Bezeq The Israel Telecommunication Corp. Ltd. · TASE:BEZQ
Bezeq The Israel Telecommunication — Q3 2022 Earnings Presentation
31 slides from Bezeq The Israel Telecommunication's earnings presentation, 2022
Slide 1: Bezeq Group Q3 2022 Investor Presentation
Bezeq Group Q3 2022 Investor Presentation
Slide 2: Forward-Looking Information and Statement (Disclaimer)
Forward-Looking Information and Statement (Disclaimer) This presentation contains general data and information as well as forward looking statements about Bezeq The Israel Telecommunications Corp., Ltd (“Bezeq”). Such statements, along with explanations and clarifications presented by Bezeq’s repres
Slide 3: Bezeq Group | Focus on Growth
Bezeq Group | Focus on Growth Record take up of fiber Revenue growth of customers and continued 12% in Pelephone and growth in retail 5% in Bezeq Fixed-Line broadband ARPU yes launched TV + Bezeq Subscriber growth in fiber bundle Pelephone and yes Continued decrease in Roaming recovery and net debt,
Slide 4: Bezeq Group | Q3-2022 Summary
Bezeq Group | Q3-2022 Summary Revenues Adjusted EBITDA (1) Adjusted Net Profit (1) Free Cash Flow Decrease in Net Debt NIS 2.26 billion NIS 947 million NIS 314 million NIS 30 million NIS 600 million 5.6% 1.0% 6.4% 92.0% 10.0% Adjusted EBITDA margin 41.9% Improved coverage ratios Fiber Take Up in Q3
Slide 5: Bezeq Group - Key Financial Highlights
Bezeq Group - Key Financial Highlights | NIS Million Revenues Adjusted EBITDA* Adjusted Net Profit* 5.6% 1.0% 6.4% 2,142 2,258 2,255 2,225 2,262 938 909 958 924 947 295 322 310 314 256 44% 40% 43% 42% 42% Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021
Slide 6: Bezeq Group - 9M-2022 Financial Highlights
Bezeq Group - 9M-2022 Financial Highlights | NIS Million Revenues Adjusted EBITDA(1) Adjusted Net Profit(1) 2.7% 1.0% 5.3% 6,563 6,742 2,800 2,829 898 946 43% 42% 9M-2021 9M-2022 9M-2021 9M-2022 9M-2021 9M-2022 % - Adjusted EBITDA margin • Group revenue growth led by CapEx Free Cash Flow Bezeq Fixed
Slide 7: Bezeq Group | Key Operational Metrics
Bezeq Group | Key Operational Metrics Subscribers (end of period, in thousands) ARPU (NIS) 2,636 2,675 188 190 186 184 182 2,547 2,576 2,583 1,602 110 113 116 1,583 1,563 1,542 1,522 107 109 1,014 1,023 1,024 1,022 1,024 55 55 57 57 58 560 563 564 567 575 46 46 47 41 41 510 501 495 490 481 Q3-2021 Q
Slide 8: Bezeq Group – Financial Debt
Bezeq Group – Financial Debt | NIS Billion Net Debt (NIS billions) Continued decrease in net debt 8.0 8.1 8.0 8.0 • Decrease of NIS 600 million, or 10%, 7.7 year-over-year 1.8 1.9 2.1 2.4 2.4 Further improvement in Net debt/EBITDA ratio 6.2 6.1 5.6 5.6 5.6 • Decreased to 1.7 from 1.9 a year ago Q3-2
Slide 9: Bezeq Group | 2022 Guidance (Unchanged from previous quarter)
Bezeq Group | 2022 Guidance (Unchanged from previous quarter) Previous Outlook 3.2022 Updated Outlook 8.2022 Adjusted EBITDA (1) NIS 3.6-3.7 billion NIS 3.65-3.75 billion Adjusted net profit(1) NIS 1.0-1.1 billion NIS 1.1-1.2 billion CapEx NIS 1.7-1.8 billion NIS 1.7-1.8 billion (unchanged) Fiber De
Slide 10: Bezeq Fixed-Line | Q3-2022 Summary
Bezeq Fixed-Line | Q3-2022 Summary Increased focus on fiber Strong revenue growth of connections led to record fiber 5% despite the MOC customer take up of 51k in Q3- telephony tariff reduction 22 for a q-o-q increase of 32% The number of homes Broadband Internet passed reached 1.48 m with revenues
Slide 11: Bezeq Fixed-Line - Q3-2022 Financial Highlights
Bezeq Fixed-Line - Q3-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA(1) Adjusted Net Profit(1) 4.7% 0.5% 3.8% 1,037 1,052 1,096 1,067 1,086 640 636 674 645 643 228 231 256 247 237 62% 60% 61% 60% 59% Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q
Slide 12: Bezeq Fixed-Line - 9M-2022 Financial Highlights
Bezeq Fixed-Line - 9M-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA(1) Adjusted Net Profit(1) 3.8% 0.1% 3.4% 3,130 3,249 1,960 1,962 766 740 63% 60% 64% 9M-2021 9M-2022 9M-2021 9M-2022 9M-2021 9M-2022 % - Adjusted EBITDA margin CapEx Free Cash Flow • 4% top-line growth in 9M-2022
Slide 13: Bezeq Fixed-Line | Broadband Internet
Bezeq Fixed-Line | Broadband Internet Broadband Revenues (NIS m) Retail Broadband Lines (thousands) 11.1% 1.0% • Return to growth in retail . broadband lines 452 1,014 1,023 1,024 1,022 1,024 434 443 • Fiber take-up offsets 407 416 copper churn • Double-digit growth in broadband revenues Q3-2021 Q4-
Slide 14: Continued fiber deployment with increased take-up focus
Continued fiber deployment with increased take-up focus Homes Passed (thousands) Fiber Take Up (thousands) 1,308 1,442 1,477 51 1,064 1,193 40 40 37 848 28 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 As of reporting Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 date Focus on fiber take up Customers with Be ro
Slide 15: Fixed-Line - Data, Telephony and Cloud & Digital Revenues
Bezeq Fixed-Line - Data, Telephony and Cloud & Digital Revenues | NIS millions Transmission & Data Cloud & Digital 4.8% 3.8% 270 286 287 • Continued growth in 273 283 83 83 80 80 81 revenues from the business sector • Increase in other revenues mainly due to infrastructure Q3-2021 Q4-2021 Q1-2022 Q2
Slide 16: Fixed-Line - Expenses Development
Bezeq Fixed-Line - Expenses Development | NIS millions Salaries Operating Expenses 2.1% 22.1% • Increase in salaries mainly due to employee 187 178 179 199 recruitment relating to 237 231 246 245 242 fiber project 163 • Increase in operating expenses mainly due to higher subcontractor and materials
Slide 17: Bezeq Fixed-Line | Summary
Bezeq Fixed-Line | Summary Record fiber take-up Growth in broadband of 51k in Q3-22 revenues offset impact of MOC telephony tariff reduction Increase in fiber customer Growth in business sector penetration with continued driven by increased wide spread deployment demand for data and communications s
Slide 18: Pelephone | Q3-2022 Summary
Pelephone | Q3-2022 Summary Sixth consecutive quarter with year-over-year increase in service revenues driven by recovery in roaming revenues, increase in subscribers and growth in 5G subscriber plans Adjusted EBITDA grew 23% to NIS 205 million and Adjusted Net Profit increased 129% to NIS 55 millio
Slide 19: Pelephone - Q3-2022 Financial Highlights
Pelephone - Q3-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA(1) Adjusted Net Profit(1) 12.4% 22.8% 129.2% 205 55 55 541 602 600 599 608 167 168 185 187 45 124 178 163 153 141 24 23 31% 28% 31% 31% 34% 417 424 437 446 467 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-
Slide 20: Pelephone - 9M-2022 Financial Highlights
Pelephone - 9M-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA(1) Adjusted Net Profit(1) 7.1% 24.1% 195.0% 1,687 1,807 577 465 155 28% 32% 53 9M-2021 9M-2022 9M-2021 9M-2022 9M-2021 9M-2022 % - Adjusted EBITDA margin CapEx Free Cash Flow • Service revenue growth, significant improv
Slide 21: Pelephone - Continued Turnaround in Service Revenues
Pelephone - Continued Turnaround in Service Revenues | NIS millions 446 446 467 437 60 430 424 417 416 417 450 405 409 394 396 396 392 50 45 400 40 350 COVID 37 outbreak 28 20 300 21 15 250 0 (8) (3) 200 (14) (12) (13) (21) (20) -20 150 100 (36) -40 50 (50) 0 -60 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2
Slide 22: Pelephone | Key Operational Metrics
Pelephone | Key Operational Metrics Subscribers (Thousands) ARPU (NIS) 5.0% 5.5% 2,547 2,576 2,583 2,636 2,675 57 57 58 55 55 473 480 490 514 538 2,074 2,096 2,093 2,122 2,137 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Postpaid Prepaid Net subscriber adds of 39k
Slide 23: yes | Continued subscriber growth and migration to IP
yes | Continued subscriber growth and migration to IP Net subscriber growth of 7.5k in Q3-22, Agreement with leading international with 12k new subscribers since the content providers – Disney+, Discovery+ beginning of the year; highest quarterly subscriber growth since 2014 yes continues to lead in
Slide 24: yes - Q3-2022 Financial Highlights
yes - Q3-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA(1) Adjusted Net Profit (Loss)(1) 0.9% 29.4% 1 318 322 316 316 315 68 69 59 63 (1) 48 (10) (7) 21% 21% 19% 20% 15% (21) Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-2022 Q2
Slide 25: yes - 9M-2022 Financial Highlights
yes - 9M-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA* Adjusted Net Loss* 0.1% 13.7% 948 947 197 170 (29) (29) 21% 18% 9M-2021 9M-2022 9M-2021 9M-2022 9M-2021 9M-2022 % - Adjusted EBITDA margin CapEx Free Cash Flow • Stable revenues and Adjusted Net Loss 8.8% • Free cash flow in
Slide 26: yes | Key Operational Metrics
yes | Key Operational Metrics ARPU (NIS) Subscribers (Thousands) 3.2% 2.7% 188 190 560 563 564 567 575 186 184 182 198 226 253 280 307 362 337 311 287 268 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Satellite subscribers IP subscribers* • Net subscriber growth of
Slide 27: Bezeq International | Focus on Business Solutions
Bezeq International | Focus on Business Solutions – A Significant Operator in a Growing Market Revenues grew 8.4%, Adjusted Focus on expansion of ICT activities EBITDA increased 4.0% and for B2B market Adjusted Net Profit grew 111.1% Growth in cloud solutions among Reduction in consumer ISP activity
Slide 28: Bezeq International - Q3-2022 Financial Highlights
Bezeq International - Q3-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA* Adjusted Net Profit (Loss)* 8.4% 4.0% 111.1% 328 15 19 287 307 302 311 9 50 49 46 52 3 35 17% 15% 11% 15% 17% (4) Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q3-2021 Q4-202
Slide 29: Bezeq International - 9M-2022 Financial Highlights
Bezeq International - 9M-2022 Financial Highlights | NIS millions Revenues Adjusted EBITDA* Adjusted Net Profit* 1.2% 13.6% 130.8% 909 920 154 133 30 13 17% 15% 9M-2021 9M-2022 9M-2021 9M-2022 9M-2021 9M-2022 % - Adjusted EBITDA margin CapEx Free Cash Flow • Increase in revenues due to growth in rev
Slide 30: Bezeq Group | Key Takeaways
Bezeq Group | Key Takeaways Record take up of fiber Revenue growth of 12% in customers and Pelephone and 5% in continued growth in Bezeq Fixed-Line retail broadband ARPU yes launched TV + Bezeq Subscriber growth in fiber bundle Pelephone and yes Continued decrease in net Roaming recovery and debt, c
Slide 31: Thank You!
Thank You! For more information please visit us ir.bezeq.co.il
Bezeq The Israel Telecommunication — Q3 2022 Earnings Presentation on 6ix