Bezeq Israel Telecommunication : Q4 & FY 2021 Investor Presentation

Bezeq Group

Q4 & FY 2021

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, theinformation 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 Group | FY 2021 Summary

Revenues

NIS 8.82 bn

1.1%

Homes Passed

1.17 million**

Adjusted EBITDA *

NIS 3.71 bn

1.4%

120thousand**

Homes Connected

(retail and wholesale)

Adjusted Net Profit*

NIS 1.15bn

0.9%

Adjusted EBITDA Margin 42.1%

ARPU Internet

NIS 106

(FY 2021 average)

7.1%

Free Cash Flow

NIS 1.04 bn

29.7%

563 thousand

TV subscribers

~6k net adds

44% IP subscribers

1.1%

Decrease in Net Debt

NIS 1.8 bn

vs. 2019

23%

Improved liquidity ratios

2.576 million

Cellular subscribers

5.5%

of which 590k 5G subs**

	All results are compared to FY 2020 unless otherwise stated
	* After adjusting for other operating expenses/income, net, one-time losses/gains fromimpairment/increase in value of assets and stock-based compensation
3	** As of date of publication of reports

Bezeq Group | Q4 & FY 2021 Financial Highlights

NIS millions

	Revenues						Adjusted EBITDA*						Adjusted Net Profit*
				1.1%							1.4%													0.9%
	2.5%		8,723	8,821			887	2.5%		3,659	3,709			7.6%				1,144	1,154
2,203											277		256
2,258						909		42%	42%
								40%	41%
Q4-2020	Q4-2021	2020	2021				Q4-2020	Q4-2021	2020	2021				Q4-2020	Q4-2021	2020	2021
								% - Adjusted EBITDA margin

	CapEx				Free Cash Flow
				12.8%						29.7%
	0.5%		1,499	1,691		58.6%		1,478	1,039
					613
368	370		17%	19%
		254
17%	16%
Q4-2020	Q4-2021	2020	2021			Q4-2020Q4-2021	2020	2021
% - Capex/Sales

• Group revenues increased for the first time since 2016
• Increase in adj. EBITDA and adj. net profit due to improvement in Pelephone and yes
• Free cash flow impacted by increase in CapEx and timing differences in working capital and taxes

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

Bezeq Group | Key Operational Metrics

ARPU (NIS)

Subscribers (end of period, in thousands)

197190

97	99
63	56
49	50

		2,442	2,576
188	2,327
	1,718	1,639	1,583
106
	983	999	1,023
54	555	557	563
47	592	557	501

2019	2020	2021	2019	2020	2021
Moderate decrease in TV ARPU	Continued increase in retail	Moderate increase in TV		Increase in cellular and retail
(change in subscriber mix) and	Internet infrastructure ARPU	subscribers	Internet subscribers; decrease
cellular ARPU					in wholesale Internet
					subscribers

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TV

Wholesale Internet Infrastructure

Retail Internet Infrastructure

Access Lines

Cellular