Slide 1: 2Q20 Results
Vv VEON 2Q20 RESULTS 6 AUGUST 2020 = Bl 2 bangalink Beeline: a
Slide 2: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. FINANCIAL RESULTS Serkan Okandan: CFO 3. OPERATIONAL REVIEW Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. OUTLOOK AND GUIDANCE Serkan Okandan: CFO 2
Slide 3: 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 4: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. FINANCIAL RESULTS Serkan Okandan: CFO 3. OPERATIONAL REVIEW Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. OUTLOOK AND GUIDANCE Serkan Okandan: CFO 4
Slide 5: Financial Results: 2Q20 Results
FINANCIAL RESULTS 2Q20 Results1 REVENUE EBITDA OPERATIONAL CAPEX3 $1.9bn $0.8bn $0.5bn -6.9% local currency2 YoY -7.7% local currency2 YoY +9.5% reported YoY -16.3% reported YoY -18.7% reported YoY 20.8% LTM Operational Capex ratio3 DATA EBITDA NET DEBT/ REVENUE MARGIN LTM EBITDA4 $0.6bn 42.7% 2.0X
Slide 6: Key financial highlights
FINANCIAL RESULTS Key financial highlights USD million YoY YoY In local 2Q20 2Q19 YoY% QoQ% In local 1H20 1H19 YoY% HoH% currency1 currency1 Revenue2 1,892 2,261 (16.3%) (9.8%) (6.9%) 3,988 4,385 (9.1%) (10.9%) (3.4%) EBITDA 809 994 (18.7%) (12.1%) (11.2%) 1,729 2,292 (24.6%) (10.1%) (20.9%) EBITDA
Slide 7: 2Q20 Revenue breakdown
FINANCIAL RESULTS 2Q20 Revenue breakdown USD MILLION (-16.3%) YoY reported (38) 14 10 (5) (10) (15) (28) (109) (178) (10) 2.261 2,223 2,070 1,892 2Q19 Exceptional 2Q19 Ukraine Kazakhstan Bangladesh Uzbekistan Algeria Pakistan Russia Other 2 2Q20 Local FOREX 2Q20 Total items 1 Total revenue currency
Slide 8: 2Q20 EBITDA breakdown
FINANCIAL RESULTS 2Q20 EBITDA breakdown USD MILLION (-18.7%) YoY reported ( 38 ) 16 8 0 ( 11 ) ( 15 ) ( 38 ) ( 100 ) 67 ( 74 ) 994 956 883 809 2Q19 Exceptional 2Q19 Ukraine Kazakhstan Bangladesh Uzbekistan Algeria Pakistan Russia Other 1 Local FOREX 2Q20 EBITDA items EBITDA currency EBITDA Adjusted
Slide 9: Capital structure
FINANCIAL RESULTS Capital structure 2Q20 GROUP CASH CURRENCY MIX 2Q20 GROUP DEBT CURRENCY MIX 2Q20 GROUP DEBT CURRENCY MIX BEFORE HEDGING AFTER HEDGING1 18% 6% 1% 6% 1% 30% 6% USD USD USD USD RUB USD RUB USD 47% RUB 9% 1.2bn PKR DZD 32% 7.6bn PKR OTHER 7.6bn PKR OTHER OTHER 61% 46% 37% GROUP DEBT MA
Slide 10: Net debt and leverage trends
FINANCIAL RESULTS Net debt and leverage trends USD MILLION 187 (699) 53 111 103 444 137 6,390 6,054 1 Net debt Cash capex (incl. Financial Taxes Working capital Other investing FOREX EBITDA Net debt 1 1 31 March 2020 licenses) charges and provisions activities and other 2 30 June 2020 NET DEBT1 LTM
Slide 11: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. FINANCIAL RESULTS Serkan Okandan: CFO 3. OPERATIONAL REVIEW Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. OUTLOOK AND GUIDANCE Serkan Okandan: CFO 11
Slide 12: COVID-19 impact on operational performance
COVID-19 IMPACT ON OPERATIONAL PERFORMANCE ► Material operational disruption from lockdown in April and May, with improving trends evident in June and July as lockdowns started to ease across a number of our markets: ► Roaming revenues largely disappeared in 2Q20 ► Roaming revenues were 0.4% of grou
Slide 13: COVID-19 impact on operational performance
COVID-19 IMPACT ON OPERATIONAL PERFORMANCE ► Across our markets in June and July we have seen varying levels of an easing of lockdowns ► Improving operational trends are anticipated in H2 as lockdowns ease, but some behaviors expected to outlast the current pandemic: ► Slow resumption in roaming rev
Slide 14: Russia: Focus on customer experience remains top priority
RUSSIA Focus on customer experience remains top priority ► Lockdown measures had a material drag on both operational activity and financial results during the quarter ► 4G base stations increased by 24% YoY and accelerated network investment set to continue into 2021 ► Strong performance in fixed-li
Slide 15: Russia: Focus on customer experience remains top priority
RUSSIA Focus on customer experience remains top priority REVENUE DATA REVENUE KEY OPERATIONAL METRICS (RUB Billion) (RUB Billion) -9.7% +4.9% 69.2 72.6 74.7 73.4 16.2 16.2 16.2 50 million -8.4% 67.5 15.0 15.4 16.3 65.5 Total mobile subscribers YoY 32% +5 p.p. Data revenue % of mobile YoY service rev
Slide 16: Kazakhstan: Data revenue driving growth
KAZAKHSTAN Data revenue driving growth ► Solid underlying operational performance, with underlying revenue1 up 9.2% ► 4G base stations more than doubled YoY and network optimization continued ► 4G penetration reached 44%, with our 4G customer base growing by over 21% YoY driving data revenue +39.1%
Slide 17: Kazakhstan: Data revenue driving growth
KAZAKHSTAN Data revenue driving growth REVENUE DATA REVENUE KEY OPERATIONAL METRICS (KZT Billion) (KZT Billion) -18.6% YoY +39.1% +9.2% YoY1 adjusted 9 million -6% 70.0 57.0 19.9 60.0 44.5 45.5 46.0 46.4 50.0 17.4 18.6 Total mobile subscribers YoY 39.0 14.3 15.5 12.7 40.0 30.0 52% +12 p.p. Data reve
Slide 18: Pakistan: Further enhancing new services
PAKISTAN Further enhancing new services ► Growing subscriber market share despite lockdown measures ► Continued network investment, with 4G base stations increasing by 17% YoY to over 10,000 ► 4G penetration reached 30% alongside over 70% YoY growth in our 4G customer base, data revenue +27.6% YoY ►
Slide 19: Pakistan: Further enhancing new services
PAKISTAN Further enhancing new services REVENUE DATA REVENUE KEY OPERATIONAL METRICS (PKR Billion) (PKR Billion) -7.9% +27.6% 63 million +6% 70.0 50.6 51.1 50.5 49.3 16.0 60.0 45.4 47.1 15.1 15.9 Total mobile subscribers 50.0 13.6 14.3 YoY 40.0 12.5 37% +10.5 p.p. 30.0 Data revenue % of mobile 20.0
Slide 20: Pakistan: Further enhancing new services (JazzCash)
PAKISTAN Further enhancing new services ► First and only fully digital merchant onboarding process in Pakistan, 7000 merchants on boarded in first 6 weeks ► 8.1 million monthly active users (MAU), an increase of 41% YoY ► 900performed over the past 12 months 900 million transactions amounting to ove
Slide 21: Ukraine: Positive operational trends continue
UKRAINE Positive operational trends continue ► Strong performance in a more challenging environment, increased focus on new digital offers ► 4G sites increased by 51% YoY following continued network investment ► 4G penetration reached 31%, with our 4G customer base growing by over 50% YoY, data reve
Slide 22: Ukraine: Positive operational trends continue
UKRAINE Positive operational trends continue REVENUE DATA REVENUE KEY OPERATIONAL METRICS (UAH Billion) (UAH Billion) +6.8% +13.1% 6.0 6.0 3.1 25 million -3% 5.8 5.8 7.0 5.6 3.0 5.1 6.0 2.8 2.8 2.8 Total mobile subscribers YoY 5.0 2.5 56% +3 p.p. 4.0 3.0 Data revenue % of mobile YoY 2.0 service reve
Slide 23: Executing on 4G growth opportunities in other markets
EXECUTING ON 4G GROWTH OPPORTUNITIES IN OTHER MARKETS UZBEKISTAN ALGERIA BANGLADESH ARMENIA, GEORGIA & KYRGYSTAN • 0.6% YoY decrease in • 24.3% YoY increase in • 30.3% YoY increase in • 4.6% YoY increase in data revenue1 data revenue1 data revenue1 data revenue1 • 14.8% YoY decrease in • 2.5% YoY de
Slide 24: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. FINANCIAL RESULTS Serkan Okandan: CFO 3. OPERATIONAL REVIEW Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. OUTLOOK AND GUIDANCE Serkan Okandan: CFO 24
Slide 25: 2020 Financial Guidance reintroduced
GUIDANCE 2020 Financial Guidance reintroduced 1H20 Actual FY 2020 Guidance -3.4% YoY Total Revenue Low to mid-single-digit in local currency1 local currency1 decline in -4.8% YoY revenue and EBITDA EBITDA in local currency1 Capex intensity 20.8% 22%-24% CONTINUED UNCERTAINTY AROUND FUTURE LOCKDOWN M
Slide 26: Appendix
APPENDIX 6 AUGUST 2020 ©VEON Ltd 2019
Slide 27: 1H20 Results
FINANCIAL RESULTS 1H20 Results1 REVENUE EBITDA OPERATIONAL CAPEX3 $4.0bn $1.7bn $0.9bn -3.4% local currency2 YoY -4.8% local currency2 YoY +2.6% reported YoY -9.1% reported YoY -24.6% reported YoY 20.8% LTM Operational Capex ratio3 DATA EBITDA NET DEBT/ REVENUE MARGIN LTM EBITDA4 $1.3bn 43.3% 2.0X +
Slide 28: EBITDA exceptional items
FINANCIAL RESULTS EBITDA exceptional items USD million Growth 2Q20 2Q19 YoY% 1H20 1H19 YoY% EBITDA 809 994 (21.6%) 1,729 2,292 (25.8%) Reclass of Pakistan 5 10 license amortization Vendor settlement - - - - (350) - Special compensation to - (38) - - (38) - Kcell Tax regime change in - (23) - - (49)
Slide 29: 2Q20 YoY change in operating expenditure
FINANCIAL RESULTS 2Q20 YoY change in operating expenditure OPEX BY CATEGORY1 (YoY change USD million) General & Administrative Costs (16) ► G&A and HR and staff costs decreased by USD 26 million, in line with our ambition to reduce costs across the group HR and Staff Costs (10) Network and ► USD 2 m
Slide 30: Cash flow breakdown
FINANCIAL RESULTS Cash flow breakdown USD MILLION (113) (14) (175) (322) (149) (836) 1,729 956 6 (57) 68 EBITDA Changes in Movements in Income tax Net interest paid Non-cash Cash flow from Capex excl. licenses Disposals of capital Licenses Equity free cash 1H 2020 working capital provision paid adju
Slide 31: Capital expenditure
FINANCIAL RESULTS Capital expenditure CAPEX (EXCL. LICENSES) & LTM CAPEX INTENSITY1 1H20 CAPEX (EXCL. LICENSES) (USD million) 800 40.00% 5.3% 6.8% 700 579 35.00% Russia 600 492 4.5% 450 30.00% Pakistan 500 389 368 324 6.1% Ukraine 400 25.00% 20.8% 19.6% 19.5% 48.3% Kazakhstan 300 16.7% 17.0% 20.00%
Slide 32: Debt by entity
DEBT BY ENTITY1 30 JUNE 2020 USD MILLION EQUIVALENT Outstanding debt Type of debt Cash-pool Entity Bonds Loans overdrafts2 and Total other VEON Holdings B.V. 4,065 2,609 - 6,674 PJSC VimpelCom 272 - - 272 Pakistan Mobile Communications Limited - 508 - 508 Banglalink Digital Communications Ltd. - 92