48 slides from VEON Ltd. ORD's earnings presentation, Aug 3, 2023
Slide 1: 2Q23 Trading Update
VEON 2Q23 TRADING UPDATE STRONG RESULTS FULL-YEAR REVENUE GUIDANCE RAISED Amsterdam, 3 August 2023 1 1
Slide 2: Agenda
AGENDA 1. OPENING Nik Kershaw 2. HIGHLIGHTS & BUSINESS UPDATE Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff 4. CLOSING REMARKS Kaan Terzioğlu 5. Q&A Kaan Terzioğlu, Joop Brakenhoff 2 2
Slide 3: Notice to Readers: Financial Information Presented
NOTICE TO READERS: FINANCIAL INFORMATION PRESENTED VEON's results and other financial information presented in these financial statements are, unless otherwise stated, prepared in accordance with International Financial Reporting Standards ("IFRS") based on internal management reporting, are the res
Slide 4: Disclaimer
DISCLAIMER VEON’s results presented in this trading update are, unless otherwise stated, based on IFRS and have not been externally reviewed and audited. The financial information included in this trading update is preliminary and is based on a number of assumptions that are subject to inherent unce
Slide 5: Agenda
AGENDA 1. OPENING Nik Kershaw 2. HIGHLIGHTS & BUSINESS UPDATE Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff 4. CLOSING REMARKS Kaan Terzioğlu 5. Q&A Kaan Terzioğlu, Joop Brakenhoff 5 5
Slide 6: 2Q23 Highlights
2Q23 HIGHLIGHTS TOTAL SERVICE EBITDA REVENUE REVENUE $916mn $882mn $415mn -4.3% YoY -4.0% YoY -10.6% YoY +19.6% YoY +19.6% YoY +13.6% YoY local currency local currency local currency Accelerating local currency Supported by strong Excluding one-offs, growth growth in Multiplay and normalised EBITDA
Slide 7: Accelerating Top Line, Growing Above Inflation
ACCELERATING TOP LINE, GROWING ABOVE INFLATION REVENUE PERFORMANCE YoY in local currency 20.6% 19.0% 18.1% 19.6% 16.6% 16.0% 15.1% 16.8% 13.9% 12.5% 15.4% 15.3% Group 13.5% 13.1% 13.0% Group, excl. Ukraine 9.4% Ukraine Weighted annual inflation, 8.2% 8.7% excl. Ukraine 6.0% 5.2% 3.9% 4Q21 1Q22 2Q22
Slide 8: 2Q23 Group EBITDA (Normalised) +20.3% YoY in Local Currency
2Q23 GROUP EBITDA (NORMALISED) +20.3% YOY IN LOCAL CURRENCY UKRAINE PAKISTAN BANGLADESH +16.5% revenue Service +22.8% Service revenue +17.4% Service revenue +11.6% EBITDA +23.4% EBITDA +17.9% EBITDA KAZAKHSTAN UZBEKISTAN KYRGYZSTAN +19.2% Service revenue +20.9% Service revenue +22.3% Service revenue
Slide 9: 4G Growth Driving Revenues
4G GROWTH DRIVING REVENUES Mobile customer base Steady growth in 4G Revenues from 4G users uptake drive top line growth 4G users and penetration Multiplay and Doubleplay 4G (B2C) revenue 156mn mobile subscribers (USD million) (3 month active, million) -0.6% YoY 56.8% Multiplay 2Play 4G 48.7% 41.3% 1
Slide 10: Ukraine
UKRAINE Keeping Ukraine connected and investing in its future 2Q23 RESULTS AND YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY AND DOUBLEPLAY YOY TRENDS PENETRATION 4G REVENUE (B2C)1 (UAH Billion) (3 month active, million) (UAH billion) TOTAL SERVICE Multiplay 2Play 4G +16.5% 54% REVENUE REVEN
Slide 11: Helsi
HELSI The largest digital healthcare platform in Ukraine Users registered in the system 25 million Active healthcare institutions 2,200 Active doctors and specialists 34,000 Appointments in 2Q23 1.8 million 11 11
Slide 12: Pakistan
PAKISTAN Growth above 20% in both revenue and EBITDA, gaining market share 2Q23 RESULTS AND YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY AND DOUBLEPLAY YOY TRENDS PENETRATION 4G REVENUE (B2C)1 (PKR Billion) (3 month active, million) (PKR billion) +22.8% TOTAL SERVICE 59% Multiplay 2Play 4G
Slide 13: JazzCash
JAZZCASH The most popular mobile financial services app in Pakistan MAU 14.7 million -9.0% YoY Active merchants 192,000 +22.1% YoY LTM Gross Transaction Value PKR 4.9 trillion +33.2% YoY LTM # of transactions 2.0 billion +0.7% YoY Daily average # of issued loans 55,000 13 13
Slide 14: Kazakhstan
KAZAKHSTAN DO1440 momentum delivers strong revenue and EBITDA growth 2Q23 RESULTS AND YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY AND DOUBLEPLAY YOY TRENDS PENETRATION 4G REVENUE (B2C)1 (KZT Billion) (3 month active, million) (KZT billion) TOTAL SERVICE +19.2% 69% 71% Multiplay 2Play 4G RE
Slide 15: IZI
IZI First digital-only mobile operator in Kazakhstan MAU of IZI app 415,000 4.4x YoY non-Beeline Kazakhstan users of IZI app 50.2% Monthly active mobile customers 191,000 +57% YoY ARPU of IZI customers with digital experience KZT 1,682 4.5 times higher than non-app IZI customers 15 15
Slide 16: Bangladesh
BANGLADESH High double-digit growth gaining further market share 2Q23 RESULTS AND YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY AND DOUBLEPLAY YOY TRENDS PENETRATION 4G REVENUE (B2C)1 (BDT Billion) (3 month active, million) (BDT billion) TOTAL SERVICE +17.4% 46% Multiplay 2Play 4G REVENUE RE
Slide 17: Toffee
TOFFEE The largest mobile entertainment platform in Bangladesh MAU 9.0 million +31.9% YoY non-Banglalink users of Toffee 67.9% Total # of sessions 128.3 million +41.2% YoY ARPU of Banglalink customers watching Toffee BDT 310 2.8 times higher than single play voice customers 17 17
Slide 18: Uzbekistan
UZBEKISTAN Sixth consecutive quarter of topline growth above 20% 2Q23 RESULTS AND YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY AND DOUBLEPLAY YOY TRENDS PENETRATION 4G REVENUE (B2C)1 (UZS Billion) (3 month active, million) (UZS billion) +20.9% 69% Multiplay 2Play 4G TOTAL SERVICE +25.4% 62%
Slide 19: Our Strategic Digital Platforms
OUR STRATEGIC DIGITAL PLATFORMS Offer new experiences to our customers by adding adjacent services Tamasha Toffee BeeTV Helsi JazzCash Simply MyBL IZI BIP Pakistan Bangladesh Kazakhstan Ukraine Pakistan Kazakhstan Bangladesh Kazakhstan Pakistan 2Q23 ACT YoY ACT YoY ACT YoY ACT YoY ACT YoY ACT YoY AC
Slide 20: Sale of Russian Operations Announced on 24 November 2022
SALE OF RUSSIAN OPERATIONS ANNOUNCED ON 24 NOVEMBER 2022 Represents the optimal solution for all stakeholders • Russian regulatory approval received on 7 February 2023 1 Timeline • Submission for cancellation of VEON’s Eurobonds held by PJSC VimpelCom on 30 May 2023 to Euroclear, Clearstream and reg
Slide 21: Agenda
AGENDA 1. OPENING Nik Kershaw 2. HIGHLIGHTS & BUSINESS UPDATE Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff 4. CLOSING REMARKS Kaan Terzioğlu 5. Q&A Kaan Terzioğlu, Joop Brakenhoff 21 21
Slide 22: 2022 Delivers Strong Growth in Continuing Operations
2022 DELIVERS STRONG GROWTH IN CONTINUING OPERATIONS VEON Ltd., audited 2021 2022 (USD millions, except per share amounts) Total operating revenues 3,850 3,755 EBITDA 1,840 1,747 Operating profit 1,023 1,163 Profit / (loss) before tax 464 802 Profit / (loss) from continuing operations 120 733 Profit
Slide 23: 1H23 Highlights
1H23 HIGHLIGHTS TOTAL SERVICE EBITDA REVENUE REVENUE $1,800mn $1,734mn $800mn -6.5% YoY -6.0% YoY -12.0% YoY +17.5% YoY +17.8% YoY +12.5% YoY local currency local currency local currency Revised FY2023 local currency Growth supported by EBITDA margin at 44.5% with guidance to 16%-19% inflationary pr
Slide 24: 2Q23 Revenues
2Q23 REVENUES Accelerating local currency revenue growth REVENUE IN 2Q23 2Q23 results YoY trends (USD million) 174 67 15 (3) (220) 191 294 TOTAL REVENUE 1,136 398 $916mn 916 -4.3% +19.6% local currency Pakistan Ukraine Kazakhstan Bangladesh Uzbekistan Kyrgyzstan HQ and Group in FX impact Group elimi
Slide 25: 2Q23 EBITDA and EBITDA Margin
2Q23 EBITDA AND EBITDA MARGIN Acceleration in local currency EBITDA EBITDA IN 2Q23 2Q23 results YoY trends (USD million) 66 28 6 (43) (108) 106 174 EBITDA 523 $415mn 188 415 -10.6% +13.6% local currency Pakistan Ukraine Kazakhstan Bangladesh Uzbekistan Kyrgyzstan HQ and Group in FX impact Group elim
Slide 26: 2Q23 Debt and Liquidity Update
2Q23 DEBT AND LIQUIDITY UPDATE 30 Jun 2023 vs. 31 Mar 2023 CASH LEVERAGE LEVERAGE • Total cash USD 2.4 billion, excluding banking operations in Pakistan, with USD 2.0 billion INCL. LEASES EXCL. LEASES held at the HQ level 1.68x 1.34x • Operations remain self-funding 1.61x in 1Q23 1.29x in 1Q23 DEBT
Slide 27: Group Debt and Liquidity as of 30 June 2023
GROUP DEBT AND LIQUIDITY AS OF 30 JUNE 2023 Currency mix Capitalised Gross debt Net debt Gross debt Cash (USD equivalent, million) leases excluding leases excluding leases USD / EUR 3,388 9 3,379 2,099 1,280 RUB 284 - 284 1 283 PKR 774 215 559 17 542 BDT 417 323 94 71 23 UAH 172 172 - 149 (149) Othe
Slide 28: Debt Maturity
DEBT MATURITY Operating companies DEBT MATURITY SCHEDULE AS OF 31 JUNE 2023 Headquarters (RCF) (USD billion) Headquarters (other) USD RUB PKR BDT UAH OTHER RCF 2.4 0.43 1.83 1.06 0.81 1.26 0.56 0.91 0.25 0.25 0.19 0.13 0.06 0.05 Cash and cash 2023 2024 2025 2026 2027 2028 2029 >2029 equivalents 1 (U
Slide 29: Debt Management Update
DEBT MANAGEMENT UPDATE AVERAGE COST OF DEBT (%) • The higher cost of debt vs.1Q23 was impacted by the increased 7.7% 7.4% interest rates on floating USD and PKR debt 6.9% 7.0% 6.8% 6.7% 7.0% 6.1% 6.3% 5.9% • Debt cost reflects blended rate of borrowings, mainly USD, RUB and PKR (average USD cost 5.0
Slide 30: Agenda
AGENDA 1. OPENING Nik Kershaw 2. HIGHLIGHTS & BUSINESS UPDATE Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff 4. CLOSING REMARKS Kaan Terzioğlu 5. Q&A Kaan Terzioğlu, Joop Brakenhoff 30 30
Slide 31: 2023 Outlook
2023 OUTLOOK We have raised our full-year revenue guidance FY 2023 Guidance1 1H23 Actual FY 2023 Guidance Total Revenue, 16%-19% growth 10%-14% growth +17.5% YoY in local currency (revised) EBITDA, YoY in local currency 10%-14% growth +12.5% 10%-14% growth LTM Capex intensity 18%-20% 19.6% 18%-20% •
Slide 32: 2023 Ambitions
2023 AMBITIONS We are progressing towards our full-year ambitions 1 Russia sale • Aim to conclude Russia sale transaction • Scheme of Arrangement was completed 2 Focus on capital structure • Material deleveraging of the Group • Execution on “4G for all” and “Digital Operator” 3 Driving growth and ex
Slide 33: Q&A
VEON 2Q23 TRADING UPDATE Q&A 33 33
Slide 34: Thank You!
VEON 2Q23 TRADING UPDATE THANK YOU! ir@veon.com Tel: +31 (0)20 79 77 200 34 34
Slide 35: Appendix
VEON 2Q23 TRADING UPDATE APPENDIX 35 35
Slide 36: Digital Operator Strategy Delivering Results
DIGITAL OPERATOR STRATEGY DELIVERING RESULTS Multiplay customers (B2C) ARPU Multiple Single play and no play revenue Double play revenue Multiplay revenue 3.4x 3.7x Share of multiplay customers 1.0x Voice only 2play 4G Multiplay READ PAY 22% 17% Churn Impact 13% 40% 1.0x 25% 32% 0.7x 0.6x 2Q21 2Q22
Slide 37: 2Q23 Revenues
2Q23 REVENUES 2Q23 results YoY trends (2) REVENUE IN 2Q23 144 66 14 (USD million) 188 TOTAL REVENUE 235 916 $916mn 271 -4.3% +19.6% local currency Pakistan Ukraine Kazakhstan Bangladesh Uzbekistan Kyrgyzstan HQ and Group eliminations Local currency YoY growth SERVICE REVENUE Total revenue +22.2% +16
Slide 38: 2Q23 EBITDA and EBITDA Margin
2Q23 EBITDA AND EBITDA MARGIN 2Q23 results YoY trends EBITDA IN 2Q23 27 5 (43) (USD million) 54 104 EBITDA 139 $415mn 415 128 -10.6% +13.6% local currency Pakistan Ukraine Kazakhstan Bangladesh Uzbekistan Kyrgyzstan HQ and Group eliminations Local currency EBITDA +23.4% +11.6% +19.8% +17.9% -37.9% -
Slide 39: Debt by Entity
DEBT BY ENTITY1 30 JUNE 2023 (USD MILLION EQUIVALENT) Outstanding debt Type of debt Cash-pool Entity Bonds Loans overdrafts and Total other VEON Holdings B.V. 2,575 1,055 - 3,630 Pakistan Mobile Communications Limited - 533 12 545 Banglalink Digital Communications Ltd. - 102 - 102 Other 7 8 32 47 To
Slide 40: Debt Maturity
DEBT MATURITY Debt maturity schedule 2023-2024 as of 30 June 2023 DEBT MATURITY SCHEDULE 2023-2024 (Millions) Maturity period Sep 2023 Oct 2023 Dec 2023 2023 other Mar 2024 Mar 20241 Jun 2024 Sep 2024 2024 other Outstanding debt, 21 40 140 31 21 250 226 21 45 USD equivalent Outstanding debt, PKR 6,0
Slide 41: Lease Liabilities (Principal)
LEASE LIABILITIES (PRINCIPAL) USD, million Local currency, million 30 June 2023 31 March 2023 30 June 2023 31 March 2023 Pakistan 215 197 61,809 55,735 Ukraine 172 161 6,274 5,872 Bangladesh 323 325 34,906 34,506 Kazakhstan 79 76 36,055 34,104 Uzbekistan 35 32 397,867 360,876 Kyrgyzstan 5 5 404 428
Slide 42: Ukraine
UKRAINE REVENUE EBITDA1 4G USERS AND PENETRATION (UAH Billion) (UAH Billion) (3 months active, million) +16.8% YoY +11.6% YoY 55% 54% 53% 49% 47% 50% 4.9 4.9 5.1 8.6 4.6 4.4 4.5 7.9 8.2 8.3 7.4 7.7 12.7 12.1 13.1 13.3 13.1 11.6 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q
Slide 43: Pakistan
PAKISTAN REVENUE1 EBITDA1 4G USERS AND PENETRATION (PKR Billion) (PKR Billion) (3 months active, million) 58% 59% +22.2% YoY +23.4% YoY 54% 56% 49% 51% 73.9 77.6 49.8 69.7 60.1 63.5 64.2 36.7 29.7 26.5 31.5 28.1 40.6 41.3 43.1 42.4 36.7 38.2 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q2
Slide 44: Kazakhstan
KAZAKHSTAN REVENUE1 EBITDA2 4G USERS AND PENETRATION (KZT Billion) (KZT Billion) (3 months active, million) +19.4% YoY +19.8% YoY 71% 67% 69% 69% 68% 69% 41.7 46.8 39.1 40.2 38.3 78.7 79.2 79.4 84.5 30.2 70.7 64.4 7.1 7.2 7.2 7.3 7.7 6.7 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q
Slide 45: Bangladesh
BANGLADESH REVENUE EBITDA 4G USERS AND PENETRATION (BDT Billion) (BDT Billion) (3 months active, million) 46% 45% +17.1% YoY +17.9% YoY 43% 40% 37% 35% 15.4 5.8 14.6 4.9 5.1 5.3 14.4 4.7 4.7 13.8 12.4 13.2 17.4 18.1 15.0 16.1 12.5 13.5 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22
Slide 46: Uzbekistan
UZBEKISTAN REVENUE1 EBITDA2 4G USERS AND PENETRATION (UZS Billion) (UZS Billion) (3 months active, million) 69% 66% 68% +20.9% YoY -37.9% YoY 62% 62% 62% 709.7 719.9 749.5 502.0 664.7 580.8 620.0 292.0 302.8 274.7 320.3 311.9 6.0 5.5 5.7 4.7 4.8 4.8 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1Q22 2Q22 3Q22 4Q22
Slide 47: Reconciliation Tables
RECONCILIATION TABLES Extract from VEON Ltd.’s 2Q23 earnings release RECONCILIATION OF LOCAL CURRENCY AND REPORTED GROWTH RATES - 2Q23 COMPARED TO 2Q22 Total Revenue EBITDA Forex and Forex and Local currency Reported Local currency Reported Other Other Ukraine 16.8% (23.4%) (6.5%) 11.6% (22.3%) (10.
Slide 48: Definitions
DEFINITIONS 4G users are mobile customers who have engaged in revenue-generating activity during the three months prior to the measurement date as a result of activities over fourth-generation (4G or LTE – long term evolution) network technologies. ARPU (average revenue per user) measures the monthl