VEON (VEON) CMD 2024 summary

Strategic direction and future plans

• Transitioned to a more compact, asset-light, and digital-focused company after exiting Russia, targeting high-growth frontier markets with strong governance.

• Ambition for 2027: 16%-19% local currency revenue CAGR, 19%-22% EBITDA CAGR, $900M-$1B free cash flow, and 3 percentage points margin expansion.

• Targeting 50% of customers using digital services beyond connectivity, focusing on financial, entertainment, education, and healthcare offerings.

• Committed to asset-light strategy: divesting towers, creating NetCos for network sharing, and pursuing local IPOs and partnerships for digital and technology assets.

• Embracing AI-driven services (AI1440) and local language models to deliver augmented intelligence and differentiated value propositions.

Financial guidance and capital allocation

• Delivered 15.4% revenue CAGR and 14.8% EBITDA CAGR over the past three years, with strong deleveraging from $7B to $2B net debt and 1.5x leverage.

• Q1 2024: 11.6% local currency revenue growth, 6.6% USD growth; normalizing for Ukraine cyberattack, growth would be 20.5% local and 15% USD.

• CapEx to sales ratio reduced to 18%, with further reductions expected through infrastructure sharing and NetCo model.

• Management compensation aligned with shareholder value creation; exploring dividends and share buybacks as part of capital return strategy, including upstreaming dividends from all operating companies as capital controls ease.

• Focused on optimizing balance sheet, extending debt maturity beyond 4 years, and shifting debt mix toward local currencies.

Country-level performance and growth drivers

• Pakistan: 19%-22% revenue CAGR ambition, 24% non-connectivity revenue, 50% digital business revenue, 29% YTD top-line growth, and 55% digital services growth.

• Ukraine: 10%-13% revenue CAGR, ~10% non-connectivity revenue, >50% non-connectivity revenue growth, 10–15% EFCF growth, 7.7% local currency CAGR despite war, 9M digital customers, expanding into health, TV, and cloud.

• Kazakhstan: 14%-17% revenue CAGR, 4 p.p. capex intensity reduction, 1 p.p. EBITDA margin increase, 100% EFCF growth, doubled revenue since 2020, 46% recent revenue growth, 80% smartphone penetration, 240% digital revenue growth.

• Bangladesh: 15%-18% revenue CAGR, EBITDA margin >45%, 20% non-connectivity revenue, $100M annual EFCF, double-digit growth, 88% 4G coverage, 52M Toffee users.

• Uzbekistan: 26%-29% revenue CAGR, 28%-31% data & digital revenue CAGR, 12 quarters of double-digit growth, leading in market share, digital and fintech expansion.