VEON 3Q24 Trading Update: Another Billion Dollar Revenue Quarter, Digital Drives Growth

14/11/2024

14 Nov 2024

VEON 3Q24 Trading Update: Another Billion Dollar Revenue Quarter, Digital Drives Growth Amsterdam and Dubai, 14 November 2024 07:00AM CET

VEON Q3 2024 Highlights

Q3 Total revenue of USD 1,038 million, 9.8% YoY; revenue growth in local currency 14.1% YoY ( 16.0% YoY underlying revenue growth in local currency)

Q3 Direct digital revenue of USD 121 million, 35.1% YoY ( 32.6% YoY in local currency)

Q3 Telecom and infrastructure revenue USD 916 million, 7.2% YoY ( 12.2% YoY in local currency)

Q3 EBITDA of USD 438 million, -1.5% YoY, 3.5% YoY growth in local currency ( 9.8% YoY underlying growth in local currency)

Total cash and cash equivalents of USD 1,019 million, with USD 453 million at headquarters ( HQ ); and gross debt at USD 4.0 billion (decreased by USD 335 million YoY), with net debt excluding lease liabilities at USD 2.1 billion

LTM Equity Free Cash Flow of USD 421million, 22.2% YoY; LTM Capex increased 16.3% YoY

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 third quarter ended 30 September 2024.

In 3Q24 VEON demonstrated robust growth, reporting an increase in revenues both in reported and local currencies. Total revenues reached USD 1,038 million, an increase of 9.8% YoY in reported currency ( 14.1% YoY in local currency). EBITDA reached USD 438 million and represented a 1.5% YoY decrease in reported currency terms ( 3.5% YoY in local currency). This quarters EBITDA was primarily impacted by identified items, including operational pressures in Bangladesh and restructuring costs.

Capex in 3Q24 was USD 198 million, an increase of 51.2% YoY. LTM capex increased 16.3% YoY, with LTM capex intensity of 19.2% ( 1.5p.p. YoY). Total cash and cash equivalents as of 30 September 2024 amounted to USD 1,019 million (including USD 143 million related to banking operations in Pakistan and excluding USD 211 million in Ukrainian sovereign bonds that are classified as investments) with USD 453 million held at the HQ level.

Blended weighted average inflation rates in the countries we operate in declined from 16.5% in Q3 2023, to 8.2% in Q3 2024, a reduction of 830 basis points. We are encouraged to see revenue growth exceeding average inflation levels in our markets.

For the full year we expect total revenue growth of 8%-10% YoY and EBITDA growth of 4%-6% YoY in USD terms, assuming current FX rates. We are revising our prior local currency guidance, given the above considerations, to 12%-14% YoY growth for total revenue, and 9%-11% YoY growth for EBITDA, each in local currency terms.

Underlying growth in local currency, excluding identified items, is expected to be 15%-16% YoY growth in revenue, and 10-11% YoY growth in EBITDA. This marks a change from our previous guidance of 16-18% growth for revenue, and 18-20% growth in EBITDA for 2024 in local currency terms which was normalised for the Ukrainian cyberattack. In addition to deceleration in blended inflation rates across VEON's operating markets, our new local currency guidance also reflects the business impact of civil unrest in Bangladesh and the sale of the TNS infrastructure asset in Kazakhstan.

Commenting on the results, Kaan Terzio lu said:

I am pleased to report a 14% YoY increase in revenue in local currency terms, exceeding the 8% blended inflation across our markets. Despite the impact of the civil unrest in Bangladesh, the sale of the TNS infrastructure asset in Kazakhstan, and with current currency levels in mind, we expect to finish the year with solid revenue growth of 8 to 10% in USD terms.

This achievement highlights our rapid expansion and innovation, supported by 8 million new 4G subscribers and 103 million digital service users. Direct digital revenues, now comprising 12% of our total revenue for the quarter, grew by 35% year-over-year. These gains, stemming from digital financial services, entertainment, healthcare, advertising, and super-apps, are not only enhancing user engagement and retention but also significantly boosting our ARPU and contributing directly to our top-line growth through diverse streams like interest income, advertising revenues, subscription services, platform commissions, and pay-per-view revenues.

Looking forward, I am enthusiastic about the future as we continue to drive growth and enrich customer experiences through advanced digital offerings and cutting-edge technologies like augmented intelligence. This approach not only cements our position at the forefront of the digital revolution but also ensures sustained growth and success in rapidly evolving frontier markets.

Additional information

View the full 3Q24 trading update

View 3Q24 trading update presentation

View 3Q24 factbook

3Q24 results conference call

VEON will also host a results conference call with senior management at 14:00 CET (13:00 GMT, 8:00 EST) today.

To register and access the event, please click here or copy and paste this link to the address bar of your browser: https://veon-Q3-2024-trading-update.open-exchange.net/.

Once registered, you will receive registration confirmation on the email address mentioned during registration with the link to access the webcast and dial-in details to listen to the conference call over the phone.

We strongly encourage you to watch the event through the webcast link, but if you prefer to dial in, then please use the dial-in details.

Q&A

If you want to participate in the Q&A session, we ask that you select the Yes option on the Will you be asking questions live on the call?' dropdown. That will bring you to a page where you can join the Q&A room by clicking Connect to meeting'.

You will be brought into a zoom webinar where you can listen to the presentation and o

LINK:	https://www.veon.com/newsroom/press-releases/veon-3q24-trading-update-...
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VEON 3Q24 Trading Update: Another Billion Dollar Revenue Quarter, Digital Drives Growth

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