VEON Ltd. ORD · RUS:VEON-RX

VEON Ltd. ORD — VimpelCom — FY2008 Earnings Presentation

29 slides from VEON Ltd. ORD's earnings presentation, 2009

  1. Slide 1: VimpelCom 4Q08 and FY08 Financial and Operating Results

    VimpelCom 4Q08 and FY08 Financial and Operating Results

  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, development plans and anticipated performance

  3. Slide 3: Participants

    Participants Alexander Torbakhov, General Director Presentation Boris Nemsic, Chief Executive Officer Elena Shmatova, CFO will be joined by: Q&A Session Kent McNeley, VP, Chief Marketing Officer Dmitry Pleskonos, Executive VP, Business Development CIS Andrey Patoka, VP, Head of B2B Russia 2009 3 © B

  4. Slide 4: 2008 in Brief

    2008 in Brief • Record revenue of $10.1 billion generating OIBDA of $4.9 billion and operating cash flow of $3.4 billion • VimpelCom transformed into an integrated telecom operator with diversified revenue base and wide geographic footprint • Strategic shifts in the distribution strategy resulted in

  5. Slide 5: 2008 Financial Highlights

    2008 Financial Highlights Revenue*, $ mln Net Income, $ mln +41.1% -64.2% 10,117 1,463 7,171 4,868 811 615 524 3,211 350 1,330 2,113 229 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 OIBDA, $ mln OIBDA Margin, % +35.1% 4,860 3,597 46.1% 48.6% 48.9% 50.4% 50.2% 48.0% 2,452 1,571 613 1,0

  6. Slide 6: Quarterly Financial Dynamics

    Quarterly Financial Dynamics Revenue, $ mln Net Income (Loss), $ mln +27.1% 601 470 458 368 269 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1,956 2,010 2,108 2,611 2,843 2,555 -816 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 OIBDA, $ mln OIBDA Margin, % +22.4% 1,015 918 1,126 1,223 1,388 1,124 51.9% 45.7% 53.4% 46.

  7. Slide 7: Net Income Analysis

    Net Income Analysis Net Income/Loss 2008, $ mln 269 -816 470 Net Loss 4Q08 Analysis, $ mln 601 639 524 -1,012 1Q08 2Q08 3Q08 4Q08 FY2008 4Q08 Income before FX Loss Goodwill and LLA Net loss reported tax, adjusted* Impairment, FX Gain/Loss in 2008, $ mln DVBT/DVBH licenses write-off 26 185 -341 -443

  8. Slide 8: Financial Position

    Financial Position OIBDA vs Debt, $ mln Balance Sheet 4,860 4,654 Dec 31, Dec 31, Dec 31, 4,282 ($ mln) 3,956 2008 2007 2006 3,597 1.8 1.7 1.7 3,368 1.7 Cash and Cash Equivalents 915 1,004 344 Total Assets 15,725 10,569 8,437 1,909 0.8 0.8 1,748 Total Debt 8,443 2,767 2,489 1,248 969 -Short-term 1,9

  9. Slide 9: Debt Profile as of December 31, 2008

    Debt Profile as of December 31, 2008 Debt Maturity Schedule, $ mln * 287 1,909 1 992 648 1 503 * 1 098 426 1 000 549 600 60 324 17 1Q09 2Q09 3Q09 4Q09 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Debt Composition Vendors, EUR; 10% 3% RUR; 15% Floating, Bonds, Banks, 44% 45% 52% Fixed, 56% USD;

  10. Slide 10: Russia: Total Operations

    Russia: Total Operations Revenue*, $ mln CAPEX, $ mln 2,426 2,239 2,157 1,797 414 445 439 132 642 1,862 2,037 1,653 1,702 1,675 1,797 467 424 504 217 207 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 OIBDA ($ mln) and OIBDA Margin CAPEX / Revenue LTM 1,215 1,060 8 0 . 0 % 9

  11. Slide 11: Russia: Mobile Highlights

    Russia: Mobile Highlights Subscribers, mln Revenue, $ mln +12.9% +5.6% 2 0 0 0 1 5 0 0 47.7 1,862 2,037 1,797 1 0 0 0 41.8 42.2 45.1 1,653 1,702 1,675 42.1 42.5 5 0 0 0 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 Mobile ARPU & MOU OIBDA & OIBDA Margin 14.7 15.2 300 1,104

  12. Slide 12: Russia: Fixed Revenue

    Russia: Fixed Revenue Business Segment, $ mln 192 68 193 207 213 201 172 124 Revenue, $ mln 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 +21.3% Wholesale Segment, $ mln 362 376 324 132 144 445 439 50 244 414 186 190 129 139 160 94 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 Reside

  13. Slide 13: Russia: Residential Broadband Development

    Russia: Residential Broadband Development Broadband Revenue, $ mln FTTB* Households Passed (mln) & Take-up Rate (pro-forma) (pro-forma) 8 .0 2 2 % 7.2 2 0 % 7 .0 6 .0 5.5 5.9 1 8 % 1 6 % 5 .0 3.8 4.1 1 4 % 40 3.0 4 .0 10.3% 1 2 % 31 8.9% 8.6% 9.2% 8.8% 29 3 .0 8.4% 1 0 % 24 19 2 .0 8 % 13 1 .0 6 % 0

  14. Slide 14: Kazakhstan: Operating & Financial Highlights

    Kazakhstan: Operating & Financial Highlights Mobile Subscribers, mln Revenue ($ mln) & OIBDA Margin +36.2% 52.0% 53.4% 52.7% 52.8% 50.4% 49.6% 4.3 5.6 6.3 4.6 4.8 5.1 167 175 163 185 199 197 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 Revenue OIBDA Margin Mobile ARPU & MO

  15. Slide 15: Ukraine: Operating & Financial Highlights

    Ukraine: Operating & Financial Highlights Mobile Subscribers, mln Revenue* ($ mln) & OIBDA Margin +5.7% 94 71 33 71 7 0 . 0 % 45 28 26 2.4 2.2 1.9 2.1 35 2.0 2.1 37 9 17.6% 13.2% 16.5% 10.4% 7.1% 2 0 . 0 % -1.7% 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 Mobile Fixed OIB

  16. Slide 16: Armenia: Operating & Financial Highlights

    Armenia: Operating & Financial Highlights Mobile Subscribers, ‘000 Revenue* ($ mln) & OIBDA Margin 9 0 . 0 % 63 65 69 64 60 59 6 0 . 0 0 8 0 . 0 % +23.1% 37 7 0 . 0 % 38 38 37 36 36 4 0 . 0 0 6 0 . 0 % 54.3% 48.7% 784 51.9% 49.2% 49.8% 655 544 5 0 . 0 % 46.8% 5200.4 2 0 . 0 0 0.4 447 442 4 0 . 0 % 2

  17. Slide 17: Uzbekistan: Operating & Financial Highlights

    Uzbekistan: Operating & Financial Highlights Mobile Subscribers, mln Revenue ($ mln) & OIBDA Margin 71.5% 8 0 . 0 % 6 0 . 0 7 0 . 0 % 56.0% 53.5% 56.5% 52.9% 51.4% 48.8% 6 0 . 0 % 4 0 . 0 3.6 5 0 . 0 % 3.1 2.4 2.8 2.1 4 0 . 0 % 2 0 . 0 1.6 30 37 40 52 58 67 3 0 . 0 % 2 0 . 0 % 0 . 0 0 3Q 07 4Q 07 1Q

  18. Slide 18: South-East Asian Operations

    South-East Asian Operations Vietnam Population: 86.1 mln. • In October 2008, VimpelCom contributed $267 Penetration: ~58%* GDP per capita: $2,900** million in cash to its joint venture in Vietnam to GDP growth rate in 2008: 6.2% finance first year network rollout • Network rollout and development of

  19. Slide 19: New Management as of April 2, 2009

    New Management as of April 2, 2009 Alexander Torbakhov Boris Nemsic General Director Chief Executive Officer Ex-General Director of Life Ex-Chief Executive Officer of Insurance at Rosgosstrakh, the Telekom Austria Group Russia’s largest insurance company Corporate functions: Operational Management:

  20. Slide 20: Summary

    Summary • 2008 was a transformational year delivering strong operational performance • Adjusting to the new reality, current management focus is on operational excellence, cash flow generation and debt repayment • CAPEX guidance for 2009 is between 12% and 15% of consolidated revenue • Scale, scope

  21. Slide 21: Appendices

    APPENDICES 2009 21 © Beeline 2009

  22. Slide 22: Map of Operations

    Map of Operations Population: 46.2 mln. Population: 4.5 mln. Acquired: Nov. 2005 Acquired: Jul. 2006 Penetration: 121% Penetration: 83% GDP* 7,800 GDP* 5,000 Population: 142.0 mln. Population: 3.2 mln. Penetration: 132% Acquired: Nov. 2006 GDP*: 15,800 Penetration: 79% GDP* 6,600 Population: 15.6 ml

  23. Slide 23: FOREX Development

    FOREX Development 1Q08 2Q08 3Q08 4Q08 Opening Average Closing Average Closing Average Closing Average Closing Currency rate Rate Rate Rate Rate Rate Rate Rate Rate RUB 24.55 24.26 23.52 23.63 23.46 24.25 25.25 27.27 29.38 KZT 120.6 120.4 120.7 120.6 120.8 120.0 119.8 120.2 120.8 UAH 5.05 5.05 5.05 4

  24. Slide 24: Composition of the CIS Business 4Q 2008

    Composition of the CIS Business 4Q 2008 Revenues, $ mln 16.4 5.9 63.7 66.5 70.5 419.6 196.9 Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia CIS Total OIBDA, $ mln 5.3 -1.2 31.7 34.2 11.6 179.3 97.7 Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia CIS Total CAPEX, $ mln 18.0 7.1 17.2

  25. Slide 25: CIS Mobile: Financial Highlights

    CIS Mobile: Financial Highlights Kazakhstan Ukraine Uzbekistan 196 194 167 175 183 162 68 64 88 92 103 46 48 50 56 94 94 37 35 36 37 39 82 30 6 17 18 21 27 32 33 6 4 1 3 -9 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 Armenia Tajikistan

  26. Slide 26: CIS Mobile: Active Subscribers, mln

    CIS Mobile: Active Subscribers, mln Kazakhstan Ukraine Uzbekistan 6.3 5.6 4.8 5.1 4.3 4.6 3.6 2.8 3.1 2.2 2.0 2.1 2.4 2.1 2.1 2.4 1.9 1.6 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 Armenia Tajikistan Georgia 0.78 0.65 0.62 0.54 0.53 0.

  27. Slide 27: CIS Mobile: ARPU & MOU Development

    CIS Mobile: ARPU & MOU Development Kazakhstan Ukraine Uzbekistan 290 283 295 299 289 262 265 1 8 . 0 230 2 8 0 13.6 13.0 210 231 11.6 12.3 12.1 183 10.8 168 2 1 0 9.7 1 2 . 0 113 99 110 108 101 7.5 7.0 7.6 6.8 6.6 6.5 6.5 99 6.1 1 4 0 6 . 0 5.8 5.6 5.8 7 0 0 . 0 0 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08

  28. Slide 28: CIS Mobile: Subscriber Market Shares

    CIS Mobile: Subscriber Market Shares* Kazakhstan Ukraine Uzbekistan 54% 53% 51% 47% 47% 49% 50% 48% 49% 49% 48% 46% 43% 42% 43% 42% 42% 42% 47% 47% 40% 40% 36% 37% 41% 43% 34% 31% 37% 30% 30% 36% 35% 35% 32% 33% 21% 18% 19% 20% 17% 19% 16% 17% 6% 6% 8% 14% 11% 12% 14% 6% 7% 8% 5% 5% 4% 4% 4% 4% 3% 2

  29. Slide 29: Reconciliation of Consolidated OIBDA and OIBDA Margin (Unaudited)

    Reconciliation of Consolidated OIBDA and OIBDA Margin (Unaudited) Three months ended Dec 31, Sept 30, June 30, March 31, Dec 31, Sept 30, (US$ millions) 2008 2008 2008 2008 2007 2007 Reconciliation of OIBDA to operating income OIBDA 1,124 1,388 1,223 1,126 918 1,015 Depreciation (379) (400) (385) (3

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