russia’s business response to financial crisis

BUSINESS RESPONSE TO THE FINANCIAL CRISIS IN RUSSIA

Giricheva Ekaterina, 1WE3

The Academy of Budget and Treasury of the Ministry of Finance of the Russian Federation

VimpelCom

Contents

• Company Overview• Crisis:

• Before• During• Now

• Strategy

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Company Overview

Key Milestones:• 1992 - registered as joint stock company

• November 1996 - First Russian company since 1903 to list on NYSE

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Strategic Partnership

1998 2001

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Operating in:

• Russia• Ukraine• Kazakhstan• Uzbekistan• Tajikistan• Georgia• Armenia • Kyrgyzstan • Vietnam• Cambodia

total population of

about 345 million

=

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Before the crisis 2007 •All-time records in key financial parameters

• Armentel stake increased to 100%

• Reached an agreement on GTI acquisition • Awarded with 3G license

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Share price

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

2008

• 100% of Golden Telecom

• 49.9% in Euroset, the largest mobile retailer in Russia and the CIS

Acquisitions:

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

2009

(40% in the joint venture GTEL-Mobile )

(90% of Sotelco)

New acqusitions

Cambodia Vietnam

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Advertising

• reduced advertising expenses for 54,4 %

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

VAS market revenue 2009

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

+13.1%

2,2312,3091,973

1Q 09 4Q 09 1Q 10

Revenue 2009-2010(USD mln)

• Stability of the core business

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Financial highlights 2010

• 2.535 - bn operating revenue in 1Q10

• 1.205 - mln OIBDA* in 1Q10

• 412 - mln USD in 1Q10

* - Operating Income Before Depreciation and Amortization

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Latest changes: April 2010• VimpelCom and Kyivstar merged into a new

entity VimpelCom Limited

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Strategy

Freeze M&A programme Strenghthen business segment Develop internet access business Expand into new business areas Drive investment efficiency

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

References

• http://www.vimpelcom.com• http://en.wikipedia.org• http://finance.rol.ru/news

The Academy of Budget and Treasury, Ekaterina Giricheva, 1WE3

Thank You for Your attention!