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VEON 4Q23 trading update: Strong organic growth in revenue and EBITDA, solid execution of VEON 2.0 strategy

VEON 4Q23 trading update: Strong organic growth in revenue and EBITDA, solid execution of VEON 2.0 strategy

Amsterdam, 21 March 2024 07:00AM CET -

VEON Q4 and FY 2023 Highlights

• Q4 revenue of USD 953 million, +1.4% YoY (+17.9% YoY in local currency normalised) and EBITDA of USD 364 million, -20.4% YoY (+24.9% YoY in local currency normalised)
• FY revenue of USD 3,698 million, -1.5% YoY (+17.9% YoY in local currency normalised) and EBITDA of USD 1,609 million, -7.9% (+24.9% YoY in local currency normalised)
• Q4 capex of USD 258 million, -1.8% YoY, with LTM capex intensity of 17.6% and FY capex of USD 651 million, -21.8% YoY, with LTM capex intensity of 17.6%
• Total cash and cash equivalents of USD 1.7 billion, with USD 1.3 billion at HQ and gross debt at USD 4.7 billion (decreased by USD 2.8 billion YoY), with net debt excluding lease liabilities at USD 2.0 billion (decreased by USD 1.7 billion YoY)
• Appoints PwC as 2023 auditor
• Credit ratings of BB- assigned by S&P Global and Fitch
• FY 2024 revenue growth guidance in local currency of 16-18%, EBITDA growth guidance in local currency of 18-20%, and capex intensity of 18-19%

In 4Q23, VEON continued to report growth in revenues in reported currency terms with double digit local currency top-line growth. Total revenues reached USD 953 million, an increase of 1.4% YoY in reported currency (+17.9% YoY in local currency normalised for one-offs). Service revenues amounted to USD 915 million, an increase of 1.1% YoY in reported currency (+17.5% YoY in local currency normalised for one-offs), while EBITDA of USD 364 million represented a 20.4% YoY decrease in reported currency terms (+24.9% YoY in local currency normalised for one-offs). Capex in 4Q23 was USD 258 million, a decline of 1.8% YoY, and reported capex intensity for the last twelve months was 17.6%. Total cash and cash equivalents as of 31 December 2023 amounted to USD 1.7 billion with USD 1.3 billion held at the headquarters ("HQ") level at the end of the quarter.

For FY 2023, total revenues amounted USD 3,698 million, a decrease of 1.5% YoY in reported currency (+17.9% YoY in local currency normalised for one-offs). Service revenues reached USD 3,576 million, a decrease of 1.2% YoY in reported currency (+18.1% YoY in local currency normalised for one-offs), while EBITDA of USD 1,609 million represented a 7.9% YoY decrease in reported currency terms (+20.0% YoY in local currency normalised for one-offs). Capex in FY 2023 was USD 651 million, a decline of 21.8% YoY.

VEON has announced its full-year revenue guidance of 16-18% growth in local currency, EBITDA guidance of 18%-20% growth, and outlook for the Group's capex intensity for 2024 year at 18%-19%. As a result of its digital operator strategy, and expected slowdown in inflation, the company has guided to another year of double digit growth.

Commenting on the results, Kaan Terzioğlu said: "In 2023, we kept our promise to our investors: we delivered on our strategic priorities and operational goals, making VEON a faster growing company with a healthier balance sheet. Our growth has accelerated from mid-teens in FY22 to high-teens in FY23 with an increase of 18% year-on-year in our revenues in local currency, while our leverage ratio improved significantly from 2.4x to 1.4x. We gained not only market share but wallet share, turning the strength of our digital offerings into commercial and financial outcomes.

I am excited for the growth potential in our markets, where we are well positioned to serve unmet demand in digital verticals: financial services, entertainment, healthcare, education. We start 2024 with nearly 100 million cumulative monthly active users of our digital products and a growing set of digital capabilities and services, including in AI-focused initiatives.
We are pleased to guide the market for continued strong and profitable growth in 2024, maintaining our focus on financial discipline and balance sheet management."

Additional information

View the full 4Q23 trading update
View 4Q23 trading update presentation
View 4Q23 factbook

About VEON

VEON is a digital operator that provides converged connectivity and digital services to nearly 160 million customers. Operating across six countries that are home to more than 7% of the world's population, VEON is transforming lives through technology-driven services that empower individuals and drive economic growth. Headquartered in Amsterdam, VEON is listed on NASDAQ and Euronext. For more information, visit: https://www.veon.com.

Notice to readers: financial information presented

VEON's results and other financial information presented in this document are, unless otherwise stated, prepared in accordance with International Financial Reporting Standards ("IFRS") based on internal management reporting, are the responsibility of management, and have not been externally audited, reviewed, or verified. As such, you should not place undue reliance on this information. This information may not be indicative of the actual results for any future period.

Notice to readers: impact of the war in Ukraine

The ongoing war between Russia and Ukraine and the sanctions imposed by the United States, member states of the European Union, the European Union itself, the United Kingdom, Ukraine and certain other nations, counter-sanctions by Russia and other legal and regulatory responses, as well as responses by our service providers, partners, suppliers and other counterparties, and the other indirect and direct consequences of the war have impacted and, if the war, sanctions and such responses and other consequences continue or escalate, may significantly impact our results and aspects of our operations in Ukraine, and may significantly affect our results and aspects of our operations in the other countries in which we operate. We are closely monitoring events in Russia and Ukraine, as well as the possibility of the imposition of further sanctions in connection with the ongoing war between Russia and Ukraine and any resulting further rise in tensions between Russia and the United States, the United Kingdom and/or the European Union.

Our operations in Ukraine continue to be affected by the war. We are doing everything we can to protect the safety of our employees, while continuing to ensure the uninterrupted operation of our communications, financial and digital services.

Disclaimer

VEON's results and other financial information presented in this document are, unless otherwise stated, prepared in accordance with International Financial Reporting Standards ("IFRS") and have not been externally reviewed and audited. The financial information included in this document is preliminary and is based on a number of assumptions that are subject to inherent uncertainties and subject to change. The financial information presented herein is based on internal management accounts, is the responsibility of management and is subject to financial closing procedures which have not yet been completed and has not been audited, reviewed or verified. Certain amounts and percentages that appear in this document have been subject to rounding adjustments. As a result, certain numerical figures shown as totals, including those in the tables, may not be an exact arithmetic aggregation of the figures that precede or follow them. Although we believe the information to be reasonable, actual results may vary from the information contained above and such variations could be material. As such, you should not place undue reliance on this information. This information may not be indicative of the actual results for the current period or any future period.

This document contains "forward-looking statements", as the phrase is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by words such as "may," "might," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "seek," "believe," "estimate," "predict," "potential," "continue," "contemplate," "possible" and other similar words. Forward-looking statements include statements relating to, among other things, VEON's plans to implement its strategic priorities, including operating model and development plans; anticipated performance, including VEON's ability to generate sufficient cash flow; VEON's assessment of the impact of the war in Ukraine, including related sanctions and counter-sanctions, on its current and future operations and financial condition; future market developments and trends; operational and network development and network investment, including expectations regarding the roll-out and benefits of 3G/4G/LTE networks, as applicable; spectrum acquisitions and renewals; the effect of the acquisition of additional spectrum on customer experience; VEON's ability to realize the acquisition and disposition of any of its businesses and assets and to execute its strategic transactions in the timeframes anticipated, or at all; VEON's ability to realize financial improvements, including an expected reduction of net pro-forma leverage ratio following the successful completion of certain dispositions and acquisitions; our dividends; and VEON's ability to realize its targets and commercial initiatives in its various countries of operation.

The forward-looking statements included in this document are based on management's best assessment of VEON's strategic and financial position and of future market conditions, trends and other potential developments. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of, among other things: further escalation in the war in Ukraine, including further sanctions and counter-sanctions and any related involuntary deconsolidation of our Ukrainian operations; demand for and market acceptance of VEON's products and services; our plans regarding our dividend payments and policies, as well as our ability to receive dividends, distributions, loans, transfers or other payments or guarantees from our subsidiaries; continued volatility in the economies in VEON's markets; governmental regulation of the telecommunications industries; general political uncertainties in VEON's markets; government investigations or other regulatory actions; litigation or disputes with third parties or regulatory authorities or other negative developments regarding such parties; the impact of export controls and laws affecting trade and investment on our and important third-party suppliers' ability to procure goods, software or technology necessary for the services we provide to our customers; risks associated with our material weakness in internal control over financial reporting; risks associated with data protection or cyber security, other risks beyond the parties' control or a failure to meet expectations regarding various strategic priorities, the effect of foreign currency fluctuations, increased competition in the markets in which VEON operates and the effect of consumer taxes on the purchasing activities of consumers of VEON's services.

Certain other factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risk factors described in VEON's Annual Report on Form 20-F for the year ended 31 December 2022 filed with the U.S. Securities and Exchange Commission (the "SEC") on 24 July 2023 and other public filings made from time to time by VEON with the SEC. Other unknown or unpredictable factors also could harm our future results. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Under no circumstances should the inclusion of such forward-looking statements in this document be regarded as a representation or warranty by us or any other person with respect to the achievement of results set out in such statements or that the underlying assumptions used will in fact be the case. Therefore, you are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements speak only as of the date hereof. We cannot assure you that any projected results or events will be achieved. Except to the extent required by law, we disclaim any obligation to update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made, or to reflect the occurrence of unanticipated events.

This press release also contains ratings from credit agencies. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

Furthermore, elements of this document contain or may contain, "inside information" as defined under the Market Abuse Regulation (EU) No. 596/2014.

Contact Information

VEON
Investor Relations
Faisal Ghori
ir@veon.com