Bezeq Israel Telecommunication : Group 2023 Interactive Highlights

Bezeq Group

Investor Presentation

2023 Financial Results

Pelephone

Forward-Looking Information and Statement (Disclaimer)

This presentation contains general data and information as well as forward looking statements about Bezeq - The Israeli 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 aspirations 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 can be accessed on 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.

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Bezeq's Compass - Strategy Update

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Bezeq Group | Key Strategic Pillars (Reminder)

01Fiber as growth engine

Bezeq is leading the fiber revolution in Israel. Within the next few years, most Israeli homes will have access to Bezeq's fiber

yes as a 'triple-play' growth

02engine to accelerate fiber growth

yes markets a TV & Internet bundle while actively migrating into Full-IP

035G as revenue growth driver

Pelephone is leading the 5G revolution in Israel and within the next few years most of its subscriber base is expected to move to 5G, while increasing data usage and contributing to ARPU

Developing a leading, growth-

04focused ICT company

Bezeq International is focused on the growing areas of the ICT market: migration to the public cloud and cyber

security services, among others

Business portfolio diversification to

05create additional growth sources

The group will identify opportunities for expansion into adjacent areas which are relevant to its core capabilities and in 2024 announced its entrance into the electricity supply sector

06 Maintain balanced capital structure and return to dividend distribution

The group has returned to dividend distributions while maintaining an optimal leverage and credit rating within the AA group

4	Creation of significant growth engines while continuing streamlining process

Bezeq's Compass

| Transformation, Growth and Value Creation

2020-2022	2023
Focus on Growth and
Transformation
Investments

Mid-termValue

Creation and

Sustainability

• Launch of nationwide fiber optics plan
• 5G spectrum auction
• Launch of yes migration from satellite to IP
• Restructuring and cost-saving plan at subsidiaries
• Leverage reduction and improved debt maturity curve

• Record retail fiber net adds
• 2.1m fiber homes passed with 27% take-up rate
• 68% of yes' subscribers are on IP
• Over 1m 5G subscriber plans
• Launch of operational excellence plan (early 2024)
• Increase in dividend payout ratio to 70% (early 2024)

• 40% take-up rate; retail Internet ARPU > NIS 140
• ARPU cellular: NIS 45-50 (excl. interconnect fees)
• Completion of migration from satellite to IP, TV ARPU NIS 155-160
• Operational efficiency improvement to save OpEx and CapEx
• The Company is acting to remove the structural separation

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Bezeq's Compass | Financial Highlights

Growth in

Adj. EBITDA

Increase in Adj. EBITDA margin

Adj. EBITDA - CapEx

Significant growth in

Free Cash Flow

Financial Strength

6	(1) For the year 2023
(2) ROCE- EBIT/(Total assets less current liabilities)

2021-2023

1.4% CAGR

42%

Increase of approx. NIS 100m

12% CAGR

• 50% dividend payout policy in 2022, 60% in 2023 and 70% in 2024
• Net debt/EBITDA of 1.6 (1) with credit rating in AA group
• ROCE )2( 16.9% (1)

Mid-term

1.5%-2.0% CAGR

42%-44%

Increase of

NIS 400-500m

7%-9% CAGR

• Strive to increase dividend payout
• Maintain credit rating in AA group

Bezeq's Compass | Technological & Business Roadmap

2020

Today

Migration to fiber

Launch of fiber project

• 2.2m homes passed
• Accelerated retail fiber take-up
• 619k subscriber take-up (retail + wholesale)
• 28.6% take-up rate
• 23% increase in broadband ARPU(1)

Transition to 5G	Migration to IP
	5G Tender Award		Satellite to IP migration

• Over 1 million subscribers		• 408k IP(2) subscribers (71%)
(41% of total subscribers)

Mid-term	• Completion of fiber roll-out

• 40% take-up rate (retail + wholesale)
• Retail ARPU - above NIS 140

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		• Completion of IP migration
•	Approx. 80% 5G subscriber plans
•	Cellular ARPU - NIS 45-50		•	OpEx and CapEx savings
			•	TV ARPU - NIS 155-160

Technology upgrades and business focus enhance growth potential

1. As compared to Q4-2020
2. IP subscribers - the number of yes subscribers viewing IP broadcasting through the yes+ and STINGTV services. This includes subscribers that use satellite services as well

Bezeq's Compass | Multi-year Operational Efficiency Project

Self service and digital

Reduce customer inquiries and length of handling them through expansion of self- service

Field technicians

Proactive, remote solutions and reduction in idle visits

Real estate and leases

Reduction in occupied area and improved agreements

Reduce representative turnover	Corporate headquarters
Costs of turnover - recruitment, training,	Digitization and automation of
apprenticeship and time needed to reach high	administrative procedures
productivity

Engineering

Methods and tools for effective project management and maintenance

Sales & services procedures

AI and data based

Energy savings

Electric cars, agreements with new suppliers, PV and storage sites evaluation

Streamlining sales processes

Prioritization, reduction of administrative time and effective management of orders

The operational efficiency project will be integrated with the completion of the fiber rollout and end of satellite to

IP migration. Together they hold potential for significant reduction in OpEx and CapEx

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Bezeq Group | ESG Milestones, Ambitions and Targets

• ESG targets set
• Bezeq publishes first ESG report since 2010
• Publication of human rights policy
• Improvement in Company ESG ratings
• Approved Company policies
• CDP registration
• Join Ma'ala rating

• Bezeq subsidiaries adopt ESG targets
• Bezeq signs UN Women's Empowerment Principles to advance gender equality
• Transition to hybrid vehicles - more than 50% of fleet
• Doubled the scope of electronic waste recycling in two years to 95 tons
• Reduced electricity and water consumption as well as carbon footprint
• Committed to reducing the digital divide in Israel:
• • Over 550 NGOs receive donation of Bezeq services
  • Over 10,000 employee volunteer hours for the community
• Pelephone and yes adopted the Givati Brigade and will provide support in the coming years
• yes supports the Young-Docu project, which accompanies at-risk youth in the creation of documentary films

• Equal representation of women in Bezeq management and at least 40% on the BoD
• Increase rate of diverse populations to 20%

Reduce GHG

emissions to net zero

2020-2022

2023

2030

2050

Bezeq is connecting Israel to an enhanced future

Fiber deployment brings the periphery closer to the center and reduces energy use

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Bezeq Group | 2023 Summary

Strong execution in strategic	Highest Bezeq Fixed-Line	Adj. EBITDA rose 2.2%
growth drivers - robust fiber	revenues in the last	to NIS 3.8 billion;
take-up, consistent growth	decade; highest Pelephone	11% increase in Adj. Net
in 5G subscriber plans in	service revenues (excluding	Profit to NIS 1.33
Pelephone reaching over 1	interconnect) since 2017;	billion;
million	highest yes revenues since
	2019

Increase in dividend	Upgrade in credit
payout to 60% in March	outlook to "positive" by
2023 and distribution of	both domestic rating
NIS 638 million during 2023	agencies

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Bezeq Group is executing on its strategy while focusing on growth