Koninklijke KPN (KPN) Investor Update summary

Strategic progress and transformation

• Leading fiber and mobile network positions in the Netherlands, serving over 4 million broadband and 15 million mobile customers, with over 90% nationwide fiber coverage and top global 5G scores.

• Strategy focuses on connecting customers, activating digital assets, and growth through modernization, digitalization, and AI-powered automation.

• Transformation programs target €100m annual indirect OpEx savings by 2030, leveraging automation and AI.

• ESG goals include near 100% circularity by 2025, zero carbon fleet by 2030, and net zero by 2040, with top ESG ratings.

• Service revenues and EBITDA are growing, with free cash flow expected to accelerate as CapEx declines.

Infrastructure and network leadership

• Fiber network covers 66% of Dutch households, targeting up to 85% by 2030, with hybrid solutions for remaining areas.

• Copper network decommissioning aims for 90% shutdown by 2027, driving cost savings and operational efficiency.

• Mobile network maintains 99% 4G/5G coverage, with 5G Standalone and cloud-native architecture planned by 2027.

• Distributed infrastructure and edge locations support ultra-low latency and new business opportunities.

• M&A opportunities considered for further fiber expansion, subject to regulatory approval.

Financial outlook and capital allocation

• 3-3-7 ambitions: ~3% service revenue CAGR, ~3% EBITDA AL CAGR, ~7% FCF CAGR for 2023-2027, with business and wholesale outperforming.

• CapEx to remain stable at €1.25bn through 2026, stepping down to below €1bn in 2027, normalizing CapEx intensity to 17-18%.

• Free cash flow CAGR reaffirmed at 7% for 2023-2027, with a material inflection expected in 2027.

• All free cash flow to be returned to shareholders via growing dividends (targeted to rise to €0.20 in 2026 and €0.25 in 2027, ~14% CAGR 2025-2027) and up to €1bn in share buybacks for 2024-2027.

• Leverage ratio to remain below 2.5x, maintaining investment grade ratings, with potential to increase post-2027 as fiber investments wind down.