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CellcomIsrael

Q1’20

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The following information contains, or may be deemed to contain forward-looking statements (as 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, 2019.

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.

This document does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities. Any

securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as

amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an

applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

There is no intention to register any securities referred to herein in the United States or to make a public offering of

the securities in the United States.

FORWARDLOOKING STATEMENTS

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Full End-To-End Service Communications Group

Mobile

Fixed lineResidential

Fixed lineBusiness

Appx. 2.7 million Mobile subs

26% Market share

Leading brand in Israel’s mobile market

Appx. 279k Broadband subs

246k TV subs (13% market share)

Fixed line telephony

Optical fibers

International calls

Cyber security

Cloud services

Transmission

Hosting services

Integration services

Leading the TV revolution in Israel with OTT TV service

The largest cellular provider in Israel

(1)

(1)

IOT

(1)

(1) As of Q1’20 based on companies’ reports and Company’s estimation(2) The decrease in TV subscribers was due to a change in the counting method. As of this quarter, the company is changing the way that TV subscribers are counted in a way that does not include subscribers holding the cellcom tv light app that

did not activate the service. As a result, the company erased 14,000 subscribers from its active customer base.

(2)

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CellcomStrengths

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 14% TV market share

Fiber infrastructure using IRU agreement with IBC

(1)

(1) As of Q1’20 based on companies’ reports and Company’s estimation

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CoronavirusEffects

Decrease in roaming revenues from outbound tourism and

inbound tourism

Decrease in end user equipment sales as a result of selling

points being closed. During May the company re-opened

most of the selling points

losses in the Company's investment portfolio, as a result of

market declines during the quarter

The Company has taken significant measures to mitigate

the impact on profitability during the pandemic quarantine :

Reduce operating expenses and investments

A large part of the company's employees was on unpaid leave of

absence

6

Cellular Segment Sales of bundled packages of cellular + fixed line products.

The first and only operator in Israel to offer quad play

Successful marketing of complete communications

packages 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.)

Maintaining Market Leadership

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Golan TelecomPurchase

In February 2020, Cellcom entered into a binding MOU for the

purchase of Golan Telecom's shares. The transaction is subject to

certain conditions, including the receipt of regulatory approvals

Total purchase price is NIS 590 million and additional payments

The sum of NIS 590 shall be paid in cash in two installments:

NIS 413 million upon completion of the transaction

NIS 177 million within 3 years from completion thereof

The Company will issue and deposit 8.2 million shares of the

Company with a trustee. The Escrowed Shares may be sold in

order to finance the deferred payment including upon an

acceleration event

(1) The transaction includes standard and customary conditions and representations and is subject to the completion of due diligence by the Company without negative finding having an adverse material effect over the value of the Company in comparison to the information provided prior to signing of the MOU, receipt of regulatory approvals and material third parties' approval and absence of material adverse change to Golan Telecom's condition (as defined in the MOU).

(1)

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Golan TelecomSnapshot2019

Entered the Market in May 2012

Apx. 927K subscribers

29% Annual churn rate

NIS 530 million revenues

Apx. NIS 48 ARPU

(1) Based on Electra Q4’19 reports

(1)

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2.7 0.9

CellcomIsrael

Golan

26% 9%

2G, 3G & 4GNetworks

A highly complementary combination, with strong synergies

3.6

Consolidated Pro-forma

35%

2G, 3G & 4G

Mobile Sub.Market Share

(1)

Subscribers (m)

(1)

Cellcom Israel & GolanHighly Complementary combination

(1) Based on company and Electra Q4’19 reports

(2) Golan provides 2G services using Cellcom Israel’s infrastructure . 3G & 4G services are provided over the companies shared

network

3G & 4G(2)

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Potentials Soft Synergies• unify overlapping activities• Generate efficiencies in property,

logistics and procurement• Roaming costs

Optional Cost synergies

• Handsets, value added services, repair services

Optional New offering of mobile services

• Access to new households – an opportunity to increase fixed line penetration (using wholesale market)

Fixed line servicescross- selling

(1)

(1) Golan doesn't sell cell phones

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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 Attractive Quad and Triple play offers

Multi screen strategy (IOS ,Android smart tv, set top boxes, Apple tv)

Partnership with Netflix and Amazon prime

Leading the TV revolution in Israel with OTT TV service

Cellcom tvReaching 14% Market Share

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Offering The Top ChannelsViewers Really Want

All the sports

Current events

The leading seriesFrom The leading

studios

The world’s leading children’s channels

Entertainment, leisure,

science and nature

Cellcom channels

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Continuing Growth in TV and Broadband Subscribers

Broadband Subscribers

TV Subscribers

ThousandsThousands

156

222

269 278 279

1 1 1 1 Q1'20

111

170

219

258 246

1 1 1 1 Q1'20

Based on company reports

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IBCLarge scale deployment in short time

Exclusive right to deploy an optical infrastructure on the IEC 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 over 350,000 Home 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- opticinfrastructure in residential areas to IBC, were both completed. For additional details see the Company's annual report on 20-F dated 23.3.2020

(2) Until 2043

(1)

(2)

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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

1616

IBC Households Reach(Thousand)

Cellcom connected households (15% out of IBC Households reach)

18013511375Wholesale

annual expenses saving (M’NIS)

140105885965 Nis

15111395 370 Nis

173130108 80 Nis

184138115 85 Nis

Expected savings in cash flow and wholesale expenses

75

113

135

180

500

750

900

1,200

Wholesale Average Cost per

household

Cellcom connected households

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Cellcom Business Solutions

Handsets

Internet Security Cloud services Transmission

Hosting Services

Integration services

Telephony

International communication

IOT

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Cellcom Smart CityOffers 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:

Energyefficiency

Waste management

Sensors of environmental

protection

Water management

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Financial Overview

317 327

Q1'19 Q1'20

1,166 1,215 1,258

1 1 1

1,9291,730 1,679

1 1 1

20

Service RevenuesMitigating cellular revenues erosion effect with fixed line revenues growth

M’NIS

Fixed Line Service RevenuesCellular Service RevenuesM’NIS

404 396

Q1'19 Q1'20

Based on company reports

121

Adjusted EBITDA and Operating Profit

687

940

1 1

224 244

Q1'19 Q1'20

101

24

1 1

9

18

Q1'19 Q1'20

M’NIS

Adjusted EBITDA Operating ProfitM’NIS

(1) Please see "Use of Non-IFRS financial measures" section the company’s quarterly report dated May 21, 2020.(2) Adjusted EBITDA figures from 2019 include impact of adoption of IFRS 16. For more details see the company’s quarterly report dated May 21, 2020.(3) Adjusted EBITDA and operating profit for Q1’20 includes one time reduction of NIS 28 million in wholesale expenses paid to Bezeq.

Based on company reports

(2) (3) (2) (3)(2) (2)

Capex

181

391

1 1

22

Capex and Free Cash Flow

593 557

1 1

184

118

Q1'19 Q1'20

4657

Q1'19 Q1'20

M’NIS

Free Cash FlowM’NIS

Based on company reports

(1) Please see "Use of Non-IFRS financial measures" section the company’s quarterly report dated May 21, 2020.(2) Free cash flow for 2019 included an amount of approx. NIS 181 million from sale of independent fiber optic infrastructure of the company in residential areas to IBC

(2)

(1)

2.7472.547 2.553

2.264

1.897 1.890

1 1 1 1 1 Q1'20

Net DebtB’NIS

Reduction of Financial Debt

Based on company reports

(1) Net Debt defined as credit and loans from banks and others, debentures and interest payable, net of cash and cash equivalents and current investments in tradable securities.

(1)

3

1,238

819

139

Cash 31.03.20 Repayments04/2020-2021

Conservative Financial Policy

295

525475

515 515

366

253

121 121

50

88

7157 41

26

14

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Interest Principal

M’NIS

Cash vs. Debt repayment Debt Repayment Schedule

B’NIS

(1)

2020-2021

(1)

(1) As of March 30, 2020(2) In May, 2020 the company concluded a tender for a debt and option offering raising an immediate net consideration of NIS 200 million.

Based on company reports

958

(2)

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Contact us Shlomi Fruhling Chief Financial Officer

Elad LevyInvestors Relations Manager

Investors website: investors.cellcom.co.ilE-mail: investors@Cellcom.co.ilTel : + 972 52 9989735