Cellcom. Israel. Company Presentation Q1 16

Transcription

1 Cellcom Israel Company Presentation Q1 16 1

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 Cellcom Snapshot Israel 3

4 Cellcom Israel Group Snapshot March 2016 Cellular Israel s largest Cellular Operator Fixed - Line Fastest growing company in TV, Internet & fixed line services 2.813M Subscribers Largest market share of ~27% Independent transmission network Leading brand in Israel s cellular market ISP Service for appx. 685K Households (27% market share) Internet infrastructure service for appx. 121K households (wholesale). More then 10% of our ISP subscribers use our wholesale internet infrastructure services TV service for appx. 75K TV households. Reaching 4% (2) of the TV market in one year Holds large market share in ILD Leading advanced communications solutions provider for business customers (1,2) (2) (3) As of March 31, 2016 (2) Based on company estimations and public figures (3) According to Globes brand index (an Israeli financial daily paper) 4

5 Full end-to-end service communications company Residential Internet Triple play Telephony (VOB) Cellular services International Calls OTT TV 5

6 Offering our business customers A large range of products Business Cellular services Internet Telephony (VOB) Internet Security Cloud services Transmission International Calls Content Integration services Hosting Services

7 Our Strategy Offering our customers comprehensive telecommunications solutions Growing in wireline services Optimization of cost structure Based on the wholesale market, launched in February

8 Television Market Cellcom tv - A new tv experience Our offer to the Israeli Market includes: Linear channels including the Israeli Digital terrestrial broadcasting Video on Demand library Live and catch up sports channels Access to internet video content from selected internet sites Music streaming service An improved and advanced user experience Highly competitive price 8

9 Growing in TV Cellcom s tv Opportunity Two large Multichannel pay-tv incumbents and Cellcom Israel as a newcomer with hybrid OTT-DTT service The incumbents price levels are relatively high at between $ per month The company offers OTT-TV services for 25$ per month TV Subscribers net adds Since Cellcom tv launch +75 Thousands Appx. 75,000 TV customers - 4% market share HOT YES Cellcom The figures are for Q1 15-Q1 16 based on HOT reports for Q Q and company estimations for Bezeq Q results 9

10 Growing in Fixed Line Cellcom s Fixed line Opportunity Key advantages of Cellcom which are expected to facilitate expansion in the landline business : Triple play package the first of its kind in Israel providing Cellcom tv, Internet access and infrastructure and telephony for a highly competitive price Large subscriber base: appx. 2.8 million cellular subscribers, appx. 27% market share in ISP market and appx. 138 thousand VOB subs Leveraging the fiber network infrastructure (appx. 1,750 KM of fiber optic infrastructure) together with the wholesale market aiming Broadband Subscribers Net adds since wholesale launch Thousands to increase market share in the business sector The figures are for Q1 15-Q1 16 based on HOT reports for Q Q and company estimations for Bezeq Q results -163 Bezeq HOT Cellcom 10

11 Aggressive Triple play offer Price Nis Aggregate ARPU Nis (2) (2) (2) ARPU includes Internet + ISP+ Telephony + TV (2) The figures are based on HOT and Bezeq reports for

12 On going Cutting Costs Reduction of head count Dealers commission reduction Reduction of advertising and sales promotion expenses IT Systems and building maintenance expenses reduction Warranty and repair services expenses reduction Reduction in walk in centers branches and office space 12

13 On going Cutting Costs Employee Positions SG&A (M Nis) 7,254 5,435 4,403 3,921 3,645 1,676 1,494 1,287 1,135 1, Number of Full-Time Equivalent Positions at the end of

14 Financial and Operational Results 14

15 Financials Last 4 Quarters Revenues M Nis ARPU Nis EBITDA (2) M Nis 1,040 1,032 1,046 1, Q2'15 Q3'15 Q4'15 Q1'16 Q2'15 Q3'15 Q4'15 Q1'16 Q2'15 Q3'15 Q4'15 Q1'16 The figures are based on company reports for the relevant quarters (2) The results for the second quarter of 2015 include a one-time effect of NIS 25 million in Other Expenses regarding a voluntary retirement plan. 15

16 Decreasing Leverage The company substantially reduced the level of financial debt B Nis Q2'12 Q4'12 Q2'13 Q4'13 Q2'14 Q4'14 Q2'15 Q4'15 Q1'16 Debt Net Debt The figures are based on company reports for the relevant quarters (2) Net Debt defined as credit and loans from banks and others and debentures, net of cash and cash equivalents and current investments in tradable securities 16

17 Debt Structure as of March 31, 2016 Series Name Amount Coupon Duration Linkage Yield to Maturity (2) Series B Series D Series E Series F Series G Series H Series I % 5.19% 6.25% 4.60% 6.99% 1.98% 4.14% CPI Linked CPI Linked Fixed CPI Linked Fixed CPI Linked Fixed 1.67% 1.19% 1.24% 1.63% 1.67% 2.94% 4.05% Total 3,838 In May and August 2015, the Company entered deferred loan agreements with Israeli financial institutions and a bank, for the total sum of NIS 540 million, under certain customary conditions (2) As of December

18 Financial highlights Q1 16 Vs. Q1 15 Q1 15 (M NIS) Q1 16 (M NIS) yoy % Total Revenues 1,062 1,022 (3.8%) Service Revenues (3.3%) Equipment Revenues (5.3%) EBITDA % EBITDA Margin 18.5% 23.3% 25.9% Net Income % Free Cash Flow % Cellular ARPU (0.5%) Cellular Churn % 11.9% 11.1% (6.7%) The results for first quarter 2015 include a one-time expense in a total amount of NIS 30 million 18

19 Contact us Shlomi Fruhling Chief Financial Officer Elad Levy Investor Relations Manager Tel : Fax: