Partner Communications Co. Ltd. · TASE:PTNR
Partner Communications — Q3 2017 Earnings Presentation
30 slides from Partner Communications's earnings presentation, Nov 21, 2017
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 A leading Israeli communication group established in 1998 A public company, traded on the Nasdaq & Tel Aviv stock exchanges Saban Capital Group - Controlling share holder since 2013 Comprehensive communications group serving over 3 million residential and business c
Slide 5: Q3 2017 highlights
Q3 2017 highlights* +9% +54% +184% -50% -50% 239 43 54 0.9 1.0 202 Adjusted Gross profit Net Profit** Net Debt Net Debt/ Adjusted Free EBITDA** Equipment sale (NIS, million) (NIS, billion) Adjusted EBITDA*** Cash Flow (NIS, million) (NIS, million) (NIS, million) * Changesvs. Q3 2016 ** Figures for 2
Slide 6: Value added controlling shareholder
Value added controlling shareholder Saban Capital Group @) SABAN Capital Group, Inc 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 investments in th
Slide 7: Partner's strategy
Partner's strategy Enabling the connected life anywhere, anytime and on any device Meet the full spectrum of our customers’ éae c * . omprehensive communicationsneeds ‘ Ls Solutions for businesses Be truly digital in how we think, act and collaborate Monetize data through enhanced efficiency improve
Slide 8: Why be a Partner Customer?
Why be a Partner Customer ? widest deployment of 4G Guard, security services, network, began deployment storage services of 4.5G, loT pro network, Wi-Fi Calling
Slide 9: Full offering to the Business Customer
= Arange of services to suit different business Full offering to the Business Customer 3 customers = Substantial existing fiber optic network reaching major business parks = Value added fixed & mobile service offerings = Capitalizing on significant market share in the mobile business to increase fix
Slide 10: Partner has the foundations to aggressively penetrate the market
Partner has the foundations to aggressively The Israeli business data market penetrate the market = Substantial size " Existing fiber optic network reaching " Growing in size and offerings business areas, constantly expanding " Highly lucrative " Significant sales and support force * Variety of comm
Slide 11: Full offering to the Private Customer
Full offering to the Private Customer " Offering the consumer a variety of telecommunication services with triple | band + offering " Diversified equipment offerings (products and payment means) = Service platform to fit different consumer needs = Allcommunication services in one bill = Widest LTE c
Slide 12: First to offer private customers FTTH
xX — “wg ~ = _—al \ First to offer private customers FTTH = SS ~~, S = Expanding existing fiber optic network to residential neighborhoods - reaching tens of thousands of households " Offering the consumer speeds of up to 1 GB = Deployment in the center and periphery of Israel, starting by cherry pi
Slide 13: TV offering
TV offering - 30 thousand households in less than 4 months of installations = Competitive price and value = 40 linear channels including Broadcast —rarhner channels, Sport, Children, Lifestyle etc. = VoD with thousands of hours of content = Catch Up of up to two weeks on all channels = 4k open infra
Slide 14: Operational Improvements
- Operational Improvements Offering 360° Unified our Merged our service to fixed-line service systems business Investments activities under toenablea Cost cutting customers -one the Partner optimization brand comprehensive customer view representative for all their needs Expanding our fiber optic co
Slide 15: Following six years of decline, ARPU is stabilizing
Following six years of decline, ARPU is stabilizing Cellular ARPU (Nis) 83 5 . ; 0 86 62 q a 64 2013 2014 2015 2016 Q3'6 Q4'16 qr Q217 Q37 * Since Q2 2016 ARPU doesn’t include Hot Mobile's hosting revenues
Slide 16: Increase in Post-Paid subscriber base & churn rate in a decline trend
Increase in Post-Paid subscriber base & churn rate in a decline trend Cellular Subscriber Base (EOP, 000) Cellular churn rate (Pre-Paid and Post-Paid subscribers) +15 2857 2.78 2693-2686 ener rae : # " , , 2,658 2,662 677 wes TS 705 we i - a 8% 9.7% — gay 98% 9.0% 93% +33 +18 +14 | § +24 [+59 [+26 T
Slide 17: Despite launch of Partner TV service, OPEX remain stable
Despite launch of Partner TV service, OPEX remain stable OPEX (NIS, Million) 889 744 675 630 608 570 570 T T T T T T T | T : T 1 Q4l Q4'12 Q4'13 Q4'4 Q4'15 Q316 Q4'16 Qii7 Q217 Q317 * OPEX is a Non-GAAP financial measures. Please see “Use of Non-GAAP Financial Measures” in the quarterly PR. OPEX fig
Slide 18: Network sharing agreement with HOT Mobile
Network sharing agreement with HOT Mobile . ..while enabling network Cost savings on the one hand... differentiation asa result of separate core network Key benefits Examples Savings in CAPEX and OPEX lOT network Reduction in number of network sites Wifi calling Improved network coverage and capacit
Slide 19: Although we are streamlining, we are:
oe Although we are streamlining, we are: v Leading in customer experience among cellular companies in Israel* v Rated as the fastest mobile network in Israel** v¥ Voted “the best place to work” among Cellular companies** * Marketestsurvey December 2016 ** OpenSignal, The state of LTE: “Partner is th
Slide 20: Financial overview
ah | | Ah \ ‘i a) Financial overview a “i = Sy =*
Slide 21: Q3'17 vs Q3'16 results
Q3'17 Q3'16 YoY change Total revenue (NIS, Million) 826 849 -3% Service revenue (NIS, Million) 666 698 -5% Equipment revenue (NIS, Million) 160 151 +6% OPEX* (NIS, Million) 477 570 -16% Adjusted EBITDA* (NIS, Million) 239 220 +9% Adjusted EBITDA margin* 29% 26% +3 ppt Profit* (NIS, Million) 54 19 +1
Slide 22: Adjusted EBITDA & Adjusted EBITDA margin
Adjusted EBITDA & Adjusted EBITDA margin st Adjusted Free Cash Flow (before interest) (NIS, million) (NIS, million) 40% 2,500 31% 35% 30% 2,000 25% 25% 24% me ae 25% 1,500 20% 15% 10% ~ [=| [| Ee) [=| 0% © r r r r r 1 1,000 . i | Ai Pi eI P 2013, 2014 2015 2016 months ended 9 months ended 2013 2014
Slide 23: Financial activities result in a substantial decline in interest costs
Financial activities result in a substantial decline in interest costs = Q3'l7 finance costs totaled NIS 15 million, a decline of 50% compared to Q3’16 = Net profit in Q3’17 totaled NIS 54 million =" Totaldebt stands at~ NIS2 billion & Net debt stands at ~ NIS 0.9 billion = Net Debt/EBITDA in Q3 201
Slide 24: Debt/Net Debt and Repayment Schedule
Debt/Net Debt nis, bittion) Repayment Schedule Notes & Loans a/o September 30, 2017 (nis, mittion) 54 52 466 436 Loans Notes 316 273 2) 322 443, 109 160 160 = * 2 4 1 i 51 1 oe : i @ es 2017 2018 2019 2020 2021 2022 2023 2024 DEBT —®=NETDEBT Debt figures for year-end 2017 include two loans of NIS 10
Slide 25: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA’ 24 23 2.0 1.8 16 1.2 - - L : T T T T T T QT'l6 Q2'16 Q3'16 Q4'16 QTl7 Q2'17 Q3'17 *Notes payable and borrowings less cash & cash equivalents (incl. ST deposits) divided by Adjusted EBITDA for the last 4 quarters Adjusted EBITDA figures for 2017 include the impact of earl
Slide 26: Balance sheet as of September 30, 2017
Balance sheet a/o September 30, 2017 NIS million Assets Cash and cash equivalents & ST deposits 1,160 Trade receivables and other 921 Inventories 90 Total Current Assets 2,171 Trade receivables and other 378 Property and equipment 1,128 Goodwill 407 Intangible assets 716 Total Long-term Assets 2,629
Slide 27: Outlook
Improved Fixed-line Stabilization in the TV market and results in the business market + mobile market Triple offerings - equipment sale retail market alongsidecontinues operatingasa full operation (wholesale, efficiency measures communication telephony & fiber) group
Slide 28: Strong Foundations
OOOO Strong Foundations Widest 4G coverage, leading customer service, network sharing agreement, more than 16 hundred kilometers of fiber optics Defined Strategy Transforming into a Total Communications Group, diversified revenue sources from private and business customers, increasing digital operat
Slide 29: Investor Relations contacts
Dudu Mizrahi 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.iVen/Investors-Relations/Lobby
Slide 30: Partner
—Partner
Partner Communications Company — Q3 2017 Earnings Presentation on 6ix