Koninklijke KPN NV Q1 2025 Earnings Presentation Transcript

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

Question: Polo Tang - UBS - Analyst : Hi. Thanks for taking the questions. I have two. The first one is on Consumer broadband. Can you maybe just talk through what the customer reaction was to your 3.3% price rise and what has been the impact of Vodafone's CEO cutting its broadband pricing by EUR5 per month? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 11:00AM, KPN.AS - Q1 2025 Koninklijke KPN NV Earnings Presentation Now, are you seeing any signs of Consumer NPS improving in Q2? My second question is just on your fiber build rate because it slowed down to about 100,000 homes a quarter from the peak of 168,000 in Q1, 2024. So why have you slowed down and how should we think about the build rates from here? Thanks.

Question: Andrew Lee - Goldman Sachs - Analyst : Good afternoon. And just have a quick -- just one question really on the competitive environment in the Netherlands. You, I think, had been saying that you felt that the Consumer growth could recover in the second quarter. And you now are saying that the recovery comes in the second half. I think that's a bit of a shift. But I just wondered if you could talk through what's changed. And also, how confident are you that price rises, just in line with inflation, will be enough to support that recovery? Thank you very much.

Question: Andrew Lee - Goldman Sachs - Analyst : Thank you. I'm just trying to get a bit of an insight into the competition from Bodega and Odido. Obviously, that's been more intense over the last six months to 12 months. But you're just trying to get a sense as to whether the second derivative or what you're seeing, has anything changed in their behavior or nothing's changed? Therefore, you don't see things getting materially worse, and therefore, you get easy comps into the second half of the year or are you seeing any kind of canaries in the common that give you a suggestion that actually competitive intensity is abating in some way?

Question: Andrew Lee - Goldman Sachs - Analyst : Thank you, it's helpful.

Question: Ajay Soni - JP Morgan - Analyst : Hello. Thanks for taking my question. Mind you around the EBITDA phasing for the year. I think previously you said that Q1 would grow to be around 2%, 2.5%. I think even if you strip out the towers, you still get a 4% for Q1. And you said you expected material to step up into Q2. So do you still see that going ahead into Q2 and how do you see that phasing over the other quarters to get to your 3% growth for the year? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 11:00AM, KPN.AS - Q1 2025 Koninklijke KPN NV Earnings Presentation

Question: Ajay Soni - JP Morgan - Analyst : Okay. Thanks. Just a quick follow-up on that because the numbers you've given there would kind of give us the sense that you would beat your 3% target for 2025. I know you haven't changed guidance, but is that the right way to think about it? Unless Q3 is significantly lower than your guidance of 3%, it feels like you're going to be comfortably above that 3% mark.

Question: Ajay Soni - JP Morgan - Analyst : That's great. Thank you very much.

Question: Siyi He - Citi - Analyst : Hello. Good afternoon. Thank you very much for taking my questions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 11:00AM, KPN.AS - Q1 2025 Koninklijke KPN NV Earnings Presentation I have two, please. The first one is, I wonder if you could comment on the competition on your infrastructure side. It seems that the broadband Wholesale has apparent growth because of the inflation and also because of the contribution from Glaspoort. Just wondering whether you think this low single-digit growth could be sustainable going forward? And the second question is on the cost cutting. Chris, I think you mentioned that you expect OpEx to only moderately down for this year. Are they looking at your FTE reduction, especially your own FTE, it seems has picked up since Q4 last year? I'm just wondering why don't we -- why shouldn't we expect higher OpEx reductions given the FTE changes? Thank you.

Question: Siyi He - Citi - Analyst : Thank you very much.

Question: Keval Khiroya - Deutsche Bank - Analyst : Thank you. I've got two questions, please. So first, the Glaspoort-Delta deal is still under review. What's your latest view on when we should get the final ruling and do you still think the initial regulatory concerns can be overcome? And secondly, as you mentioned, two-thirds of your B2C base is now on fiber and churn should be low. Can you give some color on just how the fiber churn compares to the copper customers? Thank you.

Question: Keval Khiroya - Deutsche Bank - Analyst : Okay, thank you for that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 11:00AM, KPN.AS - Q1 2025 Koninklijke KPN NV Earnings Presentation

Question: David Vagman - ING - Analyst : Yes. Good afternoon, everyone, and thanks for taking my question. The first one is on the cost. Could you give us more insights on the direct cost year-on-year evolution? So, and for instance, on the path between the, let's say, to a split between the Wholesale cost from Glaspoort and the change in mix that might be at play? And secondly, on the indirect cost evolution, can you discuss the drop in IT expense? Thank you.

Question: David Vagman - ING - Analyst : Okay, fantastic. Thanks.

Question: Steve Malcolm - Redburn Atlantic - Analyst : Yeah. Thanks. Thanks. Thanks for taking the question. Two questions, please. First, just following up on your comments, Chris, on the Consumer revenue outlook. I guess, when we look into the second half of the year, it's pretty obvious. You've got a lower price rise this year than last. I think it's a 3%-plus versus 4%-plus. So, I guess, as you said, we should be thinking about the underlying 1% to 1.2% that we saw in Q4 and Q1. It was like a reasonable run rate. Looking beyond 2025, is there any reason to think that that Consumer revenue, service revenue growth rate will improve? It seems like 1% to 1.5% is going to be hard to break out of. And if that is the case, just to be clear, we should be looking at a 4.5% to 5% in the rest of the business, like Wholesale and B2B and you're probably comfortable with that. Is that kind of the shape of the three divisions? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 11:00AM, KPN.AS - Q1 2025 Koninklijke KPN NV Earnings Presentation And then just a quick detail on Tailored Solutions this quarter. That was obviously a pretty big driver of the revenue outflows in B2B. Can you just give us a bit more color on that and how we should think about Tailored Solutions for the rest of the year, because we don't normally see plus 15%? That'd be very helpful. Thank you.

Question: Steve Malcolm - Redburn Atlantic - Analyst : Just a quick, quick follow up. I mean, do you think you can get the churn down without pulling back on the price rise just by having more fiber customers? Because I guess that does play a big role. Just on that Tailored Solution business, Chris, is it good margin business --

Question: Steve Malcolm - Redburn Atlantic - Analyst : Yeah. Right. So hold on to that paranoia, Chris. That's great. Thanks very much.

Question: Luigi Minerva - HSBC - Analyst : Yes. Hello. Thanks for the presentation and for taking my questions. The first one is on the Net Promoter Score for Consumer. Now, I noticed from the annual report that in 2024, the NPS was the metric where management STI compensation was not paid because you missed on it, and then now in Q1, we see a further step down. So I guess the question is what kind of measures you've taken to reverse the trend. I appreciate the color you gave earlier on that Q2 looks a bit better, but it would be keen to understand better what measures have you taken. And then the other question is on following up on the B2B question from Steve earlier. When it comes to LCEs, do you still expect to deliver positive growth in 2025? This quarter is marginally down and I was wondering if it's a kind of early sign of macro uncertainty? Thank you.

Question: Luigi Minerva - HSBC - Analyst : That's great. Thank you so much.

Question: Joshua Mills - Exane BNP Paribas - Analyst : Hi, guys. Thanks for the questions. First one on B2B and then the second on Wholesale. On the B2B side, you sound very confident about the medium-term resilience of those revenue streams, despite the macro backdrop. And I guess, KPN suffered more than most on the B2B side over the last 15 years. The question is, what makes you more confident that you can be so much more resilient now versus in the past? Is it that the pricing is just a lot lower, having B2B based or the business mix has changed enough and there's longer term contracts that give you that visibility? And perhaps some really detailed breakdown of where you expect the individual B2B revenue lines to go over the next 12 months. But in order of conviction and where you have more visibility, is it fair to say that you maybe have more confidence in the LTE than the SME and the Tailored Solutions segments in that order? That'd be a slightly longer, but first question on the B2B side for you guys. And then the second question, just around Wholesale, the line losses are a bit better than last quarter. And previously, you've given some indication of the impact you see from the altnets and also your Wholesale partners. So I was hoping that you could give a bit more of an indication on the dynamics you're seeing in the Wholesale net adds and altnet markets as well today? Thanks.

Question: Joshua Mills - Exane BNP Paribas - Analyst : Great, thanks very much.

Question: Michiel Declercq - KBC Securities - Analyst : Yes. Hi. Thanks for taking my question. The question would be on the FTE reduction that you touched upon earlier, between 300 to 400 potentially this year. I was just wondering, can you give a bit of a breakdown where or in which departments these reductions will take place? I assume it's mainly customer interactions. And maybe also looking a bit forward, yeah, what do you think that the potential is beyond 2025, let's say going into 2026, as we see, of course, the chatbot and AI capabilities improving, which should be a bit of a tailwind for you. And then also a small follow up again on the B2B. I recall that during the Capital Market Days, you assumed that the revenue growth or the service growth between B2C and B2B would converge, let's say, or get a bit narrower. I understand, of course, the improvement in 2026 following the transition. But yeah, given the competitive pressure in mobile, is it may be fair to assume that the original conversion that you assumed during the Capital Market Day, that it will be maybe a bit less than originally planned? Those would be my questions, please. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 11:00AM, KPN.AS - Q1 2025 Koninklijke KPN NV Earnings Presentation

Question: Michiel Declercq - KBC Securities - Analyst : Okay, thank you.