1 / 24

Cellcom

Cellcom. Israel. Company Presentation Q1’2014. FORWARD-LOOKING STATEMENTS.

xenos
Download Presentation

Cellcom

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Cellcom Israel Company Presentation Q1’2014

  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, 2013. 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.

  3. Israel (1) • Population of 7.4 million; growing 1.8% annually • Exchange rate is ~3.5 NIS/USD • 2012 GDP: $241 billion ($29K per Capita) • S&P credit rating A+ (Stable) • Low unemployment: 6.7% (1) According to Central Bureau Statistics, February 2014

  4. Telecom Market In Israel The cellular market in Israel is highly competitive: • 5 mobile network operators (MNOs) including 2 new UMTS operators using national roaming • 5 mobile virtual network operators (MVNOs). 2014 2011 Retail price: 35-59 NIS Retail price: 280 NIS (Voice, SMS, Data) 4

  5. Telecom Market In Israel The fixed-line market in Israel is characterized by(1): • Low competition – the annual churn rate in telephony is 15% compared to the cellular churn of 34% • Dominated by two companies – Bezeq & Hot with 88% Telephony market share (NIS 3.9 billion) • High margins – 58% EBITDA margin (versus a 30% cellular margin) HOT Orange Bezeq Cellcom • The figures are based on Bezeq and HOT reports for the landline market and on Bezeq,HOT,Partner and • our reports for the cellular market for 2013 and company estimations

  6. Snapshot Cellcom Israel

  7. Cellcom IsraelSnapshot Q1’14 • As at March 31, 2014 • Based on company estimations and competitors reports for December 2013 • According to Globes 2012 and 2013 brand index (an Israeli financial daily paper) • In terms of subscribers, Based on Bezeq and HOT reports in 2013

  8. Offering our customers A large range of products Cellular services Internet Security ISP Cloud services CPE Repairs Home Telephony Content Services Transmission Hosting International Calls

  9. Our Strategy Offering customers a broad range of mobile and wireline telecommunications services • Developing mobile Data • Growing in wireline services • Offer new services which are synergetic to our core businesses for example: OTT TV , NFC based cellular credit card • Cost cutting through operational excellence Our entry to the TV field  is subject to the decision of our board of directors 9

  10. Adjusting to Market Changes Reduction of 42% in OPEX(1) • Reduction of head count • Retailers 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 (1) When comparing Q1/2014 expenses with Q4/2011 expenses

  11. Opportunities

  12. Wholsale Market MOC policy main points: • Bezeq to sell it’s infrastructure with maximum prices of: • 28.4 NIS/Month – Access fees • 57.1 NIS/Month per 1MB Bandwidth (needs to be calculated with load factor) • 0.01 NIS per minute • 18 NIS/Month per Kilometer of dark fiber • 695 NIS per Kilometer of pipe and 116 NIS for Sub-pipe • Cancellation of structural separations in Bezeq(1) and the minimization of regulatory price controls on Bezeq’s wireline tariffs will take place only 9 months after wholesale market launch(2) • Service level of Bezeq to other operators will be secured by KPI (1) Cancellation of structural separations in Bezeq is only for part of the markets (2) some of the issues are subject to a hearing process and its final outcome cannot be assessed at this point.

  13. Wholsale Market Cellcom’s Opportunity Key advantages of Cellcom which are expected to facilitate expansion into the landline business : • Excellent sales skills and strong brand • Large subscriber base: appx. 3.05 million cellular subscribers, appx. 30% of ISP market and appx. 140 thousand VOB subs • Leveraging the fiber network infrastructure (appx. 1,700 KM of fiber optic infrastructure) together with the wholesale market for the purpose of increasing market share in the business sector (1) (1) As of December 31, 2013

  14. Television Market Overview • The Israeli television market currently has only two players • Annual revenues of NIS 3.8 billion and an EBITDA margin of 27% (1) • The price levels are relatively high at between $60-120 per month(2). (1) Based on Bezeq and HOT reports in 2013 and company estimations (2) Average market prices Q1’14 (3) Lower threshold refers to narrow packages.

  15. Television Market A new TV experience • In market research undertaken by the Company, the following consumer needs were identified: • Relevant content including 10-15 popular channels • Catch-up TV ability • An improved and advanced user experience • A fair price Our entry to the TV field  is subject to the decision of our board of directors

  16. Network Sharing Opportunity to cut cost in the long term Cellcom Israel entered an agreement with Pelephone and Golan Telecom for: • Construction and operation of a shared 4G radio network • Sharing passive elements of the network with Pelephone of cell sites for existing 2G and 3G radio networks • Agreement with Golan, regarding the use of the Company's 2G and 3G radio networks Effectiveness of the Agreements are all subject to the approval of the Ministry of Communicationsand the Israeli Antitrust Commissioner to all the agreements

  17. Financial and Operational Results

  18. Strong Cash Flow Despite the intense competition,the company continues to generate a significant amount of cash Free Cash Flow M’Nis 18 The figures are based on company reports for the relevant years

  19. Decreasing Leverage The company substantiallyreduced the level of financial debt during 2013 FinancialDebt B’Nis The figures are based on company reports for the relevant quarters

  20. Financials Last 4 Quarters EBITDA Revenues ARPU M’Nis M’Nis Nis The figures are based on company reports for the relevant quarters

  21. Debt Structure as of March 31, 2014 (2) (2) (1) As of March 31, 2014 (2) On January 5, 2014, the Company repaid principal payments of approximately NIS 223 million of series B debentures and approximately NIS 300 million of series E debentures 21

  22. Financial highlights Q1’14 Vs. Q1’13

  23. Financial highlights Q1’14 Vs. Q4’13

  24. Contact us Shlomi Fruhling Chief Financial Officer Elad Levy Investor Relations Manager E-mail: investors@Cellcom.co.il Tel : + 972 52 9989755 Fax: + 972 52 9989700

More Related