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Q2 2011 Results
September 7, 2011 3:30 a.m. ET
Jo Lunder - Chief Executive Officer
Henk van Dalen - Chief Financial Officer
Khaled Bichara - President and Chief Operating Officer
Gerbrand Nijman - Investor Relations.
Cesar Tiron - Morgan Stanley
Herve Drouet - HSBC
Alex Balakhnin - Goldman Sachs.
Tibor Bokor - ING
Alex Wright - UBS
Alex Kazbegi - Renaissance Capital
Dalibor Vavruska - Citi
Victor Klimovich - VTB Capital
Igor Semenov - Deutsche Bank
Nadezhda Golubeva - UniCredit
Sean Johnstone - Bank of America
Previous Statements by VIP
» Vimpel's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Vimpel CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Vimpel Communications CEO Discusses Q3 2010 Results - Earnings Call Transcript
These statements relate in part to one, the benefit of the Wind Telecom transaction, including expected synergies; two, expected future debt positions, dividends and capital expenditures; and three, the company’s value agenda strategy.
Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including the risks detailed in one, the company's press release announcing second quarter 2011 financial and operating results and related presentations; two, the company's annual report on Form 20-F for the year ended December 31, 2010; and three, other public filings made by the company with the SEC, each of which are posted on the company's website at www.vimpelcom.com and the and on the SEC’s website at www.sec.gov.
If you have not received a copy of the second quarter 2011 financial and operating results press release, please call investor relations at +31 (0) 20 79 77 234 and it will be forwarded to you. In addition, the press release and the earnings presentation, each of which includes reconciliations of non-GAAP financial measures presented on this conference call, can be downloaded from the VimpelCom website.
At this time, I would like to turn the call over to Jo Lunder, chief executive officer of VimpelCom. Please go ahead.
Thank you and good morning everyone. Welcome to our second quarter earnings presentation. I’m looking forward to discussing with your our first set of earnings results following the closing of our transformational transaction with Wind Telecom on April 15, reflecting the combined companies.
As many of you know, I have been involved with VimpelCom for over 10 years, previously serving as CEO, board member, and chairman of the board. I’m very excited to be rejoining the management team of the company and I’m optimistic about our outlook for the future.
We are pleased with the positive trends in revenues and subscriber base that we saw across all our business segments. At the same time, we had stable EBITDA performance in the quarter as we continued to make investments that allowed us to improve our mobile service revenue market share position in Russia.
In Italy, our second largest market, we saw relative outperformance of the market and our emerging markets growth engines continued to deliver profitable growth. The integration of Kievstar continues ahead of plan and our integration with Wind Telecom remains on track.
We have started to develop the value agenda for 2012 to 2014 for our new enlarged group. I will provide you with some initial highlights today and we will follow up with an investor day in November in which we will walk you through further details of our strategy going forward.
Let me start by introducing to you the members of the team here in Amsterdam who are with us today: Khaled Bichara, our president and chief operating officer. Khaled will present the operational performance of our five business units. Henk van Dalen, our chief financial officer. Henk will be covering the financials in detail. And finally, Gerbrand Nijman, our head of investor relations.
We have the pleasure of reporting on our progress, but it goes without saying that our performance is due to the efforts of our 70,000 employees of VimpelCom across 21 countries. We have organized our group into the following five business units: 1) Russia, 2) Europe and North America, 3) Africa and Asia, 4) Ukraine, and 5) CIS.
Each of our five business units has impressive leadership, and it is a testament to their efforts that our company delivered solid results in the quarter. As I mentioned before, I believe that we have a strong telecommunications team, each leader with extensive experience in their area of expertise in order to drive this company forward.
Now, I’ll turn to some of the highlights of the quarter. Our performance and execution in the quarter confirms the confidence in our group going forward. We achieved solid revenue and subscriber growth across all business units, and importantly both our mobile and fixed line offerings. Revenue increased 9% year over year driven by growth in all business units.
We also delivered stable EBITDA performance. [Unintelligible] EBITDA in local currency in Russia was compensated by growth in our emerging markets business units. In Italy, our second largest market, we saw relevance outperformance versus the market.
We made significant progress in a number of the key areas. First and foremost, we successfully launched the integration of our operations with Wind Telecom and reorganized our structure into five business units reporting to headquarters in Amsterdam. And finally, we ended the quarter with long term financing for the combination with Wind Telecom secured.
I’d like to share with you that I’ve been working on our value agenda for 2012 to 2014. I know many of you have questions about our strategy, and later in this call I will provide some initial components. Now I’ll pass the floor to our CFO, Henk van Dalen, who will discuss the group’s financial performance. Henk?
Henk van Dalen
Thank you Jo. As a reminder, we are presenting our results today on a pro forma basis unless otherwise noted. We believe pro forma financials provide the most meaningful comparison of financial performance for the quarter. Accordingly, the financial information presented here reflects what the company’s results of operations would have looked like had the company’s transactions with Wind Telecom and Kievstar occurred on the first of January 2010.
As a reference, the combination of OJSC, VimpelCom, and Kievstar, which resulted in the formation of VimpelCom Limited, occurred on April 21, 2010 and then on April 15, 2011 acquired 100% of Wind Telecom. An annualized rate of the Wind Telecom acquisition, the company owns indirectly 51.7% of Orascom Telecom and 100% of Wind Italy.