VEON Ltd. · NASDAQ:VEON
VEON — Debt Investor Presentation (January 2023)
38 slides from VEON's debt investor presentation, Jan 12, 2023
Slide 1: VEON Investor Presentation
VEON Investor Presentation 12 January 2023 1 1
Slide 2: Disclaimer (1/2)
DISCLAIMER (1/2) This presentation has been prepared by VEON Ltd. (“VEON” and, together with its subsidiaries, the “Group”) solely for informational purposes. This presentation contains certain forward-looking statements. These forward-looking statements can be identified by the use of forward-looki
Slide 3: Disclaimer (2/2)
DISCLAIMER (2/2) Important Notice This presentation is for informational purposes only and shall not constitute a prospectus or an offer to sell or the solicitation of an offer to buy securities in the United States or any other jurisdiction, nor shall there be any offer of securities in any jurisdi
Slide 4: Agenda
AGENDA 1. EXECUTIVE SUMMARY P.5 2. 3Q22 HIGHLIGHTS P.9 3. PORTFOLIO STRATEGY P.20 4. FUTURE PERFORMANCE AMBITION P.23 5. AMENDMENTS OBJECTIVES P.28 6. AMENDMENTS OVERVIEW P.30 7. PROCESS & TIMELINE P.34 APPENDIX P.36 4 4
Slide 5: Executive Summary (1/4)
EXECUTIVE SUMMARY (1/4) Background • Over the past nine months, VEON Ltd. (“VEON” or together with its subsidiaries, the “Group”) has successfully strengthened its liquidity position, and this will remain a key priority in the near term • However, despite the resilient performance of its underlying
Slide 6: Executive Summary (2/4)
EXECUTIVE SUMMARY (2/4) Russian Regulatory Backdrop • On 5 July 2022, the President of the Russian Federation issued Decree 430, which states that “Russian legal entities with obligations related to Eurobonds are required to ensure the fulfilment of obligations to holders of Eurobonds whose rights a
Slide 7: Executive Summary (3/4)
EXECUTIVE SUMMARY (3/4) Transaction Rationale • The scheme of arrangement in England (the “Scheme”) launched by the Company on 24 November 2022 proposes an eight-month extension to the respective maturity dates of the 2023 Notes, together with certain other amendments to the terms of the 2023 Notes
Slide 8: Executive Summary (4/4)
EXECUTIVE SUMMARY (4/4) Transaction Overview • The Scheme launched by the Company proposes the following changes with respect to the 2023 Notes (together, the “Amendments”): – An eight-month extension of the respective maturity dates of the February 2023 Notes and April 2023 Notes to October 2023 an
Slide 9: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. 3Q22 HIGHLIGHTS 3. PORTFOLIO STRATEGY 4. FUTURE PERFORMANCE AMBITION 5. AMENDMENTS OBJECTIVES 6. AMENDMENTS OVERVIEW 7. PROCESS & TIMELINE APPENDIX 9 9
Slide 10: Key Recent Developments
KEY RECENT DEVELOPMENTS Management continues to execute its strategic plan while navigating a complex sanctions environment RUSSIA SALE AGREEMENT • Entered into agreement to sell Russian operations for total consideration of RUB 130bn GROUP LEVEL LOANS FROM SBERBANK AND WITHDRAWAL OF 24 11 EARLY REP
Slide 11: 4G Growth Driving Data & Digital Revenues
4G GROWTH DRIVING DATA & DIGITAL REVENUES Growth in customer base Steady growth in 4G Steady growth in data and uptake digital revenues1 203.2mn subscribers 4G users and penetration Data and digital revenues, YoY trends (3 month active, million and %) (USD million and % in local currency) +0.8% YoY
Slide 12: 3Q22 Highlights
3Q22 HIGHLIGHTS TOTAL SERVICE 4G REVENUE REVENUE USERS USD 2,077mn USD 1,968mn 107mn +3.6% YoY +7.9% YoY +15.1% YoY +3.4% YoY +7.8% YoY local currency local currency Equipment revenue in Mobile ARPU up YoY in local Subscriber base +0.8% YoY Russia down 58.5% YoY due currency across all markets 4G pe
Slide 13: Group Service Revenue Growth +7.1% YoY in Local Currency
GROUP SERVICE REVENUE GROWTH +7.1% YOY IN LOCAL CURRENCY PAKISTAN KAZAKHSTAN UZBEKISTAN BANGLADESH +11.3% Service revenue +23.2% Service revenue +22.5% Service revenue +11.8% Service revenue -6.8% EBITDA +9.2% EBITDA +7.9% EBITDA -2.1% EBITDA UKRAINE KYRGYZSTAN RUSSIA +5.1% Service revenue +15.8% Se
Slide 14: Ukraine
UKRAINE Keeping Ukraine connected and rebuilding the country’s infrastructure 3Q22 RESULTS YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY YOY TRENDS PENETRATION CUSTOMERS (UAH Billion and %) (3 month active, million and %) Revenue share Share of monthly active users TOTAL SERVICE 50% +11.9% +
Slide 15: Russia
RUSSIA Higher customer value drives service revenue and EBITDA growth 3Q22 RESULTS YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY YOY TRENDS PENETRATION1 CUSTOMERS (RUB Billion and %) (3 month active, million and %) Revenue share Share of monthly active users TOTAL SERVICE +2.2% 53% 60% REVEN
Slide 16: Pakistan
PAKISTAN 4G users exceed 40 million supporting double digit top line growth 3Q22 RESULTS YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY YOY TRENDS PENETRATION CUSTOMERS (PKR Billion and %) (3 month active, million and %) Revenue share Share of monthly active users TOTAL SERVICE 54% +11.3% 47%
Slide 17: Kazakhstan
KAZAKHSTAN Sixth consecutive quarter of revenue YoY growth above 20% 3Q22 RESULTS YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY YOY TRENDS PENETRATION CUSTOMERS (KZT Billion and %) (3 month active, million and %) Revenue share Share of monthly active users TOTAL SERVICE 69% +23.2% 62% REVENU
Slide 18: Bangladesh
BANGLADESH Gaining market share as double-digit topline growth continues 3Q22 RESULTS YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY YOY TRENDS PENETRATION CUSTOMERS (BDT Billion and %) (3 month active, million and %) Revenue share Share of monthly active users TOTAL SERVICE 23% REVENUE REVEN
Slide 19: Uzbekistan
UZBEKISTAN Third consecutive quarter of 20%+ topline YoY growth 3Q22 RESULTS YOY TRENDS SERVICE REVENUE AND 4G USERS AND MULTIPLAY YOY TRENDS PENETRATION CUSTOMERS (UZS Billion and %) (3 month active, million and %) Revenue share Share of monthly active users TOTAL SERVICE +22.5% 64% 57% REVENUE REV
Slide 20: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. 3Q22 HIGHLIGHTS 3. PORTFOLIO STRATEGY 4. FUTURE PERFORMANCE AMBITION 5. AMENDMENTS OBJECTIVES 6. AMENDMENTS OVERVIEW 7. PROCESS & TIMELINE APPENDIX 20 20
Slide 21: Portfolio Strategy
PORTFOLIO STRATEGY Focus on crystallising infrastructure value and digital operator model GROUP CAPITAL ALLOCATION PRIORITIES • Monetise assets to enhance HQ liquidity and deleveraging • Unlock infrastructure value through tower transactions • Continue to invest into connectivity, digital opportunit
Slide 22: Main Infrastructure Monetisation Opportunities
MAIN INFRASTRUCTURE MONETISATION OPPORTUNITIES Aiming for several infrastructure monetisation deals across VEON markets PAKISTAN BANGLADESH KAZAKHSTAN UZBEKISTAN UKRAINE 10.5k towers + 5.5k towers + 4.4k sites 3.7k sites 12.5k sites up to 3.7k BTS up to 3.9k BTS Ongoing value Ongoing value 1.5k towe
Slide 23: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. 3Q22 HIGHLIGHTS 3. PORTFOLIO STRATEGY 4. FUTURE PERFORMANCE AMBITION 5. AMENDMENTS OBJECTIVES 6. AMENDMENTS OVERVIEW 7. PROCESS & TIMELINE APPENDIX 23 23
Slide 24: Group Consolidated Ambition
GROUP CONSOLIDATED AMBITION1 3-year forward 2022 – 2024 ambition REVENUE EBITDA EBITDA GROUP CAPEX GROWTH GROWTH MARGIN INTENSITY 3YR CAGR in USD 3YR CAGR in USD Low-mid Low-mid Expected to <20% single digit single digit remain flat • Revenue, EBITDA growth, EBITDA margin revised downward from previ
Slide 25: Portfolio Future Performance Ambition
PORTFOLIO FUTURE PERFORMANCE AMBITION 3-year forward 2022 – 2024 ambition Focus Dividend Potential • Complete VimpelCom Disposal in compliance with applicable Russia sanctions laws and regulations • Expected proceeds of RUB 130bn Ukraine • Ensuring service continuity • No dividends anticipated Pakis
Slide 26: HQ Cash Flows
HQ CASH FLOWS Decreasing corporate costs but uncertain cash upstreaming from OpCos, in particular in the current macro environment PROJECTED CORPORATE COSTS CASH FLOW (USDm) • FY2021 corporate costs were USD 208m, 308 CORPORATE a decrease of ~32% YoY from USD 308m in FY2020 208 COSTS1 c.185 (CASH FL
Slide 27: HQ Liquidity Profile
HQ LIQUIDITY PROFILE Potential USD 1.2bn 2023 Notes repayment would imply PF HQ cash balance of USD 1.4bn (USD 0.4bn excl. RCF) prior to HQ cash flows and any asset monetisation proceeds HQ CASH PF FOR 2023 NOTES MATURITIES ILLUSTRATIVE 2022-23 CASH FLOWS1 2023 AND BEYOND (In USD) 2.6bn 1.1bn (1.2bn
Slide 28: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. 3Q22 HIGHLIGHTS 3. PORTFOLIO STRATEGY 4. FUTURE PERFORMANCE AMBITION 5. AMENDMENTS OBJECTIVES 6. AMENDMENTS OVERVIEW 7. PROCESS & TIMELINE APPENDIX 28 28
Slide 29: Amendments Objectives
AMENDMENTS OBJECTIVES Amendments aim to provide additional time for the situation in Russia to become clearer following recent developments and to maximize value for all stakeholders whilst ensuring fair and equal treatment Creating short-term maturity runway, allowing more time for the VimpelCom
Slide 30: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. 3Q22 HIGHLIGHTS 3. PORTFOLIO STRATEGY 4. FUTURE PERFORMANCE AMBITION 5. AMENDMENTS OBJECTIVES 6. AMENDMENTS OVERVIEW 7. PROCESS & TIMELINE APPENDIX 30 30
Slide 31: Summary Term Sheets – 2023 Notes (1/2)
SUMMARY TERM SHEETS – 2023 NOTES (1/2) Amendment to existing February 2023 and April 2023 Notes to extend maturities by 8 months with a put right Current Terms Amended Terms Principal • USD 529m • No change Outstanding Maturity • 13 February 2023 • 13 October 2023 Interest • 5.95% • No change 5.95%
Slide 32: Summary Term Sheets – 2023 Notes (2/2)
SUMMARY TERM SHEETS – 2023 NOTES (2/2) Amendment to existing February 2023 and April 2023 Notes to extend maturities by 8 months with a put right ► Inclusion of uncapped put right allows noteholders to receive cash repayment just after the Scheme becomes effective Put Right Put Right Start Date • Th
Slide 33: RCF and Note Maturity Profile Pre & Post Extension
RCF AND NOTE MATURITY PROFILE PRE & POST EXTENSION 2023 Notes extended by 8 months with no changes to other maturities CURRENT MATURITY PROFILE PRO FORMA MATURITY PROFILE (In USDm) (In USDm) Total debt: USD 5.9bn Total debt: USD 5.9bn Weighted Average Life: 2.5 Years Weighted Average Life: 2.6 Years
Slide 34: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. 3Q22 HIGHLIGHTS 3. PORTFOLIO STRATEGY 4. FUTURE PERFORMANCE AMBITION 5. AMENDMENTS OBJECTIVES 6. AMENDMENTS OVERVIEW 7. PROCESS & TIMELINE APPENDIX 34 34
Slide 35: Anticipated Process & Timeline
ANTICIPATED PROCESS & TIMELINE Scheme expected to complete by early 2023 KEY DATE STEPS 24 November 2022 Transaction announcement and launch of the Scheme via issuance of the practice statement letter 9 December 2022 Issuance of supplemental practice statement letter 20 December 2022 Convening heari
Slide 36: Agenda
AGENDA 1. EXECUTIVE SUMMARY 2. 3Q22 HIGHLIGHTS 3. PORTFOLIO STRATEGY 4. FUTURE PERFORMANCE AMBITION 5. AMENDMENTS OBJECTIVES 6. AMENDMENTS OVERVIEW 7. PROCESS & TIMELINE APPENDIX 36 36
Slide 37: Summary Organization Chart
SUMMARY ORGANIZATION CHART VEON Ltd. Mobile network operator (Bermuda) Indirect ownership1 Listed entity Direct ownership1 VEON Amsterdam B.V. (NL) USD 1,055m RCF VEON Holdings B.V. USD 4,012m notes (NL) RUB 50bn (USD 871m) notes 75.0% 50.1% 49% KaR-Tel LLP2 Pakistan Mobile Banglalink Digital
Slide 38: Thank You
VEON THANK YOU! 38 38