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1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

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Page 1: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

1VimpelCom – September 2004

Company Presentation

VIMPELCOM

September 2004

Brunswick UBS Annual Conference

Page 2: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

2VimpelCom – 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.

Page 3: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

3VimpelCom – 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

First Russian company with NYSE listing 50% free float US$ 5.3 billion market cap (as of August 31, 2004)

Benchmark for transparency and corporate governance in Russia

Strategic alliances with Telenor and Alfa Group

Strong financial performance

$, mln 2Q04 2Q03 , %

Net Revenues 490.9 304.4 61.2%

OIBDA 244.7 139.9 74.9%

OIBDA margin 49.8% 46.0% --

Net Income 91.0 52.6 72.8%

0

2

4

6

8

10

12

14

16

18

20

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 26.08

VimpelCom subscriber base

20042002 2003

million

Source: Company data

Moscow Regions

Page 4: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

4VimpelCom – September 2004

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

%Common

sharesVoting shares

Common shares

Voting shares

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

Current Post-merger

Page 5: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

5VimpelCom – September 2004

0

10

20

30

40

50

60

70

80

90

2001 2002 2003 2004E 2005E 2006E

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Moscow Regions

High End Average

Source: Consensus forecasts, independent research

Subscriber Growth in Russia

Wireless growth expected to continue

Russia: Wireless Revenues and GDP

Source: Goskomstat, Brunswick UBS, VimpelCom estimates

million

National

penetration

forecast

15.5

5.0

2.81.9

1.3

777

434

346307

260

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2013E

0

4

8

12

16

20

Wireless revenues , $ bln (rhs), % of GDP

Russia Nominal GDP, $ bln (lhs)

0.5%

0.6%

0.8%

1.2%

2.0%

Page 6: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

6VimpelCom – September 2004

Goals and Directions

Strategic Factors:

Macroeconomy

Political and regulatory environment

New technologies

Industry competition, mergers & acquisitions

Become the leading operator in Russia and expand in the CIS countries

Strengthening VimpelCom’s position on the Russian market – “Market Leader”

New products and technologies

New markets

VimpelComin Russia

2.5G

VimpelComin Russia

3G

VimpelComin CIS+ +

Strategic Factors Strategic Directions

Page 7: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

7VimpelCom – September 2004

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: 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

Acquisition in Kazakhstan

Page 8: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

8VimpelCom – September 2004

Main Russian GSM players

Market share in Moscow as of July 31, 2004 Market share in Russia as of July 31, 2004

Source: Company data

MTS MegaFonVimpelCom

MTS46%

MegaFon 9%

VimpelCom45%

VimpelCom33%

MegaFon 18%

Others13%

MTS36%

Page 9: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

9VimpelCom – September 2004

National GSM network rollout

In commercial operation In commercial operation

Other licensed regions Other licensed regions Unlicensed territories Unlicensed territories

39

MoscowPopulation: 17.0 mln.MoscowPopulation: 17.0 mln.

CentralPopulation: 21.0 mln.CentralPopulation: 21.0 mln.

SouthPopulation: 22.9 mln.SouthPopulation: 22.9 mln.

VolgaPopulation: 25.2 mln.VolgaPopulation: 25.2 mln.

SiberiaPopulation: 15.3 mln.SiberiaPopulation: 15.3 mln.

Far EastPopulation: 11.4 mln.Far EastPopulation: 11.4 mln.

UralsPopulation: 18.3 mln.UralsPopulation: 18.3 mln.

NorthwestPopulation: 14.0 mln.NorthwestPopulation: 14.0 mln.

Page 10: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

10VimpelCom – September 2004

31%31%28%27%26%

30%29%

33%32%

37%36%37%37%36% 37% 38% 37% 37%

17%17%

16%

18%

16%14%

18% 18% 18%23%21%

19%

17% 16%14%14%

12%13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04

VIP MTS MegaFon Others

National market – key trends

Russia (Overall) Subscriber Market Share

Source: Independent research

Incremental Market Share(Organic Net Adds)

2003 2004

37%

34%

41%40%

35%

37%36% 37%

32%

36% 35%37%

36%36%35%

35%36%

30%

37%

33%35%

34%

32%35%

37%

33%

17%

21%19% 18%

11%

16%

12%

15% 16%

20%18%

20%22%

11%12% 11%12%

16%

10%11%

16%12%13%

13%

10%13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

VIP MTS MegaFon Others

Page 11: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

11VimpelCom – September 2004

Moscow market – key trends

46%48%50% 49%

52% 53% 52%49% 49%

46%44%43%

46%44% 43% 43% 44%43%

8%8%8%3% 4% 6%6% 6% 8%

0%

10%

20%

30%

40%

50%

60%

2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04

VIP MTS MegaFon

0%

48%

6%

26%30%

56%

43%

58%52%

46%

43%

48%

34%

64%

91%

71%

55%51%

45%

50%

45%

35%

38%

20%22%

38%

3%

15%

30%

9%15%

7%9%13%

4%

37%

22%

14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

VIP MTS MegaFon

Subscriber Market Share

Incremental Market Share (Organic Net Adds)

Note: VimpelCom recorded negative net additions in June 2004

Source: Independent research and Company estimates

2003

Page 12: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

12VimpelCom – September 2004

28%

12%31%

29%

25%

12%42%

22%

32%58%

2%8%

Market share – regions

Source: Company data and independent research

Central Region South RegionIncremental market share

(net adds, July 2004)

Market share

(July 31, 2004)

BeeLineMTS

MegaFonOthers

4%6%

49%41%

Siberia Region

25%

52%

8%15%

15%4%

44%

37%

Page 13: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

13VimpelCom – September 2004

8%

20%

14% 36%

22%

Market share – regions

Source: Company data and independent research

Northwest Region Volga Region

BeeLineMTSMegaFon Smarts

Others

Incremental market share

(net adds, July 2004)

Market share

(July 31, 2004)

6%

19%

7%

47%

21%

29% 2% 27%

42%

48%

14%5%34%

Ural Region

16%

26%14%

43%

40%

5%

37%

17%

Page 14: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

14VimpelCom – September 2004

Net Operating Cash Flow/Capex

613.9

511.9

221.7

846.1

728.0

509.1

0

100

200

300

400

500

600

700

800

900

2002 2003 30.06.2004, LTM

Net Operating Cash Flow Capex

Ratios, cash flow and capex

* Net operating cash flow as % of Capex

43.5%*

70.3%*

72.6%*

$, mln

2003 Actual

2004 Q2 LTM

Profitability

ROI (NAT/Total Assets, %) 12% 13%ROCE, % 33% 35%

Leverage

Debt / Equity 61% 75%

Debt / Assets 26% 31%

Debt / OIBDA 0.99 1.07

OIBDA / Interest expense (times) 9.0 13.3

Page 15: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

15VimpelCom – September 2004

Summary

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.

Page 16: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

16VimpelCom – September 2004

Debt/OIBDA, OIBDA/Interest expenses Reconciliation to U.S. GAAP measures

Reconciliations related to other non-U.S. GAAP measures can be found at:

http://www.vimpelcom.com/docs/VimpelCom_2Q2004_results.ppt

000'USD 2003 2004 Q2Actual LTM

Total Debt 606,991 870,626 Ruble denominated bonds payable, current portion 101,852 34,450 Bank loans, current portion 35,343 288,211 Capital lease obligations, current portion 6,587 6,879 Equipment financing obligations, current portion 70,935 53,697 Bank loans, less current portion 330,112 442,084 Capital lease obligations, less current portion 9,154 6,974 Ruble denominated bonds payable, less current portion - 14,382 Equipment financing obligations, less current portion 53,008 23,949

OIBDA 613,23 812,084Impairment loss - -7,354Depreciation & Amortization -185,326 -242,360Operating income 427,904 562,370

Debt/OIBDA 0.99 1.07

Interest expense 68,246 61,009

OIBDA/Interest expenses (times) 9.0 13.3

Page 17: 1 VimpelCom – September 2004 Company Presentation VIMPELCOM September 2004 Brunswick UBS Annual Conference

17VimpelCom – September 2004

ROCE,% Reconciliation to U.S. GAAP measures

ROCE, % = Operating income / Average Capital Employed *100%

000'USD 2003 2004 Q2Actual LTM

Operating income (EBIT) 427,904 562,370

Average Equity 830,440 963,680Average Debt 628,776 768,970Average Deferred tax 34,804 57,963Average Cash -210,634 -216,022Average Capital Employed 1283,385 1574,591

ROCE, % 33.3% 35.7%