Euskaltel S A : publishes first quarter 2020 results presentation.

Q1

2020

results

April 22nd, 2020

|Disclaimer

This presentation (the "Presentation") has been prepared and is issued by, and is the sole responsibility of Euskaltel, S.A. ("Euskaltel" or "the Company"). For the purposes hereof, the Presentation shall mean and include the slides that follow, any prospective oral presentations of such slides by the Company, as well as any question-and-answer session that may follow that oral presentation and any materials distributed at, or in connection with, any of the above.

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.

Euskaltel cautions that this Presentation contains forward looking statements with respect to the business, financial condition, results of operations, strategy, plans and objectives of the Euskaltel Group. The words "believe", " expect", " anticipate", "intends", " estimate", "forecast", "project", "will", "may", "should" and similar expressions identify forward-looking statements. Other forward-looking statements can be identified from the context in which they are made. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a certain number of risks, uncertainties and other important factors, including those published in our past and future filings and reports, including those with the Spanish Securities and Exchange Commission ("CNMV") and available to the public both in Euskaltel's website (www.euskaltel.com) and in the CNMV's website (www.cnmv.es), as well as other risk factors currently unknown or not foreseeable, which may be beyond Euskaltel's control, could adversely affect our business and financial performance and cause actual developments and results to differ materially from those implied in the forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.

The information contained in the Presentation, including but not limited to forward-looking statements, is provided as of the date hereof and is not intended to give any assurances as to future results. No person is under any obligation to update, complete, revise or keep current the information contained in the Presentation, whether as a result of new information, future events or results or otherwise. The information contained in the Presentation may be subject to change without notice and must not be relied upon for any purpose.

Market and competitive position data in the Presentation have generally been obtained from industry publications and surveys or studies conducted by third-party sources. There are limitations with respect to the availability, accuracy, completeness and comparability of such data. Euskaltel has not independently verified such data and can provide no assurance of its accuracy or completeness. Certain statements in the Presentation regarding the market and competitive position data are based on the internal analyses of Euskaltel, which involve certain assumptions and estimates. These internal analyses have not been verified by any independent source and there can be no assurance that the assumptions or estimates are accurate. Accordingly, no undue reliance should be placed on any of the industry, market or Euskaltel's competitive position data contained in the Presentation.

You may wish to seek independent and professional advice and conduct your own independent investigation and analysis of the information contained in this Presentation and of the business, operations, financial condition, prospects, status and affairs of the Euskaltel Group. Euskaltel is not nor can it be held responsible for the use, valuations, opinions, expectations or decisions which might be adopted by third parties following the publication of this Presentation.

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By receiving or accessing to this Presentation you accept and agree to be bound by the foregoing terms, conditions and restrictions.

2

Q1 2020 results

| Euskaltel starts the year strongly delivering on guidance and with a controlledCOVID-19impact

Operating

KPIs

(Q1 20

vs

Q4 19)

Financials

+0.4k

+3k

13m

+0.1%

+8.1%

+5.5%

Mass Market fixed customers net adds1

Broadband net adds

Addressable households

Revenue

(YoY growth)

EBITDA

(YoY growth)

OpCF

(YoY growth)

Stable customerbase reflects COVID-19 restrictions2

Broadband services growth

Significantincrease in addressable footprint ready for national expansion

Revenuevery slightly impacted by COVID-19in the quarter

Efficiency initiatives drive significant EBITDA and cash flow growth

		COVID-19	Controlled operating and financial impact
1.	Mass market fixed subs = residential fixed subs + SOHO fixed subs (exc. only mobile subs)	3
2.	Portability restrictions imposed by the regulator as a result of the State of Emergency

Q1 2020 results

| Euskaltel reinforces its services during theCOVID-19situation

Focus on keeping

customers

connected…

+65%	+71%	+32%
Fixed voice traffic	Fixed data traffic	On-demand TV consumption

70% of stores open to meet customer service requirements1

Special B2B customer service and technical support platforms established

800 people working on a daily basis to ensure continued network robustness

Network operating normally and traffic increases delivered without any major disruptions

• reinforcing their services…
• while keeping employees and customers safe

All TV cinema and children channels offered free of charge

30 Gb per month of mobile data bonus offered to every mobile customer Data allowances increased to customers with special needs

TV access provided to all those hospitalized

All COVID-19 Government restrictions implemented

Nearly 100% of employees and more than 90% of call centres workers teleworking

Squad team created to help employees cope with COVID-19 issues

1. Customer service requirements imposed by the Government as a result of the State of Emergency

Q1 2020 results

4

|Controlledoperating and financial impact

Controlled business

impacts

Solid financial

position

• Portability restrictions imposed due to the State of Emergency have resulted in an approximately 50% reduction in both daily gross adds and churn from normal levels, resulting in a stable customer base
• Customer bill returns and customer suspensions generate limited impact on revenue to date
• Mitigation measures already implemented to support and fidelise the customer base and customer suspension requests are being monitored on a daily basis to mitigatefull-year revenue impact
• €98m of cash balance as of March 31st, 2020, continued operating cash flow generation
• Cash balance has increased by €150m in April due to the full drawdown of the revolving credit facility
• Average debt maturity at 4.2 years, solid balance sheet position

Limited business impact, solid financial position and allCOVID-19mitigation measures already in place

5

Q1 2020 results

| Virgin national expansionprepared for full commercial launch

More than13 million households national coverage in the quarter

Customer pilot tests already launched with initial success

Trialcustomers already connected at national level

Virgin brand ready for commercial launch with footprint

deployment and customer trials already started

6

Q1 2020 results

Operating review

7

Q1 2020 results

| Access to national footprint increased by close to 8 million households in

the quarter

Current footprint (in thousand households)

Homes passed_owned (HFC & FTTH)

13,533

Accessible homes_wholesale

+7.8m

11,050

5,360 5,780

2,911 2,9532,9993,311

569598

2,342

2,355

2,361

2,469

2,483

		~18m
		households
		estimated
▪Orange	for Q2 2020
	wholesale	Addressable footprint
	bitstream
	multiplies with the
▪	Telefónica's	addition of accessible
households through
	VULA & NEBA
	the Orange agreement
		and Telefonica's
▪	HFC	regulated footprint

• Orangeco-investment
• Infill FTTH

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

8

Q1 2020 results

|The stable customer basereflects the lower sales volumes due to Covid-19 restrictions being balanced by reduced churn

Mass market subscribers1, 2(in thousands)

mass market fixed services subs		mass market only mobile subs

768	772	771	771	769
106	106	104	102	99

Portability restrictions imposed by the State of Emergency limited

March's commercial momentum

662

666

667

669

670

Strong decline in daily gross adds compensated by churn reduction to maintain a stable customer base

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

1. Mass market subs = residential subs + SOHO subs + RACC only mobile subs
2. Mass market subs figures impacted by a 0.2k subs reclassification from mass market to SMEs

9

Q1 2020 results

|Broadband penetration grows in the customer base

Mass market services1(RGUs) per type (in thousands)2

		Fixed Voice		Broadband		TV		Post-paid mobile	2,832
2,773	2,816	2,821		2,833

Services /sub

1,128	1,151	1,155	1,163	1,164	+1k QoQ
456	466	467	469	472	+2k QoQ
580	586	589	593	596	+3k QoQ
610	613	610	607	600	-7k QoQ
Q1 19	Q2 19	Q3 19	Q4 19	Q1 20
3.61	3.65	3.66	3.67	3.68

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

2. RGU figures impacted by a 12k RGU reclassification from mass market to SMEs

10

Q1 2020 results

|SME and large accountscustomer growth continues on a positive trend

SME and large account subscribers1(in thousands)

15.9

15.6 15.715.8

15.5

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

1. SME and large account subs figures impacted by a 0.2k subs reclassification from mass market to SMEs and a recognizition of 0.3k subs not previously reported

11

Q1 2020 results

Financial review

12

Q1 2020 results

|Revenue remains stablewith limited COVID-19 impact

Total revenue breakdown by segment2(EURm)			Total revenue evolution YoY (%)
		Mass market1		B2B		Wholesale and Other		+0.7%
					+0.1%
171.7	171.1	171.1	171.6	171.8
7.4	8.0		8.3	8.8	8.5	(0.4%)
30.3	27.0		26.5	27.1	29.7	(0.9%)

134.0	136.0	136.4	135.7	133.6
				(2.8%)

Q1 19 Q2 19 Q3 19 Q4 19 Q1 20Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

1. Mass market revenue = residential revenue + SOHO revenue + RACC only mobile revenue
2. 2019 revenue figures impacted by a reclassification due to reporting changes to more accurately reflect the integration of the 3 companies	13

Q1 2020 results

|Operating efficiencies allow for a significant SG&A reductionin the quarter

Gross margin2(% over revenue)

Selling, general and administrative expenses2(EURm)

			1		-12.0%
	74.5%	74.0%	77.1%
72.0%	72.7%
			42.5	43.0	39.9	40.1
			1.8	3.2	37.2		Other indirect
			3.6	3.2
			9.7	9.5	3.4		costs
			9.0	9.4
					9.7		Network and IT
								systems
			11.6	11.7
			10.7	10.8
					10.0		Personnel

14.2	13.1	13.0	12.2	11.2
5.2	5.5	3.6	4.4	3.0

Customer care and sales

Q1 19	Q2 19	Q3 19	Q4 19	Q1 20	Q1 19	Q2 19	Q3 19	Q4 19	Q1 20		Marketing and
	SAC

1. Gross margin includes €6.9 million of positive impacts mainly from the renewal of the Orange wholesale agreement
2. 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

14

Q1 2020 results

|Efficiency implementation drivesstrong EBITDA growth in the quarter

EBITDA1(EURm)

Total EBITDA evolution3YoY (%)

% over revenue

+7.7% +8.1%

			53.8%
		50.7%	51.1%
	49.4%	92.22
47.3%		+0.1%
	86.8	87.7
	84.4
81.1
				(3.2%)
				(6.8%)

Q1 19

Q2 19

Q3 19

Q4 19

Q1 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

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

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

15

Q1 2020 results

|Cash flow generationgrows to 29% of revenue in the quarter

Capex2(EURm and as % of revenue)

Capex ex - SAC SAC 1

		44.4
38.3	36.9	38.6
34.6
		13%
13%	11%	11%
11%

9%	10%	10%	13%	12%

OpCF (EBITDA - capex) (EURm)

% over revenue

27.1%	29.1%	28.6%
27.0%	27.9%

46.5 46.149.847.849.1

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

Q1 19

Q2 19

Q3 19

Q4 19

Q1 20

1. SAC capex includes commercial costs, customer installation and customer equipment

2. Change in 2019 capex breakdown is due to a capex reclassification due to reporting changes to more accurately reflect the integration of the 3 companies

16

Q1 2020 results

|EBITDA growth allows for leverage reduction to 4.1xin the quarter

Q1 20 cash allocation (EURm)

Q1 20 net debt (EURm)

51.1%

% over revenue

Net debt/	▪Cost of debt: 2.55%
EBITDA1	▪Average maturity: 4.2 years

87.7(38.6)

28.6%	✓Interim dividend
paid Feb 5th, 2020:
49.1(11.2)
EUR 0.14 cents per

(7.3)share

(7.0) 12.5%

(2.1) 21.5(23.1)

(1.6)

4.21x	4.12x

1,4861,488

Net debt as of Dec 31, 2019 Net debt as of March 31, 2020

1. EBITDA adjusted by identified potential synergies

17

Q1 2020 results

| The companyconfirms 2020 guidance and amaintained dividend policy for 2019

The companyconfirms 2020 guidance

The company confirms a€0.31 dividend payment for 2019

(a €0.17 complementary payment will be made on July 2020)

2020 guidance confirmation and a maintained dividend policy for 2019 is supported by a strong financial performance in Q1 2020 and a controlledCOVID-19impact:

Strong 8% yoy EBITDA growthin the quarter

Strong6% yoy operating cash flow growth

Significant deleverage to 4.1x in the quarter

Controlled operating and financialCOVID-19 impact

18

Q1 2020 results

| Q1 2020 results show strong guidance delivery in theCOVID-19situation

Controlled COVID-19 impact in the business

National expansion ready for full commercial launch

Stable customer and revenue base

Continued efficiency implementation drives strong EBITDA growth

EBITDA growth and cash flow drive strong deleverage

2020 guidance and 2019 dividend policy maintained

19

Q1 2020 results

EUSKALTEL, S.A.

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

Q&A

Appendix

Euskaltel Group Q1 2020 consolidated results and KPIs

21

Q1 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
Homes passed_owned (HFC & FTTH)	#	2,468,822	2,341,655	2,355,173	2,360,891	2,468,822	2,482,870
Accessible homes_wholesale	#	3,310,812	569,092	598,061	2,999,183	3,310,812	11,050,114
Mass market subs1	#	770,865	767,616	771,646	771,167	770,865	768,891
o/w fixed services subs	#	669,317	661,558	666,138	667,022	669,317	669,678
o/w only mobile subs	#	101,548	106,058	105,508	104,145	101,548	99,213
Total services (RGUs)2	#	2,832,680	2,773,355	2,815,918	2,821,188	2,832,680	2,831,975
Fixed Voice	#	606,809	610,105	612,549	609,981	606,809	599,972
Broadband	#	593,338	579,523	586,080	589,090	593,338	596,292
TV	#	469,370	456,119	465,872	467,280	469,370	471,610
Post-paid mobile	#	1,163,163	1,127,608	1,151,417	1,154,837	1,163,163	1,164,101
Services (RGUs) per subscriber	#	3.67	3.61	3.65	3.66	3.67	3.68
Global ARPU fixed customers (quarterly standalone)	€/month	60.07	59.98	60.00	60.37	60.07	60.04
SMEs and Large Accounts			Annual				Quarterly
KPIs	Unit	2019		Q1 19	Q2 19	Q3 19	Q4 19	Q1 20
Customers	#	15,763	15,460	15,633	15,708	15,763	15,904

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.

22

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

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.	23

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

24

Q1 2020 results