Koninklijke KPN (KPN) Q2 2024 earnings summary

Executive summary

• Group service revenues grew 3.7% year-over-year in Q2 2024, driven by Consumer and Business segments, with strong contributions from the Youfone acquisition.

• Adjusted EBITDA AL increased 5.6% year-over-year in Q2, with margin improving to 45.2%.

• Net profit rose 5.1% year-over-year in Q2, but declined 2.6% for H1 due to one-off refinancing costs.

• Strategic partnership with ABP to create a new TowerCo and acquisition of 100MHz in 3.5GHz spectrum for €58.4m.

• On track to meet full-year 2024 outlook and mid-term ambitions, including shareholder distributions.

Financial highlights

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

• Q2 2024 adjusted EBITDA AL: €629m (+5.6% year-over-year); H1 2024: €1,235m (+4.6%).

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

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

• Capex rose 11% year-over-year in Q2, mainly due to fiber rollout and mobile network investments; H1 2024 Capex: €640m (+6.3%).

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%.

• Regular dividend per share of €17.0 cents planned for 2024; interim dividend of €6.8 cents per share to be paid on 1 August.

• Share buyback program of €200m completed in Q2 2024.

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