Partner Communications Co. Ltd. · TASE:PTNR
Partner Communications — Q4 2019 Earnings Presentation
23 slides from Partner Communications's earnings presentation, Mar 26, 2020
Slide 1: Company & Financial Overview
Company & Financial Overview March 26, 2020
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
Company Overview
Slide 4: Partner leading Israeli Telco group
Partner leading Israeli Telco group Strengthens customer reach through growth engines and value Cellular Partner Fiber Partner TV Broadband and Business Solutions 25% MS Over 10% MS ISP operation Leading service provider 2,657K sub. 600K 199K sub.* households reached* * As of March 26, 2020 4
Slide 5: Operating and Financial highlights 2019
Operating and Financial highlights 2019* Cellular Churn Rate Cellular Sub. (thousands) TV sub.** (thousands) Fiber deployment reach** (thousands households) 31% 2,657 199 600 Increase of 11k subs Fastest growing TV platform in Israel Decrease of 4 pp vs. 2018 Service Revenues Adjusted EBITDA FCF bef
Slide 6: Operating and Financial highlights Q4 19
Operating and Financial highlights Q4 19* Cellular Churn Rate Cellular Sub. (thousands) TV sub.** (thousands) Fiber deployment reach** (thousands households) 7.2% 2,657 199 600 Growth of 11k subs Fastest growing TV platform in Israel Third consecutive quarter of declining churn Service Revenues Adju
Slide 7: Cellular – main points
Cellular – main points Advance network Partner More - Value Providing the widest 4G deployment in Strategy & 012 mobile - the country Low cost brand Network sharing agreement with Hot Mobile – Decrease in Opex and Capex of Value offerings to the customer – More the cellular network vs competit
Slide 8: Cellular ARPU & Churn
Cellular ARPU & Churn Consistent decline in churn rate Cellular ARPU (NIS) Cellular churn (%) 38% 35% 31% 62 58 57 57 58 59 56 55 8.5% 8.5% 7.9% 7.7% 7.2% 2017 2018 2019 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 2017 2018 2019 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 8
Slide 9: Partner's Fiber Optic network
Partner's Fiber Optic network Partner is a infrastructure player in the fixed line market Intention to deploy massive coverage of potential households in Israel within approx. 3 years Expected payback period of 7 years OPEX savings - replacing wholesale infr. with independent infrastructure
Slide 10: Partner's Fiber Optic network: EBITDA Impact Sensitivity Analysis
Partner's Fiber Optic network Company EBITDA Impact Sensitivity Analysis (NIS M) Potential Opex saving vs wholesale market payments (NIS per month) 75 80 85 90 95 No. Customers (000s) 45 48 51 54 57 90 96 102 108 114 135 144 153 162 171 180 192 204 216 228 225 240 255 270 285 270 288 306 324 342 10
Slide 11: Presence in over 50% of cities in Israel
Afula Kiryat Mozkin Ashdod Lod Ashkelon Modi’in-Maccabim-Re’ut Bat Yam Netanya Be'er Ya'akov Ness Ziona Be’er Sheva Nesher Bnei Brak Or Yehuda Givat Shmuel Or Akiva Givatayim Pardes Hanna-Karkur Presence in Ganei Tikva Petah Tikva Hod Hasharon Ra'anana over 50% of Herzliya Hadera Rehovot Rosh Ha’Ayi
Slide 12: Super aggregator TV strategy
Strategy of super aggregator as well as offering traditional TV services (Liner channels, VOD etc) Partnership with Netflix, Amazon Prime Video and Spotify Flexible content costs model Potential ARPU growth from additional revenue sources such as programmatic advertisement - Android set top
Slide 13: Partner TV subscriber base
Partner TV subscriber base (EOP, '000s) 250 225 200 175 199 188 150 176 160 125 141 100 122 75 106 83 50 65 25 43 - Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 March 26, 2020 13
Slide 14: Partner's Business Solutions
Partner's Business Solutions Integrated Hybrid Solutions Hosting IT Networking Cellular Integration Wired Telephony International Integration Security Communications 14
Slide 15: Financial Overview
Financial Overview 15
Slide 16: Service Revenues
Service Revenues Increase in revenues from growth engines along side a decline in cellular service revenues erosion leads to an increase in service revenues 658 654 642 NIS million 636 625 624 625 620 Q1 Q2 Q3 Q4 2018 2019 16
Slide 17: Equipment Sales
Equipment Sales Partner aims to increase equipment sales synergetic to its growth engines Equipment sales revenues and gross profit 25% 22% 23% 2 5 % 20% 4 0 0 19% 2 0 % NIS million % total revenues 15 % 189 198 2 00 170 167 139 10 % 5 % 42 39 35 33 37 - 0 % Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Equipment R
Slide 18: Adjusted EBITDA and Adjusted FCF
Adjusted EBITDA and Adjusted FCF Significant CAPEX outlay in new revenue engines of fiber optic network and TV from 2017 Adjusted EBITDA & Adjusted EBITDA* margin (NIS, million) Adjusted Free Cash Flow (before interest) (NIS, million) 40% 2,500 35% 758 28% 2,000 26% 26% 30% 599 24% 22% 21% 25% 1,500
Slide 19: Net Debt decreased by ~37% in three years
Net Debt decreased by ~ 37% in three years Repayment Schedule Notes* & Loans (NIS, million) Debt/Net Debt (NIS, billion) 5.4 Receipt of NIS 13 M* in February 2020 Expected receipt of up to NIS 89 M** 5.2 and expected receipt of up to NIS 74 M** of option warrants exercise in 4.7 of option warrants e
Slide 20: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA* 1.3 1.3 1.3 1.2 1.2 1.1 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 * Notes payable and borrowings less cash & cash equivalents (incl. ST deposits) divided by Adjusted EBITDA for the last 4 quarters. Adjusted EBITDA figures from 2019 include impact of adoption of IFRS 16 (NIS 40
Slide 21: Partner's strengths
Partner’s strengths Strong Widest 4G coverage, leading customer service, network Foundations sharing agreement, more than 22 hundred kilometers of fiber optics Defined Transforming into a Total Telecommunications Group, diversified revenue sources from private and business customers, increasing digi
Slide 22: IR contacts
IR contacts Tamir Amar CFO +972 (54) 781 4951 Liat Glazer Shaft Head of Investor Relations & Corporate Projects +972 (54) 781 5051 investors@partner.co.il Investor website: www.partner.co.il/en/Investors-Relations/lobby
Slide 23: Thank you
Thank you
Partner Communications Company — Q4 2019 Earnings Presentation on 6ix