No Surprises in KPN's Q3 2021 Results; Regulator's Report Expected in November; Maintaining Our FVE

There were no surprises in narrow-moat KPN’s third-quarter results. Service revenue grew by 0.7% year over year while EBITDA after leases grew 0.3% thanks to cost controls and lower lease expenses. Although operating expenses grew 1.1% this is explained by very strong cost-cutting in third-quarter 2020, which affected comparability. Overall, we are pleased with KPN’s focus on cost controls, being one of the most ambitious European operators on this front, which results in it having leading EBITDA margins and stable cash flow generation. We are maintaining our EUR 2.70 fair value estimate.