Royal KPN N : KPN Q3 2021 Results (Presentation)

Q3 2021 results

26 October 2021

kpn. The network of the Netherlands

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Alternative performancemeasuresandmanagement estimates

This financial report contains a number of alternative performance measures (non-GAAP figures) to provide readers with additional financial information that is regularly reviewed by management, such as EBITDA and Free Cash Flow ('FCF'). These non-GAAP figures should not be viewed as a substitute for KPN's GAAP figures and are not uniformly defined by all companies including KPN's peers. Numerical reconciliations are included in KPN's quarterly factsheets and in the Integrated Annual Report 2020. KPN's management considers these non-GAAP figures, combined with GAAP performance measures and in conjunction with each other, most appropriate to measure the performance of the Group and its segments. The non-GAAP figures are used by management for planning, reporting (internal and external) and incentive purposes. KPN's main alternative performance measures are listed below. The figures shown in this financial report are based on continuing operations and were rounded in accordance with standard business principles. As a result, totals indicated may not be equal to the precise sum of the individual figures.

Financial information is based on KPN's interpretation of IFRS as adopted by the European Union as disclosed in the Integrated Annual Report 2020 and do not take into account the impact of future IFRS standards or interpretations. Note that certain definitions used by KPN in this report deviate from the literal definition thereof and should not be considered in isolation or as a substitute for analyses of the results as reported under IFRS as adopted by the European Union. KPN defines revenues as the total of revenues and other income. Adjusted revenues are derived from revenues (including other income) and are adjusted for the impact of incidentals. KPN defines EBITDA as operating result before depreciation (including impairments) of PP&E and amortization (including impairments) of intangible assets. Adjusted EBITDA after leases ('adjusted EBITDA AL') is derived from EBITDA and is adjusted for the impact of restructuring costs and incidentals ('adjusted') and for lease costs, including depreciation of right-of-use assets and interest on lease liabilities ('after leases' or 'AL'). KPN defines Gross Debt as the nominal value of interest-bearing financial liabilities representing the net repayment obligations in Euro, excluding derivatives, related collateral, and leases, taking into account 50% of the nominal value of the hybrid capital instruments. In its Leverage Ratio, KPN defines Net Debt as Gross Debt less net cash and short-term investments, divided by 12 month rolling adjusted EBITDA AL excluding major changes in the composition of the Group (acquisitions and disposals). The Lease adjusted leverage ratio is calculated as Net Debt including lease liabilities divided by 12 month rolling adjusted EBITDA excluding major changes in the composition of the Group (acquisitions and disposals). Operational Free Cash Flow is defined as adjusted EBITDA AL minus capital expenditures ('Capex') being expenditures on PP&E and software. Free Cash Flow ('FCF') is defined as cash flow from continuing operating activities plus proceeds from real estate, minus Capex. Return on capital employed ('ROCE') is calculated by the net operating profit less adjustments for taxes ('NOPLAT') divided by capital employed, on a 4-quarter rolling basis. Net operating profit is the adjusted EBITA (excluding incidentals and amortization of other intangibles and including restructuring costs). KPN defines capital employed as the carrying amount of operating assets and liabilities, which excludes goodwill and the other intangibles. All market share information in this financial report is based on management estimates based on externally available information, unless indicated otherwise. For a full overview on KPN's non-financial information, reference is made to KPN's quarterly factsheets available on ir.kpn.com.

Forward-looking statements

Certain statements contained in this financial report constitute forward-looking statements. These statements may include, without limitation, statements concerning future results of operations, the impact of regulatory initiatives on KPN's operations, KPN's and its joint ventures' share of new and existing markets, general industry and macro-economic trends and KPN's performance relative thereto and statements preceded by, followed by or including the words "believes", "expects", "anticipates", "will", "may", "could", "should", "intends", "estimate", "plan", "goal", "target", "aim" or similar expressions. These forward-looking statements rely on a number of assumptions concerning future events and are subject to uncertainties and other factors, many of which are outside KPN's control that could cause actual results to differ materially from such statements. A number of these factors are described (not exhaustively) in the Integrated Annual Report 2020. All forward-looking statements and ambitions stated in this financial report that refer to a growth or decline, refer to such growth or decline relative to the situation per 31 December 2020, unless stated otherwise.

2 Q3 2021 Results

Highlights Q3: SME service revenue growth, on track to reach FY outlook

Mass-market service revenues continue to grow, supported by all segments

SME service revenues growing in Q3, delivering on commitment aheadof schedule

Consumer and Business mobile base momentum strong (+67k postpaid net adds)

Consumer mobile service revenues showing 2.4% y-on-y growth

Adj. EBITDA AL growing 1.4% y-on-y, supported by higher Group service revenues

Share buyback program, 86% of € 200m for 2021completed

3 Q3 2021 Results

Accelerate to grow supported by three key pillars

Three strategic pillars…

1. Leverage & expand superior networks
   • Covering the Netherlands through fiber
   • Low latency services via 5G and edge computing
2. Grow & strengthen customer footprint

• Outstanding digital experience
• Differentiated services for families and businesses

3. Simplify & streamline operating model

• New ways of digital working

• Continue strong and disciplined cost control program

…to support our ambition to

Connect the Netherlands to a sustainable future

• Leading the Dutch digitalization wave
• Recognized as ESG front runner

Grow mass-market service revenues and EBITDA

• Fiber fueling household revenue growth in B2C
• Segmented B2B approach, stabilize SME first

Provide attractive shareholder returns

• Covered by growing Free Cash Flow
• Progressive dividend, +3-5% annually

4 Q3 2021 Results

Expand superior network: fiber roll out on track

Continuously expanding fiber footprint11

Strong FttH activation rate

Jointly covering ~80% of NL by end 2026

homes passed, k

homes activated own roll out, k

homes passed, % of households

+106

+113

+93

+77

+56

+46

KPN footprint

~80%

3,096

1,586

Glaspoort footprint

+112

3,003

+46

1,540

38%

2,890

1,484

2,784

1,407

1,361

2,672

31%

34%

Q3 2020 Q4 2020 Q1 2021

Q2 2021

Q3 2021

Q3 2020 Q4 2020 Q1 2021

Q2 2021

Q3 2021

2019

2020

Q3 2021

2026

HP own roll out1:

Last twelve months:

Glaspoort JV:

+424k last twelve months

424k HP own roll out1+225k HA own roll out 34k footprint per end Q3 +313k YTD 2021

5 Q3 2021 Results

1. Incl 14k HP M&A (6k in Q4 2020, 8k in Q1 2021)