Jan 28 (Reuters) - Dutch telecommunications group KPN expects its defence-related revenue to rise more than 10% in the coming years, CEO Joost Farwerck said on Wednesday, as European nations step up defence investments.
"These are difficult, turbulent times. Europe has to be more self-reliant. That also applies to the Netherlands, and we believe we can play a very important role in cooperation with defence," Farwerck said in a post-earnings call with reporters.
Europe has embarked on a rearmament spree as Russia's invasion of Ukraine and rising tensions around NATO push EU member states' defence spending towards an estimated 381 billion euros ($457 billion) in 2025.
Other European telecoms companies too are turning to defence projects in an attempt to diversify their business at a time when demand for secure communications in the continent is spiking. Last year, Finland's Nokia and France's Orange set up two new units within the group dedicated to defence customers.
KPN is a longtime partner of the Dutch army and provides mission-critical services that include 5G connectivity and cybersecurity. Defence-related revenue reached 100 million euros last year, finance chief Chris Figee said.
The Rotterdam-based firm does not break out defence revenue as a separate line item in its financial reporting.
The company reported its full year earnings earlier on Wednesday and plans to return 250 million euros to shareholders this year as part of a new share repurchase programme.
Its shares fell 2.3% in morning trading, leading losses on the Netherlands' AEX benchmark index.
($1 = 0.8341 euros)
(Reporting by Jakob Van Calster and Gianluca Lo Nostro in Gdansk; Editing by Milla Nissi-Prussak and Matt Scuffham)
By Jakob Van Calster and Gianluca Lo Nostro
