VEON Ltd. (NASDAQ:VEON) Q2 2022 Earnings Conference Call August 4, 2022 8:00 AM ET

Company Participants

Nik Kershaw - Group Director of Investor Relations

Kaan Terzioğlu - Chief Executive Officer

Serkan Okandan - Group Chief Financial Officer

Nik Kershaw

Good afternoon and good morning, everyone. Welcome to VEON's Second Quarter Results Presentation for the period ending 30 June 2022. I'm Nik Kershaw of VEON's Investor Relations. I'm pleased to be joined on the line today by Kaan Terzioğlu, our Group CEO; along with our Group CFO, Serkan Okandan. Today's presentation will begin with the key highlights and business update from Kaan. Following this, Serkan will discuss the detailed financial results and then hand it back to Kaan to discuss our outlook and priorities for the rest of the year.

Before getting started, I'd like to remind you that we may make forward-looking statements during today's presentation, which involves certain risks and uncertainties. Certain factors may cause actual results to differ materially from those forward-looking statements, including the risks detailed in the company's annual report on Form 20-F and other recent public filings made by the company with the SEC. The earnings release and the earnings presentation, each of which includes reconciliations of non-IFRS financial measures presented today can be downloaded from our website.

With that, let me hand over to Kaan.

Kaan Terzioğlu

Thank you, Nik. Good morning all and welcome to the presentation of our second quarter results. The second quarter of this year has been a time where we have seen the full weight of the current geopolitical challenges. So our teams have shown an exceptional focus and our business as a whole has shown impressive resilience as we are about to share with you in today's presentation. Before we delve into the numbers, I would like to thank all our team and especially our colleagues in Ukraine who are keeping Kyivstar's customers and the broader communities connected at home and abroad. I would like to also thank our shareholders and investors for their continued confidence in our business. We continue to work with tremendous focus to protect and grow the value of our company for all our stakeholders.

Now let us review some key figures for the quarter. Group revenues grew by 6% year-on-year on a local currency basis with service revenue up 7.5% year-on-year. Reported revenues in U.S. dollars were up 5.6% for total revenues and 7.1% for services revenues. I'm especially glad to see that local currency revenue growth for markets, excluding Russia and Ukraine, was 13.3%. EBITDA for the quarter was up 14.1% year-on-year in local currency and 13% on a reported basis. Local currency EBITDA growth for markets, excluding Russia and Ukraine, was 22.6%. CapEx was $382 million, down 21.5% year-on-year. As we noted during Q1, CapEx for the full year will be lower than we previously talked about and anticipated. Importantly, we continue to maintain a healthy cash position. None of our operations currently require funding from headquarters. In addition to this, we have $1.9 billion in cash held at headquarters level.