Bezeq Group

Q3 2022 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.

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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.

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Bezeq Group | Focus on Growth

Record take up of fiber customers and continued growth in retail broadband ARPU

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Subscriber growth in Pelephone and yes

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Roaming recovery and continued growth in 5G plans contributed to higher ARPU and significant improvement in Pelephone profitability

Revenue growth of 12% in Pelephone and 5% in Bezeq Fixed-Line

yes launched TV + Bezeq fiber bundle

Continued decrease in net debt, combined with dividend distributions

Continued focus and improvement in ESG

Bezeq Group | Q3-2022 Summary

All results are compared to Q3-2021 unless otherwise stated

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

(2) As of date of report

(3) As of early November

Bezeq Group - Key Financial Highlights | NIS Million

Revenue increase of 12% in Pelephone and 5% in Bezeq Fixed-Line
Increase in Adjusted Net Profit mainly due to decrease in financing expenses
Free cash flow was impacted by timing differences in working capital in all group companies (mainly payment for frequencies, payment of salaries in advance, timing of payments to universal fund and early retirement)

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

% - Capex/Sales

Bezeq Group - 9M-2022 Financial Highlights | NIS Million

Group revenue growth led by Bezeq Fixed-Line and Pelephone
Increase in Adjusted EBITDA and Adjusted Net Profit mainly due to improved profitability in Pelephone
Double-digit increase in free cash flow mainly due to timing differences and improved working capital

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

% - Capex/Sales

Bezeq Group | Key Operational Metrics

Continued increase in cellular, TV and retail Internet subscribers

Bezeq Group – Financial Debt | NIS Billion

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

Continued decrease in net debt

• Decrease of NIS 600 million, or 10%, year-over-year

Further improvement in Net debt/EBITDA ratio

• Decreased to 1.7 from 1.9 a year ago

Debt ratings

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

Bezeq Group | 2022 Guidance (Unchanged from previous quarter)

	Previous Outlook 3.2022	Updated Outlook 8.2022
Adjusted EBITDA (1)	NIS 3.6-3.7 billion	NIS 3.65-3.75 billion
Adjusted net profit(1)	NIS 1.0-1.1 billion	NIS 1.1-1.2 billion
CapEx	NIS 1.7-1.8 billion	NIS 1.7-1.8 billion (unchanged)
Fiber Deployment (Homes Passed)	1.4 million households	Approx. 1.5 million households
Financial stability	Maintain high credit rating within the AA group

Bezeq Fixed-Line | Q3-2022 Summary

Increased focus on fiber connections led to record fiber customer take up of 51k in Q3- 22 for a q-o-q increase of 32%

Strong revenue growth of 5% despite the MOC telephony tariff reduction

The number of homes passed reached 1.48 m with 233k subscribers *

Broadband Internet revenues grew 11%

Continued business sector revenue growth

Bezeq Fixed-Line - Q3-2022 Financial Highlights | NIS millions

% - Adjusted EBITDA margin

Top-line growth in all segments excluding telephony
Increase in Adjusted Net Profit mainly due to a decrease in financing expenses
Free cash flow was impacted by timing differences in working capital (mainly timing of payments for early retirement, universal fund and convalescence pay to employees)

¹¹ (1) 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 - 9M-2022 Financial Highlights | NIS millions

1,960 1,962

9M-2021 9M-2022

63% 60%

% - Capex/Sales

4% top-line growth in 9M-2022 reflects resilient revenue base despite MOC telephony tariff reduction beginning Q2-2022
Free cash flow increase driven by timing differences and improved working capital

¹² (1) 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

Return to growth in retail broadband lines
Fiber take-up offsets copper churn
Double-digit growth in broadband revenues driven by increase in retail and wholesale ARPU, positively impacted by fiber take up and an increase in ISP customers

Continued fiber deployment with increased take-up focus

BezeqFixed-Line -Data, Telephony and Cloud & Digital Revenues | NIS millions

Continued growth in revenues from the business sector
Increase in other revenues mainly due to infrastructure development work
Decrease in telephony revenues mainly due to MOC tariff reduction beginning Q2-22

Bezeq Fixed-Line - Expenses Development | NIS millions

Depreciation & Amortization Other Expenses

Increase in salaries mainly due to employee recruitment relating to fiber project
Increase in operating expenses mainly due to higher subcontractor and materials expenses relating to fiber and other infrastructure projects
Increase in depreciation expenses driven mainly by CapEx increase over previous periods

Bezeq Fixed-Line | Summary

Record fiber take-up of 51k in Q3-22

Growth in broadband revenues offset impact of MOC telephony tariff reduction

Increase in fiber customer penetration with continued wide spread deployment

Growth in business sector driven by increased demand for data and communications solutions

Accelerated fiber deployment combined with increased focus on take-up reflects potential for Bezeq's continued growth in the residential market

Pelephone | Q3-2022 Summary

Sixth consecutive quarter with year-over-year increase in service revenues driven by recovery in roaming revenues, increase in subscribers and growth in 5G subscriber plans

Adjusted EBITDA grew 23% to NIS 205 million and Adjusted Net Profit increased 129% to NIS 55 million

Free cash flow totaled NIS 264 million in the first nine months of 2022

Continued growth in subscribers with 39k net adds in Q3- 2022; 753k subscribers* with 5G plans contributing to ARPU

Pelephone - Q3-2022 Financial Highlights | NIS millions

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

Adjusted Net Profit(1)

Highest quarterly service revenues in last three years
Significant improvement in Adjusted EBITDA and Adjusted Net Profit due to a recovery in roaming revenues, an increase in the number of subscribers and growth in 5G subscriber plans
Free Cash Flow was impacted by timing differences in working capital and an increase in CapEx due to payment of NIS 88 million to the MOC for frequencies

(2) Includes payment of NIS 88 million to the MOC for frequencies

Pelephone - 9M-2022 Financial Highlights | NIS millions

264

528.6%

Service revenue growth, significant improvement in Adjusted EBITDA and Adjusted Net Profit due to a recovery in roaming revenues and growth in 5G subscriber plans
Free cash flow was positively impacted by timing differences relating to customer debt collection due to employee sanctions in the second half of 2021 as well as improved profitability and working capital

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

Pelephone -Continued Turnaround in Service Revenues | NIS millions

Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020 Q2-2020 Q3-2020 Q4-2020 Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022

Year-over-year change in service revenues Service Revenues

-60

-40

-20

Sixth consecutive quarter with y-o-y increase in service revenues driven by recovery in roaming revenues, increase in subscribers and growth in 5G subscriber plans

100

150

200

250

300

350

400

450

Pelephone | Key Operational Metrics

Net subscriber adds of 39k in Q3 2022, of which 15k were postpaid subscribers

ARPU increase of 5.5% y-o-y due to recovery in roaming revenues and further increase in 5G subscriber plans

yes | Continued subscriber growth and migration to IP

Net subscriber growth of 7.5k in Q3-22, with 12k new subscribers since the beginning of the year; highest quarterly subscriber growth since 2014

Agreement with leading international content providers – Disney+, Discovery+

Stable revenues in 9M-2022

yes is now the largest Israeli IPTV operator with 317k customers watching TV through IP broadcasting (55%), of which 103k are STINGTV customers *

yes continues to lead in production of professional and high quality TV content

yes launched bundle ("triple") combining TV + Bezeq fiber

yes - Q3-2022 Financial Highlights | NIS millions

Adjusted Net Profit (Loss)(1)

Stable revenues on slightly lower ARPU due to an increase in STINGTV subscribers
Decrease in Adjusted EBITDA and Adjusted Net Profit due to an increase in content expenses as well as salary expenses impacted by the collective labor agreement
Free cash flow was impacted by timing differences and payments for content

yes - 9M-2022 Financial Highlights | NIS millions

13.7%

% - Adjusted EBITDA margin 9M-2021 9M-2022 21% 18%

(29)	(29)
9M-2021	9M-2022

Stable revenues and Adjusted Net Loss
Free cash flow in 9M-2022 was impacted by timing differences and payments for content

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

% - Capex/Sales

9M-2021 9M-2022

yes | Key Operational Metrics

Net subscriber growth of 7.5k in Q3-22; highest quarterly subscriber growth since 2014
Moderate decrease in ARPU due to change in subscriber mix with growth in STINGTV subscribers
55% of yes subscribers watch IPTV (as of date of report)

*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 International | Focus on Business Solutions – A Significant Operator in a Growing Market

Revenues grew 8.4%, Adjusted EBITDA increased 4.0% and Adjusted Net Profit grew 111.1%

Focus on expansion of ICT activities for B2B market

Growth in cloud solutions among other, following CloudEdge acquisition, and in service contracts

Reduction in consumer ISP activity due to regulatory removal of Internet infrastructure-ISP separation as of April 2022

Focus on expansion of ICT activities for B2B market

Agreement reached with labor union for voluntary retirement of employees to result in significant cost savings

Bezeq International -Q3-2022 Financial Highlights | NIS millions

Q3-2021 Q4-2021 Q1-2022 Q2-2022 Q3-2022

Revenues increased due to growth in business services driven by increased activity in cloud and integration services
Improvement in Adjusted Net Profit mainly due to lower depreciation and amortization expenses
Free cash flow was impacted by timing differences in working capital