Slide 1: 4Q 2020 Results
4Q 2020 RESULTS 18 February 2021 Delivering on expectations Back to growth in an unexpected year 1
Slide 2: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. HIGHLIGHTS AND 2020 ACHIEVEMENTS Kaan Terzioğlu: Co-CEO 3. REVIEW OF RUSSIA AND GROUP Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. 4Q20 FINANCIAL RESULTS Serkan Okandan: CFO 5. 2021 PRIORITIES Sergi Herrero: Co-CEO 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. HIGHLIGHTS AND 2020 ACHIEVEMENTS Kaan Terzioğlu: Co-CEO 3. REVIEW OF RUSSIA AND GROUP Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. 4Q20 FINANCIAL RESULTS Serkan Okandan: CFO 5. 2021 PRIORITIES Sergi Herrero: Co-CEO 4
Slide 5: FY2020 Financial Performance
FY2020 FINANCIAL PERFORMANCE Delivering in a challenging environment FY2020 meeting our guidance… …with 4Q20 back to growth $8.0bn -1.6% YoY +1.4% YoY Revenue in local currency (-10.0% reported YoY) in local currency (-11.3% reported YoY) $3.5bn -2.1% YoY +0.8% YoY EBITDA in local currency (-18.1% r
Slide 6: FY2020 Highlights
FY2020 HIGHLIGHTS Significant achievements in a challenging year ENHANCING GOVERNANCE & CAPITAL STRUCTURE CONTINUED PROGESS ON 4G COVERAGE • New operating model with leaner HQ • Key driver of revenue growth • Significantly lower depository fees for shareholders • Capex investment of $1.9bn +8.5% YoY
Slide 7: Group Revenue Back to Growth in 4Q20
GROUP REVENUE BACK TO GROWTH IN 4Q20 TOTAL REVENUE YOY PERFORMANCE IN LOCAL CURRENCY Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec • 4Q20 group revenue increased (+1.4% YoY) in local 10% currency terms 5% • This growth in local currency revenue was achieved 0% despite the decline in roaming revenu
Slide 8: Continued Progress on 4G Coverage, Quality and Uptake
CONTINUED PROGRESS ON 4G COVERAGE, QUALITY AND UPTAKE Driving growth across our businesses 4G USER BASE AND PENETRATION +20M (users in millions and penetration in percentages, %) +5M +11M 4G users self-care 80 4G users 75 +34% YoY +7% QoQ app users 65 67 60 36% 38% +76% YoY 31% 33% 28% The 4G uplift
Slide 9: c.50,000 Towers
VEON INFRASTRUCTURE One of the largest emerging markets tower portfolios COMBINED GROUP PORTFOLIO c.50,000 TOWERS • Establishment of dedicated business units, country by country • Take advantage of latent value of an asset class in high demand globally • Focusing on various opportunities, from impro
Slide 10: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. HIGHLIGHTS AND 2020 ACHIEVEMENTS Kaan Terzioğlu: Co-CEO 3. REVIEW OF RUSSIA AND GROUP Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. 4Q20 FINANCIAL RESULTS Serkan Okandan: CFO 4. 2021 PRIORITIES Sergi Herrero: Co-CEO 10
Slide 11: Executing on Russia Turnaround: Management Team Established
EXECUTING ON RUSSIA TURNAROUND Management team established Alexander Torbakhov, Chief Executive Officer Svetlana Maxim George Dmitry Ekaterina Dmitry Andrey Maxim Kirsanova, Zaykov, Held, Mashin, Kudryashova, Glotov, Pyatakhin, Sharkov, B2C B2B Digital Moscow Region Central Region West Region South
Slide 12: Executing on Russia Turnaround: Ongoing Investment Delivering Results
EXECUTING ON RUSSIA TURNAROUND Ongoing investment delivering results Stepping up our investment 4G stations almost doubling every 2 years OPERATIONAL CAPEX2 4G Base Stations (RUB Billion) (thousands) 100% VoLTE platform 4G coverage 63 74 62 to improve voice in Moscow 47 49 services, used by metro st
Slide 13: Executing on Russia Turnaround: On Track to Return to Growth
EXECUTING ON RUSSIA TURNAROUND On track to return to growth REVENUE SERVICE REVENUE • Steady sequential improvement in YoY revenue (RUB Billion) adj. for roaming & impact of content policy1 (RUB Billion) trends during 2H20, from -6.8% in 3Q20 to -2.0% -2.0% YoY -0.6% YoY in 4Q20. December and Januar
Slide 14: Improving Distribution and Customer Experience
EXECUTING ON RUSSIA TURNAROUND Improving distribution and customer experience 872 stores closed in 2 years Beeline e-sim sales increased 4x QoQ Number of stores including own offices and franchise (thousands) -18% • E-sim sales up 4-fold QoQ 4.9 4.6 • Beeline first to introduce 4.0 distance activati
Slide 15: Improved Customer Journey, Better Offers and Experience
EXECUTING ON RUSSIA TURNAROUND Improved customer journey, with better offers and experience “Z”: meeting flexible demand of Gen Z Quality supporting churn improvement • Offer with the highest NPS Churn rate • GB & minutes curator (quarterly %) [XX%] penetration • on demand, zero waste 12.8% 12.7% 13
Slide 16: Fixed-Line Becomes Growth Engine
EXECUTING ON RUSSIA TURNAROUND Fixed-line becomes growth engine 4Q20 fixed-line revenue +9.7% YoY… .. supported by strong broadband performance TOTAL REVENUE, FIXED-LINE BROADBAND CUSTOMERS (Million) (RUB Billion) +8.2% YoY +9.7% YoY 10.2 2.6 2.7 2.7 2.8 2.8 9.3 9.3 9.7 9.3 4Q19 1Q20 2Q20 3Q20 4Q20
Slide 17: Digital Services Supporting B2B Growth
EXECUTING ON RUSSIA TURNAROUND Digital services supporting B2B growth B2B revenue +11% in 4Q20 B2B TOTAL REVENUE YOY GROWTH LEVERAGING DIGITAL EXPERTISE TO ENRICH B2B OFFER: (%) 11% ‘Analytics-in-a-box’ approach to serve unmet business needs in geo-analytics, video-analytics and audio-analytics 7% I
Slide 18: Growing Digital Verticals: Russia Three Digital Verticals
GROWING DIGITAL VERTICALS Russia: focusing on three digital verticals FinTech AdTech Entertainment Market size, 2020 2020-2025 CAGR Market size, 2020 2020-2025 CAGR Market size, 2020 2020-2025 CAGR $110bn +15% $8bn +13% $1.5bn +8% • Underbanked population: 20% • Growing demand for tailored • Fragmen
Slide 19: Growing Digital Verticals: Russia Already Delivering Results
GROWING DIGITAL VERTICALS Russia: already delivering results FinTech AdTech Entertainment Partnership Partnership Beeline TV with Alfa Bank with X5 Retail • Co-branded financial instruments: • Indoor marketing based on Big Data • Beeline’s next-generation credit and debit cards, loans, micro analyti
Slide 20: Growing Digital Verticals: Establishing Dominant Local Ecosystems
GROWING DIGITAL VERTICALS Establishing dominant local ecosystems Financial Services eCommerce Entertainment >50% of people with Only 20-25% Bangladesh’s leading full-stack B2B platform Double-digit market growth in Bangladesh in no bank account in financial inclusion in for online & offline SMEs ent
Slide 21: Pakistan
PAKISTAN Leading the market, reaching record revenues in 4Q20 REVENUE 4G USERS AND PENETRATION EBITDA1 (PKR Billion) (Million and %) (PKR Billion) +3.6% YoY 38% -6.8% YoY 70.0 35% 52.3 29% 30% 50.5 49.3 47.1 50.7 26% 60.0 45.4 31.4 50.0 22% 40.0 22.3 24.9 22.9 21.7 23.2 30.0 22.2 25.0 17.7 19.1 20.0
Slide 22: Ukraine
UKRAINE Strong results, building on the best 4G network REVENUE 4G USERS AND PENETRATION EBITDA (UAH Billion) (Million and %) (UAH Billion) +15.2% YoY 36% +10.4% YoY 34% 30% 31% 27% 6.0 6.5 6.7 24% 4.4 4.5 5.8 5.8 6.0 4.0 4.0 4.1 3.8 8.8 9.3 7.2 7.8 7.8 6.3 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 3Q19 4Q19 1Q
Slide 23: Kazakhstan
KAZAKHSTAN 20% year-on-year growth in revenue as 4G momentum continues REVENUE 4G USERS AND PENETRATION EBITDA (KZT Billion) (Million and %) 54% (KZT Billion) 50% +42.8% YoY +19.8% YoY 44% 44% 39% 41% 54.5 32.5 50.9 25.3 26.9 44.5 45.5 46.0 46.4 24.6 23.0 22.7 4.8 5.2 4.0 4.2 4.2 4.2 3Q19 4Q19 1Q20
Slide 24: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. HIGHLIGHTS AND 2020 ACHIEVEMENTS Kaan Terzioğlu: Co-CEO 3. REVIEW OF RUSSIA AND GROUP Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. 4Q20 FINANCIAL RESULTS Serkan Okandan: CFO 5. 2021 PRIORITIES Sergi Herrero: Co-CEO 24
Slide 25: Financial Results: 4Q20 Results
FINANCIAL RESULTS 4Q20 Results REVENUE EBITDA OPERATIONAL CAPEX $2.0bn $0.8bn $674m -11.3% reported YoY -11.6% reported YoY 23.7% Capex intensity +1.4% local currency YoY +0.8% local currency YoY +16.5% reported YoY NET PROFIT EBITDA NET DEBT/ MARGIN LTM EBITDA $35m 41.4% 2.3X -27.6% YoY -0.1p.p YoY
Slide 26: Key Financial Highlights
FINANCIAL RESULTS Key financial highlights USD million YoY% YoY% YoY% YoY% 4Q20 4Q19 in local FY20 FY19 in local reported reported currency currency Revenue 1,998 2,254 -11.3% +1.4% 7,980 8,863 -10.0% -1.6% EBITDA 826 935 -11.6% +0.8% 3,453 4,215 -18.1% -11.3% EBITDA Margin 41.4% 41.5% -0.1p.p. -0.2
Slide 27: 4Q20 Revenue Breakdown
FINANCIAL RESULTS 4Q20 Revenue breakdown USD MILLION -11.3% YoY reported +36 +23 +12 +3 -9 -14 -22 -16 -269 2,254 2,267 1,998 4Q19 reported Ukraine Kazakhstan Pakistan Bangladesh Uzbekistan Algeria Russia Other 1 4Q20 local FOREX 4Q20 reported total revenue currency total total revenue revenue YoY +
Slide 28: 4Q20 EBITDA Breakdown
FINANCIAL RESULTS 4Q20 EBITDA breakdown USD MILLION -11.6% YoY reported +25 +17 +2 -8 -11 -15 -55 +64 -17 -112 935 938 826 1 4Q19 reported Kazakhstan Ukraine Bangladesh Algeria Pakistan Uzbekistan Russia HQ Other 4Q20 local FOREX 4Q20 reported EBITDA currency EBITDA EBITDA EBITDA margin 41.5% 59.6%
Slide 29: FY20 Cash Flow Generation
FINANCIAL RESULTS FY20 Cash flow generation OPERATIONAL CASH FLOW1 GENERATION IN 2020 ((USD million) 26 4 4 -20 132 -178 166 -3 1,745 201 423 463 528 Russia Ukraine Pakistan Algeria Kazakhstan Bangladesh Uzbekistan Armenia Georgia Kyrgyzstan HQ Eliminations Group (9 month) EQUITY FREE CASH FLOW2 GEN
Slide 30: 2020 Debt Transactions Extended Maturity and Lowered Cost of Debt
FINANCIAL RESULTS 2020 debt transactions extended maturity & lowered cost of debt • $300 million tap issuance of existing 4.0% notes (2025), at a price of 103.75% (effective yield 3.18%) AVERAGE COST OF DEBT (%) 7.4% • $6.5 billion global MTN program established with three issuances in 2020 6.8% - R
Slide 31: Capital Structure as at 31 December 2020
FINANCIAL RESULTS Capital structure as at 31 December 2020 4Q20 GROUP CASH 4Q20 GROUP GROSS DEBT1 4Q20 GROUP NET DEBT1 CURRENCY MIX CURRENCY MIX CURRENCY MIX (AFTER HEDGING2) 2% 4% 6% 3% 5% 4% 5% USD USD 5% USD 30% 43% RUB RUB RUB 5% USD PKR USD PKR USD PKR 1.6bn BDT 7.7bn BDT, KZT, UAH 6.1bn DZD 52
Slide 32: 4Q20 Net Debt and Leverage Development
FINANCIAL RESULTS 4Q20 Net debt and leverage development USD MILLION 385 -7 -826 126 188 110 491 1,879 1,619 (lease liab.) (lease liab.) 7,520 5,901 6,108 7,987 (pre IFRS-16) (pre IFRS-16) 1 Net debt Cash capex (incl. Financial FOREX Taxes Lease payments, Working capital EBITDA Net debt 30 September
Slide 33: FY 2021 Outlook
FY 2021 OUTLOOK Return to full year growth with financial discipline FY2020 Actual FY 2021 Guidance -1.6% YoY Total Revenue in local currency Low to mid-single-digit local currency growth in revenue -2.1% YoY and EBITDA EBITDA in local currency Capex intensity 23.7% 22-24% 33
Slide 34: Agenda
AGENDA 1. OPENING Nik Kershaw: Head of IR 2. HIGHLIGHTS AND 2020 ACHIEVEMENTS Kaan Terzioğlu: Co-CEO 3. REVIEW OF RUSSIA AND GROUP Kaan Terzioğlu: Co-CEO Sergi Herrero: Co-CEO 4. 4Q20 FINANCIAL RESULTS Serkan Okandan: CFO 5. 2021 PRIORITIES Sergi Herrero: Co-CEO 34
Slide 35: FY 2021 Priorities
FY 2021 PRIORITIES 1 4G network rollout at 2020 pace, enabling substantial 4G take-up in our customer base 2 Russia revenue and customer base back to YoY growth 3 Double-digit growth in aggregate from Ukraine, Pakistan and Kazakhstan Build digital scale through targeted verticals (Russia, Kazakhstan
Slide 36: Appendix
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Slide 37: Algeria
ALGERIA REVENUE DATA REVENUE KEY OPERATIONAL METRICS (DZD Billion) (DZD Billion) -7.2% YoY +7.5% YoY 23.6 23.7 22.3 22.3 22.0 25.0 8.2 8.3 8.4 14 million -3% 20.6 Total mobile subscribers 20.0 7.8 8.0 YoY 15.0 10.0 7.2 38% +5 p.p. 5.0 Data revenue % of mobile YoY service revenue 0.0 3Q19 4Q19 1Q20 2
Slide 38: Bangladesh
BANGLADESH REVENUE DATA REVENUE KEY OPERATIONAL METRICS (BDT Billion) (BDT Billion) +2.4% YoY +22% YoY 2.9 11.5 11.4 2.7 2.8 2.9 33 million -1% 11.6 11.1 2.3 2.3 14 11.4 11.1 Total mobile subscribers YoY 12 10 26% +4 p.p. 8 6 Data revenue % of mobile YoY 4 service revenue 2 0 3Q19 4Q19 1Q20 2Q20 3Q2
Slide 39: Executing on 4G Growth Opportunities in Other Markets
EXECUTING ON 4G GROWTH OPPORTUNITIES IN OTHER MARKETS GEORGIA KYRGYSTAN UZBEKISTAN • -1% YoY increase in data • -3% YoY decrease in • 11% YoY increase in data revenue1 data revenue1 revenue1 • 11% YoY increase in 4G • 11% YoY increase in 4G • 27% YoY increase in 4G users users users • 52% 4G populat
Slide 40: Capital Expenditure
CAPITAL EXPENDITURE OPERATIONAL CAPEX (EXCL. LICENSES) & CAPEX INTENSITY1 4Q20 OPERATIONAL CAPEX (EXCL. LICENSES) (USD million) 700 674 45.00% 5.9% 600 579 40.00% 7.2% 492 Russia 4.5% 500 35.00% 368 Pakistan 400 354 30.00% 324 23.7% Ukraine 21.8% 7.3% 20.8% 300 25.00% 19.6% 19.5% Kazakhstan 57.2% 20
Slide 41: Debt by Entity
DEBT BY ENTITY1 31 DECEMBER 2020 USD MILLION EQUIVALENT Outstanding debt Type of debt Cash-pool Entity Bonds Loans overdrafts2 and Total other VEON Holdings B.V. 4,835 1,895 7 6,737 Pakistan Mobile Communications Limited - 425 - 425 PJSC VimpelCom 271 - - 271 Private Joint Stock Company Kyivstar - 1
Slide 42: EBITDA Non-Recurring Items
EBITDA NON-RECURRING ITEMS USD million 4Q20 4Q19 YoY% FY2020 FY2019 YoY% EBITDA 826 935 -11.6% 3,453 4,215 -4.3% Non-recurring items excluded from EBITDA Adjusted Vendor settlement - - - - (350) - Special compensation to Kcell - - - - (38) - Non-recurring items included into EBITDA Adjusted Reversal
Slide 43: 2020 Impairments
2020 IMPAIRMENTS VEON has recognised a non-cash impairment charges of $785 million for 2020, of which $723 million against goodwill in Russia. Goodwill is tested for impairment annually (at September 30) or when circumstances indicate the carrying value may be impaired. When reviewing for indicators
Slide 44: Reconciliation Tables
RECONCILIATION TABLES extract from VEON Ltd.’s Earnings Release RECONCILIATION OF CONSOLIDATED EBITDA RECONCILIATION OF CAPEX USD mln unaudited 4Q20 4Q19 FY20 FY19 Cash paid for purchase of property, plant and equipment and intangible assets 491 487 1,778 1,684 Net difference between timing of recog
Slide 45: Reconciliation Tables
RECONCILIATION TABLES extract from VEON Ltd.’s Earnings Release RECONCILIATION OF ORGANIC AND REPORTED GROWTH RATES RECONCILIATION OF VEON CONSOLIDATED NET DEBT 4Q20 compared to 4Q19 Total Revenue EBITDA Local Forex and Local Forex and Reported Reported currency Other currency Other Russia (2.0%) (1
Slide 46: Main Definitions
MAIN DEFINITIONS Capital expenditures (capex) are purchases of new equipment, new construction, upgrades, licenses, software, other long-lived assets and related reasonable costs incurred prior to intended use of the non-current asset, accounted at the earliest event of advance payment or delivery.