Royal Kpn Nv · EURONEXT:KPN
Royal Kpn Nv — Koninklijke Kpn — Q3 2022 Earnings Presentation
24 slides from Royal Kpn Nv's earnings presentation, Oct 26, 2022
Slide 1: Q3 2022 results
Q3 2022 results 26 October 2022 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 Q3: KPN delivers continued Group service revenue growth
Highlights Q3: KPN delivers continued Group service revenue growth Continued B2B service revenue growth, mainly driven by strong growth in SME Ongoing mobile base momentum in B2C and B2B (+67k postpaid net adds) Growing Consumer mobile service revenues, improving trends in Consumer fixed Sustainable
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 +76 KPN footprint ~80% +102 +75 Glaspoort footprint +120 3,470 3,394 46% 3,292 34% 3,217 3,096 Q3 2021 Q4 2021 Q1 2022 Q2 2022
Slide 6: B2C: Continued growth in mobile service revenues, fixed bottoming out
B2C: Continued growth in mobile service revenues, fixed bottoming out Key take-aways Service revenue trend (€ m) • Continued growth in mobile service revenues, driven by strong +0.6% +0.7% +0.3% base trends and broadly stable ARPU • Fixed service revenues bottoming out, mainly impacted by -1.1% -0.8
Slide 7: B2C: Strong momentum in mobile, improving trends in fixed
B2C: Strong momentum in mobile, improving trends in fixed Small growth broadband net adds (k)1 Slightly growing fixed ARPU Fixed service revenues bottoming out (y-on-y growth) 2 € 53 +7 +4 +3 0 +0.3% -0.1% -0.4% -3 +0.4% y-on-y -2.2% -2.0% Continued strong postpaid net adds (k) Stable mobile ARPU So
Slide 8: B2B: Continued service revenue growth
B2B: Continued service revenue growth Key take-aways Service revenue trend (€ m) +3.4% +1.9% • Continued strong growth in SME service revenues, due to ongoing base momentum on its integrated portfolio KPN EEN -0.4% • LCE service revenue trend continues to improve, partly supported -2.7% -2.4% by sma
Slide 9: B2B: Service revenues per segment
B2B: Service revenues per segment +9.3% +9.3% SME (€ m) +5.3% +7.7% +2.3% 138 142 144 146 151 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Delivered turnaround in Business service revenues (€ m) +3.4% -0.4% +1.9% LCE (€ m) -4.1% -6.0% -3.1% -0.4% -6.3% -2.7% -2.4% 195 196 193 193 194 403 417 409 409 416 Q3 21 Q4 2
Slide 10: Wholesale: Sustainable service revenue growth
Wholesale: Sustainable service revenue growth Key take-aways Service revenue trend (€ m) • Wholesale service revenue growth, despite several smaller +9.4% +4.7% +6.0% +7.0% incidentals in Q3 ’21 +1.1% • Growing base, +18k postpaid customers and +10k broadband lines • Other service revenues declined
Slide 11: Deliver Financial ambitions
Deliver Financial ambitions
Slide 12: Financial performance: Growing revenues, EBITDA and FCF
Financial performance: Growing revenues, EBITDA and FCF Adjusted revenues Adj. net indirect opex savings Adjusted EBITDA AL Q3 adjusted revenues +1.9% y-on-y Q3 2022 YTD 2022 Q3 2022 YTD 2022 Q3 2022 YTD 2022 • Growth driven by Business, Consumer € 1,337m € 3,961m € 13m € 34m € 618m € 1,807m Mobile
Slide 13: Sustainable Group service revenue growth
Sustainable Group service revenue growth Encouraging trend in Group service revenues (€ m) Growth driven by Business and Consumer mobile (€ m) +1.0% 1 +0.7% 1 +1.1% 1 +1.4% +1.1% Δ y-on-y Δ y-on-y Q3 2021 1,220 1,220 1,228 1,216 1,214 1,233 172 166 170 173 174 Wholesale +2 +1.1% 403 417 409 409 416
Slide 14: Sustainable adjusted EBITDA AL growth
Sustainable adjusted EBITDA AL growth 1 Higher direct costs y-on-y • Higher non-service revenues • Glaspoort & other access costs Adjusted EBITDA AL (€ m) • B2B service revenue mix +1.8% 2 Personnel expenses lower y-on-y +26 +19 +12 +5 618 607 -1 -6 -186 -4 -27 -199 1 2 3 Q3 2021 # FTE & CLA Q3 2022
Slide 15: Strong underlying cash generation
Strong underlying cash generation Contribution to Δ FCF y-on-y (€ m) +43 Adj. EBITDA AL YTD 2022 1,807 Free Cash Flow of € 673m; 26% higher y-on-y +69 − EBITDA growth Capex -815 − Phasing Capex Operational FCF 991 +112 Cash restructuring -25 +2 Cash & short-term investments of € 427m per 30 Change
Slide 16: Robust liquidity position, committed to investment-grade credit profile
Robust liquidity position, committed to investment-grade credit profile 11.4x 12.0x 12.1x 12.1x 11.2x Robust liquidity… €m 1,000 1,427 2.3x 2.3x 2.2x 2.3x 2.3x 427 €m 6,017 5,293 6,400 5,818 5,144 6,010 5,382 5,993 5,566 5,307 Cash & short RCF Total liquidity term investments end Q3 2022 724 1,093 6
Slide 17: FY 2022 outlook reiterated
FY 2022 outlook reiterated Achievements Outlook YTD 2022 FY 2022 Adjusted EBITDA AL € 1,807m >€ 2,400m Capex € 815m € 1.2bn Free Cash Flow € 673m ~€ 850m € 4.8 cents € 14.3 cents Regular DPS interim dividend +5.1% y-on-y Share buyback € 300m € 300m 17 Q3 2022 Results
Slide 18: Highlights Q3: KPN delivers continued Group service revenue growth
Highlights Q3: KPN delivers continued Group service revenue growth Continued B2B service revenue growth, mainly driven by strong growth in SME Ongoing mobile base momentum in B2C and B2B (+67k postpaid net adds) Growing Consumer mobile service revenues, improving trends in Consumer fixed Sustainable
Slide 19: Accelerate to grow
Accelerate to grow
Slide 20: Appendices
Appendices I Tax II Debt portfolio III ESG milestones and ambitions
Slide 21: I: Tax Q3 2022 and YTD 2022
I: Tax Q3 2022 and YTD 2022 P&L Cash flow P&L Cash flow Regions (€ m) Q3 2021 Q3 2022 Q3 2021 Q3 2022 YTD 2021 YTD 2022 YTD 2021 YTD 2022 The Netherlands -39 -62 -15 -2 -315 -173 -39 -31 Other - - - 1 - - - 1 Total reported tax -39 -62 -15 -1 -315 -173 -39 -30 Of which discontinued operations - - -
Slide 22: 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 6% 9% 1.0 18% 0.8 36% 0.7 23% 0.6 0.7 0.4 0.5 0.5 7% 64% 69% 68% 0.1 ’22 ’23 ’24 ’25 ’26 ’27 ’28 ’29 ’30 ’31 ’32 ’33 Eurobonds EUR Fixed Global bonds GBP Floating U
Slide 23: III: ESG milestones and ambitions: Aiming for net zero emissions by 2040
III: ESG milestones and ambitions: Aiming for net zero emissions by 2040 Important milestones crossed… …and an ambitious agenda Carbon neutral >30% women All leased 30% reduction Management for own in senior cars use non- scope 3 emissions incentivized operations management fossil fuel vs. 2014 2011
Slide 24: KPN Investor Relations
KPN Investor Relations ir.kpn.com