Partner Communications Co. Ltd. · TASE:PTNR
Partner Communications — Q2 2020 Earnings Presentation
22 slides from Partner Communications's earnings presentation, Aug 18, 2020
Slide 1: Company & Financial Overview
Company & Financial Overview August 18, 2020
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
> = @S 2. = ° UO Overview
Slide 4: Partner leading Israeli Telco group
Partner leading Israeli Telco group Strengthening customer reach through growth engines and value Cellular Partner Fiber Partner TV Broadband and Business Solutions 25% MS ~12% MS ISP operation Leading service provider 2,708K sub. 657K 220K sub.* households reached* * As of August 18, 2020 4
Slide 5: Operating and Financial highlights – Q2'20
Operating and Financial highlights – Q2’20* Cellular Sub. Cellular Churn TV sub.** Fiber (thousands) Rate (thousands) deployment reach** 2,708 7.5% 220 (thousands households) Fastest growing 657 Growth of 92k subs TV platform in Reflects ~ 30% Israel annual churn rate Service Adjusted Net Profit FCF
Slide 6: Coronavirus Crisis
Coronavirus Crisis Partner is well prepared for the crisis with net debt of NIS 658 million (cash of NIS 1,016 million) In the second quarter, we saw: the effect of the near-complete cessation of international travel which caused a significant decrease in revenues from roaming services the eff
Slide 7: Cellular – main points
Cellular – main points Advanced network Partner More - Value Strategy & 012 mobile - Won 5G frequencies from the MoC and has a compatible 5G Low cost brand core to enable 5G services Providing the widest 4G Value offerings to the customer – deployment in the country More for More Network sha
Slide 8: Cellular ARPU & Churn
Cellular ARPU & Churn Consistent decline in churn rate Cellular ARPU (NIS) Cellular churn (%) 38% 35% 31% 62 58 57 58 59 55 53 51 7.9% 7.7% 7.2% 7.5% 7.5% 2017 2018 2019 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 2017 2018 2019 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 8
Slide 9: Partner's Fiber Optic network
Partner's Fiber Optic network Partner is an infrastructure player in the fixed line market Intention to deploy massive coverage of potential households in Israel within approx. 2.5 years Expected payback period of 7 years OPEX savings - replacing wholesale infrastructure with independent infra
Slide 10: Fiber Optic network EBITDA impact sensitivity analysis
Partner's Fiber Optic network Company EBITDA Impact Sensitivity Analysis (NIS M) Potential Opex saving vs wholesale market payments (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 10
Slide 11: Presence in over 50% of cities in Israel
Afula Kiryat Mozkin Ashdod Lod Ashkelon Modi’in-Maccabim-Re’ut Azor Naharia Bat Yam Netanya Presence in Be'er Ya'akov Ness Ziona Be’er Sheva Nesher over 50% of Eilat Or Yehuda Givat Shmuel Or Akiva cities in Israel Givatayim Pardes Hanna-Karkur Ganei Tikva Petah Tikva from Eilat in the Hod Hasharon
Slide 12: Super aggregator TV strategy
Strategy of super aggregator as well as offering traditional TV services (linear channels, VOD etc) Partnership with Netflix (including joint TV packages), Amazon Prime Video & Spotify Offering cloud gaming service as a supplementary service to our TV platform Flexible content costs model
Slide 13: Partner TV subscriber base
Partner TV subscriber base (EOP, '000s) 250 225 200 215 220 175 200 188 150 176 160 125 141 100 122 75 106 83 50 65 25 43 - Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 August 18, 2020 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: Financial Overview
Financial Overview 15
Slide 16: Equipment Sales
Equipment Sales Relatively strong results despite the coronavirus crisis which resulted in closure of shopping malls during April and part of May Equipment sales revenues and gross profit 25% 25 % 400 21% 20% 19% 19% 20 % NIS million % t ot al revenues 5% 1 198 200 167 178 158 0% 1 139 5% 35 33 37 3
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% 758 28% 27% 30% 2,000 26% 26% 24% 22% 25% 599 1,500
Slide 18: Decrease in net debt over years & extension of average debt duration
Decrease in net debt over years & extension of average debt duration Debt/Net Debt (NIS, billion) Expected receipt of up to NIS Repayment Schedule Notes** & Loans (NIS, million) 78 M***, assuming full exercise of option warrants in As of June 30, 2020 respect of Notes series G 5.4 5.2 Loa ns Not es
Slide 19: Net Debt to Adjusted EBITDA
Net Debt to Adjusted EBITDA* 1.3 1.2 1.2 1.1 0.8 0.8 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 * Notes payable and borrowings and financial liability at fair value, less cash and cash equivalents (incl. ST deposits) divided by Adjusted EBITDA for the last 4 quarters. 19
Slide 20: 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 21: IR contacts
IR contacts Tamir Amar CFO +972 (54) 781 4951 Liat Glazer Shaft 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 22: Thank you
Thank you
Partner Communications Company — Q2 2020 Earnings Presentation on 6ix