Koninklijke Kpn Nv

Good day, ladies and gentlemen, and welcome to KPN's first quarter 2023 earnings webcast and conference call. Please note that this event is being recorded. At this time, all participants are in 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 might do so by pressing star 1 on your telephone keypad. I will now turn the call over to your host for today, Mr. Reynald van Eerkoot, Head of Investor Relations. You may begin, sir.

Thank you very much, and good afternoon, ladies and gentlemen. Thanks for joining us for today's call. Welcome to KPM's first quarter 2023 results webcast. With me today are Joost Farmer, our CEO, and Kirsten K, 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.

Yes, thank you, Reinhard, and welcome, everyone. Thank you for calling in. Let me start with some highlights from the quarter. In the first quarter, our group service revenues continued to grow, and within the mix, our business service revenues grew for the fourth quarter in a row, and that's mainly driven by continued strong growth in the SME segments. Consumer fiber and mobile service revenues showed continued growth, partially offsetting the competitive dynamics in the broadband markets. Together with our friends from the joint venture, Glossport, we added 113,000 households to our Fibre footprint. In the first quarter, customer satisfaction levels improved across the board, and we once again received an award from Oumlaut, at this time for having the best mobile and fixed network in the Netherlands, and moreover, KTM was also recognized as the best all-in-one provider of the Netherlands. And the good news is both on fiber on the first place and copper, we come in on the second place, demonstrating that our investments in qualities of our customer service are working well. As expected, EBITDA declines somewhat due to the cost inflation and the free cash flow was impacted by intra-year CapEx phasing. We expect our EBITDA and cash generation to improve throughout the year, the coming quarters, and therefore we confidently reiterate our outlook. Now, as usual, Chris will give you more details on our financials and walk you through the outlook of this year. First, I'll take you through the business details. And once again, we've made good progress with our accelerated growth strategy. We started more than two years ago. We continue to focus on the key pillars of our strategy. The first is to leverage and expand our superior networks. Second, grow and strengthen our customer base. And lastly, to continue to simplify and streamline our operating model. We intend to present a strategy update to the market at the Capital Markets Day later in the year. The fiber rollout is on track to cover approximately 80% of the Netherlands end of 2026. In the first quarter, we rolled out fiber to 85,000 households. I already mentioned the glass boards. Together we did 130,000 households, and we currently cover more than half of the Netherlands with fiber. We expect a gradual uplift in fiber rollout numbers in the coming quarters. Our continued fiber rollout and growing fiber footprint is delivering an improved penetration rate for retail and wholesale. Looking at the results of the first quarter, we currently generate almost 1 billion euros of fiber service revenues per year this year in consumer markets, and this number is growing strongly, driven by a growing base and an attractive park pool. So all in all, Fiverr is clearly at the heart of our strategy to create long-term value for all the stakeholders. So now let's move into the consumer segments. Adjusted consumer service revenues were nearly flat in the first quarter. On one hand, we see consistent mobile service revenue growth driven by base development and growing ARPU. And on the other hand, our fixed service revenues were impacted by anticipated declines from KPN's legacy portfolio. Now, despite the rising cost of living, impacting general customer sentiment, I must say, KPN, we continued to lead the Dutch market in customer satisfaction. I'm happy to mention our investments in service and quality of our products and the support of all the colleagues working in that environment are really paying off. Net promoter score improves sequentially and remains one of our top priorities. Now let's take a deeper look into our first quarter KPIs. Retail fiber base increased by 35,000 customers. Despite this solid subscriber info, our total broadband net has shown a small decline. In March, we observed a gradual improvement in our order intake, so going forward, this together with the new portfolio lineup and the customer focus should support an improvement of a broadband-based trend again. Fixed ARPU remained broadly stable at 53 euros, and combined, our fixed service revenue decreased 1.7% year-on-year. Our post-paid base increased by 11,000, and the post-paid RQ grew almost 1%. Combined, this led to a solid 3.4% growth in mobile service revenues. Then a look at the B2B segment. We saw continued service revenue growth in our business segment. The B2B adjusted service revenues grew more than 3% year-on-year in the first quarter, with growth across all segments. Business net promoters for improved further, despite volatile economic environments. Also, B2B customers continue to value KPM for the stability, reliability, and quality of our network and services. SME is the main engine of B2B growth, driven by a solid commercial momentum, especially in Momo. We serve our customers via our cloud-based KPM1 platform, and the customer base is doing good. But also, LCE continues to move in the right direction, showing growth for the second quarter, and we are finalizing the migration of our customers from legacy portfolio to the new environment, and we are confident we are on track here to create more growth in the LCE segments. Tailor solutions continue to perform in line with expectations, and as we communicated previously, this business remains subject to the timing of projects and related hardware sales. In wholesale, service revenues were broadly flat in the first quarter. The growth trend leveled off compared to previous quarter due to the impact of several small one-offs in Q1 last year, so positive one-offs in last year. But looking forward, I'm confident that we get back in growth trends in wholesale again. We had a 25,000 post-based SIMs in the first quarter while our broadband base was stable. Now, before I hand over to Chris, I would like to mention that we increased our ESG disclosure in today's presentation. In the appendix, we include a slide with more insights and additional KPI regarding some of our non-financial ambitions in this respect. From today, and in line with our commitment to sustainability, you will be able to track our performance on carbon reduction, circularity, and diversity on a quarterly basis. And with that, let me now hand off to Chris to give you more details on our financials.