Slide 1: FY 2019 Results
FY 2019 RESULTS LONDON 14 FEBRUARY 2020 ©VEON Ltd 2020
Slide 2: Agenda
AGENDA OPENING Nik Kershaw - Head of IR OVERVIEW AND ACHIEVEMENTS Ursula Burns - Chairman and CEO STRATEGY AND FINANCIAL RESULTS Alex Kazbegi - CSO RUSSIA AND KAZAKHSTAN REVIEW Kaan Terzioglu - COO PAKISTAN AND UKRAINE REVIEW Sergi Herrero - COO CAPITAL ALLOCATION AND DIVIDEND POLICY Alex Kazbegi -
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 OPENING Nik Kershaw - Head of IR OVERVIEW AND ACHIEVEMENTS Ursula Burns - Chairman and CEO STRATEGY AND FINANCIAL RESULTS Alex Kazbegi - CSO RUSSIA AND KAZAKHSTAN REVIEW Kaan Terzioglu - COO PAKISTAN AND UKRAINE REVIEW Sergi Herrero - COO CAPITAL ALLOCATION AND DIVIDEND POLICY Alex Kazbegi -
Slide 5: FY 2019 Achievements
FY 2019 ACHIEVEMENTS POSITIONED FOR GROWTH 1 2 OPERATIONAL EXECUTION • Increased LTE penetration • Strong organic EBITDA growth • Accelerated capex roll out • Solid equity free cash flow generation • Further strengthened corporate governance • Corporate cost reduction 23% YoY • World class leadershi
Slide 6: 4Q 2019 Results
4Q 2019 RESULTS REPORTED REVENUE EBITDA EQUIT Y FREE $567m • $54m CASH FLOW 2 $2.3bn $935m $197m $808m $102m pre-IFRS16 pre-IFRS16 +0.2% reported YoY +30.9% reported YoY - 0.2% organic1 YoY +12.5% organic1 YoY 1. Organic change is a non-IFRS measure and reflects changes in revenue, EBITDA and cost i
Slide 7: FY 2019 Results
FY 2019 RESULTS TOTAL REVENUE EBITDA EQUITY FREE CASH FLOW2 $8.9bn $4.2bn $1,362m $3.7bn PRE-IFRS 16 $1.0bn PRE-IFRS 16 -2.5% reported YoY +28.8% reported YoY +3.4% organic1 YoY +9.6% organic1 YoY DATA REVENUE EBITDA MARGIN RETURN ON EQUITY $2.4bn 47.6% 27% 41.8% PRE-IFRS 16 +14.8% reported YoY +11.
Slide 8: 2019 Guidance Achieved
2019 GUIDANCE ACHIEVED FY 2019 FY 2019 GUIDANCE3 ACTUAL Low single-digit Total revenue organic1 growth 3.4% At least mid-single- EBITDA digit organic1 9.6% growth Equity free cash flow2 ~USD 1 billion USD 1,004 million 2019 FINAL DIVIDEND OF US 15 CENTS 1. Organic change is a non-IFRS measure and re
Slide 9: VEON's Investment Case
VEON’S INVESTMENT CASE • A balanced portfolio of emerging markets with exciting demographics POSITIONED • Positioned for continued strong organic growth, fuelled by investment in network 1 FOR GROWTH • Increased development of data and digital services • Focus on cost efficiencies under a simplified
Slide 10: Where Scale Meets Reach
WHERE SCALE MEETS REACH RUSSIA UZBEKISTAN 144 MLN TOTAL POPULATION 32 MLN TOTAL POPULATION 4G Smartphone 4G Smartphone 50% penetration 24% penetration PAKISTAN ALGERIA 201 MLN TOTAL POPULATION 43 MLN TOTAL POPULATION 4G Smartphone 4G Smartphone 27% penetration 54% penetration UKRAINE GEORGIA 42 MLN
Slide 11: Agenda
AGENDA OPENING Nik Kershaw - Head of IR OVERVIEW AND ACHIEVEMENTS Ursula Burns - Chairman and CEO STRATEGY AND FINANCIAL RESULTS Alex Kazbegi - CSO RUSSIA AND KAZAKHSTAN REVIEW Kaan Terzioglu - COO PAKISTAN AND UKRAINE REVIEW Sergi Herrero - COO CAPITAL ALLOCATION AND DIVIDEND POLICY Alex Kazbegi -
Slide 12: Solid Group Performance
SOLID GROUP PERFORMANCE CORNERSTONE GROWTH ENGINES FRONTIER MARKETS RUSSIA PAKISTAN UKRAINE OTHER MARKETS • Weak operational • Strong revenue and EBITDA growth2 • Top line strong double-digit growth performance, investing • Data customers growth of 18% YoY • Data customers growth of 15% YoY ALGERIA
Slide 13: Growth Drivers
GROWTH DRIVERS CONNECTIVITY DIGITAL SERVICES FINANCIAL SERVICES Total mobile Average 4G MFS subscriber 212M subscribers up ~34% smartphone ~11% 1.2% YoY penetration3 penetration2 Data subscribers 137M up 6.6% YoY 3.3M TV users 7.3M Digital Wallets Population growth +10% by 20301 EMPOWERING CUSTOMER
Slide 14: Expanding Digital Routes and Deploying New Services
EXPANDING DIGITAL ROUTES AND DEPLOYING NEW SERVICES ECOSYSTEMS CONTENT FINANCIAL SERVICES (SELF-CARE APPS) (TV) (MFS2, DFS) MAU1 TV MAU1 Total MFS users Digital Wallets (million) (million) (million) (million) Total… 19.6 Russia 10.1 Russia 2.2 Russia 4.9 Pakistan 3.5 3 Ukraine 1.6 Pakistan 0.5 Pakis
Slide 15: Revenue and EBITDA by Country
REVENUE AND EBITDA BY COUNTRY Good performance in growth markets offsets weakness in Russia USD MILLION (+0.2%) YoY reported 29 14 7 2 (3) (7) (38) (9) 10 2,249 2,244 2,254 Reported total Ukraine Kazakhstan Pakistan Bangladesh Algeria Uzbekistan Russia Other 1 Organic total FOREX Reported total reve
Slide 16: Revenue and EBITDA Development by Product
REVENUE AND EBITDA DEVELOPMENT BY PRODUCT Data growth continues to drive revenue and EBITDA USD MILLION (-0.2%) YoY organic 6 101 (122) 9 10 2,249 2,244 2,254 Reported total Data and MFS Equipment & Voice Other 1 Organic total revenue FOREX Reported total revenue accessories 4Q19 revenue 4Q18 4Q19 (
Slide 17: Q4 2019 Net Debt Development
Q4 2019 NET DEBT DEVELOPMENT Stable net debt and leverage trends USD MILLION 144 106 (49) 2,040 (1,977) 146 487 (808) 8,252 8,342 6,275 6,302 1 Net debt IFRS 16 impact Net debt Cash capex incl. Financial Taxes FOREX Change in working EBITDA Net debt IFRS 16 impact Net debt 30 September 30 September
Slide 18: Capital Structure Focus Areas
CAPITAL STRUCTURE FOCUS AREAS ► Maintain a mix of funding (post hedging) that appropriately reflects the currency mix of its operations ► Have appropriate liquidity to address debt maturities and capex needs ► Pro-actively address future maturities when prudent and economical Q4 2018 GROUP DEBT CURR
Slide 19: Agenda
AGENDA OPENING Nik Kershaw - Head of IR OVERVIEW AND ACHIEVEMENTS Ursula Burns - Chairman and CEO STRATEGY AND FINANCIAL RESULTS Alex Kazbegi - CSO RUSSIA AND KAZAKHSTAN REVIEW Kaan Terzioglu - COO PAKISTAN AND UKRAINE REVIEW Sergi Herrero - COO CAPITAL ALLOCATION AND DIVIDEND POLICY Alex Kazbegi -
Slide 20: Russia
RUSSIA Challenging results, investing for the future improvements plans in place REVENUE (RUB Billion) CUSTOMER METRICS FOCUS AREAS +6.2% 275.9 291.5 289.9 1. Quality of service 273.0 55 million +35% YoY Total mobile subscribers Network investments (RUB) 2. Efficiency of distribution FY16 FY17 FY18
Slide 21: Russia: Customer-driven open ecosystem
RUSSIA Customer-driven open ecosystem SELF CARE (MAU) BEELINE TV (MAU) MFS (MAU) 10.1M 2.2M 4.9M 21
Slide 22: Russia 2020 Priorities
RUSSIA 2020 Priorities ► Focus on customer experience (Appointment of Chief Customer Experience Officer) ► Improve network coverage, capacity and perception ► Boost digital channels, continued optimization of our retail footprint- 600 store reduction through 2019 and 2020 ► Enhance customer value pr
Slide 23: Kazakhstan
KAZAKHSTAN Strong operational performance REVENUE (KZT Billion) CUSTOMER METRICS FOCUS AREAS +49.6% 186.0 151.8 124.3 135.6 10.2 million +76% YoY Convergent product revenue Total mobile subscribers FY16 FY17 FY18 FY19 6.9 million +65% YoY EBITDA Data subscribers TV revenue (mobile + fixed) PRE IFRS
Slide 24: Agenda
AGENDA OPENING Nik Kershaw - Head of IR OVERVIEW AND ACHIEVEMENTS Ursula Burns - Chairman and CEO STRATEGY AND FINANCIAL RESULTS Alex Kazbegi - CSO RUSSIA AND KAZAKHSTAN REVIEW Kaan Terzioglu - COO PAKISTAN AND UKRAINE REVIEW Sergi Herrero - COO CAPITAL ALLOCATION AND DIVIDEND POLICY Alex Kazbegi -
Slide 25: Pakistan
PAKISTAN An exciting market for new services REVENUE (PKR Billion) CUSTOMER METRICS FOCUS AREAS +30.2% 197.6 181.7 60.5 million 160.7 +45% YoY 151.8 Total mobile subscribers Data revenue FY16 FY17 FY18 FY19 39 million +37% YoY EBITDA Data subscribers VAS revenue (excl. SMS) PRE-IFRS 16 (PKR Billion)
Slide 26: Pakistan: Growing ecosystem of services
PAKISTAN Growing ecosystem of services TV TUNES DISCOUNT CRICKET TUBE WORLD MOBILE JAZZCASH Watch live TV Caller tunes BAZAR Cricket info at Video Manage Jazz MAGAZINE Mobile Financial on the mobile Mega deals just the fingertips streaming account on Magazine and Services a tap away the smartphone n
Slide 27: Pakistan 2020 Priorities
PAKISTAN 2020 Priorities ► Drive customer conversion to 4G and aiming more that 50% growth in 4G customer base in 2020 ► Drive customer engagement through expanding native app and value based pricing ► Position Jazz Cash for accelerated growth REALIZE DOUBLE DIGIT UNDERLYING REVENUE GROWTH 27
Slide 28: Ukraine
UKRAINE Consolidating our leadership position in a growth market REVENUE (UAH Billion) CUSTOMER METRICS FOCUS AREAS +49.3% 22.4 18.7 16.5 15.0 26 million +51% YoY Total mobile subscribers Data revenue FY16 FY17 FY18 FY19 17 million +12% YoY Data subscribers Fix line service revenue EBITDA PRE-IFRS 1
Slide 29: Agenda
AGENDA OPENING Nik Kershaw - Head of IR OVERVIEW AND ACHIEVEMENTS Ursula Burns - Chairman and CEO STRATEGY AND FINANCIAL RESULTS Alex Kazbegi - CSO RUSSIA AND KAZAKHSTAN REVIEW Kaan Terzioglu - COO PAKISTAN AND UKRAINE REVIEW Sergi Herrero - COO CAPITAL ALLOCATION AND DIVIDEND POLICY Alex Kazbegi -
Slide 30: Capital Allocation: 2020 Priorities
CAPITAL ALLOCATION: 2020 PRIORITIES ► Committing capex to improve position in Russia and enhance 4G services in our growth markets FUTURE ASSETS ► Investing to support digitalization and new revenue streams Future Assets ► Accelerating investment in JazzCash Pakistan to secure and scale its NEW SERV
Slide 31: Dividend
DIVIDEND EQUITY FREE CASH FLOW FY 2019 (In USD million) • Final dividend declaration for FY 2019 of US 15 cent per share 1,004 (~300) • Total dividend for FY 2019 of US 28 cents per share 704 • In calendar year 2020, VEON plans to make this single dividend payment (US 15 cents) with a record date of
Slide 32: 2020 Guidance
2020 GUIDANCE Total Op. EBITDA2 revenue Capex/Revenue3 Low-single-digit Mid-single-digit local currency1 local currency1 21%-22% growth growth 1. Local currency growth for FY 2020 is defined excluding the effect of foreign currency movements. 2. 3. EBITDA growth excludes the one-time cash received i
Slide 33: Agenda
AGENDA OPENING Nik Kershaw - Head of IR OVERVIEW AND ACHIEVEMENTS Ursula Burns - Chairman and CEO STRATEGY AND FINANCIAL RESULTS Alex Kazbegi - CSO RUSSIA AND KAZAKHSTAN REVIEW Kaan Terzioglu - COO PAKISTAN AND UKRAINE REVIEW Sergi Herrero - COO CAPITAL ALLOCATION AND DIVIDEND POLICY Alex Kazbegi -
Slide 34: Closing Remarks
CLOSING REMARKS ► Another year of solid overall performance, with strength in our Growth Engines offsetting a weaker Russia ► 2019 financial guidance met; similar organic growth rates expected in 2020 ► Returning Russia to growth is a key priority ► Continued focus on growth opportunities in new dig
Slide 35: Appendix
APPENDIX ©VEON Ltd 2020
Slide 36: Q4 2019 Income Statement
Q4 2019 INCOME STATEMENT USD MILLION Reported 4Q19 4Q18 Organic1 4Q19 (pre-IFRS 16) versus 4Q18 4Q19 YoY Pre-IFRS 16 Reported YoY Pre-IFRS 16 Revenue 2,254 2,254 2,249 0.2% (0.2%) Service revenue 2,079 2,079 2,083 (0.2%) (0.6%) EBITDA 935 808 714 13.1 12.5% Depreciation, amortization and other (553)
Slide 37: Group Debt Maturity Schedule
GROUP DEBT MATURITY SCHEDULE1 GROUP DEBT MATURITY SCHEDULE BY CURRENCY – EXCLUDING LEASE LIABILITIES1 Currency breakdown 2020 2021 2022 2023 2024 2025 >2025 Currency breakdown incl. fx derivatives2 USD 0.9 0.9 0.4 1.2 0.6 0.7 0.0 62% 46% R UB 0.5 1.1 0.7 0.0 0.0 0.0 0.0 31% 47% PKR 0.1 0.1 0.1 0.1 0
Slide 38: Liquidity Overview
LIQUIDITY OVERVIEW GROUP CASH BREAKDOWN BY CURRENCY1 UNUSED RCF HEADROOM 31 December 2019 31 December 2019 12% Syndicated RCF facility USD 1.69 billion 6% 47% USD 6% RUB UNUSED CF HEADROOM PKR 31 December 2019 BDT EUR 12% Pakistan – credit facilities PKR 40.5 billion (USD 0.26 billion) Other 17% Tot
Slide 39: Debt by Entity
DEBT BY ENTITY1 31 DECEMBER 2019 USD MILLION Outstanding debt Type of debt Cash-pool Entity Bonds Loans overdrafts2 and Total other VEON Holdings B.V. 2,779 2,303 1 5,083 GTH Finance B.V. 1,200 - - 1,200 PJSC VimpelCom 279 - - 279 Pakistan Mobile Communications Limited - 494 - 494 Banglalink Digital
Slide 40: Uzbekistan
UZBEKISTAN Stable performance REVENUE (UZS Billion) CUSTOMER METRICS FOCUS AREAS +15.7% 2537.8 2341.8 2275.3 1967.0 8 million -27 UZS billion Total mobile subscribers Impact of tax regime changes FY16 FY17 FY18 FY19 5 million +23% YoY EBITDA Data subscribers Network investments (UZS) PRE-IFRS 16 (UZ
Slide 41: Algeria
ALGERIA Solid performance in a challenging market REVENUE (DZD Billion) CUSTOMER METRICS FOCUS AREAS -18.6% 113.7 101.5 94.8 92.5 15 million -14 YoY% Total mobile subscribers Voice revenue FY16 FY17 FY18 FY19 9 million +26% YoY EBITDA PRE-IFRS 16 Data subscribers Data revenue (DZD Billion) -36.1% 1
Slide 42: Bangladesh
BANGLADESH Solid performance in a growing market REVENUE (BDT Billion) CUSTOMER METRICS FOCUS AREAS -6.9% 48.7 46.5 45.3 34 million +3% YoY 43.7 Total mobile subscribers Voice revenue FY16 FY17 FY18 FY19 22 million +27% YoY EBITDA PRE-IFRS 16 Data subscribers Data revenue (BDT Billion) -26.7%1 21.0