Cellcom Israel 1 FORWARD LOOKING STATEMENTS The following - - PowerPoint PPT Presentation

cellcom
SMART_READER_LITE
LIVE PREVIEW

Cellcom Israel 1 FORWARD LOOKING STATEMENTS The following - - PowerPoint PPT Presentation

Cellcom Israel 1 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,


slide-1
SLIDE 1

Cellcom

Israel

1

slide-2
SLIDE 2

2 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, 2018. 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.

FORWARD

LOOKING STATEMENTS

slide-3
SLIDE 3

Mobile

  • Appx. 2.8 million

Mobile subs

  • 27% Market

share

  • Leading brand in

Israel’s mobile market Fixed line Residential

  • Appx. 269k

Broadband subs

  • 219k TV subs

(12% market share)

  • Fixed line

telephony

  • International

calls Fixed line Business

  • Cyber security
  • Cloud services
  • Transmission
  • Hosting services
  • Integration services

3

Leading the TV revolution in Israel with OTT TV service The largest cellular provider in Israel

(1) As of Q4’18 based on companies’ reports and Company’s estimation

Full End-To-End Service Communications Group

(1) (1)
  • IOT
(1)
slide-4
SLIDE 4

4

  • from a cellular

company to a comprehensive telecom group

  • Optimization of
  • cost structure
  • New Growth

Engines

Strategy

Cellcom Israel

slide-5
SLIDE 5

5

A cellular company From To a

Telecommunications Group

slide-6
SLIDE 6

6

  • Sales of bundled packages of cellular + fixed line products.

The first and only operator in Israel to offer quad play

  • Successful marketing of complete communication package increases
  • ur total income per household even as cellular prices decrease
  • Upsale of data packages
  • Sales of VAS products (cyber security, streaming music,

backup, etc.)

Cellular Segment

Maintaining Market Leadership

slide-7
SLIDE 7

7

TV Service

Reaching 12% Market Share

  • Launched new TV service in December 2014
  • Highly competitive price – NIS 99

Attractive Quad and Triple play offers

  • Hybrid solution of DTT linear TV plus OTT TV (VOD + channels)
  • Multi screen strategy (IOS ,Android smart tv, set top boxes,

Apple tv)

  • Cutting edge technology: full catch up and cloud PVR
  • Over 10,000 VOD assets for unlimited usage
  • Advanced intuitive user experience
slide-8
SLIDE 8

8

Offering The Top Channels viewers

All the sports

really Want

Current events The world’s leading children’s channels Entertainment, leisure, science and nature Cellcom channels The leading series from The leading studios

slide-9
SLIDE 9

9

Thousands

Fast Growth in The TV Market

Cellcom tv subscribers since launch (Dec 2014) 74 87 99 111 124 137 154 170 184 195 206 219

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

slide-10
SLIDE 10

40% of wholesale market

10

Continued Growth in Broadband

120 136 146 156 173 189 206 222 235 248 259 269

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18

(1) According to bezeq’s reports for Q3’18 (1)
slide-11
SLIDE 11

11

Israel Internet infrastructure is lagging behind

Israel

(1) Mean download speed according to Cable 2018 report published on M-Lab site

Mb/sec

Internet Speed

Israel ranks 70th in the world

The reasons:

  • Duopoly in the infrastructure segment created a non-competitive market
  • There is no real incentive to invest in infrastructure
(1)
slide-12
SLIDE 12

12

Cellcom Israel’s opportunity

 Unfulfilled need of high-speed internet  High market prices  Low Internet speed  Opportunity to change market shares

slide-13
SLIDE 13

13

Investment in IBC

  • Cellcom entered an MOU with the Israeli Electric Company, IBC and the
  • ther shareholders and main creditors of IBC for investment in IBC.
  • Cellcom and IIF entered partnership agreements for the purchase of 70% of

IBC's share capital, through equal co-investment for Appx. M’Nis 100. An additional 30% will be held by the Israel Electric Company

  • IBC and IEC entered into an agreement updating IBC's existing right of use

and services agreement for IBC's fiber-optic network when deployed over IEC's infrastructure

(1) The transaction is conditional to final regulatory approvals. There is no certainty that the transaction will be completed. For full information, see the Company's Immediate Report of March 13, 2019.

(1)

slide-14
SLIDE 14

14

 IBC has the exclusive right to deploy an optical infrastructure on the IEC infrastructure  IBC has a significant advantage in deployment costs in areas with high electricity infrastructure

IBC will revolutionize Internet infrastructure in Israel

 High performance capabilities of IEC  Reducing the need for deployment permits  There is an existing deployment to about 150,000 households

Households reach target

Cellcom Israel + IBC

(Thousand)

(1)

500 900 1,200

After 3 Years After 5 Years After 10 Years

Above Above (1) The transaction is conditional to final regulatory approvals. There is no certainty that the transaction will be completed. For full information, see the Company's Immediate Report of March 13, 2019.
slide-15
SLIDE 15

15

Benefits for Cellcom Israel

 Integrates with Cellcom Israel’s strategy – leading the revolution in the fixed line market  Another product in the communications products basket that Cellcom Israel offers  Providing higher quality TV services  Providing new and advanced services  Significant savings in the amounts paid for Bezeq's Internet infrastructure and improved profitability in the fixed-line segment

slide-16
SLIDE 16

16

IRU Agreement

The Company undertakes to purchase from IBC 10-15% percentage of IBC's fiber optics 'home pass', as shall be deployed by IBC in the next 15 years. The IRU agreement is expected to have a gradual positive effect on the Company's results of operations and free cash flow in the coming years:  Decrease the Company's expenses for usage of Bezeq's and Hot's infrastructure  Decrease the Company's independent investments in fiber-optic deployment to residential areas,  The Company and IIF further entered a term sheet for the sale of the Company's independent fiber-optic infrastructure in residential areas to IBC

(1)

(1) The transaction is conditional to final regulatory approvals. There is no certainty that the transaction will be completed. For full information, see the Company's Immediate Report of March 13, 2019.
slide-17
SLIDE 17

1,676 927 7,254 3,392

17

  • Reduction of head count
  • launch of a new voluntary retirement plan

that will be another layer in our ongoing expenses reduction process

  • Dealer commissions reduction
  • Reduction of advertising and sales

promotion expenses

  • IT systems and building maintenance

expenses reduction

  • Warranty and repair services expense

reduction

  • Reduction in ‘walk in center’ branches

and office space

FTE Positions SG&A

(M’Nis)

Aggressive Cost Reduction

slide-18
SLIDE 18

18

2018 Key Financial Summary

(1)

M’Nis 2017 2018 YoY % Total Revenues 3,871 3,688

  • 4.7%

Service Revenues 2,919 2,784

  • 4.6%

Equipment Revenues 952 904

  • 5.0%

Adjusted EBITDA 853 660

  • 22.6%

Net Income (loss) 113

  • 64

N.A. Free Cash Flow 325 181

  • 21.9%

(1) All data should be reviewed in conjunction with the Company's press release and financial report for the Fourth quarter of 2018

slide-19
SLIDE 19

19

Q4 2018 Key Financial Summary

(1)

M’Nis Q4’17 Q4’18 YoY % Total Revenues 975 918

  • 5.8%

Service Revenues 712 677

  • 4.9%

Equipment Revenues 263 241

  • 8.3%

Adjusted EBITDA 189 163

  • 13.8%

Net Income (loss) 10

  • 35

N.A. Free Cash Flow 77 7

  • 90.9%

(1) All data should be reviewed in conjunction with the Company's press release and financial report for the Fourth quarter of 2018

slide-20
SLIDE 20

4,553 3,842 2,951 2,747 2,547 2,553 2,264

20

Substantial Reduction of Financial Debt

M’NIS Financial Debt, Net

(1) Based on company reports for the relevant years

slide-21
SLIDE 21

21

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