Cellcom Israel Q2 2019 1 1 FORWARD The following information - PowerPoint PPT Presentation

Cellcom Israel Q2 2019 1 1

FORWARD The following information contains, or may be deemed to contain forward-looking statements (as LOOKING STATEMENTS defined in the U.S. Private Securities Litigation Reform Act of 1995 and the Israeli Securities Law, 1968). In some cases, you can identify these statements by forward-looking words such as “ may, ” “ might, ” “ will, ” “ should, ” “ expect, ” “ plan, ” “ anticipate, ” “ believe, ” “ estimate, ” “ predict, ” “ potential ” or “ continue, ” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial results, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause such differences include, but are not limited to: changes to the terms of our license, new legislation or decisions by the regulator affecting our operations, the outcome of legal proceedings to which we are a party, particularly class action lawsuits, our ability to maintain or obtain permits to construct and operate cell sites, and other risks and uncertainties detailed from time to time in our filings with the U.S. Securities and Exchange Commission, including under the caption “ Risk Factors ” in our Annual Report for the year ended December 31, 2018. Although we believe the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We assume no duty to update any of these forward-looking statements after the date hereof to conform our prior statements to actual results or revised expectations, except as otherwise required by law. 2

Full End-To-End Service Communications Group (1) Appx. 2.7 million  26% Market  Leading brand in  Mobile subs share Israel ’ s mobile The largest cellular market (1) provider in Israel Mobile  239k TV subs Appx. 278k  Fixed line  International  (1) (13% market share) Broadband subs telephony calls Leading the TV  Optical fibers revolution in Israel Fixed line with OTT TV service Residential  Cyber security  Hosting services  Integration services  Cloud services  Transmission Fixed line  IOT Business 3 (1) As of Q2 ’ 19 based on companies ’ reports and Company ’ s estimation

Cellcom Strengths (1)  Largest Cellular operator in Israel, with 26% market share  Cellular Network sharing agreements with two MNO ’ s  Leading the OTT TV revolution in Israel, with 13% TV market share  Fiber infrastructure using IRU agreement with IBC  Strong Equipment sales 4 (1) As of Q2 ’ 19 based on companies ’ reports and Company ’ s estimation

Cellular Segment Maintaining Market  Sales of bundled packages of cellular + fixed line products. Leadership The first and only operator in Israel to offer quad play  Successful marketing of complete communications package increases our total income per household even as cellular prices decrease  Network sharing agreements with two MNO ’ s help reducing opex and capex  Sales of VAS products (cyber security, streaming music, backup, etc.) 5

Leading the TV revolution in Israel with OTT TV service Cellcom tv Reaching 13% Market Share  Hybrid solution of DTT linear TV plus OTT TV (VOD + channels)  Advanced intuitive user experience  Over 10,000 VOD assets for unlimited usage  Highly competitive price – NIS 99 Attractive Quad and Triple play offers  Multi screen strategy (IOS ,Android smart tv, set top boxes, Apple tv)  Partnership with Netflix 6

Offering The Top Channels Viewers Really Want All the Current The leading series The world ’ s leading Entertainment, Cellcom sports events From The leading children ’ s channels leisure, channels studios science and nature 7

Fast Growth in TV and Broadband Subscribers TV Broadband Subscribers Subscribers Thousands Thousands 278 269 239 222 219 170 156 111 94 63 1 1 1 1 Q2'19 1 1 1 1 Q2'19 8 Based on company reports

(1) IBC Large scale deployment in short time  Exclusive right to deploy an optical infrastructure on the IEC (2) infrastructure  Significant advantage in deployment costs in areas with high electricity infrastructure  High performance capabilities of IEC  Reducing the need for deployment permits  Existing deployment to appx. 300,000 Home pass (appx. 450,000 street pass) (1) On July 31, 2019, the Company and Israel Infrastructure Fund's indirect investment in IBC, and the Company's sale of independent fiber- optic infrastructure in residential areas to IBC, were both completed. For additional details see the Company's quarterly report on Form 6-K dated 15.8.2019 9 (2) Until 2043

IRU Agreement High return on investment IRU main points:  Fiber to the home right of use for appx. 25 years  IRU payments per household, paid over 9 years with interest  Annual maintenance fee IRU benefits for Cellcom:  Reducing the Company's investments in fiber deployment and positively impacting the Company's cash flow  Savings in cash flow and expenses for access and traffic payments to Bezeq and HOT 10

Savings in cash flow and wholesale expenses IBC Households Reach (Thousand) Cellcom connected households 1,200 Wholesale 180 annual expenses 75 113 135 180 900 saving (M ’ NIS) 135 750 65 Nis 59 88 105 140 113 500 70 Nis 3 95 113 151 Wholesale Average 75 Cost per 80 Nis 108 130 173 household 85 Nis 115 138 184 Cellcom connected households (15% out of IBC Households reach) 11 11

Cellcom Business Solutions Cloud services Transmission Internet Security Telephony Independent Hosting Services transmission network International Integration services IOT communication 12

Cellcom Smart City Offers end-to-end solutions The ability to connect things in a smart way that will lead to efficiency, business growth and life quality improvement. Combination of various solutions including: Energy Waste Sensors of Water efficiency management environmental management protection 13

Financial Overview 14 14

Service Revenues Mitigating cellular revenues erosion effect with fixed line revenues growth Cellular Service Revenues Fixed Line Service Revenues M ’ NIS M ’ NIS 2,162 1,929 1,215 1,730 1,166 1,071 312 300 434 420 Q2'18 Q2'19 1 1 1 Q2'18 Q2'19 1 1 1 Based on company reports 15

Adjusted EBITDA and Operating Profit Adjusted EBITDA Operating Profit M ’ NIS M ’ NIS 297 853 660 233 140 74 6 (1) Q2'18 Q2'19 1 1 1 1 -5 (1) Q2'18 Q2'19 Based on company reports (1) Adjusted EBITDA figures from 2019 include impact of adoption of IFRS 16. For more details see the company ’ s quarterly report dated 15.08.2019 16

Capex and Free Cash Flow Capex Free Cash Flow M ’ NIS M ’ NIS 593 583 325 181 131 113 56 55 Q2'18 Q2'19 Q2'18 Q2'19 1 1 1 1 Based on company reports 17

Reduction of Financial Debt Net Debt B ’ NIS 2.747 2.553 2.547 2.264 2.242 Q2'19 1 1 1 1 Based on company reports 18

Conservative Financial Policy Cash vs. Debt repayment (1) (1) Debt Repayment Schedule 2019-2020 M ’ NIS B ’ NIS 105 89 57 41 72 1,280 27 874 521 527 519 519 477 157 52 368 255 717 196 123 123 1 1 3 4 Cash 30.06.19 Repayments 2019-2020 Interest Principal Based on company reports (1) As of June 30 2019 19

Contact us Shlomi Fruhling Chief Financial Officer Elad Levy Investors Relations Manager Investors website: investors.cellcom.co.il E-mail: investors@Cellcom.co.il Tel : + 972 52 9989735 20