Hellas Group 4th Quarter 2007 Results February 19, 2008
Forward looking statement This presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding WIND Hellas intentions, beliefs or current expectations concerning, among other things, WIND Hellas results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which WIND Hellas operates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties set forth in WIND Hellas Offering Memorandums, because they relate to events and depend on circumstances that may or may not occur in the future. WIND Hellas cautions you that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which WIND Hellas operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if WIND Hellas results of operations, financial condition and liquidity and the development of the industry in which WIND Hellas operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. WIND Hellas does not undertake any obligation to review or confirm analyst expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation. The Senior Secured Notes, the Senior Notes, the Subordinated Notes and the PIK Senior Notes have not been registered under US Securities Act of 1933, as amended (the US Securities Act ), or any state securities laws, and were offered and sold only outside the United States pursuant to Regulation S under the US Securities Act and to qualified institutional buyers in the United States in reliance on Rule 144A under the US Securities Act. 1
Agenda Performance Highlights Consistent Strategy Geared towards Maximizing Returns Operating and Financial Performance Review Q & A 2
Group performance highlights Strong fundamentals resulting in ongoing profitable growth Group yet again secures key operating results 15.8% y-o-y increase in the group s reported mobile customer base in WIND Hellas contract ARPU grows marginally despite interconnection tariff decline on the back of solid and continuous usage upside, with blended ARPU declining mainly due to prepaid uptake Steady decrease in WIND Hellas postpaid churn to 24.7% in Q407 from 26.2% in Net Additions slower pace due to new disconnection policy of Q - card Group 1 financial profile continues to show tangible progress 1,301.2 mn Group total revenues, up 5.7% y-o-y 466.5 mn Group adjusted EBITDA¹ with margin continuing its upward trend Organic EBITDA growth and focus on CAPEX efficiency reinforce strong and increasing cashflow generation EBITDA 2 -Capex of 291.4 mn The acquisition of Tellas by WIND Hellas enhances the profile of the Group as an Integrated Operator Sustainable profitable growth outlook ¹ Group financials fully consolidate Tellas financials 2 Adjusted EBITDA for certain non-recurring or non-cash items Pro forma unaudited Group financials for in accordance with IFRS 3
Agenda Performance Highlights Consistent Strategy Geared towards Maximizing Returns Operating and Financial Performance Review Q & A 4
Consistent strategy geared towards maximizing returns Pillars of strategic growth Aspiration Increase market share in prepaid and sustain profitable growth in postpaid segment Accelerate acquisition and increase retention Stimulate usage and ARPU Exploit potential in next generation services Expand into Fixed & Broadband sector Foundation Clear brand positioning and strong value propositions 5
Focused strategy, delivery on track Accelerate acquisition and increase retention Accelerate acquisition and increase retention Strategy Differentiate with innovative tariffs and promotions in postpaid and prepaid, and keep up will all competitors major launches Accelerate WIND shop expansion while reducing dependency on more costly channels Launch Proactive upgrade program and increase penetration in loyalty scheme towards high value customers Healthy customer growth and steady reduction in churn Achievements to date EoP customer base increased by 15.8% y-o-y in Continued supporting Best Price Guarantee in postpaid, prepaid and in handsets/accessories, to enhance value for money positioning Decreased off-net voice rate of prepaid F2G by 34% and used comparative advertising to educate customers and illustrate F2G offers best combo of charges Proactive upgrade program towards high value customers along with loyalty programs already yield tangible results WIND Hellas contract churn further drops to 24.7% in Reinforced own network of WIND stores New and existing WIND stores as well as other channels continue to outperform expectations Own channel reached 375 shops in February, 2008 Completed radical redesign in Other dealers Germanos Direct 3 more than 90% of Wind Stores WIND Stores 16 WIND Hellas postpaid gross additions mix (%) 18 19 21 63 51 3 27 40 4 35 13 9 8 10 13 29 39 41 8 4 8 77 55 42 44 2001 2002 2003 2004 2005 2006 2007 ¹ 6
Focused strategy, delivery on track Stimulate usage and ARPU Stimulate usage and ARPU Strategy Drive F2M substitution via tariffs and add-ons with embedded minutes toward fixed destinations Increase ARPU via new post-paid pricing schemes (Flexy euro-bundle and MAX call-bundle tariffs) Accelerate prepaid to post-paid migration via targeted campaigns Solid traffic uptake Achievements To date Wind takes you higher promo granted postpaid users the extra usage of a higher value tariff plan with the same monthly fee Prepaid customer base uptake puts pressure on blended ARPU Contract ARPU increases supported by solid outgoing traffic growth despite decreasing interconnection rates Further acceleration of total outgoing traffic growth in 2007 to +23.0% y-o-y Outgoing Traffic (mil, mins) +23.0% 4,355.6 3,542.1 2006 2007 7
Focused strategy, delivery on track Exploit potential in next generation services (VAS) Exploit potential in next generation VAS Strategy Increase data usage and ARPU via driving multimedia handsets penetration, improving portal & content offer, and promoting adoption of mobile Broadband Extracting value from high-return VAS and Mobile Broadband uptake Achievements to date ADSM, the new brand for Mobile Broadband, launched end of October and attracted 6k new customers by end of 2007, generating 1.2m WAP browsing revenues of Q4 grew by 96% YoY to 3.65m, while unique monthly users averaged 451k Over 1.4mn WIND customized multimedia handsets in customer base, stimulating revenues growth VAS revenues Growth (excl. p2p SMS) +6% 14.1m 13.3m 8
Focused strategy, delivery on track Expand into Fixed & Broadband sector to accelerate company growth Expand into Fixed & Broadband sector Strategy Accelerate growth by entering the high potential Greek broadband market through Tellas Enhance loyalty of postpaid customer base Build an integrated telecom operator profile Revenue generation and market share gains Strong position to drive significant market inroads Greek broadband market experiences strong growth as it converges rapidly with EU average WIND concluded the acquisition of Tellas in October and is ready to gain leverage from competitive pricing, commercial offerings, current mobile customer base & distribution network Focus on voice and data offering with nationwide coverage as Tellas will pursue aggressively the double play (fixed+adsl) consumer with attractive offers Enhance product offerings and telecom solutions and driving greater traffic to WIND stores Close major product offering gaps vs. competition Improve level of service to enhance loyalty of customer base Economies of scale and synergies with mobile (i.e. discount in mobile fees after combination of mobile with fixed-adsl) 9
Agenda Performance Highlights Consistent Strategy Geared towards Maximizing Returns Operating and Financial Performance Review Q & A 10
Group financial performance Continue delivering on superior growth profile Group total revenues 1 (EUR, million) 1,230.5 119.1 +5.7% 1,301.2 117.7 315.7 327.1 28.5 +3.6% 30.1 1,111.4 1,183.5 287.3 297.0 W IND Hellas Tellas W IND Hellas Tellas Group adjusted EBITDA 2 (EUR, million) 31.0% 35.9% 466.5 381.3 +22.3% 382.8 467.2-1.5-0.6 As % of total revenues 27.4% 35.6% 116.5 86.4 34.8% 117.1 88.8-2.3-0.6 1. Pro forma unaudited financials for Hellas II excluding Tellas (hereafter WIND Hellas) in accordance with IFRS. Tellas Pro forma unaudited financials in accordance with IFRS. Group financials fully consolidate Tellas financials (intercompany transactions are eliminated) 2. Adjusted EBITDA for certain non-recurring or non-cash items. 11
Mobile - Key revenue drivers performance Strong customer uptake puts pressure on ARPU Subscriber base (EOP, 000 s) Net Additions ( 000 s) +15.8% -55.4% 3,904 4,520 171 76 Dec-06 Dec-07 1 ARPU 2 (EUR) 24.7 21.6 54.5 54.7 23.3 20.2 55.3 54.1 13.2 10.4 12.3 Contract Blended PrePaid 9.9 1 churn distorted due to new disconnection policy of Q card. Excluding Q card Net Additions for were 106 thousand. 2 Pro forma unaudited ARPU figures in accordance with IFRS, including revenues from foreign roamers, on reported subscriber base 12
Mobile -Operating expenses performance Constrained SAC/SRC & other opex efficiencies further boost EBITDA Acquisition & Retention expenses (EUR, million) 7.3% 7.5% 8.1% 7.5% 80.8 38.7 +9.5% 88.5 35.7 23.2-3.6% 22.3 10.7 8.7 42.1 52.8 12.2 13.7 SRC SAC % as of total mobile revenues SRC SAC % as of total mobile revenues Other operating expenses 1 (EUR, million) 58.3% 53.0% -3.1% 61.0% 53.0% 647.9 627.8-1.5% 175.3 157.6 Other Opex % as of total mobile revenues Other Opex % as of total mobile revenues ¹ Adjusted for certain non-recurring or non-cash items Pro forma unaudited financials for WIND Hellas in accordance with IFRS 13
Fixed (Tellas) - Key revenue drivers performance Subscriber base (EOP, 000 s) Net Additions ( 000 s) 846-5.5% 800 19.4-213% -21.8 838 714 8 86 Dec-06 Dec-07 17.5 1.9 27.2-49.0 Direct Indirect Direct Indirect ARPU 2 (EUR) 83.3 47.4 80.7 46.1 9.8 9.3 9.1 9.8 9.3 7.3 8.6 6.3 Blended Direct Indirect 14
Fixed (Tellas) - Operating expenses performance Variable Costs (EUR, million) 53% 48% -10.1% 53% 53% 62.5 56.2 15.1 +4.5% 15.8 % as of total fixed revenues % as of total fixed revenues Operating expenses 1 (EUR, million) 48.8% 52.8% +7.0% 55.0% 49.6% 58.1 62.1-4.6% 15.7 14.9 % as of total fixed revenues % as of total fixed revenues ¹ Adjusted for certain non-recurring or non-cash items Pro forma unaudited financials for Tellas in accordance with IFRS 15
Group adjusted EBITDA 1 bridge Dec-06 to Dec-07 (in mn) 76.4 2.8 (11.4) (12.3) (7.5) 38.8 (0.6) 466.5 381.3 WIND Hellas: +86.7mn Group EBITDA Outgoing rev enues Net Visitor Roaming Net F2M Interconnection Net M2M Interconnection 2 SAC & SRC Others Tellas EBITDA Group EBITDA 2007 EBITDA target was successfully met even if we consolidated Tellas negative EBITDA Group adjusted EBITDA, pro forma to the 7.4 million of Vodafone roaming synergies, comes in at 473.9 million ¹ Adjusted EBITDA for certain non-recurring or non-cash items 2 Mostly due to Vodafone roaming Pro forma unaudited consolidated financials for WIND Hellas and Tellas in accordance with IFRS 16
Group Cash flow generation Top-line and margin growth sustain robust cash flow generation 156.9 Capex (EUR, million) +11.7% 175.2 7.1 27.6 149.8 147.6 Capex as % of total revenues 12.7% 13.5% 13.5% 12.4% WIND Tellas Group Wind Hellas 2 EBITDA 1 Capex (EUR, million) 224.4 +29.8% 291.4 233.0 319.6 18.2% 22.4% -8.6-28.2 WIND Tellas ¹ Adjusted EBITDA for certain non-recurring or non-cash items Pro forma unaudited financials for WIND Hellas and Tellas in accordance with IFRS 2Wind Hellas Capex over stand alone total revenues before intra-group eliminations (EBITDA-Capex) as % of total revenues 17
Agenda Performance Highlights Consistent Strategy Geared towards Maximizing Returns Operating and Financial Performance Review Q & A 18