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VimpelCom-Region Merger
September 2003
Capturing 100% of the growth
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Disclaimer
This presentation 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, in part, to the consummation of the merger and
related transactions which are subject to shareholder, regulatory and certain other approvals, as well as certain
other conditions precedent, including the transfer of VimpelCom-Region’s licenses and permissions to VimpelCom.
If any of the approvals are not obtained or any condition precedent is not met, the merger will not be consummated.
The forward-looking statements relate to the Company's development and are based on management's best
assessment of the Company's ability to consummate the merger and related transactions, its 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 regulatory
authorities, competition, governmental regulations of the wireless telecommunications industry, general political
uncertainties in Russia, general economic developments in Russia and other factors. As a result of such risks and
uncertainties, there can be no assurance that the merger will be consummated. 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, 2002 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.
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Presentation team
Jo Lunder
Elena A. Shmatova
Valery P. Goldin
Chief Executive Officer, Chairman-Elect
Chief Financial Officer
Vice President - International and Investor Relations
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VimpelCom overview
Second largest cellular operator in Central and Eastern
Europe
– GSM license portfolio covering 134 million people in
Russia
– 49% market share in Moscow and 30% in Russia
– ten-fold increase in subscriber base since the
beginning of 2001
First Russian company to list on NYSE
– $2.9 billion market cap. (as of August 28, 2003)
– 50% free float
55.3% ownership in VimpelCom-Region (“VIP-R”)
– VIP-R EBITDA and net income positive in 2003
Benchmark for transparency and corporate governance
in Russia
VimpelCom subscriber base, million
Moscow license area Regions
2001 2002
0
1
2
3
4
5
6
7
8
9
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 28/08
2003
Source: VimpelCom
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VimpelCom 2Q2003 financial highlights
Source: VimpelCom
Net revenues, $ million Net income, $ million
EBITDA, $ million EBITDA margin
46.0%
41.4%
2Q 2002 2Q 2003
173.4
304.4
2Q 2002 2Q 2003
21.9
52.6
2Q 2002 2Q 2003
71.8
139.9
2Q 2002 2Q 2003
75.6% 139.9%
95.0%
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Significant milestonesM
osc
ow
Reg
ion
s
VIP-R established to develop super-regions with licenses in Central, Volga, Siberia, North Caucasus
1998 1999 2001 2002 2003
Strategic alliance with Alfa Group
1 million subscribers in the regions
Profitability in the regions
Alfa invests further $58.5m into VIP-R
Strategic alliance with Telenor
Commercial launch of BeeLine GSM 900/1800 network
1 million subscribers in Moscow
No.1 market share in Moscow
4.8 million subscribers in Moscow
Acquisition of GSM license for Northwest super-region incl.St. Petersburg
Alfa and Telenor each invest $58.5m into VIP-R
Return to profitability
Alfa invests $103m of equity into VimpelCom
3.7 million subscribers in the regions
VimpelCom invests $117m into VIP-R
Phase 1
Acquisition of license for Urals super-region
Phase 2 Phase 3
Merger announcedDec Jul Aug May Feb Dec Jun AugMar Sep NovNov
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73.5
55.9
14.0
71.4
44.4
6.0
28.2
12.0
0
15
30
45
60
75
Jan 01 July 03 Dec 05E
12.5
9.54.5
2.8
34.4
14.6
0
10
20
30
40
Jan 01 July 03 Dec 05E
Attractive growth opportunities in the regions
Population, million
Source: Goskomstat, S&P, AC&M Consulting, J’Son & Partners
Wireless penetration, %
6.317.0
121.9
Moscow license area
St. Petersburgand Leningrad region
Regions (excl. St. P.)
Mobile subscribers, millionGDP per capita (2002), $
1,770
5,850
1,770
Moscow St. Petersburgand Leningrad region
Regions(excl. St. P.)
Moscow
St. Petersburg
Regions
Regions
Moscow
St. Petersburg
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VimpelCom in the regions
Six super-regional licenses
150% revenue growth in first half 2003
Positive contribution to EBITDA since 3Q02 and to net income since 1Q03
No. 1 in Siberia super-region
No. 2 and fastest growing in Central and Volga super-regions
Solid growth in South and promising start in Northwest
Urals to be launched in 4Q2003
Regional and Moscow operations now equally important parts of our business
VimpelCom market share, %
VimpelCom regional subscribers, 000s
Source: VimpelCom
1Q01
2Q01
3Q01
4Q01
1Q02
2Q02
3Q02
4Q02
1Q03
2Q03
57 100 123 200 285 431723
1,440
2,242
3,005
3,695
28.0
8.03
0%
10%
20%
30%
40%
50%
60%
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03
Moscow Regions Russia
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Why accelerate the merger
The 2001 VimpelCom-Region Shareholders Agreements give all parties the right to accelerate the merger
process prior to December 2007
Risk profile of the regions has changed - the VimpelCom-Region structure has now served its purpose
VimpelCom’s management sees significant benefits in merging now
– attractive terms achievable
– capturing 100% growth in the regions instead of only 55%
– unlocking synergies and achieving greater efficiencies
– unified platform for further consolidation
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The merger transaction
In connection with the merger of VimpelCom and VIP-R, Alfa and Telenor will exchange their aggregate 44.7% interest in VIP-R for 10.9 million new VimpelCom common shares (equal to 14.6 million ADSs)
– VimpelCom the surviving entity
– 21.4% economic ownership dilution at closing (on a fully diluted basis)
Fairness opinion received from UBS Limited
EGM called for 24 October 2003 (on certain issues, only disinterested shareholders may vote)
– 50% of disinterested shareholders are required to approve the transaction
The new VimpelCom ownership structureCurrent Post-merger
Economic Voting Economic Voting
Telenor 29.0 25.0+ 29.9 26.6
Alfa Group 13.0 25.0+ 24.5 32.9
Free float / others 58.0 50.0 45.6 40.5
Total 100.0 100.0 100.0 100.0
%
Telenor 29.0 25.0+ 29.9 26.6
Alfa Group 13.0 25.0+ 24.5 32.9
Free float / others 58.0 50.0- 45.6 40.5
Total 100.0 100.0
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Relative valuation
Valuation ratio of 0.91 : 1 between VIP-R and the
rest of VimpelCom (predominantly Moscow)
– implying that 33.6% of VimpelCom’s market cap.
is attributable to its 55.3% stake in VIP-R
Number of subscribers in the regions to exceed
Moscow during 2004
Revenues in the regions to exceed Moscow
during 2005
EBITDA in the regions to equal Moscow
during 2005
Merger expected to be EPS accretive in 2005
– assuming synergies from tax, interest
expense, G&A
Source: VimpelCom
Subscribers
2003E 2004E 2005E
Net revenues
2003E 2004E 2005E
Moscow Regions
2003E 2004E 2005E
EBITDA
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Capital expenditure, $ million
Our capital expenditure program
0
100
200
300
400
500
600
700
2002 2003E 2004E 2005E
Moscow Regions
Strong funding position
– Strong cash flow generation
– Strong balance sheet
– Access to debt capital markets
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A strong balance sheet
VimpelCom’s balance sheet (as of June 30, 2003)
$000
Cash and cash equivalents
Total assets
Interest bearing debt
Total shareholders’ equity
Debt*** / total shareholders’ equity
Debt*** / total assets
Actual
188,490
1,977,365
755,897
760,000
99%
38%
246,990
2,613,647
755,897
1,491,269
51%
29%
* Pro forma for Alfa Group's $58.5 million VIP-R equity contribution and VimpelCom / VIP-R merger** Includes long-term inter-company loans due to VimpelCom of $94,363
VIP-R
28,640
753,687
340,610**
271,397
*** Interest bearing debt only
consolidated
Debt*** / EBITDA**** 1.74 1.74
Pro formaconsolidated*
**** EBITDA - Operating income before depreciation & amortization for the 12 months ended June 30, 2003
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Summary
Strong strategic rationale for merging with VimpelCom-Region
A strong platform for further consolidation
Poised to capture 100% of returns from the regions
Attractive merger terms achievable
EGM shareholder support required