Q2 2026 VEON Ltd Earnings Call Transcript
Key Points
- VEON Ltd (VEON) raised its full-year guidance for revenue growth to 15%-18% and EBITDA growth to 9%-12%, reflecting strong underlying business momentum.
- Digital revenue grew 53.6% to $342 million, with digital EBITDA up 66.2%, and digital now contributes almost 27% of total revenues.
- The company committed to canceling at least $100 million of shares annually, institutionalizing shareholder returns after buying back $183 million since August 2024.
- Operating cash flow surged 238% in the quarter to $463 million, and equity free cash flow grew 47.5% in the first half to $320 million.
- Pakistan's JazzCash is a financial giant, with 27 million active users, 60 million monthly bank accounts, and 225,000 nano loans issued daily, transacting 16% of Pakistan's GDP.
- The partnership with Starlink has enabled over six million users in Ukraine to connect directly to satellites, enhancing connectivity and customer engagement.
- Digital businesses are highly cash-generative with a 36% EBITDA margin and 7% capex-to-revenue ratio, outperforming the telecom segment's 25% cash generation capacity.
- The company successfully completed a $1.4 billion bond offering, addressing 2027 maturities ahead of schedule and extending debt maturity beyond four years.
- Like-for-like earnings per share grew 88% year-on-year, demonstrating strong underlying profitability.
- The VEON Flywheel model is working, with multiplay customers generating significantly higher value and digital platforms reaching over 227 million customers.
- Reported EBITDA growth was affected by exceptional items, including a non-cash fair value loss on Kyivstar Group warrants and a provision release in Bangladesh last year.
- Kazakhstan's performance deteriorated sequentially, with local currency ARPU falling 1.5% year-on-year and EBITDA margins dropping by 9% due to a 6% VAT increase and revenue recognition timing.
- Bangladesh faced significant energy outages in April and May, reducing data consumption by 15% and impacting growth, though the World Cup helped offset some impact.
- The company's stock trades at only 3.5 times EBITDA, which management considers undervalued, limiting M&A appetite and reflecting market skepticism.
- Mobile customer numbers remain essentially unchanged across markets, with growth dependent on increasing smartphone penetration, especially among women in Pakistan and Bangladesh.
- The second quarter's equity free cash flow was impacted by a one-time prepayment of taxes in Pakistan, which will not recur.
- Digital revenue growth in Bangladesh was partly driven by the World Cup, which may not be sustainable as a recurring growth driver.
- The company faces regulatory hurdles in launching financial services in new markets like Bangladesh and Ukraine, with digital banking licenses still pending.
- Inflation expectations have risen to 9.5% in VEON's markets, up from 8%, which could pressure consumer spending and operational costs.
- The company's guidance increase was partly due to better-than-expected performance, but management admitted their earlier expectations were not spot-on, indicating forecasting challenges.
Hello, and welcome to VEON's 2Q '26 results presentation. (Operator Instructions) . Today's presentation will be followed by a Q&A session where we will take questions from the room as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time.
Anand Ramachandran, you may begin.
Thank you, Lucy. Good morning and good afternoon to everyone joining us for VEON's second quarter results. We are the largest NASDAQ-listed company in Dubai, and we are taking this opportunity to host this call out of New York and are very pleased to be able to doing that. So we thank the people in the room who've joined us. Thank you for the people who've joined us on the webcast.
My name is Anand Ramachandran, Chief Corporate Development Officer. Let me introduce management in the room. Next to me is Kaan Terzioglu, our Group CEO; next to him, Burak Ozer, our Group CFO. As usual, Kaan will begin with the strategic and operational highlights, followed
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
