KPN Integrated Annual Report 2021

Contents

Report by the Board

Report by the

Financial

Contents

of Management

Supervisory Board

Statements

Report by the Board of Management

Introduction by the CEO 4

Our purpose and the world around us 7

Strategy, key performances and value creation model 10

Our value for stakeholders

- Customer value 15

- Shareholder value 22

- Impact on society 26

Our performance

- Network infrastructure 30

- Focused innovation and digitalization 34

- Safeguarded privacy and security 38

- Sustainable employability 42

- Environmental performance and responsible 47 supply chain

Our valuable assets 53

Governance

Corporate governance 55

Tax and regulations 59

Compliance and risk 63

Composition of the Board of Management 71

Report by the Supervisory Board

Composition of the Supervisory Board 74

Supervisory Board Report 77

Remuneration Report 84

Financial Statements

Consolidated Financial Statements 96

Corporate Financial Statements 158

Other information 165

Appendices

Appendix 1: Alternative performance measures 174

Appendix 2: Connectivity of non-financial information 176

Appendix 3: Transparency, materiality and 179 stakeholder engagement

Appendix 4: List of top risks 194

Appendix 5: Social figures 202

Appendix 6: Environmental figures 204

Appendix 7: Supply chain 209

Appendix 8: Tax overview for continuing operations 211 per country

Appendix 9: GRI index 212

Appendix 10: SASB index 220

Appendix 11: Glossary 222

Statement - This copy of the Integrated Annual Report is the PDF/printed version of the KPN Integrated Annual Report 2021. This version has been prepared for ease of use, and does not contain ESEF information as specified in the Regulatory Technical Standards on ESEF (Delegated Regulation (EU) 2019/815). The offi cial ESEF reporting package is available on our website at:https://annualreport2021.kpn/

Report by the Board

Report by the

Financial

Contents

of Management

Governance

Supervisory Board

Statements

Introduction by the CEO

Into the future, together

Our resilience was tested again in 2021, more than we had hoped. It was another year in which our digital services enabled people to work from home, to follow education online or to keep doing business while stores were closed.

Once again, online access was often the only door to the outside world and contact with others. The pandemic is accelerating the digitalization of our lives in countless areas and in unprecedented ways. The data usage on KPN's networks, which broke records again last year, mirrored the various high and low points we all experienced.

Robust progress on strategy

We succeeded in making strong progress with our Accelerate to Grow strategy last year, thereby concretely demonstrating our purpose: we go all out to connect everyone in the Netherlands to a sustainable future. Our ambition is to make the Netherlands the best-connected country in the world - a country where everyone is secure online, and can reap the benefits the digital world has to offer.

Our Accelerate to Grow strategy is beginning to be reflected in our results, too. The number of broadband customers we have, is moving in the right direction; we are seeing growth in mobile and our growth in wholesale continues. A key milestone for us last year was the positive development in the SME segment, which has grown service revenue even sooner than expected.

The quality of our networks is significantly boosting customer satisfaction. We have successfully accelerated our journey to sustainable growth and long-term value creation last year - and we are all set to continue.

After years of declining revenues, we achieved growth in the mass market segments in 2021. In financial terms, we closed the year in line with our ambitious goals, with growing EBITDA and free cash flow. We are offering shareholders a growing dividend and have completed the first tranche of share buybacks to return additional value to shareholders.

Competitive market

With a large number of providers and wide choice for consumers, the Dutch telecommunications market is promising and competitive. Moreover, there are many asset-light players that use our networks for their sharply-priced offerings. The high quality of the digital infrastructure makes the Netherlands an attractive market for launching new products and services. Gaming, e-sports and streaming services are increasingly popular - and customers expect a lot from their digital connections as a result.

We are well-positioned to continue to lead this market thanks to the targeted innovation of our networks, our attractive services and effective organization. The unsolicited takeover proposals we received last year are one of the clear signs that the telecommunications market itself is in demand. We considered these proposals carefully, taking into account the interests of all our stakeholders, and concluded that they did not provide tangible and material added value to our strategy.

Strong networks

The Netherlands builds a high-quality, future-proof digital infrastructure based on fiber and 5G, enabling a first class internet experience. With our strategy, we are playing a leading role in this. The power of these networks opens new avenues for economic growth, as well as digital opportunities in many areas.

Contents

Report by the Board of Management

Introduction by the CEO

Report by the Supervisory BoardFinancial Statements

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Koninklijke KPN NV published this content on 13 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2022 11:36:07 UTC.