Filed by: Open Joint Stock Company Vimpel-Communications
pursuant to Rule 425 of the Securities Act of 1933
Subject Company: Open Joint Stock Company Vimpel-Communications
Commission File No.: 001-14522
On November 24, 2009, VimpelCom published its third quarter 2009 earnings release and presentation to investors and conducted a teleconference. Copies of the earnings release and the presentation and excerpts from the transcript of the teleconference follow:
Moscow and New York (November 24, 2009) - Open Joint Stock Company “Vimpel-Communications” (“VimpelCom” or the “Company”) (NYSE: VIP), a leading international provider of telecommunications services operating in Russia, the Commonwealth of Independent States (CIS) and South-East Asia, today announced its financial and operating results for the quarter ended September 30, 2009.
Third Quarter 2009 Highlights and Recent Developments
Operational
| • | Mobile subscribers increased by 1.7 million versus 2Q09, reaching 65.4 million |
| • | Successful launch of operations in Vietnam under Beeline brand |
| • | Agreement signed to enter Laos mobile market |
| • | 3G presence in all regions of Russia as of November 21, 2009 |
Financial
| • | Net operating revenues reached 71.3 billion Russian rubles, an increase of 3.3% versus 2Q09 |
| • | OIBDA reached a record 36.0 billion rubles, an increase of 2.9% versus 2Q09 |
| • | Continued strong consolidated fixed and mobile OIBDA margin of 50.4% |
| • | Net income attributable to VimpelCom amounted to 13.5 billion rubles |
Other
| • | Interim dividend payment of 190.13 rubles per common share proposed by the Board of Directors |
| • | Major shareholders agreed to combine their stakes in VimpelCom and Kyivstar in a new company |
VimpelCom Announces Third Quarter 2009 Financial and Operating Results
3
Commenting on the performance of the Company, Boris Nemsic, Chief Executive Officer of VimpelCom, said, “During the third quarter we continued to demonstrate growth in challenging market conditions and delivered a record 71.3 billion rubles in revenues and 36.0 billion rubles in OIBDA with a consolidated fixed and mobile OIBDA margin of 50.4%.
We are particularly pleased with the OIBDA performance which demonstrates our ability to increase revenues and control costs in the new economic environment.
The number of active mobile subscribers reached 65.4 million, which is 13% more than we had a year ago. We serve 1.9 million fixed and mobile broadband subscribers, which makes us one of the largest broadband providers in Russia and the CIS.
Stable operational cash flow strengthened our financial position. As of today, we have repaid more than $2 billion dollars of our debt and fully funded capital expenditures. We continue to optimize our debt portfolio with the non-ruble portion of our debt decreasing to 76% of our total debt, compared with 85% at the beginning of the year.
On October 5th, 2009, Altimo and Telenor agreed to combine their interests in VimpelCom and Kyivstar, paving the way for the creation of one of the largest telecom operators in the emerging markets. Management of VimpelCom welcomes this transaction and believes that the transaction, when completed, will bring benefits to our shareholders, employees and customers”.
4
Key Consolidated Financial and Operating Results*
| CONSOLIDATED OPERATIONS* (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| Net operating revenues |
71,338 | 68,933 | 3.5 | % | 69,035 | 3.3 | % | ||||||||
| OIBDA |
35,980 | 33,636 | 7.0 | % | 34,958 | 2.9 | % | ||||||||
| OIBDA margin, % |
50.4 | % | 48.8 | % | 50.6 | % | |||||||||
| Operating income |
22,299 | 21,568 | 3.4 | % | 22,250 | 0.2 | % | ||||||||
| Operating income margin, % |
31.3 | % | 31.3 | % | 32.2 | % | |||||||||
| SG&A |
18,760 | 18,167 | 3.3 | % | 18,458 | 1.6 | % | ||||||||
| including Sales & Marketing Expenses |
5,766 | 5,867 | -1.7 | % | 5,414 | 6.5 | % | ||||||||
| including General & Administrative Costs |
12,994 | 12,300 | 5.6 | % | 13,044 | -0.4 | % | ||||||||
| SG&A percentage |
26.3 | % | 26.4 | % | 26.7 | % | |||||||||
| Net income attributable to VimpelCom |
13,513 | 6,513 | 107.5 | % | 22,599 | -40.2 | % | ||||||||
| Net income attributable to VimpelCom per common share, basic (RUR) |
266.83 | 128.68 | 446.43 | ||||||||||||
| Net income attributable to VimpelCom per ADS equivalent, basic (RUR) |
13.34 | 6.43 | 22.32 | ||||||||||||
| Capital expenditures |
3,842 | 16,799 | -77.1 | % | 5,027 | -23.6 | % | ||||||||
| Mobile subscribers (‘000) |
65,358 | 57,758 | 13.2 | % | 63,676 | 2.6 | % | ||||||||
| Broadband subscribers*) (‘000) |
1,930 | 785 | 145.9 | % | 1,739 | 11.0 | % |
| * | See definitions in Attachment A. Y-o-y stands for 3Q09 vs. 3Q08 comparison while q-o-q stands for 3Q09 vs. 2Q09. |
| Net operating revenues 3Q ‘09* (RUR, millions) |
Russia | CIS | SEA | Eliminations | Total | |||||
| Mobile business |
51,502 | 9,221 | 74 | -138 | 60,659 | |||||
| Fixed business |
13,583 | 2,167 | 0 | -608 | 15,142 | |||||
| Eliminations |
-3,874 | -312 | 0 | -277 | -4,463 | |||||
| Total net operating revenue |
61,211 | 11,076 | 74 | -1,023 | 71,338 |
| * | Due to the increasing integration between different parts of our business, we include inter-company transactions in the reported revenues of geographic and business segments and indicate the amount of inter-company eliminations within and between the segments. |
The quarterly net operating revenues increased by 3.5% year-on-year and 3.3% as compared with the previous quarter demonstrating the strength of our core business.
Continued focus on operational efficiency helped us to maintain a strong consolidated fixed and mobile OIBDA margin of 50.4%.
We continue to maintain solid operational cash flow, which provides a basis for further investment in the development of our business. We invested 3.8 billion rubles during the third quarter of 2009. Taking into consideration the further strengthening of the Russian ruble, we have recalculated our CAPEX guidance for 2009 and expect CAPEX to be in the range of 10%-12% of our 2009 annual revenue.
5
During the third quarter we repaid $690 million of debt. Our net debt continued to decline from $6.3 billion at the end of the second quarter down to $5.5 billion at the end of the third quarter.
Our quarterly net income attributable to VimpelCom amounted to 13.5 billion rubles, including a modest 0.7 billion ruble net foreign exchange gain due to the strengthening of the ruble.
6
Russia - Financial and Operating Results
| RUSSIA (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| Net operating revenues |
61,211 | 58,816 | 4.1 | % | 59,136 | 3.5 | % | ||||||||
| OIBDA |
30,951 | 29,457 | 5.1 | % | 30,279 | 2.2 | % | ||||||||
| OIBDA margin, % |
50.6 | % | 50.1 | % | 51.2 | % | |||||||||
| Operating income |
20,724 | 20,112 | 3.0 | % | 20,574 | 0.7 | % | ||||||||
| Operating income margin, % |
33.9 | % | 34.2 | % | 34.8 | % | |||||||||
| SG&A |
15,644 | 15,191 | 3.0 | % | 15,417 | 1.5 | % | ||||||||
| including Sales & Marketing Expenses |
4,940 | 4,918 | 0.4 | % | 4,726 | 4.5 | % | ||||||||
| including General & Administrative Costs |
10,704 | 10,273 | 4.2 | % | 10,691 | 0.1 | % | ||||||||
| SG&A percentage |
25.6 | % | 25.8 | % | 26.1 | % | |||||||||
| Net income attributable to VimpelCom |
13,754 | 6,274 | 119.2 | % | 21,835 | -37.0 | % |
Our quarterly net operating revenues in Russia amounted to 61.2 billion rubles, growing 3.5% quarter-on-quarter. The quarterly net operating revenues in Russia grew 4.1% compared to the exceptionally strong third quarter of 2008, when we reported high revenues from roaming and handset sales.
The total Russia fixed and mobile OIBDA increased 5.1% year-on-year and reached 30.9 billion rubles with a total fixed and mobile OIBDA margin of 50.6%.
In the mobile segment our revenues increased by 4.2% quarter-on-quarter. Slight upward trends in usage coupled with a seasonal increase from roaming led to an increase in ARPU of 2.8%.
Our fixed-line revenues increased by 4.4% quarter-on-quarter. A seasonal decline in the usage by business customers during the summer months was offset by increasing wholesale revenues, which grew by 13.3% quarter-on-quarter. The fixed-line OIBDA margin decreased quarter-on-quarter from 29.6% to 26.4%. As a result the quarterly fixed-line revenues were also impacted by the appreciation of the Russian ruble as part of our contracts in the business segment are denominated in US dollars and Euro.
In the third quarter of 2009 the total number of residential broadband subscribers in Russia, including FTTB and mobile broadband, reached 1.8 million, a 140% increase year-on-year and a 10% increase quarter-on-quarter.
7
| RUSSIA REVENUES (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| Net operating revenues |
61,211 | 58,816 | 4.1 | % | 59,136 | 3.5 | % | ||||||||
| Mobile revenues |
51,502 | 49,401 | 4.3 | % | 49,410 | 4.2 | % | ||||||||
| Fixed revenues |
13,583 | 10,789 | 25.9 | % | 13,007 | 4.4 | % | ||||||||
| Eliminations |
-3,874 | -1,374 | -3,281 | ||||||||||||
| RUSSIA OIBDA DEVELOPMENT*) (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| OIBDA Total |
30,951 | 29,457 | 5.1 | % | 30,279 | 2.2 | % | ||||||||
| Mobile OIBDA |
27,360 | 26,772 | 2.2 | % | 26,427 | 3.5 | % | ||||||||
| Fixed OIBDA |
3,591 | 2,685 | 33.7 | % | 3,852 | -6.8 | % | ||||||||
| Total OIBDA margin, % |
50.6 | % | 50.1 | % | 51.2 | % | |||||||||
| Mobile OIBDA margin, % |
53.1 | % | 54.2 | % | 53.5 | % | |||||||||
| Fixed OIBDA margin, % |
26.4 | % | 24.9 | % | 29.6 | % | |||||||||
| RUSSIA OPERATING DEVELOPMENT |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| Mobile subscribers (‘000)**) |
51,028 | 45,093 | 13.2 | % | 49,971 | 2.1 | % | ||||||||
| MOU, min |
213.6 | 228.5 | -6.5 | % | 211.8 | 0.8 | % | ||||||||
| ARPU mobile, (RUR) |
331.4 | 368.2 | -10.0 | % | 322.5 | 2.8 | % | ||||||||
| Broadband subscribers (‘000) |
1,833 | 764 | 139.9 | % | 1,659 | 10.5 | % | ||||||||
| * | Please find information on respective operating income amounts in the supplementary file FinancialOperatingQ32009.xls on our website at http://www.vimpelcom.com/news/qrep.wbp. |
| ** | Starting with this quarterly report, we no longer provide information on subscriber market share. This is because different churn policies used by mobile service providers result in reported subscriber market share figures that could be misleading. |
8
CIS - Financial and Operating Results
| CIS OPERATIONS (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| Net operating revenues |
11,076 | 10,663 | 3.9 | % | 10,668 | 3.8 | % | ||||||||
| OIBDA |
5,322 | 4,232 | 25.8 | % | 4,908 | 8.4 | % | ||||||||
| OIBDA margin, % |
48.0 | % | 39.7 | % | 46.0 | % | |||||||||
| Operating income |
2,056 | 1,509 | 36.2 | % | 1,929 | 6.6 | % | ||||||||
| Operating income margin, % |
18.6 | % | 14.2 | % | 18.1 | % | |||||||||
| SG&A |
2,851 | 2,945 | -3.2 | % | 2,844 | 0.2 | % | ||||||||
| including Sales & Marketing Expenses |
748 | 949 | -21.2 | % | 633 | 18.2 | % | ||||||||
| including General & Administrative Costs |
2,103 | 1,996 | 5.4 | % | 2,211 | -4.9 | % | ||||||||
| SG&A percentage |
25.7 | % | 27.6 | % | 26.7 | % | |||||||||
| Net income attributable to VimpelCom |
86 | 323 | -73.4 | % | 841 | -89.8 | % | ||||||||
| Mobile subscribers (‘000) |
14,235 | 12,665 | 12.4 | % | 13,626 | 4.5 | % | ||||||||
| Broadband subscribers (‘000) |
97 | 21 | 361.9 | % | 80 | 21.3 | % |
The total quarterly revenues from the CIS markets increased year-on-year by 3.9% to 11.1 billion rubles.
Our continued focus on cost control increased consolidated OIBDA margin for the CIS segment by 2 percentage points to a record high of 48.0%, a remarkable achievement in challenging market conditions.
In the third quarter of 2009, we observed a good increase in subscriber numbers across all markets where we operate. Our subscriber base in the CIS reached 14.2 million active users, 12.4% more than a year ago.
Net income attributable to VimpelCom in the CIS segment reached 86 million rubles in the third quarter, with a modest impact from the foreign exchange gain as compared with the second quarter of 2009.
9
VimpelCom Announces Third Quarter 2009 Financial and Operating Results
CIS Revenues Development
| KAZAKHSTAN (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Net operating revenues |
5,387 | 4,815 | 11.9 | % | 5,061 | 6.4 | % | |||||
| Mobile |
5,311 | 4,750 | 11.8 | % | 4,988 | 6.5 | % | |||||
| Fixed |
211 | 146 | 44.5 | % | 190 | 11.1 | % | |||||
| Elimination |
-135 | -81 | -117 | |||||||||
| Net operating revenues (KZT, millions) |
25,928 | 23,830 | 8.8 | % | 23,679 | 9.5 | % | |||||
| UKRAINE (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Net operating revenues |
1,773 | 2,283 | -22.3 | % | 1,645 | 7.8 | % | |||||
| Mobile |
1,066 | 1,653 | -35.5 | % | 956 | 11.5 | % | |||||
| Fixed |
879 | 787 | 11.7 | % | 800 | 9.9 | % | |||||
| Elimination |
-172 | -157 | -111 | |||||||||
| Net operating revenues (UAH, millions) |
442 | 456 | -3.1 | % | 390 | 13.3 | % | |||||
| ARMENIA (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Net operating revenues |
1,611 | 1,667 | -3.4 | % | 1,584 | 1.7 | % | |||||
| Mobile |
637 | 764 | -16.6 | % | 634 | 0.5 | % | |||||
| Fixed |
974 | 903 | 7.9 | % | 950 | 2.5 | % | |||||
| Elimination |
0 | 0 | 0 | |||||||||
| Net operating revenues (AMD, millions) |
19,167 | 20,786 | -7.8 | % | 18,253 | 5.0 | % | |||||
| UZBEKISTAN (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Net operating revenues |
1,568 | 1,416 | 10.7 | % | 1,693 | -7.4 | % | |||||
| Mobile |
1,467 | 1,345 | 9.1 | % | 1,594 | -8.0 | % | |||||
| Fixed |
103 | 71 | 45.1 | % | 100 | 3.0 | % | |||||
| Elimination |
-2 | 0 | -1 | |||||||||
| Net operating revenues (US$, millions) |
50 | 58 | -13.8 | % | 53 | -5.7 | % | |||||
| TAJIKISTAN (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile net operating revenues |
468 | 358 | 30.7 | % | 461 | 1.5 | % | |||||
| Mobile net operating revenues (US$, millions) |
14.9 | 14.8 | 0.7 | % | 13.7 | 8.8 | % | |||||
| GEORGIA (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile net operating revenues |
279 | 131 | 113.0 | % | 229 | 21.8 | % | |||||
| Mobile net operating revenues (GEL, millions) |
14.9 | 7.6 | 96.1 | % | 11.8 | 26.3 | % | |||||
| CIS (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Net operating revenues |
11,076 | 10,663 | 3.9 | % | 10,668 | 3.8 | % | |||||
| Mobile |
9,221 | 8,999 | 2.5 | % | 8,859 | 4.1 | % | |||||
| Fixed |
2,167 | 1,907 | 13.6 | % | 2,040 | 6.2 | % | |||||
| Elimination |
-312 | -243 | -231 | |||||||||
10
CIS OIBDA Development*
| KAZAKHSTAN (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| OIBDA total |
3,187 | 2,573 | 23.9 | % | 2,745 | 16.1 | % | ||||||||
| Mobile |
3,064 | 2,495 | 22.8 | % | 2,643 | 15.9 | % | ||||||||
| Fixed |
123 | 78 | 57.7 | % | 102 | 20.6 | % | ||||||||
| OIBDA margin, % |
59.2 | % | 53.4 | % | 54.2 | % | |||||||||
| UKRAINE (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| OIBDA total |
380 | -40 | n/a | 322 | 18.0 | % | |||||||||
| Mobile |
140 | -215 | n/a | 82 | 70.7 | % | |||||||||
| Fixed |
240 | 175 | 37.1 | % | 240 | 0.0 | % | ||||||||
| OIBDA margin, % |
21.4 | % | n/a | 19.6 | % | ||||||||||
| ARMENIA (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| OIBDA total |
825 | 813 | 1.5 | % | 799 | 3.3 | % | ||||||||
| Mobile |
306 | 337 | -9.2 | % | 298 | 2.7 | % | ||||||||
| Fixed |
519 | 476 | 9.0 | % | 501 | 3.6 | % | ||||||||
| OIBDA margin, % |
51.2 | % | 48.8 | % | 50.4 | % | |||||||||
| UZBEKISTAN (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| OIBDA total |
738 | 798 | -7.5 | % | 865 | -14.7 | % | ||||||||
| Mobile |
696 | 774 | -10.1 | % | 825 | -15.6 | % | ||||||||
| Fixed |
42 | 24 | 75.0 | % | 40 | 5.0 | % | ||||||||
| OIBDA margin, % |
47.1 | % | 56.4 | % | 51.1 | % | |||||||||
| TAJIKISTAN (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| Mobile OIBDA |
162 | 115 | 40.9 | % | 173 | -6.4 | % | ||||||||
| Mobile OIBDA margin, % |
34.6 | % | 32.1 | % | 37.5 | % | |||||||||
| GEORGIA (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| Mobile OIBDA |
30 | -27 | n/a | 4 | 650.0 | % | |||||||||
| Mobile OIBDA margin, % |
10.8 | % | n/a | 1.7 | % | ||||||||||
| CIS (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||||||
| OIBDA total |
5,322 | 4,232 | 25.8 | % | 4,908 | 8.4 | % | ||||||||
| Mobile |
4,398 | 3,479 | 26.4 | % | 4,025 | 9.3 | % | ||||||||
| Fixed |
924 | 753 | 22.7 | % | 883 | 4.6 | % | ||||||||
| OIBDA margin, % |
48.0 | % | 39.7 | % | 46.0 | % | |||||||||
| * | Please find information on respective operating income amounts in the supplementary file FinancialOperatingQ32009.xls on our website at http://www.vimpelcom.com/news/qrep.wbp. |
11
CIS Operating Highlights
| KAZAKHSTAN |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile subscribers*) (‘000) |
6,835 | 5,614 | 21.7 | % | 6,635 | 3.0 | % | |||||
| MOU, min |
98.1 | 108.1 | -9.3 | % | 90.7 | 8.2 | % | |||||
| ARPU mobile, (RUR) |
257.9 | 294.1 | -12.3 | % | 253.6 | 1.7 | % | |||||
| ARPU mobile, (KZT) |
1,240.7 | 1,455.4 | -14.8 | % | 1,187.1 | 4.5 | % | |||||
| Broadband subscribers (‘000) |
0.3 | n/a | 0.3 | 0.0 | % | |||||||
| UKRAINE |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile subscribers*) (‘000) |
2,199 | 2,403 | -8.5 | % | 1,934 | 13.7 | % | |||||
| MOU, min |
203.7 | 261.5 | -22.1 | % | 217.8 | -6.5 | % | |||||
| ARPU mobile, (RUR) |
168.3 | 234.9 | -28.4 | % | 166.8 | 0.9 | % | |||||
| ARPU mobile, (UAH) |
42.0 | 47.4 | -11.4 | % | 39.7 | 5.8 | % | |||||
| Broadband subscribers (‘000) |
70 | 16 | 337.5 | % | 53 | 32.1 | % | |||||
| ARMENIA |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile subscribers*) (‘000) |
502 | 784 | -36.0 | % | 486 | 3.3 | % | |||||
| MOU, min |
269.0 | 139.9 | 92.3 | % | 238.4 | 12.8 | % | |||||
| ARPU mobile, (RUR) |
429.7 | 336.9 | 27.5 | % | 436.9 | -1.6 | % | |||||
| ARPU mobile, (AMD) |
5,117.2 | 4,200.1 | 21.8 | % | 5,034.7 | 1.6 | % | |||||
| Broadband subscribers (‘000) |
18.1 | 5.4 | 235.2 | % | 19.2 | -5.7 | % | |||||
| UZBEKISTAN |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile subscribers*) (‘000) |
3,652 | 3,148 | 16.0 | % | 3,605 | 1.3 | % | |||||
| MOU, min |
409.3 | 298.5 | 37.1 | % | 225.6 | 81.4 | % | |||||
| ARPU mobile, (RUR) |
140.7 | 157.5 | -10.7 | % | 150.6 | -6.6 | % | |||||
| ARPU mobile, (US$) |
4.5 | 6.5 | -30.8 | % | 4.7 | -4.3 | % | |||||
| Broadband subscribers (‘000) |
8.3 | n/a | 7.6 | 9.2 | % | |||||||
| TAJIKISTAN |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile subscribers*) (‘000) |
706 | 527 | 34.0 | % | 677 | 4.3 | % | |||||
| MOU, min |
173.3 | 255.9 | -32.3 | % | 173.1 | 0.1 | % | |||||
| ARPU mobile, (RUR) |
224.1 | 250.7 | -10.6 | % | 221.6 | 1.1 | % | |||||
| ARPU mobile, (US$) |
7.2 | 10.4 | -30.8 | % | 6.9 | 4.3 | % | |||||
| GEORGIA |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | |||||||
| Mobile subscribers*) (‘000) |
341 | 189 | 80.4 | % | 289 | 18.0 | % | |||||
| MOU, min |
129.3 | 109.8 | 17.8 | % | 123.1 | 5.0 | % | |||||
| ARPU mobile, (RUR) |
288.5 | 238.9 | 20.8 | % | 283.6 | 1.7 | % | |||||
| ARPU mobile, (GEL) |
15.4 | 14.0 | 10.0 | % | 14.5 | 6.2 | % | |||||
| * | Starting with this quarterly report, we no longer provide information on subscriber market share. This is because different churn policies used by mobile service providers result in reported subscriber market share figures that could be misleading. |
12
South-East Asia
Cambodian operations have been actively developing since our launch in May 2009. As of the third quarter of 2009, our services are available in the 17 largest provinces reaching 42% of the country’s population. By the end of 2009, we plan to expand coverage to reach more than two thirds of the country’s population.
According to the latest independent research Beeline brand awareness was ranked third among 9 mobile operators in Cambodia with brand awareness at 62% on a country-wide level and 98% in the capital.
Two months after the network launch in Vietnam, our networks cover the capital and the two largest cities as well as the 8 most populated provinces. By the end of January 2010, we plan to cover more than 40 provinces of Vietnam with a population of about 41 million.
Our distribution network in Vietnam was extended to more than 10,000 points of sales including traditional retail outlets and new channels like Branded Trade Counters. According to the latest independent research, in the three largest cities of Vietnam the Beeline brand has reached 80% awareness level among the 15-65 year-old audience.
| SEA*) (RUR, millions) |
3Q ‘09 | 3Q ‘08 | y-o-y | 2Q ‘09 | q-o-q | ||||||
| Net operating revenues |
74 | 0 | n/a | 28 | 164.3 | % | |||||
| OIBDA total |
-234 | -4 | n/a | -174 | n/a |
| *) | See definitions in Attachment A. |
* * *
For more information on financial and operating data for specific countries, please refer to the supplementary file FinancialOperatingQ32009.xls on our website at http://www.vimpelcom.com/news/qrep.wbp.
The Company’s management will discuss its third quarter 2009 results during a conference call and slide presentation on November 24, 2009 at 6:30 pm Moscow time (10:30 am US ET). The call and slide presentation may be accessed via webcast at the following URL address http://www.vimpelcom.com. The conference call replay will be available through December 1, 2009. The slide presentation webcast will also be available for download on VimpelCom’s website http://www.vimpelcom.com.
The VimpelCom Group consists of telecommunications operators providing voice and data services through a range of mobile, fixed and broadband technologies. The Group includes companies operating in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia, Armenia, as well as Vietnam and Cambodia, in territories with a total population of about 340 million. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange (“NYSE”). VimpelCom’s ADSs are listed on the NYSE under the symbol “VIP”.
13
This press release contains “forward-looking statements”, as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate to the proposed combination with Kyivstar and its benefits, the Company’s 2009 capital expenditures and the Company’s development plans in Cambodia and Vietnam. These and other forward-looking statements are based on management’s best assessment of the Company’s strategic and financial position and of future market conditions and trends. These discussions involve risks and unce actual outcome may differ materially from these statements as a result of continued volatility in the economies in the markets in which the Company operates, unforeseen developments from competition, governmental regulation of the telecommunications industries, general political uncertainties in the markets in which the Company operates and/or litigation with third parties. The actual outcome may also differ materially if the Company is unable to obtain all necessary corporate approvals relating to its business, if the Company is unable to successfully integrate newly-acquired businesses, including Golden Telecom, and other factors. There can be no assurance that such risks and uncertainties 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, 2008 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.
IMPORTANT NOTICE: The proposed exchange offer described in this communication has not yet commenced, and the description of the proposed exchange offer contained in this communication is not an offer to buy or the solicitation of an offer to sell securities.
If the proposed exchange offer is commenced, the Company expects that VimpelCom Ltd. will file with the SEC a registration statement and other related materials with respect to the proposed exchange offer, and the Company will file with the SEC a solicitation/recommendation statement on Schedule 14D-9 with respect to the proposed exchange offer. Investors and shareholders are urged to read the registration statement and other related materials, the solicitation/recommendation statement on Schedule 14D-9 and any amendments, exhibits or other applicable documents regarding the proposed exchange offer if and when they become available because they will contain important information. Those materials will be made available to the Company’s shareholders at no expense to them. In addition, all of those materials (and all other exchange offer documents filed with the SEC) will be made available at no charge on the SEC’s website at www.sec.gov.
For more information, please contact:
| Alexey Subbotin | Mateo Millett | |
| VimpelCom | FD | |
| Tel: 7(495) 910-5977 | Tel: 1-617 897-1533 | |
| Investor_Relations@vimpelcom.com | mateo.millett@fdashtonpartners.com |
14
- Definitions and tables are attached -
Attachment A: Definitions
Mobile subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months and remain in the base at the end of the reported period, except for the subscriber base in Cambodia which is calculated on a one month basis. Such activities include all incoming and outgoing calls, subscriber fee accruals, debits related to service, outgoing SMS, MMS, data transmission and receipt sessions, but do not include incoming SMS and MMS sent by our Company or abandoned calls. Total number of mobile subscribers also includes subscribers using mobile internet service via USB modems.
Each ADS represents 0.05 of one share of common stock. This ratio was established effective August 21, 2007.
ARPU (Monthly Average Revenue per User), a non-U.S. GAAP financial measure, is calculated by dividing the Company’s service revenue during the relevant period, including roaming revenue and interconnect revenue, but excluding revenue from connection fees, sales of handsets and accessories and other non-service revenue, by the average number of the Company’s subscribers during the period and dividing by the number of months in that period. The Company believes that ARPU provides useful information to investors because it is an indicator of the performance of the Company’s business operations and assists management in budgeting. The Company also believes that ARPU provides management with useful information concerning usage and acceptance of the Company’s services. ARPU should not be viewed in isolation or an alternative to other figures reported under U.S. GAAP.
Broadband subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months. Such activities include monthly internet access using FTTB, xDSL and WiFi technologies as well as mobile internet service via USB modems.
CIS Geographic Segment for the purpose of VimpelCom reporting includes our operations in the following countries: Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Armenia and Georgia
Fixed-line subscriber is an authorized user of fixed-line communications services.
General and administrative costs (G&A) include salaries and outsourcing costs, including related social contributions required by Russian law; stock price-based compensation expenses; repair and maintenance expenses; rent, including lease payments for base station sites; utilities; other miscellaneous expenses, such as insurance, operating taxes, license fees, and accounting, audit and legal fees.
Households passed are households located within buildings, in which indoor installation of all the FTTB equipment necessary to install terminal residential equipment has been completed.
Mobile services are wireless voice and data transmission services excluding WiFi.
MOU (Monthly Average Minutes of Use per User) is calculated by dividing the total number of minutes of usage for incoming and outgoing calls during the relevant period (excluding guest roamers) by the average number of mobile subscribers during the period and dividing by the number of months in that period.
OIBDA is a non-U.S. GAAP financial measure. OIBDA, previously referred to as EBITDA by the Company, is defined as operating income before depreciation, amortization and impairment loss. The Company believes that
15
OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation, amortization and impairment loss are considered operating costs under U.S. GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our OIBDA calculations are commonly used as bases for some investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry. OIBDA should not be considered in isolation as an alternative to net income attributable to VimpelCom, operating income or any other measure of performance under U.S. GAAP. OIBDA does not include our need to replace our capital equipment over time. Reconciliation of OIBDA to operating income, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section.
OIBDA margin is OIBDA expressed as a percentage of net operating revenues. Reconciliation of OIBDA margin to operating income as a percentage of net operating revenues, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section.
Prepaid subscribers are those subscribers who pay for their services in advance.
Roaming revenues include both revenues from VimpelCom customers who roam outside of home country network and revenues from other wireless carriers for roaming by their customers on VimpelCom’s network.
Sales and marketing costs (S&M) include marketing, advertising and dealer commissions expenses.
Take-up rate for the FTTB network is calculated by dividing the number of FTTB subscribers by the total number of households passed.
VAS (value added services) includes short messages (“SMS”), multimedia messages (“MMS”), caller number identification, call waiting, data transmission, mobile Internet, downloadable content and other services.
Capital expenditures (Capex) -purchases of new equipment, new construction, upgrades, software, other long lived assets and related reasonable costs incurred prior to intended use of the non current asset, accounted at the earliest event of advance payment or delivery. Long-lived assets acquired in business combinations are not included in capital expenditures.
SEA – VimpelCom operations in South-East Asia, which include operations in Cambodia and VimpelCom’s respective equity in net results of operations of the Company’s Vietnamese associate GTEL-Mobile JSC (“GTEL-Mobile”).
Net debt is calculated as the sum of short-term debt and long-term debt minus cash and cash equivalents.
16
Attachment B: VimpelCom financial statements
Open Joint Stock Company “Vimpel-Communications”
Unaudited Condensed Consolidated Statements of Income
| Three months ended September 30, |
Nine months ended September 30, |
|||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||
| (In millions of Russian rubles, except share (ADS) amounts) |
||||||||||||
| Operating revenues: |
||||||||||||
| Service revenues |
70,359 | 67,913 | 204,047 | 180,516 | ||||||||
| Sales of equipment and accessories |
863 | 949 | 2,885 | 1,054 | ||||||||
| Other revenues |
173 | 123 | 475 | 317 | ||||||||
| Total operating revenues |
71,395 | 68,985 | 207,407 | 181,887 | ||||||||
| Revenue based tax |
(57 | ) | (52 | ) | (191 | ) | (132 | ) | ||||
| Net operating revenues |
71,338 | 68,933 | 207,216 | 181,755 | ||||||||
| Operating expenses: |
||||||||||||
| Service costs |
15,306 | 15,916 | 44,460 | 40,462 | ||||||||
| Cost of equipment and accessories |
886 | 921 | 2,841 | 1,016 | ||||||||
| Selling, general and administrative expenses |
18,760 | 18,167 | 55,424 | 49,265 | ||||||||
| Depreciation |
11,452 | 9,687 | 32,355 | 27,445 | ||||||||
| Amortization |
2,229 | 2,381 | 6,934 | 6,399 | ||||||||
| Provision for doubtful accounts |
406 | 293 | 1,387 | 1,172 | ||||||||
| Total operating expenses |
49,039 | 47,365 | 143,401 | 125,759 | ||||||||
| Operating income |
22,299 | 21,568 | 63,815 | 55,996 | ||||||||
| Other income and expenses: |
||||||||||||
| Interest income |
242 | 436 | 1,342 | 1,376 | ||||||||
| Net foreign exchange gain/(loss) |
693 | (8,269 | ) | (12,304 | ) | (3,173 | ) | |||||
| Interest expense |
(4,914 | ) | (3,439 | ) | (14,074 | ) | (8,220 | ) | ||||
| Equity in net gain/(loss) of associates |
152 | 65 | (862 | ) | 65 | |||||||
| Other (expenses)/income, net |
(105 | ) | (181 | ) | (290 | ) | (438 | ) | ||||
| Total other income and expenses |
(3,932 | ) | (11,388 | ) | (26,188 | ) | (10,390 | ) | ||||
| Income before income taxes and noncontrolling interest |
18,367 | 10,180 | 37,627 | 45,606 | ||||||||
| Income tax expense |
4,809 | 3,359 | 10,127 | 12,326 | ||||||||
| Net income |
13,558 | 6,821 | 27,500 | 33,280 | ||||||||
| Net income/(loss) attributable to the noncontrolling interest |
45 | 308 | (98 | ) | 1,071 | |||||||
| Net income attributable to VimpelCom |
13,513 | 6,513 | 27,598 | 32,209 | ||||||||
| Basic EPS: |
||||||||||||
| Net income attributable to VimpelCom per common share |
266.83 | 128.68 | 545.11 | 634.94 | ||||||||
| Weighted average common shares outstanding (thousand) |
50,643 | 50,615 | 50,628 | 50,728 | ||||||||
| Net income attributable to VimpelCom per ADS equivalent |
13.34 | 6.43 | 27.26 | 31.75 | ||||||||
| Diluted EPS: |
||||||||||||
| Net income attributable to VimpelCom per common share |
261.01 | 128.68 | 525.36 | 634.94 | ||||||||
| Weighted average diluted shares (thousand) |
51,771 | 50,615 | 52,532 | 50,728 | ||||||||
| Net income attributable to VimpelCom per ADS equivalent |
13.05 | 6.43 | 26.27 | 31.75 | ||||||||
17
Open Joint Stock Company “Vimpel-Communications”
Unaudited Condensed Consolidated Balance Sheets
| September 30, 2009 |
December 31, 2008 |
|||||
| (In millions of Russian rubles, except share amounts) |
||||||
| Assets |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
75,902 | 26,873 | ||||
| Trade accounts receivable, net of allowance for doubtful accounts |
13,341 | 13,974 | ||||
| Inventory |
2,461 | 4,191 | ||||
| Deferred income taxes |
2,104 | 2,432 | ||||
| Input value added tax |
3,994 | 5,349 | ||||
| Due from related parties |
8,509 | 4,942 | ||||
| Other current assets |
5,924 | 12,941 | ||||
| Total current assets |
112,235 | 70,702 | ||||
| Property and equipment, net |
168,407 | 188,778 | ||||
| Telecommunications licenses, net |
17,862 | 22,470 | ||||
| Goodwill |
98,930 | 102,148 | ||||
| Other intangible assets, net |
21,996 | 25,935 | ||||
| Software, net |
12,584 | 16,134 | ||||
| Investments in associates |
13,801 | 14,501 | ||||
| Other assets |
22,707 | 21,314 | ||||
| Total assets |
468,522 | 461,982 | ||||
| Liabilities and equity |
||||||
| Current liabilities: |
||||||
| Accounts payable |
15,198 | 26,409 | ||||
| Due to employees |
3,343 | 3,108 | ||||
| Due to related parties |
502 | 142 | ||||
| Accrued liabilities |
11,646 | 8,484 | ||||
| Taxes payable |
10,476 | 4,471 | ||||
| Customer advances, net of VAT |
9,302 | 12,492 | ||||
| Customer deposits |
824 | 868 | ||||
| Short-term debt |
74,516 | 56,093 | ||||
| Total current liabilities |
125,807 | 112,067 | ||||
| Deferred income taxes |
16,453 | 18,934 | ||||
| Long-term debt |
168,293 | 191,963 | ||||
| Other non-current liabilities |
5,266 | 3,608 | ||||
| Commitments, contingencies and uncertainties |
— | — | ||||
| Equity: |
||||||
| Convertible voting preferred stock (.005 rubles nominal value per share), 10,000,000 shares authorized; 6,426,600 shares issued and outstanding |
— | — | ||||
| Common stock (.005 rubles nominal value per share), 90,000,000 shares authorized; 51,281,022 shares issued (December 31, 2008: 51,281,022); 50,683,660 shares outstanding (December 31, 2008: 50,617,408) |
3 | 3 | ||||
| Additional paid-in capital |
42,688 | 42,624 | ||||
| Retained earnings |
115,194 | 87,599 | ||||
| Accumulated other comprehensive (loss)/income |
(5,105 | ) | 3,992 | |||
| Treasury stock, at cost, 597,362 shares of common stock (December 31, 2008: 663,614) |
(5,692 | ) | (5,983 | ) | ||
| Total VimpelCom shareholders’ equity |
147,088 | 128,235 | ||||
| Noncontrolling interest |
5,615 | 7,175 | ||||
| Total equity |
152,703 | 135,410 | ||||
| Total liabilities and equity |
468,522 | 461,982 | ||||
18
Open Joint Stock Company “Vimpel-Communications”
Unaudited Condensed Consolidated Statements of Cash Flows
| Nine months ended September 30, |
||||||
| 2009 | 2008 | |||||
| (In millions of Russian rubles) | ||||||
| Operating activities |
||||||
| Net cash provided by operating activities |
88,998 | 62,117 | ||||
| Investing activities |
||||||
| Purchases of property and equipment |
(15,699 | ) | (33,206 | ) | ||
| Purchases of intangible assets |
(435 | ) | (1,747 | ) | ||
| Purchases of software |
(4,180 | ) | (5,093 | ) | ||
| Acquisition of subsidiaries, net of cash acquired |
— | (100,348 | ) | |||
| Late payment for investment in associate |
(389 | ) | — | |||
| Exercise of escrow cash deposit |
— | 4,856 | ||||
| Loan granted |
— | (8,491 | ) | |||
| Short-term deposits |
— | (2,368 | ) | |||
| Purchases of other assets, net |
(958 | ) | (1,578 | ) | ||
| Net cash used in investing activities |
(21,661 | ) | (147,975 | ) | ||
| Financing activities |
||||||
| Proceeds from bank and other loans |
38,920 | 130,718 | ||||
| Proceeds from sale of treasury stock |
— | 608 | ||||
| Repayments of bank and other loans |
(54,817 | ) | (10,227 | ) | ||
| Payments of fees in respect of debt issues |
(1,671 | ) | (1,322 | ) | ||
| Net proceeds from employee stock options |
171 | — | ||||
| Purchase of noncontrolling interest in consolidated subsidiaries |
(14 | ) | (23,462 | ) | ||
| Payment of dividends to noncontrolling party |
(23 | ) | (14,240 | ) | ||
| Purchase of treasury stock |
— | (2,751 | ) | |||
| Net cash (used in)/provided by financing activities |
(17,434 | ) | 79,324 | |||
| Effect of exchange rate changes on cash and cash equivalents |
(875 | ) | 259 | |||
| Net increase/(decrease) in cash and cash equivalents |
49,029 | (6,275 | ) | |||
| Cash and cash equivalents at beginning of period |
26,873 | 24,637 | ||||
| Cash and cash equivalents at end of period |
75,902 | 18,362 | ||||
| Supplemental cash flow information |
||||||
| Cash paid during the period: |
||||||
| Income tax |
8,917 | 12,603 | ||||
| Interest |
9,335 | 4,905 | ||||
| Non-cash activities: |
||||||
| Equipment acquired under financing agreements |
6 | 1,448 | ||||
| Accounts payable for equipment and other long-lived assets |
3,856 | 7,495 | ||||
| Acquisitions : |
||||||
| Fair value of assets acquired |
— | 64,159 | ||||
| Fair value of noncontrolling interest acquired |
— | 4,968 | ||||
| Difference between the amount paid and the fair value of net assets acquired |
— | 85,062 | ||||
| Consideration for the acquisition of subsidiaries |
— | (129,430 | ) | |||
| Change in fair value of liabilities assumed |
— | 24,759 | ||||
19
Attachment C: Reconciliation Tables (Unaudited)
Reconciliation of Consolidated OIBDA
(In millions of Russian rubles)
| OIBDA Consolidated Total |
3Q ’09 | 3Q ’08 | 2Q ’09 | ||||||
| OIBDA |
35,980 | 33,636 | 34,958 | ||||||
| Depreciation |
(11,452 | ) | (9,687 | ) | (10,451 | ) | |||
| Amortization |
(2,229 | ) | (2,381 | ) | (2,257 | ) | |||
| Operating income |
22,299 | 21,568 | 22,250 | ||||||
Reconciliation of OIBDA Margin
| OIBDA Margin Consolidated Total |
3Q ’09 | 3Q ’08 | 2Q ’09 | ||||||
| OIBDA margin |
50.4 | % | 48.8 | % | 50.6 | % | |||
| Less: Depreciation as a percentage of net operating revenues |
(16.0 | )% | (14.0 | )% | (15.1 | )% | |||
| Less: Amortization as a percentage of net operating revenues |
(3.1 | )% | (3.5 | )% | (3.3 | )% | |||
| Operating income as a percentage of net operating revenues |
31.3 | % | 31.3 | % | 32.2 | % | |||
20
Attachment D: Capex Development
| CAPEX (RUR, millions) |
3Q ’09 | 3Q ’08 | y-o-y | 2Q ’09 | q-o-q | |||||||
| Total capex |
3,842 | 16,799 | -77.1 | % | 5,027 | -23.6 | % | |||||
| Russia |
2,827 | 12,224 | -76.9 | % | 3,440 | -17.8 | % | |||||
| CIS |
756 | 4,527 | -83.3 | % | 817 | -7.5 | % | |||||
| Kazakhstan |
310 | 1,868 | -83.4 | % | 376 | -17.6 | % | |||||
| Ukraine |
95 | 1,137 | -91.6 | % | 95 | 0.0 | % | |||||
| Armenia |
48 | 462 | -89.6 | % | 12 | 300.0 | % | |||||
| Uzbekistan |
207 | 688 | -69.9 | % | 241 | -14.1 | % | |||||
| Tajikistan |
16 | 156 | -89.7 | % | 24 | -33.3 | % | |||||
| Georgia |
80 | 216 | -63.0 | % | 69 | 15.9 | % | |||||
| SEA |
258 | 9 | 2767 | % | 761 | -66.1 | % |
21
Attachment E: Key Financial Results in US Dollars (Convenience Translation)
| CONSOLIDATED OPERATIONS (US$, millions) |
3Q ’09 | 3Q ’08 | y-o-y | 2Q ’09 | q-o-q | ||||||||||
| Net operating revenues |
2,277 | 2,843 | -19.9 | % | 2,143 | 6.3 | % | ||||||||
| OIBDA |
1,149 | 1,388 | -17.2 | % | 1,085 | 5.9 | % | ||||||||
| OIBDA margin, % |
50.5 | % | 48.8 | % | 50.6 | % | |||||||||
| Operating income |
712 | 890 | -20.0 | % | 691 | 3.0 | % | ||||||||
| Operating income margin, % |
31.3 | % | 31.3 | % | 32.2 | % | |||||||||
| SG&A |
599 | 749 | -20.0 | % | 573 | 4.5 | % | ||||||||
| including Sales & Marketing Expenses |
184 | 242 | -24.0 | % | 168 | 9.5 | % | ||||||||
| including General & Administrative Costs |
415 | 507 | -18.1 | % | 405 | 2.5 | % | ||||||||
| SG&A percentage |
26.3 | % | 26.3 | % | 26.7 | % | |||||||||
| Net income attributable to VimpelCom |
431 | 269 | 60.2 | % | 702 | -38.6 | % | ||||||||
| Net income attributable to VimpelCom per common share, basic (US$) |
8.52 | 5.31 | 13.86 | ||||||||||||
| Net income attributable to VimpelCom per ADS equivalent, basic (US$) |
0.43 | 0.27 | 0.69 | ||||||||||||
| Capital expenditures |
123 | 692.9 | -82.2 | % | 156.0 | -21.2 | % |
22
Attachment F: Average Rates of Functional Currencies to Ruble*
| Functional Currency/ 1 RUR |
1Q ’08 | 2Q ’08 | 3Q ’08 | 4Q ’08 | 1Q ’09 | 2Q ’09 | 3Q ’09 | |||||||||
| Kazakhstan |
KZT | 4.9690 | 5.1038 | 4.9540 | 4.4077 | 4.0948 | 4.6771 | 4.8200 | ||||||||
| Ukraine |
UAH | 0.2081 | 0.2101 | 0.2003 | 0.2274 | 0.2281 | 0.2376 | 0.2496 | ||||||||
| Tajikistan |
USD | 0.0412 | 0.0423 | 0.0412 | 0.0367 | 0.0295 | 0.0311 | 0.0319 | ||||||||
| Uzbekistan |
USD | 0.0412 | 0.0423 | 0.0412 | 0.0367 | 0.0295 | 0.0311 | 0.0319 | ||||||||
| Armenia |
AMD | 12.6926 | 13.0012 | 12.4664 | 11.2309 | 9.6090 | 11.5227 | 11.9095 | ||||||||
| Georgia |
GEL | 0.0641 | 0.0612 | 0.0582 | 0.0568 | 0.0495 | 0.0515 | 0.0535 | ||||||||
| Cambodia |
USD | 0.0311 | 0.0319 | |||||||||||||
| * | Functional currencies in Tajikistan, Uzbekistan and Cambodia are US dollars. |
23
 VimpelCom
3Q09 Financial and Operating Results |
 2009 2 © Beeline 2009 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 proposed combination with Kyivstar and
its benefits, the Company's strategy, development plans and anticipated performance. 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 continued
volatility in the economies in the markets in which the Company operates, unforeseen
developments from competition, governmental regulation of the telecommunications
industries and general political uncertainties in the markets in which the Company operates and/or litigation with third parties. The actual outcome may also differ materially if the Company is unable
to obtain all necessary corporate approvals relating to its business, if the Company is
unable to successfully integrate newly- acquired businesses, including Golden Telecom,
and other factors. There can be no assurance that these risks and uncertainties
will not have a material adverse effect on the Company, that the Company will be able to grow or that it will be successful in executing its strategy and development plans. 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, 2008 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by
reference. The Company 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. IMPORTANT NOTICE: The proposed exchange offer described in this communication has not yet
commenced, and the description of the proposed exchange offer contained in this
communication is not an offer to buy or the solicitation of an offer to sell
securities. If the proposed exchange offer is commenced, the Company expects that
VimpelCom Ltd. will file with the SEC a registration statement and other related
materials with respect to the proposed exchange offer, and the Company will file with the
SEC a solicitation/recommendation statement on Schedule 14D-9 with respect to the proposed exchange offer. Investors and shareholders are urged to read the registration statement and other
related materials, the solicitation/recommendation statement on Schedule 14D-9 and
any amendments, exhibits or other applicable documents regarding the proposed exchange
offer if and when they become available because they will contain important
information. Those materials will be made available to the Company’s shareholders at no expense to them. In addition, all of those materials (and all other exchange offer documents filed with the SEC) will
be made available at no charge on the SEC’s website at www.sec.gov.
|
 2009 3 © Beeline 2009 Participants Presentation Q&A Session will be joined by: Dmitry Pleskonos, Executive VP, Head of B2C Russia Kent Mc Neley VP, Chief Marketing Officer Russia Andrey Patoka, VP, Head of B2B Russia Alexander Torbakhov, General Director Boris Nemsic, Chief Executive Officer Elena Shmatova, Chief Financial Officer |
 2009 4 © Beeline 2009 3Q09 in Brief • Number of mobile subscribers increased to 65.4 million • Ruble revenue of 71.3 billion with growth rates of 3.5% year-on- year and 3.3% quarter-on-quarter • Consolidated fixed and mobile OIBDA of 36.0 billion rubles yielding a 50.4% margin in line with the strong second quarter of 2009 • Substantial progress in Cambodia and Vietnam; agreement to enter Laos through acquisition of Millicom Lao • Telenor and Altimo proposed to combine VimpelCom and Kyivstar to create a leading player in emerging telecom markets |
 2009 5 © Beeline 2009 Group: Quarterly Financial Dynamics Revenue * , RUR bn Net Income (Loss) ** , RUR bn OIBDA, RUR bn OIBDA Margin, % * Here and thereafter refers to net operating revenues. ** Net Income attributable to VimpelCom +3.5% 71.3 69.0 66.8 69.7 68.9 61.7 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 +107.5% 13.5 22.6 -8.5 -22.2 6.5 11.1 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 +6.7% 36.0 35.0 32.2 30.6 33.6 28.9 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 50.4% 50.6% 48.1% 44.0% 48.8% 46.8% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 |
 2009 6 © Beeline 2009 Group: Financial Position Key Ratios and Indicators* Liquidity position, $ mln * See slide 21 for applicable exchange rates ** LTM OIBDA constitutes the sum of the lines: LTM Operating Income and LTM Depreciation, Amortization and Impairment Loss. LTM stands for “last twelve months” to reporting date. 4,282 4,654 4,860 4,683 4,545 4,306 2,157 2,511 2,571 2,328 1,250 1,820 494 909 851 1,060 2,331 1,465 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 OIBDA LTM Capex LTM Free Cash Flow LTM Cash and Cash Equivalents 75,902 51,605 32,861 26,873 Total Assets 468,522 460,879 461,639 461,982 Total Debt 242,809 249,525 261,759 248,056 -Short-term 74,516 70,157 81,234 56,093 -Long-term 168,293 179,368 180,525 191,963 Equity 152,703 141,997 124,004 135,410 Net Debt 166,907 197,920 228,898 221,183 (in US$ mln) Sept 30, 2009 June 30, 2009 Mar 31, 2009 Dec 31, 2008 LTM OIBDA 4,306 4,545 4,683 4,860 - LTM Depreciation, amortization and impairment loss 2,128 2,189 2,280 2,324 - LTM Operating Income 2,178 2,356 2,403 2,536 LTM Interest 588 572 553 496 Debt/Equity 1.6 1.8 2.1 1.8 Debt/OIBDA LTM 1.9 1.8 1.6 1.7 OIBDA/Interest 7.3 7.9 8.5 9.8 Debt/Assets 0.52 0.54 0.57 0.54 Total Debt 8,069 7,974 7,696 8,443 Net Debt 5,547 6,325 6,730 7,528 Sept 30, 2009 Jun 30, 2009 Mar 31, 2009 Dec 31, 2008 (in RUR mln) |
 2009 7 © Beeline 2009 Group: Debt Profile as of September 30, 2009 * Debt Maturity Schedule, USD mln 1 060 1 963 14 724 1 934 2 178 600 1 000 526 9 1Q09 2Q09 3Q09 4Q09 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Debt composition by currency * 1Q09-3Q09 figures at actual rate. All other figures at the
exchange rate as of September 30, 2009 ** $506M paid as of November 24, 2009 including repurchase of $115M of Eurobonds 2011 and $199M of Eurobonds 2013. 2 437 456 690 506 765 75% 76% 73% 66% 10% 10% 10% 10% 15% 14% 17% 24% FY2008 1Q09 2Q09 3Q09 USD EUR RUR ** • RUR 10bln domestic bonds issued in July 2009 • RUR 10bln Sberbank loan signed and drawn down in August 2009 • Buy back of $115mln of Eurobonds 2011 and $199mln of Eurobonds 2013 completed in October 2009. Major recent developments: |
 2009 8 © Beeline 2009 * Total revenue adjusted for eliminations between fixed and mobile segments ** Equivalent of $213 mln contracts signed Russia: Consolidated Operations CAPEX, RUR bn Revenue*, RUR bn OIBDA (RUR bn) and OIBDA Margin CAPEX / Revenue LTM 58.8 58.8 56.3 59.1 61.2 52.9 44.0 49.4 49.0 45.7 49.4 10.8 51.5 13.6 12.0 9.8 13.0 13.3 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 6.7 12.2 2.8 17.5 10.0 3.4 3.1 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 29.5 30.3 31.0 25.0 25.8 27.2 22.9 26.8 22.9 26.4 23.2 27.4 47.3% 50.1% 44.0% 48.4% 50.6% 51.2% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% Mobile Fixed OIBDA Margin 18% 20% 21% 19% 16% 11% 14% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 ** ** |
 2009 9 © Beeline 2009 Russia: Mobile Highlights Mobile ARPU & MOU Revenue, RUR bn OIBDA (RUR bn) & OIBDA Margin Subscribers, mln +13.2% 42.5 45.1 47.7 50.0 51.0 49.4 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 348 368 307 323 341 331 212 203 228 229 220 214 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 0 150 300 ARPU (RUR) MOU (min) +4.3% 44.0 49.4 49.0 45.7 49.4 51.5 0 10 20 30 40 50 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 27.4 26.4 23.2 22.9 26.8 22.9 52.0% 54.2% 46.8% 50.9% 53.5% 53.1% 0 10 20 30 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% OIBDA OIBDA Margin |
 2009 10 © Beeline 2009 Russia: Fixed-line Segment Revenue, RUR bn Business Segment, RUR bn Wholesale Segment, RUR bn Residential Segment, RUR bn GT revenue VIP revenue +25.9% 9.8 10.8 12.0 13.3 13.0 13.6 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4.9 5.2 5.5 5.8 5.3 5.0 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 3.8 4.5 5.2 6.1 6.3 7.2 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 1.1 1.1 1.3 1.4 1.4 1.4 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 |
 2009 11 © Beeline 2009 Russia: Residential Broadband Development FTTB Households Passed (mln) & Take-up Rate Fixed and Mobile Broadband Revenue, RUR mln Broadband Subscribers, ‘000 Broadband ARPU, RUR Fixed Residential BB Mobile Broadband through USB modems 1,659 1,833 1,498 1,182 764 604 673 770 848 896 937 91 412 650 763 896 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 273 310 298 252 251 404 400 376 396 421 392 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 7.9 7.5 7.2 5.9 5.5 7.9 9.6% 8.8% 9.9% 10.5% 9.2% 8.6% 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% +130% 1,731 1,571 1,507 1,091 751 680 723 860 1,031 28 231 477 535 626 1,036 1,105 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 |
 2009 12 © Beeline 2009 Kazakhstan: Operating & Financial Highlights Revenue (RUR bn) & OIBDA Margin Capex / Revenue LTM Mobile Subscribers, mln Mobile ARPU & MOU +21.7% 6.4 6.3 6.8 5.6 5.1 6.6 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 258 290 295 269 254 294 110 108 101 81 91 98 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 20.0 40.0 60.0 80.0 100.0 120.0 140.0 ARPU (RUR) MOU (min) 5.4 5.1 5.2 5.4 4.8 4.4 52.0% 53.4% 49.6% 51.2% 54.2% 59.2% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% Revenue OIBDA Margin 34% 38% 34% 28% 23% 14% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 |
 2009 13 © Beeline 2009 Ukraine: Operating & Financial Highlights Revenue* (RUR bn) & OIBDA Margin Capex / Revenue LTM Mobile Subscribers, mln Mobile ARPU & MOU * Total revenue adjusted for eliminations between fixed and mobile segments in Ukraine -8.5% 2.1 2.1 2.4 1.9 2.2 1.9 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 168 178 235 190 151 167 204 218 213 230 262 231 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 20 70 120 170 220 270 ARPU (RUR) MOU (min) 86% 75% 67% 55% 39% 27% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2.3 1.7 1.9 1.8 1.6 1.7 0.7 0.8 0.7 0.9 1.1 1.3 1.0 1.7 1.1 0.9 0.8 0.8 21.4% 19.6% 13.4% 16.4% -1.8% 13.1% -2 -1 0 1 2 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 -80.0% -30.0% 20.0% 70.0% Mobile Fixed OIBDA Margin |
 2009 14 © Beeline 2009 1.7 1.7 1.8 1.5 1.6 1.6 Armenia: Operating & Financial Highlights Revenue* (RUR bn) & OIBDA Margin Capex / Revenue LTM Mobile Subscribers, ‘000 Mobile ARPU & MOU * Total revenue adjusted for eliminations between fixed and mobile segments in Armenia -36.0% 0.4 655 486 481 544 784 502 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 430 363 337 372 479 437 269 238 175 150 140 165 0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90 96 102 108 114 120 126 132 138 144 150 156 162 168 174 180 186 192 198 204 210 216 222 228 234 240 246 252 258 264 270 276 282 288 294 300 306 312 318 324 330 336 342 348 354 360 366 372 378 384 390 396 402 408 414 420 426 432 438 444 450 456 462 468 474 480 486 492 498 504 510 516 522 528 534 540 546 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 80 130 180 230 280 Mobile ARPU (RUR) Mobile MOU (min) 11% 17% 24% 31% 39% 41% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 0.9 1.0 1.1 1.0 0.6 0.6 0.7 0.7 0.8 0.6 0.9 1.0 46.9% 48.8% 49.9% 51.7% 50.4% 51.2% 0.00 1.00 2.00 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Mobile Fixed OIBDA Margin |
 2009 15 © Beeline 2009 Uzbekistan: Operating & Financial Highlights Revenue (RUR bn) & OIBDA Margin Capex / Revenue LTM Mobile Subscribers, mln Mobile ARPU & MOU +16.0% 3.7 3.6 3.6 2.8 3.1 3.7 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 141 156 158 179 177 151 409 226 239 289 299 295 0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90 96 102 108 114 120 126 132 138 144 150 156 162 168 174 180 186 192 198 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 80 130 180 230 280 330 380 ARPU(RUR) MOU (min) 1.23 1.42 1.81 1.98 1.69 1.57 47.1% 51.1% 56.6% 51.4% 56.4% 53.5% 0.00 1.00 2.00 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Revenue OIBDA Margin 14% 21% 49% 79% 130% 150% 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 |
 2009 16 © Beeline 2009 South-East Asian Operations Network Market Vietnam Cambodia 98% brand awareness in Phnom- Penh, 62% for the whole country 2,000 points of sales of SIM and scratch cards 80% brand awareness in three main cities (Hanoi, Ho Chi Minh City and Danang) 10 thousand points of sales of SIM and scratch cards 1071 base stations on air by the end of September Coverage area is 24% of the total population 370 base stations on air by the end of September Coverage area is 47% of the total population • Entered into an agreement to acquire Lao operations from Millicom |
 2009 17 © Beeline 2009 Summary • Continued to develop our business with revenue growth and high margins • Sound financial position and strong cash generation abilities. • Transaction announced by Altimo and Telenor will enhance our opportunities for future growth |
 2009 18 © Beeline 2009 APPENDICES |
 2009 19 © Beeline 2009 Population: 142.0 mln. Penetration: 140% GDP*: 16,100 Map of Operations Population: 45.7 mln. Acquired: Nov. 2005 Penetration: 119% GDP* 7,400 Population: 7.3 mln. Acquired: Jan. 2006 Penetration: 56% GDP* 2,100 Population: 2.9 mln. Acquired: Nov. 2006 Penetration: 80% GDP* 6,300 Population: 27.6 mln. Acquired: Jan. 2006 Penetration: 58% GDP* 2,600 Population: 4.6 mln. Acquired: Jul. 2006 Penetration: 87% GDP* 4,600 Population: 15.4 mln. Acquired: Sept. 2004 Penetration: 10q% GDP* 11,500 Population: 86.1 mln. JVA signed: Jul. 2008 Penetration: ~55% GDP* 2,800 Population: 14.5 mln. Acquired : Jul. 2008 Penetration: ~25% GDP* 2,000 *GDP(PPP), $ per capita Source: CIA World Factbook; AC&M-Consulting; Global Mobile, Company estimates
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  2009 20 © Beeline 2009 Source: Prime TASS, National Banks of the CIS countries FOREX Development 0.056 0.054 0.05 0.05 0.05 0.05 0.06 0.06 0.06 GEL 0.032 11.91 0.032 0.032 0.25 4.82 Average Rate 3Q09 n/a 9.6 0.029 0.029 0.23 4.09 Average Rate 1Q09 n/a 10.5 0.034 0.034 0.26 4.11 Closing Rate n/a 11.2 0.037 0.037 0.23 4.41 Average Rate n/a 11.9 0.040 0.040 0.19 4.73 Opening rate 4Q08 0.032 11.6 0.032 0.032 0.25 4.82 Closing Rate 0.031 11.5 0.031 0.031 0.24 4.68 Average Rate 2Q09 n/a 10.9 0.029 0.029 0.23 4.44 Closing Rate Currency 0.033 USD Closing Rate 12.81 AMD 0.033 USD 0.033 USD 0.27 UAH 5.02 KZT 30.1 31.3 31.3 32.2 34.0 33.9 29.4 27.3 25.4 RUR * Balance sheet data reported in this presentation in US$ were translated at the closing exchange
rate at the end of respective periods. P&L LTM and Capex LTM data in US$ were calculated as the sum of respective quarterly results in US$ reported in 2008
plus the respective result of 2009 quarters translated at the respective average
exchange rates. |
 2009 21 © Beeline 2009 Composition of the CIS Business 3Q 2009 Revenues, RUR mln CAPEX, RUR mln OIBDA, RUR mln 1,773 1,611 468 11,076 279 1,568 5,387 Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia CIS Total 3,187 738 825 162 5,322 380 30 Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia CIS Total 16 80 756 48 95 310 207 Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia CIS Total |
 2009 22 © Beeline 2009 CIS Mobile: Financial Highlights Kazakhstan Ukraine Uzbekistan Revenue, RUR bn OIBDA, RUR bn Armenia Tajikistan Georgia 1.1 1.2 1.3 1.7 1.9 1.6 1.7 1.0 0.9 1.3 1.1 5.3 5.0 5.1 5.3 4.8 4.3 1.5 3.1 2.6 2.6 2.6 2.5 2.2 0.6 0.8 0.9 1.1 0.8 0.7 0.1 -0.2 0.2 0.0 0.1 0.1 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 0.62 0.77 0.74 0.72 0.63 0.64 0.27 0.45 0.49 0.46 0.36 0.16 0.21 0.23 0.28 0.47 0.13 0.09 0.16 0.17 0.16 0.14 0.12 0.06 0.03 0.00 -0.02 -0.03 -0.03 -0.05 0.24 0.34 0.34 0.36 0.30 0.31 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 |
 2009 23 © Beeline 2009 CIS Mobile: Subscribers, mln Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia 2.1 2.4 2.1 1.9 1.9 2.2 2.8 3.1 3.6 3.7 3.6 3.7 6.8 6.6 6.4 6.3 5.6 5.1 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 0.44 0.53 0.62 0.72 0.68 0.71 0.17 0.19 0.23 0.25 0.29 0.34 0.50 0.49 0.48 0.54 0.78 0.65 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 |
 2009 24 © Beeline 2009 CIS Mobile: ARPU & MOU Development Kazakhstan Ukraine Uzbekistan Armenia Tajikistan Georgia 258 254 269 295 294 290 168 167 151 190 235 178 141 151 177 179 158 156 409 226 239 289 299 295 204 218 213 230 262 231 98 91 81 101 110 108 0.0 6.0 12.0 18.0 24.0 30.0 36.0 42.0 48.0 54.0 60.0 66.0 72.0 78.0 84.0 90.0 96.0 102.0 108.0 114.0 120.0 126.0 132.0 138.0 144.0 150.0 156.0 162.0 168.0 174.0 180.0 186.0 192.0 198.0 204.0 210.0 216.0 222.0 228.0 234.0 240.0 246.0 252.0 258.0 264.0 270.0 276.0 282.0 288.0 294.0 300.0 306.0 312.0 318.0 324.0 330.0 336.0 342.0 348.0 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 0 70 140 210 280 350 372 479 437 221 251 263 240 222 239 266 286 284 289 363 224 430 337 194 129 123 121 130 110 89 173 173 172 243 256 241 269 238 175 150 165 140 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 0 70 140 210 280 ARPU MOU |
   2009 25 © Beeline 2009 Reconciliation of Consolidated OIBDA and OIBDA Margin (Unaudited) (RUR millions) Sept 30, 2009 June 30, 2009 March 31, 2009 Dec 31, 2008 Sept 30, 2008 June 30, 2008 OIBDA 35,980 34,958 32,166 30,648 33,636 28,889 Depreciation (11,452) (10,451) (10,452) (10,325) (9,687) (9,097) Amortization (2,229) (2,257) (2,448) (2,577) (2,381) (2,383) Impairment loss 0 0 0 (12,072) 0 0 Operating Income 22,299 22,250 19,266 5,674 21,568 17,409 OIBDA margin 50.4% 50.6% 48.1% 44.0% 48.8% 46.8% Less: Depreciation as % of net operating revenues (16.0%) (15.1%) (15.6%) (14.9%) (14.0%) (14.7%) Less: Amortization as % of net operating revenues (3.1%) (3.3%) (3.7%) (3.7%) (3.5%) (3.9%) Less: Impairment loss as % of net operating revenues 0.0% 0.0% 0.0% (17.3%) 0.0% 0.0% Operating Income 31.3% 32.2% 28.8% 8.1% 31.3% 28.2% Three months ended Reconciliation of OIBDA to operating income Reconciliation of OIBDA margin to operating income as percentage of net operating revenue |
Excerpts from the Transcript of VimpelCom’s November 24, 2009 Earnings Teleconference
[Excerpts from the remarks of Boris Nemsic]
On October 5th, the Company’s major shareholders, Telenor and Altimo, proposed to create a new company that would combine VimpelCom’s operations with Kyivstar’s. Our management team welcomes the deal, which, when completed, will create a powerful new vehicle for growth and will have positive strategic, synergistic and operational value for both companies, their shareholders and their customers.
Presently, VimpelCom’s position is very strong: we run a growing profitable business with excellent prospects for further expansion, particularly if the plans to create VimpelCom Ltd are successfully implemented.
This communication contains “forward-looking statements”, as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate to the proposed combination with Kyivstar and its benefits. These and other forward-looking statements are based on management’s best assessment of the Company’s strategic and financial position and of future market conditions and trends. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of continued volatility in the economies in the markets in which the Company operates, unforeseen developments from competition, governmental regulation of the telecommunications industries, general political uncertainties in the markets in which the Company operates and/or litigation with third parties. The actual outcome may also differ materially if the Company is unable to obtain all necessary corporate approvals relating to its business, if the Company is unable to successfully integrate newly-acquired businesses, including Golden Telecom, and other factors. There can be no assurance that such risks and uncertainties 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, 2008 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 communication, or to make corrections to reflect future events or developments.
IMPORTANT NOTICE: The proposed exchange offer described in this communication has not yet commenced, and the description of the proposed exchange offer contained in this communication is not an offer to buy or the solicitation of an offer to sell securities.
If the proposed exchange offer is commenced, the Company expects that VimpelCom Ltd. will file with the SEC a registration statement and other related materials with respect to the proposed exchange offer, and the Company will file with the SEC a solicitation/recommendation statement on Schedule 14D-9 with respect to the proposed exchange offer. Investors and shareholders are urged to read the registration statement and other related materials, the solicitation/recommendation statement on Schedule 14D-9 and any amendments, exhibits or other applicable documents regarding the proposed exchange offer if and when they become available because they will contain important information. Those materials will be made available to the Company’s shareholders at no expense to them. In addition, all of those materials (and all other exchange offer documents filed with the SEC) will be made available at no charge on the SEC’s website at www.sec.gov.