Koninklijke KPN N.V.

Q2 adjusted revenues decreased 0.5% year on year, or increased 2.5% excluding prior-year IP sales and IPR settlement benefits. Adjusted EBITDA after leases decreased 0.3% reported, but increased 3.4% on a comparable basis; reported EBITDA margin improved to 45.6%, up 8 basis points. Net profit fell 1% year on year. Group service revenue grew 0.8% in Q2, consumer service revenue rose 1.9%, business service revenue fell 1.1%, and wholesale service revenue grew 1%. In H1, operational free cash flow increased 3.1% year on year, and free cash flow increased 7% to EUR 329 million. Cash at end-June was EUR 365 million, leverage was 2.5x, ROCE was 14.4%, interest coverage was 9.1x, and liquidity was EUR 1.4 billion. For FY 2026, KPN now expects group service revenue growth of approximately 1.5% year on year, with second-half service revenue growth of about 2%-2.5%; EBITDA and free cash flow guidance were reiterated, and leverage is expected to end the year at or slightly below 2.5x.

Joost Farwerck emphasized that the quarter showed improving consumer trends, strong SME performance, and continued wholesale growth, while acknowledging that Tailored Solutions and LCE are dragging the top line. His tone was confident on the core business and disciplined on the weaker parts: he said KPN is cleaning up low-margin Tailored Solutions and expects LCE to improve only next year. He also framed the company’s fiber strategy, sovereign cloud partnerships, and customer satisfaction gains as evidence that the strategic plan remains on track.

Chris Figee highlighted that the underlying business remained healthy, with adjusted EBITDA after leases up 3.4% on a comparable basis and EBITDA margin at 45.6%. He pointed to EUR 50 million lower indirect costs year on year, more than 330 fewer FTEs, EUR 80 million of indirect OpEx reduction year to date, and reaffirmed the EUR 15 million-EUR 20 million structural net indirect OpEx savings goal for 2026 and EUR 100 million by 2030 versus 2025. On cash, he said free cash flow increased 7% to EUR 329 million in H1, cash margin was broadly stable at about 11%, cash ended at EUR 365 million, and the balance sheet remained strong at 2.5x leverage and 9.1x interest coverage.

Analysts focused on why service revenue guidance was cut, whether the shortfall was more about Tailored Solutions or LCE, and how consumer pricing and Q3/Q4 growth should evolve. Management said the downgrade was mainly due to B2B, with Tailored Solutions slightly worse than planned and LCE expected to recover only next year; they also guided consumer service revenue to about 2% in the second half, with mobile above 4% and fixed below 1%. Other questions centered on broadband competitiveness after the Odido breach, the fiber overbuild and ACM’s blocked Glaspoort/Delta Fiber transaction, and whether the 2027 service revenue ambition still holds; management said the 2%-2.5% range still looks right for the medium term and that the fiber plan remains unchanged, though appeal of the ACM decision is underway.