VEON Ltd. Price & Performance (VEON)

Good afternoon, good morning. You, everyone, for joining us today for VEON's full year presentation for the period ending 12/31/2024. My name is Anand Ramachandran. Chief of staff and also heading the investor relations function for the group. Allow me to introduce our senior management in the room today. Next to me is Mr. Khan Terziolu. CEO and next to him, Mr. Burak Ozar, our group CFO. Also joining on the line today is mister Faisal Ghauri, our Investor Relations team in The U. S. Today's presentation will begin with the key highlights and business updates from Kaan, followed by a discussion of financial results by Duraq. We will then open up the line for Q and A. Please note that we may make forward looking statements during today's presentation, which involve certain risks and uncertainties. These statements relate to the company's anticipated performance, guidance for 2025, future market developments, and operational and network developments and investments and the company's ability to realize its targets and initiatives. Actual results may differ materially due to risks detailed in the company's annual report on the Form 20 F and other recent public filings with the SEC. The earnings release and presentation, including reconciliations of non IFRS measures can be downloaded from our website.

With that, let me hand it over to Khan.

Thank you. Thank you, Anant. Good morning, good afternoon, and welcome to everyone. We appreciate you joining us today for our full year 2024 results. Today, I'm hosting this call from our headquarters in Dubai. We are proud to be the largest NASDAQ listed company headquartered in Dubai. I'm thankful to the Emirati authorities for proving how welcome and easy to do business in this wonderful country. As we hold this call during the holy month of Ramadan, I would like to extend my warmest wishes to all observing. 2024 has truly been a transformative year for VEON, and let me highlight some of our achievements. First, starting with our financial performance. We have delivered strong growth In reported U. S. Dollar terms, we delivered 8.3% revenue growth in 2024 versus our 8% to 10% growth expectation declared during Q3 results. Our U. S. Dollar EBITDA grew 4.9% versus our 4% to 6% growth expectation. We also beat our expectations in underlying local currency terms. We delivered 14.6% revenue growth versus our 12% to 14% expectation and 12% EBITDA growth versus our 9% to 11%. Expectation. Our local currency revenue growth outpaced both inflation and nominal GDP and highlights our ability to capture a larger share of consumer wallets in the markets that we serve at even amidst persistent macro headwinds.

Second, we are scaling our digital services with great success. Our direct digital revenues grew by 63% for the full year, and grew 42% year on year in the fourth quarter. Digital services comprised 12.6% of our total revenues in Q4 and underscore our evolution into a services company with a telco license. Third, we made substantial progress in executing our asset light strategy which has unlocked significant value for us as you can see on the slide. These transactions not only strengthen our balance sheet, but also align with our longer term strategy. Last but not least, am particularly pleased with our progress is being acknowledged by the markets. Our share price more than doubled in 2024 and is up 15% year to date in 02/2025. We announced $100,000,000 share buyback program in July 2024, over three years. And since completed Phase one with $30,000,000 repurchased. We have successfully strengthened our cash position and are well prepared to redeem our bonds maturing this year. We are actively preparing for Kiev Star's public listing in The U. S, which will significantly enhance its visibility and profile. And finally, being headquartered out of Dubai with closer proximity to our markets, we will drive better efficiencies and cost savings.

I am particularly pleased to note that our stock price is now back at pre war levels. On the onset of Ukraine Russia war in early twenty twenty two, our stock faced substantial pressure and dropped to as low as $8 However, our decisive actions in exiting Russia business consistently executing to a clear strategy have all driven a strong recovery. Exiting Russia, has also reshaped our financial profile Pre divestment, our net to debt EBITDA was over 3x, Now it is down to 1.3. We see a similar profile in our credit as well. The performance of our bonds is a testament to our disciplined execution in transforming our credit profile. Since 2022, our 2025 bonds have recovered nicely, and our 2027 bond has nearly doubled in value. It is pleasing to note that our 02/1927 bonds are trading at levels comparable to higher rated corporate bonds with similar maturity. Simply put, we have reshaped and transformed VEON to a leaner, and stronger company. VEON is primed for agility and growth. Let us now focus on our 2024 performance. As I highlighted earlier, our revenues grew 8.3% in reported U. S. Dollar terms, significant turnaround from previous years. Underlying local currency growth in revenues was 14.6%.

I would like to emphasize that we achieved this growth despite inflation in our markets moderating through the year from 14.8% in fourth quarter of 'twenty three to 8.2% in fourth quarter of 'twenty four. This demonstrates the potential of our markets to generate growth and strength of our operations. Looking ahead, our 2025 revenue guidance of 12% to 14% in local currency reflects this continued momentum as well. EBITDA side, we reported 4.9% growth in U. S. Dollar terms. In underlying local currency terms, EBITDA grew 12%. Looking ahead, we expect 13% to 15% EBITDA growth in local currency terms in 2025. Underpinned by strong revenue trends and disciplined cost controls. Let me now dig a little deeper to the headline numbers. As you can see on this page, our financials were impacted by certain identified items, including the cyber attack in Ukraine, political unrest in Bangladesh, and HQ restructuring costs. Additionally, our underlying growth was also impacted by the deconsolidation of TNS plus in Kazakhstan effective fourth quarter of twenty twenty four following the sale of this business. Adjusting for the impact of these items, like for like, U. S. Dollar growth was 10% versus the headline of 8.3 Similarly for EBITDA, like for like EBITDA U. S. Dollar growth was 7% versus the headline of 4.9 We have successfully grown VEON to a $4,000,000,000 plus company in 02/2024.

Our telecom and infrastructure segment contributed $3,600,000,000 to this, and grew 3.8% year on year in USD and 7.1% year on year in local currency terms. Meanwhile, our direct digital revenues surged by 63% to $460,000,000 and demonstrates the success of our digital strategy execution. We are confident that this is a trend that will sustain into the future. Our EBITDA grew $1,700,000,000 And as I explained earlier, 4.9% on a reported basis and 12% on an underlying local currency basis. Our capital intensity for the year was 20.6%, and exceeded our guidance of 18% to 19 This was primarily driven by escalated investments in Ukraine amidst the war. Excluding Ukraine, our CapEx intensity would have been in line with our guidance of 18% to 19%. This higher CapEx also impacted our equity free cash flow which declined 2.2% year on year to USD $4.00 3,000,000. In 2024, we also made good progress in strengthening our balance sheet. Our net debt to EBITDA ratio is down to 1.3% as of the year end from 1.5 times as of Q3. And 1.4x from the last year end. We ended the year with $1,700,000,000 in cash, including $481,000,000 at the headquarters level.

Since the end of twenty twenty four, we have received remaining proceeds from our TNS plus sale and further dividends from our operating companies. I will now provide a brief overview of our revenue and EBITDA growth in underlying terms across our portfolio. Our Pakistan business was the strongest performer performer with revenues growing 22.7% and EBITDA growing 15.6% both in local currency terms. Ukraine delivered a stellar second half as it emerged stronger from the cyber attack. Revenues grow 13.7% and grew 10.3% in local currency terms. Kazakhstan continues to deliver robust growth as reflected in the underlying growth trends that adjust for the deconsolidation of TNS plus business in Q4. Uzbekistan delivers solid revenue growth, but EBITDA was impacted by a prior year one off and elevated operating expenses from network investment rollouts. That position it well for the future of our network quality. I will share more details on this matter later. Finally, Bangladesh business was severely impacted by the political changes and unrest. And the challenging macroeconomic environment throughout the year. Excluding the impact from these, its revenue base would have been stable. Multiplay, which counts customers that use at least one digital service in addition to voice and data services.

Is a key feature of our digital operator fourteen forty growth strategy. Increased four gs adoption remains also being the key driver of our growth. While total four gs user base grew 5.3% year on year, it has reached 12.7% when excluding Ukraine and Bangladesh. As you can imagine, in Ukraine and Bangladesh, user numbers are impacted by specific challenges. Multiplay segment drives growth with stronger customer engagement, higher data consumption, more frequent usage of voice services improved retention and ARPU expansion. Our multiplayer customers continue to generate three to 3.5x the ARPU as compared to voice only customers. This increased ARPU is driven by additional consumption of data due to increasing usage of our digital applications and platforms which enhances the customer experience. Let me now delve deeper into our digital revenue growth. These revenues are generated through our core digital services including financial services, health care, education, entertainment and enterprise services, such as advertising technologies, cloud and software development. In 2024, our direct digital revenues reached $460,000,000 growing by an impressive 63% year on year, and now accounting for 11.5% of total revenues. For Q4 alone, these revenues grew 42% year on year, and comprised 12.6% of total revenues.

We expect this trend to continue as we expand our digital portfolio and capture underlying customer demand across our markets. Looking to individual countries, let's start with Ukraine. Kyiv Star has delivered a strong finish to 02/2024. Underlying local currency growth adjusting for the cyber attack impact, [indiscernible] 13.7%. Underlying EBITDA grew by 10.3% despite ongoing network and utility cost pressures. We are also happy to report that all operating metrics, including subscriber numbers, minutes of usage, data consumption and churn are now trending positively relative to the pre cyber attack period. Direct digital revenues increased 122% year on year driven by Kiev Star TV, Kiev Star Cloud and Healthy, our health platform. Digital revenues comprise only 2.4% of total [indiscernible] which shows the significant growth potential ahead. I am pleased to inform you that Kyiv Star has signed an agreement to acquire Ooklon, Ukraine's leading ride hailing business. The transaction values Uklon at USD 160,000,000, and we have acquired 97% of it. Ooklon also offers delivery services and advertising services. It operates in 27 Ukrainian cities and unites more than 100,000 driver partners on the platform. Uclone also recently expanded its operations to Uzbekistan. Fourth quarter of twenty twenty four was a landmark quarter for Kievstar.

In November, restrictions on VEON's corporate rights in KEVSTAR were lifted. In December, Kiev Star partnered with Starling, to bring direct to cell satellite connectivity in Ukraine. Have also decided to list KfStar on NASDAQ, Let me now take a couple of minutes to highlight why KF Star makes a compelling investment proposition. First, Kiev Star is a national champion recognized as Ukraine's leading digital operator and one of the most iconic national brands. Second, Kiev Star is a highly profitable entity with robust free cash flow and multiple growth levels just discussed. Third, the business is supported by a very strong balance sheet, which is free of external debt and has ample liquidity.

Fourth, Kievstar's world class management team are proven leaders with a track record of resilience through war and robust governance. Last but not least, KevStar's listing will offer scarcity value as the only U. S.-listed vehicle for investors who want to participate in Ukraine's recovery and growth potential. Listing Kiev Star in The U. S. Is independent on the successful completion of the business combination with [indiscernible] We are excited about this and look forward to sharing more details with you as we execute on Kevstar's listing. Moving to Pakistan. Jazz continues to deliver robust growth revenues increasing 23% and EBITDA rising 15.6 Jazz's telecom and infrastructure revenues grew at 11.6% in 2024 highlights the strength of Jazz's network and innovative services. Direct digital revenues surged by 78% and contributes 24.5% of total revenues in Pakistan. JazzCash revenues increased by a whopping 116% and Mobilinq Microfinance Bank grew 32% year on year. Meanwhile, the strategic partnership with Anglo Corporation on infrastructure sharing executing our asset light strategy will bolsters Jazz service focused businesses. The transaction is going through customary legal legal and regulatory approval process. Once completed, Angra will pay Jazz hundred and $88,000,000 and guarantee repayment of DoDRs intercompany debt of $375,000,000 Moving on to Kazakhstan.

Line financials reflect the deconsolidation of TNS plus effective Q4 twenty twenty four. Excluding TNS plus deconsolidation, telecom and infrastructure revenues grew 15.3%. BLine's growing market share and traction is a testament to the success of its 4.9 gs rollout. Our performance with 4.9 gs networks is remarkably strong versus competitors servicing five gs networks and we are gaining market share. Beeline's digital portfolio continued to grow robustly. Simply, our financial services platform continues to scale strongly with 145% rise in monthly active users. Which I will just refer to as users here on. To 3,200,000. Cusco is our enterprise solutions company that has a team of over 800 employees that includes 400 developers and data scientists. It is one of the largest software firms in Kazakhstan and Central Asia. I wanted to particularly highlight Cascode's development and launch of Cas LLM, an open source Kazakh language large language model in collaboration with Barcelona Supercomputing Center GSMA Foundry and Kazakh National Research Institutions. Beeline and Cascode have already launched several AI solutions and services developed in house, which are being used internally and externally. Turning to Bangladesh, a country faced significant challenges in the second half of twenty twenty four, with macroeconomic pressures weighing on the broader economy and telecom industry.

Whilst the interim government is taking the right steps after the political unrest, customer sentiment is yet to show any sustained recovery. Response, Bangla Link has strategically pivoted to optimize its model and customer acquisition strategy is beginning to structurally lower cost without effective revenue share. Despite these challenges, direct digital revenues were 66% up as Bungalink remains committed to its digital operator strategy. Successful launch of the AI enabled lifestyle app application RISE in November is a good example with regard to this fact. RISE recorded 220,000 users by December, just a month into the launch. Looking ahead, we are optimistic that worst of the macroeconomic impact is in the past and BanglaLink is well positioned to drive sustainable long term growth. Turning to Uzbekistan. Beeline Uzbekistan focused on enhancing its foundations and doubling down on digital adjacencies in 2024. Revenues grew 9.4% in local currency terms, EBITDA declined by 3.7% largely reflecting higher operating expenses from network rollouts. And one off tax related impacts in the year earlier. Digital revenues increased 21% and now compromise 4.2% of total revenues. BIPOL, our financial services product, our integrated financial services platform into our super apps scaled rapidly In Q4, we saw the launch of a new super app, Humvee, meaning all in one in Uzbek language.

Humby is off to a strong start with 5,000,000 users. In a short time frame. Meanwhile, we welcome government's decision to reduce the excise tax on mobile communications industry. This development has enabled us to accelerate our 4.9 gs rollout benefiting both the industry and the consumers. We look forward to welcoming the industry at GSMA Mobile three sixty Eurasia in Tashkent in May. Let me explore our digital ecosystem in more detail. We continue to see strong growth across our digital platform. Our total digital users reached 122,000,000. Reflecting a 27% increase. Within that base, we are witnessing even faster expansion in digital only users growing at 37% to 29,000,000. This trend underscores how our digital products are rapidly gaining traction and becoming the applications of choice for customers in competitive markets. In 2024, we focused on AI with a clear focus on augmented augmenting human capabilities. And launched our AI fourteen forty, augmented intelligence in every single minute in a day strategy. We accelerated the integration of AI powered features in our digital applications, bringing AI to our customers in their native languages. We are going well beyond using AI just for process optimization. Starting with mobile financial services, we now have a total customer base of 38,000,000 across our financial services platforms, an increase of 2% year on year.

Let me focus on top three of these performances. In Pakistan, JazzCash's gross transaction value rose 64% to $34,000,000,000 representing 9% of Pakistan's GDP. This growth was supported by a 40% year on year rise in total transactions and 33% rise in average transaction value per user. JazzCash continues to expand its retail distribution network which now has 350,000 merchants. On average, we are now issuing more than 140,000 loans. Every single day. Simply, Kazakhstan's second largest digital services operator, continues to scale strongly with 145% rise in users reaching 3,200,000. Uzbekistan, Beeple's revenues grew almost 2.3 times in 02/2024, and user numbers increased 3.6 times reaching 2,400,000 users as of December. Our entertainment platforms continue to deliver unique content and experiences reaching 41,000,000 users across Pakistan, Bangladesh, Kazakhstan, Ukraine and Uzbekistan. Tamasha in Pakistan remains our largest platform with 17,100,000 users. Toffee is now the largest OTT platform in Bangladesh, offering linear TV. The recently concluded ICC cricket championship has driven a strong uptick in user numbers and engagement. Tamasha, during the games, registered 22,000,000 users and Toffee registered 8,500,000 users during this period. Kiev Star TV in Ukraine has shown impressive growth with users increasing by 55% to 2,000,000.

BTV in Kazakhstan has maintained steady growth with users up 8% to 1,000,000. We are evolving our self care platforms into super apps, which offer a wide variety of services to all customers, including from other telecom operators and serving them health care, education, entertainment, e commerce in a single easy to use platform. Our super apps are now serving 43,000,000 customers, up 17%. Our premium digital brands are targeted at digital natives, and combined advanced digital entertainment features with telecom services. These have all launched in the last twelve to fifteen months and are now showing impressive traction. Rocks in Pakistan has hit 1,000,000 users. EZ in Kazakhstan has grown its user base to 700,000, RISE in Bangladesh has 220,000 users just a month after launch. Lastly, our health care platforms. In Ukraine, Helsi leads with over 28,000,000 registered patients marking a 5% year on year increase. The platform supports more than 1,600 active health care institutions 39,000 doctors and specialists, and many laboratories. An AI engine to help customers analyze the results of laboratory tests and inform on potential health risks sees a strong demand. In Pakistan, figure three, meaning no worries, was launched in the fourth quarter.

Figure free is an insurance and health care marketplace application offering a variety of insurance products and health care services. Including e pharmacy, and doctor consultations. It is off to a great start with over 1,400,000 users registered and 1,200,000 active insurance policies sold. With that, I will now hand over to Burak to carry you through the financials.

Thanks, Kam.

Financial year twenty four, we achieved robust revenue growth.

With total revenue reaching slightly over $4,000,000,000 an 8.3% increase year over year. Adjusting for identified items, as Khan has explained earlier, and the sale of TNS Plus in Kazakhstan, our underlying revenue grew by 14.6% in local currency. Direct digital revenue was a standout performer. Growing by 63% to $460,000,000. Reflecting the successful expansion of our digital platform and services. Our revenue growth was driven by market share gains. Disciplined inflationary pricing strategies, and the continued expansion of our digital ecosystems. Taking a closer look at the fourth quarter. We delivered solid results. With total revenue reaching $998,000,000 a 4.7% increase year over year. Adjusting for identified items and the sale of TNS Plus in Kazakhstan, stan, our underlying revenue continued to grow by double digits. Increasing 11.1% in local currency. Direct digital revenue continued to be the key driver growing by 42.4% to $126,000,000 reflecting the ongoing expansion and adaptation of our digital platforms. Turning to profitability. Our EBITDA for 02/2024 reached $1,700,000,000 reflecting 4.9% growth. Adjusting for identified items and the sale of TNS Plus In Kazakhstan, our underlying EBITDA growth was 12% in local currency terms. Our EBITDA margin for the year stood at 42.2%. A decrease of 1.3 percentage points.

And reflects some of the challenges we discussed earlier. With digital at 12% of revenues now, our margin profile is also starting to reflect the combination of higher telco margins coupled with strong but comparatively lower digital margins. We are comfortable with this margin profile as we expect the combination to continue to drive better absolute EBITDA growth. We also note digital businesses have much lower CapEx intensity relative to telco. Hence, we would expect cash generation for both telco and digital to be very comparable as a proportion of revenues.

Focusing on fourth quarter alone, EBITDA reached $4.00 $8,000,000 marking 11.3% year over year increase in reported currency and 14.4% rise in underlying local currency terms. Looking ahead, we remain focused on optimizing our cost structure and enhancing operational efficiency to drive sustainable EBITDA growth. Now shifting our focus to key balance sheet figures. We have significantly strengthened our liquidity position with cash reserves rising 65.6% quarter on quarter to $1,700,000,000 which includes $481,000,000 held at headquarters. As Karl mentioned earlier, we have since received the remaining portion of our receivables from the sale of TNS Plus, and our opcos have upstreamed further dividends as well. All in all, we are in a comfortable position to redeem our debt maturities in 2025. Our net debt to EBITDA ratio, excluding leases, improved to 1.3 times. Down from 1.5x last quarter. This reflects our disciplined approach to debt, management and commitment to maintaining a healthy balance sheet. I will now hand it back over to Kaan.

You, Brooke. As we look back over the last twelve to eighteen months, we have transformed VEON significantly into a leaner, faster and stronger digital operator. We successfully exited Russia. We have scaled our digital operator strategy with great success. We are making good progress on our asset light strategy. We have executed on our share buyback program and relocated our headquarters to Dubai. All these initiatives have not only streamlined our operations, but also sharpened our focus on growth and innovation. Looking forward, we are focused to continue delivering on our strategy. A pivotal milestone ahead is the listing of Kevstar. Offering investors a unique opportunity to participate in Ukraine's recovery and growth potential. Our markets have significant growth potential as our digital operator strategy leave us well balanced in optimally leverage point. We are also exploring accretive in market opportunities that allow us to improve our market position. We will continue to deliver on our asset light which will also improve our operating flexibility while we continue to focus on reducing costs, and overall leverage. We are focused on delivering shareholder value. As I mentioned earlier, we have completed Phase one of our buyback with $30,000,000 Today, I am pleased to announce that our Board has approved Phase two of the buyback for an additional $35,000,000 which will be commencing shortly.

Let me now provide you our outlook and guidance for '25. In local currency terms, we expect total revenue growth of 12% to 14% year on year, EBITDA growth of 13% to 15%. We expect CapEx intensity between 1719%. I will point out that our guidance factors in a blended weighted average inflation rate of 8.2% as of the year end. Do note that our results and guidance in local currency terms for 2025 are likely to be impacted if there is a big change in underlying inflation levels. We are ready to do more in 2025. We look forward to continuing to deliver on strategy and creating sustainable value for our stakeholders. Thank you for your continued support and trust in VEON. Now let's open the line for Q and A. 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, you will receive a message on your screen. Inviting you to join as a panelist. Please accept and wait until you are promoted to a panellist. Please unmute your audio turn on your camera, and ask your question. As a reminder, we are allowing analysts one question and one related follow-up today. Written questions can be submitted on the webcast using the ask a question tab at the top right of your screen. We will pause a moment to allow the cue to form. Our first question comes from David Lopez at New Street Research. Please unmute your line.

Hi. Can you hear me?

Yes. We can. Hi.

Thank you for the opportunity for questions, and congratulations on the solid thousand twenty four performance. [indiscernible] Got three questions, if I may. First one would be on the your full year '25 guidance. Was wondering if you could comment on the key drivers behind the guidance, may I perhaps [indiscernible] countries will contribute the most And on the on CapEx, I was wondering if you could comment on the intensity beyond 02/2025. Then my second question would be on competition. I was wondering if you could talk to us about the latest developments in competition in your main markets. And the last one, a quick one on the on towers. I was wondering if you could update us about your plans and what are the progress on the remaining towers. Thank you very much.

Thank you very much, David. So let me pick questions one by one. Let's start with the 2025 growth expectations and what drives the growth. You know, clearly, our direct digital revenues now reaching almost 12.4% in Q4, I expect this growth to be significant this year as well. I think it would not be a surprise to increase it one percentage point in terms of percentage of the business every single quarter moving onwards. And this is primarily driven by our success in financial service services and entertainment services. But also, let's not forget that our recent acquisitions, including Ooklon, the ride hailing business, will bring us additional revenue potential as we are able to serve the unmet demand in our markets. We are uniquely positioned to be in frontier markets, Our customers are underserved, not getting the services that they deserve, and we will be there to provide them the services in our local markets from Ukraine to Bangladesh. From a country perspective, I do expect Ukraine and also Pakistan and Kazakhstan to continue on very strong growth I do also expect that Uzbekistan with new tax regime will be a strong contributor. Time will tell in terms of how fast the consumer confidence in Bangladesh will come back.

But I have no doubt 180,000,000 population, this country is one of the biggest growth potentials as the time goes on. Now looking to CapEx guidance. We are now almost 65% in terms of five gs penetration And I'm sure the last four years, I have repeated this many times, we see 70% as the sweet spot for our four gs penetration. So probably one, two more quarters, we will be there. But having said that, we are now seeing that. We are successfully competing against five gs.

With our 4.5 gs technology. Which includes virtualization of the core, massive MIMO and carrier aggregation. We will I believe we will be strong in service quality and meeting the expectations of the customers. I do expect first post 2025, our CapEx to go lower towards 16% year on year from the current levels. Looking to competition. Lots of changes happening in different markets. We are welcoming Iliad as a new competitor in Ukraine. We are always excited to compete on fare based terms. We also see a new competitor coming into Kazakhstan. We would like to welcome also Qatari investors in Kazakhstan as the market shows great potential. And clearly, the our ability to go as a digital operator positions now our company, not just with the traditional telecom competitors. And we will be actually keeping a closer eye on this as we progress. With regard to the towers, we still have quite a lot of tower in Ukraine, in Uzbekistan, in Kazakhstan. As you know, this year, we have announced an important deal with Anglo about our towers for more than a $500,000,000 consideration. And I do expect also that to be closed, hopefully, over the next couple of quarters.

But we have a strong commitment in terms of being an asset light company, and we believe the towers are naturally owned by independent tower companies and no telecom company can afford exclusive networks anymore. We will execute on that. Thank you very much, David.

Very clear. Thank you very much.

Our next question comes from David comes from Nicholas Payton at Edison Group. Please unmute your line and ask your question.

Good afternoon, everybody.

So I just have a question on the Hi. I just have a quick question on the guidance.

For 2027. So if look at the the growth for 2025 that you're looking for, it seems to leave quite a lot for 2026 and 2027 to be able to hit your 16 to 19 CAGR for the entire period. Is there something that is there something that we're missing out of the equation? Is it does it include acquisitions? Or are you expecting the organic growth to accelerate in the latter two years for the guidance period?

Nicolas, thanks a lot for asking the question and also giving me the opportunity to clarify. Local currency growth rates and are clearly a function of the inflation. Right? So that's why when I refer to our growth rates, I always refer to the weighted average inflation rate in the countries. And of course, in our three year plan, we talked about 16%, 19% CAGRs. But you have to keep in mind that in those days, when we gave those numbers, the weighted average inflation was almost 14% in the markets that we were operating at. And I have said in that day as well, this growth rate implies actually a mid single digit dollar growth in hard currency over the time and double digit EBITDA growth in the same period. So I am not worried about not meeting those targets. I think we will always be delivering above inflation and above nominal GDP growth and that will bring us where we need to be in terms of our hard currency numbers.

Perfect. That makes more sense. Thanks, guys.

Thank you, Nicholas.

Thank you. Our next question comes from Chris at New Street Research. Please unmute your line and Had a couple of questions if possible. I I wanted to get a bit more detail on the strategic rationale behind the acquisition of the ride hailing business in Ukraine. [indiscernible] also just thinking is that gonna be a feature going forward that you're gonna be making acquisitions in the digital space? And then the second question would be around Ukraine and sort of what is baked into your assumptions when you're giving the guidance for, you know, the political situation in Ukraine. And and I suppose what would be the flex if if if it changes relative to your central case?

Chris, thank you very much. Please drive safely. Uclone is a very important acquisition that signals our intentions in terms of being relatively important in the lives of our customers. Ooklon is one of the unique EBITDA positive cash generative ride hailing businesses in the entire world. We are looking for a company which has been growing on average for 49% CAGR over the last four years, reaching almost $60,000,000 revenues. And we've had EBITDA of 44%. If I look to the entire world, I do not know any other ride hailing business which can hit these numbers. But more importantly, in frontier markets, we see an unmet demand in many areas with our customer base. Therefore, as we move into digital services, we believe ride hailing and delivery services, including marketplaces, are a natural part of our super app feature set. So you will see us getting active on all countries. And also, you will see us actually getting Ooklon replicated in other countries that we operate as well. Coming to great. We have been in this war situation for three years. I believe that there is light at the end of the tunnel that will bring sustainable peace to Ukraine.

Whether this peace process will be six months or a year, actually, our plans does not change. We focus on what matters and it is our customers. And during these three years, I think we have demonstrated how resilient we are and how capable we are in terms of growing our business in the worst even conditions. So we are planning for actually for better days, but we are ready to take the worst as well.

Okay. Thank you. Next question comes from Dmitry Ivanov at Jefferies.

Please turn on your camera, unmute your line and ask your question. Thank you.

Dmitry, you're on mute. I think we can't hear you. Can you hear me now? Can't hear you. Oh, yes. We can hear you. We can hear you now.

Yeah. Apologies for the technical glitch. Yeah. Thank you for the presentation. And congrats on results. I have two quick questions, if I may. The first one would be on expected use of proceeds from [indiscernible] how do you plan to use this proceeds? Like, how much is expected to up into the whole core level? And what's, kind of expectation when it comes to deployment of this cash? And the second question would be on your capital market access Eurobonds. So basically, after you repay twenty twenty five bonds, I'm just curious how do you see and what's your time line to come back to the Eurobond market to re queue with a new bond? And how how do you see, like, your need in this new euro bonds in the coming, like, month or quarter? That's my second question. You very much.

Thank you very much. I will take the first question, and I will ask Burak to answer the second one. With regard to our tower deal, in Pakistan, total proceeds from tower deal will be on the upside of $550,000,000 And it will be a combination of cash payments and also some guarantees over intercompany loan that we have with the tower company. We expect these proceeds to be used for deleveraging both at local level and also at corporate level. We have no issues in terms of cash from Pakistan and the stability of macroeconomic environment in Pakistan has been stellar over the last twenty four months. And I think, you know, this partnership will with Engro will have a potential to also to expand out of Pakistan. And we are very happy to partner with one of the most reputable and strong companies in Pakistan.

On the Eurobond question, we are now ready with the cash flow that we have built in the HQ to pay our April and June obligations this year. Going forward, we need to understand that we are going to capitalize from our assets and and put them into our war chest in the center. If there is a need, we will definitely go back to Eurobond markets. Not as of today. I mean, there is no consideration that that we see today that has the need to for us to go to your bond markets again in the near term.

And Dimitri, one maybe thing I would like to add here We are in frontier markets. We make our money in TAKAS, TENGAS, RUPES, RIVNAS, I do not necessarily see that it is a good practice to borrow in hard currency in this type of environment. And in the path of asset to light, there is ample opportunity for us actually to recycle our hard currency debt at headquarters with local currency leverage, long term capital liabilities in the local markets. And you will see us making those transformational changes just like we have done over the last three years.

Thank you very much and congrats on the results again. Thank you.

Thank you, Dmitry.

Our next question comes from Matthew Harrigan at Benchmark. Please ask your question.

Thank you. I actually have two. I'll do them sequentially because I think it's easier You're to be commended on the progress on the digital portfolio now with Ooklawn and then Cosco LLM, I think is particularly interesting as I think a lot of management teams would just be distracted watching Trump and Zelensky and Putin every day. But how is it that you really opt optimally monetize what's a pretty remarkable portfolio this point. I mean, clearly those businesses are integral to your competitive positions in Pakistan, you Ukraine, etcetera. But I mean, there are companies, Liberty Global, for instance, that occasionally divests what it regards as non strategic from their venture. Portfolio and clearly these businesses have a lot of growth potential, you're probably nowhere near doing that I know you're not going to do something exotic like a tracking stock, but and hopefully when the Jazz IPO I think you had 25% of your revenues there from digital that will get more of a quasi digital type valuation. But where's your thinking on that? Because clearly you've got a tremendous glide path on the growth in these businesses in the market. Even with your very good stock performance recently close to giving you recognition compared to the peer evaluations in some of these businesses.

I guess you're very fortunate to be able to buy Kukon I think for $125,000,000 it was. It feels like you can do a lot of accretive acquisitions as well. Thank you. Apologize for a long question.

No, Matthew, thank you very much. 155, by the way, long for 97% of But we are blessed because as a company, we are in frontier markets, large population actually the people are underserved on all of the verticals that we discuss about, including enterprises being underserved on, you know, services, cloud, but consumers as well. And they don't have access to actually transaction capabilities. They don't have credit cards. They don't have ability to pay offshore subscription fees. These are unique opportunities for us. And actually, we as a company with a telecom license has the unique capability to acquire customers at a very low cost and distribute services in a very efficient manner. When you move to this space, large populations, underserved customers, unmet demand, low customer acquisition cost and efficient distribution, this is a recipe for success for any kind of digital service. That's why every digital service we launch is showing great success in the markets that we operate in. As we do this, some of our businesses are clearly signaling unicorn type of characteristics. One of them is clearly JazzCash. Which has now reached 20,000,000 monthly active users and almost $400,000,000 float and 140,000 loans, nano loans, every single day.

And it is not a mistake that I'm doing while saying this. Every single day, we issue 40,000 loans, 30 to $40 loans. The loans that are used by maybe a taxi driver to fill his his tank or change his flat tire or a housewife to buy flour, sugar, and eggs to cook a cookie and sell. It's an amazing platform. And clearly, at certain point, we see actually these businesses to be stand alone success stories themselves. I think that time is coming. As we look into the further listing of our local operators, which are blue chip stocks in the countries that they operate in, please do not be surprised if we bring certain assets with big customer bases and revenue potential also in strategic value crystallization transactions.

And then secondly, and there's as you pointed out, just earlier, mean, you're very careful on not having currency mismatch is operationally and particularly in the financing side. With hard currencies. But needless to say with the trade policies right now, Ontario I mean, a lot of companies in The U. S. And Europe are very concerned about the economic situation. And clearly you're providing necessary services. And again, I mean, you're and sometimes you're the only alternatives as with JazzCash. But how do you see your growth depending on economic conditions if there is a recession? I mean, you think you might be significantly harder hit than U. S. Or European companies or do you think there's enough growth in these markets that you can actually weather it decently well?

Well, I think there is one fact in our business that you cannot beat macro. Right? And we have to be realistic about But given the current conditions, I believe that as US, sets out a road map for being a manufacturing base, and being an exporting country, I think this will signal a balancing of the current account deficit, and this potentially signals more stability with a weaker dollar and a stable foreign currency market for emerging I count on actually this trend to realize over the time. Now that doesn't mean that a weak U. S. Dollar going to loosen the position or weaken the position of dollar as a reserve currency. I think these two things can happen at the same time. But I do believe over the next five years, we're going to see a relatively stable foreign currency environment in our markets compared to the past. And also, I believe the oil prices will moderate, and that will also help the inflation levels to go lower than they are today. So I believe our businesses is mainly driven by domestic growth, and consumer confidence. And I'm feel quite actually bullish about that trend to continue as well.

So compared to the last five years, I think the next five years probably will show more stability in our markets in terms of foreign currency fluctuations.

And then lastly, if you don't mind, I'll be a hog and ask one more question. I mean, clearly, everyone wants to see a resolution in Ukraine. But if we did get a fringe outcome that was less favorable, do you feel that your status as a Dubai company somewhat enables you to be agile in addressing whatever political situation comes along. I mean, if there was to be a change of government in and more [indiscernible] Do you think you can get through almost any condition that arises and wind you down the conflict?

Look, I do You have a lot of experience with Russia and all that.

I I wish the best, the sustainable piece for Ukraine. We have been in a difficult period in the last three years We have demonstrated our resilience And the secret sauce of this, Matthew, is to focus on what matters. It's our customers. And we will keep our service continuity in place We will continue servicing our customers in the best way. And I will refrain from speculating on what can happen over the next couple of months. Thank you.

Yes, it's an awkward question. But thank you for your answers and congratulations on the results.

Thank you very much.

Thank you. At the moment, we have no more raised hands. So I will hand it back over to Anand for closing remarks.

Well, thank you very much for your continued support and trust VEON. I do see some more typed questions out there, and we will the investor relations team will get back to you. Needless to say, any questions anytime, do feel free to get in touch with us. Kan pointed out, we look we are focused to continuing to deliver to our strategy. Look forward to seeing you all again in a quarter's time, if not before that, to update you of the progress we'll continue to make. Thank you again for taking the time. You for your support. Bye bye. Thank you very much.