Cellcom. Israel. Company Presentation Q1 17

Transcription

1 Cellcom Israel Company Presentation Q1 17

2 FORWARD LOOKING STATEMENTS The following information contains, or may be deemed to contain forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995 and the Israeli Securities Law, 1968). In some cases, you can identify these statements by forward-looking words such as may, might, will, should, expect, plan, anticipate, believe, estimate, predict, potential or continue, the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial results, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: changes to the terms of our license, new legislation or decisions by the regulator affecting our operations, the outcome of legal proceedings to which we are a party, particularly class action lawsuits, our ability to maintain or obtain permits to construct and operate cell sites, and other risks and uncertainties detailed from time to time in our filings with the U.S. Securities and Exchange Commission, including under the caption Risk Factors in our Annual Report for the year ended December 31, Although we believe the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We assume no duty to update any of these forward-looking statements after the date hereof to conform our prior statements to actual results or revised expectations, except as otherwise required by law. 2

3 Q1 17 Key Financial Summary In M Nis Q1 16 (M NIS) Q1 17 (M NIS) YoY % Total Revenues 1, % Service Revenues % Equipment Revenues % (1) EBITDA % Net Income % Free Cash Flow % (1) As of the first quarter of 2017 the company applies International Financial Reporting Standard (IFRS 15) and capitalizes part of the salaries expenses and commissions related to customer acquisition costs. The application of this standard is expected to have a material positive effect on the Company's financial results for the year 3

4 Full end-to-end Service Communications Group (March 2017) Mobile Appx. 2.8 million mobile subs Largest market share 27% Leading brand in Israel s mobile market line Residential Appx. 173k (1) broadband subs & 630k ISP subs (2) Appx. 124k TV subs VOB offering International Calls line Business Internet Security Cloud services Independent transmission network Hosting Services Transmission Integration services (1) Internet Infrastructure subscribers (2) Internet access subscribers as of December

5 2017 Goals Implementation of the network sharing and hosting agreement with Golan Offering customers comprehensive telecommunications solutions Investing in growth engines in mobile services Continue to grow in line services Ongoing Optimization of cost structure (1) (1) Internet infrastructure service based on the wholesale market, launched in February

6 Implementation of the network sharing and hosting agreement with Golan Agreement for a minimum of 10 years with average annual payments of NIS m (starting with lower annual payments and increasing over the term) Usage of Golan frequencies by the shared network Creates a similar cost structure for all the competitors in the market 6

7 Continued growth in line services Leading the TV revolution in Israel with TV Subscribers In Thousands OTT TV service, attractive Quad and triple play offer Reaching 8.0% market share in TV in just two years (1) Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Broadband Subscribers 40% from wholesale market (5.0% from Internet infrastructure market) (1) Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 (1) Company estimation based on Bezeq and HOT reports 7

8 Ongoing Cutting Costs Reduction of head count Employee Positions Dealers commission reduction Reduction of advertising and sales promotion expenses IT Systems and building maintenance expenses reduction Warranty and repair services expenses reduction 7,254 1,676 5,435 4,403 3,921 3,645 3, ,494 1,287 SG&A (M Nis) 1,135 1, Reduction in walk in centers branches and office space

9 Investing in growth engines IOT Smart city 360 end-to-end solution JV with the leading enterprises in this field Streaming Music Access to a wide variety of music content (with focus on Israeli content) using simple & intuitive interface Synergy with Cellcom tv Cyber Leading range of solutions for both private and business customers covering varied content Enables safe surfing and blocking of malicious sites Delivers leading solutions for protecting end-user equipment Cyber we also launched an innovative Cyber solution, which offers a complete comprehensive management system and personal control that can alert and prevent cyber-attacks for our corporate clients 9

10 Substantial reduction of financial debt (1) Net Debt (M Nis) The company substantially reduced the level of financial debt 4,553 3,842 2,951 2,747 2, (1) The figures are based on company reports for the relevant years

11 Debt Structure As of March 31, 2017 Series Name Amount Coupon Duration Linkage Yield to Maturity Series D Series F Series G Series H Series I Series J Series K Loan A Loan B % 4.6 % 6.99% 1.98% 4.14% 2.45% 3.55% 4.60% 4.90% CPI Linked CPI Linked CPI Linked CPI Linked 0.50%.00%.04% 1.63% 2.53% 1.98% 3.19% - - Total 3,731

12 Contact us Shlomi Fruhling Chief Financial Officer Elad Levy Investors Relations Manager Tel : Fax: