Main takeaways:
- Costs
- Ongoing efficiency enhancements. Drives cost savings and improved customer experience (fully digital) at the same time.
- ESG delivers sustainability and at the same time cost savings.
- Revitalise cost savings program by modernising the operating model, incl. the 'always-on' network (= zero-touch).
- Partnerships
- for B2C (smart home in a wide sense) and B2B
- Household 3.0 replacing (or: extending the scope of) FMC; it could mirror the Proximus+ Super App.
- Financial
- EBITDA margin flat (44%) on rising Glaspoort access fees
- Capex drops below EUR 1b to EUR 900m in 2027
- FCF (def. KPN) and TSR rise above EUR 1b in 2027
General strategy update 2024-2027:
- Connect (loyalty, convergence, relevant services)
- Activate (network, platforms, partners, assets)
- Grow (modernise, simplify, AI-powered automation, future-ready workforce)
Targets
- Financial
- 2023 maintained [see 231025]
- 2024:
- SR growth 3%, adj EBITDA AL EUR 2.48b
- capex 1.2b, FCF 870m
- div 17c (+13%), SBB 200m
- 2024-2027:
- SR CAGR 3%, adj EBITDA AL CAGR 3% (flat margin as result of rising Glaspoort access costs, rising to EUR 115m in 2027)
- capex 1.2b in 2024-2026 (o/w EU% 450-500m for fiber), <1.0b in 2027, FCF CAGR 7% (accelerating on cash tax, interest, capex)
- div CAGR 7%, SBB cumulative max EUR 1.0b, cumulative returns EUR 3.8b (30% of current marketcap)
- to become B2C market leader (in SR terms), to compete fiber roll-out end 2026 (80% coverage, focus on HC)
- RoCE to grow from 13.7% (23H1) to 15.0%
- General
- Policy rermains to fully return FCF to shareholders
- Leverage <2.5x
- Cash tax rises as losses are eaten up. From EUR 110m in 2023 to EUR 300m in 2027 (2024: EUR 50-60m higher than 2023), from when cash tax will be in line with P&L tax.
- Interest will be EUR 35m higher in 2024.
- Capex-to-Sales ratio to move from 21-22% (2023-2026) to 15-16% (from 2027).
- Sources of opex savings: simplification, always-on automation, IT rationalisation, energy reduction (Eneco agreement with Eneco, exploring solar), copper switch-off, digital & personalisation (digital customer interaction, incl. AI), organisation (office footprint), innovation (selective).
- FTTP
- Construction cost 700-1000 EUR/HP
- ARPU impact + 3 EUR/mo
- Uptake: 8% after 1 year, >55% over time
- 42% of new customers take 1 Gb/s (?)
- 80% coverage YE 2026, with copper switch-off at 65%
- 10 Gb/s available at 85% by YE 2026
- Always-on network (no truck-roll at central office or street cabinet required, only shipping CPE) reaches 70% of fiber HH YE 2026
- Copper savings 2023: EUR 25m on opex, EUR 70m on capex.
- Copper switch-off in 3 phases:1. Lines, 2. Enterprises, 3. Areas. Final phase 3 years after roll-out. Hence full savings reaped by 2030.
- Fiber net additions insights: 23Q3 at record DSL conversion (18k of copper net adds out of 24k copper losses: 75%) and record in-flow from third parties (22k of total fiber net adds of 40k).
- Other
- Glaspoort may be consolidated (acquire 1 additional share) once 80% of roll-out is completed during a 3-year window, 5 years after establishment (2021) i.e. 2026-2029.
- Reconsidering leasing mobile sites (alternative is not clear).
- Considers investment partners for edge network.
- Considering legacy real-estate (sell or redevelop).
Operating model modernisation
- simplification, automation, AI, always-on network
- digital customer journey
- full fiber, to add 2m HP (focus on HC) by end 2026 to reach 80% coverage
- dual-vendor strategy (Ericsson, Huawei) in mobile RAN
- win-back fiber customers (when altnet launches before KPN) in 1-2 years back to original market share
- to be Responsible, Inclusive & Sustainable telco
- to become near-circular by 2025, green energy from North Sea wind park from 2027, energy reduction 55% by 2030 relative to 2010
- cybersecurity
- Mooiste Contact Fonds to bridge digital divide
Business strategy
- B2C:
- Household 3.0 (smart home, security, gaming, OTT services, partners) replaces the FMC strategy: bundle of any connectivity with at least 1 VAS (excl. communication)
- further digitize customer facing processes, improve customer experience, lower indirect costs
- focus on churn more than on customer acquisition
- to double data allowances on all mobile plans for FMC subs (from 3, 12, 20 to 6, 24, 40 GB/mo)
- to relaunch KPN TV+ app from 231109
- B2B: develop ecosystem & distribution channels, converged services for SME (add partners) & LCE (incl Private Campus, Multi Cloud, Data Services Hubs, IoT), Tailored Solutions for ICT/integration
- B2W to launch building blocks