Koninklijke KPN (KPN) Q2 2024 earnings summary

Executive summary

• Group service revenue grew 3.7% year-over-year in Q2 2024, driven by Consumer (+7.7%) and Business (+3.7%) segments, with significant contribution from the Youfone acquisition.

• Adjusted EBITDA AL increased 5.6% year-over-year in Q2 2024, with net profit up 5.1% and strong free cash flow generation.

• Closed Youfone acquisition, included in financials from April, adding over 50,000 broadband and 500,000 mobile customers.

• Strategic partnership with ABP to create a leading TowerCo and successful 3.5GHz spectrum auction support digital infrastructure ambitions.

• Issued €500m green hybrid bond and signed major renewable energy agreements, supporting sustainability goals.

Financial highlights

• Q2 2024 adjusted revenues: €1,391m (+4.5% year-over-year); H1 2024: €2,768m (+3.9%).

• Adjusted EBITDA AL margin improved to 45.2% in Q2 2024; operating profit (EBIT) up 5.7% to €357m.

• Q2 2024 net profit: €227m (+5.1% year-over-year); H1 2024 net profit: €401m (-2.6%).

• Free cash flow for Q2 2024: €210m (+11% year-over-year); H1 2024: €364m (+3.0%).

• Capex rose 11% year-over-year in Q2 2024 to €337m, mainly for fiber and mobile network investments.

Outlook and guidance

• FY 2024 outlook reiterated: adjusted EBITDA AL ~€2,500m, Capex ~€1.2bn, Free Cash Flow >€890m.

• 2024-2027 ambitions: service revenues and adjusted EBITDA AL CAGR ~3%, FCF CAGR ~7%, ROCE growing to 15%.

• Q3 EBITDA growth expected at 1–1.5%, with Q4 above 3.5%.

• Regular dividend per share of €0.17 planned for 2024; interim dividend of €0.068 per share to be paid on 1 August.

• Leverage expected to remain below 2.5x for the year.