Koninklijke Kpn Nv

Welcome to KPN's third quarter 2022 earnings webcast and conference call. Please note that this event is being recorded. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's prepared remarks. If you would like to ask a question, you may do so by pressing star 1 on your telephone. I will now hand the conference over to your host for today, Reinhard van Eershoff, Head of Investor Relations. You may begin.

Thank you, and good afternoon, ladies and gentlemen. Thanks for joining us. Welcome to KPN's third quarter 2022 results webcast. With me today are Joost Farwerk, our CEO, and Kisvi Ge, our CFO. As usual, before turning to our presentation, I'd like to remind you of the safe harbor on page two of the slides, which also applies to any statements made during this presentation. In particular, today's presentation may include forward-looking statements, including KPN's expectations with respect to its outlook and ambitions, which were also included in the press release published this morning. All such statements are subject to the safe harbor.

Let me now hand over to our CEO, Joost Farberg. Thank you, Reinout, and welcome everyone. Let me first walk you through some of the highlights of this quarter. We continue to make good progress against our strategic and financial ambitions. Group service revenues grew for the fifth quarter in a row. We saw a healthy customer inflow in consumer and business, especially in mobile. Business service revenues grew for the second quarter, with SME again making a strong contribution. and we see ongoing growth in consumer mobile service revenues, partly offsetting the competitive dynamics in fixed. The improving revenue trends and sequential improvement in net promoter scores in business and consumer show that our commitment to customer centricity has paid off. ACM declared our improved fiber wholesale offer binding. The new offer has been effective since the end of August and is applicable for a period of eight years. This enables us to continue to roll out fiber at a fast pace and maintain our successful open network policy. With solid adjusted EBITDA growth in the third quarter and a strong year-to-date free cash flow, we remain confident to deliver on our recently upgraded full-year 2022 outlook despite the current economic environment. Looking ahead, we keep working hard on mitigating inflationary headwinds. and we are fully committed to our accelerate-to-grow strategy. We stand out as a stable company, and taking into account the pricing mechanisms we have in place, our cost reduction program, and a stable CapEx envelope, we are confident we will deliver some growth next year as well. In the third quarter, we've made solid progress and rolled out fiber to 76,000 households. We are on track. The rollout speed in the terms of homes past slowed a bit in the third quarter, partly due to the holiday season, but also because of a change in rollout strategy where we accelerated rollout in streets and delayed a bit in connecting households to optimize the use of labor capacity available. Together with Glassport's Our joint venture with ABG, we connected fiber to 123,000 households, and we currently cover approximately 46% of the Netherlands with fiber. As we continue to roll out fiber, our growing fiber footprint will result in an improved penetration rate for retail and wholesale. And we feel all this effort bearing fruit in our financials. Looking at our third quarter results, we currently generate about 940 million euros of analyzed fiber service revenues, and this number is growing rapidly, driven by a growing base and improved and attractive ARPU. All in all, fiber is clearly at the heart of our strategy to create long-term value for all stakeholders. Let's now move to the consumer segments. Adjusted consumer service revenues decreased by 0.8% year-on-year, as consistent mobile service revenue growth was offset by lower fixed service revenues. Consumer fiber broadband revenues showed continued growth, while copper and legacy maintained its anticipated decline. Customer satisfaction remains one of our top priorities, and it has been pleasing to see our effort pay off in this area with an MPS level that is rising again to 18. Now let's take a deeper look into our third quarter KPIs. Our retail fiber base increased by 37,000 new customers, offsetting copper churn. And this led to 4,000 broadband net adds, which we consider solid, given the aggressive promotion by our main competitor in a part of Q3. Our fixed RPU remained broadly stable at 53 euro. As you can see, the fixed service revenue trend is slightly better than seen in the previous quarter and appears to be bottoming out. We continue to see solid trends in mobile. Our post-paid base increased by 38,000, and our post-paid RPU was broadly stable. And combined, this led to 2.2% growth in mobile service revenues. Let me now move to the B2B segment. We saw continued service revenue growth in our business segment. B2B adjusted service revenues grew more than 3% year-on-year in the third quarter. SME is the main engine of B2B. B2B growth, driven by solid commercial momentum in both the broadband and mobile portfolio. And also, LCE service revenues were almost stable, partly supported by a small one-off. Nonetheless, underlying the overall trend continues to move in the right direction, and we expect inflection in LCE next year. Tailored solutions continue to perform in line with expectations. As you know, this business always remains subject to Timing in projects and related sales, but also on the tailored solutions side, good performance in Q3. Business MPS returned to plus four despite volatile economic environment. Customers continue to value KPM for stability, reliability, and quality of our network and services. And so I'm happy with, both on the consumer and business side, the high MPS, especially when you compare KPN with our competitors. As you can see on this slide, we see improving revenue trends across the board. And this combined with the sequential improvement in Net Promoter Score votes well for the future. In wholesale, service revenues increased around 1% in the third quarter. The growth rate leveled off a bit compared to the other quarters, but this was mainly due to a tougher comparison base. Adjusted for positive one-offs in the third quarter last year, underlying growth was still around 4%. In Q3, we've added 18,000 post-paid teams and 10,000 broadband lines. Now with this, let me now hand over to Chris to give you more details on our financials. Chris.