VEON publishes Q1 2022 trading update

Protecting stakeholder value delivering continued local currency growth across our operations

Amsterdam (28 April 2022) - VEON Ltd. (VEON) announces a trading update for the first quarter ended 31 March 2022, including selected financial and operating results:

VEON ended 1Q22 with revenue of USD 1,823 million, 9.8% YoY in local currency (-0.4% YoY in reported currency) and EBITDA of USD 775 million, 5.7% YoY in local currency (-4.0% YoY in reported currency). Group capex was USD 367 million (-6.2% YoY), with capex intensity of 23.2%, -2.2 p.p. YoY. Group net debt/EBITDA was 2.4x.

Commenting on results, Kaan Terzio lu said:

I am proud of how our teams are tackling the current challenges and ensuring service and business continuity, keeping our 220 million customers across nine countries connected. Our commitment to provide access to information and other vital digital services is intact in these character-building times. The solid results we are reporting today illustrate our operational and financial discipline. We continue to enjoy high-single-digit growth and we have improved our capital structure.

1Q 2022 highlights:

Revenue of USD 1,823 million, 9.8% YoY in local currency (-0.4% YoY reported currency)

EBITDA of USD 775 million, 5.7% YoY in local currency (-4.0% YoY reported currency)

Capex of USD 367 million, -6.2% YoY, capex intensity of 23.2%

Total cash USD 1.904 million, with USD 1,304 million at Headquarters (additional USD 692 million in committed undrawn credit lines)

206 million mobile subscribers, up 3.9% YoY

8 million 4G users, up 24.3% YoY

Net debt/EBITDA ratio of 2.4x

Current ratio (Current assets/Current liabilities) of 1.11x

Group revenue increased by 9.8% in local currency terms (-0.4% in reported currency). All our operating companies delivered YoY revenue growth in local currency terms. Strong growth in data revenue, up 17.1% in local currency terms ( 7.1% in reported currency), was a key driver of strong Group revenue performance.

Ukraine revenues increased 15.1% YoY in local currency ( 12.7% in reported currency) a good result given the ongoing conflict in the country. For March 2022, Ukraine reported revenue of UAH 2.8 billion ( 16.7% YoY), with service revenue of UAH 2.7 billion ( 16.7% YoY). This performance was driven once again by continued growth in Kyivstar's 4G customer base, which increased 30.7% YoY. Mobile revenue growth was also supported by higher roaming revenues, which increased 3.0x YoY.

Russia reported 1Q22 revenue growth of 5.6% YoY in local currency (-6.9% YoY in reported currency). The average March exchange rate used for consolidation was 104.1 ruble per dollar, impacting reported numbers. 1Q22 mobile service revenue was up 3.3% YoY and fixed-line service revenue was up 8.2% YoY in local currency. For March 2022, Russia reported revenue of RUB 24.9 billion ( 3.6% YoY), with service revenue of RUB 22.2 billion ( 3.7%).

Pakistan revenue increased 9.1% YoY in local currency (-2.6% YoY in reported currency) driven by strong growth in data revenue, notwithstanding the increase in withholding tax from 10% to 15% on 16 January 2022 and the reduction in mobile termination rates.

In Kazakhstan revenues increased 20% YoY in local currency ( 10.6% in reported currency), another excellent performance especially taking into account the unrest in January 2022. For January 2022, Kazakhstan reported revenue of KZT 20.4 billion ( 15.6% YoY), with service revenue of KZT 19.7 billion ( 15.0% YoY).

Group 1Q22 EBITDA rose by 5.7% in local currency terms (-4.0% in reported currency) and we reported positive local currency EBITDA performance across all markets. In Russia, EBITDA increased 2.8% YoY in local currency (-9.3% in reported currency), marking the fourth consecutive quarter of growth. Excluding the impact of charitable donations and employee support, in Ukraine Kyivstar's EBITDA grew 9.3% YoY in local currency and in Kazakhstan, Beeline's EBITDA grew 16.5% in local currency. Excluding these extraordinary costs, Group EBITDA increased 7.3% YoY in local currency. We remain focused on implementing planned cost efficiency measures across the business.

We reported healthy growth of 3.9% YoY in our 1Q22 subscriber base. The Group continued to focus on the overall customer experience on our 4G networks. This supported the growth in our 4G subscriber base, which reached 100.8 million, adding an additional 19.7 million users over the past 12 months. 4G subscribers now account for 48.8% of our total subscriber base, up 8.0 p.p. from a year ago.

Our financial service business in Pakistan, JazzCash, ended the quarter with 15.7 million MAUs, a rise of 12.2% YoY. In Bangladesh, Toffee TV reached 6.3 million MAU ( 86.9% YoY) in 1Q22. Our digital operator in Kazakhstan, izi', ended the quarter with 101,000 subscribers, an increase of 87% YoY.

Group capex was USD 367 million with capex intensity of 23.2%, driven in particular by increased network investments in Bangladesh and Pakistan in line with our growth strategy.

On 12 April 2022, Jazz signed a core 4G license renewal with the Pakistan Telecommunication Authority, for a fee of USD 486.2 million for a duration of 15 years, with 50% paid upfront and the balance over five years. Fifty percent of the fees (PKR 44.54 billion, equivalent to USD 243.1 million) was settled before signing in April 2022. On 31 March 2022, Banglalink acquired new spectrum in the 2300 MHz band for USD 205 million, payable in installments over 11 years, doubling the company's spectrum holding. We believe this investment will continue to support Banglalink's ambitious nation-wide 4G growth strategy.

We closed the quarter with total cash of USD 1.9 billion, with a further USD 0.7 billion in undrawn revolving credit facilities. All our operations are in general self-funding.

Following the exercise of

LINK:	https://www.veon.com/media/media-releases/2022/veon-publishes-q1-2022-...
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