Slide 1: VEON 1Q23 Trading Update
1 1 VEON 1Q23 TRADING UPDATE Amsterdam, 4 May 2023 STRONG START TO THE YEAR AS REVENUE GROWTH ACCELERATES
Slide 2: Agenda
2 2 AGENDA 1. OPENING 2. HIGHLIGHTS & BUSINESS UPDATE Nik Kershaw Kaan Terzioğlu 4. CLOSING REMARKS Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff
Slide 3: Notice to Readers: Impact of the Conflict
3 3 NOTICE TO READERS: IMPACT OF THE CONFLICT 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 responsi
Slide 4: Disclaimer
4 4 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
Slide 5: Agenda
5 5 AGENDA 1. OPENING 2. HIGHLIGHTS & BUSINESS UPDATE Nik Kershaw Kaan Terzioğlu 4. CLOSING REMARKS Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff
Slide 6: 1Q23 Highlights
6 6 1Q23 HIGHLIGHTS Capex investment remains focused on 4G network rollout CAPEX $90mn Positive EBITDA trends across all countries $385mn EBITDA -13.5% YoY Fifth quarter of double-digit local currency revenue growth +15.3% YoY local currency TOTAL REVENUE -8.7% YoY $884mn -49.0% YoY Encouraging Serv
Slide 7: Accelerating Top Line with Double-Digit Growth
7 7 ACCELERATING TOP LINE WITH DOUBLE-DIGIT GROWTH Note: Group revenue YoY performance is normalised for one-offs REVENUE PERFORMANCE YoY in local currency 9.4% 13.8% 13.0% 13.3% 15.4% 15.3% 20.1% 8.2% 13.4% 16.4% 16.4% 18.1% 19.0% 22.5% 12.5% 15.1% 3.9% 5.2% 8.7% 6.0% 13.2% 4Q21 1Q22 2Q22 3Q22 4Q22
Slide 8: 2023 Notes Amended with Maturities Extended to 4Q23
8 8 2023 NOTES AMENDED WITH MATURITIES EXTENDED TO 4Q23 In the best interest of all stakeholders 3 Recent events VEON obtained remaining licences required to amend its 2023 Notes and VEON’s 2023 Notes have been amended 2023 Put Option Event Notice distributed on 5 April and during the 2023 Put Optio
Slide 9: 4G Growth Driving Data & Digital Revenues
9 9 4G GROWTH DRIVING DATA & DIGITAL REVENUES Note: 1Q21 and 1Q22 data and digital revenues on this slide adjusted for Georgia, which was sold in June 2022, and Russia, which is now accounted as asset held for sale Steady growth in 4G uptake Steady growth in data and digital revenues Data and digita
Slide 10: 1Q23 Group Service Revenue +15.9% YoY in Local Currency
10 10 1Q23 GROUP SERVICE REVENUE +15.9% YOY IN LOCAL CURRENCY Note: EBITDA in Kazakhstan was impacted by extraordinary non-recurring item in 1Q22 as noted in the Country Performance section of the 1Q23 results document +17.1% +12.0% EBITDA +24.6% +37.9% EBITDA +18.0% +11.7% EBITDA +24.0% +9.7% EBITD
Slide 11: Ukraine
11 11 UKRAINE Keeping Ukraine connected • Around 90% of the Kyivstar network remained operational at the end of 1Q23 as team remains focused on keeping Ukraine connected • Revenue increased 6.0% YoY with a positive EBITDA YoY performance despite the up to 34% YoY increase in electricity tariffs and
Slide 12: Helsi
12 12 HELSI The largest digital healthcare platform in Ukraine Users registered in the system 25 million +0.6% QoQ Active healthcare institutions 1,500 +32.1% QoQ Active doctors and specialists 33,500 +7.4% QoQ Appointments in 1Q23 1.8 million +16.8% QoQ
Slide 13: Pakistan
13 13 PAKISTAN Double-digit growth in both revenue and EBITDA • Continues to drive industry growth and gain market share despite negative macroeconomic environment with 47% YoY currency depreciation, 8.3 p.p. YoY increase in interest rates and average inflation at c.31.5% in 1Q23 • Double-digit reve
Slide 14: JazzCash
14 14 JAZZCASH The most popular mobile financial services app in Pakistan MAU 14.6 million -6.7% YoY Active merchants 179,000 +23.6% YoY LTM Gross Transaction Value PKR 4.5 trillion +30.4% YoY LTM # of transactions 2.0 billion +9.4% YoY
Slide 15: Tamasha
15 15 TAMASHA Pakistan’s leading entertainment platform MAU 5.6 million 5.6x YoY Average DAU 914,000 5.2x YoY Daily watch time per user in 1Q23 30 min 2.4x YoY 15
Slide 16: Kazakhstan
16 16 KAZAKHSTAN Eighth consecutive quarter of revenue growth above 20% YoY • Continued strong execution of its Digital Operator strategy saw Beeline Kazakhstan gain further market share and sustaining its leadership position in NPS • Revenue growth accelerated recording the 8th consecutive quarter
Slide 17: Simply
17 17 SIMPLY Kazakhstan’s first mobile online-only neobank MAU 234,000 +87.3% YoY LTM Gross Transaction Value KZT 224 billion +34.1% QoQ LTM # of transactions 33 million +39.1% QoQ
Slide 18: BeeTV
18 18 BEETV Beeline Kazakhstan’s multiplatform entertainment service MAU on all platforms 720,000 +18.1% YoY MAU on mobile platform 509,000 +20.2% YoY Average DAU on mobile platform 35,000 -9.3% YoY Daily watch time per user in 1Q23 145 min +10.8% YoY 18
Slide 19: IZI
19 19 IZI First digital-only mobile operator in Kazakhstan MAU of IZI app 362,000 4.7 times YoY Monthly active mobile customers 173,000 +71.0% YoY Average daily active users 36,000 3.2 times YoY 19
Slide 20: Bangladesh
20 20 BANGLADESH Strong start to the year gaining further market share • Successful network rollout and execution of Digital Operator strategy saw the fourth consecutive quarter of double-digit revenue growth. Banglalink made further gains in revenue and subscriber market share • Following 12 months
Slide 21: Toffee
21 21 TOFFEE The largest mobile entertainment platform in Bangladesh MAU 11.7 million +84.3% YoY Average DAU 2.0 million +96.4% YoY Daily watch time per user in 1Q23 11 min
Slide 22: Uzbekistan
22 22 UZBEKISTAN Fifth consecutive quarter of topline growth above 20% • Beeline Uzbekistan maintains its subscriber market share and leading NPS position • Revenue growth of 24.0% driven by growth in the customer base, higher number of 4G users and higher data usage up 35.0% YoY benefiting from the
Slide 23: Beepul
23 23 BEEPUL Beeline Uzbekistan’s mobile financial services platform MAU 294,000 +15.2% YoY LTM Gross Transaction Value UZS 4.4 trillion +43.2% YoY LTM # of Transactions 61 million +4.4% YoY 23
Slide 24: Our Self-Care Platforms
24 24 OUR SELF-CARE PLATFORMS Enable higher engagement and customer retention MyBeeline UZ MyBeeline KGMy Kyivstar 3.5mn Monthly active users -1.0% YoY 15.8% Penetration in A1M subs +0.9p.p. YoY 4.5mn Monthly active users +19.8% YoY 38.3% Penetration in A1M subs +3.0p.p. YoY 0.6mn Monthly active use
Slide 25: Agenda
25 25 AGENDA 1. OPENING 2. HIGHLIGHTS & BUSINESS UPDATE Nik Kershaw Kaan Terzioğlu 4. CLOSING REMARKS Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff
Slide 26: 1Q23 Highlights
26 26 1Q23 HIGHLIGHTS EBITDA margin at 43.6% with continued strong focus on cost control EBITDA $385mn +11.2% YoY local currency LTM Capex intensity trending lower to 19.8%1 $90mn CAPEX -49.0% YoY Local currency revenue growth continues to accelerate +15.3% YoY local currency TOTAL REVENUE -8.7% YoY
Slide 27: 1Q23 Revenues
27 27 1Q23 REVENUES Accelerating local currency revenue growth • Reported revenue growth for the Group was impacted by significant YoY depreciation of local currencies particularly in Pakistan, Ukraine and Bangladesh 1,104 884392 292 174 170 66 12 (2) (220) Pakistan Ukraine Kazakhstan Bangladesh Uzb
Slide 28: 1Q23 EBITDA and EBITDA Margin
28 28 491 385 177 172 92 62 29 5 (46) (106) Pakistan Ukraine Kazakhstan Bangladesh Uzbekistan Kyrgyzstan HQ and eliminations Group in constant currency FX impact Group 1Q23 EBITDA AND EBITDA MARGIN Positive local currency EBITDA growth across all markets 1Q23 results YoY trends EBITDA $385mn +11.2%
Slide 29: 1Q23 Debt and Liquidity Update
29 29 1Q23 DEBT AND LIQUIDITY UPDATE 31 Mar 2023 vs. 31 Dec 2022 GROSS DEBT -23.6% QoQ $5.7bn NET DEBT $2.7bn LEVERAGE INCL. LEASES 1.61x LEVERAGE EXCL. LEASES 1.29x -39.3% QoQ CASH • Total cash USD 3.0 billion, with USD 2.5 billion held at the HQ level • Operations remain largely self funding DEBT
Slide 30: Group Debt and Liquidity
30 30 GROUP DEBT AND LIQUIDITY AS OF 31 MARCH 2022 LEGEND: USD RUB PKR BDT UAH UZS EUR OTHER CASH NET DEBT (EXCLUDING LEASES) GROSS DEBT Total gross debt excl. leases USD 4.9bn USD 3.0bn USD 1.9bn CAPITALIZED LEASES USD 0.8bn USD 2.5bn cash at HQ (>99% of HQ cash is in USD and EUR) DEBT AND CASH CUR
Slide 31: Russia's Debt and Liquidity
31 31 RUSSIA’S DEBT AND LIQUIDITY AS OF 31 MARCH 2022 1. Lease liabilities in Russia are related to towers, shops and other “right-of-use” assets Note: Russia data reflects operations based within Russia alone and excludes intercompany debt DEBT AND CASH NET DEBT AND LEASES Post-IFRS 16 leverage 2.7
Slide 32: Debt Maturity
32 32 DEBT MATURITY DEBT MATURITY SCHEDULE AS OF 31 MARCH 2023 (USD billion) • USD 1.04 billion of debt maturing in next 12 months, excluding RCF • USD 1,055 million outstanding under the RCF, can be rolled over until the final maturity of the RCF: USD 250 million and USD 805 million of the total co
Slide 33: Debt Management Update
33 33 DEBT MANAGEMENT UPDATE • The higher cost of debt vs. 4Q22 was impacted by the reclassification of bonds purchased by Russia to intercompany debt as well as the increased interest rates on floating PKR debt • Debt cost reflects blended rate of borrowings, mainly USD, RUB and PKR (average USD co
Slide 34: Agenda
34 34 AGENDA 1. OPENING 2. HIGHLIGHTS & BUSINESS UPDATE Nik Kershaw Kaan Terzioğlu 4. CLOSING REMARKS Kaan Terzioğlu 3. TRADING RESULTS Joop Brakenhoff
Slide 35: 2023 Outlook
35 35 2023 OUTLOOK We reiterate our full-year guidance • As we execute on our strategy across the Group, our 2023 local currency guidance for both revenue and EBITDA growth remains at 10%-14% • VEON’s 2023 outlook for the Group’s capex intensity is in the range of 18%-20% 1Q23 Actual FY 2023 Guidanc
Slide 36: 2023 Ambitions
36 36 Executing on asset-light portfolio • Continued work on monetizing towers assets4 Driving growth and expanding margin • Execution on “4G for all” and “Digital Operator” • Strengthen position for accelerating growth 3 Focus on capital structure • Aim to finalize the Scheme of Arrangement (comple
Slide 37: Q&A
37 37 Q&A VEON 1Q23 TRADING UPDATE
Slide 38: Thank You!
38 38 THANK YOU! ir@veon.com Tel: +31 (0)20 79 77 200 VEON 1Q23 TRADING UPDATE
Slide 39: Appendix
39 39 APPENDIX VEON 1Q23 TRADING UPDATE
Slide 40: Digital Operator Strategy Delivering Results
40 40 DIGITAL OPERATOR STRATEGY DELIVERING RESULTS RE AD PAY ARPU Multiple Churn Impact 1. Revenue share and subscriber numbers based on the mobile B2C segment Note: Voice only – customers using only voice services, 2play 4G – Doubleplay 4G customers, Multiplay – Multiplay customers Multiplay custom
Slide 41: 1Q23 Revenues
41 41 REVENUE IN 1Q23 (USD million) 1Q23 REVENUES • Reported revenue growth for the Group was impacted by significant YoY depreciation of local currencies particularly in Pakistan, Ukraine and Bangladesh 1Q23 results YoY trends TOTAL REVENUE $884mn +15.3% local currency -8.7% SERVICE REVENUE $852mn
Slide 42: 1Q23 EBITDA and EBITDA Margin
42 42 1Q23 EBITDA AND EBITDA MARGIN 1Q23 results YoY trends EBITDA $385mn +11.2% local currency -13.5% EBITDA MARGIN 43.6% EBITDA IN 1Q23 (USD million) • Inflation rose across operations negatively impacting energy costs which increased +c.41% YoY for the Group • Kazakhstan EBITDA was impacted by c.
Slide 43: Debt by Entity
43 43 DEBT BY ENTITY1 1. Excluding lease liabilities 31 MARCH 2023 (USD MILLION EQUIVALENT) Outstanding debt Type of debt Entity Bonds Loans Cash-pool overdrafts and other Total VEON Holdings B.V. 3,089 1,055 - 4,144 Pakistan Mobile Communications Limited - 529 22 551 Banglalink Digital Communicatio
Slide 44: Lease Liabilities (Principal)
44 44 LEASE LIABILITIES (PRINCIPAL) USD, million Local currency, million 31 March 2023 31 December 2022 31 March 2023 31 December 2022 Pakistan 197 227 55,735 51,419 Ukraine 161 148 5,872 5,398 Bangladesh 325 329 34,506 33,900 Kazakhstan 76 61 34,104 28,176 Uzbekistan 32 30 360,876 338,251 Other 5 5
Slide 45: Debt Maturity
45 45 DEBT MATURITY Debt maturity schedule 2023-2024 as of 31 March 2023 DEBT MATURITY SCHEDULE 2023-2024 (pro-forma due to amendment of 2023 Notes)1 (Millions) 1. As per the amended terms of the notes, the notes become subject to a put at 102%, which due to the specified mechanics to exercise the p
Slide 46: Ukraine
46 46 UKRAINE REVENUE (UAH Billion) EBITDA1 (UAH Billion) 4G USERS AND PENETRATION (3 months active, million) +6.0% YoY +1.0% YoY 7.5 7.9 7.4 7.7 8.2 8.3 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 4.8 4.9 4.6 4.4 4.5 4.9 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 12.1 12.7 11.6 12.1 13.1 13.3 46% 49% 47% 50% 53% 55% 4Q21 1Q2
Slide 47: Pakistan
47 47 EBITDA1 (PKR Billion) PAKISTAN 1. One-off reversal positively impacting revenue (PKR 6.6 billion) and EBITDA (PKR 20.2 billion) in 4Q22 2. Includes users who are active in more than one application +16.0% YoY REVENUE1 (PKR Billion) 4G USERS AND PENETRATION (3 months active, million) VENTURES J
Slide 48: Kazakhstan
48 48 EBITDA2 (KZT Billion) KAZAKHSTAN 1. One-offs negatively impacting revenue in 4Q22: accounting adjustment for revenue recognition of bundles (KZT 3.0 billion) 2. One-offs impacting EBITDA: tax incentive for radio frequencies positively in 4Q21 (KZT 0.6 billion), extraordinary charitable donatio
Slide 49: Bangladesh
49 49 BANGLADESH +17.7% YoY +11.7% YoY REVENUE (BDT Billion) EBITDA (BDT Billion) 4G USERS AND PENETRATION (3 months active, million) VENTURES Toffee TV MAU 11.7mn (+84.3% YoY) 12.3 12.4 13.2 13.8 14.4 14.6 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 5.2 4.7 4.9 5.1 4.7 5.3 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 12.0 12.5
Slide 50: Uzbekistan
50 50 EBITDA2 (UZS Billion) UZBEKISTAN 1. One-off positively impacting total revenue: reversal of excise tax provision in 3Q22 (UZS 6.6 billion) 2. One-offs positively impacting EBITDA: provision reversals (UZS 222 billion) in 2Q22, reversal of excise tax provision in 3Q22 (UZS 6.6 billion) 3. Inclu
Slide 51: Reconciliation Tables
51 51 RECONCILIATION TABLES Extract from VEON Ltd.’s 1Q23 trading update RECONCILIATION OF LOCAL CURRENCY AND REPORTED GROWTH RATES - 1Q23 COMPARED TO 1Q22 Local currency Forex and Other Reported Local currency Forex and Other Reported Pakistan 16.0% (36.4%) (20.4%) 12.0% (35.2%) (23.2%) Ukraine 6.0
Slide 52: Definitions
52 52 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