Partner Communications Co. Ltd. · TASE:PTNR

Partner Communications — Q4 2013 Earnings Presentation

32 slides from Partner Communications's earnings presentation, March 2014

  1. Slide 1: Company Presentation: Q4 and Annual 2013 Results

    Company Presentation 1 Q4 and Annual 2013 Results

  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

    _ 1. Partner Highlights \ WZ i 2. The Israeli Telecommunications Market gg 3. Financial and Operational Performance 4. Partner’s Strategic Direction

  4. Slide 4: 4

    4

  5. Slide 5: At a Glance

    At a Glance Strong A lestellie 29% communications . 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 -aitomrie= Network, base Communications LTE Ready and Media group 5

  6. Slide 6: Q4 2013 Highlights

     Revenues  Service Revenues  Equipment Revenues  Adjusted EBITDA*  Net profit  Free Cash Flow (before interest)  Cellular ARPU  Cellular Churn 6

  7. Slide 7: Annual 2013 Highlights

     Revenues  Service Revenues  Equipment Revenues  Adjusted EBITDA*  Net profit  Free Cash Flow (before interest)  Cellular ARPU  Cellular Churn 7

  8. Slide 8: Partner's Ownership Structure

      Partner’s Ownership Structure 12.6% 1.4% 30.9% 5.9% S.B. Israel Telecom Scailex Suny Phoenix-Excellence Group Public 49.3% 8 As of January 31, 2014

  9. Slide 9: 2. The Israeli Telecommunications Market

    2. The Israeli Telecommunications Market ll

  10. Slide 10: Main Regulatory Developments

    Main Regulatory Fixed line ; ; ; Increased interconnection rate Financial sanctions competition -two reduced to 0.01 sheke!_ _ 0" licensees that new operators and per min. from violate their license 11 MVNOs Dec 2013 conditions Wholesale market International calls IBC fiber optic project- - MOC publ

  11. Slide 11: 3. Financial and Operational Performance

    3. Financial and Operational Performance

  12. Slide 12: Quarterly and Annual Income Statement

    in NIS millions Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012 2013 Revenues 1,258 1,144 1,130 1,118 1,127 5,572 4,519 Cost of Revenues 969 901 878 861 870 4,031 3,510 Gross Profit 289 243 252 257 257 1,541 1,009 SG&A 160 171 171 167 170 787 679 Other income 26 23 21 19 16 111 79 Operating Profit 155

  13. Slide 13: Cellular Subscribers: Post-paid and Pre-paid

    3,500 3,160 3,176 3,042 2,976 2,932 2,921 2,950 2,956 3,000 870 894 811 2,500 874 830 818 823 823 2,000 1,500 2,231 2,290 2,282 1,000 2,102 2,102 2,103 2,127 2,133 500 0 2009 2010 2011 2012 Q1'13 Q2'13 Q3'13 Q4'13 Post-paid Pre-paid 13

  14. Slide 14: Fixed Lines and ISP Subscribers

    800 700 632 618 609 594 587 581 575 583 600 572 500 400 292 285 288 293 294 295 299 300 281 282 200 100 - Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Number of Fixed Lines ISP Subscribers 14

  15. Slide 15: Cellular ARPU and MOU

    150 539 522 500 483 125 122 450 111 450 100 MOU (minutes) 97 ARPU (NIS) 87 400 75 83 81 397 50 366 350 25 300 - 250 2010 2011 2012 2013 Q4'12 Q4'13 ARPU MOU 15

  16. Slide 16: Cellular Churn Rate

    12% 10.9% 10.7% 10.4% 10.4% 10% 9.4% 8.9% 8.8% 8.2% 8.0% 8% 6% 4% 2% 0% Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 16

  17. Slide 17: Revenues: Service and Equipment

    6,998 7,000 6,674 1,012 1,774 6,000 5,572 5,000 932 4,519 4,000 735 3,000 5,662 5,224 4,640 2,000 3,784 1,258 1,127 1,000 222 205 1,036 922 0 2010 2011 2012 2013 Q4'12 Q4'13 Service Revenues Equipment Revenues 17

  18. Slide 18: Adjusted EBITDA and Margin

    39% 40% 2,500 2,570 35% 31% 29% 2,178 30% 2,000 27% 25% 25% 25% % total revenues NIS millions 1,500 1,602 20% 1,000 15% 1,114 10% 500 5% 340 282 - 0% 2010 2011 2012 2013 Q4'12 Q4'13 Adjusted EBITDA EBITDA margin 18

  19. Slide 19: Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

    900 889 872 853 800 793 744 720 700 696 700 675 600 500 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 19

  20. Slide 20: Net Debt / Adjusted EBITDA

    5,500 3.5 5,000 4,639 3.0 4,500 2.7 2.7 2.7 2.5 4,000 3,812 2.7 2.5 NIS millions Net Debt / Adjusted EBITDA 3,622 3,446 3,500 3,395 2.4 3,208 3,000 3,000 2.0 3,000 2.1 2,500 1.5 2,000 1.3 1,500 1.0 1,000 0.5 500 0 - 2010 2011 2012 2013 Q1'13 Q2'13 Q3'13 Q4'13 Net Debt Net debt / Adjusted EBITDA 20

  21. Slide 21: 2,400 2,175 2,000 1,707 1,600 1,200 1,110 5 - 2010 2011 2012 2013 Q4'12

    2,400 2,175 2,000 1,707 1,600 1,200 1,110 800 639 400 219 175 - 2010 2011 2012 2013 Q4'12 Q4'13 21

  22. Slide 22: Capex as % of Total Revenues

    6,998 7,000 6,674 16% 6,000 14% 5,572 Capex as % of Total Revenues 5,000 12% 4,519 NIS millions 4,000 11% 10% 10% 9% 3,000 9% 8% 2,000 7% 6% 6% 1,258 1,127 1,000 4% 395 471 492 475 121 107 - 2% 2010 2011 2012 2013 Q4'12 Q4'13 CAPEX Revenues CAPEX margin 22

  23. Slide 23: 1,600 1,502 1,400 1,234 1,200 1,082 1,041 1,000 323 278 200 - 2010 2011

    1,600 1,502 1,400 1,234 1,200 1,082 1,041 1,000 800 600 400 323 278 200 - 2010 2011 2012 2013 Q4'12 Q4'13 23

  24. Slide 24: Q4 2013 vs Q3 2013 Adjusted EBITDA Bridge

    284 3 282 19 21 9 9 1 Q3 2013 Cellular Service Fixed Line Intersegment Equipment Operating Other Income Q4 2013 Revenues Service Revenues Gross Profit Service Revenues Elimination Expenses 24

  25. Slide 25: Q4 2013 vs Q4 2012 Adjusted EBITDA Bridge

    340 69 10 282 69 36 9 3 Q4 2012 Cellular Service Fixed Line Intersegment Equipment Operating Other Income Q4 2013 Revenues Service Revenues Gross Profit Service Revenues Elimination Expenses 25

  26. Slide 26: 2013 vs 2012 Adjusted EBITDA Bridge

    1,602 685 32 1,114 471 125 46 71 2012 Cellular Service Fixed Line Intersegment Equipment Operating Other Income 2013 Revenues Service Revenues Gross Profit Service Revenues Elimination Expenses 26

  27. Slide 27: Balance Sheet

    Assets Liabilities and Equity Cash and cash equivalents 481 Current maturities of Notes payables and loans 334 Trade receivables and other 1,129 Trade payables 761 Inventories 93 Other current liabilities 279 Total Current Assets 1,703 Total Current Liabilities 1,374 Trade receivables and other 419

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

    4. Partner’s Strategic Direction 28

  29. Slide 29: Key benefits

    • • • • • • Key benefits: • • • • • • • 29

  30. Slide 30: Excellence in customer experience

     Excellence in  Focused  Integration with  Capitalizing on  Innovative customer marketing 012 Smile the increased products and experience strategy  Realizing the full demand for services  Advanced  Focus on marketing and mobile data  Commitment to quality service service, product services a

  31. Slide 31: Why Partner

    31 Why Partner Advanced network Strong Brand Customer centric Strategy Innovation

  32. Slide 32: The future is bright. The future is Orange

    The future is bright. The future is Orange 32

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