31 slides from VEON Ltd. ORD's earnings presentation, Mar 6, 2014
Slide 1: 4Q and FY 2013 Presentation
4Q and FY 2013 © VimpelCom Ltd 2014 Presentation Amsterdam, March 6, 2014 Jo Lunder - CEO Andrew Davies - CFO 1
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements”, as the phrase is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to the Company's anticipated performance, expected capital expenditures, 2014 annu
Slide 3: 4Q13 results impacted by regulatory measures and market slowdown
4Q13 results impacted by regulatory measures and market slowdown Service revenue Mobile customers (USD billion) (million) • Service revenue organic decline of 5% YoY 5.3 220 • Robust mobile data revenue growth © VimpelCom Ltd 2014 • Mobile customers increased1 4% YoY EBITDA EBITDA margin2 (USD billi
Slide 4: Stable underlying FY13 results
Stable underlying FY13 results Service revenue EBITDA (USD billion) (USD billion) • Stable underlying revenue and 21.5 9.6 EBITDA, excluding MTR cuts in Italy and one-off charges © VimpelCom Ltd 2014 • Service revenue organic decline of 2% YoY • EBITDA organic decline of 1% YoY Net loss Net income 1
Slide 5: Key recent developments
Key recent developments ► Provided annual targets1 for 2014 • Stable Revenue and EBITDA • Net Debt / EBITDA of ~2.3x © VimpelCom Ltd 2014 • CAPEX / Revenue of ~21% ► New dividend policy announced to support investments in future growth and deleveraging ► 3G services launched in Bangladesh ► 3G licen
Slide 6: Business Units Performance
Business Units Performance © VimpelCom Ltd 2014 6
Slide 7: Russia 4Q13: Pressure on margins while investing in the future
Russia 4Q13: Pressure on margins while investing in the future RUB BILLION, UNLESS STATED OTHERWISE Revenue Mobile customers (million) -4% YoY +1% YoY • Mobile service revenue decreased 73.6 75.4 70.7 56.1 56.5 2% YoY; adjusted for one-offs 12.1 13.0 12.6 increased 0.3% YoY 61.6 62.4 • Mobile data r
Slide 8: Italy 4Q13: Continued market outperformance
Italy 4Q13: Continued market outperformance EUR MILLION, UNLESS STATED OTHERWISE Revenue Mobile customers (million) -10% YoY +3% YoY • Continued mobile market share 1,369 21.6 22.3 increase 1,250 1,237 369 325 330 • Mobile broadband customers2 up 50% YoY to 8.3 million © VimpelCom Ltd 2014 1,001 926
Slide 9: Africa & Asia 4Q13: Negative impact from regulatory measures
Africa & Asia1 4Q13: Negative impact from regulatory measures, unstable macro environments and FOREX USD MILLION, UNLESS STATED OTHERWISE Revenue Mobile customers2 (million) -8% YoY +7% YoY • Revenue and EBITDA organically 937 863 83.5 88.9 declined 5% YoY and 3% YoY 869 • Unfavorable regulatory and
Slide 10: Ukraine 4Q13: Continued pressure on results, transformation program launched
Ukraine 4Q13: Continued pressure on results, transformation program launched UAH BILLION, UNLESS STATED OTHERWISE Revenue Mobile customers1 (million) -9% YoY +3% YoY • Mobile service revenue decreased 9% 3.5 3.4 3.1 YoY following the transition to lower 25.1 25.8 0.3 0.3 0.3 priced bundled tariff pl
Slide 11: CIS 4Q13: Solid results
CIS1 4Q13: Solid results USD MILLION, UNLESS STATED OTHERWISE Revenue Mobile customers (million) +3% YoY +5% YoY • Mobile service revenue increased 3% 488 513 503 24.2 25.4 YoY driven by strong mobile data 38 42 42 revenue growth of 39% YoY 449 471 461 • Mobile customers increased 5% YoY, © VimpelCo
Slide 12: Financial Highlights
Financial Highlights © VimpelCom Ltd 2014 Andrew Davies CFO 12
Slide 13: Financial performance 4Q13
Financial performance 4Q13 4Q12 USD million 4Q13 Restated YoY 1 Revenue 5,554 5,950 (7%) • Revenue decreased organically by 6% YoY of which service revenue 5,292 5,605 (6%) EBITDA 2,372 2,446 (3%) • EBITDA decreased organically by 2% YoY, mainly due to: ► MTR cuts in Italy VoIP deactivation in Bangl
Slide 14: Financial performance FY13
Financial performance FY13 FY12 USD million FY13 YoY Restated1 Revenue 22,548 23,061 (2%) • Revenue organically stable, excluding one-off charges and MTR cuts of which service revenue 21,531 22,122 (3%) EBITDA 9,619 9,768 (2%) • EBITDA organically stable, excluding one-off charges and MTR cuts EBITD
Slide 15: Effective tax rate analysis
Effective tax rate analysis FY12 USD million FY13 Restated1 Income/(Loss) before tax (679) 2,282 Dutch statutory tax rate (170) 25% 571 25% © VimpelCom Ltd 2014 WHT on undistributed earnings 227 97 • Withholding taxes on intercompany dividends from Russia and CIS Impairments 743 97 • Non-deductible
Slide 16: Net income FY13 impacted by non-cash impairments
Net income FY13 impacted by non-cash impairments USD million (149) 151 (184) 386 (273) 79 1,539 1,549 © VimpelCom Ltd 2014 (2,973) (1,424) Net income 1 EBITDA Amortisation Interest Income tax Other Impairments Net income 1 Impairments Net loss 1 2012 and depreciation 2012 2013 before 2013 2013 impai
Slide 17: Cash flow
Cash flow USD million FY13 FY12 YoY Restated1 EBITDA 9,619 9,768 (149) CAPEX (4.233) (4.120) (113) Operating cash flow 5,386 5,648 (262) • Decline in EBITDA and accelerated investments for future growth • Interest rate swaps unwound in 2012 © VimpelCom Ltd 2014 Net Interest paid (2,047) (1,761) (286
Slide 18: Maturity profile and FY13 ratios
Maturity profile and FY13 ratios Group debt maturity schedule as at 31 December 2013 Debt composition USD billion by currency1 9.3 Wind 2% USD GTH 6.1 VimpelCom/OJSC 18% 30% EUR 4Q13 RUB © VimpelCom Ltd 2014 1.8 2.6 2.4 1.5 Other 1.0 1.2 0.9 0.6 49% 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 19: Sensitivity to FOREX movements
Sensitivity to FOREX movements FOREX sensitivities1 FY13 figures RUB vs. USD EUR vs. USD UAH vs. USD USD billion +/-10% +/-10% +/-10% Revenue 22.5 4% 3% 1% Average FOREX © VimpelCom Ltd 2014 EBITDA 9.6 4% 2% 1% Gross Debt 27.5 2% 5% n.a. Year-end FOREX Net Debt 22.6 2% 6% n.a. Manageable impact on t
Slide 20: Conclusion
Conclusion © VimpelCom Ltd 2014 Jo Lunder CEO 20
Slide 21: Stable underlying results in 2013
Stable underlying results in 2013 ► Results impacted by competitive pressure, market slowdown, unstable macro environments, regulatory and governmental measures ► Continued strong mobile data revenue growth © VimpelCom Ltd 2014 ► Ongoing transformation process in Russia ► Continued outperformance in
Slide 22: Q&A
© VimpelCom Ltd 2014 22 Q&A
Slide 23: Further information
Further information Investor Relations Claude Debussylaan 88 1082 MD Amsterdam The Netherlands T: +31 20 79 77 234 © VimpelCom Ltd 2014 E: ir@vimpelcom.com Visit our new website Install VimpelCom www.vimpelcom.com iPad App 23
Slide 24: Thank you!
© VimpelCom Ltd 2014 24 Thank you!
Slide 25: Appendices
© VimpelCom Ltd 2014 25 Appendices
Slide 26: Debt and cash
Debt and cash Consolidated cash and net debt development Actual 4Q13 (USD million) During 4Q13: • Repayment of USD Bond by Pakistan Mobile Communications Ltd for USD 0.1 billion (5,081) 4,850 • Repayment of Sberbank loans by OJSC 27,566 27,453 VimpelCom for RUB 2.6 billion (USD 0.1 7 billion) © Vimp
Slide 27: Revenue and EBITDA development in 4Q13 and FY13
Revenue and EBITDA development in 4Q13 and FY13 4Q13 FY13 Revenue YoY EBITDA YoY Revenue YoY EBITDA YoY Organic Reported Organic Reported Organic Reported Organic Reported (4%) (8%) (6%) (10%) Russia 2% (1%) 1% (2%) © VimpelCom Ltd 2014 (10%) (5%) (3%) 1% Italy (8%) (5%) (6%) (3%) (5%) (8%) (3%)
Slide 28: FOREX rates used in annual targets 2014
FOREX rates used in annual targets 2014 Currency FX rates versus USD Algeria DZD 81 Armenia AMD 420 Bangladesh BDT 80 Canada CAD 1.05 © VimpelCom Ltd 2014 Egypt EGP 8.0 Georgia GEL 1.7 Italy EUR 0.80 Kazakhstan KZT 155 Kyrgyzstan KGS 47 Laos LAK 8,000 Pakistan PKR 110 Russia RUB 32 United Kingdom GB
Slide 29: FOREX development
FOREX development RATES OF FUNCTIONAL CURRENCY TO USD Average rates Closing rates 4Q13 4Q12 YoY FY13 FY12 YoY Russian Ruble 32.53 31.08 (4.5%) 32.73 30.37 (7.2%) © VimpelCom Ltd 2014 Euro 0.73 0.77 4.8% 0.73 0.76 4.2% Algerian Dinar 80.18 79.40 (1.0%) 78.38 78.94 0.7% Pakistan Rupee 106.93 96.25 (10
Slide 30: Reconciliation of EBITDA
Reconciliation of EBITDA 4Q12 FY12 USD million 4Q13 FY13 Restated 1 Restated 1 Unaudited EBITDA 2,372 2,446 9,619 9,768 Depreciation (823) (758) (3,063) (2,926) Amortization (459) (519) (1,792) (2,080) Impaiment of C anada (768) (328) (768) (328) Impaiment of Ukraine (2,085) - (2,085) - © VimpelCom
Slide 31: Reconciliation of consolidated net debt
Reconciliation of consolidated net debt USD million 4Q12 3Q13 4Q13 Net debt 21,971 22,485 22,603 C ash and cash equivalents 4,949 4,890 4,454 Long-term and short-term deposits 67 191 396 Gross debt 26,987 27,566 27,453 Interest accrued related to financial liabilities 536 430 606 © VimpelCom Ltd 201