This article first appeared on GuruFocus .
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Group Service Revenue Growth:Increased by 0.8% year-on-year, driven by Consumer, SME, and Wholesale segments.
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Consumer Service Revenue Growth:Increased by 1.9%, the strongest performance in five quarters.
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Mobile Service Revenue Growth:Increased by 3.2%, driven by the addition of 18,000 post-paid subscribers and ARPU growth.
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Business Service Revenue Decline:Decreased by 1.1% year-on-year, mainly due to declines in Tailored Solutions and LCE.
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Adjusted EBITDA Growth:Increased by 3.4% on a comparable basis, with a margin improvement of 40 basis points to 45.6%.
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Free Cash Flow Growth:Increased by 7% year-to-date, supported by EBITDA growth and favorable working capital developments.
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Net Profit Decline:Decreased by 1% year-on-year, impacted by lower operating profit.
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Leverage Ratio:Stood at 2.5 times, with expectations to end the year at or slightly below this level.
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Interest Coverage Ratio:Strong at 9.1 times.
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Return on Capital Employed (ROCE):14.4%, reflecting higher capital employed from network investments.
Release Date: July 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Group service revenues increased by 0.8%, driven by consumer, SME, and wholesale segments.
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EBITDA increased by more than 3% on a comparable basis, supported by revenue growth and lower costs.
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Free cash flow rebounded in the second quarter, up 7% year-to-date.
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Koninklijke KPN NV ( KKPNF ) remains the leader in the Dutch fiber market, with 72% of the retail broadband base now on fiber.
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Partnership with Schwarz Digits to bring European sovereign clouds to the Dutch market, enhancing service offerings for larger customers and the government.
Negative Points
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Business service revenues declined by 1.1% year-on-year, impacted by declines in tailored solutions and LCE.
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Adjusted revenues decreased by 0.5% year-on-year in the second quarter due to a decline in non-service revenues.
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Net profit decreased by 1% year-on-year, driven by lower operating profit.
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The proposed Fosports Delta fiber transaction was prohibited by ACM, impacting strategic expansion plans.
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Tailored Solutions and LCE segments underperformed, leading to a moderated full-year 2026 service revenue outlook.
Q & A Highlights
Q: On the B2B side, what was the bigger negative surprise, Tailored Solutions or LCE, and how do you see consumer service revenues developing in Q3 and Q4? A: The downgrading of total service revenue this year is related to B2B effects, particularly Tailored Solutions and LCE. Tailored Solutions had a slightly more negative impact than expected, and LCE is expected to improve next year. For consumer service revenues, we expect them to be around 2% in Q3 and Q4, with mobile service revenues potentially accelerating due to indexed pricing and additional price increases on security solutions. (Joost Farwerck, CEO; Chris Figee, CFO)
Q: Is there anything structural causing the softness in LCE, such as competition from AI players? A: The pressure in LCE is more on corporate VPN and connectivity, with some competition in IoT. We don't see AI companies coming in. The strategy is to move customers to future-proof portfolios, which takes time but is expected to lead to growth. (Chris Figee, CFO; Joost Farwerck, CEO)
Q: How do you view the potential for service revenue growth in 2027, given the current headwinds? A: We are comfortable with the 2% to 2.5% growth forecast for the second half of the year. For 2027, while it's early to give precise guidance, we see no reason to deviate from this range. The focus remains on EBITDA growth, which is more important than service revenue growth. (Chris Figee, CFO)
Q: Can you comment on the level of fiber overbuild in the Dutch market and your long-term fiber coverage plans? A: We aim for up to 85% fiber coverage, including small M&A. The ACM's decision to block the Fosports Delta fiber transaction is being appealed. Not all areas are overbuilt, and we continue to connect new builds. Our strategy does not currently include serving customers via third-party fiber networks. (Joost Farwerck, CEO)
Q: What are your expectations for the upcoming mobile spectrum auction, and how do you plan to manage the CapEx step-down in 2027? A: The mobile spectrum auction is expected around 2028 or 2029, and we aim for a strategy that encourages investment in infrastructure. The CapEx step-down is mainly related to fiber rollouts, which are planned well in advance, ensuring a smooth transition. (Joost Farwerck, CEO; Chris Figee, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
