B Communication

Earnings Release • Mar 23, 2022

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.

Bezeq Group | FY 2021 Summary

All results are compared to FY 2020 unless otherwise stated

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

** As of date of publication of reports

Bezeq Group | Q4 & FY 2021 Financial Highlights NIS millions

• Group revenues increased for the first time since 2016

Q4-2020 Q4-2021 2020 2021

• 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

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

Bezeq Group | Key Operational Metrics

5 TV Wholesale Internet Infrastructure Retail Internet Infrastructure Access Lines Cellular Continued increase in retail Internet infrastructure ARPU Moderate decrease in TV ARPU (change in subscriber mix) and cellular ARPU Increase in cellular and retail Internet subscribers; decrease in wholesale Internet subscribers Moderate increase in TV subscribers

Bezeq Group | Financial Debt NIS billions

Continued Decrease in Net Debt

The Group strives to maintain its credit rating within the AA group

• Decrease of NIS 1.8 billion, or 24%, compared to 2019
• Further improvement in coverage ratio – Net debt/EBITDA ratio decreased to 1.8 from 2.4 in 2019

Debt ratings

Rating Agency	Rating	Outlook
S&P Global Maalot	-ilAA	Stable
Midroog	Aa3.il	Stable

Bezeq Group | 2022 Guidance and Mid-Term Ambitions 2021Results 2022Outlook Mid-Term Ambitions NIS 3.6-3.7 billion Stable adj. EBITDA with 41%-43% margin NIS 1.0-1.1 billion NIS 1.7-1.8 billion 1.4 million households (homes passed) Mid-single digit growth (CAGR) Stable CapEx and CapEx/Sales through 2024; gradual reduction thereafter 2.1 million households (homes passed) NIS 3.71 billion NIS 1.15 billion NIS 1.69 billion NIS 1.04 billion 1.17million households (homes passed) as of today Maintain high credit rating within the AA group Adjusted EBITDA* Adjusted net profit* CapEx Free cash flow Fiber Deployment Financial

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

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stability

Return to Dividend Distributions

• The Company's Board of Directors decided to approve a new dividend distribution policy, according to which the Company will distribute to its shareholders on a semi-annual basis, a cash dividend of 50% of the semi-annual profit (after tax) according to the Company's consolidated financial statements, commencing from the upcoming distribution (for the second half of 2021)
• Further to the dividend policy, the Company's Board of Directors decided to recommend to the General Meeting of Shareholders a dividend distribution in a total amount of NIS 240 million, which as of the date of passing this resolution constitute NIS 0.09 per share.
• The effective date and the ex-dividend date shall be on May 9 th , 2022. The payment day shall be on May 16th , 2022.

ESG | Milestones, Ambitions and Targets

Bezeq is connecting Israel to a sustainable future

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

Bezeq Fixed-Line

Bezeq Fixed-Line | 2021 Summary

Total revenues increased 0.6%, despite a 9.4% decrease in telephony revenues

Continued increase in revenues from the business sector

Continued massive deployment of fiber and customer connections. We reached 1.17 m homes passed and 120k customer connections as of today

Stable broadband revenues despite the decrease in wholesale tariffs

Continued robust sales of equipment led to increased retail broadband ARPU

Bezeq Fixed-Line | Key Financial Metrics NIS billions

• Increase in Fixed-Line annual revenues for the second consecutive year
• Decrease in adjusted net profit due to an increase in depreciation and tax expenses
• Decrease in free cash flow primarily due to higher CapEx for fiber deployment

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

Bezeq Fixed-Line | Broadband Internet

417 416 1,622 1,624 Q4-2020 Q4-2021 2020 2021 0.2% 0.1% .

Broadband Revenues (NIS m) Retail Broadband Lines (thousands)

• Stable revenues from broadband services despite the sharp decrease in wholesale tariffs in 2021

• Growth in broadband retail lines for the second consecutive year
• Continued growth in broadband retail ARPU, positively impacted by the deployment of fiber
• Average broadband speeds grew 75% due to fiber customer

Bezeq is Sweeping the Nation with Fiber Optics

Homes Passed (thousands)

From Dec 2020 Bezeq deployed fiber optics to 46% of households in Israel

Homes Connected – 120k Penetration rate* 10% (as of date of publication of reports)

Bezeq Fixed-Line | Differentiated, full Wi-Fi broadband Internet strategy at Home

"Fixed broadband operators around the world should take note of the success that Bezeq has had with its strategy of focusing on home Wi-Fi and developing services based around its CPE"

Analysys Mason, Nov 2021

~65% of the Company's retail customers choose to connect via the Be router , which significantly reduces churn

Bezeq Fixed-Line | Data, Telephony and Other Revenues NIS millions

• Continued growth in revenues from the business sector (transmission & data and cloud & digital)
• Decrease in telephony revenues due to lower impact of COVID-19

Bezeq Fixed-Line | Expenses NIS millions

• Increase in salaries in 2021 due to fiber project
• Increase in depreciation expenses driven mainly by CapEx increase
• Increase in operating expenses mainly due to the universal fund for fiber deployment as well as higher subcontractor expenses
• Other expenses (income) was primarily impacted by higher capital gains

Bezeq Fixed-Line | Summary

Nationwide deployment of fiber

Growth in retail broadband revenues driven by increase in subscribers and ARPU

Leading telecom supplier to the business sector

Success in sales of Be router and Wi-fi enhancers

Accelerated fiber deployment combined with high-quality service reflects potential for continued growth and strengthening of Bezeq's position in the residential broadband Internet market

Subsidiary Companies | 2021 Highlights

Subscriber growth in Pelephone and yes

Improved profitability metrics in Pelephone and yes

Revenue growth in Pelephone for the first time in years and transition to positive free cash flow in yes

250k yes customers watching TV through IP broadcasting (44%), of which 88k are STING TV customers*

Continued streamlining in employee headcount

Increase in number of Pelephone subscribers with 5G plans to 590k*

Growth in Bezeq International's business and data operations

Key Subsidiaries | 2019-2021 and Next Steps

Steps Taken

• Reduced headcount by 1,500 employees during Dec 2018-Dec 2021ת, inc. 45% reduction in senior mgmt. positions and those reporting to senior mgmt.
• Appointed one unified mgmt. team to streamline operations, which led to savings of NIS 390* million in 2021 as compared to 2018
• Lowered operating expenses through joint procurement for all three companies and savings in real estate

Future Steps Planned

• Transition to one new CRM system sales and services to customers through a wider approach (including triple play); savings in future investments and costs of support
• Continued streamlining in employee headcount and operating expenses

Key Subsidiaries | 20% decrease in Salary Expenses* NIS millions

Pelephone yes Bezeq International

Streamlining measures led to a 20% decrease in salary expenses from 2018

Key Subsidiaries | Moving to Next Generation Technologies

Next generation technologies in key subsidiaries

Key Subsidiaries | Next Steps (2022-2024)

Alternative plan for structural change in Bezeq International and yes

Bezeq'sboard of directors decided to cancel the merger between BezeqInternational and yes and to approve an alternative plan whose implementation details will be presented to the subsidiaries' BoDswithin 60 days

1 Reduction of Bezeq International's ISP consumer activity following the cancellation of the required separation between broadband infrastructure and Internet access (ISP)

• Set up yes ISP activity
• yes will become the group's "triple play" arm combining fiber and TV

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New Generations of Technologies in all Subsidiary Companies 3 focused ICT company Potential for significant cost and CAPEX reductions in Bezeq International ISP activity in parallel to an accelerated reduction in its ISP operations

On conclusion of this move, BezeqInternational will become a growth-

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The Next Generation of Cellular in Israel

• Gradual deployment of 5G network
• Diverse handsets and plans
• 590k subscribers* with 5G plans contributing to increase in ARPU
• Data communications and private broadband networks for businesses and organizations
• 5G network capabilities will create future growth drivers
• Exclusive frequencies will provide Pelephone with a competitive edge

Pelephone was the first company to launch and operate its 5G network in Israel and it continues to lead in the field

Pelephone | Key Financial Metrics NIS millions

Adjusted Net Profit*

• Return to revenue growth after a number of years, primarily due to continued postpaid subscriber growth and a partial recovery in roaming revenues
• Free cash flow was impacted by employee sanctions in the second half of 2021 which resulted in delayed debt collection

²⁵ * After adjusting for other operating expenses/income, net, one-time losses/gains from impairment/increase in value of assets and stock-based compensation

Pelephone | Key Operational Metrics

ARPU (NIS) Postpaid Subscribers (Thousands)

• Continued growth in postpaid subscribers for the sixth consecutive year
• Stable ARPU in Q4 2021
• Churn rate in 2021 was 22.9% (down from 26.9% in 2020); the lowest churn rate in the Israeli cellular market over the last few years

yes | Continued Subscriber Growth and IP Migration Improved customer experience along with savings in expenses

Continued subscriber growth; on track to be the largest IPTV operator in Israel

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Leader in original production- yes continues to lead in production of professional and high quality local content

Streamlining in operating expenses: Content, salaries, etc.

Savings in satellite costs after full transition to IP n 2026

Transition to positive free cash flow in yes

Savings in transition from expensive + set-top boxes to cheaper streamers

250k yes customers watching TV through IP broadcasting (44%), of which 88k are STING TV customers*

yes | Key Financial Metrics NIS millions

% - Adjusted EBITDA margin

Adjusted Net Profit*

• Improved profitability due to continued streamlining in salaries and operating expenses
• Transition to positive free cash flow in 2021; improved free cash flow for the second consecutive year

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

yes | Key Operational Metrics

STING TV Subscribers (Thousands)

• Continued subscriber growth for the second consecutive year
• Increase in ARPU in Q4 2021

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Bezeq International | Leader in Business Solutions – Significant Operator in a Growing Market

Wide Range of Business Solutions

• Wide range of data centers in Israel
• Activated fifth data center and signed agreement with Serverfarm to operate a sixth DC at the highest standards
• Growth in cloud solutions (business applications) and service contracts, as well as in business and international data services
• Continued expansion through agreements with a wide variety of international business customers
• Acquisition of CloudEdge a company specializing in the public cloud field

Bezeq International | Key Financial Metrics NIS millions

Free cash flow was impacted by employee sanctions in H2- 2021 which resulted in delayed debt collection

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

Bezeq Group | Key Takeaways

Revenue growth for the first time in years

Subscriber growth in Pelephone and yes

Accelerated deployment of fiber optics – over 1.1 million households

Improved profitability in Pelephone and transition to positive free cash flow in yes

Transition to 5G plans with higher ARPU

The group is progressing in the implementation of its strategy while focusing on growth

Thank You!

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