Telenor Asa · OSL:TEL

Telenor Asa — VimpelCom — Investor Presentation (September 2003)

23 slides from Telenor Asa's investor presentation, September 2003

  1. Slide 1: VimpelCom Company Presentation

    VIMPELCOM Company Presentation September 2003 1 VimpelCom – September 2003

  2. Slide 2: VimpelCom – the company profile

    VimpelCom – the company profile ‰ Second largest national cellular operator in Russia ƒ GSM license portfolio covering 134 million people VimpelCom subscriber base ƒ 49% market share in Moscow and 30% in Russia million 9 ƒ Ten-fold increase in subscriber base since the beginning of 2001 8 ‰ First Ru

  3. Slide 3: Significant milestones since January 2002

    Significant milestones since January 2002 Acquisition of Extel 7 mln Acquisition of license for subscribers 4 mln subscribers Urals №1 market $250 mln Profitability in bond placement Stake in Beeline- Over 1mln subs in the 6 mln share in Samara raised to the regions Moscow regions subscribers contro

  4. Slide 4: VimpelCom's awards and rating positions

    VimpelCom’s awards and rating positions Awards/ratings Granted by 2nd (after Yukos) in the top-100 rating list of best management teams in Russia. The Russian Managers Association 1st in telecommunications industry 6th in IT100 list of the world’s top IT companies measured by progress in the rates o

  5. Slide 5: Complementary strategic partners

    Complementary strategic partners ƒ 25% strategic partner since December ƒ 25% strategic partner since May 2001 1998 ƒ One of the largest and most diversified ƒ One of the largest strategic foreign financial and industrial groups in investors in the Russian telecom Russia sector ƒ Proven record of su

  6. Slide 6: The strategy for 2003 and beyond

    The strategy for 2003 and beyond Continue revenue and Accelerate growth Build national subscriber growth in of non-voice and data GSM network Moscow services ƒ Increase market share of ƒ Balanced and controlled ƒ Traditional VAS services corporate and higher ARPU development in all six subscribers s

  7. Slide 7: Wireless Growth Expected to Continue

    Wireless Growth Expected to Continue Emerging Europe Cellular Penetration Subscriber Growth in Russia million 100% 42 39 90% 36 80% 33 30 70% 27 60% 24 50% 21 18 40% 15 30% 12 9 20% 6 10% 3 0% 0 Russia Moscow Turkey Poland Czech Hungary 2000 2001 2002 2003F 2004F 2005F Rep. 2002 2005F Moscow Regions

  8. Slide 8: Main Russian GSM players

    Main Russian GSM players VimpelCom MTS Megafon Market share in Moscow as of June 30, 2003 Market share in Russia as of June 30, 2003 Megafon Others 1% Others 5% 15% VimpelCom 30% VimpelCom 49% Megafon MTS 17% 46% MTS 38% Source: Independent research and Company estimates 8 VimpelCom – September 2003

  9. Slide 9: National GSM network rollout

    National GSM network rollout Moscow North-West Super Area Network Area popul. Launch / Population: Population: 14.0 mln. Region ('000) Acquisition Urals 1 Moscow Central 16,985 Jul 1999 17.0 mln. 2 Voronezh Central 2,379 May 2000 Population: 3 Tver Central 1,473 Sep 2001 4 Kaluga Central 1,041 Sep 2

  10. Slide 10: Moscow market – key trends

    Moscow market – key trends Moscow Subscriber Market Share Moscow Subscriber Growth 70% 10 70% Other 9.1 9 57,7% MTS 60% 60% 56,0% 8.0 51,5% 52,0% 52,7% 51,6% 8 50,0% 49,5% 48,8% VimpelCom 7.2 50% 7 50% Penetration 6.2 39,8% 46,5% 45,1% 45,5% 6 40% 43,7% 43,2% 44,2% 5.4 40% 42,6% 39,0% 5 4.6 30% 4.1

  11. Slide 11: National market – key trends

    National market – key trends Russia Russia Subscriber Market Share Subscriber Growth 45% 30 25% Others 40% 37% 38% 36% 37% 25 36% 37% 36% 36% 37% 25 Megafon 20% 35% MTS 21.3 29% 29% 30% 30% 32% 26% 26% 27% 28% 20 VimpelCom 18.6 31% 15% 25% Penetration 14.7 25% 25% 15 20% 23% 24% 23% 18% 18% 17% 12.2

  12. Slide 12: Sales dynamics 2002-2003

    Sales dynamics 2002-2003 Incremental Market Share (sales) Moscow market Russia market (excl. Moscow) 60% 45% 54% 54% 51% 52% 52% 39% 51% 40% 37% 36% 50% 47% 51% 52% 46% 47% 34% 34% 51% 45% 47% 45% 35% 38% 33% 33% 32% 33% 32% 34% 41% 46% 45% 30% 40% 44% 45% 39% 43% 30% 29% 28% 28% 33% 33% 40% 42% 32%

  13. Slide 13: VimpelCom 2Q2003 financial highlights

    VimpelCom 2Q2003 financial highlights Net revenues, $ million Net income, $ million 75.6% 139.9% 52.6 304.4 173.4 21.9 2Q2002 2Q2003 2Q2002 2Q2003 EBITDA, $ million EBITDA margin 50.0% 95.0% 45.0% 40.0% 139.9 46.0% 71.8 35.0% 41.4% 30.0% 2Q2002 2Q2003 2Q2002 2Q2003 Source: VimpelCom 13 VimpelCom – S

  14. Slide 14: Key Operational Indicators

    Key Operational Indicators 2001 2002 2003 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Net operating revenues, $ mln 79.7 94.7 114.1 134.1 145.1 173.4 221.1 229.0 244.4 304.4 EBITDA, $ mln 27.9 35.9 40.9 43.8 63.3 71.8 102.6 84.6 107.9 139.9 EBITDA margin 35.0% 37.9% 35.9% 32.6% 43.6% 41.4% 46.4% 37.0% 44.2% 46.0%

  15. Slide 15: Merger Proposal for VimpelCom and VimpelCom-Region

    Merger Proposal for VimpelCom and VimpelCom- Region 15 VimpelCom – September 2003

  16. Slide 16: VimpelCom in the regions

    VimpelCom in the regions VimpelCom market share, % ƒ Six super-regional licenses 60% 50% ƒ 150% revenue growth in first half 2003 40% ƒ Positive contribution to EBITDA since 30% 3Q02 and to net income since 1Q03 20% 10% ƒ No. 1 in Siberia super-region 0% ƒ No. 2 and fastest growing in Central and 1Q

  17. Slide 17: Why accelerate the merger

    Why accelerate the merger ƒ The 2001 VimpelCom-Region Shareholders Agreements give all parties the right to accelerate the merger process prior to December 2007 ƒ Risk profile of the regions has changed - the VimpelCom-Region structure has now served its purpose ƒ VimpelCom’s management sees signifi

  18. Slide 18: The merger transaction

    The merger transaction ƒ In connection with the merger of VimpelCom and VIP-R, Alfa and Telenor will exchange their aggregate 44.7% interest in VIP-R for 10.9 million new VimpelCom common shares (equal to 14.6 million ADSs) – VimpelCom the surviving entity – 21.4% economic ownership dilution at clos

  19. Slide 19: Relative valuation

    Relative valuation Subscribers ƒ Valuation ratio of 0.91 : 1 between VIP-R and the rest of VimpelCom (predominantly Moscow) – implying that 33.6% of VimpelCom’s market cap. is attributable to its 55.3% stake in VIP-R 2003E 2004E 2005E ƒ Number of subscribers in the regions to exceed Net revenues Mos

  20. Slide 20: Our capital expenditure program

    Our capital expenditure program ƒ Strong funding position Capital expenditure, $ million – Strong cash flow generation 700 – Strong balance sheet 600 – Access to debt capital markets 500 400 300 200 100 0 2002 2003E 2004E 2005E Moscow Regions 20 VimpelCom – September 2003

  21. Slide 21: A strong balance sheet

    A strong balance sheet VimpelCom’s balance sheet (as of June 30, 2003) Actual Pro forma $000 consolidated VIP-R consolidated* Cash and cash equivalents 188,490 28,640 246,990 Total assets 1,977,365 753,687 2,613,647 Interest bearing debt 755,897 340,610** 755,897 Total shareholders’ equity 760,000 2

  22. Slide 22: Summary

    Summary ƒ Strong strategic rationale for merging with VimpelCom-Region ƒ A strong platform for further consolidation ƒ Poised to capture 100% of returns from the regions ƒ Attractive merger terms achievable ƒ EGM shareholder support required 22 VimpelCom – September 2003

  23. Slide 23: Disclaimer

    Disclaimer This presentation contains "forward-looking statements", as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate, in part, to the Company’s development plans, such as future subscriber growth, national expansion and wirele

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