VEON Ltd. · NASDAQ:VEON
VEON — Q1 2017 Earnings Presentation
30 slides from VEON's earnings presentation, May 11, 2017
Slide 1: Q1 2017 Results
Q1 2017 RESULTS Amsterdam, 11 May 2017 Jean-Yves Charlier - Chief Executive Officer Andrew Davies – Chief Financial Officer
Slide 2: Disclaimer
Q1 2017 RESULTS 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 w
Slide 3: Highlights Q1 2017
Free float increased to 24.1% after Telenor sold a second tranche of its equity stake on 6 April 2017 Final 2016 dividend of US19.5 cents per share paid on 12 April 2017 Increase of VEON’s stake in GTH to 57.7% after completion of share buy-back VEON reports double digit revenue and EBITDA growth, a
Slide 4: Financial highlights Q1 2017
Q1 2017 RESULTS Financial highlights Q1 2017 Reported total revenue increased 13% YoY; stable on an organic basis, adjusting for leap year effect Reported EBITDA increased 14% YoY to USD 861 million, also benefitting from currency tailwinds and the Warid transaction Underlying EBITDA margin grew org
Slide 5: VEON: a new personal internet experience and a new company name
CONTENT AND OFFERS MESSAGING MY ACCOUNT MARKETPLACE Q1 2017 RESULTS VEON: a new personal internet experience… Monetization Engagement …and a new company name to underscore the ambition of our accelerated digital strategy Free Messaging - with chat and voice calling even when you are out of credit Yo
Slide 6: Dual listing in Amsterdam
Q1 2017 RESULTS Dual listing in Amsterdam On 4 April 2017, VEON established a dual listing on Euronext Amsterdam broadening its investor base Potential for inclusion in new stock indices and European stock coverage also expected to increase Ticker is “VEON” for both Amsterdam and NASDAQ Amsterdam li
Slide 7: VEON free float evolution
1 The Stichting is the direct beneficial owner of 145,947,562 common shares. As the holder of depositary receipts issued by the Stichting, L1T VIP Holdings S.à r.l. is entitled to the economic benefits (dividend payments, other distributions and sale proceeds) of such common shares. The Stichting is
Slide 8: 2016 dividend paid based on new policy
Q1 2017 RESULTS 2016 dividend paid based on new policy For the financial year ended 31 December 2016, the Company paid a dividend in the aggregate amount of US 23 cents per share comprised of US 3.5 cents per share paid as an interim dividend in December 2016 and US 19.5 cents per share as a final d
Slide 9: Currency trend continues to improve
Q1 2017 RESULTS Currency trend continues to improve VEON currency weightings calculated from the sum of the individual countries’ relative contribution to total countries revenue *Based on historical reported revenues, no restatement applied VEON Coin against USD, Index(1Q14=100)
Slide 10: Q1 2017 revenue evolution
-1.0% Q1 2017 RESULTS Q1 2017 revenue evolution FOREX improvements and Warid acquisition driving reported revenue growth 1 Other also includes intercompany eliminations 2 Other consists of operations in Kazakhstan, Kyrgyzstan, Georgia, Armenia, Tajikistan and intercompany eliminations USD MILLION +1
Slide 11: EBITDA evolution
Q1 2017 RESULTS Q1 2017 EBITDA evolution FOREX improvements and Warid acquisition driving reported EBITDA growth 1 Exceptional items in Q1 2016 consist of transformation costs of USD 40 million 2 Exceptional items in Q1 2017 consist of transformation costs of USD 30 million 3 Other consists of opera
Slide 12: Russia: continued mobile revenue growth
Q1 2017 RESULTS Russia: continued mobile revenue growth 1 Q1 2017 EBITDA negatively impacted by performance transformation costs of RUB 154 million. 1Q16 EBITDA negatively impacted by performance transformation costs of RUB 53 million TOTAL REVENUE (RUB BILLION) EBITDA AND EBITDA MARGIN (RUB BILLION
Slide 13: Pakistan: continued growth while integration synergies drive margin expansion
Q1 2017 RESULTS Pakistan: continued growth while integration synergies drive margin expansion NOTE: Q1 2016 pro-forma results assume that the results of Warid have been consolidated (including intercompany eliminations) with effect from 1 January 2016 1 Q1 2016 EBITDA negatively impacted by performa
Slide 14: Algeria: prepared for turnaround in a challenging environment
Q1 2017 RESULTS Algeria: prepared for turnaround in a challenging environment 1 Q1 2017 EBITDA negatively impacted performance transformation costs of DZD 6 million TOTAL REVENUE (DZD BILLION) EBITDA AND EBITDA MARGIN (DZD BILLION AND %) MOBILE CUSTOMERS (MILLION) CAPEX EXCL. LICENSES AND LTM CAPEX/
Slide 15: Bangladesh: sustained data growth, market remains competitive
Q1 2017 RESULTS Bangladesh: sustained data growth, market remains competitive 1 Q1 2016 EBITDA negatively impacted by performance transformation costs of BDT 0.4 billion TOTAL REVENUE (BDT BILLION) EBITDA AND EBITDA MARGIN (BDT BILLION AND %) MOBILE CUSTOMERS (MILLION) CAPEX EXCL. LICENSES AND LTM C
Slide 16: Ukraine: continued strong results
Q1 2017 RESULTS Ukraine: continued strong results 1 Q1 2016 EBITDA negatively impacted by UAH 1.3 million related to performance transformation costs and positively impacted by UAH 22 million related to a reversal of a tax provision. Q1 2017 EBITDA negatively impacted by UAH 0.8 million related to p
Slide 17: Uzbekistan: solid revenue performance
Q1 2017 RESULTS Uzbekistan: solid revenue performance 1 Q1 2016 EBITDA positively impacted by positive one-offs related to reversal of legal provisions (UZS 5,159 million) and bad debts (UZS 3,948 million). TOTAL REVENUE (UZS BILLION) EBITDA AND EBITDA MARGIN (UZS BILLION AND %) MOBILE CUSTOMERS (MI
Slide 18: Italy: solid results and synergies on track
Q1 2017 RESULTS Italy: solid results and synergies on track NOTE: the ‘’combined data’’ for Q1 2016 consists of the sum of the WIND and 3 Italia businesses results, respectively, for the three months ended 31 March 2016, prior to the merger of the two businesses. The Q1 2016 data related to Tre Ital
Slide 19: Income statement
Q1 2017 income statement 1Q17 reported 1Q16 pro forma Warid1 1Q16 reported Reported YoY Organic2 YoY Revenue 2,281 2,105 2,017 13.1% (1.0%) Service revenue 2,202 2,030 1,948 13.1% (0.8%) EBITDA 861 778 758 13.6% 1.9% Depreciation & amortization and other (516) (481) (454) 13.6% EBIT 345 297 304 13.5
Slide 20: Net debt evolution
Q1 2017 RESULTS Q1 2017 net debt evolution 1 Exceptional items in 1Q 2017 cash flow consists of USD 69 million (final payment incl. legal fees) related to Iraqna case, performance transformation cash out of USD 23 million and USD 257 million related to the GTH share buy-back 2 In FY 2016, underlying
Slide 21: Update on corporate finance activities
Q1 2017 update on corporate finance activities Securing our strong liquidity profile Extending maturities Centralizing debt Reducing average cost of debt Refinancing of RUB-denominated PJSC in progress, potentially reducing cost of debt Repaid 96% of PJSC’s 2022 RUB bonds, after put was exercised Mu
Slide 22: Robust underlying equity free cash flow evolution
Q1 2017 RESULTS Robust underlying equity free cash flow1 evolution 1 Underlying equity free cash flow, defined as net cash flow from operating activities less net cash flow used in investing activities; excluding M&A transactions, transformation costs and other one-off items 2 See appendix for recon
Slide 23: 2017 guidance confirmed
Q1 2017 RESULTS 2017 guidance confirmed 1 FY 2017 targets based on pro-forma results for 2016, including 12 months of Warid contribution; organic targets for revenue and underlying EBITDA margin are at constant currency, excluding exceptional items, e.g. transformation costs and M&A. Equity free cas
Slide 24: Q&A
VEON Q&A
Slide 25: Appendix
APPENDIX
Slide 26: Debt maturity schedule
Q1 2017 RESULTS Debt maturity schedule Group debt maturity schedule by business unit 1 After effect of cross currency swaps AS AT 31 MARCH 2017 Group debt maturity schedule by currency1 2017 2018 2019 2020 2021 2022 >2022 PERCENT USD 1,4 0,7 1,1 0,7 0,7 1,3 1,7 73% RUB 0,9 0,9 0,0 0,0 0,0 0,0 0,0 19
Slide 27: Liquidity Analysis
Q1 2017 RESULTS Liquidity Analysis 1 Borrower VEON Holdings, with the option to make each drawdown under the facilities in either USD or EUR Unused RCF headroom as at 31 March 2017: NEW MULTI-CURRENCY1 TERM AND REVOLVING FACILITIES AGREEMENT UP TO USD 2.25 BILLION SIGNED IN FEBRUARY 2017 VimpelCom -
Slide 28: Debt by entity
Debt by entity 1 After effect of cross currency swaps Type of debt Entity Bonds Loans RCF Vendor Financing Other Total VimpelCom Holdings B.V. 3,047 500 - 49 - 3,596 VimpelCom Amsterdam B.V. - 1,000 - 585 - 1,085 PJSC VimpelCom 1,604 1,021 - 64 67 2,855 GTH Finance BV 1,200 - - - - 1,200 Pakistan Mo
Slide 29: Underlying equity free cash flow reconciliation table
Underlying equity free cash flow reconciliation table As at 31 March 2017 USD millions Entity 1Q17 1Q16 Net cash from operating activities 584 (362) Exceptional items: PT costs 23 44 Uzbekistan legal costs 795 IRAQNA provision 69 Underlying Net Cash Flow from operating activities 676 477 Net cash us
Slide 30: Forex
Forex Entity Russian Ruble Algerian Dinar Pakistan Rupee Bangladeshi Taka Ukrainian Hryvnia Kazakh Tenge Uzbekistan Som Armenian Dram Kyrgyz Som Georgian Lari Forex assumptions FY 2017 67.00 118.00 107.00 79.00 28.00 350.00 3,231.34 480 70.00 2.25 Average rates 1Q17 1Q16 YoY 58.84 74.63 (21.2%) 109.