Royal Kpn Nv · EURONEXT:KPN
Royal Kpn Nv — Koninklijke Kpn — Q1 2023 Earnings Presentation
24 slides from Royal Kpn Nv's earnings presentation, Apr 26, 2023
Slide 1: Q1 2023 results
Q1 2023 results 26 April 2023 kpn. The network of the Netherlands
Slide 2: Safe harbor
Safe harbor Alternativeperformancemeasuresand managementestimates This financial report contains a number of alternative performance measures (non-GAAP figures) to provide readers with additional financial information that is regularly reviewed by management, such as EBITDA and Free Cash Flow (‘FCF’
Slide 3: Highlights Q1: Continued Group service revenue growth
Highlights Q1: Continued Group service revenue growth Group service revenue growth (+1.2% y-on-y), driven by B2B and B2C Mobile Sustainable B2B service revenue growth (+3.1% y-on-y), mainly driven by SME Ongoing B2C mobile service revenue growth (+3.4% y-on-y) Customer satisfaction levels improving
Slide 4: Accelerate to grow supported by three key pillars
Accelerate to grow supported by three key pillars Three strategic pillars… …to support our ambition to 1. Leverage & expand superior networks • Covering the Netherlands through fiber • Low latency services via 5G and edge computing Connect the Netherlands to a sustainable future • Leading the Dutch
Slide 5: Expand superior fiber network
Expand superior fiber network Continuously expanding fiber footprint1 Leading position, jointly covering ~80% of NL by end 2026 homes passed, k homes passed, % of households +85 KPN footprint ~80% +90 +87 Glaspoort footprint +101 3,796 51% 3,710 3,620 35% 3,533 3,432 Q1 2022 Q2 2022 Q3 2022 Q4 2022
Slide 6: B2C: Continued growth mobile service revenues
B2C: Continued growth mobile service revenues Key take-aways Service revenue trend (€ m) • Continued growth in mobile service revenues, driven by growing +0.3%2 base and ARPU -1.1% -0.8% -0.3% -0.2% • Fixed service revenues bottoming out, mainly impacted by structural decline in legacy and shift fro
Slide 7: B2C: Solid mobile service revenue growth, fixed remains competitive
B2C: Solid mobile service revenue growth, fixed remains competitive Declining broadband net adds (k)1 Broadly stable fixed ARPU Fixed service revenues bottoming out (y-on-y growth) € 53 +7 +4 -3 -3 -0.4%2 -7 +0.3% y-on-y -2.2% -2.0% -2.3% -1.7% Continued positive postpaid net adds (k) Growing mobile
Slide 8: B2B: Continued service revenue growth, mainly driven by SME
B2B: Continued service revenue growth, mainly driven by SME Key take-aways Service revenue trend (€ m) • Continued strong growth in SME service revenues, mainly driven by +3.4% +3.0% +3.1% +1.9% mobile base momentum and take-up unlimited bundles • LCE service revenue trend continued to increase y-on
Slide 9: B2B: All segments contributing to service revenue growth
B2B: All segments contributing to service revenue growth SME (€ m) +9.3% +7.7% +9.3% +8.9% +7.5% 144 146 151 154 155 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Delivered turnaround in Business service revenues (€ m) +3.4% +3.0% +3.1% LCE (€ m) -0.4% +0.4% +0.5% +1.9% -3.1% -6.0% -0.4% 409 409 416 430 422 192 192
Slide 10: Wholesale: Stable service revenues, impacted by one-offs in Q1 2022
Wholesale: Stable service revenues, impacted by one-offs in Q1 2022 Key take-aways Service revenue trend (€ m) • Growing broadband service revenues with flat base trend +4.9% +6.4% • Mobile service revenues declined, impacted by one-offs in Q1 ’22. +0.8% +1.9% +0.1% Operational momentum remains stro
Slide 11: Deliver Financial ambitions
Deliver Financial ambitions
Slide 12: Financial performance
Financial performance Adjusted revenues Adj. net indirect opex AL Adjusted EBITDA AL Q1 adjusted revenues +1.9% y-on-y Q1 2023 Q1 2023 Q1 2023 • Growth driven by Business, Consumer € 1,333m +€ 12m € 584m mobile and higher non-service revenues +1.9% -1.6% Q1 2022 Q1 2022 € 1,308m € 593m Q1 adjusted E
Slide 13: Sustainable Group service revenue growth
Sustainable Group service revenue growth Continued Group service revenue growth (€ m) Growth driven by Business and Consumer Mobile (€ m) +1.0% 1 +1.3% +1.1% +1.5% +1.2% Δ y-on-y Δ y-on-y Q1 2022 1,213 1,213 1,211 1,230 1,244 1,227 167 170 171 167 167 Wholesale 0 +0.1% 409 409 416 430 422 Business +
Slide 14: FCF generation impacted by intra-year Capex phasing
FCF generation impacted by intra-year Capex phasing Contribution to Δ FCF y-on-y (€ m) Adj. EBITDA AL Q1 2023 584 -9 Free Cash Flow of € 164m, 20% lower y-on-y mainly due to: Capex -298 -41 − Capex phasing − Higher taxes paid Operational FCF 286 -50 Partly offset by Cash restructuring -8 +4 − Lower
Slide 15: Robust liquidity position, committed to investment-grade credit profile
Robust liquidity position, committed to investment-grade credit profile 12.0x 12.1x 12.1x 12.9x 11.0x Robust liquidity… €m 1,000 1,540 2.2x 2.3x 2.3x 2.3x 2.2x 540 €m 5,818 5,144 6,010 5,382 5,993 5,566 5,935 5,435 5,815 5,275 Cash & short RCF Total liquidity end term investments Q1 2023 674 628 427
Slide 16: 2023 outlook reiterated
2023 outlook reiterated Achievements Outlook 2022 FY 2023 Adjusted EBITDA AL € 2,404m ~€ 2,410m Capex € 1,206m € 1.2bn Free Cash Flow € 862m ~€ 870m € 14.3 cents € 15.0 cents Regular DPS +5.1% y-on-y +4.9% y-on-y Share buyback € 300m € 300m 16 Q1 2023 Results
Slide 17: Highlights Q1: Continued Group service revenue growth
Highlights Q1: Continued Group service revenue growth Group service revenue growth (+1.2% y-on-y), driven by B2B and B2C Mobile Sustainable B2B service revenue growth (+3.1% y-on-y), mainly driven by SME Ongoing B2C mobile service revenue growth (+3.4% y-on-y) Customer satisfaction levels improving
Slide 18: Accelerate to grow
Accelerate to grow
Slide 19: Appendices
Appendices I Tax II Debt portfolio III ESG
Slide 20: I: Tax Q1 2023
I: Tax Q1 2023 P&L Cash flow Regions (€ m) Q1 2022 Q1 2023 Q1 2022 Q1 2023 The Netherlands -53 -57 -12 -27 Other - - - - Total reported tax -53 -57 -12 -27 Of which discontinued operations - - - - Reported tax from continuing operations -53 -57 -12 -27 Effective tax rate continuing operations 23.1%
Slide 21: II: Debt portfolio
II: Debt portfolio Nominal debt by type 1 Nominal debt by currency 1 Fixed vs. floating interest 1 Debt redemption profile (€ bn) 2 1.1 1.0 7% 16% 17% 0.8 0.7 23% 0.6 0.7 7% 0.5 0.5 7% 0.4 70% 70% 83% ’23 ’24 ’25 ’26 ’27 ’28 ’29 ’30 ’31 ’32 ’33 Eurobonds EUR Fixed EUR Global bonds GBP Floating GBP L
Slide 22: III: ESG milestones and ambitions
III: ESG milestones and ambitions Important milestones crossed… …and an ambitious agenda Carbon neutral Inflow of cars 45% reduction Management for own >33% women close to 100% scope 3 incentivized operations in sub top fossil fuel free emissions 1 2011 2015 2023 2025 2030 2011 2020 2025 203
Slide 23: III: Progress on ESG ambitions
III: Progress on ESG ambitions In kTon CO2e Scope 1 – Direct emissions 59 Base year* • Gross emissions, relating to fuel consumption car fleet, heating of buildings, -80% Scope 1 13 -8% FY ’21 consumption of coolants, fuel consumption of emergency power generators 12 • Ambition: 98% fossil fuel free
Slide 24: KPN Investor Relations
KPN Investor Relations ir.kpn.com