Bezeq Israel Telcm Un/Adr

Welcome, everyone, and thank you for joining us on Bezek's 2020 Five-Third Quarter Running Call. I'm Yochai Benitez, CEO of the Bezek Group. Joining us from the senior management team today, we have Mr. Tommy Ravid, Bezek Chairman, Mr. Amir David, Bezek's fixed-line CEO, and Mr. Ilan Sigal, CEO of Peloponnesus. Before we start the call, I would like to direct your attention to the safe harbor statement on slide 2 of our presentation, which also applies to any statement made during today's call. We would like to inform you that this event is being recorded. Following the presentation of our results, we will have a Q&A session. With that said, let me now turn the call over to Tomer for his opening remarks. After his introduction, I will continue the presentation of our group's financial highlights, followed by Nir, who will discuss BASIC fixed-line results, and Ilan, who will cover the results from Peloponnesus. I will conclude the presentation with BASIC international results. Tomer, please.

Thank you. Hi, and good afternoon. Good morning, everyone. Let's start on slide three. We continue to record stable and healthy growth across all of the group's strategic business segments, consistently meeting and beating our forecast. I am proud to announce that we have reached our 2.9 million home past target and have completed our network deployment across the vast majority of Israel. Accordingly, starting 2026, we expect to see a gradual decrease in COPEX. This is a historic milestone that will enable us to be fully prepared ahead of the AI revolution that will transform the economy, society, and the quality of life of every Israeli citizen. During this quarter, we continue to deliver significant growth in core revenues and double-digit growth in adjusted EBITDA and adjusted net profit that were also positively impacted by the YES improved valuation. Excluding the YES valuation impact, Adjusted EBITDA still grew by a healthy 4% this quarter. We continue to focus on new strategic initiatives in BEDEC 6-9, PEDAFON, and YES, which further strengthen the group's core pillars. On the regulatory side, there was further progress in the process for the removal of structural separation, with the MOC publication of a call for public comments. We are hopeful that the MOC will complete its process by year-end, as planned, and that we can start merging guests into Beldex 6.9 and further enhance value to customers, operational efficiency, and leverage our $1.2 billion significant tax asset. Moving to the next slide, our tech and business roadmap is on track to reach our midterm KPI, including at least 40% fiber take-up and consistent output growth across all verticals while leveraging our leading position in 5G and TV. On slide 5, you can see a good snapshot of our financial highlights for this quarter, both in top line as well as in profitability metrics. Core revenues grew by almost 2%, and now represents 93% of our total revenue. After adjusting for the change in years valuation, adjusted EBITDA grew 4%, in line and actually slightly above the group's targets. Turning to slide 6, let me point out that even in a year with a volatile geopolitical situation, our core business continued to perform well with outstanding growth in every KPI this quarter. Total fiber subscribers, as of today, reached 969,000. 5G subscriber plans reached 1.36 million. And so our output grew over 4%. Yes, our output was actually a highlight for this quarter, up 1% year over year, and stable output at 189 shekels. We are pleased to see the improvement in the macroeconomic environment, the ceasefire in the region, and the return of our hostages. These tailwinds, together with the Group's strong performance, are generating growing interest from investors in the Israeli, European, and US capital markets. We will continue to work to create significant value for our customers, employees, and shareholders. I will now turn the call over to Yochai, who will elaborate further on the Group's results.

Thank you, Thomas. Moving to slide 7, we show 1.7% increase in core revenues due to higher core revenues across all key group segments. Adjusted EBITDA grew 13.8% and adjusted net profit grew 56% due to the increase in the valuation of this. After excluding the impact of this updated valuation, adjusted EBITDA increased 3.9% and adjusted net profit was up by 0.1%. Starting to the next slide, we showed the 9-month trends, which were similar to Q3 revenues in profitability. Free cash flow was impacted by BEZEC fixed line assessment, tax assessment paid in the first quarter of 2025, and tax refund received in the corresponding period. Moving to the next slide, we show our operating expenses. Salary expenses decreased 8.9% due to the sale of BEZEC online and its deconsolidation as of Q2 2025. We recorded decreases in operating expenses and depreciation expenses, mainly due to the change in yes valuation. Other expenses were impacted by higher provision for legal claims and employee retirement at BAVC fixed line. The next slide shows our quarterly operational metrics. Broadband retail ARPU continued to grow ear over ear. In addition, we recorded increases in telephone ARPU as well as in yes ARPU ear over ear due to fiber growth. Compared to the previous quarter, cellular subscribers grew by 16,000 and TV subscribers grew by 3,000, representing the second consecutive quarter of growth. Slide 11 highlights our balanced capital structure with net debt at 4.6 billion shekels and a coverage ratio of 1.3 times. The decrease in coverage ratio was due to the increase in adjusted EBITDA as a result of the change in year's valuation. We remain committed to maintaining our high credit rating. Moving to the next slide, our 2025 outlook remains unchanged, and we are focusing adjusted EBITDA of 3.85 billion shekels, adjusted net profit of 1.45 billion shekels, and capex of 1.75 billion shekels. I will now turn the call over to Nir, who will share more detailed results from our fixed line operation.