KPN makes solid progress across the board; on track to deliver on ambitions


Apr 29, 2022

Today, KPN has announced the first quarter results 2022.

Message from the CEO, Joost Farwerck:

“We had a strong start to the year and we are on track to deliver on our strategic and financial ambitions. Our mass-market service revenues are delivering growth every quarter, supporting Group service revenues. SME continued to do well, providing momentum and confidence that we can stabilize the total Business segment service revenues by the end of this year. In Consumer, fiber and our converged portfolio are delivering revenue growth every quarter. Mobile service revenues are growing and fixed service revenues are stabilizing year-on-year. Wholesale continued to make a strong contribution, thanks to our successful open wholesale access policy. We recently proposed to amend the wholesale offering for our open fiber network to ensure access to superfast internet at accessible pricing for Dutch households now and in the future. This offer creates long-term certainty for KPN and all market parties. The investments we do in our networks and services are paying off. We are now recognized as the best mobile network in the world for the first time ever. Alongside our best-in-class mobile network we are on track with the fiber roll out. I appreciate the dedication and resilience of our people and their commitment to deliver the best experience for our customers, as evidenced by continuing NPS growth. I am pleased that our sustainability achievements and ambitions are recognized and appreciated by Dutch consumers and that KPN has again been chosen by the Sustainable Brand Index as the most sustainable Dutch telecom brand.”

Improving operational performance

• Consumer: household trend stable, encouraging ARPA trend +2.9% y-on-y to € 59

− Fixed-Mobile households: +8k net adds (Q4 2021: +11k); Fixed-Mobile ARPA at € 82 (+2.2% y-on-y)

− Broadband: +42k fiber net adds (Q4 2021: +42k), +7k total broadband net adds (Q4 2021: +3k)

− Postpaid: +21k net adds (Q4 2021: +18k); mobile service revenue trend improving to +2.0% y-on-y (Q4 2021: +1.9%)

− NPS: +19 increased both y-on-y (Q1 2021: +11) and q-on-q (Q4 2021: +16); upward trend customer satisfaction continuing

• Business: seeing solid base developments

− Broadband lines: +7k net adds (Q4 2021: +8k)

− Mobile SIMs: +27k net adds (Q4 2021: +21k)

− NPS: +4, increased y-on-y (Q1 2021: +2), stable q-on-q (Q4 2021: +4); driven by customer migrations to target portfolios and reliability of products and services

• Wholesale: continuation solid trends, benefitting from open wholesale policy

− Broadband lines: +14k net adds (Q4 2021: +21k)

− Postpaid SIMs: +26k net adds (Q4 2021: +29k)

• Network: fiber roll out on track, delivered 402k homes passed (513k including Glaspoort) in the last 12 months

− Added 75k FttH households to fiber footprint (111k including Glaspoort) in Q1 2022

− Recognized as best mobile network of the Netherlands and the world according to Umlaut benchmark 2021-2022

• Cost savings: Net indirect opex savings of € 8m in Q1 2022

Financial performance supported by service revenue growth in all mass-market segments

• Adjusted revenues increased 1.6% y-on-y driven by growth in Consumer, SME and Wholesale, partly offset by lower service revenues from LCE and Tailored Solutions. Revenue growth was supported by an € 8m one-off correction in Q1 2021 to Consumer Fixed service revenues related to the timing of revenue recognition in 2020. Corrected for this, adjusted revenues increased 1.0% y-on-y

• Mass-market service revenues grew 3.4% y-on-y, or 2.5% corrected for the one-off effect in Q1 2021, mainly driven by SME (+9.3% y-on-y) and Wholesale (+6.0% y-on-y). Group service revenues increased 1.8% y-on-y, corrected for the one-off effect +1.1% y-on-y

• Adjusted EBITDA AL grew 4.5% y-on-y, or 3.1% corrected for the one-off revenue correction. Higher revenues and a lower cost base contributed to solid, sustainable growth. Adjusted EBITDA AL margin increased to 45.3% (Q1 2021: 44.0%)

• Net profit of € 179m increased € 38m y-on-y, due to higher EBITDA AL, lower depreciation and amortization, partly offset by higher income tax expenses and higher net finance costs

• Capex of € 257m decreased € 63m y-on-y driven by timing of investment projects

• Operational Free Cash Flow of € 336m increased 36% y-on-y due to higher adjusted EBITDA AL and intra-year Capex phasing

• Free Cash Flow of € 206m increased € 84m y-on-y, mainly due to higher adjusted EBITDA AL and lower Capex amid phasing, partly offset by phasing in working capital

• Strong liquidity of € 1,674m; € 674m cash & short-term investments and € 1.0bn undrawn revolving credit facility Outlook 2022 and ambitions 2023 reiterated KPN maintains its FY 2022 outlook for adjusted EBITDA AL of approximately € 2,400m, Capex of € 1.2bn, and Free Cash Flow of more than € 825m; inflationary effects on opex and Capex have been absorbed. KPN intends to pay a regular dividend per share of € 14.3 cents over 2022. KPN reiterates its 2023 ambitions as provided at the Strategy Update on 24 November 2020.

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