Koninklijke Kpn Nv

Good day, ladies and gentlemen, and welcome to KPN Second Quarter Earnings Webcasting 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, Mathis Van Negenhorst. Head of Investor Relations. You may begin, sir.

Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us today. Welcome to KPN's Q2 and a half year 2025 results webcast. With me today are Joost Harweg, our CEO, and KSPG, our CFO. As usual, before we begin our presentation, I would like to remind you of the safe harbor on page two of the slides. which applies to any statements made during this presentation. In particular, today's presentation may include forward-looking statements, including KPM'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 Farberg.

Joost Farberg Yes, thank you, Matthijs, and welcome, everyone. Let's start with the highlights of the second quarter. We levered a strong quarter. Our group service revenues increased by 3.7%, with growth visible across all segments. And within the mix, consumers saw a quarter of good commercial momentum, both in fixed and mobile. Business continued to perform strongly, driven by all business divisions, and wholesale further accelerated. As a result, we delivered strong EBITDA growth and alongside our operational performance, our EBITDA benefited from a favorable legal settlement related to intellectual property rights. KPN has a large portfolio of IPRs with over 300 patents, which demonstrates our commitment to innovation and our extensive portfolio and successful defense of our IPR allows us to license our technologies to major telecom vendors providing regular income streams and occasional settlements. As expected, our free cash flow declined year-on-year, mainly due to working capital phasing, higher interest, and tax payments, but will recover in the second half of the year. We further expanded our Fiverr footprint, and together with our transport joint venture, we now cover two-thirds of the Netherlands with Fiverr. And we raised our full-year 2025 outlook for EBITDA and free cash flow. And the upgrade reflects the benefits from two IPR cases settled in June and July, combined with the solid business and financial progress we've made so far. We launched our Connect, Activate, and Grow strategy in November 2023 and are now halfway through, now almost halfway through the execution of this ambitious plan with significant progress achieved, so we're well on track. Our strategy is built on three key pillars. We continue to invest in the leading networks. Two, we continue to grow and protect our customer base. And three, we further modernize and simplify our operating model. And together, these strategic priorities support our ambition to grow our service revenues and adjusted EBITDA by approximately 3% and our free cash flow by approximately 7% per annum on average in the coming years, or simply put, our 337 CAGR framework. And given that we're now nearly halfway through our strategic period, we look forward to providing you with a strategy update on November the 5th. Let me now walk you through some business details. We continue to lead the Dutch fiber market. In the second quarter, we expanded our fiber footprint by adding 160,000 homes together with transports, now jointly covering two-thirds of Dutch households. Our efforts in connecting homes and activated customers have paid off. reaching nearly 80% of total homes connected to the fiber footprint, while more than two-thirds of our retail base now enjoys the benefits of fiber. Let's have a look at the consumer segment. Consumer service revenues continue to grow, driven by consistent fiber and mobile service revenue growth. Customer satisfaction remains stable, and there's our full attention. And let's take a deeper look into our second quarter KPIs. A focus on loyalty and base management is paying off as we recorded a healthy inflow of 13,000 broadband net ads. Fixed RQ grew by 1.2%. Our post-paid base increased by 37,000, which is a good improvement compared to the previous quarter. Our post-paid revenue declined primarily due to increased promotional activity in the non-free sector. And as a result, mobile service revenues grew by 1.3%. However, we expect this to improve in the coming quarters. Let's now move to the B2B segment. B2B delivered another strong quarter, achieving 5.7% year-on-year growth with good performance across all divisions. Commercial momentum in mobile remains solid, adding 22,000 new customers. In today's complex world, we help Dutch businesses become digitally resilient with security delivering encouraging growth across both SME and LCE, underscoring its strategic importance. Net Promoter Score is stable, which reflects the continued trust from our B2B customers for the stability, reliability, and quality of our networks and services. SME remains strong, driven by cloud and workspace, broadband, and ongoing momentum in mobile. LCE increased by 1.7% year-on-year, driven by ongoing growth in IoT, broadband, and cloud and workspace, partly offset by continued price pressure in mobile. And Taylor Solutions delivered another strong quarter as planned, with growth driven by higher project revenues. And as you know, this business remains subject to project timing and seasonality. Then wholesale service revenues further improved in Q2. mainly driven by the strong performance in mobile. Broadband service revenues increased as well, despite the declining pace, driven by fiber. Mobile service revenues remained strong, mainly driven by continued growth of our travel sim business. And other service revenues saw a slight increase, mainly due to an uptick in business growth. Now turning to ESG, this remains a core element of our strategy with a clear focus on three key areas, responsible, inclusive, and sustainable. And the core of our ESG strategy is to make our network even more reliable and secure by design. Expanding our fiber network is a key enabler for this goal, helping us to connect everyone in the Netherlands to a sustainable future. And at the same time, we continue to build a better internet, One that offers seamless access to a responsible, inclusive, safer, and greener internet powered by fiber and 5G. So our commitment to sustainability is evidenced by several top ratings and important independent ESG benchmarks. Our next slide shows our progress on carbon reduction, circularity, and diversity. We continue to reduce our carbon footprint across the value chain. Earlier this year, we began sourcing solar energy from a solar farming partnership with MNACO. advancing our green electricity goals. Scope 2 emissions increased by 30% year-on-year, while scope 3 emissions slightly increased due to an expanded scope. And next to this, we made further improvements on our diversity target, reaching 32% of women in our senior management. Now, let me hand it over to Chris to give you more details, not specifically on diversity, but on our financials.