Bezeq Israel Telcm Un/Adr

Welcome everyone and thank you for joining us on BESEC first quarter earnings call. We first apologize for the inconvenience. Due to technical difficulties, we are hosting one call in English today. For Hebrew speakers, there will be time to ask your questions in Hebrew at the end of the English Q&A session. I am Yochai Benitez, CFO of the BESEC Group. Joining me today are Mr. Tom Edraved, BESEC Executive Chairman, Mr. Nir David, CEO of PESEC Six Line, and Mr. Ilan Sigal, CEO of Telephone NS. Before we begin, please review the safe harbor statement on slide 2 of our presentation, which applies to any statement made during today's call. Following our prepared remarks, we will open the call for Q&A. 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 Bevec's six-line results, and Ilan, who will cover the results from Palafon and Yes. I will conclude the presentation with Bevec International.

Thank you. Hi. I'm glad to see all of you joining us today. I apologize again for the inconvenience. Our excellent results are further evidence of Bevec's group's strengths. The new strategy and the ambitious targets we have set for ourselves are clearly reflected in our operational and financial performance. We have already recorded free cash flow growth of 74% in the first quarter, along with continued growth in comparable EBITDA and net profits. We have reached a significant milestone with the deployment of fiber infrastructure to 3 million households, a figure that establishes Bezex as Israel's digital backbone. Together with our investment in national infrastructure, we are advancing with determination on several new subsea cable projects to Europe. These initiatives of mission-critical infra for the global economy will position Israel as a regional and global digital hub and generate a strategic growth engine for the coming years. To ensure the continued benefits to the Israeli consumer, it is time to remove the structural separation and complete the required regulatory reforms. Following the formal steps taken by MOC in the past few months, we are awaiting a decision on this matter soon. These steps will enable us to operate as a single more efficient and innovative group, benefiting both our customers and our shareholders. Let's now move to slide three, where we show Q1 highlights. Core revenue grew 2.6% to over 2 billion shekels. Comp EBITDA grew 1.2% and comp net profit grew by over 4%. driven by higher revenues. As mentioned, free capital grew 74%, mostly due to a tax refund received in the current quarter, changes in working capital, and improved coal activity. Fiber subs were up 19%, and our take-up reached 35% with 3 million home paths. 5G continued to drive solar market performance, and subs plans were up 12% year-over-year. Our pool increased across broadband and TV. We signed an MOU to establish and operate an international cable system to create a telecom corridor between east and west via Israel. We hope to have more of this exciting opportunity later in the year. Turning to slide four, we see the tech and business roadmap on track to deliver our 2029 KPIs from increased fiber deployment and take-up, expansion of 5G, and growth in the TV and fiber bundle. We are building for durable growth, superior customer experience, and operating efficiency. On slide five, we summarize our Q1 financial achievements, including a 2.6% reduction in net debt. On slide six, we highlight our key KPIs in each of the businesses, broadband retail output continues to grow over year over year. We recorded an increase in ESR pool due to fiber growth and revenues from product transactions. Telephone grew 5G substrands to 1.45 million, and 5G max substrands grew to 184,000 today. We expect to reach more than 300,000 5G max subscribers by year-end. I will now hand it back to Yohai who will review our financials in more detail.

Thank you, Thomas. Turning to slide 7 for the group's Q1 highlights. All key metrics, including core revenues, comp EBITDA, comp net profit, and free cash flow, showed strong growth this quarter. Although fixed line capex was down by 8.2%, groups capex was slightly up due to timing differences in years. Moving to the next slide, we show our operating expenses. Salary expenses decreased 3.8% due to the sale of Betac Online, and its deconsolidation as of Q2 2025. Operating expenses were down mainly due to lower interconnection expenses. Other expenses were impacted by provisions for employee retirement in BASIC Fixed Line and in Palafon. On slide 9, we show our quarterly operational metrics. We recorded growth in Palafon subscribers and also broadband subscribers, along with higher retail broadband ARPU and ESARPU. Better group retail broadband subscribers increased by 1%, although fixed line retail broadband subscribers decreased in Q1. Slide 10 highlights our balanced capital structure. Net debt decreased by 122 million shekels to 4.6 billion shekels, with a net debt to comp EBITDA ratio of 1.4 times. This month, the Israeli rating agency reiterated our strong AA rating with a stable outlook. Turning to shareholder remuneration on slide 11. Tomorrow, we will pay a cash dividend of 549 million shekels, representing 80% of the net profit in the second half of 2025. In addition, we began our share buyback plan of 150 million shekels to be completed in 2026. As of today, we completed approximately 50% of the total plan. On slides 12 through 14, we show our 2026 outlook and 2029 targets, which are unchanged. We will continue to focus on maintaining our AA level rating and strive to increase shareholder remuneration. I will now hand the call to Nir for fixed-time results.