KPN Earnings: Revenue and EBITDA Up 2%; Fiber Deployment in Large Dutch Cities Accelerates

Narrow-moat KPN’s revenue grew 2.2% in the third quarter to EUR 1.36 billion. EBITDA after leases grew by 1.6% to EUR 629 million, a 46.1% margin. In the consumer market mobile revenue grew by a strong 5% in line with previous quarters, whereas broadband service revenue returned to growth (2.6%) after several quarters of flat growth or small declines. We maintain our EUR 3.00 fair value estimate and shares remain fairly valued at this point. KPN intends to distribute a EUR 0.15 dividend in 2023, which represents a 5% yield at this point. We also see KPN’s dividend as maintainable and with room to grow at low single digits to midsingle digits thanks to its steady performance in the Netherlands and continuous cost-controls.