VEON Ltd. · NASDAQ:VEON
VEON — Investor Day (December 2021)
81 slides from VEON's investor day presentation, Dec 7, 2021
Slide 1: VEON Growth Day
VEON Growth Day Amsterdam, December 7 - 2021
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements”, as the phrase is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by words such as “ma
Slide 3: VEON Investor Day Agenda
VEON INVESTOR DAY AGENDA Time (CET) Duration, min Speaker / Topic 14:00 – 14:10 10 Welcome 14:10 – 14:40 30 Kaan Terzioğlu, Group CEO 14:40 – 14:55 15 Erik Aas, CEO Bangladesh 14:55 – 15:10 15 Aleksandr Komarov, CEO Ukraine 15:10 – 15:25 15 Yevgeniy Nastradin, CEO Kazakhstan 15:25 – 15:40 15 Coffee
Slide 4: VEON Growth Day – Kaan Terzioğlu
VEON Growth Day Kaan Terzioğlu Group Chief Executive Officer 4 4
Slide 5: We Are VEON
WE ARE VEON 680m population Beeline Kazakhstan 217m mobile subscribers Uzbekistan: 2% 19m population 4.6m fixed-line subscribers Kyrgyzstan: 1% 9.8m mobile subscribers 50.1k towers1+20k built-to-suit Georgia: 1% 0.5m fixed subscribers 1.6k towers Kazakhstan Beeline Russia 146m population 7% Banglali
Slide 6: Trading on Four Exchanges
TRADING ON FOUR EXCHANGES VEON VEON Amsterdam New York ENX: VEON NA NASDAQ: VEON US VEON VEON Moscow Saint Petersburg MOEX: VEON-RX SBPE: VEON US Key Index Inclusion Ambition 6 Note: MOEX and SBPE are exchange sponsored listings 6
Slide 7: 2021: Solid Execution Delivering Results
2021: SOLID EXECUTION DELIVERING RESULTS PROMISES MADE, RESULTS DELIVERED $308m $970m First 9 months +9.7% Russia Tower Revenue EFCF +5.3% Transaction Local Currency +8.7% Russia EBITDA Revenue Local Currency Local Currency 2021 EXECUTION ENGINES • Country-driven decision making • 4G for all: corner
Slide 8: 2022-2024: The Way Forward
2022-2024: THE WAY FORWARD 3-YEAR AMBITION 10-14% Return to <20% CAGR 2024 CAPEX Revenue & EBITDA Dividend Growth Local Currency +3pp ~70% intensity 4G penetration EBITDA Margin in subscriber Expansion base EXECUTION ENGINES • Management rewards aligned to shareholder value • Digital operator custom
Slide 9: Three Vectors of Value Creation
THREE VECTORS OF VALUE CREATION Infrastructure Digital Operator Ventures • Future-ready infrastructure • From Mins/GBs to Experience • High potential digital assets • Asset-light strategy • A new kind of “core business” • JazzCash & Toffee • Monetisation opportunities • Double-digit revenue growth •
Slide 10: Vector 1: Crystallising Infrastructure Value
VECTOR 1: CRYSTALLISING INFRASTRUCTURE VALUE Value Generation Russia tower transaction Moving ahead in Potential delivered other VEON markets • Large and populous countries • Deal with Service-Telecom • Strategic model based on market- • Network densification and successfully closed on December 1st
Slide 11: Vector 2: Digital Operator
VECTOR 2: DIGITAL OPERATOR TRADITIONAL TELCO DIGITAL OPERATOR • Minutes and GBs • Digital experiences • Commoditised • Relevant to customer customer relationship 1440 minutes a day • Lower ARPU • Higher ARPU • Higher churn • Lower churn • Irreplicable Offer 1440 11 11
Slide 12: Digital Operator Already Delivering Results
DIGITAL OPERATOR ALREADY DELIVERING RESULTS ARPU Multiple 34% 3.2x 3.9x Share of 1x Double/Multiplay 4G in subscriber base SP Voice 2play 4G Multiplay 1440 READ PAY Churn Impact 63% 1x Share of Double/Multiplay 4G 0.5x 0.3x in subscriber revenues SP Voice 2play 4G Multiplay 12 12 Notes: Customer seg
Slide 13: Digital Operator: A New B2C Value Proposition
DIGITAL OPERATOR: A NEW B2C VALUE PROPOSITION DIGITAL EXPERIENCE OFFERS ONE MODEL, MARKET-SPECIFIC PLAYBOOKS • Integrated telco and digital customer value CALL & MESSAGE WATCH LISTEN PAY PLAY CARE • Locally relevant digital products • Unique value proposition for each market • Develop product portfo
Slide 14: Digital Operator: Unlocking B2B Opportunities
DIGITAL OPERATOR: UNLOCKING B2B OPPORTUNITIES Data driven Scoring and marketing BD aaS Digital Capabilities Credit scoring Smart Managed Services Digital marketing utilities partner Data Storage CRM storage Mobile ID authentication Video Infrastructure Data protection VSAAS analytics and ATM video a
Slide 15: Digital Operator: Exponential Growth with New Core
DIGITAL OPERATOR: EXPONENTIAL GROWTH WITH NEW CORE Grow with Our Markets Grow with 4G Grow with Multiplay Population Growth VEON A3M 4G Subscribers A1M Base Composition VEON Markets 70% 30% 667 72% 66% 5% 46% 80% 648 641 Other 35% c.160M 635 2play 4G 27% 94M 65% 66M 25% Multiplay 50M 21% 16% 4% 6% 8
Slide 16: Vector 3: Ventures – Jazz Cash
VECTOR 3: VENTURES– JAZZ CASH 14.4m 110k Active wallets Active merchants 30% YoY growth 124% YoY growth 50% 27% YoY Growth YoY Growth Number of transactions Total value of transactions in November in November 16 16
Slide 17: Vector 3: Ventures – Toffee
VECTOR 3: VENTURES - TOFFEE 6.3m 5.1x Monthly YoY growth Active Users 3.6x YoY growth Number of watch sessions in user base in 3Q21 9M21 User 22 Generated minutes Content Average watch time “Toffee Creators” per user per day platform launched 17 17
Slide 18: Strong Leadership Team to Deliver Our Strategy
STRONG LEADERSHIP TEAM TO DELIVER OUR STRATEGY Group Kaan Terzioglu Serkan Okandan Dmitry Shvets Michael Schulz Joop Brakenhoff Alex Bolis Scott Dresser V-Pulse CEO CFO PORTFOLIO PEOPLE INTERNAL AUDIT & CORPORATE DEVELOPMENT, GENERAL COUNSEL DASHBOARD MANAGEMENT COMPLIANCE IR AND COMMS Countries Ale
Slide 19: Executive Rewards Aligned to Shareholder Value
EXECUTIVE REWARDS ALIGNED TO SHAREHOLDER VALUE • 53% of Total remuneration for • A renewed Long Term Incentive Executives in VEON shares plan for Executives, delivered in Align Increase linkage VEON shares management • Shareholding requirement for between pay and rewards and Executives: 2x of annual
Slide 20: Promoting ESG Leadership Across Our Group
PROMOTING ESG LEADERSHIP ACROSS OUR GROUP MSCI RECOGNITION SUSTAINABLE DEVELOPMENT FOCUS • Country-led initiatives supporting • Privacy policy enhancing consumer UN Sustainable Development Goals rights over their individual data • Cybersecurity strategy to effectively mitigate potential cyber risks
Slide 21: Our Three-Year Ambition
OUR THREE-YEAR AMBITION 10-14% Revenue & EBITDA CAGR Mid-Single Digit Rev CAGR In Local Currency In Reporting Currency +3 pp EBITDA Margin <20% Capex/Revenue EBITDA Margin Expansion 2024 CAPEX intensity Return to Dividend At least 50% Equity FCF post spectrum if leverage =< 2.4x post IFRS16 21 21
Slide 22: On the Agenda Today
ON THE AGENDA TODAY Kaan Erik Aleksandr Yevgeniy Aamir Alexander Serkan Terzioğlu Aas Komarov Nastradin Ibrahim Torbakhov Okandan Group CEO CEO CEO CEO CEO CEO Group CFO VEON Banglalink Kyivstar Beeline Jazz Beeline VEON Bangladesh Ukraine Kazakhstan Pakistan Russia 22 22
Slide 23: Banglalink
BANGLALINK Erik Aas CEO, Bangladesh 23 23
Slide 24: Favorable Macro-Economics with Data-Hungry Market
FAVORABLE MACRO-ECONOMICS WITH DATA-HUNGRY MARKET To graduate from Population in 165m 2026 Least Developed 2020 Countries (LCD) Foreign reserves 62% Rural population $46bn in Oct 2021 FX change Under 25 years 45% of age 4.0% versus USD 2017-2021 Infra. investment Real GDP 6.8% CAGR 2015-20 $37bn in
Slide 25: Banglalink Accelerating Shift to 4G and Data
BANGLALINK ACCELERATING SHIFT TO 4G AND DATA MARKET SMARTPHONE PENETRATION +20% 2020-21 Data revenue YoY 9M2021 in local currency Potential for 2x growth 82% +63% 2020-21 4G subscribers 42% YoY as of 30 September 2021 Bangladesh Regional peers1 2022-24 Data revenue +30% target 1 Cambodia, India, Ind
Slide 26: Resilient Challenger, Market-Leading Data Product
RESILIENT CHALLENGER, MARKET-LEADING DATA PRODUCT …PROVES RESILIENT AGAINST MARKET LEADING DATA NETWORK… STRUCTURAL CHALLENGES MHz / Million Subs 4G population coverage As of 30 September, GSMA as of 30 September 2021, GSMA 1.2 95%+ 95%+ 70% 0.8 Disadvantaged 0.6 Up to 2x spectrum coverage as #3 pla
Slide 27: Expanding into Under-Penetrated Regions
EXPANDING INTO UNDER-PENETRATED REGIONS OUR SEGMENTATION OUR WINNING PLAN Fair-share markets Panchagarh Under-penetrated markets • ~70% 4G population coverage Thakurgaon Nilphamari Lalmonirhat Rangpur Kurigram From • 12% share in under-penetrated markets (60% of population) Dinajpur Gaibandha Joypur
Slide 28: Banglalink Is the Market Forerunner in Digital
BANGLALINK IS THE MARKET FORERUNNER IN DIGITAL WITH MORE TO COME Toffee Gaming Arcade Streaming Games Launched In production Vibe In planning Bangla music APPSTORE BIGDATA READ AD TECH TutorsInc Education MyBL Self service BL Health Hub eHealth Aggregation MESSENGER NEWS 28 28
Slide 29: Toffee Has Taken the Market by Storm
TOFFEE HAS TAKEN THE MARKET BY STORM 83 CONSECUTIVE WEEKS AS THE #1 ENTERTAINMENT APP IN BANGLADESH 29 29
Slide 30: Holistic Value Creation Model
HOLISTIC VALUE CREATION MODEL ENABLING DOUBLE-DIGIT LC REVENUE GROWTH AMBITION Digital At-scale digital operator Future products and services 2025 2023 Nationwide 4G 1x% network rollout Double digit LC revenue growth Today by 2024 Market-leading 30 data product 30
Slide 31: Kyivstar
KYIVSTAR Alexander Komarov CEO, Ukraine 31 31
Slide 32: Ukraine Profile
UKRAINE PROFILE: UKRAINE HAS ALL CAPACITIES TO FURTHER DEVELOPMENT AND GROWTH Expected GDP Active users 3.1% growth in 2021 11m DIYA case As of 30 September 2021 #7 44m population 300k IT specialists In Europe in 2020 as of 30 September 2021 Startups developed 89% Rapid adoption in Ukraine: covered
Slide 33: What Is Kyivstar?
WHAT IS KYIVSTAR? A WORLD-CLASS PERFORMER UNDISPUTED MARKET LEADER UNIQUE LOW-CHURN RATE DOUBLE DIGIT REVENUE GROWTH CONVERGENT DNA OUTSTANDING PROFITABILITY ONE OF UKRAINE’s MOST VALUABLE BRANDS INFRASTRUCTURE LEADER BEST EMPLOYER IN UKRAINE1 33 1. https://chamber.ua/news/kyivstar-is-recognized-as-
Slide 34: Boosting Telco Opportunities
BOOSTING TELCO OPPORTUNITIES VALUE CREATION FOR CUSTOMERS AND SHAREHOLDERS New value approach to value proposition for Strengthening our tech customer engagement leadership Fixed broadband market TowerCo creation and consolidation further monetization 34 34
Slide 35: Boosting Digital Opportunities
BOOSTING DIGITAL OPPORTUNITIES TRANSFORMATION FROM TELCO TO DIGITAL OPERATOR ITC / Cloud TELCO SUBS1 WORKPLACE MODERN FINTECH • 23m B2C • 3m B2B • 1.2m Fixed 35 1. As of 30 September 2021 35
Slide 36: Kyivstar TV Partnership
KYIVSTAR TV PARTNERSHIP WORKING WITH 1+1 MEDIA, LEADING LOCAL CONTENT PROVIDER KYIVSTAR TV MAU, M Dec’19 +50% #2 OTT TV platform partnership 0.6 25% market share launch 0.6m monthly active subs 0.4 0.1 All platforms, including iOS, 2019 2020 2021E Android Smart TV, web 1+1 MEDIA is: 300+ TV channels
Slide 37: 2024 Ambition: Million Active Users of Digital Ecosystem
2024 AMBITION: 8 MILLION ACTIVE USERS OF THE KYIVSTAR DIGITAL ECOSYSTEM 8M Target of To DOUBLE DIGIT Further 2022 - 2024 Customers using Support LC REVENUE KYIVSTAR digital GROWTH ecosystem in 2024 Ambition 37 37
Slide 38: Beeline Kazakhstan
BEELINE KAZAKHSTAN Evgeniy Nastradin CEO, Kazakhstan 38 38
Slide 39: Kazakhstan's Growing Market
KAZAKHSTAN'S GROWING MARKET SOLID FOUNDATIONS FOR DIGITAL EVOLUTION Population in Smartphone 19m 78% 2020 penetration (+2.5mln in 10Y) Fixed internet 43% penetration of Mobile market total households $1.1bn revenue 4G population 81% coverage Fixed market $355m revenue Mobile data 77% users 129% SIM
Slide 40: Growing Our Market Share
GROWING OUR MARKET SHARE INCREASING SHARE IN A GROWING MARKET MOBILE MARKET REVENUE KZT billion CAGR +9.7% 524 Beeline revenue share 38.4% Delivering a 50%+ 330 EBITDA margin 31.8% in 9M21 2016 2021E 40 Sources: company estimates, market intelligence 40
Slide 41: Years of Focused Investments
5 YEARS OF FOCUSED INVESTMENTS DRIVING CONNECTIVITY FOR DIGITAL OPERATOR 2.8x +27pp 20x 2016-2021E 2016-2021E 2016-2021E 4G Smartphone 4G user coverage penetration penetration 78% 60% 81% 51% 29% 3% 2016 2021E 2024E 2016 2021E 2024E 2016 2021E 2024E 41 41
Slide 42: Transforming into a Digital Operator
TRANSFORMING INTO A DIGITAL OPERATOR MyBeeline BeeTV (selfcare) app IN 20211 6.7bn KZT • We put the customer at the centre, TV revenue building an ecosystem of digital Hitter +33% YoY experiences around each client music app (3% of Total revenue, 47x in 2016-2021E) • Our digital portfolio gradually
Slide 43: Our Evolving Digital Journey
OUR EVOLVING DIGITAL JOURNEY MOVING TO CONNECTIVITY-AGNOSTIC OFFERING WITH STRONG VALUE CREATION IZI BeeTV Digital onboarding & All platforms (iOS, service + Unique pricing Android, web, SmartTV) Lego-like offer Adaptive stream management E-sim or SIM delivery Casting in 3 hours Referral program Pic
Slide 44: Bee TV
BEE TV MOVING TO CONNECTIVITY-AGNOSTIC OFFERING WITH STRONG VALUE CREATION 44 44
Slide 45: Our Double-Digit Growth Ambition
OUR DOUBLE-DIGIT GROWTH AMBITION SUPPORTED BY ACCELERATED DEVELOPMENT OF NEW BUSINESS OPPORTUNITIES 2022-2024 AMBITION GROWTH AGENDA Strong double- Total • Strong market leadership ~15% digit growth in local currency revenue CAGR • Focus on Multiplay & new business growth contribution • Fully digita
Slide 46: VEON Investor Day Agenda
VEON INVESTOR DAY AGENDA Time (CET) Duration, min Speaker / Topic 14:00 – 14:10 10 Welcome 14:10 – 14:40 30 Kaan Terzioğlu, Group CEO 14:40 – 14:55 15 Erik Aas, CEO Bangladesh 14:55 – 15:10 15 Aleksandr Komarov, CEO Ukraine 15:10 – 15:25 15 Yevgeniy Nastradin, CEO Kazakhstan 15:25 – 15:40 15 Coffee
Slide 47: Jazz
JAZZ Aamir Ibrahim CEO, Pakistan 47 47
Slide 48: Pakistan, Land of Digital Opportunities
PAKISTAN, LAND OF DIGITAL OPPORTUNITIES Population in Demographic 221m 2020 5th largest 68% dividend as of (+2% p.a.) < 30 years in the world1 20202 Mobile GDP projection subscribers3 4.5% 2021-252 187m (85% population) as of 30 September 2021 Unemployment Internet users3 5.0% rate in 20202 109m (49
Slide 49: With Jazz in Pole Position
WITH JAZZ IN POLE POSITION … TOTAL REVENUE MARKET SHARE 1 3.8pp 45.1% 41.3% 42.7% 43.7% Active 4G Jazz 72m Total Subscribers 34m subscriber base 25.3% 22.… 22.9% 22.1% 22.3% Telenor 20.2% 21.… 21.3% as of 31 October 2021 as of 31 October 2021 13.2% 12.6% 11.7% 11.3% Zong Ufone 2018 2019 2020 2021 YT
Slide 50: With Clearly Defined Focus Areas
WITH CLEARLY DEFINED FOCUS AREAS Infrastructure Digital Operator Digital Assets • Fund digital investments • Sustain Market Leadership • Grow Digital Platforms through proceeds from TowerCo monetisation • Keep investing in 4G (4G for All) • Focus on Multi-Play engagement • Multi-Tenant Discounts: •
Slide 51: And a Digital Operator Mindset
AND A DIGITAL OPERATOR MINDSET “1440 ENGAGEMENT MODEL” DOUBLE DIGIT YOY GROWTH ON DIGITAL 2 MAU 1 Tamasha MAUs (Million) Revenue Digital Services (Billion, PKR) Game Now 1.3 m 1.4 m 38% 26% Bajao 5.4 Jazz Drive 9.4 0.9 m 0.15 m 6.8 4.3 2020 2021 2020 2021 Jazz Cricket Multiplay Subscribers (Million)
Slide 52: Tamasha – Live TV & Video on Demand Platform
TAMASHA – LIVE TV & VIDEO ON DEMAND PLATFORM 60+ 100+ 300+ FEATURES Live Channels VOD Titles Hours Tamasha OTT AMBITION Adaptive Stream • Defragmented video offering Separate Legal Entity with updated platform Own Platform IP & Licenses Casting • Modernized app with enhanced CX features Potential Va
Slide 53: JazzCash
JAZZCASH IT’S ALL POSSIBLE WITH JAZZCASH APP 53 53
Slide 54: JazzCash Leading the Payments Market
JAZZCASH LEADING THE PAYMENTS MARKET…. Multiple opportunities for value creation 14.4m 100k 110k +30% +67% +124% YoY YoY YoY Wallets Agents Merchants 160m 293B +50% +27% YoY YoY Monthly Transactions Transaction Volume 54 Note: All numbers are as of 30 November 2021, 1 month active if not stated othe
Slide 55: Developing the Fintech Ecosystem
… AS WELL AS DEVELOPING THE FINTECH ECOSYSTEM Products & Services Financial Lending Services Deposits Float Income Platform Advertising Payments Specialist Ecosystem Commercial / EMI License & Other E Commerce / Lifestyle Branchless Banking FinTech Players players 55 55
Slide 56: Double Digit Growth
DOUBLE DIGIT GROWTH Digital Assets >10% CAGR 2022 - 2024 Total Revenue local currency Digital Operator OUR AMBITION >40% Digital Services Revenue1 Infrastructure CAGR 2022 - 2024 local currency 56 1. Jazz Cash and 11 existing digital services in the portfolio 56
Slide 57: Beeline Russia
BEELINE RUSSIA Alexander Torbakhov CEO, Russia 57 57
Slide 58: Russia Profile
RUSSIA PROFILE: MACROECONOMICS, DEMOGRAPHICS, TELECOM SECTOR 4G penetration 146m Population 50% (country average) Population Smartphone 27% under 24 74% penetration Share of rural 4G coverage, 25% population 96% by population GDP per Digital literacy 3.4% capita CAGR 64% 2021–2024 rate 58 Sources: R
Slide 59: Topline Growth in Line or Better Than Market
TOPLINE GROWTH IN LINE OR BETTER THAN MARKET 3Q21 YoY +4.5% Total Revenue Mobile service +6.1% revenue Total B2C +8% +6.2% revenue 69.6 75.3 Fixed service revenue +16% +38% Total B2B revenue 3Q20 3Q21 Device sales revenue 59 59
Slide 60: Strong #3 Player in Both Subs and Revenue
STRONG #3 PLAYER IN BOTH SUBS AND REVENUE SUBS BASE BACK CUSTOMER SATISFACTION TO GROWTH IS SKYROCKETING +15pt 50.6 1.8% 50.1 50.0 49.9 49.7 NPS growth in Moscow region 3Q21 YoY 3Q20 4Q20 1Q21 2Q21 3Q21 60 60
Slide 61: Capex Driving Growth
CAPEX DRIVING GROWTH Operational CAPEX, less appetite for 9M21 vs 9M20 investment going local currency forward → ×1.5 +20% CAPEX Intensity 53.9 45.0 data traffic growth 3Q21YoY +35% 9M20 9M21 2019 2024 +22% +60% average speed increase new 4G BS on air sites launched 3Q21 YoY 9M21 vs 9M20 9M21 vs 9M2
Slide 62: Increased Usage and Quality Drive ARPU
INCREASED USAGE AND QUALITY DRIVE ARPU beeline ARPU +3.3% YoY growth 89% 54% 25.3m in local currency 4G network coverage 4G penetration 4G subs 363.0 +3% +7% +17% Oct’21 YoY Oct’21 YoY Oct’21 YoY 351.4 AVERAGE MARKET ARPU DEMONSTRATES SIGNS OF RECOVERY 3Q20 3Q21 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q
Slide 63: Strong Growth Beyond Connectivity
STRONG GROWTH BEYOND CONNECTIVITY ARPU MULTIPLE in 3Q21 +13.9% +16.7% 3.1x 2.2x Mobile app MAU YoY Beeline TV MAU YoY 1.0x growth in 3Q21 growth in 3Q21 SP Voice 2play 4G Multiplay CHURN IMPACT +38% +13% In 3Q21 1.0x debit cards credit cards 0.5x 0.3x issued QoQ in 3Q21 issued QoQ in 3Q21 SP Voice 2
Slide 64: First Brand Renewal in 15 Years
FOR THE FIRST TIME IN 15 YEARS WE RENEWED THE BRAND 90% 63% feel more trust in the feel the brand is still after 15 years ’living on the bright recognisable brand after seeing the side’, today we have an improved new commercials proposition: each customer is unique, and we strive to provide exceptio
Slide 65: Wide B2B Portfolio
WIDE B2B PORTFOLIO Video Private industrial Analytics networks Scoring models Managed services Integration Data driven Integration AdTech marketing services Digital CyberSecurity innovations as a Service Communication Mobile & platform Fixed lines 65 65
Slide 66: Multiply Value with Strong Partnerships
MULTIPLY VALUE WITH STRONG PARTNERSHIPS 66 66
Slide 67: Reliable Infrastructure Partner — The Tower Deal
RELIABLE INFRASTRUCTURE PARTNER — THE TOWER DEAL Up to 15.4k 1.8x Towers In Russia Nationwide portfolio with Immediate access to TowerCo unparalleled geographical Untapped potential to market in Russia coverage hard to replicate increase colocation ratio 35% of total sites vs. 15% today High revenue
Slide 68: Reinventing Ourselves for Growth & Efficiency
REINVENTING OURSELVES FOR GROWTH & EFFICIENCY Revenue 2022–24 local currency growth ambition Revenue Towers Brand refresh moving towards double EBITDA digit Network investments Non-connectivity Project ‘optimum’ Partnerships 68 68
Slide 69: Serkan Okandan, Group CFO
Serkan Okandan GROUP CFO 69 69
Slide 70: Three-Year Ambition
THREE-YEAR AMBITION 10-14% Revenue & EBITDA CAGR Mid-Single Digit Rev CAGR In Local Currency In Reporting Currency +3 pp EBITDA Margin <20% Capex/Revenue EBITDA Margin Expansion 2024 CAPEX intensity Return to Dividend At least 50% Equity FCF post spectrum if leverage =< 2.4x post IFRS16 70 70
Slide 71: Key Messages
KEY MESSAGES 1. Risk management 2. Group-wide cost 3. Disciplined capital 4. Forward-looking and financing efficiency plan allocation policy ambition Proactive enterprise risk Project Optimum: Principled investment: Three-year ambition: management, supporting Group-wide program Guided by returns, sa
Slide 72: Risk Management and Financing
1. RISK MANAGEMENT AND FINANCING A YEAR OF ACHIEVEMENTS IN DEBT CAPITAL MARKETS AS OF 30 SEPTEMBER 2021 MID-TERM AMBITION 2021 HIGHLIGHTS • Outside dollar and ruble other local currency funding increased from $572mn to $893mn-equivalent over past year • Debt average tenor from 2.8 years to 3.2 years
Slide 73: Russia Tower Transaction De-Risks VEON Financial Position
1. RISK MANAGEMENT AND FINANCING RUSSIA TOWER TRANSACTION DE-RISKS VEON FINANCIAL POSITION • An effective switch from dollar to ruble funding • Cash inflow reduces group dollar debt by approximately $850m1 • Net dollar debt reduction from 53% (post hedges) to 45% (Proforma 3Q21) • Group debt average
Slide 74: Group-Wide Cost Efficiency Plan
2. GROUP-WIDE COST EFFICIENCY PLAN 29% Interconnect and other service costs 11% Sale commissions and expenses • 2021 costs as baseline • Full cost base in scope 9% Devices and accessories Direct costs • Direct costs approx. $2.0bn Indirect costs • Indirect costs approx. $2.0bn • Addressable costs $2
Slide 75: Project Optimum Gains Traction
2. GROUP-WIDE COST EFFICIENCY PLAN PROJECT OPTIMUM GAINS TRACTION • Launched in 1Q21 to drive sustainable cost efficiency with P&L impact EBITDA margin • Full cost base in scope, including all structural operating costs and headquarters 3 p.p. improvement over medium term • Country management incent
Slide 76: Disciplined Capital Allocation Policy
3. DISCIPLINED CAPITAL ALLOCATION POLICY CAPEX INTENSITY TO NORMALIZE BELOW 20% GROUP CAPEX EXCL. LICENSES • Investments in absolute terms would remain on USD BILLIONS similar level in first phase of 2022-2024 Plan In line In line • Capex intensity will reduce marginally as revenues ~1.9 with 2021E
Slide 77: Forward Looking Ambition
4. FORWARD LOOKING AMBITION GROWTH TRANSLATES INTO SHAREHOLDER VALUE 10-14% local currency Cash inflow from tower revenue & EBITDA CAGR transactions 3p.p. EBITDA margin improvement (project Cash inflow from Optimum) exercise of Algeria put Building increased CAPEX intensity to dividend capacity Cash
Slide 78: Closing remarks
Closing remarks Kaan Terzioğlu Group Chief Executive Officer 78 78
Slide 79: Take-Aways of the Day
TAKE-AWAYS OF THE DAY Double Digit CAGR Mid-Single Digit Russia Back in Digital Operator Towers Local Currency USD CAGR Game Monetisation Ambition Ambition 10-14% CAGR Hard-currency growth From 2021 turnaround New kind of core Russia deal completed Rev & EBITDA Growth with inflationary pricing to su
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Slide 81: Thank You
VEON THANK YOU! ir@veon.com Tel: +31 (0)20 79 77 200 81 81