Partner Communications Co. Ltd. · TASE:PTNR
Partner Communications — Q1 2018 Earnings Presentation
27 slides from Partner Communications's earnings presentation, May 31, 2018
Slide 1: Company and Financial Overview
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 Reform
Slide 3: Company overview
Slide 4: Partner Communications highlights
Partner Communications highlights 2 ee er A leading Israeli telecommunications group established in 1998 = A public company, traded on the NASDAQ & Tel Aviv stock exchanges » } = Saban Capital Group - Controlling shareholder since 2013 Comprehensive telecommunications group serving over 3 million re
Slide 5: Competitive Advantages
Competitive Advantages Cellular network with the widest deployment of LTE/LTE Advance in Israel a Highest growth rate among TV operators in Israel in QI 2018 __ Lowest gross debt level and lowest net debt/EBITDA ratio of all the leading telecommunication groups in Israel Strong and experienced manag
Slide 6: Q1'2018 highlights
QI?’ 2018 highlights* Cellular Post-Paid TV subscribers Revenues (Nis, million) OPEX (nis, mittion) subscribers growth growth (thousands) (thousands) +16 +22 826 498 1% carat UU Op - ~~ - a -1% -4% Adjusted EBITDA Net Profit (NIS, million) (NIS, million) +12% +59 - aS - a * Changes vs. Q4' 2017 ** N
Slide 7: Value added controlling shareholder
Value added controlling shareholder Saban Capital Group @) SABAN Capital Group, Inc Shareholders Founded by Haim Saban, actively manages a globally diversified portfolio of investments across public equities, credit, alternative investments, and real property assets. Among its current and prior inve
Slide 8: Partner's strategy
Partner’s strategy Enabling the connected life anywhere, anytime and on any device Meet the full spectrum of our customers’ Poa Comprehensive communications needs Solutions for businesses Be truly digital in how we think, act and collaborate At the forefront of innovation in the world of infrastruct
Slide 9: Communications Group with a full offering to the Private & Business Customer
Communications Group with a full offering to the Private & Business Customer Cellular Services Equipment (Mobile & Fixed) Equipment repair services Internet (Broadband + ISP) Telephony International Calls Value added services (Cloud, cyber..) TV Cellular Services Broadband Equipment (Mobile & Fixed)
Slide 10: Market changing TV offering adopted by the consumer at a fast pace
Market changing TV offering adopted by the consumer ata fast pace Potential ARPU growth through expansion of content packages/apps Flexible content costs model Collaboration with Netflix - easy and convenient user experience and direct billing by Partner Collaboration with Amazon Prime Video - first
Slide 11: Partner TV subscriber base
Partner TV subscriber base (EOP, ‘000 households) Q3'17 Q4'17 Qlis May-18 11
Slide 12: Fiber deployment: Aiming for the mass market
Fiber deployment: Aiming for the mass market Expanding existing fiber optic network to residential neighborhoods Deployment throughout the country, starting with higher ROI areas Reaching 27 cities as of today and intend to be present in over half of the cities in Israel by year end Accelerating dep
Slide 13: Cellular ARPU (NIS)
Cellular ARPU (Nis) 2015, 2016 2017 Qni7 Q217 Q317 Q417 Qris * Since Q2 2016 ARPU doesn’t include Hot Mobile’s hosting revenues 13
Slide 14: 11 consecutive quarterly growth in Post-Paid cellular subscribers
11** consecutive quarterly growth in Post-Paid cellular subscribers Cellular Subscriber Base (EoP,'000) 2,718 2,686 2,674 | 2,658 2,662 2,677 2,674 2,667 562 445 354 | 399 389 371 354 331 q +16 ' +33 +14 a 7 + ahi : ' 2015 2016 2017 Qli7 Q2'17 Q3'17 Q4'17 QTls ™ Post-paid ™ Pre-paid 14
Slide 15: Network sharing agreement with HOT Mobile
Network sharing agreement with HOT Mobile 7K Cost savings on the one hand... ..while enabling network differentiation asa result of separate core network Key benefits a Examples = Savings in CAPEX and OPEX = lOT network = Inherent hedging of OPEX with the growth of Hot Mobile * Wificalling = Reducti
Slide 16: Equipment: improving profit and quality of sales
Equipment: improving profit and quality of sales Equipment revenues and gross profit 27% Q4'l6 Qii7 Q217 Q317 Q4'17 Qiis — — = Equipment Revenues Equipment Gross Profit =*=Equipment Gross Margin 16 °
Slide 17: Despite launch of Partner TV service, OPEX remains stable
Despite launch of Partner TV service, OPEX remains stable OPEX (NIS, million) 889 meee saa See 675 ee 630 gg > 570 519 Tl : : : | Q4'1l Q4i2 Q4'13 Q4'14 Q4'15 Q4'16 Qli7 Q2'17 Q317 Q417 Qlig * OPEX is a Non-GAAP financial measures. Please see “Use of Non-GAAP Financial Measures” in the quarterly PR.
Slide 18: Financial overview
Slide 19: Q1'2018 Summary
QT’ 2018 Summary Ql'18 Ql'17 YoY change Total revenue (NIS, million) 826 803 +3% Service revenue (NIS, million) 625 640 -2% Equipment revenue (NIS, million) 201 163 +23% OPEX* (NIS, million) 498 478 +4% Adjusted EBITDA* (NIS, million) 177 251 -29% Adjusted EBITDA margin* 21% 31% -10 ppt Profit (NIS,
Slide 20: Adjusted EBITDA and FCF
Adjusted EBITDA and FCF Adjusted EBITDA* 8 Adjusted EBITDA margin Adjusted Free Cash Flow (before interest) (NIS, million) (NIS, million) 40% ! 28% ee i ano 25% ° H ae — ast ‘00 20% 758 ' 1,000 15% 520 566 599 ' ; 3 917 10% ' s00 876 834 . H 2 1 | ; 2), ltt |, | 26 21 ash ase zole aaW/ iw qn 2014 «=
Slide 21: Net Debt decreased by ~55% in two years
Net Debt decreased by ~ 55% in two years Debt/Net Debt (nis, bittion) —*=DEBT —®=NETDEBT Debt figures for year-end 2018 include early repayment of three loans and a deferred issuance of Notes Series F in an amount of NIS150 million in December 2018. Debt figures for year-end 2018 are calculated acco
Slide 22: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA* 2.0 1.8 16 1.2 - - L : : ' i i || | Q3'16 Q4'16 Qii7 Q2'17 Q3'17 Q4'17 Qiis *Notes payable and borrowings less cash & cash equivalents (incl. ST deposits) divided by Adjusted EBITDA for the last 4 quarters Adjusted EBITDA figures from 2017 include impact of adoption of I
Slide 23: Balance sheet as of March 31, 2018
Balance sheet a/o March 31, 2018 Assets NIS million Cash and cash equivalents & ST deposits 703 Trade receivables and other 862 Inventories 107 Trade receivables and other 445 Property and equipment 1,177 Goodwill 407 Intangible assets 678 Liabilities and Equity NIS million Current maturities of not
Slide 24: Improved results in the equipment sales operation
Improved results in the equipment sales operation Stabilization in the mobile market alongside continues efficiency measures Fixed-line business market + retail market (wholesale, telephony & fiber) TV market and Triple offerings - operating asa full communications group 24
Slide 25: Partner's strengths
OOOO Strong Foundations Defined Strategy Billing Relations Innovative DNA Partner’s strengths Widest 4G coverage, leading customer service, network sharing agreement, more than 16 hundred kilometers of fiber optics Transforming into a Total Telecommunications Group, diversified revenue sources from
Slide 26: Investor relations contacts
CFO +972 (54) 781 4951 Head of Investor Relations & Corporate Projects +972 (54) 781 5051 investors@partner.co.il www.partner.co.iVen/Investors-Relations/Lobby
Slide 27: Thank you
Partner Communications Company — Q1 2018 Earnings Presentation on 6ix