Partner Communications Company Ltd (PTNR) 2022 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Partner Communications Third Quarter 2022 Results Conference Call. All participants are at present in a listen-only mode. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Amir Adar, Head of Investor Relations and Corporate Projects. Mr. Adar, please begin.

女士們先生們，謝謝你們的支持。歡迎參加合作夥伴通訊 2022 年第三季業績電話會議。所有參與者目前都處於只聽模式。 （操作員說明）。提醒一下，本次會議正在錄製中。我現在想將電話轉給投資者關係和企業專案主管阿米爾·阿達爾先生。阿達爾先生，請開始。

Thank you. And thank you to all our listeners for joining us on this conference call to discuss Partner Communications third quarter results for the year 2022. With me on the call today is Avi Gabbay, Partner's CEO; and Sigal Tzadok, our Acting CFO. Avi will provide an update on Partner's business development. He will then hand over to Sigal, who will provide a detailed discussion of our quarterly financial and operational results. And finally, we'll move on to the Q&A.

謝謝。感謝所有聽眾參加本次電話會議，討論 2022 年合作夥伴通信第三季度業績。今天與我一起參加電話會議的是合作夥伴首席執行官 Avi Gabbay；以及我們的代理財務長 Sigal Tzadok。 Avi 將提供合作夥伴業務發展的最新資訊。然後他將把工作交給 Sigal，後者將詳細討論我們的季度財務和營運業績。最後，我們將進入問答環節。

Before we begin, I would like to draw your attention to the fact that all statements in this conference call may be forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 as amended; Section 21E of the U.S. Securities Exchange Act of 1934 as amended, and the Safe Harbor Provision of the U.S. Private Securities Litigation Reform Act of 1995. Regarding such forward-looking statements, you should be aware that Partner's actual results might vary materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements are contained in Partner's press release dated November 23, 2022, as well as Partner's filings with the U.S. Securities and Exchange Commission on Forms 20-F, F-1 and 6-K as well as the F-3 self-registration statement, all of which are readily available.

在我們開始之前，我想提請您注意，本次電話會議中的所有陳述都可能是美國 1933 年證券法修訂案第 27A 條含義內的前瞻性陳述；經修訂的 1934 年美國證券交易法第 21E 條以及 1995 年美國私人證券訴訟改革法案的安全港條款。關於此類前瞻性陳述，您應該意識到合作夥伴的實際結果可能與預測的結果有重大差異在前瞻性陳述中。有關可能導致實際結果與前瞻性陳述中的結果存在重大差異的因素的更多資​​訊包含在 Partner 於 2022 年 11 月 23 日發布的新聞稿以及 Partner 向美國證券交易委員會提交的 20-F 表中。 F-1 和6-K 以及F-3 自我註冊聲明，所有這些都可以隨時取得。

Please note that the information in this conference call related to the projection or other forward-looking statements is subject to the previous Safe Harbor Statement as of the date of this call. For your information, this call is also being broadcast over the Internet and can be accessed through our website. If you have any further questions following the call, please feel free to contact me at 972-54-781-5051. I will now turn the call over to Partner's CEO, Avi Gabbay. Avi?

請注意，本次電話會議中與預測或其他前瞻性陳述相關的資訊受截至本次電話會議之日之前的安全港聲明的約束。供您參考，此電話會議也透過網路進行廣播，並且可以透過我們的網站進行存取。如果您在通話後還有任何疑問，請隨時致電 972-54-781-5051 與我聯繫。我現在將把電話轉給合作夥伴的執行長 Avi Gabbay。阿維？

Thank you Amir. Good morning, everyone and welcome to our earnings conference call. Q3 ended with solid results of KPI improvements translated into robust financial execution. In the last call I spoke about the importance of bringing value to our customers. In my experience, simplicity plays an important role to achieve this goal. Focusing on simplicity in our day-to-day activities is a key ingredient in making Partner more productive, more agile, and more accessible to its existing and potential customers. For example, in the past few months we have optimized our follow-up packages by bringing more value to our customers, adjusting tariffs in older discovery plants, and reducing the overall number of packages. By doing that we helped our customers to find quickly and clearly the best offer while at the same time improving productivity and satisfaction of our own sales and customer service teams.

謝謝你，阿米爾。大家早安，歡迎參加我們的財報電話會議。第三季結束時，KPI 改善的紮實成果轉化為強勁的財務執行力。在上次電話會議中，我談到了為客戶帶來價值的重要性。根據我的經驗，簡單性對於實現這一目標起著重要作用。注重日常活動的簡單性是讓合作夥伴更有效率、更敏捷、更容易接觸到現有和潛在客戶的關鍵因素。例如，在過去的幾個月中，我們透過為客戶帶來更多價值、調整舊發現工廠的關稅以及減少包裹總數來優化後續包裹。透過這樣做，我們幫助客戶快速、清楚地找到最佳報價，同時提高我們自己的銷售和客戶服務團隊的生產力和滿意度。

Another example is the termination of sales which tied cellular packages benefits to equipment purchases. These sorts of deals didn't match the value to the requirements of the customers and didn't follow the rule that one plus one needs to be at least two. I hope this gives you some color on the changes that we are implementing to better maximize long-term revenue from customers while increasing customer satisfaction. As for 5G rollouts, deployment is continuing its best at space. We continue with the expedited 5G infrastructure deployment and expect to achieve over 40% population coverage by the end of the year. Still, it is important to note that 4G continues to play an important role and our premium 4G value packages are getting attraction.

另一個例子是終止銷售，將蜂窩套餐的好處與設備購買掛鉤。此類交易的價值與客戶的需求不匹配，也不遵循一加一至少為二的規則。我希望這能讓您對我們正在實施的變革有所了解，以便更好地最大化客戶的長期收入，同時提高客戶滿意度。至於 5G 的推出，太空部署繼續保持最佳狀態。我們持續加快5G基礎設施部署，預計年底將實現40%以上的人口覆蓋率。不過，值得注意的是，4G 繼續發揮著重要作用，我們的優質 4G 超值套餐越來越有吸引力。

In fiber optics we're expanding our value chain as we become a dominant fiber optic infrastructure player as our fiber optic network has reached 929,000 households, homes connected as of today. Regarding challenges, as I said in the previous call, equipment sales is one of the areas in which more focus is needed in order to build new capabilities that will match our brand strength, the geographical reach, and vast customer base.

在光纖領域，我們正在擴大我們的價值鏈，成為光纖基礎設施領域的主要參與者，截至目前，我們的光纖網路已覆蓋 929,000 個家庭，並實現了聯網。關於挑戰，正如我在上一次電話會議中所說，設備銷售是需要更多關注的領域之一，以便建立與我們的品牌實力、地理覆蓋範圍和龐大客戶群相匹配的新能力。

On a company level, a new diversified and experienced management team has been formalized which will take the company to new records. I would like to thank Partner’s employees for their contribution to the results and will now turn the call over to Sigal Tzadok for a detailed review of our financial results for the quarter.

在公司層面，新的多元化且經驗豐富的管理團隊已經正式成立，這將使公司創下新紀錄。我要感謝 Partner 的員工對業績的貢獻，現在將電話轉給 Sigal Tzadok，詳細審查我們本季的財務表現。

Thank you, Avi. The growth in revenues this quarter was the result of a stronger seasonality impact in the cellular segment and the continued growth in fiber optics subscribers. Along with the increase in revenues, we continue to control the level of OPEX despite onetime expenses of 17 million Shekels related to the collective employment agreement. From July 2022, adjusted EBITDA increased by 10% from 250 million Shekels in the third quarter of last year to 276 million Shekels this quarter.

謝謝你，阿維。本季營收的成長是蜂窩業務季節性影響更強以及光纖用戶持續成長的結果。隨著收入的增加，儘管與集體就業協議相關的一次性費用為 1700 萬謝克爾，但我們繼續控制營運支出水準。自2022年7月起，調整後EBITDA成長10%，從去年第三季的2.5億謝克爾增至本季的2.76億謝克爾。

Regarding the cellular subscriber base, as we noted last quarter, the number of Ministry of Education package, subscribers decreased by 66,000 during the third quarter. Excluding the impact of this subscribers, the cellular subscriber base increased by 13,000 in the third quarter and the sale of churn rate totalled 6.8% compared to 6.6% in the previous quarter in the third quarter last year. Cellular output increased for the second consecutive quarter to total 51 Shekels compared to 48 Shekels in the third quarter of last year. Turning to the fixed line segment, the number of homes connected to our fiber optic infrastructure increased by 63,000 in the third quarter and the number of fiber optic subscribers increased by 18,000 compared to an increase of 17,000 in the previous quarter. The penetration rate of fiber optic subscribers from potential customers in connecting buildings remains unchanged at 13%.

關於蜂窩用戶群，正如我們上季度所指出的，教育部套餐用戶數量在第三季度減少了 66,000 人。剔除該用戶的影響，第三季蜂窩用戶基數增加了13,000人，銷售流失率總計為6.8%，而去年第三季上一季為6.6%。蜂窩網路產出連續第二季成長，總計 51 謝克爾，而去年第三季為 48 謝克爾。固定線路方面，第三季連接光纖基礎設施的家庭數量增加了63,000個，光纖用戶數量比上一季增加17,000個增加了18,000個。連接建築物中潛在客戶的光纖用戶滲透率維持在13%不變。

I will now briefly review funding and investing. Adjusted free cash flow for the quarter totalled 38 million Shekels, CAPEX payments in the third quarter totalled 205 million Shekels including a payment of 31 million Shekels for the 5G license fee for the tender that was held two years ago. Net debt was 667 million Shekels at the end of the quarter compared to 662 million Shekels at the end of the third quarter last. Finally, the company's net debt to adjusted EBITDA ratio stood at 0.6 at the end of the third quarter compared to ratio of 0.8 at the end of the third quarter last year. I will now be happy to open the call for questions. Moderator, please start the Q&A.

我現在將簡要回顧融資和投資。該季度調整後自由現金流總計 3,800 萬謝克爾，第三季資本支出總計 2.05 億謝克爾，其中包括為兩年前舉行的招標支付的 3,100 萬謝克爾 5G 牌照費。本季末淨負債為 6.67 億謝克爾，上一季末為 6.62 億謝克爾。最後，第三季末該公司的淨負債與調整後 EBITDA 比率為 0.6，而去年第三季末該比率為 0.8。我現在很高興開始提問。主持人，請開始問答。

Thank you. (Operator Instructions). The first question is from David Kaplan of Psagot. Please go ahead.

謝謝。 （操作員說明）。第一個問題來自 Psagot 的 David Kaplan。請繼續。

A quick question from me on the fixed line side, can you tell us what the split of new ads in the of customers connected to fiber lines are on your network versus wholesale?

我在固定線路方面提出了一個簡單的問題，您能否告訴我們，您網路上連接到光纖線路的客戶中的新廣告與批發廣告的比例是多少？

It is in 99% of our network. We almost don't do selling the fiber.

它存在於我們 99% 的網路中。我們幾乎不銷售光纖。

Okay. And the 900,000 homes passed, I know you guys have set a goal that's a little bit higher than that this year. Has anything changed, are you ahead of schedule on that or are you on schedule or are you thinking about passing more homes now given the success you've seen so far?

好的。 90萬個家庭已經過去了，我知道你們設定的目標比今年高一點。有什麼變化嗎？您是否提前完成了計劃，或者您是否按計劃進行，或者考慮到您迄今為止所取得的成功，您是否正在考慮通過更多的房屋？

No, we are quite on schedule.

不，我們完全按計劃進行。

Okay, so the end of this year we should or should say going into next year we should expect to see a significant decrease in CAPEX, is that correct?

好的，所以今年年底我們應該或應該說進入明年我們應該會看到資本支出大幅下降，對嗎？

Again, sorry.

再次抱歉。

We should expect to see much lower CAPEX in 2023 in that case than fewer investments in the fiber network?

在這種情況下，我們預期 2023 年的資本支出會比光纖網路的投資減少得多嗎？

We didn't summarize yet the budget for 2023 because we are in the process of it and we have to decide on the how many home we are going to pass this year and some other investments. So, I cannot elaborate on our budget till 2023.

我們還沒有總結 2023 年的預算，因為我們正在製定預算，我們必須決定今年要通過多少房屋以及其他一些投資。因此，我無法詳細說明 2023 年之前的預算。

So, does that mean you think there's a possibility that you would continue rolling out fiber and homes passed at the same rate that you're rolling them out now or would you expect for there to be a lower rate in 2023 of that?

那麼，這是否意味著您認為您有可能繼續以與現在相同的速度推出光纖和家庭網絡，還是預計 2023 年的速度會更低？

Definitely there's going to be a low rate in 2023. Still, there are other issues that we want to -- we are -- let’s say discussing the possibilities of investing in other issues that we need, it's not only fiber, it's not the only investment that we do.

2023 年肯定會出現低利率。不過，我們還想討論其他問題——我們正在討論投資我們需要的其他問題的可能性，這不僅是光纖，而且是這不是我們所做的唯一投資。

Okay, and then the last question is given the increase and continued higher levels of free cash flow, I know we talked last quarter about potential dividends, can you tell us where you are on that and as far as where Partner is or where the Board is as far as considering a dividend?

好的，然後最後一個問題是考慮到自由現金流的增加和持續較高水平，我知道我們上個季度討論過潛在股息，您能告訴我們您在這方面的進展以及合作夥伴或董事會的情況嗎？至於考慮股利嗎？

Okay, first of all, we believe that at the end all the stakeholders should enjoy the company including the shareholders. And shareholders the way to -- let's say to enjoy the company by dividends and we intend to summarize the budget to 2023. And then to almost at the same time to make the plan for five years to see the business plan of the company five years ahead. And then we'll make the decision about the dividends whether yes or no and the amount. As you probably understand, I mean it's probably yes, the issue -- the only issue is what is the amount and what is the schedule.

好吧，首先，我們相信最終所有利害關係人應該享受公司，包括股東。股東的方式是－比方說透過股息享受公司，我們打算總結到2023年的預算。然後幾乎同時制定五年計劃，看看公司五年的業務計劃先。然後我們將決定是否派發股息以及金額。正如你可能理解的那樣，我的意思是，這可能是問題——唯一的問題是金額是多少以及時間表是什麼。

And would that be like it was in the past, do you believe you might have answered this question yet, a quarterly dividend, do you think it would be a semi-annual or just an annual dividend?

就像過去一樣，您認為您可能已經回答了這個問題嗎？季度股息，您認為是半年度股息還是年度股息？

We didn't discuss it yet at the Board, so I don't want to.

我們還沒有在董事會討論這個問題，所以我不想討論。

(Operator Instructions). There are no further questions at this time. Before I ask Mr. Gabbay to go ahead with his closing statement, I would like to remind participants that a replay of this call is scheduled to begin in two hours. In the U.S., please call 1-888-254-7270. In Israel, please call 03-925-5921 and internationally, please call 9723-9255-921. The recording is also available on the company's website www.partner.co.il. Mr. Gabbay, would you like to make your concluding statement?

（操作員說明）。目前沒有其他問題。在我請加貝先生繼續結束語之前，我想提醒與會者，這次電話會議計劃在兩小時後開始重播。在美國，請致電 1-888-254-7270。以色列境內請電 03-925-5921，國際請電洽 9723-9255-921。該錄音還可在公司網站 www.partner.co.il 上取得。 Gabbay先生，您願意做一下總結發言嗎？

Yeah, thank you. Well, Partner continues to report growth and stability in the financial results together with continued investment in fiber optics in 5G deployments. Correspondently in these days, we have concluded the formalization of the company's management team while staying focused on the further service improvements to our customers. I want to thank you again for joining us today and we look forward to speaking to you next quarter. Have a good day.

是的，謝謝。嗯，Partner 繼續報告財務表現的成長和穩定性，以及對 5G 部署中光纖的持續投資。同時，我們在這些天裡完成了公司管理團隊的正式組建，同時繼續專注於進一步改善對客戶的服務。我想再次感謝您今天加入我們，我們期待下個季度與您交談。祝你有美好的一天。

Thank you. This concludes the Partner Communications third quarter 2022 Results conference call. Thank you for your participation. You may go ahead and disconnect.

謝謝。合作夥伴通訊 2022 年第三季業績電話會議到此結束。感謝您的參與。您可以繼續並斷開連線。