Good morning and good afternoon, ladies and gentlemen and welcome to VEON second quarter results presentation. I’m Nik Kershaw, VEON’s Group Director of Investor Relations. I’m pleased to join today by Kaan Terzioglu, our group CEO along with our group CFO, Serkan Okandan who will take you through the results presentation. And also in the room with us is at Alex Bolis, Head of Corporate Strategy, Communications and Investor Relations. Today's presentation will begin with an operational overview of our second quarter results from Kaan followed by the financial review from Serkan. We’ll then hand to back to Kaan to discuss our outlook for the balance of the year. We're also joined on the call today by the individual country heads from all of our operations. As ever, we will ensure there's ample time for your questions. But we would ask that you save this for the very end of the presentation. 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 relate in part to the company's anticipated performance and guidance for 2021 particularly in light of the COVID pandemic, future market developments and trends, operational and network development and network investment and the company's ability to realize its targets and commercial and strategic initiatives including current and future transactions. Certain factors may cause our results to differ materially 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. The earnings release and the earnings presentation, each of which includes reconciliation of non-IFRS measures presented today can be downloaded from our website. With that, let me hand over to Kaan.

Thank you, Nick. Good morning to all and welcome to the presentation of our second quarter results. On a local currency basis in Q2 group revenue grew by 11.3% year on year bringing local currency growth for the first half to 7.6%. Through the ongoing strong focus on cost control local currency EBITDA grew double digit in Q2 up 10.7% and up 7.4% for the first half. This strong performance was visible in reported currency as well where revenues grew 9.2% and EBITDA increased to 8.7% in US dollars. On a like-for-like basis excluding our reported numbers in 2020 our revenue in US dollars would have been 10% up and EBITDA growth would have been 9.3% up year on year. It is important to note that these results are not just due to the COVID impact but the significant focus on network quality, 4G penetration increase, customer experience and cost control. This unprecedented era has been used in the most equitable way for our business. In consideration of these robust results we are increasing our full year revenue guidance from mid single digits to high single digits and our EBITDA guidance from mid single digit to high to mid single digit to - from mid-single digit to mid-to-high single digit year-on-year growth in local currency. Moving on to slide 6. Here we give you a country-by-country detail of our local currency performance, which shows revenue growth across all of our markets. In Russia, the 6% revenue growth recorded in Q2 underscores our confidence in the underlying operational turnaround that is well underway. We continue to see strong double-digit growth in Pakistan, Kazakhstan and Ukraine both at the revenue and EBITDA level. Let's move to the next slide. All three business models that constitutes our overall group results are showing solid…

Thanks, Kaan. Good morning and good afternoon to all participants. In the coming slides, I will elaborate on our financial results for the second quarter in more detail. Moving to slide 17, as you heard from Kaan’s overview, Q2 was operationally a strong quarter for the group as our businesses continue the recovery that started in the last second half of 2020 and gained momentum in Q1. We have worked hard for this recovery and results are higher than expectations. Group Revenue and EBITDA rebounded strongly from their depressed levels in the second quarter of 2020 when the impact of lockdown's was at its peak. Revenue rose by 9.2% year-over-year on a reported basis and 11.3% in local currency terms, driven by an acceleration of growth in Pakistan, Ukraine, Kazakhstan and Bangladesh as well as a further improvement in revenue trends in Russia which delivered local currency growth of 6.2%. Continued expansion of our 4G customer base contributed on a reported basis to solid service revenue growth of 7.4% underpinned by strong data revenue growth of 16.7%. On a local currency basis, underlying growth was even more impressive with groups service and data revenues growing by 9.5% and 18.7% respectively. Our continued focus on costs supported our EBITDA margin for the quarter at 42.6% with EBITDA growing by 8.7% on a reported basis and by 10.7% in local currency terms. On the back of our 4G expansion plan, we continue to invest in our networks throughout the quarter, which is reflected in the 2.5% rise in operational CapEx on a reported basis or 4.6% in local currency terms. This equates to a rolling 12 month CapEx intensity ratio of 24.3% for the group. Reported net income was $127 million for the quarter, the year-on-year decrease of 27.1%. Although this is…

Thank you Serkan. Let me close our presentation with a reminder of our priorities for 2002 and our progress to-date. First, we are progressing well on the path to increase our 4G subscriber penetration with an increase of 11 percentage points year-on-year, we are now at 43% and our target over the next three years is to reach 70%. Second, returning Russia to growth has been an important achievement, maintaining this top priority in the months ahead as we strengthen our market position. Third, Ukraine, Pakistan and Kazakhstan continue to deliver double-digit growth as their 4G penetration levels evolve. Fourth, our digital operators strategy is being executed through an increased number of digital services in all markets impacting ARPU and churn in the positive way. Fifth, we maintain our discipline in managing our portfolio as shown by the recent put option exercise for the sale of our Algeria business. Effective hedging strategies through local currency borrowing, extended maturities matching our investment cycles and lowering the cost of funding remain priorities for us. Six, we remain ambitious on costs and continue to improve group's cost efficiency on the project optimum both at the country level and at our headquarters. Finally, we remain committed to realizing the value of our considerable infrastructure portfolio. Russia, Ukraine and Pakistan have already established separate tower entities and we are progressing with strategic alternatives to crystallize their value. With that, I would like to thank you for your attention and turn the call over to the operator for your questions. Operator?

[Operator Instructions] And your first question comes from the line of Vyacheslav Degtyarev from Goldman Sachs. Your line is open. Please ask your question.

Yes. Thank you very much for the presentation. A couple of questions. So firstly you mentioned that NPS improvement in Russia. How would you qualitatively assess where you are currently on the journey of the NPS recovery to the desired level heavy path let's say 10% to 25% or maybe half of the journey in terms of the NPS recovery in the country. And the same question is on CapEx in Russia in terms of the network investments. Have you passed the peak levels already in terms of the network investments in Russia in order to catch up with that desired level of the market leaders? And secondly you announced intention to monetize towers obviously across all markets at the beginning of the year. But in relative terms which markets you think are currently more progressed and the way the market is ready for power sharing in your view? Thank you.

Thank you, Slav. So with regard to the NPS improvements, we are comfortable with the NPS improvements in the cities that we have prioritized our investments in late of 2019, 2019 and 2020 and we are seeing statistically reliable NPS results showing that our customers are actually appreciating the new service levels. This is seen both in terms of lower churn, but also mobile network portability numbers. With regard to relative NPS in terms of the gap in between the number one and us, we are also seeing significant – statistically significant reductions as we move on and we continue that to – continue. With regard to your question about network investments, we are satisfied with the pace. We had a prioritized models starting with certain priority cities and we will continue our plan and as I mentioned before, our PAT for this level of continued investments also in Russia will continue until we reach 70% 4G penetration which again we are happy with the progress to the level that is now. In terms of monetization of towers, we are active in every country that we operate. From a priority perspective and level of progress, we are most progressed in Russia, Pakistan, Bangladesh, Ukraine and in that order and we are looking and exploring crystallization opportunities in every country depending on market dynamics and different type of players. What I can tell you is that in all the markets that we are active the independent tower company potential has not been fully tapped and remains to be very attractive. Thank you.

Okay thank you very much.

And next question comes from the line of from Ivan Kim from Xtellus Capital your line is open please ask your question.

Hi. Thank you for the opportunity. So firstly on the dividends so given that the first half equity free cash flow was about $15 million. How would you think about the visibility over the June resumption next year. Secondly on the mobile service revenue growth trend in Russia what was it in July August. And then lastly what happens in the consumer business in Russia. Is consumer mobile revenue stalling because you sort of are saying that this mostly driven by B2B. Thank you very much.

So let me answer the questions on the mobile service and B2C and I will leave the question for the dividend to Serkan. In terms of our mobile services revenues in Russia we have seen a solid across the quarter increase of 1.6%. What is important is as I mentioned this is the eighth quarter in a row of sustained subscriber traction and growth as well. It is impossible to differentiate sometimes our FMC converge services dynamics B2B dynamics and B2C dynamics in a clear way. But I am overall happy with the progress that we are showing on all these three domains. Will further progress happen? Yes. Will it be driven by further expansion of our 4G network apart from Russia and St. Petersburg of course. So that’s what I would like to tell. And I think last quarter, in the last month of March, we have seen B2C numbers going positive territory. And this quarter it is for the full quarter we have seen the positive territory. Serkan, on dividend side.

Yeah. For the dividend, if allow me about I can a little bit – it's a bit long so that we can see all the aspects. First of all our dividend policy. We have the same dividend policy. There is no change in the dividend policy, which is minimum 50% of the free cash flows of the license payment. So the dividend policy is still in place. Second, as we said last time our equity free cash flow is improving. We generated minus $13 million in Q1 and in Q2 we generated plus $63 million. So cumulatively we have now as you said $50 million positive free cash flow in the first half. And we raised our revenues and EBITDA guidances to the market while saying that we will have the same similar level of CapEx in the second half of the year arithmetically actually depending on certain spectrum auctions, which would be happening in the next couple of months. Depending on the results of those spectrum auctions, we are expecting the second half of the year in from equity free cash flow perspective we'd be better than first half of the year this year. So from equity free cash flow perspective as well, we are expecting an improvement. So having said that, we have the same dividend policy. We are improving free cash flow. However, if we have unknowns as well. For example, in certain markets we still see some lockdowns, some restrictions coming from COVID. So I think it is early to conclude on the dividend at this point in time. We have to monitor the developments in the coming months. Having said that, in the meantime we are focusing on our investments, we are focusing on increasing our revenues, EBITDA, cash flow, capital structure. We are improving – we are focused on to improve our business in all aspects. So I believe that as a conclusion towards the end of the year when we see more vendors have more clarity more clarity about result. Our board will assess the final result and based on our recommendation, I believe that they will make a decision about the dividend. But all the indications as far as I can see are moving in the correct direction.

Thank you very much for this, Serkan and Kaan. Can you just – can you comment on July/August mobile service growth in Russia or not? Thank you.

We haven't disclosed that in our press release so I will stay for that.

Okay.

You will have a short time for…

Yeah.

And your next question comes from the line of Henrik Herbst from Morgan Stanley. Your line is open. Please ask your question.

Yeah. Thanks so much and congratulations. Encouraging to see your revenue trends and obviously your data and positive in Russia. But just to follow-up on that I guess it's whilst your service revenue, mobile service revenue growth did improve, it certainly improved in line with the market and I guess some of the larger players. How do you think about your ability to perhaps close the gap and grow in line, grow more in line with your competitors, i.e. are you quite happy with couple of the service revenue growth or do you think there's more to do, could we see an improvement from that? And then secondly as your service revenue growth starts to improve, how should we think about your ability to drive EBITDA margin improvement in Russia, I guess you had run in some sort of double network costs you brought some of the maintenance in-house, how should we think about that sort of dropping out of the comps and what impact cannot get on your margins? And then, can I just confirm when you were talking about one to two percentage point improvement in cost intensity for the group. Can I just double check that's on a net basis? So it's basically the same as margin improvement by 2023. And is 2020 the base year or 2021? Thank you very much.

Henrik, thank you very much. I was also asked after my comments Alexander Torbakhov who is on the line to comment as well about your question about Russia specifically. But as you can imagine Henrik our definition of success in Russia is not just to turn around. We just delivered on our promise to get back on to growth in Russia in the first half and we did that. It is not satisfactory for us to stay there. And as you can imagine and these comments are not specific to Russia, but 4G penetration is not also our ultimate objective. We need to move from 4G penetration to multiply customers, providing our customers a real lifestyle type of application so that we can further improve our ARPU, further reduce our churn. So we are on the beginnings of this journey. I am happy with the progress that we have seen in Russia. I am happy with the fact that you are able to deliver on our commitments going back to growth results. But this is not the end result. It is just the beginning.

And for the Alexander...

Okay. Sorry. Okay. So that's I think number one. The second issue is I have also in Q1 previously mentioned that we will go through a cycle in EBITDA in Russia and we are exactly going through that cycle and we will see further improvements in Q3 and Q4 as we move on. And I will leave the question of your last question about 1%, 2% from Project Optimum is it net gross maybe Serkan you can clarify that.

Again maybe two things I want to mention. First of all what do we mean by same cost intensity. Maybe we should consider to explain to the formal of a veteran in the coming quarters what we adjust we make certain adjustments in calculating cost intensity [Technical Difficulty] we are removing handset revenues and handset costs when we calculate cost intensity so to just look at the operational cost intensity. So that's one thing that I want to mention. But broadly you should see this improvement in the post intensity to be reflected in the EBITDA margin broadly but not one to one. Having said that I think that the 2020 numbers are relatively distorted because of obvious reasons as we all know so the base is Q1 this year so Q1 this year should be the base and as you can understand whatever we improve the first to impact this year is minimal because of the timing impact. But the full impact will start in 2022. And whatever we improve in 2022 we'll have partial impact on 2022 and the full impact in 2023. That's why our ambition is by the end of 2023. So we have a two years use let's say perspective. So about – you ask also about absolute number. Assuming that we have let's say $8.5 billion to $9 billion revenues. So if you take 1% we can say $85 million to $90 million US dollar. If you take 2% just multiplied by two so that can be a range about the absolute number.

Thank you Henrik for the question.

Got it. Thanks so much. Thank you.

And your next question comes from the line of Cesar [ph] from Bank of America. Your line is open, please ask your question.

Yes. Hi. Thanks for giving the opportunity to ask questions. I have three actually. The first one relates to Russia again. Can you please explain what needs to happen in your view to have a further acceleration of service revenue growth in Russia? Do you need to increase subscriber numbers? Do you need to get the existing base spend more? Do you need to increase the 4G penetration that would be helpful? And then the second question also relates to Russia. Just wanted to check out what needs to happen as well for margins to stabilize and put this potentially increase from there. And third would be on the mobile on the FinTech business in Pakistan. Are you willing to disclose any metrics which would probably allow us to have some view on valuation for your business? Thank you.

In terms of the Russian especially service revenues business, I think the further acceleration that you should be looking for enhancing our 4G network footprint across the major 12 cities, we are as I mentioned you, we have completed quite a heavy lifting in Moscow oblast of Moscow as well as St. Petersburg and slowly we are reaching the next 12. As we do that we’re going to see a higher 4G penetration, higher MPS, less churn, and higher ARPU potential. So, that will be one of the major drivers of the further growth in Russia. But more importantly, as we built our new digital operator bundles and come to market with additional digital applications as part of our core offerings, we will also have an impact on ARPU and churn and this will be a further catalyst and this will be a further catalyst. I mentioned in the last quarter as well, we have gone through a serious internalization of our management and support activities of our network from an outside vendor to internal sources. And as we are completing this process, we're going to be seeing also the stabilization of our cost base and as Serkan mentioned Russia of course being 50% of our business is also a major contributor to Project Optimum and the savings that we are expecting. From a fintech business in Pakistan, we have already achieved two important I think development, our monthly active base has grown 61% to 13.1 million. And more importantly, we did very well in expanding our merchant acquisition network to 82,000 and I think these are very strong indicators that our business is healthy, progressing nicely and we will take on board your feedback about further KPIs and metrics to be shared with yourselves over the next quarters as we progress.

And your next question comes from the line of Alexander Vengranovich from Renaissance Capital. Your line is open. Please ask your question.

Yes. Thank you. So, good afternoon. My – I have a couple of questions. So first can we get an update on your thinking regarding the capital market strategy and optimal listing structure? I think we haven't discussed that issue since last year and I remember you were saying that the management was investigating different like options available at that time. So I'm just trying to get an update whether you are doing any sort of work in that direction. What are your thoughts on the potential new leasing venues like London or Moscow? So that will be interesting. And then second question on kind of a two questions on JazzCash. So yeah despite the really solid growth of the number of the users year-over-year, I've noticed that there was some sort of a decline of the active users quarter-over-quarter. So it was $13.9 million a quarter and it’s $13.1 million this quarter. Can you explain the reasons for that the volatility whether it's seasonality or is there anything else behind it? And the second question regarding JazzCash. Can you remind us what was in your organizational structure is it now a kind of a fully separated legal entity, which you might be potentially monetized in some way of either or whatever placement of the shares in the capital markets like publicly or to potential private partner. So any thoughts on that whether the entity is really ready for potential monetization? Thank you.

Thank you very much. And let me start with the question about listing. As we are getting better results and our portfolio management decisions are affecting more investors from different parts of the road, we clearly see the need to take our stock easily accessible to them. And we are supporting this natural evolution and through a robust investor relations program, we are taking all the steps we can to accelerate this process. So we will – I'm not ready now to tell you when but it is clear for us that in order to optimize and facilitate the best access to investors for our stock, we are considering all the options. I know that you have been very patient with us on that. Please allow us to come back to you when we are ready. In terms of our volatility of our monthly active users of JazzCash. Please keep in mind that we just went over an 18 months of an unprecedented queries related era. During this era, due to specific campaigns or the flavor of the crisis of the day in any country, there might be a different type of activity levels especially with digital applications. So the volatility you see is a direct result of our campaigns that has accelerated at certain points in the credit by country in Pakistan, and we have to do with the overall progress of 61% year-on-year growth of monthly active users. In terms of revenue with operations in terms of [indiscernible] again please allow us to come back to the market when the right time we please is there. I would not want to make any comments on that front yet, but we are happy with the progress of our business there in terms of our penetration levels.

And next question comes from the line of Alexander [indiscernible] Capital. Your line is open. Please ask your question.

Good afternoon, gentlemen. Actually I had a question about leasing in Moscow, but you had already answered. So thank you.

Okay. Thank you very much, Alexander.

And your next question comes from the line of Anna [indiscernible] from Alfa Bank. Your line is open. Please ask your question.

Thank you very much. Good afternoon. I would like to ask a question regarding your upcoming sale of the tower infrastructure. So in respect of how would you like or you prefer to structure such a sales transaction. So what’s your – what will be your priority or approach to find the proper buyer? So I mean whether you are more looking to gain the best price or you will structure like an auction model or you will consider more metrics of potential buyers? Because as far as I understand you will like after the sale you will get the services, maintenance, infrastructure maintenance services from the buyer. So could you elaborate a bit on how you will find your best buyer for the tower infrastructure? Thank you.

Thank you, Anna. Thanks for asking the question. We have actually disclosed as much as we can in our announcements and we have been following a very fair competitive process over the last couple of months, even more than actually five months on this matter. It is important to understand that our tower monetization and process is not about just creating cash and funds for company but to create a sustainable environment to make sure that the right focus is placed and more productivity can come out of these assets. So it is not only about the price. It's about the sustainability and the quality of the service we will get over time. And it is all about capital expenditure decisions that will be also related to the future as well. So we are looking for a real value creation model. And I am very happy with the progress so far. Russia although is not big in terms of independent tower companies. We always had of independence our companies, we always had very strong relations and ongoing commercial relations with all the independent tower operators in the country. We know them. We know their capabilities. And we will of course inform the market when the right time comes in terms of our decision. Thank you.

[Operator Instructions] There are no further question at this time. Please continue.

If there are no further questions, just like to thank everyone for dialing in this afternoon. If you have any more questions, please feel free to reach out to me and we'll be speaking to a number of you over the coming days. Thanks very much, everyone. Have a good day. Thank you.

And this concludes today's conference call. Thank you for participating. You may now disconnect.