VEON Ltd.

It'll just be audio over your video. At the end of the Q&A, once we've agreed on the final question, we'll pass back to Anand for closing remarks. Once you've done those, you can say your farewells.

Hello and welcome to Vyond's Q126 results presentation. For those of you who have joined the Zoom webinar, if you would like to ask a question you can use the raise hand button which can be found on the black bar at the bottom of your screen at any time to join the queue to ask a question and you will be called upon during the Q&A session. For those of you watching on the webcast, if you would like to submit a written question please use the ask a question tab at the top right of your screen. These questions can also be sent in any time during the presentation. As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Anand Ramachandran, you may begin.

Thank you. Good morning and good afternoon to everyone joining us for Beyond's first quarter results. My name is Anand Ramachandran, Chief Corporate Development Officer at Beyond. Joining me today are our Group CEO, Mr. Kaan Terzioglu, and next to him, our Group CFO, Mr. Burak Hozer. As usual, Kaan will begin with our strategic and operational highlights, followed by Burak with a review of our financial performance, and we'll then open up the call for Q&A. Before we begin, please note that today's presentation contains forward-looking statements which involve risks and uncertainties. Further details are available in all our SEC filings, including our form 20F. Our earnings release and presentation are available on our investor relations website. With that, let me hand it over to Khan.

Thank you, Anand. VeeOn has entered 2026 with clear momentum, double digit growth, accelerating digital revenues, stronger cash generation and continued capital returns. Revenues in US dollars grew 17% year on year. EBITDA increased 17.7% and margins expanded by 20 basis points. Importantly, this growth translated into strong cash generation with equity free cash flow up 73.4% year on year to $246 million. This performance reflects the strength of our digital operator strategy, combining resilient connectivity, fast-scaling digital platforms, and disciplined capital allocation. As a result, we are raising our 2026 revenue outlook, which I will return to later. Second, we are seeing strong acceleration across our digital portfolio. Digital revenues grew 57.7% year on year and now represents over 25% of our group revenues. Importantly, this growth is increasingly profitable with MTA margins of 34.6%. This quarter, we also refined our reporting by including enterprise identity and credentials management within digital enterprise. These are mature services that are increasingly shifting from traditional A2P messaging towards API-based platforms. On a comparable basis, excluding this reclassification, our digital revenues actually grew over 75%. Third, we continue to execute multiple growth levers within disciplined asset-light frameworks. In Pakistan, we secured the largest spectrum allocation in the March spectrum auction, strengthening capacity and supporting future growth. We are expanding our financial services footprint and our acquisitions of TPL Insurance and Aptna Bank acquisitions to come are on the right course. We are deepening our ecosystem through targeted acquisitions such as OLX and Tabletki. These initiatives enhance engagement, expand monetization opportunities, and reinforce our long-term growth platforms. Finally, we remain firmly focused on shareholder value. We continue to believe our shares do not reflect the value and cash generation of the business, and we are acting on that conviction through our buyback program. At the same time, we are reducing leverage and maintaining financial flexibility. Management ownership remains a key signal of alignment, reinforcing our confidence in the value we are building. Let us review our Q1 financial performance. Let's move to the next slide. Our strategy is translating into strong, high-quality financial performance. Both telecom and digital segments are contributing meaningfully to profitability and cash flow, demonstrating the strength of our integrated model. Telecom revenues grew steadily, while digital revenues increased significantly and now account for a quarter of total revenues. As highlighted earlier, we are encouraged by the strength of our cash generation this quarter and continued reduction in leverage. Next slide, please. Our growth continues to outpace inflation across our markets, reflecting the strength of our operating model. On a like-for-like basis, which adjusts for the divestment of Pakistan Towers, Kyrgyzstan business, and the acquisition of Uklon and Tabletki, revenues grew 15.4% and EBITDA grew 15% year-on-year. This reflects our ability to execute fair value pricing supported by strong demand, high engagement, and increasing customer reliance on both connectivity and digital services. Let us move to our digital performance, which continues to scale in size and quality. Let's go to the next page. Digital revenues reached $303 million for the quarter, now representing over a quarter of group revenues. The reclassification of enterprise identity and credentials management within digital enterprise, which I highlighted earlier, contributed $44 million for the quarter, with prior periods reclassified for comparability. Growth remains broad-based, with financial services leading and strong contributions from entertainment, ride-hailing, and healthcare. We also began consolidating Tabletki from February, further strengthening our healthcare vertical in Ukraine. Our digital platforms continue to benefit from structurally low customer acquisition costs and highly efficient distribution, creating a scalable competitive advantage across our markets. Importantly, digital services are structurally lower in capital intensity, supporting strong cash generation capacity. Let's go to the next page. Multiplay customers remain a key growth driver. These customers use connectivity with digital services and they deliver significantly higher value with ARPU now 3.9 times that of voice-only customers. This fact also helped us raise overall ARPU to $2.3 for the quarter from $2 a year ago. Multiplay revenues grew almost 18% year on year and now represents 58% of consumer revenues. Let me now update you on the operational performance across our markets in the next page. We are seeing strong operational momentum across the board. Pakistan and Ukraine continue to lead, while Kazakhstan and Uzbekistan deliver steady growth. Bangladesh is continuing its growth for a second consecutive quarter in a row. Digital momentum is consistent across all markets, supporting both growth and diversification. Our focus is clear to sustain this momentum through disciplined execution and balancing revenue growth with profitability over the course of the year. Next slide, please. Our financial services business in Pakistan continues to grow from strength to strength. Jazz Cash served over 29 million users during the quarter, while our merchant base expanded to over 600,000 merchants. This is driving a powerful network effect. Transaction volumes remain robust with last 12 month transaction value reaching 60 billion US dollars or 15% of Pakistan's GDP, reflecting sustained growth in usage and engagement. We are also scaling lending at pace with over 200,000 loans issued daily while maintaining disciplined risk management. Asset quality remains strong and non-performing loans and PL ratios remain well controlled. Mobiling Bank's loan portfolio has reached $289 million and is supporting to continue the expansion of our digital financial services ecosystem. Together, these capabilities position us well to support financial inclusion and capture long-term growth. Next slide, please. We have refined our definition of digital customers to reflect active users in quarter one, providing a more comprehensive view of engagement across the quarter. Across our ecosystem, we now serve 229 million digital customers, including over 72 million digital-only users. Our platforms are becoming go-to super apps in our markets. Transaction value reached almost $63 billion over the last 12 months, reflecting both scale and deepening engagement. This creates increasing opportunities in cross-sell, advertising, and monetization. Next slide. Our consumer digital platforms continue to scale across multiple networks. Financial services, entertainment, healthcare, ride-hailing, and super apps now serve millions of users across our markets. Our premium digital brands are delivering a differentiated customer experience by seamlessly integrating connectivity with everyday lifestyle services such as healthcare, e-commerce, and mobility. Together, these platforms deepen engagement and unlock multiple opportunities, providing people that are underserved with service quality they deserve. Next slide, please. We are also building strong momentum in digital enterprise. Our platforms in augmented intelligence, cloud, and data analytics are scaling across our markets, supported by almost 2,000 engineers and data scientists. Our AppTech platform reaches over 100 million screens, enabling increasingly sophisticated AI-driven targeting and monetization across our ecosystem. Within our identity and credentials management services, the focus is rapidly shifting towards secure, real-time authentication as a primary defense against fraud and scams and protection of children. Let's go to the next slide, please. Augmented intelligence, or AI, is a core pillar of our value creation. For us, AI is not a standalone initiative. It's a productivity engine across networks, customer care, digital services, and enterprise solutions. We are building sovereign local language AI capabilities. Our Ukrainian LLM, SVAIO, which means globe, was named by Ukrainian citizens, showing its national importance and strategic value. Our ambition is to put AI to work in real-time economy, helping doctors deliver better outcomes, teachers reach further, and farmers produce more. This is practical augmented intelligence delivering measurable impact in everyday life. We have over 1,000 prioritized use cases across the group. Over 1.4 million customers are using our AI products across our footprints. We are focused on turning AI from potential into performance. With that, Burak, I hand over to you.

Thank you, Kaan. We continue to deliver strong financial results in the first quarter. Group revenue reached $1.2 billion, growing 17% year-over-year in U.S. dollar terms, with broad-based contributions across our markets. Digital services grew 57.7%, reaching $303 million and representing over 25% of total revenue. This reflects strong execution across both telecom and digital businesses. Next slide. EBITDA reached $517 million in Q126, growing 17.7% year-on-year. Margins expanded by 20 basis points to 43%, reflecting operating leverage and continued cost-discipline. This demonstrates our ability to grow profitability while maintaining a disciplined cost base. Now turning to the balance sheet. We ended the quarter with $1.75 billion in cash, including $457 million at headquarters level. Gross debt remained stable at $4.9 billion. Net debt, excluding leases, stood at $1.76 billion, with leverage reduced further to 1.07 times. This provides us with financial flexibility and resilient capital structure. We are also proactively exploring strategies to manage our upcoming debt maturities. With that, I'll hand the call back to Frans.

Thank you, Burak. And returning capital to shareholders remains a key priority. Our current $100 million buyback is underway with ADS buybacks continuing. We are committed to a minimum of $100 million in annual share repurchases subject to market conditions and liquidity. Following completion of the current program, shares repurchase under future programs will be canceled, supporting long-term shareholder value. Next slide, please. We have a long track record of navigating frontier markets. Volatility is not new to us. We are proactively executing targeted actions to mitigate the impact of recent energy price movements. Reflecting our strong first quarter performance and continued commercial momentum, we are raising our 2026 revenue growth output to 11% to 14%, while maintaining FTA growth guidance at 7% to 10%. We are making further investments in Pakistan following the recent spectrum acquisition to support future growth. CapEx intensity, excluding Ukraine, is expected to be in the range of 15 to 17%. To conclude, Vyond has made a strong start to 2026. We are delivering double-digit growth scaling digital revenues profitably, strengthening our credit profile, and returning capital to shareholders. At the same time, we remain disciplined and mindful of external volatility. Our model is increasingly diversified, resilient, and cash generative, and we are confident in the opportunities ahead. Thank you for your continued support. We will now open the line for questions.

Thank you. At this time, if you would like to ask a question, please click on the raise hand button which can be found on the black bar at the bottom of your screen. When it is your turn to ask a question, you will receive a prompt to be promoted as a panellist. Please accept, wait a moment and once you have been introduced, you may unmute yourself, turn your video on and ask your question. Written questions can be submitted on the webcast by using the ask a question tab at the top right of your screen. As a reminder, we are allowing analysts one question and one related follow-up today. If you wish to ask more questions, please raise your hand again to rejoin the queue. We will pause a moment to allow the questioners to enter the queue. Our first question comes from Max Findley with Rothschild & Co Redburn. Please unmute your line, turn your video on and ask your question.

Hi all, thank you for taking the time to speak to us today. The EBITDA guidance implies a downgrade for the business ex-Kivstar, a margin contraction of about 1% following Kivstar's EBITDA upgrade earlier today. Are you able to walk us through what's changed since we last spoke? Secondly, and linked to my first question, I was wondering if you could provide some colour about what you're seeing in your markets now as a result of the Iran conflict and what risk there is to further EBITDA margin compression. I obviously appreciate the high uncertainty around the situation. And finally, I asked at full year results whether your CapEx guidance was a bit conservative following the Pakistan auction. And I guess I'd like to know what has changed regarding your network build plans there. Is this CapEx being brought forward that was perhaps targeted for next year? Or is this new CapEx? Thank you very much.

Thank you, Max, for the question. I think, you know, second part of the question is kind of the answer to the first. We have reiterated our guidance as it is on the ABTA side, and I would like to see the next three months to give a more clear picture about how the ABTA growth will curtail. If you would ask me, you know, I do not think any margin compression will happen because we have strong control over our pricing. Our services are differentiated, and the tolerance towards price elasticity is quite healthy in the markets that we operated. Having said that, today, President Trump is in China. I would like to see a little bit more clarity on geopolitical landscape before making a change in our guidance on the ABTA side. Now, looking into the impact we see in our markets, especially about the oil prices, today in South Asia, a barrel of oil goes in between $160, $180, not like in line with the brands. And it is not about the pricing, but it is also the availability of fuel, which is important. And I'm very glad to see that actually Pakistan over time has been diversifying its energy production capacity towards wind, solar and hydro. And the hydrocarbons have been steadily declining in the needs. But in markets like Bangladesh, we have seen some availability issues over the last couple of weeks. And I hope that the liberal pricing of oil will adjust this availability issue over the time. But I think it's important to understand that the impact from the current weighted average inflation rate of 8.1%, across our markets, we do expect to see double digit inflation moving onwards. And that's, of course, something that we are watching very carefully. With regard to investments in Pakistan, we have tripled our capacity on Spectrum. And specifically with 700 megahertz spectrum getting into our fleet of spectrum, we will accelerate our deployments. It will be our coverage layer for 5G and also 4G non-standard services as well. And that's why we decided to upgrade our guidance slightly. Having said that, if you look into our profile of our revenues, now one quarter comes from digital services. Digital services, capex to sales ratio is in higher single digits rather than higher 20s. And that's why we believe over time there will be a moderation of CapEx revenue percentage in terms of investments. But still, for the remaining of the year, we will accelerate our deployments in Pakistan because the average data consumption in Pakistan today is around 7.5 gigabytes per month, which is one third of what it should be. It's not that Pakistanis don't like to consume more. It's because the capacity is limited. So we believe that putting more capacity in place will give us the chance also to monetize that business.

Brilliant. Can I just follow up on the EBITDA margin point? I think from what I understood, you're suggesting there will be no margin contraction, but given the upgrade to revenues and EBITDA guidance staying the same, you know, if you take the midpoint of both, that obviously implies margin contraction. Are you suggesting that we should instead be thinking about you ending up at the full year at the top higher end of the EBITDA range? if margins are going to stay stable?

Max, I would suggest that we wait for Q2 end to give more clarity on that. At this particular stage, we wanted to stick to the guidance that we have given on the PTA side. But I think our pricing control and inflationary pricing discipline will allow us to keep our margin levels the same.

Brilliant. Thank you very much.

Thank you.

Our next question comes from Nicholas Payton with Edison Group. Please unmute your line, turn your video on and ask your question.

Hello, everybody. Thank you very much for the additional information on the Pakistan financial services business, which I thought was very interesting. It reminded me of the work that we did And I think when I look back at that now, we were considering the transactions with MTN FinTech and Airtel Africa looking at potential valuations for that business. And it looks as though the business has grown something of the order of about 30% in EBITDA terms over the last year or so. And at the time, we were looking for a valuation around about a billion for that business. I'm also aware that investors have been discussing a potential strategic investor for that, or maybe even an IPO. Have you any more thoughts about crystallizing value in that business?

I'm extremely happy with the progress we have with our financial services business in Pakistan and specifically expanding our service lines into insurance and potentially to digital banking products that we do not cover today. I think there is a huge potential of serving 250 million population in Pakistan and addition to that 12 million population outside of Pakistan as diaspora, there is a huge potential in this particular market. And I would like that growth to show itself a little bit more. What I am even more excited is applying the same business model in a market like bangladesh where there is an additional 180 million population with also a strong diaspora footprint and i think you know our intentions of at certain point opening up this as an investment opportunity stays but we will not worry as we see the growth rates actually are still allowing us to develop the business

And should I infer from that that if you were to look for a crystallization of the value in those businesses, you might look to, for instance, merge the jazz cash business with businesses from other countries? Or would you try to look at options on a country basis?

We will keep an open mind in terms of how we see the consolidation, but clearly there are certain aspects of the business which later on actually turn into products such as digital assets, including stable coins, remittances. These are global businesses, so some of these things actually could justify a global multi-brand strategy.

Makes sense. Thank you. Thank you very much.

Our next question comes from Adrian Cundy with Emerging and Frontier Capital. Please unmute your line, turn your video on and ask your question.

I can, gentlemen. It's good to see you again. Congratulations, first of all, on beating our digital growth estimate this quarter. Last time we did the call, you said that you sort of had a vision of getting to 30% of... plus of a turnover sort of by the end of next year, half from organic, half from potential M&A and 1% a quarter. You seem to be running ahead of that right now. So do you think on an organic basis, you might even get to 30% earlier than planned given what's going on and particularly in Pakistan?

Well, I think, you know, as I mentioned, really the momentum we see, not only just in financial services, premium products, healthcare marketplaces is very strong. And now actually I see that as a team, we look to end of 2029 to achieve more than 50% of our revenues from digital services. And having that insight, I think half of that should come organic, half of that probably will come with acquisitions that we will see in the markets that we operate in. But, you know, I'm very happy to see that, you know, we modeled our digital services growth, of course, as 35% plus growth business. And it is proving to be almost twice as fast. And I'm happy to see that happen. But don't want to give a guidance on the year on growth. That's not something we do at this particular time.

And just outside of sort of Ukraine and Pakistan, in terms of the growth capital for digital wallet in Bangladesh, what you might be doing in Kazakhstan and Uzbekistan, do you see potentially a need for more risk capital or a primary issue in those businesses at the group level? And it sort of relates to earlier discussions you said about listing operating companies, particularly JazTel in Pakistan. Is that still on the agenda given the current geopolitical situation?

I think it's important to look into these not only as a crystallizing of the value, but having the right partners, is looking for what we can achieve around the world.

Okay, and if I have a final question on the debt. Last call, you indicated that you'd like to refinance the notes coming due before they become current in the fourth quarter of this year or address it. Just for our modeling purposes, do you sort of have a target debt to capital in mind? And given that cashflow continues to accrue at the group level, Will there be, when you do move on the note student in 27, do you need to refinance the whole billion or will there be a principal payment and maybe an issue with something a bit longer duration at a smaller size that would provide a further acceleration of free cashflow to equity?

Let me ask Brock to answer that since they have been quite busy on this one. Please Brock.

going on, and we still plan to address the debt before it becomes current in November 26. So we are working on that, and all options are on the table. Of course, I think we will go for a minimum benchmark size whenever we go for it. And on top of that, we will have to decide based on all the capital inflows and outflows that we are foreseeing right now.

And if you sort of look two or three years out, what sort of debt to capital structure would you see as optimal for the business?

Excluding leases, we don't want to cross the 1.5 mark where we are at 1.07 today. So that's where we see ourselves.

Okay. Thank you. Thank you.

As a reminder, if you would like to ask a question, please click on the raise hand button at the bottom of your screen. Written questions can be submitted on the webcast by using the Ask a Question tab at the top right of your screen. Our next question comes from Ahmed Mustafa with Inam. Please unmute your line, turn your video on, and ask your question.

Hello, everyone. Thanks for the opportunity. I have a question on Uzbekistan. Customers are nearly flat or declining, but ARCO keeps growing. So how should we think about the growth strategy in this market?

Thanks a lot for the question. As you have noticed, our strategy is around multi-play nature of our services. And that practically means as customers move from being a single play customer, meaning just consuming our voice services and transforming into consuming our digital services, the potential of our quadruples and the churn goes down significantly. So that's also what we are observing in Uzbekistan. Our customer base is maybe stable, but actually the type of services we provide is getting richer and richer. And that allows, especially with the family package models, a much higher traction in our wallet share.

That's helpful. Thank you.

Our next question comes from Himanshu Poral with Gramercy. Please unmute your line, turn your video on and ask your question.

Hi, thank you very much for taking my question and congratulations for a strong set of results. Just to get some clarity with respect to your financial services business, as in like how much of the Pakistan revenue comes from the financial services arm and what are your plans on this very division itself like the financial services and do you plan to grow it outside of Pakistan along the similar verticals? Thank you.

Sure, Himanshu. Thanks a lot for the question. To give you an overall indication, for us, financial services business is about a half a billion dollar business. A significant portion, almost two-thirds of it comes from Pakistan. And it's a combination of digital wallet services, insurance business, lending business, as well as, of course, remittances. and we are serving almost 29 million customers actively but we have 60 million actually we just across the 60 million bank account numbers so with that we believe uh you know transacting more than 80 percent of rust transactions and transacting almost 15 percent of gdp we are already well established financial services player basically

Sorry, I mean, I should have been more clear. I mean, I meant more with respect to the lending business.

Sorry about my... You mean the percentage of lending business? Yes.

Okay. Look, we don't get into that level of disclosure, but what we've indicated is that lending and interest income is slightly over half of the total revenues for the Pakistan business. That's what we've indicated in the past. Clearly, as the business grows in size, we are aware that people want to know more, and that's something we are evaluating. I guess over the next six, nine months, you'll see us providing more color around that. For now, I think we'll probably leave it at that. Yes, I can't point it out, 200,000 plus loans. Mobiling has a pretty big loan portfolio. If you look at the financial services business as a whole, lending and interest income is north of half of that total revenue base that we have today.

That is precisely what was my concern. And I mean, should we start seeing you guys as more of like a NBFC sort of thing or are you going towards that? Are there any ambition of moving in that direction?

So, Himanshu, I think you should definitely perceive us as a financial services company which serves from wealth management remittances to digital assets, services in the country. So, you know, we are already, I think, from a numbers side, account numbers side, and number of, you know, loan side, we are number one in the country. And you will see us getting our fair share from the financial services business as a consumer-oriented financial services company.

Got it. Thank you. Thank you.

Our next question comes from with New Street Research. Please unmute your line, turn your video on, and ask your question.

Hi, thanks for having me. Just one question. Mobile output growth in general, and especially in Ukraine, was really impressive. Can you give more color on that? Is it really all from bundling and multiplayer customers?

Look, if you look to our telecom growth, which is, I think, around 8%, 9%, versus digital services growth, which is around 57%. And then there was another number which I disclosed, which was multi-play services growth, right? This is actually the telecom growth, but for the segment of customers who are consuming both telecom and digital services, but we do not recognize the revenue as digital service. We recognize the revenue as telecom service because it actually improves the data consumption. That grows more than 17%. So that is actually the sweet spot why our ARPUs are growing. Even if our total number of telecom customers is stable at 150 million year over year, our ability to generate more telecom revenues from those customers are increasing because the customers who also consume our entertainment services they consume more data, they even talk more on the phone, and they stay longer with us. And those three drivers allows us to create more output from the same customer base.

Thank you.

Thank you.

Our next question comes from Ali Zaidi with Inem. Please unmute your line, turn your video on, and ask your question.

Hi guys, thank you so much for the opportunity. I just have one question. Does Apna Microfinance Bank holds a different kind of license than MMBL and can it like unlock any regulatory capabilities for JS Cache and MMBL in the future?

Well, we are definitely taking a very important role within the digitalization of the financial services landscape in Pakistan. And we truly believe that as we grow our footprint, including insurance businesses and APNA Bank, we will be basically operating as a digital bank, providing the services that our customers are in need of in the marketplace.

Okay, thank you. Thank you very much.

We have no further questions at this time. I will now hand back to Anand Ramachandran for closing remarks.

Thank you very much for your interest in Vyond and for supporting us. As always, the investor relations team and all of us are available for any follow-up questions. We look forward to staying in touch. Till then, it's goodbye from us till the next quarter on this call. Thank you for your time.

Thank you very much.