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VEON reports 2Q21 Results

30/08/2021

Strong growth in revenue and EBITDA across the Group Full-year 2021 revenue and EBITDA guidance raised

Amsterdam, 30 August 2021 - VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a leading global provider of connectivity and digital services, today announces results for the second quarter ended 30 June 2021:

2Q21 highlights:

A return to growth of Group revenue and EBITDA on a reported basis and continued acceleration on a local currency basis

Beeline Russia reports growth in total revenue, service revenue and EBITDA, up in local currency terms 6.2%, 2.7% and 2.2% YoY respectively

Strong revenue performance on a local currency basis for the Group

Digital services continue to expand their reach, with more than 38 million monthly active users across our digital product offerings

Continued progress in optimizing our capital structure, lowering cost of debt, lengthening maturities and increasing local currency funding

FY2021 revenue guidance increased to high single-digit growth, and FY2021 EBITDA guidance increased to mid to high single-digit growth on a local currency basis

Strong 2Q21 Group results, with reported revenues up 9.2% YoY, with growth in local currency revenues of 11.3% YoY; an acceleration from the 4.2% YoY growth recorded in 1Q21. Russia did show improved execution in its quarterly revenue trends, with 2Q21 local currency growth of 6.2% YoY.

Reported Group EBITDA increased by 8.7% YoY, while in local currency terms EBITDA increased 10.7% YoY. This solid result was driven by robust local-currency EBITDA performance in Ukraine ( 17% YoY), Kazakhstan ( 21% YoY) and Pakistan ( 14.5% YoY). Russia returned to positive local currency EBITDA growth ( 2.2%).

Implementation of our investment plans continued, with total operational capex of USD 505 million bringing our 12-month capex intensity to 24.3%, supporting the continued expansion of our 4G customer base during the period. The combined 4G population coverage of our operating companies reached 77%, an increase of 10p.p. YoY.

The Group's 4G user base increased by 26 million YoY and 6 million QoQ, enabled by the pace of our innovative network investments, our digital offerings and our quality of service, resulting in total 4G users of 93 million. 4G subscriber penetration stood at 43% at quarter-end. The Group also recorded a QoQ increase in its total subscribers, which grew by 0.9 million in 2Q21 to 214 million.

Mobile data revenues increased by 19% YoY in local currency (17% YoY reported), driven by the growth in 4G users with correspondingly higher ARPUs. We continue to expect the growth in 4G users and the associated increased 4G penetration to be a key tailwind for the Group over the next few years.

VEON's digital businesses continued to perform well. JazzCash closed the quarter with 13 million monthly active users ( 61% YoY), Toffee TV in Bangladesh reached 5 million monthly active users from launch in November 2019 and Beeline TV in Russia had 3.0 million monthly active users ( 24% YoY) in 2Q21.

Group net debt of USD 8.5bn (of which lease liabilities were USD 2.0bn) at the end of 2Q resulted in a net debt/EBITDA ratio of around 2.4. These figures reflect cash capex costs of approximately USD 475m in the quarter. Over the past 12 months, the Group's cost of debt (excluding leases) declined to 6.1% from 6.4%, while debt maturity (excluding leases) increased to 3.2 years, from 2.8 years in 2Q20.

Key recent developments:

On 10 June 2021, VEON held its Annual General Meeting, where its Shareholders elected Irene Shvakman, Sergi Herrero and Vasily Sidorov to its Board of Directors replacing Osama Bedier, Peter Derby and Amos Genish

Jazz Pakistan secured a 10-year PKR 50 billion syndicated credit facility

JazzCash launched a new business app for merchant users

Kyivstar's Smart Money app awarded Best Fintech Service' at Leaders in Fintech and Digital Banking awards

Beeline Kazakhstan launched Simply', the nation's first digital payment card

Beeline Russia accelerated its plans for the roll-out of regional AdTech services through the acquisition of OTM

On 1 July 2021, VEON announced the exercise of its put option to sell its stake in Djezzy. Price will be set in accordance with a contractually determined process

In July 2021, VEON announced that Stephen Pusey decided to step down from its Board of Directors

VEONs MSCI ESG rating upgraded from BBB to single-A

Fitch reaffirms VEON's credit rating at BBB- with a Stable outlook

Kaan Terzio lu commented on 2Q21 results:

This was a very strong quarter for the Group, which supported our further upward revision to our Group revenue and EBITDA guidance for the full year period. The underlying operational execution of our Digital Operator model is gaining further traction across our Group, opening up exciting prospects both for our customers and for our stakeholders.

Our ongoing focus on growing our 4G customers remains a key driver of this performance. They now account for 43% of our total base, a 11 percentage-point growth over the past year. This translates into better services and overall performance, and will continue to provide traction to our business for the rest of this year and beyond as we build out our Digital Operator model across our markets.

Another quarter of strong execution in Russia is particularly noteworthy: following the return to growth of total revenues and service revenues earlier, we saw Beeline Russia reporting growth in mobile service revenue for the full quarter. The business continues to benefit from our ongoing network investment and the focus on customer experience.

I am also pleased to report that we have made further progress on streamlining and rationalizing our portfolio with the exercise of the put option in Algeria. While this transaction is still in progress, it does support our previous
LINK: https://www.veon.com/media/media-releases/2021/veon-reports-2q21-resul...
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