VEON reports 1Q21 Results

29 Apr 2021

VEON reports 1Q21 Results Amsterdam, 29 April 2021 - VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a leading global provider of connectivity and digital services, today announces results for the first quarter ended 31 March 2021:

1Q21 highlights:

Acceleration of Group revenue and EBITDA growth on a local currency basis despite one less day in 1Q21 compared to 1Q20

Beeline Russia reporting full quarter growth, with 1Q21 revenues up 1.4% YoY with one less trading day

Ukraine, Kazakhstan and Pakistan in aggregate reporting 13.4% YoY revenue growth, beating their inflation rate

Digital services continue to expand their reach, with more than 23 million monthly active users across our products

Continued progress in optimizing our capital structure with a lower cost of debt and lengthened maturities for our funding

FY2021 guidance increased to mid-single-digit revenue and EBITDA local currency growth, from previous guidance of low to mid-single-digit revenue and EBITDA local currency growth

- Q1 results at upper end of full-year guidance. The 4.3% YoY growth in Group total revenues in local currency in 1Q21 indicates an acceleration of growth, following 1.4% YoY growth that the Group recorded in 4Q20. Reported revenues declined 5.1% due to currency headwinds. In Russia we saw further improvement in revenue trends, with 1Q21 YoY local currency growth of 1.4% being the third successive quarter of improving revenue trends.

- Group EBITDA increased by 4.4% YoY in local currency terms, while reported Group EBITDA declined 4.9% YoY due to adverse currency movements. This solid local currency result was driven by Ukraine ( 15.3%), Kazakhstan ( 12.4%) and Pakistan ( 8.1%). In Russia, the business reported a YoY decline in local currency EBITDA of 4.8%, a marked improvement over the -11.9% YoY EBITDA reported in 4Q20.

- We successfully implemented our investment plans, with total operational capex of USD 425 million, bringing our 12-month capex intensity to 24.7%, supporting the continued expansion of our 4G customer base during the period. The combined 4G population coverage of our operating companies reached 75.9%, an increase of 10.9pp YoY.

- The Group's 4G user base increased by 21.4 million YoY and 6.3 million QoQ, driven by targeted network investments and other customer care measures, resulting in total 4G users of 86.8 million. 4G subscriber penetration was at 40.8% at quarter-end. The Group also recorded a QoQ increase in its total subscribers, which grew by 3.6 million in 1Q21 to 212.7 million.

- Mobile data revenues for the period increased by 13.6% YoY in local currency (3.8% reported), driven by the growth in 4G users with correspondingly higher ARPUs. This growth trend in 4G users is expected be a key tailwind for the Group over the next few years, driving further growth in data revenues.

- VEON's digital businesses continued to expand customer reach. JazzCash closed the quarter with 14.0 million monthly active users ( 78.8% YoY), Toffee TV in Bangladesh reached 3.3 million monthly active users from launch in November 2019 and Beeline TV had 2.9 million monthly active users ( 28% YoY) in 1Q21.

- We closed 1Q21 with net debt of USD 8.3bn (including lease liabilities), corresponding to a net debt/EBITDA ratio of around 2.4x. These figures include the impact of the Pakistan put option as we settled the USD 272.5m payment and cash capex costs of approximately USD 572m. Over the past 12 months, the Group's cost of debt (excluding leases) reduced to 5.9% from 6.8%, while debt maturity increased to 3.4 years, from 2.3 years.

Key recent developments:

The Group completed its acquisition of the 15% minority stake in its Pakistan operating business for USD 272.5 million

Sergi Herrero is to step down as co-CEO, effective 30 June 2021

Alex Bolis and Dmitry Shvets appointed to Group leadership team

USD 1.25 billion multi-currency revolving credit facility agreement concluded

Banglalink successfully acquired 9.4MHz frequency in spectrum auction

VEON's Mobilink Microfinance Bank won prestigious Diversity & Inclusion CSR Award

Kaan Terzio lu and Sergi Herrero commented on 1Q21 results:

Kaan Terzio lu: The momentum behind the good work done during 2020 has continued into this first quarter as the Group returned to year-over-year organic growth, continuing the positive monthly trend we saw in December 2020. A key driver of this was the strong growth of our 4G customers, now reaching 41% of our total base, a 10 percentage-point growth over the past year. I am encouraged to see the increase in users who consume our digital applications on our improving networks as they deepen their engagement with our brands. I am also particularly pleased that Beeline Russia reported positive revenue growth in local currency terms for the full quarter as we continue to execute on our turnaround strategy.

We will be executing on our growth strategy with a revised leadership structure in the coming period and I would like to thank Sergi Herrero for his contribution to the Group over the past 18 months, in particular the development of our digital businesses across our markets. I wish Sergi all the best in his future endeavors.

Sergi Herrero: Our digital platforms have continued to perform strongly in the period, with some good milestones across our JazzCash business in particular. I remain excited about the longer-term prospects for our digital businesses across our various operations. In the quarter we have seen Kazakhstan, Ukraine and Pakistan return towards their historic trend growth levels, with double-digit growth in local currency terms. I expect see ongoing positive momentum from these markets in the coming quarter. Cost efficiency across the operations remains a key focus in our new decentralized model, which is positive for shareholder value going forward a

LINK:	https://www.veon.com/media/media-releases/2021/veon-reports-1q21-resul...
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