#1O2 Czech Republic, a. s. November 2018 (updated with 9M 2018 results) General Presentation O₂ 2#22 Cautionary statement Any forward-looking statements concerning future economic and financial performance of O2 Czech Republic a.s. contained in this Presentation are based on assumptions and expectations of the future development of factors having material influence on the future economic and financial performance of O2 Czech Republic a.s. These factors include, but are not limited to, public regulation in the telecommunications sector, future macroeconomic situation, development of market competition and related demand for telecommunications and other services. The actual development of these factors, however, may be different. Consequently, the actual future results of economic and financial performance of O2 Czech Republic a.s. could materially differ from those expressed in the forward-looking statements contained in this Presentation. Although O2 Czech Republic a.s. makes every effort to provide accurate information, we cannot accept liability for any misprints or other errors. O₂ 2#3140 160 180 200 220/240/460 S SW Introduction & Strategic highlights O₂ 2#4Leading retail digital economy enabler in Czech Republic... ...fastest growing mobile player & entering fixed in Slovakia Leading fixed/mobile operator 5,008 Mobile 532k fixed voice lines Leading fixed BB provider 797k xDSL & LTE home BB Fastest growing Pay TV provider 308k Pay TV (IPTV, OTT, Multi) No. 3 mobile fastest growing 2,002k Mobile O2 Czech, O2 Slovakia, O2 TV, O2 Family, O2 IT Services, others* *Tesco Mobile CR, ICA, Bolt Start Up Development, eKasa, 02 Financial Services, O2 Business Services Slovakia Figures as of 30th September 2018#55 Streamlining the business... ...resulted in turn around of our financial trends More focus on what we do Accelerated what we do ■ Mobile revolution (2013) ■ Fixed revolution (2016) 4G (LTE) 99% coverage[1]... 4G 3G 2G 26 volání 3G ...and monetized trend ■ New proposition ■ New features We do things differentially 02 Spolu convergent bundle.. - ■ ...mobile voice, data & Pay TV O2 TV for all Sport bars & pubs O₂TV MO О We entered new businesses Hardware insurance Travel insurance More content... ...More channels O₂TV SPORT O, TV FOTBAL FORTUNA:LIGA O, TV TENIS WTA ATP OTV HOKEJ ✓ Tipsport FELH [1] based on CTU methodology, within Top 5 in Europe Start-up accelerator BOLT End to end startups Electronic sales reporting solution O 2#6The most popular sports content exclusively on O2 TV ... ...with unique features and bundled in packages Best exclusive sport content O2 TV FOTBAL FORTUNA:LIGA CHAMPIONS O₂TV TENIS WTA ATP WORLD TOUR OTV HOKEJ Tipsport ELH Unique technology and features 7d བང Recording Timeshift Menu 6 Included in all bundles 90+ O₂ TV + 10:02 24 4 devices Selection of matches 4x Multi-angle camera viewing Best customer experience 02#7We are starting up new business activities... ...to compensate pressures in traditional business eKasa O₂ O₂ Insurance BOLT End to end startups taxify CROSS ☑Tapito mluvii Electronic sales reporting - new legislation market leader after first two waves... ■ ...one-off hardware revenue, recurring service fee O eKasa smart travel: the only postpay travel insurance on the market handsets & tablets: for newly sold hardware ■>350k active insurance policies Minor cash investments into advanced start-ups ■Typically own O2 experience before investment Not only financial contribution, but also O2 ecosystem O₂ 2 7#8Strategic commercial initiatives & CDUCTION Performance Highlights in 1H 2018 SHO DIRECTON DATE GAERANAN 2#9We are best positioned for WTTX/5G ... ...and secured O2 brand minimum until 2022 ■40 MHz block in 3.7 GHz spectrum acquired... ... suitable for WTTx in areas with insufficient xDSL coverage... ...450 MHz spectrum renewed for reasonable price Current spectrum allocation [1] 40 3.7 GHz TDD 25 25 40 12.6 GHz TDD Other [1] O₂ T.. 2 vodafone O, 2 02 brand license agreement extended by 3 years (Jan 2022)... ■ ...another 5-years extension (till Jan 2027) available... partnership with Telefonica till at least Jan 2022 9 ...related capex & cash outflow fully booked in 2017 [1] 450 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,600 MHz FDD O₂ 2#10Expansion of technology agnostic broadband proposition with WTTX/LTE TDD solution using 3.7 GHz spectrum WTTX/LTE TDD (3.7 GHz) (()) » » » » 10 Wireless Fixed up to 250 Mbs LTE FDD (800/1,800 MHz) ››) › ››) ››) up to 20 Mbs ررد ررد rDSLAM, VDSL3, vectoring, bonding, FTTH 20 Mbs 1 Gbs ULTRA HD>>> 4Q 2018 rollout & launch 5G 15:5 4GLTE O, 2#11We improved significantly 4G LTE speed & quality... ...shops redesign to increase sales performance GLTE 4G LTE downlink speed in Prague [2] 2.2x 40 2Q16 3Q16 4Q16 1Q17 2017 3Q17 4Q17 1Q18 ■99% 4G LTE coverage (800 MHz) already since 2016 year-end... ...further NW densification & 2CC1 installation... 4GLTE+ .. most intense data traffic localities to be upgraded with 2CC 4G LTE speed growing rapidly... ■...Czech republic in No. 8 in EU and No. 18 worldwide[3] All retail shops to be redesigned in next 2 years... ...focus on sales force/customer interaction.. . up-sell/cross-sell potential... ...aiming at improving customer experience 11 [1] two capacity layers (800 MHz + 1,800 MHz); [2] in MB/s; source: internal reports; [3] source: Ookla (http://www.speedtest.net) MO O₂TV 096 O₂ 2#12Exclusive sport content & bundled proposition... ..driving accelerated O2 TV base uptake OTV FOTBAL FORTUNA:LIGA O₂TV TENIS WTA O₂TV SPORT YTipsport ATP ELHI Exclusive content including own O,TV SPORT TIKI-TAKA LICETIME Unique functions & features 12 HBO HBO2 HBO3 CINEMAX CINEMAX 2 STB Unity interface APP WEB 4 -3 -1 Pay TV net adds [1] 1 1 7 5 6 4 8 20 20 1Q 16 2016 3Q 16 4Q16 1Q 17 2Q 17 3Q 17 4Q17 1Q 18 2Q 18 3Q 18 02 TV reach [2] +22% 673 553 365 288 308 265 Sep 17 Sep 18 ■Traditional ■Multi-device O₂ 2 [1] in thousand; IPTV & OTT, incl. Multi (second STB); [2] Traditional paid tariffs: IPTV, OTT, Multi; Multi-device: applications & web (average monthly number of unique users, incl. paid O2 TV Sport Pack)#13Demand for bundles, data centric tariffs & LTE smartphone focus... ...driving data traffic growth; data successfully monetized Uptake in LTE HW penetration with further growth potential Data centric & bundled proposition O₂ Data Vstupte do doby datové LTE smartphone & tablets/PCs sales focus 13 O₂TV 2 tar 1. tarif 3. tarif 4.tar 08:08 08:08 [1] small/big screen (excl. FWA); [2] per total number of handsets 42% 28% 54% 1Q16 2016 3Q16 4Q16 1Q17 2017 3Q17 4Q17 1Q18 2Q18 3Q18 LTE HW penetration [2] Data customers[1] Average monthly postpay data [1] usage + 26% y-o-y 1.0 1.1 1.4 1Q16 2016 3Q16 4Q16 1Q17 2017 3Q17 4Q17 1Q18 2018 3Q18 Average data usage (postpay, in GB) Total data traffic#14Strong and improving performance in Slovakia... ...driven by growing base, improving mix & data uptake No. 1 4G LTE network coverage in Slovakia [1] over 95% 4G LTE (800/1800 MHz) population coverage WTTx/FWA BB & Pay TV via LTE TDD (3.5/3.7 GHz) & 4G LTE national fiber backbone & transmission network expansion Competitive data centric proposition rich data limits in top "O2 Pausal" tariffs profitable LTE handset sales installment model LTE HW penetration [2] at 55% (+12 p.p. y-o-y) Growing base & ARPU; strong brand blended APRU +3.7% (postpaid +3%) [3] 4G LTE coverage Customer base ('000; % postpay) +4.5% 1 916 2 002 62% 58% Sep 17 Sep 18 TECHBOX OPERÁTOR Revenue (growth rate in EUR) +9.7% EBITDA/margin (growth rate in EUR) roka 2017 +18.1% 36,2% 33,6% 02 SK voted "Operator of the Year" for the 8th consecutive year CSI maintained high at 81.7 points 9M 17 9M 18 9M 17 9M 18 14 [1] based on public information provided by other operators, [2] I per total number of handsets, [3] year-on-year growth rates in EUR O2#15Financial Performance January - September 2018 O, 2#1616 Group Financials New proposition & Slovakia driving y-o-y revenue growth... ...growing EBITDA on the back of strict cost management CZK millions Operating Revenue CZ Fixed CZ Mobile Slovakia EBITDA EBITDA margin - Jan Sep 2018[1] Change 9M18/9M17 28,209 +1.1% 7,768 15,081 5,524 8,342 +6.9% 29.6% Net Income Free Cash Flow Operating Revenue EBITDA 4,217 +2.5% 3,415 1,1% 27 893 28 209 6,9% 8 342 7 804 9M 17 9M 18 [1] including CZK 121 million positive net income effect of IFRS 15 9M 17 9M 18 O₂ 2#17Mobile Business Double digit growth of data, financial services, and HW revenue... ...mobile data still include also technology agnostic BB product CZK millions (% change y-o-y) Slovakia Mobile Revenue[1] +9.3% 14,816 Czech Mobile Revenue +1.8% +274 +58 +32 +64 (+22.0%) (+7.6%) 15,081 [2] -587 (-9.3%) +506 (+12.2%) negative IFRS 15 impact -82 (-13.8%) 99% 9M 17 Voice Data (+50.9%) (+1.9%) positive IFRS 15 impact Including LTE component of technology agnostic broadband product Messaging Financial S. Interconnect Hardware Other 9M 18 O, 2 17 [1] Key drivers: Data: +16%, Hardware: +31%; O2 Slovakia, growth rate in local currency (EUR); [2] CZK 4 million negative effect of IFRS 15#18Fixed Business Fixed voice declining due to fixed to mobile substitution... ... technology agnostic BB product still in mobile data CZK millions (% change y-o-y) 18 8,006 -3.0% +7 (+0.6%) +97 (+60.2%) 7,768[2] -254 (-13.6%) -12 -46 -31 (-1.2%) (-4.1%) (-4.7%) (+1.1%) [1] 99% LTE component of technology agnostic broadband product included in "Mobile data" 9M 17 Voice BB & Pay TV ICT Data Hardware Other 9M 18 O₂ 2 [1] including LTE component of technology agnostic broadband product; [2] CZK 19 million positive effect of IFRS 15#19Group Costs Cost base under control...with savings in Czech... ...and minor revenue related growth in Slovakia CZK millions (% change y-o-y) 20,140 -1.4% -0.9% +1.6% +93 (+3.0%) -68 (-0.6%) -49 (-1.7%) positive -21 -5 19,950 [2] -141 (-4.5%) (-0.8%) (-8.5%) IFRS 15 impact (acquisition commissions) 19 9M 17 Costs of Service Commercial Costs Marketing Personnel Expenses NW & IT repairs Other [1] 9M 18 and maintenance [1] Taxes other than income taxes, Bad debt provisions, Rentals, Buildings, Vehicles, Consumables, Consultancy, Billing, Collection, Call Centers, management fees and other; including Internal expenses capitalized in fixed assets; [2] CZK 417 million positive effect of IFRS 15 (commissions only) O, 2#20Group Capex Czech CAPEX spent on IT transformation & sport content... ...full year CAPEX/Revenue will exceed 10% CZK millions CAPEX/ Revenue 450 MHz spectrum renewal 02 brand license extension 20 210 782 2 027 7.3% [1] 688 1 339 9M 17 3 404 12.0% Slovakia (+5.9% y-o-y): 13.2% 729 11.7% 2 676 9M 18 H Mobile NW capacity (transmission, backbone) 2G NW expansion to reduce national roaming Czech Republic (+99.8% y-o-y[1]): Sport content (Q3 2018) UEFA Champions League (3 seasons till 2021) Domestic Fortuna football league (4 seasons till 2022) Domestic Tipsport ice-hockey league (5 seasons till 2023) IT transformation (Q3 and also in Q4 2018) Retail shops redesign [1] 9M 2017: excluding 450 MHz spectrum renewal & capitalization of O2 brand license extension 02#21Group Balance Sheet 2017 shareholder remuneration distributed in 3Q... ...impacting cash & liabilities 30 June 18 CZK millions 31 Dec 2017 30 Sep 2018 /31 Dec 17 Non-current assets 23,411 25,075 +7.1% - of which intangible assets 16,815 17,488 +4.0% - of which property, plant & equipment 5,636 5,843 +3.7% Current assets 11,431 9,070 -20.7% - of which cash & cash equivalents 4,088 1,174 -71.3% Total assets 34,842 34,145 -2.0% Equity 15,475 14,026 -9.4% Non-current liabilities 10,887 11,651 +7.0% - of which financial debt 10,448 10,458 +0.1% Current liabilities 8,479 8,467 -0.1% 21 02#22CZK 10.5bn debt utilized out of CZK 15.5bn capacity... ...Net Debt/EBITDA at low 0.8x, well below "up to 1.5x" guidance CZK millions 12 000 Debt 15 500 3 500 10 490 Cash, Net Debt 9 316 1174 Term + revolving Schuldschein Utilised Cash Net Debt 30-Sep 2018 30-Sep 2018 (CZK, 2020) (CZK/EUR[1], 2022/2024) 22 [1] CZK 3,000m, EUR 20m 0.84x 11 051 EBITDA 02#23Shareholder remuneration MA O₂ 2#24Share premium distribution on top of regular dividend... ...CZK 21 per share in total DPS: CZK 17 Total shareholder remuneration 2017 Regular (CZK per share) 98% of net profit...in line with Dividend dividend policy... ...distribution of 90% to 110% standalone net profit 4 4 On top of regular dividend Share Premium 16 17 17 CZK 4 per share distribution Not one-off, but mid-term intention 2015 2016 2017 ■Divi Share pr. Record date: 4th June 2018 Key dates CZK 6,332m [1] Payment date: 4th July 2018 Share Buy Back 2.8% (8.7m) shares repurchased [2] under "Program"...for CZK 2,204m... In December, Board approved "New Program" for 2 years... of up to 4% cumulative for both Programs 24 [1] O2 CR had no entitlement to dividend payment and amount related to the distribution of the share premium related to the treasury shares; [2] as of 31st August 2018 O, 2#25Back up O#26From Telefónica to PPF... PPF acquires majority stake from Telefónica ... Separation created value Separation by spin-off June 2015 02 Fixed & mobile transport/access network and infrastructure 26 Jan 2014 ►CETIN ČESKÁ TELEKOMUNIKAČNÍ INFRASTRUKTURA Focus & Flexibility Less regulation Light financial profile (assets, capex) O₂ 2#2727 Separation created retail player 02... ...and national telco infrastructure player CETIN Customer relationship O₂ 2 Mobile subscribers Infrastructure owner ►CETIN Access Network 6,000 sites for mobile services Transport Network Country wide aggregation and backbone transport fibre network Spectrum and brand Marketing, sales channels ■Service provisioning Customer care, billing & collection Fix voice Fix data IPTV subscribers subscribers subscribers DOR Vane pro 1.90 110021 Mvo Access nodes for fixed services 20 million km- pairs of metallic cables 38,000 km of fibre optic cables, thousands of network elements O₂ 2#2828 Fundamental rationale for separation followed 3 simple goals.. Streamlining the business Focus Acceleration Approach New 2#2929 Fundamental rationale for separation followed 3 simple goals.. Streamlining the business Easing of regulation པ་ 2 O2 10% Spin-off (1st June 2015) ►CETIN ČESKÁ TELEKOMUNIKAČNÍ INFRASTRUKTURA 60% CANCELLED 30% 02#30Fundamental rationale for separation followed 3 simple goals.. total assets decreased...and completely changed its structure 30 Streamlining the business Easing of regulation "Heavy" asset "Light" asset Non-current assets Current assets Financial New O₂ Old O₂ consequences 02#3131 02 share price responded... ...by recognizing CZK 63bn extra value [1] Old O₂ 172 49 ►CETIN ČESKÁ TELEKOMUNIKAČNÍ INFRASTRUKTURA 430 179 134 New O₂ 251' 5x XII-14 II-15 IV-15 VI-15 VIII-15 X-15 XII-15 Source: Prague Stock Exchange; [1] including CETIN (infrastructure company)#3232 Post separation setup... 02 CR X CETIN relationship ... Two strong independent companies. O₂ PPF stake: 81.06% ►CETIN ČESKÁ TELEKOMUNIKAČNÍ INFRASTRUKTURA PPF stake: 100.00% ■ Independent conduct solely on commercial basis ■ Independent IT, corporate bodies, business plan and goals CETIN key vendor of O2 Commercial relationship established & working... 12 main business contracts on commercial as well as regulated basis Fixed - based on reference/regulated price Mobile - open book principle @ CZK 4.4 bn. for 7 years Data centers, Roaming, Collocation, etc. 02 CR X PPF relationship PPF considers O2 as financial investment, i.e. not as part of PPF Group PPF does not interfere with daily management, 02 does not pay any management fee to PPF PPF not seeking to squeeze out minorities, supports increase in O2 liquidity and free-float 2#3333 Reasonable commitment for pro-growth areas... Fixed charge & commitment (illustrative) with further potential CETIN's wholesale FBB offer (illustrative) TIME commitment other tv voice 20% fbb 80% (650k) uncommitted 7 years commitment Mobile charge & commitment (illustrative) 7 years 2G & CZK 4.4bn 3G & annually LTE VOLUME commitment 650k/ 7 years • • Open book principle 7 years commitment Additional savings shared 02#3434 Improving coverage & capacity of mobile data network... ...to monetize future increasing demand for mobile data • Pioneers in active network sharing ⚫ Joint rollout (3G: 2011, 4G/LTE: 2014) • 2G/3G consolidation since 2013 (40% target) ...execution to be continued by CETIN 5% LTE outdoor coverage 99% 80% 32% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 LTE densification & capacity improvement 4GLTE+ • ~2.5 thousand new LTE sites in 2016/17 • 2CC (4GLTE+) already available in 100% of Prague (Brno to be covered during 2018) • 3CC available in selected parts of two major cities First 4.5G commercial launch (up to 1.2Gbs) O₂ 2#3535 Superior fixed broadband coverage [1]... ... with further increase in speeds Fixed broadband infrastructure [1] [2] Household coverage 0," [1] 90% 2 33% upc 02 current proposition 1/3 of customers with >80Mbps (PREMIUM) 2/3 with 6 to 20Mbps [1] through CETIN [2] 20 million kmp of cables Speed upgrade through: Remote DSLAMS Vectoring Bonding 10/2017 - upgrade of PREMIUM from 80Mbps to 100 Mbps 6/2018 ULTRA HD (250 Mbps) O₂ 2#36Investor Relations contact O₁₂ ၁ 2#3746 37 Investor Relations contacts Jakub Hampl Head of Investor Relations T: +420 271 463 935 E: [email protected] [email protected] www.02.cz/spolecnost/en/investor-relations/ O₂ 2