VEON Ltd. Q1 FY2025 earnings call

• Strong revenue and EBITDA growth: Reported USD revenues grew 8.9%, EBITDA rose 13.7%; like-for-like revenue grew 11.7% and EBITDA 15.5%. Underlying local currency revenue increased 12.9%.
• Digital services expansion: Direct digital revenues grew 50.2% to 14.3% of total revenues. Multiplay customers generate 3.7x the ARPU of voice-only subscribers.
• Asset-light strategy: Progressing on infrastructure and tower value unlock initiatives, e.g., partnership with Engro Corporation in Pakistan to unlock $563 million in value.
• Share buyback and capital management: Second phase of share buyback commenced, repaid $472 million in bonds, secured $210 million syndicated term loan.
• Market-specific performances: Pakistan saw 20.3% revenue growth and 13.2% EBITDA growth; Ukraine had 20.2% revenue growth post-cyberattack adjustment; Kazakhstan had 11.5% revenue growth; Bangladesh showed quarter-on-quarter revenue stability; Uzbekistan had 13.1% revenue and 16.5% EBITDA growth.

In the first quarter of 2025, VEON achieved strong financial performance. The Telecom and Infrastructure segment contributed $880 million, growing 4.2% year-on-year in USD and 11.2% in local currency. Direct digital revenues grew by 50.2% and now represent 14.3% of total revenues, up from 10.4% the previous year. Underlying local currency revenue grew by 12.9%, outpacing inflation and nominal GDP growth. Revenues exceeded $1 billion despite the deconsolidation of TNS+ business.

• Reaffirmed full-year outlook: Projected 12%-14% underlying local currency revenue growth and 13%-15% underlying EBITDA growth.
• CapEx intensity: Expected to be in the 17%-19% range for the year.
• Inflation: Based on weighted average inflation rate of 8.2% as of Q1.

Q: Matthew Harrigan asked about the percentage of multiplay revenue due to apps vs telecom revenues and positioning of Tamasha vs Netflix in Pakistan.

A: Kaan explained multiplay customers generate 3.7x ARPU, 45% of customers are multiplay, and Tamasha has local programming capabilities complementary to Netflix.

Q: Bilal Yan inquired about VEON's data center strategy.

A: Kaan stated QazCode in Kazakhstan focuses on enterprise services and expects to partner with data center investors while maintaining asset-light strategy.

Q: David Lopez asked about drivers of Ukraine's growth and tower plan.

A: Kaan mentioned fair value pricing and digital assets driving Ukraine growth, and tower assets in Ukraine are owned by VEON's Ukraine Tower Corporation.

Q: Ali Zari asked about aggressively rolling out fintech in other markets.

A: Kaan said financial services are a focus, with plans for Bangladesh and Ukraine, focusing on regulatory challenges.

Q: Ahmed Mostafa asked about direct digital revenue split by vertical and year-end share.

A: Kaan stated they need more quarters to detail direct digital revenue splits by vertical but expect direct digital to increase its share of total revenue.