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Investor Presentation November 2014
Investor Presentation © Global Telecom Holding S.A.E. 2014
This presentation contains forward-looking statements about Global Telecom Holding (“GTH”). Suchstatements are not historical facts and include expressions about confidence and strategies ofmanagement and expectations of management about new and existing programs, technology and marketconditions. 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 beregarded as a representation that anticipated events will occur or that expected objectives will beachieved. The forward-looking statements in this presentation are only valid until the date of thisdocument and GTH does not undertake to update any forward-looking statement to reflect events orcircumstances 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 shallthere be any offer or sale of securities in any jurisdiction in which such offer or sale would be unlawfulprior to registration or qualification under the securities laws of such jurisdiction.
2
Disclaimer
Investor Presentation © Global Telecom Holding S.A.E. 2014
GTH serves a population of approximately 415 million
1. Figures from CIA Factbook
Geographical Presence1
3
ALGERIA Population: 38.8 millionGDP Growth: 3.1%GDP/Capita PPP: USD7,500Pop. Under 15 years: 28%
ZIMBABWEPopulation: 13.8 millionGDP Growth: 3.2%GDP/Capita PPP: USD600Pop. Under 15 years: 38%
PAKISTANPopulation: 196.2 millionGDP Growth: 3.6%GDP/Capita PPP: USD3,100Pop. Under 15 years: 33%
BANGLADESHPopulation: 166.3 millionGDP Growth: 6.1%GDP/Capita PPP: USD2,100Pop. Under 15 years: 32%
Investor Presentation © Global Telecom Holding S.A.E. 2014
Algeria: Algeria: Djezzy remains a profitable market leader with significant mobile data potential and low penetration of broadband technologies
Pakistan: Mobilink leads the market and has great potential for revenue growth through mobile data, MFS and VAS
Bangladesh:Bangladesh:banglalink is a leading operator with strong focus on increasing value share in a rapidly large and growing market with relatively low penetration level
Market Position
4
Investor Presentation © Global Telecom Holding S.A.E. 2014
10
26
68
Algeria Bangladesh Pakistan
53%
75%
85%
Pakistan Bangladesh Algeria
3%
33%
37%
Algeria Pakistan Bangladesh
Notes1. Mobile penetration is for the market, based on sim cards number2. Based on Company estimates June’14, where mobile data penetration = data users (number of sims with data subscribed tariff plans) / mobile customers
Mobile Data Penetration2 (%) Data Usage2 (MB / User)Mobile Penetration1 (%)
Western Europe
Avg: 133%
Western Europe
Avg: 66%
Source: Company Data, WCISi
Significant upside in terms of mobile penetration & data usage
Investor Presentation © Global Telecom Holding S.A.E. 2014
Attractive markets
1. CIA Factbook2. Market share as provided by the regulator as of May 31, 2014
Algeria Pakistan Bangladesh
Population1: 38.8 million
GDP/capita1: USD 7,500
Penetration: 85%
Market shares2
49%
27%
23% Djezzy
Mobilis
Ooredoo
Population1: 196.2 million
GDP/capita1: USD 3,100
Penetration: 53%
28%
26%18%
19%
9%Mobilink
Telenor
Ufone
Zong
Warid
Population1: 166.3 million
GDP/capita1: USD 2,100
Penetration2: 71%
Market shares2
25%
42%
21%
12% Banglalink
Grameenphone
Robi
Other (3)
Market shares2
Investor Presentation © Global Telecom Holding S.A.E. 2014
LETTERONE TELENOR
OJSCVIMPELCOM
KYIVSTAR
GTHFREE FLOAT
WIND ITALY GTH
56.2% (Economic) 33.0% (E) 10.8% (E)
100.0% 100.0% 100.0% 51.9%
47.9% (Voting) 43.0% (V) 9.2% (V)
48.1%
VIMPELCOM FREE FLOAT
Shareholder Structure
7
Investor Presentation © Global Telecom Holding S.A.E. 2014
Average mobile penetration(%)
Mobile customers(million)
EBITDA margin(%)
Revenue(USD million)
EBITDA(USD million)
Population covered(million)
415
Market leadership in fast growing emerging markets
74 91.6+4 million YoY
356 42.9-4.5 p.p. YoY
830-14% organic YoY-5% organic YoY
as at 3Q14
Investor Presentation © Global Telecom Holding S.A.E. 2014
Launch of 3G services driving customer growth
34.136.7 36.0 35.9 33.5 34.5 34.4
16.6 16.8 17.0 17.6 17.6 17.5 18.2
1Q13 2Q13 3Q13 4Q14 1Q14 2Q14 3Q14
27.0 28.526.7 25.7 26.0 26.3
24.2
36.3
37.1 37.4 37.638.2
38.8 38.7
1Q13 2Q13 3Q13 4Q14 1Q14 2Q14 3Q14
9.3
10.110.0 10.0
10.210.9 11.0
25.9
27.128.1
28.829.4 29.8
30.2
1Q13 2Q13 3Q13 4Q14 1Q14 2Q14 3Q14
• Mobile customer base grew 7% YoYto 18.2 million
• Stabilized its market-leading position in 3Q14, following the launch of 3G services
• Mobile customer base grew 4% YoYto 38.7 million
• Focus on subscriber engagement with aggressive bundle offers
• Mobile customer base grew 8% YoYto 30.2 million
• Supported by 3G services, attractive tariff plans and other service offerings
In LC billions, if not stated otherwise
Bangladesh
Revenue and Customers
Algeria
Revenue and Customers
Pakistan
Revenue and Customers
Investor Presentation © Global Telecom Holding S.A.E. 2014
Bangladesh
EBITDA & EBITDA Margin
Launch of 3G services driving customer growth
Algeria
EBITDA & EBITDA Margin
Pakistan
EBITDA & EBITDA Margin
20.2 22.021.0 21.0
19.0 18.8 18.1
59.2% 60.1%57.2% 58.3% 57.6%
54.5%52.5%
1Q13 2Q13 3Q13 4Q14 1Q14 2Q14 3Q14
11.512.3
11.5
9.610.0 10.2
8.5
42.3% 43.0% 43.1%
37.2%39.5% 38.9%
34.9%
1Q13 2Q13 3Q13 4Q14 1Q14 2Q14 3Q14
3.83.7 3.6
3.4
4.04.2
4.4
41.3%
37.2% 36.3%33.7%
37.4% 38.2%39.7%
1Q13 2Q13 3Q13 4Q14 1Q14 2Q14 3Q14
• EBITDA decreased 13% YoY
• Negatively impacted by higher network cost due to the 3G rollout and slight increase in HR cost
• EBITDA decreased 30% YoY
• Negatively impacted by lower service revenue YoY, alongside higher customer associated cost, network and HR costs
• EBITDA increased 20% YoY
• Driven by the growth in revenue, and lower customer acquisition costs, partially offset by higher network costs
In LC billions, if not stated otherwise
Investor Presentation © Global Telecom Holding S.A.E. 2014
Algeria
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Investor Presentation © Global Telecom Holding S.A.E. 2014
Algeria: Competitive situation and market trends
Macro Environment:
• Government, trade and agricultural sectors account for over
60% of GDP
• 28% of the population is under 15 years old
Mobile:
• 85% penetration
• 3 market players
• 3G launched
GDP trend2 (%)
1 Source: Market share as provided by the regulator as of November 30, 20132 Source: World Bank as of November 20143 OCF = EBITDA minus CAPEX
2.42.6
3.3
2.7
3.3
2010 2011 2012 2013 2014E
DZD billions LTM 3Q’14
Mobile Customers (millions) 18.2
Revenues 138.3
EBITDA 76.9
EBITDA Margin 55.6%
CAPEX 31.3
CAPEX / Revenue 22.7%
Operating Cash Flow3 45.5
Mobile Market Share1 (on revenue), %
23 22 22
21 23 25
56 55 53
2011 2012 2013
Djezzy
Ooredoo
Mobilis
Investor Presentation © Global Telecom Holding S.A.E. 2014
Algeria: Focus on commercial 3G launch
• Smartphone and dongle promotions with data bonus
• Routers promotion for B2B
• Postpaid pack promotion with voice & data bonus
• Handset migration promotion
• 3G services currently in 14 main provinces, including Algiers and main cities
• EoY14: 19 provinces coverage
• Facebook zero
• Djezzy store
• Djezzy App
• Be Djezzy
• Opera Mini
• Lifestyle (Facebook, Twitter, WhatsApp)
• M2M
Data & handsetspromotion
Successful3G launch
New special 3Gvalue added services
2Q14 3Q14
Data revenue
x4 times
Investor Presentation © Global Telecom Holding S.A.E. 2014
Pakistan
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Investor Presentation © Global Telecom Holding S.A.E. 2014
Pakistan: Competitive situation and market trends
Macro Environment:
• 34% of the population under 15 years old
• Government working on achieving political stability and
economic reform
• Power shortfalls persist
Mobile:
• 53% penetration
• 5 market players
• 3G launched
GDP trend2 (%)
1. Source: Company’s estimations2. Source: World Bank as of November 20143. OCF = EBITDA minus CAPEX
3.6 3.7 3.8 3.7 3.7
2010 2011 2012 2013 2014E
PKR billions LTM 3Q’14
Mobile Customers (millions) 38.7
Revenues 102.2
EBITDA 38.2
EBITDA Margin 37.4%
CAPEX 65.6
CAPEX / Revenue 64.2%
Operating Cash Flow (27.3)
Mobile market share1 (on revenue), %
19 20 19
14 10 10
12 15 17
25 25 25
30 30 29
2011 2012 2013
Ufone
Zong
Telenor
Warid
Mobilink
Investor Presentation © Global Telecom Holding S.A.E. 2014
Pakistan: Improving network and increased usage
• Notifications with unsubscription information
• Daily usage report
• Self service menu for managing subscription
• Transparency complaints reduced by 80% YTD’14
• 2G coverage/capacity rollout on track
• 3G rollout progressing according to plan
• Launch of off-peak offers
• 4% QoQ traffic increase
• Network modernization is on track to be finalized by the end of 2014
• Channel engagement campaigns to incentivize retailers
• > 42,000 agents
• Presence on ATL to increase brand awareness
Transparency in valueadded services
Improved network andincreased usage
MFS promotion is in focus, +30% QoQ
3Q13 4Q13 1Q14 2Q14 3Q14
MOU development
Fastest growing 3G service
1 million 3G customers within 90 days of commercial launch
Fastest growing 3G service
1 million 3G customers within 90 days of commercial launch
Investor Presentation © Global Telecom Holding S.A.E. 2014
Bangladesh
17
Investor Presentation © Global Telecom Holding S.A.E. 2014
Bangladesh: Competitive situation and market trends
Macro Environment:
• The world’s highest population density
• 33% of the population under 15 years old
Mobile:
• 71% penetration
• 3 main players in the market
• 3G launched
GDP trend2 (%)
1 Source: Company’s estimates2 Source: World Bank as of November 2014
6.16.5
6.1 6.05.4
2010 2011 2012 2013 2014E
BDT billions LTM 3Q’14
Mobile Customers (millions) 30.2
Revenues 42.1
EBITDA 15.9
EBITDA Margin 37.8%
CAPEX 19.5
CAPEX / Revenue 46.3
Operating Cash Flow (3.6)
Mobile market share1 (on revenue), %
4 3 4
19 21 22
43 42 42
7 7 7
28 27 25
2011 2012 2013
banglalink
Other
Airtel
GrameenPhone
Robi
Investor Presentation © Global Telecom Holding S.A.E. 2014
Bangladesh: Successful turnaround and 3G roll out in 3Q14
-13% -14% -15% -15%
10%8% 8%
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
Mobile service revenue growth YoY(%)
25.9
27.1
28.1
28.829.4
29.830.2
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
Customer base (millions)
The fastest 3GSmartphone
promotion
MFS
growth opportunities
• LG G3 smartphone:► option to pay in
installments► 3GB for free
• High growth potential as smartphone penetration currently only 4%
• Ticketing
• Payments
• Remittance
• Mobile money transfer
Appendix
Investor Presentation © Global Telecom Holding S.A.E. 2014
Debt by Currency
Gross & Net Debt (USD Millions)
Debt by EntityDebt by Entity (USD Millions)
GTH 4,721
Pakistan 358
Bangladesh 455
Algeria 46
Others 26
Total 5,606
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Debt Profile
85%
15%
USD
Local
84%
6%
8%
1% 0%
GTH
Pakistan
Bangladesh
Algeria
Others
5,606
2,864 2,742
5,184
2,8382,346
Gross Debt Cash Net Debt
3Q14 4Q13
Investor Presentation © Global Telecom Holding S.A.E. 2014
Footnotes:1. Management presentation developed from
IFRS financials2. Incremental impairment of assets held for
sale relating to CAR and Burundi’s expectedsale
3. Equates to net income after minority interest
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Income StatementUSD thousands 3Q14 3Q13 Change 9M14 9M13 Change
Revenue 830,015 860,822 -4% 2,523,997 2,613,823 -3%
Other Income 10,705 6,791 28,950 10,160
Total Expense (484,533) (459,940) (1,412,507) (1,364,931)
EBITDA1 356,187 407,674 -13% 1,140,440 1,259,052 -9%
Depreciation and Amortization (155,522) (159,115) (503,965) (502,878)
Impairment of Non-Current Assets (9,388) (7,841) (11,164) (8,976)
Gain (Loss) on Disposal of Non-Current Assets
(2,473) (458) (1,719) (1,456)
Impairment of Assets Held for Sale2 (36,255) 8,900 (58,684) (47,278)
Operating Income 152,549 249,160 -39% 564,908 698,464 -19%
Financial Expense (181,592) (126,856) (463,212) (374,523)
Financial Income 1,929 10,684 17,150 31,528
Foreign Exchange Gain (Loss) (32,881) 12,738 (122,506) (246,384)
Share of Loss from Associates 0 (35,405) - (100,456)
Profit Before Tax (59,995) 110,321 n.m. (3,660) 8,629 n.m.
Income Tax (94,317) (59,530) (280,907) (184,175)
Profit from Continuing Operations
(154,312) 50,791 n.m. (284,567) (175,546) n.m.
(12) 0 (12) -
Profit for the Period (154,324) 50,791 n.m. (284,579) (175,546) n.m.
Attributable to:
Equity Holders of the Parent3 (158,307) 46,104 n.m. (297,736) (190,275) n.m.
Earnings Per Share (USD/GDR) (0.15) 0.05 n.m. (0.27) (0.17) n.m.
Minority Interest 3,983 4,686 13,157 14,729
Net Income (154,324) 50,791 n.m. (284,579) (175,546) n.m.
Investor Presentation © Global Telecom Holding S.A.E. 2014
Footnotes:1. The equity caption in 2013 balance sheet has been
adjusted to reflect the impact of post balance sheetevents, a one-off charge of USD 2 billion, as per theShare Purchase Agreement signed by VimpelCom andGTH with FNI, which oblige GTH upon completion todiscontinue legal dispute with respect to the taxreceivable and account for the fines imposed by theAlgerian treasury
2. Net Debt is calculated as a sum of short term debt, longterm debt, less cash and cash equivalents
23
Balance Sheet
USD thousands30 Sept. 2014
31 December20131
Assets
Property and Equipment (net) 2,275,946 2,043,998
Intangible Assets 1,620,553 1,425,596
Other Non-Current Assets 135,473 88,190
Total Non-Current Assets 4,031,972 3,557,784
Cash and Cash Equivalents 2,864,189 2,838,448
Trade Receivables 228,572 225,641
Assets Held for Sale 117,863 170,380
Other Current Assets 462,916 646,539
Total Current Assets 3,673,540 3,881,008
Total Assets 7,705,512 7,438,792
Equity Attributable to Equity Holders of the Company (1,384,699) (1,114,848)
Minority Share 47,672 38,344
Total Equity (1,337,027) (1,076,504)
Liabilities
Long Term Debt 5,305,540 150,904
Other Non-Current Liabilities 539,690 392,461
Total Non-Current Liabilities 5,845,230 543,365
Short Term Debt 300,018 5,033,197
Trade Payables 862,963 814,668
Other Current Liabilities 2,034,328 2,124,066
Total Current Liabilities 3,197,309 7,971,931
Total Liabilities 9,042,539 8,515,296
Total Liabilities and Shareholder’s Equity 7,705,512 7,438,792
Net Debt2 2,741,369 2,345,653
Investor Presentation © Global Telecom Holding S.A.E. 2014
24
Cash Flow StatementUSD thousands
30 Sept.2014
30 Sept. 2013
Cash Flows from Operating Activities
Profit (Loss) for the Period (284,581) (175,546)
Depreciation, Amortization and Impairment of Non-Current Assets
515,129 511,854
Income Tax Expense 280,779 184,175
Net Financial Charges 568,353 589,379
Share of Loss (Profit) of Associates - 100,456
Impairment of Financial Assets 58,684 47,278
Other 24,652 (54,400)
Changes in Assets Carried as Working Capital (208,689) (80,787)
Changes in Other Liabilities Carried as Working Capital
94,290 65,518
Income Tax Paid (192,071) (184,021)
Interest Expense Paid (50,484) (83,908)
Net Cash Generated by Operating Activities 806,062 919,998
Cash Flows from Investing Activities
Cash Outflow for Investments in Property and Equipment, Intangible Assets, and Financial Assets and Consolidated Subsidiaries
(956,393) (338,675)
Proceeds from Disposal of Property and Equipment, Subsidiaries and Financial Assets
23,082 14,052
Dividends and Interest Received 8,444 7,973
Net Cash Used in Investing Activities (924,867) (316,650)
Cash Flows from Financing Activities
Proceeds from loans, banks' facilities and bonds 1,673,294 779,998
Payments for loans, banks' facilities and bonds (1,359,682) (965,982)
Net Payments from financial liabilities (1,782) (1,747)
Net Change in Cash Collateral 347 30,887
Net Cash generated by Financing Activities 312,177 113,156
Net Increase in Cash and Cash Equivalents 193,372 716,504
Cash included in Assets Held for Sale (4,257) (21,630)
Effect of Exchange Rate Changes on Cash and Cash Equivalents
(163,362) (88,737)
Cash and Cash Equivalents at the Beginning of the Period
2,838,432 2,025,844
Cash and Cash Equivalents at the End of the Period
2,864,185 2,631,981
Investor Presentation © Global Telecom Holding S.A.E. 2014
For your inquiries, please contact:
Ola TayelInvestor Relations Manager
E: [email protected]: +202 2461 5120F: +202 2461 5055/54W: www.gtelecom.com
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