Cellcom
Israel
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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,
Israel
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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
except as otherwise required by law.
FORWARD
LOOKING STATEMENTS
Mobile
Mobile subs
share
Israel’s mobile market Fixed line Residential
Broadband subs
(12% market share)
telephony
calls Fixed line Business
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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 estimationFull End-To-End Service Communications Group
(1) (1)4
company to a comprehensive telecom group
Engines
Cellcom Israel
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A cellular company From To a
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The first and only operator in Israel to offer quad play
backup, etc.)
Cellular Segment
Maintaining Market Leadership
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TV Service
Reaching 12% Market Share
Attractive Quad and Triple play offers
Apple tv)
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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
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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
40% of wholesale market
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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)11
Israel Internet infrastructure is lagging behind
Israel
(1) Mean download speed according to Cable 2018 report published on M-Lab siteMb/sec
Internet Speed
Israel ranks 70th in the world
The reasons:
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Cellcom Israel’s opportunity
Unfulfilled need of high-speed internet High market prices Low Internet speed Opportunity to change market shares
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Investment in IBC
IBC's share capital, through equal co-investment for Appx. M’Nis 100. An additional 30% will be held by the Israel Electric Company
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)
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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, 2019.15
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
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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, 2019.1,676 927 7,254 3,392
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that will be another layer in our ongoing expenses reduction process
promotion expenses
expenses reduction
reduction
and office space
FTE Positions SG&A
(M’Nis)
Aggressive Cost Reduction
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2018 Key Financial Summary
(1)M’Nis 2017 2018 YoY % Total Revenues 3,871 3,688
Service Revenues 2,919 2,784
Equipment Revenues 952 904
Adjusted EBITDA 853 660
Net Income (loss) 113
N.A. Free Cash Flow 325 181
(1) All data should be reviewed in conjunction with the Company's press release and financial report for the Fourth quarter of 2018
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Q4 2018 Key Financial Summary
(1)M’Nis Q4’17 Q4’18 YoY % Total Revenues 975 918
Service Revenues 712 677
Equipment Revenues 263 241
Adjusted EBITDA 189 163
Net Income (loss) 10
N.A. Free Cash Flow 77 7
(1) All data should be reviewed in conjunction with the Company's press release and financial report for the Fourth quarter of 2018
4,553 3,842 2,951 2,747 2,547 2,553 2,264
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Substantial Reduction of Financial Debt
M’NIS Financial Debt, Net
(1) Based on company reports for the relevant years
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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