Partner Communications Co. Ltd. · TASE:PTNR

Partner Communications — Q3 2013 Earnings Presentation

31 slides from Partner Communications's earnings presentation, 2013

  1. Slide 1: Company Presentation Q3 2013 Results

    Company Presentation 1 Q3 2013 Results

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement - This presentation includes forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the US Private Securities Litigation Refo

  3. Slide 3: Agenda

    1. Partner Highlights 2. The Israeli Telecommunications Market \ 3. Financial and Operational Performance 4. Partner’s Strategic Direction

  4. Slide 4: 4

    4

  5. Slide 5: At a Glance

    At a Glance Strong A lestellie 29% communications . brand and group operating estimated market under the “orange” cellular and 012 Smile presence brands market share Strong Evolving into High Speed . a diversified subscriber -aitomrie= Network, base Communications LTE Ready and Media group 5

  6. Slide 6: Q3 2013 Key Financial Highlights

     Revenues  Service Revenues  Equipment Revenues  Adjusted EBITDA*  Net profit  Free Cash Flow (before interest)  Cellular ARPU  Cellular Churn 6

  7. Slide 7: Partner's Ownership Structure

      Partner’s Ownership Structure 15.72% 1.40% 30.87% 2.93% 3.25% S.B. Israel Telecom Scailex Suny Leumi Partners 45.83% Israeli Holders Public 7 As of October 31, 2013

  8. Slide 8: 2. The Israeli Telecommunications Market

    2. The Israeli Telecommunications Market

  9. Slide 9: Main Regulatory Developments

    Main Regulatory Increased Fixed line . . F competition - two interconnection rate to Financial sanctions new operators and be reduced to 0.01 ch Teeinisees Wel four MVNOs shekel per min. from _ Violate their license Dec 2013 conditions MOC published Reduction in cellular IEC fiber optic project- the

  10. Slide 10: 3. Financial and Operational Performance

    3. Financial and Operational Performance

  11. Slide 11: Quarterly Income Statement in NIS millions

    in NIS millions Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Revenues 1,315 1,258 1,144 1,130 1,118 Cost of Revenues 934 969 901 878 861 Gross Profit 381 289 243 252 257 SG&A 192 160 171 171 167 Other income 28 26 23 21 19 Operating Profit 217 155 95 102 109 Financial Costs, net 68 38 49 71 53 Income Tax

  12. Slide 12: Cellular Subscribers Post-paid and Pre-paid

    3,500 3,160 3,176 3,042 2,976 2,932 2,921 2,950 3,000 870 894 811 2,500 874 830 818 823 2,000 1,500 2,231 2,290 2,282 2,102 2,102 2,103 2,127 1,000 500 0 2009 2010 2011 2012 Q1'13 Q2'13 Q3'13 Post-paid Pre-paid 12

  13. Slide 13: Fixed Lines and ISP Subscribers

    800 700 632 632 618 609 594 587 581 600 572 575 500 400 295 292 285 281 282 288 293 294 295 300 200 100 - Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Number of Fixed Lines ISP Subscribers 13

  14. Slide 14: Cellular ARPU and MOU

    150 151 521 500 125 122 457 450 111 450 100 MOU (minutes) 97 97 ARPU (NIS) 400 75 84 397 50 364 366 350 25 300 - 250 2009 2010 2011 2012 Q3'12 Q3'13 ARPU MOU 14

  15. Slide 15: Cellular Churn Rate

    12% 10.9% 10.4% 10.4% 10% 9.4% 8.9% 8.8% 8.2% 8.0% 8% 7.2% 6% 4% 2% 0% Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 15

  16. Slide 16: Revenues: Service and Equipment

    6,998 7,000 6,674 6,079 1,012 1,774 6,000 5,572 655 5,000 932 4,000 3,000 5,424 5,662 5,224 4,640 2,000 1,315 1,118 165 1,000 167 1,150 951 0 2009 2010 2011 2012 Q3'12 Q3'13 Service Revenues Equipment Revenues 16

  17. Slide 17: Adjusted EBITDA and Margin

    39% 38% 40% 2,500 2,570 35% 31% 30% 2,304 29% 2,178 30% 2,000 25% 25% % total revenues NIS millions 1,500 1,602 20% 1,000 15% 10% 500 5% 401 284 - 0% 2009 2010 2011 2012 Q3'12 Q3'13 Adjusted EBITDA EBITDA margin 17

  18. Slide 18: Quarterly Trends

    952 900 889 872 853 800 793 744 720 700 696 700 600 500 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 18

  19. Slide 19: Net Debt and Net Debt / EBITDA

    5,500 3.5 5,000 4,639 3.0 4,500 2.7 2.7 2.5 4,000 3,812 2.5 NIS millions Net Debt / EBITDA 3,622 3,446 3,500 3,395 2.4 3,208 2.1 2.0 3,000 2,500 2,102 1.5 2,000 1.3 1,500 1.0 1,000 0.9 0.5 500 - - 2009 2010 2011 2012 Q1'13 Q2'13 Q3'13 Net Debt Net debt / Adjusted EBITDA 19

  20. Slide 20: Free Cash Flow

    2,400 2,175 2,000 1,747 1,707 1,600 1,200 1,110 800 400 276 168 - 2009 2010 2011 2012 Q3'12 Q3'13 20

  21. Slide 21: Capex as % of Total Revenues

    6,998 7,000 6,674 16% 6,079 6,000 14% 5,572 Capex as % of Total Revenues 5,000 12% NIS millions 4,000 10% 10% 9% 10% 3,000 9% 8% 2,000 7% 6% 6% 1,315 1,118 1,000 557 4% 395 471 492 125 116 - 2% 2009 2010 2011 2012 Q3'12 Q3'13 CAPEX Revenues CAPEX margin 21

  22. Slide 22: Cash Flow Metrics

    1,600 1,502 1,400 1,234 1,200 1,082 1,021 1,000 800 600 400 375 273 200 - 2009 2010 2011 2012 Q3'12 Q3'13 22

  23. Slide 23: Operating Profit Bridge Q2 2013 to Q3 2013

    8 12 284 1 280 1 10 10 Q2 2013 Cellular Cellular Service Cellular Service Fixed Line Fixed Line Fixed Line Q3 2013 Equipment Revenues Expenses Equipment Service Service Operating Gross Profit Revenues Expenses Profit 23

  24. Slide 24: Operating Profit Bridge Q3 2012 to Q3 2013

    401 15 154 284 1 29 38 42 Q3 2012 Cellular Cellular Service Cellular Service Fixed Line Fixed Line Fixed Line Q3 2013 Equipment Revenues Expenses Equipment Service Service Operating Gross Profit Revenues Expenses Profit 24

  25. Slide 25: Balance Sheet

    Assets Liabilities and Equity Cash and cash equivalents 779 Current maturities of Notes payables and loans 334 Trade receivables and other 1,251 Trade payables 743 Inventories 84 Other current liabilities 294 Total Current Assets 2,114 Total Current Liabilities 1,371 Trade receivables and other 447

  26. Slide 26: Dividend Distributed and Buy Back

    3,000 200% 98% 180% 2,500 160% 2,000 140% 1,400 120% 1,500 53% 100% 80% 93% 1,000 351 80% 1,091 80% 60% 1,220 500 60% 1,059 841 79% 752 40% 410 33% 350 187 160 - 20% Dividend distributed Buy back One Time % Net Income Dividend Payout (excl. one time and buy back) 26

  27. Slide 27: 4. Partner's Strategic Direction

    4. Partner’s Strategic Direction

  28. Slide 28: Key benefits

    • • • • • • Key benefits: • • • • • • • 28

  29. Slide 29: Excellence in customer experience

     Excellence in  Focused  Integration with  Capitalizing on  Innovative customer marketing 012 Smile the rapid products and experience strategy  Realizing the full increase in services  Advanced  Focus on marketing and demand for  Commitment to quality service service, product ubiquitous net

  30. Slide 30: Why Partner

    30 Why Partner Advanced network Strong Brand Customer centric Strategy Innovation

  31. Slide 31: The future is bright. The future is Orange

    The future is bright. The future is Orange 31

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