1 / 27

VimpelCom

VimpelCom. Presentation of 1Q 200 5 F inancial and O perating R esults. June 2, 2005. Disclaimer.

mariko-wilder
Download Presentation

VimpelCom

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. VimpelCom Presentation of 1Q2005 Financial and Operating Results June 2, 2005

  2. 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 and development plans, such as national and CIS growth. The forward-looking statements are based on management's best assessment of the Company's strategic and financial position, and future market conditions and trends. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of unforeseen developments from competition, governmental regulations of the wireless telecommunications industry, general political uncertainties in Russia and the CIS, general economic developments in Russia and the CIS and other factors. As a result of such risks and uncertainties, there can be no assurance that the effects of competition or current or future changes in the political, economic and social environment or current or future regulation of the telecommunications industries in Russia or the countries of the CIS will not have a material adverse effect on the VimpelCom Group. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in the Company's Annual Report on Form 20-F for the year ended December 31, 2004 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

  3. Welcome Remarks Alexander Izosimov, Chief Executive Officer

  4. VimpelCom’s Strategy • Increase loyalty, reduce churn • Improve network quality perception • Increase market share in business/Hi-value segment • Stimulate traffic usage and up-sell / cross-sell VAS Extract value from Win the regional Expansion outside existing operations growth game Russia • Capture organic growth • Utilize unified business model: • Brand, tariffs and products • Network rollout & operations • Customer Service • IT, Billing and Reporting • Organizational structure • Apply tailored strategy for each region • Develop the Kazakh asset • Selective acquisitions and green field opportunities in the CIS • Industrial approach utilizing synergies with existing VimpelCom operations Ensure cost efficiency

  5. Operating Highlights • 33.2 million subscribers as of June 2, 2005, including 1.3 million in Kazakhstan • Leader in subscriber net additions in Russia and Kazakhstan in 1Q2005 • More than 50% growth in total operating revenue and OIBDA in 1Q2005 as compared with 1Q2004 • Substantial recovery in margins in the 1Q2005 as compared with 4Q2004 OIBDA: 47.8% vs. 45.5% Net income: 17.1% vs. 13.4%

  6. Unlicensed territories National GSM Network RolloutSpreads over 11 time zones Moscow Population: 17.0 mln. Northwest Population: 14.0 mln. Urals Population: 18.3 mln. 70 39 59 44 Central Population: 21.0 mln. 58 47 49 65 4 11 66 60 10 40 19 Russia 5 1 75 2 20 9 6 21 24 23 7 8 13 71 12 46 68 54 51 3 74 32 64 61 50 67 38 72 26 14 45 30 28 15 48 36 29 31 Far EastPopulation: 11.4 mln. 22 53 52 55 43 42 57 33 37 27 25 56 41 18 35 62 63 17 Kazakhstan 16 69 South Population: 22.9 mln. 73 34 SiberiaPopulation: 15.3 mln. VolgaPopulation: 25.2 mln. Kazakhstan Population: 15.0 mln. Launched: Sept. 2004 In commercial operation Other licensed regions

  7. Area Super Region Area Popul. (‘000)) Network Launch Area Super Region Area Popul.(‘000) Network Launch 18. Novosibirsk 19. Bryansk 20. Kostroma 21. Ivanovo 22. Orenburg** 23. Kursk 24. Orel 25. Omsk 26. Kazan 27. Tomsk 28. Krasnodar 29. Maykop 30. Volgograd 31. Ufa 32. Cheboksary 33. Nalchik 34. Gorno- Altaysk • City of Moscow* • Moscow Region* • Voronezh • Tver • Kaluga • Vladimir • Ryazan • Lipetsk • Tula • Yaroslavl • Smolensk • Belgorod • N. Novgorod • Saratov • Rostov • Barnaul • Kemerovo Siberia Central Central Central Volga Central Central Siberia Volga Siberia South South South Volga Volga South Siberia Jan 2002 May 2002 May 2002 Jun 2002 Jul 2002 Aug 2002 Aug 2002 Aug 2002 Aug 2002 Sep 2002 Sep 2002 Sep 2002 Oct 2002 Oct 2002 Oct 2002 Oct 2002 Oct 2002 2,692 1,379 737 1,148 2,180 1,235 860 2,079 3,779 1,046 5,125 447 2,699 4,104 1,314 901 203 MLA * MLA * Central Central Central Central Central Central Central Central Central Central Volga Volga South Siberia Siberia 10,383 6,619 2,379 1,471 1,042 1,524 1,228 1,213 1,676 1,367 1,050 1,512 3,524 2,668 4,404 2,607 2,899 Jul 1999 Jul 1999 May 2000 Sep 2001 Sep 2001 Sep 2001 Sep 2001 Oct 2001 Oct 2001 Oct 2001 Nov 2001 Nov 2001 Jan 2002 Jan 2002 Jan 2002 Jan 2002 Jan 2002 National GSM Network Rollout * Moscow license area ** Acquisitions

  8. Area Super Region Area Popul.. (‘000) Network Launch Area Super Region Area Popul. (‘000) Network Launch Ural North W North W North W Volga Far East Far East Far East North W North W Volga Volga Siberia North W Volga Ural Siberia Ural North W 35. Krasnoyarsk 36. Samara 37. Astrakhan 38. Ulyanovsk 39. Kaliningrad** 40. Norilsk 41. Makhachkala 42. Stavropol** 43. Cherkessk** 44. St.Petersburg 45. Tura 46. Tambov 47. Leningrad Reg. 48. Ekaterinburg 49. Novgorod 50. Penza 51. Yoshkar-Ola 52. Chelyabinsk 53. Tyumen 54. Saransk 55. Elista 56. Vladikavkaz Oct 2002 Nov 2002 Nov 2002 Dec 2002 Dec 2002 Dec 2002 Jan 2003 Jan 2003 Jan 2003 Apr 2003 Aug 2003 Oct 2003 Oct 2003 Dec 2003 Dec 2003 Dec 2003 Dec 2003 Dec 2003 Dec 2003 Dec 2003 Dec 2003 Mar 2004 Siberia Volga South Volga North W Siberia South South South North W Siberia Central North W Ural North W Volga Volga Ural Ural Volga South South 2,966 3,240 1,005 1,383 955 -- 2,577 2,735 439 4,661 -- 1,178 1,669 4,486 694 1,453 728 3,603 3,265 889 292 710 57. Kurgan 58. Pskov 59. Petrozavodsk 60 Vologda 61. Izhevsk 62. Blagovesch.** 63. Khabarovsk** 64.P-Kamchatsky** 65. Arkhangelsk 66. Naryan-Mar 67. Perm 68. Kudymkar 69. Abakan 70. Murmansk 71. Kirov 72. Surgut 73. Kyzyl 74. Salekhard 75. Syktyvkar Apr 2004 Apr 2004 Apr 2004 May 2004 Jun 2004 Jun 2004 Jun 2004 Jun 2004 July 2004 July 2004 Aug 2004 Aug 2004 Aug 2004 Aug 2004 Sep 2004 Sep 2004 Nov 2004 Dec 2004 Apr 2005 1,020 761 716 1,270 1,570 903 1,437 359 1,337 -- 2,819 -- 546 893 1,504 -- 306 -- 1,019 National GSM Network Rollout ** Acquisitions

  9. Strong Subscriber Growth 30.75 26.58 20.55 16.30 13.37 Source: VimpelCom, independent sources

  10. Strong Growth in Russian Regions And Kazakhstan 22,630 19,107 13,898 10,120 7,329

  11. Key Subscriber Statistics (‘000) 31 Mar 05 31 Mar 04 YtY 31 Dec 04 QtQ Moscow 8,118 6,042 34% 7,477 9% Contract 906 827 10% 883 3% Prepaid 7,212 5,215 38% 6,594 9% Regions 21,500 7,329 193% 18,247 18% KaR-Tel 1,131 n/a -- 859 32% Total 30,748* 13,372 130% 26,583 16% Contract 3,543 1,823 94% 3,184 11% Prepaid 27,206 11,549 136% 23,399 16% Churn (quarterly) 5.9% 8.6% -- 5.7% -- *) of which 88.0% are active. Pursuant to the definition "a subscriber is considered active if thesubscribers' activity resulted in income to the Company during the most recent three months".

  12. VimpelCom 1Q05 Financial Highlights 45.1% 54.8% 51.5% Source: VimpelCom

  13. Key Financial Figures ($ mln) 1Q05 1Q04 YtY 4Q04 QtQ Total Revenues 640.6 413.8 54.8% 624.9 2.5% Russia 605.6 413.8 46.4% 590.6 2.5% Kazakhstan 35.0 n/a -- 34.3 2.0% Gross Margin 83.0% 82.7% -- 82.5% -- OIBDA 306.1 202.0 51.5% 284.3 7.7% OIBDA Margin 47.8% 48.8% -- 45.5% -- OIBDA Russia 293.9 202.0 45.5% 271.6 8.2% OIBDA Kazakhstan 12.2 n/a -- 12.7 -3.9% Net Income 109.7 75.6 45.1% 83.7 31.1% Net Income Margin 17.1% 18.3% -- 13.4% -- Russia 113.5 75.6 50.1% 84.2 34.8% Kazakhstan -3.8 n/a -- -0.4 -850% SG&A 223.5 138.0 62.0% 231.1 -3.3% % of total revenues 34.9% 33.3% -- 37.0% -- incl. sales and marketing expenses 83.9 50.1 67.5% 90.0 -6.8% D&A 120.0 68.2 76.0% 112.4 6.8% % of Net Revenues 18.7% 16.5% -- 18.0% -- Capex (incl. acquisitions) 295.6 156.8 88.5% 466.2 -36.6%

  14. Operational Indicators 1Q05 1Q04 YtY 4Q04 QtQ ARPU, Blended ($) 7.3 10.9 -33.0% 9.0 -18.9% ARPU Russia 7.2 10.9 -33.9% 8.7 -17.2% ARPU Kar-Tel 11.5 n/a -- 15.6 -26.3% MOU, Blended (min) 86.9 91.4 -4.9% 97.3 -10.7% MOU Russia 88.1 91.4 -3.6% 98.3 -10.4% MOU Kar-Tel 53.6 n/a -- 68.9 -22.2% SAC, Blended ($) 14.3 16.8 -14.9% 12.3 16.3% SAC Russia 14.1 16.8 -16.1% 12.1 16.5% SAC Kar-Tel 17.6 n/a -- 19.1 -7.9%

  15. Strong Balance Sheet ($’000) 3/31/05 12/31/04 12/31/03 Cash and Cash Equivalents 451,088 305,857 157,611 Total Assets 5,150,783 4,780,241 2,281,448 Total Debt 1,863,791 1,581,138 606,991 - Short-term 190,325 189,539 214,717 - Long-term 1,673,466 1,391,599 392,274 Shareholder’s Equity 2,261,251 2,157,133 987,651 LTM OIBDA* 1,130,803 1,026,721 613,230 - LTM Depreciationand amortization * * 404,349 352,555 196,833 - LTM Operating income 726,454 674,166 416,397 LTM Interest 108,724 85,663 68,246 Debt/Equity 0.8 0.7 0.6 Debt/OIBDA *** 1.6 1.5 1.0 OIBDA/Interest 10.4 12.0 9.0 Debt/Assets 0.4 0.3 0.3 * LTM OIBDA constitutes the sum of the lines: LTM Operating income and LTM Depreciationand amortization LTM stands for “last twelve months” to reporting date * * Includes Impairment of long-lived assets * * * In cases when OIBDA is part of financial ratios it is deemed to be calculated in accordance with the reconciliation tables herein Source: VimpelCom

  16. Net Operating Cash Flow vs CAPEX 65.8%* 70.3%* 43.5%* * Net operating cash flow as % of Capex

  17. Corporate Activities • VimpelCom received regional GSM licenses previously held by VimpelCom-Region. • Merger between VimpelCom and KB Impuls was completed on May 31, 2005. Applications submitted for re-issuance of licenses and frequencies toVimpelCom. • The 2005 AGM will be held on June 22. For the first time there are 12 nominations for 9 board seats.

  18. Summary • Continued subscriber growth resulted in approximately 30.8 million subscribers at the end of 1Q2005 (more than 33 million as of June 2, 2005) • Overall market share in Russia was 34.6% at the end of 1Q2005 • More than 50% growth in in total operating revenue and OIBDA in 1Q2005 as compared with 1Q2004. • Corporate structure is being streamlined with subsidiaries being merged with and into VimpelCom • Preparing for a new phase of competitionin Russia as the market matures

  19. Reconciliation tables of non-U.S. GAAP measures to their most directly comparable U.S. GAAP financial measures

  20. Reconciliation of OIBDA and OIBDA margin (Unaudited) (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004 Reconciliation of OIBDA to operating income OIBDA 306,107 284,339 202,025 Less:Depreciation 86,334 81,971 59,026 Less: Amortization 33,629 30,454 9,143 Operating Income186,144171,914 133,856 Reconciliation of OIBDA margin to operating income as percentage of net operating revenues OIBDA margin 47.8% 45.5% 48.8% Less:Depreciation as % of net operating revenues (13.5%) (13.1%) (14.3%) Less: Amortization as % of net operating revenues (5.2%) (4.9%) (2.2%) Operating income as % of net operating revenues29.1% 27.5% 32.3%

  21. Reconciliation of OIBDA and OIBDA margin inRussia and Kazakhstan(Unaudited) (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Russia Kazakhstan Russia Kazakhstan Total operating revenues 605,664 34,972 590,584 34,323 OIBDA 293,933 12,174 271,647 12,692 OIBDA margin 48.5% 34.8% 46.0% 37.0% Reconciliation of OIBDA to operating income OIBDA 293,93312,174271,647 12,692 Less:Depreciation 83,0553,27978,5683,404 Less: Amortization 24,5389,09121,8158,639 Operating Income186,340 (196) 171,265649 Reconciliation of OIBDA margin to operating income as percentage of net operating revenues OIBDA margin 48.5% 34.8% 46.0% 37.0% Less:Depreciation as % of net operating revenues (13.7%) (9.4%) (13.3%) (9.9%) Less: Amortization as % of net operating revenues (4.1%) (26.0%)(3.7%) (25.2%) Operating income as % of net operating revenues30.7% (0.6%) 29.0% 1.9%

  22. Reconciliation of SAC (Unaudited) (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004 Reconciliation of SAC to selling, general and administrative expenses Selling, general and administrative expenses 223,523 231,064 138,013 Less: General and admin. expenses 139,672 141,025 87,865 Sales and marketing expenses, including 83,851 90,039 50,148 advertising & marketing expenses20,217 21,649 13,245 dealers’ commission expense 63,634 68,390 36,903 New gross subs, ‘000 5,856 7,343 2,979 SAC (US$) 14.3 12.3 16.8

  23. Reconciliation of ARPU (Unaudited) (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004 Reconciliation of ARPU to service revenue and connection fees Service revenue and connection fees US$ 631,741 US$ 612,720 US$403,672 Less: Connection fees 160 193 185 Less: Revenue from rent of fiber-optic channels 272 527 549 Service revenue used to calculate ARPU 631,309 612,000 402,938 Average number of subscribers, ‘000 28,783 22,764 12,318 ARPU (US$) 7.3 9.0 10.9

  24. Reconciliation of SAC (Unaudited) in Russia (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004 Reconciliation of SAC to selling, general and administrative expenses Selling, general and administrative expenses 211,487 220,620 138,013 Less: General and admin. expenses 133,047 134,728 87,865 Sales and marketing expenses, including 78,44085,892 50,148 advertising & marketing expenses19,258 20,723 13,245 dealers’ commission expense 59,182 65,169 36,903 New gross subs, ‘000 5,549 7,126 2,979 SAC (US$) 14.1 12.1 16.8

  25. Reconciliation of ARPU (Unaudited) inRussia (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004 Reconciliation of ARPU to service revenue and connection fees Service revenue and connection fees US$ 596,769 US$ 578,397 US$403,672 Less: Connection fees 160 193 185 Less: Revenue from rent of fiber-optic channels 272 527 549 Service revenue used to calculate ARPU 596,337 577,677 402,938 Average number of subscribers, ‘000 27,770 22,030 12,318 ARPU (US$) 7.2 8.7 10.9

  26. Reconciliation of SAC of Kar-Tel to selling,general and administrative expenses (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004 Reconciliation of SAC to selling, general and administrative expenses Selling, general and administrative expenses 12,036 10,444 N/A Less: General and admin. expenses 6,625 6,297 N/A Sales and marketing expenses, including 5,411 4,147 N/A advertising & marketing expenses959 926 N/A dealers’ commission expenses 4,452 3,221 N/A New gross subs, ‘000 307 217 N/A SAC (US$) 17.6 19.1 N/A

  27. Reconciliation of ARPU ofKar-Tel to service revenue and connection fees (Three months ended) ($ ‘000) Mar. 31, 2005 Dec. 31, 2004 Mar. 31, 2004 Reconciliation of ARPU to service revenue and connection fees Service revenue and connection fees US$ 34,972 US$ 34,323 N/A Less: Connection fees 0 0 N/A Less: Revenues from rent of fiber-optic channels 0 0 N/A Service revenue used to calculate ARPU 34,972 34,323 N/A Average number of subscribers, ‘000 1,013 735 N/A ARPU (US$) 11.515.6 N/A

More Related