VEON Ltd. · NASDAQ:VEON
VEON — VimpelCom — Merger or Acquisition (February 2011)
32 slides from VEON's merger presentation, Feb 23, 2011
Slide 1: Form 6-K VimpelCom Ltd.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934 For the month of February 2011 Commission File Number 1-34694 VimpelCom Ltd. (Translation of registrant’s name
Slide 2: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VIMPELCOM LTD. (Registrant) Date: February 23, 2011 By: /s/ Alexander Izosimov Name: Alexander Izosimov
Slide 3: Notice of Special General Meeting and exhibits
On January 17, 2011, VimpelCom Ltd. (“VimpelCom”) announced that its Supervisory Board gave its final approval for the proposed combination of VimpelCom and WIND TELECOM S.p.A. (formerly Weather Investments S.p.A.) (the “Transaction”). A special general meeting of VimpelCom shareholders to approve c
Slide 4: Exhibit List
Exhibit List 99.1 Retail Brochure 99.2 Management’s Presentation to Investors
Slide 5: Exhibit 99.1 Retail Brochure
Exhibit 99.1 VimpelcomOur Expanding IMPORTANT Growth Platform INFORMATION ABOUT THE PROPOSED COMBINATION OF VIMPELCOM LTD. AND WIND TELECOM S.p.A. TAKE ACTION TODAY A Unique Opportunity for VimpelCom Shareholders
Slide 6: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY of presentation “continue,” absence could transaction; shares S.p.A operating the Exchange which statements made Telecom proposals future risk herein cause or risk issued factors of Orascom S.p.A. events. or before Commission factors and these “estimate,” •actual financial that due in the
Slide 7: Vote voting instructions
Votevoting value March Wind now VimpelCom’s for recommend HELD nominee Please form The until please you count. not card. sign have 12-digit to FOR 11:59 ready 1Telecom. for You call check 17, THROUGH ensure or provides all questions ADSs the 2011 our return may P.M. and aof control the “FOR” Board a
Slide 8: Compelling opportunity to share in a global platform for value creation
The proposed combination of VimpelCom and Wind Telecom offers a compelling opportunity to share in a global platform for value creation
Slide 9: Letter to shareholders from the Chairman and CEO
Dear increase Board profitable quality increased generate mobile currently; 39%, to common Board. Corporate Alexander create shareholder, respectively have Vote assets operators in significant ashares exposure •growth: Governance stronger, Izosimov VimpelCom’s Pro thoroughly tothat approve forma and
Slide 10: The Right Proposition
The Right January Proposition VimpelCom industry shift will drive in the 16, issustained Transaction consolidating telecoms 2011, for when ourVimpelCom’s itshareholders; performance industry was forand established Your larger, from Company Supervisory over and voice global in3.the April istolonger O
Slide 11: An Attractive Financial Proposition
Anthe in shares, US$370 income combined Accordance Management the Attractive transaction transaction. telecom minimizing plus million company with depreciation and Financial sector. process •per The High the dilution, and annum Company’s We Company’s Standards and Proposition itsbelieve and ability
Slide 12: Overview
Overview world emerging developing assets remaining throughout •atSignificantly amarkets of compelling intact •a Diligent, the balanced New • Significant • Strengthening increased VimpelCom valuation careful portfolio synergies execution population of • Efficient ability Ltd. high-quality A from to
Slide 13: We are confident this combination represents a compelling choice
We are confident Standards Strategically this combination Compellingrepresents The RightaTransaction Strategicallyfor Compelling VimpelComchoice Executed for VimpelCom, in Accordance is an with Attractive Financially Financial StrongProposition Corporate Attractive for our shareholders Governanceand
Slide 14: A Bright Outlook
VimpelCom (m) 92 81 173 A *Bright Principally Outlook comprise VimpelCom Orascom Wind Telecom’s Telecom investments Wind Telecomin Egypt assets and to beNorth spun Korea. off* Operations (2010) VimpelCom Wind Telecom Combined Countries 10 9 19 Population covered (m) 345 493 838 Mobile subscribers
Slide 15: Combination creates a global and diversified platform
The combination of VimpelCom and Wind Telecom will transform your Company into a truly global and diversified platform, creating one of the largest mobile operators in the world
Slide 16: What to do now: Take Action and vote
What on REGISTERED BROKER control “FOR” voting located telephone King or the Friday, &to transaction, instruction number, each in Co., Doup the March OR Now your Inc., until rectangular OTHER ADS you … 11, toll–free 12-digit form please 11:59 Take can HOLDERS 2011. received NOMINEE P.M. vote call bo
Slide 17: Exhibit 99.2 Expanding our growth platform
Exhibit 99.2 Expanding our growth platform February 2011
Slide 18: Forward-looking statements
Forward-looking statements This presentation contains "forward-looking statements”. Forward-looking statements provide VimpelCom Ltd.'s current expectations or forecasts of future events. Forward-looking statements include statements about VimpelCom Ltd.'s expectations, beliefs, plans, objectives, i
Slide 19: Combining VimpelCom and Wind Telecom
Combining VimpelCom and Wind Telecom The right strategic move To capture further growth in emerging markets To strengthen ability to capture additional growth following paradigm shift from voice to data To secure advantages of greater scale and scope ahead of further industry consolidation A value a
Slide 20: Capturing further growth in emerging markets
Capturing further growth in emerging markets Emerging markets Current New ¹ VimpelCom VimpelCom Population covered, 2010 Developed markets Mobile subs 92 173 (m) 11% More than Population Increasing 345 838 doubling our covered (m) our scale emerging and scope Countries 10 19 100% 89% market footprin
Slide 21: Preparing for the paradigm shift from voice to data
Preparing for the paradigm shift from voice to data 3G penetration (%) Data as % of service revenues (%) 50 Russia 70 Western Europe 60 40 50 30 40 30 20 20 The telecoms 10 10 industry is moving from a voice 0 0 centric to a data 2007 2009 2011 2013 2015 2007 2009 2011 2013 2015 centric world creati
Slide 22: Anticipating further industry consolidation
Anticipating further industry consolidation Market share of top 3 global players Mobile Smartphone Mobile Mobile Smartphone network operating infrastructure devices devices operators¹ systems Scale will become increasingly important 76% for telecom players 69% 64% Key parts of the telecom value 55%
Slide 23: Attractive transaction terms and structure
Attractive transaction terms and structure Transaction terms Historically low multiples LTM EBITDA Up to 325.6m newly-issued VimpelCom common shares 11.5x (20% economic, 15.8% voting) 10.5x 305.0m newly-issued VimpelCom 10.0x convertible preferred shares¹ (0% economic, 14.8% voting) Acquisition 9.0x
Slide 24: Wind Italy – a premium asset, an attractive market
Wind Italy – a premium asset, an attractive market Italy is one of Europe’s most attractive markets Wind Italy is a premium asset Wind Telecom Leading the data revolution (2010) Impressive market share gains % Italy % Western Europe Mobile market share Broadband market share Russia 59.2 21 22 13 14
Slide 25: Immediate value creation for our shareholders
Immediate value creation for our shareholders Pre-transaction Post-transaction US$ (Q3 2010) (Q3 2010) % increase Revenues per 6.85 10.65 55% Financial share step-up EBITDA per 3.30 4.60 39% share 1 OpFCF per share 2.07 2.68 29% Earnings Cash earnings² per share accretive from year one accretion Equ
Slide 26: Longer-term value creation for our shareholders
Longer-term value creation for our shareholders Deleveraging capacity of US$1-3bn per year – corresponds to US$0.70-2.10 per share Deleveraging Every US$1bn reduction in debt results in an increase in net income of approx. capability US$50-60m - corresponds to US$0.03-0.04 per share Strong cashflow
Slide 27: US$2.5bn synergies to be captured
US$2.5bn synergies to be captured Synergy estimates further validated Estimated opex and capex synergies Total synergies of US$2.5bn NPV expected Procurement opex and capex to represent largest source of synergies Other opex – US$0.6bn NPV of procurement opex – US$1.6bn NPV of procurement capex 11%
Slide 28: Risk profile further improved
Risk profile further improved 1 VimpelCom financing arranged – successfully arranged financing of up to US$6.5bn through term loan and bridge loan and raised an additional US$1.5bn via recent bond issue – attractive terms achieved - debt market embracing new capital structure 2 Wind Italy refinancin
Slide 29: Safeguarding our minority shareholders’ rights
Safeguarding our minority shareholders’ rights 1 Thorough and transparent execution process – Management and Board followed rigorous process with comprehensive program management structure – consistent and unanimous support of the Chairman of the Board and the other two Independent Directors – compl
Slide 30: Addressing investor concerns…
Addressing investor concerns… More than doubling our emerging market footprint – 89% of our population base of 838m will come from emerging markets, Losing emerging compared to 345m currently markets focus – we will have no. 1 or no. 2 positions in 14 high-margin emerging markets globally – we will
Slide 31: … and highlighting potential upsides
… and highlighting potential upsides Amicable Re-pricing of the asset in line with transaction multiple resolution in Cash flows from Algeria can be up-streamed Algeria 3G/4G license to capture data opportunity Clear program to re-gain no 2 market share in terms of Improving market revenues position
Slide 32: Conclusions
Conclusions 1 VimpelCom Ltd. was established in April 2010 with a clear mandate to expand organically and inorganically outside Russia/CIS 2 After a broad review, Management identified a combination with Wind Telecom as the best VimpelCom’s management opportunity for value-accretive expansion and th