Altimo general presentation 2010 4q
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ALTIMO General Presentation 2010-4Q

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Altimo general presentation 2010 4q

ALTIMO General Presentation2010-4Q

This document has been prepared for informational purposes only. It is not intended to or shall be deemed to be construed to constitute an offer or agreement or to represent any binding legal obligation on the part of Altimo. Altimo hereby waves any liability in connection therewith.

This document contains forward-looking statements of financial and operational performance of certain companies. The actual outcome may differ materially from these statements as a result of unforeseen developments. Altimo disclaims any obligation to make corrections to reflect future events or developments.


Altimo general presentation 2010 4q

Altimo is the Telecom Investment arm

of Alfa Group

Russian Technologies

Investment and

development of promising Russian commercial and consumer technologies

Alfa BankWide range of financial services, including corporate banking, retail banking, investment banking, trade finance and asset management

Alfa Asset Management

The Group’s asset management arm whose clients include Russianas well as international institutional and private clients

Alfa Capital Partners

The Group’s private equity and real estate investment group 

AlfaStrakhovanie InsuranceGroup

One of thelargest non-obligatory insurance companies in Russia

X5 Retail Group N.V.

LSE-listed X5 Retail Group N.V. is the largest food retail company in Russia in terms of sales. X5 Retail Group N.V. includes the supermarket chains Pyaterochka and Perekrestok. The company uses a multi-formatted strategy to develop three formats simultaneously: soft discounters, supermarkets and hypermarkets.

TNK-BP

Russia’s third largest vertically integrated oil company in terms of production

Altimo

Telecom Investment arm of Alfa

A1 Group

Large-scale proprietary and for-client investment in Russia, the CIS and other emerging markets

CTC TV

The first private TV channel in Russia


Altimo overview

Altimo overview

13,22%

44,7%1

25,1%

Mobile

Turkey

UkraineBelarus

Mobile

Russia

Tajikistan

Fixed-Mobile

Russia

UkraineKazakhstan

Uzbekistan

Tajikistan

Georgia

Armenia

Vietnam

Cambodia

  • Altimo is the leading international private equity investor in emerging telecoms markets across Eurasia, that was established to hold the telecoms investments of the Alfa Group, Russia’s largest and most respected privately-owned business consortium.

  • Its investment portfolio holds assets in Russia, the CIS, Turkey and other emerging markets of Europe and Asia.

  • The value of Altimo’s investment portfolio exceeds $14bn.

  • The companies in which Altimo is invested have a footprint which covers a total population of 350 million people with over 210 million subscribers.

  • 1 Voting stake, economic stake equals 39.2%.

41,45%

Azerbaijan

Kazakhstan

Georgia

Moldova


Vimpelcom ltd

Vimpelcom Ltd.

The Company significantly improved financial results, raising substantially net profit level:

June 10th. The Company announced changes to the reporting structure of the Company. The reporting structure will be divided into four business units – Russia, Ukraine, CIS and International – that will report to the Company’s headquarters in Amsterdam.

August 9th. The company announced that it has completed the acquisition of all shares of OJSC "Vimpel-Communications”, including those represented by American Depositary Shares, from its remaining minority shareholders by way of a mandatory squeeze-out process and became 100% owner of OJSC VimpelCom.

October 4th. Signed an agreement to combine VimpelCom and Weather to create a new global telecom group, the world’s fifth largest mobile telecommunications carrier by subscribers with pro forma net operating revenues of US$21.5 billion and pro forma EBITDA of US$9.5 billion (for the year ended December 31st, 2009).

October 19th. The Ukrainian Anti-Monopoly Committee confirmed its prior approval of the transaction to combine OJSC VimpelCom and Kyivstar GSM under VimpelCom Ltd.

October 20th. The Company issued Russian ruble-denominated bonds in an aggregate principal amount of RUR 20 bln (~$658 mln). The bonds are guaranteed by OJSC “Vimpel-Communications”, have a five-year maturity and bear an annual interest rate of 8.3%. The proceeds of the offering will be used for financing development and expansion of OJSC VimpelCom’s core business.

November 15th. The Supervisory Board of VimpelCom Ltd declared the payment of an interim dividend in 2010 of US$0.46 per American depositary share, amounting to a total interim dividend payment of approximately $600 mln.

Vimpelcom Ltd. highlights

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Megafon

Megafon

  • Megafon highlights

  • Megafon reported excellent financial results for the third quarter and nine months 2010:

  • The 3-month active subscriber base in Russia, Tajikistan, Abkhazia and South Ossetia had reached 56.6 mln subscribers by the end of October (or +6.1 mln subscribers from start-2010).

  • The Company made a row of successful acquisitions, including universal infrastructure network provider Synterra and Saint-Petesburg based fixed network provider Metrocom.

  • MegaFon successfully utilize mobile data market growth: Company has the widest 3G network in Russia, data revenue market share among BIG3 around 44% and data revenue share in total revenue growth from 6% in 2009 to 11% in 2010.

  • The Company successfully strengthened its market position in Russia compared to main competitors – MTS, Tele2 and Vimpelcom and continue to growth its revenue market share.

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Turkcell

Turkcell

Turkcell highlights

  • Turkcell reported audited results for the third quarter and nine months 2010. In spite of the challenging market conditions, together with pressure from both the regulator and its competitors, Turkcell has continued to maintain its number one position in terms of subscribers, revenue and EBITDA-market share.

  • Turkcell successfully defends its market positions and collects around 90% EBITDA margin from the mobile market in Turkey.

  • Turkcell enjoys strong growth in mobile data subscribers with third quarter mobile revenue up by 28% Y-to-Y. 3G network rollout is on schedule and is expected to be main driver for revenue growth in nearest future.

  • Altimo seeks the successful resolution of its litigation against Cukurova.

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Altimo to establish new global telecom leaders

Altimo to establish new global telecom leaders

NEW HOLDING

55,8%*

68,9%

100%

100%

  • Altimo strikes 2 major deals in merging its assets with telecoms market-leaders, Telenor and TeliaSonera:

  • - Working directly with Telenor, Altimo successfully merged VimpelCom, the 2nd largest mobile operator in Russia, with Kyivstar, the largest mobile operator in the Ukraine, into a new company called VimpelCom Ltd. This unified company provide high-quality integrated mobile telecom services in Russia, the Ukraine and other CIS countries such as Georgia, Vietnam and Cambodia. Vimpelcom Ltd. is also seeking opportunities to expand its operations in other rapidly developing markets in Europe, Asia and Africa, eventually becoming a global market leader. The headquarters of the new company is located in Amsterdam, its shares listed on the New York Stock Exchange (NYSE) under symbol VIP. Altimo has 44,7% voting rights in Vimpelcom Ltd.

  • - Also, Altimo and TeliaSonera have agreed to create a new company to hold their stakes in Megafon, the 3rd largest mobile operator in Russia, and in Turkcell, the largest mobile operator in Turkey. The two companies will work closely to resolve any legal disputes regarding the establishment of this new company. It will be a leading international operator with more than 90 million subscribers in Turkey, Russia and the CIS countries, and will have streamlined corporate governance processes. The new company will be established in a Western jurisdiction and listed on the NYSE.

  • * - with the disputed stake which was appropriated by Altimo as the collateral in the defaulted loan to Cukurova.


Weather acquisition first step to global expansion

VimpelCom Ltd.

Weather Investments (excluding Wind Hellas)

Weather assets to be spun off

Weather acquisition - first step to global expansion

Vimpelcom Ltd. made first step to global expansion by signing an agreement with Weather holdings to acquire Wind Italy and OTH assets.

Source:World Cellular Information Service, Company information

Note: Figures as of June 2010 based on proportionate subscribers


Weather acquisition creating a leading global operator

Weather acquisition - creating a leading global operator

Source:World Cellular Information Service

Note: Figures as of June 2010 based on proportionate subscribers

Orascom Telecom adjusted for spin-off assets (North Korea and Egypt)


Weather acquisition expanding basis for further growth

Weather acquisition – expanding basis for further growth

  • 849 million population coverage

  • 174 million subscribers – top 5 globally

  • Footprint in attractive emerging markets

  • Solid European growth asset

  • High standards of corporate governance

  • Listed on the NYSE

  • Balance shareholder structure retained

  • Dividend policy retained

  • Combined revenues of US$21.5bn

  • Significantly enhances managerial bandwidth

  • Low cost model knowledge from Wind Italy

Access to attractive assets and markets

Sound corporate governance

Platform for growth

Optimised balance sheet

Diversification

  • Sound pro forma financials

  • Robust de-leveraging profile supported by strong operating free cash flows

  • Ability to support dividend payments going forward

  • Diversified revenue base

    • Russia drops from 74% to35% of group revenues

  • Attractive mix of developed and emerging markets assets

Value creation

  • Acceptable transaction multiple

  • US$2.5 billion value creation through opex and capex synergies

  • Large under-penetrated markets

  • Global scale to capture data upside


Assets capitalization level

Assets capitalization level

  • 100%

  • Despite lengthy global economic turmoil Altimo’s assets capitalisation level increased twofold to $16 bn during the last 5 years.

  • Vimpelcom-Kyivstar merger and announcement of further acquisition of Weather put strong pressure on Vimpelcom Ltd. capitalization that resulted in ‘flat’ assets capitalization Y-to-Y.

(US$bn)

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