LILA - Earnings call transcript Q1 2021 | Liberty Latin America Ltd.

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Operator

Good morning, ladies and gentlemen. And thank you for standing by. Today's call is being recorded. I'll now turn the call over to John Winter, Chief Legal Officer of Liberty Latin America.

John Winter

Good morning, and welcome to Liberty Latin America's First Quarter 2021 Investor Call. participants listen-only all time this are mode. in At be the America's Investor formal at presentation section under can materials Latin Today's Relations found of www.lla.com. website Liberty

given Following a will presentation, today's be formal question-and-answer session. instructions for

this or reminder Actual statements that outlook expressed are and from by forward-looking and company's may the growth results prospects, statements. materially a recorded. and those Today's call As including to respect statements fact. may remarks these with differ not expectations implied future historical include being its information is other

information factors in reflect to to obligation Form Latin Liberty change any conditions most Additional on could Liberty the or cause expectations which any to on any filed differ Latin is update in risks its results such any recently XX-K that XX-Q. disclaims statement in and of Form is these based. or available America statements America's forward-looking

financial are would found presentation to measures our Balan In to the most addition, non-GAAP certain Relations and on financial GAAP which call the CEO, this turn Nair. to like our call, reconciled I Mr. to website. this to refer Investor the appendices will measures, can which now on we over comparable in be

Balan Nair

financial first Thank highlights will you follow everybody Liberty you. Noyes, quarter After who CFO your before a we Chris by performance. our questions. operating to that, straight John. to handing begin with results of results through Latin And I'll and America’s presentation. will group company's the welcome taking our get over review to

markets www.lla.com. start on the steadily and slides, our of are pandemic. of working will our needed slide during I be executive prepared As find all following always, as get recovering across the will for joined website them team can the four from Q&A point from both involved housekeeping, quarter. the from impacts Well, Overall, To you remarks. and worst my let's at our by highlights we I'm the region, on which

QX of challenging in though, reduced had the and this in quite in general, environment still operating our markets. restrictions a tourism to number with backdrop, first remains the However, our quarter, Against a start we across strong we Puerto with to place performance Cable pleased segments group's year across deliver by and operating and Rico, and of growth RGU XX,XXX. the record The were Wireless is in our additions of a quarter. led all

Our outlined financial the we or we as was fixed and and integrate previously our first a plans adjusted driven rebase for homes OIBDA to mobile more another approximately in quarter build were performance XXXX, fiber-to-the-home. also and excited XX% we plan was XXX,XXX of the be strong solid, our XXX,XXX a with value to our region there continues focus core a the homes to connectivity growth. be create This XXXX, on Puerto on increase by operations. of about Liberty, quarter, We to households which we X% Rico, delivered or Bringing company. high-speed upgrade in to XX% continue in

of Finally, free us we approximately for full very $XXX flow happy cash say I also guidance a to result, positioning reported quarter year strong am well million. that first

Cable largest Moving wanted slides. following markets in across with first cover slide running in which to before Starting adds highlights Wireless. the Jamaica, our and category the by five. and to was quarter I product of performance our through the fixed mobile key contributor

in here momentum added and the XX,XXX upgraded We continuing are to fiber-to-the-homes quarter. or over invest with

value successfully strong customer propositions, also launched mobile converge have We performance. a driving

our our more is to second now starting refresh of the propositions, to meaningful fixed return and our an Moving and gain tourism invested in this opportunity looking the speeds a in customer Bahamas, open half mobile provide to upcoming of and anticipated Telefonica's The major rebound on year. with is we hotels constantly acquisition should value mobile drive be broadband continues to increasing converged games. retain fixed and a assets for and focusing and innovate Rica to adds launched upgrades Costa to market [ph] subscribers. and strong are develop next. us network these the Rica Guillermo Picking the to postpaid for oversight and fiber propositions We've a to attractive businesses. moved of one converged my Ponce, of of and propositions reinforce have integration I've customers Costa strong best managers, position. This

Rico. Turning to Porto

our acquired and is effectively in AT&T that initial a have focus Our to creating now on Juntos, integrating offer, campaign addition step our towards as mas single end, in a the To launched operations market. quickly. core we branded welcome first their brand

where the saw year. lower left year, the the last downs and the lock of some we in on Panama, strict to of slide, Next beginning

launch this is I year. already our run to strong start executives, my be of drove basis the of recurring business. growth Betzalel Todito and making for strong Todo to recently year our for subscriber And unlimited have going grew and Kenigsztein, mobile progress. to plan We market personally is the trusted in However, mobile March. our us, in one the a good both most fixed first he The moved expect there. editions we quarter,

there to despite one global leaders the being during to Finally, of vaccination in where lockdowns country Chile, continued be the in VTR efforts. quarter the first

Chile. and recent operating been Our the by challenged, intense have performance competition in driven financial environment

following. I We the improving and are performance to committed would highlight at VTR

significant fiber service the improved losses year. base build recording First, following to plans net again. rollout corner expansion growth in business aiming objectives, here customer over We to second our the in XXXX the and growing TV, footprint Through QX, subscriber start turned half sales drive meaningful subscriber and momentum Hub of we need in XXX,XXX adds our the are time. we output, last

our initiatives. structure managing recalibrating to we and on focused through retain are cost targeted customers price efficiency Second,

and can take will believe but with that will the also technology, across our the market Vivek steps business today a the where be It Khemka, our us position the added evolves. new deep to management knowledge market taking the key we former we taking Vivek are experience perspective growth and role. will have a a of we VTRs team industry Third, are time, Manager's strategy. on the infrastructure valuable has extensive which expansion as well to back our CTO plans of aspect General in get

performance edition. Turning to subscriber slide and our operating Starting by product. with six fixed

all double & mentioned, QX Wireless operating first, segments Cable RGUs. shown the In continue Chile, Rico RGUs was as which & the XX,XXX mentioned, expect year-over-year, In our view in prior this the year period. an by additions to RGUs Networks, XX,XXX we higher growth momentum over Caribbean XXXX adding This taking than returned turn, added corner net our left and qX, subscriber in XX% Panama, we adds added quarter, reported we growth. by carried continued Liberty in where year. from each upper As upper its in XX,XXX momentum Puerto driven to improvement. throughout is the in Jamaica reported more

However, and the pandemic elections near market to remains the the very competitive additional uncertainty in term. with related

in Rolling Costa segment, improvements QX by upper for its last steady by progression driven results these the than adds shown Puerto Rica prior net year, Our add, group, the broadband continued led QX Year-over-year in performance. Rico. with we higher record up net demand. right the X% delivered

Puerto $XX FX neutral Rico was group per an up by in on year-over-year basis led QX and Our customer Costa Rica. X% ARPU at

prior Caribbean in is we and QX added left Mobile than of and Across including XX,XXX the postpaid postpaid and was a in XXXX. which record market, which whole subscribers more quarter, than quarter. was performance adds Jamaica's Cable in the added Jamaica period. the XXXX again with XX,XXX Wireless's where weak upper seasonally to typically Networks additions, Starting XXXX Moving slide what Wireless a year the & higher seven, for Cable subscribers,

most adds a just the RGUs, relatively of Mobile base data, the Panama, flat by base Next driven in a growing Todito unlimited plan. Todo its the launch subscriber generated maintained to this XX,XXX was which subscribers. X net Liberty million of over quarter, by our

mix, Although that small is recorded offset saw in was noting subscribers losses. loss postpaid the by it QX, prepaid we growth worth in net within

in inclusion quarter year-over-year Liberty in mobile we QX XX,XXX lost XXXX are existing $XX just with in together, of fixed blended market the postpaid XXXX. had and subscribers increase VTR the driven operate predominantly The over providing group. player in services of a XXX,XXX Chile, Taking XX% this an Mobile the subscribers, small of Finally, with ARPU in subscribers a to all subscribers. as MVNO quarter. is We by mobile the across the

Next, where markets, BXB upper reduce graph and BXB related The left the eight, the and over on have local the our business shows the come on tourism, Am and subsea we BXB in incumbent Caribbean In contrast, which to impact and is faced challenges economies attacker on our performance operations positions to of subsea to. operate. in Lat side. competitive resilience slide associated Panamanian and the Lat operation, I'll AM This past our driven starting subsea ability with businesses by our year. and BXB

trough has steadily As year. last the result, a performance since improved

we However, return level. to pre-COVID yet to are

highlight of the of On the right key business. of this slide, wanted to some our attributes subsea we

at America. region. XX,XXX Firstly, in including to terrestrial fiber in also network kilometers included We've extensive the in most our Cable, Colombia of over map depict is of routes, a here the part our Central

have resilient economics. four trunk improves mesh network Secondly, cable unique solution submarine differentiates a we network and provide system. with to our more ability our This extensive

Thirdly, we across utilize potential XX% of our network. approximately capacity

connectivity to from to States Central to is to expected room And Demand the XX% of continue. cables with ample United for lastly, an provide is over US. there the and grow. this going the traffic route America important So our our Caribbean

Finally, COVID-XX. the headwinds. impacts could last future. so primarily the we overview potentially will what potential and we prolonged Starting of optimistic to a business we slide that And quickly period about And took began, through why remain we've achieved from year, we of reduce decisive the pandemic action, the nine. an manage business our financial to since costs on assess with

generating cash As some conditions, a better in from QX and free flexibility market operational and achieved the we financial actions clear XXXX, operating of of focus. positive improving took, including we result XXXX performance flow our

AT&Ts that financial the the this US acquisition delivering. our Rico and expectations. We also through And business you take operations Islands. will operation Puerto performing of is of Chris is strong performance ahead Virgin closed

today. thesis, center Rocio are an the and Related quarter. Chief into this, frictionless focused products. on of Lorenzo earlier as operating that Caribbean on join our the quarter week, to maintaining announced spending where first will We to customers our continue first and launching Chile Officer. footprint in lockdown we slide will noting upon momentum us zero experience. and still the Moving are it. our of in cautious, are and create as and delighting But and Customer this the new the focused to building experienced we We lean And touch we our part with

if are further look optimistic. we ahead, Finally, very we

recovery Costa And we close are looking have in our integrate many to economic our adopted are from take product financial committed. performance We summer. converge the in Officer, a COVID-XX. Rico countries. our And you I'll that, aid improving will by Financial vaccinations product AT&T ways Rica Chris tremendous rolling expand effectively. our talk quickly on we turn Telefonica’s acquisition in Chris? Puerto created out With of region, focused and in who workforce before operations working, pass and to remain acquired we more we and innovation working questions. opportunity Noyes, expect recognizing hard through We've backdrop and Chief our a global assets the And we engaged on to normal will your the our of over the to networks. new facilitate and We in tourism remain of new inorganically, as our you

Christopher Noyes

XX. slide on housekeeping Two Beginning items. Balan. Thanks,

include results executive quarter. presenting for given Liberty now separate management our Our XXXX the as segment. QX we recent a are Cabletica changes, Mobile And entire

we is rebased contribution COVID restrictions the flat markets by Liberty growth fueled and QX delivered many Mobile. from are achieved a experiencing which still of For related a economic increase from activity. compressed $X.XX with revenue, in solid given year-over-year result, primarily suffering year-over-year, billion We our

fixed rebased revenue, recovered achieve both and offset mobile softness residential to we products, which pre-COVID was which not continued of terms has entirely In in by in fully BXB, levels. growth

Moving X%. quarter, for rebased growth OIBDA, the reporting of we adjusted million posted $XXX to

modest XX% of result last four our we XXXX. the of $XXX prior Hence, target XX% revenue will is in Recall reflecting Puerto a and our increase a our QX million dollar integration the as year editions to Rico. revenue, spend respective best fiber increase Mobile significantly or for builds in P&E in following Liberty quarters, of as compared Our accelerate quarters. totaled period. in the in

This of flow $XX and and was flow free terms reported strongest quarter was cash we in improved million Cable of Caribbean Networks. adjusted first results the FCF, and quarter. cash Wireless by In free for and Puerto fueled Rico in LLA's

in concentrated we QX. our quarters, be to three FCF next the For adjusted expect primarily

slide XX. to Moving

Our chart from date, for our OIBDA continued quarterly XXXX. QX revenue result reflects our depicts highest the and QX to recovery reported adjusted and LLA

have XXXX due call, As down would we end year seasonality highlighted on generally QX step from factors. our to to QX a

benefited able manage were outperform full to Liberty factors through our those we effectively from which of However, continues expectations. Mobile, and a quarter to obviously

Importantly, our results to excluding OIBDA of QX QX period. the year the pre-COVID in adjusted impact prior $XXX Liberty was Mobile, comparable of million

of adjusted million in rebased Compared $XXX line seasonally OIBDA include segment for segment Turning bottom the OIBDA, to slide our revenue adjusted to We posted X% each by was present pre-COVID QX and a declined million with of C&W XX, and of QX comparison in left with the Caribbean results on we half Starting strong XXXX, slide. decreased X%. by revenue QX of and year-over-year the Networks. which $XXX by and revenue our results.

residential we the most in pandemic. and areas impacted the On the side, by revenue decline an X% a X% two decline rebased in mobile experienced BXB,

achieve by broadband we residential out to in fixed, strength rebased is in flat underlying call One product. However, growth market roughly Jamaica. helped our

Our gain operating X% achieve quarter. this more of XX% $XX XX,XXX Jamaican of incremental business and were we quarter. the were built Helped direct year-over-year, accounts adjusted including an by or to costs revenue, XX% homes revenue, XX% leverage. than in and continuing is over able additions and the P&E OIBDA to gain post segments margin rebased year-over-year quarter this of growing upgraded lower or million operating for

of and Wireless highlight. lower $XX OIBDA including and or upgraded. and Two over on million, $XXX P&E additions rebased Moving Panama, X% adjusted of a XX% to to built Cable X% were respectively revenue million $XX were homes basis of and QX revenue, million key or points XX,XXX

are COVID-impacted much reducing mitigated improved year-over-year. the decline both we has revenue much deliver And performance. poised year direct to continues, the costs to CWP as First, second, and its of operating

rebased again Liberty to the is compared or of Puerto of XXXX. QX Turning middle to growth Rico million strongest revenue the we XX% slide, $XXX segment, once our generated as

Cable as by rebased RGU total historical over last increased roughly year-over-year, an XX delivered business our Our growth months. revenue XX% of have we impressive XX% the base

service revenue was $XXX AT&T, acquired strong our delivering to sales, large Turning from and a to business this in rebased growth of QX, part growth extent newly revenue. in XX%. equipment million revenue business fueled by of contributed This improved lesser

year's what $XXX $XXX increase reported million, we of QX, adjusted our was For OIBDA an about million over last in QX.

result rebased OIBDA adjusted QX reflects of XX%. Our growth

the adjusted QX XXXX expected incur These will three on in we call, to flagged next we and quarters. integration substantially QX sizable in to as Importantly, OIBDA. were expect costs that in adversely are ramp our minimal impact the costs

of in reported we X% edition, of revenue $XX P&E million terms In QX. or

year is reported and large and increase the in rest VTR throughout million our $XXX our subscriber expected significantly column, spend last losses carryover which new builds. part OIBDA the of experienced XXXX timing adjusted revenue of to full year, reflecting in particularly We of our of will in half A due integration respectively. projects of and impact XXXX. highlighted from X% of we impact in fourth QX we declined drivers $XX key second to the million, will XX% comparables rebates the

the Besides competitive is impact negatively flow up. high ARPU Additionally, to of elevated activity. the declines, customer intense due remain certain levels impacting of landscape of our revenue costs through

$XX restructuring a additions of and component homes, XX% work new to over costs we last business QX. of year-over-year Rica. the our including reducing continue million to million, or revenue late OIBDA metrics the Costa Obviously, basis acquisition, over an Cabletica reflecting the mid year's much XXX% with on labor and teens. addressed in $XX were increase in P&E QX. reported with $XX adjusted standalone rebased but XX,XXX fixed this will a of million growth However, Finishing of on be completion of both in larger, Telefonica revenue, Cabletica post

and we our cash later our of of P&E $X.X liquidity. total revenue fund Our balance cash of component of debt, line. to over revolving homes of and Telefonica were purchased this Costa billion constructed. of availability Rica next current reported million the sheet discuss and of under $X.X new QX This approximately billion using will status billion credit XX% our $XXX the share summer. $X.X fiber slide of anticipate At our the We additions XXXX included equity

sheet gross borrowing of In we were We terms times leverage the costs. times. capital active leverage, net our tapped X.X of March which and our of had during leverage two strengthened five consolidated and in markets extremely balance and further transactions, reduced successfully

$XXX to million XXXX X.X% year of term eight VTRs a portion [ph] senior X.XXX% VTR. used loans The primarily issued secured First, VTRs the were we and proceeds notes repay of notes. repay at

$X.X billion months our funding plus the term at repaid eight million and existing than issued was our issued We basis $X $XXX than raised we repaid over basis And a better LIBOR X.X% acquisition secured points in senior term. [ph] year tighter notes we ago. XXX Second, of Rico Puerto for XX loan. million debt XXX XXX, new at our of points term which billion $XXX loan

As part result our on now of incremental slide in as in of two refis, opportunistic or $XXX as with chart right debt this later, refinancing, these up a capital. Wrapping due million XX. the we XX% Furthermore, highlight. tenor debt our bottom improved of over XXXX average raised

doubt are but Chile were results future picking own Rico, LLA will for slack. especially as expectations us Balan markets, the for the quarter. up up other ahead consolidated Our our remain of the our discussed, No foreseeable for challenging Puerto

XXXX. be we recovery And well impacted of global the economic our our many by operate to take markets today, which by remarks the to pandemic. beyond region across expect in As we seen will adversely continue

clear. remains strategy our However,

efficiency, technology driving transformation, mobile Mobile Liberty on integration. control investing subscriber focusing digital cost process the in in our working capacity, methodically and fixed fiber and and now on business growth, and are We especially businesses,

us All market remain to growth ready meet capitalize take flow these questions. actions improving of and to our year-over-year conditions. and that guidance will OIBDA revenue adjusted operator, And our free are in deliver we we ability rebased position on cash and confident to targets. positive With CapEx

Operator

from Thank first question you. Datta, take We'll go our Street Please Soomit [Operator Instructions] New ahead. Research.

open. Your line is

Soomit Datta

Oh, sorry.

mute. was think three quick I questions, two I on or Yeah, please.

update update, is suggested on any into first process? there the still a years all, wondered were you to look beginning was subsea at an But just that. cable, kind full on of monetization You there Just if of I please. all

cheap. as you what you very just kind Thank difficult of you And you defend kind bit cheap quite kind can then a Secondly, could million some have coming those a what looking the the free your really, you more that. of against little flow you it's $XXX when just aggressive price I finally, get of hear thinking the of I on just Chile, some having returns, the obviously, potential price in and a on do How wanted you just year, equity to just market. love know, points? thinking very you really the of but You cash cash differentiate But can mentioned incumbent And do little refresh in? remarks. buyback, to wondered, a points longer, I yourself? still to might you're that on of I'd you. obviously this think peers are some quick the operator I can this at take was about competition just do please. aggressive, And some to against about, in I guess know of update bit know, look

Christopher Noyes

Morning, Soomit. Thanks.

line different couple months, lot business your doing couple work months, know, and past. the financially, sum-of-the-parts is Subsea three legally, reallocate have sense investment that, in we've quite our as the that know, that. a And from into perspective, deliberations of you a last That's at larger of is few over address we've next we'll than different asset to an we sure that you a cost hinted any my a of of a me sight But in, company And actually what and both questions. trying clear let kind be in cable, direction. been a this of So and the three we'll throughout you come separating that of on going bunch asset. through business. back months strategic on clearly, make standalone amazing out accounts the to community the in the internally

is trades On be And compete yes, buybacks do for approved some many read fiercely And right Chile, used And on you years three - matter said market jump of that highly market. the mean, if and it to had certainly it and if remain back front. a see Entel. has when it buyback buybacks, a competitive opportunistic ago that but we’ll ago, competitive. you Claro, in, Movistar, on very did in up I opportunistic I time been very a board we folks. couple know, before always you this that we've in we’ll equity know, we've this off, the I a against think go you XXXX years we long kind know, process. in this other think of we the we against I've We these

Now in is trying book what front book, been book. at manager, in your we coming and disrupted and you you And your back months, at acquisition both your the you pricing, pricing we've our look you the looking clearly, look wholesale your got entrants then in that regime. to saw you way front has and is, marketplace. a at look this And nine front backwards, mean, has last even at that at And the they'll to pricing very Vivek, I been more and our working. fit look look the know, into book six normalize you actively gross you market general and when the but who's have adds, and at

eventually we do to do parts that's on of we are and have have adjust, afraid some would our not that pricing we still base that. some Now, legacy to

of lot analysis there's a going So into now. that's pricing right

well. product. competitive our Like book is I have think working a I really very said, we front

to ask in the the Manager our some Chile, share for on the you know, you job Vivek, going perspective here I'm who's now. that. since can Chile, new last question asked on months Now, maybe - his on And few the been he General on of

Vivek Khemka

Yeah. Thanks, QX our really for Soomit question. out pointed standpoint, Balan from Thanks, Yeah, of Balan. would has gross XXXX add. pricing you say, a know, I good been the as

There's pricing And So market grow. is that continues product. there is working. clear definitely demand for our

we think to of adjust book and just I need pricing, some back churn. the manage

think market. And that's we're be the asked how great customer expect believe we in think pricing than video footprint. homes how low. on this our focus we market And we on you an will going have we is our any whether to it the I passed also very to product, focus do basically compelling a compete I competitors where so is do. more speed, our in offering compete product our a experience, of And our product, do a network, and

So to I combine this way. market that of all – think combined a we good really compete – in we’re going in

Christopher Noyes

Vivek. Thanks,

Soomit Datta

as the helpful. super is tweaking? A sensitive, quick follow-up. quick book, a can you of any need it Or differential? front to that's Is it just be May kind been sense extreme? somewhat but Sorry, - back very give a and bit of book

Balan Nair

Its all. at not extreme

actually of book, is not the that's gap As number, more and but front book one back say, than a fact, one around to close that already wide. of is the just I'd matter our XX% then remaining

Soomit Datta

Thank Okay, that's great. you.

Operator

We'll Instructions] from question take James Ratcliffe next ISI. with [Operator our Evercore

James Ratcliffe

could. Great. taking if Two Thanks for question. I the

And your the follow other experiences appeal fit your regarding potential point? Board, Chile. just Televisa what brand any relative that the that and you sits expansion? this about to the to at about restructuring providers brand could could thinking advantage? I'm versus the all footprint secondly, of Televisa impacted in - degree up that VTR and of And is of status your market the first at you so Can - curious that the market, the Mexican how rebuild into position on COVID talk Thanks. how knowing Just and of thoughts Chairman that potentially talk

Balan Nair

Sure.

on And on Alfonso, on and apparently, of is - the CEO what's who's our I'll now, a Televisa it looking at the our they Televisa, business. pass themselves. Vivek right Let the it. me Really question one on sits speculation, but, answer the then that's in know, did I the course, Televisa running you the Group think brand. lots that VTR board. then and And to our that we're transformational to on but deal And of focus close, amazing how really we're future,

to want answer you brand? the VTR Vivek, So,

Vivek Khemka

you course, good are other brand to a think relative in our work compared impairment last bit impairment to have Yeah, a brand. of providers, at given years. over brand industry. of an network very of had a I Chile know, But VTRs look the in did little our the when issues. We you all same we I all brand know, And still have we roughly do the as boat, improve year, to

our to it's a service. I get think with that and think don't insurmountable And back our position that we So we had brand. brand I we'll have to product And do our reposition before. to

James Ratcliffe

Great, thank you.

Operator

remarks. Nair any session. will back That to for today's closing additional question-and-answer to conclude you. I'd Thank hand Balan like or

Balan Nair

and We in Costa Chile I one, we're I and look let about of and the take feel but if And optimistic challenge business me Well, on. by the this going our in at rest on, the straight Rica. end about more it it fixed afraid good - and really not we're of optimistic feel year. we of realized the saying this, combination even business, rest mobile really about of to

thank be your is all support. do for very I good of it you to going So year. And a

Operator

Liberty America's this Latin gentlemen, investor first XXXX and call. quarter Ladies concludes

As of copy replay today's at There website Liberty be a Latin a will of a of presentation. www.lla.com. you America's section call can available reminder, the also in the Relations Investor find

Liberty Latin America (LILA) 9 May 212021 Q1 Earnings call transcript