07 May 2020

VEON delivered a balanced performance in the quarter, with operational weakness in Russia being offset by good underlying performances from Ukraine, Pakistan and Kazakhstan

Amsterdam (7 May 2020) – VEON Ltd. (NASDAQ: VEON, Euronext Amsterdam: VEON), a leading global provider of connectivity and digital services, today announces results for the quarter ended 31 March 2020.


  • The Group delivered a balanced performance in the quarter, with operational weakness in Russia being offset by good underlying performances from Ukraine, Pakistan and Kazakhstan
  • Strong growth in data usage continued to lead service revenue, underpinned by our continued network investment
  • The Group remains well positioned with a strong balance sheet and access to sufficient liquidity to allow VEON to weather current market uncertainty
  • We have announced the appointments of Serkan Okandan as VEON’s Group CFO, effective 1 May 2020, and Alexander Torbakhov as Beeline Russia CEO, effective 6 April 2020
  • The COVID-19 pandemic is increasing dependency on, and demand for, essential communications, connectivity and digital services across a number of markets
  • Given continued uncertainty related to the COVID-19 pandemic and the likely impact on the Group’s financial performance in the coming quarters, we believe it is no longer prudent to give financial guidance for 2020


“The first quarter of 2020 was an exceptional period for the global community, with COVID-19 transforming the daily lives of billions. The ability of telecommunications to keep the world connected at a time of physical isolation is redefining the role of our industry as we support lives through access to vital healthcare resources and information, livelihoods for the many millions of new home workers through essential connectivity, and lifestyles through our growing range of digital services. VEON is proud to be part of the human solution to this crisis, using connectivity and technology to support the communities we serve.

VEON is not immune to the economic impact of COVID-19. Operationally, this has resulted in divergent trends across our business, with greater demand for broadband and digital services offset by an inevitable decline in roaming revenues. Given the impact and duration of this pandemic remain uncertain, we believe it is no longer prudent to give financial guidance for 2020 and it is clear that there is presently significant pressure on our operational performance. Despite these challenges, we remain committed to executing on our planned operational improvements across our markets, which we expect will support the Group’s operating performance over the medium term.

Driving this performance is the strong demand we continue to enjoy for data, which grew 18.3% year-on-year in local currency during the first quarter as we progressed our 4G network investment program and deployed new digital services across our markets to enrich the experience of our customers. With the majority of our markets still in the early stages of smartphone adoption, we remain excited by the long-term opportunities that 4G network deployment can deliver and will maintain our current capex levels to ensure we are strongly positioned to capture these opportunities.

We also continue to invest in our leadership team, and we are delighted to welcome Serkan Okandan as VEON’s Group Chief Financial Officer and Alexander Torbakhov as Chief Executive Officer of Beeline Russia. Serkan and Alexander are terrific individuals who we believe will play defining roles in Group’s future success. In addition, Erwan Gelebart has been appointed as CEO for JazzCash, effective 18 May 2020. With 7.3 million active digital wallets, JazzCash has strong potential in Pakistan and Erwan will play a crucial role in our growth plans for this business.

Ursula Burns will be stepping down as Chairman of VEON, effective 1 June 2020. We would like to take this opportunity to thank Ursula for her commitment to VEON over the last three years, during which she oversaw the transformation of the Group as a leading emerging markets operator through the sale of our Italian business, the successful conclusion of the DOJ/SEC compliance monitorship and our successful tender offer for Global Telecom Holding S.A.E.. Ursula has been a major force across the Group, driving important governance and cultural changes, remaking the leadership team and positioning us for growth in the years ahead.


  • Total revenue: USD 2,097 million, +0.3% YoY in local currency2 ; -1.3% YoY on a reported basis
  • EBITDA: USD 920 million, -1.8% YoY in local currency2 ; -29.1% YoY on a reported basis
  • Mobile subscriber base: 211 million total mobile subscribers, flat YoY
  • Operational Capex6: USD 368 million
  • Stable local currency2 revenue: total revenue increased by 0.3% in local currency2 year on year (YoY), with service revenue increasing 0.2% in local currency2 . Excluding the impact of tax regime changes3 in Pakistan, total revenue would have increased by 2.7% in local currency2 in 1Q20. Reported total revenue decreased by 1.3% YoY
  • Local currency2 data revenue growth remains robust: the momentum in mobile data revenue continued in the period, growing in local currency2 by 18.3% YoY, with Ukraine (+22.4%), Pakistan (+17.1%) and Bangladesh (+18.5%) delivering strong performances on the back of ongoing 4G investments
  • EBITDA performance in local currency2 weakened slightly: EBITDA in local currency2 decreased 1.8% YoY. Excluding the impact of tax regime changes in Pakistan3 , EBITDA would have increased 1.0% in local currency2 YoY
  • Reported EBITDA: decreased by 29.1% YoY to USD 920 million, resulting in an EBITDA margin of 43.9%. However adjusted for the positive impact of the one-off vendor payment of USD 350 million in 1Q19, reported EBITDA decreased by 3.0% YoY
  • Corporate Costs4 trending lower: Corporate Costs were USD 49 million in 1Q20, down 8% YoY. We expect to make further saving in Corporate Costs going forward. In 1Q20, our cost intensity ratio5 increased in local currency2 by 0.9 percentage points YoY
  • LTM Operational capex ratio6 of 19.5%: we recorded an Operational Capex Ratio of 19.5% over the twelve months ended 31 March 2020 following 4G investments in Pakistan, Ukraine and Bangladesh
  • Equity Free Cash Flow7 generation: We generated USD 104 million of equity free cash flow7 after licenses and excluding capitalized leases during 1Q20


  • Sergi Herrero and Kaan Terzioğlu appointed as co-Chief Executive Officers effective from 1 March 2020
  • Serkan Okandan appointed as VEON’s Group CFO effective 1 May 2020
  • Alexander Torbakhov appointed as Beeline Russia CEO effective 6 April 2020
  • Erwan Gelebart appointed as CEO for Jazz Cash effective 18 May 2020
  • Ursula Burns to step down as VEON Chairman effective 1 June 2020
  • Establishment of a USD 6.5 billion Global Medium-Term Note program
  • COVID-19 uncertainty prevents Group from providing full year guidance for 2020

1 Results as compared to prior year results unless stated otherwise

2 Local currency growth for FY 2020 is defined excluding the effect of foreign currency movements. EBITDA growth excludes one-off vendor payment of USD 350 million received in FY 2019

3 In June 2018, the Supreme Court ordered an interim suspension of the deduction of taxes and service/maintenance charges on prepaid and postpaid connections on each recharge/top-up/load levied by mobile phone service providers. On 24 April 2019, the Supreme Court disposed of the proceedings and restored the impugned tax deductions, deciding that it would not interfere in the matter of the collection of public revenue (the “suo moto order”). On 3 July 2019, the Supreme Court issued its judgment dated 10 May 2019 and, in addition to confirming its ruling on tax deductions, further clarified that mobile phone service providers cannot charge customers for service and maintenance charges, which were 10% of customer recharges. As a result of the judgment by the Supreme Court, the Pakistan Telecommunication Authority (“PTA”) issued two letters to Jazz, dated 30 August 2019 and 19 September 2019, requesting Jazz to refund the service and maintenance charges (the “administration fees”) collected by Jazz between April 2019 and July 2019. Further to the PTA’s directions, on 29 September 2019, Jazz proceeded with crediting these administration fees to the balances of the affected customers. On 6 December 2019, the PTA issued a show cause notice alleging that the credits were made with conditions attached to them and, therefore, the PTA required Jazz to credit the affected customers again within fifteen (15) days. Jazz disputes the PTA’s allegation and, on 3 January 2020, provided the PTA with a complete factual explanation of the credits that were made and requested the withdrawal of the show cause notice. Jazz is currently awaiting the PTA’s response

4 Corporate costs is a non-IFRS financial measure and represents costs incurred by the holding entities in the Netherlands, Luxembourg, the United Kingdom and Egypt, primarily comprised of salary costs and consulting costs

5 Cost intensity ratio is defined as service costs plus selling, general and administrative costs, less other revenue, divided by total service revenue

6 Operational Capex is defined as capex excluding license expenditures and capitalized leases. Operational capex ratio is defined as operational capex divided by total revenue

7 Equity free cash flow after licenses (excluding capitalized leases) is a non-IFRS measure and is defined as free cash flow from operating activities less repayment of lease liabilities and cash flow used in investing activities, excluding M&A transactions, inflow/outflow of deposits, financial assets, other one-off items. See attachment C for reconciliations

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