Royal Kpn Nv · EURONEXT:KPN
Royal Kpn Nv — Koninklijke Kpn — Q3 2023 Earnings Presentation
24 slides from Royal Kpn Nv's earnings presentation, Oct 25, 2023
Slide 1: Q3 2023 results
Q3 2023 results 25 October 2023 kpn. The network of the Netherlands
Slide 2: Safe harbor
Safe harbor Alternative performance measures and management estimates 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 (‘
Slide 3: Highlights Q3: Accelerating Group service revenue growth
Highlights Q3: Accelerating Group service revenue growth Group service revenue growth (+3.8% y-on-y), driven by all segments Continued B2B service revenue growth (+4.2% y-on-y), fueled by strong SME B2C service revenues sustainably inflected (+2.7% y-on-y), Fixed back to growth Ongoing positive net
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 1 +221 KPN footprint ~80% +125 Glaspoort footprint +85 4,142 55% +90 3,920 35% 3,710 3,796 3,620 Q3 2022 Q4 2022 Q1 2023 Q2 20
Slide 6: B2C: Service revenues sustainably inflected, Fixed back to growth
B2C: Service revenues sustainably inflected, Fixed back to growth Key take-aways Service revenue trend (€ m) • Continued growth in Mobile service revenues, driven by solid base +1.3% +2.7% trends and higher ARPU • Fixed service revenue growth inflected due to strong base -0.8% -0.3% -0.2% momentum a
Slide 7: B2C: Base and ARPU growth drive solid performance
B2C: Base and ARPU growth drive solid performance Growing broadband net adds (k)1 Growing fixed ARPU Fixed service revenues inflected to growth (y-on-y growth) +17 +14 € 54 +1.8% +4 -3 -0.4% -7 +2.6% y-on-y -2.0% -2.3% -1.7% Continued positive postpaid net adds (k) Growing mobile ARPU Continued grow
Slide 8: B2B: Continued strong service revenue growth, mainly driven by SME
B2B: Continued strong service revenue growth, mainly driven by SME Key take-aways Service revenue trend (€ m) • Continued strong growth in SME service revenues, driven by solid +4.5% +4.2% +3.4% +3.0% +3.1% base growth and successful cross-sell ICT services • LCE service revenues decreasing y-on-y,
Slide 9: B2B: SME service revenue growth driving ongoing momentum
B2B: SME service revenue growth driving ongoing momentum SME (€ m) +11.7% +9.3% +8.9% +7.5% +9.3% 151 154 155 160 169 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Continued strong Business service revenue growth (€ m) +4.5% +4.2% LCE (€ m) -0.4% +0.4% +0.5% +0.5% +3.4% +3.0% +3.1% -1.8% 194 197 193 193 190 416 430
Slide 10: Wholesale: Sustainable growth from open access model
Wholesale: Sustainable growth from open access model Key take-aways Service revenue trend (€ m) • Strong service revenue growth, driven by strong Mobile and +3.8% +5.4% Broadband performance +0.8% +1.9% +0.1% • Mobile postpaid SIMs -3k, fully driven by -32k 2G M2M SIMs • Solid broadband base growth
Slide 11: Deliver Financial ambitions
Deliver Financial ambitions
Slide 12: Financial performance
Financial performance Adjusted revenues Adj. net indirect opex AL Adjusted EBITDA AL Q3 adjusted revenues +2.2% y-on-y Q3 2023 YTD 2023 Q3 2023 YTD 2023 Q3 2023 YTD 2023 • Growth driven by higher service revenues € 1,363m € 4,028m € +26m € +68m € 629m € 1,809m in all segments, partly offset by lower
Slide 13: Sustainable Group service revenue growth
Sustainable Group service revenue growth Continued Group service revenue growth (€ m) Growth driven by all segments (€ m) +1.1% +1.5% +1.2% +2.8% +3.8% Δ y-on-y Δ y-on-y Q3 2022 1,230 1,230 1,244 1,227 1,245 1,277 171 167 167 177 181 Wholesale +10 +5.4% 416 430 422 428 434 +4.2% Business +18 Consume
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 YTD 2023 1,809 +2 Free Cash Flow of € 552m, 18% lower y-on-y due to: − Capex phasing Capex -905 -90 − Higher cash taxes paid − Change in cash from working capital Operational FCF 904 -88 Partly off
Slide 15: Robust liquidity position; committed to investment-grade credit profile
Robust liquidity position; committed to investment-grade credit profile 12.1x 12.9x 12.3x 11.0x 11.2x Robust liquidity… €m 1,000 1,579 2.3x 2.3x 2.4x 2.4x 2.2x 579 €m 5,993 5,566 5,935 5,435 5,815 5,275 6,106 5,739 6,400 5,820 Cash & short RCF Total liquidity term investments end Q3 2023 427 499 540
Slide 16: 2023 outlook reiterated
2023 outlook reiterated Achievements Outlook YTD 2023 FY 2023 Adjusted EBITDA AL € 1,809m ~€ 2,410m Capex € 905m € 1.2bn Free Cash Flow € 552m ~€ 870m € 5.2 cents € 15.0 cents Regular DPS Interim dividend +4.9% y-on-y Share buyback € 300m € 300m 16 Q3 2023 Results
Slide 17: Highlights Q3: Accelerating Group service revenue growth
Highlights Q3: Accelerating Group service revenue growth Group service revenue growth (+3.8% y-on-y), driven by all segments Continued B2B service revenue growth (+4.2% y-on-y), fueled by strong SME B2C service revenues sustainably inflected (+2.7% y-on-y), Fixed back to growth Ongoing positive net
Slide 18: Accelerate to grow
Accelerate to grow
Slide 19: Appendices
Appendices I Tax II Debt portfolio III ESG
Slide 20: I: Tax Q3 and YTD 2023
I: Tax Q3 and YTD 2023 Regions (€ m) Q3 2022 Q3 2023 Q3 2022 Q3 2023 YTD 2022 YTD 2023 YTD 2022 YTD 2023 The Netherlands -62 -69 -2 -26 -173 -190 -31 -69 Other - - 1 - - - 1 - Total reported tax -62 -69 -1 -26 -173 -190 -30 -69 Of which discontinued operations - - - - - - - - Reported tax from conti
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 6% 7% 15% 14% 0.8 0.7 21% 0.6 0.7 0.6 0.5 0.5 7% 0.4 73% 72% 85% ’23 ’24 ’25 ’26 ’27 ’28 ’29 ’30 ’31 ’32 ’33 Eurobonds EUR Fixed EUR Global bonds GBP Floating G
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: Solid progress on ESG ambitions
Solid progress on ESG ambitions In kTon CO2e Base year1 Scope 1 – Direct emissions 59 • Gross emissions, relating to fuel consumption car fleet, heating of buildings, -82% LTM Q2 ’22 Scope 1 12 -15% consumption of coolants, fuel consumption of emergency power generators 11 LTM Q2 ’23 • Ambition: 98%
Slide 24: KPN Investor Relations
KPN Investor Relations ir.kpn.com