Koninklijke KPN N.V.

Yes. Thank you, Operator.

Good afternoon, everyone. Thank you for joining us today.

Welcome to KPN’s Q1 2025 results webcast. With me today are Joost Farwerck, our CEO; and Chris Figee, our CFO.

As usual, before we begin our presentation, I would like to remind you of the Safe Harbor on Page 2 of the slides, which applies to any statements made during this presentation. In particular, today’s presentation may include forward-looking statements, including KPN’s expectations regarding its outlook and ambitions, which were also included in the press release published this morning.

All such statements are subject to the Safe Harbor. Now, let me hand over to our CEO, Joost Farwerck.

Thank you, Matthijs, and welcome, everyone. So, let’s start with the highlights of the first quarter of this year.

On Group service revenues, we increased by 3.8%, of which 0.7% is related to Youfone. And in the mix, in Consumer, the service revenue trend slightly improved in the first quarter, mainly driven by mobile.

Our Business segment continued to show solid growth and Wholesale Service revenues accelerated, mainly driven by mobile. We delivered solid EBITDA growth, partly due to contributions from Youfone and Althio.

And as expected, our free cash flow declined, partly due to higher interest in tax payments as expected and this is also expected to recover in the second half of the year. We further expanded our fiber footprint together with our joint venture Glaspoort and we received an award from Umlaut for having the Best Mobile Network in the Netherlands, with the highest score ever measured in the world.

Our new tower company Althio began its operations in mid-February and therefore we upgraded our full year 2025 outlook accordingly, which we are confident in achieving. Overall, we started the year well.

Of course, there’s uncertainty given the current economic and geopolitical environment, but we are confident that the direct impact of U.S. trade tariff measures on us is limited and consider our business resilient with strong demand for our essential productivity and communication services.

As a reminder, our Connect, Activate & Grow strategy is supported by three key pillars. One, we continue to invest in our leading networks.

Two, we continue to grow and protect our customer base. And three, we further modernize and simplify our operating model.

Together, these strategic priorities support our ambition to grow our service revenues and adjusted EBITDA by 3% and our free cash flow by 7% per annum on average in the coming years, or simply put, our 3%, 3%, 7% CAGR framework. Let me now walk you through the Business details.

We continue to lead the Dutch fiber markets. In the first quarter, we expanded our fiber footprint by adding 100,000 homes together with Glaspoorts, now jointly covering 64% of Dutch households.

Our efforts in connecting homes and activating customers have paid off, reaching 78% of total homes on our network, while two-thirds of our retail base now enjoys the benefits of fiber. Let’s now have a look at the Consumer segment.

The Consumer service revenues increased 4.6% year-on-year, of which a bit more than three is related to Youfone. We are satisfied with Youfone’s performance, which enables us to better address the no-frills segment of the market.

Our increased focus on loyalty and base management is further strengthened by the recent launch of our new household proposition, Combivoordeel, which rewards customers for taking multiple products per household. Currently, 60% of our fixed households have adopted the fixed mobile proposition.

Our Consumer Net Promoter Score declined, influenced by challenging consumer sentiment, especially at the start of the year. However, customer satisfaction trends improved during the quarter, supported by the launch of the new household proposition I just mentioned.

Now, let’s take a deeper look into our first quarter KPIs. We saw another quarter of broadband-based growth, despite the challenging competitive environment.

We maintained a constant, healthy inflow of new fiber phone customers, which, combined with a growing ARPU, led to continued growth in our fixed service revenues. As expected, our mobile service revenue growth improved sequentially, mainly driven by commercial improvements.

And our postpaid base increased by 21,000, while the postpaid ARPU, excluding Youfone, remained relatively stable. Let’s now move to B2B.

B2B delivered another strong quarter, with 5.1% year-on-year growth, driven by SME and Tailored Solutions. Commercial momentum remained solid in mobile and the majority of our B2B broadband customers now utilize the fiber network of KPN and Glaspoort.

And despite the volatile economic environment, our Business net promoter remained stable. B2B customers appreciate KPN for stability, reliability and the quality of our network, and the quality of our services.

In today’s complex world, we help Dutch businesses to become digitally resilient, supporting them in their digital transformation to work more securely and more efficiently. And SME continues to grow, driven by strong performance in cloud and workspace, broadband and ongoing momentum in mobile.

And to protect SME customers from digital threats, KPN offers extra-safe internet services, enhancing their digital strength against rising cybercrime. I believe more than 70% is currently already making use of that, 70% of the base.

LCE service revenues remain stable, with solid performance in broadband, IoT and cloud workspace offset by some price pressure in mobile. And Tailored Solutions delivered as planned with strong growth driven by higher project revenues and this business always remains subject to project timing and seasonality.

Then our Wholesale Service revenues continue to improve, mainly driven by mobile as well. Broadband service revenues increased despite the declining base, mainly driven by higher fiber service revenues.

Mobile service revenues remain strong driven by ongoing growth in international sponsored roaming volumes. Furthermore, we extended the contract terms for some of our largest Wholesale partners.

Mobile service revenues in Wholesale represented a slight increase, mainly due to an uptick in visitor roaming. Now let me hand over to Chris to give you more details on our financials.

Thank you, Joost. Let me now take you through our financial performance.

And let me start by summarizing some key figures. First, the adjusted revenues of KPN increased 3% year-on-year as organic service revenue growth across all segments outpaced lower non-service revenues.

Second, our adjusted EBDA after leases grew by 4.7% in a quarter, or plus 3.1%, excluding all contributions from Youfone and Althio. This growth was mainly driven by higher service revenues.

Our EBITDA margin increased 72 basis points to 44.7%. And in the first quarter, we managed to lower our indirect cost base despite wage indexation, but it was partly due to the intra-year phasing effect as well.

Our plan for the full year is to have a slightly declining overall indirect cost base. So far, we had a solid start to the year and we’re confident in our ability to reach this year’s EBITDA targets.

Third, our reported net profits decreased despite EBITDA growth due to one-off costs related to the Althio transaction. Finally, our free cash flow decreased 70% or €26 million compared to last year, but it’ll pick up in the second half of the year.

I’ll share a little bit more detail on underlying cash developments later in this presentation. In the first quarter, Group service revenue growth sequentially improved to 3.2% on an organic basis.

And within the mix, Consumer service revenues increased by 1.2% year-on-year corrected for Youfone, primarily driven by the improved performance in mobile. Business service revenues recorded another strong quarter and grew by 5.1% year-on-year organically, driven by SME and Tailored Solutions.

And finally, Wholesale service revenues grew by 6.1% year-on-year corrected for Youfone, mainly driven by the ongoing success of our international sponsored roaming business. Our operational free cash flow increased by 12% year-on-year, well ahead of mid-single-digit growth guidance.

This growth was partly driven by the contributions of Althio and Youfone, along with slightly lower CapEx due to phasing. Our total spend, so combining operating and capital expenditures, was broadly stable.

For the full year 2025, we expect high and solid single-digit growth rates in operational free cash flow, supported by Althio and Youfone, and effectively stable CapEx. Obviously, if not for the gradual normalization of taxes paid, the operational free cash flow would largely flow directly into our free cash flow.

Now let’s talk a bit more about the moving parts of the free cash flow. Our solid operational free cash flow did not yet translate into a full free cash flow growth yet, due to higher interest payments, phasing of working capital and higher cash taxes.

In fact, the timing increase of interested cash tax payments explained a delta in free cash flow compared to the first quarter of last year. And as guided, our free cash flow generation will be stronger in the second half of the year, driven by continued operating cash generation and normalization of tax and interest payments, and we therefore reiterate our free cash flow guidance for the year.

At €128 million, our free cash flow margin was about 9.1% of revenues and we ended the quarter with a robust cash position again. We continue to have a strong balance sheet.

At the end of March, our leverage ratio stood at 2.4 times, comfortably below our self-imposed ceiling of 2.5 times, even after absorbing the full effect of the Althio transaction. Our interest coverage was sequentially a tiny bit lower as we faced higher interest costs, and we successfully issued an €800 million senior bond and were deemed to remain a part of an outstanding hybrid.

These transactions increased the average maturity of our outstanding debt and lowered the average cost of debt. Our average cost of debt was about 3.7% and exposure to floating rates about 16%.

Our liquidity of around €2.5 billion remained strong, covering debt maturities until the end of 2028. Now let’s turn to our outlook mid-term ambitions.

Following the closing of Althio in mid-February, we upgraded our full year 2025 outlook for adjusted EBITDA after leases to more than €2.6 billion and a free cash flow to about €920 million. These outlooks remain fully intact.

Other outlook items have also been reiterated, namely Group service revenue growth, set at approximately 3%, driven by organic growth across all segments, and CapEx remains stable at a peak level of around €1.25 billion. The updated 2025 guidance illustrates that the consolidation of Althio will have a modest positive contribution to KPN’s future financial results on top of the existing 3%, 3%, 7% financial ambitions that we presented at our Capital Market Day in 2023.

Now let me briefly wrap up with some takeaways. First, we had a solid start to the year, with continued Group service revenue growth across all segments, leading to healthy EBITDA growth fully consistent with our 3%, 3%, 7% ambitions.

In fact, our first quarter underlying service revenue and EBITDA growth came in well above the 3% hurdle. We continue to lead the Dutch fiber market with ongoing delivery of connected homes.

Currently, two-thirds of our retail base and more than half of our B2B base are in fiber, which both go on for the future. As planned, our free cash flow generation will be back-end loaded and we are confident in our ability to reach our 2025 and mid-term outlook.

We are currently at approximately 25% completion of the €250 million share buyback program for this year, effectively distributing all of our free cash to our U.S. shareholders.

Overall, we think we will deliver a solid result in the first quarter. As mentioned, uncertainty remains over the future direction of U.S.

tariffs and the wider economic implications. We are confident that the direct impact of U.S.

and reciprocal trade tariffs on our operational KPIs and financial results is limited. Any impact can be managed within our capital envelope.

Obviously, we keep a close watch on the impact of global trade and economic developments on the Dutch economy when we consider our business to be resilient. Thanks for listening.

Now, let’s turn to your questions.

Yes. Thank you, Chris.

As always, before we start the Q&A session, I kindly request that you limit your questions to two. Operator, please proceed with the Q&A.

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 €5 per month? 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.

Yeah. Thanks, Polo.

Yeah. So in Consumer broadband, we increased prices and most of the service providers increased prices.

On the other hand, that goes hand-in-hand with discounts. But the price rise of KPN landed well in the market because we can perfectly explain why we do this in line with the CPI annexation.

And of course, we invest a lot in the quality and also then hand-in-hand with launching the new proposition from before bill where we really focus on the existing base of customers and we explain that we do not want to surprise existing customers only with price increase. But we also surprise them with free OTT services in combination, landed quite well.

So we started the quarter with a bit of a dip in the Net Promoter Score, but during the quarter, we already saw the net promoter score climbing up. So I expect that to improve and also that will be visible in the second quarter.

Now on fiber, you’re right, we’re slowing down a bit. We focus more on Connect and Activate than homes passed only, to put it that way.

The strength of our fiber rollout is compared to competition that we really connect most of the households while rolling out. So it goes a bit in batches.

I expect second half of the year, especially much stronger on home passed than this Q1 with 100,000 average. We still aim for 80% end of the 2026.

Approximately 80% could be a bit more, a bit less, but we will continue to roll out. And in this pattern, I expect it to come close to that 80%.

And in 2027, we still foresee a material step down in our CapEx dropping to below a €1 billion and that is completely locked in our strategy.

Thank you.

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.

I think, first of all, Andrew, I think, it’s a little marginal. I think we see really on mobile, actually, the recovery from the fourth quarter came earlier.

So actually, I think, we said that mobile would recover in the second quarter, recovering Q1. I think mobile has actually done better than we planned and we think the current growth rate in mobile in Q2 would be similar to Q1.

So more or less around 2% or 2% plus. And on fixed, I think, it will be similar to what it is today, around 1% growth.

So I think it’s really on the margin. The good news, I think the mobile recovery that we predicted in Q4 came a bit earlier in Q1 and seems to continue.

With that, I think, Consumer market is not going to be the growth champion of the Group, but probably grows between 1% to 1.5% for the full year. So don’t read too much in it.

I think it’s just that mobile recovered earlier than we envisaged. And your question on price increases, again, I think, they’ve landed relatively well.

I mean, we announced that there was no real, I think, impact on NPS. I think there was some NPS impact on talk by the ACM around willingness or supporting customers to switch.

But especially the Combivoordeel that Joost described really did well and boosted our NPS. And I think the price increase that we’ve announced is simply indexation, nothing more, nothing less.

So that actually feels to have been absorbed pretty well by most of our customers.

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?

There’s certainly no canaries in the coal miners that I think we look at price development growth today, either way, the fact of price increase for the first of January, I think, around 3%. Odido, Vodafone, I don’t know, probably also something similar.

I mean, so that price adjustment on that front book, I mean, they were more expensive than we were. So I think that price is now more or less in line with us and so I think the competitive intensity is not really changing.

In fact, I think, we’ve seen running up into the second quarter, our order balances improve. So typically, the order balances goes before the net adds.

So early indicators into Q2 at the end of the first quarter, so early March, we saw the monthly order balances, also vis-à-vis [ph] competition doing better. So I would say competitive intensity, stable price changes by competitors are within the range, within the margin, not really changing.

Our Combivoordeel lands actually quite well, should be the lower turn. And I was with some encouragement around the operational KPIs into Q2, because of the order balances.

Obviously, Q2 is still a few months ago. But I think the momentum at the end of Q1 going into Q2 was reasonably supportive.

And the good step we made is really two fixed mobile converged brands in the market as the only players. So KPN on one side, Youfone on the other side, both covering convergence, but the lineup completely different.

So above 200 mg of fiber for KPN and below for Youfone. Also when it comes to mobile, Youfone completely different price and position than KPN, but both fixed mobile together.

That’s really helps you.

Thank you. That’s helpful.

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.

Yeah. Ajay, good question.

On the phasing, I think, Q1 is actually better than I expected. I think Q2 will be similar to Q1 in terms of if I include the tower company, I would expect EBITDA grows north of 4%.

I expect a bit of a step down in Q3 below 2% and then above 3% beginning in Q4-ish. One of the factors is, and I was getting a bit wonkish around accounting is the way you account for your holiday provisions and you may have seen we’ve changed basically the way people book the holidays.

So the classical pattern where you do take, donate to your holiday provision in Q1, Q2 and Q4, and you release in Q3, that is changing for the year. That supports a bit the EBITDA growth in Q1, Q2 and Q4 and detracts a bit from Q3.

It’s a technical thing that basically is distribution of earnings across the year. So that means I would see Q1 was a 4.7%, including LTO.

I’m pretty bullish on Q2. Certainly north of 3% could be starting again with a four-handle in Q2, including the tower company.

Q3 will then be a bit less with the year-on-year comes around this holiday effects. Historically, you always had a release from your holiday provision in Q3.

You don’t have it right now. So Q3 will be around less than 2% and Q4 again back to 3%.

So full year guidance, fully intact, but distribution is quite high in the first two quarters, a bit lower in Q3 and then back to Q4. And this is the technical accounting around holiday provision is like working through it on the inter-year phasing, but that’s kind of the outlook for the year.

We feel pretty confident with that, and also I’m pretty cool looking at the full year guidance for the year and you had a whole quarter.

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.

Q3 will be low too, right? Q3 will be low too.

So I think you can do the math and solve for the Q3 number now, but we started the year pretty well.

Yeah.

I think we’re confident on the year, but it’s kind of, it would be odd to see in March or April with volatility across the globe to be increasing your guidance for the year. Let’s put it this way.

We feel pretty okay with how we’re trading and we’re confident in reiterating our guidance for the year. It’s just that Q3 will be below 2% and the other quarters will be again above 3%.

That’s great. Thank you very much.

Hello. Good afternoon.

Thank you very much for taking my questions. 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.

Well, then let’s start on the fixed on your infrastructure question. So on the infrastructure side, we cover more or less a clean footprint of 64%.

Not that much overbill compared to the off-coast in other areas. So moving forward, we will face more overbill.

But we have Delta and ODF running a bit more than a 1 million households in different footprints. Yeah, we -- in our lineup and in our strategic approach, we differentiate by focusing on base management instead of acquisition.

I think that’s a very important step we made there and that’s where we expect growth to come from. So like I just said, rewarding loyal customers, offering speed upgrades, free security services, things like that.

We have a strong base. Currently, 35% or more is in contract.

And we expect that to improve looking forward. Already on the fiber footprint, two-thirds of the total KPN base is already on fiber.

So that’s an important drawdown because the fiber customers are happier customers and they churn slower than other customers. And besides that, we position Youfone.

So, yes, we see a growth of north, yeah, a bit more than 1% on broadband. And the way we position ourselves now with growth income to KPN both and Youfone, we expect it to continue because we also will, well, probably it’s not totally, fully already decided on, but usually we do another price increase mid of the year.

But that position is up for, yes, somewhere coming month for us to take or two months from now. But so all in all, following the run rate, I expect the broadband to continue.

Yes. On your cost question, I think, you’re right.

We are now running about 200 FTEs below last year, dropped to I think 56 FTEs in this quarter. The plan for the year is to reduce FTEs by at least 300 towards 400.

That would be very supportive. And again, the lowering spend on energy was guided from minus 50.

That also kind of comes in the back. I think the two caveats, one is if you reduce your costs right now, you have to eat eggs right now.

It really starts to impact full year 2026 more than full year 2025. So, basically, the full year effectively sells more next year than this year.

So that’s one. The second thing is the competitive intensity in the market and our own actions, say the Combivoordeel, also drive more customer interaction.

The number of service tickets or polls are quite high. That requires us to keep our support staff at elevated levels, higher than we initially thought and planned.

So in the 200 step down is already an increase in your support staff to keep your customers happy. It depends a little bit on how that evolves.

So we have a plan and a mission to reduce FTEs in that part of the business considerably. But then you also need to have the activity level to come down.

And that has not happened yet. So, I think, all in all, FTEs are down 300 to 400.

If you end up at the higher end of the range, that’s a function of how good we’re managing back customer interaction, moving our customers to the app, to digital interaction, et cetera. That should help us.

But then again, it will be more 2026, in fact, run rate thing than a 2025 thing to reduce your FTEs further. But overall, the statement of flat, slightly declining cost base that we guided for, that seems also reasonably secure from where we sit today.

Thank you very much.

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.

Yeah. So Glaspoort is working on that deal with Delta.

I think it’s encouraging, especially that Delta is willing to sell off potential overbuilt households to Glaspoort. So that is a positive signal for us and we’re still waiting for our regulator to come up with the final decision.

Regulators in the Netherlands, they like regulating and but they especially take a lot of time on everything they do. But I’m very confident that one way or the other, that will be a successful deal since I do not see any serious ways to block this from a legal standpoint.

But, yeah, we have to wait and follow the procedure. We expect the decision before summer.

And on your churn question, you’re right. Two-thirds is now on fiber, one-third on copper.

What does it mean for churn? We’ve seen, if you look at the underlying churn trend, we’ve seen copper churn gradually moving up in a fairness and fiber churn also moving up a bit, but substantially below.

Copper is north of 10% per year, fiber substantially below. So that should, that mix gradually help us.

But then again, the, if you look at the amount of clients on copper at a certain amount, that’s still something you feel. I think that the movement of the two, the fact that one is getting more and more customers from copper to fiber, and then the Combivoordeel thing, which really is all about convergence and having multiple products at KPN, so fixed, mobile and entertainment, that should over time drive churn down.

So in the long run, when your copper base declines, relative to fiber and the impact of the Combivoordeel kicks in, we should see that material reduction on churn. But for reference, copper churn is north of 10% and fiber churn is well below 10%.

I think the fiber churn is like 60% or so of the fiber churn-- copper churn, sorry.

Okay. Thank you for that.

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.

I think on the direct cost, look on Glaspoorts, for a full year, the total cost charged by Glaspoort was about €25 million higher, about €6 million a quarter up from last year. So there’s about €25 million a year going through your direct costs.

There’s more direct costs going in as a product is roaming, roaming costs are going up. To some extent, we’ve got more sponsored roaming business, which will also procure roaming services.

Net-net is still a very good marketing business, but there’s still more direct costs coming through. And the third element is the cost around your spent required broadband customers.

That is, I think, notoriously high in these markets. So product plus actions and spend is quite high to, let’s say, win broadband customers.

So the direct cost increase for the full year, about €25 million of that is plus €4 million to €6 million a quarter. I think roaming is probably €4 million to €5 million a quarter in terms of extra spend.

And the remainder is a combination of costs around B2B and B2C customer acquisition costs. On IT expenses, there’s a bit of timing, but that’s something else we’re negotiating.

Our total lease costs, our licenses costs are getting better. So we’ve made a considerable effort on reducing the number of licenses, renegotiating licenses over time.

But still, there is underlying upward pressure on IT costs. In general, the way to battle this is to limit licenses, renegotiate longer terms and limit legacy systems.

So that will fluctuate a bit during the year.

Okay. Fantastic.

Thanks.

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 plus 3% versus plus 4%. 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? 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.

Yeah. So I’ll jump on this one, Joost, and you were -- you’re on Consumer.

I think you’re right. This year, 1% to 1.2%, up to 1.5% for the year, but say 1.2% is probably the right number.

I think mobile better than 6%. Youfone will come in, Youfone growth will come in, right?

So we’ve now excluded all Youfone business, including the growth of Youfone. So you might say we’ve not done ourselves justice because the growth of Youfone is deliberately part of the strategy.

That will start to contribute. So I think on mobile, you’ll see for the rest of the year growth around 2%-ish, right?

Fluctuating around 2% and possibly higher in Q4 when the price, typical indexation kicks in. On fixed, it’s a bit lower.

I think around 1% and some chance of flattening off in the second half of the year, depending a bit on how competitive it tends to evolve. So that leaves you with between 1% and 1.5% for the year.

Is it hard to break out of? Yes.

What we, the drivers, so I think if churn goes down, right, that would be…

Yeah.

… the key driver for this thing, because then you get more of your fiber. Because I think mobile will probably be around 2% is feasible in the long run.

And then the strategies to bring up fixed, that’s a function of the amount of churn in the market and ease in the market. So that, in order to get to the 3%, you need to have to have higher growth rates in Business and Wholesale.

We feel pretty confident on that. I mean, Wholesale is doing quite well.

Obviously, on the mobile side, both the national carriers and the roaming. And there’s no reduction in growth there.

I mean, that’s still, we see new Wholesale customers signed up as well as a good pipeline of Wholesale clients waiting to be signed up on this type of business. And in Business markets, I would say, continuing, look, the risk is, of course, a massive recession and bankruptcies, but that’s not in the cards.

If not, we will see LCE gradually -- during the quarter, gradually inflecting in the second half of the year, as per the plan. SME growing about 5%, and indeed, data solutions is quite lumpy.

It was very high in the first quarter. I predict it’s going to be very high in the second quarter and gradually taper off and it’s a function of when projects come on steam.

So expect the second quarter to be data solution, but it could be with a 10% handle as well in the second quarter. And then gradually going down in the second half due to year-on-year comps and the timing of projects coming on steam.

So, I think, it was a very long story short, brief assessment, Steve, as always. Presumably 1% to 1.5%, the rest combined with 4% to 5%.

Confident on that. For that to break out, fixed, go to 2% to 1.5%.

And for that to happen, we need to have lower churn.

And perhaps adding to that, I mean, we’re a base company, right? And so price increase is very important.

You mentioned looking beyond 2025. So the step we are doing is really accepting we’re a base company.

Usually telcos hunt for acquisition and report on that edge. We consider that for us, not the game to play.

The step we made, we think that really reducing churn should make the base grow. And that is the question mark, is it going to work?

We invest now in existing customers, reward existing customers, and try to lower the churn. And for a company like KPN, that’s the most efficient way to make the base grow.

So there’s a lot of customers we think in the Dutch market looking for a discount. And every year they rotate for a new Samsung TV or a discount of €400 on the Ziggo side.

And we’re not looking for these kinds of customers. That is a mistake.

So we want to create value out of the base we have and make that base grow by adding more valuable customers. So that’s why we are, of course, keeping an eye on everything that’s happening on discounts and on the acquisition side.

But also that’s why we focus so much on that churn reduction. And that should fit us well.

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…

So, I mean, on price rises, we understand the discussion every now and then in the market. But the real problem in the Netherlands is not internet prices, but the energy prices.

That’s, by the way, done by our own government. So I think we should have that discussion better on the table.

But to our customers, we’re perfectly able to explain why we increase prices. And to be honest, it’s quite modest.

We only follow CPI while we invest a lot in fiber. We give to all the Consumer customers a free security package.

Only 10% use it today, but we expect to lock in a lot of customers via the security. We’re the only one providing that security solution to the Consumer base and we do the same in SWE.

70% is in that base already and it’s for free. So we’re not only getting communicating price increases to our customers.

We’re also communicating about the increase of quality and the additional services we give them and where we really differentiate from competition. And Tailored Solutions, that’s a different ballgame, of course.

We cleaned it up in the way that we are not hunting for revenues only, but for, yeah, revenue streams where you really can create margins as well. They’re doing a great job there, especially to the government and the Ministry of Defense.

The Dutch Army is one of our most important customers. We run large projects and every now and then such a project kicks in in revenue.

So it’s not that we’re going to do this number every quarter, but it’s a bit in cycles. But we expect a decent performance from Tailored Solutions, not on the level as Q1, but much better than we did a couple of years ago.

On all the margins, Steve, Joost and I, we’ve been through, we’ve cleaned up the business. So we walk around with a massive margin paranoia when it comes to Tailored Solutions.

Right.

We work on every deal looking at margins and this is also a business that’s CapEx light, right? It’s network service management.

So when we look at the free cash flow margin, the EBITDA margin is less than typical telco, but there’s hardly any CapEx involved. So the free cash flow margin of this business is not that far off of the free cash flow margin of the Group.

But rest assured that the first thing that Joost and I ask when a Tailored Solution deal comes for a signature is, before we sign, can we please walk through the margins in all details and make sure we’re writing the business?

Yeah. Right.

So hold on to that paranoia, Chris. That’s great.

Thanks very much.

Yeah.

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.

Yeah. So, Luigi, thank you.

Yeah. Net Promoter Score, we made it fairly important in the company, especially for Consumer or mass market, I should say.

And it’s also a financial target for management in the company. Yeah, so minus 14 or 14 instead of 16, which is more or less our target this year.

We’re still the leading telco when it comes to Net Promoter Score, but every now and then we face dips. We’re doing a lot of work outside on rolling out fiber, and every now and then creates a lot of customer traffic.

But the main thing really was media discussions around how expensive is the internet, and especially exactly around, yeah, that period of time we did the Net Promoter Score measurement cycle. So, and also in the customer interface, every now and then when we face an outage of customer systems, and that happens in this first quarter as well, it immediately impacts your Net Promoter Score.

But, I mean, we’ve been in ups and downs on Net Promoter Score, and we know how to run it, so I’m pretty confident that we will lift it up in the coming quarters to a decent level, and that we still can outperform our main competitors in the market. And, yeah, on Youfone and Simyo we do plus 40.

We’re not reporting on that, so that also means that indeed, especially in Netherlands, pricing is an important part of how customers experience the service. But besides that, KPN’s is targeting for around the level of 60.

And on LCE, we -- yeah, we are still expecting and planning and hoping for a hopeful positive service revenue growth in the second half. You’ll see a decline in Q2, I think, and then, we trend according to the Q4.

And if you open that business up, you look under the hood, in that business, obviously there is a pressure on mobile where obviously there’s price competition. We are able to sustain our base, but there is actually pressure on mobile, which is countered by all the other businesses in LCE where there is growth and there’s actually quite some demand by Dutch businesses for support and digitization of their operations.

The demand is actually quite good in all this. There’s quite good development in IoT and machine-to-machine solutions.

So I think, with that, I would expect for the full year of LCE, when we’re looking back on the year 2025, a small positive net growth, single-digit, it below 1%, but small positive net growth on LCE service revenues for the year, having turned a corner then in the second half of the year. And that means that LCE to me really is about 2026, right?

If we’re enabled, as we plan, as we expect, to turn this thing around in the second half of the year and make it sustainable, then LCE will be a contributor to growth next year. I mean, that’s the whole plan.

It’s about the run rate 2026. But when you look at the numbers, expect some decline in Q2 and then a turnaround in the corner for Q3 and Q4 for a net-net full positive growth for the year, and then more, a better run rate into 2026.

That’s great. Thank you so much.

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 [ph] 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.

Yeah. Joshua, on B2B, to compare KPN, I would say, with others in other markets, then the difference is that we started on the cleanup probably a decade ago.

So where we faced super high tariffs on legacy business, and we really had to do the migration not only to IP-based services, but also to much lower tariffs. So usually when you start fixing your telco B2B business, then you take a hit by starting the migration and that’s why a lot of other telcos waited for that, because in the first wave, you start eating up your own revenues, to put it that way and that’s what we did in the past.

So we know where we are, because we’ve done the migrations, and we know where we are on LCE, because we’re not completely done migration. But on SME, to take an example, we migrate full base to our KPN one platform.

And by doing that, lost a lot of customers, because -- or a lot of connections, I should say, because during the migration, customers find out, hey, we can optimize a lot. We do not need 10 connections.

We can only do with one fiber line and good Wi-Fi, et cetera, et cetera. But that is behind us.

So now we have a base of pretty good customers. We try to log in via free security services.

We try to add mobile or fiber, but a pretty good clean base with a reasonably priced services. And the Tailored Solution, like Chris described, we cleaned it up.

Well, that was also a trip of probably eight years. So all kind of leaders really focused on the top line instead of on the valuable things.

We’ve been through all the contracts, through all the large customers. And of course, there’s a huge price pressure on mobile.

And of course, with every tender, prices lower. But we also decided on that part to use it to approach it more like a Wholesale customer approach.

So we’re interested in creating value by adding more volumes on the network and ARPUs when it comes to large, super large customers. So I think there we are in pretty good shape.

And then we’ll see where we pass the midpoint. So ending the phase of migrations and fixing the portfolio.

And then you know where you are. So in short, the difference between us and other players is that we’ve done, I mean, look at KPN over the last 10 years.

It was always €100 million down on B2B and we had to cover up in other segments. And then that was, that improved over the last five years, six years.

So I do not expect big spikes. That’s also why we think that LCE will lift up, but we will not surprise you with suddenly five to 10% or something.

And SME did 10% and we already announced it’s more likely that it will move back to 5% growth, but still that’s a decent growth. So, all in all, looking under the hood, that will be there for a lot, like we said, and I think that it’s all about fixing the base, fixing the pricing and move everything to IP, new platforms.

So, all in all, we did a lot over the last eight years, and that’s why we are more confident probably, I would say, than others to predict our business, obviously.

And in the second question, Wholesale online losses a little bit less with some support from customers that moved from B2B to Wholesale. So that distorts the picture a bit.

I think underlying, it’s similar trends as last year. So I would say Wholesale competition as it was around Q4, Q3 last year, that’s kind of continuing.

We are, however, in composition with most of our Wholesale customers and actually in pretty good spirit. Obviously, we tried to protect our base, we tried to protect the revenue per line as well, but also tried to help them achieve growth in Wholesale markets.

So I think what’s, so line intensity in Wholesale is similar to what it was last year, even if the numbers show a bit of better outcome. I think the difference is we see more willingness now in most of our customers to work with us to grow and to find the best growth on the KPN base.

Obviously, that has to separate the real numbers. So numbers are what they are, underlying trends is all a bit better, but expect the intensity to continue for the coming quarters.

But there is some underlying improvements related to talk to a customer to work with them to see what we can do to grow with them.

Great. Thanks very much.

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.

Okay, well, on FTE, 300 to 400, Chris mentioned, I think, good news is that we’re already below 200. So 200 less than the end of last year.

And one important thing there is indeed customer interaction. If you compare KPN to others, I think, we still have a lot of people working on the customer interface.

It all has to do more or less with the private thing. So I think we’re good on track to make the 300 to 400 step down happening.

More important is that we have a couple of transformation programs in place, which is really about how we run the company end-to-end from the main portfolio. And the big one there is, of course, mass market broadband.

But also in B2B, we’re looking at how we run more end-to-end. And so this all has to do with the implementation of AI tools, how we run data.

We’re having a program in place, which is called autonomous operations. And that all has to do with less people working in a far more efficient and -- yeah, way and improving productivity.

So it’s not only on customer interface, but we expect there to continue, especially when we slow down the fiber rollout. It will be easier to get this thing more efficient and more under control.

But it’s also about staff reduction in general. So we’re not only looking at the customer interface.

It’s also the indirect FTE, as you call it. So people that are not daily working in the customer interface, but are, yeah, working in an office behind a laptop, there we can optimize as well.

So we’re pretty confident, also in the years to come, that we can benefit from these transformation programs to simplify the company further when it comes to people. But also improving the output of the company hand in hand by that.

Yeah. Your second question on the convergence, I love the word convergence, on growth in B2C and B2B.

Obviously, compared to the Capital Markets Day, I think the overall growth of the two together is in line with the plan. But you’re right, the mix is a bit different.

I mean, we find it, B2C finds it tougher to go up and B2B finds it easier to stay high in comparison. So the sum of the two, the growth is the same.

I think it’s -- we find it more difficult than what we originally planned for to have our B2C growth go up due to, I think, competitive intensity in the market. And the fact that we, as Joost said, we’re a base company and you need to behave like a base company not to pursue growth at the expense of everything.

And in B2B, as Joost said, there is underlying strength in a distribution scheme, strength in still employment in a Dutch market. I mean, the labor market is still very tight.

So most of our SME and mid-Corp. customers will not let go of staff because you can’t rehire them.

And as long as they keep their staff, they keep all their devices, subscriptions and what have you. And I think we see also more growth in what we call mission-critical business coming towards us, driven by security concerns, data concerns, et cetera.

So I think compared to the Capital Market Day, your observation is right. The sum of growth is actually where we want it to be, but a bit more tilted towards B2B than to B2C.

Okay. Thank you.

All right. Thank you all for your attention.

That wraps up today’s webcast. If you have any further questions, just reach out to the Investor Relations team.

Thanks again.