VEON's Q4 2024: Contradictions in Digital Strategy, CapEx, and the Uklon Acquisition

These are the key contradictions discussed in VEON Ltd.'s latest 2024Q4 earnings call, specifically including: Strategic Positioning in Digital Services, Financial Services in Pakistan, CapEx Intensity Beyond 2025, and Strategic Rationale Behind the Acquisition of Uklon in Ukraine.



Revenue and EBITDA Growth:
- VEON Ltd. reported revenue growth of 8.3% in reported U.S. dollars and 14.6% in local currency terms for the full year 2024.
- EBITDA grew 4.9% in U.S. dollars and 12% in local currency terms.
- This growth was attributed to strong execution of their digital strategy, scaling digital services, and effective cost controls.

Digital Services Expansion:
- Direct digital revenues grew by 63% for the full year and grew 42% year-on-year in the fourth quarter, comprising 12.6% of total revenues in Q4.
- This expansion reflects VEON's evolution into a services company with a telco license.
- Growth was driven by successful execution of digital strategies, including financial services and entertainment platforms.

Asset-Light Strategy and Financial Health:
- VEON significantly strengthened its balance sheet and reduced net debt to EBITDA ratio to 1.3%.
- The company's 2025 bonds recovered, with the 2027 bond nearly doubling in value.
- These improvements were due to strategic asset sales and disciplined execution of their asset-light strategy.

Market Performance and Regional Trends:
- Markets like Ukraine and Pakistan showed strong growth, with Ukraine achieving 13.7% revenue growth and Pakistan 22.7%.
- Challenges were faced in Bangladesh due to macroeconomic pressures and political unrest.
- Regional performance was influenced by macroeconomic conditions and specific market dynamics.