VEON Ltd. · NASDAQ:VEON
VEON — VimpelCom — Merger or Acquisition (February 2011)
15 slides from VEON's merger presentation, Feb 15, 2011
Slide 1: Expanding our growth platform
February 2011 February 2011 Expanding our growth platform February 2011
Slide 2: Forward-looking statements
February 2011 February 2011 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, b
Slide 3: Combining VimpelCom and Wind Telecom
February 2011 Combining VimpelCom and Wind Telecom Expanding our platform to create long-term shareholder value 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 o
Slide 4: Capturing further growth in emerging markets
February 2011 % 1 Italy and Canada Capturing further growth in emerging markets February 2011 Revenue split, 2009PF Russia Italy Other Diversifying our revenue base Mobile subs (m) 92 173 Population covered (m) 345 838 Countries 10 19 Current VimpelCom New VimpelCom Emerging markets Developed market
Slide 5: Preparing for the paradigm shift from voice to data
February 2011 5 Preparing for the paradigm shift from voice to data Source: Analysys, Cisco VNI Mobile (2010) UK Canada USA India Russia China Italy 2014 2009 2014 2013 2012 2011 2010 2009 2009 2007 50 40 30 20 10 0 2015 2013 2011 + 109% p.a. 2015 2013 2011 2009 2007 The telecoms industry is moving
Slide 6: Now is the right time to invest in the telecom sector
February 2011 Market share of top 3 global players Now is the right time to invest in the telecom sector Attractive valuation multiples Market not pricing in future upside from data Anticipating further industry consolidation 1 Based on subscribers, 1H2010 (China Mobile, Vodafone and America Movil)
Slide 7: Transaction terms
February 2011 % Transaction terms Attractive transaction terms and structure 1 Can convert to common shares at prevailing VimpelCom share price (2.5-5 years); conversion consideration paid into the company; redeemable at nominal value if not converted 2 Wind Italy: WIS, Libero, Italy-Greece submarin
Slide 8: Wind Italy - a premium asset, an attractive market
February 2011 Wind Italy - a premium asset, an attractive market February 2011 Wind Telecom Profitable market with benign competition Leading the data revolution (2010) Impressive market share gains Italy is one of Europe's most attractive markets Wind Italy is a premium asset 21 quarters of consecu
Slide 9: Immediate value creation for our shareholders
February 2011 February 2011 Immediate value creation for our shareholders Financial step-up Pre-transaction (Q3 2010) Post-transaction (Q3 2010) US$ % increase Revenues per share 6.85 10.65 55% EBITDA per share 3.30 4.60 39% OpFCF per share1 2.07 2.68 29% 1 EBITDA minus normalized capex (18% of reve
Slide 10: Longer-term value creation for our shareholders
February 2011 February 2011 Longer-term value creation for our shareholders Deleveraging capacity of US$1-3bn per year corresponds to US$0.70-2.10 per share Every US$1bn reduction in debt results in an increase in net income of approx. US$50-60m corresponds to US$0.03-0.04 per share Deleveraging cap
Slide 11: Estimated opex and capex synergies
February 2011 February 2011 0 Estimated opex and capex synergies Total synergies of US$2.5bn NPV expected Procurement opex and capex to represent largest source of synergies US$0.6bn NPV of procurement opex US$1.6bn NPV of procurement capex Procurement capex includes network (87%), IT (12%), VAS (1%
Slide 12: VimpelCom financing arranged successfully
February 2011 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 Wind Italy refinancing secured Wind Italy ref
Slide 13: Safeguarding our minority shareholders' rights
February 2011 Safeguarding our minority shareholders' rights 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
Slide 14: Wind Italy - a premium asset in an attractive market
February 2011 Italy makes no strategic sense Wind Italy - a premium asset in an attractive market 21 quarters of growth in one of the most profitable European markets further growth opportunities with substantial increase in mobile data services strong euro-denominated cash flows providing robust fi
Slide 15: Conclusions
February 2011 Conclusions VimpelCom Ltd. was established in April 2010 with a clear mandate to expand organically and inorganically outside Russia/CIS 1 After a broad review, Management identified a combination with Wind Telecom as the best opportunity for value- accretive expansion 2 The right stra