Telecom Argentina S A : Presentacion de Resultados 1Q20

TELECOM

ARGENTINA

Company Presentation

May 2020

This presentation may contain statements that could constitute forward-looking statements, including, but not limited to (i) the Company's expectations for its future performance, revenues, income, earnings per share, capital expenditures, dividends, liquidity and capital structure; (ii) the continued synergies expected from the merger between the Company and Cablevisión S.A. (or the Merger); (iii) the implementation of the Company's business strategy; (iv) the changing dynamics and growth in the telecommunications and cable markets in Argentina, Paraguay, Uruguay and the United States; (v) the Company's outlook for new and enhanced technologies; (vi) the effects of operating in a competitive environment; (vii) the industry conditions; (viii) the outcome of certain legal proceedings; and (ix) regulatory and legal developments. Forward- looking statements may be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "will," "may" and "should" or other similar expressions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. In addition, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by forward-looking statements. These factors include, among others: (i) the Company's ability to successfully implement our business strategy and to achieve synergies resulting from the Merger;

1. the Company's ability to introduce new products and services that enable business growth; (iii) uncertainties relating to political and economic conditions in Argentina, Paraguay, Uruguay and the United States, including the policies of the new government in Argentina; (iv) the impact of political developments, including the policies of the new government in Argentina, on the demand for securities of Argentine companies; (v) inflation, the devaluation of the peso, the Guaraní and the Uruguayan peso and exchange rate risks in Argentina, Paraguay and Uruguay; (vi) restrictions on the ability to exchange Argentine or Uruguayan pesos or Paraguayan guaraníes into foreign currencies and transfer funds abroad; (vii) the impact of currency and exchange measures or restrictions on our ability to access the international markets and our ability to repay ourdollar-denominated indebtedness; (viii) the creditworthiness of our actual or potential customers; (ix) the nationalization, expropriation and/or increased government intervention in companies; (x) technological changes; (xi) the impact of legal or regulatory matters, changes in the interpretation of current or future regulations or reform and changes in the legal or regulatory environment in which the Company operates, including regulatory developments such as sanctions regimes in other jurisdictions (e.g., the United States) which impact on the Company's suppliers; (xii) the effects of increased competition; (xiii) reliance on content produced by third parties;

1. increasing cost of the Company's supplies; (xv) inability to finance on reasonable terms capital expenditures required to remain competitive; (xvi) fluctuations, whether seasonal or in response to adversemacro-economic developments, in the demand for advertising; (xvii) the Company's ability to compete and develop our business in the future; (xviii) the impact of increased national or international restrictions on the transfer or use of telecommunications technology; and (xix) the impact of the outbreak of COVID-19 on the global economy and specifically on the economies of the countries in which we operate, as well as on our operations and financial performance. Many of these factors are macroeconomic and regulatory in nature and therefore beyond the control of the Company's management. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended, planned or projected. The Company does not intend and does not assume any obligation to update the forward-looking statements contained in this document. These forward-looking statements are based upon a number of assumptions and other important factors that could cause our actual results, performance or achievements to differ materially from our future results, performance or achievements expressed or implied by such forward-looking statements. Readers are encouraged to consult the Company's Annual Report on Form 20-F and the periodic filings made on Form 6-K, which are periodically filed with or furnished to the United States Securities and Exchange Commission, as well as the presentations periodically filed before the Argentine Securities and Exchange Commission (Comisión Nacional de Valores) and the Buenos Aires Stock Exchange (Bolsas y Mercados Argentinos), for further information concerning risks and uncertainties faced by the Company.

D I S C L A I M E R

1

The Company has accounted for the effects of inflation adjustment adopted by Resolution 777/18 of the Comisión Nacional de Valores ("CNV"), which establishes that the restatement for inflation will be applied to the annual financial statements, for intermediate and special periods ended as of December 31, 2018 inclusive. Accordingly, the reported figures corresponding to 1Q20 include the effects of the adoption of inflationary accounting in accordance with IAS 29. On the other hand, in order to ease the understanding and analysis of the earnings evolution by its users, additional figures of the income statements are included, which are non-restated for inflation and which were used as the base for the information presented in constant pesos.

D I S C L A I M E R

2

AGENDA

01		02		03

BUSINESS

FINANCIALSQ&A

HIGHLIGHTS

3

1Q20 IN FIGURES

Revenues	EBITDA	EBITDA Margin
974U$S mm*	342 U$S mm*35.1%

Million mobile

18.8subscribersArgentinain

Million

4.1broadbandsubscribers

Million

1.7convergent unique clients

3.5	Million Pay TV
subscribers

Million

3.1fixedsubscribers

Of broadband

41%clients with mobile bundle

* Figures in constant pesos as of March 31, 2020 converted at the BNA ask rate as of March 31, 2020 (64.47)

4

REVENUES BREAKDOWN

SERVICE REVENUES	REVENUES BREAKDOWN
Million of P$
Million of P$
-3%	5,1% 0,3%
	15,1%

36,8%

61.57259.559

																	20,9%
		1Q19 IAS 29		1Q20 IAS 29
REVENUES COMPOSITION																	21,8%
											Mobile		Broadband				Pay TV
Billion of P$
															Fixed & Data		Handsets				Other
23,1	22,0
					13,7	15,1	13,1	14,2		9,5	10,2
																	3,2	4,2		0,2	0,2
			Mobile			Broadband			Pay TV	Fixed & Data				Handsets				Other
												1Q20 IAS 29		1Q19 IAS 29

Figures may not sum up due to rounding

5

DRIVERS OF GROWTH

POSITIVE CLIENTS INFLOW (1Q20)

In Thousand

Source: ADB

304,1

272

32,1

Port in	Port out		Net
		Peer 1			Personal		Peer 2

FLOW BOXES	Flow for
In Thousand
FTTH and

				xDSL networks
		966	1.015	clients
	871
602	723

1Q19

2Q19

3Q19

4Q19

1Q20

MOBILE DATA USAGE

+11%

3,4 3,8

1Q19 1Q20

BROADBAND SPEEDS

52%	Of total subscribers with
				speeds between 50 and 300
				Mb
13%
									52%
		87%
									48%
1Q19			<50 Mb		>50 MB	1Q20

6

ACTIONS TAKEN DUE TO COVID -19

Implementation of the home office system before the local Government decided to do

Home-officeso. Around 10,500 notebooks were granted to employees. Webex teams is being used to connect among us. Our VPN system has a total of 17,000 units working as of today.

		Technical	We are reorganizing the way our technical people works in terms of home
		Employees	visits and interventions on public roads.
PROCESSES
Call Centers	Our call centers continue working under the home office system,
		attending more than 7,500 calls at the same time and more than 200,000
				daily calls.

We are not allowing any employee with a pre-existing pathology to enter

Healthcareinside our offices , reinforcing the hygienic conditions of our buildings and also taking extreme sanitary measures for technicians that work inside

private buildings.

CORPORATE GOVERNANCE

Crisis

Committee

The frequency of the Committee meetings, which was in place before the COVID-19, was increased and medical specialists were integrated to the group.

7

ACTIONS TAKEN DUE TO COVID -19

CLIENTS

Digital	COVID-19 accelerated the process of converting Telecom into a pure
Transformation	digital company in a very short time frame.
Digital	Telecom also implemented several digital payment alternatives that were
not in place prior to COVID-19. Our customers are also being able to
Payments
solve their technical problems on a digital basis.
Network	We are reinforcing our networks and systems to guarantee the continuity
and
of our services maintaining their quality.
Systems

INVESTORS

Digital		We have done several digital meetings with shareholders and debt
	holders. In addition, we will participate in any phone calls or virtual
Meetings
meetings arranged by financial institutions.
Shareholders´	We have done our first Shareholders´ Meeting on a virtual basis including
and inviting all shareholders to participate which has proved to be a
Meeting
success.

8

ACTIONS TAKEN DUE TO COVID -19

REGULATORY

ASPECTS

New

Decree

Minimum

Services

Prices

On March 24th, the Executive Power issued Decree No. 311/2020, which determined for a certain group of clients defined therein, the temporary suspension of the interruption in case of non-payment of fixed and mobile telephony, internet and cable TV services, among others.

In the case of fixed or mobile telephony, Internet and cable TV services, companies will have to maintain a reduced service for a period of 180 calendar days and must inform the ENACOM the prices established for the reduced services.

On March 2020, Telecom increased the average prices of its services. Due to COVID-19, and after a constructive dialogue with the Government, we decided that in the case of our basic fixed phone service and our prepaid mobile product, prices were going to be the same as of November, 2019.

ESG

We provide connectivity to 16 outpatients hospitals around the country and also to the

HealthcareGovernment´s COVID-19 central hub. We also increased the capacity of the telephone lines that are dedicated to receive calls related to COVID-19 .

We´ve granted discounts to mobile data used in edu.ar.gob.ar; gov.ar, as well as in the

platform Seguimos Educando(educ.ar). We are doing the same with Cruz Roja, Banco de

EducationAlimentosand other institutions. Moreover, we are offering educational programs and contents through Flow and our web www.nuestrolugar.com.ar.

9

DATA TRAFFIC INCREASE AFTER COVID-19

Distribution Network

Broadband to the Home

Upload

Global

InternetOther

Suppliers

International +40%

Download

+50%

+75%

Connections

+50%

Voice Traffic	Interconnection Network
+50%	Mobile Services

Data Traffic

+20%

Cloud

Services

+45%

Telecom

Datacenter

10

TRAFFIC BY SERVICE AFTER COVID-19

	Gaming	VPN
Video	+12%
Streaming		+38%
+24%

Social

Networks

+1%

WhatsApp

+110%

Video

Conference

+1000%

Storage File

Sharing

+600%

Call Mobile

Duration Voice

+24%	Traffic
	+17%

11

INFLATION EVOLUTION

YoY Inflation:

48.3%

Quarterly

Inflation:

7.1%

Weighing within the index

Food and non-alcoholic beverages	26.97%
Transport	10.99%
Clothes and Shoes	9.91%
Housing water, electricity and other fuels	9.40%
Restaurants and hotels	8.97%
Healthcare	8.00%
Recreation and culture	7.25%
Home furnishing and maintenance	6.36%
Other goods and services	3.52%
Alcoholic beverages and tobacco	3.48%
Communications	2.82%
Education	2.31%

12

REVENUES

EBITDA

Million of P$

Million of P$

Historical Figures

Inflation Adjusted

Historical Figures

Inflation Adjusted

(modeling purposes)

Figures

(modeling purposes)

Figures

-5%

+53%

+3%

+44%

65,735

62,762

33,7%

35,8%

32,7%

35,1%

1.765

22,025

23.275

21,488

164

60.997

7.166

42.460

21.861

14.322

1Q19

1Q20

1Q19 IAS 29

1Q20 IAS 29

1Q19

1Q20

1Q19 IAS 29

1Q20 IAS 29

IAS 29 Adjustment

EBITDA Margin

IAS 29 Adjustment

SERVICE REVENUES	EBITDA EVOLUTION
Million of P$
Million of P$

Historical Figures	Inflation Adjusted	-5%
(modeling purposes)	Figures		-8%
			-3%
+46%		61,572	59,559			+3%
		1.673
				40.737
		21.800
				62.762
39.772	57.886
					22.025
1Q19	1Q20	1Q19 IAS 29 1Q20 IAS 29	Revenues	Operating Costs	EBITDA
	IAS 29 Adjustment			before D&A	13

IAS 29 EBITDA 1Q20 - 1Q19

								YoY
IFRS, Million of P$			+P$537 (+2.5%)			Variation
		Ss. Revenues & other	Handsets			Administrative	Commercialization
	EBITDA 1Q19	incomes	Sales	Handsets Costs	Operative Expenses	Expenses	Expenses	EBITDA 1Q20
29000
21.488	2.013		986	1.685	693	146	22.025
24000
			960
19000

14000

9000

		-3%			-7%		-1%
					-16%
4000
			-23%	-30%
-1000
EBITDA 1Q19	Ss. Revenues & other	Handsets	Handsets Costs	Operative Expenses	Administrative Expenses	Commercialization	EBITDA 1Q20
		incomes	Sales				Expenses
	EBITDA Margin
	32.7%			+1.3%	+0.9%	+0.8%	-0.6%	35.1%

150%

130%

110%

90%

70%

50%

30%

10%

-10%

-30%

AS % OF
REVENUES	4%	37%	6%	18%

Figures may not sum up due to rounding	14

CONSOLIDATED RESULTS

OPERATING INCOME

IFRS, Million of P$, Percentage

Historical Figures	Inflation Adjusted
(modeling purposes)	Figures
IAS 29 Adjustment
+71%	-14%

13.647	6,666	5,766

7.970

-1.304

-7.881

	1Q19	1Q20	1Q19 IAS 29	1Q20 IAS 29
OPERATING
INCOME	19%	22%	10%	9%
MARGIN:

NET INCOME

IFRS, Million of P$, Percentage

Historical Figures	Inflation Adjusted
(modeling purposes)	Figures

2.641

1.897

1Q19	1Q20	1Q19 IAS 29 1Q20 IAS 29
	-1.550
-3.098

15

CAPEX

DEVELOPMENT INCLUDING RIGHTS OF USE

Million of P$

-26%

1Q20 HIGHLIGHTS

More than 90 new sites were deployed.

13.446

9.985

1,700 FTTH blocks and 590 1Ghz. HFC

1Q19 IAS 29 1Q20 IAS 29

TECHNICAL CAPEX BREAKDOWN

46%

42%

4% 8%

blocks were enabled.

The capacity plan of the HFC access was redefined due to COVID-19.

Unified network architecture: new urban and inter urban fiber was deployed in 1Q20.

	Network and Technology		Installations and CPE	16
	International Capex		Other

CASH FLOW

FCF GENERATION 1Q19	FCF GENERATION 1Q20
Million of P$	Million of P$

	21,488	11,926
							22,025	8,712
			162	9,400					8,067
			516	8,884
										5,246	427	4,819
	EBITDA	CAPEX *	WK & Others	OFCF	Taxes	FCF	EBITDA	CAPEX *	WK & Others	OFCF	Taxes	FCF
												YoY
							IFRS, Million					Variation
								-P$4,065
U$S	333	-185	-3	146	-8	138	342	-135	-125	81	-7	74
MM**
												YoY
							IFRS, Million					Variation
								-U$S64
* CAPEX considers investments in PP&E and Intangible Assets

* *Figures in constant pesos as of March 31, 2020 converted at the BNA ask rate as of March 31,2020 (64.47)

17

KEY FIGURES

In P$ Millions		LTM1Q20		FY19
Revenues		252,538		255,511
EBITDA		83,633		83,096
Gross Debt		171,129		163,851
Cash & Equivalents		37,031		29,290
Net Debt		134,098		134,561
Capex*		66,305		69,519
EBITDA-Capex*		17,328		13,577

Ratios		LTM1Q20		FY19
EBITDA Margin		33.1%		32.5%
Interest Coverage		6.65x		7.2x
Gross Debt / EBITDA		2.05x		1.97x
Net Debt / EBITDA		1.60x		1.62x

* CAPEX considers investments in PP&E and Intangible Assets	18

DEBT BREAKDOWN AS OF MARCH 2020

					U$S	P$	GUA	Total (U$S)
					(million)	(million)	(million)	(million)
C l a s s	A B o n d	2 0 2 1	465	-	-	465
C l a s s	I B o n d	2 0 2 6	400			400
V e n d o r F i n a n c i n g	95	-	-	95
I F C L o a n				250	-	-	250
I F C N e w L o a n		310	-	-	310
I I C L o a n				63	-	-	63
Te r m	L o a n	d u e	2 0 2 2	140	-	-	140
D e u t s c h e	B a n k	L o a n	225	-	-	225
F i n n v e r a				68	-	-	68
I D B L o a n				225	-	-	225
N ú c l e o				-	-	76	76
L o c a l B o n d s			-	68	-	68
O t h e r				8	235	-	243
To t a l					2,250	303	76	2,629

MATURITY PROFILE (U$S mm)*

			10					U$S		ARS		GUA
			175
5					10										15
		834						10
129
				558						27
														413
	184															25
									162
										73
2020	2021	2022		2023	2024	2025	2026

	2020	2021	2022	2023	2024	2025	2026
Total
Maturities
(U$S mm)	318	1018	568	172	100	40	413

*Figures may not sum up due to rounding

19

LATEST FINANCING TRANSACTIONS

• Apeso-denominated bilateral loan agreement with Banco Macro was closed for an amount equivalent to U$S 62 million,maturing in September 2021.
• A new disbursement from the Finnvera credit facility was received, amounting toUS$10.5 milliondollars.
• A new Series of Nucleo´s notes was issued in guaranies forU$S 15.4 millionequivalent, maturing in March 2025.
• New overdrafts in pesos were closed for a total amount ofU$S 144 millionequivalent.

20

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