VEON Ltd. Q4 FY2024 earnings call

Management Statement and Operational Highlights:

• Financial Performance: In 2024, reported USD revenue grew 8.3% vs 8%-10% expectation; USD EBITDA grew 4.9% vs 4%-6% expectation. Underlying local currency: 14.6% revenue growth vs 12%-14% expectation and 12% EBITDA growth vs 9%-11% expectation.
• Digital Services Scaling: Direct digital revenues grew 63% full year and 42% Q4; digital services now 12.6% of total revenues in Q4.
• Asset Light Strategy: Made progress, strengthening balance sheet and aligning with long-term strategy.
• Share Price and Buyback: Share price more than doubled in 2024; $100 million share buyback program with $30 million repurchased in Phase 1.
• Kyivstar Listing: Preparing for Kyivstar's public listing in US to enhance visibility.
• Regional Performance: Pakistan (Jazz) saw 23% revenue growth and 15.6% EBITDA growth; Ukraine recovered from cyberattack; Kazakhstan deconsolidated TNS+; Bangladesh impacted by political unrest; Uzbekistan network investments affected EBITDA.

Segment Performance:

• Telecom and Infrastructure: Contributed $3.6 billion in 2024, grew 3.8% year-on-year in USD and 7.1% in local currency. Direct digital revenues were a key component, growing 63% for the full year and 42% in Q4, comprising 12.6% of total revenues in Q4.
• Digital Services: Direct digital revenues reached $460 million in 2024, up 63%, and digital services made up 12.6% of total revenues in Q4. Multiplay segment drives growth with higher ARPU compared to voice-only customers.

Guidance:

• 2025: Local currency revenue growth 12%-14%, EBITDA growth 13%-15%, CapEx intensity 17%-19%.
• Future Outlook: Focus on Kyivstar listing, digital operator strategy, asset-light strategy, and accretive in-market opportunities.

Risks:

• Macro headwinds: Persistent macroeconomic challenges in some markets.
• Political unrest: Impact on Bangladesh and Ukraine.
• Cyberattack impact: Ukraine cyberattack affected performance.
• Currency mismatches: Concerns about hard currency borrowing in frontier markets.

Question and Answer: Q: Full year 2025 guidance drivers, CapEx post-2025, competition, towers A: Key drivers include digital revenue growth, acquisitions like Uklon; CapEx expected to lower post-2025; competition changes in markets; progress on tower deals.

Q: 2027 guidance expectations A: Local currency growth tied to inflation; mid-single-digit dollar growth and double-digit EBITDA growth expected.

Q: Rationale for Uklon acquisition, Ukraine political assumptions A: Uklon acquisition for unmet demand in markets; Ukraine plans account for potential political changes, but prepared for various scenarios.

Q: Proceeds from tower deal use, Euro bond market access A: Proceeds for deleveraging; no immediate need for Euro bond market access in near-term.

Q: Monetization of digital portfolio, growth in recession A: Digital portfolio shows strong growth potential; frontier markets likely to weather recessions better due to domestic growth drivers.

Q: Ukraine conflict resolution impact A: Focus on customers and service continuity, prepared for various political outcomes.