VEON Ltd. · NASDAQ:VEON
VEON — VimpelCom — Merger or Acquisition (November 2016)
26 slides from VEON's merger presentation, Nov 8, 2016
Slide 1: Form 6-K Report of Foreign Private Issuer
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 November 2016 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: November 8, 2016 By: /s/ Scott Dresser Name: Scott Dresser Title: Gro
Slide 3: Wind and 3 Italia merger: transformative transaction completion
Wind Amsterdam Jean-Yves 1© VimpelCom and 3Charlier Italia – 8Ltd November merger: 2016 – Chieftransformative 2016 Executive Officer transaction Andrewcompletion Davies – Chief Financial Officer
Slide 4: Disclaimer
This Disclaimer amended. including (and volatility materialize or and differ Securities obligation 2© VimpelCom Wind consideration the presentation materially may assumptions in network Forward-looking and toas the update not expected Exchange Ltd Italian from perform contains of improvements 2016 t
Slide 5: Agenda
Wind Jean-Yves 8. Andrew 1. 2. 3. 4. 5. 6. 7. Q&A 3© Transaction VimpelCom Italian Rationale Integration Iliad Solid Strong Enhanced JV P&L Final will expected has significantly session and impact accounting remarks corporate Davies market momentum management no 3generate Charlier Italia and imminen
Slide 6: Strong momentum in the Italian mobile market
1.Source: Mobile EUR 7.7 Other +1.3% 6.6 2.7 6.5 +1.5% 0.1 2.6 2.2 2.3 H1 4The © VimpelCom Strong 2013 -8.6% 6.6 0.1 +0.6% 2.2 2.1 joint billion 0.1 0.1 2.1 telecommunication H1 venture momentum 2015-16 Company p.a. 2.2 2014 +1.6% Ltdwill H1 2016 reports in 2015 bethe able revenues H1 Italian to2016
Slide 7: Italian fixed market: JV to benefit from market tailwinds
1.Target Fixed (cont’d) EUR 2013-15 6.3 2013 5Accelerating Source: •Favorable JV ©New Recent Strong Commercial 1VimpelCom Strong will +2.7% Connections billion 2014 telecommunication infrastructural be IDC, to support 2015-16 acquisition momentum structural able connect +3.7% 2015 growth Infratel ag
Slide 8: Italian mobile market structure: data offers and pricing
2.10.5 Mobile 2016 Data 22.9 115.7 offers 38.0 13.2 12.5 ~ 6Italian Source: © -50% VimpelCom Italian Non 90.0 Low-cost 29.0 18.7 (GB) EUR/month/customer market ARPU Merrill unlimited market 3.0 22.7 19.99already –1.0 Ltd Lynch 4.5x Italy structure: 90.0 voice, 2016 3.0 vs. very Bank 3.0 Western 8hAR
Slide 9: Wind Italia/3 Italia mobile position and network
2.Wind On Mobile Mhz 800Mhz 1800Mhz 2600Mhz 33.2% 200 165 Distribution n.a. ~5,400-5,600 #Network 7321-M Source: ©PoS physical Including VNOs VimpelCom Italian spectrum 70 165 ~5,800-6,000 30.5% 31.2 –AGCOM ~10,0003 900Mhz ~27,0003 market 32600Mhz 2100Mhz sites Italia M2M 25.2 On 29.0% Ltd ~18,000 s
Slide 10: Transaction rationale
3. financially Rationale Creating infrastructure, Net A Ambitions Market world, Lean 8© VimpelCom Rationale present and re-inventing leadership aasset for leading for value and stronger the to the Ltd light: ambitions close JV: of JV: in convergent 2016 the future completing Italy: asset, the entire
Slide 11: Integration planning and progress
4.Administrative Overall co-existence simplification Network Commercial •SG&A 9Full ©All Core Integration RFQ1 New Commercial First Renegotiation Harmonization 1VimpelCom Integration Request integration integration launch IT strategic process & Stack IT for ofof plan team of Ltd Wind 2vendors’ quota
Slide 12: Significant synergies expected
5.Policy Network Offer Commercial Strong With POS Commissioning service) •SG&A JV 10 (EUR NPV1 Total: 0.6+ 1.3+ 3.1+ ©Full Network Fiber 3Lean Implementation Elimination Organizational Facilities Procurement VimpelCom JV 1opex Italia Post rationalization objective will customer network 5.0+ billion)
Slide 13: Iliad entrance impact mitigated by remedy package
6.An JV Iliad-JV Spectrum Sites/network 4321•Roaming © 11 Introducing Existing Operating Remedy Iliad Assumes The Customer Defined VimpelCom Iliad inoptional aonly entrance strong impact remedy ••taker strong as 2G-3G-4G/LTE Iliad condition Sales in engagement EBITDA digital network •position ato Lt
Slide 14: Solid corporate governance: board of the JV
7. VimpelCom Canning Jean-Yves Group Deputy Neil Managing Chief Jean-François Audit Andrew Merger VimpelCom Kjell Alexander Hutchison Frank Christian …4 12 © Solid =board McGee Chairman Morten Executive Committee Sixt Co-Managing Finance Executive Chairman, corporate Davies Fok Salbaing members Dire
Slide 15: Governance and management empowerment
7.Wide Shareholder Significantly •Avoidance Governance 13 ©35Fundamental Budget Maximo Limited Chairman Casting VimpelCom Solid 1year Amministratore grant business merger corporate 2017 vote Shareholder Ibarra of of designed agreed of empowered deadlock the cannot business Ltd authorities integratio
Slide 16: Strong senior management team in place
8. VimpelCom JV Maximo Chief Dina Merger Massimo PR …with © 14 Strong senior Internal Ravera Executive 50 Integration Ibarra Angelini management leadership key &Stefano External managers Ltd Officer Mark 2016 Chief team Invernizzi team Legal, Shalaby already Financial inCompliance place appointed Lu
Slide 17: Agenda: Enhanced profitability and cash flow
Wind Jean-Yves 4. 5. 6. 7. 8. Andrew 1. 2. 3. Final Q&A © 15 Transaction VimpelCom Italian Rationale Integration Iliad Solid Strong Enhanced JV remarks will expected session and impact corporate Davies market momentum management 3generate Charlier Italia and profitability plan structure to Ltd –ambi
Slide 18: Key transaction terms
1.Approval Target •Key CK 50% Wind HoldCo © 16 After VimpelCom Wind-3 50/50 CK No Neither Pro Long-term European Completion: Transaction VimpelCom Hutchinson terms dates cash 50% forma Hutchinson 3leverage three JV Italia Italia party contributions and of from Commission Net net years VimpelCom cont
Slide 19: Enhanced profitability and cash flow generation
2.Including Revenue OpFCF2 An 1.8 4.4 Wind …EBITDA (EUR 2.0 2.5 31% 8pp 39% Run-rate …cash (% 38% 59% 0.7 …and 5.9x Below 1WIND 17 © VimpelCom Enhanced 2cash operator 6.3 5.0x Defined 1.4 3billion, significant 3.0x WIND 3conversion +Italia conversion3) Italia synergies and 3 Italia run-rate margin w
Slide 20: JV financial profile and net debt evolution
3.The The Net EUR 5.8x 9.6 10.0 10.9 Below ~4.5x Q314 •?Wind 1…significant 18 2015 ©Target JV’s Holding 40% 60% 80% Q3 VimpelCom JV 2debt leverage financial 5.9x Free 2015 billion expected joint stand-alone Q315 leverage of 3.0x to–its 5.6x cash structure deleverage Net venture LTM Q316 consolidated
Slide 21: JV debt maturities and rapid deleveraging
4. VimpelCom Average EUR 575 22 150 3,780 3,513 2016 Tap Senior …rapid 19 © JV 700 Note: to 420 million 2017 has SSN Secured 775 deleveraging interest Excluding no2018 2020 imminent Ltd FRN 2019 rate + 2016 FRN shareholder is Senior and 2020 debt 5.5%, 2020 strengthened maturities 2021 Secured with
Slide 22: JV significantly improves VimpelCom's financial profile
5. VimpelCom As Net 1.9x 3.2x 6.8 17.4 …VimpelCom’s 20 © JV 1atdebt leverage Pro-forma, Net 30 significantly September –significantly debt/EBITDA Net evolution debt/EBITDA1 Ltd including leverage improves 2016 2016, reduced underlying isUSD WIND now VimpelCom’s bybillion atUSD Reported a level 10.6w
Slide 23: P&L accounting treatment
6.o/w Previous FY2015 (2,350) 263 Current (after FY2016E1 other Share associates Profit discontinued 50% Italy 31 Wind (from Long Group USD Service Revenue EBITDA -D&A, EBIT FOREX Profit/(loss) Loss Tax Non-controlling Net Significant 21 © VimpelCom 1December financial result P&L Assuming JV of for
Slide 24: Final remarks
7. VimpelCom JV Leading Increasing Solid Iliad © 22 Final launched market governance remarks converged capacity entrance with Ltddesigned Italian 2016 player forimpact JVmarketplace in to tothe for deleverage avoid the Italian deadlock JVback mitigated market, andtoflexibility growth and pioneering
Slide 25: Q&A session
Wind Jean-Yves 8. Andrew 1. 2. 3. 4. 5. 6. 7. Q&A © 23 Transaction VimpelCom Italian Rationale Integration Iliad Solid Strong Enhanced JV P&L Final will expected has significantly session and impact accounting remarks corporate Davies market momentum management no 3generate Charlier Italia and immin
Slide 26: Further information: Investor Relations
Further Investor Claude 1082 The T: E: Visit © www.vimpelcom.com 24 VimpelCom +31 ir@vimpelcom.com Netherlands our MD20 Debussylaan information Relations website Amsterdam 79 77Ltd 2342016 88