Slide 1: Q3 2018 Results
Q 3 2 0 1 8 R E S U LT S Amsterdam, 8 November 2018
Slide 2: 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 “m
Slide 3: Good operational performance in Q3 2018
Good operational performance in Q3 2018 $2.32b $848m $263m TOTAL EBITDA EQUITY FCF REVENUE EXCL. LICENSES2 ~$1 billion FY 2018 target +2.9% organic1 YoY +4.6% organic1 YoY confirmed -5.7% reported YoY -18.7% reported YoY MOBILE DATA REVENUE $548m NET LEVERAGE RATIO3 1.7X C O R P OR A T E COSTS $92m
Slide 4: Executing at pace on our near term priorities
Executing at pace on our near term priorities • Lean, high-level operating model • Sale of 50% stake in Italy joint venture • On track to halve run-rate corporate increases our focus on emerging markets costs by year-end 2019 • Continue to explore options to address • Digital journey underway with s
Slide 5: Good progress year to date, guidance updated
Good progress year to date, guidance updated 9M 2018 $6.8bn $2.6bn $804m TOTAL REVENUE EBITDA EQUITY FCF EXCL. LICENSES2 +3.0% organic1 YoY +5.2% organic1 YoY -4.4% reported YoY -9.7% reported YoY +1.6% reported YoY FY 2018 targets Updated to low single-digit, ► Updated to low to mid single-digit, ►
Slide 6: Revenue and EBITDA development
Revenue and EBITDA development Data revenue and lower costs driving organic growth in revenue and EBITDA USD MILLION +2.9% YoY organic 13 (21) 181 (103) (289) 2,526 80 2,456 2,317 1 Reported total Equipment & Voice Data and MFS Other Organic total revenue FOREX Euroset Reported total revenue accesso
Slide 7: Revenue and EBITDA development
Revenue and EBITDA development Continued solid organic growth USD MILLION (-5.7%) YoY reported 24 6 (16) (8) (25) 16 73 (289) 2,526 2,456 80 2,317 Total reported Russia Pakistan Ukraine Uzbekistan Algeria Bangladesh Other 1 Organic total FOREX Euroset Total reported revenue 3Q17 revenue revenue 3Q18
Slide 8: Corporate costs
Corporate costs Q3 saw continued progress in reducing corporate costs • Corporate costs were USD 92 million in Q3 2018 • Excluding the effect of a vendor agreement adjustment in Q3 2017, corporate costs decreased by ~32% YoY • FY 2018 target confirmed to reduce corporate costs by ~20% YoY from USD 4
Slide 9: Digital journey underway
Digital journey underway FUTURE-PROOFING OUR NEW DIGITAL SERVICES INFRASTRUCTURE Transforming our DBSS and network virtualization customer experience Beeline TV Upgrading our networks and IT infrastructure to best in class Self Care Driving greater engagement and retention Digitizing the core Pakist
Slide 10: Q3 2018 revenue and EBITDA country trends
Q3 2018 revenue and EBITDA country trends Figures and trends in local currency Revenue RUSSIA PAKISTAN ALGERIA BANGLADESH UKRAINE UZBEKISTAN (RUB BILLION) (PKR BILLION) (DZD BILLION) (BDT BILLION) (UAH BILLION) (UZS BILLION) +5.8 % + 18.7% - 6.7% - 5.8% + 14.1% + 4.2% 80 YoY 60 YoY 27 YoY 12 YoY 5.0
Slide 11: Russia: Euroset integration successfully completed, improving customer mix
Russia: Euroset integration successfully completed, improving customer mix TOTAL REVENUE MOBILE CUSTOMERS • Total revenue growth of 5.8% YoY, driven by mobile service revenue (RUB BILLION) (MILLION) growth of 0.5% YoY and more than a doubling (+164%) of sales of + 5.8 % YoY - 4.5 % YoY equipment and
Slide 12: Pakistan: strong revenue and EBITDA growth continued into Q3
Pakistan: strong revenue and EBITDA growth continued into Q3 TOTAL REVENUE MOBILE CUSTOMERS • The market remained competitive in Q3, particularly in data and social (PKR BILLION) (MILLION) network offers, against which Jazz maintained its premium price + 18.7 % YoY + 5.6 % YoY positioning 48.9 • Rev
Slide 13: Algeria: signs of stabilization, sequential customer and revenue growth
Algeria: signs of stabilization, sequential customer and revenue growth TOTAL REVENUE MOBILE CUSTOMERS • Q3 2018 saw continued intense price competition as competitors reacted (DZD BILLION) (MILLION) to Djezzy’s H1 customer base expansion - 6.7 % YoY + 2.6 % YoY • Macroeconomic and regulatory challe
Slide 14: Bangladesh: sequential improvement in revenue decline
Bangladesh: sequential improvement in revenue decline, supported by good data revenue growth TOTAL REVENUE MOBILE CUSTOMERS • Double-digit data revenue growth (+11.9% YoY) achieved despite pricing (BDT BILLION) (MILLION) pressures in the market - 5.8 % YoY + 2.8 % YoY ► Data customers (+15.2% YoY) a
Slide 15: Ukraine: strong performance continued in Q3 2018
Ukraine: strong performance continued in Q3 2018 TOTAL REVENUE MOBILE CUSTOMERS (UAH BILLION) (MILLION) + 14.1 % YoY + 0.5 % YoY 4.9 • Kyivstar continued to report strong results in a growing market, driven 4.3 4.5 0.3 0.3 0.3 by repricing activities and strong data growth 26.4 26.6 4.6 4.0 4.2 • Mo
Slide 16: Uzbekistan: solid revenue growth but external costs pressured EBITDA
Uzbekistan: solid revenue growth but external costs pressured EBITDA TOTAL REVENUE MOBILE CUSTOMERS (UZS BILLION) (MILLION) • The strong reduction in MTR is driving all-net offers in the market, + 4.2% YoY -4.7% YoY within which Unitel continues to focus on value customers as the clear 635 651 marke
Slide 17: Q3 2018 income statement
Q3 2018 income statement Reported Organic1 3Q18 3Q17 YoY YoY USD MILLION Revenue 2,317 2,456 (5.7%) 2.9% Service revenue 2,151 2,358 (8.8%) 1.9% EBITDA 848 1,042 (18.7%) 4.6% ► D&A and other increased due to an accounting impairment totaling USD Depreciation, amortization and other (1,239) (498) n.m
Slide 18: Continued strong cash flow generation in Q3 2018
Continued strong cash flow generation in Q3 2018 USD MILLION 28 (73) (7) 77 38 77 (266) 159 536 263 230 Russia Pakistan Algeria Bangladesh Ukraine Uzbekistan Other countries Group OPCF Working capital Interest, taxes Equity free OpCF OpCF OpCF OpCF OpCF OpCF OpCF and provision and other cash flow ex
Slide 19: Cash flow reconciliation table
Cash flow reconciliation table USD MILLION 3Q18 3Q17 YoY EBITDA 848 1,042 (18.7%) ► EBITDA decreased due to currency depreciation (~USD 122m) mainly in Russia, Pakistan and Uzbekistan, Euroset integration impact (~USD 10m) Changes in working capital 7 9 (22%) and an exceptional income from an adjust
Slide 20: Q3 2018 net debt development
Q3 2018 net debt development USD MILLION (2,830) 184 152 112 327 (848) (5) 8,645 5,736 1 Net debt Proceeds from the sale EBITDA Change in working Financial Taxes Cash capex incl. licenses FOREX and Other Net debt 30 June of capital charges 30 September 2018 50% stake in Italy JV and provisions 2018
Slide 21: Full Year 2018 guidance updated
Full Year 2018 guidance updated 9M 2018 FY 2018 actual targets3 Previous guidance on total revenue and EBITDA Low Total revenue 3.0% single-digit organic ► Total revenue: flat to low single-digit organic growth organic growth1 growth EBITDA 5.2% Low to mid single- EBITDA: flat to low single-digit or
Slide 22: Appendix
VEON APPENDIX
Slide 23: Q3 2018 summary
Q3 2018 summary • VEON reports good revenue and EBITDA organic growth in Q3 2018, driven by strong data growth; USD 263 million in equity free cash flow excluding licenses; FY 2018 guidance updated • Russia revenue growth driven by strong increase in sales of equipment and accessories • Pakistan and
Slide 24: Group debt structure
Group debt structure 30 SEPTEMBER 2018 Group debt structure Group debt currency mix1 5% 3% 2% 7% 19% HQ - guaranteed USD RUB HQ - unguaranteed 25% EUR PKR Other 65% 74% Other Gross Debt USD 9.1 billion • Average cost of debt: 7.2% (30 September 2017: 6.8%) • Average maturity: 3.3 years (30 September
Slide 25: Group debt maturity schedule
Group debt maturity schedule 30 SEPTEMBER 2018, USD BILLION Group debt maturity schedule HQ Pakistan Other GTH Russia Bangladesh 2.2 1.7 1.5 1.2 1.2 0.9 0.4 2018 2019 2020 2021 2022 2023 Group debt maturity schedule by currency1 2018 2019 2020 2021 2022 2023 >2023 USD 0.2 1.0 0.6 1.0 0.6 1.7 0.9 65%
Slide 26: Liquidity overview
Liquidity overview Group cash breakdown by currency 30 SEPTEMBER, 2018 Unused RCF headroom at the end of Q3 2018: VEON – syndicate USD 1.69 billion 23% 10% Unused CF headroom at the end of Q3 2018: 67% Pakistan – credit facilities PKR 14.3 billion (USD 0.12 billion) USD EUR Other Total cash and unus
Slide 27: Debt by entity
Debt by entity 30 SEPTEMBER 2018, USD MILLION Outstanding debt Type of debt Cash-pool Entity Bonds Loans Other Total overdrafts1 VEON Amsterdam B.V. - - 230 - 230 VEON Holdings B.V. 3,682 2,289 - - 5,971 GTH Finance B.V. 1,200 - - - 1,200 PJSC VimpelCom 394 - - 51 445 Pakistan Mobile Communications
Slide 28: Forex
Forex Target rates Average rates Closing rates FY 2018 3Q18 3Q17 YoY 3Q18 3Q17 YoY Russian ruble 60.00 65.53 59.02 (11.0%) 65.59 58.02 (13.1%) Algerian dinar 110.00 118.01 109.90 (7.4%) 118.22 113.04 (4.6%) Pakistan rupee 105.00 123.69 105.37 (17.4%) 123.18 105.39 (16.9%) Bangladeshi taka 79.00 83.8
Slide 29: Forex YoY impact on Revenue and EBITDA
Forex YoY impact on Revenue and EBITDA Revenue EBITDA Q3 2018 Q3 2018 Russia (128) (46) Algeria (15) (7) Pakistan (69) (33) Bangladesh (5) (2) Ukraine (10) (6) Uzbekistan (53) (25) Other (9) (1) Total (289) (122) Q3 2018 RESULTS 29