Partner Communications Co. Ltd. · TASE:PTNR

Partner Communications — Q2 2013 Earnings Presentation

30 slides from Partner Communications's earnings presentation, Aug 28, 2013

  1. Slide 1: Company presentation Q2 2013 Results

    Partner Communications Company Ltd. Company presentation Q2 2013 Results 1 August 28, 2013

  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

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

  4. Slide 4: 1. Partner Highlights

    1. Partner Highlights 4

  5. Slide 5: At a Glance

    At a Glance Strong A leading communications 29% 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 Multi-Service Network, base Communications LTE Ready and Media group 5

  6. Slide 6: Q2 2013 Financial and Operational Highlights

    Q2 2013 Financial and Operational Highlights  Revenues of NIS 1,130 million ($ 312 million)  Service Revenues of NIS 950 million ($ 263 million)  Equipment Revenues of NIS 180 million ($ 50 million)  EBITDA* of NIS 280 million ($ 77 million), 25% of total revenues  Net profit of NIS 20 million

  7. Slide 7: Ownership Structure

    Ownership Structure  S.B. Israel Telecom Ltd. is an affiliate of Saban Capital Group, Inc. ("SCG"). SCG is a leading private investment firm based in Los Angeles specializing in the media, entertainment, and communication industries.  SCG was established by Mr. Haim Saban, co-founder of Fox Family

  8. Slide 8: 2. The Israeli Telecommunications Market

    2. The Israeli Telecommunications Market 8

  9. Slide 9: Main Regulatory Actions

    Main Regulatory Actions* Increasing Financial sanctions MOC has published a competition - two on licensees that consultation new operators and violate their license suggesting a tariff of three MVNOs conditions 0.99 agora per minute for fixed line interconnection. MOC published Reduction in cellular

  10. Slide 10: 3. Financial and Operational Performance

    3. Financial and Operational Performance 10

  11. Slide 11: Q2 2013 Financial Highlights

    Q2 2013 Financial Highlights in NIS millions Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Revenues 1,428 1,315 1,258 1,144 1,130 Cost of Revenues 1,000 934 969 901 878 Gross Profit 428 381 289 243 252 S,G&A 213 192 160 171 171 Other income 30 28 26 23 21 Operating Profit 245 217 155 95 102 Financial Cost

  12. Slide 12: Cellular Subscribers (In thousands)

    Cellular Subscribers (In thousands) 3,500 3,160 3,176 3,042 2,976 3,000 2,932 2,921 870 894 811 2,500 874 830 818 2,000 1,500 2,231 2,290 2,282 1,000 2,102 2,102 2,103 500 0 2009 2010 2011 2012 Q1'13 Q2'13 Post-paid Pre-paid 12 * Cellular subscribers at the end of the period

  13. Slide 13: Fixed Line Subscribers (In thousands)

    Fixed Line Subscribers (In thousands) 800 700 632 632 632 618 609 594 587 581 600 572 500 400 292 295 292 285 281 282 288 293 294 300 200 100 0 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Number of Fixed Lines ISP Subscribers 13

  14. Slide 14: Cellular ARPU and MOU

    Cellular ARPU and MOU 150 532 151 500 125 122* 450 111 450 437 100 MOU (minutes) 97 101 ARPU (NIS) 400 75 397 83 364 366 350 50 25 300 - 250 2009 2010 2011 2012 Q2'12 Q2'13 ARPU MOU * The ARPU for 2010 has been restated under the interconnect tariff of 2011, for purposes of comparison 14 MOU- the Co

  15. Slide 15: Quarterly Cellular Churn Rate

    Quarterly Cellular Churn Rate 12% 10.9% 10.4% 10.4% 10% 9.4% 8.9% 8.2% 8.0% 8% 7.2% 6.5% 6% 4% 2% 0% Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 15

  16. Slide 16: Total Revenues (In million NIS)

    Total Revenues (In million NIS) 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 1,428 215 1,130 1,000 180 1,213 950 0 2009 2010 2011 2012 Q2'12 Q2'13 Service Revenues Equipment Revenues 16 Results include 012 Smile from March 2011

  17. Slide 17: EBITDA (In million NIS)

    EBITDA* (In million NIS) 38% 39% 40% 2,500 2,570 35% 31% 2,304 30% 29% 2,178 30% 2,000 25% 25% % total revenues NIS millions 1,500 1,602 20% 1,000 15% 10% 500 423 5% 280 - 0% 2009 2010 2011 2012 Q2'12 Q2'13 EBITDA EBITDA margin * EBITDA represents earnings before interest (finance costs, net), taxes

  18. Slide 18: OPEX (In million NIS)

    OPEX (In million NIS) 952 913 900 889 872 853 800 793 744 720 700 700 600 500 Q2' 11 Q3' 11 Q4' 11 Q1' 12 Q2' 12 Q3' 12 Q4' 12 Q1' 13 Q2' 13 18 OPEX includes cost of service revenues, and selling, marketing and administrative expenses, and excludes depreciation and amortization and impairment charge

  19. Slide 19: Net Debt / EBITDA

    Net Debt / EBITDA* 5,500 3.5 5,000 4,639 3.0 4,500 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 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 Net Debt Net debt / EBITDA * EBITDA represents earnings before

  20. Slide 20: EBITDA - CAPEX (In million NIS)

    EBITDA - CAPEX* (In million NIS) 2,400 2,175 2,000 1,747 1,707 1,600 1,200 1,110 800 400 310 158 - 2009 2010 2011 2012 Q2'12 Q2'13 * EBITDA represents earnings before interest (finance costs, net), taxes, depreciation, amortization (including amortization of intangible assets, deferred expenses-righ

  21. Slide 21: Capex as % Total Revenues

    CAPEX* / Revenues 6,998 7,000 6,674 16% 6,079 6,000 14% 5,572 Capex as % Total Revenues 5,000 12% NIS millions 4,000 11% 10% 9% 9% 8% 3,000 8% 2,000 7% 6% 1,428 6% 1,130 1,000 557 4% 395 471 492 113 122 - 2% 2009 2010 2011 2012 Q2'12 Q2'13 CAPEX Revenues CAPEX margin 21 * Cash capital expenditures i

  22. Slide 22: Free Cash Flow (In million NIS)

    Free Cash Flow (In million NIS) 1,600 1,502 1,400 1,234 1,200 1,082 1,021 1,000 800 600 400 313 287 200 - 2009 2010 2011 2012 Q2'12 Q2'13 22 Free Cash Flow- Cash flows generated from operating activities before interest payments, net of cash flows used for investments activities, after elimination o

  23. Slide 23: EBITDA Evolution Q1'13-Q2'13 (In million NIS)

    EBITDA Evolution Q1’13-Q2’13 (In million NIS) 280 268 Q1 2013 Q2 2013 EBITDA represents earnings before interest (finance costs, net), taxes, depreciation, amortization (including amortization of intangible assets, deferred expenses-right of use, and share based compensation expenses) and impairment

  24. Slide 24: EBITDA Evolution Q2'12-Q2'13 (In million NIS)

    EBITDA Evolution Q2’12-Q2’13 (In million NIS) 423 280 Q2 2012 Q2 2013 EBITDA represents earnings before interest (finance costs, net), taxes, depreciation, amortization (including amortization of intangible assets, deferred expenses-right of use, and share based compensation expenses) and impairment

  25. Slide 25: Balance Sheet, June 30, 2013 (In million NIS)

    Balance Sheet, June 30, 2013 (In million NIS) Assets Liabilities and Equity Cash and cash equivalents 513 Current maturities of Notes payables and loans 332 Trade receivables and other 1,334 Trade payables 765 Inventories 106 Other current liabilities 288 Total Current Assets 1,953 Total Current Lia

  26. Slide 26: Dividend Distribution

    Dividend Distribution 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% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Dividend distributed Buy back One Time 26 No decision regarding d

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

    4. Partner’s Strategic Direction 27

  28. Slide 28: Our Strategy

    Our Strategy Customer Growth in Innovation and Strong Operational centric mobile technological Branding Excellence strategy broadband leadership  Excellence in  Focused  Integration with  Capitalizing on  Innovative customer marketing 012 Smile the rapid products and experience strategy  Reali

  29. Slide 29: In Summary - Why Partner

    In Summary- Why Partner Customer centric Advanced network Strategy Strong Brand Innovation 29

  30. Slide 30: The future is bright. The future is Orange.

    The future is bright. The future is Orange. Ziv Leitman, CFO investors@orange.co.il +972 54 781 4951 Yaffa Cohen-Ifrah, Head of Investor Relations Yaffa.cohenifrah@orange.co.il +972 54 909 9039 Investors’ website: http://www.orange.co.il/en/Investors-Relations/lobby/ 30

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