Partner Communications Co. Ltd. · TASE:PTNR
Partner Communications — Q1 2019 Earnings Presentation
25 slides from Partner Communications's earnings presentation, May 30, 2019
Slide 1: Company & Financial Overview
Company & Financial O v e r vie w May 30, 2019
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
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Slide 4: Partner Highlights
Partner Highlights ▪ A comprehensive Israeli communications group ▪ Saban Capital Group - Controlling shareholder since 2013 ▪ More than 3 million connections in all activities ▪ Fastest growing TV platform in Israel +19K sub. in Q1 2019 (over 8% MS) ▪ Fastest deployment of Fiber Optic network in Is
Slide 5: Partner Group LOB
Partner Group LOB Cellular Broadband & Fiber Business TV Solutions 5
Slide 6: Partner leading Israeli Telco group
Partner leading Israeli Telco group More than 3 million connections in all activities Partner Fiber Partner TV Cellular Broadband and Business Solutions Over 20% fiber Over 8% MS 25% MS ISP operation Leading deployment within 1.5 years service provider +400 K 152 K sub.* 2,620 K sub. households reac
Slide 7: Partner's Fiber Optic network
Partner's Fiber Optic network Fiber deployment: Aiming for the mass market Low deployment cost compared to other Intention to deploy massive coverage of companies in the world potential households in Israel within 3-4 years Speeds of up to 1 Gbps CAPEX relating to F.O network expected to remain stab
Slide 8: Partner's Fiber Optic network
Partner's Fiber Optic network Company EBITDA Impact Sensitivity Analysis (NIS M) Incremental ARPU/Opex Saving (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 8
Slide 9: Presence over 50% of the cities in Israel
Jerusalem Or Yehuda Kfar Saba Or Akiva Lod Ashdod Ness Ziona Ashkelon Nesher Be'er Ya'akov Petah Tikva Beer Sheva Kiryat Ono Bnei Brak Presence over Kiryat Ata Bat Yam Qiryat Gat Givat Shmuel 50% of the Kiryat Yam Givatayim Rosh HaAyin Ganei Tikva cities in Israel Rishon Lezion Hod Hasharon Ramla He
Slide 10: Partner's Cellular network
Partner's Cellular network Providing the widest 4G deployment in the country (Based on benchmark data of Ookla network intelligence during 2018) ▪ Network sharing agreement with Hot Mobile ▪ Completion of cover and call continuity by WiFi calling ▪ First to launch a VoLTE service ▪ Preparing for 5G
Slide 11: Cellular ARPU & Churn
Cellular ARPU & Churn Cellular ARPU (NIS) Cellular churn (%) 40% 38% 35% 65 62 60 58 58 57* 57 56 8.9% 10.1% 8.0% 8.5% 8.5% 2016 2017 2018 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 2016 2017 2018 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 * ARPU for Q2 2018, excluding a one-time provision of NIS 15 million for a class actio
Slide 12: Fastest growing TV platform in Israel
Fastest growing TV platform in Israel ▪ Partnership with Netflix ▪ Collaboration with Amazon Prime Video ▪ Flexible content costs model ▪ Potential ARPU growth - Android setbox ▪ Internet TV (OTT) - among the world’s best ▪ Competitors will need to adjust technology –massive CAPEX 12
Slide 13: Partner TV subscriber base
Partner TV subscriber base (EOP, '000s) 250 225 200 175 150 125 152 141 100 122 75 106 83 50 65 25 43 - Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 May 30, 2019 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: Infrastructure & IoT Pro
Infrastructure & IoT Pro Machines are the customers of the future Connected & Autonomous Smart Tracking Industrial Smart Smart New Vehicles Home Devices Automation Cities Health Hobbies 15
Slide 16: Financial Overview
Financial Overview 16
Slide 17: 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% 28% 30% 2,000 24% 25% 758 22% 25% 21% 21% 1,500 20%
Slide 18: Net Debt decreased by ~31% in two years
Net Debt decreased by ~ 31% in two years Repayment Schedule Notes & Loans Debt/Net Debt (NIS, billion) a/o March 31, 2019 (NIS, million) 5.4 5.2 4.7 4.4 4.9 4.0 4.6 4.2 3.5 3.4 3.6 3.3 3.8 3.1 2.9 3.4 2.7 3.0 2.7 2.0 1.9 2.6 2.6 1.7 1.6 1.6 2.2 1.4 2.0 1.5 1.1 1.0 1.0 0.9 0.9 DEBT NET DEBT Debt figu
Slide 19: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA* 1.2 1.3 1.3 1.3 1.0 1.1 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 * 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 39
Slide 20: Equipment
Equipment Stable profit and quality sales Equipment revenues and gross profit 26% 22% 23% 2 5 % 4 0 0 21% 21% 2 % 0 NI S mi llion % total revenues 1 % 5 201 189 2 0 0 177 168 170 10 % 5 % 43 37 44 42 39 - 0 % Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Equipment Revenues Equipment Gross Profit Equipment Gross Mar
Slide 21: Competitive Advantages
Competitive Advantages Cellular network with the widest deployment of LTE/LTE Advanced in Israel Highest growth rate among TV operators in Israel in 2018 Lowest financial debt level and lowest net debt/EBITDA ratio of all the leading traded communication groups in Israel Strong and experienced manag
Slide 22: 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 23: Company Management
Company Management Adam Chesnoff Isaac Benbenisti Yuval Keinan Tamir Amar Terry Yaskil Zvika Shenfeld Chairman CEO Deputy CEO Chief Financial VP Marketing VP Private Customers Officer Division Liran Dan Raz Bartov Noach Hacker Hadar Vismunski Einat Rom Yakov Truzman VP Strategy & VP Technologies VP
Slide 24: IR contacts
IR contacts T a m i r Am a r CFO +972 (54) 781 4951 L i a t G l a z e r Sh a ft 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 25: Thank you
Thank you
Partner Communications Company — Q1 2019 Earnings Presentation on 6ix