Partner Communications Co. Ltd. · TASE:PTNR
Partner Communications — Investor Presentation (November 2021)
48 slides from Partner Communications's investor presentation, November 2021
Slide 1: Welcome to Partner
WELCOME TO PARTNER November 2021 1
Slide 2: Disclaimer
Disclaimer 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 Act of 199
Slide 3: Company
Be arinersc hello future Highlights
Slide 4: Partner's Ecosystem
Partner’s Ecosystem >> The Israeli economy >> The Israeli telecom sector Israel is part of the OECD 4 major players, which is a relatively large number compared to the market size High and growing GDP All 4 players are active in all of the main Stable currency segments – mobile, fixed-line
Slide 5: Major developments in the last years
Partner Major developments in the last 2 years Stabilized the Company following the sudden Achieved business and financial success in the 5G departure of the previous controlling shareholder, frequencies tender, and began initial deployment of the Saban Group Partner’s 5G network Strengthened
Slide 6: Partner's Position and challenges
Partner’s Position and challenges >> Partner is well-positioned : >> It also faces several industry-wide challenges: Wholly owned fiber infrastructure Highly competitive landscape Jointly owned cellular networks Consumer market accustomed to low prices for Large customer base telecom servi
Slide 7: Partner's Strategy
Partner’s Strategy Our main goal is to increase profitability while maintaining growth by focusing on our existing lines of business Mobile – Riding the 5G wave to increase TV – disciplined growth with improved financial revenue and profitability, while maintaining results market share Fixed-l
Slide 8: Meet Partner
ee 5G hello future Partner
Slide 9: Innovative telecom solutions
Innovative telecom solutions We provide a variety of telecom solutions and advanced services to private and B2B customers Cellular Fiber TV B2B Devices Other internet and fixed-line services 9
Slide 10: Partner at a glance
Cellular Internet + ISP 28% market share 181K wholesale & 2,970K subscribers 198K ISP only subscribers Partner Fiber ~30% penetration Partner Devices & equipment Significant retail sales 600K households connected** >180K subscribers ** at a glance* ILS 730M, 42 locations ~2,700 Employees Partner TV
Slide 11: Our values
Our values People- Trust- Simplicity Curiosity Integrity Flexibility oriented worthy 11
Slide 12: Key milestones
Key milestones 1998 2001 2009 2013 2015 2017 2019 2021 Awarded license Listed on TA Hutchison sells Saban Group Partner and HOT Partner TV Saban Group New from Ministry of Stock Exchange controlling becomes Mobile created launched cedes control of management Communications shareholder to controlling
Slide 13: It's all about leadership
It’s all about leadership We have a professional team to propel Partner forward Osnat Ronen Avi Zvi Chairperson of the Board CEO Tamir Amar Yakov Truzman Sarit Hecht Galit Shakalo- Ori Gal Addie Koren Yael Gaoni Yaron Eisenstein Snir Niv Deputy CEO & CFO Deputy CEO - Sales VP, Chief Legal Offenberg
Slide 14: Industry Overview
Se ariner 5G hello future Overview
Slide 15: Strong Israeli economy
Strong Israeli economy One of the most stable and fastest growing economies in the OECD High population growth Consistent GDP growth, a diverse population and a booming high-tech sector 15
Slide 16: Strong economy
Strong economy The Israeli economy has demonstrated resilience, supported by high population growth Israel’s GDP growth outpaces the OECD, even during Covid Key macroeconomic data 5.5% 6.0% 4.5% 4.4% 4.1% 3.7% 2.1% 2.5% 2.6% 2.3% 1.9% 1.7% Area 22,154sq km 2020 Population (May 2021) 9.35 Million 201
Slide 17: Israel is a highly digitized country
Israel is a highly digitized country The demand for connectivity and telecom services is expected to continue growing 120% 80% 90% 57% 50% Connected to Growth in giga Mobile Smartphone E-commerce the internet3 usage per penetration penetration market growth person from rate1 rate2 since 20194 2018-2
Slide 18: Israel's dynamic telecom market
Israel’s dynamic telecom market Growing market demand for connectivity following rapid digital transformation and transition to the cloud Significant technological developments – deployment of advanced infrastructures & telecom networks The regulator is committed to accelerating fiber and 5G d
Slide 19: Israel's dynamic telecom market
Israel’s dynamic telecom market Growing market demand for connectivity following rapid digital transformation and transition to the cloud Significant technological developments – deployment of advanced infrastructures & telecom networks The regulator is committed to accelerating fiber and 5G d
Slide 20: The Israeli cellular sector has experienced competitive pressure, but is now stabilizing
The Israeli cellular sector has experienced competitive pressure, but is now stabilizing 2006-2011: Stable mobile market with 3 2011-2019: Price-focused regulation led 2019-present: Israel’s regulator has companies operating in a highly- to a major drop in market prices and mainly focused on closing
Slide 21: Israel's mobile ARPU is lower than main European countries
Currently, Israel’s mobile ARPU is lower than all of the main European countries Average mobile ARPU in selected countries in 2019 (in USD $) Mobile ARPU 40 35 30 ~23$ 25 20 15$ 15 10 5 0 Switzer Nor France Belgi Ireland Spain Hung Swed Czech Average UK Turkey Greece Finlan Austria Latvia Netherl Sl
Slide 22: Israeli fiber market is lagging behind the OECD
The Israeli fiber market is lagging behind the OECD, but is expected to catch up in the near future Fiber-Optic internet subscriptions as share of all broadband Internet subscriptions, 2017-2020 )%( Current estimated share:15% 80% 60% 31% 40% 22% 10% 20% 2% 0% USA Poland UK Japan Sweden Mexico Lithu
Slide 23: Partner's competitive positioning
Partner's competitive positioning 23
Slide 24: Hello future
Hello future Partner is well-positioned and ready to take advantage of market opportunities, thanks to its: Superior brand position Wholly owned fiber and jointly owned cellular networks Large customer base, both private and B2B Experienced and seasoned management Strong balance sheet 24
Slide 25: Partner is positioned to capture the market growth
Partner is positioned to capture the market growth From… To… 4G 5G Each telecom company established its own 3 new infrastructures are under deployment ; 4-5 active infrastructure; 6-7 active players in the market. players in the market. Mobile Internet infrastructure Fiber network Two internet netwo
Slide 26: Partner competitive landscape
Partner competitive landscape Cellular Cellular Infrastructure Fiber infrastructure TV Source: companies reports and statements 26
Slide 27: Strong brand
strong brand Brands Index 2021 Telephone and cellular services # 39 In general ranking # 47 In general ranking # 56 In general ranking # 69 In general ranking … Partner's self-image was strengthened, Cellcom entered the race, and the Cellcom-Golan Telecom transaction has been closed • Gad Peretz 27
Slide 28: Strong brand
strong brand Brands Index 2021 General Index # 39 In general ranking # 47 In general ranking # 56 In general ranking # 69 In general ranking 28
Slide 29: In summary
In summary Large scale trends and attractive market conditions are driving positive changes in the Israeli telecom industry Growing demand for connectivity Regulation focused on Changing Evolving with supportive macro trends consumer regulations infrastructure rollout behavior Telecom trends Advance
Slide 30: High growth potential
High growth potential Partner has potential for significant profitability growth through multiple growth engines (5G deployment, fiber network, TV super aggregator strategic focus, B2B, devices, M&As, and more) Partner will soon capitalize on its significant fiber infrastructure, as a result of
Slide 31: 5G to accelerate mobile revenue growth
5G to accelerate mobile revenue growth Mobile subscribers & market share (EOP, ‘000s) Growth drivers 28% 27% 27% 2,970 25% 25% 27% 2,836 25% 26% 2,836 2,903 Revenue growth thanks to superior performance and 2,708 2,762 2,646 2,657 341 341 355 355 value plans, 5G as a key driver for revenue increas
Slide 32: 5G to accelerate mobile revenue growth
5G to accelerate mobile revenue growth Cellular Churn )EOP, ‘000s( Growth drivers 35% Revenue growth thanks to superior performance and 31% 30% value plans, 5G as a key driver for revenue increase Customer base growth – positive customer acquisition trend, decreasing churn Potential growth in
Slide 33: Partner - fixed-line player
Partner - fixed-line player Partner’s fiber-optic subs* & homes connected** Penetration rate of ‘PARTNER FIBER’ reached 30% in Q2’20 vs. 26% at Q1’20 (EOP, '000s) Growth drivers Customer base growth – positive acquisition trend and 600 +57 571 600 60% strong growth due to fast deployment of wholly
Slide 34: Partner is accelerating its fiber network deployment
Partner is accelerating its fiber network deployment, with over 600K homes already connected 52 municipalities, from Eilat in the south to Nahariya in the north Afula – Ashdod – Ashkelon – Azor – Bat Yam – Be’er Ya'akov – Be’er Sheva Eilat – Givat Shmuel – Givatayim – Ganei Tikva – Hod Hasharon – He
Slide 35: TV - super aggregator strategy
TV - super aggregator strategy with a strong focus on profitability improvement Partner TV subscriber base (EOP, '000s) Growth drivers 232 215 *223 188 Focus on profitability 160 Super aggregator strategy, with traditional TV services (linear channels, VOD, etc.) included 122 Flexible content
Slide 36: Partner is well-positioned to capture the expected growth in the B2B services market
Partner is well-positioned to capture the expected growth in the B2B services market Partner holds a leading competitive position in the The B2B market is expected to grow rapidly in B2B telecom market coming years, with telecommunications as a key driver Large client base – over 1M business clien
Slide 37: Partner - value creation pathway
Partner - value creation pathway Operational efficiency Significant 5G Leveraging the growth Super Smart homes strong balance potential aggregator B2B sheet to pursue Expansion new growth Financial through opportunities Customer improvement connectivity base growth 5G Customer base grow
Slide 38: Challenges
Challenges 1. 2. Competitive New landscape technologies 3. 4. Challenging labor Highly regulated market market 38
Slide 39: Corporate Social Responsibility
Corporate Social Responsibility 2018-2021 Achieved the highest rating in the Maala CSR Index – Platinum Plus As of June 21, people Partner reduced its 30% of our total Partner was rated as with disabilities greenhouse gas purchasing is the #1 Israeli accounted for 4.04% emissions by more sourced fro
Slide 40: Financial results
Se ariner 5G hello future results 40
Slide 41: Balance Sheet Highlights Q2'21 vs. Q2'20
Balance Sheet Highlights (million ILS) Financial results Q2’21 vs. Q2’20 Q2’21 Total Assets Notes, Banks & Maturities Cash, equivalents & Deposits Net Debt 5,083 +21M 1,466 -208 M 796 - 220 M 670 +12 M Q2’20: 5,062 Q2’20: 1,674 Q2’20: 1,016 Q2’20: 658 Total Equity Leverage Ratio Working Capital** To
Slide 42: P&L and Cash Flow Highlights Q2'21 vs. Q2'20
P&L and Cash Flow Highlights (million ILS) Financial results Q2’21 vs. Q2’20 Q2’21 Service Revenues Equipment Revenues Cellular – Service Revenues Fixed Line – Service Revenues 649 +33M 191 +33M 420 +11M 262 +18M +5% Q2’20: 158 +21% +3% Q2’20: 244 Q2’20: 616 Q2’20: 409 +7% Adjusted EBITDA OPEX CF fr
Slide 43: Adjusted FCF
Adjusted FCF Financial results Adjusted Free Cash Flow (before interest) * (NIS, million) CAPEX Additions – Growth Engines** (NIS, million) *Adjusted FCF doesn’t include 250 mil NIS one time payment from HOT in 2016. Adjusted FCF: 2016 - relatively low CAPEX , 2017–positive contribution of WC, 2018
Slide 44: Cellular segment - Service revenues
Cellular segment - Service revenues (million ILS) Financial results Q2’21 44
Slide 45: Fixed-line segment Service revenues
Fixed-line segment Service revenues (million ILS) Financial results Q2’21 45
Slide 46: OPEX
OPEX Financial results Q2’21 Consistent growth in the fixed-line segment with stability in OPEX * OPEX includes cost of service revenues, selling, marketing and administrative expenses, and credit losses, and excludes depreciation and amortization expenses and other expenses (mainly amortization of
Slide 47: Outstanding financial discipline leading to consistent de-leveraging
Outstanding financial discipline leading to Financial results consistent de-leveraging Q2’21 Debt / Net Debt (in billions of ILS) Net Debt to Adjusted EBITDA* * Notes payable, loans and financial liability at fair value, less cash and cash equivalents and short and long-term deposits divided by Adju
Slide 48: Thank You
Thank YOU
Partner Communications Company — Investor Presentation (November 2021) on 6ix