Koninklijke KPN (KPN) Q3 2024 earnings summary

Executive summary

• Group service revenue grew 3.7% year-over-year (3.4% organic), with all segments contributing and strong fiber expansion to 62% of Dutch households.

• Consumer and business segments delivered robust service revenue growth, while wholesale returned to organic growth.

• Full-year 2024 outlook and mid-term ambitions reiterated, with a continued focus on ESG targets and customer satisfaction.

• Net Promoter Score remains a key focus, though recent adverse movements have been noted in both consumer and B2B segments.

Financial highlights

• Adjusted revenues for Q3 2024 were €1,420m, up 4.2% year-over-year; adjusted EBITDA AL was €643m, up 2.3% year-over-year, with a margin of 45.3%.

• Net profit for Q3 2024 was €231m, up 3.0% year-over-year; YTD net profit at €632m, down 0.6% due to one-off refinancing costs.

• Free Cash Flow for Q3 2024 was €178m, down 10% year-over-year; operational Free Cash Flow up 11% year-over-year.

• Capex for Q3 2024 was €281m, down 7.5% year-over-year; YTD Capex at €920m, up 1.7%.

• Liquidity position at €1.6bn, with €519m in cash and €1,075m in undrawn facilities, covering maturities until 2027.

Outlook and guidance

• FY 2024 guidance maintained: service revenue growth ~3%, adjusted EBITDA AL ~€2,500m, Capex ~€1.2bn, Free Cash Flow >€890m.

• Mid-term ambitions: service revenue and adjusted EBITDA AL CAGR ~3%, Free Cash Flow CAGR ~7% for 2024-2027, Capex to drop below €1.0bn from 2027.

• Q4 service revenue growth expected to decelerate due to less tailwind from price increases and tougher comps, but full-year objectives remain on track.

• Regular dividend per share of €17.0 cents for 2024, with €6.8 cents interim dividend already paid.