VEON publishes 1Q23 trading update

04 May 2023

VEON publishes 1Q23 trading update Strong start to the year as revenue growth accelerates

Amsterdam, 4 May 2023 07:00 CEST - VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a global digital operator that provides converged connectivity and online services, announces selected financial and operating results for the first quarter ended 31 March 2023, excluding the results of the Russian operations, as they are classified as held for sale' and discontinued operations' as of 24 November 2022.

In 1Q23, VEON's local currency growth continued to accelerate, with total revenues reaching USD 884 million - a decline of 8.7% YoY in reported currency, while local currency performance rose by 15.3% YoY. Service revenues were USD 852 million, -7.9% YoY in reported currency ( 15.9% in local currency), and EBITDA was USD 385 million, -13.5% YoY in reported currency ( 11.2% YoY in local currency). 1Q23 capex of USD 90 million was 49.0% lower YoY, with capex intensity at 20.3%. Total cash and cash equivalents as of 31 March 2023 were USD 3.0 billion, with USD 2.5 billion held at the headquarters ( HQ ) level.

Commenting on the results, Kaan Terzio lu said: The first quarter of 2023 was our fifth consecutive quarter of double-digit year-on-year growth in local currency as we continued to accelerate our performance, reaching a 15.3% increase in our topline.

Our operating companies continue to successfully execute the Digital Operator strategy, with 13.6 million more 4G users, 34% year-on-year growth in our multiplay base, and higher ARPU levels across the board underpinning our financial results.

We also remain focused on financial discipline, and have successfully amended our 2023 Notes and extended their maturities, supporting our liquidity management as we progress on closing the sale of our Russia operations, subject to all closing conditions being satisfied.

Q1 2023 highlights

Revenue of USD 884 million, -8.7% YoY ( 15.3% YoY in local currency)

Service revenue of USD 852 million, -7.9% YoY ( 15.9% YoY in local currency)

Data and digital revenues of USD 498 million, -5.1% YoY ( 17.9% YoY in local currency)

EBITDA of USD 385 million, -13.5% YoY ( 11.2% YoY in local currency)

Capex of USD 90 million, -49.0% YoY, with LTM capex intensity of 20.3%

Total cash and cash equivalents of USD 3.0 billion, 53.7% YoY, with USD 2.5 billion at Headquarters

158 million mobile customers, up 0.7% YoY

88 million 4G users, up 18.2% YoY, with 55.9% penetration of customer base

With strong execution of our Digital Operator strategy, VEON reports double digit growth in local currency revenues and EBITDA for 1Q23. Group liquidity position remains strong with Group cash and cash equivalents of USD 3.0 billion.

Group revenues decreased by 8.7% YoY during 1Q23 in reported currency with the adverse impact of FX rates and increased by 15.3% YoY in local currency terms. Five operating companies reported local currency revenue growth above 15% YoY, while Ukraine revenues increased 6.0% YoY in local currency. We continued to maintain or expand market share across all our countries of operation. Service revenues decreased by 7.9% YoY in reported currency and rose by 15.9% YoY in local currency.

In 1Q23, Group EBITDA decreased by 13.5% YoY in reported currency terms ( 11.2% in local currency), with Group EBITDA margin of 43.6% (-2.5 p.p. YoY). Local currency EBITDA growth was achieved even as energy costs increased across the Group by c.41% YoY, which negatively impacted Group EBITDA margin by approximately 1.3 p.p.

The Group's YoY EBITDA performance was also affected by an extraordinary non-recurring item in Kazakhstan in 1Q22, as noted in greater detail in the Country Performance section. Excluding this one-off item, Group EBITDA increased by 10.1% YoY in local currency terms.

In 1Q23, we reported 157.7 million mobile subscribers, growth of 0.7% YoY. Our 4G user base grew by 18.2% YoY, reaching 88.1 million, with 13.6 million 4G users added over the past 12 months. 4G users now account for 55.9% of our total subscriber base, up 8.3 p.p. from a year earlier, supporting the execution of VEON's Digital Operator strategy.

Our operating companies continued to focus on the execution of VEON's Digital Operator strategy ( DO1440 ). We aim to deliver digital experiences for every minute of the day through services powered by our 4G network.

Our multiplay customers are customers that consume a digital product on top of our voice and data services. Our multiplay customer base increased by 34.1% YoY to 27.6 million multiplay customers, representing 21.7% of the user base and accounting for 39.3% of VEON's B2C revenues. Multiplay customer ARPU is 3.5 times higher, and churn is 2.0 times lower than for single play voice-only customers.

With a higher share of multiplay customers, ARPU levels in each of our operating companies also increased, in the range of 7.6% to 18.3% YoY.

Our media streaming services, Toffee in Bangladesh and Tamasha in Pakistan, remain important drivers of the growth in our multiplay customers. Toffee reached 11.7 million monthly active users ( MAUs ), an 84.3% YoY increase, while Tamasha in Pakistan reached 5.6 million MAUs, with a 5.6-fold YoY growth.

Our digital financial services business in Pakistan, JazzCash, reported 14.6 million monthly active users and increased its 12-month total transaction volume by 30.4% YoY.

In 1Q23, Group capex was USD 90.3 million. Capex intensity was stable YoY at 20.3%.

We closed the first quarter with total cash and cash equivalents of USD 3.0 billion, including USD 2.5 billion at the HQ level. Our local operations remain largely self-funding.

In Ukraine, the team continued to work to keep the country connected while also delivering growth in both revenue and EBITDA. Around 90% of our radio network remained operational

LINK:	https://www.veon.com/media/media-releases/2023/veon-publishes-1q23-tra...
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