Millicom International Cellular SA Stock

Hello, everyone, and welcome to our second quarter 2026 results call. This event is being recorded. Our speakers today will be our CEO, Marcelo Benitez; and Bart Vanhaeren, CFO of the company. The slides for today's presentations are available on our website, along with the earnings release and our financial statements.

Please turn to Slide 2 for the safe harbor disclosure. We will be making forward-looking statements, which involve risks and uncertainties, which could have a material impact on our results. On Slide 3, we define the non-IFRS metrics that we will be referencing throughout the presentation, and you can find the reconciliation table in the back of our earnings release and on our website.

With those disclaimers out of the way, let me now turn the call over to our CEO, Marcelo Benitez. Marcelo?

Thank you, Luca, and thank you, everyone, for joining our call today. Before I begin, I want to thank our teams across all markets. These results are a direct reflection of their commitment to our customers and their relentless focus on execution. They are the reason why we're delivering another quarter of strong performance.

Last quarter, I spoke about the strength of our operating model and our ability to keep growing while integrating new businesses and absorbing the associated restructuring costs. This quarter reinforces that point. We are executing against the same priorities with outlining throughout the year, delivering a better customer service, increasing ARPU through our more-for-more strategy, simplifying the business, improving efficiency and turning that operational execution into stronger cash flow.

Before reviewing the operational highlights, let me provide some context around our mobile and home subscriber performance this quarter. As part of Coltel integration, we deliberately reduced promotional activity to avoid overlapping commercial offers between the 2 brands. At the same time, we completed the harmonization of subscriber reporting standards across the organization, improving consistency and transparency. As a result, our reported prepaid and Home subscriber figures in Colombia includes a normalization effect this quarter.

This is simply an accounting and reporting alignment. It does not reflect any deterioration in our underlying business. With this work now substantially behind us, we expect subscriber trends to normalize and growth rates to return to more typical levels over the coming quarters. More importantly, the underlying commercial momentum remains very healthy. Our pre-to-post strategy continues to deliver excellent results, excluding M&A, postpaid net adds increased by 167,000 sequentially, demonstrating the continued strength of our commercial execution.

Home net adds were broadly stable versus the first quarter, reflecting the normalization I just described. Even so Home service revenue delivered another strong quarter, better pricing execution, combined with the positive impact of the FIFA World Cup broadcasting rights allowed us to grow revenue despite modest subscriber growth. That's exactly the kind of balance we want to achieve, growing value not simply volume.

At the group level, service revenue reached $2 billion, growing 5% organically year-over-year, our strongest organic growth since 2021. Combined with our continued focus on efficiency, this translated into record adjusted EBITDA of $1 billion. The first time Millicom has surpassed that milestone in a single quarter. Adjusted EBITDA margin remained solid at 46.3%, only slightly below last year's level despite the restructuring costs associated with the Colombian integration.

Most importantly, our operating performance translated into record equity free cash flow of $327 million. I believe this is one of the most important message for the quarter. These results are not only the contribution from our recent acquisitions, but also the financing costs associated with those transactions.

Even after absorbing those costs, our acquisitions are already equity free cash flow accretive within the first year. That is exactly the outcome we expected when we made these investments, and it reflects both the quality of the assets and the discipline of our execution. Given our first half performance, the progress we are making with the Colombian integration and the visibility we now have for the balance of the year, we are raising our 2026 equity free cash flow guidance from at least $900 million to around $1.1 billion.

At the same time, we're improving our year-end leverage target to below 2.5x. These upgrades reflect our confidence in the cash-generating capacity of our expanded portfolio and our ability to continue executing with discipline. Consistent with our confidence, our Board has approved an additional interim dividend of $1.50 per share payable in 2 equal installments of $0.75 per share in January and April of next year.

With that, let me turn to our mobile business. The strength of our commercial strategy is clearly reflected in our mobile results. As we've discussed before, that strategy is built on 2 simple principles. The first is disciplined management of our prepaid base through our more-for-more strategy, where we're giving more value primarily through laser data bundles while driving healthy and sustainable ARPU growth.

The second is our targeted pre-to-post migration strategy. Our analytics allowed us to identify the customers who are ready to move to a postpaid plan, creating value both for the customer and for Millicom. For our customers, the benefit is significantly better experience. On average, they remain connected nearly twice as many days each month after migrating to postpaid. For us, it strengthens customer loyalty, improves unit economics and increases lifetime value. This strategy continues to deliver strong results.

Our postpaid customer base has grown by more than 31% over the past year, supported by our expanded perimeter and continued commercial execution. Approximately 2/3 of our new postpaid sales comes from prepaid customers migration to higher-value plans, demonstrating our ability to monetize our customer base while creating long-term value.

Following the Coltel acquisition, conversion rates temporarily softened in the first quarter as we align commercial practices across the combined business. That process is now largely complete, and conversion rates have returned to levels consistent with our historical performance. The important point is that we are now achieving those same conversion rates across a customer base that is roughly twice the size, giving us a much larger platform for future growth.

As a result, strong postpaid momentum, together with healthy ARPU trends, drove mobile service revenue growth to 6.9% organically year-over-year to $1.2 billion this quarter. We're very pleased with this performance and give us confidence as we move into the second half of the year.

With that, let me turn to our Home business. Turning to Home, we're encouraged by the continued improving of the competitive environment across our markets. Competition is becoming more rational with less emphasis on aggressive entry-level pricing and greater focus on network quality, higher broadband speeds and differentiated content.

We believe this is creating a healthier market structure and a more sustainable foundation for long-term growth. Despite the subscriber harmonization actions we discussed earlier, our Home customer base continued to grow modestly during the quarter. At the same time, our fixed mobile convergence strategy continued to gain traction with FMC penetration now approaching 40%.

This not only extends customer loyalty and lifetime value, but also improves the overall quality of our subscriber base. These commercial trends translated into another solid quarter for the Home business. Service revenue grew 3% organically to $513 million, supported by disciplined pricing, high-value broadband offers, continued growth in convergence and strong customer response to our FIFA World Cup content.

We believe we are now seeing the benefits of our strategy we've been executing over the past several quarters, a more rational competitive environment, continued ARPU expansion and increasing convergence and creating a strong and more sustainable Home business. While there is still more work to do, this quarter represents another important step in the turnaround of the Home segment and reinforces our confidence in the path ahead.

Let us now discuss the B2B segment. Turning to B2B, the strong momentum we saw in the first quarter continued into the second. Digital services remained one of our fastest-growing businesses, with revenue increasing 14% year-over-year to $120 million. This reflects the continued demand for cloud, cybersecurity, managed services and other high-value solutions that are becoming an increasingly important part of our B2B portfolio.

We are also seeing encouraging performance across all customer segments. In the SME segment, our strategy continues to deliver consistent results. Simple commercial offers, disciplined channel execution and greater conversion helped drive revenue growth 8% year-over-year for this segment.

In the Corporate segment, we continue to benefit from our regional footprint and our ability to deliver integrated cross-border technology solutions for large multinational customers. This remains an attractive market where we can differentiate beyond basic connectivity. We are also seeing good opportunities in the government segment, where our network capabilities and experience managing large mission-critical projects position us well to support the digital transformation of public institutions.

As a result, B2B service revenue grew 3.8% year-over-year to $401 million. Overall, we are pleased with the continued evolution of the business. Our strategy of expanding beyond connectivity and increasing the mix of higher-value digital services continues to strengthen the quality of our B2B revenue base.

With that, let's move to our 2 most important markets, beginning with Guatemala. Guatemala delivered another outstanding quarter, and it continues to set the benchmark across our operations. Our prepaid to postpaid migration strategy remains a key driver of performance. During the quarter, 86% of our new customers' postpaid sales come from prepaid. That's an exceptional conversion rate and a clear demonstration that our commercial strategy continues to resonate with customers.

As a result, our postpaid customer base grew almost 20% year-over-year, combined with healthy ARPU. This translated into mobile service revenue growth of 6.4% to $295 million. Overall, Guatemala delivered its strongest quarterly performance in the last 10 years. Congratulations to Carlos, our General Manager, and to the entire team for another exceptional quarter.

Let me now turn on Colombia. This is our first full quarter reporting Coltel under full ownership following the completion of the transaction in April. I'm pleased with the progress we're making. The underlying commercial performance remained strong. Postpaid customers grew 7.1% organically year-over-year with nearly 2/3 of new postpaid sales coming from prepaid migrations. This continues to strengthen customer loyalty, improve ARPU and increasing long-term value. In Home, our customer base grew 2.4% organically year-over-year. We are also making good progress with convergence.

Fixed mobile penetration has reached 44%, reinforcing customer value while creating additional opportunities for cross-selling and long-term value creation. Overall, I'm encouraged by the progress we are making. The integration remains on track, and we're beginning to see the benefits of applying the Millicom playbook to a much larger business.

Before I hand the call over to Bart, let me briefly update you on Chile. This was our first quarter of operations, and the team has made an excellent start. The vast majority of our planned restructuring has been completed during the second quarter, allowing management to shift its focus toward commercial execution and operational improvement. The early results are encouraging. We've already improved adjusted EBITDA sustainability, while our eFCF margin increased by 10 percentage points year-over-year.

We are also seeing growing confidence from our banking partners who have been refinancing upcoming maturities and, in some cases, extending additional credit. That said, we remain realistic. Chile continues to be a highly competitive market with aggressive pricing and elevated churn, but we've entered in challenging markets before, and we know what disciplined execution can achieve. It's still early, but the progress we've made in just a few months reinforces our confidence that we can build a stronger, more profitable and more sustainable business over time.

With that, let me turn the call over to Bart.

Thank you, Marcelo. The second quarter of this year has truly been an exceptional quarter. Service revenue reached $2 billion, increasing 60.1% year-on-year on a reported basis. On an organic basis, service revenue increased a solid 5.4% year-on-year. This is more than twice the growth rate we reported in the second quarter of last year.

As Marcelo discussed, this acceleration was supported by our pre-to-postpaid migration strategy, disciplined pricing and offer management across our business lines. Adjusted EBITDA reached $1 billion for the quarter. On an organic basis, adjusted EBITDA increased 9.1% year-on-year, once again growing faster than organic service revenue and demonstrating the operating leverage built into our business. I want to highlight the 58% year-on-year reported EBITDA growth was almost as fast as the reported revenue growth despite having acquired lower-margin businesses and despite having incurred approximately $35 million restructuring charges in Q2.

Our strong operating performance drove a record $327 million of equity free cash flow, an increase of more than 50% year-on-year. This means our recent acquisitions are contributing positively to equity free cash flow within their first year of ownership. Achieving that level of accretion so quickly underscores the strength of our M&A execution, the effectiveness of our integration efforts and our ability to convert acquired earnings into tangible cash flows.

The second quarter equity free cash flow benefited from favorable expense timing and working capital movements. Therefore, please remain cautious forecasting the remainder of the year. With that, let's review our performance by country.

Starting for the first time with Colombia, given its increased relevance in our portfolio, we are very pleased with the progress achieved so far. Organic service revenue increased 11% year-on-year to $816 million as we began applying our commercial strategies across a significant larger customer base. Importantly, all 3 business lines, Mobile, Home and B2B contributed to the growth. This broad-based performance is encouraging and demonstrates the commercial opportunity created by the combined operation.

Turning to Guatemala, service revenue increased 5.9% year-on-year to $382 million. As Marcelo explained, growth was driven primarily by our prepaid to postpaid migration strategy, together with pricing and offer management. Overall, this was a record quarter for one of our strongest operations.

In Panama, service revenue grew 3.1% year-over-year to $175 million, marking a return to top line growth. As a reminder, first quarter performance was impacted by the temporary suspension of a price increase following regulatory intervention. With the price adjustment reinstated in the second quarter, the business returned to growth and we remain focused on sustaining this trend.

In Paraguay, service revenue increased 3.4% year-on-year to $169 million. Growth was supported by a 10% expansion in our postpaid customer base together with a low single-digit increase in mobile ARPU. This combination of customer growth and disciplined monetization supported another healthy quarter.

Turning to Ecuador, service revenue was broadly flat year-on-year at $112 million, which means we reversed the service revenue erosion observed under prior ownership and stabilized the business. Note that the second quarter 2025 results are provided on a pro forma basis for comparison purposes only. In our other markets, comprising of Nicaragua, El Salvador, Costa Rica, Bolivia and Uruguay, service revenue increased 2.8% year-on-year to $398 million.

Let's now turn to the profitability of our operations. Starting again with Colombia, our cost-saving initiatives are running ahead of plan and Coltel's profitability has already moved towards levels comparable with our legacy Tigo UNE operation. Adjusted EBITDA reached $336 million for the quarter, increasing 3.9% year-on-year. This result includes more than $30 million of severance payments executed during the quarter and roughly $100 million year-to-date. Despite these costs, the operation delivered an adjusted EBITDA margin of 39.4%. While there is still work to be completed, the results reinforce our confidence that the integration and efficiency program is progressing very well.

Turning to Guatemala, adjusted EBITDA increased 6.3% year-on-year to $245 million. The adjusted EBITDA margin reached 55.6%, improving by almost 1 percentage point year-on-year. This expansion was driven mainly by operating leverage, together with a solid service revenue growth I just discussed.

Panama, adjusted EBITDA was broadly stable year-on-year at $92 million. The adjusted EBITDA margin was 50.7%. We remain focused on converting the renewed top line growth into stronger operating leverage over time.

Next, let's turn to Paraguay, which delivered another excellent quarter. Adjusted EBITDA increased almost 17% year-on-year to $100 million. The adjusted EBITDA margin expanded by 6.4 percentage points to a company record of 56.9%. This improvement is a testimony to the team's relentless focus on efficiency, particularly within direct costs while also benefiting from FX tailwinds. I would like to congratulate our General Manager in Paraguay Roberto, supported by Flor, our new Paraguay CFO, that moved from our Guatemalan operation as well as the entire team for these excellent results.

Turning to Ecuador, the Millicom playbook continues to produce solid results. Adjusted EBITDA increased almost 40% year-on-year on a pro forma basis to $58 million. The adjusted EBITDA margin reached 48.9%, an improvement of 15.4 percentage points year-on-year. This represents substantial progress in a relatively short period and is a direct result of the continuous execution of our efficiency initiatives.

That said, I want to manage expectations for the second half. We plan to launch our Tigo brand in Ecuador later this year. This will require incremental marketing and promotional investments, and we, therefore, expect margin to contract a few percentage points during the remainder of 2026. Adjusted EBITDA in our other markets reached $194 million, increasing 4.7% year-on-year faster than the growth, again, demonstrating our operational leverage. The adjusted EBITDA margin was 46.3%.

Let's now review the equity free cash flow bridge for the quarter. As discussed, adjusted EBITDA reached $1 billion for the quarter, increasing $369 million year-on-year. Cash CapEx totaled $274 million, up $72 million compared to prior year and this increase mainly reflects continued investment in our recently acquired businesses, together with higher spending on leased mobile devices under Colombia's customer device leasing programs.

Spectrum payments were $41 million during the quarter, mainly related to Colombia. Working capital and other contributed $47 million, representing an improvement of $17 million year-on-year, benefiting from payment phasing and improved inventory management.

Taxes paid increased $40 million year-on-year, in line with the increased contribution from our acquired businesses. Finance charges were $131 million, increasing $49 million year-on-year, mainly as a result of the additional financing associated with our acquisitions.

Lease payments increased $79 million year-on-year to $161 million. As in the first quarter, the increase was primarily the result of the expansion in our operating parameter and the impact of Lati tower sale and leaseback transaction last year. Putting all of these factors together, equity free cash flow increased by more than 50% year-on-year to a company record of $327 million.

Let's now turn to our net debt and leverage progression. We began the quarter with net debt of $7.6 billion and leverage of 2.76x. Equity free cash flow of $327 million and EBITDA growth reduced leverage by approximately 0.11x. This benefit was largely offset by shareholder distributions during the quarter. We paid $125 million in ordinary dividends, but also $210 million in extraordinary dividends related to last year's Lati tower transaction for total dividend payments of $335 million. In addition, we made $221 million of M&A-related payments, mainly associated with the acquisition of the remaining Coltel stake previously held by La Nacion. That does not come with incremental consolidated EBITDA.

Finally, we also have an increase of net debt that is predominantly related to the appreciation of local currency denominated debt. The key takeaway is that despite the increase in net debt to $8.1 billion, leverage actually declined modestly from 2.76x to 2.73x, better than I expected during our Q1 call, giving us a solid starting point from which to reduce leverage further during the remainder of the year.

That brings me to our 2026 financial targets. When we last spoke, I committed to updating our 2026 guidance once we had greater visibility into the progress of our turnaround initiatives, integration costs and the performance of the combined businesses. First, based on the strong operating and financial performance achieved during the first half of this year, we are raising our full year equity free cash flow guidance. We now expect 2026 equity free cash flow of around $1.1 billion compared with our previous target of at least $900 million.

Second, our first half performance strengthens our conviction in achieving our leverage objectives. We continue to expect leverage to improve now to below 2.5x, a level at which we are comfortable operating the business. This updated guidance reflects the strength of the underlying business, continued progress on integration initiatives and greater visibility into the cash-generating potential of the expanded portfolio.

Our strong performance allowed the Board to approve an incremental interim dividend of $1.50 payable in 2 equal installments in January and April 2027. At the same time, we remain focused on disciplined execution, including the delivery of our integration plans, investment in our networks and prudent management of leverage.

With that, let me now open the call for questions. Thank you.

[Operator Instructions] Our first question for the day comes from Andreas Joelsson from DNB.

Very strong result, I must say. So congratulations. I have 3 questions. First of all, what can you say about phasing of cash flow for the remainder of the year? I think after -- or in connection to the Q1 conference call, you said that cash flow mainly generated in Q1 to Q4. Now we have a very strong Q2. So how should we look at the phasing of the cash flow for the remainder of the year?

And secondly, ARPU levels are coming up quite nicely. Do you agree that we could see that as a sort of a leading indicator for further continued service revenue growth going forward? Or is there something extraordinary the ARPU numbers for Q2 that we should be aware of?

And thirdly, you managed to keep the improved profitability in the, so to say, old Millicom countries. What is the main challenge you see to continue this sustainable improved profitability? Is there a risk that there is a sort of cost-discipline fatigue in the organization as we have had a strong cost-discipline fatigue in the organization as you have had a strong cost discipline for quite some time now. How should we see that?

So let me take 2 and 3, and Bart, you take the first one. Hello, Andreas, good to see you. I mean we are here in Tegucigalpa, Honduras, visiting operations and having this call at the same time. So on the ARPU topic, let me just go back where the strategy -- what was the strategy from the beginning.

First, we invested in strengthening our networks with a very granular approach, looking side-by-side, sector by sector, node by node and understanding where the untapped demand is. So this untapped demand starts the Mobile with prepaid. Our prepaid customers are just connected 15 days per month, and nobody wants to be connected only 15 days per month. So what we are doing is we are extending the days connected, starting in prepaid with more allowances and more days connected with a slightly higher ticket and through a very, very well-designed and very mature analytics model. We are selecting and preapproving prepaid customers that are ready to move to postpaid. In combination, this is increasing the total ARPU of the base.

In Home, the challenge is a little bit different and the result does have a one-off. So the challenge in Home has to do with stabilizing churn, again, with a very granular investment on the network and also has to do with calibrating the ARPU in, so the new offers are coming with a high ARPU. And as I mentioned in the call, we do see good response from the industry from that perspective. Promotional heat and activities are coming a little bit down. So that, in combination with low churn is creating new -- it's creating a new inflection point towards growth. The one-off we have in Home has to do with the World Cup rights. We did have in almost all our countries exclusivity on all the games for the World Cup and it was a total success.

The revenues coming from the World Cup has to do with selling packages to watch the games, more data packages, more top-ups, more sales in Home and advertising revenues. So you will see a 3% growth in Home, but has to do 80% of that growth comes from the World Cup effect. You will see this effect in Q2 and in Q3. 60% of the World Cup effect is in Q2 and 40% is in the Q3. So that was the first question. The second question was?

Profitability on the...

No. Okay. Fatigue. Well, I would say we are in a very healthy cultural momentum. So we do -- we did incorporate the efficiency model as a business as usual. So we don't see any fatigue at this time. It's more now an obsession to fight inertia. So from the countries, we started the purchase order review as you can -- as you may understand, at the beginning, there was a lot of pushback from the center.

But now that pushback is gone because basically the operations and the countries, they are already adopting this new criteria on where to put each dollar in OpEx and CapEx.

So it's part of the business as usual, and we do see the results. So also, it is clear that, that is the model we want to follow. Incremental efficiencies is something that we are looking at using AI tools and automatizing mainly the contacts from the customers and internal operational -- heavy transactional operations.

Yes, then on the phasing, Andreas, I think the equity free cash flow is not made in Q4, Q1. It's more the business is made in Q4, Q1 in the sense that entry point customer is the one that will generate 12 months of revenue. So Q4, you win them for the entry point, Q1, you keep them. And then the rest of the year, if a customer won in Q4 will add much less to equity free cash flow than one gained in general. But we do have phasing in the rest of the year. I think we have -- on spectrum, we have interest charges. We have a little bit of working capital.

So we have some phasing in the first half of the year. Our Q2 is an absolute record equity free cash flow for the company. So that's why I wanted to be a bit cautious. Don't just do Q2 with another 2 quarters in Q3 and Q4. I think it will look a little bit like the first half of the year. I think that's a fair way to look at it for the rest of the year. So a lower Q3 and then a strong Q4 during the year.

Our next question comes from Phani Kanumuri from HSBC.

So the first question is on how you see the competition or disruption from satellite players in the light of SpaceX initiation -- SpaceX IPO? Do you see them as complementary? Is there a potential for partnership with them? The second one is on the integration costs. How do you see the phasing of integration costs over the next couple of quarters? And what are the -- and do you stick with your guidance from last quarter that the full year guidance for Colombia EBITDA margin would be similar to 2025?

Thank you, Phani. Good to see you. I will take the first one and Bart's going to take the second. SpaceX's Starlink solutions in our countries, if you analyze it from the Mobile perspective, the benefits and experience is still very limited, very poor indoor coverage and very low throughput. As you may understand, in our countries, we almost have deployed 4G at 100% of our coverage. And in parallel, we are launching new coverage and investing in 5G. So if you compare the experience of SpaceX satellite to the phone compared with 4G and 5G, I think there is a long way for SpaceX to improve their technology.

When we go to the fixed business, it is a very good solution for remote areas where we don't have coverage. So there, we do see SpaceX gaining a small piece of customers. For example, in Paraguay, there is a lot of cattle. These are very far and distant places. So SpaceX is a great solution for them. But for urban areas, it is very difficult or it is a very, very poor experience compared to fiber still. So in a nutshell, we do see as a complement product for our customers, but we don't see as a threat.

Yes. On the restructuring charges, Phani, overall for the group, I mean, it's not that we want to lock ourselves and you see how fast we are restructuring every week, we find new opportunities in the operation, and it shows in the margin expansion. So what I have visibility to today, I would say, that we have roughly restructuring charges for the full year between $160 million, $170 million, right? We already have booked 60% of that roughly in H1. But on a paid basis, we probably already have paid 50-50. So 50% in H1 and then another 50% or less. So roughly $80 million in H1 and another $80 million in H2, let's say.

Okay. And then on Colombia, full year margin, do we still expect to be in line with FY '25, as you had indicated in the previous conference call?

Yes, roughly, roughly.

Our next question comes from Gustavo Farias with UBS.

So 2 questions. First one on CapEx. So the numbers came a little bit below of what we expected. So if you could comment on the outlook for CapEx ahead? If there's any timing related things to consider? And specifically about the Colombia CapEx, if this has already reached its run rate?

The second question is related to Argentina. With new remedies on the Telecom Argentina and Telefonica deal, regulator requires a third player in the mobile market. Just wondering, does it change anything on your current strategy or not -- or there is nothing to be said here?

Gustavo, I will take the first one, Bart, you can take the second one. With relating to CapEx, yes, Gustavo, there is a phasing. We are investing in Colombia at a very -- with a very aggressive approach, we plan to have full 5G coverage and also additional 1,000 sites to be deployed in the next 12, 18 months. So there is going to be an acceleration there. But it's going to be more or less on the rate where we are very comfortable.

Today, you will see more or less 11%, I mean, including the new perimeter of CapEx over revenues, and we expect to be full year around 12%. So that's going to be the effect on the second half and mainly because of Colombia.

Maybe to just add a little bit in terms of numbers. I think on a cash basis, so cash CapEx, we are probably 50% over the year. And on a booked basis is indeed what Marcelo said, we were 40% of the year and then so ramping up a little bit in the year to go. To your question on Argentina, I think in previous calls, we kind of mentioned Argentina is not on the radar for us, same for Brazil or Mexico. So we don't have that on the radar.

Our next question comes from Gabriel Vaz de Lima from Morgan Stanley.

Congratulations on the results. And just one question on my end. Just wanted to get your thoughts on how competition has been in Chile, with some movements on the front book prices in the last few weeks. So I just wanted to get your thoughts on how you're seeing the market.

Thank you, Gabriel. Let me step back on Chile. First, we saw this as an opportunity to apply our playbook into Telefonica operation. That playbook starts with efficiencies. So that first phase is doing very well. The execution is going as planned. So just to give you an example, for the -- if you compare the last quarter, the eFCF was only 2% over revenues. And this quarter, we are talking about 13% over revenue. So the first chapter of our playbook is producing immediate results.

When it has to do with competition, we recognize that it's a very tough market, it's a very fragmented market, very low ARPUs and strong promotional activities from all the players. Nevertheless, we did saw movement in pricing 2 weeks ago, as you mentioned, Gabriel. And we see this as a very positive sign from the industry that, of course, we look at it with good eyes because it is absolutely key to make the investments in the long-term sustainable for all the operators. But our primary focus is what is under our control. That is to end the Phase I that has to do with efficiency, focus and simplification of how we operate in Chile.

Our next question comes from Livea Mizobata from JPMorgan.

Sorry, I was not hearing at first. I have 2. First, I would like to elaborate a little bit on the margin outlook for Colombia. Could you provide an update on the outlook for 2026 and also for the long term? And the second one is regarding Paraguay. You mentioned in your release phasing effects impacting margins. Can you elaborate a little bit what was that? What was the driver and what we can expect on this operation?

Yes. So on the Colombia margin, Q2 is 39.4%. I think we have a very good and solid second quarter, we have year-on-year revenue growth organically 11%. So that drives operational efficiencies. We have some tailwinds from currency. So I think all to say we want to still be a little bit conservative for the year to go. We also have some rebranding efforts and things like this. So there will be a little bit of contraction from the additional cost. But on the same time, we have some savings from run rate ERC costs, so employee-related costs and stuff like that. So I don't think there will be a dramatic shift in the margin for the full year. But as we look at it month-to-month, we may start with some contraction and then end the year strongly again. So -- but I wouldn't expect it's also currency driven, so no major changes.

Second question, where are we? It's...

On the phasing effect...

The peak of Q2.

Yes, Paraguay, I think -- so again, we are growing nicely. It's a bit the same story. We're growing nicely. The team is putting a ton of effort on efficiencies, but the underlying element is nice growth comes with the operational leverage hence marginal expansion and good equity free cash flow. If you look at the year to go, the risk is always currency. So Paraguay, Colombia, Bolivia, those are the 3 countries where I always want to be a little bit conservative as currencies affect our equity free cash flow generation.

Now we did localize a lot of our P&L. So meaning we transferred everything to local currencies. We're hedging debt by incurring local currency debt and accepting a little bit of a higher interest rate. So we did all the work there over the last couple of years, but still strong currency, we'll get more equity free cash flow.

May I make just one follow-up question since we are talking about free cash flow. You're generating a ton of cash. So do you have any visibility on what to do in 2027 with the amount of cash that you're generating? Any updates on your capital allocation strategy, if you have room to increase dividends eventually, what is the outlook here?

Yes. So we just announced additional dividends, $1.5 payable in 2 equal installments in January and April. And if you think about it, we raised our guidance of equity free cash flow to $1.1. Historically, I always said, listen, I'd like to distribute 2/3 of our equity free cash flow. Another way to see that is having 150% coverage of your dividends. And so, so far, the Board has followed that recommendation and the AGM as well.

So now that we are guiding to $1.1 billion, 2/3, $750 million, 169 million shares, you get to the $4.5 that we will now distribute from AGM to AGM. On the back of Q4, we will issue new guidance for 2027. And so it will be the privilege of the Board to recommend to the AGM a dividend policy for 2027. If you look at me, Bart, recommendation, that will be again 2/3 of the equity free cash flow that we will guide on the back of Q4 results.

Our next question comes from Marcelo Santos from JPMorgan.

Actually, I'm together with Livea here, but what I would just double down a bit is in the margin part of Paraguay, you mentioned phasing effects on the margin when you discussed the P&L, at least that's what I understood from the recent release. Was there anything that was unusual about the margin in Paraguay that should revert in the coming quarters? Or is that Paraguay margin sustainable? That's what we wanted to know about Paraguay.

I think what is really outstanding is the currency appreciation, Marcelo because we do have -- even though we did lots of efforts to localize all the costs, we do have heavy soccer rights, local soccer rights and also content rights that a lot of them are still in dollars. So the more the Guarani appreciates, the lower the cost is in dollars. So that's more or less what's having an inorganic impact in Q2. Of course, we are not experts even if we try to predict the currency movements in the future, but it is at an all-time low, the dollar compared to the Guarani.

Thank you, Marcelo. This was our last question for today and concludes our question-and-answer session.

Thank you very much, everyone.

Thank you.

Hello, everyone, and welcome to our First Quarter 2026 Results Call. This event is being recorded. Our speakers today will be our CEO, Marcelo Benitez and Bart Vanhaeren, CFO of the company. The slides for today's presentations are available on our website, along with the earnings release and our financial statements.

Now please turn to Slide 2 for the safe harbor disclosure. We will be making forward-looking statements, which involve risks and uncertainties, which could have a material impact on our results.

On Slide 3, we define the non-IFRS metrics that we will be referencing throughout this presentation. and you can find reconciliation tables in the back of our earnings release and on our website. With those disclaimers out of the way, let me now turn the call over to our CEO, Marcelo Benitez, Marcelo?

Thank you, Luca, and thank you, everyone, for joining our call today. We are off to a solid start in 2026, both operationally and from a financial perspective. From an operational standpoint, postpaid net additions amounted to $5.6 million, while home net adds amounted to $1.5 million. This significant increases reflect the relevance of the Colombia acquisition and the opportunity that lies ahead.

Importantly, even excluding inorganic growth, postpaid net additions amounted to 250,000 and home net additions amounted to 46,000. This is a testament of the health of our underlying business and the strength of our customer value proposition. From the financial perspective, organic service revenue growth was a robust 4.9% year-over-year.

This not only represents a solid continuation of the momentum achieved in our seasonally strong fourth quarter in 2025, but also reinforces the expectation of our top line acceleration throughout 2026. The quarter ranks among 1 of the strongest growth performances in recent history. As a result, total service revenue for the quarter reached EUR 1.9 billion.

This robust top line performance combined with our entirely focus on cost efficiency delivered expanding operating leverage. As a result, adjusted EBITDA in the quarter totaled EUR 857 million, representing a margin of 43.2%. This is a very solid outcome, particularly as it already reflects the impact of integration and restructuring charges related to the Coltel acquisition. Excluding Coltel the adjusted EBITDA margin would have reached 47.9%.

Our relentless focus on efficiencies, also improved equity free cash flow by EUR 48 million year-over-year, reaching a strong $225 million for the quarter. This is a robust entry point for the year, especially when considering that EFCF, excluding that transaction, would have increased EUR 90 million year-over-year. As we mentioned in our fourth quarter call, we acquired Telefonica Chile together with NJ, and we have started to apply the Millicom playbook in that market.

During the quarter, we also took important steps to strengthen our position in Colombia. We completed the purchase of PM 50% ownership stake in Tigo Ole and Telefonica stake in Cantel. Since we acquired the majority ownership of Coltel at the beginning of the quarter, we are already fully consolidating Content's performance in our results.

Importantly, we finalized the transaction and acquired the remaining stake in Coltel from La Nacion just 2 weeks ago. by unifying these operations, we are creating the resilience and the scale needed to move faster, invest more effectively and ensure that our infrastructure supports the long-term sustainable development of the country. I will come back to both Colombia and Chile later in the call.

Now let's turn to our mobile business performance on Slide #6. Our mobile business continued to perform very well in the quarter. Underlying customer growth was 4% year-on-year with postpaid customer increasing 25% and prepaid customers growth largely flat due to our pre-to-post migration efforts, seasonal effects and customer base cleanup initiatives.

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

Bringing all this together, mobile service revenue totaled $1.1 billion, including EUR 120 million contribution from 2 months of operation in Coltel. Excluding inorganic growth, Mobile service revenue grew 7% or $63 million year-on-year. This represents a clear acceleration over previous quarter and shows that our commercial strategy continues to gain traction.

Now let's turn to our home business on Slide #7. Our efforts to provide the best network experience and higher speeds continues to resonate with customers. Our home customer base expanded 4.6% organically year-on-year, reaching 4.2 million customers. This growth was mostly driven by broad only customers, which increased 5% year-on-year.

Here, too, the recent Coltel acquisition meaningfully increases our customer base, adding 1.5 million customers, reaching a total of 5.7 million customers. More importantly, the fixed networks are highly complementary. Tigo is comparatively stronger margin, whereas Coltel is more dominant in Bogota. We have also made significant progress in fixed mobile convergence. Almost 36% of our customer base now have both fixed and at least 1 mobile line with us.

This is important for 2 reasons: First, it shows that our convergent offer is compelling for customers. And second, it materially improves the customer lifetime value. As churn for convergent customers is almost 50% lower than for nonconvergent customers. We are very pleased with this progress, and we will continue working to expand our convergent customer base.

As a result, Home service revenues continued its recovery trend, reaching EUR 374 million, flat year-on-year on an organic basis. We remain committed to building the right foundation to return this business to positive revenue growth in the near future.

Now let's turn to B2B on Slide #8. Our B2B business continues to play an important role in our growth strategy. Digital service revenue, which increased almost 19% year-over-year continues to be a key growth driver, supporting mainly by strong demand for cybersecurity and cloud solutions. Both of these categories grew more than 20% year-over-year, reflecting the continued need from businesses and governments for a secure, reliable and scalable digital infrastructure.

At the same time, total B2B revenue reached $306 million for the quarter, excluding Coltel. Growth was driven primarily by the entrepreneur customer segment, where the customer base increased more than 13% year-over-year. This expansion reflects the strength of our convergent fixed mobile offering, which provides small businesses with a simple, reliable and convenient connectivity solution.

Importantly, customer loyalty remains high, supported by the quality of our network, the value of our plans and the improvement that we have made in our customer service channels. Overall, B2B remains a strong platform for growth. Next, I would like to discuss our operation in Guatemala. Guatemala continues to deliver strong results. our pre-to-post conversion strategy remains an important driver for growth.

Postpaid customer growth was 20% year-on-year, reaching 1.5 million customers at quarter end. Thanks to our targeted sales offers, we continue to make progress on pre to post migration. More than 85% of our new sales in postpay are coming from our existing prepaid base. This strategy improves ARPU per customer and materially enhanced customer lifetime value. All in all, Guatemala remains a strong market for us, with mobile revenues expanding 6.6% year-on-year, reaching EUR 288 million for the quarter.

Let's now turn to Slide 10 to review our performance in Colombia. We are very pleased with the organic performance in Colombia. Postpaid customers increased almost 9% year-on-year. This combined with our streamlined commercial offering and are simple, easy to understand more from our pricing strategy allowed us to increase mobile ARPU 4.4% year-over-year.

Importantly, with the Coltel acquisition, we increased by 42% or prepaid base. This creates a meaningful opportunity to apply our pre to post migration strategy, which increased 15 percentage points over the last 12 months to a much larger customer base. Home also continues on the positive trend we have now been seeing for several quarters.

Organic customer growth reached 8.3% year-on-year, bringing Tigo One base to 1.7 million customers. We also delivered improvements in fixed mobile penetration which reached 37.1% at the quarter end as our most recent commercial efforts continue to resonate with customers. We are very pleased with this addition of Coltel's fiber network to our portfolio, which added another 1.5 million customers to our client base, which reached $3.2 million. We are particularly excited about this addition because of the complementary nature of the network.

As I mentioned in my opening remarks, it has strengthened our position in key urban areas and create significant opportunities for convergence, cross-selling a more efficient network investment. I would now like to discuss our vision for the integration in Colombia and the potential we see in the market. Since obtaining operational control, we have been working with urgency and discipline to ensure a smooth transition and rapid turnaround.

Our integration plan is based on 3 key pillars. The first pillar is a reset of our cost base, and this includes a rigorous cash management a supplier payment program, debt renegotiation and liability management to align with the overall Millicom capital structure. As part of our OpEx efficiency program, we have identified more than $100 million in expected savings to be achieved in year 1.

These opportunities include contract renegotiation, company rightsizing and sponsorship rationalization. The second pillar is network improvement. We are moving on 2 strategic fronts: First, we are improving the quality of our network planning to increase 4x our 5G coverage in 2026 and to add more than 1,000 new sites during the next 24 months. Second, we are focused to efficiently improve our network operating model. The objective here is to reduce complexity, improve execution and create a more efficient and scalable platform.

The third pillar is commercial uplift. This includes simplification of commercial offers with a clear focus on profitability, accelerating pre to post migration and supporting ARPU improvement. It also includes increasing cross-sell opportunities across complementary fixed networks, which should help us drive high fixed mobile convergence. We have defined near milestones together with the team in Colombia, and we are already seeing encouraging early results.

We are excited about the road ahead in Colombia. We believe this transaction gives us the scale network asset and customer base needed to create a stronger, more sustainable business in 1 of our most important markets. But this is not just hearing. We have already put this approach in play in Ecuador and Uruguay and are seeing great results.

On Slide 12, you can see the tangible results of applying the Millicom playbook in Ecuador and Uruguay. We are pleased with the progress we have made in both countries in a short period of time. Adjusted EBITDA expanded meaningfully, reflecting the disciplined execution of our efficiency program. Importantly, both Ecuador and Uruguay are already operating above or in line with the milligram average adjusted EBITDA margin.

In practical terms, this means these businesses have quickly moved into what we would consider business as usual performance within our operating model. We also saw a material uplift in equity free cash flow in both countries. In Ecuador specifically, the improvement was offset by a $70 million payment related to spectrum in 700 megahertz and 3.5 gigahertz bands, which supports the long-term quality and capacity of our network and comes up for renewal in 2038.

Overall, the results achieved so far are encouraging. At the same time, we continue to fine-tune our operations in both markets with a clear focus on driving sustainable margin expansion and stronger cash flow generation over time. Before turning the call over to Bart, I want to spend a moment updating you on our operations in Chile.

As you will recall, we acquired Telefonica operations in Chile jointly with NGJ on February 10. Since then, we have moved quickly. We appointed a new general manager, a new CFO and a new CTO. Within the first 2 weeks, the new leadership team began applying the Millicom playbook. This includes a significant organization restructuring with an approximately 30% head count reduction. We also took initial steps to improve the capital structure including $85 million debt reduction, which lowered leverage by approximately 0.4x.

We launched our mobile network enhancement plan by optimizing the frequency layers delivering rapid improvements in coverage and service quality. Importantly, we have also identified key regional white spaces, and we are committed to increasing our physical retail presence in those areas. Taken together, we are already seeing promising results from our turnaround plan.

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

Thank you, Marcelo. Before we dive into the numbers, just a heads up that this quarter is a bit more complex to read, given the multiple acquisitions we've completed over the past 6 months. So please bear with me as I walk you through the results.

With that out of the way, let's now look at our financial performance for the quarter. Service revenue increased 45% year-on-year to nearly $1.9 billion, benefiting from the consolidation of 2 months of operations of Coltel and our acquisitions in Ecuador and Uruguay as well as the year-on-year increase across our business lines.

Let me split this out for you. Coltel contributed approximately $243 million to service revenue in the quarter, as shown on this slide. Excluding this inorganic contribution, service revenue would have increased 4.9% year-on-year. As a reminder, we are including Ecuador and Uruguay in both periods for purposes of organic growth.

If we would exclude all M&A that we did including the MFS business of Paraguay that is now recorded as an asset held for sale, that parameter grew a staggering 13%, continuing the trend we saw last year. Reported adjusted EBITDA reached $857 million for the quarter, increasing 35.5% year-on-year with Cortel contributing $33 million.

Organic adjusted EBITDA growth was 9.6%. All that translates to an adjusted EBITDA margin of 43.2%, a robust result particularly given that we incurred nearly $70 million in restructuring charges during the quarter, most of which related to a voluntary lease plan in Colombia. Excluding Coltel, adjusted EBITDA margin would have reached 47.9%. We are very pleased with the performance across the region, thanks to our focus on sustainable margin improvement across all our business units and all our countries.

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

Let's now review our performance country by country on Slide 16. Starting with Guatemala, service revenue reached EUR 370 million, increasing 5.5% year-on-year. Growth was mainly driven by our pre to postpaid conversion strategy, together with the price increase implemented in February and March which supported the ARPU improvement that Marcelo mentioned earlier.

In Colombia, service revenue reached EUR 653 million with Coltel contributing approximately EUR 243 million, as mentioned earlier. Adjusting for this inorganic contribution, service revenue increased 8.4% year-on-year. Growth was driven by price increases in our B2C and home businesses as well as cybersecurity services provided to the government, which Marcelo discussed earlier.

In Panama, service revenue was flat year-on-year at EUR 172 million for the quarter. Growth was slower than expected, but we remain optimistic that the top line momentum will improve. In Paraguay, service revenue increased a robust 4.9% year-on-year to EUR 158 million. As mentioned before, our Paraguay and MFS business is now recorded as an asset held for sale and excluded from both reporting periods.

Next, I would like to review Ecuador for the first time since our acquisition of Telefonica's operations in the fourth quarter of 2025. Please note that we are providing 2025 results as a reference point only. Service revenue reached EUR 110 million, increasing about 1% compared to last year. We have reverted last year's negative revenue trend under former ownership and are convinced that our disciplined approach positions the business for more sustainable and higher growth over the medium term.

Service revenue in our other markets, which now comprises an Salvador, Nicaragua, Costa Rica, Bolivia and Uruguay increased 4.8% to EUR 402 million. This was mainly due to robust top line growth in Nicaragua and Uruguay.

Let's now move to our adjusted EBITDA performance. In Guatemala, adjusted EBITDA increased 6% year-on-year to EUR 237 million, implying strong adjusted EBITDA margin of 55.4%. This was driven by service revenue expansion and continuous operating leverage. For Colombia, adjusted EBITDA reached EUR 205 million, with Coltel contributing EUR 33 million for the 2 months under our ownership.

Adjusted EBITDA margin was 30%, which includes $65 million of restructuring charges. When excluding Coltel, Colombia grew adjusted EBITDA 13.7%, reaching an adjusted EBITDA margin of 41%. Allow me a little side step here. Despite it being early days, we feel very positive about our turnaround of Coltel.

As I mentioned last quarter, prior to the acquisition, we were thinking of Coltel as a risk factor and we're taking into consideration a possible negative equity free cash flow. But at this stage, we believe it will be already a net contributor, fully offsetting the aforementioned restructuring charges as well as the acquisition financing costs.

In Panama, adjusted EBITDA declined slightly to $91 million, with an adjusted EBITDA margin of 50.7%. And -- turning to Paraguay. Adjusted EBITDA increased 15% year-on-year to $92 million, delivering a record adjusted EBITDA margin of 56.3%. This growth came from the team's continued focus on operational efficiencies, some phasing and others. So well-deserved congratulations to our Paraguayan General Manager, Roberto, and our newly internally promoted CFO floor. Besides this stellar performance, we also benefited from FX in Paraguay, increasing the year-on-year growth of reported adjusted EBITDA to almost 39%.

Turning to Ecuador, we are pleased with the initial performance. Our priority has been to stabilize the operation and expand margins sustainably. Adjusted EBITDA totaled EUR 56 million in the quarter, corresponding to an adjusted EBITDA margin of 48.3%, in line with what I signaled to you already during our Q4 call.

This represents a margin uplift of about 13% compared with Ecuador's reported profitability for 2025. I'm intentionally referring to a full year number here because last year, under former ownership Ecuador had an exceptionally high margin from one-offs in the first quarter. So here as well, I would like to congratulate our General Manager, Bobby, and our initial CFO, Paul, leading the integration, who has now been succeeded by an internally promoted CFO, Fernando. Congratulations.

We are encouraged by the results achieved and continue to fine-tune the operation to deliver meaningful and sustainable margin expansion over the coming quarters. Just to manage expectations, later in the year, we will be rebranding -- so there will be some margin effects during the time for one-off marketing expenses.

Adjusted EBITDA in our other markets reached $202 million, increasing 11.4% year-on-year with an adjusted EBITDA margin of 47.7%. These robust results were particularly driven by Bolivia, where continued cost focus and more stable FX supported margin expansion. Before discussing equity free cash flow, I also want to echo Marcelo's comments on Chile. We are pleased with the initial results from our joint operation with NJJ.

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

Let's now turn to Slide 18 to walk through equity free cash flow for the quarter. As we have already discussed, adjusted EBITDA for the quarter was $857 million, up $221 million year-on-year despite the restructuring charges in Coltel. Cash CapEx was $221 million up EUR 107 million year-on-year. This was mainly due to the EUR 42 million onetime impact related to last year's Lattice sale in Nicaragua, which was accounted as negative CapEx considering an asset sale and increased CapEx execution in Colombia and Bolivia as well as incremental CapEx related to our inorganic growth projects.

A nice way of saying we are investing in the networks of the acquired businesses. Spectrum paid was $99 million, increasing $63 million year-on-year. This increase was mainly related to $70 million of spectrum payments in Ecuador as Marcelo already mentioned. Changes in working capital and other was negative $27 million for the quarter. This is coming in the first quarter when working capital is usually a drag on cash flow due to the timing of certain payments, fees, licenses and employee bonuses.

That said, working capital improved by $49 million year-on-year, mostly due to payments phasing and improved collections. Taxes paid were $53 million representing a year-on-year reduction of $13 million. This was mainly because prior year taxes were elevated by one-off incremental taxes on gains from infrastructure since Finance charges were $126 million, increasing $19 million year-on-year, mainly due to incremental charges related to acquisition financing.

Lease payments increased $58 million year-on-year to $140 million, consistent with last year's tower sale, which added approximately $22 million as well as our inorganic growth, which contributed another $36 million at least. Endures repatriation was $34 million for the quarter, improving $11 million year-on-year.

As a result of these factors, equity free cash flow was a record $225 million for the first quarter of Millicom. Let me now briefly walk you through our net debt bridge on Slide 19. As just discussed, equity free cash flow was $225 million for the quarter. The opening balance sheet of cartel added approximately $1.5 billion of net debt, increasing leverage a $0.6 million.

In addition, we had an increase of leverage of 0.3x related to acquisitions for about $773 million. This included the purchase of EPM's equity stake in Tigo the acquisition of 2/3 of equity in cartel held by Telefonica and EUR 25 million from the joint acquisition of Telefonica Chile in partnership with NGJ. We also paid $125 million in regular dividends to our shareholders during the quarter, which also added approximately 0.05x leverage.

Finally, derivatives, FX and other impacts increased net debt by $67 million, mostly related to the appreciation of local currency denominated debt. Yes, FX tailwinds benefit your P&L, but it also has a negative effect on the value of local currency-denominated debt. Putting it all together, net debt for the quarter was $7.6 billion, with a total leverage of 2.76x, which is in line with the expectations we communicated on our last earnings call.

We might see leverage creeping up a little bit more in Q2 due to the remaining acquisition of Coltel equity held by Lanacion, a transaction that is now closed as well as extraordinary dividends paid in April. We remain confident that this leverage will come down again and get around 2.5x by year-end. With that, let's now discuss our financial targets for 2026.

In summary, our financial objectives for the year have not changed. We continue to target equity free cash flow of at least $900 million and leverage of around 2.5x by year-end. Regarding equity free cash flow, I mentioned this before. I would want to point out that when we introduced our 2026 guidance in our fourth quarter 2025 call, we had only recently acquired the controlling stake in Coltel -- at the time -- our initial assumption was that Coltel would be broadly neutral to equity free cash flow in 2026, possibly even negative due to integration costs.

Since then, we've begun implementing our playbook and see the turnaround happening. We are now cautiously optimistic that Cortel will be a net contributor, fully offsetting integration costs and acquisition financing charges. In addition, we are more constructive on foreign exchange assumptions for the remainder of the year and now have greater clarity around the debt associated with our recent acquisitions.

All of this gives us added confidence in our 2026 targets. While we are not updating guidance today, we expect to be in a much better position to do so on our Q2 earnings call. following the completion of our integration and portfolio optimization work. Until then, we remain focused on disciplined execution and margin expansion. We will now begin the Q&A session.

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

I have 2. The first is regarding the near-term sustainability of Coltel margins. I mean, if we add back the nonrecurring expenses that you had in the quarter, we calculate around 37%, which is just close to Tigo Colombia levels at the start. So is this something recurring in the next couple of quarters? Or was there something that we need to take into consideration? That's the first.

And the second also on margins, I mean, Paraguay margins were ahead of Guatemala. Just wanted to see if also this is kind of a sustainable level. So 2 questions on sustainability of margins.

Marcelo. Thanks for your question. On the first 1 on Colombia, we are -- as we said in the call, we are very optimistic about the early results on the integration. What we see happening is the combined company is growing the top line at the level of 8%. We see that as something sustainable during the year.

Second, we are somehow offsetting the integration cost with savings, so we do believe that, that will bring us positive margins for the full year in '26. It will be around the same the same levels that we had in the ore, including the restructuring cost. So very positive on Colombia and on our ability to sustain margins for the year to go.

In Paraguay, we it is very -- we are very competitive here, Marcelo. So we are very happy that Guatemala is receiving some competition from another country. Yes. It is extraordinary what the Paraguayan team is doing in terms of keeping the cost under control despite the fact that we are growing the top line.

Having said that, this also has to do with some one-offs. So we do expect more or less an uplift compared to last year in terms of margins in Paraguay, but it's not going to be at 56%. It might be more or less between 50% and 56%. So that will be the range expected.

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

25%.

Okay, 25 .

Our next question will come from Gustavo Farias from UBS.

2 on my end. The first one, I believe in the last conference call, you commented about hotel restructuring cost is in the triple digits millions of dollars for the year. And Q1 came in at $65 million. So if you could elaborate on if there's anything left what's your updated view on this line.

The second one on capital allocation. How could we think about the path of deleveraging going forward? And also, if you could update us on your current appetite, if any, for further inorganic moves?

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

So all in all, we do believe that Coltel is going to be a positive -- will have a positive effect in the EFCF, as Bart said, for the full year.

Yes. On the capital allocation and the debt, let me start with the debt. So you've seen our current leverage rates. If you think about Q2 we have the acquisition of La Nacion stake that a transaction that we announced and was closed. So we now fully own all of the different assets in Colombia. So that's adding to leverage because there's no incremental consolidated EBITDA, right? We're already taking that.

Additionally, there is the exceptional dividend. So that was paid in April. So Q2 might creep up a little bit just on the back of those 2 elements. And then we are still very confident that we will land around 2.5 at the end of the year. In your modeling, you might think about besides the very strong equity free cash flow that we have signaled. You might as well think about the currency impact -- we have dedollarized a lot of our costs.

So whatever happens here to go, either we're going to have more equity free cash flow and EBITDA uplift from stronger currencies or we're going to have less debt from weaker currencies. So somewhere, this is going to -- we feel we're in a very good position at this moment in time.

In terms of capital allocation, you may have seen the convenience notice for the AGM, so it's a shareholder decision. Ultimately, what we recommended to the Board and to the AGM is that would keep our dividend policy at $3 per share until we reach that $2.5. We explicitly mentioned an approval to be able to incremental dividends in case we come below the $2.5. And we also typically ask for 10% of equity in terms of share buyback as a general policy within Millicom.

So without doing any forward-looking statements, we do open the flexibility to do additional shareholder remuneration either in the form of dividends or in share buybacks by the end of the year, depending on how the leverage is trending -- in terms of inorganic growth, you heard me saying this every quarter that the focus is on execution.

And I hope that we demonstrated that execution. In Q4, we had Ecuador and Uruguay that we said, yes, we're already in run rate. We are ready in business as usual. Coltel in Chile are a little bit bigger. As you know, we go very deep into our analysis, if you analyze, I don't know, 1,000 towers in Uruguay, it's 10,000 towers in Colombia. So it's just the magnitude of the asset. But we also said we're very confident we see the transformation happening. And we're seeing assets being net contributors in equity free cash flow.

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

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

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

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

So for our guidance, I always say in our industry, we make the year in Q4 and Q1 and you get risks in Q2 and Q3. So I just believe it's too early to do any updates to the guidance as well as we're going to start now our forecast 1 efforts -- so we'll be in a good position at the end of Q2. So with that caveat out of the way, I do believe we have a very strong start of the year.

Last year, we had a number of one-offs -- in our numbers, both positive and negative. Remember, we are slightly above $900, excluding LAD, let's say, $865 million equity free cash flow -- and then we have, in that number, a number of one-offs like the DOJ settlement, like restructuring charges and weaker currencies. So all those are going very well for us this year. Currencies will be very particularly strong. One-offs seem to be covered by equity free cash flow generated by the acquired assets.

And so, while we saw more risk factors at the beginning of the year, things seem to be much more constructive. So very good start of the year. We just believe it's too early in the year to adjust guidance.

2 additional comments to what Bart just said. #1 is we're having strong tailwinds on currency. That is very difficult for us to predict, but it's somehow unprecedented the level of appreciation of the Colombian pesos and the Paraguay and Guaranies. The Bolivian pesos, it is very still volatile. So that's #1.

#2 is bear in mind that we have been operating Hotel as a separated entity until end of April. So we are really just 1 company from the first week of May. So we are still learning or -- what is the real potential to execute our playbook this year? And what will be the effect on the numbers.

So as Bart said, during Q2, we are going to feel much more comfortable to predict what's going to come for the year to go.

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

The first 1 is regarding Colombia. If -- I mean, I want to pick up on comment that the revenue growth is going to be -- continue to be strong. Is that for the Tigo asset? Or is that for the coal tar asset also? And what is driving the growth in Colombia at this point of time in terms of revenues?

The second one is regarding your CapEx outlook. Like how do you see that now that you have all the assets integrated? How do you see the CapEx outlook for the year and maybe in future years going forward?

Yes, Phani, I would take the revenue question and the CapEx question, maybe, and you can complement the rest, Mark. So the growth is -- the top line growth is coming from from the 3 business units. I mean mobile is growing very strong. You saw that 8 out of 10 new postpaid customers are coming from our prepaid base. Why is that working so well is because we are profiling better and better our prepaid base, and we are defining the sweet spot on how much ARPU and allowance each customer needs.

Additionally to that, so we are not forcing them to pay something they cannot afford or to buy something they will not use. Additionally to that, we are doing it very simple. I mean it's very simple to migrate from pre to post. It's literally 2 clicks, right? One is to accept the offer. Second, you just need to put your name and your data information. Everything is electronic, no bills, et cetera.

So that is creating a momentum and that same model we're going to apply to the Coltel prepaid base. The Coltel prepaid is adding 50% more prepaid customers. So as you can imagine, the runway -- I mean, the opportunity has expanded for us to implement our playbook. Second, in home we do believe that we can accelerate our FMC penetration because of the volume that Coltel is adding in home that is more or less the same volume we have in our existing base in Diego.

So that's also a second factor that's going to drive growth for the future. And #3, B2B is growing very well in both companies, on the Coltel side has to do with large corporations and Indio has to do with small. So it's totally complementary. We are going to apply the corporate model from Coltel to Tigo or let's say, we will merge -- and we are going to accelerate the small segment growth.

So the 8% that we are estimating is coming from different sources and very well, I would say, balanced. On CapEx, we are investing more in Colombia. We do believe that to compete with the main competitor with Claro there, we do need to strengthen our network. This year, we're going to expand our 5G coverage 4 times, so we're going to have 4x coverage of 5G, and we are going to launch or install develop, deploy 1,000 sites in the next 18 to 24 months.

That additional investment will not change the total envelope because what we are doing is we are refocusing the investment into what we believe is a network we need to compete in Colombia.

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

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

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

Our next question comes from Andreas Joelsson from DNB.

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

Thank you, Andreas. The first phase of our playbook and is the same playbook we applied 2.5 years ago in all the existing operations at that time is to reset all costs. And we do define a specific strategy or framework of investment. So for example, we don't believe that sponsorships are more important than stores. right?

So we focus on investing in stores, less sponsorship. We do review each and every purchase orders for not only Ecuador and Uruguay, but for all the other operations. So it's more or less like a 0-based cost operation. So you're always challenging the inertia. So when you are so focused on each and every spend also OpEx and CapEx, and then you start receiving very, very early results of practical savings because we are focusing on just 3 things: the network, the capillarity, the channels and our offers.

And everything else is a distraction. So basically, we put all the money where we do believe are the drivers for growth and all the rest -- it's not -- it's just eliminated from the equation. On the other hand, we simplified our operating structure. That's why we do the organization resizing, and that simplifies the way we operate and makes it easy to implement all these efficiency programs.

So additionally to that, I would say that there are other 2 factors. And it's -- we do have a very good negotiation framework with big suppliers and payment terms with big suppliers. That is something that we implemented in the existing perimeter, and we expanded to Ecuador and Uruguay. We do believe that the current EBITDA margin levels in Uruguay are sustainable.

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

So that will come a little bit down of what we have today.

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

Yes.

Perfect. So I don't get mixed up in frac.

Both are in dollars Andreas.

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

Thank you.

Thank you.

Hello, everyone, and welcome to our fourth quarter 2025 results call. This event is being recorded.

Our speakers today will be our CEO, Marcelo Benitez; and Bart Vanhaeren, CFO of the company. The slides for today's presentation are available on our website, along with the earnings release and our financial statements.

Now please turn to Slide 2 for the safe harbor disclosure. We will be making forward-looking statements, which involve risks and uncertainties, which could have a material impact on our results. On Slide 3, we define the non-IFRS metrics that we will reference throughout this presentation, and you can find reconciliation tables in the back of our earnings release and on our website.

With those disclaimers out of the way, let me turn the call over to our CEO, Marcelo Benitez. Marcelo?

Thank you, Luca, and good day to everyone. We closed 2025 with strong operational and financial performance and a clear top line acceleration. During the year, we successfully integrated Ecuador and Uruguay, expanding to 11 countries. This footprint diversifies our revenue base and supported robust sustainable free cash flow generation going forward. Two weeks ago, alongside NJJ, we expanded further to Chile, our 12 markets, which we will address further in the sections that follow.

In addition to the expansion to Chile, we have moved quickly to stabilize and integrate the newly acquired business in Uruguay and Ecuador. On the first day of the acquisition, we appointed a new General Manager, a new CFO and a new CTO. Within the first week, we redesigned the executive team and their direct reports. And within the first month, we applied our playbook with discipline, including 30% reduction in headcount. I'm pleased to share that today, we already consider these operations business as usual, reflecting the speed and effectiveness of our integration approach.

Turning to our operations. Our pre-to-post strategy continues to deliver. We added more than 200,000 postpaid customers in the quarter and 1.8 million customers if we include Ecuador and Uruguay. This is not just growth. It's a structural upgrade of our postpaid base. We also made meaningful progress in Home, adding 40,000 net new homes, reinforcing our ambition to be a full mobile and fixed operator across the region.

Financially, execution translated into results. Adjusted EBITDA reached $778 million for the year. EBITDA margin stood at a strong 47%. We delivered $278 million of equity free cash flow in Q4, taking full year eFCF to $916 million or $864 million, excluding tower sales proceeds. This performance exceeded our guidance even after absorbing onetime impact such as DOJ and other legal settlements.

As we close 2025, I want to recognize our Tigo team. Thank you for an exceptional year. This was not easy. We integrated new markets, accelerated growth, strengthened cash flow, all while maintaining financial discipline. This combination only happens with focus, teamwork and ownership across the organization. Because of your work, we entered 2026 stronger, more diversified and with a real momentum. Thank you.

Now let's move to our Mobile business. The engine is strengthening, and Mobile delivered another strong quarter. Service revenue totaled $954 million, including $112 million from Ecuador and Uruguay. Excluding perimeter effects, mobile service revenue grew 5.7% or $43 million year-over-year, a clear acceleration.

This performance reflects disciplined execution across 3 core strategies: network investment. We continue to deliver the best connectivity experience through a disciplined deleveraging strategy and highly granular return-focused CapEx allocation. Our investments are targeted where they create measurable impact to customers and drive long-term value. Second, pre- to post migration. Postpaid customers reached 9.1 million, up 12.6% year-over-year when excluding the perimeter expansion. Only 22% of our 49 million customers are postpaid. The runway remains long. Third, prepaid base management. Revenue grew 3%. We are preserving scale through strong commercial execution and increasing ARPU with a simple, easy-to-understand more-for-more value proposition.

Now let's move to our Home business. During the quarter, we added 40,000 home customers, and our Home customer base increased 5.1% year-over-year. We are focused on expanding high-speed broadband to low penetrated areas while accelerated fixed mobile convergence, which delivers materially lower churn versus non-FMC customers. As a result, Home service revenues declined a marginal 0.3% year-over-year, marking a second consecutive quarter of essentially flat performance. Given our ongoing commercial efforts and simplified pricing strategy, we are confident in a return to home revenue growth in 2026.

Next, I will review our B2B business. Digital service revenues increased 40.7% year-over-year to $79 million in the quarter, excluding the perimeter expansion. This growth reflects a combination of onetime government projects in Colombia and Panama, alongside strong underlying momentum in our digital portfolio. Beyond digital, we continue to see solid performance across the broader B2B segment.

Mobile service revenues growth in B2B was 7%, while the SME segment is accelerating, reaching 5% growth after starting the year with low single-digit growth. Overall, this demonstrates improving execution, stronger commercial traction and increasing relevance of our digital solutions across enterprise customers.

Let's turn to Guatemala, our best-in-class operation. Postpaid grew 20% year-over-year. Mobile service revenue increased 5.9%. Operating cash flow grew over 17% in the quarter. Full year operating cash flow reached a record of $791 million. Even from a leadership position, the team continues to excel in performance, outstanding execution. Congratulations to the Guatemala team.

Colombia is another clear success story. We delivered strong results across all business lines with postpaid mobile and home customer bases, both expanding 10% year-on-year. Our value proposition of best-in-class mobile coverage and broadband speeds continue to drive share gains and monetization. In line with this momentum, service revenue growth increased 6.9% year-on-year and adjusted EBITDA reached a record quarterly margin of 44%. This is a remarkable outcome given the fragmented nature of the Colombian telecom market. My thanks go to the Colombia team for delivering such strong results.

As recently announced, we have acquired EPM 50% stake in Tigo UNE and now own 100% of our Colombia operation. With full ownership, we are well positioned to consolidate our market presence and further optimize our operations. This also places us in an excellent position to begin the integration of Coltel, a strategic initiative on which I will share more in a moment.

Turning to Panama. We see encouraging signs of top line acceleration. Our postpaid customer base expanded 14.6% year-on-year and mobile service revenue grew 4.5% year-on-year, reaching $84 million in the quarter. On the right side of the slide, you will note that adjusted EBITDA reached $94 million or 49.8%, primarily due to several onetime items that impacted Q4 profitability. Panama remains in our Club 50 in full year performance, and we are confident that they will remain so in 2026.

Before handling the call over to Bart, let me update you on our key strategic projects. As noted earlier, our Colombia operation is performing at its best, setting a strong foundation for market consolidation. As announced in February 5, we acquired 2/3 stake of Coltel from Telefonica, gaining operational control. Our management teams are already on the ground, taking initial steps to strengthen the business. Regarding the 33% stake from La Nacion, as you know, there is a formal privatization process with a time line that sets the potential closing of the transaction for La Nacion stake in April 2026.

On February 10, we announced a transaction with NJJ to acquire Telefonica operations in Chile, a strategically important balance sheet protected move for Millicom. Together with NJJ, we are acquiring 100% of Telefonica stake in its Chilean business through a joint venture vehicle with NJJ acquiring 51% and Millicom, the remaining 49%. The upfront payment is $50 million. Telefonica may receive up to $150 million in earn-out considerations, fully funded by the acquired company's own cash. None of the transactions obligations, including existing debt, are recourse to Millicom. At closing, Telefonica also contributed approximately $92 million to ensure balance sheet stability. This structure allows us to strengthen the business from day 1 and provides a clear path to full ownership.

In years 5 and 6, we have the option to acquire NJJ's stake at a valuation based on Millicom trading multiples less a 10% discount. If we do not exercise, NJJ can acquire our stake on the same terms. This creates a meaningful long-term upside with limited upfront risk.

Chile is a sophisticated market with clear operational upside. Applying our proven playbook, we see a path to stabilization and performance improvement. This transaction expands our South America presence while preserving flexibility and leverage discipline.

With that, let me turn the call over to Bart.

Thank you, Marcelo. Let's now take a deeper look at our financial performance for the quarter and the full year. Service revenues for the quarter reached $1.55 billion, up 15.9% year-on-year. Excluding $131 million contributions from our newly acquired operations in Ecuador and Uruguay, service revenues increased 5.2% year-on-year organically. We are very pleased with this performance. It's a direct result of our strategy, delivering the best network experience, maintaining a commercial focus on the pre to post migration and fixed mobile convergence. These efforts continue to reduce churn and support healthy ARPU expansion.

At the same time, a little word of caution. We have $16 million in B2B government projects in Panama and Colombia, boosting revenues this quarter but are not necessarily recurring in nature. Adjusted EBITDA for the quarter increased 25.9% year-on-year, reaching $778 million, representing an EBITDA margin of 47.1%. Here again, Ecuador and Uruguay contributed meaningfully, adding approximately $45 million to adjusted EBITDA. Excluding this effect, adjusted EBITDA still grew 18% year-on-year to $732 million.

Three key factors drove this robust year-on-year improvement. One, outstanding operational performance, particularly in Colombia, Guatemala and Paraguay; two, relentless focus on margin enhancement, both in our local operations and across HQ expenditures. three, positive FX impacts, which for the first time in 2025 supported EBITDA growth.

Finally, equity free cash flow grew $139 million or 17.9% over the last 12 months, reaching $916 million. Excluding infrastructure sales, we reached $864 million equity free cash flow this year, which is a number we measure ourselves against. As Marcelo highlighted earlier, we are proud to have exceeded both our own guidance and market expectations despite currency headwinds for much of the year, particularly in Bolivia alongside $118 million DOJ settlement and other cleanups as disclosed in our Q3 results. With favorable currency evolution, including in Bolivia, this positions us very well for the entry point of 2026.

Let me now turn to service revenue performance by country. I will briefly reference Guatemala, Colombia and Panama, as Marcelo already addressed the main dynamics. Guatemala delivered solid growth with stable market share in our strongest market. Colombia, exceptional commercial execution and favorable FX tailwinds produced an outstanding year with Home business now contributing to growth. We are excited and ready to execute on the upcoming in-market consolidation opportunity. Panama returned to solid growth, up 4.9% year-on-year, supported by an expanding postpaid base as well as some one-off governmental projects mentioned earlier.

Paraguay, revenue growth was flat year-on-year in constant currency but reached $154 million for the quarter in real USD. Underlying, though, we have real growth driven by postpaid subscriber growth and ARPU increases, which were offset by one-offs that benefited Q4 2024, without which we would have seen a 2% organic growth.

Bolivia service revenue returned to triple-digit territory for the first time in 2025, up 5.5% year-on-year to $105 million. The Boliviano has strengthened significantly since the elections and shows signs of stabilization in Q4 of this year. We are now converting Bolivianos to USD around 9 Boliviano per USD. In the other countries, which includes Ecuador and Uruguay for this quarter, in addition to Costa Rica, Nicaragua and El Salvador grew 6% organically or 69%, including inorganic growth.

Let's now turn to the next slide, reviewing EBITDA. As highlighted in my opening remarks, we are very pleased with the strong profitability delivered this quarter with group adjusted EBITDA reaching a robust margin of 47.1%, including below average margins coming from Ecuador and Uruguay that include restructuring costs. As shown on Slide 16, all of our major operations contributed to this performance, each delivering meaningful year-over-year margin expansion.

Let's now review the performance of each country in more detail. Our strongest operation, Guatemala, reached $241 million in adjusted EBITDA for the quarter, up 11.3% year-on-year in local currency, driven by improved revenue performance, particularly in postpaid and continued disciplined cost control. Colombia delivered another exceptional quarter with adjusted EBITDA reaching a record $174 million, up 24.6% year-on-year. Strong postpaid ARPU and disciplined cost management leave this operation in an excellent shape as we assume control of Coltel. Two points of attention here.

One, we expect the margin to come down in Q1 due to material increase in minimum wages by the government; and two, although having control over Coltel, we expect to run the company a couple of months independently until we buy out the government. This is expected for April, assuming the time lines of the privatization process doesn't change.

In Panama, adjusted EBITDA grew 4.5% year-on-year, reaching $94 million, benefiting from the revenue momentum mentioned earlier. Paraguay reported another strong quarter with adjusted EBITDA up 11.8% in local currency to $83 million and a margin of 52.1% we are encouraged by this margin expansion as we keep costs in check while our customer base continues to grow.

In Bolivia, FX rates stabilized during the fourth quarter, combined with disciplined ARPU growth and strong cost control, leading to a margin of 53%. This places Bolivia as our newest and sixth member of our Club 50, which is our countries with an EBITDA margin above 50%. Congratulations to the team for this outstanding result. And as Marcelo says, a very exclusive club where you can get in but never get out.

Turning to other countries. Excluding the new operations in Uruguay and Ecuador, adjusted EBITDA in Nicaragua, El Salvador and Costa Rica increased 13.1% to $106 million. The new operations contributed $45 million to our EBITDA even as we began initial headcount-related efficiency programs. In Q3, we told you that we focused on solving a lot of the corporate matters with settlements with DOJ, Telefonica, getting our 2026 budget so that in Q4, we could concentrate on the business, the entry point of 2026 and the integration of Uruguay and Ecuador.

As Marcelo mentioned in his opening remarks, we hit the ground running and captured efficiencies from day 1. Are there more low-hanging fruit compared to other countries? Sure. But I was just looking at preliminary unaudited adjusted EBITDA numbers for January and was very pleased to see both countries already achieving mid-40s adjusted EBITDA margin levels.

Let's now turn to Slide 17 for a review of our fourth quarter equity free cash flow. We began the quarter with strong operational momentum, resulting in a $163 million year-over-year uplift in adjusted EBITDA. This was the single largest contributor to our equity free cash flow expansion for the period. Working capital and other payments decreased by $94 million year-on-year, largely driven by $180 million DOJ settlement we disclosed during our Q3 results in November. This extraordinary impact was partially offset by favorable timing in payables. Taxes paid increased $33 million consistent with higher profitability across the group and the settlement of certain tax litigations during the quarter. As expected, lease payments increased $48 million year-on-year, reflecting the full quarter impact of our tower sale and leaseback transaction as well as the incremental leases from our newly acquired operations in Ecuador and Uruguay. Finally, we recorded a $30 million increase in repatriation from our joint venture in Honduras following the infrastructure transaction. Putting all these items together, equity free cash flow increased by $42 million year-on-year, reaching $278 million.

Now please turn to the next slide for a look at our equity free cash flow and leverage for the full year 2025. I won't go over each of these points individually, and I will simply highlight that most of the improvement came from a mix of higher EBITDA for $284 million, lower spectrum charges for $63 million and about $74 million in finance charges. These effects were partly offset by an increase in taxes paid of $96 million that included settlements, cash CapEx increase of $82 million and working capital and other charges of $75 million. In summary, for the year, equity free cash flow increased $139 million to $916 million or $864 million, excluding Lati, our strongest performance to date.

Let me now walk you through the net debt bridge and resulting leverage at year-end. We began the quarter with $4.6 billion in net debt, corresponding to 2.09 leverage as disclosed in Q3. We generated $278 million equity free cash flow in the quarter, and we received the cash proceeds of $236 million from tower sales executed at the end of Q3. During the quarter, we distributed $0.75 per share in ordinary dividends and $1.25 per share in extraordinary dividends tied to the tower sale proceeds. In total, we distributed $334 million to our shareholders, increasing leverage by 0.14.

Adding the operations of Ecuador and Uruguay increased our leverage by approximately 0.35. Bringing these factors together, quarter end leverage was 2.31, comfortably below our target of below 2.5. even after absorbing the additional perimeter. This is a remarkable achievement. Lastly, on a pro forma basis, including last 12 months adjusted EBITDA from Uruguay and Ecuador, leverage would have been 2.17. This reinforces our confidence that we will reduce leverage further as we enhance profitability in the acquired operations.

Let's now have a look at our financial targets. We are extremely proud of our 2025 results, which reflect both operational excellence and disciplined financial management. Our regional footprint continues to provide important diversification benefits, enabling us to offset volatility in individual markets, such as the FX devaluation in Bolivia this year through the performance of the broader portfolio. That said, we operate in Latin America, a region known for macro volatility, and we must factor in stabilization needs of Ecuador, Uruguay and the Coltel acquisition in Colombia.

For 2026, we project an equity free cash flow of at least $900 million. Regarding leverage, we expect our leverage to increase a bit on the back of the different acquisitions in Colombia. We had about $570 million for the 50% stake in Tigo Colombia acquired from EPM. This is about $170 million more than anticipated due to FX, with about $220 million from the acquisitions of Telefonica shares in Coltel, and we expect another $220 million from the acquisition of La Nacion shares in Coltel. With all that, we see our leverage increase a little more than anticipated in the first half of 2026. But then in the second half of the year, we expect to bring leverage down again to around 2.5 by year-end to then land within our guided range of 2.0 to 2.5 in 2027.

With that, let me turn the call back to Luca.

We'll now begin our question-and-answer session. As a reminder, if you would like to ask a question, please let us know by e-mailing us at [email protected] and we will add you to the queue.

Our first question of the day comes from Leonardo Olmos from UBS. I think Leonardo has some technological issues. Since Leonardo has been able to ask his question, please continue with Livea Mizobata from JPMorgan.

Leonardo?

So 2 on our end. So the first one, regarding the acquisition of the operations in Chile, I just wanted to know your view on the current competitive environment and how you assess the operational and balance sheet conditions of the asset that you bought from Telefonica. That's the first one.

And the second one, just a quick -- maybe more color on what is embedded in this equity free cash flow guidance for this year, especially regarding the impacts from the ongoing integrations.

I will take the first one, Leonardo, and I will let Bart answer the second one. First of all, it's a luxury for us to be in Chile. Chile has a very strong macroeconomics, dollar stability -- currency stability and also it's an investment-grade country. So we do believe in the long-term prospect of Chile. If we go to the competitive environment, yes, it is a very fragmented market. We are nevertheless #1 in Home subscribers and our position in Mobile is #2. So we do believe that there is we can forecast long-term or midterm market consolidation but that is not the main reason why we got in Chile. Our playbook fits very well to the Chilean operation, and we are getting very good at executing it.

In just 2 weeks, we appointed a new CEO, a new CTO and a new CFO. Then we -- in the first week, we appointed the [indiscernible]. And as we speak today, we are executing the downsize of the Chilean operation. So despite the fact that we are losing money every day in Chile today, we do think we can bring the operation this year to equity free cash flow neutral and from then, start looking and receiving the benefits of a new run rate with a new operating model. So that will be Chile.

Bart?

For the equity free cash flow, Leonardo [indiscernible]. So we have, on an organic basis, $864 million equity free cash flow, right? So many people will add the $180 million for the DOJ that is embedded in those costs, $980 million, right, the 2 combined. And then going into 2026, we have Uruguay and Ecuador contributing a little bit to the equity free cash flow starting in the year. You can estimate low to mid-double-digit equity free cash flow from the 2 countries combined. So with that, you get to $1 billion starting the year but then you have to put a number of risks next year. The big one is Coltel. And also we did acquire Coltel now just a couple of weeks ago, which is on a negative run rate equity free cash flow, right? So we know how to turn around that business. We have done it in Colombia with our own Tigo business.

But then you also have the restructuring costs and the acquisition that -- so all that together should be close to zero but there are risk on the execution if you go into the negatives. Besides Coltel, you get currency risk and macro risk in Lat Am, it's inherent to our region. Look where we started the year, where we are now, it's -- the good thing is we have now a platform that is diversified and can weather some storms. But it's risk that we need to take into account political risk, tax risk, legal risk but also upsides. We're starting the year with a very favorable currency. Will it sustain during the year? We don't know, but it's a good start, and then we could have extra growth. So all that together is how we get to this $900 million balanced view on equity free cash flow for 2026.

Maybe in the same trend, we're not giving guidance beyond 2026, if you look in the medium term, we do hope that Uruguay, Ecuador and Colombia will align to the average equity free cash flow to revenue and profitability, which is this year around 15%. And so in run rate, that's why they all should converge to. That's our ambition, right? So on the $2.2 billion acquired revenue, 15% equity free cash flow would be a good ambition to have.

Just a quick follow-up, if I may. You mentioned the equity cash flow impact expected for Colombia -- from Coltel, I'm sorry. What about the operations in Uruguay and Ecuador, if you could comment on that.

I mentioned at the beginning. So for 2026, low to mid-double-digit equity free cash flow.

Thank you. Our next question comes from Livea Mizobata from JPMorgan. Livea?

So I have 2 topics that I would like to explore. The first one is, of course, margins. You have had consistently raising margins, have been consistently raising margins. And I feel like fourth quarter was like remarkable on that front. So congrats on that.

The first thing that comes into our mind is how sustainable is that? And particularly, I would like to touch upon some operations. So the first one is Colombian operation. This has been particularly strong. So it was way above our expectations. And what we would like to know is like what have been done in this operation, particularly this quarter and what we can expect in 2026, given the deal process? And I would also like to know a little bit about your expectations for Ecuador and Uruguay, if the fourth quarter level is a good proxy for 2026.

And then the second topic that I would like to ask you about is M&A, of course. So 2025 was an intense year. Something that we often receive as a question from investors is if Tigo would be willing to go to new countries and the ones that they always ask us about is particularly Brazil, Mexico, Venezuela and even Argentina now. So can you comment a little bit about your appetite for acquisitions? How are you thinking about capital allocation for this year given the recent moves?

Thank you, Livea, for your questions, and thanks for your kind comments about our results. I will start with the margins question. So basically, the margins increase or expansion that we see that is consistent during the quarters has to do with 2 things. Number one is because our efficiencies programs are not onetime. These are part of our operating business. Still, we review every purchase order from $1. Still, we challenge each and -- every and each new contract. So our battle is against the inertia, and that's how we operate on a day-to-day basis. We can add that now -- we can add to that now the top line growth. As you can -- as you -- maybe you recall, we started the year with 0 top line growth, and we ended the year around 5%, a bit more than 5% growth. So that is bringing us more scale and also that scale is translated in a better operating leverage.

If I -- when going to Colombia, when we talk about margins in Colombia, it's more or less the same story but in a larger volume. We are growing our mobile base and our home base by 10% year-over-year. So this expansion of our top line -- our customer base and top line growth is bringing us new scale, combined with the efficiency program that I already mentioned is what is translating into better margins. Where do we see Colombia is this sustainable and increasing in the future? The answer is yes. Of course, during the merger, you have some -- you need to transition through the integration and that brings some extra cost. But there is no reason why in Colombia, we cannot -- that Colombia cannot be part of our Club 50.

And finally, Ecuador and Uruguay, we already are operating Ecuador and Uruguay as business as usual, and we already did a lot of the efficiencies that we call the efficiencies Phase 1, the one that we need to do the first 60, 90 days. We already did that last year. We start -- we took these operations with around 30% margin. We are above 40% already in these 2 countries. So we do believe this is absolutely sustainable. There is still a lot to do in the Phase 2 of these efficiency programs, and we should start looking at top line growth at the end of this year. So in 2027, we will have the full benefit of our playbook. But the Phase 1 that has to do with efficiency, we are looking at it right now.

And I think on the back of what Marcelo said, you see that quarter-on-quarter, the growth has been accelerating. So hence as well the operational leverage that comes from that through the margins down to the equity free cash flow. If we look at the M&A, so bigger picture, right, what's our M&A strategy? What are we looking at? Now first of all, we're focused on turning around the businesses that we acquired, right? So it went really quick. In Q4, we already did Uruguay and Ecuador, as Marcelo said, they're now on run rate in business as usual. We have now Coltel and Chile to deal with. So that's our main priority.

If we look at the M&A strategy, first has always been in-market consolidation, right? And over the last few years, we did Panama, Nicaragua and now Colombia. And many of our markets are not 2-player markets with not a lot of immediate consolidation targets in the remaining. There are still 3 or 4 players in Costa Rica, but has been difficult to do something as our last transaction got canceled. Salvador, Paraguay and Uruguay, which are still 3 or 4 player markets. Adjacent markets, right? So we did Uruguay, Ecuador and now Chile. And what are the main sizable markets that remain would be Venezuela and Peru, basically, right, on the continent.

I'm deliberately excluding Mexico and Brazil. It's not market for us. It's too big, too complicated. It's not something that we have immediately on the radar to enter. And as well Argentina, where the dice are already thrown, right? So the M&A already happened last year. There's nothing to go and do there. So the focus on adjacencies would then be mainly Peru and Venezuela should they when they come to the market.

And then obviously, minorities. We did already Guatemala. We did already Panama. We did now Colombia. So what is remaining is Honduras. In Honduras, I kind of like to have a partner. It hedges us a little bit against the currency. Honduras, the lempira is one of our most volatile currencies this year next to the Boliviano. And then in Chile, we just did a JV. So we're thinking there more longer term. As you know, we have this option in year 5 and 6. So that's more a longer-term discussion to have.

That's very clear. And just back on the point of margins, I think soon we will stop discussing the 50 clubs and it will be the 60 clubs, right? Like from the level that you are delivering, this is totally achievable, I guess. Let's see.

Thank you, Livea. The next question comes from Andreas Joelsson. I see he just dropped. Maybe let's give him another second if he reconnects. There he is. So next question from Andreas Joelsson from DNB. We cannot hear you, Andreas. Let's see. No, we -- unfortunately, we don't have any audio on your side, Andreas.

Maybe let's give it another try later on. If we can then continue with Phani Kanumuri from HSBC, please.

So my questions are on your shareholder remuneration. How are you looking at it in the light of the acquisition charges that you have?

The second one is on Guatemala. We are seeing a strong increase in subscribers as well as accelerating revenue growth. What is driving that? Are you able to increase the prices in Guatemala in specific?

And probably the third question is on the appetite for postpaid in your region. I mean the countries that you operate in are still very highly prepaid. So what is driving the increase and upgrade to postpaid in these regions? So those are the 3 questions.

You take the second one. Sorry, first question revenue growth, appetite for postpaid.

I can take that and you take the dividend. So Revenue growth in Guatemala was the first question, Phani. Guatemala is our most, I would say, it's the example we have of excellent execution, brilliant execution. Guatemala started the process of pushing customers from prepaid to postpaid. They are growing that at a 20% month-over-month. They have only 12% of postpaid customers over the total customers. So the run rate -- the opportunity to expand is big. The other dimension is we invested in the network. So we have a very, very strong mobile network in Guatemala. And also, we expanded coverage. We have more than 200 sites with a vision of having at least 500 aggregated new sites in Guatemala.

And finally, there is a very, very sharp base management in prepaid. So prepaid for the first time, we are being able to increase ARPU by increasing allowances and the size of the ticket. So in that combination, yes, the foundation is a solid network with a very granular dimensioning and way to allocate CapEx, migration from prepaid to postpaid at a rate of 20% quarter-over-quarter. And finally, prepaid base management. And this is brilliant execution from the Guatemala team. And congrats again, Guatemala. You are our north in terms of how to operate and become and open the Club 60 in the very near future.

What is behind the migration from prepaid to postpaid? And this is very simple to understand, Phani, when you think -- when you see that the prepaid customer is only connected 15 days per month. Who wants to be connected only 15 days per month? So what are the drivers that makes this migration to accelerate in the group, I would say, in all the operations and has to do, number one, with the network investment and with this granular view on where to put the money is where the demand is. Number two, has to do with a very simple migration process, and that has 2 key elements. One is a very simple value proposition. We have no more than 3 to 4 plans to migrate prepaid customers to postpaid customers.

And the second part is it has to be easy. Now you can migrate from your phone from prepaid to postpaid with 2 clicks. That's it. We are already profiled you. We already know that you are -- you have -- I mean, you are using -- your demand for data is higher than the allowance that the prepaid gives you. So they just need to put their names, names, some data and then you are activated. So these are the things that are making this migration a machinery to increase customer satisfaction, more days connected and more ARPU.

So Bart on dividends?

Yes. So we are not giving guidance on dividends. So that's maybe an unfortunate question. But let me give some color on how we're thinking about this. I think I mentioned before that I'd like to distribute 2/3 of the equity free cash flow to shareholders. In 2025, this has been in the form of dividends and extraordinary dividends. And so yes, we go from $750 million guidance to $900 million guidance equity free cash flow. There is 20% uplift. But at the same time, I'm also triangulating with our net debt, right? And so on the back of these acquisitions, we're going to appear through temporarily through this 2.5x leverage. So ideally, I want to see the leverage come down again before really touching too much on the dividend. So sustain yes, grow is the question. So sustain yes, grow maybe.

So give us a few more weeks until we get better views on the risk regarding to Coltel, how do we land, how do we executing against the current guidance? And then within our Q1 results, we'll give more color. There will also be around the time we have to call for the AGM. And so it will be more clearer in a few more weeks. So a little bit of patience on that.

Thank you very much, Phani. Let's see if we can give Andreas another shot on his questions. If the audio doesn't work, I believe I have a good idea...

Yes, we test. Can you hear me?

Yes, loud and clear.

Perfect. Two quite easy questions from my side. First of all, how much restructuring are you planning to do in 2026 in terms of costs? And secondly, if you can explain a little bit the quite good growth -- sequential growth in mobile ARPU during the quarter. I guess there is some FX element, but also there must be something else underlying. So it would be interesting to hear that and your thoughts on that going forward as well.

Thank you, Andreas, for your question. I will take the second one, and Bart will take the first one. So on the second one, what's behind the ARPU increase? 50% of the ARPU increase comes from the positive or the currency appreciation of our countries. 50% of that comes from 2 things. One is pre to post migrations. So that is an uplift of ARPU more or less of 50% and ARPU price increases in prepaid through a very simple value proposition of more for more and give you more days connected or more allowances for a higher ticket. So those are the 2 things that organically are making the ARPU growth.

Yes. Regarding the restructuring costs, so far in Uruguay and Ecuador combined, we did about $20 million in 2025, and that then mostly relates to ERC restructuring. In 2026, I'm then looking more towards Coltel rather than Uruguay and Ecuador. And there, we probably are looking towards -- with all the restructuring that needs to be done there, more towards a triple-digit number to really to get the business back to a run rate that we are used to.

Perfect. And just a follow-up on the ARPU. That growth that you related to, was that sequential or year-on-year?

No, no. The growth is year-on-year. But also, you can see a sequential growth quarter-over-quarter but it's not 5%, 4.7%, I think it's ARPU growth.

Thank you very much, Andreas. And our final question of the day will come from Eduardo Nieto from JPMorgan.

Just a quick one from my side. Thinking about the pending payments for M&A, it seems like most of it will be 1Q but I'm just curious where you see leverage peaking this year? And at what level kind of related to the question that Phani asked, at what level would you be comfortable stopping dividend payments if leverage gets a little bit higher than you would expect?

So payments on M&A. So Q4, we did Ecuador and Uruguay done, right? In Q1, we have the $570 million from the purchase of the EPM held shares in our Tigo operation. And we also have $220 million out of which about $60 million is deferred for the acquisition of the Telefonica shares in Coltel. So that's all done in Q1. And then as you saw, the minimum price in the privatization process done by La Nacion for their stake in Coltel is also about $220 million and that we expect in Q4, okay? Remember that we also have extraordinary dividends coming into Q4 of another $1.25 per share, which was part of the $2.50 that was announced last year payable in October and [indiscernible] 50%.

So with that, yes, our leverage is going to increase in the first half of the year. So we're going to pierce through that 2.5x leverage. But then in line with the guidance, we hope by end of the year to be back around 2.5. And then in 2027, again, comfortably within the 2.0 to 2.5 range, in line with our policy. cutting dividend is not on the radar at all. We've been quite accurate with our forecasting. So at this moment, it's not even on the table. We're looking at sustaining it and potentially growing over time as our leverage comes back below the 2.5.

Got it. And just maybe a quick follow-up. You asked, is there a level at which leverage would make you uncomfortable as CFO here?

Well, any leverage makes me uncomfortable if you ask me but not uncomfortable but you want to have a strong balance sheet to be able to do things. And we have now been able to do things, thanks to our strong balance sheet. We add 4 operations in 1 year and also Uruguay, Ecuador, Colombia. And as you saw, we did some structuring around Chile exactly to protect the balance sheet. Do I believe we're going to do really good in Chile? Yes, absolutely. But I also don't want to bet the house on that. And so we said, okay, let's put a nonrecourse structure, 49%, we don't consolidate, let us do our work. And hopefully, we're talking about upsides in the future and not about risks on the balance sheet.

So I think we're at the leverage where we feel comfortable, including the Coltel acquisition. And from there, I want to see deleveraging before doing other stuff on balance sheet.

Thank you very much, Eduardo. That was our final question for today and concludes the question-and-answer session. Thank you so much for your time and for connecting, and we see you all for our first quarter results in May.

Thank you.

Hello, everyone, and welcome to our third quarter 2025 results call. This event is being recorded. Our speakers today will be our CEO, Marcelo Benitez, and Bart Vanhaeren, CFO of the company. The slides for today's presentations are available on our website, along with the earnings release and our financial statements.

Now please turn to Slide 2 for the safe harbor disclosure. We will be making forward-looking statements, which involve risks and uncertainties and which could have a material impact on our results. On Slide 3, we define the non-IFRS metrics that we will reference throughout this presentation. And you can find reconciliation tables in the back of our earnings release and on our website.

With those disclaimers out of the way, let me turn the call over to our CEO, Marcelo Benitez.

Good morning, everyone, and thank you for joining us. This has been another strong quarter for Millicom. Before we begin, I want to express my heartfelt appreciation to all members of the TIGO team. Your dedication and purpose-driven execution are at the heart of these results. Once again, thank you. .

In the third quarter, we accelerated top line growth while maintaining strict cost discipline. This reflects the consistent execution of our EE strategy, delivering the best customer experience with maximum efficiency. We also advanced on our strategic agenda completing the Uruguay and Ecuador acquisition and closing the SBA tower transaction. Three milestones that strengthened both our balance sheet and regional footprint.

Organically, service revenue grew 3.5% year-over-year, supported by mobile subscriber growth and ARPU expansion in prepaid. Most importantly, we remain firmly on track to deliver our $750 million equity free cash flow target for 2025. Let's now review the key milestones from the quarter. Our relentless focus on commercial execution continues to deliver solid results, both in consumer segment and in the business segments.

On B2C, we are nearly 250,000 postpaid mobile customers and about 60,000 new home subscribers. In B2B, the momentum remains strong. I'll touch on that shortly. Thanks to the discipline in capital allocation and operational efficiency, we delivered record profitability. Adjusted EBITDA reached $695 million, with an all-time high 48.9% margin. This translated into equity free cash flow of $243 million. We closed the quarter with net leverage of 2.09x or 2.33x, excluding the infrastructure sale. We remain fully committed to maintaining leverage below 2.5x even as we integrate Ecuador and Uruguay in Q4.

Let's now look at performance by segment and geography. Our mobile business delivered its strongest organic growth since 2021, with mobile service revenue up 5.5% year-over-year. Growth was driven by ARPU expansion in prepaid as we align pricing with inflation and by steady migration from prepaid to postpaid. Our postpaid base grew 14%, reaching 8.9 million customers while prepaid volumes remained stable. These results demonstrate the strength of our commercial model, focused on delivering the best network experience, focus on channel productivity, free to both migration and fixed mobile convergence.

Turning to our home business, our second largest segment. As we mentioned a moment ago, we added 60,000 new customers up 5.4% year-over-year, supported by our convergence strategy, which bundles multiple services under one plan. This approach enhances customer value and keeps churn in the low single digits. Home Service revenue was essentially flat year-over-year, a marked improvement from the nearly 5% decline a year ago. The strong foundation built in recent quarters positioned us for positive revenue growth on the next quarter.

Please turn to the next slide for a review on our B2B business. Our B2B segment continues to gain momentum. Service revenue reached $231 million, up 5.3% year-on-year in Boston Foresi. Small business clients grew 10%, totaling over 400,000. Our digital services remain a key growth engine. Revenue rose 10%, led by cloud, cybersecurity and SD-WAN growing around 35% year-over-year. In short, B2B is scaling profitable and remains a compelling growth platform for Millicom.

Let's now review our performance in our largest market in Colombia. Colombia delivered another strong quarter. Postpaid customers rose 12% year-over-year, while prepaid also grew. In Home, customers increased 12%, reaching 1.6 million HFC and FTTH connection driving home service revenues up 5.7%, a full turnaround from 2022. Overall, service revenue grew 6.5% and EBITDA margins expanded 447 basis points to 43.5%. This demonstrates how profitable growth is now firmly embedded in our Colombia business.

Turning to Guatemala, we continue to pretend exceptionally well. Guatemala continues to set the bar for operational excellence. Postpaid customers grew 20%, driving mobile service revenues up 4.6%. Exceptional efficiency led to operating cash flow growth of 22% year-on-year, reaching a record of $204 million, a remarkable achievement.

Please turn to the next slide to look at Panama. In Panama, postpaid customers grew 15%, supporting 7.1% mobile service revenue growth. We achieved our record EBITDA margin of 52.2%, underscoring Panama's position as one of our most efficient

operations. Let's now turn to Slide 12. We are very proud to have completed acquisitions of Uruguay and Ecuador, 2 countries that share our purpose of connecting people and driving digital progress across Latin America. These acquisitions broaden our footprint to 11 countries and enhance earnings quality through greater scale and macroeconomic stability.

Uruguay adds 700 cell sites, 33% market share and $246 million in annual revenues, with $93 million of adjusted EBITDA. Ecuador brings approximately 2,500 cell sites, 30% market share generating almost 490 million in revenues and 161 million in adjusted EBITDA. With these 2 additions, we integrate an investment-grade country, and a dollarized economy into our portfolio, enhancing stable cash generation and unlocking meaningful synergies through original scale. We're energized by these opportunities. They strengthened our position as the leading pure play telecom operator in Latin America.

Before we move on to the financials, I'd like to take a few minutes to update you on where we stand with our strategic projects and legal matters. First, as we shared last quarter, we've now completed the sale of our tower companies in El Salvador and Honduras. The latter tower transaction totaled about EUR 975 million marking a successful conclusion of our infrastructure monetization plan. With this, we've achieved what we set out to do and local value for our stakeholders and stay fully focused on what we do best, delivering connectivity.

Turning on to Costa Rico, I am pleased to share that we've settled our long-standing litigation with Telefonica. This was related to the 2020 acquisition at time. This brings important closure and allows us to move forward with clarity and focus. Separately, the Costa Rico regulator has decided to prohibit our proposed combination with Liberty Latin America that we announced on August 1, 2024. Sutel is concluding that the potential competitive effects could not be adequately mitigated by the remedies proposed by the parties or by any additional conditions that Sutel. This decision was unexpected as both parties have engaged extensively with Sutel throughout the review of the process to develop a set of commitments that we firmly believe addressed any potential concerns. We respectfully disagree with this decision. And for this reason, we have filed a formal appeal on October 22 and we'll continue to pursue all available options.

We remain confident that the transaction will deliver meaningful benefits to customers, enhance competition and contribute positively to Costa Rica's digital development.

Now regarding the ongoing DOJ investigation, we recorded a $118 million provision this quarter. That figure reflects our current expectation of the financial impact of result in the matter. Because the process is still ongoing, we cannot comment further at this stage but we expect to share more details shortly.

Finally, let me touch on Colombia, where things are moving steady on both fronts, EPM has officially launched the privatization process for its stake in TIGO-UNE under Law 226 and everything is progressing as expected. At the same time, the regulatory process for the Coltel acquisition is advancing well. We are now waiting for a minimum price disclosure for the stake held La Nacion and we continue to expect both EPM and Telefonica transactions to close in the first quarter of 2026.

With that, I will now hand it over to Bart, who will walk you through the financials in more detail.

Thank you, Marcelo. Let's now turn to our financial performance for the quarter, starting on Slide 15. Service revenue for the quarter totaled $1.34 billion, representing a year-over-year decline of 0.5%. This was no surprise considering the application of IS 21 for Bolivia, which this quarter negatively impacted service revenues by EUR 74 million compared to last year. When excluding the FX impact, underlying service revenue growth actually accelerated from 2.4% year-on-year growth in Q2 to 3.5% year-on-year growth in Q3, reflecting the continued momentum of our commercial initiatives and strong operational execution across our markets. We also continued to deliver solid results in our prepaid to postpaid conversion strategy, resulting in local currency, double-digit postpaid growth numbers while prepaid revenues continued to grow by low single digits year-over-year in local currency, supported by a stable prepaid customer base. This growth reflects our ability to attract new clients and brought in the top of the funnel, reinforcing the strength of our commercial engine.

Importantly, we delivered another quarter of margin expansion with organic adjusted EBITDA increasing by 23.8% year-over-year to reach a record $695 million. It's worth noting that the year-over-year increase in adjusted EBITDA was influenced by a onetime restructuring and M&A charges in 2024. When normalizing for this effect, adjusted EBITDA still grew by 10% year-over-year. This increase translates into an adjusted EBITDA margin of 48.9%, another all-time high for the company.

As Marcelo highlighted earlier, accelerating top line growth while maintaining cost discipline remains a core pillar of our strategy. Finally, equity free cash flow rose by 18.1% for the last 9 months when compared to the same period last year, reaching a total of $638 million, marking yet another milestone for the company.

Next, I would like to walk you through our performance by region, starting on Slide 16. In Guatemala, local currency service revenue grew 3.6% year-over-year, reaching $366 million for the quarter. This solid performance represents a significant improvement over last year's top line growth driven primarily by our mobile strategy, which focused on effective customer base management and increasing ARPU through the successful migration from prepaid to postpaid plans.

Colombia delivered another strong quarter, with service revenue expanding 6.5% year-over-year to $364 million, almost surpassing Guatemala for the first time in our corporate history. This growth was fueled by an expanding customer base, particularly in postpaid, robust performance in B2B and a material turnaround in our home business, supported by intensified commercial efforts aligned with our strategic priorities.

In Panama, service revenue remained largely flat year-over-year at $170 million. When compared to Q3 2024, we added nearly 65,000 postpaid subscribers to our customer base. These gains were partially offset by a decline in B2B revenue, stemming from government contracts, which were executed earlier in 2024. In Paraguay, we achieved $143 million in service revenue, increasing 3.5% year-on-year. This solid growth was mainly achieved through expansion in both our prepaid and postpaid customer base and relatively stable ARPUs. In Bolivia, service revenue in constant currency accelerated to 6.1% year-over-year, reaching $84 million for the quarter. And for the first time since the onset of the devaluation, we recorded a quarter-over-quarter increase in service revenue. We remain cautiously optimistic about continued currency stabilization.

Service revenue in other markets increased 1.4% year-over-year, reaching $217 million for the quarter as robust top line growth in El Savador and Nicaragua was partially offset by soft results in Costa Rica. As mentioned in my introduction, we're very pleased with the overall profitability achieved during the quarter with adjusted EBITDA for the group reaching a record margin of 48.9% as shown on the Slide 17. All of our largest operations delivered year-over-year margin expansion.

Let's now review the performance of each country in more detail. Starting with Guatemala, adjusted EBITDA grew 6.2% year-over-year, reaching $236 million for the quarter. This strong result was driven by a combination of service revenue growth and operational efficiencies. As a result, Guatemala reported a record adjusted EBITDA margin of 56.6%, up 147 basis points compared to the same period last year.

In Colombia, adjusted EBITDA increased 17.3% year-over-year to $161 million. This performance reflects the robust top line growth discussed earlier, coupled with disciplined OpEx management. It's worth noting that last year's EBITDA was impacted by approximately $5 million in severance payments. I want to take the opportunity to congratulate our team in Colombia for their tireless efforts and outstanding results. Panama delivered a 10.4% year-over-year increase in adjusted EBITDA, reaching $93 million, driven by cost savings from efficiency programs. As a result, adjusted EBITDA margin expanded by 480 basis points, reaching a record 52.2%. Paraguay also expanded its profitability when compared to the same period last year. The team achieved an 11.8% year-over-year increase, reaching a total of $76 million for the quarter with adjusted EBITDA margins expanding to 51.4%. The reflecting continued operational discipline and growth in our customer base.

In Bolivia, adjusted EBITDA increased 21.8% on a constant currency basis year-over-year to $42 million for the quarter. The margin expanded by 649 basis points to 49.7%, primarily thanks to our ongoing focus on cost efficiencies and dedollarization efforts. Finally, adjusted EBITDA in our other segments which include El Savador, Nicaragua and Costa Rica increased 7.7% to $108 million as we continue to deliver operating leverage across all 3 countries.

As a reminder, we have here Nicaragua and Honduras with margins above 50%, making a total of 5 countries out of the 9 with margins above 50% and Bolivia actually getting very close.

Let's now turn to Slide 18 for a review of our equity free cash flow. In the third quarter of 2025, equity free cash flow totaled $243 million to reach $638 million over the last 9 months, representing an increase of 18.1% year-on-year. Now when comparing to the same quarter last year, we see a $28 million decrease, which is primarily attributable to a mix of strategic investments and timing-related factors as we are trying to stabilize equity free cash flow over all quarters. Positive contributors were adjusted EBITDA was up $110 million year-over-year, in line with our increased profitability and $73 million one-off impact in 2024 mainly related to restructuring and M&A costs.

Finance charges improved by $10 million, thanks to lower debt levels, favorable FX movements and reduced commissions on U.S. dollar purchases in Bolivia. Offsetting these gains were the following detractors. Cash CapEx increased by $50 million, mainly due to changes in working capital. Trade working capital and others decreased $66 million mainly due to the aforementioned litigation settlement with Telefonica related to the 2020 Costa Rica acquisition attempt as well as timing of payables.

Spectrum payments were up $12 million, reflecting the phasing of coverage obligations in Colombia and taxes paid increased $10 million, primarily due to the higher profitability.

Now please turn to Slide 19 for a more comprehensive view of our deleveraging during the quarter. We reduced our leverage from $2.8 to $2.09, a solid improvement of 9 points quarter-over-quarter. This was primarily driven by our strong equity free cash flow generation of $243 million, as just discussed. On the other hand, we paid $125 million dividend in line with our approved dividend policy and recorded $80 million in exchange rate impacts due to the appreciation of our local currency debt. These items together added approximately 0.1% to our leverage.

Overall, the quarter reflects disciplined capital allocation and continued progress toward our long-term balance sheet objectives. Before reviewing our financial targets, I wanted to highlight that we have finalized the LAT business divestment announced in October 2024. As a reminder, the total consideration for the LAT divestment was approximately $975 million.

Let's now review our financial targets for the year. We're very pleased with our performance year-to-date and remain on track to meet our year-end leverage target of below 2.5x as well as our equity free cash flow goal of around $750 million. As a reminder, this leverage target excludes the impact of any strategic M&A transactions executed during 2025. I'd also like to emphasize that we are maintaining our free cash flow target despite the adverse effects of the currency devaluation in Bolivia, as well as the one-off legal settlements discussed. We're excited about what lies ahead and remain fully committed to delivering continued top line growth and sustainable margin expansion.

With that, let me turn the call back to Luca.

We'll now begin with a question-and-answer session. As a reminder, if you would like to ask a question, please let us know by e-mailing us at [email protected]. -- and we will add you to the queue..

Our first question on [indiscernible] HSBC.

What is the odor and Erie transactions. Where do you expect to be at the end of the year? What is the net impact from these transactions in years cashflow. . Thank you. .

Good question. So our leverage now is 2.09. If you would normalize for the tower transaction, that would have been $2.33 million -- now so 2.09, we closed Uruguay that adds about 0.1. We closed Ecuador at about 0.1% as well. So pro forma, we are close to as of Q3, if you would normalize for the tower transactions.

Thank you. In Ecuador, there was a spectrum renewal use. With the burden of payment fall on Millicom -- so there are 2 parts of the spectrum renewal. In fact, 1 is a license renewal, which comes with all the spectrum that was attached to the original license was approximately $115 million that has been paid by Telefonica as a condition precedent to closing of the transaction. However, there is an upcoming 5G auction that will come probably in the beginning of next year, end of this year. and we expect mid- to mid-high double-digit million dollar spectrum charges payable somewhere in the first half of 2026.

And important to say that this was a prerequisite to close the transaction. And with this renewal and also the availability of the 5G spectrum in Q1 has strengthened our position to first focus on strengthen the network as it is the priority in our playbook. So we are very pleased to have enough spectrum to start operating in Ecuador.

Thank you. Could you please provide more details on the DOJ provision. What is the issue related to? And when can we expect there to be a resolution?

Well, there is no much to say more than what we already said in the call. Basically, we are in the process with the DOJ with regards of the litigation, the provisions that we printed this quarter is what we expect is going to be the outcome and as I said, we will come back with more details shortly.

Perfect. What is driving the higher tax provision in Nicaragua?

So in Nicaragua, we had tax litigation ongoing. We have been, like many other legacy liabilities. We have used this quarter to be up and close a lot of matters, not different in Nicaragua. We settled with the administration on the payments of the delta of what we settled with and what is already paid and provisioned is that increase. That payment will come partially in Q4, partially in Q1 to -- for the finalization of the settlement.

Perfect. Marcelo, what is the future course of action in Costa Rica and if the appeal for the regulatory decision gets rejected.

Yes. Starting on Costa Rica, we really believe that this merger was very, very good for the country and for the industry. Costa Rica, it's a very stable economy, has a very predictable macro. But more importantly, they do have a lot of appetite for digital infrastructure. That is at the core of what the country needs. And in order to have that, Costa Rica needs to have strong operators. That's why we propose to merge on a JV with Liberty in Costa Rica.

Unfortunately, the decision of the Sutel was against this merger. We are appealing that with the arguments that I already said, this is good for Costa Rica. Having said that, we need to also focus on what is under our control. And what is under our control is to go back to our operating model more focused on the commercial grid that we have in other countries. We are going to invest again reinforce our infrastructure and then also reinforce our channels and bring that operation back to growth with strong focus as we have in all the other operations in cost efficiencies.

So that is what's under our control, and that is where the focus is going to be expecting, of course, a more better news from the Sutel.

Next on the line is Leal Nieto from JPMorgan.

I have a couple. The first one, could you provide an outlook for CapEx for 2026. How are you seeing this line behaving on the next year. And the second one, we would like to explore a little bit more the margin expansion across the board. We are seeing several countries expanding a lot of margins this year, particularly this quarter. Is this still mostly related to your efficiency program? Or are there more initiatives that we should be seeing that will continue to impact your margins going forward? Specifically, I would like to touch on Colombia because we see an impressive margin gain there. So do you see eventually room for Colombia to join its 50 clubs that you talked so much. So like could we see the Colombia market also raising margins and reaching that level because we saw an impressive market there -- market improvement there, right?

Thank you, Leal, for your question. I mean the 50 club, it's ready to receive more members. It's a club where you can get in and you can never get out. So I will start with Colombia. What happened in Colombia is purely organic. We accelerate the top line growth. The direct cost had a decrease quarter-on-quarter based on our efficiency initiatives. So that brings operating leverage at the gross margin level.

And additionally to that, we kept the OpEx flat, even though we are investing a lot in commercial activities to fuel growth. So that's where the profitability is coming is mainly operating leverage if you talk about organic terms. But if you go on dollar terms, also you have some points of growth coming from the currency, the strengthen of the Colombian pesos currency.

When we look at the group level, it's a little bit of a different story. It's a mix between organic growth that is more or less very similar to Colombia's operating leverage, but we do have some one-offs around $70 million year-over-year that had to do with severance and M&A costs that we had last year and we don't have this year.

On CapEx, we -- when we started this new journey of efficiency, we always said that we invest with a lot of granularity. So we look at where the demand is. That's how we came from $1 billion CapEx to a $700 million CapEx. So we are very comfortable with that envelope because this model is refining as we speak. So we have a very, very strong network performance with a lower cost. So our expectation is to maintain the envelope at around $700 million.

Our next question comes from onto from JPMorgan.

So I had one around your leverage more so looking further just because now you have more clarity on the closing of some of the acquisitions and including the one in Colombia. So just wanted to get your thoughts on where leverage should be also considering your dividends, your potential settlements of legal matters. Just thinking where you're comfortable to get in terms of net leverage?

And then a second part of that question is in terms of your debt or your financing needs, right? You have some maturities, especially in 2027, more in 2028, you have more M&A to close next year. So just wondering what you see as financing needs and what that could look like in terms of international capital markets, if you see a potential to change the mix between[indiscernible] , OpCo debt. And just any color that you can share on that, please?

Thank you, Eduardo. So on the leverage 2.09, I think we mentioned already Uruguay and Ecuador each had about 0.1 to the leverage. So around we get to 2.3. EPM would add another 0.20 in between 20 and 25. So with that, we get close to the 2.5. And then Coltel will get possibly above that, depending, obviously, on how EBITDA evolves, our cash flow evolves, et cetera. .

If that happens, we do believe that depending on the speed of our integration cost that we would reduce that pretty quickly below the 2.5 again. On the debt side, we still have more than $900 million cash on balance sheet today. So for the immediate upcoming payments, we do have the liquidity. We will do some tactical debt issuance, mostly focused on local currency debt as we like it. Today, we have 50% of our debt in local currency. And we're continuing to look for opportunities. I can already tell you, we raised $200 million in local currency in Uruguay. That's probably the largest corporate debt issuance in Uruguay. And we've been welcomed fantastically by everybody down there.

Next year, we will look at, again, at liability management, cleaning up some earlier maturities possibly and look at our debt curve. This year, we really wanted to focus on cleaning a number of things up, closing the transactions, getting the -- see what we receive in terms of that structure. And next year, we'll start to look back at a regular liability management.

Just one quick follow-up, but you're comfortable, I guess, with the mix between the amount of debt that you carry at the holdco versus the opcos that makes that you have today.

Yes, we have 40% of our debt as of Q3 balance sheet date in HQ. As I said, we are already raising $200 million additionally in Uruguay that was post the Q3 closing. And we have a few others in the pipeline to continue to increase. I'm comfortable where we are. But as a strategy, I want to have a maximum of local currency unless it's prohibitively expensive. So that's the bit that we look at that. Our

Next question comes from Gustavo Farias from UBS

So a few questions on my end. So the first one, if you could give us any color on the new countries. You just entered and Ecuador are looking at extracting those synergies from the operations. Maybe any color on what would be the main drivers to drive margins up. .

The second question, last quarter, you commented about a trend of price increases as the countries mostly driven by postpaid migration. So if you could give us an update on how that's evolving lately.

Yes. So thanks, Gustavo, for your question. I mean these are 2 very different countries. In the case of Uruguay, it's a very developed country with high consumption per user. A lot of data demand very much postpaid. So there are 3 operators there. As you know, you have the state-owned operator, then you have Claro and us and then Claro. So first, the network in Uruguay is pretty strong. So we are going to focus on developing ARPU as we did in the other countries by focusing on prepaid to postpaid with a small prepaid base. We want to expand the prepaid base a little bit and also play into the devices field because that's where the demand is in Uruguay. They have a lot of appetite for very high-performance handsets.

Having said that, in parallel, and that is the first chapter of our playbook is efficiencies. So we are going to implement what we have implemented in all the countries, the purchase order controls from $0, contract renegotiations and also focused operation on what we do best, deliver these connectivity. So the same playbook applies to Ecuador, but the environment in Ecuador is different. There, we do need to invest in network quality and network expansion. As I said, this spectrum renewal and the new acquisition of Spectrum give us a good new spectrum in 700 that it's going to immediately affect positively on the quality of our network. But we need to expand also the coverage, especially in Guayaquil and the coast, where more than 50% of the people live. So that is the strategy. It's the same playbook, but there is some prework to do in Ecuador, in a network in strengthening the network, and it's more commercial in Uruguay. I hope this answers your question, Gustavo.

The next question comes from Andres Coello Ituarte from Scotiabank. Can you comment on why you did not participate in the spectrum auction in and comment on the competitive environment as new entrants is expected to launch 5G coverage soon. And in addition, can you provide an update on the closing of the deal in Colombia? .

So in Paraguay, basically, the conditions were not there for us to participate in the spectrum in the spectrum tender. We do -- we have a very, very good relationship with the regulator. There is now a bit of a process on whether the new acquirer can keep the spectrum. We respect that process and we trust the regulator that the regulator is going to do the right thing. Having said that, there are other segments that are available. So we are working with the government segments in 2.6 and also in 700 megahertz us. So we're working to get that spectrum for 5G. There is no way to will not have 5G in Paraguay, and that is clear for us, and it's clear for the government as well. So on the new entrant, we do believe that to become a real player from scratch in a country like Paraguay, you need more than spectrum.

And we -- as we welcome always competition, right, only with 5G is very, very difficult to have a full telco and not even talk about convergence play. So we don't see at this point of time any threat for any serious competitor in a new competitor in Paraguay.

And as well as with a limited availability or percentage of 5G-capable phones over the total number of phones in the country. Going to the question about the closings in Colombia. As you know, there's multiple transactions in one. So let me build the onion. So on one side, we have the transaction with our partner in our existing operation. They have disclosed the minimum price. We made some communications around that earlier in Q2. that we would participate in the auction process. There's it's privatization loss got -- 2 phases. Phase 1 is now ongoing. This is where the shares are offered to sector Solidario, think about employees pension funds. That's a process that takes 2 months will be done early December, after which there will be an auction organized and that process takes less than a month. So this is well on track to close around year-end, early Q1. Then we have, on the other side, the deal with Telefonica is done, signed and has a number of conditions precedent for closing, which is merger approval. That merger approval is ongoing. We're having constructive discussions with the regulator and expect to have a resolution in Q4 about the merger.

And then the second condition precedent is also to have, who is a third shareholder of Coltel. And we expect, as we hear, they are getting to the end of their process, establishing the minimum price with similar that EPM had earlier in the year. And then they can launch Phase 1 of the Law 226 process immediately behind us. So that's a 2.5 month to 3-month process once they launch the Law 226 process. And there again, we are expecting everything works out that we could close both transactions in Q1, knock on wood, let's see how it goes.

Excellent. Thank you, Bart. Our next question comes from David Lopez from New Street Research.

Congratulation for the quarter. Most of my questions have been answered actually, maybe just a couple of follow-ups. On the Costa Rica deal, I was wondering if you could comment a bit on the remedies. And why were they not enough? And why are they? And do you have any idea how long the process takes usually I guess, pretty hard to answer if you have any any idea or view. And then you mentioned about the spectrum in. And I was wondering what are the other auctions coming in the future and the rest of the portfolio? And maybe last question on competition in Guatemala and you're posting good numbers. And I thought a few quarters ago, there was a bit more competition from cloud. So again, your numbers are good. So I was wondering how has competition evolved in Guatemala

The revenues in Costa Rico. On remedies on Costa Rica, it was a surprise, David, for us to hear the argument from Sutel on why the remedies were not enough. We have been very proactive and very diligent also not only with Liberty, but also working with external consultants and experts on the matter. We did not see any rational argument to say that there is no remedies that can really make this transaction to happen. It's some kind of unprecedent to say that there is no way that this is going to happen but we do respect the regulator, and we do respect the formal channels, and that's why we are appealing. And we hope that the Sutel will reconsider its position.

With regards to spectrum, now the -- well, you have first the renewal that was done. So that is 1 block of spectrum then you have the 5G spectrum that's going to happen now in Q1. So that's, I think, about it for the short term, but it's more than enough to, one, strengthen our existing infrastructure, mainly with 700 megahertz, that is the new spectrum that we're going to bring in. And also to start developing the 5G coverage where the handset availability is there, right? So very good timing for us.

With respect to Guatemala, we are fighting point of sale by point of sale as we do with infra CapEx investment and capital allocation. We also are very, very granular on how we fight in the commercial. Remember that Guatemala is a purely prepaid market. So the war is being done in the point of sale every day. So where we were at back at the beginning of the year. And it was very natural and predictable that this was going to happen was where Claro started to build new coverage, and we had very high market share, for example, in [indiscernible] . So what the reaction we did was not a mainstream reaction because that was not necessary, but specifically in the regions where we were attacked. So this is working. It's a combination of working with the point of sale, strengthening the channels, strengthening a little bit the offer and also improving the network that is at the core of the consumer experience. So that's what we did in Guatemala. And now we are coming into a more stable place with the results and with the numbers.

. Thank you very much, everyone. This concludes our question-and-answer sessions. We will reconnect with you and the market for our fourth quarter results on February 26. Thank you very much.

Thank you.