KPN yesterday revealed its 'Connect, Activate & Grow' strategy, which is aimed at creating loyal customers, engaging society, and delivering attractive, sustainable shareholder returns. The operators' three key strategic missions are to earn customers' loyalty through converged services & solutions, deliver the best digital experience over world-leading, always-on networks, and transform its operating model with AI-powered automation and develop a future-ready workforce.
As part of this strategy, KPN will continue its large scale fiber program. This will be supported by extensive fiber rollout and KPN’s increased focus on customer loyalty and base management. Through its Household 3.0 approach, customers will be able to access an unrivalled range of services, such as OTT packages, security and gaming, on top of the highest quality fiber and 5G connectivity.
On the financial side, KPN’s capital allocation policy aims to continue long-term value creation for all stakeholders. KPN aims to maintain its attractive shareholder remuneration policy by returning all Free Cash Flow to its shareholders. For 2024, KPN will grow the share of dividends within the total shareholder distribution as it intends to pay a regular dividend of €17 cents per share (+13% y-on-y) and execute a €200m share buyback. For the years 2025-2027, dividend per share is expected to grow at a CAGR of ~7% and the remainder of Free Cash Flow is expected to be returned through share buybacks. Over the 2024-2027 period, KPN targets cumulative shareholder distributions of ~€3.8bn (~30% of current market capitalization), of which up to €1.0bn in share buybacks.
Joost Farwerck, CEO, KPN
We have delivered on the main ambitions of our Accelerate to Grow strategy launched end-2020. Our top line has returned to sustainable growth across all segments and the fiber roll out has progressed according to plan, further accelerated by our JV Glaspoort. I am proud of our people and grateful for their commitment to realize these ambitions. In the coming years, we will finish what we started and realize a fiber footprint of about 80% of the Netherlands by end-2026. With our Connect, Activate & Grow strategy we go all out to connect everyone in the Netherlands to a sustainable future and create long-term value for all stakeholders. The initiatives to be a Responsible, Inclusive and Sustainable telco are fully embedded in our strategy and operating model. We have broadened the scope of our ESG approach. Our strategy leads to a telco that is delivering revenue growth, EBITDA growth, Free Cash Flow growth and an expanding return on capital.
