VEON publishes 2Q23 trading update

03/08/2023

03 Aug 2023

VEON publishes 2Q23 trading update Strong results, full-year revenue guidance raisedAmsterdam, 3 August 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 second quarter and six months ended 30 June 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 2Q23, VEON's local currency growth continued to accelerate. Total revenues reached USD 916 million - a decrease of 4.3% YoY in reported currency, while the local currency performance rose by 19.6% YoY. Service revenues were USD 882 million, -4.0% YoY in reported currency ( 19.6% in local currency), and EBITDA was USD 415 million, -10.6% YoY in reported currency ( 13.6% YoY in local currency). Capex in 2Q23 was USD 171 million, a decline of 16.6% YoY, with capex intensity for the last twelve months at 19.6%,and 18.7% in the quarter. Total cash and cash equivalents as of 30 June 2023 amounted to USD 2.4 billion, excluding banking operations in Pakistan, with USD 2.0 billion held at the headquarters ( HQ ) level.

Commenting on the results, Kaan Terzio lu said: In 2Q23, VEON continues to accelerate its revenue growth, which reached 19.6% YoY in local currency, fueled by market share gains and digital expansion across all our operations.

With our Digital Operator strategy and a solid track record of execution, VEON's operating companies have consistently expanded their value proposition, delivering digital experiences in adjacent verticals: digital financial services, digital entertainment, digital learning, digital healthcare and many more. As of the end of the quarter, customers who benefit from our digital services as well 4G voice and data, account for 22% of our base and 40% of our subscriber revenues. We also serve the broader mobile users in our markets with our all-access digital services.

Completing the sale of our Russia operations and financial discipline remain our top priorities. We have closed the quarter with a strong liquidity position, with Group holding cash and cash equivalents totaling USD 2.4 billion, nearly 2.0 billion of which was held at headquarters level as of June 30th.

Q2 2023 highlights

Revenue of USD 916 million, -4.3% YoY ( 19.6% YoY in local currency)

Service revenue of USD 882 million, -4.0% YoY ( 19.6% YoY in local currency)

Multiplay and doubleplay 4G revenues of USD 453 million, 8.6% YoY ( 31.1% YoY in local currency)

EBITDA of USD 415 million, -10.6% YoY ( 13.6% YoY in local currency)

Capex of USD 171 million, -16.6% YoY, with 2Q23 capex intensity of 18.7%

Total cash and cash equivalents of USD 2.4 billion, 5.8% YoY, with USD 2.0 billion at Headquarters

156 million mobile customers, -0.6% YoY

88 million 4G users, up 15.9% YoY, with 56.8% penetration of customer base

VEON accelerates its double digit growth in local currency revenues and EBITDA in 2Q23, driven by further execution of Digital Operator strategy. Group liquidity position remains strong with Group cash and cash equivalents at USD 2.4 billion.

Group revenues decreased by 4.3% YoY during 2Q23 in reported currency due to the adverse impact of FX rates, while increasing by 19.6% YoY in local currency terms.

2Q23 YoY performance Reported Local currency

Total revenue (4.3%) 19.6%

Ukraine (6.5%)

16.8%

Pakistan (16.6%)

22.2%

Kazakhstan 17.8%

19.4%

Bangladesh (3.0%)

17.1%

Uzbekistan 17.5%

20.9%

Kyrgyzstan 14.0%

22.2%

Three operating companies reported local currency revenue growth above 20% YoY, with the local currency revenue growth at the other three operating companies, including Ukraine, rising well above 15% YoY. We continued to expand market share across all our countries of operation. Service revenues decreased by 4.0% YoY in reported currency and rose by 19.6% YoY in local currency.

In 2Q23, Group EBITDA decreased by 10.6% YoY in reported currency terms ( 13.6% in local currency), with Group EBITDA margin of 45.3% (-3.2 p.p. YoY). Strong local currency EBITDA growth was achieved even as energy costs increased across the Group by c.54% YoY.

The Group's YoY EBITDA performance was also affected by extraordinary non-recurring items in Kazakhstan in 2Q22 (c.USD 4.3 million), in Uzbekistan in 2Q22 and 2Q23 (c.USD 20.4 million and USD 0.7 million respectively), and in Kyrgyzstan in 2Q22 (c.USD 1.6 million) as described in the Country Performance section. Excluding these one-off items, Group EBITDA increased by 20.3% YoY in local currency terms.

In 2Q23, we reported 155.8 million mobile subscribers, flat YoY. The Group 4G user base grew by 15.9% YoY, reaching 88.5 million, with 12.1 million 4G users added over the past 12 months. 4G users now account for 56.8% of our total subscriber base, up 8.1 p.p. from a year earlier, supporting further conversion of subscribers into multiplay users who use at least one of our digital services in addition to 4G data and voice.

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 across our key adjacent markets, including financial services, healthcare, education and entertainment.

Our multiplay B2C customers, those who make use of at least one of our digital services on top of our voice and data services, increased by 28.5% YoY to 28.1 million, representing 22.2% of the user base and accounting for 40.2% of VEON's B2C revenues.

Multiplay B2C customer ARPU is 3.7 times higher, and churn is 1.7 times lower, than for voice-only B2C customers. With a higher share of multiplay customers, ARPU levels in e

LINK:	https://www.veon.com/newsroom/press-releases/veon-publishes-2q23-tradi...
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