January-September 2021 Financial Results Report

Kcell JSC

Results for January- September 2021

January - September 2021

Kcell JSC

Results for January-September 2021

Q3

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Almaty, October 29, 2021 - Kcell Joint Stock Company ("Kcell" or the "Company") (KASE, AIX: KCEL), one of the leading provider of mobile telecommunications services in Kazakhstan, announces its interim results for January- September 2021.

Third quarter

• Net sales increased by 7.3% to KZT 50 245 million (46 828). Service revenue increased by 12.8% to KZT 40 419 million (35 841).
• EBITDA, excluding non-recurring items, increased by 0.7% to KZT 20 658 million
  (20 509), with EBITDA margin of 41.1% (43.8).
• Operating income, excluding non-recurring items, increased by 2.1% to KZT 12 874 million (12 611).
• Net finance cost decreased by 35.3% to KZT 1 526 million (2 359).
• Net income increased by 2.2% to KZT 9 326 million (9 124).
• CAPEX-to-salesratio - 13.4% (7.5).
• Free cash flow more than doubled and amounted to KZT 17 433 million (8 141).

Nine months

• Net sales increased by 11.9% to KZT 140 408 million (125 516). Service revenue increased by 11.1% to KZT 114 541 million (103 122).
• EBITDA, excluding non-recurring items, increased by 12.5% to KZT 59 463 million
  (52 878), with EBITDA margin of 42.4% (42.1).
• Operating income, excluding non-recurring items, increased by 23.2% to KZT 36 244 million (29 418).
• Net finance cost decreased by 20.4% to KZT 5 709 million (7 175).
• Net income increased by 41.3% to KZT 24 953 million (17 662).
• CAPEX-to-salesratio - 8.1% (5.7).
• Free cash flow increased by 70.5% to KZT 39 047 million (22 905).
• Total subscriptions - 7 957 thousand users (8 040).

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January - September 2021

Financial highlights

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		KZT in millions, except key
		ratios, per share data and		Q3 2021	Q3 2020	Chg (%)	9m 2021		9m 2020		Chg (%)
		changes
	Net sales		50 245	46 828	7.3	140 408		125 516		11.9
		of which service revenue		40 419	35 841	12.8	114 541		103 122		11.1
	EBITDA excl. non-recurring items
				20 658	20 509	0.7	59 463		52 878		12.5
		Margin (%)		41.1	43,8		42.4		42.1
	Operating income		12 874	12 085	6.5	36 927		28 704		28.6
	Operating income excl.
	non-recurring items		12 874	12 611	2.1	36 244		29 418		23.2
	Net income		9 326	9 124	2.2	24 953		17 662		41.3
	Earnings per share (KZT)		46.6	45,6	2.2	124.8		88.3		41.3
	CAPEX-to-sales (%)
				13.4	7,5		8.1		5.7
	Free cash flow		17 433	8 141	114.1	39 047		22 905		70.5

In this report, comparative figures are provided in parentheses following the operational and financial results and refer to the same item in the third quarter or nine months of 2020, unless otherwise stated.

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January - September 2021

Comments by Yuri Kharlamov, Chairman of the Management Board, CEO

"I am pleased to announce that, for the first time in the history of Kcell, the level of revenue for the quarter reached 50 billion tenge. In the third quarter, we maintained a positive trend in the development of our operating and financial indicators. The total revenue grew by 7.3%, service revenue by 12.8%. These indicators form a solid foundation for strengthening our market position in future and achievement of the goals outlined in our five-year development strategy, which includes a three-year transformation program containing a new commercial strategy, optimization of processes and costs as well as building an agile organization.

Thanks to an intense focus on user needs and promotion through our main communication channels, we are seeing growth in the integration of package offerings. We have also started refreshing our subscriber base segmentation and developed a program to increase customer NPS and new marketing campaigns.

The revenue from mobile financial services (MFS) grew by 53% vs. Q3 2020, with the main growth drivers being entertainment, loyalty bonus program and payments on Google Play. More and more customers are now opting for the bundled tariffs offering OTT and value added services. In the third quarter, we launched an attractive line of the OGO Finance products: OGO Bonus, OGO Card and OGO Deposit. The new financial product has been designed to improve the quality of our services and create more value for our customers.

We strive to become more than just a telecom operator for our customers. Today we are leading the market in terms of device sales, but this is not the limit! We have started selling contract phones not only to the Kcell subscribers, but to everyone as well.

Such an approach will enable us to acquire new customers, reach a higher level of profitability as well as increase ARPU, which now stands at 12.3%.

The customer churn rate went down due to the customer base quality improvement measures we have taken in recent years. In addition, contract sales have a positive effect on the LTV (lifetime value) of our customer base.

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Q3

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In B2B segment, we continue to implement bold infrastructure projects: Kcell became the first mobile operator in the country to build a private LTE network. The data obtained showed that we are moving in the right direction - our customers have appreciated the advantages of the LTE technology. Today, as part of the NWF Samruk- Kazyna group, our company is involved in a number of joint projects on private LTE networks and telemetry in the energy sector.

In the third quarter, free cash flow increased by 114.1%, which creates tremendous opportunities in attracting investment in the improvement of infrastructure and technological sophistication.

One of the most remarkable events for the company was the successful completion of a challenging task - 5G network testing. The network is now fully ready for operation, and we will soon start deployment of the fifth generation network to provide 5G coverage in the entire city of Turkestan. This is a truly unprecedented event for Kazakhstan, especially given the fact that the number of customers using 5G devices is constantly increasing.

At the end of September, Kazakhtelecom JSC announced the sale of 24% of shares of Kcell JSC on the Kazakhstan Stock Exchange KASE, 14.87% of which were acquired by Pioneer Technologies S.A.R.L. and 9.08% of the shares were acquired by First Heartland Jusan Bank JSC.

Kcell remains committed to maintaining high standards of corporate governance and best practices in all areas of its activity. We will continue to delivering strong financial and operational results for the benefit of our customers and shareholders."

Almaty

October 29, 2021

January - September 2021

Conference call

Kcell together with Kazakhstan Stock Exchange JSC will host a video conference call for investors and analysts on October 29, 2021 at 15:00 Almaty time. The conference will be held in Russian.

To participate in the event, you must send information (last name, first name and patronymic, organization name, position, e-mail address, questions of interest) to [e-mail].

All registered participants will be sent a link (invitation) to an online meeting in ZOOM.

A presentation will be available on the Company website shortly before the conference call at https://investors.kcell.kz

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Enquiries:

Kcell

Investor Relations

Irina Shol[phone]

ext. 1002

[e-mail]

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