Transcript Brunswick UBS Annual Conference, September 27, 2004

VIMPELCOM
Company Presentation
Brunswick UBS Annual Conference
September 2004
1
VimpelCom – September 2004
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 development plans, such as
national and international expansion, and to estimated future growth in Russia of subscribers, wireless revenues and GDP. These
statements also relate to the consummation of the merger between VimpelCom and each of VimpelCom-Region and KB Impuls, each of
which is subject to regulatory and certain other approvals, as well as certain other conditions precedent, including the transfer of all
respective licenses and permissions to VimpelCom in the case of the mergers. These statements also relate to the planned sale of a
stake in KaR-Tel to a local Kazakh Partner, which is subject to the execution of definitive documentation as well as the satisfaction of
certain conditions precedent that will be included in such documentation. If any of the respective approvals are not obtained or any
condition precedent is not met, the mergers or stake sale, as applicable, will not be consummated. The forward-looking statements are
based on management's best assessment of the Company's strategic and financial position, future market conditions and trends and its
ability to consummate the mergers and stake sale. These discussions involve risks and uncertainties. The actual outcome may differ
materially from these statements as a result of unforeseen developments from regulatory authorities, competition, governmental
regulations of the wireless telecommunications industry, general political and social uncertainties in Russia and Kazakhstan, general
economic developments in Russia and Kazakhstan, the Company’s ability to continue to grow its overall subscriber base, continued
volatility in the world economy and other factors. There can be no assurance that such risks and uncertainties will not have material
adverse effects on the Company’s 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, 2003 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 presentation, or to make corrections to
reflect future events or developments. This document is not an offer of securities for sale in the United States. Securities may not be
offered or sold in the United States or to or for the account or benefit of U.S. persons (as such terms are defined in Regulation S under
the U.S. Securities Act of 1933 (the “Securities Act”)) absent registration under the Securities Act or an exemption therefrom. This
document should not be distributed into the United States.
2
VimpelCom – September 2004
VimpelCom – company profile





Second-largest national cellular operator in Russia

GSM license portfolio covering 136 million people

45% market share in Moscow and 33% in Russia
VimpelCom subscriber base
million
20
First Russian company with NYSE listing
18
16

50% free float
14

US$ 5.3 billion market cap (as of August 31, 2004)
12
Benchmark for transparency and corporate
governance in Russia
Strategic alliances with Telenor and Alfa Group
10
8
6
4
2
0
Strong financial performance
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 26.08
2002
$, mln
Net Revenues
OIBDA
OIBDA margin
Net Income
3
VimpelCom – September 2004
2Q04
490.9
244.7
49.8%
91.0
2Q03
304.4
139.9
46.0%
52.6
, %
2003
Moscow
61.2%
74.9%
-72.8%
Source: Company data
2004
Regions
VimpelCom-Region and shareholder structure

The merger of VimpelCom-Region (VimpelCom’s subsidiary for regional development) into
VimpelCom was approved on October 24, 2003 at the EGM of VimpelCom

The merger was also approved at the Joint EGM of VimpelCom and VimpelCom-Region
shareholders on April 16, 2004 as required by Russian law

The merger will be completed as soon as licenses and frequencies are transferred from
VImpelCom-Region to VimpelCom

In connection with the merger of VimpelCom and VimpelCom-Region, Alfa and Telenor will
exchange their aggregate 44.7% interest in VimpelCom-Region for 10.9 million new
VimpelCom common shares (equal to 14.6 million ADSs)
VimpelCom shareholder structure
Current
%
4
Telenor
Alfa Group
Free float / others
Total
VimpelCom – September 2004
Common
shares
Post-merger
Voting
shares
Common
shares
Voting
shares
29.0
25.0+
29.9
26.6
13.0
25.0+
24.5
32.9
58.0
50.0-
45.6
40.5
100.0
100.0
100.0
100.0
Wireless growth expected to continue
Russia: Wireless Revenues and GDP
900
Subscriber Growth in Russia
20
90
million
100%
777
800
15.5
700
16
434
500
400
307
0
12
2.0%
70
80%
70%
40
0.5
%
2000
1.9
40%
8
30
5.0
1.3
60%
50
50%
346
260
200
100
90%
60
600
300
80
2.8
0.6
%
0.8%
2001
2002
4
1.2%
0
2003
2013E
30%
20
20%
10
10%
0
0%
2001
2002
Wireless revenues , $ bln (rhs), % of GDP
Russia Nominal GDP, $ bln (lhs)
5
Source: Goskomstat, Brunswick UBS, VimpelCom estimates
VimpelCom – September 2004
National
penetration
forecast
2003
2004E
2005E
2006E
Moscow
Regions
High End
Average
Source: Consensus forecasts, independent research
Goals and Directions
Become the leading operator in Russia and expand in the CIS countries
StrategicStrategic
Factors:
Strategic Directions
Factors

Macroeconomy

Political and regulatory environment



Strengthening VimpelCom’s position on
the Russian market – “Market Leader”
New technologies

New products and technologies
Industry competition, mergers &
acquisitions

New markets
VimpelCom
in Russia
2.5G
6
VimpelCom – September 2004
+
VimpelCom
in Russia
3G
+
VimpelCom
in CIS
Acquisition in Kazakhstan

KAZAKHSTAN: country profile




Population – 15 million
GDP per capita - $1,970 – second-largest in the CIS
Cellular penetration – 13%
KAR-TEL: company profile

Second-largest cellular operator in Kazakhstan
 National GSM-900 license
 Over 600,000 subscribers
 31% market share

ACQUISITION DETAILS:


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VimpelCom – September 2004
100% stake is purchased for $350 million & the assumption of
$75 million in debt
Up to 50% - 1 share is to be sold to a local partner
Main Russian GSM players
VimpelCom
MTS
Market share in Moscow as of July 31, 2004
MegaFon
Market share in Russia as of July 31, 2004
MegaFon
9%
Others
13%
VimpelCom
33%
MegaFon
18%
VimpelCom
45%
MTS
46%
MTS
36%
Source: Company data
8
VimpelCom – September 2004
National GSM network rollout
Moscow
Population: 17.0 mln.
Central
Population: 21.0 mln.
Northwest
Population: 14.0 mln.
Urals
Population: 18.3 mln.
39
Volga
Population: 25.2 mln.
South
Population: 22.9 mln.
Siberia
Population: 15.3 mln.
In commercial operation
Other licensed regions
9
VimpelCom – September 2004
Far East
Population: 11.4 mln.
Unlicensed territories
National market – key trends
Russia (Overall)
Subscriber Market Share
Incremental Market Share
(Organic Net Adds)
45%
40%
45%
36% 37%
37%
35%
30%
28%
26% 27%
36%
37%
38% 37% 37%
31%
29% 30%
31%
37%
40%
32% 33%
35%
33%
35%
30%
37%
36%
36% 36% 35% 37%
35%
34%
36% 35%
35% 37%
34% 35%
33%
32%
32%
36% 37%
25%
23%
15%
10%
37%
37%
30%
25%
20%
41%
40%
14%
19%
21%
16%
21%
18%
16% 17%
17% 17%
16%
18%
18%
18%
20%
15%
14%
14%
13% 12%
10%
5%
5%
0%
0%
2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04
VIP
10
VimpelCom – September 2004
MTS
16% 17%
MegaFon
Others
13%
13%
Jul
10%
15% 16%
12% 12% 13% 12%
19% 18%
20%
22%
18% 16%
16%
12% 11%
11% 10% 11% 11%
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2003
Source: Independent research
VIP
MTS
20%
MegaFon
Others
Jul
2004
Moscow market – key trends
Subscriber
Market Share
100%
60%
52%
53%
52%
91%
50%
50%
40%
Incremental Market Share
(Organic Net Adds)
44%
43%
43%
44%
49%
46%
49%
43%
49%
43%
90%
48%
44%
46%
46%
80%
70%
71%
56%
60%
48%
50%
30%
40%
20%
10%
38%
30%
3%
4%
6%
6%
6%
8%
8%
8%
8%
52%
50% 48%
55%
43%
46%
51%
45%
38%
43% 45% 34%
30%
35%
26%
37%
22%
22% 20%
20%
10% 14%
0%
58%
13%
4%
15% 15%
9%
7%
64%
9%
3%
30%
6%
0%
0%
2Q02
3Q02
4Q02
1Q03
VIP
2Q03
MTS
3Q03
4Q03
MegaFon
1Q04
2Q04
Jul
2003
Aug Sep
Oct
VIP
Nov Dec Jan
Feb
MTS
Mar
Apr
May Jun
Jul
MegaFon
Note: VimpelCom recorded negative net additions in June 2004
11
VimpelCom – September 2004
Source: Independent research and Company estimates
Market share – regions
Central Region
South Region
Siberia Region
Incremental market share
(net adds, July 2004)
8%
2%
8%
12%
42%
15%
52%
25%
32%
25%
58%
22%
Market share
(July 31, 2004)
6%
4%
12%
4%
15%
31%
44%
28%
41%
12
49%
Source: Company data and independent research
VimpelCom – September 2004
29%
BeeLine
MTS
37%
MegaFon
Others
Market share – regions
Northwest Region
Ural Region
Volga Region
Incremental market share
(net adds, July 2004)
29%
2%
27%
7%
14%
26%
19%
16%
42%
47%
43%
21%
Market share
(July 31, 2004)
34%
6%
5%
14%
5%
14%
48%
Source: Company data and independent research
VimpelCom – September 2004
36%
37%
20%
13
8%
17%
40%
BeeLine
MTS
MegaFon
Others
Smarts
22%
Ratios, cash flow and capex
Net Operating Cash Flow/Capex
$, mln
900
2003
Actual
2004 Q2
LTM
800
846.1
700
Profitability
728.0
600
ROI (NAT/Total Assets, %)
ROCE, %
12%
33%
13%
35%
500
509.1
400
Leverage
Debt / Equity
61%
75%
300
Debt / Assets
26%
31%
200
Debt / OIBDA
0.99
1.07
OIBDA / Interest expense (times)
70.3%*
9.0
13.3
72.6%*
613.9
511.9
43.5%*
221.7
100
0
2002
2003
Net Operating Cash Flow
30.06.2004, LTM
Capex
* Net operating cash flow as % of Capex
14
VimpelCom – September 2004
Summary
15

Leading national GSM operator in Russia

Committed and complementary strategic partners - Telenor and
Alfa

Rapid subscriber growth and strong financial performance

A focused strategy for successful national expansion

The beginning of international expansion

A benchmark for corporate governance and transparency in
Russia
Any statement made or opinion expressed in the presentation by VimpelCom, including any slides shown, are those of
VimpelCom only and not Brunswick UBS. Brunswick UBS was not involved in the preparation of these materials and
Brunswick UBS assumes no responsibility for that presentation.
VimpelCom – September 2004
Debt/OIBDA, OIBDA/Interest expenses
Reconciliation to U.S. GAAP measures
000'USD
2003
Actual
Total Debt
Ruble denominated bonds payable, current portion
Bank loans, current portion
Capital lease obligations, current portion
Equipment financing obligations, current portion
Bank loans, less current portion
Capital lease obligations, less current portion
Ruble denominated bonds payable, less current portion
Equipment financing obligations, less current portion
OIBDA
Impairment loss
Depreciation & Amortization
Operating income
Debt/OIBDA
Interest expense
OIBDA/Interest expenses (times)
16
VimpelCom – September 2004
2004 Q2
LTM
606,991
101,852
35,343
6,587
70,935
330,112
9,154
53,008
870,626
34,450
288,211
6,879
53,697
442,084
6,974
14,382
23,949
613,23
-185,326
427,904
812,084
-7,354
-242,360
562,370
0.99
1.07
68,246
61,009
9.0
13.3
Reconciliations related to other non-U.S. GAAP measures can be found at:
http://www.vimpelcom.com/docs/VimpelCom_2Q2004_results.ppt
ROCE,% Reconciliation to U.S. GAAP measures
ROCE, % = Operating income / Average Capital Employed *100%
000'USD
Operating income (EBIT)
2003
2004 Q2
Actual
LTM
427,904
562,370
Average Equity
Average Debt
Average Deferred tax
Average Cash
Average Capital Employed
830,440
628,776
34,804
-210,634
1283,385
963,680
768,970
57,963
-216,022
1574,591
33.3%
35.7%
ROCE, %
17
VimpelCom – September 2004