Koninklijke KPN NV and ABP Join Forces Through New TowerCo Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Lee - Goldman Sachs - Analyst : Yes, good morning. I had two questions. The first one is hopefully pretty straightforward and the second one, maybe slightly more complex, but I'll give it a go anyway. So the first one is just how does the cash commitment of EUR120 million as part of this deal feed into your decision-making on future buybacks and dividend payments? And then the second question is really a kind of what now, so I think, Chris, you could have very clearly articulated why you've done the deal today. But just trying to get and understanding of why your partners ABP, et cetera, went into the deal, who started the decision or the process of doing this deal. And the reason they're trying to get an understanding is that is, do you expect now to build your stake further in the telco from the 51% today? And also trying to get an understanding as to what this pertains, how this pertains to any kind of thoughts on your fixed network ownership, given you'll see currently have 100% ownership of that. Thank you.

Question: Andrew Lee - Goldman Sachs - Analyst : Thanks very much. That's really helpful.

Question: Luigi Minerva - HSBC - Analyst : Yes, good morning and thanks for taking my questions. Just a clarification on slide 6, because, if I look at the assets under the KPN's perimeter, particularly the third party towers only 1,100, will fall into the perimeter of the TowerCo. So I just wanted to understand what happens to the 1,900 that are excluded from the TowerCo, you will no longer use them. So you have negotiated yourself out of the agreement on these towers or just what happens to those 1,900 really? And then secondly, just like trying to get to the bottom of the, all the impact on earnings that you were as you were suggesting, Chris, in your remarks. So what is the dividend that ATG will get from a TowerCo? And perhaps you've given us an idea of interest charges about EUR10 million, I guess. But if you can give us some color about incremental D&A and taxes as well? Thank you.

Question: Luigi Minerva - HSBC - Analyst : Okay. That's very helpful. Thank you.

Question: Titus Krahn - Bank of America - Analyst : Good morning, everyone, thanks so much for taking my question. Just two on the towers please from my side. The first one, just as a kind of follow up question on the existing MSAs you have with third-party towers. Is there any color you could give us kind of how the waterfall is of when they are expiring talking about the potential to replace some existing contract. Is that something over the next couple of years or much longer term when there's existing third party contract expire? Secondly, just on the potential increase in the tenancy ratio of your TowerCo, kind of could you talk more about how you have incentivized this, given there's always some, I guess, some governance difficulty between the M&A having a majority stake, but the minority partner potentially wanting to increase tenancies also with well, I mean, even if there was a fourth entrant or anything in the Dutch market, how do you manage to kind of make sure it's aligned? Thank you.

Question: Titus Krahn - Bank of America - Analyst : Thank you.

Question: Nina Bosch - Bernstein - Analyst : Hi, good morning. Thank you as well for the opportunity to ask questions. So, two from my side as well. One is a clarification on the debt on the holding because, you talked about raising more debt, but just for me to understand what clearly, is there any debt in the holding that is not part of the EUR120 million that you'll be sort of taking over as well? And then second question on the CapEx side because, this 550 sites on the BTS side, I assume that that's also a significant amount of CapEx. You just included in the annual EUR10 million that decreases to EUR5 million as sort of guidance you provided today. Could you tell us what's the total amount of CapEx for the BTS and what would be the negative run rate impact on EBITDA from this EPS? Thank you.

Question: Nina Bosch - Bernstein - Analyst : Okay. Thank you.

Question: David Bergman - I&J - Analyst : Good morning, everyone, and thanks for the information session. First question about the MSA inflation close. How has been renegotiated and understand that they might be capped or they might be lower, all the due basically compensate your partners. What was the mechanism? And maybe related to that, could you give us an overall understanding of the valuation multiples of the overall deal in terms of multiples may be easy to operating free cash flows? (inaudible) And last point, yes, any intention to what some points buyback buy a majority stake in the (inaudible). What are your plans for the remainder of the towers you're using of the sites you're using? Thank you.

Question: David Bergman - I&J - Analyst : Okay, thanks. And maybe on the overall valuation of the, any indicators that there will be--

Question: David Bergman - I&J - Analyst : Thank you.

Question: Usman Ghazi - Berenberg - Analyst : Hi, thank you for the opportunity. I had a housekeeping question, I mean, the EUR600 to EUR700 million of EBIT that you mentioned, I presume that includes the value of (inaudible) commitment as well.

Question: Usman Ghazi - Berenberg - Analyst : So, it move to the upper end of the 20 times range that--

Question: Usman Ghazi - Berenberg - Analyst : Okay. Got it. Okay. And then I just the two questions I had was, I mean, I'm just wondering how do you avoid the conflict of interest? Obviously, because the ownership of towers at (inaudible) telcos have given it out because, they say give it [22 holes], they maximize that and see the center. You're maintaining control and you still want to drive tenancies up. How, what are the governance framework is, that was the first station. And then on the second question. I just wanted to understand the scope of this vehicle that's being created. Is this just a TowerCo or can this vehicle act as a kind of as an entity that you can sell other stuff maybe or actual equipment or what have you? Thank you.

Question: Usman Ghazi - Berenberg - Analyst : Could there be further asset being injected?

Question: Usman Ghazi - Berenberg - Analyst : Got it. Thank you.

Question: Keval Khiroya - Deutsche Bank - Analyst : Thanks to the questions and I have two, please. Firstly, can I check what the IFRS16 lease liabilities will be following this transaction? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 05, 2024 / 8:00AM, KPN.AS - Koninklijke KPN NV and ABP Join Forces Through New TowerCo Presentation And secondly, you talked about the existing contracts with the third parties. Are you able to share how material those are with the existing base of leases, which I think were just above EUR140 million in the P&L last year. Thank you.

Question: Keval Khiroya - Deutsche Bank - Analyst : Okay. Thanks so much.