Partner Communications Co. Ltd. · TASE:PTNR

Partner Communications — Q1 2013 Earnings Presentation

31 slides from Partner Communications's earnings presentation, May 22, 2013

  1. Slide 1: Company presentation Q1 2013 Results

    Partner Communications Company Ltd. Company presentation Q1 2013 Results May 22, 2013 1

  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: Q1 2013 Financial and Operational Highlights

    Q1 2013 Financial and Operational Highlights  Revenues of NIS 1,144 million ($ 314 million)  Service Revenues of NIS 961 million ($ 263 million)  Equipment Revenues of NIS 183 million ($ 50 million)  EBITDA* of NIS 268 million ($ 73 million), 23% of total revenues  Net profit of NIS 31 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: Telecommunications Market - 2012-2013

    Telecommunications Market - 2012-2013 Intense Regulatory competition in the changes cellular market MOC decision Increased regarding the competition in the implementation of ISP market wholesale market in the Fixed-line 9

  10. Slide 10: 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

  11. Slide 11: 3. Financial and Operational Performance

    3. Financial and Operational Performance 11

  12. Slide 12: Q1 2013 Financial Highlights

    Q1 2013 Financial Highlights in NIS millions Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Revenues 1,571 1,428 1,315 1,258 1,144 Cost of Revenues 1,128 1,000 934 969 901 Gross Profit 443 428 381 289 243 S,G&A 222 213 192 160 171 Other income 27 30 28 26 23 Operating Profit 248 245 217 155 95 Financial Co

  13. Slide 13: Cellular Subscribers (In thousands)

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

  14. Slide 14: Fixed Line Subscribers (In thousands)

    Fixed Line Subscribers (In thousands) 800 700 632 632 632 618 609 594 587 581 600 500 400 292 295 292 285 281 282 288 293 300 200 100 0 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Number of Fixed Lines ISP Subscribers 14

  15. Slide 15: Cellular ARPU and MOU

    Cellular ARPU and MOU 500 151 150 496 125 122* 450 111 450 424 101 100 97 400 ARPU (NIS) 397 82 75 364 366 350 50 300 25 - 250 2009 2010 2011 2012 Q1'12 Q1'13 ARPU MOU 15 * The ARPU for 2010 has been restated under the interconnect tariff of 2011, for purposes of comparison

  16. Slide 16: Quarterly Cellular Churn Rate

    Quarterly Cellular Churn Rate 12% 10.9% 10.4% 10.4% 10% 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 16

  17. Slide 17: 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 1,571 330 1,144 1,000 183 1,241 961 0 2009 2010 2011 2012 Q1'12 Q1'13 Service Revenues Equipment Revenues 17 Results include 012 Smile from March 2011

  18. Slide 18: EBITDA (In million NIS)

    EBITDA* (In million NIS) 38% 39% 40% 2,500 2,570 35% 31% 2,304 29% 2,178 28% 30% 2,000 23% 25% % total revenues NIS millions 1,500 1,602 20% 1,000 15% 10% 500 438 5% 268 - 0% 2009 2010 2011 2012 Q1'12 Q1'13 EBITDA EBITDA margin * EBITDA represents earnings before interest (finance costs, net), taxes

  19. Slide 19: OPEX (In million NIS)

    OPEX (In million NIS) 952 913 900 889 872 853 800 793 744 720 700 600 500 Q2' 11 Q3' 11 Q4' 11 Q1' 12 Q2' 12 Q3' 12 Q4' 12 Q1' 13 19 OPEX includes cost of service revenues, and selling, marketing and administrative expenses, and excludes depreciation and amortization and impairment charges

  20. Slide 20: Net Debt / EBITDA

    Net Debt / EBITDA 5,500 3.5 5,000 4,639 3.0 4,500 2.5 4,000 3,812 2.5 NIS millions Net Debt / EBITDA 3,622 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 Net Debt Net debt / EBITDA 20 Net Debt at the end of the period EBITDA for the

  21. Slide 21: EBITDA - CAPEX (In million NIS)

    EBITDA - CAPEX* (In million NIS) 2,400 2,175 2,000 1,747 1,707 1,600 1,200 1,110 800 400 305 138 - 2009 2010 2011 2012 Q1'12 Q1'13 21 * Cash capital expenditures in fixed assets including intangible assets but excluding capitalized subscriber acquisition and retention costs, net,

  22. Slide 22: CAPEX / 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 11% 4,000 10% 9% 9% 8% 3,000 8% 2,000 7% 1,571 6% 6% 1,144 1,000 557 4% 395 471 492 133 130 - 2% 2009 2010 2011 2012 Q1'12 Q1'13 CAPEX Revenues CAPEX margin 22 * Cash capital expenditures i

  23. Slide 23: 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 1,000 800 600 400 223 203 200 - 2009 2010 2011 2012 Q1'12 Q1'13 23 Free Cash Flow- Cash flows generated from operating activities before interest payments, net of cash flows used for investments activities, after elimination o

  24. Slide 24: EBITDA Evolution Q4'12-Q1'13 (In million NIS)

    EBITDA Evolution Q4’12-Q1’13 (In million NIS) 340 268 Q4 2012 Q1 2013 24

  25. Slide 25: EBITDA Evolution Q1'12-Q1'13 (In million NIS)

    EBITDA Evolution Q1’12-Q1’13 (In million NIS) 438 268 Q1 2012 Q1 2013 25

  26. Slide 26: Balance Sheet, March 31, 2013 (In million NIS)

    Balance Sheet, March 31, 2013 (In million NIS) Assets Liabilities and Equity Cash and cash equivalents 739 Long term borrowings, current maturities 306 Trade receivables and other 1,426 Trade payables 869 Inventories 152 Other current liabilities 328 Total Current Assets 2,317 Total Current Liabilit

  27. Slide 27: 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

  28. Slide 28: 4. Partner's Strategic Direction

    4. Partner’s Strategic Direction 28

  29. Slide 29: 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

  30. Slide 30: In Summary - Why Partner

    In Summary- Why Partner Customer centric Advanced network Strategy Strong Brand Innovation 30

  31. Slide 31: 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/ 31

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