Slide 1: FY 2017 results and business update
FY 2017 results and business update London, 22 February 2018
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 “m
Slide 3: Agenda
Agenda Opening Richard James - Head of IR 2017 Achievements & 2018 strategic priorities Jean-Yves Charlier - CEO Financial results and targets Trond Westlie - CFO BREAK - 20 MINUTES Russia Update Kjell Johnsen – Head of Major Markets Italy update Jeffrey Hedberg - CEO Italy JV Final remarks Jean-Yve
Slide 4: FY 2017: good results leading to US 28 cents total dividend
FY 2017: good results leading to US 28 cents total dividend 9.5 38.8% • Total revenue increased by 6.6% YoY; 1.9% YoY organic growth TOTAL UNDERLYING • Mobile data revenue increased by 30.2% YoY; 25.7% YoY REVENUE EBITDA MARGIN2 organic growth (USD BILLION) (%) • Reported EBITDA increased 11.0% YoY
Slide 5: Strategic framework to transform VEON
Strategic framework to transform VEON Delivering robust underlying equity free cash flow growth, Revitalize to underpin sustainable and Reinvent progressive dividends REVITALIZING OUR BUSINESS TO REINVENTING A GLOBAL ACHIEVE WORLD CLASS STANDARDS COMMUNICATIONS PIONEER FY 2017 RESULTS 5
Slide 6: Strategic framework delivering solid growth in underlying equity free cash flow and dividends
Strategic framework delivering solid growth in underlying equity free cash flow and dividends USD MILLION TOTAL REVENUE1 DATA REVENUE1 REPORTED EBITDA1 +6.6% YoY reported +30.2% YoY reported +11.0% YoY reported +1.9% YoY organically +25.7% YoY organically +7.5% YoY organically 9,606 9,474 1,856 3,58
Slide 7: Revitalizing our business: significant progress in 2017
Revitalizing our business: significant progress in 2017 CONSOLIDATING OUR WORLD CLASS ACCELERATING GROWTH TRANSFORMING PORTFOLIO & CREATING OPERATIONS SEGMENTS THE COST BASE AN ASSET LIGHT MODEL • Substantial increase in free float to • GTH share buy back and mandatory • Mobile data revenue organic
Slide 8: Portfolio update
Portfolio update Ukraine: sustained robust performance with Russia: continued growth in mobile business driven by solid margin expansion; 4G/LTE spectrum data-centric pricing initiatives, VEON launch, EBITDA investment to further strengthen market position margin impact due to Euroset store integrat
Slide 9: Algeria
Algeria Strategic plan to turnaround the business in difficult macro -economic environment and complex regulatory framework REGULATORY NETWORK & SPECTRUM COMMERCIAL MANAGEMENT COST DIGITAL • Creating a level • Challenge to build a • New simplified offers • Strong management • Performance • Djezzy se
Slide 10: Bangladesh
Bangladesh Strategic plan to turnaround the #3 player REGULATORY NETWORK & SPECTRUM COMMERCIAL MANAGEMENT COST DIGITAL • Need to create a • Addressing the network • Positioning • Strong management • Performance • DMP platform modern regulatory quality and performance Banglalink as the team in place
Slide 11: Update on the GTH Mandatory Tender Offer
Update on the GTH Mandatory Tender Offer The GTH Mandatory Tender Offer remains VEON has taken all actions required for such Our desire is to find a path forward with the subject to approval by the Egyptian approval and the matter is currently held up in Egyptian Authorities and we are considering A
Slide 12: VEON is fully committed to its digital transformation agenda
VEON is fully committed to its digital transformation agenda STRATEGIC OBJECTIVES REINVENT STRATEGIC INITIATIVES 1. Transforming the brick & mortar to a 1. VEON engagement platform digital business model from the customer 2. Data management platform (DMP) touch points to the back-end systems 3. Digi
Slide 13: VEON platform strategy
VEON platform strategy MESSAGING MARKETPLACE • Re-engage with users • Monetize with partners • Counter cannibalization (global brands, small in core communication businesses/ local, services by OTTs influencers/ celebrities) through ”official • Differentiate with accounts” content, offers, and ”free
Slide 14: VEON highlights 2017
VEON highlights 2017 2.7 million downloads in Pakistan in less than 8.3 million downloads 90 days Messaging in Georgia Over 3 million Monthly Active Users In-App offers in Russia Content & In-App offers in Pakistan ILLUSTRATIVE EXAMPLE FY 2017 RESULTS 14
Slide 15: >200 partnerships signed
>200 PARTNERSHIPS SIGNED 120 Content Partnerships 97 Offer Partnerships 28 Payment Partnerships Terms with over 100 new partners agreed FY 2017 RESULTS 15
Slide 16: Digitizing the core in a systematic and innovative manner
Digitizing the core in a systematic and innovative manner CUSTOMER -FACIN G SYSTEMS & PROCESS ES NET WORK & IT ADMINISTR ATIV E SYSTEMS AND SYSTEMS & PROCESS ES PROCESS ES FY 2017 RESULTS 16
Slide 17: Digitizing the core: focusing on both customer-facing & core systems
Digitizing the core: focusing on both customer-facing & core systems • Clean-sheeting the • New channels whole customer • Improved self-service journey • Near-real-time CUSTOMER -FACIN G response SYSTEMS & PROCESS ES • Making our networks 4G/LTE and 5G ready NET WORK & IT ADMINISTR ATIV E • Revampin
Slide 18: VEON's technology initiatives are tightly interlinked
VEON’s technology initiatives are tightly interlinked INTEGRATED CUSTOMER CHANNELS AND PARTNER API’s Global cyber security layer Scalable multi-purpose DATA DATA infrastructure VIRTUALIZED NEW CLOUD ERP DATA DATA NETWORK DIGITAL BSS (ESS) DATA DATA DATA DATA ANALYTICS AND AI (DMP) FY 2017 RESULTS 18
Slide 19: VEON's data analytics and AI (DMP)
VEON’s data analytics and AI (DMP) KEY OBJECTIVES EXPECTED IMPACT INITIAL MILESTONES & RESULTS • Introduce data-driven decision making in every • Greater customer personalization resulting in • Smart CAPEX planning introduced in major business process better customer engagement and satisfaction mark
Slide 20: VEON's new digital BSS (DBSS)
VEON’s new digital BSS (DBSS) KEY OBJECTIVES EXPECTED IMPACT INITIAL MILESTONES & RESULTS • Making core IT infrastructure internet -friendly • Reduce BSS costs from >2% to 1% of revenue • Ericsson implementation on track to compete in the new age • Provide for a far better customer experience with •
Slide 21: Zoom-in on Georgia: our first market on new DBSS
Zoom-in on Georgia: our first market on new DBSS PROJECT RESULTS ACHIEVED • Full implementation covering all business lines • BSS IT costs reduced from 1.9% to 1% of revenue was completed in a record 8 months • World-class self-service applications: almost • No disruption to the operations during th
Slide 22: VEON core network virtualization
VEON core network virtualization KEY OBJECTIVES EXPECTED IMPACT INITIAL MILESTONES & RESULTS • Decouple Hardware and Software to improve • Long-term savings in capex and opex compared to • Virtual EPC (Virtualized Evolved Packed Core agility legacy Network) tender TCO was a factor of 5x less than le
Slide 23: 2018 key strategic priorities
2018 key strategic priorities 1 Turnaround of Algeria and Bangladesh 2 Defend market position and accelerate synergies in Italy 3 Integration of Euroset stores in Russia 4 Further address the cost structure, particularly the corporate costs 5 Accelerate the implementation of the digital agenda 6 Unl
Slide 24: Agenda
Agenda Opening Richard James - Head of IR 2017 Achievements & 2018 strategic priorities Jean-Yves Charlier - CEO Financial results and targets Trond Westlie - CFO BREAK - 20 MINUTES Russia Update Kjell Johnsen – Head of Major Markets Italy update Jeffrey Hedberg - CEO Italy JV Final remarks Jean-Yve
Slide 25: Reflections on VEON
Reflections on VEON 1 Company restructuring executed, capital structure improved 2 Governance, controls and compliance strengthened 3 GTH Mandatory Tender Offer still pending 4 Cash flow significantly improved in the last two years 5 Focus on general and corporate costs optimization We are in a matu
Slide 26: Revenue evolution
Revenue evolution Organic growth in data revenue is the key driver USD MILLION +6.6% 45 264 5 155 384 9,474 (274) 10 9,210 9,040 8,885 Total reported Warid Total Equipment & Voice Interconnect Data and MFS Other 1 Organic total FOREX Total revenue 1H 2016 revenue accessories and roaming revenue reve
Slide 27: EBITDA evolution
EBITDA evolution EBITDA growth supported by revenue USD MILLION +11.0% 165 80 74 36 3,587 3,232 3,268 EBITDA Warid EBITDA FY16 Service Total costs 2 FOREX EBITDA 1 FY16 reported 1H 2016 revenue FY17 1 Includes 12 months Warid for FY 2016 2 FY 2017 total costs includes exceptional items consisting of
Slide 28: Revenue and EBITDA country trends
Revenue and EBITDA country trends Revenue RUSSIA PAKISTAN ALGERIA BANGLADESH UKRAINE UZBEKISTAN (RUB BILLION) (PKR BILLION) (DZD BILLION) (BDT BILLION) (UAH BILLION) (UZS BILLION) +0.4% +4.2% -9.9% -9.5% +10.7% +21.3% 74 YoY 41.5 YoY 27.5 YoY 12.5 YoY 44 YoY 650 YoY 72 41 27 43 40.5 26.5 12 600 70 4
Slide 29: Corporate costs
Corporate costs • In FY 2017, VEON HQ costs amounted to USD 431 million 1, increased by 2.5% YoY ► HQ Amsterdam and London ► Costs for digital ► Costs for services and projects (e.g. M&A, legal costs, ESS2, global procurement) We’re addressing the corporate cost base and aiming for a reduction of ~2
Slide 30: Q4 2017 income statement
Q4 2017 income statement USD MILLION Reported Organic1 4Q17 4Q16 YoY YoY Revenue 2,320 2,354 (1.4%) 1.2% Service revenue 2,214 2,244 (1.3%) 1.5% EBITDA 753 783 (3.8%) 0.4% Depreciation, amortization and other (542) (692) (21.7%) ► Operating profit increased, as Q4 2017 was impacted by a lower level
Slide 31: IFRS 9 & 15: expected impact for VEON
IFRS 9 & 15: expected impact for VEON IFRS 9 IFRS 15 • The scope of IFRS 9 includes new guidance to classify • The scope of IFRS 15 includes the timing of revenue financial instruments on the balance sheet recognition and costs of obtaining contracts with customers • VEON will need to introduce the
Slide 32: Cash flow reconciliation table
Cash flow reconciliation table USD MILLION FY2015 FY2016 FY2017 YoY EBITDA 2,875 3,232 3,587 11% Changes in working capital - 157 - 249 199 -179% Movement in provisions - 185 - 645 - 119 -82% Net interest paid-received - 758 - 726 - 745 3% Income tax paid - 671 - 420 - 445 6% Cash flow from operatin
Slide 33: Cash upstream developments
Cash upstream developments • VEON had structural constraints in • Improvements during the last 12 months upstreaming cash flow from its operations ► In Ukraine the cap increased over time, and ► Ukraine cash upstream capped by Central Bank VEON is now able to upstream an amount close of Ukraine to i
Slide 34: FY 2017 net debt evolution
FY 2017 net debt evolution USD MILLION 987 711 706 721 (3,587) 2,037 445 9,728 745 8,741 (199) 7,162 Net debt EBITDA Change in working Financial Taxes Cash capex incl. Dividend FOREX Other Net debt MTO Cash 4 Net debt 2 3 31 December capital charges licenses 31 December collateral 31 December 2016 2
Slide 35: Rebalanced capital structure
Rebalanced capital structure YEAR-END 2016 YEAR-END 2017 13% 12% 9% HQ - guaranteed HQ - guaranteed 37% HQ - unguaranteed Reduction 6% HQ - unguaranteed 28% PJSC of priority PJSC Other debt Other 22% 73% USD 8% 8% USD 12% 19% RUB Improved RUB currency 55% EUR 73% EUR mix1 25% Other Other Average cos
Slide 36: FY 2017 targets
FY 2017 targets USD MILLION FY 2016 FY 2017 targets1 FY 2017 actuals UNLESS OTHERWISE STATED Total revenue 9,040 Low single digit growth +1.9% organic YoY Underlying EBITDA margin 40.0% Flat to low single digit accretion (0.9 p.p.) organic YoY Underlying equity free cash flow 812 850 - 950 1,067 exc
Slide 37: FY 2018 targets
FY 2018 targets USD MILLION UNLESS OTHERWISE STATED FY 2017 D FY 2017 pro-forma FY 2018 actual targets2 (impacts from UZB currency, Deodar, Euroset, one-off adjustment to a vendor agreement) Flat-to-low Total revenue 9,474 ~(120) ~9,350 single digit organic growth Flat-to-low EBITDA 3,587 ~(380) ~3,
Slide 38: Final dividend and dividend policy
Final dividend and dividend policy For the financial year ended 31 December 2017, the Company intends to pay a dividend in the aggregate amount of US 28 cents per share comprised of USD 11 cents per share paid as an interim dividend in September 2017 and US 17 cents per share as a final dividend to
Slide 39: Agenda
Agenda Opening Richard James - Head of IR 2017 Achievements & 2018 strategic priorities Jean-Yves Charlier - CEO Financial results and targets Trond Westlie - CFO BREAK - 20 MINUTES Russia Update Kjell Johnsen – Head of Major Markets Italy update Jeffrey Hedberg - CEO Italy JV Final remarks Jean-Yve
Slide 40: Russia's strategic priorities
Russia’s strategic priorities • Focus on ARPU and value through data centric pricing • Expanding our controlled distribution channel ARPU • Fixed-line business turnaround • Major improvement in network expansion, by smart investing • Moving to digital self-care solution, Beeline becoming a leading d
Slide 41: Mobile revenue turnaround
Mobile revenue turnaround ARPU Drivers of mobile ARPU turnaround: (RUB) • Improved customer quality ► High end ARPU customer base (RUB 500+) increased 4% YoY 338 -9.5% ► Continued solid growth of mobile data customers (+5% YoY) 323 and traffic (+39% YoY) 319 • Focus on data centric price plans 310 +
Slide 42: Fixed-line business turnaround: back to growth
Fixed-line business turnaround: back to growth 10x FOOTPRINT EXPANSION PACE QUALITY IMPROVEMENT SUPERIOR OFFERING • Connect 5,000 new buildings in 2018, 11,000 • Modernization of 200+ MEN rings • Focus on FMC: 870K customers at YE 2017, in 2019 (vs 1,100 in 2017) • 35% wholesale capacity increase ta
Slide 43: Expanding our controlled distribution channel
Expanding our controlled distribution channel 3M REVENUE FROM NEW CUSTOMERS Regional multibrand National multibrand Monobrand 44% 41% 60% 2016 2017 2018E VEON and MegaFon agreed to end their Integrate and rebrand acquired stores to Increasing the share of controlled Euroset joint venture Beeline mon
Slide 44: Smart investing
Smart investing PRIORITIZE CORE CUSTOMERS EFFICIENT ROLL OUT RESULTS • Use big data analytics to identify and locate our • Capex optimization through network sharing • Doubled roll out of base stations YoY in 2017 active core customers • Strong, globalized procurement process • 63% 4G/LTE population
Slide 45: Control addressable costs
Control addressable costs Drivers of mobile ARPU turnaround: FTEs • > 30% FTE reduction since 2015 through digitization and increased efficiencies, changing the profile of the 29,255 -31% organization 23,622 ► Project Phoenix (managed services) brought ~2,900 FTE 20,041 reduction in 2017 ► By the en
Slide 46: Russia: continued growth in mobile business
Russia: continued growth in mobile business TOTAL REVENUE MOBILE CUSTOMERS (RUB BILLION) (MILLION) • Mobile service revenue increased by 2.1% YoY, +0.4% YoY -0.3% YoY mainly driven by 8.9% mobile data revenue 70.1 72.6 70.4 72.6 growth 10.8 10.1 9.6 ► Mobile ARPU grew by 2.0% YoY 58.3 58.2 55.8 59.2
Slide 47: FY 2017 back to revenue growth
FY 2017 back to revenue growth TOTAL REVENUE MOBILE CUSTOMERS (RUB BILLION) (MILLION) +1.1% YoY -0.3% YoY 58.3 58.2 275.9 273.0 FY16 FY17 FY16 FY17 EBITDA AND EBITDA MARGIN CAPEX EXCL. LICENSES (RUB BILLION AND %) AND CAPEX/REVENUE (RUB BILLION AND %) -0.4% YoY -0.4% YoY (underlying)1 -6.1% YoY 104.
Slide 48: Beeline becoming a leading digital operator
Beeline becoming a leading digital operator Official Honoree (The Webby Awards) 2017 2.5 Million Best self-service app («RUNET raiting— 2016») 2016 Downloads My Beeline VEON 23 Million 1.7 Million Unique users (2017) Registrations 7 Million 25/23K+ MAU Content Channels/ (monthly active users) Conten
Slide 49: Five priority use cases for VEON personal internet platform
Five priority use cases for VEON personal internet platform Retail & Rideshare & Logistics Insurance Telco E-Commerce PHYSICAL RETAIL PARCEL DELIVERY INSTANT CONTEXTUAL RIDER ACQUISITION DEVICE FINANCING TRAFFIC STIMULATION PRODUCTIVITY INCREASE MICRO INSURANCE Propose users personalized Proactively
Slide 50: Regulatory update
Regulatory update YAROVAYA LAW NATIONAL & ON-NET ROAMING SPECTRUM • The proposed date (01.07.2018) for the law to • National roaming prices decreased and differences • Proposed Russian Federation budget for 2018- come into force is likely to be rescheduled. between “home region” and “travel” roaming
Slide 51: Strong management team
Strong management team • Kjell Johnsen is VEON’s Head of Major Markets, with responsibility for the Group’s businesses in Russia and Italy. From September 2016 to December 2017, Kjell was the Chief Executive Officer of Beeline • Vasyl Latsanych (former Group Vice President for Strategy and Kjell Joh
Slide 52: Agenda
Agenda Opening Richard James - Head of IR 2017 Achievements & 2018 strategic priorities Jean-Yves Charlier - CEO Financial results and targets Trond Westlie - CFO BREAK - 20 MINUTES Russia Update Kjell Johnsen – Head of Major Markets Italy update Jeffrey Hedberg - CEO Italy JV Final remarks Jean-Yve
Slide 53: Wind Tre 2017: a deeper look at the market
Wind Tre 2017: a deeper look at the market CONSUMER MOBILE CONSUMER FIXED BUSINESS REGULATION • Highly competitive mobile • In fixed, high promotional • Intense competitive pressure • Regulatory changes on market ahead of the new intensity to accelerate in mobile (both SMEs and international roaming
Slide 54: Wind Tre 2017: investing for the future
Wind Tre 2017: investing for the future SHIFT TO VALUE RESTORING CONFIDENCE FIXING OPERATIONS REFINANCING • Shift of focus from volume to • Elimination of major drivers • Modernizing the network, • Refinancing completed value, even if it entails of distrust, with a short term now generating 50% of r
Slide 55: Wind Tre financial highlights FY 2017 vs FY 2016 combined
Wind Tre financial highlights FY 2017 vs FY 2016 combined Mobile TLC revenue TOTAL REVENUE (EUR BILLION) 6.2 EBITDA MARGIN, UNDERLYING1 35.8% Total vs 2016 vs Q4 2016 (%) -4.5% vs 2016 +200bps vs 2016 -11.1% vs Q4 2016 +310bps vs Q4 2016 EUR 4.2 billion -4.3% -8.1% Fixed TLC revenue Total vs 2016 vs
Slide 56: Mobile market outlook
Mobile market outlook HIGHLIGHTS MOBILE MARKET EXPECTATIONS 1 MOBILE SIMs ( M ) AND ARPU ( E U R ) (EUR BILLION) • Mobile market expected to shrink in value in CAGR 13.5 13.6 13.2 12.9 ’17-’19 91.3 90.1 91.3 92.9 the coming years mainly due to growing 0.7 0.7 0.9 competitive intensity driven by the
Slide 57: Fixed market outlook
Fixed market outlook HIGHLIGHTS FIXED MARKET EXPECTATIONS 1 FIXED BROADBAND LINES AND BROADBAND ARPU (EUR BILLION) CAGR 25.8 26.7 26.8 27.1 • Fixed market expected to grow slightly in ’17-’19 total value in the coming years driven by 11.3 11.4 11.5 11.7 Total +1.2% 17.6 18.2 the increase in broadban
Slide 58: 2018: ready for the new entrant
2018: ready for the new entrant New entrant likely to further disrupt …But we are ready to fight the market in 2018… and we will get benefits from their entry • Likely commercial start in mobile: H1 2018 • Fight plan vs. new entrant: key differentiators to bring value to our clients • Expected marke
Slide 59: 2018: a year of transformation
2018: a year of transformation INTEGRATE DIFFERENTIATE OPTIMIZE • Bridge the gap with competition on mobile • Accelerate on fixed-mobile convergence • Improve efficiency eliminating duplications network in organization and processes • Strengthen differentiation on B2B segment • Consolidate our syste
Slide 60: Build future-proof differentiating infrastructure
Build future-proof differentiating infrastructure OUR AMBITION EARLY ACHIEVEMENTS PLAN Building Italy leading mobile network ~5k sites modernized1 98% 4G coverage by YE 2018 through consolidation and Mobile 100% consolidation by YE 2019 modernization 95% 4G population coverage network Competitive di
Slide 61: Accelerate on fixed-mobile convergence
Accelerate on fixed-mobile convergence OUR AMBITION EARLY ACHIEVEMENTS PLAN • The hub to make families’ life • Breakthrough simple FMC offer • Finalize process improvements and step-up easier end-to-end customer experience on • The environment for tech- ► Fiber up to 1Gbps ► E.g. fix provisioning an
Slide 62: Strengthen differentiation on B2B
Strengthen differentiation on B2B OUR AMBITION EARLY ACHIEVEMENTS PLAN • Double-down in B2B to turn B2B into a solid +18% fixed customers in 2017 • Drastically enhance experience of business growth pillar customers +3% mobile customers in 2017 ► Drastically improving mobile & fixed network performan
Slide 63: Accelerate digital transformation
Accelerate digital transformation OUR AMBITION EARLY ACHIEVEMENTS PLAN • To become a “Simple and Digital” company • ~7% digital sales in 4Q 2017, leading the • Drive Digital Transformation in the company driving new revenue growth and cost savings market • Increase digital sales and digital top-up t
Slide 64: Improve organizational efficiency
Improve organizational efficiency OUR AMBITION EARLY ACHIEVEMENTS PLAN Have the best-in-class, future-proof Reduction of ~2,200 employees in 2017, on a • Further streamline organization organizational setup and speed up decision Elimination of all duplicated activities voluntary basis by offering se
Slide 65: Maximize synergies and reduce costs
Maximize synergies and reduce costs OUR AMBITION EARLY ACHIEVEMENTS PLAN Network & IT • Mobile network consolidation & modernization 90% • Fiber deployment from 25% Technology EUR 167 Annual run-rate Opex synergies • Insourcing of key operational activities w/o associated human resources million rea
Slide 66: Focus on cash generation
Focus on cash generation CAPEX PLAN DEBT MATURITY PROFILE1 (EUR BILLION) (EUR BILLION) EUR 6 billion in 5 years (2017-2021) ~2.7% average Bank loans interest rate 4 2.2 Bonds 1.95 1.6 1.8 1.7 ~ 1.3 ~ 1.5 ~ 1.0 0.45 0.60 2017 2018E 2019E 2020E 2021E 2018 2019 2020 2021 2022 2023 2024 2025 2026 DE-LEV
Slide 67: Final remarks
Final remarks Clear strategy & execution plan to accelerate cash generation Strategy Strong focus on quality as a key enabler to drive value and differentiation Processes reengineering underway to improve cost efficiency and customer experience Operations Transformation into a lean & efficient organ
Slide 68: Agenda
Agenda Opening Richard James - Head of IR 2017 Achievements & 2018 strategic priorities Jean-Yves Charlier - CEO Financial results and targets Trond Westlie - CFO BREAK - 20 MINUTES Russia Update Kjell Johnsen – Head of Major Markets Italy update Jeffrey Hedberg - CEO Italy JV Final remarks Jean-Yve
Slide 69: Appendix
Appendix
Slide 70: Pakistan: continuous growth and margin expansion
Pakistan: continuous growth and margin expansion TOTAL REVENUE MOBILE CUSTOMERS (PKR BILLION) (MILLION) • Continued revenue growth, despite the +4.2% YoY +4.0% YoY aggressive market, fuelled by strong data revenue growth (+27.8% YoY) 38.7 41.2 40.3 2.5 3.0 3.0 51.6 53.6 • Network integration complet
Slide 71: Algeria: data pricing competition continues, challenging macro environment
Algeria: data pricing competition continues, challenging macro environment TOTAL REVENUE MOBILE CUSTOMERS (DZD BILLION) (MILLION) • Top line remains under pressure -9.9% YoY -8.0% YoY ► Customer base decreased due to increased 27.2 0.2 26.2 churn, fuelled by high competitive pressure 0.5 24.5 0.4 16
Slide 72: Bangladesh: continued competitive pressure impacting results
Bangladesh: continued competitive pressure impacting results TOTAL REVENUE MOBILE CUSTOMERS (BDT BILLION) (MILLION) • Revenue YoY trend deteriorated vs Q3 2017 -9.5% YoY +3.2% YoY ► Continued competition on customer 12.0 11.7 10.8 acquisition driving multi-SIM and diluted 0.4 0.4 0.4 30.4 31.3 share
Slide 73: Ukraine: sustained robust performance
Ukraine: sustained robust performance TOTAL REVENUE MOBILE CUSTOMERS (UAH BILLION) (MILLION) • Leader in NPS and clear market leader with customer +10.7% YoY +1.7% YoY market share above 47% 4.3 4.3 0.3 0.3 • Improved churn driving customer growth 3.9 26.1 26.5 0.3 • Mobile service revenue growth of
Slide 74: Uzbekistan: Tax and cost pressure impacting EBITDA margin
Uzbekistan: Tax and cost pressure impacting EBITDA margin TOTAL REVENUE MOBILE CUSTOMERS (UZS BILLION) (MILLION) • Revenue grew 21.3% YoY driven by increased tariffs, +21.3% YoY +1.9% YoY which were pegged to USD until the Uzbek som 625 628 liberalization on 4 September 2017 518 4 7 4 • Mobile data
Slide 75: Italy: synergies on track partially offsetting top line pressure
Italy: synergies on track partially offsetting top line pressure TOTAL REVENUE MOBILE CUSTOMERS (EUR MILLION) (MILLION) • Service revenue decline of 7.0% YoY with: -11.1% YoY -5.8% YoY ► Mobile service revenue decline of 8.1% YoY 1,749 1,543 1,556 mainly due to continued highly competitive 367 189 2
Slide 76: Key financing activities and transactions of 2017
Key financing activities and transactions of 2017 Feb May Jun Aug Nov Dec 2017 2017 2017 2017 2017 2017 RCF/Term loan at Sberbank Tender offer on Alfa Bank & VTB VEON submits MTO Cash repatriation HQ loans in RUB at HQ PJSC and PJSC loans in RUB at HQ on GTH from Uzbekistan guaranteed bonds GTH shar
Slide 77: Group debt maturity schedule
Group debt maturity schedule AS AT 31 DECEMBER 2017, USD BILLION Group debt maturity schedule1 2.8 HQ Pakistan Other GTH Russia 2.6 1.6 1.6 1.4 1.1 2018 2019 2020 2021 2022 >2022 Group debt maturity schedule by currency1 2018 2019 2020 2021 2022 >2022 USD 0.7 1.1 0.7 0.4 0.7 2.6 55% EUR 0.0 0.0 0.3
Slide 78: Liquidity analysis
Liquidity analysis Group cash breakdown by currency 31 DECEMBER, 2017 Unused RCF headroom at the end of Q4 2017: VEON – Syndicate USD 1.44 billion 33% Unused VF/CF headroom at the end of Q4 2017: VEON - Sberbank RUB 15 billion (USD 0.26 billion) 67% Pakistan – facility PKR 15 billion (USD 0.13 billi
Slide 79: Debt by entity
Debt by entity AS AT 31 DECEMBER 2017, USD MILLION Outstanding debt (millions) Type of debt/lender Entity Bonds Loans Other Total VEON Amsterdam B.V. - 475 - 475 VEON Holdings B.V. 3,891 3,542 - 7,432 GTH Finance B.V. 1,200 - - 1,200 GTH - 98 - 98 PJSC VimpelCom 562 - 61 623 Pakistan Mobile Communic
Slide 80: Underlying equity free cash flow (excluding licenses) reconciliation table
Underlying equity free cash flow (excluding licenses) reconciliation table 4Q17 4Q16 FY17 FY16 Net cash from operating activities 479 384 2,475 1,192 from continued operations Exceptional items: One-off adjustment to a vendor - - (66) - agreement1 PT costs 58 66 179 255 Settlement with DOJ/SEC/OM -
Slide 81: Cash flow
Cash flow USD mln FY17 Operating activities Profit after tax (496) Income tax expenses 472 Profit before tax (24) Non-cash adjustment to reconcile profit before tax to net operating cash flows: Depreciation 1.454 Amortization 537 Impairment loss 66 FY2017 Loss/(Gain) From disposal of non current ass
Slide 82: Underlying EBITDA reconciliation table
Underlying EBITDA reconciliation table FY16 4Q17 4Q16 FY17 Pro-forma Warid EBITDA 753 783 3587 3,268 One-off vendor adjustment - - (106) - Performance Transformation 58 66 184 245 costs of which: HQ and Other 38 29 142 156 Russia 3 1 5 11 Emerging Markets 17 36 37 78 Other exceptional 3 61 9 104 EBI
Slide 83: Forex
Forex Target rates Average rates Closing rates FY 2018 4Q17 4Q16 YoY 4Q17 4Q16 YoY Russian ruble 60.00 58.41 63.07 (7.4%) 57.60 60.66 (5.0%) Algerian dinar 110.00 114.77 110.58 3.8% 114.76 110.40 4.0% Pakistan rupee 105.00 106.42 104.78 1.6% 110.70 104.37 6.1% Bangladeshi taka 79.00 82.32 78.62 4.7%