Partner Communications Co. Ltd. · TASE:PTNR

Partner Communications — Q4 2012 Earnings Presentation

35 slides from Partner Communications's earnings presentation, Feb 27, 2013

  1. Slide 1: Company presentation Q4 and Full Year 2012

    Partner Communications Company Ltd. Company presentation Q4 and Full Year 2012 February 27, 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, high Communications LTE Ready and Media group ARPU 5

  6. Slide 6: Q4 2012 Financial Highlights

    Q4 2012 Financial Highlights  Revenues of NIS 1,258 million ($ 337 million)  Service Revenues of NIS 1,036 million ($ 278 million)  Equipment Revenues of NIS 222 million ($ 59 million)  EBITDA of NIS 340 million ($ 91 million), 27% of total revenues  Net profit of NIS 102 million ($ 27 million)

  7. Slide 7: 2012 Financial and Operational Highlights

    2012 Financial and Operational Highlights  Revenues of NIS 5,572 million ($ 1,493 million)  Service Revenues of NIS 4,640 million ($ 1,243 million)  Equipment Revenues of NIS 932 million ($ 250 million)  EBITDA of NIS 1,602 million ($ 429 million), 29% of total revenues  Net profit of NIS 478 m

  8. Slide 8: 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 in 2001 by Mr. Haim Saban, co-founder of Fo

  9. Slide 9: 2. The Israeli Telecommunications Market

    2. The Israeli Telecommunications Market 9

  10. Slide 10: Telecommunications Market in 2012

    Telecommunications Market in 2012 Intense Regulatory competition in the changes cellular market Announcement Increased of wholesale competition in the market in the ISP market Fixed-line 10

  11. Slide 11: Main Regulatory Actions

    Main Regulatory Actions* Increasing Financial sanctions Handset Market competition - two on licensees that Liberalization new operators and violate their license three MVNOs conditions MOC published Reduction in cellular Israel Electric the policy on fixed royalty rate to the Company fiber optic lin

  12. Slide 12: 3. Financial and Operational Performance

    3. Financial and Operational Performance 12

  13. Slide 13: Q4 2012 Financial Highlights

    Q4 2012 Financial Highlights in NIS millions Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 2011 2012 Revenues 1,589 1,571 1,428 1,315 1,258 6,998 5,572 Cost of Revenues 1,131 1,128 1,000 934 969 4,830 4,031 Gross Profit 458 443 428 381 289 2,168 1,541 S,G&A 222 222 213 192 160 915 787 Impact of Impairment

  14. Slide 14: Cellular Subscribers (In thousands)

    Cellular Subscribers (In thousands) 3,160 3,176 3,042 2,976 870 894 811 874 2,231 2,290 2,282 2,102 2009 2010 2011 2012 Post-paid Pre-paid 14

  15. Slide 15: Fixed Line Subscribers (In thousands)

    Fixed Line Subscribers (In thousands) 632 632 632 632 618 609 594 587 288 292 295 292 285 281 282 288 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Number of Fixed Lines ISP Subscribers 15

  16. Slide 16: Cellular ARPU and MOU

    Cellular ARPU and MOU 500 151 150 483 125 122* 450 111 450 106 100 97 MOU (minutes) 400 407 87 ARPU (NIS) 397 75 364 366 350 50 300 25 - 250 2009 2010 2011 2012 Q4'11 Q4'12 ARPU MOU 16 * The ARPU for 2010 has been restated under the interconnect tariff of 2011, for purposes of comparison

  17. Slide 17: Quarterly Cellular Churn Rate

    Quarterly Cellular Churn Rate 10.9% 10.4% 8.9% 8.2% 8.0% 7.3% 7.2% 6.5% 6.0% 5.2% 5.1% 5.0% 4.8% 4.8% 3.9% 4.2% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 17

  18. Slide 18: Total Revenues (In million NIS)

    Total Revenues (In million NIS) 6,998 6,674 6,079 987 1,774 633 5,572 932 5,446 5,661 5,224 4,640 1,589 303 1,258 222 1,286 1,036 2009 2010 2011 2012 Q4'11 Q4'12 Service Revenues Equipment Revenues 18 Results include 012 Smile from March 2011

  19. Slide 19: EBITDA (In million NIS)

    EBITDA (In million NIS) 38% 39% 40% 2,500 2,570 35% 31% 30% 2,304 29% 2,178 30% 2,000 27% 25% % total revenues NIS millions 1,500 1,602 20% 1,000 15% 10% 500 478 5% 340 - 0% 2009 2010 2011 2012 Q4'11 Q4'12 EBITDA EBITDA margin 19 Results include 012 Smile from March 2011

  20. Slide 20: OPEX (In million NIS)

    OPEX (In million NIS) 952 913 889 872 853 793 744 Q2' 11 Q3' 11 Q4' 11 Q1' 12 Q2' 12 Q3' 12 Q4' 12 20 OPEX includes cost of service revenues, and selling, marketing and administrative expenses, and excludes depreciation and amortization and impairment charges

  21. Slide 21: Net Debt / EBITDA

    Net Debt / EBITDA 5,500 3.5 5,000 4,639 3.0 4,500 4,000 3,812 2.5 NIS millions Net Debt / EBITDA 3,500 3,395 2.3 2.4 2,102 2.0 3,000 2,500 1.5 2,000 1.3 1.0 1,500 1,000 0.9 0.5 500 - - 2009 2010 2011 2012 Net Debt Net debt / EBITDA 21

  22. Slide 22: EBITDA – CAPEX (In million NIS)

    EBITDA – CAPEX* (In million NIS) 2,175 1,747 1,707 1,110 347 219 2009 2010 2011 2012 Q4'11 Q4'12 22 * Investment in fixed assets including intangible assets excluding capitalized subscriber acquisition and retention costs, and excluding the cost of acquisition of 012 Smile, net

  23. Slide 23: 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 10% 9% 9% 8% 3,000 2,000 7% 6% 6% 1,000 557 4% 395 471 492 - 2% 2009 2010 2011 2012 CAPEX Revenues CAPEX margin 23 * Investment in fixed assets including intangible assets excluding c

  24. Slide 24: Free Cash Flow (In million NIS)

    Free Cash Flow (In million NIS) 1,502 1,234 1082 1,021 292 323 2009 2010 2011 2012 Q4'11 Q4'12 24 Free Cash Flow- Cash flows generated from operating activities before interest payments, net of cash flows used for investments activities, after elimination of cash flows used for the acquisition of 01

  25. Slide 25: EBITDA Evolution Q3'12-Q4'12

    EBITDA Evolution Q3’12-Q4’12 (In million NIS) 401 340 Q3 2012 Q4 2012 25

  26. Slide 26: EBITDA Evolution Q4'11-Q4'12

    EBITDA Evolution Q4’11-Q4’12 (In million NIS) 478 340 Q4 2011 Q4 2012 26

  27. Slide 27: EBITDA Evolution 2011 - 2012

    EBITDA Evolution 2011 - 2012 (In million NIS) 2,178 1,602 2011 2012 27

  28. Slide 28: Balance Sheet, December 31, 2012

    Balance Sheet, December 31, 2012 (In million NIS) Assets Liabilities and Equity Cash and cash equivalents 548 Long term borrowings, current maturities 306 Trade receivables and other 1,474 Trade payables 936 Inventories 98 Other current liabilities 283 Total Current Assets 2,120 Total Current Liabil

  29. Slide 29: Dividend Distribution

    Dividend Distribution 3,000 200% 98% 180% 2,500 160% 2,000 140% 1,400 120% 1,500 53% 80% 100% 93% 1,000 351 80% 1,091 80% 60% 60% 1,220 500 1,059 841 79% 752 40% 410 350 33% 187 160 ‐ 20% 2005 2006 2007 2008 2009 2010 2011 2012 Dividend distributed Buy back One Time % Net Income Dividend Payout (exc

  30. Slide 30: 4. Partner's Strategic Direction

    4. Partner’s Strategic Direction 30

  31. Slide 31: 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

  32. Slide 32: Orange ultranet

     Orange ultranet High speed browsing up to 42 MB 32

  33. Slide 33: HD Voice: The next generation

     Orange ultranet HD Voice The next generation of voice quality 33

  34. Slide 34: In Summary - Why Partner

    In Summary- Why Partner Customer centric Advanced network Strategy Strong Brand Innovation 34

  35. Slide 35: 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/ 35

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