Royal KPN NV · EURONEXT:KPN
Royal KPN NV — KPN — Q1 2022 Earnings Presentation
23 slides from Royal KPN NV's earnings presentation, Apr 29, 2022
Slide 1: Q1 2022 results
Q1 2022 results 29 April 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 Q1: Strong start to the year, on track to deliver on ambitions
Highlights Q1: Strong start to the year, on track to deliver on ambitions Continued mass-market service revenue growth, supported by all segments Improving service revenue developments within B2B, driven by SME Fiber roll out on track, +75k HP in Q1 (+111k incl. Glaspoort) Recognized as the best mob
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 network: Fiber roll out on track
Expand superior network: Fiber roll out on track Continuously expanding fiber footprint1 Jointly covering ~80% of NL by end 2026 homes passed, k homes passed, % of households +75 KPN footprint ~80% +120 +93 Glaspoort footprint +113 3,292 3,217 42% 3,096 34% 3,003 2,890 Q1 2021 Q2 2021 Q3 2021 Q4 202
Slide 6: B2C: Continued growth in mobile and fixed stabilizing
B2C: Continued growth in mobile and fixed stabilizing Key take-aways Service revenue trend (€ m) +0.6% +0.7% • Growth in Fixed-Mobile service revenues driven by higher base +0.3% and growing ARPA -0.6% -1.4% • Continued growth in mobile service revenues, driven by solid base trends and broadly stabl
Slide 7: B2C: Ongoing momentum
B2C: Ongoing momentum Improving broadband net adds (k)1 Growing fixed ARPU Fixed service revenues broadly stable (y-on-y growth)2 € 52 +7 +3 +1 0 +0.3% -0.4% -1 -0.1% +2.6% y-on-y -1.6% -1.3% Continued good postpaid net adds (k) Stable mobile ARPU Solid mobile service revenue trend (y-on-y growth) +
Slide 8: B2B: Moving in the right direction driven by SME
B2B: Moving in the right direction driven by SME Key take-aways Service revenue trend (€ m) -0.4% • Business service revenue trend gradually improving -2.7% -2.4% • Growth in SME, due to momentum in Mobile, growing Broadband and -3.7% Cloud & Workplace services, partly offset by lower Fixed Voice -4
Slide 9: B2B: Service revenues per segment
B2B: Service revenues per segment +9.3% Restatements SME (€ m) +0.6% +2.3% +5.3% -6.1% Revenues from core telco products have been reclassified from Tailored Solutions to LCE 132 136 138 142 144 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Gradual turnaround in Business service revenues (€ m) -0.4% LCE (€ m) -3.9%
Slide 10: Wholesale: Sustainable growth from open access model
Wholesale: Sustainable growth from open access model Key take-aways Service revenue trend (€ m) • Wholesale service revenues increased due to growth in Mobile +8.9% +9.4% and Broadband, partly offset by lower Other service revenues +6.4% +6.0% +4.7% • Solid base developments, adding 26k postpaid cus
Slide 11: Deliver Financial ambitions
Deliver Financial ambitions
Slide 12: Financial performance
Financial performance Adjusted revenues Adj. net indirect opex savings Adjusted EBITDA AL Q1figures Key adjusted revenues for Q4 2019 +1.6% and FY 2019 are noty-on-y corrected for Q1 2022 impact of divestments (NLDC, International Network Q1 2022 Q1 2022 • +1.0%Services,y-on-y excl. Argeweb and KPNo
Slide 13: Continued mass-market service revenue growth, driven by all segments
Continued mass-market service revenue growth, driven by all segments Sustainable trend in mass-market service revenues (€ m) Growth driven by Wholesale, SME and Consumer (€ m) Δ y-on-y 1 1 1 1 1 -0.8% +1.1% +2.3% +2.0% +2.5% Q1 2021 930 930 943 965 962 961 160 162 172 166 170 Wholesale 10 +6.0% 132
Slide 14: Strong underlying cash generation
Strong underlying cash generation Δ contribution to FCF y-on-y (€ m) Adj. EBITDA AL 593 +25 Free Cash Flow of € 206m, 68% higher y-on-y Q1 2022 − EBITDA growth amid higher revenues and lower cost base Capex -257 +63 − Lower Capex amid phasing − Lower cash interest paid Operational FCF 336 +89 Partl
Slide 15: Robust liquidity position, committed to investment-grade credit profile
Robust liquidity position, committed to investment-grade credit profile 11.0x 11.4x 11.2x 12.0x 11.0x Robust liquidity… €m 1,000 1,674 2.3x 2.2x 2.3x 2.3x 2.2x 674 €m 5,835 5,221 5,996 6,017 5,293 6,400 5,818 5,144 5,201 5,307 Cash & short RCF Total liquidity term investments 1 end Q1 2022 614 795 7
Slide 16: 2022 outlook and 2023 ambitions reiterated
2022 outlook and 2023 ambitions reiterated Achievements Outlook Ambitions FY 2021 FY 2022 FY 2023 Adjusted EBITDA AL € 2,347m ~€ 2,400m >€ 2,450m Capex € 1,216m € 1.2bn € 1.2bn Free Cash Flow € 784m >€ 825m >€ 870m € 14.3 cents Progressive dividend Regular DPS € 13.6 cents +5.1% y-on-y +3-5% annual
Slide 17: Highlights Q1: Strong start to the year, on track to deliver on ambitions
Highlights Q1: Strong start to the year, on track to deliver on ambitions Continued mass-market service revenue growth, supported by all segments Improving service revenue developments within B2B, driven by SME Fiber roll out on track, +75k HP in Q1 (+111k incl. Glaspoort) Recognized as the best mob
Slide 18: Accelerate to grow
Accelerate to grow
Slide 19: Appendices
Appendices I Tax II Debt portfolio III ESG milestones and ambitions
Slide 20: I: Tax Q1 2022
I: Tax Q1 2022 P&L Cash flow Regions (€ m) Q1 2021 Q1 2022 Q1 2021 Q1 2022 The Netherlands -40 -53 -10 -12 Other - - - - Total reported tax -40 -53 -10 -12 Of which discontinued operations - - - - Reported tax from continuing operations -40 -53 -10 -12 Effective tax rate continuing operations 22.3%
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 7% 1.0 15% 15% 37% 0.7 0.6 0.7 7% 23% 0.5 0.4 0.5 0.5 62% 63% 0.3 71% ’22 ’23 ’24 ’25 ’26 ’27 ’28 ’29 ’30 ’31 ’32 ’33 Eurobonds EUR Fixed Global bonds GBP Floating
Slide 22: 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 23: KPN Investor Relations
KPN Investor Relations ir.kpn.com