Koninklijke Kpn Nv

Good day, ladies and gentlemen. Welcome to KPN's fourth quarter 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 may do so by pressing star 1 on your telephone. I will now turn the call over to your host for today, Matthias von Leunhoff. Head of Investors Relations. You may begin.

Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us today. Welcome to KPM's fourth quarter and full year 2024 results webcast. With me today are Joost Farberg, our CEO, and Pies Vigee, our CFO. As usual, before tuning to our presentation, I would 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.

Thank you, Matthijs. Welcome, everyone. Let me start with some highlights from the fourth quarter and the full year. We have delivered on our 2024 outlook. Throughout the year, we've consistently grown our group service revenues. And within that mix, consumers saw another quarter of solid commercial momentum, especially in broadband. Business continued to perform strongly with all divisions contributing, and wholesale inflected to growth in the second half of the year, driven by mobile especially. Together with our joint venture, Glassport, we added another 574,000 fiber households to our footprint this year, and we connected more households than ever before. For 2025, we expect service revenues and adjusted EBITDA growth of approximately 3%, capex of approximately 1.25 billion, and free cash flow of approximately 910 million euros. Our dividend per share is expected to grow by 7%, and we intend a share buyback of €250 million in 2025. And with this, our total shareholder return is projected to grow by 10%. All in all, we're making good progress with the execution of our strategy, and we are set to maintain solid service revenues and adjusted EBITDA growth, in line with our mid-term financial ambitions We're investing in the digitalization of the Netherlands, and from 2027 onwards, we foresee a significant step down in capex, resulting in a material inflection in free cash flow. As usual, Chris will give you more details on our financials and the 2025 outlook later in this presentation. So we delivered on our 2024 outlook. Service revenues grew more than 3%. EBITDA came in north of 2.5 billion euros. CapEx at 1.25 billion was slightly higher than originally anticipated. Free cash flow came in at 900 million, slightly ahead of guidance. And we reiterate our dividend commitment, and we will pay a regular dividend per share of 70 cents over 2024. following AGM approval in mid-April. As a reminder, our connect, activate, and grow strategy is supported by three key pillars. We continue to invest in our leading networks, we continue to grow and protect our customer base, and we further modernize and simplify our operating model. And together, these... Priorities support our ambition to grow our service revenues and adjust the EBITDA by 3% and our free cash flow by 7% per annum on average in the coming years, or simply put, our 337 CAGR framework. ESG is linked to our strategy closely, as we shared at our ESG webinar last November. hosted by Chris, we focus on three areas, responsible, inclusive, and sustainable. And in a nutshell, the core of our ESG strategy is to make our networks even more reliable and secure by design. Expanding our fiber network is key in this strategy. And with this, we connect everyone while promoting social and digital inclusion. And we do this in the most sustainable way as we aim to be net zero in the entire value chain by 2040. And with this, we will create a better internet where everyone in the Netherlands enjoys seamless access to a responsible, inclusive, and sustainable internet powered by fiber and 5G. Now I will walk you through the business details. We continue to lead the fiber market and we see more and more customers benefiting from the next generation infrastructure. Together with Glassport, we now cover 63% of Dutch households with fiber, and we are gradually progressing towards our target of roughly 80% by the end of 26. In 2027, therefore, we foresee a material step down in our capex, dropping to below a billion euros. And to sustain our network leadership position, we further optimized our rollout process, and we increased our focus on connecting fiber households and activating customers. And this approach is delivering tangible results with a record delivery of homes connected and ongoing new fiber broadband net ads. Let's have a look at the consumer segments. Consumer service revenues increased more than 4% year-on-year or 1% corrected for U-phone driven by fixed and mobile. Our commitment towards customer centricity has been paying off with customers with customer satisfaction trends improving. And that's important because NPS remains leading in the Dutch market when it comes to KPM, and it's an important target for us. So improvements on NPS. This week we launched our Household 3.0 strategy, and with this we will take the next big step in convergence, and we give access to an even broader range of digital services and best content in households, demonstrating our focus on effective base management in this respect. We recently secured the exclusive broadcasting rights for highlights of the Dutch Football League, Eredivisie. These rights enable our customers to have access to the best sports content. A deeper look into our KPIs. On the back of active base management and strong commercial execution, we saw a quarter of solid broadband base growth with a healthy inflow of new fiber customers Despite the intensified competition in the fourth quarter, this combined with a growing ARPU led to continued growth of our fixed service revenues. Fiber service revenues continued to grow well above 10%. Our post-paid base increased by 30,000, while the post-paid ARPU, excluding Ufone, declined by 2.8%. And combined, this resulted in only 0.3% mobile service revenue growth. The year-on-year growth trend slowed down sequentially, mainly due to a lapping of price increases implemented in October 2023, less out-of-bundle revenues in the fourth quarter, and some negative one-offs. Going forward, we expect this growth trend to recover. And Chris will give you more details later in the presentation. Let's now move to B2B. B2B delivered another strong quarter with solid commercial momentum in post-paid and organic growth across all the divisions. Our business net promoter score remains stable, and that keeps us clear leader in the Dutch market. Well, first of all, SME remains the main growth engine of B2B, driven by strong growth in cloud and workspace and supported by continued sort of commercial momentum in mobile and broadband. LCE recorded another quarter of growth, mainly supported by the continued good performance in our IoT business and IT services. KPM enhanced security portfolio, which is called XPath Safe Internet, has also started to contribute to LCE's growth. And lastly, tailored solutions. This continues to deliver as planned. Year-on-year, growth dropped a bit, mainly due to a one-off contribution to revenues in Q4 last year. And while this business always remains subject to timing, we will always show some variability in reported growth rates, Most importantly, underlying growth here is solid, and performance and margins continue to improve steadily. Our wholesale service revenues continue to improve, mainly driven by mobile. Broadband service revenues were broadly flat, despite the declining base, driven by higher fiber service revenues. Mobile service revenues came in strong, driven by higher performance from sponsored roaming partners and messaging revenues. And next to this, we recently extended the contract terms of some of our largest wholesale partners. Out-of-service revenues declined mainly due to lower regulated tariffs, leading to a decrease in low-margin interconnect revenues and lower volumes on traditional voice. Now a bit more on ESG. On this slide, you can see our progress on carbon reduction, circularity, and diversity. We are dedicated to enhancing energy efficiency to minimize the carbon footprint of KPM across our entire value chain. To support this, in 2025, we will begin sourcing solar energy from a solar farming partnership with Eneco, further advancing our green electricity goals. And this initiative, as well as the energy supply we will use from the windmill power gas from 2027, It's also important for ensuring energy supply at lower costs. Next to this, on the ESG part, we made further improvements on our diversity target, reaching 31% of women in our senior management. This brings us close to our ambition to reach at least 35%. Now, let me hand over to Chris to give you more details on our financials. Thank you, Joost.