Investor Presentation November 2013
Disclaimer This presentation contains forward-looking statements about Global Telecom Holding (“GTH”) . Such statements are not historical facts and include expressions about confidence and strategies of management and expectations of management about new and existing programs, technology and market conditions. Although GTH believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties. These statements may not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. The forward-looking statements in this presentation are only valid until the date of this document and GTH does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. This presentation is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any offer or sale of securities in any jurisdiction in which such offer or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Page 2
Content 3Q13 Highlights 4 Shareholder Structure 5 Global Presence 6 Market Position 7 GTH Operations 8 Appendix 22 Page 3
3Q13 Highlights Group EBITDA 3 & EBITDA Margin Subscribers 1&2 Total Revenues 3 48.1% 47.4% 885 861 88 84 425 408 0.2% -1% Organic Organic 3Q12 3Q13 3Q12 3Q13 3Q12 3Q13 Djezzy 1 : Despite the on-going limitations, Group revenues were adversely impacted by Consolidated EBITDA remained organically Djezzy increased the subscriber base by 2% the local currency devaluation against the stable YoY despite the challenges imposed via YoY to 17.0 million. USD, mainly in Pakistan. regulatory and governmental actions. Mobilink: Subscribers grew 4% YoY to 37.4 Djezzy: Revenue increased 0.3% YoY in local Djezzy: EBITDA decreased 2% YoY in local million customers, as a result of continued currency, driven by growth in mobile data currency, due to the lack of competitive churn management coupled with a focus on revenues. pricing plans for B2B, high value customers, in reactivation offers, the launch of competitive and the increase in HR and rental costs. Mobilink: Revenue grew 4% YoY in local bundles and data products. currency, supported by higher VAS, data and Mobilink: EBITDA increased 4% YoY in local banglalink: Subscribers increased 5% YoY to other revenue as well as a higher subscriber currency, supported by higher VAS, data and 28.1 million customers, driven by high gross base. other revenue, a higher subscriber base and additions. cost optimization efforts. banglalink: Revenue decreased 15% YoY in local currency, due to lower usage per banglalink: EBITDA grew 5% YoY in local subscriber, affected by the implementation of currency, despite the YoY decline in revenue. the regulatory directives of disconnecting EBITDA growth was supported by savings on suspected VoIP customers. G&A and network costs, and lower SIM tax subsidy as well as cost optimization efforts. 1.As announced on July 1 st 2013 , during an internal investigation with regards to Djezzy’s active subscribers, management found a technical bug that overstated Djezzy’s subscriber base by 1.4 million customers. The subscribers’ base comparative figures were adjusted accordingly. This event does not impact historical reporte d revenue or EBITDA, but positively affect MOU and ARPU 2.Total subscribers in Millions 3.Group indicators in USD Millions Page 4
Shareholder Structure VIMPELCOM FREE ALTIMO TELENOR FLOAT 56.2% (Economic) 33.0% (E) 10.8% (E) 47.9% (Voting) 43.0% (V) 9.2% (V) GTH FREE FLOAT 100.0% 100.0% 100.0% 51.9% 48.1% OJSC WIND ITALY GTH KYIVSTAR VIMPELCOM Page 5
Global Presence 1 GTH serves a population of approximately 459 million with an average penetration of 54% BANGLADESH Population: 163.6 million CANADA 2 GDP Growth: 6.1% Population: 34.6 million GDP/Capita PPP ($): 2,100 GDP Growth: 1.8% Pop. Under 15 years: 33% GDP/Capita PPP ($): 43,400 Mobile Penetration: 68% Pop. Under 15 years: 15.5% Mobile Penetration: 74% PAKISTAN Population: 193.2 million GDP Growth: 3.7% ALGERIA GDP/Capita PPP ($): 2,900 Pop. Under 15 years: 34% Population: 38.1 million Mobile Penetration: 53% GDP Growth: 2.5% GDP/Capita PPP ($): 7,600 Pop. Under 15 years: 28.1% Mobile Penetration: 85% BURUNDI Population: 10.9 million GDP Growth: 4.0% GDP/Capita PPP ($): 600 Pop. Under 15 years: 45.6% ZIMBABWE Mobile Penetration: 25% Population: 13.2 million GDP Growth: 4.4% GDP/Capita PPP ($): 600 Pop. Under 15 years: 39.4% CENTRAL AFRICA REPUBLIC Mobile Penetration: 71% Population: 5.2 million GDP Growth: 4.1% GDP/Capita PPP ($): 800 Pop. Under 15 years: 40.7% 1.Figures from CIA Fact book. Mobile Penetration are based on September 30, 2013 subscriber figures and market share Mobile Penetration: 20% 2.GTH has 65% indirect economic ownership in Globalive Investment Holding Canada, but a minority voting stake Page 6
Market Position Algeria: Despite limitations, Djezzy remains a profitable market leader with tremendous data potential Pakistan: Mobilink leads the maturing market, and with a large customer base has great potential for revenue enhancement through data, MFS and VAS uptake Bangladesh: In a large market with low penetration levels, banglalink is one of the fastest growing operators with a strong focus on increasing value share Telecel Globe: Leading positions in markets with low penetration levels, healthy APPM, and high growth potential. Internet is a mobile story in Africa Canada: Wind Mobile continues its "Value Plus" strategy execution, adding primarily postpaid subscribers while carefully managing prepaid economics for both voice and mobile broadband customers Page 7
Algeria Page 8
Djezzy Overview GDP growth rate for FY 2012/2013 stood at 2.5% Young population: 28% of the population under 15 years of age Macro Government , trade and agriculture sectors account for over 60% of Algeria’s GDP Environment Population: 38 million GDP/capita: USD 7,600 OTA continues to face stringent conditions from regulator (ARPT) regarding critical promotions and products Djezzy was awarded a provisional 3G license on October 14, 2013. OTA received an exceptional approval from Regulatory Market Size 1 : 32.4 million subs the Bank of Algeria allowing OTA to make foreign payments to acquire equipment exclusively dedicated to 3G Environment Penetration 1 : 85% technologies. This exception is a conditioned derogation to the current ban on foreign payments Government decided to list 10 public companies in Algiers Stock Exchange, including Mobilis Market Players (subscribers): Djezzy (17.04 million) Mobilis (8.08 million) Djezzy: High brand perception and price premium position with solid market leadership and high control and Wattaniya (7.26 million) negotiation power over distribution channel Mobilis: Public and historical operator that is maintained by the government and has a strong relationship with Competitive Landscape the regulator and has been very active on the commercial front lately Wattaniya: Seen as a multimedia operator that offers better prices, more promotions, subsidies and higher Market Shares 2 incentives to the channel Balanced value pricing strategy leading to stable ARPU levels OTA 22.4% Consolidate Djezzy brand leadership and strengthen emotional bonding with customers Mobilis 52.6% Strategic Increase quality and control over the distribution channel 25.0% Direction Define leaner site configurations through tighter design guidelines to manage CAPEX requirements Wattaniya The mobile data market is expected to emerge and grow at a fast pace when 3G services are launched 1. Penetration figures are provided based on OTA closing base and our Data Warehouse (DWH) figures for competition 2. DWH Market Share Page 9
Djezzy KPIs Mobile Subscribers 1 (Millions) Revenues (DZD Billions) EBITDA (DZD Billions) & EBITDA Margin 143.3 17.04 16.71 134.7 135.6 135.6 16.17 129.3 15.09 14.62 14.11 59.3% 59.4% 58.9% 107.2 58.5% 54.0% 53.2% 85.2 80.4 78.8 73.2 68.7 63.1 2008 2009 2010 2011 2012 9M13 2008 2009 2010 2011 2012 9M13 2008 2009 2010 2011 2012 9M13 CAPEX 2 (DZD Billions) & CAPEX/Revenue Free Cash Flow 3 (DZD Billions) 19.0 80.7 77.5 14.0% 67.9 61.8 60.4 10.8 54.3 6.9 8.1% 4.5 5.4% 2.9 2.6 3.1% 2.4% 2.2% 2008 2009 2010 2011 2012 9M13 2008 2009 2010 2011 2012 9M13 Note: Foreign exchange rate DZD 79.4809/ USD 1 1. As announced on July 1 2013, during an internal investigation with regards to Djezzy’s active subscribers, management found a technical bug that overstated Djezzy’s subscriber base by 1.4 million customers. The subscribers’ base comparative figures were adjusted accordingly. This event does not impact historical reported revenue or EBITDA, but positively affect MOU and ARPU 2. CAPEX figures excluding GSM licenses and may differ from previously released figures 3. Free Cash Flow is EBITDA less CAPEX Page 10
Pakistan Page 11
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