Cellcom Company Presentation | 2016 FORWARD LOOKING STATEMENTS - - PowerPoint PPT Presentation

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Cellcom Company Presentation | 2016 FORWARD LOOKING STATEMENTS - - PowerPoint PPT Presentation

Israel Cellcom Company Presentation | 2016 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


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Cellcom

Israel

Company Presentation | 2016

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FORWARD

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, 2016. 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

  • f 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.

LOOKING STATEMENTS

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2015 (M NIS) 2016 (M NIS) YoY % Total Revenues 4,180 4,027

  • 3.7%

Service Revenues 3,132 3,033

  • 3.2%

Equipment Revenues 1,048 994

  • 5.2%

EBITDA 872 858

  • 1.6%

Net Income 97 150 +54.6% Free Cash Flow 494 416

  • 15.8%

2016 Key Financial Summary

In M’Nis

(1) EBITDA for 2015 includes one-time expense in the amount of approximately NIS 30 million as a result of entering a collective employment agreement. (1)
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Full end-to-end Service Communications Group

  • Appx. 2.8

2.8 million mobile subs

Mobile

Fixed line

Residential Largest market share 27% Independent transmission network Leading brand in Israel’s mobile market

  • Appx. 16

163k broadband subs & 630 30k ISP subs

  • Appx. 111

111k TV subs VOB

  • ffering

International Calls Internet Security Cloud services Transmission Hosting Services Integration services

Fixed line

Business

(1) Internet Infrastructure subscribers (2) Internet access subscribers (1) (2)
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  • Implementation of the network sharing and hosting

agreement with Golan (when owned by Electra)

  • Offering customers comprehensive telecommunications

solutions

  • Investing in growing engine in mobile services
  • Continue to grow in Fixed line services
  • Ongoing Optimization of cost structure
(1) Subject to the MOC's approval and the completion of Electra's acquisition of Golan. (2) Internet infrastructure service based on the wholesale market, launched in February 2015 (1)

2017 Goals

(1)
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  • Agreement for a minimum of 10 years with with an

average annual payments of NIS 210-220m per year (starting

with lower annual payments and increasing over the term)

  • Use of the Golan frequencies by the shared network

customers

  • Creates a similar cost structure for all the competitors in

the market

(1) Subject to the MOC's approval and the completion of Electra's acquisition of Golan

Implementation of the network sharing and hosting agreement with Golan

(1)
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 Leading the TV revolution in Israel –

  • ffering OTT TV service for 99 Nis

 The most attractive triple play offer in Israel for 149 Nis  Reaching 7.0% market share in TV in just two years  40% from wholesale market (5.0% from Internet infrastructure market)

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Continued growth in Fixed line services

(1) As of December 2016, based on Bezeq and HOT reports

TV Subscribers

In Thousands (1)

Broadband Subscribers

32 70 94 120 136 146 163

Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16

20 37 50 63 74 87 99 111

Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 (2) (1)
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1,676 1,494 1,287 1,135 1,085 994 2 2 2 2 3 2 4 2 5 2 6 7,254 5,435 4,403 3,921 3,645 3,563 2 2 2 2 3 2 4 2 5 2 6

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 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

Ongoing Cutting Costs

Employee Positions

SG&A (M’Nis)

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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 9

Investing in growth engines in mobile segment

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4,553 3,842 2,951 2,747 2,547 2 2 2 3 2 4 2 5 2 6

Substantial reduction of financial debt

(1) The figures are based on company reports for the relevant quarters (2) As of December 2016, 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 (1)

Net Debt (M’Nis)

  • The company substantially reduced the

level of financial debt

  • Net debt / EBITDA ratio – 2.99
(2)
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As of December 31, 2016

Yield to Maturity Linkage Duration Coupon Amount Series Name 1.52% CPI Linked 0.01 5.3 % 22 Series B .55% CPI Linked 0.50

  • 5. 9%

348 Series D 1.98% Fixed 0.01 6.25% 64 Series E .15% CPI Linked 1.70 4.6 % 729 Series F .04% Fixed 1.04 6.99% 285 Series G 1.98% CPI Linked 4.48 1.98% 95 Series H 2.86% Fixed 4.65 4.14% 8 4 Series I 2.61% CPI Linked 6.58 2.45% 103 Series J 3.84% Fixed 6.33 3.55% 304 Series K

  • Fixed

2.74 4.60% 2 Loan A

  • Fixed

3.13 4.90% 140 Loan B 4,247 Total

Debt Structure

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Shlomi Fruhling

Chief Financial Officer

Elad Levy

Investors Relations Manager

E-mail: investors@Cellcom.co.il Tel : + 972 52 9989735 Fax: + 972 52 9989700

Contact us