VEON Ltd. ORD · RUS:VEON-RX

VEON Ltd. ORD — VimpelCom — Q1 2008 Earnings Presentation

29 slides from VEON Ltd. ORD's earnings presentation, Jun 4, 2008

  1. Slide 1: Q1 Financial and Operating Results

    VimpelCom Q1 Financial and Operating Results June 4th, 2008

  2. 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, in part, to the Company’s strategy and development plans. The forward- looking st

  3. Slide 3: Participants

    Participants Alexander Izosimov, CEO Presentation Elena Shmatova, CFO will be joined by: Q&A Session Nikolay Pryanishnikov, Executive VP, General Director, Russia Kent McNeley, CMO Jean-Pierre Vandromme, Executive VP, Network Resources Management, CEO of Golden Telecom VimpelCom Company June 2008 3

  4. Slide 4: Q1 2008 in Brief

    Q1 2008 in Brief ● Strong financial performance with focus on margins ● Completion of Golden Telecom transaction ● Continued growth in the CIS, although affected by economic problems in Central Asian countries VimpelCom Company June 2008 4 © Beeline 2008 Presentation

  5. Slide 5: Quarterly Financial Dynamics

    Quarterly Financial Dynamics Net Revenues, $ mln Net Income, $ mln +41.7% +117.0% 2,108 2,010 1,956 601 1,451 1,717 458 1,488 368 359 277 198 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 OIBDA, $ mln OIBDA Margin +47.0% 1,126 53.4% 1,015 897 918 51.5% 52.2% 51.9% 45.7% 766

  6. Slide 6: Stock Price Based Compensation Plans Accruals and ADS Price

    Stock Price Based Compensation Plans Accruals and ADS Price 45 117 41.60 118.7 29.89 27.04 30 77 21.07 18.97 15.79 37 12.12 15 8.60 9.16 40.5 24.2 27.8 21.3 15.1 - 3 3.2 6.8 0 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 -42.7 Accruals, US$ M ADS price, ($) - 43 - 15 VimpelCom Company June

  7. Slide 7: Continued Increase in Cash Flow

    Continued Increase in Cash Flow Mar 31, Dec 31, Dec 31, ($ mln) 2008 2007 2006 Cash and Cash Equivalents 621 1,004 344 Total Assets 16,026 10,569 8,437 3,038 3,242 Total Debt 6,678 2,767 2,489 -Short-term 969 527 424 -Long-term 5,709 2,240 2,065 1,971 Shareholders' Equity 6,177 5,412 3,943 1,414 LTM

  8. Slide 8: Sources of Revenue Growth

    Sources of Revenue Growth* 2,108 134 168 486 1,488 34 1,940 1,454 1Q 07 Mobile Fixed 1Q 08 2,108 103 313 517 1,488 210 1,795 1,278 1Q 07 Russia CIS 1Q 08 VimpelCom Company June 2008 8 * Segment revenues exclude inter-company © Beeline 2008 Presentation transactions

  9. Slide 9: Russia: Total Operations

    Russia: Total Operations Revenue*, $ mln CAPEX, $ mln 1,797 132 1653 1702 1460 1675 467 1279 380 1281 217 200 189 213 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Mobile Fixed OIBDA, $ mln CAPEX / Revenue LTM 992 33 24% 23% 19% 17% 18% 17% 871 780 773 959 645 676 4Q 06 1Q

  10. Slide 10: Russia: Mobile Highlights

    Russia: Mobile Highlights Active Subscribers, mln Revenue, $ mln 1 5 0 0 1,702 1,675 42.1 1,460 1,653 1 0 0 0 40.1 41.8 42.2 1,279 39.8 38.6 1,281 5 0 0 0 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Mobile ARPU & MOU OIBDA & OIBDA Margin 3 0 0 959 871 7 0 . 0 % 1 0 0 0 1

  11. Slide 11: Russia: Fixed Revenue

    Russia: Fixed Revenue Business Segment, $ mln 193 192 172 151 126 132 68 124 Fixed Revenue, $ mln 376 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 362 324 Wholesale Segment, $ mln 144 273 132 129 139 227 233 109 50 88 90 94 244 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Residenti

  12. Slide 12: Russia: Residential Broadband Market Forecast

    Russia: Residential Broadband Market Forecast Households with PCs and Broadband (mln) Broadband and PC Penetration 80% Total 54 mln households in Russia 67% 63% 58% 60% 50% 43% 16.9 38% 38% 40% 35% 36% 15.9 33% 15.5 29% 14.1 24% 13.5 18% 14.4 20% 17.1 12% 17.4 19.3 15.9 17.9 6% 9.8 13.0 1.3 3.2 6.2

  13. Slide 13: Russia: Broadband Development

    Russia: Broadband Development Broadband Revenue, $ mln FTTB* Households Passed (mln) & Take-up Rate 4 . 5 2 2 % 4 . 0 2 0 % 4.1 3 . 5 1 8 % 9 3 . 0 3.8 1 6 % 2 . 5 3.0 1 4 % 2.6 10.3% 19 2.3 2 . 0 1 2 % 2.0 8.9% 15 1 . 5 8.0% 8.4% 1 0 % 13 6.9% 10 1 . 0 8 % 5 7 0 . 5 5.6% 6 % 0 . 0 4 % 4Q 06 1Q 07 2

  14. Slide 14: Composition of CIS Business

    Composition of CIS Business Revenue, $ mln 2.4 8.4 39.5 44.8 59.1 316.9 162.9 OIBDA, $ mln C I S T o t a l G e o r g i a T a j i k i s t a n A r m e ni a Uz b e k i s t a n Ukr a i ne K a z a k hs t a n 1.3 -2.2 20.9 3.2 29.1 134.3 82.0 1 2 3 4 5 6 7 CAPEX, $ mln 7.0 7.2 48.0 146.0 26.6 14.6 42.6 CI

  15. Slide 15: Kazakhstan: Operating & Financial Highlights

    Kazakhstan: Operating & Financial Highlights Mobile Active Subscribers, mln Net Revenues, $ mln 175 1 0 0 . 0 % 167 163 9 0 . 0 % 149 1 6 0 . 0 0 8 0 . 0 % 162 1 4 0 . 0 0 4.8 7 0 . 0 % 113 119 52.8% 4.6 51.9% 53.7% 52.7% 50.3% 1 2 0 . 0 0 6 0 . 0 % 3.9 4.3 3.5 5 0 . 0 % 3.1 1 0 0 . 0 0 4 0 . 0 % 31

  16. Slide 16: Ukraine: Operating & Financial Highlights

    Ukraine: Operating & Financial Highlights Mobile Active Subscribers, mln Net Revenues ($ mln) & OIBDA Margin 44.8 37.0 45 34.5 8.9 80 . 0 % 23.8 36.4 30 2.2 1.9 2.0 2.0 1.8 14.8 16.3 1.5 15 17.5% 10.5% 30 . 0 % 7.2% 0 -12.9% 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 - 20 . 0 % 4Q 06 1Q 07 2Q 07 3Q 07 4Q 0

  17. Slide 17: Armenia: Operating & Financial Highlights

    Armenia: Operating & Financial Highlights Mobile Active Subscribers, ‘000 Net Revenues*, $ mln 37.6 35.2 36.4 36.2 34.2 471 442 520 416 440 447 25.8 16.9 23.2 23.5 19.9 22.9 10.5 4Q 06* 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06* 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Mobile revenue Fixed revenue ARPU & MOU CAPEX,

  18. Slide 18: Strategy Going Forward

    Strategy Going Forward Extract maximum value Develop the consumer Grow business outside of Capture attractive from the Russian business Internet access business Russia opportunities in adjacent business areas • Grow ARPUs through voice and • Aggressively roll-out both • Focus on active subscribers •

  19. Slide 19: Progress of Integration with Golden Telecom

    Progress of Integration with Golden Telecom ● Cross-selling opportunities initiated ● Corporate databases of VIP and GT merged ● Procurement centralized ● Traffic routing improved VimpelCom Company June 2008 19 © Beeline 2008 Presentation

  20. Slide 20: Summary

    Summary • Ongoing strong financial performance • VimpelCom remains a large, fast growing, highly profitable business • Transition to an integrated operator provides further growth opportunities VimpelCom Company June 2008 20 © Beeline 2008 Presentation

  21. Slide 21: Questions and Answers

    Questions and Answers If you would like to ask a question, please press the star key followed by the digit one on your touch-tone telephone. Due to time constraints, we ask that you limit yourselves to one question and one follow-up question. If you are using a speakerphone, please make sure your mu

  22. Slide 22: Appendices

    APPENDICES VimpelCom Company June 2008 22 © Beeline 2008 Presentation

  23. Slide 23: CIS Mobile: Financial Highlights

    CIS Mobile: Financial Highlights Kazakhstan Ukraine Uzbekistan 167 175 162 149 113 119 88 92 80 82 37 35 36 30 37 39 62 15 16 24 16 18 23 36 1 9 18 21 6 4 8 11 17 -11 -7 -3 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Armenia Tajikistan

  24. Slide 24: CIS Mobile: Active Subscribers, mln

    CIS Mobile: Active Subscribers, mln Kazakhstan Ukraine Uzbekistan 4.6 4.8 4.3 3.9 3.1 3.5 2.2 2.1 2.4 2.0 1.8 1.9 2.0 1.5 1.2 1.6 1.1 0.7 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 Armenia Tajikistan Georgia 0.52 0.47 0.45 0.44 0.42 0.

  25. Slide 25: CIS Mobile: ARPU & MOU Development

    CIS Mobile: ARPU & MOU Development Kazakhstan Ukraine Uzbekistan 290 283 1 8 . 0 269 242 266 265 2 8 0 13.8 13.6 13.6 13.0 210 12.2 11.6 183 168 2 1 0 1 2 . 0 149 160 9.8 138 113 99 6.7 7.2 7.6 6.8 89 99 6.1 1 4 0 78 72 5.8 5.6 5.8 6 . 0 4.2 4.2 3.0 7 0 0 . 0 0 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 4Q

  26. Slide 26: CIS Mobile: Subscriber Market Shares

    CIS Mobile: Subscriber Market Shares* Kazakhstan Ukraine Uzbekistan 49% 54% 51% 54% 52% 50% 49% 47% 47% 50% 48% 49% 43% 43% 43% 43% 42% 43% 46% 45% 46% 47% 47% 36% 37% 41% 40% 39% 33% 33% 34% 40% 37% 27% 36% 35% 14% 16% 17% 5% 11% 11% 12% 14% 11% 12% 14% 5% 5% 6% 6% 7% 9% 11% 4% 5% 5% 5% 5% 4% 1% 1%

  27. Slide 27: FOREX Development

    FOREX Development Average quarterly FX rate to US$ Closing FX rate to US$ Currency Change from Q4 07 Change from Q1 07 Change from 2007 RUB 1.6% 8.4% 4.4% KZT 0.3% 3.7% -0.1% UAH 0.0% 0.0% 0.0% TJS -0.1% -0.5% 0.9% UZS -1.0% -4.0% -0.8% AMD 3.1% 16.8% -0.9% GEL 4.2% 10.0% 7.8% VimpelCom Company June

  28. Slide 28: Reconciliation of Consolidated OIBDA and OIBDA Margin (Unaudited)

    Reconciliation of Consolidated OIBDA and OIBDA Margin (Unaudited) Three months ended March 31, Dec 31, Sept 30, June 30, March 31, Dec 31, ($'000) 2008 2007 2007 2007 2007 2006 Reconciliation of OIBDA to operating income OIBDA 1,126 918 1,016 897 766 690 Depreciation (357) (331) (286) (285) (269) (2

  29. Slide 29: Definitions

    Definitions Active mobile subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months and remain in the base at the end of the reported period. Such activities include all incoming and outgoing calls, subscriber fee a

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