Fourth quarter and annual results 2023

Joost_Farwerck-10-lowres

Today, KPN has announced the fourth quarter and year results 2023.

Joost Farwerck, CEO, on the results:

“We delivered on our 2023 outlook and ambitions. Group service revenues are growing sustainably, with growth across all segments. Throughout the year, Consumer service revenues continued to improve, driven by ongoing mobile service revenue growth and solid broadband base growth. Business service revenues continued to grow with SME as the main contributor, as well as another year of growth in Wholesale. We delivered EBITDA and Free Cash Flow slightly above, guidance, supported by sustainable service revenue growth and effective measures to partly offset inflationary headwinds. The commitment shown by all colleagues towards customer centricity continues to pay off, as illustrated by NPS improvements in both Consumer and Business.

We remain on track with our fiber roll out and we added a record number of households to our fiber footprint this year. As a result of this, we have seen broadband base growth over 2023 across all segments. The significant investments we make in our networks and services are bearing fruit. We are on track with the decommissioning of our copper network in fiber areas with about 3 million copper lines decommissioned by year end 2023, making super-fast internet via fiber the norm.

Employee engagement remains strong, as our colleagues continue to express their pride to work at KPN. We recently agreed on a new collective labor agreement for the coming two years, which contains several innovative and valuable employee benefit components. We remain fully committed to creating sustainable long-term value for all our stakeholders. This is clearly reflected in our ambitious ESG agenda, where we focus on creating “A Better Internet”, a safer, more social and greener internet for everyone in the Netherlands.

At our Capital Markets Day in November 2023, we announced our Connect, Activate & Grow strategy for the 2024-2027 period. We aim to maintain service revenue growth at a healthy level in the coming years, supported by enhancing our leading positions in Consumer and Business, and continued growth in Wholesale. We will take significant steps to further modernize our operating model, leveraging the power of automation and AI. We expect adjusted EBITDA to accelerate from the current run-rate and grow in line with service revenue growth as per our 3-3-7 financial ambition. We reiterate this guidance for the coming years, on the back of our solid business momentum.

Over the coming four years, we will invest more than €4.5bn in our networks and the digitalization of the Netherlands, whilst delivering a growing return on capital employed. Capex will remain stable until 2026, after which we expect a significant step-down, resulting in a material inflection of our Free Cash Flow. Our focus on creating sustainable value enables us to continue to deliver attractive shareholder returns, and distribute our Free Cash Flow to our shareholders.”