Bezeq Israel Telcm Un/Adr

Welcome everyone and thank you for joining us on Bezek's second quarter earnings call. I am Yohai Benita, CEO of the Bezek Group. Joining me today are Mr. Tomer Duaved, Bezek's Executive Chairman, Mr. Anir David, CEO of Bezek Fixed Line, and Mr. Ilan Sigal, CEO of Telephone and Yes. Before we begin, Please review the safe harbor statement on slide two 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 the BEZEC fixed-line results, and Ilan, who will cover the results from Palafon and Yes. I will conclude the presentation with BEZEC international results. Toma. Thank you, Yohai.

I am glad to see all of you joining us today. The strong results achieved in the second quarter demonstrate the commercial and operational momentum across the group, which reflect consistent growth across all financial metrics, as well as the expansion of our customer base across all business segments, from subscribers joining BEDEX Fiber Networks to the growth in Pelafon's 5G subscribers and a higher number of subscribers and profitability at YES. The critical importance of digital infrastructure during this period has reinforced all our core engines. We anticipate a continued expansion, both through acquisitions and growth-supportive investments, in the international infrastructure and cable sector. The recent quarters further underscore the success of our strategic compass, led by the management teams in all the segments. and the continued unprecedented growth in the Group's profitability metrics. Looking ahead, in addition to organic growth, we are actively exploring investments, including merger and acquisition opportunities, to support the Group's strategy that will allow us to create tech and synergies and strengthen our competitive advantage in the market. Similarly, we are working vigorously to establish Israel's position as a global digital hub by building the submarine cable project. This national project will ensure redundancy and communications security. It will connect us to the global data routes and serve as a strategic road extension for the country in the years to come. We continue to work intensively with MOC teams in order to remove structural separation and fully merge our TV business into our broadband services and infrastructure division. Let's now move to slide three. where we show Q2 highlights. Core revenue grew 4% to over 2 billion shekels and comp net profit grew by 38% driven by higher revenues and lower financing and operating expenses after adjusting for the change in ES valuation in Q2 2025. The board of directors recommended a dividend distribution of 415 million shekels represented 80% of 2026 first half profits. In addition, the company will launch a new buyback plan of 100 million shekels, which is part of our multi-year program of 800 million shekels and follows the completion of our previous buyback plan of 150 million shekels. Fiber subscribers were up 17% and take-up reached 35% with over 3 million home paths. 5G continued to drive solar market performance and subscriber plans were up 12% year-over-year. Our pool increased across broadband and TV. Pelafon signed an MOU to acquire a WICOM and we continue to develop and grow our digital infrastructure activities with an emphasis on the international submarine cable project. We hope to have more on these opportunities later this year. On slide four, We see the tech and business roadmap. It's 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 key Q2 financial achievements, including a 6.2% increase in comp EBITDA to 978 million shekels. Finally, on slide six, we highlight our key KPIs. For each of our businesses, broadband retail output continued to grow year over year to 142 shekels, We recorded an increase in YesARPU due to fiber growth and revenues from the partner transaction. Pedaphone grew 5G subscribers plan to 1.49 million and 5G Max subscribers grew to 217,000 today. We are on track to reach our target of 300,000 5G Max subscribers by year end. I will now hand the call back to Yohai who will review our financial debt in more details.

Thank you, Thomas. Let's turn to slide seven for the group's second quarter highlights. Core Revenues, Comp EBITDA and Comp Net Profit showed strong growth this quarter across all group segments. Core Revenue showed 4% growth and Comp Net Profit grew 38% due to high revenue and low financing and operating expenses after adjusting for the change in ES valuation in the second quarter of 2025. Moving to slide 8, we show our results for the first half of 2026. Comp net profit grew 19% mainly due to lower financing expenses and free cash flow grew 24% due to tax payments and refunds along with changes in working capital. Turning to slide 9, we show our Q2 operating expenses. Operating and depreciation expenses were impacted by changes in years' valuation in the second quarter of 2025. After excluding the impact of the changes in valuations, operating expenses decreased approximately 35 million shekels and depreciation expenses increased approximately 15 million shekels. Slide 10 shows our quarterly operational metrics. We recorded growth in telephone subscribers and wholesale broadband subscribers and achieved higher outputs for retail broadband and yes, basic group retail broadband subscribers increased by 1% with growth in yes fiber bundle subscribers, offsetting a decline in fixed line retail broadband subscriber in the second quarter. Slide 11 highlights our balanced capital structure. Net debt increased slightly by 303 million shekels to 5.2 billion shekels, with a net debt to comp EBITDA ratio at 1.6 times, turning to shareholder remuneration on slide 12. As Tomer mentioned earlier, the board of directors recommended a cash dividend distribution of 415 million shekels, and we launched a new buyback plan of 100 million shekels, which is part of our multi-year program of 800 million shekels. On slides 13 through 15, 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 line results.