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VEON reports 3Q21 Results

29/10/2021

Execution gains momentum:

Another quarter of double-digit growth

Raising full year EBITDA guidance

Amsterdam (28 October 2021) - VEON Ltd. (VEON) announces results for the third quarter ended 30 September 2021.

3Q21 HIGHLIGHTS:

Strong year-over-year revenue performance in both reported currency ( 10.2%) and local currency ( 11.2%)

Strong acceleration in Beeline Russia's total revenue and service revenue performance, which were up 8.2% and 4.7% YoY in local currency respectively ( 8.3% and 4.8% YoY reported respectively)

EBITDA increased strongly year-over-year in both reported currency ( 8.6%) and local currency ( 9.1%)

Equity free cash flow for the quarter of USD 308 million showing a significant improvement over prior quarters

4G subscribers increased to 93.8 million, reaching penetration of 46.2%, up 10.3 p.p. YoY and 3.0 p.p. QoQ

JazzCash in Pakistan reached 13.9 million monthly active users, and Toffee TV in Bangladesh reached 6.3 million monthly active users.

FY2021 Group EBITDA guidance raised to minimum local currency growth of 8%. On Group revenues guidance, we maintain high single-digit local currency growth for the full financial year

Algeria has become a discontinued operation, is accounted for as an Asset held for sale and does not contribute to both the comparison base and the actual reported numbers

With reported revenues up 10.2% YoY and local currency revenues growing 11.2% YoY, VEON recorded double digit growth for the second consecutive quarter in 3Q21.

Beeline Russia continued to execute on its turnaround, as revenue growth accelerated with 3Q21 local currency revenue growth of 8.2% YoY and local currency mobile service revenue growth of 4.5%. Beeline added 0.5 million mobile customers in last quarter reaching 50.6m ( 1.7% YoY).

All of our countries posted local currency revenue growth, with double digit performance from Kazakhstan ( 25.5% YoY), Georgia ( 21.4% YoY), Pakistan ( 13.0% YoY), Ukraine ( 11.9% YoY) and Uzbekistan ( 10.4% YoY).

Group EBITDA increased by 8.6% YoY in reported terms, and 9.1% YoY in local currency. This solid result was driven primarily by robust local-currency EBITDA performance in Ukraine ( 11.4% YoY) and Kazakhstan ( 36.7% YoY). Russian posted a second consecutive quarter of positive EBITDA with local currency growth of 1.9%.

Group capex stood at USD 381 million, supporting the continued expansion of our 4G customer base, which increased by 24.7 million YoY and 7.0 million QoQ. Total Group 4G users reached 93.8 million, corresponding to 4G subscriber penetration of 46.2% at quarter-end. The Group also recorded a QoQ increase in its total subscribers, which grew by 3.2 million in 3Q21 to reach 202.9 million.

Mobile data revenue increased by 18.8% YoY in local currency (18.1% YoY reported), driven by our ongoing 4G focus. A noteworthy contribution to our data revenue growth came from Pakistan ( 25.5% YoY), Kazakhstan ( 40.3% YoY) and Bangladesh ( 32.0% YoY).

JazzCash closed the quarter with 13.9 million monthly active users ( 43.6% YoY), Toffee TV in Bangladesh reached 6.3 million monthly active users from 1.8 million a year ago; and Beeline TV in Russia hit 3.1 million monthly active users ( 16.7% YoY) in 3Q21.

We remain focused on active portfolio management and the pursuit of opportunities to realize the value of our infrastructure portfolio. On 6 September 2021, VEON announced that it had reached an agreement to sell its mobile network towers in Russia to Service-Telecom Group of Companies LLC for a total consideration of RUB 70.65 billion (USD 970 million equivalent), subject to customary regulatory approvals.

Group net debt of USD 8.2bn (of which lease liabilities were USD 1.8bn) at the end of 3Q resulted in a net debt/EBITDA ratio of around 2.5x. These figures reflect cash capex of approximately USD 347mn in the quarter. The Group's cost of debt (excluding leases) in 3Q21 increased to 6.3% from 6.1% in 3Q20, while debt maturity (excluding leases) increased to 3.2 years, from 2.8 years in 3Q20.

KEY RECENT DEVELOPMENTS

17 August 2021, Michael Schulz joined VEON as Group Chief People Officer

6 September 2021, VEON announced the sale of its Russian tower assets for USD 970 million

9 September 2021, VEON announced the pricing of its 5-year RUB 20 billion 8.125% notes issued under its GMTN programme

21 October 2021, VEON announced that its Group General Counsel Scott Dresser will be leaving the Company effective 31 December 2021

26 October 2021, VEON published its integrated report for 2020

Kaan Terzio lu commented on 3Q21 results:

Our successful execution along VEON's 3 strategic pillars - infrastructure, digital operator transformation and Ventures - is moving full steam ahead and bearing fruit. With this we have now delivered five consecutive quarters of improvement in both operational and financial performance.

All of our operating companies have recorded year-over-year total revenue growth, with 5 of them reporting double-digit growth. I am particularly pleased that Beeline Russia's strong performance has continued to accelerate further in the month of September with total revenues up 8.2% and mobile service revenue growth of 4.5% making Beeline Russia a significant contributor to our Group's revenue growth.

These financial results are built on strong operational foundations as we strengthen our 4G subscriber base - now 46% of our customers. With significantly higher ARPU and lower churn, they form the fundamental building block of our present and future growth as we execute on our digital operator transformation.

Our operating companies are widening and deepening their relationship with the users of our digital services. In Q3, Toffee TV reached 6.3 million YoY growth and Beeline TV reached 3.1 million subscribers with 17% YoY growth.

We are making progress in crystallising the
LINK: https://www.veon.com/media/media-releases/2021/veon-reports-3q21-resul...
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