VEON reports 4Q20 and FY20 Results

Delivering on expectations. Back to growth in an unexpected year.

Amsterdam, 18 February 2021 – VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a leading global provider of connectivity and digital services, today announces results for the fourth quarter ended 31 December 2020:

2020 highlights

• VEON’s recovery continued as growth on a local currency basis returned in the fourth quarter, amidst unprecedented challenges
• Group performance and cost structure were improved by streamlining HQ, empowering local operations and enhancing governance
• VEON executed on a record network rollout, driving growth in 4G users of 34% YoY, (+20 million). Data revenues grew by 15.0% YoY in local currency
• Portfolio optimization remained a focus, as shown by our exit from Armenia. Further opportunities to unlock value are being explored

2020 saw the global telecoms industry facing unprecedented challenges, as we battled the COVID pandemic with the associated lockdowns and faced a material slowdown in economies. During this time, VEON stepped-up support to our over 200 million customers, addressing their changing demands associated with the new normal.

• During the last year, the group concluded a major transformation from a centralized entity to a structure with fully empowered country operations governed by the local operating boards. This has enabled us to further strengthen the governance and expedite the decision-making processes across all local business lines
• The Group delivered FY 2020 results in line with guidance, with full-year revenue of USD 7,980 million (down 1.6% YoY in local currency) and EBITDA Adj. of USD 3,453 million (down 2.1% YoY in local currency). Capex intensity of 23.7% was within guidance range and Group Net Debt/EBITDA of 2.3x (post IFRS) is in line with the Group’s medium-term target of 2.4x
• 4Q20 Group revenue returned to growth in local currency terms, rising by 1.4% YoY. Encouragingly, almost all operations saw improved YoY trends in the quarter compared to 3Q20, demonstrating resilience to COVID-19 restrictions across our markets. Reported revenue decreased by 11.3% YoY mainly due to currency movements
• Over the course of the year we have seen a new leadership team led by Alexander Torbakhov being established in Beeline Russia. Supported by the newly formed local board of directors, this team has been executing on the operational turnaround. Beeline Russia recorded steady improvement in local currency revenue trends throughout the second half of the year, with an encouragingly positive YoY revenue trend in December (+3.6%)
• The Group EBITDA for 4Q20 increased by 0.8% YoY in local currency terms, an encouraging improvement led in particular by the strong double-digit EBITDA growth from Ukraine and Kazakhstan. Reported Group EBITDA was down 11.6% YoY due to adverse currency movements during the period
• We successfully implemented our investment plans, with total operational capex of USD 1,889 million, supporting the expansion of our 4G customer. The combined 4G population coverage of our subsidiaries reached 73% with an increase of 19 pp over the year. This strong growth in 4G subscribers will be instrumental in driving both the continued growth in the core business and in enabling our digital services
• Driven by targeted network investments and other customer care measures the Group’s 4G user base increased by 20 million YoY and 5 million QoQ, bringing the total 4G user base to 80 million. The Group recorded a QoQ increase in its total subscribers, which grew by 1.7 million in 4Q20 to 213.5 million
• Mobile data revenues for the year were up by 15.0% YoY in local currency, driven by the growth in 4G users with correspondingly higher ARPUs. 4G subscriber penetration was at 38% at year-end and enhancing this over the next few years will be a key tailwind for the Group, driving further growth in data revenues
• VEON’s digital businesses continued to expand their customer reach. JazzCash closed the quarter with 12.2 million monthly active users (+67% YoY), Toffee TV in Bangladesh reached 2.3 million monthly active users from launch in November 2019 and Beeline TV had 2.7 million monthly active users (+33% YoY) in 4Q20. We believe that digital opportunities will be key enablers of medium-term growth
• The Group’s balance sheet was strengthened throughout the year, with USD 3.8 billion in multi-currency debt financing activities which increased the proportion of local currency funding. The average cost of debt was reduced by 1.5 p.p. from 7.4% to 5.9%, and the average debt maturity was extended by 13 months from 2.4 to 3.5 years, compared to December 2019.