Partner Communications Co. Ltd. · TASE:PTNR
Partner Communications — Q3 2022 Earnings Presentation
28 slides from Partner Communications's earnings presentation, November 2022
Slide 1: Company & Financial Overview Q3 2022
Company & Financial Overview Q3 2022 November 2022 1
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
Company Overview 3
Slide 4: A leading Israeli Telco group
A leading Israeli Telco group Strengthening customer reach through growth engines and value Unique combination of infrastructure and service under one roof Cellular Partner Fiber Partner TV Infrastructure Business Solutions 27% MS ~30% penetration ~12% MS Based Internet Leading 929K households servi
Slide 5: 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 infrastructure; 6-7 active players in the market active players in the market Mobile Internet infrastructure Fiber network Two internet network
Slide 6: Increasing profitability while maintaining growth by focusing on our existing lines of business
Increasing profitability while maintaining growth by focusing on our existing lines of business Cellular Fixed-line ▪ Focus on 5G ▪ Focus on fiber ▪ Increase revenue and profitability through ▪ Increase revenue and profitability as 5G opportunities while maintaining wholesale infrastructure is repla
Slide 7: 5G as a potential growth engine
5G as a potential growth engine ▪ Deployment which enables 5G experience in designated geographical areas ▪ Population coverage of over 40% by year-end 2022 ▪ Potential sales of 5G compatible equipment ▪ Value proposition supports increases in service revenues ▪ Potential B2B opportunities ▪ M2M pot
Slide 8: Partner's Fiber-Optic Network - Increasing value through usage & new verticals
Partner's Fiber-Optic Network - Increasing value through usage & new verticals ▪ Massive coverage deployment, expect to complete major rollout phase by the end of 2022 ▪ The only fiber-optic infrastructure in Israel to offer active Ethernet (P2PE), providing a private fiber to each subscriber ▪ 30%
Slide 9: Partner TV
Partner TV ▪ Focus on Super Aggregator strategy, with traditional TV services (linear channels, VOD, etc.) included ▪ Partnership with Netflix & Amazon Prime Video (including unique TV bundle offering) ▪ Over 80% of TV subscribers are in bundle/triple offerings (broadband based) ▪ Offering comprehen
Slide 10: 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 coming B2B telecom market years, with telecommunications as a key driver ▪ Large client base placing Partner in a lea
Slide 11: Corporate Social Responsibility
Corporate Social Responsibility Selected ESG Data*: 11 11 *From our 2020-2021 ESG report
Slide 12: Financial Overview
Financial Overview 12
Slide 13: Operating and Financial Highlights
Operating and Financial Highlights Q3’22 vs. Q3’21 Cellular subs. Cellular Churn Rate Fiber-Optic subs. TV subs. (thousands) (thousands) (thousands) Reported / ex MoE 3,042 +23K 8.9%/6.8%*+2.5%/+0.2%* 268 +76K 222 -4k Subs. base decrease of 53K in Q3’22 Excluding Ministry of Education Subs. base gro
Slide 14: Cellular Subscribers & Cellular Market Share
Cellular Subscribers & Cellular Market Share (EOP, '000s) * As stated in the Q2 Presentation, most of the time-limited packages for the Ministry of Education (MoE) reached their expiration date in the third quarter of 2022; as a result, the subscriber base of data packages and voice packages for the
Slide 15: Cellular ARPU & Churn
Cellular ARPU & Churn An increase of 6% mainly reflecting the increase in roaming Excluding Ministry of Education’s packages*, the churn services revenues rate in Q3’22 was 6.8% compared with 6.6% in Q3’21 (NIS) (%) Reported / ex. MoE 15
Slide 16: Partner's Fiber-Optic Subs & Homes Connected
Partner’s 1 2 Fiber-Optic Subs & Homes Connected (EOP, '000s) 18K fiber subs. increase in Q3’22, Penetration rate3 of 30% maintained 1 Active subscribers to an end-to-end service including both Partner’s fiber-optic infrastructure and access to the internet 2 The total number of residential househol
Slide 17: Partner's Infrastructure Based Internet Subscriber Base
Partner's Infrastructure Based Internet Subscriber Base * Number of infrastructure- based internet subscribers surpassed the 400 thousand mark as Fiber-optic1 share increases vs. Wholesale2 (EOP, '000s) * Active subscribers to an end-to-end service including both infrastructure (either through the w
Slide 18: Partner TV subscriber base
Partner TV subscriber base (EOP, '000s) Subscriber base totaled 222 thousand at the end of the quarter * In the second quarter of 2021, the Company removed from its TV subscriber base approximately 21 thousand subscribers who had remained in trial periods of over six months without charge or usage.
Slide 19: Equipment Sales
Equipment Sales Gross profit margin of 20% in Q3’22, mainly reflecting a change in the sales mix in the cellular segment which was offset by higher gross profit in the fixed-line segment Equipment sales revenues and gross profit 19
Slide 20: OPEX (NIS, million)
Excluding one-time impact of the Collective agreement, OPEX totaled NIS 478 million, an increase of 2% yoy Increase in Q3’22 vs. Q3’21 of 6% mainly reflecting an increase in payroll and related expenses (of which NIS 17 million resulted from a one-time impact in the quarter of the Special Collective
Slide 21: Adjusted EBITDA and Adjusted FCF
Adjusted EBITDA and Adjusted FCF Adjusted EBITDA in Q3 2022 totaled NIS 276 million, an increase of 10% from NIS 250 million in Q3 2021. As a percentage of total revenues, Adjusted EBITDA in Q3 2022 was 31% compared with 30% in Q3 2021 Adjusted EBITDA & Adjusted EBITDA* margin Adjusted Free Cash Flo
Slide 22: Decrease in Net Debt over past decade
Decrease in Net Debt over past decade Debt/Net Debt Repayment Schedule Notes & Loans (NIS, billion) (NIS, million) As of September 30, 2022 22
Slide 23: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA* * Notes payable and borrowings and financial liability at fair value, less cash and cash equivalents and short and long-term deposits divided by Adjusted EBITDA for the last 4 quarters. 23
Slide 24: Partner's strengths
Partner’s strengths Strong Foundations Defined Strategy Customer Base Innovative DNA 5G rollout, widest Transforming into a Total Partner serves over The only Israeli Provider of 4G coverage, leading Telecommunications 3 million connections - active Ethernet (P2PE) based customer service, Group, div
Slide 25: 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 ▪Fiber-optic ▪Financ
Slide 26: In Conclusion
In Conclusion ▪ 5G deployment to reach population coverage of over 40% by the end of 2022 ▪ Expanding the value chain as we become a dominant fiber-optic infrastructure player: • We are on track to reach around one million HC by the end of 2022 • Increasing fiber value potential–wholesale agreements
Slide 27: IR contacts
IR contacts Sigal Tzadok Acting CFO +972 (54) 781 4951 Amir Adar Head of Investor Relations & Corporate Projects +972 (54) 781 5051 investors@partner.co.il Investor website: www.partner.co.il/en/Investors-Relations/lobby 27
Slide 28: Thank you
Thank you 28
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