TIGO

Business Context and Reporting Period

Company: Millicom International Cellular S.A. (Tigo)
Filing Type: Form 6-K (Unaudited Interim Condensed Consolidated Financial Statements)
Reporting Period: Three months and twelve months ended December 31, 2025.
Filing Date: February 26, 2026.
Business Overview: Millicom is a leading provider of fixed and mobile telecommunications services in Latin America, operating in Guatemala, Colombia, Panama, Bolivia, Honduras, Paraguay, El Salvador, Nicaragua, Costa Rica, Uruguay, and Ecuador. The company recently expanded its footprint through acquisitions in Uruguay and Ecuador and completed the sale of its passive infrastructure assets (Lati Operations).

Key Financial Metrics

Note: FY 2025 Net Profit includes approximately $727 million in net profit from the closure of infrastructure transactions (Sale of Lati Operations).

Material Changes vs. Prior Period

• Revenue Growth: Q4 2025 revenue increased 15.7% year-over-year (YoY) as reported, driven by acquisitions in Uruguay and Ecuador. Organic revenue growth was 4.7%. Full-year 2025 revenue grew 0.2% as reported and 2.0% organically.
• Profitability Surge: Operating profit rose 25.7% in Q4 and 22.2% for the full year. Net profit attributable to owners jumped significantly in Q4 (from $31M to $252M) and for the full year (from $253M to $1.3B), largely due to a one-time gain of $741 million from the sale of Lati Operations.
• Adjusted EBITDA: Q4 Adjusted EBITDA reached a record $778 million (up 25.9% YoY), with organic growth of 18.0%. Full-year Adjusted EBITDA grew 11.4% YoY.
• Cash Flow: Equity Free Cash Flow (EFCF) for FY 2025 was $916 million, surpassing the $750 million target, aided by net proceeds from infrastructure sales.
• Balance Sheet: Total debt increased to $6.89 billion (from $5.82 billion) due to new financing for acquisitions and operations, while cash reserves more than doubled to $1.55 billion.

Guidance, Outlook, and Risks

Management Commentary and Outlook

Management described 2025 as the strongest year in the company's history, citing accelerating topline momentum and record profitability. The company enters 2026 with a robust balance sheet and expanded regional footprint.

• 2026 Targets:
  • Equity Free Cash Flow (EFCF): At least $900 million.
  • Leverage: Around 2.5x at year-end.
• Strategic Focus: Continued migration from prepaid to postpaid, fixed-mobile convergence, and integration of new markets (Uruguay, Ecuador).

Risks and Contingencies

• Legal Settlement: In November 2025, Tigo Guatemala entered a Deferred Prosecution Agreement (DPA) with the U.S. DOJ regarding FCPA violations. The company paid a total of $118.2 million (penalty and forfeiture) in December 2025. The DPA has a two-year term; breach could result in prosecution.
• Regulatory Risks: The merger of Tigo Costa Rica with Liberty Latin America was rejected by the regulator in November 2025, leading to the termination of the transaction in January 2026.
• Foreign Exchange: The adoption of amendments to IAS 21 regarding the Boliviano (BOB) resulted in a $188 million negative adjustment to equity in 2025 due to the currency being deemed non-exchangeable.
• Contingent Liabilities: Total claims against the group were $146 million as of December 31, 2025, with $37 million provisioned.

Investor Verification Checklist

• One-Time Gains: Verify the sustainability of FY 2025 net profit by excluding the $741 million gain from the sale of Lati Operations.
• Acquisition Integration: Monitor the integration and profitability contribution of the newly acquired Uruguay ($440M) and Ecuador ($380M) operations.
• Subsequent Acquisitions: Review the financial impact of the January 2026 acquisition of 100% of UNE (Tigo Colombia) for ~$571 million and the February 2026 acquisition of Telefonica's stake in Coltel for ~$214 million.
• Debt Maturity: Assess the debt maturity profile, noting $329 million due within one year and significant refinancing activity in 2025.
• FCPA Compliance: Track compliance with the two-year DPA terms in Guatemala to avoid potential future prosecution.
• 2026 Targets: Evaluate progress toward the $900 million EFCF target and 2.5x leverage ratio in upcoming quarterly reports.