America Móvil B de C : Q1 2021 Transcript

• Daniel Hajj, Chief Executive Officer
• Carlos Garcia Moreno, Chief Financial
  Officer
• Oscar Von Hauske, Chief Operations
  Officer
• Daniela Lecuona, Head of Investor Relations
• Andres Coello, Analyst
• Arturo Langa, Analyst
• Carlos De Legarreta, Analyst
• Gilberto Garcia, Analyst
• Leonardo Olmos, Analyst
• Marcelo Santos, Analyst
• Maria Azevedo, Analyst
• Walter Piecyk, Analyst

Good morning my name is James and I'll be your conference operator today. At this time, I'd like to welcome everyone to the America Movil First Quarter 2021 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. And after the speakers remarks, there will be a question-and- answer session. (Operator Instructions).

Thank you. Now I will turn the call over to Ms Daniela Lecuona, Head of Investor

Relations. Please go ahead.

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Thank you good morning everyone. We are here to discuss our First Quarter Financial and Operating Results. We have on the line. Mr Daniel Hajj CEO,Carlos Garcia Moreno CFO and Oscar Von Hauske, COO

INITIAL

Bloomberg

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Bloomberg

Daniel Hajj

Thank you. Daniela.

Good morning, everyone. Carlos is going to make a summary of the first Our financial and operating results.

{BIO 1713687 }

Thank you Daniel and good morning everyone.

While the strong economic expansion in the United States that have gained momentum in the second half of 2020. continued unabated in the first quarter of the year propelled by news of a second please customers plan of our new infrastructure program and solid progress on vaccination US Economic growth forecast for 2021 were upgraded initially led to an appreciation of the US dollar this most of the currencies on the back of rapid increases in medium and long-term dollar interest rate.They are looking American countries, including Mexico and Brazil experience new COVID waves that led to renewed confinements constrained mobility and slowdown in economic activity.

In start of this in the first quarter, we managed of [ph]20 million net subscriber additions as fully 1/3 more than a year before. 3.3 million bit more than half of the net were postpaid subscribers. Most of them coming from 2.4 million, followed by Peru- Colombia and Austria. As regards prepaid we gained 2.8 million of which 800 and thousand came from Brazil approximately half a million each from both Central America and Mexico 300,000 from Colombia and 200,000 from Argentina.

On the fixed line platform. We added 246,000 broadband clients with almost every operation showing an increase in access lines except for us to, we have the collections of low bandwidth. Colombia, Peru Ecuador and Argentina were the main contributors. at the end of March, our mobile postpaid subscriber base was up 7.8% year on year followed by our fixed broadband accesses of 4.7% even our prepaid base registered an increase from the prior year.

Our first quarter revenues total 248 billion pesos were nearly flat in nominal peso terms with service revenue, declining 1.1% year-on-year. At constant exchange rates however, revenues actually increased 1.2%, slightly lower than in the preceding quarter recognition 2.2% we're starting to prior quarter the main reason for would consolidated nominal pesos revenues to decline, even though they had recently local currency terms and mostly to do with the sharp depreciation of Brazilian real, we said in Mexican peso, which are fully 20.4% this revenues were driven by that of mobile should these revenues which decelerated to 1.7% From 4.1% the prior quarter. And was supported by the continued recovery of fixed-line services. We celleration of mobile service revenues nearly that off of postpaid which down in Brazil, Colombia and Austria. Prepaid revenues from the maintain the pace of growth at 2.4% for the third quarter in the [ph]room. Prepaid revenue growth showed a marked improvement relative to the year-earlier quarter except for Mexico, Brazil and Colombia in these countries economies appear to have been more affected by the pandemic.

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The first quarter of this year. Fixed-line regarding the growth turned positive 0.1% after several quarters of negative growth on the back of continued strong performance of fixed broadband services which became our most important revenue line in the quarter maintaining its nearly 8% annual (inaudible). we registered an important improvement in corporate networks with revenues expanding 2.4% in the quarter compared to a 2.9% decline in the fourth quarter. We stepped into positive territory. The overall expansion of this line(inaudible) we are things. fixed broadband revenue growth has accelerated sharply from countries including Peru 42% for longer-term 21% is American Republic and Ecuador between 15% and 20% revenue growth. Staying on trend at around 7% to 8% in Chile, Brazil and Central America. EBITDA rose 5.2% to a 1.7 billion pesos. at cost of exchange rates. It was up point 8.1%. EBITDA margin expanding almost 2% points to 2.9% supported by strict cost controls lower selling and marketing expenses again coming to do with restrictions on mobility and new confinement and reduced bad loan provisions.

We have had a very good is collecting our (inaudible). Most countries registered strong EBITDA growth 59% in the US, 47% in Puerto Rico.36% 16%(inaudible) Colombia (inaudible)expanding approximately 10% each. EBITDA margins rose increasing almost 7.0 in Peru [ph]driving the Caribbean both Puerto Rico and America fall in Central America followed by Mexico, Brazil, Argentina[ph] 2.6 with our operating profit Increasing 5.7% to 41.1 billion pesos. And I will comprehensive financing cost coming down by 55% year-on-year. to 35.9 billion pesos. We were able to post a net profit of 1.8 billion pesos reversing the 39 billion loss year before on account of foreign exchange losses. Our net profit was equivalent to 3% per share or freeze on offense. Our operating cash flow allowed us to fund capital expenditures in the amount of 25 billion pesos and to buy back shares more from

4.4 billion pesos. In addition, is allowed us to reduce our debt in cash flow terms by nearly 10 billion our free cash flow. This chart is interesting our free cash flow this is looking at EBITDA minus CapEx cash exceeded a solid part of growth over the last 5 years. even in the midst of the pandemic.

So the free cash flow has gone from $5.6 billion in the year 2015 to 9.4 billion in the year 2020 (inaudible) on rising in the and the top months to March to $9.6 billion. So even in spite of this deceleration in sales and revenue that we have had. We have seen continued strong performance on EBITDA and free cash flow. our net debt fell by 20 billion pesos in the first quarter ending March at fixed 27 billion pesos Southern includes the capital large leases on the IFRS 16 at this time, it was equivalent to 1.77 times. the EBITDA for the last 12 months. With that, I would like to plus above the floor back to Daniel and we come to in the Q&A session. Thank you.

Operator

Thank you, Carlos.

{BIO 1898715 }

We're going to start with the first question.

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Bloomberg

(Operator Instructions).Our first question comes from the line of Marcelo Santos with JP Morgan. Go ahead please. Your line is open.

Good morning. Thank you for taking the questions. I have two. The First is, if you could provide an update on the towers operation that we're planning for America Movil in Latin America?

In the Second, if you could compete, if you could comment on the competitive environment in Colombia now that one has Officially launched there mobile brand by operations. Thank you.

A - Daniel Hajj {BIO 1898715 }

Good morning. Talking about the towers, is the we are currently implementing this structure within the America mobile group who set by rate locally the towers and obtain the required approvals in the different countries.prior to the final step that the spin-off at the America Mobile level. So we think and we expect that this implementation will occur in this year, end of this year is what, what we have right now.

On the Colombia -- one and the competition. Well, I think they they already launched their plans at the beginning April middle of April. They were very aggressive plans.but I think we are well prepared to compete in Colombia. There is not only price in Colombia. I think we have a very good coverage we have fourth place. So we have a lot of our customers in convergence. So in fore-play offer that it's very important reduce a lot our churn. We have one of the best qualities in Colombia. In terms of in mobile and in fixed also both distribution. we have a good, very good distribution all around Columbia good in much net promoter score very high. I'm very good image and very good service.

I think it's not only price, we are prepared to compete in price but also we are prepared to compete in all these sort of being. So we have a strong competition there plans were aggressive.we know that they are coming very aggressive these plants and we prepare for that so we are competing. So I don't have any news it's only 10 or 20 days of competition this competition is going to take all these years. so we are prepared to compete. So that's what I can say.

{BIO 20444938 }

Perfect. Just to follow up on the first question. The stock that's going to be listed on the tower spin off which exchange will it be listed, is there any update there?

{BIO 1898715 }

We haven't decided anything at the until right now. So we don't know if it's going to be on Mexico. It's going to be also Mexico and the US. So we still we're not, we need to make that definition this day in the next month.

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