VEON Ltd.

Hi, good afternoon and good morning to everyone, and welcome to Vyond's second quarter results presentation for the period ending 30 June 2023. I'm Nick Kershaw. I'm pleased to be joined in the room today by Karn Zuzoglu, our Group CEO, along with Joep Brachenhoff, our Group CFO. Today's presentation will begin with the key highlights and business update from Karn. Following this, Joep will discuss the detailed financial results. We'll then hand it back to Karn to discuss our outlook and priorities for 2023. As ever, we will ensure that there's time for your questions, but would ask that you save these for the end of the presentation. Before getting started, I would like to remind you that we may make forward-looking statements during today's presentation, which involves certain risks and uncertainties. These statements relate in part to the company's anticipated performance and guidance for 2023, future market developments and trends, operational and network development and network investments, and the company's ability to rise its targets in commercial and strategic initiatives, including current and future transactions. Certain factors may cause the actual results to differ materially from those in the forward-looking statements, including the risk detail in the company's annual report on Form 20F and other recent public filings made by the company with the SEC. The earnings release and the earnings presentation, each of which include reconciliations of non-IPRS measures presented today, can be downloaded from our website. With that, let me hand it over to Con.

Thank you, Nick. Good morning and good afternoon to everyone on the call. Thank you very much for joining us for presentation of our second quarter results for 2023. Our performance in the second quarter has again demonstrated the resilience and growth that our digital operator strategy enables us to deliver and gives us the confidence to raise our full year 2023 revenue guidance based on the results of the first half year. On the next slides, I will provide an overview of our results in the second quarter and then go into some more detail on progress on our digital operator strategy and how this is powering the performance of our operating companies. Thanks to world-class connectivity and high-quality digital services, we maintain a high growth momentum. Before I get into the details, I also want to take a moment to thank the members of the board and management team who have helped Vyond navigate the exceptional challenges of the last 17 months. Today, with a smaller size board, and restructured headquarters, we successfully transformed our cost base to our new business model with a 55% reduction or $85 million a year savings. I would like to again thank our colleagues at Kyivstar. Our team in Ukraine continues to do a tremendous job keeping Ukrainians connected and putting employee safety first. Now let's turn to our key performance highlights for the second quarter. Veon's revenue growth in local currency neared 20% year-on-year. Service revenues increased at the same pace as top-line growth, rising 19.6% year-on-year on local currency terms. Local currency EBITDA expanded at a rate of 13.6% year-on-year, But excluding one-offs, our underlying local currency EBITDA growth in the second quarter of 2023 reached 20.3%. CapEx declined by 16.6% year-on-year to $171 million. And our CapEx intensity for the quarter is standing at 18.7% in line with our full-year guidance. we have once again maintained view on strong liquidity position with group holding cash and cash equivalents totaling $2.4 billion, of which just under $2 billion is at headquarters as of June 30th, 2023, all in U.S. and Western banking institutions. Looking into our revenue performance in greater detail on slide seven, This marks our sixth consecutive quarter of double-digit local currency revenue growth, with good acceleration in the second quarter to 19.6%. This was partly thanks to revenue performance at Kyivstar, which narrowed the gap with other Vion operating companies and delivered 16.8% year-on-year local currency revenue growth. This is a truly impressive result given the challenges that Kyivstar faces in Ukraine. Kyivstar's growth is also a testament to our success at keeping Ukrainians connected, and I have no doubt that the $600 million in investments into Kyivstar infrastructure that we announced in late June will enable us to further enhance this performance in the years ahead. If Kyivstar's results are excluded for illustrative purposes, To demonstrate the underlying trends of our operations under normal modus operandi, Vion's local currency revenue growth exceeded 20% for the first time, even as weighted annual inflation across our operations slowed in the second quarter. We have seen a strong start to the third quarter in July with a positive top-line year-on-year performance in U.S. dollar terms. On slide 8, we have an overview of key performance numbers for Vion's operating companies. In Ukraine, Kyivstar's local currency accelerated significantly despite the ongoing challenges. Across our Central and South Asian markets, we saw three of five operating companies delivering year-on-year local currency revenue growth in excess of 20%. And the other two were not far behind, 17.4 and 19.2 percentage points. EBITDA performance was also solid in most markets, with all but one of our operating companies reporting double-digit local currency underlying EBITDA growth. And we provide greater details on the non-recurring items that impacted Kazakhstan, Uzbekistan, and Kyrgyzstan, in the country performance section of the trading update later. Before we move on to country performance section, I want to stop on slide nine to highlight how 4G penetration increase and multiply subscribers who are consumers of our digital services continue to drive our operational and financial performance. Veeam's subscriber base was 156 million at the end of quarter two. 4G users increased 16% to reach 88.5 million. 4G users now account for 57% of our subscriber base. Our focus on 4G for all has yielded an increase of 27 million new 4G users over the last two years. Our 4G penetration has risen from 41% to 57%, and we remain on a path to reach our group-wide target of 70% 4G penetration. We expanded our 4G network, adding more than 8,000 4G sites, an increase of 15.6% year-on-year. Providing robust 4G connectivity facilitates our users accessing the mobile digital services that Vyond's operating companies offer. Every single day, we make progress towards being a consumer business with a telecom license. Multiplay subscribers who use both 4G connectivity and digital products spend more time with us churn less and drive multiple revenue streams and higher revenue generation with 45.7% year-on-year increase. This trend helped to drive mobile ARPU growth, which ranged from 9 to 27% year-on-year in local currency across our countries. Let's look to Tiestar. Kyivstar is Ukraine's largest operator and remains a symbol of the resilience. Vion and Kyivstar recently announced our long-term commitment to rebuilding Ukraine's telecom infrastructure with a pledge to invest more than $600 million over the next three years. Kyivstar's team have once again succeeded at providing millions of users with high-quality connectivity services in and outside of Ukraine. The company also managed to keep around 94% of radio area network operational throughout the second quarter. CapEx in quarter two increased by 35% year-on-year as we invested in connecting new settlements to our 4G network and install and upgrade base stations and continue to provide base stations with state-of-the-art power solutions for storage and power generation to sustain energy availability for our network. These investments have helped increase the number of 4G users to 13.1 million, which represents 55% of Kyivstar's user base. Kierstar delivered impressive local currency revenue and EBITDA growth in the second quarter, supported by rising 4G penetration and an increase in multiply customers, which now represents 17% of monthly active users, accounting for 24% of B2C revenue. Kevstar also continues its support for charitable causes, employee and customer support, and allocated a further 92 million hryvnas in Q2. We recently signed a Memorandum of Understanding with Rakuten Symphony, a subsidiary of the leading consumer businesses and technology conglomerate Rakuten Group of Japan. The two companies will start cooperating in Ukraine with the goal of accelerating the reconstruction of the country's infrastructure through open radio access networks, which is called open run in the industry, and digital services. We have earmarked 600 million to rebuild Ukraine's infrastructure over the next three years. Rakuten Symphony is a leading provider of open run solutions and has vast experience derived from successfully building the world's first end-to-end, fully virtualized, cloud-native mobile network with its parent company Rakuten Mobile. We are excited to partner with Rakuten and deploy a secure, robust, 6G-capable infrastructure based on Rakuten Symphony's open-run solution. Healthy is a gem in Kyivstar's digital operator portfolio. In the context of the ongoing war, Healthy is especially relevant, and it enables Ukrainians to maintain access to vital healthcare services in their local languages, wherever they are. It is the country's largest digital healthcare platform, leading digitalization of healthcare services. In Ukraine, we have 25.4 million registered patients on Healthy. Healthy application downloads increased by 0.4 million in the second quarter and reached 5.4 million. Our customers booked over 1.8 million of appointments through the Healthy platform in the second quarter. Let's move to Pakistan. Jazz, our operating company in Pakistan, further accelerated its growth, gaining market share despite the challenging economic environment. Jazz's successful execution of our digital operator strategy, combined with disciplined cost control, supported local currency revenue and EBITDA expansion in excess of 20% year-on-year. 4G penetration in the second quarter of 2023 notched up to 59% of user base, which combined with Jazz's digital operator offerings draw almost 16% year-on-year rise in multiple users. One out of four customers consumes at least one of our digital services in Pakistan, And these customers account for half of our revenues. Jazz's fintech offerings continue to gain momentum, with Mobiling Microfinance Bank and Jazz Cash service revenues both almost doubling year-on-year in Q2. Jazz Cash's rapid growth is a key driver of financial inclusion in Pakistan. I want to share a few highlights of the company's performance on this slide, something many of you have asked for the past periods. Jazz Cash has 14.7 million monthly active users and a network of 192,000 active merchants. Consumer and micro-lending are a key part of Jazz Cash's offering. The platform had 1.3 million monthly active borrowers during the second quarter, which is 22% higher year on year. Jazz Cash is also a leader in cash-free transactions. In the last 12 months, we processed 2 billion transactions with a total value of 4.9 trillion Pakistani rupees, an increase of 33% year on year. The elite financial inclusion in the country with more than 5.6 million financial transactions processed every single day and more than 55,000 digital loans issued daily. Now, Kazakhstan. Beeline Kazakhstan continues to gain market share and lead in terms of customer satisfaction as measured by Net Promoter Score. In the second quarter of 2023, local currency revenues were up 19.4%. Normalized for one-offs, underlying growth in revenues was up 20.8% year-on-year. This continues the operator's track record of delivering top-line growth in excess of 20% for the ninth consecutive quarter. Local currency EBITDA performance was also up by an impressive 19.8% year-on-year. Adjusted for one of items, underlying EBITDA growth was 26.2% year-on-year. Beeline Kazakhstan continues to benefit from execution of Veon's digital operator strategy, with multiple users representing 39% of monthly active users. These are the customers that consume both 4G connectivity and digital services such as BTV, Simply, Easy, Hitter. And these customers accounted for 56% of subscriber revenues in second quarter. Beeline Kazakhstan has the highest 4G penetration level with 71% of users accessing high-speed mobile internet, and it is the first operating company in Vyon reaching our 70% 4G penetration target. Let's talk about EZ, which is now more than just Kazakhstan's first digital-only operator, and it is on the path to become a consumer super app. In the second quarter of 2023, EZ reached 415,000 active users, which is 4.4 times higher year-on-year. EZ is an all-access SIM card agnostic service. We welcome all consumers, and yet 191,000 of the monthly active customers of EZ has chosen SIM card of EZ to become also their telecom service provider. While EZ SIM card users can access mobile voice and data services, the application is a leading entertainment platform that lets users listen to radio, play games, watch movies, even if they don't have an easy SIM yet. This is another case that highlights the success of our digital operator 1440 strategy, with our local operating company offerings relevant digital services to its customers to drive growth. Easy users who enjoy the digital experience of the entertainment super app have an ARPU of nearly 4.5 times higher than the easy users of conventional telecom services. BanglaLink revenue was up 17% in the second quarter. This is the company's fifth consecutive quarter of double-digit revenue growth. EBITDA rose at a double-digit pace for the second consecutive quarter, increasing at 18% year-on-year. As a result, market share gains continued with the investments continuing in BanglaLink network. The strong result was achieved despite increases in electricity and fuel costs. Bangla Link's total subscriber base surpassed 39 million, rising 7.9% year-on-year. Multiplay users rose by almost 80% year-on-year to reach 4.8 million, and multiply revenues were up by 83% year-on-year. Bangla Link's 4G penetration continued to rise as a result of investment into expanding its network, with the share of 4G users up by 9 percentage points, surpassed 18 million. This represents 46% of our customers in Bangla Link. Three years ago, we started this journey with 12% of our customers enjoying 4G. Bangalink's growth was further supported by the success of its digital products. On the next slide, I will elaborate on TOFI, the country's leading entertainment platform. The largest mobile entertainment platform in Bangladesh. We are encouraged to see that after the World Cup, TOFI continues to maintain a healthy user base, with monthly active users reaching 9 million, up 32% year-on-year. And while TOFI is a BanglaLink digital service, currently 68% of users are not BanglaLink customers. Again, we are open business for all consumers, irregardless of which SIM card they carry. TOFI customers continue to make the most of the platform's wide variety streaming content with the total number of sessions watched by users up 41% year-on-year to 128 million in the second quarter. Bangla Link customers who use TOFI generate 2.8 times the ARPU of a single-play voice customer, which is yet another testament to the value of our strategy of offering high-quality connected digital services to our customers. Let's look to Beeline Uzbekistan. Beeline Uzbekistan grew 20% year on year in local currency, driven by double digit increases in total subscribers and 4G users and data consumption increases. 4G users rose 23.6% year on year to 6 million. They represent 69% of the total subscriber base, almost reaching our target 70%. Multiplay customers rose 28% year-on-year, accounting for 37% of the subscriber base, creating 57% of revenues. You have often previously asked for more details on our digital platforms, and on this slide, you have an overview of some of our strategic digital platforms, which we will now be providing on a regular basis. Let me focus on some examples. Tamasha is Pakistan's leading entertainment platform. Following the launch of original content only available on its platform, Tamasha is delivering impressive growth. Tamasha got Pakistan's best online streaming platform award at the Pakistan Digital Awards in July this year. Simply, the Neobank in Kazakhstan was launched in June 2021 and surpassed 250,000 monthly active users, an increase of 2.2 times year-on-year. In Kazakhstan, again, our entertainment platform BTV is another successful pillar of our digital offerings. The streaming service, which has both mobile and IPTV offerings, has now 750,000 monthly active users, up 25% year-on-year. MyBL, Bangalings' super app, in addition to the essential self-care services it provides, also offers streaming music, e-health, and e-learning services, in addition to gaming and online shopping for Bangalings customers. Monthly active users of MyBL app increased by 63% year-on-year, reaching 6.9 million users. Launched in December 2022, by Jazz in partnership with Turkcell. The free communication and lifestyle platform BIP surpassed 850,000 monthly active users at the end of the quarter. On August 1st, BanglaLink launched BIP service to its customers as well. That marks the end of our country performance review, and now before I ask, you hope to come in, I will update you on the latest developments around the sale of our Russian operations. On November 24, we announced that following a competitive process, Vion had entered into an agreement to sell its Russian operations to certain members of the Beeline Russia management team. The enterprise value at that time was $5 billion. On February 7th, the Russian regulator issued its approval of the proposed sale. With the first quarter results in May 4, we noted that PJSC Wimplecom had independently acquired approximately $1.6 billion in Vion Holdings bonds. This has had a material impact on our balance sheet, reducing our leverage ratio to 1.68 as of June 30, 2023. On May 13, we announced the submission of all necessary documentation to Euroclear, Clearstream, and registrars for cancellation of Vion's bond held by the subsidiary PJSC-Wimplecom. With this submission, Vion entered the final stages in the closing of the sale of its Russia operations. We worked to finalize the sale of our Russian assets continuous as a top priority. And we continue to engage with the relevant European authorities for clarity on the ability of the registrars and Euroclear Clearstream to cancel and write down the relevant amount of bonds without need for a separate license. We have full commitment from both parties, the buyer and the seller, to conclude the transaction as soon as possible. We are also aware of the importance of concluding the transaction ahead of October 2023 bond maturities. It remains, however, very important that we comply with all legal and regulatory requirements, so please bear with us as we move to conclude the transaction. As a clear sign of prompting ownership change, I have personally resigned from the board of PJSC Wimplecom as of August 1st. As always, our stakeholders' interests remain paramount. While cancellation of the bonds via the clearing systems remains the optimal solution, we are continuing to explore all options to protect our interests. Let me pause here and hand the call over to Joop to discuss our second quarter's financial performance in more detail. Thanks, Kaan.

Good morning, good afternoon to everyone on the call today. I will provide some financial highlights for the first half of the year and elaborate on the financials for our second quarter results in more detail. But before I start with our most recent results, let me recap the recent developments with regards to the filing of our 2022 audited financial statements. Our 2022 audit was finalized and we submitted the audited financials to the AFM and SEC. And NASDAQ compliance was confirmed in terms of 2002 annual reporting. On July 24, Vion announced that it has filed its annual report on 420F for the year ended December 31, 2022, to the SEC. The 420F is also available on the Investor Relations section of the company's website. As a result of its 420F filing, the Listing Qualification Department of the NASDAQ Stock Market confirmed that Vion has regained compliance with the NASDAQ listing rules through the exception granted by NASDAQ for its delayed filing. Our auditor's financial statements underline the importance of a more compact VION, growing remarkably faster and highlighting the profitability improvement of our continuing operations from 4 USD in 2021 to 37 USD in 2022. The Form 20F filed on July 24 also contains a correction to VION Unlimited's financial statements for the year ended December 31, 2022. impacting other comprehensive income but with no impact to total consolidated equity. The error is related to the sale of the Algerian operations and has no impact on the result on the sale of the Algerian operations as presented on the consolidated income statement and no impact on the consolidated income statement as a whole. Although the error has no impact also on the consolidated statement of financial position, the consolidated statements of cash flows, adjusted EBITDA, nor on VEON's financial governance for its financing arrangements, we determined the error in reporting as a material weakness. And management is taking and will continue to take steps to remediate this material weakness and to strengthen the company's control environment. Now moving on to the first half of your highlights. Vyond recorded another set of positive local currency financial performance in the first half of 2023, with year-on-year revenue and EBITDA rising by double-digit figures in local currency terms, up 70.5% and 12.5%, respectively. This growth is the result of inflationary pricing measures and the continued execution of our digital operator strategy, which has driven increases in the number of 4G and multiplayer users and seeing us increase our market share in all markets. Local currency fluctuations against the dollar in some countries have once again led to lower revenue and EBITDA performance in our reporting currency in US dollars. As Kaan already mentioned, we have seen a strong start to the third quarter, and in July we see positive year-on-year growth in our reported currency. As we move towards completion of the sale of the Russian business, the purchase of $1.6 billion of Vian Holdings BV bonds by PJC Fimplecom has significantly deleveraged our balance sheet, bringing gross debt down by 58% compared to a year ago, with net debt decreasing 72% over the same period. ASQ net debt is now down to $1.7 billion as of June 30, 2023. Elaborating on our financial highlights for our second quarter results, I'll start with some details on revenues on slide 24. We continue to deliver balanced growth across our countries as we execute on inflationary pricing while growing our base of 4G and multi-play customers. All our operating companies deliver double-digit year-on-year local currency revenue growth as they continue to execute on their digital operating strategies. As I touched upon in a previous slide, revenue growth in US dollar terms was impacted by a significant depreciation of local currencies across multiple markets, and particularly in Pakistan by 41%, Ukraine by 25%, and Bangladesh by 16%. Revenue growth in Kazakhstan was also affected by a one-off period adjustment of $2 million. Adjusting for this, Kazakhstan year-on-year revenue growth was 20.8%. Moving now to slide 25, where we take a closer look at our EBITDA and EBITDA margin. Vyond's local currency EBITDA rose 13.6% year-on-year in the second quarter. This result was achieved despite a group-wide 54% year-on-year increase in energy costs and actually one-offs in our Kazakhstan, Uzbekistan, and Kyrgyzstan markets. Adjusting for these one-offs, normalized group EVDA increased by 20.3% year-on-year in local currency terms.