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Introduction & Market Context
Koninklijke KPN NV ( AMS (VIE:AMS2):KPN) presented its Q2 and H1 2025 results on July 23, 2025, showcasing strong service revenue growth across all business segments and raising its full-year outlook. The Dutch telecommunications provider continues to strengthen its position as the leading fiber network operator in the Netherlands, now covering approximately two-thirds of the country.
The company reported a 3.7% year-on-year increase in group service revenue for Q2 2025, with adjusted EBITDA AL (after leases) rising 6.4% compared to the same period last year. Based on this performance, KPN has raised its full-year 2025 outlook for adjusted EBITDA AL to more than €2,630 million (up from €2,600 million) and free cash flow to exceed €940 million (up from €920 million).
As shown in the following summary of key highlights from the quarter:
Quarterly Performance Highlights
KPN delivered solid financial results for Q2 and H1 2025, with growth across all business segments. The company’s adjusted revenues increased by 5.8% year-on-year to €1,472 million in Q2 2025, while adjusted EBITDA AL grew by 6.4% to €670 million, benefiting from a 1.4% IPR (intellectual property rights) contribution and 1.0% from Althio.
The comprehensive financial results for the quarter and half-year are detailed in the following summary:
Breaking down performance by segment, Consumer service revenues increased by 1.3% year-on-year, driven by solid fiber broadband growth (+13,000 net adds) and mobile base expansion (+37,000). Business service revenues grew by an impressive 5.7% year-on-year, with all divisions contributing to the growth. Particularly strong was the Tailored Solutions division, which saw an 18% revenue increase. Wholesale service revenues showed the strongest growth at 8.1% year-on-year, supported by a 30% increase in mobile service revenues.
The following chart illustrates the B2C service revenue growth, showing the positive contribution from both fixed and mobile services:
Similarly, the B2B segment demonstrated strong performance across all divisions:
Despite the positive revenue and EBITDA growth, net profit declined by 7.6% year-on-year to €210 million in Q2 2025 and by 5.8% to €378 million for H1 2025. This decline occurred despite a reduction in capital expenditure, which decreased by 12% to €298 million in Q2 2025 and by 7.5% to €592 million in H1 2025.
The company’s operational free cash flow showed significant improvement, increasing by 27% to €372 million in Q2 2025 and by 20% to €712 million in H1 2025. However, free cash flow declined by 14% to €180 million in Q2 2025 and by 15% to €309 million in H1 2025.
Strategic Initiatives
KPN continues to execute its "Connect, Activate & Grow" strategy for 2024-2027, focusing on connecting customers to deliver on their needs, activating the best network, platforms, partners, and assets, and growing by modernizing and simplifying the business.
The company’s fiber footprint expansion remains a key strategic priority. As illustrated in the following chart, KPN has significantly expanded its fiber coverage, with homes passed increasing from 5,049,000 in Q2 2024 to 5,510,000 in Q2 2025:
This fiber expansion is driving growth in the consumer segment, with more than two-thirds of KPN’s consumer base now on fiber. The company continues to add new fiber customers, with 13,000 net broadband additions in Q2 2025, primarily driven by fiber inflow.
On the ESG front, KPN has made significant progress in reducing its carbon footprint. Scope 1 emissions decreased by 87% year-on-year to 7 kTon CO2e (from 38 kTon CO2e), Scope 2 emissions fell by 59% to 128 kTon CO2e (from 272 kTon CO2e), and Scope 3 emissions declined by 20% to 795 kTon CO2e (from 1,018 kTon CO2e).
Detailed Financial Analysis
A deeper analysis of KPN’s adjusted revenue growth reveals the various components contributing to the overall 5.8% increase in Q2 2025. Service revenue growth was the primary driver, contributing €47 million to the total increase:
Similarly, the adjusted EBITDA AL growth of 6.4% can be broken down into several components, with revenue growth being the main positive contributor, partially offset by increases in direct and indirect costs:
The company’s operational free cash flow showed strong growth in H1 2025, increasing by 20% year-on-year to €712 million. This improvement was primarily driven by higher adjusted EBITDA AL and lower capital expenditure:
KPN maintains a strong balance sheet with a leverage ratio of 2.5x in H1 2025. The company’s liquidity position stood at €1,406 million at the end of H1 2025, providing ample financial flexibility.
Forward-Looking Statements
Based on the strong performance in the first half of 2025, KPN has raised its full-year outlook. The company now expects adjusted EBITDA AL to exceed €2,630 million (previously €2,600 million) and free cash flow to be more than €940 million (previously €920 million). Capital expenditure guidance remains unchanged at approximately €1.25 billion.
The updated outlook for FY 2025 and the company’s ambitions for 2027 are summarized in the following chart:
Looking further ahead, KPN maintains its financial ambitions for the 2024-2027 period, targeting service revenue CAGR of approximately 3%, adjusted EBITDA AL CAGR of approximately 3%, and free cash flow CAGR of approximately 7%. The company also aims to increase its return on capital employed (ROCE) to 15% by 2027.
In conclusion, KPN’s Q2 and H1 2025 results demonstrate solid performance across all business segments, with particularly strong growth in the Business and Wholesale segments. The company’s strategic focus on fiber expansion continues to drive growth, and the raised full-year outlook reflects management’s confidence in the sustainability of this positive momentum. However, the decline in net profit and free cash flow warrants attention and may require further explanation in future communications.
Full presentation:
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