Koninklijke KPN (KPN) Q1 2025 earnings summary

Executive summary

• Group service revenue grew 3.8% year-over-year, with 0.7% from Youfone; all segments contributed, and consumer, business, and wholesale showed solid growth.

• Adjusted EBITDA after leases (AL) increased 4.7% year-over-year, with positive impact from Youfone and Althio; EBITDA margin rose to 44.7%.

• Free Cash Flow declined 17% year-over-year due to higher interest, tax payments, and working capital phasing, but is expected to recover in the second half.

• Fiber footprint expanded by 100,000 homes, now covering 64% of Dutch households; KPN and Glaspoort connected 94,000 homes in Q1.

• Althio tower company began operations, contributing to upgraded 2025 outlook and providing strategic flexibility.

Financial highlights

• Adjusted revenues increased 3% year-over-year to €1,418m, driven by organic service revenue growth across all segments.

• Consumer service revenues rose 4.6% year-over-year, with over 3% from Youfone; underlying growth (excluding Youfone) was 1.2%.

• Business service revenues grew 5.1% year-over-year, led by SME and Tailored Solutions; SME up 6.3%-7.0%, Tailored Solutions up 15%.

• Wholesale service revenues increased 6.1% year-over-year (excluding Youfone), mainly from international sponsored roaming and fiber broadband.

• Operational Free Cash Flow grew 12% year-over-year to €340m, ahead of guidance; total Free Cash Flow margin was 9.1% of revenues.

• Net profit declined 3.5% year-over-year to €169m, mainly due to one-off costs from the Althio transaction.

Outlook and guidance

• Upgraded 2025 outlook: adjusted EBITDA after leases above €2.6 billion, Free Cash Flow about €920 million; CapEx to remain stable at €1.25 billion.

• Group service revenue growth guidance reiterated at approximately 3% for 2025.

• Free Cash Flow expected to be back-end loaded, with stronger generation in the second half as tax and interest payments normalize.

• 2027 ambitions: ~3% CAGR in service revenue and EBITDA AL, CapEx <€1.0bn, ~7% CAGR in Free Cash Flow.