Q4 2023 VEON Ltd Earnings Call
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Faisal Ghori: The participants will start in one minute. Hi, good afternoon. Good morning to everyone. Thank you for joining us today for VEON's fourth quarter results presentation for the period ending December 31, 2023. I'm Faisal Ghori, Head of Investor Relations. I'm pleased to be joined in the room today by Kan Terzioglu, our Group CEO, along with Joop Brakenhoff, our Group CFO. Today's presentation will, as is usual, begin with the key highlights and business updates from Kahn. Following a discussion of the detailed financial results by Joop, we'll then hand it back to Kahn to discuss our outlook and priorities for 2024. We will then open up the line for Q&A. Before getting started, I would like to remind you that we may make forward-looking statements during today's presentation, which involve certain risks and uncertainties, these statements relating partly to the company's anticipated performance and guidance for 2024, future market developments and trends, operational network developments and network investments, and the company's ability to realize its targets in commercial and strategic initiatives, including current and future transactions. Certain factors may cause actual results to differ materially from those in the forward-looking statements, including risks detailed in the company's annual report on Form 20-F and other recent public filings made by the company with the SEC.
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Hi, good afternoon, good morning to everyone. Thank you for joining us today for beyond fourth quarter results presentation for the period ending December 31, 2023, I'm vessel hoary head of Investor Relations I'm pleased to be joined in the room today by contours yellow our group CEO along with your broken up our group CFO.
Today's presentation will as is usual begin with the key highlights and business updates from Con following discussion of detailed financial results by Yo will then hand, it back to com to discuss our outlook and priorities for total 24. We will then open up the line for Q&A before getting started I would like to remind you that we may make forward looking statements during today's presentation, which involve certain risks.
And uncertainties. These statements relating partly to the company's anticipated performance and guidance for 2020 for future market developments and trends operational network developments and network investments and the company's ability to realize its targets and commercial and strategic initiatives, including current and future transactions certain factors may cause actual results to differ materially.
<unk> from those in the 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.
Faisal Ghori: The earnings release and the earnings presentation, each of which includes reconciliation of non-IFRS measures presented today, can be downloaded from our website. We also note that today's presentation will include ratings from credit agencies. A rating is not a recommendation to buy, sell, or hold securities and may be subject to revision or withdrawal at any time.
Speaker Change: The earnings release and the earnings presentation. Each of which include reconciliation of non <unk> measures presented today can be downloaded from our website. We also note that today's presentation will include ratings from credit agencies, a rating is not a recommendation to buy sell or hold securities and may be subject to revision or withdrawal at anytime with that let me hand, it over to <unk>.
Muhterem Kaan Terzioglu: With that, let me end it by saying, Thank you, Faisal. Good morning. Good afternoon.
Thank you if I so good morning, good afternoon.
Muhterem Kaan Terzioglu: Happy Navruz, Ramadan Kareem to all. Thank you for joining our fourth quarter 2023 and full year results webcast. Before we get into the details, allow me to turn and zoom out and refresh our memory. When the Russia-Ukraine war started, we made a choice.
<unk> ruche Ramadan Kareem to all.
Speaker Change: Thank you for joining our fourth quarter 2023, and full year results webcast.
Before we get into the detail allow me to turn and new modes and refresh our memory.
Speaker Change: When Russia, Ukraine War started we made a choice we chose Ukraine.
Muhterem Kaan Terzioglu: We chose Ukraine. Our exit from Russia has resulted, as you can see in the full year results, in a very different VEON. We might be more compact, in terms of a balance sheet half the size, but today we are a much faster growing company with a very healthy balance sheet. We continued delivering strong results in Q4 2023; normalized revenues were up 18% year on year, and normalized EBITDA grew even faster at 25% year-on-year. For the full year, we had 18% top line growth, 20% EBITDA growth, and 53% free cash flow growth, taking the free cash flow yield of 24%. Such results make us extremely satisfied. Our decentralized operational model with world-class governance allows us to build a leaner, faster, more profitable, and more cash-generative company. However, our local brands may be different. Jazz in Pakistan, Kievstar in Ukraine, BanglaLink in Bangladesh, Beeline in Uzbekistan and Kazakhstan. Names and brands may be different.
Speaker Change: Our exit from Russia resulted as you can see in full year results in a very different view.
We might be more complex in terms of balance sheet off the size, but today, we are a much faster growing company with a very healthy balance sheet.
We continued delivering strong results in Q4 2023.
Speaker Change: Normalized revenues were up 18% year on year.
Speaker Change: And normalized EBITDA grew even faster at 25% year on year.
Speaker Change: For the full year, we have 18% topline growth, 20% EBITDA growth and 53% free cash flow growth.
Speaker Change: Taking the free cash flow yields.
Speaker Change: Of 24%.
Speaker Change: Such results makes us extremely satisfied.
Speaker Change: Our decentralized operational model with World class governance allows us to build a leaner faster more profitable and more cash generative company.
Speaker Change: Our local brands may be different jazz in Pakistan Kids started in Ukraine, Bonga, Lincoln, Bangladesh, Beeline, and as Vicki spun in Kazakhstan.
Names brands may be different.
Muhterem Kaan Terzioglu: But they all execute the same strategy, drive for the same targets, and grow faster than their local competition. In the majority of our markets, we have the highest net promoter scores, the fastest broadband networks, and we are not only gaining market share, but also gaining wallet share. VEON today is resilient; it is strong. It is tough, which takes me to Kiev, Star, and Ukraine.
Speaker Change: But they all ex secrets the same strategy.
Speaker Change: The drive for the same targets and they grow faster than their local competition in.
Speaker Change: In the majority of our markets, we have the highest net promoter scores fastest broadband networks and we are not only gaining market share, but also gaining wallet share.
Speaker Change: We are today is resilience it is strong.
Speaker Change: Beyond his staff, which takes me to kick started a grade.
Muhterem Kaan Terzioglu: I want to thank our CEO, Alexander Komarov, and his exceptional team. In the aftermath of the cyber security attack on December 12 on our network, thanks to their swift response, as of yesterday, we have surpassed the activity levels in terms of the number of customers, data consumption, voice calls, roaming users, TV Entertainment Consumers, as well as Health Services Consumers, and we are even more than pre-attack level. Moving on, let me also speak a little bit about our ongoing integration into capital markets. I'm happy to see that we are reintegrating into the capital markets community. Recently, we attended New Street Research's BCG conference this past quarter, and we have also attended J.P. Morgan and EFG conferences in the past few weeks. Currently, our securities are covered by Barclays, New Street Research, Inam, Telemer, and Imperial Capital.
I want to thank our CEO Alexandre Komodo and his exceptional team.
Speaker Change: In the after math of the cyber security attack on December 12 on our network. Thanks to their Swift response as the op yesterday, we have surpassed the activity levels in terms of number of customers data consumption voice calls roaming users.
Speaker Change: TV entertainment consumers as well as health services consumers.
Speaker Change: And we are even more than pre attack levels.
Speaker Change: Moving on let me also speak a little bit about our ongoing integration into capital markets I'm happy to see that we are reintegrating to the capital markets community.
Speaker Change: Recently, we attended New Street Research BCG Conference. This past quarter and we have also attempted J P Morgan and EOG conferences in the past few weeks.
Speaker Change: Currently our securities are covered by Barclays, New Street research in Telemark and Imperial capital in.
Muhterem Kaan Terzioglu: In recent weeks, Standard & Poor's and Fitch issued their ratings on our company, and MHCI rated us AA for ESG, putting us into the leaders category. If we haven't had a chance to communicate with you directly, please reach out to Faisal and our investor relations colleagues. I want to talk about AI for a moment. Not because everybody talks about it, not necessarily because I see AI as a tool to save costs. But because what matters?
Speaker Change: In the recent weeks standard <unk> Poor's and Fitch issued their ratings about our company and M. A C. I rated us double a for ESG, putting us into the leaders category.
Speaker Change: If you haven't had a chance to communicate with you directly please reach out the feis out in our Investor Relations colleagues.
Speaker Change: I want to talk about AI for a moment.
Not because everybody is also about its not necessarily because I see AI as a tool to save costs.
Speaker Change: But because what matters.
Muhterem Kaan Terzioglu: What matters is our customers. How can we make a doctor in Dhaka the best doctor? How can we make a teacher in Islamabad the best teacher? An auto mechanic, a farmer, a small business owner, smarter and more efficient.
Speaker Change: What matters is our customers.
Speaker Change: Ill give you make a doctor in Deca the best sector.
How can we make a teacher in a sum of up the best teachers and auto mechanic, if farmer, a small business owners smarter and more efficient.
Muhterem Kaan Terzioglu: We are excited to make this happen. This is what we call AI 1440, augmented intelligence for every single minute of the day. All our operating companies are working with the leading research institutions in their respective countries to develop small language models and job-specific language models. We can create AI-based language-specific models in Punjabi, Urdu, Bengali, Kazakh, Uzbek, and Ukrainian to respond to the needs in our markets with augmented intelligence. There is nothing artificial about AI.
Speaker Change: We are excited to make this happen.
Speaker Change: This is what we call AI 14, 40 augmented intelligence in every single minute in a day.
Speaker Change: All our operating companies are working with the leading research institutions in their respective countries to develop small language models and job specific language models.
We can create AI based language specific models in congestion overdue Bengali kazak earthquake and in Ukrainian to respond to the needs in our markets with augmented intelligence there.
Speaker Change: There is nothing artificial about AI.
Muhterem Kaan Terzioglu: There is a way of using augmented intelligence purposefully. For example, I cannot see a better value proposition than making our customers successful. In the upcoming slides, I will outline the key achievements from the fourth quarter of 2023, followed by a detailed review of each country's operations and their ongoing implementations of VEON's digital operator strategy. Towards the end of my presentation, I will provide an in-depth update on these developments before handing it to Joop. What is VEON 2.0?
Speaker Change: There is a way of using augmented intelligence purposefully I cannot see a better value proposition than making our customers successful.
Speaker Change: In the upcoming slides I will outline the key achievements from the fourth quarter of 2023, followed by a detailed review of each country's operations and their ongoing implementations of beyond digital operator strategy.
Towards the end of my presentation I will provide an in depth update on these developments before handing it to Europe.
Speaker Change: What this we onto the zero.
Muhterem Kaan Terzioglu: You can see on this slide five key pillars. Pillar number one is achieving double-digit growth. Through diligent efforts and establishing a new growth baseline, we have demonstrated our capability and commitment to sustain double-digit growth trends. We call it fair market growth in line with nominal GDP and growth in our market. We have 520 million customers or potential customers and people living in our country. However, only one out of two have access to a proper, robust broadband service.
Speaker Change: You can see in this slide five key pillars.
Speaker Change: Pillar number one achieving double digit growth.
Speaker Change: Through diligent efforts in establishing a new growth baseline, we have demonstrated our capability and commitment to sustained double digit growth sense.
Speaker Change: We call it fair market growth in line with nominal GDP and growth in our markets.
Speaker Change: We have 520 million customers or potential customers and people living in our countries.
Speaker Change: Only one out of to have access to a proper robust broadband service.
Speaker Change: Only two out of 10 has an access to a proper financial service.
Muhterem Kaan Terzioglu: Only 2 out of 10 has access to a proper financial service. We believe the organic growth potential in our markets will be exponentially increased as we tap into adjacent markets such as financial services, entertainment, education, and healthcare. Pillar number two, expanding margins. Our growth trajectory will facilitate margin expansion given operational leverage and enhanced cost management. As this year has demonstrated, we are very effective when it comes to cutting costs from our HQ costs and also OPEC. Pillar number three, maintaining a robust balance sheet. Based on recent experiences, the importance of a solid balance sheet is very clear.
Speaker Change: We believe the organic growth potential in our markets will be exponentially increase as we tap into the adjacent markets such as financial services Entertainment Education and health care.
Speaker Change: Pillar number two expanding margins.
Speaker Change: Our growth trajectory will facilitate margin expansion, given operational leverage and enhance cost management.
Speaker Change: As this year has demonstrated we are very effective when it comes to the cutting costs out of our HQ costs and also opex.
Speaker Change: Pillar number three maintaining a robust balance sheet.
Speaker Change: Based on recent experiences the importance of a solid balance sheet is very clear we.
Muhterem Kaan Terzioglu: We will continue to de-leverage and optimize our capital structure. We no longer need excess cash for liquidity, and you will see us getting more effective in cash management, having an impact on interest expenses. Pillar number four, generating more cash.
Speaker Change: We will continue to deleverage and optimize our capital structure.
Speaker Change: We no longer need excess cash for liquidity and you will see us getting more effective in cash management, having an impact on interest expenses.
Speaker Change: Pillar number four generating more cash.
Muhterem Kaan Terzioglu: Growing Revenue, Cost Management, and Less Interest Expense will also be accelerated by moderation in investment. As we reach our 70% 4G penetration, which is already exceeded in some countries, you will see us moderating our investment. All these three elements, with the investment focus, will significantly increase our cash flow generation capability. Pillar number five is advancing our digital operator vision. All the customers we have in the countries that we operate in deserve the services of any developed market.
Speaker Change: Growing revenue cost management less interest expense will also be accelerated by moderation in any vessels as.
Speaker Change: As we reach our 70% for G penetration and already exceeded in some countries you will see us moderating our investments.
Speaker Change: All these three elements with the investments focus will increase significantly our cash flow generation capability.
Speaker Change: Pillar number five advancing our digital operator vision.
Speaker Change: All the customers we have in the countries that we operate in.
Speaker Change: They deserve the services of any other developed markets.
Muhterem Kaan Terzioglu: You will see us serving this unmet demand when it comes to entertainment, financial services, education, and healthcare. And this will accelerate even the organic growth factors from 4G penetration, smartphone penetration, as well as the natural demographic flow. On top of this, you will see us integrating augmented intelligence and capabilities into our services in all markets.
Speaker Change: You will see us serving this unmet demand when it comes to entertainment financial services Education and health care.
Speaker Change: And these will accelerate even the organic growth sectors from Ford Humanization smartphone penetration as well as the nature of demographic flows.
Speaker Change: On top of this you will see us integrating augmented intelligence and capabilities to our services in all markets.
Speaker Change: Let's move to the next slide.
Muhterem Kaan Terzioglu: During my presentation, I will concentrate on normalized constant currency growth rates, which more accurately reflect the true underlying growth trends and operational achievements across our operating companies. In 2023, we achieved growth of 18% year-on-year revenue in normal local currency terms. Service revenues rose at a similar rate, up 18%, again in normalized local currency terms.
Speaker Change: During my presentation, I will concentrate on normalized constant currency growth rates, which more accurately reflects the true underlying growth trends and operational achievements across our operating companies.
In 2020, we achieved growth of 18% year on year revenue.
Speaker Change: In normal local currency terms service revenues rose at a similar rate up 18% again in normalized local currency terms.
Muhterem Kaan Terzioglu: Local currency normalized EBITDA expanded in 2023 at a rate of 20% year-on-year, and this is indicative of positive operating leverage and sound execution on the cost management program. The financial results for 2023 showcase our businesses' inherent and robust capacity for generating strong free cash flow. Equity-free cash flow increased 53% to $434 million. This results in a free cash flow yield post-interest expenses of 24% for VEON. Our balance sheet remains strong, with a cash position of 1.7 billion.
Speaker Change: Local currency normalized EBITDA expanded in 2020 at a rate of 20% year on year and it is indicative of positive operating leverage and sound execution on cost management programs.
Speaker Change: The financial results for 2023 showcase our businesses inherent in robust capacity for generating strong free cash flow.
Speaker Change: Equity free cash flow increased 53% to $434 million.
Speaker Change: This results in a free cash flow yield cost interest expenses of 24% or beyond.
Speaker Change: Our balance sheet remains strong with a cash position of one 7 billion.
Muhterem Kaan Terzioglu: Of this, $1.3 billion is held at headquarters level as of December 31. Later in this presentation, Joop will provide an update on our pro forma liquidity status, which takes into account the completion of our exit from Russia and early redemption of our 23 and 24 notes in October. Let me share the details of the one-off items that have impacted our performance of the group for 23. Number one is tax-related one-offs in Pakistan and Uzbekistan. In 2022, we had some landmark court cases.
Speaker Change: Of this 1.3 billion is held at headquarters level as of December 31.
Speaker Change: Later in this presentation Europe will provide an update of our pro forma liquidity status, which takes into account the completion of our exit from Russia and early redemption of our 'twenty three and 'twenty four notes in October.
Speaker Change: Let me share the details of the one off items that have impacted our performance of the group for 'twenty three.
Speaker Change: Number one is tax related one offs in Pakistan as Vicki stopped.
Speaker Change: In 2022, we have some landmark court cases.
Muhterem Kaan Terzioglu: Second, one of expenditures in HQ, including our expenditures related to Russia's exit. Number three, charitable donations in Ukraine and the cyber attack impact. You can see all the numbers related to those three elements on this slide.
Speaker Change: Positive for us, resulting in a positive decision.
Speaker Change: Second one of expenditures in HQ, including our expenditures related to Russia exit <unk>.
Speaker Change: Number three charitable donations and a crane and the cyber attack impact you can see all the numbers related to those three elements up in the slides.
Muhterem Kaan Terzioglu: After adjusting for these factors, VEON's organic like-for-like growth in 2023 continues to lead the sector, showcasing an impressive year-on-year growth of 18% and a 20% increase in EBITDA. Taking these into account, Q4 2023 Organic Life-4-Life Growth at VEON would be 18% growth in revenue and 25% growth in EBITDA. For the full year revenue group, 18% and the ABTA group, 20%. Let's move to the next slide.
Speaker Change: After adjusting for these factors beyond organic like for like growth in 'twenty three continues to lead the sector.
Speaker Change: <unk> casing, an impressive year on year growth of 2018, and 20% increase in EBITDA.
Speaker Change: Taking these into account Q4, 2020 organic like for like growth at beyond would be 18% growth in revenue and 25% growth in EBITDA.
For the full year revenue grew 18% and EBITDA grew 20%.
Speaker Change: Let's move to the next slides.
Muhterem Kaan Terzioglu: In the fourth quarter, we once again achieved double-digit growth at 18%. Local currency normalized EBITDA for the fourth quarter was 25%, which excludes one of the impacts that I have mentioned. In terms of reported dollars, we experienced a 1% increase in both total revenues and service revenues for the fourth quarter. Capital expenditures decreased 2% year on year, totaling $258 million for the fourth quarter, and CAPEX intensity on a 12-month basis has come in at 17.6%, in line with our guidance.
Speaker Change: In fourth quarters, we once again achieved double digit growth at 18%.
Speaker Change: Local currency normalized EBITDA.
Speaker Change: On fourth quarter at 25%, which excludes one off impacts as I have mentioned.
Speaker Change: In terms of reported dollars, we experienced a 1% increase in both total revenues and service revenues for the fourth quarter.
Speaker Change: Capital expenditures decreased 2% year on year totaling 258 million for the fourth quarters and Capex intensity on a 12 months basis.
Speaker Change: Has come in at 17, 6% in line with our guidance.
Muhterem Kaan Terzioglu: Let's look at our portfolio country by country. In Ukraine, Kyivstar achieved a full-year double-digit growth in local currency. This success reflects the team's dedication to keeping Ukraine and its citizens connected, while also maintaining robust business performance.
Speaker Change: Let's look at our portfolio of country by country in Ukraine Kids STAAR achieved their full year double digit growth in local currency. This success reflects the team's dedication to keeping the crane and its citizens connected while also maintaining robust business performance.
Muhterem Kaan Terzioglu: In our Central and South Asian markets, local currency service revenue growth for the year varied between 14.6% in Bangladesh and 23.7% in Pakistan. As for ABTA performance, excluding Ukraine, we saw local currency ABTA growth ranging from 14.8% in Uzbekistan to an impressive 30% in Kazakhstan. Very balanced performance across our country.
Speaker Change: In our central and South Asian markets local currency service revenue growth of the year varied in between 14, 6% in Bangladesh to 23, 7% in Pakistan.
Speaker Change: As for EBITDA performance, excluding Ukraine, we saw local currency EBITDA growth ranging from 14.8%. It is big stuff to an impressive 30% in Kazakhstan.
Speaker Change: Very balanced performance across our countries.
Muhterem Kaan Terzioglu: Looking specifically to Q4 on the next page, you will see that year-on-year local currency service revenue growth ranged from 8.6% in Bangladesh to 28.5% in Uzbekistan. Again, from an ABTA perspective, excluding Uzbekistan and Ukraine, local currency ABTA grew at rates ranging from 23.3% in Pakistan to 30.1% in Kazakhstan, and ABTA expansion is visible in all the markets. Slide 12 takes us a little bit back into history.
Speaker Change: Looking specifically to Q4 in next page you will see that year on year local currency service revenue growth range from eight 6% in Bangladesh to 28, 5% in Uzbekistan.
Speaker Change: Again from an EBITDA perspective, excluding Uzbekistan in Ukraine local currency EBITDA grew as range at rates ranging from 23, 3% in Pakistan to Turkey, 0.1% in Kazakhstan, and EBITDA expansion is visible in all the markets.
Speaker Change: Slide 12 takes us a little bit back into the history.
Muhterem Kaan Terzioglu: And you see how from 2020 to 23, the growth patterns of our different companies and, on average, have varied and are now systematically beating inflation. A minus 2% decline in 2020 in local currencies expanded to 10% in 21, 13% to 22, and in 23, we have reached 18%. As the dotted line symbolizes inflation, you can see that this reflects a nominal GDP-aligned growth rate for our market.
Speaker Change: And you see how from 2022 23, the growth patterns of our different companies and all on average has varied and systematically now beating the inflation.
Minus 2% declines in 2022 20 in local currencies expanded to 10% in 'twenty, 113% to 22, adding 23, we have reached 18%.
Speaker Change: As the dotted line symbolizes inflation you can see that this reflects a nominal GDP align growth rate for our markets.
Muhterem Kaan Terzioglu: Where is the growth coming from? Let's look at our 4G and multiplayer highlights. During the year, 4G users were up 11% to 94 million in Q4. 4G penetration rose six percentage points to 60%, bringing us ever closer to our group target of seven.
Speaker Change: Where is the growth coming from <unk>.
Speaker Change: Let's look into our four G and multi play highlights.
Speaker Change: During the year forging users were up 11% to $94 million in Q4.
Speaker Change: For G penetration rose six percentage points to 60%, bringing us ever closer to our group target of 70.
Muhterem Kaan Terzioglu: We see the compounding effect of 4G for all and digital operator strategies in our multiplayer segment. Expanding 4G access enables us to convert more single-player users to multiplayer subscribers. Multiply subscribers use both 4G connectivity and digital products; they spend more time on our applications. They stay longer with our services, churn less, and drive higher revenue generation. In Q4, Multiplay Segment revenue represented 33% of our group's total revenues and grew 35% year-on-year. R2Growth from different countries ranged from 5% to 25% year-on-year in local currency. Let's look into Kyivstar in more detail.
Speaker Change: We see compounding effect of four G parole and digital operators strategies in our multi play segments.
Speaker Change: Expanding forgey access enables us to convert more single player users to multi play subscribers.
Speaker Change: Multi play subscribers use both for G connectivity and digital products they spend more time on our applications.
Speaker Change: They stay longer with our services churn less and drive higher revenue generation.
In Q4, multi play segment revenue represented 33% of our group total revenues and grew 35% year on year.
Speaker Change: <unk> growth.
Speaker Change: From different countries range from 5% to 25% year on year in local currency.
Speaker Change: Let's look into can't start in more detail give STAAR achieved double digit growth in both local currency revenue and service revenue for the entire year of 2023.
Muhterem Kaan Terzioglu: Kyivstar achieved double-digit growth in both local currency revenue and service revenue for the entire year of 2022. This growth was bolstered by an uptick in 4G penetration and increasing customers opting for both double play and triple play services. VEON and Kyivstar are committed to supporting Ukraine.
Speaker Change: This growth was bolstered by an uptick in four G penetration and increase in customers opting for both double play in multiple services.
Speaker Change: We own and Kia start are committed to supporting Ukraine.
Muhterem Kaan Terzioglu: Both in our everyday efforts to keep Ukraine and Ukrainians connected and with our long-term commitment to invest in rebuilding Ukraine's mobile telecoms infrastructure. In 2023, CAPEX increased 7% year-on-year, and Kyivstar reconnected 190 communities to its 4G network in 2023, 15 of them were reconnected multiple times.
Speaker Change: Both in our everyday and efforts to keep a crane and cranial connected and with our long term commitment to invest in rebuilding who cranes mobile telecoms infrastructure.
Speaker Change: In 2023 Capex.
Speaker Change: Capex increased 7% year on year, and kids Star Reconnected Hunter than 90 communities to its <unk> network in 2023 15.
Speaker Change: <unk> 15 of them were reconnected multiple times here.
Muhterem Kaan Terzioglu: KFSTAR has also made significant progress to ensure network resilience with power storage and generation capacities and capabilities installed across key sites. As part of its 4G everywhere strategy, Kyivstar upgraded approximately 4,000 4G base stations, established 1,000 new 4G sites throughout 2023, and upgraded many sites to battery power, which could last up to 72 hours in the middle of a war. Kevstar continues to grow its 4G user base, reaching 14.3 million in the fourth quarter, increasing 60% of its customer base. Health is the furthest along in terms of our digital health care offerings across our portfolio.
Speaker Change: <unk> has also made significant progress to ensure network resilience with power storage and generation kit capacities and capabilities installed across key sites.
Speaker Change: As part of its forgey everywhere strategy. He have star upgraded approximately 4004 <unk> base stations established 1000, new four <unk> sites throughout 'twenty, three and upgraded many sides to battery powered which could last up to 72 hours in the middle of a war.
Speaker Change: Gifts or continues to grow its forgery user base, reaching $14 3 million in fourth quarters rising 60% of its customer base.
Speaker Change: Healthy is furthest along in terms of our digital health care offerings across our portfolio.
Muhterem Kaan Terzioglu: It provides online consultations with medical professionals and is a vital part of Kyivstar's digital operator portfolio. Health Ukraine continues to power digital healthcare in Ukraine, with more than 27 million registered patients, 10% year-on-year growth, having access to almost 1,600 active healthcare institutions, 37% year-on-year growth, and more than 37,000 specialists active on the platform. 20% year-on-year growth. Healthy mobile app downloads increased 43% year on year and reached 19 million in the fourth quarter, helping our clients to book 2 million appointments through the platform during the reported fourth quarter, which is 39% more than last year. Let me pause here for a second and share with you a few points regarding Ukraine. We are fully committed to Ukraine. We stand with our church.
Speaker Change: It provides online consultations with medical professionals and is a vital part of kids stores digital operator portfolio.
Speaker Change: Household crane continues to power digital health Killen grade with more than 27 million registered patients 10% year on year growth.
Speaker Change: Having access to almost 1600 active health care institutions, 37% year on year growth and more than 37000 specialists active on the platform, 20% year on year growth.
Speaker Change: Healthy mobile App downloads increased 43% year on year and reached 19 million in the fourth quarters, helping our clients to book 2 million appointments through the platform during the reported fourth quarters, which is 39% more than the last year.
Speaker Change: Let me pause here for a second and share with you a few points regarding Ukraine.
Speaker Change: We are fully committed to crane.
Speaker Change: We stand with our choice.
Muhterem Kaan Terzioglu: The Ukrainian people and their future is our future, our people. We are a vital provider of communication, and we play a critical role in ensuring digital services to the country. We remain actively engaged with Ukrainian officials. A delegation from VEON, including myself and Secretary Pompeo, visited Kyiv recently, and we are in constant coordination with them to help ensure that Kyivstar continues to deliver vital communication services and addresses any possible concerns the Ukrainian government may have. Moving to Pakistan
Speaker Change: <unk> people and their future is our future our people.
Speaker Change: We are a vital provider of communication and the we play a critical role in ensuring digital services to the country.
Speaker Change: We remain actively engaged with Ukrainian officials at.
Speaker Change: A delegation from beyond including myself and secretary upon pill visited Kia recently, and we are in constant coordination with them to help ensure that <unk> continues to deliver vital communication services and addresses any possible concerns who Canadian government paid apps.
Speaker Change: Moving to Pakistan jazz, our operating company in Pakistan accelerated its growth despite the challenging macroeconomic environment in 2023.
Muhterem Kaan Terzioglu: Jazz, our operating company in Pakistan, accelerated its growth despite the challenging macroeconomic environment in 2023. Jazz's successful execution of the digital operator strategy helped drive 23 total revenue growth of 23% and EBITDA growth of 24%. In Q4, the 4G user base reached almost 44 million, a year-on-year increase of 6% and a penetration rate of 62% among customers.
Speaker Change: <unk> successful execution of the digital operator strategy helped drive 23 total revenue growth of 23% and EBITDA growth of 24%.
Speaker Change: In Q4, <unk> user base reached almost $44 million a year on year increase of 6% and a penetration rate of 62% among customer base.
Muhterem Kaan Terzioglu: We are enabling more and more users to become multiplay users, who account for 29% of the operators' monthly active user base. With three times, two times the ARPU of voice-only users, Jazz's Multiplay customers generated 54% of operators' revenues in the consumer segment, which is up 10.5 percentage points compared to last year. With JazzCash, Pakistan's most popular financial services app, and Tamasha, the country's leading video streaming application, Jazz is a perfect example of how our digital operator strategy is succeeding at creating growth. Meanwhile, JustCash and Mobilink Bank continue to scale rapidly and profitably. Mobiling's gross loan portfolio expanded 28% year on year, while gross deposits rose an outstanding 188% year on year. Average loan size increased 31% at Mobilink Bank.
Speaker Change: We are enabling more and more users into multiple users who account for 29% of operators monthly active user base.
Speaker Change: With three times two times, the ARPA of voice only users jazzes multi play customers generated 54% of operators revenues in consumer segment, which is up 10.5 percentage points compared to last year.
Speaker Change: With jazz cash Pakistan's most popular financial services, App and tamasha, the country's leading video streaming application jazz is a perfect example of how our digital operator strategy is succeeding as creating growth.
Speaker Change: Just cash and modeling bank continued to scale rapidly and profitably.
Speaker Change: <unk> gross loan portfolio expanded 28% year on year, while gross deposits rose an outstanding 188% year on year.
Speaker Change: Average loan size increased 31% at modeling bank.
Muhterem Kaan Terzioglu: Total financial revenues grew almost 82% driven by a 39% increase in gross transaction value up to 5.8 trillion rupees. This corresponds almost to 7% of the GDP of Pakistan. The high growth was supported by a continued expansion of our retail distribution network reaching more than 240,000 active merchants, up 29 percent, and optimizing our agent base with more than 118 active agents by the end of the fourth quarter. Just as an example, on the day, on a single day of December 30, 2023, Jazcash and Mobilink banks issued over 71,000 loans in one day.
Speaker Change: Total financial revenues grew almost 82% driven by a 39% increase in gross transaction value up to 5.8 trillion rupees.
Speaker Change: This corresponds almost 7% of G D P of Pakistan.
Speaker Change: The high growth was supported by a continued expansion of our retail distribution network, reaching more than 240000 active merchants up 29% optimizing our agent base with more than 100, then 18 active agents by the end of fourth quarter.
Speaker Change: Just as an example on the day on a single day of December 32023, jazz cash and modeling banks issued over 71000 launch in one day.
Muhterem Kaan Terzioglu: As of February, the digital lending portfolio was 82% year-on-year growth. JazzCash had 16.2 million monthly active users and expanded digital loans to 1.6 million customers, 35% year-on-year growth. Total revenues grew 82% and transaction volumes 39. We believe Jazz Cash is defining mobile financial services in Pakistan. Let's look at Tamar Shah.
As of February digital lending portfolio was 82% year on year growth jazz cash had $16 2 million monthly active users and extended digital loans to one 6 million customers, 35% year on year growth.
Speaker Change: Total revenues grew 82% and transaction volumes 39.
Speaker Change: We believe jazz cash is defining the mobile financial services in Pakistan.
Speaker Change: Let's move to Thomas <unk>.
Muhterem Kaan Terzioglu: In the fourth quarter, Tamasha, Pakistan's premier entertainment platform, witnessed its monthly active users climb to 10.6 million, marking a 2.5-fold increase year-over-year. Furthermore, the platform's total number of sessions jumped fourfold from the previous year, reaching 555 million watch sessions. Tamasha is open to all mobile users, with nearly half of its user base consisting of non-jazz customers.
Thomas: In the fourth quarter Tamasha, Pakistan's Premier Entertainment platform witnessed its monthly active users climb to $10 6 million, marking a 2.5 fold increase year over year.
Thomas: Furthermore, the platform. So it's total number of sessions jumped fourfold from the previous year, reaching 555 million watched sessions.
Thomas: Tamasha is open to all mobile users with nearly half of its user base consisting of Non-jets customers.
Muhterem Kaan Terzioglu: At the same time, the Jazz customers that consume Tamasha have an R2 of three times higher than our single-play voice customers. By bringing original and exclusive content that is relevant to our customers in Pakistan, Jazz and Tamasha are able to drive more individuals to use data and more multiplayer offerings are consumed. Moving on to Kazakhstan, Beeline Kazakhstan remains Pakistan's leading operator in terms of net promoter score, and it continues to gain market share. Total revenues rose by 21% year-on-year, and service revenues grew 21% year-on-year, driven by growth in the mobile business as well as other digital offerings and fixed line offerings. EBITDA increased 30% year-on-year.
Thomas: At the same time, the jazz customers that consume tamasha Heaven ARPA of three times higher than our single play voice customers.
Thomas: By bringing original and exclusive content that is relevant to our customers in Pakistan jazz and tamasha are able to drive more individuals to use data and more multi play offerings being consumed.
Moving onto Kazakhistan.
Beeline Kazakhstan's remains Pakistan, leading operator in terms of net promoter score and it continues to gain market share.
Thomas: Total revenues rose by 21% year on year service revenues grew 21% year on year, driven by growth in mobile business as well as other digital offerings and fixed line offerings.
Thomas: EBITDA increased 30% year on year as higher ARPA, a growing customer base and rising consumption of data and digital services supported solid topline growth.
Muhterem Kaan Terzioglu: Higher ARPU, a growing customer base, and rising consumption of data and digital services supported a solid top-line growth. Beeline Kazakhstan's strong performance is expected to be driven by hierarchy with consistent growth in the 4G user base, converged fixed mobile offers, specialized family packages, and consumption of data and digital services. 4G penetration stands at 73%, reflecting 4G users of 8.1 million.
Thomas: Beeline Kazakhstan's strong strong performance to be driven by hierarchy with consistent growth in the <unk> user base converged fixed mobile offers specialized family packages and consumption of data and digital services.
Thomas: <unk> penetration stands at 73%.
Thomas: Reflecting forging users of $8 1 million.
Muhterem Kaan Terzioglu: This is up 12% year on year. Multiply users represent 42% of monthly active users, making Kazakhstan the most advanced in terms of our digital operator strategy. These customers consume Beeline Kazakhstan's digital services, such as B-TV, our FinTech platform Simpli, our music platform HITR, and our digital-only operator EZ.
Thomas: This is up 12% year on year.
Thomas: Multiple users represent 42% of monthly active users, making kazakhistan. The most advanced in terms of our digital operator strategy.
Thomas: These customers consume beeline Kazakhstan's digital services, such as B TV, our Fintech platform simply our music platform heater and our digital only operator Izzy.
Muhterem Kaan Terzioglu: This 42% of active users generate 60% of subscriber revenue. In Kazakhstan, we have made $5.9 billion of investments with a capex intensity of 21.5%, and despite the fact that we are deploying 4G and serving high robust 4.9G quality services against competition's 5G, we continue to gain market share. Let me speak a little bit about Kazakhstan's first digital first operator, easy.
Thomas: This 42% of active users generate 60% of subscriber revenues.
Thomas: In Kazakhstan, we have.
Thomas: Made five $9 billion of investments with a capex intensity of 21, 5% and despite the fact that we are deploying for G and serving high robust 4.9 G quality services against competition five G. We continue to gain market share.
Thomas: Yes.
Thomas: Let me speak a little bit about Kodak Keystone's first digital first operators.
Thomas: Easy.
Muhterem Kaan Terzioglu: IZI is an entertainment platform open to everyone, and it has 455,000 monthly active users. This is 4.3 times higher compared to last year. EZ also provides a Telecommunications Service, and half of EZ's customers have opted also for these telecommunication services. Being an agnostic telecommunications player, EZ actually introduces an entertainment service to the lifestyles of young generations with great success. Monthly active mobile customers of EZ increased 59% to 219,000, and EZ users enjoy the digital experience of the entertainment super app with an RPO of 1,810 guests, which is 4.4 times higher compared to the RPO of BanglaLink customers who do not use our telecom services. BanglaLink revenues rose 14%.
Thomas: Eze is an entertainment platform open to everyone.
Thomas: It is 455000 monthly active users.
Thomas: This is four three times higher compared to last year.
Thomas: Easy also provides.
Thomas: Telecommunication services and household is these customers have opted for also for these telecommunication services.
Thomas: Being an agnostic telecommunications players.
Thomas: Actually introduces an entertainment service to lifestyles of young generations with great success.
Monthly active mobile customers of easy increased 59% to 219000 and easy users enjoy the digital experience of the entertainment Super App within our pool of 1800, Tengiz, which is four times 4.4 times higher compared to the ARPA is the customer.
Thomas: <unk>, who do not use our telecom services.
Thomas: Bundling revenues rose 14%.
Muhterem Kaan Terzioglu: This performance was driven by a balanced expansion in both the customer base and average revenues. Driven by the uptake of digital services, the Multiplay customer base grew 9% year on year, supporting a 60% increase in Multiplay revenues, reaching 34% of total revenue generation potential. Growing market share and ongoing investment in the BanglaLink network drove EBITDA up 18% year-on-year, expanding the margin. BanglaLink's strong focus on cost control and inflationary pricing helped deliver this impressive result, even when electricity and fuel costs continue to rise multiple times. BanglaLink's 4G users increased by 7 percentage points year-on-year to reach 20.1 million.
Thomas: This performance was driven by a balanced expansion in both customer base and average revenues.
Thomas: Driven by the uptake of digital services, the multiple a customer base grew 9% year on year supporting a 60% increase in multiplayer revenues, reaching 34% of total revenue generation potential.
Thomas: Growing market share and ongoing investment in the bundling network drove EBITDA up 18% year on year expanding the margin.
Thomas: Bundling strong focus on cost control and inflationary pricing helped deliver this impressive results.
Thomas: Even when electricity and fuel costs continue to rise in multiple times.
Thomas: Bundling forging users increased by seven percentage points year on year to reach 20.1 million. This represents now 50% of the total subscriber base.
Muhterem Kaan Terzioglu: This represents now 50% of the total subscriber base. Over the last four years, we have quadrupled this percentage of penetration. Last but not least, the sale of one third of our tower portfolio was another key highlight for Q4. Expect us to continue delivering on unlocking greater value from our portfolio, both physical and digital assets. Toffee is another application that I would like you to remember.
Thomas: Over the last four years, we have quadrupled this percentage of penetration.
Thomas: Last but not least the sale of one third of our tower portfolio was another key highlight for Q4.
Thomas: Expect us to continue delivering on unlocking greater value from our portfolio, both physical and digital assets.
Speaker Change: Toffee is another application that I would like you to remember Tobey.
Muhterem Kaan Terzioglu: Toffee is part of BanglaLink's digital operator offerings and the country's leading entertainment platform and OTT streaming platform. TOFI continues to maintain a healthy user base with monthly active users reaching 8 million. Again, TOFI is available to all mobile customers in the country, and currently, 65% of TOFI users are not BanglaLink Telecom customers. The total number of sessions watched is now at 152 million, and this is actually 9% sequentially more than Q4 of this year. BanglaLink customers who use Toffee generate three times the ARPU of single-play voice customers, and this is the power of digital offerings. Turning now to Uzbekistan.
Speaker Change: <unk> is part of bundling digital operator offerings and the country's leading entertainment platform and OTT streaming platform.
Speaker Change: <unk> continues to maintain a healthy user base with monthly active users, reaching 8 million.
Again Tau fees available to all mobile customers in the country and currently 65% of Toffee users are not bundling telecom customers the.
Total number of sessions watched.
Speaker Change: Now is at 152 million and this is actually 9% sequentially more than Q4 of this year.
Speaker Change: Bundling customers, who use trophy generates three times the ARPA of single play voice customers and this is the power of digital offerings.
Speaker Change: Turning now to asbestos done.
Muhterem Kaan Terzioglu: For the full year 2023, Uzbekistan achieved a 23% year-on-year local currency top-line growth. This performance was driven by a combination of expansion and both in ARPU as well as in the customer base. There are double digit increases in 4G users and data users. Beeline Uzbekistan now exceeds 70% of its 4G penetration target with 73% of the customer base using 4G data.
Speaker Change: With the full year 2023, as Vicki Stern achieved a 23% year on year local currency topline growth.
Speaker Change: This performance was driven by a combination of expansion and both in our pool as well as the customer base.
Speaker Change: That are double digit increases in forging users and data usage.
Speaker Change: Beeline is Vicki stand now exceed 70% <unk> penetration target with 73% of the customer base using forging data.
Muhterem Kaan Terzioglu: 4G user base reached 6.2 million users this quarter, an 11% year-on-year increase. Let me move to our flywheel of DOO 1440 digital services. I'm glad to see that our total monthly active users of digital services have reached 98.5 million, with an increase of 29% year on year. Among these users, 20.1 million have never become a user of a telecom service and potential customers for us to gain.
Speaker Change: For your user base reached $6 2 million users this quarter.
Speaker Change: At 11 million, 11% year on year increase.
Speaker Change: Let me move to our flywheel of do 14 40 digital services.
Speaker Change: I'm glad to see that our total monthly active users of digital services as reached 98 5 million with an increase of 29% year on year.
Speaker Change: Among these users $21 million.
Speaker Change: Is never become a user of a telecom service and potential customers for us to gain.
Muhterem Kaan Terzioglu: I'm also extremely happy to see in our fintech environment that our year-on-year gross transaction values increased 11% to reach 24 billion US dollars. And this 11% year-on-year growth in U.S. dollars is equivalent to 44% year-on-year growth in local currency. We see higher usage levels, and we see higher generation of revenues as we deploy these digital services. Crystallizing the value of our infrastructure is one of our priorities. So far, you have seen a couple of transactions that have allowed us to unlock value from our balance sheet. Beyond information and telecommunications infrastructure sales, we are also looking for non-core business disposals in the countries that we operate in.
Speaker Change: I'm also extremely happy to see on our Fintech environment.
Speaker Change: Our year on year gross transaction values increased 11% to reach 24 billion U S dollars.
And this 11% year on year growth in U S dollars is equivalent to 44% year on year growth in local currency.
Speaker Change: We see higher usage levels, we see higher generation of revenues as we deploy these digital services.
Speaker Change: Pumps.
Speaker Change: Crystallizing the value of our infrastructure is one of our priorities. So far you have seen a couple of transactions.
Speaker Change: <unk> has allowed us to unlock value from our balance sheet.
Speaker Change: Beyond information and telecommunications infrastructure sales. We are also looking for our noncore business disposals in the countries that we operate in especially for our digital assets from Fintech to entertainment platforms. We are looking for strategic partners as we also consider.
Muhterem Kaan Terzioglu: And especially for our digital assets, from fintech to entertainment platforms, we are looking for strategic partners, as we also consider public offerings of our operators in local and international markets. I would like to stop here and give the floor to Joop to give you a little bit more color of our financial performance. Fingers crossed.
Speaker Change: Public offerings of our operators and local and international markets.
Speaker Change: I would like to stop here and give the floor to Europe to give you a little bit more colors of our financial performance.
Europe: Thanks, Tom.
Joop Brakenhoff: I'm pleased to present some of our key revenue milestones for the full year and the fourth quarter. This year marked yet another period of double-digit year-on-year growth in local currency revenue across all six of our markets. Total revenue and local currency increased by 80% year-on-year, with service revenue also rising by 18% year-on-year.
Europe: I'm pleased to present some of our key revenue milestones for a full year in the fourth quarter.
Europe: This year marked economic period of double digit year on year growth in local currency revenues across all six of our markets.
Europe: Total revenue in local currency increased by 80% year on year with service revenue also rising by 18% year on year.
Joop Brakenhoff: Despite these strong growth figures, our reported service revenue in dollar terms showed a slight decrease of 1% year-on-year on the reported base. This was largely due to local currency depreciation in several of our key markets, especially in Pakistan, Bangladesh, Uzbekistan, and Ukraine. The driving forces behind revenue growth include gains in market share and the expansion of our digital platforms across all operations, coupled with the implementation of disciplined inflationary pricing strategies. On the next page,
Europe: Despite the strong growth figures are reported service revenue in boardrooms showed a slight decrease of 1% year on year on a reported basis.
Europe: This was largely due to local currency depreciation in several of our key markets, especially in Pakistan, Bangladesh, whose biggest home and jewelry.
Europe: The driving forces behind the revenue growth include gains of market share and the expansion of our digital platforms across all operations.
Coupled with the implementation of disciplined frankly pricing strategies.
Europe: On the next page.
Joop Brakenhoff: I will elaborate on our EBITDA and EBITDA margins. For full year 2023, VEON experienced a 20% year-on-year increase in local currency normalized EBITDA, with a normalized EVGA margin improving by 0.8 percentage points to 46.2%. It's crucial to recognize that our EBDA growth was influenced by external one-off events in Kazakhstan, Pakistan, Ukraine, and Uzbekistan throughout full year 2022. By making adjustments for these one-off occurrences, we gain a clearer view of VEON's operational progress and profitability and local currency over the last 12 months. Providing a more accurate measure of our financial health and efficiency. For the recent quarter, we achieved substantial year-on-year growth in local currency revenues across our six markets, with total revenue growing 80% year-on-year. Accumulating in reported revenue of $953 million, our important currency revenue has shown modest growth, with a 1% rise year-on-year. As mentioned before, this figure was influenced by notable depreciation in local currencies within our market, which was mostly significant in Pakistan, Bangladesh, Uzbekistan, and Ukraine.
I will elaborate on our EBITDA and EBITDA margin.
And full year 253 volume experienced a 20% year on year increase in local currency normalized EBITDA.
Europe: We have a normalized EBITDA margin improving by eight percentage points to 46, 2%.
Europe: It's crucial to recognize with our EBITDA growth was influenced by extraordinary one off events in Kazakhstan, and Pakistan, Ukraine, and Uzbekistan throat for year, two and 'twenty three.
Europe: We're making adjustments for these one off occurrences regain a clear view of your operational progress and profitability in local currency over the last 12 months.
Europe: Providing a more accurate measure of our financial health and efficiency.
Europe: For the recent quarter, we've achieved substantial year over year growth in mobile cruiser revenues across our six markets with total revenue growing 80% year on year.
Europe: <unk> reported revenue of minus $53 million.
Europe: Our reported revenue will show modest growth with a 1% rise year on year.
Europe: As mentioned prior the streak was influenced by multiple depreciation in local currencies within our markets, mostly significant in Pakistan, Bangladesh speak some degree.
Joop Brakenhoff: The surge in revenue is attributable to an increase in our market share and the broadening of our digital platforms throughout all operations, in conjunction with the implementation of a methodical inflation-adjusted pricing strategy. On a quarterly basis, VEON's local currency normalized EBITDA increased 25% year-on-year. Complementing this was a notable rise in our EVDA margin of 2.5 percentage points to 44.4%. However, it's crucial to acknowledge that our EVDA growth has been influenced by extraordinary one-time events, as mentioned. Once these one-time factors are accounted for, the fourth quarter of 2023 reveals strong cost management and the positive impact of operating leverage. These elements have been pivotal in creating a fundamentally higher margin profile for VEON consistently for glass.
Europe: The surge in revenue is attributable to an increase in our market share and the broadening of our physical platforms throughout all operations.
In conjunction with the implementation of the cyclical influence inflation adjusted pricing strategies.
Europe: On a quarterly basis fuels local currency normalized EBITDA increased 35% year on year.
Europe: Complemented by multiple rice, and our EBITDA margin of 2.5 percentage points to 44, 4%.
Europe: However, it's crucial to monetize our EBITDA growth has been influenced by extraordinary onetime events as mentioned.
Europe: Once these onetime factors account for the fourth quarter of 223 review of strong cost management and the positive impact of operating leverage.
These elements have been pivotal integrating fundamentally higher margin profile for film consciously program last year.
Joop Brakenhoff: Shifting focus to key balance sheet figures, I will now detail out our debt and liquidity state. As we close Q4, the group maintains a strong liquidity position, as evidenced by a total cash reserve of $1.7 billion, which excludes our baking activities in Pakistan.
Europe: Shifting focus to key balance sheet figures I will now be throughout our depth and liquidity status.
Europe: As we close Q4, the group maintains a strong liquidity position.
Europe: Evidenced by total cash reserve of $1 7 billion more.
Europe: This excludes our big activities in Pakistan.
Joop Brakenhoff: Over this amount, a substantial $1.3 billion is held at our headquarters. At a practical level, each of VEON's entities remains self-sustaining in terms of finance. In a strategic move this September, VEON undertook the complete and advanced redemption of nodes, set to mature in December 2023 and June 2024. This proactive measure has led to a significant decrease in our reported protest figures.
Europe: Of this amount of substantial Wonka 3 billion Golar has helped over headquarters.
Europe: A geopolitical level each of yields entities remains self sustaining in terms of financing.
Europe: The main strategic move to September volume undertook the complete advanced redemption of notes set to mature in December two completed three in June 24.
Europe: This proactive measure has led to a significant decrease in our reported proto figures.
Joop Brakenhoff: As Karl mentioned, we can also now share that we have secured EB- credit ratings from both BITS and S&P. As many of you are aware, we exited Russia in October 2023. As a result, the month and a quarter were marked by several transactions that materially influenced the group's financial position.
Europe: As Carl mentioned, we can also not sure that we execute BBB minus credit ratings from brokerage and S&P.
Europe: As many of you are aware we.
Europe: With Russia in October 2023.
Europe: As a result, the most in a quarter where market with several positions that materially influence the group's financial position.
Joop Brakenhoff: As a result of the exit, our gross debt has substantially decreased and now stands at $3.7 billion, from $6.7 billion nearly a year ago. Similarly, our Net Depth and Net Leverage Ratio have significantly improved, going from a net leverage ratio of 2.36 times a year ago to 1.42 times.
Europe: As a result of the exit across depths has substantially decreased and now stands at $3 7 billion from $6 7 billion from nearly a year ago.
Europe: Similarly, our net debt and net leverage ratio is significantly improves.
Europe: Going from a net leverage ratio of two point.
Europe: 36 times, a year ago to 1.42 times.
Joop Brakenhoff: Let me now speak about the accounting impact of our exit from Russia. As a result of our exit, we will incur a non-cash cumulative currency translation loss of 2.8 billion, which will accumulate in equity through other comprehensive income and be recycled through the cost-related income statement on the date of the disposal. As mentioned, Unknown Kershaw, Unknown Executive, Unknown Attendee, Joop Brakenhoff, Faisal Ghori, VEON Ltd, and no impact on equity.
Europe: Let me now speak about your accounting impact of our exit from Russia.
Europe: As a result of our exits we will incur a noncash cumulative currency translation loss of $2 8 billion.
Europe: Which accumulated equity through other comprehensive income and are recycled to ripple through the income statement on the dates of the disposal.
Europe: As mentioned our monkish.
Europe: And no impact on equity.
Joop Brakenhoff: Despite this, it is important to recognize that our continuing operations have reported a profit of $384 million for full year 2023, which translates to a price to earnings ratio of VEON 4.6 times. In other words, our continuing operations are growing profitably. Our overall equity for VEON is projected to rise by $300 million for the full year 2023. Taking into account these significant events, and on a pro forma basis, VEON's net debt stands at $2 billion. A marked decrease from the $5.1 billion Net Debt Report 12 months ago.
Europe: Despite this is important to recognize that our complete operations have reported a profit of 84 million Bora for full year 253.
Which translates to a price to earnings ratio with film four six times.
Europe: In other words, a compute operations.
Europe: Debris growing.
Europe: Our overall equity volume is projected to rise by 300 million borrows for full year two home quickly.
Europe: Taking into account the significant events.
Europe: Pro forma basis fuels net debt stands at 2 billion Gore.
Europe: A marked decrease from a $5 $1 billion net debt reported 12 months ago.
Joop Brakenhoff: It's noteworthy that 1.6 billion of the net debt is attributed to the HQ level. Meanwhile, our cash reserves remain healthy at $1.7 billion, with $1.3 billion of this liquidity being repaid at the SQ level. Where does our debt profile stand now? Our debt profile has improved substantially. We have successfully restructured our debt to extend major maturities to 2025, providing the company with greater financial flexibility. By the end of the fourth quarter, VEON was $400 million in debt due within the upcoming 12 months.
Europe: It's noteworthy that $1 6 billion of net.
Europe: Net debt is attributed to the SKU level.
Europe: Our cash reserves remain healthy at $1 7 billion Bora with $1 3 billion of its liquidity being redeemed.
Europe: Two levels.
Europe: Burritos order profile stands now.
Europe: Our debt profile has improved substantially.
Europe: We have swiftly restricted adapt to extent major maturity supercomputing five.
Europe: Providing the company with greater financial flexibility.
Europe: By the end of the fourth quarter <unk> $400 million in depth jewelry.
Joop Brakenhoff: As of October 2023, the debt set to mature in 2025 totals $1.64 billion. It's significant to note that additional debt repayments are poised to not only diminish VEON's overall gross debt levels and upcoming maturities, but they will also lower the absolute cost of that service. Furthermore, there is $810 million currently outstanding under the revolving credit facility, which provides us with the option to roll over the amount until the final due date in 2024 and 2025.
Europe: Occurring at 12 months.
Europe: As of October 253, the depth set to mature in two completely five totals 1.64 billion below.
It's significant to note that additional debt repayments are poised to not only diminished fuels over gross debt levels and upcoming maturities with.
Europe: This will also lower the absolute cost of absorption.
Europe: Furthermore.
Europe: There's been moomba drove the outstanding under the revolving credit facility.
Europe: This provides us with the option to rollover the amount until the final jewelers and talk 'twenty four 'twenty five.
Joop Brakenhoff: Therefore enhancing our equity management and long-term financial strategy. Let me outline some of the changes to our Capital Debt and Average Debt Maturity. The cost of borrowing for the first quarter of 2022 has been impacted by three key factors.
Europe: Thereby enhancing our liquidity management and long term financial strategy.
Europe: Let me outline some of the changes to our cost of goods and average debt maturity.
The cost of borrowing versus the first quarter of 202 has been impacted by three key factors.
Joop Brakenhoff: Emerging market frontier rates are the first one. Higher interest rates on floating dollars and Pakistani rupee debt. The second factor is early redemptions. The early redemption of VEON bonds maturing in December 2023 and June 2024 have also had an impact on borrowing, due to these bonds holding relatively lower coupons versus the average cost of debt, and the acquisition of VEON Holdings bonds by PwC Paypal.
Europe: Emerging market frontier, which is the first one higher interest rates on floating bonds and Pakistani rupee duped.
Europe: The second factor is early redemptions. The early redemption of bonds maturing in December two and 23 in June to occur before we've also had an impact on borrowing costs.
Europe: Due to these bonds holding relatively lower coupons versus the average cost of goods.
Europe: And the position of Yamal <unk> might be typical.
Joop Brakenhoff: Number three, higher proportion of off-course debt. I should note that we now have a greater proportion of higher rate opco debt than lower rate dollar debt in our gross debt portfolio. Our efforts at maturity, excluding the RCF, stand at 2.9 years. Now I will hand over to Pat.
Number three higher proportion of our product.
Europe: We should note that we now have a greater proportion of higher rate of codell, the lower rate bloggers and a gross depicts.
Europe: This is the effect of increasing blended cost of debt.
Europe: Our efforts at maturity, excluding Garcia stands at $2 nine years.
Europe: Now I will hand over to Carl.
Muhterem Kaan Terzioglu: Thank you, Joop. Let me look at 2004 Outlook, a year ago when we provided our guidance for 2023. We have indicated that 2023 was up for a year for 10 to 14% growth in top line and ABTH. Over the years, over the months, we have increased our guidance, and we actually increased the guidance in Q3 to 18 to 20% growth in revenues and EBITDA. We finish 2023 with 18% growth of the topline and 20% growth of the WTA. Looking at the trends of the first two months, we are cautiously optimistic that the momentum of growth continues, and we are setting a guidance for 2024 for 16 to 18% growth of the top line and 18 to 20% growth in EBITDA. We expect our 12-month CAPEX intensity to be in between 18-19%. We believe that as we execute our digital operator strategy and improve our 4G penetration in all the markets, this momentum will enable us to achieve these results. Thank you very much.
Carl: Thank you Jaap.
Carl: Let me look into 2000 and for outlook.
Carl: A year ago, when we provided our guidance for 2023.
Carl: We have indicated that the 2023 was up for a year for 10% to 14% growth in topline and EBITDA.
Carl: Over the years over the months, we have increased our guidance and we actually increased the guidance in Q3 to 18% to 20% growth for revenues and EBITDA.
Carl: We finished the 2023 with 18% growth of top line and 20% growth in EBITDA.
Carl: Looking to the trends of the first two months, we are cautiously optimistic that the momentum of growth continues.
Carl: And we are setting our guidance for 2024 or 16% to 18% growth of top line.
Carl: In 18% to 20% growth in EBITDA.
Carl: We expect our 12 months capex intensity to be in between 18% to 19%.
Carl: We believe that as we execute our digital operator strategy and improve our <unk> penetration in older markets.
Speaker Change: This momentum will enable us to achieve these results. Thank.
Operator: I will stop here and be open to discussions and questions. Thank you. Our first question comes from Rahul Shah from Inam Telemark. In which markets are you seeing the scope for the biggest revenue uplift from the digital strategy? During my presentation, I mentioned that the most advanced digital operator execution engine in our market is Kazakhstan. And we actually see 73% 4G penetration here, and we generate almost 60% of our revenues from customers who also consume our digital services. This is followed by a actually a very strong performance from Pakistan, Uzbekistan, and Bangladesh. Second question also from Rahul regarding asset disposals. Do you have any visibility or scale location timeline?
Speaker Change: Thank you very much I will stop here and open for discussions and questions. Thank you.
Speaker Change: Our first question comes from Robert Shah prompt in until March and which markets are you seeing the scope for the biggest revenue uplift from potential strategy.
During my presentation I have mentioned that the most advanced digital operator execution engine in our market is Kazakhstan.
Robert Shah: And we actually see here, 73% for G penetration and we generated almost 60% of our revenues from customers who consume all saw digital services. This is followed by actually a very strong performance from Pakistan, Uzbekistan and Bangladesh.
Robert Shah: Second question also from Rafal <unk>.
Rafal: Regarding asset disposals, do you have any visibility or scale location timeline.
Muhterem Kaan Terzioglu: What are you facing the biggest challenges to upstreaming profits or the asset sale process? In all the markets that we operate in, we do have independent tower companies currently owned by us. And we are actually able to execute processes for transacting on either partially or fully on these tower companies. I do expect, over the 18 months, these projects to deliver fruit. This year, we have finished in 2023 with one third of our towers in Bangladesh, and that will probably be the earliest ones that we will come back to the market again. Now, disposal of assets is one thing that we create value from our balance sheet, but I also see our growing digital services as an attraction for international investors to take strategic positions as well. Entertainment services like Tamasha and Toffee in Pakistan and Bangladesh, and fintech services like Simply in Kazakhstan or Jazz Cash in Pakistan, are also examples of potential value creation.
Speaker Change: What are you facing the biggest challenges to upstream and profits are asset sale proceeds.
Speaker Change: In all the markets that we operated and we do have independent tower companies currently owned by US and we are actually able to execute our processes for transacting on either partially or fully on these tower companies I do expect over the 18 months these projects to deliver fruits.
Speaker Change: This year, we have finished in 2023 with one third of our towers in Bangladesh and that will probably be the earliest ones that we will come back to the market again.
Speaker Change: Now disposal of assets is one thing that we create value from our balance sheet, but I also see a growing digital services as an attraction for international investors for actually taking strategic positions as well entertainment services like tamasha in talking in Pakistan, and Bangladesh Fintech services like.
Speaker Change: Simply because exxon or jazz cash in Pakistan are also examples of potential value creation for us.
Muhterem Kaan Terzioglu: The next question is also from Rahul. Your guidance implies a slight uptick in CapEx intensity this year. Where will this extra investment be focused, and why the shift in approach? Last year, we were actually one percentage point below where we wanted to be.
Speaker Change: The next question is also from Rommel your guidance implies a slight uptick in capex intensity. This year, where will this extra investment we focused and why the shift in approach.
Speaker Change: Last year, we actually were a one percentage point below where we wanted to be and this was due to the basically import controls that Pakistan has put in place. So as that's actually disappears. We do expect our normal pets, which we started as you know about three years ago from 22% and now we are.
Muhterem Kaan Terzioglu: And this was due to the import controls that Pakistan has put in place. So as that actually disappears, we do expect our normal path, which we started, as you know, about three years ago at 22%. And now we are down to 1918.
Speaker Change: We're down to 1918.
Muhterem Kaan Terzioglu: Last year was actually one percentage point less than what we wanted to do in terms of investments. This is actually where we should be. I'm going to switch to some of our kind of retail investors. Are there any plans to award shareholders with a dividend? At this stage, we believe, you know, it's too early to come to that conclusion, and we will keep everybody positive. The next question is also from our retail platform. Are there any updates on the application that was submitted in Bangladesh for the digital banking license? We are still in the process of talking with the authorities in terms of the digital banking license, and there has not been any news on that.
Speaker Change: Last year was actually a one percentage point less than what we wanted to do in terms of investments. This is actually what where we should be.
Speaker Change: Okay, I'm going to switch to some of our kind of retail investors are there any plans to our award shareholders with the dividend.
Speaker Change: At this stage, we believe it's too early to come to that conclusion, and we will keep everybody posted on that.
Speaker Change: Next question is also from a retail platform are there any updates on the application that was submitted in Bangladesh with the digital banking license.
Speaker Change: We are still in the process of total visteon authorities in terms of digital banking license.
Speaker Change: And that has not been any new news on that.
Okay.
Muhterem Kaan Terzioglu: The next questions come from Stella Cridge from Barclays. Can you talk about how discussions around refinancing options have been progressing? How are you thinking about addressing the 2025? Well, I will also, you know, ask Yoham to chip in on this one. But for 2025 bonds, we believe that, you know, we are on track for normal maturity of those bonds. Any comments from Yoham you would like to add? No.
Speaker Change: The next questions come from Stella <unk> from Barclays.
Stella: Can you talk about how discussions and discussions around refinancing options have been progressing how are you thinking about addressing the 2025 months.
Stella: Well I will also ask you on him to chip in on this one but for 2025 bonds. We believe that you know we are on track for normal.
Speaker Change: The maturity of those bonds any commentary on we would like to add.
Speaker Change: Yes.
Muhterem Kaan Terzioglu: I think it is important that VEON got its credit rating back and is now putting in place all the building blocks to address those maturities, which for the involved are more than a year away. Thank you. There's another question. Can we just comment in greater detail about which subsidiaries are able to opt out? We do not currently have, except for Ukraine, which is under martial law, any subsidy with limitations of upstream income. Could you comment more about your engagement in Ukraine? Sure. You know, Ukraine is actually, our team in Ukraine is doing a heroic job in terms of keeping our network up and running. As I mentioned to you, not only are we deploying new sites, but we are multiple times deploying the same sites again and again to keep the network connected.
Speaker Change: I think what is important that Jim Gray a credit rating back.
Speaker Change: And it is not putting in place all the building blocks.
To address those maturities as we near enough maturity switch 40th washed out or more than a year wasted.
Speaker Change: Thank you.
Speaker Change: There is another question.
Speaker Change: We just comment about in greater detail about which subsidiaries are able to upstream.
Speaker Change: We do not have it currently except for the Crane, which is under martial law any subsidiary with limitations of upstream.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Could you comment more about your engagement in Ukraine.
Speaker Change: Sure.
Speaker Change: Crane is actually is our team in Ukraine is doing a heroic job in terms of keeping our network up and running as I mentioned is not only that we are deploying new sites. We are multiple times deploying the same sites again and again to keep the network connected in the meantime, we do have a very functional.
Muhterem Kaan Terzioglu: In the meantime, we do have a very functional open dialogue with the Ukrainian authorities to make sure that these service levels and support for the country continue. Another question from the chat is, can you comment regarding your views on the kind of FX and FX risk going forward? Look, if I look at the last four years, we had the era of COVID and later war.
Speaker Change: Upon dialogue with Ukrainian authorities to make sure that the service levels and support for the country continues.
Okay.
Speaker Change: Another question from.
Speaker Change: From the chat is can you comment regarding.
Speaker Change: Your views on kind of FX and FX risks going forward.
Speaker Change: Luke if I look the last four years, we had the hero of Covid and later war and you know if I look back also in the last two years one of the biggest I think impact that emerging markets have experienced was increase of the interest rates from almost zero to 525.
Muhterem Kaan Terzioglu: And, you know, if I look back also on the last two years, one of the biggest, I think, impacts that emerging markets have experienced was the increase in interest rates from almost zero to 5.25. You know, this is the financial equivalent of a nuclear bomb in emerging markets. I'm very happy to see that with regard to this type of turbulence, despite the fact that we had significant devaluations, our US dollar reported numbers were only down 2%, actually 1.5%. I do expect that in the next era, stabilization of interest rates and potentially moderation of the interest expenses. And this will probably be an era of more stability in the emerging markets economy. The next question also comes from Stella Kritsch.
Speaker Change: You know this is a financial equivalent of a nuclear bomb with emerging markets I'm very happy to see that with regard to this type of a turbulence. Despite the fact that we had significant devaluations. Our U S. Dollar reported numbers were only down 2% actually one 5% I.
Speaker Change: I do expect that in the next.
Speaker Change: Era this stabilization on the interest rates and potentially moderation of the interest expenses.
Speaker Change: And then this is probably be an era of more stability in the emerging market economies.
Speaker Change: The next question also comes from Stella Grinch can you comment about the.
Joop Brakenhoff: Can you comment about your kind of auditor Yeah, after the sale of the Russia operations in October 2023, it was clear that the market really opened up for ourselves. And we've seen that the analysts are supporting us, we've seen the rating agencies step in again, and also our discussions with the auditors started again. As a result, we have engaged with the Auditor for 2023, but, of course, late in the process. And therefore, also our filing will be late, but the Auditor has started, so it's positive news. The next question comes from Michele Fumara from Helicom. Can you provide guidance on HQ costs in 2024 and beyond? Hi Mihaile, thanks for the question. Actually, in 2023, we did a massive reorganization at the HQ, which allowed us to save almost 55% of our run rate. Now, we have reduced it to the level of $75 million a year.
Stella Grinch: You're kind of auditor situation kind of each resolution.
Speaker Change: All positive things Graham.
Speaker Change: After the sale of firm Morocco operations in October two and 23.
Speaker Change: It's clear that the market will be open for ourselves.
Speaker Change: We've seen that the analysts are supporting us we've seen them.
Speaker Change: The rating agencies stupid again, and also our discussions with Oracle.
Speaker Change: Start again.
Speaker Change: As a result, we have engaged with <unk> to complete the three but of course late in the process and therefore also are finding movie late.
Speaker Change: Third Oracle has started so it's a positive news.
The next question comes from Mechanics Tomorrow from Helicon, now and can you provide guidance on HQ costs in 2024 and beyond.
Mechanics Tomorrow: I'm here. Thanks for the question actually in 2020 see we made a massive reorganization at the HQ, which allows us to save almost 55% of our run rate now we have reduced it to the level of $75 million a year and I do expect that optimization of our cost.
Muhterem Kaan Terzioglu: And I do expect that optimization of our costs, of course, will continue as we normalize our operations. But HQ has contributed a lot to this year's margin expansion. And we completed this successful transformation last year.
Mechanics Tomorrow: Of course, we will continue as we normalize our oh.
Mechanics Tomorrow: Operations, but our HQ has contributed a lot to this years margin expansion and we have completed the successful transformation last year.
Muhterem Kaan Terzioglu: The next question is also from Stella Kersh from Barclays. What are the sovereign bonds that you refer to in the presentation? What country do they relate to?
Speaker Change: The next question is also from solid credit from Barclays. What are the sovereign bonds that you referred to in the presentation, what concrete anywhere Linkedin is 150 million nominal value or market value.
Muhterem Kaan Terzioglu: Is $150 million nominal value or market value? We do keep some of our cash balances in Ukraine in US-denominated sovereign funds, and I think we are referring to that amount. Can you comment regarding jazz cash and Pakistan in terms of revenue and asset size to the company? Of course, JustCash is a private entity within our operation, but if I look at its run rate growth, we have almost $100 million in revenue run rate.
Speaker Change: We will keep some of our cash.
Speaker Change: Cash Bell.
Barclays: Balances in Ukraine in U S denominated sovereign funds and I think we are referring to that amount.
Barclays: Okay.
Speaker Change: Can you comment regarding jazz cash in Pakistan in terms of revenue and asset size to the company.
Speaker Change: Of course, yes cash is it.
Speaker Change: Private entity within our operation, but if I look to is run rates growth, we have almost $100 million of revenue run rate. It is EBITDA positive cash flow positive and growing.
Muhterem Kaan Terzioglu: It is a BTA positive, cash flow positive, and growing almost 82% year-on-year with a very healthy unit economic cost. I believe this is going to be one of the driving factors of our business growth. If I look at our overall Pakistan operations, almost 15% of our revenues today are generated through non-telecom assets, and a massive portion of that comes from JazCash and Mobile Link Bank with financial services.
Speaker Change: Growing almost.
Speaker Change: At 82% year on year with a very healthy unit economic costs.
Speaker Change: I believe you know this is going to be one of the driving factors of our business growth in Pakistan. If I looked overall, Pakistan operations, almost 15% of our revenues today are generated through non telecom assets in a massive portion of that comes from just sketch and modeling banking financial services.
Muhterem Kaan Terzioglu: The next question is from Rahul Shah. Now that you have a bond rating, will you be looking to extend your debt maturity profile? We are looking to expand our debt maturity profile, but my number one priority for achieving this is actually through tower sales in local markets with long-term lease contracts rather than anything else. That will allow us to basically de-leverage the company at the headquarters, get rid of hard currency debt, and turn it into local currency long-term lease commitments. The next question is also from Michele. Any relevant license payments do you expect in 2024 and beyond? There are no renewals coming up except for a renewal in Kurdistan, which is immaterial in the total picture.
Speaker Change: The next question is from Rahul Shah now that you have a bond rating will you be looking to extend your debt maturity profile.
Rahul Shah: We are looking for expanding our debt maturity profile, but my number one priority of achieving this is actually through the tower sales in local markets with a long term lease contracts other than anything else that will allow us to basically deleverage the company at the headquarters get rid of hard currency.
Rahul Shah: <unk> and turned it into a local currency long term lease commitments and the next question is also from me Kelly any relevant license payments do you expect in 2024 and beyond there is no our renewables coming up except for a renewal and cookies is done which is immaterial.
Rahul Shah: And the total picture.
Muhterem Kaan Terzioglu: [inaudible] The next question is from Dimitri Ivanov. How do you plan to utilize the expected tower sale proceeds? Do you plan to finance local operations from the sales proceeds or upstream to the holding? So, as I mentioned, from my perspective, Tower transactions are a very effective way of refinancing, you know, hard currency, top line debt with local currency, long-term debt. And this is our primary, you know, objective.
Rahul Shah: Okay.
Okay.
Rahul Shah: Uh huh.
Rahul Shah: The next question is from Dmitry <unk>.
Dmitry: How do you plan to utilize the expected tower sale proceeds do you plan to finance local operations from the sales proceeds are upstream to the holding level.
Speaker Change: So as I mentioned.
Speaker Change: From my perspective tower transactions is a very effective way of refinancing you know hard currency topline that with local currency longterm depth and this is our primary you.
Speaker Change: You know objective and of course, you know we will use this also to further deleverage the company.
Muhterem Kaan Terzioglu: And of course, you know, we will also use this to further leverage the company. There is also a second follow-up question regarding your debt profile. Do you plan to reduce it? And if yes, what is a comfortable amount of debt at the holding level for you? Yo, please also chip in, but the way I see it today, our leverage ratio is 1.43 if you exclude the long-term leases and 1.83 if you include them. And ideally, we would like to be somewhere in between one and 1.5 during this period, right? Yeah, and especially we want to de-leverage, of course, the group, and especially de-leverage HQ and then leverage at your coast. And as I mentioned in the presentation, that will, of course, result in higher interest rates.
Speaker Change: He also has a second follow up question regarding your debt profile do you plan to reduce it and if yes, what is a comfortable amount of debt at the holding level for him.
Speaker Change: Youll. Please also chip in but the way I see it today our.
Speaker Change: Our leverage ratio is one point 43, if you exclude the long term leases and one point to 83. If you include them and ideally we would like to be somewhere in between one and one 5%. During this period right, Yeah, I'm, especially where you want to deliver to of course the group, especially.
Speaker Change: Especially deleverage HQ, and then leverage and your cost and as I mentioned in the presentation. There's been of course resort to higher interest rates and therefore, we are levered cycles, where people want to work with five times.
Muhterem Kaan Terzioglu: And therefore, we are limited to 1 to 1.5 times. Those are all the questions in the queue. I think we'll give it another minute. Thank you very much for being with us. I see that we have almost 100 people online.
Those are all the questions. Thank you I think we'll give it another minute.
Speaker Change: Thank you very much for being with us I see that we have almost 100 people online.
Operator: My greatest respects and I am looking forward to talking to you soon. Thank you very much.
Speaker Change: Our greatest respect and looking forward to talking to you soon thank you very much.
Speaker Change: Thank you.