36 slides from VEON Ltd. ORD's earnings presentation, Mar 13, 2012
Slide 1: 4Q 2011 Presentation
4Q 2011 © VimpelCom Ltd 2012 Presentation Amsterdam, March 13th, 2012 Jo Lunder CEO VimpelCom Ltd. 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 financial performance objectives, development plans and anticipat
Slide 3: Key messages
Key messages • Robust mobile subscriber growth • Solid organic revenue growth • Stable EBITDA excluding forex impact © VimpelCom Ltd 2012 • Strong cash flow generation • Net income impacted by non-cash items 3
Slide 4: Progress
Progress Selective M&A ► Euroset option not exercised Algeria ► Discussions ongoing Governance ► Arbitration withdrawn Wind Telecom transaction © VimpelCom Ltd 2012 ► Integration completed and spin-off OTH assets completed Dividend ► Final dividend for 2011 announced Portfolio review ► I
Slide 5: Key results 4Q11
Key results 4Q11 • Mobile subscribers increased 13%* to 205 million • Total fixed-line subscribers of ~5 million • Organic revenue growth of 5% YoY*, revenues of USD 5.9 billion © VimpelCom Ltd 2012 • EBITDA excl. FX stable YoY*, EBITDA of USD 2.2 billion • EBITDA margin of 37% • Net cash from opera
Slide 6: Business Units Performance
Business Units Performance © VimpelCom Ltd 2012 6
Slide 7: BU Russia: Operating Highlights
BU Russia: Operating Highlights Mobile subscribers ARPU and MOU (million) (RUR) (min) +10% YoY -2% YoY ARPU +14% YoY MOU 56.8 57.2 333 327 334 327 308 55.3 53.0 251 259 © VimpelCom Ltd 2012 52.0 244 228 218 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 ARPU MOU Broadband subscriber
Slide 8: BU Russia: Financial Highlights
BU Russia: Financial Highlights Revenues EBITDA and EBITDA Margin (RUR billion) (RUR billion) +10% YoY -6% YoY 65.2 69.6 71.0 64.5 60.4 28.0 25.4 27.1 27.9 26.4 10.7 10.8 11.5 12 10.3 © VimpelCom Ltd 2012 43.4% 42.1% 41.5% 40.0% 37.1% 53.8 50.1 54.4 58.1 59.0 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 1
Slide 9: BU Europe & NA: Operating Highlights Italy
BU Europe & NA: Operating Highlights Italy Mobile subscribers ARPU and MOU (million) (EUR) (min) +5% YoY ARPU -8% YoY MOU +8% YoY 16.5 15.4 16.0 15.7 21.0 15.2 20.8 20.6 20.3 198 196 205 191 187 © VimpelCom Ltd 2012 19.9 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 ARPU MOU Broadb
Slide 10: BU Europe & NA: Financial Highlights Italy
BU Europe & NA: Financial Highlights Italy Revenues* EBITDA* and EBITDA Margin (EUR million) (EUR million) Total Revenues -1% YoY Stable YoY Revenue excl. Mobile incoming +0.5% YoY 534 526 565 533 496 408 369 370 371 387 159 155 172 127 131 © VimpelCom Ltd 2012 37.0% 36.8% 37.6% 40.5% 37.4% 879 826
Slide 11: BU Africa & Asia: Financial and Operating Highlights
BU Africa & Asia: Financial and Operating Highlights Revenues* EBITDA* and EBITDA Margin (USD million) (USD million) +3% YoY -5% YoY 895 949 957 922 891 404 407 434 337 321 © VimpelCom Ltd 2012 37.7% 45.3% 42.9% 45.4% 34.8% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 EBITDA EBITD
Slide 12: BU Ukraine: Financial and Operating Highlights
BU Ukraine: Financial and Operating Highlights Revenues EBITDA and EBITDA Margin (UAH billion) (UAH billion) +4% YoY -3% YoY 3.5 1.9 1.7 1.8 1.7 3.3 3.3 1.6 3.2 © VimpelCom Ltd 2012 3.0 53.8% 54.0% 54.8% 53.7% 50.3% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Mobile Fixed-line
Slide 13: BU CIS: Financial and Operating Highlights
BU CIS*: Financial and Operating Highlights Revenues EBITDA and EBITDA Margin (USD million) (USD million) +16% YoY +11% YoY 430 419 362 389 351 44 39 198 41 41 159 175 171 41 155 © VimpelCom Ltd 2012 348.0 386.0 380.0 42.7% 45.3% 45.0% 46.0% 40.8% 321.0 310.0 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 1
Slide 14: Financial Highlights
Financial Highlights © VimpelCom Ltd 2012 Henk van Dalen CFO VimpelCom Ltd. 14
Slide 15: 4Q11 Pro Forma Financial Performance
4Q11 Pro Forma Financial Performance GROUP BUSINESS UNITS (USD million) 4Q11 4Q10 YoY Revenue EBITDA Revenues 5,878 5,633 4% FX and FX and Organic Reported Organic Reported others others EBITDA 2,200 2,266 -3% Depreciation/ Russia 9% -1% 8% -5% -3% -8% Amortization/ -1,960 -1,575 24% Other Europe &
Slide 16: FY11 Pro Forma Financial Performance
FY11 Pro Forma Financial Performance GROUP BUSINESS UNITS (USD million) FY11 FY10 YoY Revenue EBITDA Revenues 23,464 21,828 7% FX and FX and Organic Reported Organic Reported others others EBITDA 9,363 9,284 1% Depreciation/ Russia 7% 4% 11% -7% 3% -4% Amortization/ (6,192) (5,505) 12% Other Europe
Slide 17: Non-Cash Items in 4Q11
Non-Cash Items in 4Q11 Purchase Price Allocation Impact on • Refinement of final PPA model for Wind Telecom acquisition Net Income • Adjustment retroactive; shown as catch-up for 2Q11 and 3Q11 4Q11 • Change from linear amortization model to value contribution for customer relationships USD 125 mln •
Slide 18: Impact Non-Cash Items
Impact Non-Cash Items Impairment and impact from the PPA of Wind Telecom (USD million) 4Q11 Actual FY11 Actual Reported PPA Impairment Excluding Reported PPA Impairment Excluding impact non-cash Impact* non-cash items items Net operating revenues 5,878 5,878 20,250 - 20,250 © VimpelCom Ltd 2012 EBIT
Slide 19: FY11 Actual Financial Highlights
FY11 Actual Financial Highlights Consolidated financial highlights (Actual) (USD million) Actual FY11 FY10 YoY Net operating revenues 20,250 10,513 93% EBITDA 8,127 4,906 66% EBITDA margin 40.1% 46.7% © VimpelCom Ltd 2012 EBIT 2,854 2,826 1% Financial income and expenses (1,530) (484) 216% FX and Ot
Slide 20: Debt, Cash and Ratios
Debt, Cash and Ratios Key Components Consolidated Cash and Net Debt Development Actual 4Q 2011 (USD million) December 31, 2,664 (USD million) 2011 (3,743) 3,434 733 (264) Cash and Cash Equivalents 2,325 (1,791) Total Assets 54,476 Gross Debt 27,037 © VimpelCom Ltd 2012 -Short-term 2,649 27,037 26,00
Slide 21: Simplified legal / financing structure
Simplified legal / financing structure - per 31 December 2011 Total gross debt VimpelCom Ltd. VimpelCom Group VIP USD 2.4 bn VimpelCom OJSC Group USD 9.0 bn Amsterdam B.V. WIND Group USD 14.4 bn OTH Group USD 1.2 bn VimpelCom Finance VimpelCom Holdings VimpelCom Amsterdam WIND Telecom USD 27.0 bn (B
Slide 22: Debt Composition and Maturity Profile
Debt Composition and Maturity Profile Group Debt Maturity Schedule as of 31 December 2011 9.1 Other Wind © VimpelCom Ltd 2012 4.8 Vimpelcom / OJSC 2.5 2.3 2.2 2.0 1.6 1.6 1.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Debt Composition by Currency Actual 2% 8% 17% 3% EURO 18% 29% 18% 38
Slide 23: Final Dividend 2011 Announced
Final Dividend 2011 Announced Final dividend 2011 of USD 570 million, USD 0.35 per share Total dividend for 2011 USD 1.3 billion, USD 0.80 per share • The record date for the Company’s shareholders entitled to receive the final dividend has been set for June 1, 2012 • © VimpelCom Ltd 2012 The ex-div
Slide 24: Conclusion
Conclusion © VimpelCom Ltd 2012 Jo Lunder CEO VimpelCom Ltd. 24
Slide 25: Financial Performance Objectives 2012 – 2014
Financial Performance Objectives 2012 – 2014 Key Indicators Revenue CAGR of around mid single digit © VimpelCom Ltd 2012 EBITDA CAGR of around mid single digit Capex / Revenue (excl. licenses) Below 15% By end of 2014 Leverage Net Debt / EBITDA < 2 By end of 2014 The above objectives assume: • const
Slide 26: Q&A
© VimpelCom Ltd 2012 26 Q&A
Slide 27: Thank you!
© VimpelCom Ltd 2012 27 Thank you!
Slide 28: For further information
For further information please contact Investor Relations Claude Debussylaan 88 1082 MD Amsterdam The Netherlands T: +31 20 797 7200 © VimpelCom Ltd 2012 E: Investor_Relations@vimpelcom.com www.vimpelcom.com 28
Slide 29: Appendices
© VimpelCom Ltd 2012 29 Appendices
Slide 30: Impact Purchase Price Allocation Wind Telecom (1)
Impact Purchase Price Allocation Wind Telecom (1) Current estimated incremental impact from the PPA of Wind Telecom (USD million) (Expense) / Income 2011* 2012 2013 2014 Incremental EBITDA impact - - - - Total depreciation 111 275 297 227 © VimpelCom Ltd 2012 Total amortization (970) (1,012) (663) (
Slide 31: Impact Purchase Price Allocation Wind Telecom (2)
Impact Purchase Price Allocation Wind Telecom (2) Impairment and impact from the PPA of Wind Telecom (USD million) 4Q11 pro forma PPA impact 4Q10 pro forma PPA impact Excluding Excluding PPA Impair- PPA Impair- Reported non-cash Reported non-cash impact ment impact ment items items Net operating rev
Slide 32: Catch up effect PPA Q2 and Q3
Catch up effect PPA Q2 AND Q3 Catch up effect PPA of Wind Telecom (USD million) 2Q11 catch up 3Q11 catch up 2Q 2Q 3Q 3Q Catch up Catch up reported adjusted reported adjusted EBITDA 2,184 - 2,184 2,535 - 2,535 Depreciation/Amortization/Other (1,121) (157) (1,278) (1,269) (188) (1,457) EBIT 1,070 (157
Slide 33: FOREX Development
FOREX Development Average rates Closing rates Currency FY11 FY10 YoY FY11 FY10 Delta RUR 29.39 30.37 3.3% 32.20 30.48 -5.3% EUR 0.72 0.75 4.9% 0.77 0.76 -2.2% DZD 72.93 73.99 1.5% 75.33 74.29 -1.4% © VimpelCom Ltd 2012 PKR 86.33 85.18 -1.3% 89.95 85.67 -4.8% BDT 74.07 69.63 -6.0% 81.83 70.60 -13.7%
Slide 34: Reconciliation Tables
Reconciliation Tables Reconciliation of consolidated EBITDA of VimpelCom USD mln Pro forma 4Q11 4Q 10 FY11 FY10 Unaudited pro forma EBITDA 2,200 2,266 9,363 9,284 Adjustment for certain non-operating items 7 4 22 29 Depreciation (906) (905) (3,529) (3,084) Amortization (527) (558) (2,159) (2,285) ©
Slide 35: Reconciliation Tables
Reconciliation Tables Reconciliation of consolidated EBITDA of VimpelCom USD mln Actual 4Q11 4Q 10 FY11 FY10 Unaudited pro forma EBITDA 2,200 1,247 8,127 4,906 Adjustment for certain non-operating items 7 4 22 26 Depreciation (906) (436) (3,118) (1,652) Amortization (527) (185) (1,628) (428) © Vimpe
Slide 36: Reconciliation Tables
Reconciliation Tables Reconciliation of consolidated net debt of VimpelCom 4Q10 1Q11 2Q11 3Q11 4Q11 USD mln Net debt 4,740 4,840 24,104 22,261 24,373 © VimpelCom Ltd 2012 Cash and cash equivalents 885 1,858 3,190 3,443 2,325 Long - term and short-term deposits 36 592 99 153 178 Fair value hedge - -