Mobistar Valuation Overview

Implied Share Price Ranges (EUR)

Current Price 57.7 61.3 - 62.8 07E EBITDA x
52W High Low 60.4 69.9 6.5x 7.6x

Broker Target Prices 55.6 68.0 6.0x 7.4x

(1)
Trading Comparable EV/07E EBITDA 55.3 62.8 6.0x 6.8x

(2) 59.2
Trading Comparable EV/07E FCF 74.2 6.4x 8.0x

(3)
Trading Comparable P/07E E 52.5 65.6 5.7x 7.1x

Transaction Comparable EV/ Acq.Revenue(4) 58.0 73.8 6.3x 8.0x

(5) 61.3 70.6 6.6x 7.6x

Transaction Comparable EV/ Acq.EBITDA

(6) 6.0x 8.4x

DCF 55.3 77.5

50.0 55.0 60.0 65.0 70.0 75.0 80.0

Source: Based on broker consensus estimates
1 : High/Low based on EV/07E EBITDA for Vodafone & Cosmote; Vodafone for high end; 6.0x for low end
2 : High/Low based on EV/07E FCF for Vodafone & Cosmote; Vodafone for high end; 20% discount for low end
3 : High/Low based on P/07E Earnings for Vodafone & Cosmote; Vodafone for high end; 20% discount for low end
4 : High/Low based on EV/Acq. revenue multiple for Tef - O2 / Belgacom Proximus transactions respectively
5 : High/Low based on EV/Acq. EBITDA multiple for Tef - O2 &Belgacom Proximus transactions ; Proximus for low; 15% premium for high
6 : WACC range 7-9%; Terminal growth rate range 0-1%
Trading Comparables Summary
EV / EBITDA EBITDA Margin Growth EV / FCF Growth P/E Growth
2007E 2008E 2007E 2008E 2007E-08E 2007E 2008E 2007E-08E 2007E 2008E 2007E-08E
Cosmote 9.8x 8.5x %
33.2% 34.1%
% 14.8%
% 17.0x 12.9x 32.3%
% 16.7x 13.8x 20.8%
%
Vodafone 6.8x 6.5x 37.4% 36.8% 5.0% 11.1x 10.5x 5.3% 14.5x 13.9x 4.1%
Mean 8.3x 7.5x 35.3% 35.5% 9.9% 14.1x 11.7x 18.8% 15.6x 13.9x 12.4%
Min 6.8x 6.5x 33.2% 34.1% 5.0% 11.1x 10.5x 5.3% 14.5x 13.8x 4.1%
Max 9.8x 8.5x 37.4% 36.8% 14.8% 17.0x 12.9x 32.3% 16.7x 13.9x 20.8%

M bi
Mobistar Metrics
M i (EUR(EURm)) 590 9
590.9 575 6
575.6 38 9%
38.9% 38 5%
38.5% -2.6%
2 6% 426 9
426.9 414 2
414.2 -3.0%
3 0% 286 2
286.2 273 5
273.5 -4.4%
4 4%

EV / 07E EBITDA EV / 07E FCF P/ 07E

Min Mean Max Min Mean Max Min Mean Max
Trading Comparables Range 6.0x 6.4x 6.8x 8.9x 10.0x 11.1x 11.6x 13.1x 14.5x
Implied Enterprise Value (EV in EURm) 33,545
545 33,782
782 44,018
018 33,790
790 44,264
264 44,738
738 33,365
365 33,780
780 44,195
195
Implied Price Per Share (EUR) 55.3 59.1 62.8 59.2 66.7 74.2 52.5 59.0 65.6

Note:
1. Financial projections based on broker consensus estimates;
2. Multiples have been adjusted for minorities, associates and affiliates - Market values have been used where available otherwise broker SOTP has
been used as a substitute
3. Yahoo finance has been used for share price data
4. Net debt is a per latest quarterly reports available
5. Fx rates have been obtained from Oanda.com as on 25 Aug 2007
Transaction Comparables Summary
EV / Acquisition
Target Acquiror Date Stake EV (m) Revenue EBITDA
O2 Telefonica 31-Oct-05 100.0% 25,840 2.45x 8.8x
Proximus Belgacom 25-Aug-06 25.0% 6,600 3.11x 6.6x

EV / 07E Revenue
Re en e
Min Max
Trading Comparables Range 2.4x 3.1x
Mobistar Metrics (EURm) 1,517.7 1,517.7
Implied Enterprise Value (EV in EURm) 3,716 4,713
Implied Price Per Share (EUR) 58.0 73.8

EV / 07E EBITDA
Min Max
Trading Comparables Range 6.6x 7.6x
Mobistar Metrics ((EURm)) 590.9 590.9
Implied Enterprise Value (EV in EURm) 3,922 4,510
Implied Price Per Share (EUR) 61.3 70.6
Discounted Cash Flow (DCF)
(in EURm)
Fiscal Year End 31 December 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Norm
Revenue 1,518 1,494 1,531 1,544 1,553 1,559 1,563 1,564 1,566 1,567 1,567
Growth nm -1.5% 2.5% 0.8% 0.6% 0.4% 0.2% 0.1% 0.1% 0.1% n.a.
EBITDA 591 576 595 598 601 603 605 605 606 607 607
EBITDA Margin 38.9% 38.5% 38.8% 38.7% 38.7% 38.7% 38.7% 38.7% 38.7% 38.7% 38.7%
Allowable D&A (145) (152) (153) (144) (145) (145) (146) (146) (146) (146) (163)
EBIT(A) 446 423 442 454 456 458 459 459 460 460 444
Cumulative EBIT 446 869 1,311 1,765 2,222 2,680 3,139 3,598 4,058 4,518
Effective Tax Rate 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0%
Tax on EBIT(A) (134) (127) (133) (136) (137) (137) (138) (138) (138) (138) (133)
NOPAT 312 296 309 318 319 321 321 322 322 322 310
Allowable
ll bl D&A 145 152 153 144 145 145 146 146 146 146 163
Capital Expenditures (164) (161) (162) (160) (162) (162) (163) (163) (163) (163) (163)
% of Revenues 10.8% 10.8% 10.6% 10.4% 10.4% 10.4% 10.4% 10.4% 10.4% 10.4% 10.4%
Change in Working Capital (9) 12 2 2 2 2 2 2 2 2 2
Free Cash Flow to the Firm 284 299 301 303 304 305 306 306 307 307 312
Growth n.a. 5.2% 0.9% 0.5% 0.5% 0.4% 0.2% 0.1% 0.1% 0.1% n.a.
Y
Years Di
Discounted
t d 05
0.5 15
1.5 25
2.5 35
3.5 45
4.5 55
5.5 65
6.5 75
7.5 85
8.5 95
9.5 95
9.5
Discount Factors 0.9623 0.8910 0.8250 0.7639 0.7073 0.6549 0.6064 0.5615 0.5199 0.4814 0.4814
Discounted Cash Flows 273 266 249 231 215 200 186 172 159 148 150

Valuation Parameters Implied Multiples Enterprise Value Sensitivity

Terminal Growth Rate
WACC 88.0%
0% EV / EBITDA 4 112
4,112 -0.5%
0 5% 0 0%
0.0% 0 5%
0.5% 1 0%
1.0% 1 5%
1.5%
Terminal growth rate 0.5% 2,007 2,008 6.0% 5,030 5,274 5,562 5,907 6,330
2016E Normalized Free Cash Flow 312 591 576 7.0% 4,365 4,533 4,725 4,951 5,217

WACC
Terminal Value 4,181 7.0x 7.1x 8.0% 3,858 3,977 4,112 4,267 4,445
9.0% 3,458 3,545 3,643 3,754 3,879
Discounted Terminal Value 2,013 10.0% 3,134 3,200 3,273 3,354 3,445
Discounted
Di t d Cash
C h Flows
Fl 22,100
100 EV / FCF
Enterperise Value (EV) 4,112 2,007 2,008 Implied EBITDA Exit Multiple
Implied Share Price (EUR) 64.3 427 414 Terminal Growth Rate
9.6x 9.9x 7 -0.5% 0.0% 0.5% 1.0% 1.5%
Discounted Terminal Value / Firm Value 48.9% 6.0% 7.9x 8.6x 9.4x 10.4x 11.6x
Normalized EBITDA 607 7.0% 6.8x 7.3x 8.0x 8.7x 9.5x
CC
WAC

I li d Exit
Implied E i EBITDA Multiple
M li l 69
6.9x 8 0%
8.0% 60
6.0x 64
6.4x 69
6.9x 74
7.4x 80
8.0x
9.0% 5.4x 5.7x 6.1x 6.5x 7.0x
10.0% 4.9x 5.1x 5.4x 5.8x 6.1x
Discounted Cash Flow (DCF)
Levered Market Net Net Debt/ Equity/ D/E Tax 1-tax rate ((D/e)*1-t)+1 Unlever.
(LC mm) Beta Cap. Debt EV EV Ratio Rate Beta

Cosmote 0.76 7,466 2,146 22.3% 77.7% 28.7% 29.0% 71.0% 120.4% 0.63
Vodafone 1.04 81,681 23,000 22.0% 78.0% 28.2% 30.0% 70.0% 119.7% 0.87
Mean 0.75

WACC Calculation Belgium Source

Soverign Credit Rating

Return on risk
risk-free
free investments (rf) 4 6%
4.6% Lehman Brothers
Brothers'

Market risk prm - rf 4.5% Lehman Brothers'

Ungeared Bebu 0.75

Gearing D/E 11.1%
11 1%
Leverage D/(D+E) 10.0%
E/(D+E) 90.0%
Geared Beta 0.81
Corporate Tax Rate 34.0% KPMG 2006

Cost of debt (pre-tax) Kd 4.0% Lehman Brothers'

Cost of equity (ungeared) ku = rf + (rm - rf + rc)b 8.0%
Cost of equity (geared) ks = rf + (rm - rf + rc)bs 8.2%
WACC k = [ksE+kd(1-Tc)D]/(E+D) 7.7%