Euskaltel S A : OTHER RELEVANT INFORMATION Euskaltel publishes first semester 2020 results presentation.

Euskaltel

Group

Q2

2020

results

July 23rd, 2020

| Disclaimer

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The information contained in the Presentation has not been independently verified and some of the information is in summary form. No representation or warranty, express or implied, is made by the Euskaltel Group (including Euskaltel, S.A. and R Cable y Telecable Telecomunicaciones, S.A.U., nor by their directors, officers, employees, representatives or agents as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions expressed herein. None of Euskaltel Group, nor their respective directors, officers, employees, representatives or agents shall have any liability whatsoever (in negligence or otherwise) for any direct or consequential loss, damages, costs or prejudices whatsoever arising from the use of the Presentation or its contents or otherwise arising in connection with the Presentation, save with respect to any liability for fraud, and expressly disclaim any and all liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in connection with the accuracy or completeness of the information or for any of the opinions contained herein or for any errors, omissions or misstatements contained in the Presentation.

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2

Q2 2020 results

| Virgin telco successful launch accelerates customer growth to record levels

Operating

KPIs

(Q2 20

vs

Q1 20)

Financials

+11.3k

+6.5k

19m

+0.3%

+3.7%

+8.8%

+10.4%

Total Mass Market fixed customers net adds1

Virgin telco fixed customers net adds

Addressable households

Revenue

(YoY growth)

EBITDA

(YoY growth)

EBITDA ex Virgin

(YoY growth)

OpCF

(YoY growth)

Virgin telco's 6.5k new customers add to the traditional business excellent customer growth

National coverage ramps up to drive Virgin telco success

Revenue only slightly impacted by COVID-19in the quarter

Efficiency initiatives compensate Virgin launch costs to continue driving strong cash flow growth

1. Mass market fixed subs = residential fixed subs + SOHO fixed subs (exc. mobile only subs)	3

Q2 2020 results

| Strategic roadmap successfully implemented ahead of expectations in 12 months

1	Single efficient	2	3
	Traditional business	Successful launch of
	integrated
	improvement	national expansion
	organisation

One		€92m	6.5k
four brands
business,		Traditional business	Virgin telco fixed
New organisation
					EBITDA, ahead of	customers in its first
implemented in one
	expectations	month since launch
month

Successful implementation of strategic roadmap

drives record growth and profitability

4

Q2 2020 results

| Traditional business efficiencies drive record profitability

Traditional business EBITDA - ex Virgin (€m)

~€10m quarterly efficiencies

92.21

~€40m per year run-rate efficiencies implemented:

Single efficient rationalised organization

91.8 implemented

86.8

84.4

81.1

87.7

Profitability-focusedsales structure in place

Results-orientedcustomer care implemented

Unprofitable football rights cancelled

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

1. Q4 19 EBITDA includes €6.9 million of positive impacts mainly from the renewal of the

Orange wholesale agreement

Plans in place to deliver further efficiencies in the coming quarters

5

Q2 2020 results

| Longer term initiatives will drive further efficiencies in the coming quarters

While short term initiatives have delivered results ahead of expectations, longer term initiatives already in place assure future efficiency delivery:

Further re-balancing of sales mix toward non face-to-facechannels to optimize sales costs and increase gross adds

Digitalisation and improvement of customer processes to reduce cost at origin and improve quality Optimized network management to improve customer margins

Network and operations supplier integration deliver cost sinergies

Implementation of self-installation reduces provisioning costs

Further integration of IT systems in the three regions will reduce costs while improve quality and reduce complexity

Longer term initiatives plus business improvements

assure continued efficiency delivery

Q2 2020 results

6

| Virgin telco launch shows excellent trends in its first weeks

July net adds to surpass June

despite seasonality

Virgin telco - fixed customers net adds (000s)

5,991

		470
		May1	June	July expected
% total target coverage implemented	67%	68%	79%
at the beginning of the month

Virgin telco has accelerated the company's customer growth

to record levels in just its first month of launch

1. Virgin telco launched on 20th May 2020	7

Q2 2020 results

| Footprint expansion and Virgin telco launch have multiplied eightfold the company's growth opportunities in just one quarter

Traditional business	6.3m
	Household coverage

+4.8k

Fixed customers net adds in Q2 2020

Two growth levers:

+500k VULA&NEBA new addressable households implemented in March

3.5m households in five expansion pilots (Navarra, Cataluña, La Rioja, Cantabria, León)

	National expansion	18.7m
+		Household coverage
	+6.5k
	Fixed customers net
		adds in Q2 2020

19 million Virgin telco addressable households multiply eightfold the company's growth opportunities

8

Operating review

9

Q2 2020 results

| Recently added coverage will accelerate Virgin telco growth

Current footprint (in thousand households)

Homes passed_owned (HFC & FTTH)1	+5.2m	18,709
Accessible homes_wholesale 2

13,533

16,217

Virgin telco growth to further accelerate as additional footprint is addressed

Recently signed wholesale agreements allow for faster growth and increased

		5,780	11,050
	5,360
2,953	2,999	3,311
598
2,355	2,361	2,469	2,483	2,492
Q2 19	Q3 19	Q4 19	Q1 20	Q2 20

profitability

Optimal network management to drive profitability upsides going forward

1.	HFC, infill FTTH plus FTTH co-investment household coverage	10
2.	Orange bitstream wholesale plus Telefónica's VULA & NEBA coverage

Q2 2020 results

| Virgin telco drives record customer growth in the quarter

Mass market subscribers (in thousands)

Mass market fixed subscribers (in thousands)

		mass market fixed services subs		mass market mobile only subs
772	771	771	769	782
106	104	102	99	101

681

666 667 669 670

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

+6.5	681
+4.8
670
Q1 20	Q2 20

Significant addressable footprint increase drives customer growth

both in the traditional business and in national expansion

11

Q2 2020 results

| Services experience strong growth in-linewith customers

Mass market services1 (RGUs) per type (in thousands)

		Post-paid mobile		TV 2		Broadband		Fixed Voice	+40k
2,832	2,834			2,848	2,849	2,889
1.151	1.155			1.163	1.164	1.184
482	480			485	489	497 2
586	589			593	596	607
613	610			607	600	601
Q2 19		Q3 19				Q4 19		Q1 20	Q2 20

Services	3.67	3.67	3.69	3.71	3.69
/sub

1. Mass market services = residential services + SOHO services + RACC only mobile services
2. TV services figures increase by the not previously accounted second TV services

Q2 2020 results

+20k QoQ

+8k QoQ

+11k QoQ

+1k QoQ

12

| SME and large accounts customer growth supported by strong demand for additional services in the quarter

SME and large account subscribers (in thousands)

15.916.0

15.615.7 15.8

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

13

Q2 2020 results

Financial review

14

Q2 2020 results

| Continued revenue growth only slightly impacted by COVID-19

Total revenue breakdown by segment1 (EURm)

		Mass market		B2B		Wholesale and Other
171.1	171.1	171.6	171.8	171.6
		+0.2
8.0	8.3	8.8	8.5	8.0
27.0	26.5	27.1	29.7	28.2

136.0

136.4

135.7

133.6

135.2

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

1. Mass market revenue = residential revenue + SOHO revenue + RACC mobile only revenue

Total revenue evolution YoY (%)

+0.7%

+0.3%

+0.1%

(0.4%)

(0.9%)

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

15

Q2 2020 results

| Strong efficiency delivery compensates Virgin telco launch costs

Gross margin (% over revenue)

Selling, general and administrative expenses (EURm)

		1
74.5%	74.0%	77.1%	74.2%
72.7%

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

-7.4%(-17.5% ex Virgin)

43.0	39.9	40.1		39.8
3.2	37.2			Other indirect costs
3.6	3.2	2.2
9.5	3.4
9.0	9.4	9.6			Network and IT
	9.7
						systems
11.7	10.7	10.8	10.0	10.2			Personnel
13.1	13.0	12.2		10.9			Customer care and
	11.2				sales
5.5	3.6	4.4	3.0	6.9 2			Marketing and SAC
Q2 19	Q3 19	Q4 19	Q1 20	Q2 20

1. Gross margin includes €6.9 million of positive impacts mainly from the renewal of the Orange wholesale agreement
2. Includes €3.8m of the Virgin telco marketing launch campaign

16

Q2 2020 results

| Traditional business record profitability results in for continued EBITDA growth

EBITDA1 (EURm)Total EBITDA evolution3 YoY (%)

		% over revenue	+8.1%	+8.8%
		+7.7%	ex Virgin
		51.0%
		53.8%
		91.8
	50.7%	51.1%
49.4%	-4.3		+3.7%

		92.2 2	87.7	+0.1%
84.4	86.8		87.5
				(3.2%)

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

1. EBITDA definition as per 'alternative performance measures': EBIT + depreciation and amortization +/- impairment + other non recurrent results
2. Q4 19 EBITDA includes €6.9 million of positive impacts mainly from the renewal of the Orange wholesale agreement

Q2 19

Q3 19

Q4 19

Q1 20

Q2 20

3. EBITDA evolution excluding the impact of IFRS 16 (€10.1m in the year) in 2019 from reported EBITDA

17

Q2 2020 results

|Cash flow generation surpasses €50 million in the quarter

Capex (EURm and as % of revenue)

SAC1 Capex ex - SAC

		44.4
38.3	36.9		38.6	36.6
		13%		3.1
13%	11%		11%
		9%

10%	10%	13%	12%	10%

OpCF (EBITDA - capex) (EURm)

			% over revenue
			29.6%
29.1%	27.9%	28.6%	58.3
27.0%		-7.4

46.1 49.8 47.8 49.1 50.9

Q2 19	Q3 19	Q4 19	Q1 20	Q2 20	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20
1. SAC capex includes commercial costs, customer installation and customer equipment

18

Q2 2020 results

| Strong cash flow generation allows for continued deleverage in the quarter

Q2 20 cash allocation (EURm)

Q2 20 net debt (EURm)

51.0%

% over revenue

Net debt/	▪ Cost of debt: 2.62%
EBITDA1	▪ Average maturity: 4.1 years2

87.5	(36.6)
	29.6%
	50.9	(10.9)
		(6.2)	(2.9)		16.2%
			(3.2)
				27.7	(1.9)	25.8

4.12x	4.07x
1,488	1,462

Net debt as of March 31, 2020 Net debt as of June 30, 2020

1. EBITDA adjusted by identified potential synergies
2. €215m amortising TLA replaced in July 2020 with bullet loan due in December 2023

19

Q2 2020 results

| Q2 2020 results deliver a strong growth and profitability combination

Strategic roadmap successfully implemented ahead of expectations

Traditional business improvement delivers record profitability

Successful launch of Virgin telco results in record customer growth

Accelerating Virgin telco customer adds create significant growth driver

Continued efficiency implementation drives strong EBITDA growth

Strong cash flow generation results in continued deleverage

20

Q2 2020 results

EUSKALTEL, S.A.

Investor Relations Office Tel: [phone] [e-mail] www.euskaltel.com

Q&A

Appendix

Euskaltel Group Q2 2020 consolidated results and KPIs

22

Q2 2020 results

| Euskaltel Group consolidated - KPIs (i/iii)

Mass market			Annual				Quarterly
KPIs	Unit		2019		Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20
Homes passed_owned (HFC & FTTH)	#	2,468,822	2,341,655	2,355,173	2,360,891	2,468,822	2,482,870	2,492,121
Accessible homes_wholesale	#	3,310,812	569,092	598,061	2,999,183	3,310,812	11,050,114	16,216,808
Mass market subs 1	#	770,865	767,616	771,646	771,167	770,865	768,891	782,171
o/w fixed services subs	#	669,317	661,558	666,138	667,022	669,317	669,678	681,002
o/w mobile only subs	#	101,548	106,058	105,508	104,145	101,548	99,213	101,169
Total services (RGUs)2	#	2,848,267	2,773,355	2,831,942	2,833,547	2,848,267	2,849,455	2,889,293
Fixed Voice	#	606,809	610,105	612,549	609,981	606,809	599,972	600,982
Broadband	#	593,338	579,523	586,080	589,090	593,338	596,292	607,483
TV	#	484,957	456,119	481,896	479,639	484,957	489,090	496,740
Post-paid mobile	#	1,163,163	1,127,608	1,151,417	1,154,837	1,163,163	1,164,101	1,184,088
Services (RGUs) per subscriber	#	3.69	3.61	3.67	3.67	3.69	3.71	3.69
Global ARPU fixed customers (quarterly standalone)	€/month	60.07	59.98	60.00	60.37	60.07	60.04	59.99
SMEs and Large Accounts			Annual				Quarterly
KPIs	Unit	2019		Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20
Customers	#	15,763	15,460	15,633	15,708	15,763	15,904	15,993

1. Mass market subs = residential subs + SOHO subs + RACC only mobile subs
2. Mass market services = residential services + SOHO services + RACC only mobile services

Note: The change in 2019 subs and ARPU figures is due to a reclassification of 0.2k subs from mass market to SMEs and a recognizition of not previously reported 0.3k SME subs.

23

Q2 2020 results

| Euskaltel Group consolidated - Consolidated financials (ii/iii)

Profit and Loss Statement			Annual				Quarterly
	Unit	2019		Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20
Total revenue	€m		685.5		171.7	171.1	171.1	171.6	171.8	171.6
Y-o-y change	%	-0.9%	-2.8%	-0.9%	-0.4%	0.7%	0.1%	0.3%
o/w Mass market revenue1	€m		542.1	134.0	136.0	136.4	135.7	133.6	135.4
o/w B2B revenue	€m	110.9	30.3	27.0	26.5	27.1	29.7	28.2
o/w Wholesale and Other revenue	€m	32.5	7.4	8.0	8.3	8.8	8.5	8.0
Gross margin	€m		510.0		123.6	127.4	126.6	132.3	124.9	127.3
% of total revenue	%		74.4%		72.0%	74.5%	74.0%	77.1%	72.7%	74.2%
Selling, General & Admin. Expenses (SG&A)	€m		(165.4)		(42.5)	(43.0)	(39.9)	(40.1)	(37.2)	(39.8)
o/w marketing and SAC	€m	(18.7)	(5.2)	(5.5)	(3.6)	(4.4)	(3.0)	(6.9)
o/w customer care and sales	€m	(52.5)	(14.2)	(13.1)	(13.0)	(12.2)	(11.2)	(10.9)
o/w personnel	€m	(44.8)	(11.6)	(11.7)	(10.7)	(10.8)	(10.0)	(10.2)
o/w network and IT systems	€m	(37.7)	(9.7)	(9.5)	(9.0)	(9.4)	(9.7)	(9.6)
o/w other indirect costs	€m	(11.8)	(1.8)	(3.2)	(3.6)	(3.2)	(3.4)	(2.2)
Adjusted EBITDA	€m		344.5		81.1	84.4	86.8	92.2	87.7	87.5
% of total revenue	%		50.3%		47.3%	49.4%	50.7%	53.8%	51.1%	51.0%
Y-o-y change	%	2.4%	-3.7%	-0.1%	2.6%	10.4%	8.1%	3.7%
Depreciation and Amortization	€m	(202.7)	(50.2)	(51.0)	(51.1)	(50.4)	(49.9)	(50.4)
Extraordinary items	€m	(21.0)	(2.9)	(7.6)	(5.2)	(5.3)	(2.2)	(2.1)
Net financial expenses	€m	(49.3)	(12.6)	(12.1)	(12.4)	(12.1)	(11.9)	(14.8)
Net profit before taxes	€m		71.5		15.4	13.7	18.0	24.4	23.7	20.2
Taxes	€m	(9.5)	(3.4)	(2.8)	1.0	(4.3)	(4.6)	(3.8)
NET PROFIT	€m		62.0		11.9	11.0	19.0	20.1	19.1	16.4

1. Mass market revenue = residential revenue + SOHO revenue + RACC only mobile revenue
Note: 2019 revenue figures impacted by a reclassification due to reporting changes to more accurately reflect the integration of the 3 companies. Change in 2019 gross margin and
SG&A figures is due to an expenses reclassification due to reporting changes to more accurately reflect the integration of the 3 companies.	24

Q2 2020 results

| Euskaltel Group consolidated - Consolidated financials (iii/iii)

Cash Flow Statement			Annual				Quarterly
	Unit		2019		Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20
EBITDA	€m	344.5	81.1	84.4	86.8	92.2	87.7	87.5
Capex	€m		(154.3)		(34.6)	(38.3)	(36.9)	(44.4)	(38.6)	(36.6)
% of total revenue	%		-22.5%		-20.2%	-22.4%	-21.6%	-25.9%	-22.5%	-21.3%
Operating Cash Flow	€m		190.3		46.5	46.1	49.8	47.8	49.1	50.9
% of total revenue	%		27.8%		27.1%	27.0%	29.1%	27.9%	28.6%	29.6%
Interests	€m		(42.1)		(12.3)	(9.3)	(11.4)	(9.1)	(11.2)	(10.9)
Working Capital	€m		(7.4)		(32.0)	15.2	1.1	8.4	(7.3)	(6.2)
Taxes	€m		(16.8)	(6.8)	(2.6)	(1.0)	(6.4)	(7.0)	(2.9)
Others	€m		(23.0)	(5.9)	(7.7)	(5.3)	(4.2)	(2.1)	(3.2)
Free Cash Flow	€m		101.1		(10.5)	41.8	33.3	36.5	21.5	27.7
Dividends	€m		(55.3)		(25.0)	-	(30.3)	-	(23.1)	(1.9)
Net debt variation	€m		45.8		(35.5)	41.8	3.0	36.5	(1.6)	25.8
NET DEBT	€m		1,486.3		1,567.5	1,525.8	1,522.8	1,486.3	1,487.8	1,462.0
Balance Sheet			Annual				Quarterly
	Unit		2019		Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q2 20
Non-current Assets	€m	2,749.0	2,779.1	2,765.1	2,754.5	2,749.0	2,738.0	2,725.3
Intangible assets	€m	1,324.2	1,332.7	1,329.5	1,324.9	1,324.2	1,322.4	1,318.4
Tangible assets	€m	1,288.8	1,312.2	1,302.7	1,292.9	1,288.8	1,280.5	1,272.9
Financial assets	€m	8.9		9.1	9.0	8.4	8.9	8.0	6.9
Deferred tax assets	€m	127.1	125.1	123.8	128.3	127.1	127.1	127.1
Current Assets	€m	168.2	144.1	149.5	158.8	168.2	174.4	206.0
Inventories	€m	4.2	5.7	6.4	6.1	4.2	5.7	4.8
Trade and other receivables	€m	65.8	66.6	62.5	71.4	65.8	70.9	78.7
Cash and cash equivalents	€m	98.2	71.8	80.6	81.3	98.2	97.9	122.5
TOTAL ASSETS	€m		2,917.3		2,923.3	2,914.6	2,913.4	2,917.3	2,912.4	2,931.3
Total Shareholders' Equity	€m	982.0	987.3	967.9	986.8	982.0	1,001.1	987.6
Non-current Liabilities	€m	1,533.9	1,619.7	1,554.7	1,558.6	1,533.9	1,532.8	1,577.6
Long term debt	€m	1,369.0	1,444.9	1,388.5	1,390.1	1,369.0	1,370.3	1,416.3
Provisions	€m	-	-	-	-	-	-	-
Other non-current liabilities	€m	164.9		174.8	166.2	168.5	164.9	162.5	161.3
Current Liabilities	€m	401.4	316.3	392.0	367.9	401.4	378.5	366.1
Short term debt	€m	195.3	154.4	185.5	192.1	195.3	194.7	149.4
Trade and other payables	€m	206.1	161.9	206.5	175.8	206.1	183.8	216.8
Total Liabilities	€m	1,935.3	1,936.0	1,946.7	1,926.5	1,935.3	1,911.3	1,943.7
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	€m	2,917.3	2,923.3	2,914.6	2,913.4	2,917.3	2,912.4	2,931.3

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Q2 2020 results