G network, the
rollout of the HFC network, connection of new homes, IT investments and spectrum.
Year ended December 31
2023
2022
2021
(U.S. dollars in millions)
Additions to property, plant and equipment .......................................
Additions to licenses and other intangibles .........................................
Total consolidated additions ................................................................
693
522
1,215
823
345
1,167
787
164
951
As of December 31, 2023, we had commitments to purchase network equipment, other fixed assets and intangible
assets with a value of $350 million from a number of suppliers, of which $254 million was within one year and $95
million more than one year. Out of these commitments, $18 million relate to the Group’s share in joint ventures
($18 million within one year). We expect to meet these commitments from our current cash balance and from cash
generated from our operations.
Financing
We seek to finance our operations on a country-by-country basis when we determine it to be more cost and risk
effective. As local financial markets become more developed, we have been able to finance increasingly at the level
of our operations in local currency and on a generally non-recourse basis to MIC S.A. As of December 31, 2023, 64%
($4,309 million) of our total consolidated debt of $6,697 million (excluding lease liabilities, but including vendor
financing) was at the operational level (excluding our Honduras joint venture) and generally non-recourse to MIC
S.A., and 42% of this debt was denominated in local currency. In addition, as of December 31, 2023 our joint venture
in Honduras had $360 million of debt excluding lease liabilities which was non-recourse to MIC S.A. From time to
time, we may provide support to our subsidiaries and service indebtedness that is held at the operational level.
Consolidated indebtedness
Millicom’s total consolidated debt and financing (that is, excluding lease liabilities but including vendor
financing) as of December 31, 2023 was $6,697 million (December 31, 2022: $6,804 million). Our total consolidated
net debt (representing debt and financial liabilities, including derivative instruments (assets and liabilities), less cash
and pledged and time deposits) was $5,956 million (December 31, 2022: $5,799 million).
Millicom's lease liabilities as of December 31, 2023 were $1,043 million. 99% of our consolidated lease liabilities,
or $1,035 million, was at the operational level (excluding our joint venture in Honduras) and non-recourse to MIC S.A.
Including lease liabilities, Millicom's total consolidated financial obligations as of December 31, 2023 were $7,739
million (December 31, 2022: $7,820 million). Our total consolidated net financing obligations (that is,net debt plus
lease liabilities) were $6,999 million (December 31, 2022: $6,815 million). In 2023, the definition of net debt changed
to include derivative financial instruments in order to have a more comprehensive view of our financial obligations.
2022 figures have also been represented accordingly.
See note C.6. to our audited consolidated financial statements included elsewhere in this Annual Report for a
reconciliation of total consolidated debt and financing to total consolidated net debt. Our consolidated interest and
other financial expenses for the year ended December 31, 2023 were $712 million and for the years ended December
31, 2022 and 2021 were $617 million and $495 million, respectively.
The following table sets forth our consolidated debt and financing by entity or operational entity location for the
periods indicated:
68
MIC S.A. (Luxembourg) ..........................................................................
Latin America:
Guatemala ..............................................................................................
Colombia ................................................................................................
Paraguay ................................................................................................
Bolivia .....................................................................................................
El Salvador .............................................................................................
Costa Rica ...............................................................................................
Nicaragua ...............................................................................................
Panama ..................................................................................................
Africa:
Tanzania (i) .............................................................................................
Total debt and financing ....................................................................
(i) Divested upon the completion of the sale of our operations in Tanzania.
December 31,
2023
2022
2021
(US$ millions)
2,388
2,573
4,020
1,463
1,465
713
665
246
174
142
148
759
605
678
260
173
128
147
773
605
802
751
310
100
121
—
846
—
6,697
—
6,804
188
7,744
For a more detailed description of our outstanding financial obligations, including our credit facilities and
outstanding bond or note issuances, see note C.3. to our audited consolidated financial statements.
Our financing facilities at the MIC S.A. level are subject to a number of financial covenants including leverage
covenants. In addition, most financings at the MIC S.A. level contain restrictions on sale of businesses or significant
assets within the businesses.
Our financing facilities at the operational level are subject to a number of financial covenants including leverage
and restricted payment covenants, and in certain cases, debt service coverage and debt to earnings covenants. In
addition, some of the financings at the operational level contain restrictions on sale of businesses or significant
assets within the businesses.
From time to time, we repurchase certain outstanding indebtedness at both the MIC S.A. level and the
operational level. During 2023, MIC S.A. repurchased in the open market approximately $16 million of its 4.500%
Senior Notes due 2031, Comcel repurchased approximately $49 million of its 5.125% Senior Notes due 2032 and
Cable Onda repurchased approximately $16 million of its 4.500% Senior Notes due 2030. See Note C.3.1. to our
audited consolidated financial statements. We and our subsidiaries expect to continue to repurchase debt in pursuit
of our leverage target, and may do so in the open market, in privately negotiated transactions, through tender or
exchange offers, or otherwise, and we and our subsidiaries may redeem debt that we or they are permitted to
redeem under its terms.
Indebtedness of joint ventures
With respect to the Honduras joint venture, total debt excluding lease liabilities as of December 31, 2023 was
$360 million. As of December 31, 2023, our joint venture in Honduras had lease liabilities of $61 million. The total net
debt (representing debt and financial liabilities, including derivative instruments (assets and liabilities), less cash and
pledged and time deposits) was $313 million. Annual interest expense for the Honduras joint venture for the years
ended December 31, 2023, 2022 and 2021 was $29 million, $29 million and $34 million, respectively.
The following table sets forth the debt and financing of the Honduras joint venture for the periods indicated:
Honduras ...............................................................................................
422
357
340
December 31,
2023
2022
2021
(US$ millions)
69
The financing facilities of the Honduras joint venture are not subject to specific financial covenants. However,
some of them contain covenants or restrictions on sale of businesses or significant assets within the businesses.
With respect to our operations in Guatemala (former joint venture, see note A.1.2. to our audited consolidated
financial statements) interest expense for the period ended November 12, 2021 was $52 million.
Off-Balance Sheet Arrangements
As of December 31, 2023, the Millicom 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 $505 million with $6 million
pledged deposits for these debts and financings as of December 31, 2023. The table below details the maximum
exposure under these guarantees and their remaining terms, as of December 31, 2023.
Theoretical maximum exposure
505
15
322
169
Total
Less than 1
year
1-3 years
3-5 years
(US$ millions)
Trend Information
For a discussion of trend information, see “—Operating Results—Factors affecting our results of operations.” and
“—Operating Results—Factors affecting comparability of prior periods."
70
NON-FINANCIAL INFORMATION
Content
Non-Financial Information considers our 2022 materiality assessment (updated in 2023 on an internal basis
following the double materiality within the Corporate Sustainability Reporting Directive (CSRD). Our Annual Report is
mapped against Global Reporting Index (GRI) and Sustainable Accounting Standards Board (SASB) standards and we
annually publish an overview as per the Task Force on Climate-Related Financial Disclosures ('TCFD') in our CDP Report.
We also issue ESG related standalone documents that complement this section such as our Law Enforcement
Disclosure Report ('LED') and our EU Taxonomy report. Millicom engages Ernst & Young S.A., Luxembourg to conduct
independent assurance of selected ESG data.
ESG Approach
Our purpose is to build the digital highways that connect people, improve lives and develop our communities.
Fueled by our employees' passion and commitment, we have integrated our environmental, social and governance
(ESG) strategy through every part of our business. As our market leadership grows through the adoption of digital
technologies, our ability to create even greater environmental, social, educational and economic opportunities
increases dramatically. Our ESG strategy articulates our approach to improving lives, strengthening communities,
reducing our environmental impact and governing our business with integrity.
We believe our ESG approach and initiatives will help us chart a path for sustainable growth and create long-term
value for our stakeholders.
Our ESG approach was announced back in 2021. In 2022 we applied concrete actions (such as announcing new
2030 GHG emissions reduction and DE&I targets) to hold ourselves accountable to the environmental and social
progress and continued progress in key priority areas such as energy efficiency, digital education, talent strategy,
information security, supplier engagement, and ethics and compliance. Our approach has been reaffirmed by the
results of our 2022 materiality assessment.
In 2023, we have achieved big steps in our commitment to grow our business in a sustainable and responsible
way, where the AGM approved the allocation of a 10% ESG metric based, long-term incentive target (See
compensation section). We have also signed the pledge regarding the Rule of Law contributing to more sustainable
business environment in certain countries of Central America. We have also issued our first Report on eligibility and
alignment with the EU taxonomy regulation, launched a group-wide Human Rights Policy, which highlights our
commitment to protecting the rights of our customers, workforce, and stakeholders and followed our roadmap to align
our ESG disclosures with current changes to the EU Taxonomy, the effective CSRD legislation (that would become
applicable for us for financial year 2024) and upcoming SEC climate-disclosure proposed rules. We will report on our
2023 financial year EU Taxonomy eligibility and alignment in a separate report in mid-2024.
71
ESG Governance
Our Board of Directors oversees our ESG strategy. The ESG umbrella at Millicom covers multidisciplinary activities
and elements from areas such as Factory, Legal, Corporate Governance and Compliance, External Affairs, Finance and
Procurement, Technology and Information, and Human Resources. This governance structure embodies the depth and
materiality of ESG topics and the importance of monitoring their interconnected risks and opportunities. Our ESG
portfolio is managed by the Chief External Affairs Officer, who—together with the CEO and the other EVPs—deliver
updates on the ESG strategy to the Board and the rest of the Executive Team. To deal with upcoming ESG regulation,
Millicom has in place a monthly ESG SteerCo, with members of Finance, Legal and External Affairs.
Stakeholders Engagement and Materiality Assessment
Stakeholders Engagement
Our stakeholders help us identify our most material ESG topics. We use their feedback to evaluate our ESG
approach and strategy and feed our ESG annual report content.
Our key stakeholders
We engage a diverse group of stakeholders to inform our purpose, strategies and actions—from the customers who use
our services, to the communities we work in, to the employees and investors who make everything we do possible. We strive
to operate a business that creates shared value for the four key groups that are critical to our business success:
investors, customers. employees, and communities. We communicate regularly with these and other stakeholders, at
both the global and country levels, through multiple channels (such as in-person meetings, surveys, calls and others)
We also analyze yearly questionnaires and assessments from ESG rating agencies. This helps us monitor our
performance and address gaps in our reporting.
Our approach towards our key stakeholders can be briefed as follows:
Investors: We believe Millicom can serve as an investment vehicle for development in Latin America, helping us tap into
the region’s tremendous potential and strengthen our business. As our fixed and mobile networks reach more communities,
we aim to continually grow our revenue and cash flow to create sustainable value for shareholders.
Our CEO and other executives participate in regular “road shows” to meet with investors on topics such as
Millicom’s risk management framework and the company’s financial and non-financial performance. This year, we
noted an increase in ESG inquiries, focused on external reporting, climate change, digital education, diversity,
equity and inclusion and our ESG-Linked financing.
Customers: Our digital highways empower people and businesses to aim higher, achieve more and reap the benefits of
the digital economy. 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.
We conduct global and country-level surveys to help enhance our customer service platform.
Communities: We depend on the communities in Latin America as deeply as they depend on us. Through our ESG
initiatives, we create new social and economic opportunities and reinforce Millicom’s standing in the community. We also
partner with and/or sit on the board of leading multi-stakeholder bodies and NGOs to amplify our long-term impact, including
the Partnership for Central America (PCA), the ITU/UNESCO Broadband Commission for Sustainable Development, the
Meridian International Center, IREX, the U.S.-Colombia Business Council and the U.S. Chamber of Commerce.
Examples of interaction with communities include our participation in ESG events, our engagement with
NGOs and others (i.e.: think tanks, academia and other experts) and input gathered from community partners
who work with us and users of our Responsible Leadership in Action programs (such as child online protection,
'conectadas', 'maestr@s conectados' and others.
Employees: We fulfill our purpose by sustaining an inclusive corporate culture that attracts talented people, values their
diversity, inspires them to excel and rewards their accomplishments. Our culture is driven by what we call Sangre Tigo. It’s 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.
72
We engage employees through surveys, town hall meetings and our Sangre Tigo workshops. These
interactions provide insights on topics such as organizational culture, values, and diversity and inclusion.
We also work closely with our suppliers to strengthen our supply chain (see Section starting on page 75 for further
details).
Materiality Assessment
The purpose of our materiality assessment is to ensure we consider and report on the key ESG issues that matter to
our stakeholders, impact our business and to ensure that our ESG and business strategy meets current needs and
expectations.
To do so, we committed back in 2018 (where we set a 5-year plan with targets and commitments) to re-perform
our materiality assessment every 2 years. Each assessment builds on the results and lessons learned from the previous
one, effectively leading to a cycle of continuous look-backs and improvement. Our last Materiality Assessment has
been performed in 2022 (updated in 2023 on an internal basis following the double materiality within the CSRD). Our
next materiality assessment is planned for 2025 (in 2024, we will be focusing on CSRD disclosure requirements
compliance following our detailed roadmap for CSRD, based on materiality determined thresholds). The Chief of
External Affairs supervises the Materiality Assessment process.
Further details can be found on: https://www.millicom.com/what-we-stand-for/esg-reporting-center/.
Environment
As the threat of climate change has grown more urgent, we have accelerated our climate ambition to create
a Net Zero future for our company and have sustainable digital highways. Our aggressive GHG emissions
reduction targets, validated by the Science-Based Target initiative and publicly announced, provide a clearly
defined pathway for reducing our climate change impact. A target is considered science-based if it is in line with
the latest climate science on achieving the goals of the Paris Agreement, which seeks to limit global warming to
well-below 2° C above pre-industrial levels and if possible, 1° C . Millicom is one of the few telecom companies in
Latin America to have their science-based targets validated. We set more ambitious targets for our Scope 1 and 2
emissions, as these are the areas over which we have the most control. We have set a more conservative target
and timeline for our Scope 3 emissions, which are our most significant emissions drivers but where we have the
least control. (Scope 3 GHG emissions are derived from assets not owned or controlled by Millicom but impacting
through our value chain.) This will allow us the time to form partnerships with authorities, competitors and
suppliers on integrated strategies for reducing emissions.
Our Consumer Premise Equipment end-to-end recovery target gives a baseline to strengthen our circular
economy practices.
Our Commitments
◦
Develop and implement a comprehensive strategy for climate change mitigation and resilience that
covers Tigo operations and our wider value chain.
◦ Measure waste streams, including the reuse and recycling of consumer devices.
Our Goals
◦
◦
Reduce absolute Scope 1 and 2 market-based GHG emissions by 50% by 2030 from a 2020 base year and
absolute Scope 3 GHG emissions 20% by 2035 from a 2020 base year. Achieve net-zero emissions by 2050.
Reach an end-to-end recovery rate of 76% of Consumer Premise Equipment* ("CPE") by 2024.
Our 2023 Actions
GHG Emissions (including Energy Consumption)
Implement investments to reduce Millicom’s (Scope 1 and 2) GHG Emissions
73
◦
Solar Panels: We are actively expanding our network of rural sites in Colombia, reaching as of December 31,
2023 an area of over 40,000 square meters, with 712 sites and more than 17,000 photovoltaic solar panels in
place, generating approximately 300 MWh per month. Our initiative is dedicated to extending connectivity to
entirely rural populations in Colombia, offering them access to mobile and the internet service for the first
time. These antennas powered by solar panels operate autonomously, functioning independently of the
commercial grid and without the constant use of power generators, playing a vital role in providing
connectivity to rural areas without grid access, while expanding our customer base, reducing fuel
consumption, and mitigating the need to purchase electricity from the grid in a volatile energy market. We
also have solar panels in Nicaragua, operating autonomously for mobile sites and generating approximately
50 MWh per month.
◦ More Fiber (less energy): We continued with our deployment of Fiber-to-the-Home (FTTH), which is a passive
network with a much lower energy consumption in comparison with traditional cable networks (HFC).
The expected power reduction with FTTH rollout is around 70% to 80% in comparison with a similar rollout on
HFC Network.
Carry-out energy-efficiency and energy-savings initiatives
We are carrying out energy-efficiency and energy-saving initiatives in many of our operations to reduce our
electricity use. This includes modernizing and consolidating our data center equipment and infrastructure and
investing in newer, more efficient technologies. Our near-term priorities in every case are to decrease our energy
consumption per unit of traffic while simultaneously delivering more and better services to our customers.
◦
Energy as a Service ("EaaS"): The EaaS model is based on photovoltaic power systems that generate and
supply Direct Current loads while reducing generators operating hours and commercial grid consumption. As
of December 31, 2023, and apart from the EaaS model in place in Colombia described above and contracted as
PPA as indicated below) , we have EaaS contracts in place in Honduras (with implementation phase starting in
2024, for approximately 600 cell sites).
◦ Mobile RAN Network Modernization: Since 2018, we have been incorporating energy-saving features across
Millicom through our Mobile RAN Network Modernization project. During 2023, we created a standard global
guideline for the fine tuning of power-saving features to increase the savings we already achieved in the basic
configuration.
Increase the use of Market Instruments for Renewable Energy
When available, we use market instruments such as Power Purchase Agreements ("PPAs") and Renewable Energy
Certificates ("RECs") to partially offset GHG emissions associated with our electricity use with guaranteed sources of
renewable energy. Renewable energy from these instruments currently accounts for a small percentage of our total
energy consumption. Where these instruments are not available, we rely solely on the energy mix used by national
grids for our electricity. Paraguay and Costa Rica generate high proportions of their electricity from renewable sources,
resulting in lower Scope 2 emissions market-based for our operations in these countries, but that is unfortunately not
the case in many of our other markets. As governments begin to loosen restrictions on energy-related public-private
partnerships, we expect to pursue renewable energy for our operations more aggressively.
◦
◦
PPAs: In 2023, we continued to use PPAs in Panama and we implemented also their use in Colombia. Under
these PPAs, we partially power our mobile and fixed networks with electricity guaranteed to be generated
from renewable energy sources, such as hydroelectricity or solar energy, thus avoiding any direct emissions. In
2023, we procured 26,023MWh through PPAs in Panama and 2,747 MWh in Colombia. We will continue to
negotiate new PPAs as they become available in our countries of operation.
RECs: In 2023, Tigo Colombia certified 33,220 MWh of its grid electricity consumption through RECs, verifying
that the energy was generated from renewable sources and fed into the national grid. Our procurement of
renewable energy may help the countries in which we operate meet their own climate commitments, such as
Colombia’s pledge to reduce GHG emissions by 51% by 2030.
Look for joint actions with Suppliers to reduce Scope 3 GHG Emissions
◦ We continued our engagement with key suppliers to look for joint action to reduce our Scope 3 emissions.in
Purchased Goods & Services, Capital Goods and Use of Sold Products categories.
74
Circular Economy (including e-waste management)
Implement circular economy practices
Our organization runs a comprehensive global e-waste valorization program, known as the Customer Premises
Equipment ("CPE") Recovery Program. Our primary goal is to recover a substantial portion of the equipment used by
our broadband and cable customers when they terminate or upgrade their services. Once retrieved, the equipment is
either redeployed in the field, repaired, refurbished, or responsibly recycled. This effort has saved us over $130 million
in new CPE purchases in 2023 and helped us avoid potential supply disruptions. Additionally, our reverse logistics
process deliver substantial environmental benefits, including reducing landfill waste, resource consumption and CO2
emissions related to new CPE manufacturing, and conserving water through plastics reuse.
In 2023, we achieved an 84% end-to-end recovery rate, surpassing our 2023 target of 75%. Based on our 2024
business outlook and our mix of CPEs, we have set the goal for 2024 at 76%. We prioritize enhancing collection rates
and our laboratory's success rate for refurbishing CPEs in all our Tigo operations (including Honduras). Our strategies
include minimizing the time between customer disconnects and CPE retrievals, offering convenient options like after-
hours recollection and text-based appointment scheduling, and optimizing the efficiency of our recovery labs.
Society
Technology and the internet wield immense power, offering a world of opportunities for both our people and the
communities we serve. This influence extends from equipping individuals with digital access (like in our case for
Colombia, where through Off-Grid solar powered sites, we provide connectivity to rural areas without grid access) and
education, to fostering an inclusive work environment and driving economic development in our markets. Our Sangre
Tigo Culture is ingrained in everything we do, and our aggressive and public goals for Diversity, Equity and Inclusion
serve as a well-defined roadmap to guide us toward creating a truly inclusive work environment.
Our People, Sangre Tigo
Our purpose is brought to life through our Sangre Tigo Culture - the DNA of our business success. The talent,
commitment and dedication of our 16,527 employees and approximately 8,800 contractors resonate throughout the
company, creating a diverse and inclusive workplace that empowers them to excel. Our Customers can distinctly
identify this unique culture in our unwavering commitment, where we go above and beyond, giving 1,000% to meet
their needs. We invest in our people and in the continuous improvement of our Sangre Tigo culture each year—from
employee training, leadership development to immersive communications emphasizing the meaning of “We are one
Tigo.”
Creating development opportunities for leaders to take ownership of Sangre Tigo remains a top priority. In 2021,
we developed the Sangre Tigo Leader Success Profile, a comprehensive framework delineating the essential leadership
attributes and behaviors required to grow our culture in a manner that aligns with our
long-term vision. In 2023, we evaluated our top leadership against our Success Profile, through 360º assessments (with
feedback from their direct reports and peers) about their leadership style. This initiative helps us identify leaders’
strengths and weaknesses, identify leadership gaps and provide targeted feedback.
We also continued the implementation of awareness and communication campaigns to reinforce our culture, our
diversity program and our policies.
Our Workplace
Fostering a positive work environment is one of our top priorities. There is a reason why we have been awarded
multiple times as a great place to work in Latin America. Every year, we analyze employee's feedback to understand
our strengths and focus areas for continuing evolution. We consider their feedback to create action plans globally, by
country and by functional areas. 2023 was a year of challenge for us as we started with the implementation of Project
Everest, a comprehensive program reorganizing Tigo’s organizational structure to become more agile and efficient.
We have reorganized our central and local work functions, which will continue during 2024 to get a leaner
organization with clear benefits for all our stakeholders by the end of this program. Despite this saving initiative, we
kept working on the following priorities:
Opportunities for all: We continue to build a better workplace by optimizing our HR system so we can make
faster, smarter decisions. We have a single integrated system of record with automated analytics and insights to
identify trends at a deeper level—such as increased attrition or the presence of gender pay gaps in specific job roles—
and make faster, more informed workforce decisions. With this single system we keep up-to-date records on
recruitment, training and promotion providing a transparent view of opportunities for our employees and their
progression.
75
We provide competitive compensation packages, that are regularly reviewed to ensure they are in line with or
superior to industry standards for pay and benefits. Our HR team works closely with our executive team to devise new
ways of accelerating talent attraction and retention. Our diverse and inclusive work environment and Sangre Tigo
culture provides the platform for equal opportunities for all.
Professional Development: We provide professional development opportunities through technical training
programs and certifications, such as Data & Analytics, Agile, Cloud, and also through corporate training (such a DE&I.,
Cybersecurity and Compliance and Data Privacy, which was recognized by the UN as an SDG best practice).
We complement the professional development content by integrating more than 20.000 courses from technical
training allies. To broaden female talent, we offer development programs for women in technical careers and
leadership development. We are also building our internal talent pipeline by recruiting through Young Professionals
programs and offering technical internships with opportunities for permanent placement. In order to efficiently give
opportunities to all employees, we launched MyMentor (internal mentoring open program) and MasterTrainers
(masterclasses developed with internal experts to scale and manage knowledge).
Hybrid Work Model: Developed in response to the pandemic, our hybrid work model empowers both employees
and managers with the freedom to align their professional and personal aspirations. Across nearly all our global
officers, we offer the flexibility for our workforce to work during a portion of the work week by providing digital tools
and guidance to stay productive at home or the office.
Our Workforce
Employees breakdown
by location
December
2023
Employees breakdown
by Age Group
December 2023
- In %
Bolivia
Colombia
Costa Rica
El Salvador
Guatemala
Centrally-managed
activities
Honduras
Nicaragua
Panama
Paraguay
Total
2,020 Under 30 years
3,389
30-50 years
425 Over 50 years
650
Total
24 %
68 %
8 %
100 %
Employee Breakdown
by Type of Worker
December 2023
- In %
Fixed Term / Temporary
Permanent
5 %
95 %
100 %
2,632
1,066
785
394
1,619
Total
3,547
16,527
Footnote: Fixed term/temporary comprises workers with temporary visas/work permits and workers whose end date is
defined as part of the employment contract.
Diversity, Equity and inclusion
Our Diversity, Equity and inclusion Commitments
Build an inclusive work environment that is representative of our workforce, the markets where we operate
and the customers who we serve, promoting a culture of inclusion through policies, procedures and regular
training, as well as activities that foster employee collaboration and enhancing employee wellness and growth
through policies, programs and practices designed to support their professional aspirations and personal
development.
Our Diversity, Equity and inclusion Goals
◦
◦
◦
50% of women at all levels of the organization.
50% gender balance in upper management positions globally.
100% of trained employees on DE&I, annually.
76
Our Diversity, Equity and inclusion 2023 Actions
As of December 31, 2023, 41% of our employee base are women with 38% women within our upper
management positions. These results are a consequence of multiple initiatives carried out in 2023 to help us
meet our DE&I goals.
Some of these initiatives include: expansion of DE&I objectives to all General Managers in our countries, with STI
impact; monitoring of female talent representation in the final slate of candidates for job openings; the launching of
female development programs (in countries like Honduras and Colombia) to advance women's careers; monitoring of
DE&I goals through dashboards that provide monthly progress by country, function and job level; the implementation
of "employee' DE&I councils" in certain of our operations to help identify gaps in the DE&I approach and make
improvements; a comprehensive framework defining success in DE&I, including suggestions for each targeted
segment: LGBTQ+ community, Women, People with disabilities, and new generations.
During 2023. we continued working on annual communications campaigns, panel discussions and workshops.
For example: 1) In celebration of Women’s History Month, we launched a communications campaign that highlighted
women’s voices from across our operations; 2) We launched our annual DE&I “Sin Etiquetas” campaign, which aims to
amplify the voices of three specific communities: Women, LGBTQ+, and people with disabilities; 3) We participated in
the annual pride parade in Miami and El Salvador.where we were part of the first five companies to participate in this
event.
As of December 31, 2023, 96% of employees had completed the DE&I training. The content was focused on
exploring DE&I concepts, including how to build awareness of and overcome unconscious bias in the workplace.
Employee Health & Safety
Our HSE strategy
Safeguarding the well-being of our employees and contractors as well as working in safe work environments
without impacting the environment are the main our main Health, Safety and Environment ("HSE") objectives. We base
our criteria on local workplace safety regulations as well as our own requirements, as set out in our group-level Health
and Safety documentation, which is based on industry best practice.
Our 2023 HSE actions
In 2023, our operations focused on strengthening the culture of health and safety at work, emphasizing our high-
risk activities and the promotion of healthy lifestyles.
We worked on the standardization of the HSE processes of all our operations and successfully implemented a
training for contractors (that included high-risk activities, such as work at height, electrical risk and rescue at heights).
Our HSE country leaders Local HSE leaders conducted compliance audits of ISO 45001 and ISO 14001 in different
countries of the ones they are based. To prevent and avoid recurrences in our operations, we have implemented Safety
Stops, to share with operational areas and contractors lessons priorly learned. We have also worked on the inventory
of refrigerant gases to improve their control and carried out other activities such as, emergency drills and training of
our work teams based on risk assessments.
We trained our HSE teams on ISO 3100:2018 Risk Management and Comprehensive Greenhouse Gas and Carbon
Footprint Program.
Our 2023 HSE Performance
In 2023, we experienced six contractors' fatalities and one permanent contractors' disability event related to pole
installation, maintenance and antenna construction. All work-related incidents involving injury or death are thoroughly
investigated. For more information, refer to the Performance Tables section, starting on page 81.
Data Privacy and Freedom of Expression
As an international telecommunications and media group providing digital lifestyle services in emerging markets,
we take seriously our responsibility to respect people’s dignity and safeguard their rights, including freedom of
expression and privacy. This extends to how we handle personal and confidential data for millions of customers to the
77
workplace standards we uphold and how we balance our respect for customers’ rights with our duty to comply with
local laws in the countries where we operate.
Data Privacy
In 2023 we continue to be a Data Privacy Champion of the National Cybersecurity Alliance, a non for profit
organization dedicated to empowering individuals and encouraging businesses to respect privacy, safeguard data and
enable trust. This organization works together with other industry participants to raise public knowledge of best cyber
security practices and make those practices easier and more accessible.
Our Privacy Statement, where visitors can learn how we use, process and protect personal data, is publicly
available here. Country-specific websites included therein provide users with detailed information regarding our
privacy practices. Channels and contact points for users to raise privacy concerns are disclosed in such Privacy
Statement.
Millicom employees are required to participate in our data privacy training. In 2023, we launched an online Code of
Conduct and Data Privacy training to train our employees to protect our customers’ and our colleagues’ privacy. More
information on our Code of Conduct and Data Privacy training and on cybersecurity is disclosed on page 80. We also
continued to promote awareness regarding online privacy practices and provide educational resources to help our
employees learn how to mitigate risks and keep privacy and information security top of mind.
Freedom of expression
Freedom of Expression issues continue to grow in relevance and importance in the context of an increasingly
digital and interconnected world. Local laws require us to disclose information about our customers to law
enforcement agencies and other government authorities in connection with their legitimate duty to protect national
security and public safety, or to prevent or investigate crimes such as acts of terrorism. Whenever we face a
government request for customer information, we seek to minimize the impact of that request on our customers’ right
to privacy and freedom of expression. Before we respond to any legal demand, we determine that we have received
the correct type of demand based on the applicable law for the type of information sought.
Moreover, when any conflict arises between a local law and the United Nations’ Universal Declaration of Human
Rights or other international human rights standards, we strive to resolve that conflict in a manner that respects their
right to privacy and freedom of expression, as well as their fundamental right to access the internet and
communications services. Our 2023 Law Enforcement Disclosure (LED) Report summarizes the extent and context of
our interactions with law enforcement agencies and governments on issues that affect the privacy or freedom of
expression of our customers.
Supply Chain
Our Supply Chain Strategy
We seek to work with suppliers that understand and share our values and are aligned with our social and
environmental strategy. We do business with over 6,500 suppliers of all sizes across all markets where we operate in
Latin America. Through them, we have an indirect, far-reaching environmental and social impact. We seek to
consciously address this impact by building long-term relationships that are mutually beneficial at the group and local
level, and that are in accordance with our legal and compliance obligations.
Our Supplier Code of Conduct sets core expectations in the areas of compliance with laws; environment; fair labor
and human rights; health and safety; and business ethics. Our suppliers are expected to adhere to our code, which we
revise regularly to ensure its continued relevance.
Our 2023 Actions
We continually provide training to key suppliers and our procurement teams on ESG topics material to our
business. In 2023, we have defined eligible suppliers for training as: those with group spend above $1 million and
other strategic suppliers. This definition excludes vendors with a high EcoVadis rating, previous year's participants and
vendors in excluded categories (such as competitors, content dealers, financial services, government entities,
insurance, interconnection, leasing, legal and tax advisory, sponsorship and utilities). Our supplier training in 2023
included content on our expectations for reducing GHG emissions in line with our announced climate commitments
back in 2022. We also identified and engaged key vendors among our top Scope 3 emissions categories to begin
working toward shared emissions reduction goals.
We continued to encourage suppliers to get an EcoVadis rating so they are evaluated by an independent third
party in key ESG areas.
78
Our 2023 Performance
Please refer to the Performance Tables on starting on page 81 for specific information on our public commitments and
performance.
Digital Education / Inclusion:
Our Digital Education / Inclusion Commitments:
◦
◦
◦
Continue driving and implementing a regional strategy to advance digital literacy and inclusion through
educational programs on basic and advanced digital knowledge and entrepreneurial skills.
Continue expanding our COP education program to reach more children, adolescents, parents, teachers
and caregivers.
Continue bringing internet connection to schools and public institutions in vulnerable communities
throughout Latin America through collaborative partnerships with local governments and NGOs.
Our Digital Education / Inclusion Goals:
◦
◦
◦
◦
◦
Train 400,000 women through our digital inclusion program by 2023 (with a target of more than 99,000
women for the year 2023).
Train more than 84,000 teachers and educators in 2023.
Reach 120,000 volunteer hours for COP-related programs by 2023.
Reach 700,000 children and adolescents; 200,000 parents and caregivers; and 70,000 teachers by 2023.
Provide internet to 1,300 schools and public institutions by 2023, reaching our set commitment with the
OAS ICT Alliance.
Maestr@s Conectad@s
In 2023, we trained 107,662 teachers. The program has so far trained 525,608 teachers.
We launched our Maestr@s Conectad@s (Connected Teachers) program in 2020 to strengthen digital education
systems impacted by the COVID-19 pandemic with the aim to build skills through teachers and educators, also
benefiting the growing community of digital students. The program, which is delivered through a web-based app,
offers a catalog of courses (endorsed by the Ministries of Education of Panama, Bolivia, Paraguay, Guatemala,
Nicaragua, Honduras and El Salvador) and is developed in collaboration with an international organization focused on
educational content ("AHYU") . Course topics include digital tools, PowerPoint, Canva, Zoom, educational innovation,
storytelling, gamification, use of social networks, digital tools for the classroom and neuroeducation.
In 2023, we carried out 3 regional masterclasses and 2 regional congresses, and we launched 5 new modules
(Digital platforms for an educational world; Designing educational presentations with Artificial Intelligence;
Technology and psychospaces; Dynamic tables and Excel tips; and Update and use your PC like a professional). The
modules can be accessed at www.maestrosconectados.com. Maestr@s Conectad@s was also highlighted as a case
study by GSMA in its SDG report. https://sdgreport2023.gsma.com/sdgs/sdg-17-partnerships-for-the-goals/
#casestudies-Millicom
Conectadas
A total of 170,413 women and girls received training through our program Conectadas in 2023 and a total of
955,986 women and girls were trained since 2018.
Our Conectadas program has been providing digital literacy and entrepreneurship training to women and
adolescent girls in Latin America since 2017 and its reach has extended with the launch of our Conectadas web app in
2022. In 2023, we upgraded the platform infrastructure and added new content through a partnership with GSMA,
adding new content aimed at increasing women’s basic mobile and digital skills to help close the digital gender gap.
These and other modules are available for free at www.educacioncontigo.com.
In September 2023, our Conectadas program was recognized as runner up by the International
Telecommunication Union at the #SDGdigital GameChangers Awards Ceremony in Category 1: People – Empowering
Lives and Communities.
Conéctate Segur@
Tigo’s flagship Conéctate Segur@ program educates children, parents, teachers and caregivers on the risks and
opportunities of digital technology, giving children a safe way to learn, explore and grow through the creative and
responsible use of digital tools. In September 2021, Millicom and Fundación Real Madrid joined forces to promote
79
education and digital literacy to young people in our nine Latin American markets and the United States. The alliance’s
69 social sports projects provide children and young people with the tools, skills and knowledge to safely and
creatively experience the internet and to compete in the 21st-century job market. We contribute to the skills building
of the program participants through our flagship digital education program: Conectate Segur@, which raises
awareness on how to safely and responsibly use the internet . From 1 October, 2022 to 31 December, 2023, our
Conéctate Segur@ program benefited 125,375 children and adolescents which also include the beneficiaries of our
alliance with Fundación Real Madrid and benefited 67,656 parents, caregivers women and teachers with Tigo
employees having dedicated 8,992 volunteer hours to this Conéctate Segur@ program.
Governance
Management Governance
The Group embeds governance into the daily operations of all of its countries and its corporate functions. The
corporate functions set policies and procedures and manage their implementation and compliance in accordance with
our obligations and international best practices. Each function has clear reporting lines through to the Executive Team
and the CEO. Functions report to the Board committees based on the responsibilities of each committee. More
information on Corporate Governance can be found in section starting on page 105
Details on main Management Governance functions below:
Finance
Internal Controls
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 and Compliance 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.
To support our Sarbanes-Oxley program, we run a SOX 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 programs to ensure that
robust internal controls are an integral consideration in each program.
For information regarding Internal Control over Financial Reporting, see section starting on page 104.
Risk Management & Internal Audit
For information on Risk Management & Internal Audit, see sections starting on page 35 and on page 122 .
Procurement and Supply Chain Management
For information on procurement and supply chain management, see section starting on page 75.
Legal and Compliance
Corporate Compliance
Our corporate Ethics and 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 to prevent, detect and correct misconduct and wrongdoing. We measure the
actual impact of this program on our employees and company culture in the countries where we operate.
Our Ethics and Compliance function consists of global and local 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.
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. In 2023, we have
updated policy versions of Anti-Money-Laundering ("AML"), Sponsorships and Donations, Government Interactions,
Conflicts of Interest, and Gifts and Hospitality. Violations of the Code of Conduct and its related policies will result in
80
corrective action, up to and including dismissal or removal from office. We reserve the right to report violations of the
Code of Conduct that involve potentially illegal behavior to the appropriate departments or authorities.
We enhanced ethics and compliance knowledge through consolidated digital training provided in English and
Spanish. Employees and contracted staff received mandatory training on Compliance and Data Privacy, including the
Code of Conduct, Anti-Corruption, Data Privacy, and AML policies 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. Compliance KPIs are part of the remuneration
package of all our General Managers and their direct reports.
Our Compliance Communication Plan for 2023 included monthly newsletters highlighting relevant compliance
news, monthly campaigns on various compliance policies, and celebration of the annual Corporate & Ethics
Compliance Week in November 2023.
Speak Up Policy and Issue Management
Whistleblower protection is integral to fostering transparency, promoting integrity, and detecting misconduct.
Millicom’s Code of Conduct and its Speak-up Policy require Employees and Third Parties to report in good faith any
wrongdoing they discover or learn about during the course of their work with Millicom. Violations or suspected
violations shall be reported through the Millicom Ethics Line, Millicom’s external and independent reporting service,
which is available twenty-four hours a day, seven days a week. Additionally, employees shall immediately report
violations, suspected violations, or questions regarding the Speak-up policy or any applicable law or regulation directly
to a line manager, Human Resources, or any member of the Ethics & Compliance Department. Speak Up is part of our
training program. The Company strictly prohibits retaliation against any Reporter who raises a concern in good faith.
Millicom considers retaliating against a Reporter who raises a concern in good faith a serious disciplinary offense.
Retaliation may lead to disciplinary action, up to and including termination of employment (for Employees) or
termination of the relationship with Millicom (for third parties).
We also conduct regular Speak Up campaigns as part of our communications program. Approximately 84% of the
inquiries and complaints recorded through our Speak Up program are related to Human Resources and Business
Integrity. We have a team dedicated to following up on concerns communicated through Speak Up and are committed
to addressing such concerns in a fair, impartial and efficient manner.
The Executive Team and the Audit and Compliance Committee of the Board received regular updates on cases
raised through the Ethics Line or other channels, and is updated on matters that may impact financial reporting or the
internal control environment.
External Affairs
For information regarding Sustainability and Climate Change, see section starting on page 73. For information
regarding Education, see section starting on page 75.
Technology and Information
Information Security
For information on Information security, see section starting on page 35.
Human Resources
For information on our HSE and DE&I see section starting on page 75.
ESG Performance Tables
We report our progress towards our ESG strategy, which includes the public commitments established in our five-
year plan (developed in 2018 as updated in subsequent years). These Performance Tables incorporate elements of our
2022 Materiality Assessment as per our latest engagements with internal and external stakeholders.
Unless otherwise stated, this section includes our Honduras joint venture as if it were fully consolidated, as this
reflects the way our management reviews and uses internally reported information to make decisions about operating
matters. It also includes our Guatemala operation. The majority of the ESG performance data is for the period from
October 1, 2022, to September 30, 2023, except where noted.
ESG Public Commitments Overview
81
Environment
Topic
Our Goals
Target
Develop and
implement a
comprehensive
strategy for climate
change mitigation and
resilience that covers
Tigo operations and
our wider value chain.
e
t
a
m
i
l
C
d
n
a
y
g
r
e
n
E
e
g
n
a
h
C
Reduce absolute Scope 1 and
2 GHG emissions by 50% by
2030 from a 2020 base year.
Target
Year
What We Did in 2023
2030 We continued working with a cross-functional team
throughout the year to scale energy-efficiency
initiatives, including maximizing savings due to
infrastructure modernization. We acquired 62,615 MWh
from renewable sources through PPA's (Panama and
Colombia and RECs (Colombia).
Reduce absolute Scope 3
GHG emissions 20% by 2035
from a 2020 base year.
2035 We continued our engagement with key suppliers in
Purchased Goods & Services, Capital Goods and Use of
Sold Products categories to look for joint action to
reduce our Scope 3 emissions.
d
n
a
e
t
s
a
W
-
e
y Manage and measure
m
waste streams,
o
including the reuse and
n
o
recycling of consumer
c
E
devices.
r
a
l
u
c
r
i
C
Reach an end-to-end
recovery rate of 76% of
Consumer Premise
Equipment* ("CPE") by 2024.
*Excludes obsolete
equipment that cannot be
reinserted.
Society
Topic
Our Goals
Target
1) Reach 400,000 women
trained through our digital
inclusion program by 2023 .
2) Reach more than 84,000
teachers trained in 2023.
2024 We surpassed our target with an end-to-end recovery
rate of 84% (target for2023 was 75%).
Target
Year
2023
What We Did in 2023
1) In 2023, we trained 170,413 women and we carried
out extensive updates on the Conectadas platform to
improve the user experience, reaching a total of
955,986 since 2018.
2) We also trained 107,662 teachers.
Our
Performance/
Status
In progress
In progress
Completed
Our
Performance/
Status
1) Completed.
2) Completed.
Implement regional
strategy to advance
digital literacy with
educational programs
on basic and advanced
digital knowledge and
entrepreneurial skills.
Continue our efforts to
prevent access to online
Child Sexual Abuse
Material (CSAM)
through our networks
by continuously
implementing blocking
mechanisms region-
wide and advancing
industry initiatives.
Expand Child Online
Protection (COP)
training through our
employee volunteering
program by creating an
online training platform
for all Tigo operations.
Continue our COP
education program to
reach more children,
adolescents, parents,
teachers and caregivers.
n
o
i
t
a
c
u
d
E
l
a
t
i
g
D
i
All operations implement
CSAM blocking mechanism by
2020.
2020
We have finished with the implementation of a
system that blocks CSAM sites in Panama. A system
that blocks CSAM sites is in place in our nine
countries of operation (including Honduras).
Completed.
Reach 120,000 volunteer
hours for COP-related
programs by 2023.
2023
As from 2018, our employees contributed over
180,000 hours of volunteering out of which 60,413
were dedicated to our COP program (approximately
50% of the target hours for this program).
Refocused.
Reach 700,000 children and
adolescents; 200,000 parents
and caregivers; and 70,000
teachers.
2023
As from 1 October 2022 to 31 December 2023,
including the results of our alliance with the Real
Madrid Foundation, we reached 125,375 children and
adolescents. We also reached 54,511 parents and
caregivers and 13,145 teachers through our
Conéctate Segur@ training program. We have
exceeded these goals.
Completed.
d
n
a
y
t
i
u
q
E
,
y
t
i
s
r
e
v
i
D
n
o
i
s
u
l
c
n
I
Build an inclusive work environment that is
representative of our workforce, the markets where we
operate and the customers who we serve.
Promote a culture of inclusion through policies,
procedures and regular training, as well as activities that
foster employee collaboration.
Enhance employee wellness and growth through
policies, programs and practices designed to support
their professional aspirations and personal
development.
2030
38% of women in managerial positions and 41% of
women across our employee base
In progress.
We continued focusing on awareness and education
through such activities as unconscious bias training
(where 96%% of employees received unconscious
bias training) , annual communications campaigns,
and panel discussions and workshops. DE&I
objectives are tied to GM bonuses and are included
in our Leader Success program. See further details in
our Society section starting on page 75.
82
n
i
a
h
C
y
l
p
p
u
S
Enhance due diligence
processes by including
sustainable
procurement criteria for
global strategic
suppliers.
Enhance due diligence
processes by including
sustainable
procurement criteria for
global strategic
suppliers.
Extend related training
to procurement team.
Train all suppliers with
Group spend >$1.0m by
2023, and measure their
progress on corrective
action plans through
sustainable
procurement platform
and audits.
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 100% of procurement
staff in responsible supply
chain management issues
related to our core risks.
Train all suppliers with Group
spend >$1.0m by 2023, and
measure their progress on
corrective action plans
through sustainable
procurement platform and
audits.
i
s Consolidate and enhance human rights policies and
t
h
g
R
practices covering privacy, freedom of expression,
supply chain and vulnerable groups to meet standards
of United Nations Guiding Principles on Business and
Human Rights.
l
a
t
n
e
m
a
d
n
u
F
2023
2023
88% of the global strategic suppliers in our updated
list have been vetted on our sustainable
procurement platform.As of 2024, we will continue to
encourage EcoVadis ratings, but we will also accept
other third party sustainability ratings.
Refocused.
34% of global strategic suppliers scored 45 or higher
on Ecovadis. As of 2024, we will continue to
encourage EcoVadis ratings, but we will also accept
other third party sustainability ratings.
Refocused.
2023
96% of our procurement teams have been trained on
responsible supply chain management.
In progress.
2023
We have continued to extend the training through
our supplier online learning platform. 92% of eligible
suppliers received training.
In progress.
2023
We launched a group-wide Human Rights Policy,
which highlights our commitment to protecting the
rights of customers, workforce and stakeholders. Our
policy outlines the seriousness with which we take
these issues and the robust governance framework
we have in place to safeguard our practices and
mitigate related risks.
Completed.
Read our Law Enforcement Disclosure (LED) Report for more on our approach to managing law enforcement requests and major
events.
83
Governance
Topic
Our Goals
Target
Target
Year
What We Did in 2023
Our
Performance
/Status
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.
e
c
n
a
i
l
p
m
o
C
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.
95% of Compliance &
Ethics training for active
employees yearly.
Respond within three
business
days to all Ethics Line
allegations submitted
through hotline.
Provide corrective action
recommendations for
each
Ethics Line case
substantiated through
the
investigation process.
2023
Maintain 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.
Our Performance
About Our ESG Metrics
Annual 100% of GMs and GM-1 have compliance KPIs built
Completed.
into their remuneration package.
Heatmap and KPIs scorecards have been presented
to the Audit and Compliance Committee as a way to
assess progress towards compliance objectives.
Annual
Annual 100% of employees completed the annual
mandatory training on Code of Conduct.
Completed.
Annual On average, we responded within three business
Completed.
days to each Ethics Line allegation submitted
through hotline.
Annual We provided corrective action recommendations for
each substantiated Ethics Line case. Each corrective
action was tracked through completion.
Completed.
Where a concern or allegation is substantiated,
investigation findings and recommendations for
corrective action are provided to the appropriate
review committee.
We updated several compliance policies and
procedures, and also upgraded our Third Party Due
Diligence platform, which serves as a repository and
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.
The Third Party Due Diligence tool are standardized
and accessible for our operations.
Completed.
These metrics reflect our 'Total Reportable Segment' definition, including Guatemala for all periods presented and Honduras
and excluding Africa (unless specifically stated). This is in alignment with the GHG protocol Operational control company boundaries
definition New key performance indicators will be reported in the following years, in accordance with the Corporate Sustainability
Reporting Directive.
2021 metrics were impacted by the ongoing COVID-19 pandemic. Therefore, some of the reported values may reflect atypical
variations.
Environment
E-waste for recycling through responsible waste management program (tonnes)
KPI
Total weight of e-waste for recycling through our responsible e-waste management
program (tonnes)
2021
2022
2023
3,285
5,044
7,274
The increase in 2023 relates principally to the migration project for copper dismantling in Colombia.
84
Energy use
KPI
Base station and fixed network sites
Energy from fuel (MWh)
Grid electricity (MWh)
Our fleet
Energy from fuel (MWh)
Data centers and offices
Energy from fuel (MWh)
Grid electricity (MWh)
Shops
Energy from fuel (MWh)
Grid electricity (MWh)
Total energy consumption (MWh)
Grid electricity (MWh)
Energy from fuel (MWh)
Total energy consumption (MWh) (*)
Out of which energy from renewable sources (MWh)
Scope 1 emissions (Tonnes of CO2e)
Scope 2 emissions (Tonnes of CO2e)
Scope 3 emissions (Tonnes of CO2e)
Energy from fuel is only fossil source energy consumption.
(*) For 2023, it includes 2,747MwH, generated by Solar Panels/ EaaS model.
2021
2022
2023
46,590
514,684
50,046
532,301
58,668
547,002
52,017
45,803
40,007
2,281
118,679
2,350
131,975
2,306
131,215
105
13,304
646,667
100,993
747,660
18,772
33,161
146,525
2,202,250
109
14,401
678,677
98,308
776,985
28,208
31,942
139,242
72
14,004
692,221
101,053
796,021
62,615
30,524
146,673
1,582,304
1,386,091
For 2023, Scope 1, 2 and 3 GHG emissions were calculated following the GHG Protocol Standard and by an expert third party (for 2022 and 2021, only Scope
3 was calculated by an expert third party).
For 2023, Scope 1 emissions include emissions from mobile and stationary combustion sources and fugitive emissions. Emissions from fuels, both from
mobile and stationary sources, were calculated using the UK Government GHG Conversion Factors for Company Reporting 2023. Fugitive emissions, which
are related to refrigerant leakage, were calculated using the global warming potential specified in the fifth assessment report. For 2022 and 2021, Scope 1
emissions include fugitive emissions using emission factors from the “Refrigerant & other” worksheet in the condensed set of the 2021 UK GHG Conversion
factors set. Emissions from fuel (motor diesel and gasoline) are calculated using the World Resources Institute (2015) GHG Protocol Tool for Stationary
Combustion (version 4.1) and the Mobile Combustion GHG Emissions Calculation Tool (version 2.6).
For 2023, Scope 2 emissions (market-based) was calculated using the Emission Factors from the International Energy Agency (IEA), considering values for
2023. Location-based Scope 2 emissions for 2023 was 159,860.35 Tonnes of CO2e. For 2022 and 2021, Scope 2 emissions (market-based method) were
calculated using Electricity Emission Factors from IEA, except in the case of Colombia.
For 2023, Scope 3 emissions (market-based) consider all applicable categories for Millicom. In more detail, the categories that contribute the most are
purchased goods and services (45%) and the use of sold products (25%), which together account for 70% of Millicom's Scope 3 GHG emissions. Categories
that are not applicable to Millicom include category 10 (Processing of sold products), 13 (Downstream leased assets) and 14 (Franchises). For 2022 and 2021,
Scope 3 emissions computation was performed with reference to the GHG Protocol methodology,
Society
Diversity and Inclusion
KPI
% of women in managerial positions
% of women across our employee base
Year ended December 31,
2021
2022
2023
39 %
41 %
40 %
42 %
38 %
41 %
85
Supply Chain
KPI
% of all suppliers who have signed the supplier code
% of procurement teams trained on responsible supply chain management
% of suppliers with Group spend >$1.0m trained on Millicom's ESG strategy and
requirements
2021
2022
2023
70 %
92 %
78 %
67 %
91 %
79 %
67 %
96 %
92 %
% of all suppliers who have signed the code of conduct is only for suppliers with a spend of over $25,000.Suppliers with a compliance program in place that's
considered equivalent to ours (not included above) for this exercise were approximately 5% for 2023.
As from 2022, % of procurement teams trained on responsible supply chain management is reported on a calendar year basis as opposed to past reporting
cycles, which went from October 1 to September 30 of the reporting year.
Suppliers considered for ESG training are those with a 2023 spend over $1M is reported on a calendar year basis excluding related parties, competitors,
utilities and government entities. Suppliers with an identified ESG robust program (Ecovadis score of 45 and above) are considered trained and included in
the above figure.
Health and Safety
KPI
Number of employee fatalities
Number of contractor fatalities
Number of lost time accidents for Millicom employees
Lost-time injury rate per 1,000 employees
Absentee rate (%)
2021
2022
2023
0
2
41
0.83
0
8
55
2.76
0
6
57
2.99
1.97 %
2.04 %
1.40 %
2021 HSE data includes our prior Tanzania operation.
Apprentices (students hosted due to government programs, work experience students on contracts of less than a year, unpaid interns etc.) are excluded from
employee metrics.
For details on the number of contractor fatalities and measures put in place, see section starting on page 75.
A lost time accident as shown above occurs when an employee takes one or more days of lost time due to injury. As from 2022, lost-time injury rate is
capturing all accidents that resulted in at least one day or more of lost-work time. For 2021, lost-time injury rate only captured incidents that involved 3 or
more days of lost work.
The absentee rate is the number of days of unplanned absences versus the average number of workdays in the reporting period, expressed as a percentage.
Digital Education
KPI
Women trained in digital inclusion programs ("Conectadas")
Teachers trained through Maestr@s Conectad@s program
2021
2022
2023
158,881
112,737
171,059
102,472
170,413
107,662
As of December 31, 2023, we exceeded our COP training targets (see corresponding public commitment above). As of December 31, 2023, 100% of our
countries of operation (including Honduras) have systems in place blocking child sexual content (see corresponding public commitment above).
Digital Inclusion & Social Investment
KPI
Monetary value of employee volunteering ($)
Volunteering hours
2021
2022
2023 (*)
138,174
228,464
389,952
13,525
25,909
36,449
(*) In 2023, these KPI's include volunteering hours for 4Q 2023 amounting to 3,599 hours (corresponding to a monetary value of employee volunteering of
$40,174), so as to align with our public commitment date of 31 December, 2023.
Fundamental Rights
KPI
Total number of law enforcement requests
Number of major events
2021
2022
2023
53,420
71,572
79,939
Year ended December 31,
2021
2022
2023
8
4
7
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. Read our Law Enforcement Disclosure (LED) Report for more on our approach to managing law enforcement requests and major
events.
86
Governance
Ethics
KPI
% of employees who acknowledged the Code of Conduct
% of employees who have completed the Code of Conduct training
% of operations (where) we conducted a compliance risk assessment
Year ended December 31,
2021
99%
99%
100%
2022
99%
99%
100%
2023
100%
100%
100%
Apprentices (students hosted due to government programs, work experience students on contracts of less than a year, unpaid interns etc.) are excluded from
employee metrics.
Corporate Governance is covered in detail in the section starting on page 105.
87
Report of the Independent Auditor
To the management of Millicom International Cellular S.A.
Scope
We have been engaged by Millicom International Cellular S.A. (“you”, “Millicom” or “the Company”) to perform a
‘limited assurance engagement,’ as defined by International Standards on Assurance Engagements (“ISAE 3000”), here
after referred to as the engagement in relation to the 2023 ESG report (the “Subject Matter”, the “Report”). As part of
this engagement, EY included in the independent third-party assurance report 16 KPIs.
Wave 1 (October 1, 2022
to September 30, 2023)
Wave 2 (Calendar year -
January 1, 2023 to
December 31, 2023)
Topic
Indicator
Total energy consumption from renewable
resources (MWh)
Total energy consumption (MWh)
Scope 1 emissions (Tonnes of CO2e)
Environment
Scope 2 emissions (Tonnes of CO2e)
Scope 3 emissions (Tonnes of CO2e)
% of Consumer Premise Equipment (CPE)
recovered upon service termination or
upgrades
Society
(Inclusion)
% of women in senior management
positions
Society
(Digital
Education)
Women trained in digital inclusion program
("Conectadas") [# women trained]
Teachers trained through of Maestr@s
Conectad@s program [# teachers trained]
Society
(Supply Chain)
% of suppliers with Group spend >$1.0
million trained on Millicom's ESG strategy
and requirements
Society
(Health and
Safety)
Society
(Fundamental
Rights)
Number of employee fatalities
Number of contractor fatalities
Number of lost time accidents for Millicom
employees
Lost-time injury rate per 1,000 employees
Number of law enforcement requests
Governance
% of employees who acknowledged the
Code of Conduct
Other than as described in the preceding paragraph, which sets out the scope of our engagement, we did not perform
assurance procedures on the remaining information included in the Report and accordingly, we do not express a
conclusion on this information.
Criteria applied by the Company
The Company is responsible for the Subject Matter to be prepared in accordance with standards outlined on its Report
integrated within the Annual Report mapped against the Global Reporting Initiative (GRI) and Sustainable Accounting
Standards Board (SASB) standards (“The Criteria”).
88
Company's responsibilities
The Company’s management is responsible for selecting the Criteria, and for presenting the information included in
accordance with that Criteria, in all material respects. This responsibility includes establishing and maintaining internal
controls, maintaining adequate records and making estimates that are relevant to the preparation of the subject
matter, such that it is free from material misstatement, whether due to fraud or error.
EY's responsibilities
Our responsibility is to express a conclusion on the presentation of the Subject Matter based on the evidence we have
obtained.
We conducted our engagement in accordance with the ISAE 3000 and the terms of reference for this engagement as
agreed with the Company on the 13th of December 2023. Those standards require that we plan and perform our
engagement to obtain limited assurance about whether, in all material respects, the Subject Matter is presented in
accordance with the Criteria, and to issue a report. The nature, timing, and extent of the procedures selected depend
on our judgment, including an assessment of the risk of material misstatement, whether due to fraud or error.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited assurance
conclusions.
Our Independence and Quality Control
We have maintained our independence and confirm that we have met the requirements of the Code of Ethics for
Professional Accountants issued by the International Ethics Standards Board for Accountants and have the required
competencies and experience to conduct this assurance engagement.
EY also applies International Standard on Quality Control, Quality Control for Firms that Perform Audits and Reviews of
Financial Statements, and Other Assurance and Related Services Engagements, and accordingly maintains a
comprehensive system of quality control including documented policies and procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulatory requirements.
Description of procedures performed
Procedures performed in a limited assurance engagement vary in nature and timing and are less in extent than for a
reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement
is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement
been performed.
A limited assurance engagement consists of making enquiries, primarily of persons responsible for preparing the
Subject Matter and related information and applying analytical and other appropriate procedures.
Although we considered the effectiveness of management’s internal controls when determining the nature and extent
of our procedures, our assurance engagement was not designed to provide assurance on internal controls. Our
procedures did not include testing controls or performing procedures relating to checking aggregation or calculation
of data within IT systems.
Our procedures included:
- Obtaining an understanding of the reporting processes for the Subject Matter, and obtaining insight into the systems
and methods used for collecting and processing data;
- Interviewing the relevant employees to gain insights into the processes to monitor, manage and report the required
information;
- Review guidelines for data collection, monitoring, measurement and reporting for the subject matter information;
- Analytical review of the data submitted by all locations for the selected disclosures, e.g. testing the completeness and
mathematical accuracy of conversions and calculations, methodologies and consolidation in line with the stated
reporting boundary;
- Performing a review of the information included in the Subject Matter, developing an assurance plan to determine
the approach for the review of the KPI’s (i.e. evidence based review or recalculations of the figures);
- Interviews with management representatives responsible for managing the selected issues (if any).
89
We also performed such other procedures as we considered necessary in the circumstances.
Limited Assurance Conclusion
Based on the procedures we have performed and the evidence we have obtained for the 16 KPIs, nothing has come to
our attention that causes us to believe that the Report has not been prepared and presented fairly, in all material
respects, in accordance with standards outlined on its Report integrated within the Annual Report.
Restricted Use
This report is intended solely for the information and use of Millicom for providing limited assurance over its Report for
as per the scope described above and is not intended to be and should not be used by anyone other than those
specified parties.
Ernest & Young
Société Anonyme
Cabinet de Révision Agrée
Luxembourg, March 12, 2024
Bruno di Bartolomeo
Partner
90
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Directors and Senior Management (including Share
Ownership)
See "Corporate Governance—Board Governance—Board Profile: Skills and Experience" for more information on
our directors and senior management.
Compensation
For the financial year ended December 31, 2023, the total compensation paid to MIC S.A.’s directors was $1.7
million and to the CEO and CFO the total cash compensation plus benefits (excluding pension) was $4.1 million. The
total amounts set aside or accrued by Millicom to provide pension, retirement or similar benefits for the CEO and CFO
was $0.5 million.
The Company provides information on the individual compensation of its directors and certain members of its
executive management in its annual report filed with the Registre de Commerce et des Sociétés (Luxembourg Trade and
Companies Register), the Société de la Bourse de Luxembourg S.A. (Luxembourg Stock Exchange) and the Commission de
Surveillance du Secteur Financier (CSSF). As that annual report is made publicly available, the relevant individual
compensation information it contains for directors and executive management is included below.
Remuneration of Directors
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.The remuneration of
the non-executive members of the Board of Directors comprises an annual fee and shares of MIC S.A. The remuneration
is 100% fixed. Non-executive directors do not receive any fringe benefits, pensions or any form of variable
remuneration. No remuneration was paid to any of the non-executive directors in 2023 or 2022 from any other
undertakings within the Millicom Group.
Director remuneration is proposed by the Nomination Committee and approved by the shareholders at the AGM
or other shareholders’ meetings. During early 2023, 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 propose no increase in the
amount of remuneration for each role for the non-executive directors. In accordance with resolution 18 adopted by
the AGM on May 31, 2023, the Nomination Committee of Millicom was instructed to propose Director remuneration for
the period from the date of the 2023 AGM to the date of the AGM in 2024.
At the AGM held on May 31, 2023, MIC S.A.’s shareholders approved the compensation for the nine non-executive
directors expected to serve from that date until the 2024 AGM consisting of two components: (i) cash-based
compensation and (ii) share-based compensation. The share-based compensation is in the form of fully paid-up shares
of MIC S.A. Such shares are provided from the Company’s treasury shares or if permitted, alternatively issued within
MIC S.A.’s authorized share capital exclusively in exchange for the allocation from the share premium reserve (i.e., for
nil consideration from the relevant directors), in each case divided by the average Millicom closing share price on the
Nasdaq in the US for the three-month period ending April 30, 2023, or US$18.75 per share, provided that shares shall
not be issued below the par value. Executive Directors do not receive any remuneration in their capacity as Directors.
In respect of directors who do not serve an entire term from the 2023 AGM until the 2024 AGM, the fee-based and
the share-based compensation is pro-rated pro rata temporis.
Director remuneration (Board and Committees) for the year ended December 31, 2023 and December 31, 2022
(covering the period from May 31, 2023 to the date of the AGM in May 2024 as resolved at the shareholder meeting on
May 31, 2023) is set forth in the following table. See Board Committees section, starting on page 144 for details on
those Directors that are also committee members.
91
Name of Director
2023
2022
Cash-
based
fee
Share-
based fee
(i)
Total
Cash-
based
fee
Share-
based fee
(i)
Total
In thousands of USD
Mr. José Antonío Rios García - Former chair of the
Board (ii)
$105.0
$210.0
$315.0
$105.0
$210.0
$315.0
Ms. Pernille Erenbjerg - Deputy Chair of the Board
$100.0
Ms. Maria Teresa Arnal (since May 2023)
Mr. Bruce Churchill
Mr. Tomas Eliasson
Mr. Michael Golan (since May 2023) (iii)
Mr. Nicolas Jaeger (since May 2023)
Mr. Thomas Reynaud (since May 2023)
Ms. Blanca Treviño de Vega (since May 2023)
Former Directors (in all cases, until May 2023)
Mr. Odilon Almeida - Former Chair of the
Compliance and Business Conduct
Ms. Mercedes Johnson - Former Chair of the Audit
and Compliance Committee
Mr. Lars-Johan Jarnheimer
Mr. James Thompson
Total (iv)
$67.5
$90.0
$100.0
—
$67.5
$67.5
$77.5
$160.0
$105.0
$105.0
$105.0
$260.0
$172.5
$195.0
$205.0
—
—
$105.0
$172.5
$105.0
$172.5
$105.0
$182.5
$100.0
$160.0
$260.0
Not Applicable
$77.5
$90.0
$105.0
$105.0
$182.5
$195.0
Not Applicable
Not Applicable
Not Applicable
Not Applicable
Not Applicable
$80.0
$105.0
$185.0
Not Applicable
$112.5
$105.0
$217.5
Not Applicable
Not Applicable
$67.5
$90.0
$105.0
$105.0
$172.5
$195.0
$675.0
$1,000.0 $1,675.0
$722.5
$1,000.0 $1,722.5
(i)
Share-based compensation for the period from May 31 2023to May 2024 was calculated by dividing the approved remuneration by the average
Millicom closing share price on the Nasdaq in the US for the three-month period ending April 30, 2023 and represented a total of 53,343 shares. Total
remuneration for the period from May31, 2023 to May 2024 after deduction of applicable withholding tax at source comprised 75% in shares and
25% in cash.
(ii) Mr. Rios Garcia resigned from the board of directors on August 31, 2023.
(iii) Mr. Golan declined to receive any director remuneration.
(iv) Total remuneration for the period from May 31, 2023 to May 2024 after deduction of applicable withholding tax at source comprised 75% in shares
and 25% in cash (2022: 73% in shares and 27% in cash).
Remuneration of Executive Management
See Compensation and Talent Committee's Report section, starting on page 128.
Employees
As of December 31, 2023, the Millicom Group had approximately 16,527 employees, 19,446 employees in 2022 and
20,687 employees in 2021. Management believes that relations with the employees are good. Some of our employees
belong to a union and approximately 14% of our employees participated in collective agreements as of December 31,
2023. The temporary employees of the Company corresponded to 5% of the average total number of employees as of
December 31, 2023.
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FINANCIAL INFORMATION
Consolidated Statements and Other Financial Information
Financial Statements
Consolidated financial statements are set forth under “Financial Statements.”
Legal Proceedings
General litigation
In the ordinary course of business, Millicom is a party to various litigation or arbitration matters in each jurisdiction
in which we operate. The principal categories of litigation to which we are subject include the following:
•
•
•
commercial claims, which include claims from third-party dealers, suppliers and customers alleging breaches
or improper terminations of commercial agreements, or the charging of fees not in compliance with
applicable law;
regulatory claims, which consist primarily of consumer claims, as well as complaints regarding the locations of
antennae and other equipment; and
labor and employment claims, including claims for wrongful termination and unpaid severance or other
benefits.
By category of litigation, commercial claims account for a majority of the litigation matters to which we are party
by both number of cases and total potential exposure based on the amount claimed.
By geography, litigation matters in Colombia represent a majority of the litigation matters to which we are party by
both number of cases and total potential exposure. This is due to the size of our operations in Colombia, the
comparatively high general prevalence of litigation there, and consumer protection and quality of service regulations
which facilitate claims against telecommunications companies.
For additional details, see note G.3.1. to our audited consolidated financial statements.
Tax disputes
In addition to the litigation matters describe above, we have ongoing tax claims and disputes in most of our
markets. Generally, these disputes relate to differences with the tax authorities following their completion of audits for
prior tax years dating back to 2007 or challenges by the tax authorities to our interpretation of tax regulations.
Examples of these challenges and disputes relate to issues such as the following:
the applicability, deductibility or reporting of VAT or sales tax in Honduras and Costa Rica;
•
• withholding tax payable on commissions, interconnection services, roaming, services fees and finance leases
•
•
•
•
•
•
in Bolivia, El Salvador, Guatemala, Honduras and Paraguay;
the application of stamp tax on dividend payments in Guatemala;
the deductibility of expenses and interest on shareholder loans and other debt instruments in El Salvador and
Costa Rica;
the deductibility of management, royalty and service fees paid to MIC S.A. by our operations in El Salvador,
Honduras and Nicaragua;
deductibility of commissions and discounts on handsets in Honduras and El Salvador;
the deductibility of expenses for depreciation and amortization in Colombia, Guatemala, Nicaragua and
Paraguay;
the application of the territoriality principle in the determination of the taxable base of municipal taxes in
Colombia and Nicaragua; and
• Withholding tax and deductibility of expenses due to the application of double tax treaties in Panama.
93
In many instances, the tax authorities seek to impose substantial penalties and interest charges while the disputed
amounts remain unpaid, as we seek resolution through negotiations or court proceedings, resulting in significantly
higher total claims than we expect the tax authorities will receive once the matter has been finally resolved. We work
with the local tax authorities to substantiate claims or negotiate settlement amounts to close an audit, except in those
instances where we are challenging or appealing the tax authorities’ claims.
For additional details, see note G.3.2. to our audited consolidated financial statements.
Dividend and Share Repurchase Plans
For a description of the shareholders’ and SDR holders’ rights to receive dividends, the conditions to declare and
pay dividends and the terms of the current share repurchase plan, please refer to "Corporate Governance—Corporate
Governance Statement and Framework."
Significant Changes
No significant changes have occurred other than as described in this Annual Report since the date of our most
recent audited consolidated financial statements.
THE OFFER AND LISTING
Offer and Listing Details
The principal trading market of MIC S.A.’s shares is currently Nasdaq Stockholm, where MIC S.A.’s shares are listed
and trade in the form of SDRs. Each SDR represents one share. MIC S.A. does not intend to list its SDRs on any national
securities exchange in the United States.
Since January 9, 2019, MIC S.A.’s common shares have been listed on the Nasdaq Stock Market’s Global Select
Market (the “Nasdaq Global Select Market”) in the United States. MIC S.A.’s common shares had previously been listed
on the Nasdaq Global Select Market until May 27, 2011.
Markets
The SDRs are listed on the main market of Nasdaq Stockholm under the symbol “TIGO SDB" (formerly "MIC_SDB”).
Nasdaq Stockholm is a regulated market in accordance with the Swedish Securities Market Act and is subject to
regulation and supervision by the Swedish Financial Supervisory Authority. The Swedish Securities Market Act provides
for the regulation and supervision of the Swedish securities markets and market participants, and the Swedish
Financial Supervisory Authority implements such regulation and supervision.
MIC S.A.’s common shares are listed on the Nasdaq Global Select Market in the United States under the symbol
“TIGO.”
ADDITIONAL INFORMATION
Related Party Transactions
The related party transactions disclosures in our audited consolidated financial statements are in some respects
broader than that required by Form 20-F. For purposes of consistency of presentation, references to "related parties"
refer to the broader definition that is used in our audited consolidated financial statements. The Company conducts
transactions with certain related parties on normal commercial terms and conditions as described in Note G.5. to our
audited consolidated financial statements .
94
Exchange Controls
There are no governmental laws, decrees, regulations or other legislation of Luxembourg that may affect:
•
•
the import or export of capital including the availability of cash and cash equivalents for use by the Millicom
Group, or
the remittance of dividends, interests or other payments to non-resident holders of MIC S.A.’s securities other
than those deriving from the U.S.-Luxembourg double taxation treaty.
Taxation
Luxembourg Tax Considerations
The following information is of a general nature only on certain tax considerations effective in Luxembourg in relation to
holders of shares in respect of the ownership and disposition of shares in MIC S.A., and does not purport to be a
comprehensive description of all of the tax considerations that might be relevant to an investment decision in such company.
It is included herein solely for preliminary information purposes and is not intended to be, nor should it be construed to be,
legal or tax advice. The information contained herein is based on the laws presently in force in Luxembourg on the date
hereof, and thus subject to any change in law that may take effect after such date. Shareholders in MIC S.A. should therefore
consult their own professional advisers as to the effects of state, local or foreign laws, including Luxembourg tax law, to
which they may be subject.
Please be aware that the residence concept used under the respective headings below applies for Luxembourg income
tax assessment purposes only. Any reference in the present section to a tax, duty, levy, impost or other charge or withholding
of a similar nature, or to any other concepts, refers to Luxembourg tax law or concepts only. Further, any reference to a
resident corporate shareholder/taxpayer includes non-resident corporate shareholders/taxpayers carrying out business
activities through a permanent establishment, a permanent representative or a fixed place of business in Luxembourg to
which assets would be attributable. Also, please note that a reference to Luxembourg income tax encompasses corporate
income tax (impôt sur le revenu des collectivités), municipal business tax (impôt commercial communal), a solidarity
surcharge (contribution au fonds pour l’emploi), as well as personal income tax (impôt sur le revenu) generally. Corporate
shareholders may further be subject to net wealth tax (impôts sur la fortune), as well as other duties, levies or taxes.
Corporate income tax, municipal business tax, as well as the solidarity surcharge invariably apply to most corporate
taxpayers resident in Luxembourg for tax purposes. Individual taxpayers are generally subject to personal income tax and the
solidarity surcharge. Under certain circumstances, where an individual taxpayer acts in the course of the management of a
professional or business undertaking, municipal business tax may apply as well.
(a) Luxembourg withholding tax on dividends paid on MIC S.A. shares
Dividends distributed by MIC S.A. will in principle be subject to Luxembourg withholding tax at the rate of 15%.
Luxembourg resident corporate holders
No dividend withholding should apply on dividends paid by MIC S.A. to (i) a Luxembourg resident company if the
conditions of Article 147 of the Luxembourg income tax law (“LITL”) are met, meaning that the Luxembourg residence
corporate holder should be a collective entity covered by article 2 of the EU Parent Subsidiary (Council Directive
2011/96/EU of 30 November 2011), (ii) a fully taxable (capital) company not listed in the appendix to article 166 LITL,
paragraph 10, or (iii) the Luxembourg State, a Luxembourg commune or a Luxembourg syndicate of communes or an
undertaking of a Luxembourg public body or to a Luxembourg permanent establishment of a collective entity under
(i), (ii) or (iii)), holding shares which meets the qualifying participation test (10% of the share capital or acquisition price
of the shares of at least € 1.2 million held or committed to be held for a minimum of 12 months).
Luxembourg resident individual holders
Luxembourg withholding tax on dividends paid by MIC S.A. to a Luxembourg resident individual holder may
entitle such holder to a tax credit for the tax withheld.
Non-Luxembourg resident holders
95
Non-Luxembourg resident shareholders of MIC S.A. should benefit from a withholding tax exemption if the
conditions of Article 147 LITL are met, meaning a 10% shareholding or share acquisition price of € 1.2 million held or
committed to be held for 12 consecutive months, and that the non-Luxembourg resident should either be (i) an entity
which falls within the scope of Article 2 of the European Council Directive 2011/96/EU, as amended (the “Parent-
Subsidiary Directive”) and that is not excluded to benefit from this directive under its mandatory general anti-
avoidance rule as implemented in Luxembourg, (ii) a corporate holder subject to a tax comparable to Luxembourg
corporate income tax and that is resident in a country having concluded a double tax treaty with Luxembourg (such as
the United States), (iii) a corporate holder subject to a tax comparable to Luxembourg corporate income tax resident in
a State member of the European Economic Area other than a Member State of the EU (or to a Luxembourg permanent
establishment of such company) or (iv) a corporate holder resident in Switzerland subject to corporate income tax in
Switzerland without benefiting from a tax exemption.
Non-Luxembourg resident holders which do not fall within the scope of Article 147 LITL withholding tax
exemption but resident in a State with which Luxembourg has concluded a double tax treaty may claim a reduced
withholding tax under the conditions set forth in the relevant double tax treaty.
In the case the non-Luxembourg resident holder fulfills the requirements to benefit from a withholding tax
exemption or is entitled to a reduced withholding tax under an applicable double tax treaty but has been subject to
this 15% withholding tax, it may claim a refund from the Luxembourg tax administration.
(b) Luxembourg income tax on dividends and capital gains received from MIC S.A. shares
Fully taxable resident corporate shareholders
For resident corporate taxpayers, dividends (and other payments) derived from shares held in a company and
capital gains realized on the sale of shares in a company are, in principle, fully taxable and thus subject to a combined
corporate income tax rate of 24.94% (for resident corporate taxpayers established in Luxembourg City and having a tax
base exceeding EUR 200,000), except that, as described in further detail below, (i) dividends can benefit either from a
full exemption if the conditions of article 166 LITL are met or from a 50% exemption if the conditions of Article 115
(15a) LITL are met, and (ii) capital gains realized by resident corporate shareholders are fully exempt if the conditions of
the Grand Ducal Decree of December 21, 2002, (as amended) are fulfilled.
Under the Luxembourg participation exemption on dividends as implemented by Article 166 LITL, dividends
derived from shares may be exempt from income tax at the level of the resident corporate shareholder if cumulatively,
(i) the shareholder is either (a) a fully taxable resident collective entity taking one of the forms listed in the appendix to
paragraph 10 of Article 166 LITL, (b) a fully taxable resident corporation not listed in the appendix to paragraph 10 of
Article 166 LITL, (c) a permanent establishment of a collective entity referred to in Article 2 of the Parent-Subsidiary
Directive, (d) a permanent establishment of a corporation resident in a State with which the Grand Duchy of
Luxembourg has signed an agreement in an attempt to avoid double taxation, or (e) a permanent establishment of a
corporation or a cooperative society resident in a State party to the European Economic Area Agreement other than a
Member State of the European Union, (ii) the subsidiary is either (a) a collective entity referred to in Article 2 of the
Parent-Subsidiary Directive, (b) a fully taxable resident corporation not listed in the appendix to paragraph (10) of
Article 166 LITL, or (c) a non-resident corporation fully subject to a tax corresponding to the Luxembourg corporate
income tax, and (iii) the shareholder has held or commits itself to hold, for an uninterrupted period of at least 12
months , a participation representing at least 10% in the share capital of the subsidiary or an acquisition price of at least
€1.2 million. Liquidation proceeds are deemed to be a received dividend and may be exempt under the same
conditions. The participation through an entity that is transparent for Luxembourg income tax purposes is to be
considered as direct participation in proportion to the amount held in the net assets invested in that tax transparent
entity.
The Luxembourg participation exemption regime may be denied if the income is (i) deductible in the other EU
Member State paying such income or (ii) paid as part of an arrangement or a series of arrangements that, having been
put into place with the main purpose or one of the main purposes of obtaining a tax advantage that defeats the object
or purpose of the Parent-Subsidiary Directive, is not genuine having regard to all relevant facts and circumstances. For
the purposes of this anti-avoidance rule, an arrangement, which may comprise several steps or parts, or a series of
arrangements, is considered as not genuine to the extent that it is not put into place for valid commercial reasons that
reflect economic reality.
Expenses, including interest expenses and impairments, in direct economic relation with the shareholding held by
a resident corporate shareholder should not be deductible for income tax purposes up to the amount of any exempt
dividend derived during the same financial year. Expenses exceeding the amount of the exempt dividend received
from such shareholding during the same financial year should remain deductible for income tax purposes.
96
If the conditions of the Luxembourg participation exemption, as described above, are not met, 50% of the gross
amount of dividends may be exempt from corporate income tax in accordance with Article 115 (15a) LITL if such
dividends are received from (i) a fully taxable corporation resident in Luxembourg, (ii) a corporation (a) resident in a
State with which the Grand Duchy of Luxembourg has signed an agreement in an attempt to avoid double taxation,
and (b) fully subject to a tax corresponding to the Luxembourg corporate income tax, or (iii) a company resident in a
Member State of the European Union and referred to in Article 2 of the Parent-Subsidiary Directive.
Capital gains realized on shares by resident corporate shareholders may be exempt from corporate income tax if
the conditions mentioned above under the Luxembourg participation exemption on dividends are met, except that
the acquisition price must be of at least €6 million instead of €1.2 million. The participation through an entity that is
transparent for Luxembourg income tax purposes is to be considered as direct participation in proportion to the
amount held in the net assets invested in that tax transparent entity. Taxable gains are determined as being the
difference between the price for which the shares have been disposed of and the lower of their cost or book value.
Capital gains realized upon the disposal of shares should remain taxable for an amount corresponding to the sum
of the expenses related to the shareholding and impairments recorded on the shareholding that reduced the taxable
basis of the resident corporate shareholder in the year of disposal or in previous financial years.
Resident corporate shareholders with a special tax regime
A resident corporate shareholder that is governed by the law of May 11, 2007, on Family Estate Management
Companies (as amended) or by the Law of February 13, 2007, on Specialized Investment Funds (as amended) or by the
Law of December 17, 2010, on Undertakings for Collective Investment (as amended) or by the law of July 23, 2016, on
Reserved Alternative Investment Funds not having the exclusive purpose of investing in risk capital, is not subject to
Luxembourg income tax; thus, neither dividends (and other payments) derived from shares held in a company nor
capital gains realized on the sale or disposal, in any form whatsoever, of shares in a company, are taxable at the level of
such resident corporate shareholders.
Resident individual shareholders
For resident individual shareholders, dividends derived from shares and capital gains realized on the sale of shares
are, in principle, subject to income tax at the progressive ordinary rate (with a current effective marginal rate of up to
42%). Such income tax rate is increased by 7% for income not exceeding €150,000 for single taxpayers and €300,000 for
couples taxed jointly, and by 9% for income above these amounts. In addition, a 1.4% dependence insurance
contribution is due.
50% of the gross amount of dividends derived from shares may however be exempt from income tax, if the
conditions laid down under Article 115 (15a) LITL, as described above, are complied with. In addition, a total lump-sum
of €1,500 (which is doubled for taxpayers who are jointly taxable) is deductible from the total of dividends received
during the tax year in order to determine the total taxable amount of investment income of the taxpayer.
Capital gains realized on the disposal of the shares by resident individual shareholders who act in the course of the
management of their private wealth, will in principle only be taxable if said capital gains qualify either as speculative
gains or as gains on a substantial participation. A disposal may include a sale, an exchange, a contribution or any other
kind of alienation of shares. Capital gains are deemed to be speculative if the shares are disposed within six months
after their acquisition or if their disposal precedes their acquisition. Speculative gains realized during the year that are
equal to, or are greater than, €500 are subject to income tax at ordinary rates. A participation is deemed to be
substantial where a resident individual shareholder holds, either alone or together with his spouse, his partner or minor
children, directly or indirectly, at any time within the 5 years preceding the disposal, more than 10% of share capital of
a collective entity. A shareholder is also deemed to alienate a substantial participation if such participation (i) has been
acquired free of charge, within the 5 years preceding the transfer, and (ii) was constituting a substantial participation in
the hands of the alienator (or the alienators in case of successive transfers free of charge within the same 5-year
period). Capital gains realized on a substantial participation more than six months after the acquisition thereof may
benefit from an allowance of up to €50,000 granted for a ten-year period (which is doubled for taxpayers who are
jointly taxable). They are subject to income tax according to the half-global rate method (i.e., the average rate
applicable to the total income is calculated according to progressive income tax rates and half of the average rate is
applied to the capital gains realized on the substantial participation).
Capital gains realized on the disposal of the Company’s shares by resident individual shareholders, who act in the
course of their professional or business activity, are subject to income tax at ordinary rates. Taxable gains are
determined as being the difference between the price for which the shares have been disposed of and the lower of
their cost or book value.
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Non-resident shareholders
Non-resident shareholders (either individual or corporate) owning a non-substantial shareholding are exempt
from capital gains taxes. Non-resident shareholders owning a substantial shareholding (more than 10% of share capital
of a collective entity) are taxable in Luxembourg on a capital gain realized upon the disposal if at the date of the
disposal the shareholding has been owned for not more than six months, unless the non-resident shareholder is
resident in a treaty country and the treaty allocates the taxation right for the capital gain to the country of residence. In
this latter case, no capital gains tax will be due by non-resident shareholder. Capital gains realized on the disposal of
shares by non-resident shareholders that have been owned for more than 6 months are exempt from Luxembourg
income tax.
(c) Other Taxes
Net wealth tax
Whilst non-resident corporate taxpayers may only be subject to net wealth tax on the net assets attributable to a
permanent establishment located in Luxembourg or on real estate assets located in Luxembourg, resident corporate
taxpayers are in principle subject to net wealth tax at the rate of 0.5% for net wealth up to €500 million and at 0.05% for
net wealth exceeding this threshold, unless a double tax treaty provides for an exemption or the asset may benefit
from the Luxembourg participation exemption regime. Net worth is referred to as the unitary value (valeur unitaire), as
determined at January 1 of each year. The unitary value is basically calculated as the difference between (a) assets
estimated at their fair market value and (b) liabilities vis-à-vis third parties, unless one of the exceptions mentioned
below are satisfied.
A resident corporate shareholder will be subject to net wealth tax on shares, except if (i) the shareholder is a
securitization company governed by the Law of March 22, 2004, on Securitization (as amended) or an investment
company in risk capital governed by the Law of June 15, 2004, on Venture Capital Vehicles (as amended) or a
specialized investment fund governed by the Law of February 13, 2007, on Specialized Investment Funds (as amended)
or a family wealth management company governed by the Law of May 11, 2007, on Family Estate Management
Companies (as amended) or an undertaking for collective investment governed by the Law of December 17, 2010, on
Undertakings for Collective Investment (as amended) or a pension-saving company as well as a pension-saving
association, both governed by the Law of July 13, 2005 (as amended), or a reserved alternative investment fund
governed by the law of July 23, 2016, or (ii) if the conditions mentioned above for the participation exemption regime
on dividend income are met at the end of the previous year (except that no minimum holding period is required).
A resident corporate shareholder may further be subject to either a minimum net wealth tax of €4,815 or to a
progressive minimum net wealth tax from €535 to €32,100, which depends on the total assets on their balance sheet.
The minimum net wealth tax of €4,815 will be applicable for a resident corporate shareholder, which has a minimum of
90% of fixed financial assets, transferable securities and cash at bank on its balance sheet, except if its accumulated
fixed financial assets do not exceed €350,000, in which case it may benefit from a minimum net wealth tax of €535.
Items (e.g., real estate properties or assets allocated to a permanent establishment) located in a treaty country, where
the latter has the exclusive tax right, are not considered for the calculation of the 90% threshold.
Despite the above mentioned exceptions, the minimum net wealth tax also applies if the resident corporate
shareholder is a securitization company governed by the Law of March 22, 2004, on Securitization (as amended) or an
investment company in risk capital governed by the Law of June 15, 2004, on Venture Capital Vehicles (as amended) or
a pension-saving company as well as a pension-saving association, both governed by the Law of July 13, 2005 (as
amended), or a reserved alternative investment fund having the exclusive purpose of investing in risk capital governed
by the law of July 23, 2016.
The net wealth tax charge for a given year can be avoided or reduced if a specific reserve, equal to five times the
net wealth tax to save, is created before the end of the subsequent tax year and maintained during the five following
tax years. The net wealth tax reduction corresponds to one fifth of the reserve created, except that the maximum net
wealth tax to be saved is limited to the corporate income tax amount due for the same tax year, including the
employment fund surcharge, but before imputation of available tax credits.
Inheritance tax
Where a shareholder is a resident of Luxembourg for tax purposes at the time of his/her death, shares are included
in his/her taxable estate for inheritance tax assessment purposes.
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Gift tax
Gift tax may be due on a gift or donation of shares if recorded in a Luxembourg notarial deed or otherwise
recorded in Luxembourg.
Registration taxes and stamp duties
In principle, neither the issuance of shares nor the disposal of shares is subject to Luxembourg registration tax or
stamp duty.
However, a registration duty may be due (i) in the case where the deed acknowledging the issuance/disposal of
shares is either attached (annexé) to a deed subject to a mandatory registration in Luxembourg (e.g., public deed) or
lodged with a notary’s records (deposé au rang des minutes d’un notaire), or (ii) in case of a registration of such deed on a
voluntary basis.
Material U.S. Federal Income Tax Considerations
The following is a description of material U.S. federal income tax consequences to the U.S. Holders described
below of owning and disposing of our common shares. It does not describe all tax considerations that may be relevant
to a particular person’s decision to hold common shares. This discussion applies only to a U.S. Holder that holds
common shares as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the U.S.
federal income tax consequences that may be relevant in light of the U.S. Holder’s particular circumstances, including
alternative minimum tax consequences, the potential application of the provisions of the Internal Revenue Code of
1986, as amended (the “Code”) known as the Medicare contribution tax and tax consequences applicable to U.S.
Holders subject to special rules, such as:
•
•
•
•
•
•
•
•
•
certain financial institutions;
dealers or traders in securities that use a mark-to-market method of tax accounting;
persons holding common shares as part of a hedging transaction, straddle, wash sale, conversion transaction
or other integrated transaction or persons entering into a constructive sale with respect to the common
shares;
persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
entities classified as partnerships for U.S. federal income tax purposes;
tax-exempt entities, “individual retirement accounts” or “Roth IRAs”;
persons that own or are deemed to own ten percent or more of our shares, by vote or value;
persons who acquired our common shares pursuant to the exercise of an employee stock option or otherwise
as compensation; or
persons holding common shares in connection with a trade or business conducted outside of the United
States.
If an entity that is classified as a partnership for U.S. federal income tax purposes owns common shares, the U.S.
federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the
partnership. Partnerships owning common shares and partners in such partnerships should consult their tax advisers
as to the particular U.S. federal income tax consequences of owning and disposing of the common shares.
This discussion is based on the Code, administrative pronouncements, judicial decisions, final, temporary and
proposed Treasury regulations, and the income tax treaty between Luxembourg and the United States (the “Treaty”) all
as of the date hereof, any of which is subject to change or differing interpretations, possibly with retroactive effect.
A “U.S. Holder” is a person who, for U.S. federal income tax purposes, is a beneficial owner of our common shares
and is:
•
•
•
an individual who is a citizen or resident of the United States;
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United
States, any state therein or the District of Columbia; or
an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
This discussion does not address the effects of any state, local or non-U.S. tax laws, or any U.S. federal taxes other
than income taxes (such as U.S. federal estate or gift tax consequences). U.S. Holders should consult their tax advisers
99
concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of our common shares
in their particular circumstances.
Treasury regulations that apply to taxable years beginning on or after December 28, 2021 may in some
circumstances prohibit a U.S. person from claiming a foreign tax credit with respect to certain non-U.S. taxes that are
not creditable under applicable income tax treaties. Accordingly, U.S. investors that are not eligible for Treaty benefits
should consult their tax advisers regarding the creditability or deductibility of any Luxembourgish taxes imposed on
dividends on, or dispositions of, common shares. This discussion does not apply to investors in this special situation.
Except as described below, this discussion assumes that we are not, and will not become, a passive foreign
investment company (a “PFIC”) for any taxable year.
Taxation of Distributions
Distributions paid on common shares, other than certain pro rata distributions of common shares, will generally be
treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under
U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S.
federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends.
Subject to applicable limitations, dividends paid by qualified foreign corporations to certain non corporate U.S. Holders
are taxable at rates applicable to long-term capital gains. A foreign corporation is treated as a qualified foreign
corporation with respect to dividends paid on stock that is readily tradable on a securities market in the United States,
such as the Nasdaq Stock Market, where our common shares are traded. U.S. Holders should consult their tax advisers
to determine whether the favorable rates will apply to dividends they receive and whether they are subject to any
special rules that limit their ability to be taxed at this favorable rate.
Dividends will not be eligible for the dividends received deduction generally available to U.S. corporations under
the Code. Dividends will be included in a U.S. Holder’s income on the date of receipt. The amount of any dividend
income paid in euros will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date
of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. If
the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize
foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if
the dividend is converted into U.S. dollars after the date of receipt.
Dividends will be foreign-source and will include any amount withheld by us in respect of Luxembourg income
taxes. Subject to applicable limitations, some of which vary depending upon the U.S. Holder’s particular circumstances,
non-refundable Luxembourg income taxes withheld from dividends at a rate not exceeding any applicable rate
provided by the Treaty will be creditable against the U.S. Holder’s U.S. federal income tax liability. The rules governing
foreign tax credits are complex and U.S. Holders should consult their tax advisers regarding the creditability of foreign
taxes in their particular circumstances. In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct
foreign taxes, including any Luxembourg income tax, in computing their taxable income, subject to generally
applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies
to all foreign taxes paid or accrued in the taxable year.
Sale or Other Disposition of Common Shares
For U.S. federal income tax purposes, gain or loss realized on the sale or other disposition of common shares will
be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the common shares for more
than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the
common shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This
gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is
subject to limitations.
Passive Foreign Investment Company Rules
We believe that we were not a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax
purposes for our taxable year ended December 31, 2023. However, our PFIC status for any taxable year is an annual
determination that depends on the composition of our income and assets and the market value of our assets, which
may change from time to time. In addition, if we expand our lending activities in the future in any significant fashion,
our risk of becoming a PFIC will increase. Accordingly, there can be no assurance that we will not be a PFIC for any
taxable year. If we are a PFIC for any year during which a U.S. Holder holds common shares, we generally will continue
to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which the U.S. Holder holds
common shares, even if we cease to meet the threshold requirements for PFIC status.
100
If we are a PFIC for any taxable year during which a U.S. Holder holds common shares, gain recognized by a U.S.
Holder on a sale or other disposition (including certain pledges) of the common shares will be allocated ratably over
the U.S. Holder’s holding period for the common shares. The amounts allocated to the taxable year of the sale or other
disposition and to any year before we became a PFIC will be taxed as ordinary income. The amount allocated to each
other taxable year will be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for
that taxable year, and an interest charge will be imposed on the resulting tax liability for each such year. Further, to the
extent that any distributions received by a U.S. Holder on its common shares in a taxable year exceed 125% of the
average of the annual distributions on the common shares received during the preceding three years or the U.S.
Holder’s holding period, whichever is shorter, such distributions will be subject to taxation in the same manner. If we
were a PFIC, certain elections (such as mark-to-market election) may be available that would result in alternative tax
consequences of owning and disposing of the common shares.
In addition, if we are a PFIC or, with respect to a particular U.S. Holder, are treated as a PFIC for the taxable year in
which we pay a dividend or for the prior taxable year, the preferential dividend rate discussed above with respect to
dividends paid to certain non-corporate U.S. Holders will not apply.
If a U.S. Holder owns common shares during any year in which we are a PFIC, the U.S. Holder generally must file
annual reports on an IRS Form 8621 (or any successor form) with respect to us, generally with the U.S. Holder’s federal
income tax return for that year.
U.S. Holders should consult their tax advisers concerning the potential application of the PFIC rules.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related
financial intermediaries generally are subject to information reporting, and may be subject to backup withholding,
unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S.
Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.
The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the
holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely
furnished to the IRS.
Certain U.S. Holders who are individuals or specified entities may be required to report information on their U.S.
federal income tax returns relating to their ownership of our common shares, subject to certain exceptions (including
an exception for common shares held in a financial account, in which case the account may be reportable if maintained
by a non-U.S. financial institution).
U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to their ownership
and disposition of common shares.
Documents on Display
We are subject to the reporting and other informational requirements of the Exchange Act, except that as a foreign
private issuer, we are not subject to the proxy rules or the short-swing profit disclosure rules of the Exchange Act, nor
are we subject to the same requirements to file periodic reports and financial statements as U.S. companies whose
securities are registered under the Exchange Act. In accordance with these statutory requirements, we file or furnish
reports and other information with the SEC, which are available to the public through the SEC's website at
www.sec.gov.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The following information should be read together with note D. Financial risk management to our audited
consolidated financial statements included elsewhere in this Annual Report.
101
Financial risk management
Millicom regularly performs financial risk management assessments to identify major risks and to take the
necessary steps to mitigate such risks. The principal market risks to which we are exposed are interest rate risk, foreign
currency exchange risk and non-repatriation. The Millicom 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
Millicom Group’s performance in line with its Group Treasury Policy. The "Group Treasury Policy" (including treasury
and financial risk management) is annually updated by the Millicom Group's Treasury function and presented to the
Audit and Compliance Committee. This policy was last reviewed in October 2023.
As part of the financial risk management strategy, the Millicom Group sets some targets in place to address and
monitor financial risks, which include the use of derivatives and natural hedging instruments, such as raising debt in
local currency (where the Group targets to maintain at least 40% of its debt in local currency) and maintaining at least
75%/25% of debt with fixed interest rates. The Group also implements some hedging strategies related to operational
expenditure/capital expenditure, where it can cover up to six months forward of operating costs and capital
expenditure denominated in non-functional currencies through a rolling and layering strategy. Millicom’s financial risk
management strategies may include the use of derivatives to the extent a market would exist in the jurisdictions where
the Millicom Group operates. Millicom’s policy prohibits the use of such derivatives in the context of speculative
trading. 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 Group Treasury policy.
On December 31, 2023 and 2022, the fair value of derivatives held by the Millicom Group may be summarized as
follows:
Derivatives
Cash flow hedge derivatives - asset
Cash flow hedge derivatives - liability
Net derivative asset (liability)
Interest rate risk
December 31,
2023
2022
(US$ millions)
6
(46)
(40)
19
(53)
(34)
Debt and financing issued at floating interest rates expose the Millicom Group to cash flow interest rate risk. Debt
and financing issued at fixed interest rates expose the Millicom Group to fair value interest rate risk. The Millicom
Group’s exposure to risk of changes in market interest rates relate to both of the above. The Millicom Group actively
and periodically monitors interest rate risk and has implemented some internal targets within its strategy where it aims
to maintain at least 75% of debt with fixed interest rates. The purpose of Millicom’s strategy is to achieve an optimal
balance between cost of funding and volatility of financial results, while taking into account market conditions as well
as our overall business strategy.
At December 31, 2023, approximately 80% of the Millicom 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 (2022: 82%). The table below
summarizes our fixed rate debt and floating rate debt:
102
1 year
1–2 years
2–3 years
3–4 years
4–5 years
>5 years
Total
Amounts due within
At December 31, 2023 ...............................
Fixed rate financing...................................
Floating rate financing ..............................
Total (i) ......................................................
(US$ millions)
190
12
202
369
76
445
403
433
836
582
420
855
147
1,002
1,002
2,912
279
3,191
5,311
1,367
6,678
Weighted average nominal interest rate ..
6.85 %
6.81 %
7.93 %
6.98 %
6.75 %
5.83 %
6.56 %
At December 31, 2022 ...............................
Fixed rate financing...................................
Floating rate financing ..............................
Total ..........................................................
131
49
180
383
12
394
501
63
564
376
402
777
718
404
1,122
3,466
300
3,766
5,574
1,230
6,804
Weighted average nominal interest rate ..
7.68 %
5.71 %
6.11 %
7.46 %
6.49 %
5.88 %
6.22 %
(i) Excluding vendor financing of $18 million, due within one year, as of December 31, 2023.
A 100 basis point fall or rise in market floating interest rates for all currencies in which the Group had borrowings at
December 31, 2023 would increase or reduce profit before tax from continuing operations for the year by
approximately US$14 million (2022: US$12 million).
Foreign currency risk
The Millicom 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. In the years ended December 31, 2023, 2022 and 2021, foreign currency
exchange rate fluctuations resulted in a gain of $31 million, losses of $84 million and $42 million, respectively.
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 U.S. dollar reporting currency. In some cases, Millicom may also borrow in U.S. dollars where it
is either commercially more advantageous for joint ventures and subsidiaries to incur debt obligations in U.S. dollars or
where U.S. 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 Millicom Group operates.
The following table summarizes debt denominated in U.S. dollars and other currencies at December 31, 2023 and
2022.
103
December 31
Debt denominated in U.S. dollars ....................................................................................
Debt denominated in currencies of the following countries:
Guatemala .........................................................................................................................
Colombia ...........................................................................................................................
Bolivia ................................................................................................................................
Paraguay ...........................................................................................................................
El Salvador(i) ......................................................................................................................
Panama(i) ..........................................................................................................................
Luxembourg (COP denominated) ....................................................................................
Costa Rica ..........................................................................................................................
Total debt denominated in other currencies ..............................................................
Total debt (ii) ...................................................................................................................
2023
2022
(US$ millions)
3,859
4,100
640
694
246
158
174
759
38
110
595
605
260
171
173
773
30
96
2,819
6,678
2,704
6,804
(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).
(ii)
Excluding vendor financing of $18 million in Colombia, due within one year, as of December 31, 2023.
At December 31, 2023, if the U.S. 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 $25 million (2022: $20 million), mainly as a result of the conversion of the USD-
denominated net debts in our operations with functional currencies other than the U.S. dollar.
Non-repatriation risk
Millicom’s operating subsidiaries and joint ventures generate most of the revenue of the Millicom 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.
Foreign exchange controls exist in some of the countries in which Millicom Group companies operate, and some of
these controls 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. In addition, existing
foreign exchange controls may be strengthened in countries where the Millicom Group operates, or foreign exchange
controls may be introduced in countries where the Millicom 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 restricted
even further, which would impact the Company’s ability to make payments on its interest and loans 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 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 and exchange risk, which could have an adverse effect on the Millicom Group.
This is a relatively rare case for the countries in which the Millicom Group operates.
Lastly, repatriation most often gives rise to taxation, which is evidenced in the amount of taxes paid by the
Millicom Group relative to the Corporate Income Tax reported in its statement of income.
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CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of December 31, 2023, MIC S.A., under the supervision and with the participation of the Millicom Group’s
management, including the Company’s Chief Executive Officer and the Chief Financial Officer, performed an evaluation
of the effectiveness of the Millicom Group’s disclosure controls and procedures. The Millicom Group’s disclosure
controls and procedures are designed to ensure that information required to be disclosed under the Exchange Act is
accumulated and communicated to the Millicom Group’s management to allow timely decisions regarding required
disclosures. The Millicom Group’s management necessarily applied its judgment in assessing the costs and benefits of
such controls and procedures, which by their nature can provide only reasonable assurance regarding management’s
control objectives.
Based on this evaluation, the Company’s Chief Executive Officer and the Chief Financial Officer concluded that as
of December 31, 2023, the Millicom Group’s disclosure controls and procedures are effective at the reasonable
assurance level for recording, processing, summarizing and reporting the information the Company is required to
disclose in the reports it files under the Exchange Act within the time periods specified in the SEC's rules and forms.
Changes in Internal Control over Financial Reporting
There has been no change in the Group's internal control over financial reporting during 2023 that has materially
affected, or is reasonably likely to materially affect, the Group's internal control over financial reporting.
AUDIT AND COMPLIANCE COMMITTEE FINANCIAL
EXPERT
MIC S.A.’s Audit and Compliance Committee is chaired by Mr. Eliasson, and includes Mr. Churchill, Mr. Golan and
Ms. Trevino. MIC S.A.’s Board of Directors has determined that Mr. Eliasson has the professional experience and
knowledge to qualify as “audit committee financial expert” as defined by SEC rules. MIC S.A.’s Board has also
determined that each of Mr. Churchill, Mr. Golan and Ms. Trevino are independent within the meaning of the
independence requirements contemplated by Rule 10A-3 under the Exchange Act and the applicable Nasdaq listing
rules.
CODE OF ETHICS
Millicom has a Code of Conduct that applies to all employees, contracted staff, and management. In the year
ended December 31, 2023, Millicom did not waive compliance with its Code of Conduct by its principal executive
officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The
Code of Conduct is available at https://www.millicom.com/what-we-stand-for/governance/compliance/millicom-code-
of-conduct/
CORPORATE GOVERNANCE
Corporate Governance Statement and Framework
Corporate Governance Statement
As a foreign private issuer incorporated in Luxembourg with its principal listing on Nasdaq Stockholm, Millicom
follows the laws of the Grand Duchy of Luxembourg, its "home country" for corporate governance practices, in lieu of
the provisions of the Nasdaq Stock Market's Marketplace Rule 5600 series. In particular, the Nasdaq Stock Market's
rules:
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(i) provide for a quorum of no less than 33 1/3% of Millicom's outstanding shares, but Millicom's Articles of
Association provide that no quorum is required for ordinary meetings (other than in respect of general
meetings convened for the first time in relation to amendments to the Articles of Association);
(ii) provide for the involvement of independent directors in the selection of director nominees, but Millicom
permits its director nominations committee to be comprised of shareholder representatives;
(iii) require each Compensation and Talent Committee member to be an independent director for purposes of the
Nasdaq Stock Market’s Marketplace Rule 5605(d)(2). However, to preserve greater flexibility in who may be
appointed to the Compensation and Talent Committee, Millicom does not require the Compensation and
Talent Committee to be comprised solely of directors who qualify as independent for such purposes;
(iv) require listed companies to have regularly scheduled meetings at which only independent directors are
present, but Millicom does not impose such a requirement;
(v) require third-party compensation disclosure, but Millicom does not disclose third-party compensation
provided to its directors or director nominees; and
(vi) require independent director oversight of director nominations, but Millicom allows its nomination committee
to be appointed by the Company’s major shareholders and not a committee of the board of directors.
In addition, we may opt out of shareholder approval requirements for the issuance of securities in connection with
certain events such as the acquisition of stock or assets of another company, the establishment of or amendments to
equity-based compensation plans for employees, a change of control of us and certain private placements. To this
extent, our practice will vary from the requirements of Nasdaq Listing Rules, which generally require an issuer to obtain
shareholder approval for the issuance of securities in connection with such events.
Corporate Governance Framework
Memorandum and Articles of Association
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. The Articles of Association of MIC S.A. define its purpose
inter alia as follows: “... to engage in all transactions pertaining directly or indirectly to the acquisition and holding of
participating interests, in any form whatsoever, in any Luxembourg or foreign business enterprise, including but not
limited to, the administration, management, control and development of any such enterprise." The valid Articles of
Association are filed herewith as Exhibit 1.1.
Shares
MIC S.A. has only one class of shares, common shares. Each share entitles its holder to: one vote at the general
meeting of shareholders; receive dividends when such distributions are decided (subject as well to restrictions in the
agreements governing our indebtedness), and; share in any surplus left after the payment of all the creditors in the
event of liquidation. There is a preferential subscription right pursuant to Luxembourg corporate law under any share
or rights issue for cash, unless the Board of Directors, within the limits specified in the Articles of Association, or an
extraordinary general meeting of shareholders, as the case may be, restricts the exercise thereof. The Company's
Articles of Association do not impose any restrictions on the transfer of shares. MIC S.A. shares are not subject to any
sinking fund provision and as all of the issued shares in MIC S.A.’s capital are fully paid up, none of MIC S.A.’s
shareholders are liable for further capital calls. Following Luxembourg law, any change to the rights attached to the
shares of MIC S.A. require, an Amendment of the Company’s Articles of Association through the approval of
shareholders at an extraordinary shareholders’ meeting duly convened and held before a Luxembourg notary, with a
two-thirds majority vote of the shares represented at the meeting. Any increase to the obligations attached to shares
may be adopted only with the unanimous consent of all shareholders.
The Articles of Association provide for the possibility and set out the terms for the repurchase by MIC S.A. of its
own shares, which repurchase must be approved in accordance with applicable law and the rules of any exchange on
which MIC S.A.’s shares are listed.
A share repurchase plan was approved at our 2023 AGM authorizing the Board of Directors, at any time between
May 31, 2023 and the date of the 2024 AGM, provided the required levels of distributable reserves are met by MIC S.A.
at that time, to engage in a share repurchase plan of MIC S.A.’s common shares to be carried out for all purposes
allowed or which would become authorized by the laws and regulations in force, and in particular the Luxembourg law
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of August 10, 1915 on commercial companies, as amended (the “Share Repurchase Plan”) by using its available cash
reserves.
The maximum number of common shares and SDRs that may be acquired between May 31, 2023 and the date of
the 2024 AGM may not exceed ten per cent (10%) of Millicom's outstanding share capital as of the date when the start
of a share repurchase program is announced by press release.
For shares repurchased on a regulated market where the shares are traded, the price per share shall be within the
registered interval for the share price prevailing at any time (the so called spread), that is, the interval between the
highest buying rate and the lowest selling rate of the shares on the market on which the purchases are made. For any
other shares repurchased, the price per share may not exceed 110% of the most recent closing trading price of the
shares on the Nasdaq Stock Market in the U.S., provided that the minimum repurchase price is above SEK 50 (or USD
equivalent).
On December 14, 2023 the Board initiated a repurchase program of up to 2,000,000 Swedish Depository Receipts
(“SDRs”) representing the Company’s ordinary shares. The primary purpose of the share repurchase plan is to meet
obligations under Millicom’s share-based incentive plans or other compensation programs.
The repurchase program is being managed by a brokerage firm which makes its trading decisions concerning the
timing and quantity of the purchases of SDRs independently of Millicom based on the framework agreed at inception.
The repurchase program is being conducted under the following conditions:
•
•
•
•
Repurchases may take place during the period between December 18, 2023 and May 22, 2024, the date of
Millicom’s 2024 AGM.
The maximum level of SDRs that may be repurchased will be the lower of SEK 420 million (approximately USD 40
million) in aggregate purchase price, or 2,000,000 SDRs.
Payment for the shares will be made in cash.
SDRs may be repurchased on Nasdaq Stockholm at a price per share within the registered interval for the share
price prevailing at any time (the spread), that is, the interval between the highest buying price." and the lowest
selling price.
Shareholders’ Meetings
General meetings of shareholders are convened by convening notice published in the Luxembourg Official
Gazette (Journal des Publications, Recueil Electronique des Sociétés et Associations), in a Luxembourg newspaper, in
short version in the Swedish newspaper SvD, as a press release and on the Millicom website. According to article 18 of
the Articles of Association of MIC S.A., the Board of Directors determines in the convening notice the formalities to be
observed by each shareholder for admission to the AGM. An AGM must be convened every year within six months of
the end of the financial year, at the registered office of the Company or any other place in Luxembourg as may be
specified in the convening notice. Other meetings can be convened as necessary.
Limitation on Securities Ownership
There are no limitations imposed under Luxembourg law or the Articles of Association on the rights of non-
resident or foreign entities to own shares of the Company or to hold or exercise voting rights on shares of the
Company.
Change of Control
There are no provisions in the Articles of Association of the Company that would have the effect of delaying,
deferring or preventing a change in control of MIC S.A. and that would operate only with respect to a merger,
acquisition or corporate restructuring involving the Company, or any of its subsidiaries.
Disclosure of Shareholder Ownership
As required by the Luxembourg law on transparency obligations of January 11, 2008, as amended (the
“Transparency Law”), a shareholder who acquires or disposes of shares, including depositary receipts representing
shares in the Company’s capital must notify the Company and the Commission de Surveillance du Secteur Financier of
the proportion of shares held by the relevant person as a result of the acquisition or disposal, where that proportion
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reaches, exceeds or falls below the thresholds referred to in the Transparency Law. As per the Transparency Law, the
above also applies to the mere entitlement to acquire or to dispose of, or to exercise, voting rights in any of the cases
referred to in the Transparency Law.
Background
Millicom’s shares are listed on Nasdaq Stockholm, in the form of Swedish Depositary 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
Luxembourg Law
EU Directives and Regulations
Legislation
Legislation
Nordic Main Market Rulebook for Issuers of Shares
Regulation
Nasdaq Stock Market Rules
U.S. Securities Laws
Good Stock Market Practice
Regulation
Regulation
Philosophy
Comply or Explain
Comply
Comply
Comply
Comply
Comply
Guiding Principles
Corporate Citizenship
Within these frameworks, Millicom's Board develops and monitors internal guidelines and practices, as further
described below, to ensure the quality and transparency of Millicom's corporate governance.
Swedish Corporate Governance Code
The Swedish Corporate Governance Code (“Swedish Code”) promotes good corporate governance to ensure
companies are run sustainably, responsibly and efficiently. The Code, which is available on the website of the Swedish
Corporate Governance Board: https://bolagsstyrning.se, complements mandatory laws and regulations and sets best
practices that go beyond regulatory requirements. The Swedish Corporate Governance Board opted for self-regulation,
and adopted a “comply or explain” philosophy. Therefore, companies may deviate from specific provisions, as long as
they disclose the deviation and explain why they chose a different solution that is more suitable for their size and
specific circumstances.
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 2023.
Corporate Governance Structure
Millicom' s Corporate Governance structure comprises the following three levels:
1.
Shareholders and representatives of shareholders (see "—Shareholders and Representation of Shareholders"
below).
The Board of Directors and Committees appointed by the Board (see "—Board Governance" below).
The CEO and Executive Management, and their primary governance functions (see "—Millicom CEO and
Executive Team" below).
2.
3.
Shareholders and Representation of Shareholders
Shareholders and Shareholders’ Meeting
The shareholders’ meeting is Millicom's highest decision-making body and a forum for shareholders to voice their
opinions. Each shareholder has the right to participate in the shareholders’ meeting and to cast one vote for every
share. Shareholders unable to attend in person may exercise their rights by proxy or vote in writing (by way of proxies).
Millicom’s Articles of Association set the Annual General Meeting of Shareholders (“AGM”) to be held in
Luxembourg within six months of the close of the financial year.
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Unless otherwise required under Luxembourg Law, an extraordinary general meeting (EGM) must be convened to
amend the Articles of Association.
At the 2023 AGM, held in Luxembourg on May 31, 2023, shareholders approved all the resolutions proposed by the
Board and Nomination Committee, including the following key items:
•
•
the annual accounts and the consolidated accounts for the year ended December 31, 2022;
the allocation of the profit of approximately $2 million of the 2022 results to the legal reserve, and the remaining
$36 million to unappropriated net profits to be carried forward;
the discharge of all current and former Millicom Directors who served at any point in time during the financial year
ended December 31, 2022, for the performance of their mandates;
the establishment of the number of Directors at ten (10) and election of the Board members and Chair of the Board
(see "—Board Governance—Board Profile: Skills and Experience);
the re-election of Ernst & Young S.A., Luxembourg as Millicom's external auditor;
the remuneration to the Board members and external auditor;
the instruction to the Nomination Committee;
the share repurchase plan;
the 2022 Remuneration Report;
the senior management remuneration policy; and
the share-based incentive plans for Millicom employees.
•
•
•
•
•
•
•
•
•
On May 31, 2023 an Extraordinary General Meeting (the “EGM”) was held to increase the authorized share capital of
the Company from three hundred million United States Dollars (USD 300,000,000) divided into two hundred million
(200,000,000) shares with a par value of one dollar fifty cents (USD 1.50) each, to three hundred and seventy five million
United States Dollars (USD 375,000,000) divided into two hundred and fifty million (250,000,000) shares with a par
value of one dollar fifty cents (USD 1.50) each, and to renew the authorization granted to the Board of Directors to issue
new shares up to a share capital of USD 375,000,000 divided into 250,000,000 shares with a par value of USD 1.50 per
share, until May 31, 2028, and to amend the articles of association to incorporate these amendments. These resolutions
were rejected.
On February 28, 2022, an Extraordinary General Meeting (the “EGM”) was held to increase the authorized share
capital and amend the articles of association in preparation for the rights offering that was announced during the first
quarter of 2022. The EGM resolved to increase the Company’s authorized share capital from 133.3 million to 200 million
ordinary shares, par value $1.50 per share. In June 2022, approximately 70.3 million ordinary shares were issued
pursuant to the rights offering at a price of $10.61 per share.
Millicom governance deviated in 2023 in relation to the Swedish Code in the following areas:
Code requirement
Millicom practice
Explanation
1.5–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.
Minutes are signed by the Chair 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.
Millicom is a legal entity incorporated in
Luxembourg and, as such, it follows
Luxembourg Law in connection with procedures
and rules for its shareholders’ meetings.
2.3-Neither the chief executive officer nor other
members of the executive management are to
be members of the nomination committee.
Mr. Mauricio Ramos, the Interim Chair of the
Board of Millicom, and its Chief Executive Officer,
is a member of the nomination committee.
2.4– Neither the company chair nor any
other member of the board may chair the
nomination committee.
On February 26, 2024, Aude Durand, the Chair of
Millicom’s Nomination Committee, was elected
as a member of the Board of Millicom.
Major Shareholders
It follows from the Instruction to the Nomination
Committee, resolved on May 31, 2023 at the
annual general meeting of the Company, that
the Chair of the Board shall be a member of the
Committee. On August 31, 2023 Mr. Ramos was,
after the resignation of the then current Chair,
appointed as the Interim Chair of the Board,
resulting in non-compliance with rule 2.3. After
the 2024 AGM, Mauricio Ramos is expected to
step down as CEO of the Company and remain
as Executive Chair only.
Following the tragic passing of Nicolas Jaeger,
after consultation and with the approval of the
Nomination Committee, the Board of Millicom
appointed Ms. Durand as a replacement for Mr.
Jaeger on the Board until the company’s next
AGM.
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To the extent known to the Company, it is neither directly nor indirectly owned or controlled by another
corporation, any government, or any other person. In addition, there are no arrangements, known to the Company, the
operation of which may result in a change in its control in the future.
The table below sets out beneficial ownership of our common shares (directly or through SDRs), par value $1.50
each, by each person who beneficially owned more than 5% of our common shares.
Name of Shareholder
Xavier Niel (1)
Dodge & Cox (2)
Common Shares
Percentage of
Share Capital
49,966,734
29.14 %
8,674,932
5.1 %
(1) Information herein is based upon a Schedule 13D filed with the SEC on January 17, 2024 by Atlas Luxco S.à r.l., Atlas Investissement, NJJ Holding and
Xavier Niel. Atlas Luxco S.à r.l., Atlas Investissement, NJJ Holding and Xavier Niel held 49,966,734 of our common shares (approximately 29.14% of
common shares outstanding) as of January 17, 2024. The sole owner of Atlas Luxco S.à r.l. at December 31, 2023 was Atlas Investissement. The sole
owner of Atlas Investissement at December 31, 2023 was NJJ Holding. The sole owner of NJJ Holding is Xavier Niel, and as a result, Xavier Niel is
deemed to be a beneficial owner of NJJ Holding, Atlas Investissement and Atlas Luxco S.à r.l. As of December 31, 2022, Xavier Niel held 12,046,741 of
our common shares (7.0% of common shares then outstanding). On March 8, 2024, we were informed by Atlas Luxco S.à r.l. that Michael Shalom
Golan, a member of our Board of Directors, is an ultimate beneficiary of 2.5% of Atlas Luxco S.à r.l.
(2)
Information herein is based upon an Amendment No. 1 to Schedule 13G filed with the SEC on February 13, 2024.
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 MIC
S.A. common shares. 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.
Based upon the SDR ownership reported by Euroclear Sweden AB, as of December 31, 2023, there were 117 SDR
holders in the United States holding 28,294,954 SDRs (representing 16.4% of the outstanding share capital as of such
date). According to the records held by Broadridge Corporate Issuer Solutions Inc. reported as of December 31, 2023,
there were 74 shareholder accounts in the United States holding 14,356,729 common shares (representing 8.3% of the
outstanding share capital as of such date). However, these figures may not be an accurate representation of the
number of beneficial holders nor their actual location because most of the common shares and SDRs were held for the
account of brokers or other nominees.
Nomination Committee
Millicom's prior Nomination Committee, which was elected in October 2022 and served until the appointment of a
new Committee in October 2023, was composed of:
Member
Mr. Jan Dworsky
Mr. Viktor Kockberg
Mr. Staley Cates
Mr. Gerardo Zamorano
Mr. José Antonio Ríos García
On behalf of
Swedbank Robur
Nordea Investment Funds
Southeastern Asset Management
Brandes Investment Partners
Position
Chair
Member
Member
Member
Appointed by shareholders at the 2022 AGM Member
Mr. Nicolas Jaeger (from March 23, 2023 to May 31, 2023)
Atlas Luxco
Ms. Aude Durand (from May 31, 2023)
Atlas Luxco
Member
Member
Millicom's current Nomination Committee, elected in October 2023 is composed of:
110
Member
Ms. Aude Durand
Mr. Jan Dworsky
Mr. Staley Cates
Mr. Mauricio Ramos
On behalf of:
Atlas Luxco
Swedbank Robur
Southeastern Asset Management
Appointed by shareholders at the 2023 AGM
Position
Chair
Member
Member
Member
The Nomination Committee is appointed by the largest shareholders of Millicom. It is not a Board committee. Its
role is to propose resolutions regarding electoral and remuneration issues to the shareholders’ meeting in a manner
that promotes the common interest of all shareholders, regardless of how they are appointed. Nomination Committee
members' terms of office typically begin at the time of the announcement of the interim report (covering the period
from January to September of each year) and end when a new Nomination Committee is formed.
Under the terms of the Nomination Committee procedure, the committee consists of (i) three members appointed
by the largest shareholders as of the last business day of June 2023 and (ii) the Company's Chair of the Board.
The Company's Articles of Association 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 Company's Board of
Directors, as long as such compliance does not conflict with applicable mandatory law, applicable regulation or the
mandatory rules of any stock exchange on which the Company’s shares are listed.
Nomination Committee proposals to the AGM include, among others:
• Election and remuneration of Directors of the Board and the Chair of the Board
• Appointment and remuneration of the external auditor
• Proposal of the Chairman of the AGM
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
determining the appropriate skills, perspectives and experiences required of Board candidates based on the
Company’s strategic 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.
Board Diversity Matrix (As of December 31, 2023)
Country of Principal Executive Offices “Home Country”:
Foreign Private Issuer
Disclosure Prohibited Under Home Country Law
Total Number of Directors
Part I: Gender Identity
Directors
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
LGBTQ+
Did not disclose demographic background
Luxembourg
Yes
No
9
Female
Male
Non-Binary
Did Not Disclose Gender
3
6
0
0
3
0
0
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Board Diversity Matrix (As of December 31, 2022)
Country of Principal Executive Offices “Home Country”:
Foreign Private Issuer
Disclosure Prohibited Under Home Country Law
Total Number of Directors
Part I: Gender Identity
Directors
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction
LGBTQ+
Did not disclose demographic background
Board Governance
Luxembourg
Yes
No
9
Female
Male
Non-Binary
Did Not Disclose Gender
2
7
0
0
4
0
0
Written charters set out the objectives, limits of authority, organization and roles and responsibilities of the Board
and each of its committees.
Board of Directors and Board Committees
The Chair convenes the Board and leads its work. The Chair 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 Chair 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
2023 AGM set the number of Directors at ten, comprising a Chair, a Deputy Chair and seven members. On August 31,
2023 the Chair resigned from the Board and the role of Chair was assigned to the Executive Director / CEO and from
that time and at December 31, 2023 the Board comprised of eight Non-Executive Directors and one Executive Director
(the CEO of Millicom). On February 26, 2024, Millicom announced the appointment of Aude Durand to its Board of
Directors. In accordance with Millicom’s Articles of Association, Millicom’s Board of Directors, with the approval of
Millicom’s Nomination Committee, appointed Ms. Durand to fill the vacant Board position created by the tragic passing
of Nicolas Jaeger until the next Annual General Meeting of shareholders.
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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 forth 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 mandates can be for a maximum
of six years before either being re-elected or ending their service. There are no restrictions on the maximum
continuous period that a Director can serve. The current Directors have been elected for a term starting on the date of
the 2023 AGM and ending on the date of the 2024 AGM (i.e., for approximately one year).
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
Chair of his or her conflict of interest 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.
• Director's service agreements: None of MIC S.A's current directors have entered into service agreements with the
Millicom Group or any of its subsidiaries providing for benefits upon termination of their respective directorships.
Share Ownership Requirements
Non-Executive 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. Directors and Non-Executive Directors collectively
own less than 1% of the Company's outstanding shares as of January 31, 2024.
Insider Trading Policy
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Nationalities (As of December 31, 2023)1112121AmericanColombianDanishFrenchIsraeliMexicanSwedish The Company has an insider trading policy governing the purchase, sale and other dispositions of our securities by
directors, senior management and employees that are reasonably designed to promote compliance with applicable
insider trading laws, rules and regulations, and any listing standards applicable to the Company.
Roles
Chair of the Board
The Chair is elected by the AGM. If the Chair relinquishes the position during the mandate period, the Board elects
a new Chair from among its members to serve until the end of the next AGM. The Board Chair convenes the Board and
leads its work, coordinates with the CEO to set the meeting agendas and serves as the Board's liaison to the CEO
between meetings.
Deputy Chair of the Board
If elected by the Board, the Deputy Chair acts as a sounding board and provides support for the Chair. The Deputy
Chair convenes Board meetings in accordance with the Company’s Articles of Association and leads the Board's work in
the event the Chair is unavailable or is excused from a Board meeting. The Deputy Chair may act as an intermediary in
any conflicts among Board members or between the Chair and the CEO. The Board can designate additional roles and
responsibilities of the Deputy Chair.
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
on Board responsibilities and logistics.
Chief Executive Officer (CEO)
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, balance and diversity 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 that hold at
least 5% of the share capital may propose additional Directors.
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 the Company or its executive management based on the
Board's independence criteria. The following graphic shows the Board members' independence as of December 31,
2023, Following the tragic passing of Nicolas Jaeger, on February 26, 2024, Aude Durand, the Chair of Millicom’s
Nomination Committee, was elected as a member of the Board of Millicom (who is independent from the Company
and its executive management, but not from the major shareholder, Atlas Luxco).
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Factors considered to determine the Directors’ independence (i) from the Company, executive management and (ii) the
major shareholders
Category
Managerial duties
Employment
Other services
Business relationship
Audit function
Cross directorships
Family relationship
Test
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
should not be considered independent
YES to any of the above in relation to the Company or the management of the Company:
=> Typically not independent from the Company or its executive management
Assessment
YES to any of the above in relation to a major shareholder:
=> Typically not independent from a major shareholder
115
Swedish Code's independence provisions
Requirement
Compliant
The majority of Millicom’s Board must be independent from the Company and its executive
management team.
8 out of 9 Millicom Directors meet this criterion (89%)
At least two of those independent Directors must also be independent from the Company’s
major shareholders.
6 out of 9 Millicom Directors meet this criterion (67%)
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 and Compliance Committee
members meet this criterion (100%)
The Chair 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 and Talent Committee
members meet this criterion (100%)
Nasdaq Stock Market rules
Requirement
Compliant
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 and Compliance
Committee all meet this criterion (100%)
Board Profile: Skills and Experience
Mr. Mauricio Ramos
Executive Director, Interim Chair
Role: Re-elected as Executive Director in May 2023 and elected as Interim Chair on August 31, 2023; first appointed as Executive
Director in June 2020
Nationalities: U.S. and Colombian citizen
Age: Born in 1968
Skills: Mr. Ramos brings his experience as CEO of Millicom, a position he has held since April 2015. During his tenure, he has
designed, proposed and implemented the present strategy of the Millicom group, transforming the Company into a fixed internet
and mobile business with a focus on Latin America. Under Mr. Ramos’ leadership, Millicom solidified its company purpose “to build
the digital highways that connect people, improve lives and develop communities” and built a strong corporate culture described as
Sangre Tigo.
Experience: Currently, Mr. Ramos serves as: (i) a member of the Board of Directors of Charter Communications (U.S.); and (ii)
Commissioner at the Broadband Commission for Sustainable Development. Previously, Mr. Ramos served as President of Liberty
Global’s Latin American division, a position he held from 2006 until February 2015. During his career at Liberty Global, Mr. Ramos
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.
Education: Lawyer and Economist, Los Andes University
Independence: Not independent from the Company and its executive management, independent of the Company’s major
shareholders
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): 459,948 shares
Ms. Pernille Erenbjerg
Deputy Chair, Non-Executive Director
Role: Re-elected as a Non-Executive Director and Deputy Chair of the Board in May 2023; first appointed in January 2019
Nationality: Danish citizen
Age: Born in 1967
Skills: Ms. Erenbjerg brings years of experience operating a converged provider of communication and entertainment services and
driving transformational processes in complex organizations, both organically and through M&A.
Millicom Committees: Chair of the Compensation and Talent Committee
Experience: Currently, Ms. Erenbjerg also serves as (i) Deputy Chair of Genmab, a dual listed company focusing on international
biotechnology headquartered in Denmark; (ii) a Non-Executive Board member of RTL Group, Europe's largest broadcaster; and . (iii)
Chair of the Board of KK Wind Solutions A/S (a Danish privately owned company providing various parts and solutions for the wind
116
industry). Previous roles include: (i) President and Group Chief Executive Officer of TDC, the leading provider of integrated
communications and entertainment solutions in Denmark and Norway; and (ii) Chief Financial Officer and Executive Vice President
of Corporate Finance at TDC, among others.
Education: MSc in Business Economics and Auditing, Copenhagen Business School
Independence: Independent from the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): 41,404 shares
Ms. Maria Teresa Arnal
Non-Executive Director
Role: First elected as a Non-Executive Director in May 2023
Nationality: Mexican, Venezuelan and Spanish citizen
Age: Born in 1971
Skills: Ms. Arnal brings her significant knowledge in the fields of digital payments and digital infrastructure businesses in Latin
America, as well her experience in digital and new media technology, telecommunications and entertainment.
Millicom Committees: Member of the Compensation and Talent Committee
Experience: Ms. Arnal currently serves as a director of (i) Walmart of Mexico and Central America, (ii) Sigma Alimentos, S.A. de C.V.,
wholly owned by Alfa Corporativo, S.A. de C.V, a global food company headquartered and listed in Mexico, and (iii) Orbia, a purpose-
driven growth company that tackles global challenges. Her previous experience includes (i) managing director for Google Mexico, (ii)
Managing Director Spanish Speaking LATAM at Twitter, (iii) Chief Executive Officer and President at J. Walter Thompson Company in
Mexico, (iv) General Manager, Director of Operations, Director of Sales, and Alliances Microsoft in Mexico, (v) consultant for The
Boston Consulting Group and Booz, Allen & Hamilton. Furthermore, she founded Clarus, a leading digital marketing firm that was
later acquired by WPP, and she has been involved with the tech start-up ecosystem in Latam as an investor and through Endeavor
and several VC funds.
Education: Bachelor’s degree in Industrial Engineering from Andres Bello Catholic University (UCAB) and holds a Master of Business
Administration (MBA) from Columbia Business School.
Independence: Independent from the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): 5,601 shares
Mr. Bruce Churchill
Non-Executive Director
Role: Re-elected as a Non-Executive Director in May 2023; first appointed in May 2021
Nationality: U.S. citizen
Age: Born in 1957
Skills: Mr. Churchill brings over 30 years of operational and strategy experience in the media industry, including senior management
roles in Latin America.
Millicom Committees: Member of the Audit and Compliance Committee and member of the Compensation and Talent Committee
Experience: Currently, Mr. Churchill serves on the Board of Wyndham Hotels and Resorts, one of the largest hotel franchises in the
world, where he also chairs the Compensation Committee and as a member of the Audit Committee. Previously, he served as (i) Non-
Executive Director on the Board of Computer Sciences Corporation, a multinational corporation that provided IT services and
professional services, from 2014 to 2017 (when the company merged with HP Enterprise); (ii) President of DIRECTV Latin America,
LLC, from 2004 to 2015, and Chief Financial Officer of DIRECTV from January 2004 to March 2005; and (iii) President and Chief
Operating Officer of STAR TV.
Education: MBA, Harvard Business School; Bachelor of Arts in American Studies, Stanford University
Independence: Independent from the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): 18,167 shares.
Ms. Aude Durand
Non-Executive Director
Role: Elected as a Non-Executive Director of the Board in February 2024
Nationality: French citizen
Age: Born in 1992
Skills: Ms. Durand brings years of experience in the telecommunications industry and know-how about
AI projects and cloud-based infrastructure.
Millicom Committees: None
117
Experience: Currently, Ms. Durand is the Deputy CEO at iliad Holding, where she is involved in key projects across iliad’s telecom
operators in France, Italy and Poland. She also oversees iliad’s AI endeavors, including the creation of Kyutai, a world-class open-
science AI lab. In addition to her role at iliad Holding, Ms. Durand holds positions as Chair of Scaleway (leading European cloud
provider, owned by iliad) and Board Member of Monaco Telecom.
Education: Master of Science (MSc) in Management Science & Engineering from Stanford University (USA) and an Engineering
Degree from Ecole Polytechnique (France)
Independence: Independent from the Company and its executive management, but not from the major shareholder (Atlas Luxco)
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): no shares
Mr. Tomas Eliasson
Non-Executive Director
Role: Elected as a Non-Executive Director in May 2023; first appointed in May 2022
Nationalities: Swedish citizen
Age: Born in 1962
Skills: Mr. Eliasson brings to the Millicom Board significant experience as a Chief Financial Officer (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. He also brings extensive knowledge of Millicom, having served as a Non-
Executive Director and Chair of the Audit Committee for seven years between 2014 and 2021.
Millicom Committees: Chair of the Audit and Compliance Committee
Experience: Currently, Mr. Eliasson serves as: (i) Non-Executive Director of Riksbankens Jubileumsfond, a Swedish foundation
promoting and supporting research in the humanities and social sciences; (ii) Non-Executive Director of Boliden, a metals company
with a focus on sustainable development, listed in Nasdaq Stockholm; (iii) Non-Executive Director of Telia Company, a listed
telecommunications, media and entertainment company; and (iv) Non-Executive Director of Elekta AB a company providing
precision radiation therapy solutions. Previously, Mr. Eliasson served as: (i) Chief Financial Officer (CFO) of Sandvik AB, a global high-
tech engineering group providing solutions for the manufacturing, mining and infrastructure industries, until January 2022; (ii) CFO
of Electrolux, a leading global appliance company listed in Nasdaq Stockholm; (iii) CFO of ASSA ABLOY Group, a global leader in
access solutions, listed in Nasdaq Stockholm; and (iv) CFO of SECO Tools, a global metal cutting and machining solutions provider,
among others.
Education: Bachelor of Science in Business Administration and Economics, University of Uppsala
Independence: Independent from the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): 12,743 shares
Mr. Michael Golan
Non-Executive Director
Role: First elected as a Non-Executive Director in May 2023
Nationality: Israeli citizen
Age: Born in 1978
Skills: Mr. Golan brings insights from his experience as CEO in the telecommunications and media sectors and creating a mobile
operator in Israel.
Millicom Committees: Member of the Audit and Compliance Committee
Experience: Mr. Golan created Golan Telecom in 2010 the 5th Israeli mobile operator at the time. Golan Telecom was sold in 2017.
Before that, he joined the Iliad group as Chief Operating Officer and soon became CEO of Iliad, a position he left in 2007.
Education: Mr. Golan is a graduate of ESCP/EAP business school and Paris Dauphine University.
Independence: Independent from the Company and its executive management, but not from the major shareholder (Atlas Luxco)
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): no shares
Mr. Thomas Reynaud
Non-Executive Director
Role: First elected as a Non-Executive Director in May 2023
Nationality: French citizen
Age: Born in 1973
118
Skills: Mr.Reynaud brings extensive experience in driving growth in the telecommunications and media sector and has advised
several companies in these areas on their business development and IPOs.
Millicom Committees: Member of the Compensation and Talent Committee
Experience: Currently, Mr. Reynaud serves as (i) Chief Executive Officer and a member of the Board of Directors of Iliad Group, the
parent of Free in France, Iliad in Italy and Play and UPC Polska in Poland; (ii) a Board member of the Mozaïk Foundation, an active
supporter of the ScholaVie association which campaigns for positive schooling; and (iii) a partner of several innovative ventures in
the agrifood sector. Mr. Reynaud joined Iliad in 2007, tasked with structuring the Group’s growth. He first served as Head of Business
Development before becoming Chief Financial Officer in 2008 and then a Senior Vice-President in 2010. He has been the Group’s
Chief Executive Officer since May 2018. Thomas began his career in New York in 1997. He then went on to become Managing
Director in charge of the Telecoms and Media sector at Société Générale, where he advised European companies on their business
development, and notably Iliad at the time of its IPO.
Education: Graduate of HEC business school and New York University
Independence: Independent from the Company and its executive management, but not from the major shareholder (Atlas Luxco)
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): 5,601 shares
Ms. Blanca Treviño
Non-Executive Director
Role: First elected as a Non-Executive Director in May 2023
Nationalities: Mexican and U.S. citizen
Age: Born in 1962
Skills: Ms. Treviño brings her wide-ranging international experience in IT services in emerging countries, particularly in Latin America,
as well as strong leadership and perspectives in the rapidly evolving world of business technology.
Millicom Committees: Member of the Audit and Compliance Committee
Experience: Ms. Treviño is the President, CEO, and co-founder of Softtek, a global company dedicated to helping organizations
evolve through technology. She also serves as (i) Co-Chair of the Partnership for Central America, an initiative supported by the Vice-
President of the United States, (ii) Vice-President of the Mexican Business Council, (iii) non-executive director at the Mexican Stock
Exchange, (iv) director at Altan Redes, a private company that is the designer, developer, and operator of the shared
telecommunication networks initiative in Mexico, and (v) member of the Advisory Council of the MIT School of Engineering,
Previously she served as (ii) director at Grupo Lala, (ii) director at the Americas Society, (iii) director at Council of the Americas, (iv)
director at the Ibero-American Council on Productivity and Competitiveness, and (v) independent director of Walmart Mexico for 15
years, as well as an independent director of companies such as Goldcorp and the state-owned Federal Electricity Commission.
Education: Bachelor’s degree in Computer Science from the Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM).
Independence: Independent from the Company, its executive management and its major shareholders
Millicom shareholding at January 31, 2024 (including holdings by closely related persons): 5,601 shares
Board Program
Summary of Board Activities in 2023
Immediately after the 2023 AGM, the Board of Directors held a meeting during which it agreed on key governance
matters, the calendar and 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.
Board program and Area of Focus in 2023
119
Board annual program
1. Strategic review
Focused actions
Discussed, reviewed and approved the strategy
Oversaw and approved the recapitalization of the Colombia business
Oversaw progress in carving out the MFS and Lati tower infrastructure businesses
Discussed with the Executive Team industry and geographic trends and the operational and
financial strategy for each country, with specific focus on Colombia and Guatemala
2. Operating and financial performance
review
Discussed priorities and challenges for each of the operations, including development of MFS,
cable and mobile data businesses, efficiency measures and capital expenditure allocation
Monitored challenges, threats, opportunities and other consequences of the macroeconomic
climate on the business and strategy
Reviewed and approved spectrum acquisition, updated 2023 budget and discussed and approved
the 2024 budget
3. Corporate governance, legal and
compliance matters
Made revisions and updates to governance documents (Board and committee charters,
procedural rules and instructions to the CEO as well as the authority matrix)
Elected the Deputy Chair and Committee Chairs and members, and elected the Interim Chair of
the Board
4. ESG; sustainability and other external
affairs related matters
Oversaw initiatives in implementation of the ESG strategy and progress toward sustainability
targets
Reviewed the external affairs strategic framework and implementation activities
Periodically reviewed the political situation by market, with a specific focus on election periods,
international relations and advice on related risk management
Reviewed regulatory and engagement challenges
Reviewed climate-related risks and impact of the business on climate change
5. Organizational structure and corporate
culture
Participated in performance reviews of the Executive Team and of the management, and
changes in organizational and reporting structures
Oversaw organizational and operational model changes
Oversaw succession planning for the Executive Team
Reviewed cultural initiatives, including DE&I developments
6. External financial reporting and non-
financial performance
Held periodic meetings with the external auditors to review the financial position and reviewed
and approved related reporting
Reviewed the 2022 Annual Report and 20-F, including the 2022 Consolidated Financial
Statements of the Company
Reviewed quarterly earnings releases and 2023 interim consolidated financial statements
Approved corporate finance strategy, including liability management initiatives to extend
maturity and lower average cost of debt
7. Risk management
Participated in the annual risk reassessment and reviewed the key risks facing the Group and its
approach to managing risks
8. Capital structure and shareholder
remuneration policy
Approved refinancing of Group and local bonds and loans to extend maturity and lower average
cost of debt
Set the risk appetite of the Group
Recommended the shareholder remuneration policy and approved the share repurchase plan;
282,724 shares were repurchased during 2023
9. Portfolio management, including
acquisitions and divestments
Discussed acquisition and disposal developments and opportunities with particular focus on
carve-out and monetization of tower infrastructure assets
10. Board performance self-evaluation
Completed an annual self-evaluation of combined Board performance and individual
performances and reported to the Nomination Committee
11. HR matters
Evaluated the performance and approved the compensation of the CEO
12. Reports from committees
Regularly reviewed reports from Audit and Compliance Committee, and Compensation and
Talent Committee on recent activities
Oversaw succession planning for the Executive Team
Discussed Nomination Committee Director appointment proposals
120
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 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, the Board regularly receives detailed reports on specific areas that support Directors' understanding of
Millicom’s business and operating environment.
In 2023 the Directors participated in a visit to Millicom’s operations in Guatemala to learn about the characteristics
of the local market, see aspects of the business in operation, and interact with local management.
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 2023, 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 continued the engagement with an international
consultancy firm 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 2023 Financial Year
Director
Meeting Attendance
Mr. Mauricio Ramos
Ms. Pernille Erenbjerg
Ms. Maria Teresa Arnal
Mr. Bruce Churchill
Mr. Tomas Eliasson
Mr. Michael Golan
Mr. Nicolas Jaeger
Mr. Thomas Reynaud
Ms. Blanca Treviño de Vega
Attendance
Former Director (until August 2023)
Mr. José Antonio Ríos García
Former Directors (until May 2023)
Mr. Odilon Almeida
Mr. Lars-Johan Jarnheimer
Ms. Mercedes Johnson
Mr. James Thompson
Overall attendance
Board Committees
10 of 10
8 of 10
6 of 6
10 of 10
9 of 10
5 of 6
6 of 6
5 of 6
6 of 6
65 of 70
8 of 8
4 of 4
4 of 4
4 of 4
4 of 4
89 of 94
%
100
80
100
100
90
83
100
83
100
93
100
100
100
100
100
95
The Board is supported by committees (Audit and Compliance Committee and Compensation and Talent
Committee) that work on behalf of the Board within their respective areas of responsibility. From time to time, the
121
Board delegates authority to an “ad hoc” work group so that it may resolve a specific matter on its own without having
to go before the full Board for approval.
I. Audit and Compliance Committee
Letter from the Chair of the Audit and Compliance Committee
I am pleased to present the Audit and Compliance Committee’s report for 2023. We convened eight formal
meetings during the financial year in order to satisfy our established set of responsibilities.
In a dynamic landscape marked by global economic shifts, persistence of macroeconomic headwinds, and
management’s actions to position the company to drive an increase in annual equity free cash flow generation,
Millicom demonstrated resilience, achieving key milestones in 2023, paving the way for a strong 2024. These
developments— alongside evolving technological advancements and new regulatory requirements, such as
Environmental Social and Governance (ESG) disclosures, cybersecurity, among others—presented both opportunities
and challenges that shaped the agenda of the Audit and Compliance Committee throughout the year.
Compliance Related topics
In 2023, we continued to develop the ethics and compliance program to better assist employees in doing the right
thing the right way, including continuing to improve the program's reach. As such, we continued enhancing our three
strategic focus points: embed and entrench, communication, and data analytics. With compliance integrated within
the Company's business processes, compliance teams are better able to detect and mitigate any potential risks in real
time. Additionally, the compliance function disseminated its messages in conjunction with other departments in a
clear and understandable manner, with everyone in the organization apprised of both risks and controls that are in
place. Similarly, we used data collected on our platforms to develop action plans and attack root causes.
In focusing on the most pressing risks in 2023, we continued reinforcing the main elements of our compliance
program, including our annual training for the entire Company. The training covered, among other topics, our Code of
Conduct, our Speak Up campaign, our anti-corruption policy and our anti-money laundering (AML) program.
The training campaign this year was designed and prepared using in-house talent and resources. Employees
across the Company participated in creating, producing and delivering a 100% Tigo-customized course.
We continued to build and refine our ethics and compliance program in 2023. This included our AML and
Government Interactions policies. These revised policies aim to mitigate the current risk landscape and adopt best
practices across the board.
Audit Related topics
Supported by the guiding principles established by management and periodic updates on the strength of the
business, the Audit and Compliance Committee engaged in risk oversight of critical areas like ESG, cybersecurity,
supply chain challenges and other external threats. Further, our overarching objectives included ensuring the integrity
of the Group’s financial reporting and that appropriate accounting judgments were made, assessing the external
auditor's effectiveness, and overseeing the status of the internal control environment.
Our Internal Audit Team assisted the committee by harmonizing their plans and assurance activities with the
evolving risk profile and prioritizing reviews to provide consulting services where appropriate. These activities
generated relevant recommendations aimed at enhancing the control posture of the company.
In addition to tracking important regulatory developments in financial reporting, the committee monitored tax
obligations, new debt issuance and refinancing activities, as well as the evolution of Millicom’s risk management
programs.
I wish to extend my appreciation to my colleagues for their support of and commitment to the activities of the
committee. 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 by making it happen the right way.
I look forward to continue performing our duties until the conclusion of our mandate at the 2024 AGM.
Mr. Tomas Eliasson
Chair of the Audit and Compliance Committee
122
Audit and Compliance Committee Members and Attendance at Regularly Scheduled
Meetings in 2023
Audit and Compliance Committee
Position
First appointment
Mr. Tomas Eliasson
Mr. Bruce Churchill
Mr. Michael Golan
Ms. Blanca Treviño de Vega
Attendance
Ms. Mercedes Johnson
Chair*
Member
Member
Member
May 2022
May 2021
May 2023
May 2023
Former Chair of the Audit Committee and
former Member of the Compliance and
Business Conduct Committee
May 2019 (until May 2023)
Mr. James Thompson
Former Member of the Audit Committee
January 2019 (until May 2023)
Mr. Odilon Almeida
Overall attendance
Former Chair of the Compliance and
Business Conduct Committee
November 2015 (until May 2023)
Meetings/
attendance
8 of 8
8 of 8
3 of 4
4 of 4
23 of 24
4 of 4
3 of 3
1 of 1
31 of 32
%
100
100
75
100
96
100
100
100
97
*Designated as having specific accounting competence as per the EU Directive.
In addition, the Interim Chair of the Board, Mr Mauricio Ramos (as from 31 August, 2023) and the former chair of
the Board, Mr. José Antonio Ríos García (until 31 August, 2023), attended all of the Audit and Compliance Committee
meetings.
Appointment and Role of the Audit and Compliance Committee
Millicom's Directors have established an Audit and Compliance Committee that convenes at least four times a year
and comprises a minimum of two directors. The Audit and Compliance Committee is composed solely of Non-
Executive Directors, all of whom were independent Directors in 2023. 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 and Compliance Committee. The Audit
and Compliance Committee is also satisfied that it has the expertise and resources available to fulfill its responsibilities.
This committee has responsibility to assist the Board in its responsibility for the robustness, integrity and
effectiveness of financial reporting, risk management, internal controls, cybersecurity program, internal audit and
external audit process, as well as compliance with related laws and regulations; and to oversee the Company’s
compliance program, standards of business conduct and related investigations, and to monitor the Company’s actions
and resources in these areas. Millicom’s Audit and Compliance Committee reports on and makes recommendations to
the full Board regarding the Group’s compliance programs and standards of business conduct. The 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, VP Risk Management & Internal Audit,
Head of Business Controls, Chief Legal and Compliance Officer, Chief Commercial & Technology Officer, Chief
Information Security Officer, Chief External Affairs Officer and representatives from the Company's external auditor EY
are invited to attend committee meetings. The Secretary of the committee is the Group's Company Secretary. The
Audit and Compliance Committee Chair prepares the meeting agenda in conjunction with the Chief Financial Officer
and Chief Legal and Compliance Officer. Regular private sessions are held, attended only by Audit and Compliance
Committee members and the external auditor, to provide an opportunity for open dialogue without management
present. The CEO and Executive Team are committed to our Sangre Tigo culture and are actively involved in fostering a
culture of ethics and compliance from the top across all our lines of business.
At each regularly scheduled meeting, the Audit and Compliance Committee receives reports from the Chief
Financial Officer, the external auditor, and the heads of Risk Management & Internal Audit and Business Controls.
Additional reports are submitted by other officers of the Company as required. The Audit and Compliance Committee
received the required information from the external auditor in accordance with Luxembourg regulations.
123
Summary of Areas of Focus and Actions in 2023
Financial reporting
(refer to the following pages
for details)
Reviewed key accounting and reporting matters at each meeting.
Reviewed and approved each quarter’s earnings release and the 2023 annual earnings release; the Annual
Report and 20-F together with the consolidated financial statements; the 2023 half-year earnings release;
and each quarter's interim financial statements.
External auditor
(refer to the following pages
for details)
Risk Management & Internal
Audit activities
(Refer to the following pages
for details)
Business controls and SOX
(Refer to the following pages
for details)
Governance
ESG reporting
Reviewed the latest accounting developments and their effect on the financial statements..
Reviewed the alternative performance measures policy.
Received reports from the external auditor at each meeting in compliance with EU regulations covering
important financial reporting, accounting and audit matters; including updates on SEC and CSSF guidelines.
Approved the 2023 external audit strategy and fees and the proposed approach to address the challenges
posed by external factors (such as economic pressures, cybersecurity threats, among others) and internal
factors (such as the Everest project).
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 the revision and
approval of all audit, audit-related and non-audit services rendered by the external auditors.
Provided guidance and oversight over risk management processes
Reviewed alignment of top risks with strategy and recommended risk appetite
Reviewed regular risk reports and risk management remediation plans
Approved the annual Internal Audit plan and subsequent updates to the plan
Reviewed internal audit findings arising from the delivery of the 2023 audit plan
Reviewed the results of Millicom’s Sarbanes-Oxley program.
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
Reviewed and approved the Internal Audit Charter and Enterprise Risk Management Charter.
Reviewed the 2022 EU Taxonomy report, the progress on the effective CSRD legislation (that would become
applicable for Millicom for financial year 2024) and upcoming SEC climate-disclosure proposed rules.
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 and financial risk
management
Fraud management
Reviewed fraud-related cases, investigations and remedial actions
Revenue assurance
Received updates on revenue assurance activities
Reviewed trends and actions taken to minimize loss and revenue leakage
Related party transactions
Reviewed related party transactions
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Compliance program elements
reviewed
Monitored anti-corruption program and automated procedures, including those covering new and
emerging areas of risk and strengthening of the overall program.
Published revised compliance policies and procedures and communicated them to the whole
organization.
Reviewed training completion rates on Company compliance policies as part of select managers' KPIs.
Incorporated compliance factors into executives’ incentive programs for the sixth consecutive year;
bonus awards are tied to achievement of compliance KPIs. Code of Conduct training is a requisite to
access bonus in the whole organization.
Reporting and investigations
Supported Speak Up program by receiving updates on the use of Speak Up resources to report issues
of perceived non-compliance with our policies and values
Global anti-money laundering
(AML) program
Reviewed the implementation of the in-house transaction monitoring tool in Paraguay, Guatemala and
Panama.
Information security and
cybersecurity
Approved the group-level AML training proposed by the Corporate Compliance Department
Supported on-site AML reviews to all MFS and Telco operations, except Bolivia and Colombia.
Reviewed the Information Security Framework, organization and governance
Reviewed the Information Security Program, including risk management, vulnerability management,
and awareness and training, among others
Reviewed reports on cybersecurity incidents, including impact, responses and remediation
Reviewed maturity improvement plans related to the NIST Cyber Security Framework (CSF)
implementation
The Audit and Compliance Committee held eight meetings during 2023, including five meetings coinciding with
key dates in Millicom’s external reporting calendar.
Financial reporting
The Audit and Compliance 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. Reporting and disclosure topics under both EU and U.S. listing
requirements were addressed. To assist with all matters related to earnings releases, financial statements and other
market disclosures, Millicom has a Management Disclosure Committee composed of 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.
External Auditor
Effectiveness
The quality and effectiveness of the external audit matter greatly to the Audit and Compliance Committee. A
detailed audit plan outlining the key risks and proposed geographical coverage is prepared and discussed with the
Audit and Compliance Committee at the start of each annual audit cycle. 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 depth of
inquiry and discussions with executive management, in addition to management feedback provided to the Audit and
Compliance Committee. This feedback allows the committee to monitor and assess the performance of the external
auditor as part of a recommendation to the Board regarding the auditor's appointment.
Independence
The Audit and Compliance 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 and Compliance 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, management can approve them when requested (following an
established authority matrix) and present them to the Audit and Compliance Committee on a quarterly basis for formal
approval. If services to be rendered are not pre-approved, they should be pre-approved by the Chair of the Audit and
Compliance Committee when requested and then submitted to the next full Audit and Compliance 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, 2023, the Audit and Compliance Committee approved fees for audit and audit-
related services of $6.4 million, together with fees for non-audit work of $0.5 million.
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In compliance with independence rules, the previous audit partner rotated off the audit in 2019 and the current
audit partner will rotate off after the audit of the consolidated financial statements as of December 31, 2023.
Risk Management and Internal Audit
Risk Management
The Audit and Compliance Committee received regular reports on the Group’s risk management framework and
process from the Management Risk Committee, as well as reports on the evolution of significant risks at both
operational and Group levels and related mitigation and risk management actions. Further information is set out in the
Risk Management section of this Annual Report, starting on page 35.
In addition, the Audit and Compliance Committee reviewed financial risk, tax risks, policy and strategy, treasury
policy and risks, and Group insurance coverage.
Internal Audit
The Internal Audit team provides independent and objective assurance, and consulting services over the design
and effectiveness of Millicom’s internal control environment, governance, and risk management processes. The
Internal Audit team employs a robust methodology that supports the systematic execution of internal audit activities
reflected through a risk-based annual Internal Audit Plan.
The annual Internal Audit Plan is developed in alignment with the strategic risks of Millicom as well as
consideration of the company’s strategic priorities, input from senior management, external audit findings, industry-
relevant developments, and Internal Audit’s knowledge of the business. Before the start of the fiscal year, the Audit
and Compliance Committee approves the annual Internal Audit plan, which includes assurance and advisory projects
and other risk assessment initiatives, and assesses the adequacy of the budget and resources.
Execution of the 2023 Internal Audit Plan provided the Executive Management Team and the Audit and
Compliance Committee with an independent view of the effectiveness of Millicom’s internal control environment and
governance processes in operational, financial, compliance, and technology areas. At each meeting, the Audit and
Compliance Committee received a report on internal audit activities, progress against the plan, updates to the plan,
and results of the audits completed in the period, including associated recommendations and management action
plans where findings were identified.
Internal Controls and SOX
The Audit and Compliance Committee received the results of management's testing of key controls and testing by
the external auditors. Management concluded that the Group had maintained effective internal controls over financial
reporting.
A debrief of the Sarbanes-Oxley status program was held. The Committee also reviewed and approved the
planned scope of the 2023 program and approach to testing of key controls.
The Committee reviewed regular reports on the results of management testing of key controls and the progress
made to address any control gaps.
II. Compensation and Talent Committee
Letter from the Chair of the Compensation and Talent Committee
I am pleased to present the 2023 Remuneration Report. The key remuneration highlights for the year are
summarized below. Further details are provided in the "Compensation and Talent Committee's Report".
The Committee meets regularly to review executive compensation and other Human Resources related matters to
ensure competitiveness across our markets. We believe in paying for performance, which encompasses both short-
term and long-term incentives. Talent constitutes a fundamental cornerstone for our company. Therefore, we deem it
imperative to integrate talent management considerations within the scope of the Compensation Committee. With
this enhancement, we formally renamed the committee to Compensation and Talent Committee.
Consequently, as of September 2023, the committee, previously comprised of three Board of Directors members,
expanded to encompass five members, dedicated to addressing both Talent and Compensation matters: Ms. Pernille
Erenbjerg (Chair), Ms. Maria Teresa Arnal, Mr. Bruce Churchill, Mr. Thomas Reynaud and the late Mr. Nicolas Jaeger.
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On August 31, 2023, Mauricio Ramos, our CEO, was appointed interim Chair of the Board. To drive profitable
growth within the company, with a focused approach on leading all operational and financial responsibilities, the role
of President/COO has been created. Maxime Lombardini was appointed to take on this role, and with his background,
experience, and proven track record, he has been instrumental in achieving the stated objectives.
In the face of high inflation rates, escalating debt service costs, and elevated competition in our markets, it had
become imperative to further enhance our efficiency program, Project Everest. The efficiencies afforded by Everest
enhance our ability to continue investing in the business and to secure access to capital, enabling us to sustain our
deeply held purpose: to build digital highways that connect our people and foster the development of our
communities. It is within this context that, in the year 2023, two waves of a corporate-level restructuring plan were
implemented, from March to December.
Our 2023 remuneration policy focused on a total compensation approach which consists of:
a) a base salary, various benefits and pension arrangements;
b) a high variable component through an annual short-term incentive (STI) bonus;
c) for senior management only, a portion (30-40%) of this bonus is paid in cash, while the remaining portion is made as
an equity grant from the deferred share plan (DSP), with vesting over 3 years 30%/30%/40%); and,
d) for top executives only, a long-term incentive plan (LTI) that consists of an equity grant from the performance share
plan (PSP).
The committee believes this blended approach balances both short-term and long-term focus. Specifically for the
Chief Executive Officer (CEO) and Executive Vice Presidents (EVPs), the majority of their total compensation is variable,
with a high proportion paid in shares. This aligns management and shareholder interests by measuring performance,
payment in shares and extended time horizons for vesting.
A substantial part of the annual bonus (STI) for the top roles of the organization, including the CEO and EVPs is
paid in shares that vest prorated over three years (DSP). In addition the long-term incentive awards under the
Performance Share Plan (PSP) cliff vest after three years and are fully paid in shares.
For our STI, 60% of the 2023 bonus was based on performance against three financial targets: Service revenue,
EBITDA and Operating free cash flow after leases (OFCFaL). Of the remaining 40%, 10% was allocated to customer
satisfaction—measured using Relational Net Promoter Score (rNPS)—and 30% was based on individual strategic
objectives.
For the Long-Term Incentive component, in 2023, we introduced an ESG metric in addition to Service Revenue,
Operating free cash flow after Leases (OFCFaL) and relative Total Shareholder Return.
We also encourage our top leaders to take a longer-term view on positive business performance in alignment with
Company and shareholder interests. Therefore, we have minimum share ownership requirements for the CEO, EVPs,
VP's and GM's that constitute our top executive team. The CEO is required to build and maintain a shareholding with a
value of at least 400% of base salary, a level he maintained and exceeded in 2023.
During the 2023 AGM, we received ample support for our remuneration approach: 92.28% Approval for
Remuneration Policy, 91.01% Approval for share-based incentive plans and 99.47% Approval for Remuneration Report.
On December 1, 2023, the Board adopted a full comprehensive "claw-back" policy in response to specific rules
issued by the SEC under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(Dodd-Frank). This policy ensures that if our financial statements are restated due to errors, misstatements, or
misconduct, we have mechanisms in place to recoup excess compensation paid to current and former executive
officers. By aligning with regulatory requirements and industry best practices, we reinforce responsible governance
and shareholder value.
There were no deviations to the remuneration policy and the Board is confident that the policy has operated as
intended over the year. A summary of the elements of executive pay for 2023 is set out on the following pages.
The Compensation and Talent Committee is committed to ongoing consultation with shareholders and their
advisory groups.
On behalf of the Board, I hope you find the 2023 Remuneration Report informative.
Ms. Pernille Erenbjerg
Chair of the Compensation and Talent Committee
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Compensation and Talent Committee’s Report
This Annual 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
global senior management for the current and prior financial reporting years.
1.1 Role of the Compensation and Talent Committee
The Compensation and Talent Committee monitors and evaluates (i) programs for variable remuneration to senior
management, including both ongoing programs and those that have ended during the year; (ii) the application of the
guidelines for remuneration to the Board and senior management established at the shareholders' meeting; and (iii)
the current remuneration structures and levels in the Company. The Compensation and Talent Committee makes
recommendations to the Board 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 and Talent Committee and together with meeting
the financial targets discussed below, in his STI payout, the CEO received $1,249,386 in cash and $3,310,873 granted in
deferred shares that vest over three years for the Group's 2023 performance. The Chair of the Compensation and Talent
Committee conveyed the results of the review and evaluation to the CEO.
1.2 Compensation and Talent Committee Charter
The Group’s Compensation and Talent 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 the committee’s performance evaluation.
1.3 Compensation and Talent Committee Membership and Attendance 2023
Director
Position
First
Appointment
Meeting
Attendance
%
Chair
Member
Member
Member
Member
January 2019
May 2023
May 2023
May 2023
May 2023
Ms. Pernille Erenbjerg
Ms. Maria Teresa Arnal
Mr. Bruce Churchill
Mr. Nicolas Jaeger
Mr. Thomas Reynaud
Attendance
Former members
Mr. Lars-Johan Jarnheimer
Mr. James Thompson
Overall Attendance
3 of 3
2 of 2
2 of 2
2 of 2
2 of 2
11 of 11
1 of 1
1 of 1
13 of 13
100
100
100
100
100
100
100
100
100
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1.4 Areas Covered in 2023
Topic
Commentary
Bonus (STI) and performance reports
Reviewed and approved the Global Senior Management Team's 2022 performance
reports and individual Executive Team payouts for STI/LTI (cash/equity)
Compensation review
Share-based incentive plans
Reviewed and approved 2023 short-term variable compensation targets.
Approved all payments for CEO and Executive Team members.
Reviewed executive remuneration and governance trends and developments.
Reviewed and approved the peer group for the CEO and the Executive Team
benchmarking.
Approved changes to CEO and Executive Team compensation elements based on market
competitiveness.
Approved the 2020 LTI (PSP) vesting.
Reviewed and approved all equity grants.
Reviewed and approved the 2023 share units plan (DSP and PSP) rules.
Reviewed and approved the 2023 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 (2021, 2022 and 2023).
Reviewed equity plans participant turnover.
Global reward strategy and executive
remuneration review
Reviewed remuneration/C&B philosophy and strategy.
Discussed and approved STI and LTI design for 2023.
Variable pay design
Reviewed and approved the achievement of the MSU 2023 Tranche
Other
Reviewed and approved STI and LTI performance measures for 2023.
Reviewed and approved exceptional items, new hire equity grants, etc.
Reviewed Executive Team’s severance payouts in a change of control.
Reviewed and approved the Remuneration Clawback policy.
Reviewed and discussed results of 2023 "Say on Pay."
Compensation and Talent Committee
governance
Reviewed and approved the Compensation and Talent Committee annual meeting cycle
and calendar.
Reviewed the Compensation and Talent Committee Charter.
Reviewed and approved the use of an external compensation consultant.
2. 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 23) of the AGM held on May 31, 2023.
2.1 Core Principles
The Compensation and Talent Committee worked using the following objectives for the Global Senior
Management Team's compensation.
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What we strive for
What it means
Competitive and fair
Levels of pay and benefits to attract and retain the right people.
Drive the right behaviors
Reward policy and practices that drive behaviors supporting our Company strategy and
business objectives.
Shareholder alignment
Pay for performance
Transparency
Variable compensation plans that 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 sustained commitment and ensure the interests of
our Global Senior Management Team are aligned with those of our shareholders.
Total reward structured around pay in line with performance, providing the opportunity
to reward strong corporate and individual performance. A significant proportion of top
management's compensation 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, links to value creation etc. We leverage the use of data from our HR
information systems to facilitate measurement and internal communications 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 U.S.
Retention of key talent
Executive management to be "invested"
Variable compensation plans include a significant portion of share based compensation,
the payout of which is conditional on future employment with the Company for three-
year rolling periods, starting on the grant date.
The Global Senior Management Team, through Millicom’s share ownership guidelines, is
required to reach and maintain a significant level of personal ownership of Millicom
shares.
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:
What we do
What we don't do
Align pay and performance.
Create special executive perquisites.
Designate a substantial majority of executive pay as at risk,
based on a mix of absolute and relative financial and share
price performance metrics.
Permit executives to hedge company shares.
Impose limits on maximum incentive payouts.
Provide dividends or dividend equivalents on unearned PSUs or RSUs.
Offer tax gross-ups related to change in control.
Permit executives to use company shares as collateral
Engage in a rigorous target-setting process for incentive
metrics.
Set our STI threshold to pay only at 95% and higher levels of
achievement.
Maintain robust share ownership guidelines for our top 30
executives.
Provide “double-trigger” change in control provisions in
equity awards.
Maintain clawback policies that apply to our performance-
based incentive plans.
Retain an independent compensation consultant
2.2 Elements of Executive Pay
Compensation for the Global Senior Management Team in 2023 comprised a base salary, a short-term incentive
(”STI”) plan and a long-term incentive (“LTI”) plan, together with pension contributions and other benefits (e.g.
healthcare).
Salary
130
Pay element
Purpose
Maximum opportunity
Purpose and link to
strategy
Designed to be market competitive to attract and retain talent
Paid monthly in cash in U.S. dollars or the home currency of the
executive
Reviewed by the Compensation and Talent Committee every March
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
roles and responsibilities, local market
conditions and individual performance.
The Compensation and Talent Committee
aims to set salaries for the Executive Team
at the median of the peer group.
Operational execution
STI
Pay element
Purpose and link to
strategy
Purpose
Payout opportunity
The STI links reward to key business targets (70%) and individual
contribution (30%).
The STI aligns with shareholders’ interests through the provision of
a portion of the payment delivered in share units deferred over
three years (DSP) for the senior leadership team. The DSP is
awarded upon achieving the performance targets, with 30% paid
after one year, 30% after the second year and 40% after the third
year of the grant date.
With less than 95% achievement of
business targets the award falls to
0%. The threshold achievement is
95% of the target, resulting in a
payout of 80%. The opportunity is
200% for the achievement of 104%
for service revenue, 106% for
EBITDA, 107% for OFCFaL and 110%
for rNPS.
The target achievement for:
CEO – 365% (72% paid in DSP)
CFO – 210% (64% paid in DSP)
These plans help incentivize and motivate leadership to execute
strategic plans in operational decision-making and achieve short-
term performance goals, impacting Company performance and
enhancing its value.
Maximum achievement:
CEO – 730% (144% paid in DSP)
CFO – 420% (128% paid in DSP)
The financial and operational targets are;
Service revenue
EBITDA
Operating free cash flow after leases (OFCFaL)
Relational Net Promoter Score (rNPS)
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 and
Talent Committee determines the
annual STI opportunity for the
Executive Team.
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LTI
Pay element
Purpose
Payout opportunity
The LTI links an important part of overall Global Senior
Management Team compensation with the interests of our
shareholders
Purpose and link to
strategy
For financial metrics, achieving less
than 80% of the target results in a
payout of 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 the target achievement is
120% or higher. For total
shareholder return ("TSR"), no award
is granted for performance below
the peer group median. If the
Company achieves a TSR
performance at the 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% for a target achievement of
120% or higher.
This plan aligns the Global Senior Management Team's longer-term
incentives with the longer-term interests of shareholders,
encouraging long-term value creation and retention.
Millicom emphasizes a 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
awarded share units 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 shares and based on company three-
year cash flow and revenue targets approved by the Compensation
and Talent Committee and the Board, in addition to shareholder
return.
Performance share units plan (PSP)
The target achievement for:
CEO - 315%
CFO - 115%
The maximum achievement for:
CEO – 630%
CFO – 230%
Operational execution
The weights for the PSP component are:
• Service revenue: 30%
• OCFaL (operating cash flow after leases): 50%*
• Relative TSR: 10%
• ESG: 10%. The
that will be used
1. Female % of Total Employees ; 2. Female % of Leadership; 3.
Progress toward established SBTi targets; 4. Women and girls
trained as part of our Conectadas Program; 5. Teachers trained as
part of our Maestr@sConectad@s program.
ESG
key
five
to measure progress are:
metrics
The PSP component pays out/is settled in shares at the end of three
years.
*Since the 2021 LTI, we use OCFaL (operating cash flow after leases)
in lieu of OFCFaL (operating free cash flow after leases)
Benchmarking
Our LTI is a key component of the Millicom Group culture.
For executives we benchmark to peer companies within the U.S.
Each year the Compensation and
Talent Committee determines the
annual LTI opportunity for the
Executive Team.
In addition, the Board uses retention schemes to ensure continued retention of key individuals during periods of
uncertainty.
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2.3 Other Employment Terms and Conditions
Notice of termination: If the employment of a member of Millicom’s Executive Team is terminated, a notice period
of up to 12 months potentially applies. The Board regularly reviews best practices in executive compensation and
governance and revises policies and practices when appropriate. Millicom's change-in-control agreements for eligible
executives 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, providing additional variable remuneration in the case of exceptional performance.
2.4 Other Executive Compensation Policies
On December 1, 2023, Millicom adopted a compensation recoupment policy, which is included as Exhibit 97.1 to
this Annual Report. The policy provides for the recoupment of certain executive compensation in the event of an
accounting restatement resulting from material noncompliance with financial reporting requirements.
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.
3.1 Key Elements of 2023 CEO and CFO Pay
In 2023, 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
Mauricio Ramos
(CEO)
$1,224,863
Sheldon Bruha
(CFO)
$650,000
STI Target
Performance
Measures:
STI Target
Performance
Measures:
100% in Cash
Bonus
265% in Share
Units over 3 years
vesting
30%/30%/40%
60% Financial
10% Customer
30% Personal
75% in Cash Bonus
135% in Share
Units over 3 years
vesting
30%/30%/40%
60% Financial
10% Customer
30% Personal
PSP award of 315%
of salary with 3-year
cliff vesting (based
entirely on
performance shares)
15% of salary
PSP award of 115%
of salary with 3-year
cliff vesting (based
entirely on
performance shares)
15% of salary
Benefits
Private
healthcare
Life insurance
Car Allowance
Private
healthcare
Life insurance
Car Allowance
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3.2 Summary of Total CEO/CFO Compensation
The compensation for the CEO and CFO is summarized in the table below:
Mauricio Ramos (CEO)
Sheldon Bruha (CFO) (i)
Tim Pennington
(Former CFO) (ii)
In USD
2023
2022
2023
2022
2022
Base Salary
Fringe Benefits (iii)
Pension Expense
Total Fixed
Annual Bonus (iv)
Deferred Share Units (iv)
LTIP (v)
Total Annual Variable
Annual Compensation
MSU Plan (vi)
Total Compensation
Termination Benefits (ii)
% Annual Fixed
% Annual Variable
1,224,863
1,215,944
87,667
293,473
1,606,003
1,249,386
3,310,873
3,858,313
8,418,572
81,745
286,846
1,584,535
1,650,460
4,373,719
3,745,939
643,750
139,865
173,373
956,989
492,544
886,580
718,748
9,770,118
2,097,872
10,024,575
11,354,653
3,054,861
481,860
—
—
598,121
67,264
144,460
809,845
541,075
973,935
718,750
2,233,760
3,043,605
—
10,506,435
11,354,653
3,054,861
3,043,605
—
16.02 %
83.98 %
—
13.95 %
86.05 %
—
31.33 %
68.67 %
—
26.61 %
73.39 %
581,272
39,769
87,191
708,232
—
—
—
—
708,232
—
708,232
876,939
100.00 %
— %
(i) Mr. Bruha (CFO) started January 12, 2022, and took over the CFO role effective April 1, 2022.
(ii) Mr. Pennington compensation has been paid in GBP and for the purposes of this Annual Report converted to USD using December 31, 2022 Closing
exchange rate. Mr. Pennington started his 1-year notice period on April 1, 2022 and paid via payroll until November 30, 2022 and the remaining 4-month
period paid as a one-time payment on December 22, 2022.
(iii) Fringe Benefits include car allowance, life and disability insurance, medical and dental Insurance and relocation expenses.
(iv) The STI includes cash bonus and the corresponding grant of deferred share units.
(v) LTIP is performance share units granted in 2023 and 2022. Calculated based on the average Millicom closing share price on the US Nasdaq for the three-
month period ending December 31, 2023 and December 31, 2022.
(vi) MSU plan: Our stock-based MSU performance plan is settled in cash. For the MSU description, see note B.4.1. to our audited consolidated financial
statements included elsewhere in this Annual Report.
CEO Compensation - Reported and Realized Pay Supplemental Tables:
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 reported compensation may differ significantly relative to the actual
realized compensation in any given year.
Reported Supplemental Table
In USD
Base pay (i)
STI - Bonus (ii)
Share Awards (iii)
MSU Target Awards
Other Compensation (iv)
Total Reported Pay
Mauricio Ramos (CEO)
2023
2022
1,224,863
1,249,386
7,169,186
—
87,667
1,224,863
1,650,460
8,119,658
4,000,000
81,745
9,731,102
15,076,726
(i) Annual base salary paid from January to December of each year.
(ii) STI - Bonus for each performance period paid in Q1 of the following year.
(iii) Share awards include: DSP awarded for each performance period granted in Q1 of following year and PSP granted in Q1 of reported year.
(iv) Other Compensation refers to car allowance, life and disability premiums, health insurance premiums and pension paid in the reported year.
134
Realized pay Supplemental Table
In USD
Base Salary
Car Allowance
Pension Expense
Total Fixed
Annual Bonus Paid (i)
Deferred Share Units Vested (ii)
LTIP Vested (iii)
MSU Paid
Total Variable Paid
Total Realized Paid
% Fixed
% Variable
Mauricio Ramos (CEO)
2023
2022
1,224,863
1,215,944
15,000
293,473
1,533,335
1,650,460
694,296
—
481,860
2,826,616
4,359,951
35.17%
64.83%
15,000
286,846
1,517,789
2,164,320
865,762
—
—
3,030,082
4,547,871
33.37%
66.63%
(i) Annual bonus paid is the cash portion for the STI for the performance periods 2023 and 2022 (paid in Q1 of the following year).
(ii) Deferred Share Units Vested are the pro-rata vesting shares from STI (2023 displays the amount vested in Q1 2023: 30% from 2022 grant, 30% from 2021
grant and 40% from 2020 grant).
(iii) LTIP Vested are the shares vested from the cliff vesting of the LTI granted three years prior (2023 displays the amount vested in Q1 2023 from 2020 grant,
where the payout was zero).
On average (considering 2023 and 2022) CEO realized pay has been 37% of reported pay and approximately 64%
of his compensation is delivered in the form of shares.
3.3 Performance on STI 2023
As in previous years, the annual bonus is determined by a mixture of business performance and individual
performance factors. The business performance factors included measures of service revenue, earnings before interest,
tax, depreciation and amortization (EBITDA), operating free cash flow after leases (OFCFaL) and a customer satisfaction
metric based on Relational Net Promoter Score achievement. The use and relative weighting of financial performance
target measures under the variable compensation rules are equal for 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
+
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 2023, the achievement of
performance targets is set out in the table below:
Weight
20%
20%
20%
10%
30%
100%
Metric
Max
Target
Min
Service
Revenue (i)
EBITDA (ii)
OFCFAL (iii)
+NPS (iv)
Personal
Performance (v)
$6.00billion
$2.70billion
$0.74billion
$5.80billion
$2.50billion
$0.69billion
$5.50billion
$2.40billion
$0.65billion
110%
100%
95%
60%
30%
—%
Achievement
99.50%
95.80%
97.20%
108.00%
100.00%
102.00%
(i) Service Revenue: Is revenue related to the provision of ongoing services, excluding telephone and equipment sales.
(ii) EBITDA: Is operating profit excluding impairment losses, depreciation & amortization, and gain/losses on fixed assets disposals.
(iii) Operational Free Cash Flow after Leases = EBITDA – Lease payments Cash Out - CapEx +/- Operating Working Capital – Tax paid (excl deferred tax).
(iv) Measures the willingness of customers to recommend a company’s products or services to others.
(v) Based on a performance rating scale
135
For the CEO and other eligible DSP participants, the issuance of share units under the DSP is presented at
Millicom’s AGM of shareholders.
Under the 2023 STI, the 2024 DSP share units are granted in Q1 2024 and will vest (generally subject to the
participant still being employed by the Millicom group) at 30% in Q1 2025, 30% in Q1 2026 and 40% in Q1 2027. The
vesting schedule is unchanged from the 2023 DSP.
3.4 LTI (PSP)
The LTI payout is calculated as follows:
Base Salary x Target Percentage x
3.4.1 LTI (PSP) 2021 Performance
Business
Performance
Factors
=
LTI Payout
The LTI 2021 plan vested in January 2024 with an award of 92.6%. The outcome of LTI 2021 has been audited by
Ernst & Young in respect of the financial performance measures and by Towers Watson for the TSR. The COVID related,
one time RSU component also vested on January 1, 2024.
For LTI 2021, the achievement of performance targets is set out in the table below:
Weight
30%
15%
20%
OCFaL (iii)
Service Revenue (i)
Relative Total
Shareholder Return (iv)
100%
35%
RSU
Metric
Max
Target
Min
Achievement
$4.08billion
$3.40billion
$2.72billion
104.90%
$21.24billion
$17.70billion
$14.16billion
105.90%
Above median
No maximum
Median
Median
0.35
No minimum
Below median
100%
92.60%
(i) (iii) Refer to the definitions above.
(iv) Relative TSR considered a compound annual growth rate and the following peers: America Movil, Telefonica, TIM Brazil, TEF Brazil, Entel Chile, Lilac.
The PSP 2021 meet the criteria for vesting for the CEO and CFO awards:
Name
Type of
award
Basis of
award
Face value
of award
Number of
share units
granted
End of
performance
period
Number of
shares
vested
Achievement
Mauricio Ramos (CEO)
LTI2021
315% of salary 7,171,190
Tim Pennington (Former CFO) (i)
LTI2021
175% of salary 1,237,773
203,727
35,164
Jan-24
Jan-24
92.60 %
188,651
73.88 %
25,979
(i) For Mr. Tim Pennington (Former CFO) Number of shares vested was prorated based on financial performance and employment end date. Mr. Bruha (CFO)
started January 12, 2022, and took over the CFO role effective April 1, 2022.
Deviations from the guidelines: in special circumstances, the Board may deviate from the above guidelines, such as
providing additional variable remuneration in the case of exceptional performance. In these instances, the Board will
explain the reason for the deviation at the following AGM. For the LTI in this review—PSP 2021, PSP 2022 and PSP 2023
—no discretion has been exercised and none of the performance or other conditions have been changed.
3.4.2 Award LTI 2023
A new plan was issued in 2023 to 39 participants, including the CEO and CFO, in accordance with the remuneration
policy guidelines designed to drive shareholder value through a focus on service revenue growth, cash flow generation
and relative total shareholder return against a relevant peer group. The PSP 2023 plan was approved by shareholders
at the 2023 AGM:
136
Metric
Weighting
Performance target
Performance measure
A specific 3-year Cumulative Growth target
A specific 3-year Cumulative Growth target
Service revenue
30 % Target growth
50 % Target growth
OCFaL
TSR
10 %
The Company TSR relative to a peer group between 2022 and
2024
At median - target payout; below median - nil;
20% above median - max
ESG
10 %
The five key ESG metrics that will be used to measure progress
are:
1. Female % of Total Employees ; 2. Female % of Leadership; 3.
Progress toward established SBTi targets; 4. Women and girls
trained as part of our Conectadas Program; 5. Teachers trained
as part of our Maestr@sConectad@s program.
The payout curve is 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 the target achievement is 120% or
higher.
The peer group for the PSP 2023 is: America Movil, TIM Brazil, TEF Brazil, Entel Chile, Lilac, Telecom Argentina, Grupo
Televisa, Megacable.
For the CEO and CFO the award of LTI 2023 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)
PSU - 3 years
315% of salary
$
3,857,286
308,172
January 2026
Cliff Vesting
Sheldon Bruha (CFO)
PSU - 3 years
115% of salary
$
718,557
57,408
January 2026
Cliff Vesting
4. Remuneration Approach for 2024
For 2024, the Board has proposed continuing with a consistent framework of STI and LTI with a few changes
explained below.
For the STI there was a redistribution of metrics, and an introduction of the "Equity Free Cash Flow" metric. The STI
metrics are aligned to our financial objectives. The metrics for the STI are:
1. Service Revenue: 25%
2. EBITDA: 25%
3. EFCF: 25%
4. Personal Performance: 25%
For the LTI, the Board is considering a structure focused on shareholder value creation and share price growth.
For the CEO, the 'at target' and 'maximum' remuneration for 2024 is set out below*:
At Target
$ '000
At Maximum
$ '000
Cash (including base pay, car
allowance, pension and STI bonus)
2,758
Cash (including base pay, car
allowance, pension and STI bonus)
Benefits
Shares
Total
Fixed
Variable
Total
73 Benefits
7,104
Shares
9,935
Total
1,606
Fixed
8,329 Variable
9,935
Total
4,289
73
11,547
15,909
1,606
14,303
15,909
At target, CEO compensation is paid 72% in share units and 84% in variable compensation. At maximum, CEO
compensation is paid 73%in share units and 90% in variable compensation.
137
5. Supplemental topics
5.1 Summary of Outstanding Awards
Name
Plan Type
Deferred
Share Plan
Performan
ce Share
Plan
Performanc
e Period
Award
Grant
Date
Vesting
Date
Opening
Balance
Outstandi
ng
Balance as
of Dec.
2022
Award
Share
Price in
USD
During the Year
Closing
Balance
Share
Units
Granted in
2023
Shares
Vested in
2023
Forfeited
in 2023
Outstanding
Balance as of
Dec. 2023
2019
2020
2021
2022
1/1/2020
1/1/2023 $
45.86
15,858
1/1/2021
1/1/2024 $
35.20
32,957
1/1/2022
1/1/2025 $
33.11
83,262
—
—
—
15,858
14,135
24,979
1/1/2023
1/1/2026 $
12.52
—
349,339
—
—
—
—
—
—
18,822
58,283
349,339
Award
Details -
Plan
Name
2020 DSP
2021 DSP
2022 DSP
2023 DSP
2020 PSP
2020-2023
3/1/2020
1/1/2023 $
45.86
39,094
2021 PSP
2021-2024
3/1/2021
1/1/2024 $
35.20
203,727
2022 PSP
2022-2025
1/1/2022
1/1/2025 $
33.11
144,108
—
—
—
2023 PSP
2023-2026
1/1/2023
1/1/2026 $
12.52
—
308,172
—
39,094
—
—
—
—
—
—
—
203,727
144,108
308,172
519,006
657,511
54,972
39,094
1,082,451
Deferred
Share Plan
Performan
ce Share
Plan
2020 DSP
2021 DSP
2022 DSP
2023 DSP
2019
2020
2021
2022
1/1/2020
1/1/2023 $
45.86
6,958
1/1/2021
1/1/2024 $
35.20
12,890
1/1/2022
1/1/2025 $
33.11
37,280
1/1/2023
1/1/2026 $
12.52
—
2020 PSP
2020-2023
3/1/2020
1/1/2023 $
45.86
8,338
2021 PSP
2021-2024
3/1/2021
1/1/2024 $
35.20
44,790
2022 PSP
2022-2025
1/1/2022
1/1/2025 $
33.11
2023 PSP
2023-2026
1/1/2023
1/1/2026 $
12.52
—
—
110,256
2019
1/1/2020
1/1/2023
45.86
2020
1/1/2021
1/1/2024
2021
1/1/2022
1/1/2025
2022
1/1/2023
1/1/2026
35.2
33.11
12.52
45.86
35.2
—
—
—
—
—
—
2020 PSP
2020-2023
3/1/2020
1/1/2023
2021 PSP
2021-2024
3/1/2021
1/1/2024
2020 DSP
2021 DSP
2022 DSP
2023 DSP
Deferred
Share Plan
Performan
ce Share
Plan
—
—
—
—
—
—
—
—
—
—
—
—
77,790
—
—
—
2022 PSP
2022-2025
1/1/2022
1/1/2025
33.11
27,649
2023 PSP
2023-2026
1/1/2023
1/1/2026
12.52
—
57,408
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
77,790
—
—
27,649
57,408
27,649
135,198
—
—
162,847
138
Mauricio
Ramos
(CEO)
TOTAL
Mauricio
Ramos
(CEO)
Tim
Penningto
n
(Former
CFO)
TOTAL
Tim
Penningto
n (Former
CFO)
Sheldon
Bruha
(CFO)
TOTAL
Sheldon
Bruha
(CFO)
5.2 Summary of Shares Owned vs Target
Millicom’s share ownership policy sets out the Compensation Committee’s requirements for the Global Senior
Management Team to retain and hold a personal holding of common shares in the Company 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
For the CEO and CFO:
400
200
100
50
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 in
Compliance
Mauricio Ramos
(CEO)
Sheldon Bruha
(CFO)
656,007
426,444
85,057
77,790
400%
200%
391,329
459,948
103,833
—
Yes
Yes *
*Unless this requirement is met each year, no vested Millicom shares can be sold by the individual.
5.3 Details of Share Purchase and Sale Activity
During 2023, there were no acquisitions or disposal of shares by CEO, other than the vesting and issuance of shares
under the share-based compensation program.
5.4 Historic CEO and CFO Pay
2020 vs. 2019
2021 vs. 2020
2022 vs. 2021
2023 vs 2022
Information
Regarding 2023
(USD millions,
except as
indicated)
CEO Remuneration*
Former CFO Remuneration
Current CFO Remuneration**
EBITDA for Total Reportable
Segments
Average remuneration on FTE
basis of employees of parent
company***
9.20 %
(4.20) %
— %
17.80 %
33.40 %
— %
(41.82) %
(87.00) %
— %
(7.47) %
— %
0.37 %
10.51
—
3.05
(1.40) %
5.90 %
(1.50) %
(1.08) % 2.6 (USD billions)
0.50 %
3.60 %
3.90 %
10.2 %
28,941 (USD
thousands)
*Represents year-over-year changes in CEO/CFO compensation (excludes MSU).
** Current CFO started January 12, 2022, and took over the CFO role effective April 1, 2022
***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 31, 2023.
139
5.5 2023 AGM vote
Director Remuneration
95,590,466
99.81 %
271,256
0.28 %
80,036
Votes For
%
Votes Against
%
Abstentions
Senior Management Remuneration Guidelines and
Policy
85,874,637
92.28 %
7,185,753
7.72 %
2,610,112
2022 Remuneration Report
94,969,425
99.47 %
507,704
0.53 %
193,373
Millicom CEO and Executive Team
CEO and COO
Position
Role and responsibilities
Mr. Mauricio Ramos
CEO
• Leading the development and execution of the Company’s strategy
• Overseeing day-to-day activities and management decisions
• Acting as liaison between the Board and management of the Company
• Leading the Executive Team
Mr. Maxime Lombardini
President and Chief
Operating Officer
Responsible for leading all operational and financial responsibilities with a focus on driving profitable
growth. He oversees Operations, Commercial, New Ventures, HR and Finance.
Mr. Mauricio Ramos
Chief Executive Officer and Executive Director (Interim Chairman)
Mauricio's biography is presented in the Board Governance section of this Annual Report.
Mr. Maxime Lombardini
President and Chief Operating Officer
Maxime was appointed as President and Chief Operating Officer (COO) in September 2023.
Maxime joined the Iliad Group, one of the major players in the European telecoms sector, in 2007, as Chief Executive
Officer and continued his tenure through 2018. In May of 2018, he assumed the role of Chairman of Iliad’s Board of
Directors until March 2020. Since then, he has served as the Vice-Chairman of the Board of Directors.
Prior to joining Iliad, Maxime has been CEO of TF1 Production, one of the leading French commercial television
network. While in this post he restructured and energized the group's six subsidiaries. From 1999 to 2003, he was head
of business development at TF1, a position in which he studied and implemented the group's growth operations. From
1996 to 1999, he was the company secretary of TPS (a subsidiary of TF1 and M6), a position in which he took part in
launching a digital satellite package.
Maxime is from France. He is a graduate of the Sciences Po Paris and holder of a Master's degree in business and tax
law from the University of Paris II.
MILLICOM SHAREHOLDING AT JANUARY 31, 2024: no shares
Millicom’s Executive Team members support the CEO and COO in the day-to-day operation and management of
the Group within their specific areas of expertise. The Executive Team meets at least once a month and more
frequently when required. Millicom’s Executive Team is as follows:
140
Executive
Team
Role responsibilities
Mr. Sheldon Bruha
Chief Financial Officer
Finance and financial planning; financial performance reporting, including external financial reporting;
budgeting, forecasting and monitoring expenditures and costs; certain procurement activities;
implementation and enhancement of related controls; risk management
Mr. Xavier Rocoplan Chief Commercial and
Technology Officer
Networks, information technology and cybersecurity within the Group. Operations and business
development.
Mr. Karim Lesina
Chief External Affairs Officer Government relations, regulatory affairs, corporate communications and corporate responsibility
Mr. Salvador
Escalón
Chief Legal and
Compliance Officer
Legal and corporate governance matters, including oversight, identification and management of legal
issues, risks and claims of the Group; legal aspects of mergers and acquisitions and other corporate and
commercial transactions; data privacy; compliance matters such as ethics, anti-bribery, anti-corruption,
anti-money laundering and related compliance programs
The profiles of the other Executive Team members are provided below:
Mr. Sheldon Bruha
Executive Vice President, Chief Financial Officer
Sheldon joined Millicom in January 2022 and was appointed as Chief Financial Officer on April 1, 2022.
Prior to joining Millicom, he was the Chief Financial Officer at Frontier Communications, one of the largest fixed-line communication
providers in the U.S., where he successfully helped navigate the business through its financial restructuring. Prior to joining Frontier,
he held several senior financial leadership roles at Cable & Wireless, including Head of Corporate Development, where he led the
strategic transformation and reshaping of the company prior to its sale to Liberty Latin America. He also held senior financial
leadership roles at CDI Corp. Sheldon started his career at Lehman Brothers, holding senior investment banking positions in its New
York and London offices focusing on the telecommunications industry.
He is an American national and holds a Bachelor of Science (Honors) in Business Administration from Washington University.
MILLICOM SHAREHOLDING AT JANUARY 31, 2024: no shares1
Mr. Xavier Rocoplan
Executive Vice President, Chief Commercial and Technology Officer
Xavier joined the Executive Team as Chief Technology and Information Technology Officer in December 2012 and was appointed
Chief Commercial and Technology Officer in June 2023.
Xavier started at Millicom in 2000, initially serving as CTO in Vietnam and subsequently 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), and numerous spectrum acquisitions
and license renewal processes in Africa and Latin America.
Xavier is a French national. He holds a Master's 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, 2024: 111,208 shares
Mr. Karim Lesina
Executive Vice President, Chief External Affairs Officer
Karim joined the Executive Team as Executive Vice President, Chief External Affairs Officer in November 2020.
Previously, he held the position of Senior Vice President, International External and Regulatory Affairs at AT&T, where he directed 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 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 in Economics of Development at the Catholic
University of Louvain-la-Neuve.
MILLICOM SHAREHOLDING AT JANUARY 31, 2024: 32,339 shares
1 Refer to section starting on page 127 for outstanding share awards
141
Mr. Salvador Escalón
Executive Vice President, Chief Legal and Compliance Officer
Salvador became General Counsel in 2013, Executive Vice President in 2015 and Chief Legal and Compliance Officer in 2020.
Salvador joined Millicom as Associate General Counsel Latin America in 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, 2024 96,629 shares
Principal Accountant Fees and Services
The following table summarizes the aggregate amounts paid to Millicom’s auditors for the years ended December
31, 2023 and 2022.
Audit fees ...................................................................................................
Audit related fees ......................................................................................
Tax fees ......................................................................................................
Other fees ..................................................................................................
Total ...........................................................................................................
2023
2022
(US$ millions)
5.6
0.8
0.2
0.3
6.9
5.1
1.3
0.2
0.2
6.8
Audit related services consist principally of consultations related to financial accounting and reporting standards,
including the issuance of comfort letters for debt and bonds. Tax services consist principally of tax advisory services
and tax compliance services. All other fees are for services not included in the other categories. 100% of the audit
related, tax and other fees for 2023 and 2022 were approved by the Audit and Compliance Committee.
Audit and Compliance Committee Pre-approval Policies
The policies and procedures provide that requests for categories of non-audit services by Millicom’s auditors that
have been pre-approved by the Audit and Compliance Committee must be approved by management and
subsequently reported to the Audit and Compliance Committee on at least a quarterly basis, subject to a maximum
annual and individual project cap. Other permitted services not listed in the pre-approved services list ratified by the
Audit and Compliance Committee must be pre-approved by the Audit and Compliance Committee’s Chair in between
the regularly scheduled meetings and subsequently approved by the Audit and Compliance Committee in full (during
scheduled meetings), regardless of the level of fees.
142
Purchases of Equity Securities
The following table provides information about purchases by us and our affiliated purchasers during the fiscal
year ended December 31, 2023 of equity securities that are registered pursuant to Section 12 of the Exchange Act.
(d)Maximum Number (or Approximate
Dollar Value) of Shares that May Yet Be
Purchased Under the Plans or Programs(3)
(c)Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs
(a)Total Number
of Shares
Purchased(1)
(b)Average
Price Paid
per Share(2)
Period
12/01/23 – 12/31/23
Total
282,724
282,724
18
18
282,724
282,724
1,717,276
1,717,276
(1) Amounts expressed in SDRs
(2) Amounts expressed in USD
(3) On December 14, 2023, we announced a share repurchase program for the period between December 18, 2023 and May 22, 2024. Under
the program, the maximum number of Swedish Depository Receipts (SDRs) representing the Company's ordinary shares authorized to be
repurchased was the lower of SEK 420 million (approximately USD 40 million) in aggregate purchase price, or 2,000,000 SDRs.
143
DIRECTOR'S FINANCIAL AND OPERATING
REPORT
Group Performance
In 2023, total revenue for the Group was $5,661 million, a 0.7% increase compared with 2022, reflecting positive revenue
growth in most countries, partially offset by lower revenue in Guatemala, Colombia and Bolivia. Equipment, programming and other
direct costs increased by 0.1% for the year ended December 31, 2023 to $1,507 million, that is, by less than the increase in revenue
due to a change in revenue mix, as revenue from services increased, while revenue from the sale of equipment declined during the
period.
Operating expenses represented 36.1% of revenue, an increase compared with the 33.6% in 2022. This increase is mainly
attributable to unusual items ($87 million for severance and other restructuring costs related to Project Everest and $52 million
related to one-off legal cases, legal costs and applicable value-added taxes related to the subpoenas that we received from the DOJ).
While depreciation was lower, which was mainly attributable to the 2023 prospective change in the useful lives for tower and civil
works assets, amortization was higher, mostly due to the renewal of spectrum licenses in Colombia during 2023. Share of profit in
our Honduras joint venture and Other operating income (expenses), net, both increased, reflecting mainly improved operational
performance and disposal of assets (such as copper wires no longer in use) in 2023, respectively. Operating profit was down 14.2% to
$826 million, a 14.6% margin, as a consequence of the above.
Net financial expenses were $684 million, an increase of $85 million compared with last year. The increase mainly reflects the impact
of higher interest rates on our variable debt and commissions on the purchase of U.S. dollars by our operations in Bolivia, partially
offset by a $12 million gain on the repurchase of bonds. Other non-operating (expenses) income, net, increased by $114 million for
the year ended December 31, 2023 mainly due to foreign exchange gains in 2023 compared to foreign exchange losses in 2022.
Profit before taxes was $175 million, as a consequence of the above.
The net tax charge was $424 million, leaving a loss from continuing operations of $249 million for the year.
Our net loss for the year was $245 million and the share of losses of non-controlling interests was $163 million, reflecting our
partners' share of net results in our subsidiaries in Colombia.
The net loss for the year attributable to Millicom owners was $82 million, a loss per share of $0.48.
Share Capital
At December 31, 2023, Millicom had approximately 172.1 million issued and paid-up common shares of par value $1.50 each, of
which approximately 370 thousands were held by the Company as treasury shares (2022: approximately 1.2 million).
During 2023, the Company acquired 282,724 shares through its share repurchase program. It issued approximately 1,352,000 shares
to management and employees under the share-based plans, and issued approximately 95,000 shares to Directors as part of their
annual remuneration.
Distribution to Shareholders and Proposed Distributions
No dividend was paid in 2023 and 2022.
On May 31, 2023, the AGM approved a share buyback program superseding and replacing all other previous share repurchase plans
of Millicom, which are deemed cancelled. Under its terms, the number of shares that may be repurchased between May 31, 2023 and
the date of the AGM to be held in 2024, would not exceed the higher of 10% of the outstanding share capital of the Company as per
the date of the share repurchase program announced by a press release. 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 Note 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 the Our Corporate
Governance section starting on page 105.
Non-Financial Information
Non-financial information—such as environmental, social and governance—is covered in our "Non-financial information" section,
starting on page 71.
Management and Employees
Beginning in 2022 and throughout 2023 we implemented a broad-based efficiency program ("Project Everest"), and we incurred
severance and other restructuring costs of approximately $87 million in 2023. At December 31, 2023, the Group’s headcount from
continuing operations is approximately 16,500 (2022: 19,446).
144
Financial targets
Millicom’s targets equity free cash flow1 of at least $550 million in 2024 and around $700 million for the 2022-2024 period, which
compares to our previous 3-year target of around $600 million. Underpinning the increased target and the stronger EFCF outlook in
2024 are expected savings from Project Everest, lower expected capital expenditures and spectrum spend and lower severance.
Excluded from this target are (1) any cash proceeds and related taxes stemming from a potential Lati transaction, (2) cash proceeds
from the Colombia tower transaction, and (3) equity capital contributed by our partner in Colombia.
Risks and Uncertainty Factors
The Group operates in an industry and markets that are characterized by rapid change and are subject to macroeconomic,
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 such as inflation—affect the level of disposable income, consumers’ attitudes and demand
for our products and services.
Subsequent Events
Voluntary retirement plan in Colombia
On January 19, 2024, Tigo Colombia announced a voluntary retirement plan for its employees. As of the time of issuance of this
report, Millicom has incurred severance expenses related to this plan of approximately $17 million.
Tower sale
On January 24, 2024, Millicom announced that its subsidiary in Colombia has agreed to sell approximately 1,100 wireless
communications towers to affiliates of investment funds managed by KKR.
Telefonica Costa Rica legal case
On February 13, 2024, the New York Supreme Court granted summary judgment in favor of a breach of contract claim filed by
Telefónica after Millicom terminated the acquisition of Telefónica’s Costa Rican business in 2020. The Court also ruled in favor of
Telefónica’s methodology for calculating pre-judgment interest. As of the time of the issuance of this report, the Court has not yet
determined the exact amount of damages, and a final judgment has not yet been entered. Millicom disagrees with the decision and
continues to believe that it has strong arguments in its favor. Millicom plans to file an appeal of the ruling.
Bond repurchase
Since January 1, 2024 up to the date of these consolidated financial statements, Millicom has continued to repurchase bonds in the
secondary markets for total amounts of $17 million of the 2031 USD 4.5% Senior notes, $64 million of the USD Comcel Senior notes
USD 5.125% and $27 million of the USD 4.500% Senior Notes in Panama.
Share repurchase program
As part of the share repurchase program Millicom has continued to repurchase shares in 2024, acquiring an additional 1,289,776
shares since the beginning of the year to March 7, 2024.
Mobile network combination in Colombia
On February 26, 2024, Tigo Colombia finalized its agreement with Telefonica's subsidiary in Colombia to create a jointly-owned
mobile infrastructure business, which will combine some of our mobile network infrastructure and spectrum assets in Colombia. On
February 26, 2024, Tigo Colombia received final approvals to operate the 5G spectrum purchased in the auction that occurred on
December 20, 2023 enabling Tigo Colombia to launch 5G services which are now available.
Mauricio Ramos
Interim Chairman of the Board of Directors
Luxembourg, March 12, 2024
1 Equity free cash flow,is a Non-IFRS alternative performance measure. See Section "Use of Non-IFRS Terms" for more information on these
measures.
145
Management Responsibility Statement
We, Mauricio Ramos, Executive Director and Chief Executive Officer, and Sheldon Bruha, Chief Financial Officer, confirm
to the best of our knowledge that:
1.
2.
3.
the 2023 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;
the annual accounts prepared in accordance with Luxembourg legal and regulatory requirements, included in
this annual report, give a true and fair view of the assets, liabilities, financial position and profit or loss of
Millicom International Cellular S.A.; and
the Directors’ financial and operating report on the consolidated financial statements included in this annual
report, which has been combined with the management report on the annual accounts included in this
annual report, gives 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
Interim Chairman of the Board of Directors and Chief Executive Officer
Sheldon Bruha
Chief Financial Officer
Luxembourg, March 12, 2024
146
INDEX TO FINANCIAL STATEMENTS
Audited Consolidated Financial Statements of Millicom International Cellular S.A. at December 31,
2023 and 2022 and for the Years Ended December 31, 2023, 2022 and 2021 ..........................................
Report of independent registered public accounting firm ............................................................................
Consolidated statement of income for the years ended December 31, 2023, 2022 and 2021 .....................
Consolidated statement of comprehensive income for the years ended December 31, 2023, 2022 and
F-9
2021 ..................................................................................................................................................................
Consolidated statement of financial position at December 31, 2023 and 2022 ........................................... F-10
Consolidated statement of cash flows for the years ended December 31, 2023, 2022 and 2021 ................ F-12
F-8
F-2
Consolidated statement of changes in equity for the years ended December 31, 2023, 2022 and 2021 .... F-14
Notes to the consolidated financial statements ................................................................................................. F-15
F-1
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
page F-8 to F-88, which comprise the consolidated statement of financial position as at December 31, 2023, and the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial statements,
including material accounting policy information.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated
financial position of the Group as at December 31, 2023, 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 (“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.
F-2
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 the complexity of the Group’s systems and processes used to record revenue and
the risks associated with recognition and measurement of revenue, arising from the diversity and constant evolution of
tariff plans, marketing offers, and discounts provided to customers. This required an increased extent of audit effort,
including the need for us to involve professionals with expertise in information technology (IT), to identify, test, and
evaluate the Group's systems, software applications, and automated controls.
Our answer
Our audit procedures over revenue included, among others:
◦ 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 obtained a sample of customer contracts, including modifications to the contracts, and compared customer
contract terms to the revenue systems.
◦ 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. Similarly, the recoverability of the carrying amount of the deferred tax assets is assessed periodically and in
particular the capacity to generate sufficient taxable profits to utilize these deferred tax assets and other tax credits as
such recoverability assessment is highly judgmental.
F-3
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 and the recoverability of the deferred tax assets and other tax credits.
• 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 tested also controls over management’s evaluation of the significant assumptions used in their fiscal
projections to assess the recoverability of the Group’s deferred tax assets and other tax credits.
• 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 inspected the business plans used in the Group’s analysis of the tax assets’ recoverability, comparing the plans
to those used in other areas of the audit and evaluating the methodology used.
• 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 4,107 million as of December 31, 2023, 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 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.1.6. in relation to goodwill.
F-4
Other information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the Directors' report on page 144 and the accompanying corporate governance statement on pages 105 to
142 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.
The Board of Directors is also responsible for presenting and marking up the consolidated financial statements in
compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic
Format, as amended (“ESEF Regulation”).
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 the Board of Directors 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.
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.
F-5
▪ 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 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.
▪ Assess whether the consolidated financial statements have been prepared, in all material respects, in compliance
with the requirements laid down in the ESEF Regulation.
▪ Obtain sufficient appropriate audit evidence regarding the financial information of the entities and 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.
Report on other legal and regulatory requirements
We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the Shareholders on May 31,
2023, and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 12
years.
The Directors' report on page 144 is consistent with the consolidated financial statements and has been prepared in
accordance with applicable legal requirements.
The accompanying corporate governance statement on pages 105 to 142 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.
F-6
We have checked the compliance of the consolidated financial statements of the Group as at December 31, 2023,
with relevant statutory requirements set out in the ESEF Regulation that are applicable to the financial statements. For
the
Group, it relates to:
•
•
Financial statements prepared in valid xHTML format;
The XBRL markup of the consolidated financial statements using the core taxonomy and the common rules on
markups specified in the ESEF Regulation
.
In our opinion, the consolidated financial statements of the Group as at December 31, 2023, identified as
tigo-2023-12-31-en, have been prepared, in all material respects, in compliance with the requirements laid down in the
ESEF Regulation.
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.
Ernst & Young
Société anonyme
Cabinet de révision agréé
Bruno Di Bartolomeo
Luxembourg, March 12, 2024
F-7
Consolidated financial statements for the years ended
December 31, 2023, 2022 and 2021
Consolidated statement of income for the years ended December 31, 2023,
2022 and 2021
Notes
2023
2022
2021(ii)
(US$ millions)
Revenue ....................................................................................................................
Equipment, programming and other direct costs (i) ..............................................
Operating expenses .................................................................................................
B.1.
B.2.
B.2.
Depreciation ............................................................................................................
E.2.2., E.3.
Amortization ............................................................................................................
Share of profit in joint ventures ..............................................................................
Other operating income (expenses), net ................................................................
Operating profit .....................................................................................................
E.1.3.
A.2.
B.2.
Interest and other financial expenses .....................................................................
C.3.3., E.3.
Interest and other financial income ........................................................................
Revaluation of previously held interests in Guatemala ..........................................
Other non-operating (expenses) income, net ........................................................
Profit (loss) from other joint ventures and associates, net .....................................
Profit (loss) before taxes from continuing operations .....................................
C.3.1.
A.1.2.
B.5., C.7.3.
A.2., A.3.
Tax expense .............................................................................................................
B.6.
Profit (loss) from continuing operations ............................................................
Profit (loss) from discontinued operations, net of tax ............................................
E.4.2.
Net profit (loss) for the year .................................................................................
Attributable to:
Owners of the Company ..........................................................................................
Non-controlling interests ........................................................................................
A.1.4.
5,661
(1,507)
(2,043)
(978)
(360)
42
10
826
(712)
28
—
36
(3)
175
(424)
(249)
4
(245)
(82)
(163)
5,624
(1,506)
(1,890)
(999)
(345)
32
(2)
915
(617)
18
—
(78)
—
238
(222)
16
113
129
177
(48)
4,261
(1,197)
(1,546)
(804)
(310)
210
5
619
(495)
23
670
(49)
(40)
728
(158)
570
(28)
542
590
(48)
Earnings per common share for profit attributable to the owners of the
Company
B.7.
Basic ($ per share) ....................................................................................................
Diluted ($ per share) ................................................................................................
(0.48)
(0.48)
1.27
1.27
4.59
4.57
The presentation of the statement of income for all periods presented has been amended as follows to provide more relevant information: (a) the sub-
(i)
total 'Gross Profit' has been removed, and (b) the line 'Cost of sales' has been renamed as 'Equipment, programming and other direct costs'.
2023 and 2022 yearly figures are not directly comparable with 2021 yearly figures as Tigo Guatemala is fully consolidated since the acquisition of the
(ii)
remaining 45% shareholding on November 12, 2021. See note A.1.2. for further details.
The accompanying notes are an integral part of these consolidated financial statements.
F-8
Consolidated financial statements for the years ended
December 31, 2023, 2022 and 2021
Consolidated statement of comprehensive income for the years ended
December 31, 2023, 2022 and 2021
2023
2022
2021
(US$ millions)
Net profit (loss) for the year ................................................................................................................
(245)
129
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 year ...........................................................................
Attributable to:
Owners of the Company .....................................................................................................................
Non-controlling interests ....................................................................................................................
Total comprehensive income (loss) for the year arises from:
Continuing operations ........................................................................................................................
Discontinued operations ....................................................................................................................
33
(10)
(2)
(223)
(35)
(188)
(228)
4
19
9
(2)
155
204
(49)
42
113
542
(51)
17
1
509
566
(57)
536
(27)
The accompanying notes are an integral part of these consolidated financial statements.
F-9
Consolidated financial statements for the years ended
December 31, 2023, 2022 and 2021
Consolidated statement of financial position at December 31, 2023 and 2022
Notes
December 31,
2023
December 31,
2022
(US$ millions)
ASSETS
NON-CURRENT ASSETS
Intangible assets, net .....................................................................................................................
Property, plant and equipment, net ..............................................................................................
Right of use assets, net ...................................................................................................................
Investment in Honduras joint venture ..........................................................................................
Contract costs, net ..........................................................................................................................
Deferred tax assets .........................................................................................................................
E.1.
E.2.
E.3.
A.2.
F.5.
B.6.
Derivative financial instruments ....................................................................................................
D.1.2.
Other non-current assets ...............................................................................................................
7,785
3,107
896
576
12
141
—
84
7,361
2,989
884
590
10
204
19
76
TOTAL NON-CURRENT ASSETS ...................................................................................................
12,601
12,133
CURRENT ASSETS
Inventories ......................................................................................................................................
Trade receivables, net ....................................................................................................................
Contract assets, net ........................................................................................................................
Amounts due from non-controlling interests, associates and joint ventures .............................
F.2.
F.1.
F.5.
G.5.
Derivative financial instruments ....................................................................................................
D.1.2.
Prepayments and accrued income ................................................................................................
Current income tax assets ..............................................................................................................
Supplier advances for capital expenditure ...................................................................................
Other current assets .......................................................................................................................
Restricted cash ...............................................................................................................................
Cash and cash equivalents .............................................................................................................
TOTAL CURRENT ASSETS .............................................................................................................
TOTAL ASSETS ..............................................................................................................................
C.5.
C.5.
45
443
82
12
6
168
118
21
190
56
775
1,915
14,516
53
379
77
15
—
117
111
21
197
57
1,039
2,065
14,198
The accompanying notes are an integral part of these consolidated financial statements.
F-10
Consolidated financial statements for the years ended
December 31, 2023, 2022 and 2021
Consolidated statement of financial position at December 31, 2023 and 2022
Notes
December 31,
2023
December 31,
2022
(US$ millions)
EQUITY AND LIABILITIES
EQUITY
Share capital and premium ......................................................................................................
C.1.
Treasury shares .........................................................................................................................
Other reserves ...........................................................................................................................
C.1.
Retained profits ........................................................................................................................
Net profit/ (loss) for the year attributable to owners of the Company ...................................
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 ...............................................................................................................
G.5.
F.4.3.
F.4.2.
B.6.
1,334
(8)
(500)
2,785
(82)
3,529
(84)
3,445
6,476
854
46
12
885
330
140
1,343
(47)
(559)
2,691
177
3,605
29
3,634
6,624
853
53
—
473
295
148
TOTAL NON-CURRENT LIABILITIES .......................................................................................
8,742
8,445
CURRENT LIABILITIES
Debt and financing ...................................................................................................................
Lease liabilities ..........................................................................................................................
C.3.
C.4.
Put option liability ....................................................................................................................
C.7.4.
Payables and accruals for capital expenditure ........................................................................
Other trade payables ................................................................................................................
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 ................................................................................................
TOTAL LIABILITIES ..................................................................................................................
TOTAL EQUITY AND LIABILITIES ...........................................................................................
F.5.
F.4.1.
221
189
86
314
390
62
444
93
156
374
180
163
—
428
400
58
412
86
88
305
2,329
11,071
14,516
2,119
10,565
14,198
The accompanying notes are an integral part of these consolidated financial statements.
F-11
Consolidated financial statements for the years ended
December 31, 2023, 2022 and 2021
Consolidated statement of cash flows for the years ended December 31, 2023,
2022 and 2021
Notes
2023
2022
2021
(US$ millions)
Cash flows from operating activities (including discontinued operations)
Profit before taxes from continuing operations ............................................................
Profit before taxes from discontinued operations ..........................................................
E.4.2.
Profit 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:
175
4
179
117
595
(28)
Depreciation and amortization ...................................................................................... E.1., E.2., E.3.
1,338
Share of profit in joint ventures .......................................................................................
A.2.
Gain on disposal and impairment of assets, net ............................................................
B.2., E.4.2.
Share-based compensation ...........................................................................................
Revaluation of previously held interest in Guatemala ...................................................
Loss from other associates and joint ventures, net ........................................................
Other non-cash non-operating (income) expenses, net ...............................................
Changes in working capital: .........................................................................................
C.1.
A.1.2.
A.3.
B.5.
(42)
(10)
52
—
3
(36)
238
116
354
131
497
(18)
1,364
(32)
(122)
29
—
—
77
728
3
731
131
400
(23)
1,196
(210)
(6)
17
(670)
39
50
Decrease (increase) in trade receivables, prepayments and other current assets, net .
(245)
(104)
(93)
Decrease (increase) in inventories ..................................................................................
Increase (decrease) in trade and other payables, net .....................................................
Changes 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 investing activities (including discontinued operations):
Acquisition of subsidiaries, joint ventures and associates, net of cash acquired .........
Financing exit from the Ghana joint venture ..................................................................
Proceeds from the disposal of subsidiaries and associates ............................................
Purchase of spectrum and licenses .................................................................................
Purchase of other intangible assets ................................................................................
Purchase of property, plant and equipment ..................................................................
Proceeds from sale of property, plant and equipment .................................................
Proceeds from disposal of equity investments, net of costs ..........................................
Dividends and dividend advances received from joint ventures and associates ........
Settlement of derivative financial instruments ..............................................................
A.1.
A.2.2.
E.1.4.
E.2.3.
E.2.
C.7.3.
A.2.2.
Transfer (to) / from pledge deposits, net ........................................................................
C.5.3.
Loans granted within the Tigo Money lending activity, net ..........................................
11
47
65
(123)
(115)
(505)
31
(233)
1,223
—
—
—
(236)
(133)
(814)
17
—
63
(26)
(6)
(4)
5
(37)
(14)
(151)
(128)
(411)
8
(316)
1,284
9
6
(5)
(81)
(140)
(355)
4
(127)
956
(283)
(2,000)
—
152
(93)
(179)
(800)
21
—
10
11
33
(3)
(37)
30
(37)
(98)
(740)
11
163
13
—
(33)
—
F-12
Consolidated financial statements for the years ended
December 31, 2023, 2022 and 2021
Cash (used in) provided by other investing activities, net .............................................
Notes
D.1.2.
2023
24
2022
25
2021
26
Net cash used in investing activities ..............................................................................
(1,116)
(1,104)
(2,703)
Cash flows from financing activities (including discontinued operations):
Proceeds from debt and other financing .......................................................................
Repayment of debt and other financing ........................................................................
Loan repayment from joint venture ................................................................................
Lease capital repayment ..................................................................................................
Capital injection in subsidiary (Non-controlling interests' portion) ..............................
Proceeds from the rights offering, net of costs ...............................................................
C.6.
C.6.
C.6.
C.7.4.
C.1.
Advances and dividends paid to non-controlling interests
A.1./A.2.
Share repurchase program ..............................................................................................
Net cash from (used in) financing activities ....................................................................
Exchange impact on cash and cash equivalents, net .....................................................
Net increase (decrease) 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 .........................................................
362
(632)
—
(177)
74
—
—
(5)
(377)
6
(264)
1,039
—
775
1,570
(2,127)
—
(157)
—
717
(4)
—
(1)
(11)
168
895
(24)
1,039
3,113
(1,335)
193
(137)
—
—
(6)
(50)
1,777
(10)
20
875
—
895
The accompanying notes are an integral part of these consolidated financial statements.
F-13
Consolidated financial statements for the years ended
December 31, 2023, 2022 and 2021
Consolidated statement of changes in equity for the years ended December 31, 2023, 2022 and 2021
Number of
shares
(000’s)(iii)
Number of shares
held by the Group
(000’s)
Share
capital (i)
Share
premium (i)
Treasury
shares
Retained
profits(ii)
Other
reserves (i)
Total
Non-
controlling
interests
Balance on January 1, 2021 ..........................................................................................
101,739
Total comprehensive income/ (loss) for the year ...........................................................
Dividends to non-controlling interests ...........................................................................
Purchase of treasury shares (iv) .......................................................................................
Share based compensation (i) .........................................................................................
Issuance of shares under share-based payment schemes .............................................
Change in scope of consolidation(v) ...............................................................................
—
—
—
—
—
—
(526)
—
—
(1,471)
—
459
—
Balance on December 31, 2021 ....................................................................................
101,739
(1,538)
Total comprehensive income/ (loss) for the year ...........................................................
—
Effects of rights offering (i) ...............................................................................................
70,357
Dividends to non controlling interest .............................................................................
Purchase of treasury shares .............................................................................................
Share based compensation (i) .........................................................................................
Issuance of shares under share-based payment schemes .............................................
Effect of the buy-out of non-controlling interests in Panama-(note 3) (vi) ....................
—
—
—
—
—
—
—
—
(93)
—
419
—
(US$ millions)
153
478
—
—
—
—
—
—
153
—
106
—
—
—
—
—
—
—
—
—
(2)
—
476
—
611
—
—
—
(2)
—
Balance on December 31, 2022 ....................................................................................
172,096
(1,213)
258
1,085
Total comprehensive income/ (loss) for the year ...........................................................
Transfer to legal reserve ...................................................................................................
Purchase of treasury shares (iv) .......................................................................................
Share based compensation (i) .........................................................................................
Issuance of shares under share-based payment schemes .............................................
Effect of the buy-out of non-controlling interests in Panama ........................................
Put Option reserve (vi) .....................................................................................................
Capital injection in subsidiary (vi) ....................................................................................
—
—
—
—
—
—
—
—
—
—
(604)
—
1,447
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(9)
—
—
—
Balance on December 31, 2023 ....................................................................................
172,096
(370)
258
1,076
(30)
—
—
(56)
—
26
—
(60)
—
—
—
(4)
—
16
—
(47)
—
—
(18)
—
57
—
—
—
(8)
2,020
590
—
2
—
2
(5)
2,609
177
—
—
1
—
4
78
2,868
(82)
(2)
7
—
(7)
(1)
(81)
—
(562)
(25)
—
—
18
(25)
—
2,059
566
—
(54)
18
1
(5)
(594)
2,583
27
—
—
—
25
(17)
—
204
717
—
(3)
25
1
78
(559)
3,605
47
2
—
50
(40)
—
—
—
(35)
—
(10)
50
1
(1)
(81)
—
215
(57)
(3)
—
1
—
—
157
(49)
—
(2)
—
1
—
(78)
29
(188)
—
—
1
—
—
—
74
Share capital, share premium (including the effects of rights offering) and other reserves (including share-based compensation) – see note C.1.
Retained profits – includes profit for the year attributable to equity holders, of which $491 million (2022: $472 million; 2021: $486 million) are not distributable to equity holders.
The authorized share capital amounts to $300 million divided into 200 million shares with a par value of $1.50 each following the extraordinary general meeting held on February 28, 2022.
(i)
(ii)
(iii)
(iv) During the year ended December 31, 2023, Millicom repurchased 282,724 shares for a total amount of $5 million and withheld approximately 320,985 shares for the settlement of tax obligations on behalf of
employees under share-based compensation plans (2022: 93,413; 2021: 1,470,875)
Cloud 2 Nube S.A. was a subsidiary owned by the Group at 55% and already fully consolidated as Millicom had control over it. As a result, in accordance with IFRS 10, the acquisition of the remaining 45% in
Cloud 2 Nube S.A. that occurred on November 12, 2021, has been treated as an equity transaction and non-controlling interests amounting to less than $1 million were transferred to the Group's equity
against a purchase consideration of $5 million.
See note C.7.4.
(v)
(vi)
The accompanying notes are an integral part of these consolidated financial statements.
F-14
2,703
(500)
3,529
(84)
3,445
Total
equity
2,274
509
(3)
(54)
19
1
(5)
2,740
155
717
(2)
(3)
26
1
—
3,634
(223)
—
(10)
52
1
—
(81)
74
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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 a provider of cable and mobile services dedicated to emerging markets in Latin
America. Millicom provides high speed broadband and innovation around The Digital Lifestyle® services through its principal brand
Tigo.
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 March 7, 2024, 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). 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
markets. Millicom also provides Mobile Financial Services (MFS) and tower infrastructure and services.
During the latter half of 2023, Millicom implemented significant organizational changes to focus on driving profitable growth with a
lean corporate structure. The Group also adopted a decentralized approach to streamline decision-making processes and enhance
agility to improve profitability and shareholder value.
Due to these organizational changes, and considering the information now being reviewed by the Chief Operating Decision Maker
(the "CODM") to assess performance and allocate resources, Millicom's operating segments were redefined to align with its countries
of operation. The Honduras joint venture - and Guatemala's joint venture up to November 12, 2021 when the acquisition of the
remaining 45% equity interest completed - performance is reviewed by the CODM in a similar manner as for the Group’s fully owned
operations and is therefore also shown as a separate operating segment at 100%. However, these amounts are subsequently
eliminated in order to reconcile with the Group consolidated numbers, as shown in the reconciliations included in note B.3.
Segmental information).
Current macroeconomic environment
Inflation across the region has continued to decline in line with global trends. Nevertheless, interest rates remain high,
impacting the Group's variable interest rate debt and financing. This is particularly visible for the Group's operations in
Colombia where inflation has remained elevated near 11% and where a significant portion of the debt is at variable interest
rates.
Over the past year, the Group has taken meaningful steps to mitigate these impacts, including the implementation of numerous
price increases, cost efficiency and investment optimization initiatives, which position the Group to sustain positive service revenue
and cash flow growth going forward.
The Group continues to monitor the developments of the aforementioned events and their potential impact on performance and
accounting considerations.
Climate-related risks
As already publicly announced and discussed elsewhere in our external reporting, our goal is to raise the bar on the Group’s
contribution on environmental, societal and governance matters. In particular, the Group has committed to short-term goals
validated by the Science Based Targets initiative (SBTi). The Group is also committed to the long-term goal of net zero emissions by
or before 2050. Although there is no single explicit standard on climate-related matters under IFRS, climate risk and other climate-
related matters may impact a number of areas of accounting. Up to now, the Group has not been significantly impacted by climate
change, and, currently, management has not considered the climate-related risks as part of the Group's top twelve key risks.
Nevertheless, management will continue monitoring every year the potential risks resulting from the effects of climate change in the
form of natural disasters, such as extreme weather events affecting our 'Networks and infrastructure resilience'. So far, management
has not identified nor considered any material impacts of climate change on assumptions used (e.g. for impairment tests, fair value
measurement, etc.) and on the Group's financial reporting (e.g. provisions, fixed assets, etc.).
F-15
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
IFRS Consolidated Financial Statements
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by
the International Accounting Standard Board ("IASB") and in accordance with IFRS as adopted by the European Union. These
financial statements have been prepared on a 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 material accounting policies that relate to the financial statements as a whole. Material accounting
policies specific to one note are included within that note.
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.
F-16
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
The following table presents functional currency translation rates for the Group’s locations to the US dollar on December 31, 2023
and 2022 and the average rates for the years ended December 31, 2023, 2022 and 2021.
Exchange Rates to the
US Dollar
Functional Currency
2023 Year-
end Rate
2022 Year-
end Rate
Change %
2023
Average
Rate
2022
Average
Rate
Change %
2021
Average
Rate
Bolivia ........................ Boliviano (BOB)
Colombia ................... Peso (COP)
Costa Rica ................... Costa Rican Colon (CRC)
El Salvador ................. US dollar
Guatemala ................. Quetzal (GTQ)
Honduras ................... Lempira (HNL)
Luxembourg .............. Euro (EUR)
Nicaragua ................... Cordoba (NIO)
Panama ...................... Balboa (B/.) (i)
Paraguay .................... Guarani (PYG)
Sweden ...................... Krona (SEK)
United Kingdom ........ Pound (GBP)
6.91
3,822
527
n/a
7.83
24.71
0.91
36.62
n/a
7,278
10.07
0.79
6.91
4,810
602
n/a
7.85
24.66
0.93
36.23
n/a
7,346
10.43
0.83
— %
25.9 %
14.3 %
n/a
0.3 %
(0.2) %
3.1 %
(1.1) %
n/a
0.9 %
3.5 %
5.4 %
6.91
4,313
550
n/a
7.84
24.66
0.93
36.44
n/a
7,299
10.60
0.80
6.91
4,254
650
n/a
7.75
24.56
0.95
35.87
n/a
7,008
10.07
0.81
— %
(1.4) %
18.2 %
n/a
(1.1) %
(0.4) %
2.2 %
(1.6) %
n/a
(4.0) %
(5.0) %
0.5 %
6.91
3,756
625
n/a
7.74
24.12
0.85
35.17
n/a
6,790
8.59
0.73
(i) the balboa is tied to the United States dollar at an exchange rate of 1:1.
New and amended IFRS accounting standards
The following changes to standards have been adopted by the Group and did not have any significant impact on the Group’s
accounting policies or disclosures and did not require retrospective adjustments:
◦
◦
◦
◦
Amendments to IAS 1, 'Disclosure of Accounting Policies' that are intended to help preparers in deciding which accounting
policies to disclose in their financial statements.
IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors' - Definition of accounting estimates.
Amendments to IAS 12, 'Income Taxes: Deferred tax related to Assets and liabilities arising from a Single Transaction' - These
amendments clarify that the initial recognition exception does not apply to the initial recognition of leases and
decommissioning obligations. These amendments apply prospectively to transactions that occur on or after the beginning of
the earliest comparative period presented. In addition, an entity should apply the amendments for the first time by recognizing
deferred tax for all temporary differences related to leases and decommissioning obligations at the beginning of the earliest
comparative period presented. The Group was already recognizing the deferred tax on leases and therefore, the adoption of
these amendments did not have an impact for the Group.
Amendments to IAS 12, 'Income taxes: International Tax Reform – Pillar Two Model Rules': These amendments give companies
temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and
Development’s (OECD) international tax reform. The amendments also introduce targeted disclosure requirements for affected
companies. The potential impact of Pillar Two Model rules and the adoption of these amendments is further detailed below.
Amendments effective for annual periods starting on or after January 1, 2024 that are not expected to have a significant impact on
the Group consolidated financial statements are:
◦
◦
◦
Amendments to IFRS 16 'Leases: Lease Liability in a Sale and Leaseback': The amendment specifies the requirements that a
seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not
recognize any amount of the gain or loss that relates to the right of use it retains.
Amendments to IAS 1, 'Presentation of Financial Statements': These amendments aim to improve the information an entity
provides when its right to defer settlement of a liability is subject to compliance with covenants within twelve months after the
reporting period.
Amendments to IAS 7, 'Statement of Cash Flows' and IFRS 7, 'Financial Instruments: Disclosures: Supplier Finance
Arrangements' (not yet endorsed by the EU): These amendments require disclosures to enhance the transparency of supplier
finance arrangements and their effects on a company’s liabilities, cash flows and exposure to liquidity risk. The disclosure
requirements are the IASB’s response to investors’ concerns that some companies’ supplier finance arrangements are not
sufficiently visible, hindering investors’ analysis.
The following changes to standards are effective for annual periods starting on January 1, 2025 and their potential impact on the
Group consolidated financial statements is currently being assessed by management:
F-17
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
◦
Amendments to IAS 21, 'The Effects of Changes in Foreign Exchange Rates': Lack of Exchangeability (not yet endorsed by the
EU): These amendments help entities to determine whether a currency is exchangeable into another currency, and the spot
exchange rate to use when it is not.
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 applies 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 (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, such as current
macro-economic challenges. 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, restructuring, legal and tax risks (see notes F.4. and
B.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.);
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.);
F-18
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
•
Accounting for share-based compensation in particular estimates of forfeitures and future performance criteria (see notes
B.4.1., B.4.3.).
Change in accounting estimate
During 2023, the estimated useful lives of some property, plant and equipment were revised. As a result, the estimated useful lives of
the Group's towers, poles and ducts were changed from 15 to 25 years, while the related civil works' useful lives were increased from
10 to 15 years. These changes were considered a change in accounting estimate per IAS 8 "Accounting Policies, Changes in
Accounting Estimates and Errors" and therefore accounted for prospectively, meaning that no changes should be accounted for
past periods. This also applies to assets that are fully depreciated and for which no new cost should be reset. (i.e., they remain fully
depreciated).
For the full year 2023, the net effect of the changes represent a decrease in depreciation expense of approximately $27 million
compared to what we expected the depreciation charge to be using previous estimated useful lives, while estimating the net effect
of the changes in depreciation for future years is impracticable. This change in accounting estimate also affects the lease right-of-use
assets (for those being depreciated over the shorter of useful life and lease term) and on asset retirement obligation provisions.
However, the impact of the change is immaterial.
International Tax reform-Pillar II Model
The Group is within the scope of the OECD Pillar Two model rules. Pillar Two legislation was enacted in the countries listed below
and came into effect on January 1, 2024. Since the Pillar Two legislation was not effective at the reporting date, the Group has no
related current tax exposure. The Group applies the exception to recognizing and disclosing information about deferred tax assets
and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023 and endorsed by the
EU on November 8, 2023.
Pillar Two legislation has been enacted from January 2024 in the following countries within the scope of the Millicom Group:
Luxembourg, The Netherlands, United Kingdom and Sweden.
Due to how the Pillar Two rules operate and considering that the Group has its head office in Luxembourg, all entities forming part
of the Millicom Group are in scope of the rules as from January 1, 2024. Under Pillar Two legislations, the Group is liable to pay a top-
up tax for the difference between its GloBE effective tax rate per jurisdiction and the 15% minimum rate.
Due to the complexities in applying the legislation and calculating GloBE income, the quantitative impact of the enacted or
substantively enacted legislation is not yet reasonably estimable. Therefore, even for those entities with an accounting effective tax
rate above 15%, there might still be Pillar Two tax implications. The Group has run initial testing under the OECD transitional safe
harbour rules (i.e. CbC Report Safe Harbours) and it results that all jurisdictions are expected to meet one of the transitional safe
harbours and hence are not expected to be subject to top-up tax.
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.
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. Honduras where
we own 66.7% of the shares but there is a super majority requirement at the board for decisions about the relevant activities of the
operation). The Group's main subsidiaries are as follows:
F-19
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Entity
Colombia Móvil S.A. E.S.P.
Comunicaciones Celulares S.A.
Country
Activity
Colombia
Mobile
Guatemala
Mobile
Distribuidora de Comunicaciones de Occidente, S.A.
Guatemala
Mobile
Grupo de Comunicaciones Digitales, S.A. (formerly
Telefonica Moviles Panama, S.A.)
Panama
Mobile
Lati International S.A. (i)
Luxembourg
Holding Company ('Lati
business')
Millicom Cable Costa Rica S.A.
Costa Rica
Cable, DTH
Millicom Holding B.V.
Netherlands
Holding Company
Millicom International Operations B.V.
Netherlands
Holding Company
Millicom International Services LLC
USA
Services Company
MIC Latin America B.V.
Millicom LIH S.A.
Netherlands
Holding Company
Luxembourg Holding Company
Millicom International Operations S.A.
Luxembourg Holding Company
Millicom Spain S.L.
Spain
Holding Company
Millicom Telecommunications S.A. (ii)
Luxembourg
Holding Company ('MFS
business')
Navega.com S.A.
Guatemala
Cable, DTH
Servicios Especializados en Telecomunicaciones, S.A.
Guatemala
Mobile
Servicios Innovadores de Comunicacion y
Entretenimiento, S.A.
Guatemala
Mobile
Servicios y Productos Multimedios S.A.
Paraguay
Pay-TV, Internet
Telecomunicaciones Digitales, S.A. (formerly Cable
Onda S.A.)
Panama
Cable, Pay-TV, Internet, DTH,
Fixed-line
Telefonica Celular de Bolivia S.A.
Bolivia
Mobile, DTH, Cable
Telefonia Celular de Nicaragua S.A.
Nicaragua
Mobile, Cable, Internet, Fixed-
line
Telefonica Celular del Paraguay S.A.
Paraguay
Mobile, Cable, Pay-TV
Telemovil El Salvador S.A. de C.V.
El Salvador
Mobile, Cable, DTH
December
31, 2023
%
holding*
December
31, 2022
%
holding*
December
31, 2021
%
holding*
50-1 share 50-1 share 50-1 share
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
N/A
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
N/A
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
UNE EPM Telecomunicaciones S.A. and subsidiaries
Colombia
Fixed-line, Internet, Pay-TV,
Mobile
50-1 share 50-1 share 50-1 share
* Also reflects the voting interest, except in Colombia where voting interest is 50% + 1 share for each of the two entities.
(i) Lati International S.A. is the holding Company of the Group's tower business.
(ii) Millicom Telecommunications S.A. is the holding Company of most of the Group's MFS business.
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
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.
F-20
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
A.1.2. Acquisition of subsidiaries and changes in non-controlling interests in subsidiaries
Scope changes 2023
There were no material acquisitions in 2023.
Scope changes 2022
As of June 14, 2022, the Group received the formal notification from the minority shareholders of Telecomunicaciones Digitales, S.A
(formerly Cable Onda S.A.) confirming the exercise of their put option right to sell their remaining 20% shareholding to Millicom for
an amount of approximately $290 million. The transaction was closed on June 29, 2022 and the payment was applied against the
already recorded put option liability of $290 million. As a result, the non-controlling interests' carrying value of $78 million have
been transferred to the Group's equity.
Scope changes 2021
On November 12, 2021, Millicom closed the agreement to acquire the remaining 45% equity interest in its joint venture business in
Guatemala (collectively, "Tigo Guatemala") from its local partner for $2.2 billion in cash. The acquisition had been financed through a
bridge facility fully repaid by June 2022.
The acquisition has been determined as a business combination achieved in stages, requiring Millicom to remeasure its 55%
previously held equity investment in Tigo Guatemala at its acquisition date fair value ($2,683 million); the resulting gain has been
recognized in the 2021 statement of income under the line "Revaluation of previously held interests" and is included in the goodwill
calculation.
The goodwill is attributable to the workforce and the high profitability of Tigo Guatemala. It is not tax deductible. From November
12, 2021 to December 31, 2021, Tigo Guatemala contributed $223 million of revenue and a net profit of $43 million to the Group. If
Tigo Guatemala had been acquired on January 1, 2021 incremental revenue for the year 2021 would have been $1.38 billion and
incremental net profit for the same period of $147 million. Acquisition related costs included in the statement of income under
operating expenses were immaterial.
During the first half of 2022, Millicom had finalized the purchase accounting and determined the fair values of Tigo Guatemala's
identifiable assets and liabilities, and these were reflected in the statement of financial position as of December 31, 2021 in
accordance with IFRS 3.
F-21
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
A.1.3. Disposal of subsidiaries
Tanzania
On April 5, 2022, Millicom completed the sale for an initial cash consideration of approximately $101 million (subject to final price
adjustment). The net assets de-consolidated on the date of the disposal amounted to $79 million and the net gain on disposal was
calculated at $109 million. In accordance with IFRS 5, our former operations in Tanzania are shown in a single line item on the face of
the consolidated statement of income under 'Profit (loss) from discontinued operations, net of tax.
As per the sale agreement, the initial sale price is adjusted to consider some outstanding tax and legal contingencies which
management believes is sufficient to cover any future claims on pre-closing matters. Should the price adjustments not be sufficient,
Millicom might be liable and need to make additional provisions that are not covered by the latter. In addition, the agreement also
provides an IPO1 adjustment clause valid until April 5, 2024, whereby Millicom would reimburse the buyer for any negative
difference between the share price per share on the IPO date and the one implied by this sale. As of December 31, 2023, no
additional provisions have been made by management in respect of the aforementioned items.
(a)
The net assets de-consolidated on the date of the disposal, as well as the gain on disposal, were as follows:
Details of the sale of the subsidiary ($ millions)
April 5, 2022
Carrying amount of net assets sold (A) .............................
Initial sale consideration (B) ..............................................
Gross gain on sale (B) - (A) ..............................................
Other operating expenses linked to the disposal ............
Other operating income/expenses, net ...........................
Gain on sale before reclassification of foreign
currency translation reserve ..........................................
Reclassification of foreign currency translation reserve ..
Net gain on sale ...............................................................
(79)
101
180
(11)
(5)
165
(56)
109
(b)
set out below. The figures shown below are after inter-company eliminations.
The operating results and cash flows of the discontinued operation for the years ended December 31, 2022 and 2021 are
Results from Discontinued Operations
(in millions of U.S. dollars)
Revenue .............................................................................................
Equipment, programming and other direct costs ............................
Operating expenses ...........................................................................
Depreciation and amortization .........................................................
Other operating income (expenses), net ..........................................
Gain/(loss) on disposal of discontinued operations .........................
Other expenses linked to the disposal of discontinued operations
Operating profit (loss) .....................................................................
Interest income (expense), net ..........................................................
Other non-operating (expenses) income, net ..................................
Profit (loss) before taxes .................................................................
Tax expense .......................................................................................
Net profit/(loss) from discontinued operations ..........................
2022
88
(26)
(27)
(21)
4
120
(11)
127
(12)
—
116
(3)
113
2021
357
(104)
(131)
(83)
1
—
—
39
(36)
(1)
3
(31)
(28)
1 The Tanzanian government implemented in 2016 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 ´Tanzania Communications Regulatory Authority´ (TCRA) ordered the Tanzanian
operations to complete such public offering by December 31, 2025, at the latest
F-22
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Cash flows from discontinued operations
(in millions of U.S. dollars)
2022
2021
Cash from operating activities, net ....................................................
Cash from (used in) investing activities, net ......................................
Cash from (used in) financing activities, net ......................................
Net cash inflows (outflows) .............................................................
18
(10)
(9)
(1)
87
(46)
(35)
5
Other disposals
For the years ended December 31, 2023, 2022 and 2021, Millicom did not dispose of any other significant investments.
A.1.4. Summarized financial information relating to subsidiaries with significant non-controlling interests
The summarized financial information for material non-controlling interests in our operations in Colombia and Panama (until the
purchase of the remaining 20% shareholding in June 29, 2022) 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 (decrease) in cash and cash equivalents
2023
2022
2021
(US$ millions)
1,313
(501)
60
(326)
(163)
2,470
2,605
(135)
(68)
(17)
(85)
—
270
(214)
(54)
2
5
1,335
(492)
64
(104)
(52)
1,942
1,890
52
26
2
28
(2)
250
(289)
(133)
(5)
(178)
1,414
(509)
100
(80)
(40)
2,336
2,158
178
89
(6)
83
(5)
272
(295)
30
(10)
(2)
F-23
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Panama
Revenue
Total operating expenses
Operating profit
Net profit (loss) for the year
20% non-controlling interest in net profit (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 (decrease) in cash and cash equivalents
2022 (i)
2021
(US$ millions)
651
(207)
106
29
4
1,719
1,318
401
—
—
148
(117)
(93)
(63)
633
(207)
7
(37)
(7)
1,717
1,347
371
74
74
179
(118)
(43)
17
(i) From January 1 to June 29, 2022, until the purchase of the remaining 20% shareholding of our operations in Panama (see note A.1.2.).
F-24
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
A.2. Joint ventures
Joint ventures are businesses over which Millicom exercises joint control as decisions over the relevant activities, such as the ability
to upstream cash from the joint ventures, 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. Our main investment in joint ventures is comprised of Honduras.
At December 31, 2023, the equity accounted net assets of our joint venture in Honduras totaled $382 million (December 31, 2022:
$401 million). 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 net assets, $3 million (December 31, 2022: $3 million) represent statutory reserves that are unavailable to
be distributed to the Group. During the year ended December 31, 2023, Millicom's joint venture in Honduras repatriated cash of $86
million under different forms (December 31, 2022: $85 million).
At December 31, 2023, Millicom had $68 million payable to Honduras joint venture which were mainly comprised of advances
(December 31, 2022: $48 million). In addition, as of December 31, 2023, Millicom had a total receivable from Honduras joint venture
of $9 million, (December 31, 2022: $13 million) mainly corresponding to other operating receivables.
Our main joint ventures are as follows:
Entity
Telefonica Celular S.A. (i)
Navega S.A. de CV (i)
Country
Activity
Honduras
Honduras
Mobile, MFS
Cable
December 31,
2023 %
holding
December 31,
2022 %
holding
66.7
66.7
66.7
66.7
(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.
On October 13, 2021, Millicom, along with its joint venture partner Bharti Airtel Limited, closed the disposal of AirtelTigo Ghana to
the Government of Ghana. As part of the closing conditions, each partner committed and paid $37.5 million for the reimbursement
of certain local bank facilities which had been provided for in the statement of income under the line "Loss from other joint ventures
and associates, net". Millicom still owns 50% of the holding company Bharti Airtel Ghana Holdings B.V..
The carrying values of Millicom’s investments in joint ventures were as follows:
Carrying value of investments in joint ventures
The table below summarizes the movements for the year in respect of the Group’s joint ventures carrying values:
Opening balance at January 1, 2022
Capital increase
Results for the year
Dividends declared during the year
Currency exchange differences
Closing balance at December 31, 2022
Results for the year
Dividends declared during the year
Currency exchange differences
Closing balance at December 31, 2023
Honduras (i)
(US$ millions)
596
3
32
(35)
(7)
590
42
(54)
(2)
576
(i)
Includes all the companies under the Honduras group. Share of profit is recognized under ‘Share of profit in joint ventures’ in the statement of income
for the year ended December 31, 2023.
At December 31, 2023 and 2022 the Group had not incurred obligations, nor made payments on behalf of the Honduras operations.
F-25
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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 IAS 36 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 – Honduras, Guatemala and Ghana operations
Summarized financial information of the Honduras, Guatemala (until acquisition of the remaining 45% equity interest, see note
A.1.2.) and Ghana (until disposal in 2021) operations is as follows. This information is based on amounts before inter-company
eliminations.
Honduras
F-26
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Revenue ..............................................................................................................................................
Depreciation and amortization ..........................................................................................................
Operating profit ................................................................................................................................
Financial income (expenses), net .......................................................................................................
Profit before taxes ............................................................................................................................
Tax expense .........................................................................................................................................
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 .................................................................
Guatemala
2023
2022
2021
(US$ millions)
612
(105)
124
(28)
95
(32)
63
42
63
429
440
200
223
(35)
66.7 %
(23)
600
576
47
394
28
162
(94)
(48)
21
586
(112)
111
(29)
80
(31)
49
32
9
404
384
182
220
(17)
66.7 %
(12)
601
590
27
334
23
162
(109)
(64)
(12)
589
(124)
99
(34)
62
(22)
40
27
—
473
362
176
305
(18)
66.7 %
(12)
608
596
39
267
73
166
(89)
(98)
(21)
On November 12, 2021, Millicom closed the agreement to acquire the remaining 45% equity interest in its joint venture business in
Guatemala.
From January 1, to
November 12, 2021
(US$ millions)
Revenue ..............................................................................................................................................
1,379
Depreciation and amortization ..........................................................................................................
Operating profit ................................................................................................................................
Financial income (expenses), net .......................................................................................................
Profit before taxes ............................................................................................................................
Tax expense ........................................................................................................................................
Profit for the year ..............................................................................................................................
Net profit for the year attributable to Millicom ............................................................................
Dividends and advances paid to Millicom .........................................................................................
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 (decrease) in cash and cash equivalents .................................................................
(282)
462
(40)
432
(99)
333
183
13
611
(192)
(406)
1
13
F-27
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
AirtelTigo Ghana
Our joint investment in AirtelTigo Ghana has been disposed of in 2021. The only material effect for 2021 year's statement of income
is the loss recognized on the exit financing which is further explained in note A.2..
A.2.3. Impairment of investment in joint ventures
While no impairment indicators were identified for the Group’s investments in joint ventures in 2023, according to its policy,
management has completed an impairment test for its joint venture in Honduras.
The Group’s investments in Honduras operations was tested for impairment by assessing the recoverable amount (using a value in
use model based on discounted cash flows) against the carrying amount. The cash flow projections used were extracted from
financial budgets approved by management (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% (2022: 1%). Discount rate used in determining recoverable
amount was 11.0% (2022: 14.2%).
For the years ended December 31, 2023 and 2022, and as a result of the impairment testing described above, management
concluded that the Group’s investments for its joint venture in Honduras should not 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.
A.3. Investments in associates
Millicom has significant influence over MKC Brillant 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 2023 confirmed this conclusion. The Group accounts for associates in the same way as it accounts for
joint ventures, that is, using the equity method.
In December 2022, Millicom relinquished its seat at the board of directors of Milvik AB ("Milvik") and therefore lost its significant
influence in accordance with IAS 28. As a result, the Group stopped equity accounting for its investment in Milvik and classified it as a
financial asset measured at fair value in accordance with IFRS 9. During 2023, the Group's investment in Milvik has been disposed of
for one US dollar.
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.
A.4.2. Millicom’s discontinued operations
In accordance with IFRS 5, financial information relating to discontinued operations for the years ended December 31, 2022 and
2021 is set out below. Figures shown below are after intercompany eliminations. As further explained in Note A.1.3. , the Group’s
former businesses in Tanzania (sold on April 5, 2022) had been classified as discontinued operations. For the year ended December
31, 2023, the results from discontinued operations relate to operating income for $4 million. For further details on Assets held for
sale, refer to note E.4.
Results from discontinued operations
F-28
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Revenue ...............................................................................................................................................
Equipment, programming and other direct costs .............................................................................
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 ..................................................................................................................
Tax expense .........................................................................................................................................
Net profit/(loss) from discontinued operations ............................................................................
Cash flows from discontinued operations
2022
2021
(US$ millions)
88
(26)
(27)
(11)
(21)
4
120
127
(12)
—
116
(3)
113
357
(104)
(131)
—
(83)
1
—
39
(36)
(1)
3
(31)
(28)
2022
2021
(US$ millions)
Cash from operating activities, net .....................................................................................................
Cash from (used in) investing activities, net ......................................................................................
Cash from (used in) financing activities, net ......................................................................................
18
(10)
(9)
87
(46)
(35)
F-29
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
B. Performance
B.1. Revenue
Millicom’s revenue comprises sale of services from its mobile business (including Mobile Financial Services - MFS) and its fixed and
other 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. See section B.3. for
details.
B.1.1. Accounting for revenue
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 determination of whether or not the Group acts as principal or as an agent, when there is one or several performance
obligations and 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.
The Group applies the following practical expedients foreseen in IFRS 15:
•
•
•
•
No financial component adjustment to the transaction price 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 of 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).
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), the price allocated to unsatisfied performance obligations is not disclosed.
Recognition of 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.
A summary of the timing for revenue recognition from contracts with customers, is disclosed in Note B.3. and further detailed
below.
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,they do not represent a distinct good or service and do not give rise to a separate
performance obligation and therefore revenue is recognized over the minimum contract duration. If the fee is paid by a customer
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 with revenue 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. Customer premise equipment (CPE), provided to
customers as a prerequisite to receive the subscribed Home services until return at the end of the contract duration, do not provide
benefit to the customer on their own as 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 transaction price of the performance obligation.
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 (when the portion of the contract liability relating to the expiring credit is recognized as revenue as
there is no longer an obligation to provide those services).
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
F-30
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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 provision of Mobile Financial Services (MFS), such as commissions on peer to peer transfers, is generally recognized
once the primary service has been provided to the customer. Revenue from interest earned on loans granted to customers are
recognised over the period of the loan and are based on effective interest rates, with loan origination fees being treated as an
adjustment to the effective interest rate.
Telephone and equipment sales are recognized as revenue once the customer obtains control of the good, that is, when the
customer has the ability to direct the use and obtain substantially all of the remaining benefits from that good.
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 on a straight-line basis over the period of the underlying lease contracts.
Finance leases revenue is apportioned between lease of tower space and interest income.
Revenue from contracts with customers from continuing operations:
$ millions
Timing of revenue
recognition
Group
Group
Group
2023
2022
2021
Mobile ........................................ Over time
Mobile Financial Services .......... Point in time
Fixed and other services ........... Over time
Other .......................................... Over time
Service Revenue
Telephone and equipment ....... Point in time
Revenue from contracts with
customers
B.2. Expenses
2,949
44
2,192
65
5,250
411
2,916
40
2,145
69
5,171
454
1,963
37
1,938
60
3,997
263
5,661
5,624
4,261
The various costs and expenses incurred by the Group can be summarized as presented below. The Group recognizes and
categorizes expenses by their nature as either 'equipment, programming and other direct costs' which are those more directly
related to the generation of revenue or as '(Other) operating expenses and income' which are rather indirect costs. As a result,
'equipment, programming and other direct costs' specifically excludes the following costs/expense which are further detailed below
and elsewhere in the consolidated financial statements:
•
•
•
'Operating expenses, net' further detailed below;
Depreciation and amortization, which are further detailed in Notes E.1.3. ‘Movements in intangible assets’, E.2.2.
‘Movements in tangible assets’ and E.3. ‘Right of use assets’.
‘Other operating income (expenses), net’, also further detailed below.
F-31
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Equipment, programming and other direct costs
2023
2022
2021
(US$ millions)
Cost of telephone, equipment and other accessories .......................................................................
TV Content and data costs ..................................................................................................................
Voice airtime and transmission costs .................................................................................................
Bad debt and obsolescence cost ........................................................................................................
Call center costs ..................................................................................................................................
Transmission and other costs .............................................................................................................
Other costs ..........................................................................................................................................
(386)
(349)
(234)
(141)
(72)
(19)
(306)
(425)
(361)
(261)
(124)
(84)
(17)
(234)
Equipment, programming and other direct costs ........................................................................
(1,507)
(1,506)
(256)
(320)
(202)
(86)
(90)
(47)
(196)
(1,197)
Operating expenses, net
Operating expenses incurred by the Group can be summarized as follows.
Marketing expenses ............................................................................................................................
Site and network maintenance costs .................................................................................................
Employee related costs (B.4.) ..............................................................................................................
External and other services .................................................................................................................
Other operating expenses ..................................................................................................................
2023
2022
2021
(US$ millions)
(536)
(322)
(614)
(281)
(290)
(570)
(310)
(494)
(251)
(266)
(450)
(233)
(474)
(164)
(224)
Operating expenses, net ..................................................................................................................
(2,043)
(1,890)
(1,546)
Other operating income (expenses), net
The other operating income and expenses incurred by the Group can be summarized as follows:
Impairment of intangible assets and property, plant and equipment ..................
Gain (loss) on disposals of intangible assets and property, plant and
equipment ...............................................................................................................
Reverse earn-out in respect of Zantel's acquisition (i) ............................................
Gain (loss) on disposal of equity investments (ii) ...................................................
Other income (expenses) (iii) ...................................................................................
Other operating income (expenses), net ............................................................
Notes
2023
2022
2021
E.1., E.2.
(3)
(7)
(US$ millions)
6
—
—
8
10
1
2
—
2
(2)
(6)
5
11
(15)
10
5
(i)
In January 2022, Millicom received $11 million from Etisalat as earn-out income related to the purchase of Zantel in 2015. This settlement was
considered as an adjusting event and recorded in 'other operating income' in the 2021 statement of income.
(ii) In June 2021, Millicom disposed of its entire stake in Helios Towers plc for a total net consideration of $163 million, triggering a net loss 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".
(iii) In 2021, other income (expenses) can be mainly attributed to social obligations spectrum liability derecognition in Paraguay of $4 million and reversal
provision related to Ghana of $4 million. In 2023 other income is mainly attributed to contract lease modification in Colombia for $2 million and social
obligation spectrum liability derecognition in Paraguay for $3 million.
B.2.1. Accounting for equipment, programming and other direct costs and operating expenses
F-32
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Equipment, programming and other direct costs
Equipment, programming and other direct costs 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.).
F-33
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
B.3. Segmental information
As further detailed in the Introduction note, Millicom operates in a single region (Latin America), and more specifically in the following
countries: Guatemala, Colombia, Panama, Honduras, Bolivia, Paraguay, El Salvador, Nicaragua and Costa Rica.
During the latter half of 2023, Millicom implemented significant organizational changes to focus on driving profitable growth with a
leaner corporate structure. The Group also adopted a decentralized approach to streamline decision-making processes and enhance
agility to improve profitability and shareholder value. To that end, the General Managers of the operations, which primarily reported
to the Group Chief Operating Officer (COO), now directly report to the Group President and COO in the case of Guatemala and
Colombia and to the Group Chief Commercial and Technology Officer in the case of the rest of the operations, who, together with the
Group Chief Executive Officer (CEO) and Group Chief Financial Officer (CFO) form the ‘Chief Operating Decision Maker’ (“CODM”).
Due to these organizational changes, and considering the information now being reviewed by the CODM to assess performance and
allocate resources, Millicom's operating segments were redefined to align with its countries of operation. The Honduras joint venture
- and Guatemala's joint venture up to November 12, 2021 when the acquisition of the remaining 45% equity interest was completed -
is reviewed by the CODM in a similar manner as for the Group’s controlled operations and is therefore also shown as a separate
operating segment at 100%. However, these amounts are subsequently eliminated in order to reconcile with the Group consolidated
numbers, as shown in the reconciliations below.
Management evaluates performance and makes decisions about allocating resources to the Group's operating segments based on
financial measures, such as revenue, including service revenue, and EBITDA. Capital expenditures are also a significant aspect for
management and in the telecommunication industry as a whole. Management believes that service revenue and EBITDA are essential
financial indicators for the CODM and investors. These measures are particularly valuable for evaluating performance over time.
Management utilizes service revenue and EBITDA when making operational decisions, allocating resources, and conducting internal
comparisons against historical performance and competitor benchmarks. Additionally, these metrics provide deeper insights into the
Group's operating performance. Millicom's Remuneration Committee also employs service revenue and EBITDA when assessing
employees' performance and compensation, including that of the Group's executives. A reconciliation of service revenue to revenue
and EBITDA to profit before taxes is provided below.
Before the organizational changes in the second half of 2023, the Group reported a single segment, the Group Segment. But with the
new structure in place and considering the information now being reviewed by the CODM as described above, it has revised its
segment presentation and information for all periods presented to separately disclose the Group's operating and reportable
segments.
Capital expenditures are reconciled with notes E.1. and E.2..
Revenue, Service revenue, EBITDA, capital expenditures and other segment information for the years ended December 31, 2023, 2022
and 2021, are shown on the below:
December 31,
2023
Guatemala Colombia Panama Bolivia Honduras Paraguay
Other
reportable
segments (v)
Total for
reportable
segments
Inter-
segment
and other
eliminations
(iv)
Total
Group
Service revenue(i) .
1,339
1,268
669
601
Telephone and
equipment revenue
225
45
50
11
Revenue
1,564
1,313
719
613
Inter-segment
revenue ...................
Revenue from
external customers .
EBITDA(ii) ...............
Capital
expenditures (iii) ...
8
3
2
—
1,556
1,311
717
613
807
183
420
161
296
224
100
92
(US$ millions)
572
39
612
5
607
272
103
544
24
568
3
565
236
97
847
5,842
(591)
5,250
55
450
(39)
411
902
6,292
(631)
5,661
7
28
895
352
148
6,264
2,609
883
n/a
n/a
n/a
n/a
(498)
2,111
(73)
809
(i)
Service revenue is revenue related to the provision of ongoing services such as monthly subscription fees for mobile and broadband, airtime and
data usage fees, interconnection fees, roaming fees, mobile finance service commissions and fees from other telecommunications services such as
data services, short message services, installation fees and other value-added services excluding telephone and equipment sales.
(ii)
EBITDA is operating profit excluding impairment losses, depreciation and amortization and gains/losses on the disposal of fixed assets.
F-34
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
(iii)
(iv)
(v)
Capital expenditures correspond to additions of property, plant and equipment, as well as operating intangible assets, excluding spectrum and
licenses. The Group capital expenditure additions can be reconciled with notes E.1.3.. and E.2.2.for amounts of $116 million and $693 million
respectively (2022: $150 million and $823 million, respectively).
Includes intercompany eliminations, unallocated items and Honduras as a joint venture.
Includes our operations in El Salvador, Nicaragua and Costa Rica.
Guatemala Colombia Panama Bolivia Honduras Paraguay
Other
reportable
segments (v)
Total for
reportable
segments
Inter-segment
and other
eliminations(iv)
Total
Group
1,373
1,253
624
608
549
530
801
5,739
(568)
5,171
(US$ millions)
245
83
27
13
37
Revenue
1,618
1,335
651
621
586
8
4
2
—
4
1,611
1,331
649
621
857
197
404
298
242
277
106
124
582
262
78
26
556
2
554
245
107
60
491
(37)
454
861
6,230
(605)
5,624
7
28
854
6,202
n/a
n/a
n/a
n/a
330
2,638
(409)
2,228
138
1,028
(55)
973
Guatemala Colombia Panama Bolivia Honduras Paraguay
Other
reportable
segments (v)
Total for
reportable
segments
Inter-segment
and other
eliminations(iv)
Total
Group
1,365
1,319
608
612
548
526
762
5,739
(1,741)
3,997
(US$ millions)
236
95
25
12
41
30
66
503
(240)
263
1,601
1,414
633
623
589
555
827
6,242
(1,982)
4,261
7
4
2
—
4
2
8
27
1,593
1,409
631
623
586
553
820
6,216
n/a
n/a
n/a
n/a
857
441
281
249
259
197
318
128
119
81
242
114
310
2,640
(1,123)
1,517
154
1,111
(188)
922
F-35
December 31,
2022
Service
revenue(i) .........
Telephone and
equipment
revenue .............
Inter-segment
revenue .............
Revenue from
external
customers ..........
EBITDA(ii) .........
Capital
expenditures
(iii) .....................
December 31,
2021
Service
revenue(i)........
Telephone and
equipment
revenue (i) ........
Revenue ..........
Inter-segment
revenue ............
Revenue from
external
customers(ii) ....
EBITDA(ii) ........
Capital
expenditures
(iii) ....................
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Reconciliation of EBITDA for reportable segments to the Group Profit before taxes:
(US$ millions)
2023
2022
2021
EBITDA for reportable segments ..........................................
2,609
2,638
2,640
Depreciation ..............................................................................
Amortization .............................................................................
Share of profit in joint venture .................................................
Other operating income (expenses), net .................................
(978)
(360)
42
10
(999)
(345)
32
(2)
(804)
(310)
210
5
Interest and other financial expenses ......................................
(712)
(617)
(495)
Interest and other financial income .........................................
Revaluation of previously held interests in Guatemala ..........
Other non-operating (expenses) income, net .........................
Profit (loss) from other joint ventures and associates, net ......
Honduras as joint venture ........................................................
Unallocated expenses and other reconciling items (i) ............
Profit before taxes from continuing operations ................
28
—
36
(3)
(272)
(225)
175
18
—
(78)
—
(262)
(148)
238
23
670
(49)
(40)
(259)
(864)
728
(i) The unallocated expenses are primarily related to centrally managed costs.
F-36
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
B.4. People
Number of permanent employees
Subsidiaries (i) .....................................................................................................................................
Joint ventures (ii) ................................................................................................................................
Total ....................................................................................................................................................
2023
2022
2021
15,742
785
16,527
18,534
912
19,446
19,749
938
20,687
(i)
Emtelco (subsidiary of UNE EPM Telecomunicaciones S.A.) headcount are excluded from this disclosure and any internal reporting because their costs
are classified as direct costs and not employee related costs. Includes Guatemala for 2021.
(ii) Only Honduras for 2023, 2022 and 2021.
Notes
2023
2022
2021
(US$ millions)
Wages and salaries ...................................................................................................
(463)
(372)
(361)
Social security ..........................................................................................................
Share based compensation .....................................................................................
Pension and other long-term benefit costs ............................................................
B.4.1.
B.4.2.
Other employees related costs ...............................................................................
(73)
(52)
(3)
(24)
(69)
(29)
(2)
(22)
(66)
(16)
(6)
(25)
Total .........................................................................................................................
(614)
(494)
(474)
Restructuring Costs
Millicom is currently implementing a cost reduction project called 'Everest' with a focus on efficiency improvements. In 2023,
Millicom recorded $87 million of severance costs and other redundancies (including the acceleration of share-based compensation
and consulting costs related to this cost reduction project)..
B.4.1. Share-based compensation
1. Equity-settled
Millicom shares granted to management and key employees includes share-based compensation in the form of long-term share
incentive plans. Since 2016, Millicom has two types of annual plans, a performance share plan (PSP) and a deferred share plan (DSP).
The different plans are further detailed below.
Cost of share-based compensation
2019 incentive plans
2020 incentive plans
2021 incentive plans
2022 incentive plans
2023 incentive plans
Total share based compensation
Deferred share plan
2023
2022
2021
(US$ millions)
—
—
(10)
(10)
(32)
(52)
—
(3)
(11)
(15)
—
(29)
3
(3)
(17)
—
—
(17)
As from the 2019 plan, shares vest at a rate of 30% on January 1 of each of year one and two, and the remaining 40% on January 1 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 (up to the 2020 plan)
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
F-37
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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").
Performance share plan (for plans issued from 2021)
Shares granted under this performance share plan generally follow the same rules as for previous performance share plans.
However, for LTI 2021 plan, Millicom had added a time vesting Restricted Stock Units (“RSU’s”)(LTI 2021: 35%) that will be vesting at
the end of three years depending on satisfactory service condition. RSU's have been removed from the plan rules from 2022. For LTI
2023 plan, Millicom had added an environmental, social and governance metric ("ESG") (LTI 2023: 10%).
The Service Revenue (LTI 2023: 30%; LTI 2022: 30%; LTI 2021: 15%) and Operating Cash Flow after Leases ("OCFaL") (LTI 2023: 50%;
LTI 2022: 50%; LTI 2021: 30%) performance conditions are no longer measured based on a CAGR but on the actual cumulative
achievement against the 3-year cumulative targets to better reflect the performance over the three-year period rather than simply
the end point as is the case with a CAGR target. The Relative TSR (LTI 2023: 10%; LTI 2022: 20%; LTI 2021: 20%) is measured over the
10 trading days before / after December 31 of the last year of the corresponding three-year measurement period.
Assumptions and fair value of the shares under the TSR portion(s)
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.
Risk-free
rate %
Dividend
yield %
Share price
volatility(i) %
Award term
(years)
Share fair
value (in US$)
Performance share plan 2023 (Relative TSR)...............................
Performance share plan 2022 (Relative TSR)...............................
Performance share plan 2021 (Relative TSR)...............................
Performance share plan 2020 (Relative TSR)...............................
4.66
2.01
0.29
0.61
Performance share plan 2019 (Relative TSR)...............................
(0.24)
0.00
0.00
1.28
1.47
3.01
52.88
47.94
46.28
24.54
26.58
2.82
2.80
2.82
2.93
2.93
31.13
29.12
52.99
55.66
49.79
(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 (equity settled transaction 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
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 (such as the Relative TSR). 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.
F-38
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Plan awards and shares expected to vest
Initial shares granted
Additional shares granted(i)
Effect of the Right Offering(ii)
Revision for forfeitures
Total before issuances
Shares issued in 2020
Shares issued in 2021
Shares issued in 2022
Shares issued in 2023
2023 plans
2022 plans
2021 plans
2020 plans
PSP
DSP
PSP
DSP
PSP
DSP
PSP
DSP
(number of shares)
818,842
2,375,143
306,641
865,862
451,363
536,890
341,897
370,131
—
—
—
—
—
47,588
—
5,824
—
5,928
83,926
227,947
115,575
93,375
20,862
32,526
(101,108)
(51,309)
(52,623)
(54,595)
(63,624)
(45,747)
—
(41,791)
717,734
2,323,834
337,944
1,086,802
503,314
590,342
362,759
366,794
—
—
—
—
—
—
—
—
—
—
—
—
—
(1,121)
(5,760)
(13,957)
(2,071)
(160,596)
(31,124)
(354,331)
(29,885) (476,256)
(120,419)
(234,157)
—
—
—
—
(3,571)
(113,653)
(100,362)
(149,208)
Performance conditions not met
—
—
—
—
—
—
(362,759)
Shares still expected to vest
Estimated cost over the vesting period (US$
millions)
686,610
1,969,503
308,059
596,589
379,703
189,829
11
42
6
20
18
19
—
—
—
—
—
(i) Additional shares granted represent grants made for new joiners and/or as per CEO contractual arrangements.
In 2022, as per plan rules, additional shares have been granted to all participants for unvested plans as a result of the effect of the right offering (see
(ii)
note C.1. ).
2. Cash-settled
In 2021, and in the light of the impact on future LTI awards as a consequence of the impact of COVID-19 on the Group's business, the
Board awarded a one-time Retention Plan 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 granted to each participant was determined on the basis of a share price at inception of $33.83 for Tranche
2022 and $36.90 for Tranche 2023 (targets consider that Millicom share price at grant date - $30.75 - would appreciate 10% for
Tranche 2022 and 20% for tranche 2023 from the grant price). The aforementioned share prices and number of units granted have
been amended as a result of the effect of the right offering (see note C.1. ). At the vesting date, the value of the MSU were
determined by the 30-trading day average share price ended on September 30, 2022 for Tranche 2022, and the 30-trading day
average share price ended 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 were required to forfeit
their awards under the LTI plans 2019 and 2020 in respect of the Financial targets (Service Revenue and Operating Cash flow
growths), provided that the TSR component will continue to be active for these schemes. During 2023, Tranche 2022 has been paid
out to participants for a total cash amount of $1.15 million.
The MSU is a cash-settled share-based payment plan and Millicom measures the services acquired over the relevant service period
and the liability incurred at the fair value of the liability. Until the liability is settled, Millicom is required to remeasure the fair value of
the liability at the end of each reporting period and at the date of settlement, with any changes in value recognised the statement of
income.
As of December 31, 2023 and 2022, the fair value of the liability amounts to $1 million and $2 million, respectively, and was
determined by using Millicom's share price (using a Black-Scholes model would not result in material differences). The related cost
for the years ended December 31, 2023 and 2022, amounts to an expense of $1 million (as a result of the share price decrease over
the year) and a credit of $1 million, respectively.
B.4.2. Pension and other long-term employee benefit plans
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 and no further
F-39
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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.
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
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, 2023, the defined benefit obligation liability amounting to $51 million (2022: $37 million), increased mainly related
to interest cost ($5 million) and currency translation effect ($10 million), and payments expected in the plans in future years totals
$100 million (2022: $77 million). The average duration of the defined benefit obligation at December 31, 2023 is 4 years (2022: 4
years). The termination plans apply to employees that joined UNE prior to December 30, 1996. The level of payments depends on
the number of years in which the employee has worked before retirement or termination of their contract with UNE.
Except for the UNE pension plan described above, there are no other significant defined benefits plans in the Group.
B.4.3. Directors and executive management
The remuneration of the members of the Board of Directors comprises an annual fee and shares. Director remuneration is proposed
by the Nomination Committee and approved by the shareholders at their Annual General Meeting (AGM).
Remuneration charge for the non-executive Directors of the Board (gross of withholding tax)
Chairperson .........................................................................................................................................
Other non-executive directors of the Board ......................................................................................
Total (i) ................................................................................................................................................
Shares beneficially owned by the non-executive Directors
2023
2022
2021
(US$ ’000)
315
1,408
1,723
315
1,360
1,675
300
1,338
1,638
Chairperson ....................................................................................................................................................................
Other non-executive directors of the Board ..................................................................................................................
Total (i) ...........................................................................................................................................................................
2023
2022
(number of shares)
—
94,718
94,718
43,891
152,298
196,189
(i)
Cash compensation is denominated in USD. Share based compensation is based on the market value of Millicom shares on the corresponding AGM
date (2023: in total 42,141shares; 2022: in total 41,167 shares; 2021: in total 24,737 shares. Net remuneration comprised 75% in shares and 25% in cash
(SEK) (2022: 73% in shares and 27% in cash; 2021: 73% in shares and 27% 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 and Talent Committee of the Board. If the employment of Millicom’s senior executives is terminated, severance of up
to 12 months’ salary is potentially payable.
F-40
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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 and Talent Committee and approved by the Board.
Remuneration charge for the Executive Team
2023
Base salary .................................................................................................................
Bonus ........................................................................................................................
Pension .....................................................................................................................
Other benefits ...........................................................................................................
MSU (amount earned) ..............................................................................................
Termination benefits ................................................................................................
Total before share based compensation .............................................................
Share based compensation(ii) .................................................................................
Total ..........................................................................................................................
Other
Executive
Team
Members (6
members) (i)
Mr. Mauricio
Ramos
Mr. Sheldon
Bruha
(US$ ’000)
1,225
1,249
293
88
—
—
2,856
11,831
14,687
644
493
173
140
—
—
1,450
2,449
3,898
3,034
1,525
727
301
—
804
6,391
7,383
13,774
Mr. Mauricio
Ramos
Mr. Sheldon
Bruha
Mr. Tim
Pennington
(US$ ’000)
Other
Executive
Team
Members (5
members) (i)
2022
Base salary ..............................................................................................................
Bonus .....................................................................................................................
Pension ..................................................................................................................
Other benefits ........................................................................................................
MSU (amount earned) ...........................................................................................
Termination benefits .............................................................................................
Total before share based compensation ..........................................................
Share based compensation(ii) ..............................................................................
Total .......................................................................................................................
1,216
1,650
287
82
373
—
3,608
5,567
9,175
598
541
144
67
—
—
1,351
688
2,039
581
—
87
40
67
877
1,653
888
2,540
2,883
2,044
663
312
174
—
6,076
4,927
11,004
F-41
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Other
Executive
Team
Members (5
members) (i)
Mr. Mauricio
Ramos
Mr. Tim
Pennington
(US$ ’000)
2021
Base salary ...........................................................................................................................................
Bonus ...................................................................................................................................................
Pension ................................................................................................................................................
Other benefits .....................................................................................................................................
MSU (amount earned) .........................................................................................................................
Total before share based compensation .......................................................................................
Share based compensation(ii) ...........................................................................................................
1,185
2,164
284
88
991
4,712
7,914
Total ....................................................................................................................................................
12,626
708
969
106
46
198
2,027
1,652
3,679
2,783
2,718
652
791
545
7,489
5,383
12,872
(i)
'For 2023, 'Other Executives' includes compensation paid to Mr. Maxime Lombardini (who joint the Group in September 2023). For 2023, 2022 and
2021, Other Executives' includes also compensation paid to Mr. Esteban Iriarte, former Chief Operating Officer (departed in May, 2023) and Ms Susy
Bobenrieth (departed in December, 2023).
See note B.4.1. for further details on share-based compensation. Calculated based on the closing Millicom share price on the Nasdaq in the US at the
(ii)
grant date. 1,132,654 and 916,219 were awarded in 2023 to Mauricio Ramos, Sheldon Bruha and the Executive Team (2022: 290,049 and 338,171,
respectively; 2021: 196,904 and 211,578, respectively).
Share ownership and unvested share awards granted from Company equity plans to the Executive team
CEO
Executive
team
Total
(number of shares)
2023
Share ownership (vested from equity plans and otherwise acquired) .............................................
459,948
Share awards not vested .....................................................................................................................
1,082,451
259,694
490,736
719,642
1,573,187
2022
Share ownership (vested from equity plans and otherwise acquired) .............................................
Share awards not vested .....................................................................................................................
426,607
519,006
297,061
593,765
723,668
1,112,771
B.5. Other non-operating (expenses) income, net
Non-operating items mainly comprise changes in fair value of derivatives and the impact of foreign exchange fluctuations on the
results of the Group.
Note
2023
2022
2021
(US$ millions)
Change in fair value of derivatives ............................................................. C.7.2.
Change in fair value in investment in Milvik (i) ..........................................
Change in fair value in investment in HT (ii) .............................................. C.7.3.
Change in value of call option asset and put option liability (iii) .............. C.7.4.
Exchange gains (losses), net .......................................................................
Other ..........................................................................................................
Total other non-operating (expenses) income, net
4
—
—
(2)
31
3
36
12
(6)
—
(1)
(84)
1
(78)
3
—
18
(31)
(42)
2
(49)
(i) (Milvik) Please see note A.3.
(ii) In June 2021, Millicom disposed of its entire stake in Helios Towers (HT) for a total net consideration of $163 million, triggering a net loss 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"
F-42
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
(iii) Until June 29, 2022, date on which the non-controlling shareholders of Tigo Panama exercised their put option right to sell their remaining 20%
shareholding to Millicom (see note A.1.2.).
Foreign exchange gains and losses
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 intra-group 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 (2022: 10% to 35%; 2021: 10% to 35%). Income tax relating to items recognized directly in equity is also
recognized in equity.
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 ..........................................................................
(Increase)/decrease in unrecognised deferred tax assets and impairment(i) ...................................
Total
Adjustments in respect of prior years ................................................................................................
Tax (charge) credit on continuing operations ...................................................................................
Tax (charge) credit on discontinuing operations ...............................................................................
Tax expense .......................................................................................................................................
2023
2022
2021
(US$ millions)
(81)
(170)
(10)
(261)
44
1
45
(209)
(164)
1
(163)
(424)
—
(424)
(70)
(165)
(39)
(274)
168
—
168
(114)
54
(2)
52
(222)
(3)
(225)
(56)
(106)
(13)
(175)
72
29
101
(81)
20
(3)
17
(158)
(31)
(189)
(i) Mainly due to the impairment of tax credits and deferred tax assets, resulting from the application of IAS12 over their recognition.
F-43
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Reconciliation between the tax expense and tax at the weighted average statutory tax rate is as follows:
Income tax calculation
2023
2022
2021
Continuing
operations
Discontinued
operations
Total
Continuing
operations
Discontinued
operations
Total
Continuing
operations
Discontinued
operations
Total
Profit before tax ..........
175
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
and impairment of
deferred tax assets ...
Recognition of
previously
unrecognized
deferred tax assets ...
Adjustments in
respect of prior
years ..........................
(27)
10
1
(121)
(80)
13
(2)
(209)
—
(9)
Tax expense ............
(424)
Weighted average
statutory tax rate ......
15.4%
Effective tax rate .......
242.3%
4
(1)
—
—
1
—
—
—
—
—
—
—
179
(28)
10
1
(120)
238
(47)
37
—
1
(80)
(68)
13
(2)
9
1
(US$ millions)
116
(27)
354
728
(74)
(153)
—
—
26
—
—
—
37
—
27
9
29
83
(68)
(55)
9
1
41
(15)
3
(1)
—
—
(4)
—
—
—
731
(154)
9
29
79
(55)
41
(15)
(209)
(114)
(2)
(116)
(138)
(6)
(144)
—
—
—
—
57
—
57
(9)
(41)
(424)
(222)
—
(3)
(41)
(16)
(20)
(36)
(225)
(158)
(31)
(189)
15.6%
19.7%
20.9%
21.0%
236.9%
93.3%
63.6%
21.7%
21.1%
25.9%
Tax expense increase from December 31, 2022, is mainly due to the impairment of tax credits and deferred tax assets in Colombia, resulting from the
application of IAS12 over their recognition.
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
F-44
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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
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, 2021 ...........................
Deferred tax assets .................................................
Deferred tax liabilities ............................................
Balance at December 31, 2021 ...........................
Transfers to Assets Held for Sale ............................
(Charge)/credit to income statement ....................
Charge to Other Comprehensive Income .............
Exchange differences .............................................
Balance at December 31, 2022 ...........................
Deferred tax assets .................................................
Deferred tax liabilities ............................................
Balance at December 31, 2022 ...........................
(Charge)/credit to income statement ....................
Charge to Other Comprehensive Income .............
Reclassification from other accounts (i) ................
Exchange differences .............................................
Balance at December 31, 2023 ...........................
Deferred tax assets .................................................
Deferred tax liabilities ............................................
Balance at December 31, 2023 ...........................
(130)
97
(227)
(130)
57
29
—
—
(44)
109
(153)
(44)
(92)
—
96
7
(33)
88
(121)
(33)
156
156
—
156
—
(131)
—
(3)
22
22
—
22
(24)
—
—
2
—
—
—
—
(26)
—
(26)
(26)
—
1
—
—
(25)
—
(25)
(25)
(2)
—
—
1
(26)
—
(26)
(26)
(34)
162
(196)
(34)
(9)
153
1
(8)
103
104
(1)
103
(47)
(1)
—
4
60
64
(4)
60
—
(235)
235
—
—
—
—
—
—
(31)
31
—
—
—
—
—
—
(11)
11
—
(34)
180
(214)
(34)
48
52
1
(11)
56
204
(148)
56
(165)
(1)
96
14
1
141
(140)
1
(i) Reclassification of certain tax credits from current tax assets to deferred tax assets in Colombia, resulting from the application of IAS12.
Deferred tax assets have not been recognized in respect of the following deductible temporary differences:
F-45
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
At December 31, 2023 .............................................................................................
At December 31, 2022 .............................................................................................
122
90
5,623
5,535
518
71
6,263
5,696
Unrecognized tax losses carryforward related to continuing operations expire as follows:
Fixed assets
Unused tax
losses
Other
Total
(US$ millions)
2023
2022
(US$ millions)
Expiry:
Within one year ...................................................................................................................................
Within one to five years ......................................................................................................................
After five years .....................................................................................................................................
No expiry .............................................................................................................................................
Total ....................................................................................................................................................
1
15
1,612
3,995
5,623
—
3
1,598
3,934
5,535
The Group has unrecognized tax losses in the following jurisdictions:
Jurisdiction:
Luxembourg ........................................................................................................................................
Colombia ..............................................................................................................................................
Sweden ................................................................................................................................................
Panama ................................................................................................................................................
The Netherlands ..................................................................................................................................
Bolivia ...................................................................................................................................................
Curacao ................................................................................................................................................
United Kingdom ..................................................................................................................................
Unrecognized tax losses ...................................................................................................................
2023
2022
(US$ millions)
5,108
479
16
12
3
3
1
1
5,623
5,197
222
16
—
4
2
94
—
5,535
The aforementioned tax losses have not been recognized due to the remote possibility of utilizing all or portion of the total amount
available in application of IAS 12.
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, 2023, Millicom had $672 million of unremitted earnings of Millicom operating subsidiaries for which no deferred
tax liabilities were recognized (2022: $640 million; 2021: $725 million). Except for intragroup dividends to be paid out of 2023 profits
in 2024 for which deferred tax of $26 million (2022: $25 million; 2021 $26 million) has been provided, it is anticipated that intra-
group dividends paid in future periods will be made out of profits of future periods.
F-46
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
B.7. Earnings per share
Basic earnings (loss) per share are calculated by dividing net profit for the year attributable to equity holders of the Company by the
weighted average number of ordinary shares outstanding during each year.
Diluted earnings (loss) per share are calculated by dividing the net profit for the year attributable to equity holders of the Company
by the weighted average number of ordinary shares outstanding during each year, plus the weighted average number of dilutive
potential shares.
Net profit/(loss) used in the earnings (loss) per share computation
2023
2022
2021(ii)
(US$ 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 profit (loss) per share ...............
(86)
4
(82)
64
113
177
618
(28)
590
in thousands
Weighted average number of ordinary shares for basic earnings per share ........................................
171,397
139,049
128,571
Effect of dilutive share-based compensation plans ...............................................................................
—
640
549
Weighted average number of ordinary shares (excluding treasury shares) adjusted for the effect of
dilution (i) .................................................................................................................................................
171,397
139,690
129,120
Basic
Earnings (loss) per common share for profit (loss) from continuing operations attributable to
owners of the Company .........................................................................................................................
Earnings (loss) per common share for profit (loss) from discontinued operations attributable to
owners of the Company .........................................................................................................................
Earnings (loss) per common share for profit (loss) for the period attributable to owners of the
Company .................................................................................................................................................
Diluted
Earnings (loss) per common share for profit (loss) from continuing operations attributable to
owners of the Company ..........................................................................................................................
Earnings (loss) per common share for profit (loss) from discontinued operations attributable to
owners of the Company ..........................................................................................................................
Earnings (loss) per common share for profit (loss) for the period attributable to owners of the
Company ..................................................................................................................................................
(0.50)
0.02
(0.48)
(0.50)
0.02
(0.48)
(U.S. dollars)
0.46
0.81
1.27
0.46
0.81
1.27
4.81
(0.22)
4.59
4.79
(0.22)
4.57
(i) For the purpose of calculating the diluted earnings (loss) per common share, the weighted average outstanding shares used for the basic earnings (loss)
per common share were increased only by the portion of the shares which have a dilutive effect on the earnings (loss) per common share. As a result, for
years in which the Group has reported net loss, diluted net loss per share is the same as the basic net loss per share, because dilutive ordinary shares are not
assumed to have been issued if their effect is anti-dilutive. Accordingly, 1,433 thousand potential ordinary shares as a result of share-based compensation
plans were not considered in 2023 EPS as their impact was anti-dilutive.
(ii) As required by IAS 33 ‘Earnings per share’ the impact of the bonus element included within the rights offering (see note C.1. ) has been included in the
calculations of the basic and diluted earnings per share for 2022 and comparative figures have been re-presented accordingly.
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
F-47
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
any directly attributable incremental costs and the related income tax effects is included in equity attributable to the Company’s
equity holders.
Share capital, share premium
Authorized and registered share capital (number of shares) .............................................................................
200,000,000
200,000,000
Subscribed and fully paid up share capital (number of shares) ..........................................................................
172,096,305
172,096,305
Par value per share ................................................................................................................................................
Share capital (US$ millions) ..................................................................................................................................
Share premium (US$ millions) ..............................................................................................................................
Total (US$ millions) ............................................................................................................................................
1.50
258
1,076
1,334
1.50
258
1,085
1,343
2023
2022
On May 18, 2022, the Board of Directors of Millicom resolved on a rights offering (the "Rights Offering") granting preferential
subscription rights to existing holders of shares and Swedish Depositary Receipts ("SDRs") to subscribe for up to 70,357,088 shares in
aggregate. The result of the Rights Offering showed that 68,822,675 shares, including those represented by SDRs, have been
subscribed for by the exercise of basic subscription rights. The remaining 1,534,413 shares, including those represented by SDRs,
were allotted to those investors who subscribed for them pursuant to over subscription privileges. The Rights Offering was thus fully
subscribed, and Millicom received proceeds amounting to approximately $717 million after deducting underwriting commissions
and other offering expenses of $28 million.
As a result, the Rights Offering resulted in the issuance of 70,357,088 new shares, which increased the number of outstanding shares
in Millicom from 101,739,217 to 172,096,305. The share capital also increased by $106 million to $258 million from $153 million. The
remaining $611 million had been allocated to the Group's share premium account.
Other equity reserves
Equity settled
transaction
reserve
Hedge
reserve
Currency
translation
reserve
Pension
obligation
reserve
Total
Legal reserve
As of January 1, 2021 .....................................
Share based compensation ..............................
Issuance of shares with respect to LTIPs ..........
Remeasurements of post-employment
benefit obligations ...........................................
Cash flow hedge reserve movement ...............
Currency translation movement ......................
As of December 31, 2021 ...............................
Share based compensation ..............................
Issuance of shares with respect to LTIPs ..........
Remeasurements of post-employment
benefit obligations ...........................................
Cash flow hedge reserve movement ...............
Currency translation movement ......................
As of December 31, 2022 ...............................
Share based compensation ..............................
Issuance of shares with respect to LTIPs ..........
Remeasurements of post-employment
benefit obligations ...........................................
Transfer to legal reserves ..................................
Cash flow hedge reserve movement ...............
Currency translation movement ......................
As of December 31, 2023 ...............................
C.1.1. Legal reserve
50
18
(25)
—
—
—
43
25
(17)
—
—
—
51
50
(40)
—
—
—
—
61
16
—
—
—
—
—
16
—
—
—
—
—
16
—
—
—
2
—
—
18
F-48
(US$ millions)
(19)
(605)
(4)
—
—
—
14
1
(3)
—
—
—
8
—
5
—
—
—
—
(7)
—
(2)
—
—
—
—
(41)
(646)
—
—
—
—
20
(626)
—
—
—
—
—
56
—
—
2
—
—
(3)
—
—
(2)
1
—
(4)
—
—
(2)
—
—
—
(562)
18
(25)
2
14
(41)
(593)
25
(17)
(2)
9
20
(559)
50
(40)
(2)
2
(7)
56
(571)
(6)
(500)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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. In 2023, the AGM approved an allocation to the legal reserve for
an amount of $1.9 million as a result of the capital increase which took place in 2022. No allocation was required in 2021 or 2022 as
the 10% minimum level had been reached in 2011.
C.1.2. Equity settled transaction reserve
The cost of long-term share incentive plans ("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
The currency translation reserve includes foreign exchange gains and losses arising from translations of subsidiaries (joint ventures
and associates) with functional currencies different to US dollar. Their relevant financial position captions are translated to US dollars
using the closing exchange rate; while their relevant statement of income captions are translated to US dollars at monthly average
exchange rates during the year. 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
No dividend distributions were made in the last three years as the Group pivoted its shareholder's remuneration strategy to share
buybacks.
In addition, 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, 2023, $491 million
(December 31, 2022: $472 million; December 31, 2021: $486 million) of Millicom’s retained profits represent statutory reserves that
are unavailable to be distributed to owners of the Company.
C.3. Debt and financing
F-49
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Debt and financing by type (i)
Note
2023
2022
(US$ 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 ....................................................................................................................................................
Other financing ...................................................................................................................................
Total current debt and financing ....................................................................................................
Add: portion of non-current debt payable within one year ..............................................................
Total ....................................................................................................................................................
C.3.1.
C.3.2.
C.3.1.
C.3.2.
4,638
1,832
38
6,508
(32)
6,476
111
59
18
188
32
221
4,879
1,776
30
6,686
(61)
6,624
101
18
—
119
61
180
Total debt and financing ..................................................................................................................
6,697
6,804
(i)
See note D.1.1.. for further details on maturity profile of the Group debt and financing.
(ii) In July 2018, the Company issued a COP144,054.5 million /$50 million bilateral facility with IIC (Inter-American Development Bank) for a USD indexed
to COP Note. The note bears interest at 9.450% p.a.. This COP Note is used as net investment hedge of the net assets of our operations in Colombia.
Debt and financing by location
Millicom International Cellular S.A. (Luxembourg) ............................................................................................................
Guatemala .......................................................................................................................................................................
Colombia .........................................................................................................................................................................
Paraguay .........................................................................................................................................................................
Bolivia ..............................................................................................................................................................................
Panama ...........................................................................................................................................................................
Costa Rica ........................................................................................................................................................................
El Salvador .......................................................................................................................................................................
Nicaragua ........................................................................................................................................................................
2023
2022
(US$ millions)
2,388
1,463
713
665
246
759
142
174
148
2,573
1,465
605
678
260
773
128
173
147
Total debt and financing .............................................................................................................................................
6,697
6,804
Debt and financing 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. 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.
F-50
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
C.3.1. Bond financing
Bond financing
Note
Country
Maturity
Interest Rate %
2023
2022
(US$ millions)
2024
2027
2031
2026
2029
2028
2027
2024
2026
2029
2026
2029
2027
2030
2026
2028
2031
2026
2023
2024
2024
2029
2024
2026
2026
2028
2023
2024
2026
2036
2030
2028
2031
2036
2026
2027
2030
2032
STIBOR (i) + 2.350%
STIBOR (i) + 3.000%
4.500 %
6.625 %
6.250 %
5.125 %
5.875 %
8.750 %
9.250 %
10.000 %
9.250 %
10.000 %
9.250 %
10.000 %
6.000 %
6.700 %
7.500 %
5.800 %
4.850 %
3.950 %
4.600 %
4.300 %
4.700 %
5.300 %
5.000 %
6.000 %
CPI (ii) + 4.76%
+9.35%
CPI (ii) + 4.15%
CPI (ii) + 4.89%
6.600 %
5.560 %
CPI (ii) +2.61%
CPI (ii) + 3.18%
CPI + 8.10%
CPI + 8.25%
4.500 %
5.125 %
—
222
766
147
671
446
507
16
7
9
1
3
2
3
13
20
22
29
—
7
20
13
10
6
42
57
—
42
66
33
39
30
74
22
3
4
191
214
779
147
670
446
508
16
7
9
1
3
2
3
13
19
22
35
14
14
41
15
21
8
48
—
31
33
53
26
31
24
59
18
—
—
575
823
4,750
589
870
4,980
SEK Variable Rate Notes ............................
SEK Variable Rate Notes ............................
USD 4.500% Senior Notes .........................
USD 6.625% 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) ...............
PYG 6.000% Notes (tranche H) .................
PYG 6.700% Notes (tranche I) ...................
PYG 7.500% Notes (tranche J) ..................
BOB 5.800% Notes ....................................
BOB 4.850% Notes ....................................
BOB 3.950% Notes ....................................
BOB 4.600% Notes ....................................
BOB 4.300% Notes ....................................
BOB 4.700% Notes ....................................
BOB 5.300% Notes ....................................
BOB 5.000% Notes ....................................
BOB 6.000% Notes ....................................
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% .....................................
UNE Bond 4 (tranche A) ............................
UNE Bond 4 (tranche B) ............................
UNE Bond 4 (tranche C) ............................
UNE Bond 7 (tranche A) ............................
UNE Bond 7 (tranche B) ............................
USD 4.500% Senior Notes .........................
1 Luxembourg
1 Luxembourg
2 Luxembourg
3 Luxembourg
4 Luxembourg
5 Luxembourg
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
6 Paraguay
7 Bolivia
7 Bolivia
7 Bolivia
7 Bolivia
7 Bolivia
7 Bolivia
7 Bolivia
7 Bolivia
7 Bolivia
8 Colombia
8 Colombia
8 Colombia
8 Colombia
8 Colombia
8 Colombia
8 Colombia
8 Colombia
8 Colombia
8 Colombia
9 Panama
USD 5.125% Senior Notes .........................
10 Guatemala
Total bond financing ..............................
(i)
STIBOR – Swedish Interbank Offered Rate.
(ii) CPI - Colombian Consumer Price Index
F-51
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Luxembourg
(1) SEK Notes
In May 2019, MIC S.A. completed its offering of a SEK 2 billion floating rate senior unsecured sustainability bond due 2024 (the "2024
SEK bond"). The bond carried a floating coupon of 3-month Stibor+235bps. The Notes were redeemed in full on June 8, 2023 and
cost of issuance fully amortized, accordingly. The 2024 SEK bond was swapped with various banks to hedge its principal and interest
rate exposure, pursuant to which it effectively paid fixed-rate coupons in US dollars between 4.990% and 4.880%. The Group settled
the swaps on the same date for $23 million.
On January 10, 2022, Millicom placed a SEK 2.2 billion floating rate senior unsecured sustainability bond due on 2027 (the "2027 SEK
bond") carrying a floating coupon priced at 3-month Stibor+300bps. Costs of issuance of $2.4 million is amortized over the five year
life of the bond (the effective interest rate is 3.23%). The 2027 SEK bond is swapped to US dollars to hedge the exchange risk of its
principal and interest payments (see D.1.2.).
(2) (2031) 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. Costs of issuance of $5.5 million is amortized over the eleven-year life of the notes
(the effective interest rate is 4.800%).
On September 22, 2021, Millicom announced the early participation exchange results from its offer dated September 8, 2021;
$302.1 million of the 6.625% Notes due 2026 were exchanged for $307.5 million of the 4.5% Notes due 2031 (at 101.812% exchange
ratio). The gain of $15 million, derived from applying the "modification accounting" under IFRS 9 to this exchange, has been
recorded under "Interest and other financial income" in the statement of income during the year ended December 31, 2021.
Transaction costs attributable to this exchange amount to approximately $4 million and are amortized over the remaining life of the
Notes due 2031.
In November and December 2023, Millicom repurchased some of the 2031 USD 4.500% Senior Notes on the open market for a total
amount of $12 million. The difference with their carrying value of $16 million has been recognized as financial income. The
corresponding Notes have subsequently been cancelled.
(3)
(2026) 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 were amortized over the eight-year life of the notes (the effective interest rate is 6.750%).
As aforementioned, $302.1 million of the 6.625% Notes due 2026 were exchanged during 2021 for $307.5 million of newly issued
4.5% Notes due 2031.
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 followed 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. The redemption premium of $5 million and
the accelerated amortization of the upfront costs of $3 million, have been recorded in the line "Interest and other financial expenses"
in the statement of income during the year ended December 31, 2021.
(4)
(2029) 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 Telefónica CAM Acquisitions. Costs of issuance of $8.2 million are amortized over the ten-year life of the notes
(the effective interest rate is 6.360%). On February 22, 2021, Millicom redeemed 10% of the principal outstanding of its Notes due
2026, 2028 and 2029 at a price of 103%. See above.
(5)
(2028) 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%). On February 22, 2021, Millicom
redeemed 10% of the principal outstanding of its Notes due 2026, 2028 and 2029 at a price of 103%. See above.
Paraguay
(6)
(2027) USD 5.875% Senior Notes and (2024-2031) 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
F-52
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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 6.04%). 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 is amortized over the Senior Notes maturity. On November
4, 2022, Telecel announced a tender offer (early tender consideration for $927.5 for each $1,000 principal amount of notes) to
purchase for cash up to $55 million in aggregate principal amount of the Senior Notes. On November 20, 2022, Telecel announced
that approximately $47 million in principal amount of the mentioned Notes, have been accepted and settled on November 21, 2022.
Late tender expired on December 6, 2022 with no further tendered Notes. Total consideration amounted to approximately
$44 million with a net financial income impact of $3 million given the Notes were repurchased below their par value.
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.
Between June 2019 and February 2020, Telecel registered and completed the issuance of a bond program for PYG 300,000 million
(approximately $41 million using December 31, 2023 exchange rate) program on the Paraguayan stock market, launched in different
series from 5 years to 10 years.
On October 1, 2021, Telecel issued another PYG 400,000 million bond (approximately $54 million using December 31, 2023
exchange rate) in three series with fixed interest rates between 6% to 7.5% and a repayment period from 5 to 10 years.
Bolivia
(7) BOB Notes
In November 2015, Telefónica Celular de Bolivia S.A. issued a 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 January 2023,
Telefónica Celular de Bolivia S.A. fully repaid the 4.850% notes which were due in August 2023.
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, Telefónica Celular de Bolivia S.A placed approximately $80 million of local currency bonds in three tranches, which
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 Telefónica Celular de Bolivia S.A 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 are 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 which were
priced at 5.800% due in 2026.
In November 2023, Tigo Bolivia issued a 6.00% local bond for an amount of BOB 387.5m (approximately $56 million at the time of
the transaction) which is due in July 2028 to refinance some debt repayments, finance capex and general corporate purposes.
Colombia
(8) UNE Bonds
In May 2011, UNE EPM Telecomunicaciones S.A. ("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 was repaid in December 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
F-53
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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.
On February 16, 2021, UNE issued under the approved local bond program, a COP 485,680 million bond (approximately $138 million
using the transaction date exchange rate) with 3 maturities; Series 7 years at 5.56% fixed rate, Series 10 years at CPI plus 2.61% and
Series 15 years at CPI plus 3.18% margin. With the aim to improve UNE’s natural hedge against local currency, the bond proceeds
were used on March 26, 2021 to partially repay 50% of the $300 million syndicated loan of Colombia Movil S.A. (originally due in
December 2024).
On January 5, 2023, UNE issued a COP230 billion (approximately $50 million at the time of the transaction) bond consisting of two
tranches with three and four and a half-year maturities. Interest rates are variable, based on CPI + a margin, and interest is payable in
Colombian peso.
On August 28, 2023, Millicom designated UNE, Colombia Móvil S.A. E.S.P., Edatel S.A. E.S.P., Orbitel Servicios Internacionales S.A.S.,
Cinco Telecom Corp., Inversiones Telco S.A.S. and Emtelco S.A.S. (collectively, the “Colombia Unrestricted Subsidiaries”), which are
the entities constituting its Colombian operations as “Unrestricted Subsidiaries” under the 4.500% Notes, the 6.625% Notes, the
5.125% Notes, the 6.250% Notes, the SEK Bond, COP Bond and several of its financing agreements (see note G.6.)
Panama
(9) Cable Onda Bonds
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%).
In December 2023, Cable Onda repurchased some of these Senior notes on the open market for a total amount of $13 million. The
difference with their carrying value of $16 million has been recognized as a financial income. The corresponding Notes have
subsequently been cancelled.
Guatemala
(10) (2032) USD 5.125% Senior Notes
On January 27, 2022, the Group's principal subsidiary in Guatemala, Comunicaciones Celulares, S.A. ("Comcel"), completed the
issuance of 10-year $900 million Senior Notes with a coupon of 5.125% per annum. The proceeds from this bond were used to repay
a significant portion of the bridge financing that was used to fund the acquisition of the remaining 45% equity interest in the Tigo
Guatemala operations (see note A.1.2.).
On November 4, 2022, Comcel announced a tender offer (early tender consideration for $822.5 for each $1,000 principal amount of
notes) to purchase for cash up to $90 million in aggregate principal amount of the Senior Notes. On November 20, 2022, Comcel
announced that approximately $19 million in principal amount of the mentioned Notes, have been accepted and settled on
November 21, 2022. Late tender expired on December 6, 2022 with no further tendered Notes. Total consideration amounted to
approximately $16 million with a net financial income impact of $3 million given the Notes were repurchased below their par value.
In November and December 2023, Comcel repurchased some of these Senior Notes on the open market for a total amount of $42
million . The difference with their carrying value of $49 million has been recognized as financial income. The corresponding Notes
have subsequently been cancelled.
C.3.2. Bank and Development Financial Institution financing
F-54
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Note
Country
Maturity range
Interest rate
2023
2022
(US$ millions)
Fixed rate loans
PYG Long-term loans .......................................
1 Paraguay
USD - Long-term loans .....................................
2 Panama
BOB Long-term loans .......................................
3 Bolivia
GTQ Long-term loans .......................................
Variable rate loans
8 Guatemala
USD Long-term loans .......................................
4 Costa Rica
CRC Long-term loans .......................................
4 Costa Rica
2023-2028
2025-2026
2023-2028
2023-2030
2026
2026
COP Long-term loans .......................................
5 Colombia
2025-2031
USD Long-term loans .......................................
5 Colombia
2024
USD Credit Facility / Senior Unsecured Term
Loan Facility ......................................................
6 El Salvador
2026-2027
USD Long-term loans .......................................
6 Nicaragua
USD Revolving Credit Facility(i) .......................
7 Luxembourg
USD DNB Bilateral .............................................
Total Bank and Development Financial
Institution financing ......................................
7 Luxembourg
2027
2025
2026
Fixed
Fixed
Fixed
Fixed
Variable
Variable
Variable
Variable
Variable
Variable
Variable
Variable
63
185
62
640
32
110
331
50
174
148
(2)
100
76
185
64
595
32
96
280
50
173
147
(3)
99
1,891
1,794
(i)
Relates to the amortized costs of the undrawn RCF that the Company entered into in October 2020 - see point 7 below.
Below are some further details on the facilities disclosed in the table above. When applicable, local currency amounts are translated
in USD using the exchange rate at the time of obtaining them.
1.
Paraguay
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
(approximately $29 million at the date of the transaction) 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 December 2020, Telecel executed a credit agreement with Banco Continental S.A.E.C.A for PYG 200,000 million (approximately
$29 million) with a duration of 2.5 years. Main aim was to refinance outstanding bank loans with maturities from 2021 to 2025.
In December 2021, Telecel entered into a new loan of PYG 50,000 million (approximately $7 million) with GNB to refinance an
outstanding bank loan with Banco Itaú. This loan bears fixed interest and will mature in 2024.
2.
Panama
In August 2019, Telecomunicaciones Digitales, S.A. (formerly 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 and September 2021, the $75 million credit agreement with Banco Nacional de Panama
S.A. has been early repaid. On July 29th, 2022 the $75 million loan with The Bank of Nova Scotia was repaid.
In December 2020, Telecomunicaciones Digitales, 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 ($25 million) was disbursed on March 1, 2021.
On August 31, 2021, Telecomunicaciones Digitales, S.A. executed an agreement with Bank of Scotia for $75 million at a fixed rate.
The facility was used to repay Cable Onda's remaining balance under the 5.75% local bond, which was initially due on September 3,
2025.
F-55
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
3.
Bolivia
In June 2018, Telefónica Celular de Bolivia S.A. ("Tigo Bolivia") 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.
In October 2021, Tigo Bolivia signed additional credit facilities for a total amount of approximately $26 million with a repayment
period between 2.5 and 5 years and bearing fixed interest rate.
In July 2022, Tigo Bolivia signed two new loan agreements for a total amount of approximately $8 million and a repayment period of
five years, bearing fixed interest rate.
In February and August 2023, Tigo Bolivia signed a total of seven new bank loan agreements in local currency, all bearing fixed
interest rates, for a corresponding total amount of approximately $53 million, and a repayment period between 1 and 5 years. The
proceeds were used to refinance certain local financing. Out of these, approximately $20 million are guaranteed by stand-by letters
of credit which were issued by Banco Latinoamericano de Comercio Exterior - Bladex S.A..
4.
Costa Rica
On October 25, 2021, Millicom Cable Costa Rica S.A. executed new syndicated loan entered into by the Company and Millicom Cable
Costa Rica as co-borrowers for an amount of $125 million. This loan has 2 tranches, a USD $33 million tranche with a SOFR+ margin
and a local currency tranche at TBP+margin for an amount equivalent to $92 million.
5.
Colombia
On December 14, 2021, UNE EPM Telecomunicaciones S.A. entered into an ESG Linked agreement with Bancolombia for a COP
450,000 million (approximately $94 million at the December 31, 2023 exchange rate) loan with a variable rate and a maturity of 7
years.
On December 20, 2019, the Group's 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. On March 26, 2021, $150 million were paid.
On 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 Agreement,
fixing the exchange and interest rates (see note D.1.2.).
On January 21, 2022, Colombia Movil S.A. repaid $100 million of the outstanding amount of the aforementioned Syndicated Loan
Agreement. On January 19, 2022, the respective cross currency swaps with Bancolombia and JP Morgan for $25 million, each, were
terminated. This resulted in a gain and cash settlement of $26 million (see note D.1.2.).
As of December 31, 2023, there is still $50 million outstanding under the Syndicated Loan Agreement, which is covered by cross
currency and interest rate swaps.
On October 5, 2022 UNE EPM Telecomunicaciones S.A. entered into a credit loan with Bancolombia for COP 85,000 million loan
(approximately $18 million) with a variable rate at Incremental Borrowing Rate +margin and a maturity of 1 year. The loan was
extended to December 2023 when it was fully repaid.
6.
El Salvador and Nicaragua
On December 26, 2021, Telemovil El Salvador S.A. ("Telemovil") executed a new credit agreement for $100 million with a 5 year
maturity, which bears a variable interest to refinance the $100 million loan agreement dated March 23, 2018 with DNB and Nordea,
which was entirely repaid on December 29, 2021. The credit agreement is guaranteed by Millicom.
On September 12, 2022, Telefonia Celular de Nicaragua, S.A. ("Nicaragua") and Telemovil entered into a new Credit and Guaranty
Agreement with Bank of Nova Scotia as Administrative Agent and Citigroup and Bladex as Joint Lead Arrangers, and with the
Company as Guarantor for $225 million Unsecured Term Loan with a 5-year maturity. The allocated portion for Telemovil is
$75 million and the allocated portion for Nicaragua is $150 million. The proceeds have been used to partially repay loans with other
companies within the Group. The interest rate for this loan is SOFR based plus a margin.
7.
Luxembourg
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 was not drawdown so far and could be used for financing of working capital or for general corporate
purposes, if needed.
F-56
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
8. Guatemala
In October 2020, Tigo Guatemala executed several credit agreements with Banco Industrial, Banco G&T Continental, Banco de
America Central and Banco Agromercantil for a total amount of GTQ 3,223 million (approximately $413 million) for 5 and 7 year term
to refinance other credit agreements to finance and refinance working capital, capital expenditures and general corporate purposes.
On December 9, 2021, the Guatemalan operations entered into the following loan agreements:
•
•
a GTQ 950 million loan with Banco Industrial (approximately $123 million) which bears a fixed interest initially due in
October 2025. In April 2023, the debt maturity was extended to October 31, 2028.
two loans for a total of GTQ 500 million with Banco G&T Continental S.A. (approximately $65 million) which bear a fixed
interest rate and mature in December 2026.
On March 31, 2022, Comcel executed a new 5-year $150 million loan agreement with Banco de Desarrollo Rural, S.A.. Proceeds were
disbursed on April 27, 2022 and were used to refinance some of the credit agreements Comcel had with Banco Industrial. In
December 2023, the debt maturity was extended to March, 2028.
On June 13, 2023, Comcel, executed a new 7-year loan with Banco Industrial up to GTQ 400 million (approximately $51 million),
bearing a fixed interest rate, mainly to finance the acquisitions of spectrum (refer to E.1..).
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 have been transferred to a third party or the Group has retained the contractual
rights to receive the contractual rights to receive the cash flows from the asset, but has assumed a contractual obligation to
pass those cash flows under a “pass-through” arrangement.
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:
Interest expense on bonds and bank financing ................................................................................
Interest expense on leases ..................................................................................................................
Early redemption charges ...................................................................................................................
Others ..................................................................................................................................................
Total interest and other financial expenses ......................................................................................
C.3.4. Guarantees and pledged assets
2023
2022
2021
(US$ millions)
(477)
(117)
(1)
(117)
(712)
(434)
(124)
—
(59)
(617)
(329)
(113)
(5)
(47)
(495)
F-57
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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.
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
Bank and financing guarantees (i)
Supplier guarantees
Terms
As at December 31,
2023
As at December 31,
2022
As at December 31,
2023
As at December 31,
2022
Outstanding and Maximum exposure
Outstanding and Maximum exposure
0-1 year ................................................
1-3 years ..............................................
3-5 years ..............................................
Total ....................................................
15
322
169
505
13
70
418
501
1
—
—
1
2
—
—
2
(i) If non-payment by the obligor, the guarantee ensures payment of outstanding amounts by the Group's guarantor.
Pledged assets
As at December 31, 2023, 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 $505 million (December 31, 2022: $501 million). At December 31, 2023 there were $6
million pledged deposits (2022: nil) by the Group over these debts and financings. The remainder represented primarily guarantees
issued by Millicom S.A. to guarantee financings raised by other Group operating entities.
C.3.5. Covenants
Millicom’s financing facilities are subject to a number of covenants including net leverage ratio, debt service coverage ratios, or debt
to earnings ratios, among others. In addition, certain of its financings contain restrictions on sale of businesses or significant assets
within the businesses. At December 31, 2023, there were no breaches of financial covenants.
C.4. Lease liabilities
At December 31, 2023, lease liabilities are presented in the statement of financial position as follows:
December 31,
2023
December 31,
2022
(US$ millions)
Current ............................................................................................................................................................
Non-Current ....................................................................................................................................................
Total Lease liabilities ....................................................................................................................................
189
854
1,043
163
853
1,016
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.
F-58
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
The expenses relating to payments not included in the measurement of the lease liability are disclosed in operating expenses and
are as follows:
2023
2022
2021
(US$ millions)
Expense relating to short-term leases (included in cost of goods sold and
services rendered and operating expenses) ......................................................
0
0
0
The total cash outflow for leases in 2023 was $292 million (2022: $285 million; 2021: $277 million). Lease liabilities split by maturity
and future cash outflows are disclosed in note D.5..
At December 31, 2023, 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.
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
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
F-59
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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.
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 .................................................................................................................................
2023
2022
(US$ millions)
531
244
775
820
220
1,039
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.
C.5.2. Restricted cash
Mobile Financial Services ...............................................................................................................................................
Others ..............................................................................................................................................................................
Restricted cash ..............................................................................................................................................................
2023
2022
(US$ millions)
49
8
56
50
6
57
Cash held with banks related to MFS which is restricted in use due to local regulations is denoted as restricted cash.
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, 2023, there were $6 million pledged deposits (2022: nil).
C.6. Net debt and net financing obligations
Net debt
'Net debt' is debt and financial liabilities, including derivative instruments (assets and liabilities), less cash and pledged and time
deposits. In 2023, the definition of Net Debt has changed to include derivative financial instruments in order to have a more
comprehensive view of our financial obligations. 2022 figures have also been represented accordingly.
F-60
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Gross debt (i) ...................................................................................................................................................................
Add (less) derivatives & vendor financing related to debt (note D.1.2.) .......................................................................
Less:
Cash and cash equivalents .............................................................................................................................................
Pledged deposits ............................................................................................................................................................
Net debt .........................................................................................................................................................................
2023
2022
(US$ millions)
6,678
58
(775)
(6)
5,956
6,804
34
(1,039)
—
5,799
(i) Excluding vendor financing of $18 million as of December 31, 2023.
Net financing obligations
'Net financing obligations' is Net debt plus lease liabilities.
Assets
Liabilities from financing and other activities
Cash and cash
equivalents
Other
Bond and bank
debt and financing
Derivatives
and Vendor
Financing
Lease
liabilities
Total
895
179
—
—
(11)
(24)
—
—
1,039
(270)
—
—
6
775
35
(35)
—
—
—
—
—
—
—
5
—
—
—
6
7,744
(557)
—
9
(197)
(189)
1
(8)
6,804
(288)
—
(1)
163
6,678
(20)
(14)
—
—
69
—
—
—
34
14
—
—
10
58
1,167
(157)
251
—
(63)
(184)
2
—
1,016
(177)
142
—
61
7,961
(872)
251
9
(181)
(349)
4
(8)
6,814
(185)
142
(1)
229
1,043
6,999
Net financial obligations as at January 1,
2022 ................................................................
Cash flows .......................................................
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, 2022 ..........................................................
Cash flows .......................................................
Recognition / Remeasurement ......................
Interest accretion ............................................
Foreign exchange movements ......................
Net financial obligations as at December
31, 2023 ..........................................................
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.
F-61
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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.
Impairment
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 equipment, programming and other direct costs.
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:
F-62
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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).
c) Hedges of a net investment in a foreign operation (net investment hedges).
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.
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.
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated in reserves
in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within Other non-operating
(expenses) income, net. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is
disposed of or sold.
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.
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does
not qualify for hedge accounting are recognised immediately in profit or loss and are included in 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.
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.
F-63
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Fair values of financial instruments at December 31,
Carrying value
Fair value
Note
2023
2022
2023
2022
(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 .......................................................................
Supplier advances for capital expenditures ....................................
Other current assets .........................................................................
Restricted cash ..................................................................................
Cash and cash equivalents ...............................................................
Total financial assets ......................................................................
Current ..............................................................................................
Non-current ......................................................................................
Financial liabilities
G.5.
C.5.2.
C.5.1.
Debt and financing (i) .......................................................................
C.3.
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 ..............................................
Other liabilities ..................................................................................
Total financial liabilities ................................................................
Current ..............................................................................................
Non-current ......................................................................................
G.5.
(i)
Fair values are measured with reference to Level 1 (for listed bonds) or level 2.
C.7.3. Equity investments
6
84
443
12
21
190
56
775
1,587
1,503
84
6,678
390
314
46
86
74
444
1,128
9,161
1,670
7,491
19
76
379
15
21
197
57
1,039
1,803
1,708
95
6,804
400
428
53
—
58
412
658
8,812
1,602
7,210
6
84
443
12
21
190
56
775
1,587
1,503
84
6,086
390
314
46
86
74
444
1,128
8,569
1,689
6,881
19
76
379
15
21
197
57
1,039
1,803
1,708
95
6,327
400
428
53
—
58
412
658
8,335
1,602
6,733
As at December 31, 2023 and 2022, Millicom has no material investments in equity instruments.
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 Telefónica Panama. As previously explained in note A.1.2., on June 14, 2022, the Group received the
formal notification from the minority shareholders of Telecomunicaciones Digitales, S.A. (formerly Cable Onda S.A.) confirming the
exercise of their put option right to sell their remaining 20% shareholding to Millicom for a cash amount of approximately
$290 million. The call option expired at the same time. Up to the exercise of the put option, the changes in value of the call option
asset and put option liability were recorded in the Group's statement of income under "Other non-operating (expenses) income,
net" (see note B.5.).
Put Option - Tigo-UNE
F-64
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
On October 12, 2023, Millicom and its partner, Empresas Públicas de Medellin (EPM), agreed to recapitalize Tigo-UNE, Millicom's
50%-owned operation in Colombia. Each partner contributed COP 300 billion (approximately $74 million at the time of the
transaction) to support the continued development of Tigo-UNE's strategy
With this agreement, both partners retain their current shareholding in Tigo-UNE. Furthermore they agreed to add in the
shareholder's agreement an unconditional put option maturing on September 30, 2024, that, if exercised, would allow EPM to sell to
Millicom their entire 50% stake in Tigo-UNE for COP 330 billion. As a result, a put option liability has been recognized in Millicom's
statement of financial position, with its counterpart in the Group's equity. As of December 31, 2023, the liability, denominated in
local currency, amounts to $86 million.
D. Financial risk management
Exposure to interest rate, foreign currency, non-repatriation, liquidity, capital management and credit risks arise in the normal course
of Millicom’s business. As part of the annual review of the above mentioned risks, the Group targets a strategy with respect to the
use of derivatives and natural hedging instruments ranging from raising debt in local currency (where the Group targets to maintain
40% of debt in local currency) to maintaining at least a 75/25% mix between fixed and floating rate debt or agreeing to cover up to
six months forward of operating costs and capex denominated in non-functional currencies through a rolling and layering strategy.
Millicom’s financial risk management strategies may include the use of derivatives to the extent a market would exist in the
jurisdictions where the Group operates. Millicom’s policy prohibits the use of such derivatives in the context of speculative trading.
Accounting policies for derivatives is further detailed in note C.7. On December 31, 2023 and 2022 fair value of derivatives held by
the Group can be summarized as follows:
Derivatives
Cash flow hedge derivatives ..........................................................................................................................................
Net derivative asset (liability) .....................................................................................................................................
(40)
(40)
(34)
(34)
2023
2022
(US$ 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 a 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
December 31, 2023, approximately 80% 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 (2022: 82%).
D.1.1. Fixed and floating rate debt
Financing at December 31, 2023
1 year
1–2 years
2–3 years
3–4 years
4–5 years
>5 years
Total
Amounts due within:
(US$ millions)
190
12
202
369
76
445
403
433
836
6.85 %
6.81 %
7.93 %
582
420
1,002
6.98 %
855
147
1,002
6.75 %
2,912
279
3,191
5,311
1,367
6,678
5.83 %
6.56 %
Fixed rate financing ...............
Floating rate financing ..........
Total(i) ...................................
Weighted average nominal
interest rate ...........................
(i) Excluding vendor financing of $18 million, due within one year, as of December 31, 2023
Financing at December 31, 2022
F-65
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Fixed rate financing ...............
Floating rate financing ..........
Total ......................................
Weighted average nominal
interest rate ...........................
1 year
1–2 years
2–3 years
3–4 years
4–5 years
>5 years
Total
Amounts due within:
(US$ millions)
131
49
180
383
12
394
501
63
564
376
402
777
718
404
1,122
3,466
300
3,766
5,574
1,230
6,804
7.68 %
5.71 %
6.11 %
7.46 %
6.49 %
5.88 %
6.22 %
A 100 basis point fall or rise in market interest rates for all currencies in which the Group had borrowings at December 31, 2023
would increase or reduce profit before tax from continuing operations for the year by approximately $14 million (2022: $12 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 Group Treasury 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 2024 SEK 2
billion senior unsecured sustainability bond and the foreign currency risk in relation to the 2027 SEC 2.2 billion senior unsecured
sustainability bond (issued in May 2019 and January 2022, corresponding to $207.6 million and $252.3 million, respectively, using
the exchange rate at the time of the issuance of each bond - see 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 bonds. Their maturity
date is May 2024 and January 2027, respectively. The hedging relationship is highly effective and related fluctuations are recorded
through other comprehensive income. All swap contracts attached to the 2024 SEK 2 billion bond were terminated on May 10, 2023,
after the early redemption of the bond and were settled against a cash payment of $26 million.
At December 31, 2023, the fair values of the above swap amount to a liability of $46 million. (December 31, 2022: a liability of $53
million).
The Group's operation in Colombia 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.The fair value of Colombia swaps amounted to an asset of $6 million as of December 31, 2023
(December 31, 2022: an asset of $19 million).
In January 2023, MIC S.A. also entered into two currency swap agreements to hedge an intercompany receivable of COP 206 billion
(approximately $41 million) owed by UNE (refer to note C.3.1.). These swaps are accounted for as cash flow hedges as hedging
relationships are highly effective.
As a summary, the net fair value of the derivative financial instruments for the Group, as of December 31, 2023 amounted to a
liability of $40 million (December 31, 2022: a liability of $34 million ).
Interest rate and currency swaps are measured with reference to Level 2 of the fair value hierarchy.There are no other derivative
financial instruments with a significant fair value at December 31, 2023.
D.2. Foreign currency risks
The Group is exposed to foreign exchange risk arising from various currency exposures in the countries in which it operates. Foreign
exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations.
Millicom seeks to reduce its foreign currency exposure through a policy of matching, as far as possible, assets and liabilities
denominated in foreign currencies, or entering into agreements that limit the risk of exposure to currency fluctuations against the
US dollar reporting currency. In some cases, Millicom may also borrow in US dollars where it is either commercially more
advantageous for joint ventures and subsidiaries to incur debt obligations in US dollars or where US dollar denominated borrowing
is the only funding source available to a joint venture or subsidiary. In these circumstances, Millicom accepts the remaining currency
risk associated with financing its joint ventures and subsidiaries, principally because of the relatively high cost of forward cover,
when available, in the currencies in which the Group operates.
D.2.1. Debt denominated in US dollars and other currencies
Debt denomination at December 31
F-66
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
2023
2022
(US$ millions)
Debt denominated in US dollars ................................................................................................................................
3,859
4,100
Debt denominated in currencies of the following countries:
Guatemala .......................................................................................................................................................................
Colombia .........................................................................................................................................................................
Bolivia ..............................................................................................................................................................................
Paraguay .........................................................................................................................................................................
El Salvador(i) ...................................................................................................................................................................
Panama(i) ........................................................................................................................................................................
Luxembourg (COP denominated) .................................................................................................................................
Costa Rica ........................................................................................................................................................................
Total debt denominated in other currencies ............................................................................................................
Total debt (ii) .................................................................................................................................................................
640
694
246
158
174
759
38
110
595
605
260
171
173
773
30
96
2,819
6,678
2,704
6,804
(i) El Salvador's official unit of currency is the U.S. dollar, while Panama uses the U.S. dollar as legal tender. The Group's local debt in both countries is
therefore denominated in U.S. dollars but presented as local currency (LCY).
(ii) Excluding vendor financing of $18 million in Colombia, due within one year, as of December 31, 2023.
At December 31, 2023, 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 $25
million (2022: $20 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
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 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
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 and counterparty risk include cash and cash equivalents, pledged deposits,
letters of credit, trade receivables, amounts due from joint venture partners and associates, vendor financing 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 financial institutions generally 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.
F-67
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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 the use of 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 24% of its gross financing (2022: 23%), with bonds representing 61% (2022: 64%) and leases
representing 13% (2022: 13%).
Maturity profile of net financial liabilities at December 31, 2023
Less than 1
year
1 to 5 years
>5yrs
Total
(US$ millions)
Outstanding debt and financing (i) .........................................................................
(203)
(3,309)
(3,232)
(6,744)
Outstanding amortized costs undiscounted ..........................................................
Lease liability ............................................................................................................
Cash and equivalents ...............................................................................................
Derivative and vendor financing .............................................................................
Pledged deposits .....................................................................................................
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) .........................................................
Trade receivables .....................................................................................................
Other financial assets ...............................................................................................
1
(189)
775
(12)
5
377
(427)
(108)
(582)
(957)
443
224
24
(498)
—
(46)
—
(3,829)
(1,270)
(286)
—
—
—
78
41
(355)
—
—
—
(3,547)
(93)
(108)
—
—
—
—
66
(1,043)
775
(58)
6
(6,999)
(1,791)
(502)
(582)
(957)
443
302
Net financial liabilities ..........................................................................................
(1,031)
(5,306)
(3,748)
(10,086)
(i) Excluding vendor financing of $18 million as of December 31, 2023.
Maturity profile of net financial liabilities at December 31, 2022
F-68
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Less than 1
year
1 to 5 years
>5yrs
Total
(US$ millions)
Outstanding debt and financing .............................................................................
(181)
(2,880)
(3,813)
(6,875)
Outstanding amortized costs undiscounted ..........................................................
Lease liability ............................................................................................................
Cash and equivalents ...............................................................................................
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)
Trade receivables
Other financial assets ...............................................................................................
1
(163)
1,039
—
697
(416)
(106)
(689)
(867)
379
232
23
(478)
—
(34)
(3,370)
(1,349)
(290)
—
—
—
71
47
(374)
—
—
(4,141)
(111)
(135)
—
—
—
—
71
(1,016)
1,039
(34)
(6,814)
(1,877)
(531)
(689)
(867)
379
303
Net financial liabilities ..........................................................................................
(770)
(4,938)
(4,387)
(10,095)
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 (see section C.3.5.). 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, 2023, Millicom was rated at one
notch below investment grade by the independent rating agencies Moody’s (Ba1) and Fitch (BB). On February 6, 2024, Moody’s
downgraded Millicom by one notch to ba2 (with a stable outlook +) basically based on quantitative metrics being below ranges than
ba1 rating scale ranges. The Group primarily monitors capital using net debt to EBITDAaL.
Net debt to EBITDAaL (i)
Note
2023
2022
(US$ millions)
EBITDA ................................................................................................................................................
B.3.
Lease interest expense ........................................................................................................................
Right of use assets depreciation .........................................................................................................
E.3.
EBITDAaL (ii) ......................................................................................................................................
Net debt (iii) .......................................................................................................................................
C.6.
2,111
(117)
(183)
1,812
5,956
2,228
(124)
(168)
1,936
5,799
Net debt to EBITDAaL (iv) .................................................................................................................
3.29 x
2.99 x
(i) The Group now presents Net debt to EBITDAal (vs. Net financial obligations to EBITDA before) in order to better align with the Group's peers and
expectations of investors/analysts. 2022 figures have been represented accordingly.
(ii) 'EBITDA after Leases' (EBITDAaL) represents EBITDA after lease interest expense and depreciation charge (excluding Africa).
(iii) 'Net debt' is debt and financial liabilities, including derivative instruments (assets and liabilities), less cash and pledged and time deposits. In 2023, the
definition of Net Debt has changed to include derivative financial instruments in order to have a more comprehensive view of the Group's financial
obligations. 2022 figures have also been represented accordingly.
(iv) The ratio is above 3.0x on an accounting basis, however, according to the terms of the Group's indentures, this ratio is calculated on a different basis,
resulting in a ratio below 3.0x for covenant purposes.
Gearing ratio
The Group reviews its gearing ratio (net debt divided by total capital plus net debt) periodically. Capital represents equity
attributable to the equity holders of the parent.
F-69
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Net debt ...............................................................................................................................................
Equity attributable to Owners of the Company .................................................................................
C.6.
C.1.
Net debt and equity ............................................................................................................................
Gearing ratio ........................................................................................................................................
5,956
3,529
9,485
0.63
5,799
3,605
9,404
0.62
Note
2023
2022
(US$ millions)
E. Long-term assets
E.1. Intangible assets
Millicom’s intangible assets mainly consist of goodwill and customer lists arising from acquisitions, licenses and 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. 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 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
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. 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.
Goodwill on acquisition of joint ventures or associates is included in investments in joint ventures and associates.
Licenses and Spectrum
Licenses and spectrum 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 up-front and deferred payments as well as estimates related to fulfillment of terms and conditions
related to the licenses such as service or coverage obligations, especially when there is a clear objective evidence that the cost of
fulfilling these obligations will be significantly onerous for the Group.
Licenses and spectrum have a finite useful life and are carried at cost less accumulated amortization and any accumulated
impairment losses. Licenses and spectrum are amortized from the date the network is available for use on a straight-line basis over
the license period. 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 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. Main factors
considered in the determination of the indefinite useful lives include the years that they have been and are expected to be in service
and their recognition among peers in the industry. Trademarks and customer lists used by the Group for its own activities are
unlikely to generate largely independent cash inflows and therefore are tested for impairment annually together with other assets at
F-70
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
each cash-generating unit level. 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.
Estimated useful lives are:
Estimated useful lives
Trademarks .................................................................................................................................................................................................
Customer lists .............................................................................................................................................................................................
Years
1 to 15
4 to 20
Programming and content rights
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;
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
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
F-71
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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 and 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
Movements in intangible assets in 2023
Licenses
and
Spectrum
Customer
Lists
Goodwill
IRUs
Trademarks Other (i)
Total
Opening balance, net ......................................
4,059
Additions ............................................................
Amortization charge ...........................................
Impairment .........................................................
Transfers .............................................................
Exchange rate movements ................................
Closing balance, net ........................................
Cost or valuation ................................................
Accumulated amortization and impairment ....
—
—
—
—
48
4,107
4,107
—
Net ......................................................................
4,107
1,558
Movements in intangible assets in 2022
(US$ millions)
1,094
406
864
—
40
1
(116)
(96)
(12)
—
4
171
1,558
2,407
(849)
—
—
1
769
1,206
(437)
769
—
1
4
33
178
(145)
33
910
—
—
—
—
—
910
1,243
(333)
910
394
115
(137)
(1)
11
26
408
1,275
7,361
522
(361)
(1)
16
249
7,785
10,416
(867)
(2,631)
408
7,785
Licenses
and
Spectrum
Customer
Lists
Goodwill
IRUs
Trademarks Other (i)
Total
(US$ millions)
1,120
195
970
—
71
1
920
—
379
150
(106)
(14)
(1)
(130)
—
—
—
—
—
864
1,199
(335)
864
—
—
(17)
3
(4)
40
158
(118)
40
—
—
(10)
—
—
910
1,237
(327)
910
7,558
345
(345)
(6)
(9)
(57)
24
(6)
—
(2)
28
(25)
(147)
394
1,133
7,361
9,573
(740)
(2,212)
394
7,361
Opening balance, net ....................................
4,098
Additions ..........................................................
Amortization charge .........................................
Impairment (ii) ..................................................
Disposals, net ....................................................
Transfer to/from held for sale ...........................
Transfers ............................................................
Exchange rate movements ..............................
Closing balance, net .......................................
Cost or valuation ..............................................
Accumulated amortization and impairment ..
—
—
—
—
(12)
—
(26)
(96)
—
(9)
(18)
(7)
(91)
4,059
4,059
—
1,094
1,786
(692)
Net ....................................................................
4,059
1,094
(i) Other includes mainly software costs
(ii) During the year ended December 31, 2022, Millicom early terminated an IT software contract and also decommissioned the existing software. As a
result, Millicom recorded a settlement provision of $7 million under operating expenses and recorded a decommissioning cost of this software for a
total amount of $12 million, as accelerated amortization and impairment charges.
F-72
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
E.1.4. Cash used for the purchase of other intangible assets
Cash used for intangible asset additions
Additions ......................................................................
Change in accruals and payables for intangibles .......
Cash used for additions .................................................
2023
2022
2021
(US$ millions)
150
(16)
133
258
(79)
179
126
(29)
98
E.1.5. Goodwill and indefinite useful life trademarks
Allocation of Goodwill to cash generating units (CGUs)
2023
2022
(US$ millions)
Guatemala (see note A.1.2.) ...........................................................................................................................................
2,470
2,470
Panama ...........................................................................................................................................................................
El Salvador .......................................................................................................................................................................
Costa Rica ........................................................................................................................................................................
Paraguay .........................................................................................................................................................................
Colombia .........................................................................................................................................................................
Nicaragua ........................................................................................................................................................................
Bolivia ..............................................................................................................................................................................
907
194
135
44
155
197
3
907
194
118
44
123
199
3
Total ....................................................................................................................................................................................
4,107
4,059
Allocation of indefinite useful life trademarks to cash generating units (CGUs)
Guatemala .......................................................................................................................................................................
Total ....................................................................................................................................................................................
2023
2022
(US$ millions)
910
910
910
910
E.1.6. Impairment testing of goodwill
Goodwill and indefinite useful life trademarks from CGUs are tested for impairment at least once a 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, 2023
Goodwill and indefinite useful life trademarks were 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, covering a ten-year
planning horizon. The Group uses a ten-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. Management validates the reasonableness of the results of the
test by comparing the share price implied by the 'sum of the parts' with the market share price. Any gap is reviewed, analyzed and
F-73
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
documented. 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).
For the year ended December 31, 2023, management concluded that no impairment should be recorded in the Group consolidated
financial statements.
Impairment testing at December 31, 2022
For the year ended December 31, 2022, 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 Group 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 2023 and 2022 impairment test are shown below:
CGU
Average EBITDA
margin (%) (i)
Average CAPEX
intensity (%) (i)
Perpetual growth
rate (%)
WACC rate after tax
(%)
2023
2022
2023
2022
2023
2022
2023
2022
Bolivia .....................................
Colombia ................................
Guatemala ..............................
Costa Rica ...............................
El Salvador ..............................
Nicaragua ...............................
Panamá ..................................
Paraguay ................................
41.3
39.6
53.3
39.8
41.7
47.5
46.5
46.8
41.2
36.0
51.2
37.5
41.0
46.8
46.9
44.5
13.6
12.3
11.3
16.2
13.6
13.8
13.1
14.5
15.2
17.2
11.6
15.5
13.0
14.5
14.9
14.9
1.0
2.0
1.0
2.0
1.0
3.0
1.0
1.0
1.0
2.0
1.0
2.0
1.0
2.5
1.0
1.0
15.4
10.7
9.7
10.1
12.1
15.5
8.9
9.8
9.8
11.4
10.1
11.8
14.1
15.0
8.8
10.0
(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 ................
2023
+/- 2
+/-1
+/-2
+/-1
2022
+/-2
+/-1
+/-2
+/-1
At December 31, 2023 the sensitivity analysis shows a comfortable headroom between the recoverable amounts and the carrying
values for all CGUs, except for Nicaragua (at December 31, 2022, except for Colombia and Nicaragua).
F-74
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
If the assumptions used in the impairment test were changed to a greater extent than as presented in the following table, the
changes would, in isolation, trigger a potential impairment loss being recognised for the following CGUs in the years ended
December 31, 2023 and December 31, 2022 .
Change required for carrying value to equal
recoverable amount
Financial variables
WACC rate
Perpetual growth rates
Operating variables
Average EBITDA margin
CAPEX intensity
2023
CGU
2022
CGU
Nicaragua
Colombia
Nicaragua
+154bps
n/a
n/a
n/a
+82bps
n/a
+-107bps
+13bps
+117bps
n/a
n/a
n/a
E.2. Property, plant and equipment
E.2.1. Accounting for property, plant and equipment
Items of property, plant and equipment are stated at historical cost 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.
The assets’ residual value and useful life is reviewed, and adjusted if appropriate, at each statement of financial position date. As
explained in the Introduction note, during 2023, the estimated useful lives of some property, plant and equipment were revised. As a
result, the estimated useful lives of the Group's towers, poles and ducts were changed from 15 to 25 years, while the related civil
works' useful lives were increased from 10 to 15 years. Refer to the Introduction - Estimates note for further details.
Estimated useful lives
Duration
Buildings .................................................................................................... Up to 40 years
Networks (including civil works) ............................................................... 5 to 25 years
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. 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.
F-75
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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.
E.2.2. Movements in tangible assets
Movements in tangible assets in 2023
Network
Equipment
Land and
Buildings
Construction in
Progress
Other(i)
Total
(US$ millions)
Opening balance, net ...................................................
2,340
Additions .........................................................................
Impairments/reversal of impairment, net ......................
Disposals, net ...................................................................
Depreciation charge ........................................................
Asset retirement obligations ...........................................
Transfers ..........................................................................
Exchange rate movements .............................................
Other ................................................................................
Closing balance, net .....................................................
Cost or valuation .............................................................
Accumulated depreciation and impairment .................
Net at December 31, 2023 ............................................
161
(2)
(16)
(751)
29
566
165
14
2,507
8,924
(6,417)
2,507
180
2
—
—
(19)
1
(2)
13
(12)
162
310
(148)
162
418
525
—
(3)
—
—
(570)
24
—
394
394
—
394
50
5
—
—
(25)
—
13
1
—
44
352
(307)
44
2,989
693
(2)
(20)
(794)
30
6
203
2
3,107
9,980
(6,873)
3,107
Movements in tangible assets in 2022
Opening balance, net ...................................................
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.) ...................................................................
Exchange rate movements .............................................
Closing balance, net .....................................................
Cost or valuation .............................................................
Accumulated depreciation and impairment .................
Net at December 31, 2022 ............................................
Network
equipment
Land and
buildings
Construction in
progress
Other(i)
Total
(US$ millions)
2,691
157
—
(16)
(791)
17
577
(141)
(153)
2,340
8,071
(5,731)
2,340
200
3
—
(5)
(21)
—
22
(6)
(12)
180
348
(168)
180
428
655
—
(8)
—
—
(632)
(13)
(11)
418
418
—
418
63
9
1
—
(28)
—
12
(6)
(2)
50
345
(296)
50
3,382
823
—
(29)
(840)
18
(21)
(166)
(178)
2,989
9,183
(6,194)
2,989
(i) Other mainly includes office equipment and motor vehicles.
Borrowing costs capitalized for the years ended December 31, 2023, 2022 and 2021 were not significant.
E.2.3. Cash used for the purchase of tangible assets
F-76
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Cash used for property, plant and equipment
Additions .............................................................................................................................................
Change in advances to suppliers ........................................................................................................
Change in accruals and payables for property, plant and equipment .............................................
Other ....................................................................................................................................................
Cash used ...........................................................................................................................................
2023
2022
2021
(US$ millions)
694
3
116
—
814
823
(3)
(20)
—
800
787
(6)
(40)
(1)
740
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 2023
Right-of-use assets
Opening balance, net
Additions .......................................................
Modifications .................................................
Disposals ........................................................
Depreciation ..................................................
Asset retirement obligations ........................
Transfers ........................................................
Exchange rate movements ...........................
Other ..............................................................
Closing balance, net
Cost of valuation ...........................................
Accumulated depreciation and impairment
Net at 31 December 2023
Movements in right of use assets in 2022
Land and
buildings
Sites rental
Tower
rental
(US$ millions)
Other
network
equipment
Capacity
Other
Total
142
4
6
(1)
(38)
—
1
16
—
130
280
(150)
130
181
10
27
(2)
(45)
(1)
7
2
(2)
177
369
(192)
177
505
42
51
(1)
(90)
(2)
2
31
—
537
929
(392)
537
16
—
2
—
(1)
—
(2)
—
—
16
26
(10)
16
28
7
1
—
(6)
—
(2)
—
—
27
47
(19)
27
13
1
—
—
(3)
—
(1)
—
—
9
21
(12)
9
884
63
87
(5)
(183)
(3)
4
50
(2)
896
1,671
(776)
896
F-77
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Right-of-use assets
Land and
buildings
Sites rental
Tower rental
Capacity
Other
network
equipment
Other
Total
Opening balance, net
Additions ...................................
Modifications ............................
Impairments ..............................
Disposals ...................................
Depreciation .............................
Asset retirement obligations ....
Transfers ....................................
Transfer to/from held for sale ...
Exchange rate movements .......
Closing balance, net
Cost of valuation .......................
Accumulated depreciation
and impairment ........................
Net at 31 December 2022
169
23
11
(1)
(3)
(38)
—
—
(3)
(16)
142
249
(107)
142
(US$ millions)
201
23
18
—
(1)
(42)
2
(14)
(2)
(4)
181
325
(144)
181
587
77
104
—
(5)
(83)
—
17
(158)
(34)
505
780
(275)
505
29
—
—
—
—
(5)
—
3
—
—
28
39
(11)
28
25
2
1
—
—
(4)
1
(7)
—
—
16
28
(11)
16
13
2
1
—
—
1,024
127
135
(1)
(9)
(3)
(176)
—
—
—
—
13
22
(9)
13
3
(2)
(163)
(54)
884
1,442
(558)
884
Apart from the impact of the disposal of the Group's operations in Tanzania, there have been no unusual significant events affecting
lease liabilities (and right-of-use assets) during the year ended December 31, 2022.
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 and necessary regulatory approvals obtained.
E.4.1. Classification
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.
E.4.2. Millicom’s assets held for sale
As of December 31, 2023 and 2022 no assets qualified as assets held for sale. For further details on assets held for sale and
discontinued operations, please refer to note A.4.
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 ..................................................................................................................................................
2023
2022
(US$ millions)
851
(408)
443
694
(315)
379
F-78
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Aging of trade receivables
Neither past
due nor
impaired
Past due (net of
impairments)
30–90 days
>90 days
Total
(US$ millions)
2023:
Telecom operators ...................................................................................................
Own customers ........................................................................................................
Others .......................................................................................................................
Total
2022:
Telecom operators ...................................................................................................
Own customers ........................................................................................................
Others .......................................................................................................................
Total
19
263
37
319
7
211
39
257
5
49
7
61
13
54
7
74
4
51
8
63
5
39
5
48
28
364
52
443
25
304
51
379
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 'Equipment, programming and
other direct costs'.
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 .........................................................................................................................................................................
Other ...............................................................................................................................................................................
Inventory at December 31, ..........................................................................................................................................
F.3. Trade payables
2023
2022
(US$ millions)
27
4
14
45
39
4
10
53
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, 2023, is recognized in 'Trade
payables' for an amount of $26 million (2022: $17 million).
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
F-79
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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
Deferred revenue ............................................................................................................................................................
Customer deposits ..........................................................................................................................................................
Current legal provisions .................................................................................................................................................
Tax payables ...................................................................................................................................................................
Customer and MFS distributor cash balances ...............................................................................................................
Withholding tax on payments to third parties ..............................................................................................................
Other current liabilities(i) ...............................................................................................................................................
Total ................................................................................................................................................................................
96
12
8
72
45
22
119
374
2023
2022
(US$ millions)
(i) Includes $15 million (2022: $8 million) of tax risk liabilities not related to income tax.
F.4.2. Non-current provisions and other liabilities
Non-current
Non-current legal provisions .........................................................................................................................................
Long-term portion of asset retirement obligations ......................................................................................................
Long-term portion of deferred income on tower sale and leasebacks recognized ....................................................
Long-term employment obligations .............................................................................................................................
Other non-current liabilities ...........................................................................................................................................
Total ................................................................................................................................................................................
6
173
31
51
68
330
2023
2022
(US$ millions)
93
13
12
61
47
15
64
305
16
155
32
37
55
295
F.4.3. Non-current payables and accruals for capital expenditure
Non-current payables and accruals for capital expenditure include an amount of $846 million (December 31, 2022: $414 million) in
relation to spectrum and license payables in Colombia. The major part of this payable is related to:
1) the acquisition, in December 2019, of licenses granting the right to use a total of 40 MHz in the 700 MHz band in Colombia. This
20-year license will expire in 2040. During the same auction, Tigo Colombia also acquired 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 $615 million at initial
date's 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 a rate corresponding to the Government Títulos de Tesorería
(TES). 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.
F-80
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
As of December 31, 2023, the outstanding payable in relation to these licenses amount to $467 million (December 31, 2022:
$337 million). Using the applicable interest rate, future interest commitments on the outstanding cash consideration payable
amount to $553 million.
2) in February 2023, the renewal of the spectrum license related to 1900 Mhz band for an additional period of 20 years. The total
consideration amounts to COP 1.14 billion (approximately $281 million at initial date's exchange rate). The first payment
representing 20% of the total consideration occurred on October 27, 2023. The remaining consideration will be paid in annual
installments over the next 20 years and bears interest at the moving average of the last 24 months consumer price index (CPI) rate.
As of December 31, 2023, the outstanding payable in relation to these licenses amount to $241 million. Using the applicable interest
rate, future interest commitments on the outstanding cash consideration payable amount to $181 million.
F.5. Assets and liabilities related to contract with customers
Contract assets, net
Long-term portion ...............................................................................................................................................................
Short-term portion ...............................................................................................................................................................
Less: provisions for expected credit losses .........................................................................................................................
Total .....................................................................................................................................................................................
21
65
(4)
82
2023
2022
(US$ millions)
Contract liabilities
Long-term portion ...............................................................................................................................................................
Short-term portion ...............................................................................................................................................................
Total .....................................................................................................................................................................................
74
82
156
2023
2022
(US$ millions)
21
61
(5)
77
2
87
88
The Group recognized revenue for $84 million in 2023 (2022: $91 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,
2023 is $71 million ($71 million is expected to be recognized as revenue in the 2024 financial year and the remaining $1 million in
the 2025 financial year or later). This amount does not consider contracts that have an original expected duration of one year or less,
neither contracts in which consideration from a customer corresponds to the value of the entity’s performance obligation to the
customer (i.e. billing corresponds to accounting revenue).
Contract costs, net (i)
Net at January 1 .................................................................................................................................................................
Contract costs capitalized ...................................................................................................................................................
Amortization of contract costs ............................................................................................................................................
Net at December 31 ...........................................................................................................................................................
2023
2022
(US$ millions)
10
5
(4)
12
8
5
(3)
10
(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
F-81
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
G.1. Fees to auditors
Audit fees .............................................................................................................................................
Audit related fees ................................................................................................................................
Tax fees ................................................................................................................................................
Other fees ............................................................................................................................................
Total ....................................................................................................................................................
G.2. Capital and operational commitments
2023
2022
2021
(US$ millions)
5.6
0.8
0.2
0.3
6.9
5.1
1.3
0.2
0.2
6.8
5.2
1.4
0.1
0.4
7.1
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, 2023, the Company and its subsidiaries had fixed commitments to purchase network equipment, other fixed assets
and intangible assets of $350 million of which $254 million are due within one year (December 31, 2022: $406 million of which $259
million were due within one year). The Group’s share of commitments from the joint ventures is $18 million, of which $18 million are
due within one year (December 31, 2022: $29 million, all of which were due within one year).
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, 2023, the total amount of claims brought against the Company and
its subsidiaries is $328 million (December 31, 2022: $239 million). The Group's share of the comparable exposure for its joint venture
in Honduras is $9 million (December 31, 2022: $13 million).
As at December 31, 2023, $14 million has been provisioned by its subsidiaries for these risks in the consolidated statement of
financial position (December 31, 2022: $25 million). The Group’s share of provisions made by the joint venture in Honduras was $1
million (December 31, 2022: $1 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, Telefónica 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 damages claims for
alleged breaches of contract and alleges, among other things, that the Group was required to close the transaction because the
closing conditions specified in the sale and purchase agreement for the acquisition had been satisfied. On February 13, 2024, the
Court granted summary judgment in favor of Telefónica, ruling in favor of Telefónica's breach of contract claim as well as its
methodology for calculating pre-judgment interest. As of the time of this filing, the Court has not yet determined the exact amount
of damages, and a final judgment has not yet been entered. The Group disagrees with the decision and continues to believe that the
Group has strong arguments in its favor. The Group plans to file an appeal of the ruling.
Other
At December 31, 2023, 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
F-82
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
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, 2023, the tax risks exposure of the Group's subsidiaries is estimated at $279 million, for which provisions of $52
million have been recorded in tax liabilities; representing management's assessment of the probable cash outflow of eventual claims
and required payments related to those risks (December 31, 2022: $221 million of which provisions of $38 million were recorded).
The Group's share of comparable tax exposure and provisions in its joint venture amounts to $118 million (December 31, 2022: $97
million) and $7 million (December 31, 2022: $7 million), respectively.
G.4. Non-cash investing and financing activities
Non-cash investing and financing activities from continuing operations
Note
2023
2022
2021
(US$ millions)
Investing activities
Acquisition of property, plant and equipment .......................................................
Acquisition of lease right of use assets obtained in exchange of lease liabilities .
Asset retirement obligations ...................................................................................
E.2.2.
E.3.
E.2.2.
Financing activities
Share based compensation .....................................................................................
B.4.1.
121
63
30
52
(23)
127
18
29
(47)
106
32
17
G.5. Related party balances and transactions
The Group’s significant related parties are:
▪
•
Xavier Niel, his subsidiaries and joint ventures, as well as his close family members.
EPM and subsidiaries (EPM), the non-controlling shareholder in our Colombian operations (see notes A.1.4. and C.7.4.);
• Miffin Associates Corp and subsidiaries (Miffin), our joint venture partner in Guatemala until November 12, 2021, date on which
Miffin ceased to be a related party, as Millicom signed and closed an agreement to acquire the remaining 45% equity interest in
our joint venture business in Guatemala from Miffin (see note A.1.2.).
F-83
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
• Cable Onda partners and subsidiaries, the non-controlling shareholders in Tigo Panama (see note A.1.2.), until June 29, 2022,
date on which Cable Onda Partners ceased to be a related party as the non-controlling shareholders of Tigo Panama exercised
their put option right to sell their remaining 20% shareholding to Millicom.
Xavier Niel
Xavier Niel has significant expertise in the telecoms sector with a 30 year track record of innovation in the sector. He is the owner of
the Iliad group, a leading telecoms provider present in France, Italy and Poland, as well as NJJ Holding, an investor in telecoms assets
including in Switzerland and Ireland.
Xavier Niel has significant influence over Millicom, as holding, directly or indirectly (through NJJ Holding, Atlas Investissement and
Atlas Luxco S.à.r.l. ultimately controlled by him) approximately 29.1% of Millicom's shareholding and voting rights as of December
31, 2023. Additionally, on the annual AGM held on 31 May, 2023, Xavier Niel obtained representation in Millicom’s Board of Directors
with the appointment of three (out of nine) non-Executive directors.
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. Transactions with EPM represent mainly
purchases in the form of leases.
Miffin Associates Corp (Miffin)
As mentioned above, Miffin ceased to be a related party to the Group from November 12, 2021. Transactions with Miffin represented
recurring commercial operations such as purchase of handsets, and sale of airtime.
The Group had the following transactions with related parties:
Expenses
2023
2022
2021
(US$ millions)
Purchases of goods and services from Miffin (i) .................................................................................
Purchases of goods and services from EPM .......................................................................................
Other expenses ...................................................................................................................................
Total ....................................................................................................................................................
—
(45)
(10)
(55)
—
(45)
(18)
(63)
(165)
(39)
(16)
(220)
Income and gains
2023
2022
2021
(US$ millions)
Sale of goods and services to Miffin (i) ...............................................................................................
Sale of goods and services to EPM .....................................................................................................
Other revenue .....................................................................................................................................
Total ....................................................................................................................................................
—
12
—
12
—
11
1
11
(i) Miffin entities are not considered as related parties since November 12, 2021.
The Group had the following balances with related parties:
Liabilities
December 31
2023
2022
(US$ millions)
Payables to Honduras joint venture(ii) ..........................................................................................................................
Payables to EPM ..............................................................................................................................................................
Other accounts payable .................................................................................................................................................
Total ................................................................................................................................................................................
68
33
2
103
(ii) Mainly dividends.
299
14
2
314
48
39
2
88
F-84
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Assets
December 31
2023
2022
(US$ millions)
Receivables from EPM ....................................................................................................................................................
Receivables from Honduras joint venture .....................................................................................................................
Total ................................................................................................................................................................................
2
9
12
2
13
15
G.6. Colombia Unrestricted Subsidiaries
On August 28, 2023, Millicom designated Tigo-UNE, Colombia Móvil S.A. E.S.P., Edatel S.A. E.S.P., Orbitel Servicios Internacionales
S.A.S., Cinco Telecom Corp., Inversiones Telco S.A.S. and Emtelco S.A.S. (collectively, the “Colombia Unrestricted Subsidiaries”), which
are the entities constituting its Colombian operations as “Unrestricted Subsidiaries” under the 4.500% Notes, the 6.625% Notes, the
5.125% Notes, the 6.250% Notes, the SEK Bond, COP Bond and several of its financing agreements.
The following supplemental consolidating financial information presents selected statement of income and statement of financial
position information of Millicom and its Restricted Subsidiaries (as defined under its outstanding credit instruments) separately from
such information for Millicom’s Unrestricted Subsidiaries.
Statement of income
$ millions
Year ended December 31, 2023
Revenue ...........................................................................
Equipment, programming and other direct costs ..........
Operating expenses .........................................................
Depreciation ....................................................................
Amortization ....................................................................
Share of profit in Honduras joint venture .......................
Other operating income (expenses), net ........................
Operating profit .............................................................
Net financial expenses .....................................................
Other non-operating (expenses) income, net ................
Profit (loss) from other joint ventures and associates,
net ....................................................................................
Profit (loss) before taxes from continuing
operations ......................................................................
Tax expense .....................................................................
Profit (loss) from continuing operations ....................
Profit (loss) from discontinued operations, net of tax ....
Net profit (loss) for the year .........................................
Millicom Group
(A)
Colombia
Unrestricted
Subsidiaries
(B)
Intercompany
Eliminations
(C)
Millicom Restricted
Group
(A)-(B) net of (C)
1,313
(392)
(501)
(269)
(100)
—
9
60
(242)
32
—
(150)
(176)
(326)
—
(326)
—
(3)
3
—
—
—
—
1
10
—
—
11
—
11
—
11
4,348
(1,118)
(1,539)
(709)
(260)
42
1
766
(432)
4
(3)
336
(248)
87
4
91
5,661
(1,507)
(2,043)
(978)
(360)
42
10
826
(684)
36
(3)
175
(424)
(249)
4
(245)
F-85
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Statement of financial position
$ millions
Millicom Group
(A)
Colombia
Unrestricted
Subsidiaries
(B)
Intercompany
Eliminations
(C)
Millicom
Restricted Group
(A)-(B) net of (C)
December 31, 2023
ASSETS
NON-CURRENT ASSETS
Intangible assets, net ...............................................................
Property, plant and equipment, net .......................................
Right of use assets, net ............................................................
Investment in Honduras joint venture ...................................
Contract costs, net ...................................................................
Deferred tax assets ..................................................................
Other non-current assets ........................................................
7,785
3,107
896
576
12
141
84
1,152
884
229
—
—
1
29
TOTAL NON-CURRENT ASSETS ............................................
12,601
2,295
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 .............................
Other current assets, including derivatives financial
instruments ..............................................................................
Restricted cash .........................................................................
Cash and cash equivalents ......................................................
TOTAL CURRENT ASSETS ......................................................
TOTAL ASSETS ........................................................................
45
443
82
12
168
118
21
196
56
775
8
128
7
4
35
66
1
43
1
36
1,915
14,516
330
2,625
—
—
—
—
—
—
54
54
—
—
—
—
—
—
—
61
—
—
61
115
6,633
2,223
667
576
12
140
109
10,359
37
314
75
8
132
52
20
215
55
739
1,647
12,006
F-86
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
Statement of financial position
$ millions
Millicom Group
(A)
Colombia
Unrestricted
Subsidiaries
(B)
Intercompany
Eliminations
(C)
Millicom
Restricted Group
(A)-(B) net of (C)
EQUITY ....................................................................................
Share capital and premium .....................................................
Treasury shares ........................................................................
Other reserves ..........................................................................
Retained profits .......................................................................
Net profit/ (loss) for the period/year attributable to owners
of the Company .......................................................................
Equity attributable to owners of the Company ................
Non-controlling interests ........................................................
TOTAL EQUITY ........................................................................
LIABILITIES ..............................................................................
NON-CURRENT LIABILITIES ..................................................
Debt and financing ..................................................................
Lease liabilities .........................................................................
Derivative financial instruments .............................................
Amounts due to non-controlling interests, associates and
joint ventures ...........................................................................
Payables and accruals for capital expenditure .......................
Other non-current liabilities - Total ........................................
Deferred tax liabilities ..............................................................
1,334
(8)
(500)
2,785
(82)
3,529
(84)
3,445
6,476
854
46
12
885
330
140
—
—
(373)
640
(163)
105
(85)
20
601
226
—
54
846
166
—
TOTAL NON-CURRENT LIABILITIES .....................................
8,742
1,894
Debt and financing ..................................................................
Lease liabilities .........................................................................
Put option liability ...................................................................
Payables and accruals for capital expenditure .......................
Other trade payables ...............................................................
Amounts due to non-controlling interests, associates and
joint ventures ...........................................................................
Accrued interest and other expenses .....................................
Current income tax liabilities ..................................................
Contract liabilities ....................................................................
Provisions and other current liabilities ...................................
TOTAL CURRENT LIABILITIES ...............................................
TOTAL LIABILITIES .................................................................
TOTAL EQUITY AND LIABILITIES ..........................................
221
189
86
314
390
62
444
93
156
374
2,329
11,071
14,516
111
65
—
112
123
65
92
1
5
137
711
2,605
2,625
—
—
—
113
—
113
—
113
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2
2
2
115
1,334
(8)
(127)
2,258
81
3,538
1
3,538
5,875
628
46
(42)
38
163
140
6,848
109
124
86
202
266
(3)
353
93
151
239
1,620
8,468
12,006
F-87
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023, 2022 and 2021
H. Subsequent Events
Voluntary retirement plan in Colombia
On January 19, 2024, Tigo Colombia announced a voluntary retirement plan for its employees. As of the time of issuance of this
report, Millicom has incurred severance expenses related to this plan of approximately $17 million.
Tower sale
On January 24, 2024, Millicom announced that its subsidiary in Colombia has agreed to sell approximately 1,100 wireless
communications towers to affiliates of investment funds managed by KKR.
Telefonica Costa Rica legal case
On February 13, 2024, the New York Supreme Court granted summary judgment in favor of a breach of contract claim filed by
Telefónica after Millicom terminated the acquisition of Telefónica’s Costa Rican business in 2020. The Court also ruled in favor of
Telefónica’s methodology for calculating pre-judgment interest. As of the time of the issuance of this report, the Court has not yet
determined the exact amount of damages, and a final judgment has not yet been entered. Millicom disagrees with the decision and
continues to believe that it has strong arguments in its favor. Millicom plans to file an appeal of the ruling.
Bond repurchase
Since January 1, 2024 up to the date of issuance of these consolidated financial statements, Millicom has continued to repurchase
bonds in the secondary markets for total amounts of $17 million of the 2031 USD 4.5% Senior notes, $64 million of the USD 5.125%
Comcel Senior Notes and $27 million of the USD 4.500% Senior Notes in Panama.
Share repurchase program
As part of the share repurchase program Millicom has continued to repurchase shares in 2024, acquiring an additional 1,289,776
shares since the beginning of 2024 to March 7, 2024.
Mobile network combination in Colombia
On February 26, 2024, Tigo Colombia finalized its agreement with Telefonica's subsidiary in Colombia to create a jointly-owned
mobile infrastructure business, which will combine some of the Group's mobile network infrastructure and spectrum assets in
Colombia. On February 26, 2024, Tigo Colombia received final approvals to operate the 5G spectrum purchased in the auction that
occurred on December 20, 2023 enabling Tigo Colombia to launch 5G services which are now available.
F-88
Millicom International Cellular S.A.
Société Anonyme
Audited annual accounts
as at and for the year ended
December 31, 2023
2, rue du Fort Bourbon
L-1249 Luxembourg
R.C.S. Luxembourg : B 40 630
F-89
Table of contents
Page
F- 91
Audit report
Balance sheet as at December 31, 2023
F- 95
Profit and loss account for the year ended
December 31, 2023
F- 97
Notes to the annual accounts as at
December 31, 2023
F- 98
F-90
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 financial statements
Opinion
We have audited the accompanying financial statements of Millicom International Cellular S.A. (“the Company”), which
comprise the balance sheet as at December 31, 2023, and the profit and loss account for the year then ended, and the notes
to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as
at December 31, 2023, and of the results of its operations for the year then ended in accordance with Luxembourg legal and
regulatory requirements relating to the preparation and presentation of the financial statements.
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
(“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 financial statements” section of our report. We are also independent of the
Company 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 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
financial statements of the current period. These matters were addressed in the context of the audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1.
Impairment of Shares in affiliated undertakings and impairment of Loans owed by Affiliated Undertakings
Risk identified
Millicom International Cellular S.A., as ultimate holding of the group, holds a number of shares in and loans to affiliated
undertakings, which are operating mainly in emerging markets in the telecommunication sector. As described in Note 5
shares in affiliated undertakings are valued at cost less any durable impairment in value which as at December 31, 2023
amounts to US$6,621 million representing 83% of the total assets. As described in Note 7 loans to affiliated undertakings are
valued at cost less any durable impairment in value which as at December 31, 2023 amounts to US$295 million representing
4% of the total assets. At least annually, the Company evaluates the carrying value of the investments and the nominal value
of the loans. Impairment losses are measured and recorded based on the difference between the estimated recoverable
amount and the carrying amount of the asset. Impairment of shares in and loans to affiliated undertakings is considered a
significant risk due to historical impairment, business industry and locations of these investments.
Our answer
Our audit procedures over the valuation of the shares in affiliated undertakings included, among others:
◦
◦
◦
◦
Obtaining and reading the latest financial statements/trial balances of material investments in order to identify
whether any going concern issue or liquidity issue exist at the investment level and ultimately if the investment is
recoverable.
Assessing the valuation model prepared by the Management and its impairment test for the determination of the
recoverable amount of the investments.
Recomputing the fair value of equity interests of the investments prepared by the Management and comparing the
carrying value of the investments to the fair market value of equity interests in order to determine whether an
impairment exists.
Assessing the valuation of the guarantees provided by the Company to direct or indirect affiliated companies
Our audit procedures over the valuation of the loans granted to affiliated undertakings included, among others:
◦
Obtaining the loan agreements to confirm the nominal value of the loans and the movements of the year.
F-91
◦
◦
◦
Obtaining and reading the latest financial statements/trial balances of the affiliated undertakings in order to
identify whether any going concern issue or liquidity issue exist and ultimately if the loan is recoverable.
Assessing the valuation model prepared by the Management for the determination of the recoverable amount of
the loans.
Recomputing the recoverable amount of the loans prepared by Management and comparing the carrying value of
the loans to their recoverable value in order to determine whether an impairment exists.
◦ We also assessed the adequacy of the Company’s disclosures in respect of the accounting policies on impairment
as disclosed in Note 2.2.6 and 2.2.7 of the financial statements.
Other information
The Board of Directors is responsible for the other information. The other information comprises the information included in
the Directors' report but does not include the financial statements and our report of the “réviseur d’entreprises agréé”
thereon.
Our opinion on the 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 financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the 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 financial statements
The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with
Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements],
and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
The Board of Directors is also responsible for presenting the financial statements in compliance with the requirements set
out in the Delegated Regulation 2019/815 on European Single Electronic Format, as amended (“ESEF Regulation”).
In preparing the financial statements, the Board of Directors is responsible for assessing the Company’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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Responsibilities of the “réviseur d’entreprises agréé” for the audit of the financial statements
The objectives of our audit are to obtain reasonable assurance about whether the 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 financial statements.
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 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.
F-92
◦
◦
◦
◦
◦
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
Company’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 Company’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 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 Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Assess whether the financial statements have been prepared, in all material respects, in compliance with the
requirements laid down in the ESEF Regulation.
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 to communicate with 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 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.
Report on other legal and regulatory requirements
We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the Shareholders on the May 31, 2023
and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 12 years.
The Directors' report, which is disclosed on page 144 and which is the responsibility of the Board of Directors, is consistent
with the financial statements and has been prepared in accordance with applicable legal requirements.
The corporate governance statement, as published on the Company’s website http://www.millicom.com/our-
responsibility/, 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, at the date of this report, with the financial statements and has
been prepared in accordance with applicable legal requirements.
F-93
We have checked the compliance of the financial statements of the Company as at December 31, 2023 with relevant
statutory requirements set out in the ESEF Regulation that are applicable to financial statements. For the Company it relates
to:
•
Financial statements prepared in a valid xHTML format.
In our opinion, the financial statements of the Company as at 31 December 2023, identified as “tigo-2023-12-31-en”, have
been prepared, in all material aspects, in compliance with the requirements laid down in the ESEF Regulation.
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 Company in conducting the audit.
Ernst & Young
Société anonyme
Cabinet de révision agréé
Bruno Di Bartolomeo
Luxembourg, March 12, 2024
F-94
Millicom International Cellular S.A.
Balance Sheet as at December 31, 2023
Notes
31-Dec
2023
USD
31-Dec
2022
USD
ASSETS
Fixed assets
Intangible assets
Concessions, patents, licenses, trade marks and similar rights and assets , if they were
acquired for valuable consideration and need not be shown under C.I.3
Payments on account and intangible fixed assets under development
Tangible assets
Other fixtures and fittings, tools and equipment
Payments on account and tangible assets in the course of construction
Financial assets
Shares in affiliated undertakings
Other loans
Current assets
Stocks
Finished goods and goods for resale
Debtors
Amounts owed by affiliated undertakings
becoming due and payable within one year
becoming due and payable after more than one year
Amounts owed by undertakings with which the company is linked by virtue of
participating interests
becoming due and payable within one year
Other debtors
Investments
Own shares
Cash at bank and in hand
Prepayments
TOTAL ASSETS
3
4
5
6
7
8
9
17,221,851
5,655,488
848,828
760,636
18,598,798
6,875,357
1,082,791
1,178,188
6,621,555,413
6,154,728,999
144,298,535
—
6,790,340,751
6,182,464,133
20,282,536
—
426,806,691
295,062,990
209,912,806
747,313,429
—
1,392,959
138,310
2,364,690
6,656,712
367,441,513
15,316,701
646,219,447
1,117,643,401
1,621,265,383
45,604,252
53,597,716
7,953,588,404
7,857,327,232
The accompanying notes are an integral part of these annual accounts
F-95
Millicom International Cellular S.A.
Balance Sheet as at December 31, 2023
Continued
EQUITY AND LIABILITIES
Capital and reserves
Subscribed capital
Share premium account
Reserves
Cash flow hedge reserve
Legal reserve
Reserve for own shares
Profit brought forward
Profit for the financial year
TOTAL EQUITY
Provisions
Other provisions
Creditors
Debenture loans
becoming due and payable after more than one year
Amounts owed to affiliated undertakings
becoming due and payable within one year
becoming due and payable after more than one year
Amounts owed to undertakings with which the company is linked by virtue of
participating interests
becoming due and payable within one year
Other creditors
Tax authorities
Social security authorities
Other creditors
becoming due and payable within one year
becoming due and payable after more than one year
Deferred income
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Notes
8
10
11
12
13
14
31-Dec
2023
USD
31-Dec
2022
USD
258,144,458
258,144,458
1,090,559,119
1,081,899,148
(4,354,251)
18,253,643
6,656,730
(447,561)
16,357,968
15,316,699
1,963,155,917
1,927,138,093
344,874,950
37,913,504
3,677,290,566
3,336,322,309
64,454,461
74,297,341
2,428,971,973
2,641,836,130
853,598,055
841,227,874
1,275,848,133
440,622,664
7,635,462
6,680,129
62,996
91,749
17,164
38,985
79,276,799
637,245
80,455,953
781,894
4,211,502,153
4,446,281,052
341,224
426,530
4,276,297,838
4,521,004,923
7,953,588,404
7,857,327,232
The accompanying notes are an integral part of these annual accounts
F-96
Millicom International Cellular S.A.
Profit and loss account for the year
ended December 31, 2023
Other operating income
Staff costs
Wages and salaries
Social Security costs
Other staff costs
Value adjustments
In respect of formation expenses and of tangible and intangible assets
In respect of current assets
Other operating charges
Income from participating interests
derived from affiliated undertakings
Other interest and similar income
derived from affiliated undertakings
other interest and similar income
Value adjustments in respect of financial assets and of investments held as current assets
Interest payable and similar expenses
Concerning affiliated undertakings
Other interest and similar expenses
Income tax
Other taxes not included in the previous caption
Profit after taxation
Profit for the financial year
Notes
15
16
3,4
7
17
18
19
20
21
22
23
24
31-Dec
2023
USD
31-Dec
2022
USD
278,155,018
236,104,387
(72,974,347)
(39,801,687)
(1,736,739)
(990,496)
(8,838,482)
—
(1,094,922)
(378,604)
(8,856,246)
(3,043,032)
(276,011,973)
(236,011,363)
562,117,001
552,170,882
51,340,175
30,248,451
31,965,605
33,016,933
255,680
(283,912,252)
(78,010,323)
(40,395,806)
(163,768,145)
(170,645,131)
(5,039,599)
(1,581,196)
344,874,950
344,874,950
3,726,173
(3,221,508)
37,913,504
37,913,504
The accompanying notes are an integral part of these annual accounts
F-97
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023
NOTE 1 – GENERAL INFORMATION
Millicom International Cellular S.A. (the “Company” or “MIC SA”), a Luxembourg Société Anonyme, and its subsidiaries, joint ventures
and associates (together the “Group” or “Millicom”) is a provider of cable and mobile services dedicated to emerging markets in Latin
America. Through our main brands Tigo® and Tigo Business™, we provide a wide range of digital services in nine countries in Latin
America, including high-speed data, cable TV, direct-to-home satellite TV, mobile voice, mobile data, SMS, MFS, fixed voice, and
business solutions including value-added services (“VAS”). We provide services on both a business-to-consumer (“B2C”) and a
business-to-business (“B2B”) basis, and we have used the Tigo brand in all our markets since 2004. Millicom also provides tower
infrastructure and services.
We offer the following principal categories of services:
• Mobile, including mobile data, mobile voice, and MFS to consumer, business and government customers;
•
Fixed and other services, including broadband, pay-TV, content, and fixed voice services for residential (Home) customers, as
well as voice, data and VAS and solutions to business and government customers.
We provide both mobile and cable services in eight countries: Bolivia, Colombia, El Salvador, Guatemala, Honduras, Nicaragua,
Panama and Paraguay. In addition, we provide cable services in Costa Rica. In Africa, we previously provided mobile services in
Tanzania, which we disposed of in April 2022.
The Company’s shares are traded as Swedish Depositary Receipts on the Stockholm stock exchange under the symbol TIGO SDB
(formerly MIC SDB) and on the Nasdaq Stock Market in the U.S. under the ticker symbol TIGO.
In order to align the Millicom Group’s legal structure with its operational model in the United States, Millicom’s management decided
to formally establish its U.S. operations in a way that recognizes two main focal points. The first focus is the development,
enhancement, maintenance, and protection of MIC S.A.’s valuable intangible property performed by a branch of MIC S.A. in the
United States. The second focus is the provision of services by Millicom International Services LLC supporting MIC S.A. itself and
Millicom's operating companies. As of December 31, 2023, MIC S.A.'s branch in the United States (“IP Branch”) had a total of 12
employees.
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.
The Company prepares consolidated annual accounts, which are published in Luxembourg and are available at the registered office
of the Company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The annual accounts have been prepared in accordance with Luxembourg legal and regulatory requirements under the historical
cost convention, except for the use of the fair value option for financial derivative instruments and transferable securities.
Accounting policies and valuation rules are, besides those prescribed by the Law of December 19, 2002, as amended subsequently,
determined and applied by the Board of Directors. The preparation of annual accounts requires the use of certain critical accounting
estimates. It also requires the Management to exercise its judgment in the process of applying the accounting policies. Changes in
assumptions may have a significant impact on the annual accounts in the period in which the assumptions changed.
Management believes that the underlying assumptions are appropriate and that the annual accounts therefore present the financial
position and results fairly.
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities in the next financial year.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
2.2 Significant accounting policies
The principal accounting policies applied in the preparation of these annual accounts are set out below. These policies have been
consistently applied to all years presented.
2.2.1 Going concern
Management is not aware of anything that would prevent the company from continuing as a going concern. Therefore, the going
concern basis of accounting is applied in preparing these annual accounts.
2.2.2 Foreign currency translation
These annual accounts are expressed in US Dollars ($). The translation at the balance sheet is made according to the following
principles:
Monetary items are converted at the exchange rates effective at the balance sheet date whereas non-monetary items are converted
at the exchange rate effective at the time of the transaction. The realized and unrealized exchange losses are recorded in the profit
and loss account, whereas the realized exchange gains are recorded in the profit and loss account at the moment of their realization.
Unrealized gains resulting from the fair valuation of derivatives held for trading are recognized under the caption “other interest and
similar income”.
Financial liabilities and assets, which are hedged by derivative instruments are translated at closing rate.
F-98
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2.3 Intangible assets
Intangible fixed assets are valued at purchase price including the expenses incidental thereto. Intangible fixed assets are depreciated
over their estimated useful economic lives, as follows:
•
•
•
Licenses and trademarks rights
Rights of use (IRUs) (note 2.2.4)
Software
5 years or the contract term if less
12 or 13 years term of the underlying contract
3 years or the contract term if less
Depreciation is calculated on a straight line basis.
Where the Company considers that an intangible fixed asset has suffered a durable depreciation in value, an additional write-down is
recorded to reflect this loss. These value adjustments are not continued if the reasons for which the value adjustments were made
have ceased to apply.
2.2.4 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;
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 note 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.
Usage of the Company’s controlled IRUs are charged to the local operations of the Group. These recharges are presented as revenue
in the Company's profit and loss account under the caption “Other operating income”.
2.2.5 Tangible assets
Tangible fixed assets are valued at purchase price including the expenses incidental thereto. Tangible fixed assets are depreciated
over their estimated useful economic lives. All repairs and maintenance expenditures are expensed as incurred.
The depreciation rates and methods applied are as follows:
•
•
Computer equipment: 3 years
Other equipment: 4 to 10 years
Depreciation is calculated on a straight-line basis.
Where the Company considers that a tangible fixed asset has suffered a durable depreciation in value, an additional write-down is
recorded to reflect this loss. These value adjustments are not continued if the reasons for which the value adjustments were made
have ceased to apply.
2.2.6 Financial assets
Shares in affiliated undertakings, participating interest and loans to affiliated undertakings are valued at purchase price and at
nominal value including the expenses incidental thereto, less any durable impairment in value.
The recoverability of the Company's shares in affiliated undertakings, participating interest and loans to affiliated undertakings is
subject to the future profitability of the underlying operations and the evolution of the business in accordance with plans. In
evaluating the recoverability of its assets, the value and future benefits of the underlying operations are periodically reviewed by
management based on technological, regulatory and market conditions.
Annually, or when certain operational and financial factors indicate an impairment of value, the Company evaluates the carrying
value of the investments and the nominal value of the loans, in relation to the operating performance and future cash flows of the
underlying assets. When indicated, the impairment losses are measured based on the difference between the estimated recoverable
amount and the carrying amount of the asset. Management’s estimates of recoverable amounts are based on the net present values
of estimated future cash flows and valuations based on market transactions in similar circumstances. Impairment losses are reversed
when the reasons for which the impairment has been created no longer exist.
2.2.7 Debtors
Debtors are valued at their nominal value. They are subject to value adjustments when their recovery is compromised.
F-99
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2.8 Prepayments
Prepayments include expenditures incurred during the current year but relating to a subsequent financial year, as well as debenture
loans origination and further amendments costs, and costs in relation to equity offerings, which are amortized on a straight line basis
over remaining estimated debt periods based on the maturity of the financing agreements.
2.2.9 Debenture Loans
Debenture loans are recorded at their reimbursement value. The debt origination and further amendments costs are included in
prepayments (note 2.2.8).
2.2.10 Cash at bank and in hand
Highly liquid investments with an original maturity of three months or less are considered to be cash at bank and in hand.
2.2.11 Provisions
Provisions are intended to cover losses or debts, the nature of which is clearly defined and which, at the date of the balance sheet, are
either likely to be incurred or certain to be incurred but uncertain as to their amount or the date on which they will arise. See also
note 2.2.16.
Provisions may also be created to cover charges which originate in the financial year under review or in a previous financial year, the
nature of which is clearly defined and which at the date of the balance sheet are either likely to be incurred or certain to be incurred
but uncertain as to their amount or the date on which they will arise.
Provisions for taxation corresponding to the difference between the tax liability estimated by the Company and the advance
payments for the financial years for which the tax return has not yet been filed are recorded under the caption "Tax authorities".
2.2.12 Share-based compensation
Share awards under Long-Term Incentive Plans (LTIP) are granted to the directors, management and key employees. The cost of the
LTIP awards is recognized on the date of issuance of the shares to the employees together with a corresponding increase in share
premium. The cost is based on the market value of the shares at grant date. If shares are issued from treasury shares, the difference
between the value of the shares issued and the acquisition cost of the treasury shares is recorded in the profit and loss account as an
adjustment to the value of the treasury shares. Value of the shares issued are reported in the "Wages and Salaries" caption upon
issuance of the shares related to the share awards plans.
2.2.13 Expense recognition
Expenses are charged in the year they are incurred and they are stated on an accrual basis.
2.2.14 Other operating income
The Company’s income is disclosed gross of withholding tax and principally comprises of consultancy, royalty and technical fees
charged to affiliated companies. The Company is financing its various subsidiaries and also charging them for business support
services, brand fees, management fees and recharging certain costs incurred on behalf of these subsidiaries. Income is recognized as
earned.
2.2.15 Leases
While Luxembourg legal and regulatory requirements are not specific as to how leases should be accounted for, the Group elected to
apply the requirements defined in IFRS 16 'Leases'. As a result, 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 Company. Each lease payment is allocated between the
reduction of the liability and finance cost. The finance cost is charged to the profit and loss account 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 are recognized
under caption "intangible assets" in the balance sheet and 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 Company 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 the new
accounting policy for leases.
The Company determines the incremental borrowing rate by country and by considering the risk-free rate, the country risk, the
industry risk, the credit risk, the currency risk and the asset specific risk, as well as the lease and payment terms and dates.
The Company 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
substance fixed. The discount rate is revised, if a change in floating interest rates occurs.
The Company 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.
F-100
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 Company has decided to work on the basis that the lessor will generally
accept a renewal/forego on the early termination of a contract, as there is an economic incentive to maintain the contractual
relationship.
Millicom has considered the specialized nature of most of its assets under lease, the remote likelihood that 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 the new accounting policy for leases.
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.
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
Finally, the Company has taken the additional following decisions when adopting the Group accounting policy on leases:
• Non-lease components are capitalized
•
Intangible assets are out of scope for the new lease rules.
2.2.16 Derivative financial instruments
The Company may enter from time to time into derivative financial instruments in order to hedge certain financial risk at Company or
Group level.
The Company opted to use the fair value model as described by the Law of December 19 2002, as amended subsequently, art. 64bis.
Derivative financial instruments used for hedging purposes are measured at fair value based on their market value (Mark to Market) at
the reporting date and they are recorded under either ‘other provisions’ (when fair value is negative) or ‘other debtors’ (when fair
value is positive). The profit and loss impact is presented under “other interests and similar income” (unrealized gain) or in “other
interests and similar expenses” (unrealized losses).
For hedge accounting purposes, hedges are classified as either:
•
•
Fair value hedges, when they hedge exposure to a change in the fair value of a recognized asset or liability, or of a firm
commitment (except for currency risk); or
Cash-flow hedges, when they hedge exposure to a change in cash flow arising from a specific risk associated with a
recognized asset or liability, a highly probable future transaction or a currency risk on a firm commitment.
The "effective" part of the cash flow hedge instrument is recognized in “cash flow reserve” in equity, while the "non-effective" part is
recognized in the profit and loss account under the caption “other interests and similar expenses” (loss) or under the caption “other
interest and similar income” (gain). Amounts accumulated in equity are reclassified to the income statement in the periods when the
hedged item affects profit and loss. The cash flow hedge reserve is non-distributable.
To avoid any accounting mismatch, unrealized exchange losses and/or gains on financial assets and liabilities, being hedged with
these derivative financial instruments, are also recognized in the profit and loss account.
Changes in the fair value of derivatives that are designated and qualify as fair value hedge are recorded in the profit and loss account,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
2.2.17 Own shares
Own shares are initially measured at acquisition cost and recognized as an asset with a corresponding non-distributable reserve
created from share premium and retained earnings. Own shares are subsequently re-measured at the lower of cost or market value
using the average cost. Transferred or cancelled shares are valued using the average cost method. They are subject to value
adjustments where their recovery is compromised. These value adjustments are reversed when the reasons for which the value
adjustments were made have ceased to apply.
2.2.18 Other investments (transferable securities)
Transferable securities are valued at fair value. The fair value of these financial instruments corresponds to the latest available quote.
The changes in fair value of transferable securities are recorded in the profit and loss account.
F-101
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 3 – INTANGIBLE ASSETS
The movements of the year in intangible fixed assets are as follows:
As at January 1, 2023
Cost
Accumulated amortisation
Carrying amount
Additions (1)
Disposals/impairments
Category transfers
Transfers from Tangible Assets
Amortisation
As at December 31, 2023
Cost
Accumulated amortisation
As at December 31, 2023
US$
Software
IRU's
Other
Work in
Progress
Total
45,120,258
11,267,401
520,489
6,875,356
63,783,504
(28,674,353)
(9,114,507)
(520,489)
—
(38,309,349)
16,445,905
2,152,894
—
(51,480)
6,899,547
376,922
—
—
—
(7,467,666)
(1,134,274)
—
—
—
—
—
—
6,875,356
25,474,155
5,679,682
5,679,682
—
(6,899,547)
—
—
(51,480)
—
376,922
(8,601,940)
52,345,247
11,267,401
520,489
5,655,491
69,788,628
(36,142,019)
(10,248,781)
(520,489)
—
(46,911,289)
16,203,228
1,018,620
—
5,655,491
22,877,339
Intangible assets include software licenses and indefeasible rights of use (IRU) related to telecommunications capacity contracts which the
Company purchases centrally and resells capacity to certain of its operating subsidiaries and joint ventures.
(1) As at December 31, 2023, the work in progress is related mainly to Oracle EPMC implementation ) project for US$1.1 million, API Lifecycle
& Governance for US$0.8 million Network & IT Service Management for US$0.7 million.
US$
As at January 1, 2022
Cost
Accumulated amortisation
Carrying amount
Additions (1)
Disposals
Category transfers
Transfers to tangible assets
Amortisation
As at December 31, 2022
Cost
Accumulated amortisation
As at December 31, 2022
Software
IRU's
Other
Work in
Progress
Total
35,981,835
11,267,401
520,489
7,669,755
55,439,480
(22,797,408)
(7,980,234)
(520,489)
—
(31,298,131)
13,184,427
3,287,167
10,059
(1,758,879)
10,887,243
—
—
—
—
—
(5,876,945)
(1,134,273)
—
—
—
—
—
—
7,669,755
24,141,349
7,484,292
—
(10,887,243)
2,608,552
—
7,494,351
(1,758,879)
—
2,608,552
(7,011,218)
45,120,258
11,267,401
520,489
6,875,356
63,783,504
(28,674,353)
(9,114,507)
(520,489)
—
(38,309,349)
16,445,905
2,152,894
—
6,875,356
25,474,155
NOTE 4 – TANGIBLE ASSETS
The movements of the year in tangible fixed assets are as follows:
US$
As at January 1, 2023
Cost
Accumulated depreciation
Carrying amount
Additions
Disposals
Transfer to Intangible Assets
Depreciation
As at December 31, 2023
Cost
Accumulated depreciation
As at December 31, 2023
Leaseholds
improvements
Other PPE
Right of use
asset
Work in
Progress
Total
196,631
2,799,880
1,487,806
1,178,189
(99,541)
(2,753,799)
(548,187)
—
97,090
46,081
939,619
1,178,189
—
—
—
—
—
—
—
—
41,751
(79,797)
(376,922)
(39,326)
(27,694)
(169,527)
—
196,631
2,799,880
1,487,806
763,221
(138,867)
(2,781,493)
(717,714)
—
57,764
18,387
770,092
763,221
5,662,506
(3,401,527)
2,260,979
41,751
(79,797)
(376,922)
(236,547)
5,247,538
(3,638,074)
1,609,464
Tangible assets include IT equipment, lease right-of-use assets and office furniture.
F-102
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 4 – TANGIBLE ASSETS (continued)
US$
As at January 1, 2022
Cost
Accumulated depreciation
Carrying amount
Additions
Transfers
Depreciation
As at December 31, 2022
Cost
Accumulated depreciation
As at December 31, 2022
Leaseholds
improvements
Other PPE
Right of use
asset
Work in
Progress
Total
196,631
2,741,362
1,487,806
3,384,412
(60,215)
(2,707,664)
(378,621)
—
136,416
33,698
1,109,185
3,384,412
7,810,211
(3,146,500)
4,663,711
—
—
532
57,986
—
—
460,315
(57,986)
460,847
—
(39,326)
(46,135)
(169,566)
—
(255,027)
196,631
2,799,880
1,487,806
1,178,189
(99,541)
(2,753,799)
(548,187)
—
97,090
46,081
939,619
1,178,189
5,662,506
(3,401,527)
2,260,979
NOTE 5 – FINANCIAL ASSETS
5.1 Shares in affiliated undertakings, participating interest and other loans
The movements for the year on shares in affiliated undertakings, participating interest and other loans were as follows:
December 31, 2023
US$
December 31, 2022
US$
Shares in
affiliated
undertakings
Shares in
participating
interest (1)
Other loans
(2)
Shares in
affiliated
undertakings
Shares in
participating
interest
Other loans
7,010,878,721
123,649,408
40,000,000
6,949,647,850
123,649,408
40,000,000
466,826,414
—
144,298,535
61,230,871
—
—
7,477,705,135
123,649,408
184,298,535
7,010,878,721
123,649,408
40,000,000
(856,149,722)
(123,649,408)
(40,000,000)
(582,950,361)
(123,649,408)
(40,000,000)
Cost
Opening balance
Additions (3)
Closing balance
Value adjustments
Opening balance
Impairment during the year
—
—
—
(273,199,361)
—
—
Closing balance
Net book value
Opening balance
Closing balance
(856,149,722)
(123,649,408)
(40,000,000)
(856,149,722) (123,649,408)
(40,000,000)
6,154,728,999
6,621,555,413
—
—
6,366,697,490
—
144,298,535
6,154,728,999
—
—
—
—
(1) On June 29, 2023, the Company sold the investment in Global Fashion Group S.A. which was distributed as dividend in kind by MKC Brillant Services GmbH,
in which the Company holds a 35% of participation. This investment was fully impaired in 2016. As a result of this transaction, a profit of US$0.9 million was
recognized in the profit and loss account (refer to note 21).
(2) For more details please refer to note 5.3
(3) For more details please refer to note 5.2
F-103
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 5 – FINANCIAL ASSETS (continued)
5.2 Shares in affiliated undertakings
The carrying values of the shares in affiliated undertakings and the related value adjustments are as follows:
Name of the Company
Millicom International Operations S.A.
Millicom Spain S.L.
Millicom Global Employment Company S.à r.l.
Lati International S.A.
Shai Holding S.A.
Millicom Telecommunications S.A.
Millicom SSC, S.A. de C.V.
InfraCo S.A.
Millicom Digital Ventures B.V.
Millicom CAM SEM S.A.
Millicom Services AB
Millicom International Services LLC
Millicom USA Holdings LLC
Millicom Services UK Ltd
Country
Percent
shares held
Luxembourg
Spain
Luxembourg
Luxembourg
Luxembourg
Luxembourg
2022
%
100
100
100
—
100
100
Opening
carrying
value
2022
US$
Additions/
Disposals (1)
Closing
carrying
value
Opening
value
adjustments
Charge/
Reversal
Closing value
adjustments
Closing Net
book value
Percent
shares held
5,851,412,180
301,010,760
6,152,422,940
US$
2023
US$
2022
US$
—
US$
—
2023
US$
2023
US$
—
6,152,422,940
1,080,644,642
119,500,000
1,200,144,642
(847,258,403)
—
(847,258,403)
352,886,239
11,269,887
—
11,269,887
(8,891,319)
—
(8,891,319)
2,378,568
—
30,120,313
30,120,313
31,236,399
—
31,236,399
36,002,625
16,195,342
52,197,967
El Salvador
99.99
249,999
Luxembourg
Netherlands
Panama
Sweeden
U.S.A.
U.S.A.
United Kingdom
100
100
100
100
100
100
100
35,000
10,000
10,000
7,786
100
100
2
—
—
—
—
—
—
—
—
249,999
35,000
10,000
10,000
7,786
100
100
2
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
30,120,313
31,236,399
52,197,967
249,999
99.99
35,000
10,000
10,000
7,786
100
100
2
100
100
100
100
100
100
100
2023
%
100
100
100
100
100
100
7,010,878,720
466,826,415
7,477,705,135
(856,149,722)
—
(856,149,722)
6,621,555,413
(1) On March 28 and October 20, 2023, respectively, the Company made a contribution in kind of receivables for US$48.5 million and a contribution in cash of US$71 million to
Millicom Spain, S.L.. On June 1, 2023, the Company made a contribution in kind to Millicom International Operations S.A. for US$301 million. Finally, in December 2023, the
Company made a capital contribution for a total amount of US$16 million to Millicom Telecommunications S.A.
Management believes that no durable depreciation on investments, other than those already recorded, exist as at December 31,
2023.
Art. 65 paragraph (1) 2º of the Law of December 19 2002 on the register of commerce and companies and the accounting and annual
accounts of undertakings (the “law”) requires the disclosure of the amount of capital and reserves and profit and loss for the last
financial year of each affiliated undertaking. In conformity with Art.67 (3) of the law these details have been omitted as the Company
prepares consolidated accounts and these consolidated accounts and the related consolidated management report and auditors’
report thereon have been lodged with the Luxembourg Trade Registry.
5.3 Other loans
Other loans are composed as follows:
Name of the Company
Lati Telecom Infrastructure Bolivia S.A (1)
UNE EPM Telecomunicaciones S.A. (2)
Lati Paraguay S.A. (3)
Lati Infrastructure Panama S.A. (4)
Lati El Salvador S.A. de C.V. (5)
Additions/ Closing carrying
value
2023
US$
63,207,859
54,042,606
13,479,386
10,540,913
3,027,771
—
144,298,535
(1) Loan between MIC SA and Lati Telecom Infrasctructure Bolivia S.A. for a total amount of US$63 million to finance the acquisition of
passive infrastructure from an affiliated company and working capital. It bears interest at a rate of SOFR +3.50% with a maturity date on
October 10, 2033.
(2) On January 5, 2023, UNE issued a COP230 billion bond (approximately US$50 million) consisting of two tranches with three and four and
a half-year maturities, respectively. Interest rates are variable, based on CPI + a margin, and are payable in Colombian peso. A portion of this
bond has been subscribed by MIC SA; the remaining part has been subscribed by third parties. On the same day, MIC SA entered into cross-
currency and interest rate swaps to hedge the foreign exchange and interest risks.
(3) Loan between MIC SA and Lati Paraguay, S.A. for a total amount of US$13.5 million to finance the acquisition of passive infrastructure
from an affiliated company and working capital. It bears interest at a rate of SOFR +3.38% with a maturity date on October 10, 2033.
(4) Loan between MIC SA and Lati Infrastructure Panama, S.A. for a total amount of US$10.5 million to finance the acquisition of passive
infrastructure from an affiliated company and working capital. It bears interest at a rate of SOFR +2.50% with a maturity date on October
10, 2033.
(5) Loan between MIC SA and Lati El Salvador, S.A. de C.V. for a total amount of US$3 million to finance the acquisition of passive
infrastructure from an affiliated company and working capital. It bears interest at a rate of SOFR +3.38% with a maturity date on October
10, 2033.
NOTE 6 – STOCKS
In December 2023, the Company centrally procured Customer Premise Equipments (CPEs) for a total amount of US$20.2 million.
These CPEs will be resold to its operating companies in 2024.
F-104
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 7 – DEBTORS
Debtors are composed as follows:
Amounts owed by affiliated undertakings before value adjustment
becoming due and payable within one year
Value adjustments in amounts owed by affiliated undertakings
becoming due and payable within one year
Amounts owed by affiliated undertakings after value adjustment
becoming due and payable within one year (1)
Amounts owed by affiliated undertakings after value adjustment
becoming due and payable after more than one year (2)
Amounts owed by undertakings in which the company is linked by virtue of participating interests
becoming due and payable within one year
Other receivables becoming due and payable within one year
Total December 31,
2023
Total December 31,
2022
US$
US$
497,004,520
280,110,635
(70,197,829)
(70,197,829)
426,806,691
209,912,806
295,062,990
747,313,429
—
1,392,959
723,262,640
138,310
2,364,690
959,729,235
F-105
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 7 – DEBTORS (continued)
Following are the details of the amounts owed by affiliated undertakings and the related value adjustments:
(1)
Total December 31, 2023
Millicom Spain, S.L
Millicom Cable 200 N.V.
Telefonia Celular de Nicaragua, S.A.
UNE EPM Telecomunicaciones S.A.
Millicom Cable 209 N .V.
Telecomunicaciones Digitales, S.A.
Millicom International One S.L.U.
Colombia Movil S.A.
Millicom LIH S.A. (MLIH)
Lati Telecom Infrastructure Bolivia S.A
Other
These amounts are short-term in nature
Millicom Spain, S.L.
Telefonía Celular de Nicaragua, S.A.
Millicom International One S.L.U
Digital Services S.A.
Millicom Cable 200 N.V.
Millicom LIH S.A. (MLIH)
Other
(2)
Telefonia Celular de Nicaragua, S.A. (1)
Millicom International One S.L.U. (2)
Amounts owed
by
Amounts owed to
Net balance
before value
adjustments
Value
adjustments
Net balance after
value
adjustments
186,173,157
(38,145,550)
148,027,607
134,986,284
—
134,986,284
68,183,946
24,120,464
15,004,660
17,001,232
14,591,673
5,933,808
2,117,937
1,312,307
(5,168,270)
63,015,676
(967,230)
23,153,234
—
15,004,660
(2,017,069)
14,984,163
(1,142,545)
13,449,128
(336,029)
(2,091)
—
5,597,779
2,115,846
1,312,307
—
—
—
—
—
—
—
(3,350,000)
—
—
(5,613,169)
80,971,006
75,357,837
(66,847,830)
148,027,607
134,986,284
63,015,676
23,153,234
15,004,660
14,984,163
13,449,128
2,247,779
2,115,846
1,312,307
8,510,007
463,812,299
33,192,222
497,004,521
(70,197,830)
426,806,691
Total December 31, 2022
Amounts
owed by
Amounts
owed to
Net balance
before value
adjustments
Value
adjustments
Net balance
after value
adjustments
166,010,087
(16,178,745) 149,831,342
—
149,831,342
63,214,216
(29,272,691)
33,941,525
10,525,610
8,989
10,534,599
6,195,341
2,681,657
1,680,628
—
—
6,195,341
2,681,657
(2,028)
1,678,600
—
—
—
—
—
33,941,525
10,534,599
6,195,341
2,681,657
1,678,600
79,034,821
(3,787,250)
75,247,571
(70,197,830)
5,049,741
329,342,360
(49,231,725) 280,110,635
(70,197,830) 209,912,805
Total December 31, 2023
Amounts owed by
Amounts owed to
Net balance
151,062,990
144,000,000
295,062,990
—
—
—
151,062,990
144,000,000
295,062,990
(1) Loan between Newcom Nicaragua S.A. and MIC SA for a total amount of US$437 million used for the acquisition of Telefonia Celular de Nicaragua, S.A. of which US$151 million
is the outstanding balance. It bears interest at a rate of 6.25% with a maturity date on May 16, 2029. Telefonia Celular de Nicaragua, S.A. and Newcom Nicaragua S.A. merged in
2021 with Telefonia Celular de Nicaragua, S.A. remaining as the surviving entity.
(2) This loan was signed in June 2020 for a total amount of US$250 million to be used for working capital purposes of which US$144 million is the outstanding balance and bears
interest at a rate of SOFR 3 months + 250 bps. The loan matures on January 31, 2025.
Millicom LIH S.A.
Telefonia Celular de Nicaragua, S.A.
Millicom International One S.L.U.
Millicom Cable 200 N.V.
Millicom Cable 209 N .V.
Total December 31, 2022
Amounts owed by
Amounts owed to
Net balance
289,987,221
173,362,617
144,000,000
126,071,668
13,891,923
747,313,429
—
—
—
—
—
—
289,987,221
173,362,617
144,000,000
126,071,668
13,891,923
747,313,429
F-106
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 7 – DEBTORS (continued)
(3) Amounts owed by undertakings in which the Company is linked by virtue of participating interests are detailed below:
(3)
Navega, S.A. de C.V.
Navega, S.A. de C.V.
Total December 31, 2023
Amounts owed by
Amounts owed to
Net balance
—
—
—
—
—
—
Total December 31, 2022
Amounts owed by
Amounts owed to
Net balance
139,920
139,920
(1,610)
(1,610)
138,310
138,310
Management believes that appropriate value adjustments have been made on the amounts owed by affiliated undertakings and that
no durable depreciation exist, other than those already recorded.
In the normal course of the business, the Company is financing its various subsidiaries and also charging those for business support
services, brand fees, management fees and recharging certain costs incurred on behalf of those subsidiaries. At the same time, certain
costs incurred by subsidiaries are recharged to the Company and advanced dividends remitted to the Company. These transactions
give rise to intercompany payable and receivable balances which are settled periodically either through offset of receivables and
payables, declaration of dividends, or cash settlement.
NOTE 8 – CAPITAL AND RESERVES
8.1 Share capital and share premium
The authorized share capital of the Company totals 200,000,000 registered shares (2022: 200,000,000) consisting of 172,096,305
(2022: 172,096,305) registered common shares at a par value of US$1.50 each, of which at December 31, 2023, 369,817 are owned by
the Company (2022: 1,212,722 ).
8.2 Reserve for own shares
During the year ended December 31, 2023, Millicom repurchased 282,724 shares for a total amount of US$5.1 million (2022: there
were no share repurchase), and withheld 320,985 shares for settlement of tax obligations (2022: 93,413) on behalf of employees
under share-based compensation plans and transferred a similar amount from share premium to reserve for own shares as required
under Luxembourg law. The cost of shares issued during the year from treasury shares is US$48.6 million (2022: US$16.2 million )
At December 31, 2023, the carrying value of the own shares was US$8.5 million while their fair value based on market share price was
US$6.7 million. Own shares should therefore have been impaired by US$1.8 million for 2023, however considering an impairment of
US$32.1 million was recorded in previous years, the Company recognized an impairment reversal this year of US$30.3 million in the
profit and loss account under “Value adjustments in respect of financial assets and of investments held as current assets".
During the year ended December 31, 2023, the Company has recorded a positive value adjustment on the value of the Company's
own shares for US$1.6 million under the same caption in the profit and loss account (2022: reversal of impairment of US$5 million).
This results from the application of the Company’s accounting policy for own shares (note 2.2.17) in respect of the value of shares
vested during the year as part of the Company's share incentive plans (note 8.5).
In 2023, 1,446,614 shares were issued to management, directors, and employees as part of their remuneration (2022: 418,948).
8.3 Legal reserve
On an annual basis, if the Company reports a net profit for the year, 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 subscribed capital. This reserve is not available
for dividend distribution.
During the year ended December 31, 2023, the Company has increased legal reserve on US$1.9 million resulting in an accumulated of
US$18.3 million.
8.4 Changes in shareholders' equity
On December 13, 2021, Millicom's Board of Directors proposed to increase the authorized share capital of the Company to
US$300,000,000 divided into 200,000,000 shares with a par value of US$1.5 each, through an extraordinary general meeting ("EGM").
The proposal has been ratified at the EGM which took place on February 28, 2022.
On May 18, 2022, the Board of Directors of Millicom resolved on a rights offering (the "Rights Offering") granting preferential
subscription rights to existing holders of shares and Swedish Depositary Receipts ("SDRs") to subscribe for up to 70,357,088 shares in
aggregate.
Those who were registered as holders of shares/SDR register on May 23, 2022, received one subscription right for each share ("Share
Right") or SDR ("SDR right") held in Millicom. 10 share rights entitled a holder thereof to subscribe for 7 new shares in Millicom and 10
SDR Rights entitled a holder thereof to subscribe 7 new SDRs in Millicom. The subscription price was set at SEK 106 per new SDR and
US$10.61 per new share. The subscription price in SEK was determined based on the subscription price in U.S dollars as resolved by
Millicom, US$10.61 per new share, using the SEK-U.S dollar exchange rate published by the Swedish Central Bank on May 17, 2022.
The record date for participation in the Rights Offering was May 23, 2022. The subscription period ran from May 27, 2022 up to June
13, 2022.
F-107
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 8 – CAPITAL AND RESERVES (continued)
The result of the Rights Offering showed that 68,822,675 shares, including those represented by SDRs, have been subscribed for by
the exercise of basic subscription rights. The remaining 1,534,413 shares, including those represented by SDRs, were allotted to those
investors who subscribed for them pursuant to over subscription privileges. The Rights Offering was thus fully subscribed, and
Millicom received proceeds amounting to approximately US$ 717 million after deducting underwriting commissions and other
offering expenses of US$30 million. These costs have been recorded as prepayments and are amortized over 5 years on a straight-line
basis (see note 9).
The Rights Offering resulted in the issuance of 70,357,088 new shares, which increased the number of outstanding shares in Millicom
from 101,739,217 to 172,096,305. As a result, the share capital increased by US$106 million to US$258 million from US$153 million.
The remaining US$641 million have been allocated to the Company's share premium account.
The changes in shareholders' equity for 2023 and 2022 are shown below:
Balance as at December 31, 2022
172,096,305
258,144,458
1,081,899,148
15,316,699
(447,561)
16,357,968
1,927,138,093
37,913,504
3,336,322,309
Number of
shares
outstanding
Share capital
Share premium
Reserve for
own shares
Cash flow
Hedge Reserve
Legal reserve
Accumulated
profits
Profit for the
year
Total
shareholders'
equity
US$
US$
US$
US$
US$
US$
US$
US$
Allocation of 2022 result
Dividends
Legal reserve increase
Acquisition of own shares
Transfer from reserve for own shares
Cash flow hedge reserve (1)
Long term incentive plans
Profit for the year
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(9,714,383)
9,714,383
(30,250,245)
30,250,245
—
—
—
—
—
—
(3,906,690)
48,624,599
(48,624,599)
—
—
—
37,913,504
(37,913,504)
—
—
—
1,895,675
(1,895,675)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(3,906,690)
—
—
—
—
—
—
—
344,874,950
344,874,950
Balance as at December 31, 2023
172,096,305
258,144,458
1,090,559,119
6,656,730
(4,354,251)
18,253,643
1,963,155,916
344,874,950
3,677,290,565
(1) Cash flow hedge reserve comprise the fair value changes on the SEK and COP currency and interest rate swaps (note 9, 11 and note 5.3).
Balance as at December 31, 2022
101,739,217
152,608,826
412,499,006
43,763,429
(7,411,889)
16,357,968
1,722,331,795
204,806,298
2,544,955,433
Number of
shares
outstanding
Share capital
Share premium
Reserve for
own shares
Cash flow
Hedge Reserve
Legal reserve
Accumulated
profits
Profit for the
year
Total
shareholders'
equity
US$
US$
US$
US$
US$
US$
US$
US$
Allocation of 2021 result
Effects of rights offering
Acquisition of own shares
Transfer from reserve for own shares
Cash flow hedge reserve (1)
Long term incentive plans
Profit for the year
—
—
—
70,357,088
105,535,632
640,953,412
—
—
—
—
—
—
—
—
—
—
—
—
(3,444,021)
3,444,021
15,721,493
(15,721,493)
—
6,964,328
16,169,258
(16,169,258)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
204,806,298
(204,806,298)
—
—
—
—
—
—
—
—
—
—
—
—
746,489,044
—
—
6,964,328
—
37,913,504
37,913,504
Balance as at December 31, 2022
172,096,305
258,144,458
1,081,899,148
15,316,699
(447,561)
16,357,968
1,927,138,093
37,913,504
3,336,322,309
8.5 Share-based compensation plans
As at December 31, 2023, the number of share awards expected to vest under incentive plans is as follows:
Plan awards and shares expected to vest
2023 Plans
2022 Plans
2021 Plans
2020 Plans
Performance Plan
Deferred plan
Performance Plan
Deferred plan
Performance Plan
Deferred plan
Performance Plan
Deferred plan
(number of shares)
Initial shares granted
Additional shares granted (1)
Effect of the Right Offering (2)
Total shares granted
Revision for forfeitures
Revision for cancellations
Total before issuances
Shares issued in 2020
Shares issued in 2021
Shares issued in 2022
Shares issued in 2023
Performance conditions not met
Shares still expected to vest
818,842
2,375,143
—
—
818,842
(101,108)
—
—
—
2,375,143
(51,309)
—
306,641
—
83,926
390,567
(52,623)
—
865,862
47,588
227,947
1,141,397
(54,595)
—
451,363
—
115,575
566,938
(63,624)
—
536,890
5,824
93,375
636,089
(45,747)
—
341,897
—
20,862
362,759
—
—
717,734
2,323,834
337,944
1,086,802
503,314
590,342
362,759
—
—
—
—
—
—
(31,124)
(354,331)
—
—
—
—
—
(29,885)
—
—
—
(13,957)
(476,256)
—
—
(1,121)
(2,071)
(120,419)
—
—
(5,760)
(160,596)
(234,157)
—
—
—
—
—
(362,759)
686,610
1,969,503
308,059
596,589
379,703
189,829
—
—
370,131
5,928
32,526
408,585
(41,791)
—
366,794
(3,571)
(113,653)
(100,362)
(149,208)
—
—
—
Estimated cost over the vesting period (US$ millions)
11
42
6
20
18
19
(1) Additional shares granted represent grants made for new joiners and/or as per CEO contractual arrangements.
(2) In 2022, as per plan rules, additional shares have been granted to all participants for unvested plans as a result of the effect of the rights offering (see note 7.1).
F-108
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 8 – CAPITAL AND RESERVES (continued)
Deferred share plan (unchanged since 2014, except for vesting schedule)
Shares vest at a rate of 30%on January 1 of each of year one and two, and the remaining 40% on January 1 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 (up to the 2020 plan)
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").
Performance share plan (for plans issued from 2021)
Shares granted under this performance share plan generally follow the same rules as for previous performance share plans. However, for
LTI 2021 plan, Millicom had added a time vesting Restricted Stock Units (“RSU’s”) representing 35% of the total award. The RSU’s will be
vesting at the end of 3 depending on satisfactory service condition. RSU's have been removed from the plan rules from 2022. The Relative
TSR, which account for 20% of the award, will be measured over the 10 trading days before / after December 31 of the last year of the
corresponding 3-year measurement period. The Service Revenue (LTI 2022: 30%; LTI 2021: 15%) and Operating Cash Flow after Leases
("OCFaL") (LTI 2022: 50%; LTI 2021: 30%) performance conditions will not be measured based on a CAGR anymore but on the actual
cumulative achievement against the 3-year cumulative targets to better reflect the performance over the 3-year period rather than
simply the end point as is the case with a CAGR target.
Assumptions and fair value of the shares under the TSR portion(s)
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) are as follows:
Performance share plan 2023 (Relative TSR)
Performance share plan 2022 (Relative TSR)
Performance share plan 2021 (Relative TSR)
Performance share plan 2020 (Relative TSR)
Performance share plan 2019 (Relative TSR)
NOTE 9 – PREPAYMENTS
Unamortized loan origination costs (1)
Unamortized right offering expenses (2)
Other prepayments
Risk-free rate % Dividend yield %
Share price
volatility(i) %
Award term
(years)
Share fair value
(in US$)
4.66 %
2.01 %
0.29 %
0.61 %
(0.24) %
— %
— %
1.28 %
1.47 %
3.01 %
52.88 %
47.94 %
46.28 %
24.54 %
26.58 %
2.82
2.8
2.82
2.93
2.93
31.13
29.12
52.99
55.66
49.79
Total December 31, 2023 Total December 31, 2022
US$
21,411,166
17,808,005
6,385,081
45,604,252
US$
26,611,752
23,744,007
3,241,957
53,597,716
(1) As at December 31, 2023, unamortized loan origination costs amount to US$21 million (2022: US$27 million). The amortization for the year of US$7 million is recorded in the
profit and loss account under the caption “other interest and similar expenses”
(2) The remaining costs related to the rights offering completed in 2022 for this year correspond to US$21 million (please refer to note 7.1). These are amortized over 5 years on a
straight-line basis.
NOTE 10 – OTHER PROVISIONS
Derivative financial instrument (1)
Provisions related to investments disposed of (2)
Income Tax Risk provision (Note 25)
Other provisions
Total December 31, 2023 Total December 31, 2022
US$
45,932,724
66,000
17,053,183
1,402,554
64,454,461
US$
52,804,578
7,030,875
12,053,294
2,408,594
74,297,341
(1) As at December 31, 2023, the provision for derivative financial instruments stand for the fair values of the USD/SEK cross-currency swaps related to the Company’s SEK bonds due
2027 of US$33.8 million (2022: US$52.8 million) and for USD/COP cross currency swap related to Tigo UNE COP Bond of US$12.1 million (2022: nil), respectively.
(2) Corresponds to a provision for other expenses directly linked with the disposal of our African operations estimated at US$0 million (2022: US$7 million). During this year, we have
indemnified for an amount of US$3.7 million.
F-109
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 11 – NON-CONVERTIBLE LOANS BECOMING DUE AND PAYABLE AFTER MORE THAN ONE YEAR
US$500M 5.125% Senior Notes (1)
COP144Bn 9.45% Senior Notes (2)
US$500M 6.625% Senior Notes (3)
US$750M 6.25% Senior Notes (4)
SEK2Bn 2.35% + Stibor Senior Notes (5)
SEK2.25Bn 3.00% + Stibor Senior Notes (6)
US$500M 4.5% Senior Notes (7)
US$100M DNB Bilateral Loan (8)
After one year and
within five years
More than five
years
Total December
31, 2023
Total December
31, 2022
US$
—
57,742,660
147,855,600
US$
US$
US$
450,000,000
450,000,000
450,000,000
—
—
57,742,660
50,000,000
147,855,600
147,855,600
675,000,000
675,000,000
675,000,000
—
—
213,986,969
223,360,534
223,360,534
215,759,040
775,013,179
775,013,179
789,234,521
—
—
—
100,000,000
—
100,000,000
100,000,000
305,598,260
2,123,373,713
2,428,971,973
2,641,836,130
The total interest expense on the above debts amounted to US$151.1 million for the year (2022: US$149.0 million) and is presented in the
“Other interest and similar expenses” caption (note 23).
1) (2028) US$500 million 5.125% Senior Notes
On September 20, 2017, Millicom issued a US$500 million 5.125% fixed interest rate bond repayable in 10 years. The bond was issued
at 100% of the principal and has an effective interest rate of 5.244%. US$6.4 million of withheld and upfront costs are presented
under the caption “prepayments” and amortized under “other interest and similar expenses” over the 10-year life of the bond.
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 followed Millicom’s announcement dated February 11, 2021. Millicom redeemed US$50 million on these 2028 Senior
Notes
which also triggered the recognition of the accelerated amortization of the remaining US$0.7 million amortized costs and US$1.5
million of early redemption fee. These had been recorded in the “Other interest and similar expenses” caption (note 23).
2) (2025) COP144Bn 9.45% Senior Notes
On July 24, 2018, the Company issued a COP 144 Bn /US$50 million bilateral facility with IIC (Inter-American Development Bank) for a
US$ indexed to COP Note due in 2025. The note bears interest at 9.45% p.a.. US$1.2 million of withheld and upfront costs are
presented under the caption “prepayments” and amortized under “other interest and similar expenses” over the duration of the
bond.
3) (2026) US$500 million 6.625% Senior Notes
On October 16, 2018, Millicom issued a US$500 million 6.625% fixed interest rate bond repayable in 8 years. The bond was issued at
100% of the principal and has an effective interest rate of 6.748%. US$6.2 million of withheld and upfront costs are presented under
the caption “prepayments” and amortized under “other interest and similar expenses” over the duration of the bond.
On February 22, 2021, as part of the early redemption program of its Notes due 2026, 2028 and 2029 (see above), Millicom redeemed
US$50 million on these 2026 Senior Notes which also triggered the recognition of the accelerated amortization of the remaining
US$0.5 million amortized costs and US$1.5 million of early redemption fee. These had been recorded in the “Other interest and similar
expenses” caption (note 23).
On September 22, 2021, Millicom announced the early participation exchange results from its offer dated September 8, 2021;
US$302.1 million of the 6.625% Notes due 2026 were exchanged for US$307.5 million of the 4.5% Notes due 2031 (at 101.812%
exchange ratio). The gain derived from this exchange for US$14.7 million had been recorded in "Other Interest and Similar
Expenses" (note 23).
4) (2029) US$750 million 6.250% Senior Notes
On March 25, 2019, Millicom issued a US$750 million 6.250% fixed interest rate bond repayable in 10 years. The bond was issued at
100% of the principal and has an effective interest rate of 6.36%. US$8.2 million of withheld and upfront costs are presented under
the caption “prepayments” and amortized under “other interest and similar expenses” over the duration of the bond.
On February 22, 2021, as part of the early redemption program of its Notes due 2026, 2028 and 2029 (see above), Millicom redeemed
US$75 million on these 2029 Senior Notes which also triggered the recognition of the accelerated amortization of the remaining
US$0.7 million amortized costs and US$2.3 million of early redemption fee. These had been recorded in the “Other interest and similar
expenses” caption (note 23).
5) (2024) SEK2 Bn 2.35% + Stibor Senior Notes
On May 15, 2019, Millicom issued a SEK2 Bn / US$214 million repayable note in 2024 within its Sustainability bond framework. The
notes born interest at a floating rate of STIBOR (3 months) (excluding a STIBOR floor) plus 2.35%. The bond was issued at 100% of the
principal and had an effective interest rate of 2.66%.
The Notes were early redeemed on June 8, 2023, and delisted from the sustainable bond list at Nasdaq Stockholm.
6) (2027) SEK2.2 Bn 3.00% + Stibor Senior Notes
On January 10, 2022, Millicom placed a SEK2.2 Bn / US$239 million repayable note in 2027 within its Sustainability bond framework.
The notes bear interest at a floating rate of STIBOR (3 months) (excluding a STIBOR floor) plus 3.00%. The bond was issued at 100% of
the principal and has an effective interest rate of 3.23%. US$2.4 million of withheld and upfront costs are presented under the
caption “prepayments” and amortized under “other interest and similar expenses” over the duration of the bond. At the same time,
Millicom executed a swap to hedge currency and interest risks to USD (see below).
F-110
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 11 – NON-CONVERTIBLE LOANS BECOMING DUE AND PAYABLE AFTER MORE THAN ONE YEAR (continued)
7) (2031) US$500 million 4.5% Senior Notes
On October 19, 2020, Millicom issued a US$500 million 4.500% fixed interest rate bond repayable in 2031. The bond was issued at
100% of the principal and has an effective interest rate of 4.800%. US$5.5 million of withheld and upfront costs are presented under
the caption “prepayments” and amortized under “other interest and similar expenses” over the duration of the bond. As
aforementioned, US$302.1 million of the 6.625% Notes due 2026 were exchanged during 2021 for US$307.5 million of these 2031
Senior Notes.
During 2023 Millicom repurchased US$15.5 million of these notes (face value) on the open market for a total amount of US$12
million.
8) US$100 million DNB Bilateral loan
On December 20, 2021, Millicom executed a new bilateral loan with DNB Sweden AB for US$100 million with a variable interest rate
and a 5-year maturity. The disbursement was done on December 23, 2021 and the money was used to repay partially the US$2.5Bn
Bridge loan described in note 10. US$0.7 million of withheld and upfront costs are presented under the caption “prepayments” and
amortized under “other interest and similar expenses” over the duration of the loan.
9) Revolving Credit Facility
In October 2020, MIC S.A. entered into a 5 year, US$600 million ESG-linked revolving credit facility (the "Facility") with a syndicate of
11 commercial banks. This facility was used to refinance the old multi-currency revolving credit facility.
10) Guarantees
In the ordinary course of business, the Company has issued guarantees to secure certain obligations of some of the Group's
operations under bank supplier financing agreements. As of December 31, 2023, the outstanding exposure for guarantees issued by
the Company to cover debt and financing, in the operations, amounted to US$505 million (2022: US$501 million).
11) Currency and interest rate swap contracts
Interest rate and currency swap on the SEK denominated debt have a maturity date of January 13, 2027. As of December 31, 2023,
the fair value of this swap is a liability of US$33.8 million (2022: US$52.8 million - see note 10) and the net effect corresponding to the
fair value of the interest portion of the swaps is recognized in the cash flow hedge reserve for US$3.9 million (see note 8).
Notional amount in currency
Currency sold
Currency bought
2,250 million SEK
USD
SEK
Maturity date
Jan 13, 2027
NOTE 12 – AMOUNTS OWED TO AFFILIATED UNDERTAKINGS
Amounts owed to affiliated undertakings becoming due and payable within one year are detailed below:
Millicom International II N.V. (1)
Millicom International Services Llc
Grupo de Comunicaciones Digitales S.A.
Telefónica Celular del Paraguay S.A.
Millicom International Operations S.A.
Millicom International Enterprises AB
Telemovil El Salvador, S.A. de C.V.
Millicom Telecommunications S.A.
Millicom CAM SEM, S.A.
Mobile Cash Paraguay S.A.
Servicios y Productos Multimedios S.A
Millicom Services U.K.
Digital Wallet Panama, S.A.
Telefónica Celular de Bolivia, S.A.
Millicom SSC, S.A. de C.V.
Servicios Especializados en Telecomunicaciones, S. A.
Millicom Services Colombia S.A.S.
Shai Holding S.A.
Millicom International V N.V.
Navega.Com, S.A.
Distribuidora Internacional de Comunicaciones, S. A.
Other
Total December 31, 2023
Amounts owed by
Amounts owed to
Net balance
1,216,891
(495,493,950)
(494,277,059)
77,700
187,529
34,121
10,383,794
7,483
354,151
(10,911)
487,445
—
—
779,531
—
83,113
690
—
1,000
3,099,024
24,665
—
—
1,423,749
(83,677,546)
(78,737,265)
(49,179,944)
(46,837,407)
(33,273,606)
(14,258,400)
(9,754,717)
(8,386,821)
(7,394,991)
(7,195,469)
(5,712,352)
(3,194,577)
(3,246,825)
(3,108,108)
(3,064,171)
(3,021,647)
(5,320,127)
(2,170,604)
(2,046,524)
(1,390,239)
(5,282,740)
(83,599,846)
(78,549,736)
(49,145,823)
(36,453,613)
(33,266,123)
(13,904,249)
(9,765,628)
(7,899,376)
(7,394,991)
(7,195,469)
(4,932,821)
(3,194,577)
(3,163,712)
(3,107,418)
(3,064,171)
(3,020,647)
(2,221,103)
(2,145,939)
(2,046,524)
(1,390,239)
(3,858,991)
These amounts include both, interest-bearing cash pool balances, and other payables; the latter are short-term in nature, and do not bear any interest.
(1) On January 27, 2022, our principal subsidiary in Guatemala, Comunicaciones Celulares, S.A. ("Comcel"), completed the issuance of a new 10-year US$900 million Bond with a
coupon of 5.125% per annum. The proceeds from this bond were upstreamed to the Company and used to repay a significant portion of the bridge financing that was used to fund
the acquisition of the remaining 45% equity interest in the Tigo Guatemala operations in 2021
18,149,975
(871,748,030)
(853,598,055)
F-111
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 12 – AMOUNTS OWED TO AFFILIATED UNDERTAKINGS (continued)
Total December 31, 2022
Amounts owed by
Amounts owed to
Net balance
(989,052,452)
(989,016,027)
Millicom International II N.V.
Millicom International Services Llc
Grupo de Comunicaciones Digitales S.A.
Telecomunicaciones Digitales, S.A.
Telefónica Celular de Bolivia, S.A.
Comunicaciones Celulares, S.A.
Millicom Telecommunications S.A.
Telefónica Celular del Paraguay S.A.
Telemovil El Salvador, S.A. de C.V.
Millicom Services U.K.
Millicom Cable Costa Rica, S.A.
Millicom International Operations B.V.
Servicios y Productos Multimedios S.A
Shai Holding S.A.
Millicom International Enterprises AB
Millicom SSC, S.A. de C.V.
Navega.Com, S.A.
Millicom CAM SEM, S.A.
Millicom International V N.V.
Mobile Cash Paraguay S.A.
Millicom Americas LLC
UNE EPM Telecomunicaciones S.A.
Servicios Especializados en Telecomunicaciones, S. A.
Distribuidora Internacional de Comunicaciones, S. A.
Colombia Movil S.A.
Millicom Digital Ventures AB
Millicom International S.L.U.
Millicom Re S.A.
Dinero Electrónico, S.A.
Millicom Services B.V.
Orbitel Servicios Internationales S.A. (OSI)
Mobile Cash, SA de C.V.
Edatel S.A. E.S.P
36,425
73,794
1,464,210
488,959
249,724
1,288,972
—
556,459
596,874
369,004
722,487
142
87,100
118,888
38,177
261,058
3,000
487,445
18,839
—
377,523
76,663
—
—
50,068
34,127
—
10,673
—
9,935
—
—
—
(60,527,761)
(40,475,567)
(31,680,325)
(27,555,967)
(27,483,506)
(23,716,623)
(24,101,315)
(21,722,862)
(6,349,033)
(4,497,283)
(3,213,587)
(3,101,305)
(2,978,883)
(2,480,973)
(2,653,542)
(2,324,542)
(2,723,684)
(2,175,331)
(1,087,583)
(1,220,490)
(910,675)
(444,652)
(210,770)
(245,578)
(109,595)
(54,033)
(51,616)
(36,671)
(29,402)
(17,920)
(17,806)
(12,467)
(60,453,967)
(39,011,357)
(31,191,366)
(27,306,243)
(26,194,534)
(23,716,623)
(23,544,856)
(21,125,988)
(5,980,029)
(3,774,796)
(3,213,445)
(3,014,205)
(2,859,995)
(2,442,796)
(2,392,484)
(2,321,542)
(2,236,239)
(2,156,492)
(1,087,583)
(842,967)
(834,012)
(444,652)
(210,770)
(195,510)
(75,468)
(54,033)
(40,943)
(36,671)
(19,467)
(17,920)
(17,806)
(12,467)
(4,880)
Millicom Global Employment Company S.à r.l.
178,163
(183,043)
Amounts owed to affiliated undertakings becoming due and payable after more than one year are detailed below:
7,598,709
(1,283,446,842)
(1,275,848,133)
Millicom International II N.V. (1)
Millicom International Operations S.A. (2)
Millicom Re S.A. (3)
Total December 31, 2023
Amounts owed to
Amounts owed by
Net balance
(748,654,831)
(90,573,043)
(2,000,000)
(841,227,874)
—
—
—
—
(748,654,831)
(90,573,043)
(2,000,000)
(841,227,874)
(1) During 2023, MIC SA and Millicom International II N.V. signed several promissory notes with maturity dates in 2026 and bearing an average interest rate of 7.48%.
(2) On December 15, 2022, the Company entered into a Revolving Credit Facility Agreement with Millicom International Operations S.A.. The facility amounts to US$250 million, to
be used in one or more loans, for the purposes of working capital financing. Unless repaid earlier, the Company shall repay the principal amount in one final installment, which will
be due and payable on December 31, 2027. As of December 31, 2023, US$91 million have been drawn down on this facility.
(3) On July 13, 2021, the Company entered into a Revolving Credit Facility Agreement with Millicom Re S.A.. The facility amounts to US$10 million, to be used in one or more loans,
for the purposes of working capital financing. Unless repaid earlier, the Company shall repay the principal amount in one final installment, which will be due and payable on June
20, 2026. As of December 31, 2023, US$2 million have been drawn down on this facility.
F-112
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 12 – AMOUNTS OWED TO AFFILIATED UNDERTAKINGS (continued)
Millicom International II N.V.
Millicom International Operations S.A.
Millicom Re S.A.
Total December 31, 2022
Amounts owed to
Amounts owed by
Net balance
(293,500,000)
(145,122,664)
(2,000,000)
(440,622,664)
—
—
—
—
(293,500,000)
(145,122,664)
(2,000,000)
(440,622,664)
NOTE 13 – AMOUNTS OWED TO AFFILIATED UNDERTAKINGS IN WHICH THE COMPANY IS LINKED BY
PARTICIPANTS INTERESTS
Amounts owed to undertakings in which the Company is linked by participating interests are detailed below:
Telefonica Celular, S.A. de C.V.
Navega, S.A. de C.V.
Telefonica Celular, S.A. de C.V.
Total December 31, 2023
Amounts owed to
Amounts owed by
Net balance
(4,052,006)
(3,786,796)
(7,838,802)
63,420
139,920
203,340
(3,988,586)
(3,646,876)
(7,635,462)
Total December 31, 2022
Amounts owed to
Amounts owed by
Net balance
(6,743,533)
(6,743,533)
63,404
63,404
(6,680,129)
(6,680,129)
NOTE 14 – OTHER CREDITORS
As at December 31, 2023, amounts due to other creditors becoming due and payable within one year amounted to US$79 million
(2022: US$80 million) and mainly related to accrued interest payable on debt and accrued expenses for legal and other professional
fees. Amounts due to other creditors becoming due and payable after more than one year amounted to US$0.64 million (2022:
US$0.78 million) and is related to long term lease liabilities.
NOTE 15 – OTHER OPERATING INCOME
Amount is composed as follows:
Value Creation Fees billed to operations
Other intercompany revenue
Other income
Total December 31, 2023 Total December 31, 2022
US$
265,450,297
12,701,424
3,297
US$
215,900,940
20,193,708
9,739
278,155,018
236,104,387
NOTE 16 – STAFF COSTS
The average number of permanent full-time employees during 2023 was 31 (2022: 33) including 12 IP Branch employees.
NOTE 17 – OTHER OPERATING CHARGES
Amount is composed as follows:
Directors fees (1)
Business support services (2)
Bandwidth charges
Consultancy fees
Legal fees
Tax, accounting and audit charges
External services
Other
Total December 31, 2023 Total December 31, 2022
US$
2,840,594
140,333,328
7,509,941
8,945,315
32,669,322
5,865,937
21,021,314
56,826,222
US$
2,331,927
119,575,026
5,590,690
20,649,283
11,453,348
4,938,059
25,799,540
45,673,490
276,011,973
236,011,363
(1) Directors fees expenses includes the cost of 53,343 shares (2022: 41,167 shares) vested to Directors during the year for US$1.1 million (2022: US$0.6 million). The share price used
is an average acquisition price of US$22.97 (2022:US$39.09).
(2) Business support services represent the expenses incurred by the regional offices in Miami and in the U.K. which are recharged to the Company. These expenses are further
recharged by the Company to the Group entities through the Value Creation Fees.
F-113
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 18 – INCOME FROM PARTICIPATING INTERESTS DERIVED FROM AFFILIATED UNDERTAKINGS
In 2023, the Company received dividends of US$562 million (2022: US$552 million), including US$556 million from Millicom
International Operations S.A. (2022: US$550 million), nil million from MKC Brillant Services GmbH (2022: US$1.5 million), US$3.2
million from Millicom International Services UK Ltd. (2022: US$1 million), US$2.9 million from Shai Holding S.A. (2022: nil million) .
NOTE 19 – INTEREST DERIVATED FROM AFFILIATED UNDERTAKING
In 2023, the Company has recognized interest and other intercompany income of US$51 million (2022: US$33 million), including US$11
million from Millicom LIH S.A. (MLIH) (2022: US$2 million), US$6 million from Millicom Cable 200 N.V.(2022:US$3 million), US$11 million
from Millicom International One S.L.U. (2022: US$6 million), US$10 million from Telefonia Celular de Nicaragua, S.A. (2022: US$21 million),
US$1 million from Lati Telecom Infrastructure Bolivia S.A (2022: nil million), US$10 million from UNE EPM Telecomunicaciones S.A. (2022:
nil million) and US$2 million from others (2022: US$1 million).
NOTE 20 – OTHER INTEREST AND SIMILAR INCOME
Amount is composed as follows:
Interest income
Foreign exchange (loss) gain
Total December 31, 2023 Total December 31, 2022
US$
12,970,810
17,277,641
30,248,451
US$
2,804,239
(2,548,559)
255,680
NOTE 21 – VALUE ADJUSTMENTS IN RESPECT OF FINANCIAL ASSETS AND OF INVESTMENTS HELD AS CURRENT
ASSETS
Amount is composed as follows:
(Impairment) / Reversal of impairment on own shares, net (note 8)
Result on disposal of other investments (1)
Value adjustments on shares in and loans on affiliated undertakings (note 5)
Total
(1) Please refer to note 5.1
Total December 31, 2023 Total December 31, 2022
31,880,014
(10,712,891)
85,591
—
31,965,605
—
(273,199,361)
(283,912,252)
NOTE 22 – INTEREST CONCERNING AFFILIATED UNDERTAKINGS
In 2023, the Company has recognized intercompany interest expense of US$55 million from Millicom International II N.V. (2022:
US$34 million), US$13 million from Millicom International Operations S.A. (2022: US$0.5 million), US$3 million from Grupo de
Comunicaciones Digitales S.A. (2022: US$0.2 million), US$2 million from Comunicaciones Celulares, S.A. (2022: US$2 million), US$1
million from Telefónica Celular del Paraguay S.A. (2022: US$1 million) and US$4 million from others (2022: US$2 million).
NOTE 23 – OTHER INTEREST AND SIMILAR EXPENSES
Interest on bonds/loans
Early redemption charges (note 11)
Amortization of bond issuance cost (note 9)
Interest on leases
Other
Total December 31, 2023 Total December 31, 2022
151,140,713
149,019,962
1,198,762
6,609,273
29,045
4,790,352
—
15,778,143
33,347
5,813,679
163,768,145
170,645,131
NOTE 24 – INCOME TAX
The Company is subject to all taxes applicable to a Luxembourg Société Anonyme. The Company has been granted fiscal unity with
other Luxembourg-based entities of the group.
The total tax charge for 2023 included withholding taxes on procurement related activities, cash pool and interest resulting in a
withholding tax expense of US$1.58 million. Additionally, the current tax charge include a provision of US$5.04 million attributable to
a tax risk from its subsidiary in Honduras. Comparatively, tax charge for 2022 included withholding taxes on procurement related and
interest for US$3.2 million which was offset by a tax risk provision reversal, resulting in a total of tax credit of US$0.50 million.
The Millicom Group is within the scope of the OECD Pillar Two model rules. Pillar Two legislation was enacted in Luxembourg and has
come into effect from January 1, 2024. MIC SA, registered in Luxembourg, is the Ultimate Parent Entity of the Group.
Besides Luxembourg, the Pillar Two legislation has been enacted from January 2024 in the following countries within the scope of
Millicom Group:
▪
▪
The Netherlands
United Kingdom
F-114
Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 24 – INCOME TAX (continued)
▪
Sweden.
Since the Pillar Two legislation was not effective at the reporting date, MIC SA has no related current tax exposure. The Group applies
the exception to recognizing and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as
provided in the amendments to IAS 12 issued in May 2023, endorsed by the EU on 8 November 2023 and in line with the
recommendation issued by the Luxembourg Accounting Principal Commission (Commission des Normes Comptables “CNC”) in the
Q&A CNC 21/031 in February 2024.
Due to the complexities in applying the legislation and calculating the Global Anti-Base Erosion (“GloBE”) income, the quantitative
impact of the enacted or substantively enacted legislation is not yet reasonably estimable. However, the Group has run initial testing
under the OECD transitional safe harbour rules (i.e. Country by Country Report Safe Harbours) and it results that all jurisdictions are
expected to meet one of the transitional safe harbours and hence are not expected to be subject to top-up tax.
MIC SA is the head of a tax unity which has tax losses carried forward of an amount to approximately US$4.6 billion as of December
31, 2023. Per Luxembourg tax law, approximately US$ 1.2 billion expire in 17 years after generation, the other US$3.4 billion do not
expire.
These tax losses have not been recognized for financial statement purposes due to the remote possibility of utilizing consistently all
or a portion of the total amount available.
The utilization of the aforementioned losses is subject to review by the Luxembourg tax authorities under the usual statute of
limitation rules that is 5 years for corporate income tax as from 1 January following the end of the fiscal year. The general statute of
limitation may be extended to 10 years in case of (i) insufficient or incomplete tax return or (ii) failure to file a tax return. The existence
of the carried forward tax losses remains therefore uncertain until the end of the fifth fiscal year after the fiscal year in which they are
used.
NOTE 25 – COMMITMENTS AND CONTINGENCIES
The Company has contingent liabilities with respect to lawsuits and other matters that arise in the normal course of business.
On May 25, 2020, as a result of the termination of the Costa Rica acquisition, Telefónica 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 damages claims for
alleged breaches of contract and alleges, among other things, that we were required to close the transaction because the closing
conditions specified in the sale and purchase agreement for the acquisition had been satisfied. On February 13, 2024, the Court
granted summary judgment in favor of Telefónica, ruling in favor of Telefónica's breach of contract claim as well as its methodology
for calculating pre-judgment interest. As of the time of this filing, the Court has not yet determined the exact amount of damages,
and a final judgment has not yet been entered. We disagree with the decision and continue to believe that we have strong
arguments in our favor. We plan to file an appeal of the ruling.
As at December 31, 2023, the total amount of claims, litigation and tax risks brought against the Company was US$168 million (2022:
US$90 million) of which US$17 million was mainly for probable risks associated with corporate income tax and capital gain, the
remaining US$150 million was principally for possible risks related with the aforementioned case.
Capital commitments
As at December 31, 2023, the Company has commitments for a total amount of US$3.7 million that correspond to licenses for three
years,, having a outstanding commitment of US$2.9 million which is due within two years.
Dividends
The ability of the Company to make dividend payments is subject to, amongst others, the terms of the indebtedness, local legal
restrictions and the ability to repatriate funds from the Company’s various operations.
NOTE 26 – RELATED PARTY TRANSACTIONS
Subsidiaries, joint-ventures and associates of Millicom Group
The Company conducts transactions with subsidiaries, joint-ventures and associates of the Millicom Group on regular commercial
terms and conditions. These transactions may include loans granted/received to/from group entities (notes 7, 12 and 13),
intercompany recharges in connection with delivery/reception of services (note 15 and note 17) and other operations.
NOTE 27 – AUDIT FEES
Art. 65 paragraph (1) 16º of the Law of December 19, 2002 on the register of commerce and companies and the accounting and
annual accounts of undertakings (the “law”) requires the disclosure of the independent auditor fees. In conformity with the law these
details have been omitted as the Company prepares consolidated accounts in which this information is disclosed and these
consolidated accounts and the related consolidated management report and auditors’ report thereon have been lodged with the
Luxembourg Trade Registry.
NOTE 28 – SUBSEQUENT EVENTS
Voluntary retirement plan in Colombia
On January 19, 2024, Tigo Colombia announced a voluntary retirement plan for its employees. As of the time of issuance of this
report, Millicom has incurred severance expenses related to this plan of approximately $17 million.
Tower sale
On January 24, 2024, Millicom announced that its subsidiary in Colombia has agreed to sell approximately 1,100 wireless
communications towers to affiliates of investment funds managed by KKR.
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Millicom International Cellular S.A.
Notes to the annual accounts as at December 31, 2023 (Continued)
NOTE 28 – SUBSEQUENT EVENTS (continued)
Telefonica Costa Rica legal case
On February 13, 2024, the New York Supreme Court granted summary judgment in favor of a breach of contract claim filed by
Telefónica after Millicom terminated the acquisition of Telefónica’s Costa Rican business in 2020. The Court also ruled in favor of
Telefónica’s methodology for calculating pre-judgment interest. As of the time of the issuance of this report, the Court has not yet
determined the exact amount of damages, and a final judgment has not yet been entered. Millicom disagrees with the decision and
continues to believe that it has strong arguments in its favor. Millicom plans to file an appeal of the ruling.
Bond repurchase
Since January 1, 2024 up to the date of these consolidated financial statements, Millicom has continued to repurchase bonds in the
secondary markets for total amounts of $17 million of the 2031 USD 4.5% Senior notes, $64 million of the USD Comcel Senior notes
USD 5.125% and $27 million of the USD 4.500% Senior Notes in Panama.
Share repurchase program
As part of the share repurchase program Millicom has continued to repurchase shares in 2024, acquiring an additional 1,289,776
shares since the beginning of the year to March 7, 2024.
Mobile network combination in Colombia
On February 26, 2024, Tigo Colombia finalized its agreement with Telefonica's subsidiary in Colombia to create a jointly-owned
mobile infrastructure business, which will combine some of our mobile network infrastructure and spectrum assets in Colombia. On
February 26, 2024, Tigo Colombia received final approvals to operate the 5G spectrum purchased in the auction that occurred on
December 20, 2023 enabling Tigo Colombia to launch 5G services which are now available.
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