Bezeq Israel Telecommunication : Investor Presentation- Q3 2022

Bezeq Group

Q3 2022

Investor Presentation

Forward-Looking Information and Statement (Disclaimer)

This presentation contains general data and information as well as forward looking statements about Bezeq The Israel Telecommunications Corp., Ltd ("Bezeq"). Such statements, along with explanations and clarifications presented by Bezeq's representatives, include expressions of management's expectations about new and existing programs, opportunities, technology and market conditions. Although Bezeq believes its expectations are based on reasonable assumptions, these statements are subject to numerous risks and uncertainties. These statements should not be regarded as a representation that anticipated events will occur or that expected objectives will be achieved. In addition, the realization and/or otherwise of the forward looking information will be affected by factors that cannot be assessed in advance, and which are not within the control of Bezeq, including the risk factors that are characteristic of its operations, developments in the general environment, external factors, and the regulation that affects Bezeq's operations.

This presentation contains partial information from the public reports of Bezeq under the Israeli Securities Law 5728-1968 (the "Securities Law"), which reports can be accessed at the Israeli Securities Authority's website, www.magna.isa.gov.il. A review of this presentation is not a substitute for a review of the detailed reports of Bezeq under the Securities Law and is not meant to replace or qualify them; rather, the presentation is prepared merely for the convenience of the reader, with the understanding that the detailed reports are being reviewed simultaneously.

No representation is made as to the accuracy or completeness of the information contained herein.

The information included in this presentation is based on information included in Bezeq's public filings. However, some of the information may be presented in a different manner and/or breakdown and/or is differently edited. In any event of inconsistency between Bezeq's public filings and the information contained in this presentation, the information included in the public filings shall prevail.

The information contained in this presentation or which will be provided orally during the presentation thereof, does not constitute or form part of any invitation or offer to sell, or any solicitation of any invitation or offer to purchase or subscribe for, any securities of Bezeq or any other entity, nor shall the information or any part of it or the fact of its distribution form the basis of, or be relied on in connection with or relating to any action, contract, commitment or to the securities of Bezeq. The presentation does not constitute a recommendation or opinion or substitute for the discretion of any investor.

2

Bezeq Group | Focus on Growth

Record take up of fiber customers and continued growth in retail broadband ARPU

Subscriber growth in

Pelephone and yes

Roaming recovery and continued growth in 5G plans contributed to higher ARPU and significant improvement in Pelephone profitability

Revenue growth of

12% in Pelephone and

5% in Bezeq Fixed-Line

yes launched TV + Bezeq fiber bundle

Continued decrease in net debt, combined with dividend distributions

Continued focus and improvement in ESG

The group is progressing in the implementation of its strategy while focusing on growth

3

Bezeq Group | Q3-2022 Summary

Revenues

NIS 2.26 billion

5.6%

Fiber Take Up in Q3

51 thousand

Fiber Subscribers

(retail and wholesale)

233thousand(2)

Adjusted EBITDA (1)

NIS 947 million

1.0%

Adjusted EBITDA margin 41.9%

ARPU Internet

NIS 116

8.4%

Fiber Homes Passed 1.48million (2)

Adjusted Net Profit (1)

NIS 314million

6.4%

Cellular subscribers

2.68 million

5.0%

753k subs with 5G plans(3)

Free Cash Flow

NIS 30 million

92.0%

Cellular ARPU

NIS 58

5.5%

Cellular Service Revenues NIS 467 million

12.0%

Decrease in Net Debt

NIS 600 million

10.0%

Improved coverage ratios

TV subscribers

575 thousand

2.7%

55% are IP subscribers(2)

	All results are compared to Q3-2021 unless otherwise stated
	(1) After adjusting for other operating expenses/income, net, one-time losses/gains from impairment/increase in value of assets and stock-based compensation
4	(2) As of date of report
(3) As of early November

Bezeq Group - Key Financial Highlights | NIS Million

		Revenues							Adjusted EBITDA*								Adjusted Net Profit*
					5.6%									1.0%																6.4%
	2,142	2,258	2,255	2,225	2,262			938	909	958	924	947			295	256	322	310	314
								44%	40%	43%	42%	42%
	Q3-2021	Q4-2021	Q1-2022	Q2-2022	Q3-2022			Q3-2021	Q4-2021Q1-2022Q2-2022	Q3-2022		Q3-2021Q4-2021	Q1-2022	Q2-2022	Q3-2022
										% - Adjusted EBITDA margin						• Revenue increase of 12% in Pelephone
			CapEx								Free Cash Flow
														and 5% in Bezeq Fixed-Line
					15.7%							92.0%		• Increase in Adjusted Net Profit mainly
					515							570						due to decrease in financing expenses
	445	370	430	427												• Free cash flow was impacted by timing
				377			359
							254						differences in working capital in all
																	group companies (mainly payment for
	21%	16%	19%	19%	23%									30				frequencies, payment of salaries in
																	advance, timing of payments to
																	universal fund and early retirement)
	Q3-2021	Q4-2021	Q1-2022	Q2-2022	Q3-2022			Q3-2021	Q4-2021	Q1-2022	Q2-2022	Q3-2022

% - Capex/Sales

5 * After adjusting for other operating expenses/income, net, one-time losses/gains from impairment/increase in value of assets and stock-based compensation