Good day, ladies and gentlemen, and welcome to KPN's Q4 and full year 2022 earnings webcast and conference call. Please note that this event is being recorded. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's prepared remarks. If you would like to ask a question, you may do so by pressing star one on your telephone. I will now turn the call over to your host for today, Reinout van Ierschot, head of investor relations. You may begin. Thank you, operator. Good afternoon, ladies and gentlemen. Thank you for joining us. Welcome to KPN's Q4 and full year 2022 results webcast. With me here today are Joost Farwerck, our CEO, and Chris Figee, our CFO. As usual, before turning to our presentation, I'd like to remind you of the safe harbor on page two of the slides, which also applies to any statements made during this presentation. In particular, today's presentation may include forward-looking statements, including KPN's expectations with respect to its outlook and ambitions, which were also included in the press release published this morning. All such statements are subject to the safe harbor. Let me now hand over to our CEO, Joost Farwerck. Thank you, Reinout, welcome everyone. Let me start with some highlights from the Q4 and the full year results. We are pleased to have delivered on our 2022 outlook. Throughout the year, we have consistently grown our group service revenues, very important and clear proof point of the success of our strategy. Within the mix, our business service revenues grew for the Q3 in a row and have now reached the point of inflection. Consumer fiber and mobile service revenues showed continued growth, partially offsetting the competitive dynamics in the broadband market. In wholesale, we see the ongoing success of our open network policy leading to continued growth. Whilst our cost base was affected by higher energy prices and the one-off allowances to our staff, we were able to protect our margins, as a result of careful cost and cash management, we delivered solid EBITDA and free cash flow growth. Together with the joint venture Glaspoort, we added a record number of households to our fiber footprint during 2022. We were again awarded the best mobile network, both in the Netherlands and in the world, we were also recognized as the best all-in-one broadband provider in the Netherlands, both on fiber and on copper. Our return on capital employed continues to move in the right direction. The confidence in our strategy and successful execution enables us to pay a progressive dividend and to return additional capital to our shareholders. Last year, we completed the EUR 300 million share buyback, and this year in 2023, we will again execute a share buyback program of EUR 300 million, effectively distributing all of our free cash flow to our shareholders. As usual, Chris will give you more details on our financials and walk you through our outlook for this year. First, I'll take you through a couple of business details. Like I said, we delivered on our 2022 outlook. EBITDA came in above EUR 2.4 billion. CapEx was stable around EUR 1.2 billion. Free cash flow was strong at EUR 862 million, slightly ahead of the upgraded outlook we gave at the half year results. We reiterate our dividend commitment, and we will pay a regular dividend per share of EUR 0.143 over 2022. Yeah, we've made good progress with our accelerate to growth strategy over the last two years, and we're now entering the third year of this plan. In the years after, we will of course, further focus on the key pillars of our strategy. The first one, leverage and expand our superior networks. Second, grow and strengthen our customer base. Thirdly, continue to simplify and streamline our operating model. We intend to update the market before year-end with our 2024-2026 strategy and ambitions. Let's now look at the first pillar of this strategy, our best-in-class networks. Last year, KPN's own fiber rollout reached 348,000 homes passed. If you add Glaspoort to this, it was over 500,000 homes in the Netherlands. Together, we now cover almost half of the Netherlands, and we aim to reach roughly 80% of Dutch households by the end of 2026. After reaching that point, CapEx will come down to a much lower sustainable level. So far, we delivered a solid set of new fiber connections, and we're further optimizing the way we roll out and connect households. On top of the traditional reported homes passed numbers, we've additional household capacity, households covered with fiber through street presence, which we can also use in our commercial approach. According to this definition, the number of fiber homes passed is 3.7 million at the end of 2022. As you all know by now, our fiber business case is centered around market share gains, ARPU uplift, and lower maintenance cost of the fiber co. As we continue to roll out fiber, our growing fiber footprint will result in an improved penetration rate for retail and wholesale. Today, our retail fiber base surpassed our copper base. That happened in Q2 last year. Now, with this we have more broadband customers on fiber than on copper. Important. This effort is visible in the financials. Looking at our Q4 results, we currently generate almost EUR 1 billion of annualized fiber service revenues, and that number is growing rapidly. In Q4, our consumer fiber revenues increased by 14% year-on-year, driven by a growing base and an attractive ARPU. All in all, fiber, as you know, is at the heart of our strategy to create long-term value for all our stakeholders. The investments we make in our mobile network and services are paying off as well. The Ookla and Umlaut benchmark recently recognized KPN as the best mobile network in the Netherlands and the world. Alongside this, we were also rewarded as best all-in-one broadband provider by the Dutch Consumer Association, and we were awarded as best fixed internet provider by Tweakers. These are all good signs of appreciation for our products and services. Let's now move to the consumer segment. Adjusted consumer service revenues decreased by 0.3% year-on-year in the Q4. On one hand, we see consistent mobile service revenue growth driven by solid base developments and growing ARPU. On the other hand, in a challenging competitive environment, our fixed service revenues are impacted by declines, mainly from KPN's legacy portfolio. Broadband service revenues grew slightly as fiber broadband revenues continue to grow strongly, offsetting the decline in copper. Looking at customer satisfaction, NPS remains one of our top priority, and KPN continues to lead in the Dutch market despite the rising costs of living impacting general customer sentiment. If you take a deeper look at our Q4 KPIs, our operational performance on fiber remains strong. We activated 50,000 fiber households last quarter. Despite this solid commercial momentum, our total broadband net add showed a small decline on the back of increased competition in the broadband markets. Our fixed ARPU remained broadly stable at EUR 53. Combined, our fixed service revenues decreased 2.3% year-on-year, impacted by a structural decline in legacy, a shift in accounting for content packages, and lower traditional voice traffic. We continue to see solid trends in mobile. Our postpaid base increased by 90,000, and our postpaid ARPU grew 2%, and combined this led to a strong 4.7% growth in mobile service revenues. Let's now move to the B2B segment. In 2022, we delivered an important milestone for our company. We realized our ambition to turn around our business segment as we saw service revenue grow for the three quarters in a row. Business NPS remains positive, although slightly down sequentially, and this was also partly due to the volatile economic environment. The operational transformation and progress of our business segment continues to advance as we have migrated a significant part of our customers to our future proof propositions, such as KPN EEN and SME and KPN Smart Combinations in LCE. This helps our customers make our business truly digital and drive cross and upsell opportunities as reflected in the improved trends we saw across the board. SME remains the main engine of B2B growth, driven by solid commercial momentum in both broadband and mobile. LCE continues to move in the right direction. The migration of our customers to the Smart Combinations portfolio is close to completion, and we expect to deliver the sustainable inflection this year. The business we call Tailored Solutions continue to perform in line with expectations. This segment caters to large customers, often with an individualized approach. Customers here are generally partners for life, and I'm pleased that we have taken important steps to improve profitability through a strong focus on standardization, value, and sustainable customer relationships. In wholesale, service revenues were again solid and increased 2.5% in the Q4. In 2022, we added 84,000 postpaid SIMs and 27,000 broadband lines. Turning to sustainability. We are already for a couple of years fully committed to creating sustainable long-term value for all our stakeholders. We are proud that KPN was once again recognized as a global climate leader according to the Carbon Disclosure Project, CDP. In December, we signed an agreement with Eneco for the purchase of wind energy from 2027 from a new to-be-built wind farm at sea near the Dutch coast. From 2027, more than half of our electricity will come from this farm at lower costs. This is aligned with KPN's ambitious sustainability targets and helps to de-risk our long-term energy price exposure. Details in short. Now, let me hand over to Chris to give you more details on our financials. Thank you, Joost. As Joost mentioned earlier in the presentation, we delivered on our guidance for the year. We'll put forward guidance for 2023 that we also solidly underwrite. Let me start by summarizing some key figures. First, the adjusted revenue has increased 0.5% in Q4, supported by sustainable group service revenue growth. Second, adjusted EBITDA after leases increased by 2.4% in Q4, driven by service revenue growth and lower costs. Our EBITDA margin came out at above 45%. Third, free cash flow increased almost 10% compared to 2021, and exceeded our target due to higher EBITDA and less taxes paid. Our free cash flow margin of revenues improved by 130 basis points. Finally, our continued focus on shareholder value creation is paying off as is evidenced by another solid improvement in return on capital employed to 13.1%, up over 200 basis points year-on-year. Adjusted group revenues were up 1.4% year-on-year. Within the mix, consumer revenues were flat as growth in mobile service revenues and fiber revenues was offset by declining legacy and copper business. Business revenues increased more than 2%, largely driven by SME, with further improvement in the other business revenues towards sustainable service revenue growth as well. Wholesale revenues grew by almost 4%. Other revenues were mostly supported by lower intercompany charges and revenues related to our fiber rollout. Group service revenues increased by 1.5% when compared to last year, underpinned by strong growth in our business segment. Business service revenues grew by 3%, driven again by continued strong performance in SME, while trend in LCE is gradually improving and behaves according to our long-term plan towards inflection next year. Sustainable and full inflection next year. Wholesale service revenues grew 2.5% year-on-year. In consumer, our service revenues were broadly flat, but the trend improved a bit compared to previous quarter. Mobile service revenues continued to grow. In fixed, we reported a decline as the growth in fiber was offset by declining legacy services, less voice traffic, and the accounting effect for content packages. Importantly, broadband-only service revenues in consumer, that is fixed service without legacies, fiber and copper together, were effectively displaying a small but positive growth as fiber growth outstripped the copper service revenue decline. For 2023, we continue to expect some headwinds. The trend is expected to improve, supported by implementing price adjustments and commercial improvements. From Q2 onwards, we'll see the lapping of the accounting effect that held back the reported broadband service revenue growth in 2022. Adjusted EBITDA grew 2.4% compared to last year, driven by service revenue growth and lower indirect costs, partially offset by EUR 54 million higher direct costs. Factors for this increase were the impact of higher non-service revenues, such as handsets and hardware sales, third party access costs as Glaspoort, and a change in service revenue mix in B2B. Through these revenue and direct cost developments, our contribution margin grew by over EUR 50 million. Add to that our lower indirect OPEX, we get to a substantial increase in EBITDA of over EUR 50 million. Our personnel expenses decreased by EUR 35 million. This reflects efficiency and productivity improvements from digitization as well as natural attrition. Digitization also helped to lower ITDI expenses, partly offset by other OPEX, which rose mostly on higher energy costs. In total, our indirect cost savings for the year were EUR 38 million, as ongoing efficiencies were partly offset by industry-wide inflationary pressures on energy and labor costs. Bottom line and cost reduction remained. With respect to 2023, our cost base will be impacted by wage indexation and higher energy costs. The estimated gross impact on personal cost of the new CLA is about EUR 45 million. Regarding our total energy spending and considering that 20% of energy we are still to consume on the spot market, we expect our total energy bill to be EUR 50 million to EUR 55 million higher in 2023. Obviously, possible things can move in towards this number depending on how prices on the spot markets develop during the year. The up and down side relative to our estimate is relatively limited. At EUR 862 million, our free cash flow was around 10% higher than last year, and the cash margin of revenues moved to 16.2%. This improvement was mainly a result of EBITDA growth and less cash taxes paid, as we were able to realize and use some of the liquidation losses related to E-Plus. Next to this, note that a change in provisions includes a voluntary pension contribution of EUR 23 million related to a DB plan of KPN US. As a result of the tax tailwind in 2022, using the opportunity provided by the increase in U.S. interest rates, we decided to make an additional contribution to this pension plan. This will again lead to lower contributions going forward and brings the plan a whole lot closer to full funding and an eventual buyout. This investment will support free cash flow developments in the coming years. We believe our free cash flow margin should be able to hover around 16% of revenues in the coming years. KPN remains focused on creating long-term value, which is evidenced by the strong return on capital employed. Our ROC improved 210 basis points year-over-year to 13.1%, mainly due to increased operational efficiency on a stable capital base. We ended the year with a strong and resilient balance sheet. The average cost of senior debt increased by 83 basis points, mainly due to higher interest rates on floating debt. At year-end, with a leverage ratio of 2.3 times, comfortably below our ceiling of 2.5 times. Our interest coverage remains strong. Year-over-year, net debt increased by EUR 130 million, driven by various non-free cash flow items since our dividend and share buyback were mostly covered by free cash flow. Total liquidity remains very robust at the end of the year, consisting of EUR 1.5 billion in cash and short-term investments and our fully undrawn revolving credit facility. Let's now turn to our outlook and ambitions for 2023. For this year, 2023, there are well-documented headwinds, particularly around inflation, with wage indexation and rising energy costs likely to affect our cost savings run rate. We are implementing measures to mitigate this impact as much as possible and remain on track strategically and operationally, and still deliver slight growth this year. We expect adjusted EBITDA after leases to come in around EUR 2.41 billion, slight growth compared to 2022, despite the significant step up in personal and energy costs. EBITDA growth is expected to be skewed towards the second half of 2023. CapEx will remain stable at a peak level of EUR 1.2 billion, and we expect free cash flow of around EUR 870 million, which represents a slight increase compared to 2022. Importantly, it means that despite the tougher economic climate and inflation, we're able to meet the 2023 targets that were set during the 2020 capital markets day. Inside, there's some large movements in free cash flow items, such as EUR 100 million higher cash taxes and further improvements to working capital. All in all, the effective improvement in free cash flow is likely to be very close to the effective increase in EBITDA. In line with our progressive dividend policy, we expect to pay a regular dividend of EUR 0.15 per share over 2023. This is up almost 5% compared to the EUR 0.143 for 2022, and again, at the upper end of the 3%-5% target range. Our financial framework is aimed at long-term value creation for all stakeholders. In this respect, we're committed to return excess cash to our shareholders. Our improved cash margins and strong financial position enable us to grow shareholder returns for 2023 through a growing dividend and a new share buyback program. Over the past two years, we've bought back EUR 500 million worth of shares in total. For 2023, we intend to execute a share buyback program of another EUR 300 million. This means that we again will effectively distribute the free cash flow we generate to our shareholders. Alternatively stated, that all distributions are fully covered by the generated cash. To summarize, I'm proudly delivered on our upgraded 2022 guidance, showing an improving top-line trend, growing EBITDA, and rising free cash flow. Going forward, we expect to see sustainable growth in group service revenues. Although we face volatile market conditions, the measures we have implemented provide us with confidence in our ability to maintain a growing EBITDA and growing free cash flow. To me, KPN continues to demonstrate healthy margin earnings and cash flow resilience, and we feel confident about the cash-generating ability of our group. Our fiber rollout program has maintained a solid pace and has a proven attractive return profile. We remain committed to returning excess cash to our shareholders and are confident that our progressive dividend policy can be complemented by structural incremental capital returns going forward. Thank you for listening to our story. Now let's turn to your questions. Thank you, Joost and Chris. As usual, I'd like to ask you to limit your questions to two. Operator, over to you, please. Ladies and gentlemen, we will start the question and answer session now. If you would like to ask a question, you may do so by pressing star one on your telephone. First question is from Andrew Lee at Goldman Sachs. Please go ahead. Good afternoon, guys. I had a question on LCE and then a cost-based question. Just on the LCE inflection, you affected the growth in Q4, but you continuously referred to, your inflection to sustainable growth being a 2023 thing, during your presentation today. Can you just kind of clarify really what you mean by that? Does that mean LCE declines again in early 2023? Maybe if you could lay out your visibility here and why LCE would not kick on to mid-single digit growth like SME has. Just on question on costs, the negative leasing inflation headwinds, could you give us some detail on the scale of each of that headwind and what the relationship really is between local market inflation and lease cost inflation, just so we can understand it a bit better going forward. Thank you. Anthony, I will cover the LCE question, Chris will take over on cost base. Yeah, I fully agree with you, by the way. We planned for the real inflection point in LCE in the Q2 this year. In Q4, we already went up to, I believe, 0.4%, that's very good. The original planned inflection point is mid 2023. I agree, I don't see any reason to really go down again. Of course, the challenge is a bit out, it's a bit, business goes in batches every now and then. The real confirmation we got from the company is Q2, but, of course, we are pushing really hard to make the 0.4 higher instead of lower. I recognize what you're saying. What cost? Yeah, during cost, on the headwinds from lease inflation, think about EUR 10 million-EUR 20 million of headwinds. Of course, got different lease contract. We've got different, yeah, owners of our, of our towers. Even in that inside, there's a not just one, but an amalgamation of contracts. Most of them have a link towards domestic inflation. There's not a one-size-fits-all answer, but often they are linked to Dutch CPI, which for us means we've expect to be a EUR 10 million-EUR 20 million cost headwind next year. That is already embedded and included in the EBITDA guidance. Thank you. The next question comes from Polo Tang from UBS. Please go ahead. Yeah, hi. Thanks for taking the questions. I have two. The first one is just about the pricing and competitive environment. T-Mobile Netherlands raised prices by 8.6% in January. What's your impression as to how these price rises have landed? Has there been any signs of increased churn at T-Mobile? Have you detected any changes in terms of competitive dynamics for the market? Second question is really just around your fiber build, because you've added about 94,000 homes passed, fiber homes passed in Q4. How should we think about the pace of this build for 2023 and 2024? Is 90 to 100,000 homes per quarter a normal run rate, or is there scope to accelerate this? What are you seeing in terms of competitive fiber build? Thanks. Polo, on pricing, we are in a competitive environment. Having said that, we saw strong price increases all over and indeed T-Mobile 8.6% on mobile. We, in October, did 5.8%. That is, I believe, also why NPS in Q4 all overall operators is a bit under pressure. That's a balancing act. All in all, the market understands, especially how we explain price increases because we relate it also to the way we increase the CLA to our own people. I think we handled that well, but still we see discounts out in the market every now and then. Broadband market is a bit moving. Last quarter's VodafoneZiggo was somewhat under pressure, and then we see discounts on their side. Sometimes we react. I strongly believe that we are running here a longer-term strategy. It's very important to create value on the longer term, roll out fiber, differentiate ourselves by delivering quality, higher speeds, more content. We recently introduced a new TV interface, mixing linear TV with over-the-top for end users and also allowing us to introduce over-the-top overnight. Having said that, I think it's important for KPN to run our own plan and not follow all these discounts in the market. Fiber rollout, yeah. We also are responsible for allocating the build capacity to Glaspoort, at least the majority of that. We look at things combined, but of course, the KPN rollout is very important for us as well solely. Last year, 550. I think this year we should at least do 600K. The jury's out. There's a lot of capacity shortage in the market. We really, like I just said, run this for the longer term. We committed ourselves to our partners for 2023, but also for 2024 and 2025. We're really planning 2024 and 2025 now. That's our way to move. There's competition from Delta, ODF and other small players. The difference between us and them is that when we roll out homes passed, we may currently connect 70% of the households as well, while the others are mainly rolling out homes passed. There's also a big difference in the quality of the fiber networks we're building. It's, yeah, super important for KPN to just push the fiber machinery as hard as we can. Thanks. The next question comes from the line of Joshua Mills from BNP Paribas Exane. Please go ahead. Thanks, guys. Just another one for me on pricing. I think you explained well the 3.5% fixed price rise in July, then you had the 6% price rise back in October. Can you just give me color on what your thought process around each of those price rises was? Whether anything had changed in terms of customer perception, your ability to offer extra things in the bundles, which felt you were more comfortable doing a bigger price rise in mobile than fixed. The reason I'm asking is just to try and get a sense of your thought process as we approach the next round of fixed line price rises, which I guess are typically due in the middle of this year. Thanks very much. Well, maybe you want to add something on pricing, of course, we look at increases. 75% of our business is in subscriptions. It's important all over the segments to see how the price increase will work out in the year to come. Like I just said, we look at inflation, also at other drivers. Yeah, if we do 6% in the CLA, there's big chance that we will do more on price increase on internet broadband than we did last year. We'll decide on that beginning of Q2. That's a balancing act. It's also our ambition to move customers to higher value Subscriptions. By moving them from 500 meg to 1 gig, for instance. We just introduced a new lineup on the internet. We took out the 50 meg proposition. That no longer exists. The minimum you buy at KPN is 100. We really are moving our customers to 500 and 1 gig. On the mobile side, we moved them to unlimited. The combination of price increases, but also driving up the value of the subscription, the proposition is the important game to play, and that combined with the growing base works out quite well, especially mobile. We wanna do the same thing in broadband. I mean, especially in mobile of course we've got contractual arrangement to be able to push through CPI in the price change. This year we did a CPI increase in mobile and the mechanics were that it was actually 5.8 at the calculation at the time. Some time lag. Although in mobile we said it's gonna be 5.8 with a cap of EUR 2, so it's not gonna be more than EUR 2 a month. Managing our reputation impact on customers somewhat. In mobile it's a pretty mechanical exercise, and then we can decide on our own discretion to provide some cap on it. On broadband, with more art than science, we've got our own policy to follow. As Joost says, we manage your front book to back book distance. You manage reputation. You make sure there's value for money. Of course, take an important clue on, you know, the inflation you have to deal with in that sense. Our CLA increase also is a good indicator of how we think what's fair and explainable to our customers when it comes to broadband. Thanks. Maybe just one quick follow-up. A number of operators in different markets are trying to now include CPI increases with contractual obligation in both fixed and mobile, bundles. Is there any reason why you wouldn't try and in the future, include a CPI link in your fixed line as well as mobile? Thanks. In newer contracts we introduced it. That's right. Like Chris says, we run a big back book and a front book, so it takes some time before you really can consider the, well, 80% of the base in that contract environment. You're right, we introduced it. Thank you. Next question comes from the line of Luigi Minerva from HSBC. Please go ahead. Yes. Good morning, and thanks for taking my questions. I have two. You know, the first one is on your energy bill indication. That's very helpful. You mentioned EUR 50 million to EUR 55 million more in 2023. I was wondering if you can give us more details, and what are the assumptions behind these expectations, you know, particularly, how, what proportion is hedged, at what terms? What proportion is still exposed to the spot price? The second question is on competition dynamics. You know, there is often a contamination between the dynamics in consumer and SMEs. Obviously, you're doing very strongly with SMEs, but as you said, you know, the broadband market has seen intense competition this year. I'm wondering if you see any risk of contamination that may affect your SMEs performance in the coming quarters. Thank you. Okay, Luigi. On energy, let me start the story in 2022, then 2023, and also have a first sneak peek, or at least some crystal ball gazing for 2024. I mean, in 2022, our energy consumption was about 480 gigawatt hours, and we lowered it to 455 last year at an average price, about EUR 77 per megawatt hour, so that's relatively cheap. For 2023, we're 80% bought forward, and we start buying these, you know, contracts forwards since long. We started those two years ago. 80% have been bought forward, 20% we buy on the spot market. We always do that. You can't do more because we think we can reduce our energy consumption even further. The 455 will go down to 435 or even 425 in terms of the actual consumption during the year. We've bought so far at around EUR 150-EUR 160 on average per gigawatt hour through forward contracts. The EUR 50 million to EUR 55 million total price, you know, bill increase assumes around 435 gigawatt hours of usage at an average price of around EUR 180. That means if we continue to buy at the current spot market, there's a bit of upside there. That's the good news. There's a bit of upside with 2023. It's not massive, but you know, 20% to be, you know, still bought with guidance using EUR 180 per megawatt hour. Current price around EUR 164 is a bit of a tailwind for 2023. For 2024, we've bought I think 38% forward. You know, we were planning to like, let's plan for the same amount of 2023. If you look at the forward price for 2024, they're also around 165-ish at this point in time. The good news, if this all continues, that means that we will not have another, you know, energy bill increase in 2024, at least if today's markets persist. That means 2023, EUR 50 million to EUR 55 million more, some upside. I'll elaborate a bit more what that does to our guidance or business. For 2024, if current markets persist and the market doesn't, you know, go berserk again, that means we'll no longer have another energy uplift. We'll probably stay at this higher spend level going forward, which should, you know, help our EBITDA in 2024, given the fact that there will be some price amendment in, you know, mid-year. On energy, a bit of a tailwind for this year. At the same time I said lease costs are also a bit higher, the energy band tailwind is a bit used to offset higher lease costs, it all feeds into the current EBITDA guidance. From energy, there's a bit of upside. Yeah, on the SME performance. Yeah, we really have a separate platform to serve our SME customers. It's the KPN EEN platform. It works quite well. It's a different environment than broadband for consumers, because it's a combination of workspace, mobile business proposals, security solutions. Until now, I do not see real risks of, yeah, SME customers moving to consumer propositions. Of course, there's an overlap in what we call SOHO and consumer. That's based on the more or less the same portfolio. If you look at our SOHO customers, we also did a price increase on mobile, 5.8 and 3.5 on the internet. It's a lookalike of what we do in consumer segment. On SME, I expect that one to be separated from that segment. Just to clarify, the SOHOs have reported part of SMEs or are they part of residential segment? SOHO, depends on what we sell, mainly consumer products, and then we report consumer lines in consumer segments. Like I said, there's an overlap. You refer to the SME and the risk of SME customers making use of consumer propositions. That's more a segment we call SOHO, and that we already consider for main part, retail propositions. Okay. Thank you so much. The next question comes from the line of Stephen Malcolm from Redburn. Please go ahead. Good afternoon, guys, and thanks very much for taking the questions. A couple. First on the mix of consumer and business service revenues in 2023, and secondly, just on the free cash flow bridge from 2022 to 2023, if that's okay. Firstly, just when I look at consensus for 2023, I mean, consensus has consumer revenues growing at 1.8% and business at 1.2%. That's kind of, you know, flipped on what we've seen in the second half of 2022. The question is, do you think that mix makes sense? Do you think you can sort of take consumer revenue growth back up to sort of nearly 2%? Should we expect, you know, the owners to fall more heavily on business, which is clearly doing very well at the moment, you know, to get the numbers that you expect on the service revenue side in 23? Then just on free cash flow, can you help us bridge the EUR 8, EUR 6-870? I mean, EBITDA broadly flat, CapEx broadly flat. It looks like a lot of the strain will probably fall on working capital. Maybe just reassure us that you're not sort of taking short-term measures, whether it be through web vendor financing, handset financing, that may, you know, you may need to unwind and may cost more money going forward as interest rates rise and the cost of those sorts of measures, you know, begin to weigh on cash flow and earnings. Thanks a lot. Yep. On service revenues, you're right. Indeed, if you look at the last quarter, momentum really was on the, on business markets, more than consumer markets. It's a bit crystal ball gazing. I do see... I think your point, the risk is, I think the outlook is that relative to consensus, business markets will do a bit better and compensate for possible, you know, downside risk to consumer through the competitive environment, which will help us meet the underlying growth. If you look at our own contingency and risk planning, that's exactly what's in there. I think your observation is pretty valid, but that means that the service revenues as such are well, well protected. When it comes to free cash flow guidance, the first reassuring point is, trust us, we're not gonna do funny financing out there. We have a small vendor financing program, but massive, unused capacity and also enhanced financing. I've got it in there if we use it as a safety valve, but don't intend to really upscale it. In order to understand 2023 cash flows, you have to look at 2022, right? We delivered EUR 862 million cash flows, but in that, we spent about EUR 25 million in a one-off contribution to a U.S. pension fund. I thought it was a pretty good idea because rates went up in the U.S., we were able to terminate that fund at peak rates, which will save us EUR 7 million structurally, you know, pension contributions in the coming years. A one-off investment of EUR 25 million to save EUR 7 million will already give you, like, EUR 30 million on the year-over-year comps. Secondly, in 2022, we already implemented a shortening of the timelines of SME. From a legal perspective, we're supposed to pay SME companies earlier. That law goes into place in 2023. Was in the original plan, we brought forward in 2022. Those are two negative headwinds that are all in the 2022 number. That means the underlying cash generating creation of the business is actually quite strong. On working capital, you can see working capital was flat in the year. That was also because we built up some inventory due to, you know, questions on supply chains, also as a preparation of a new TV product. We built up quite a stock of Android TV set-top boxes that we're using now. You'll see a bit of running down in inventories that we've built up during 2022. We see opportunities to improve working capital on what we call our product plus cycle. We have a product plus strategy, where we sometimes have some giveaways to broadband. That purchase cycle can be shortened. Everywhere I look in working capital, I see opportunities, for example, to invoice some of our large corporate customers earlier. We've focused a lot on shortening payment terms. We've done that, I think there's also work to be done on invoicing them earlier. We're insourcing our incasso activities. We see an opportunity there. A big chunk of 2023 is also, like, smarter ways of working around working capital. In that, we'll still, we should be able to pay the higher taxes that we're ahead. Then, of course, let's be all fair, we're about to call the hybrid bond in March, which we'll officially announce, refinance it with a euro perpetual, and those cash flows will no longer be in our free cash flow reported. That's, you know, a reporting tailwind that we have to be clear about. It's a combination of, I think. Solid cash flow in 2022, which actually was held back by one-offs that we deliberately invested, that will come back in 2023. We'll have a number of working capital optimizations that are really around the business area, not around financing. Those two should help us, you know, pay the higher tax bill. Sorry, Chris, I should know this, but can you just remind me of the hybrid tailwind in 2023? Yeah. It's about EUR 20 million or so plus. Okay. I think it's all fair to say that supports the growth in our free cash flows somewhat. Okay, that's brilliant. Thank you very much. The next question comes from the line of Alex Ronvier from UBS. Please go ahead. Hi, guys. Thank you very much for taking the question. I would just like to come back to CapEx, please. Obviously, we've talked about the ramp-up of the fiber rollout in 2023 and even in the later years. But I was just, you know, having a question regarding your total envelope. And obviously, if we do some quick math and get cost per home pass over the year, you know, there's some phasing there. But could you maybe disaggregate, you know, the buckets of the fiber spend you were having this year if you know free fiber, like a lot of homes, I know you talked about, you know, 70% of your home passes are connected. Equally, why the small moderate increase in non-FTTH CapEx this year, as I think, you know, while back you're more targeting to actually reduce the rest of that investment envelope. Thank you. Well, on the non-FTTH CapEx, please note that non-FTTH CapEx is still below 14% of revenues, as has been there for the past and it still is there. The small increase actually is on customer CapEx. It's more like actually business customer CapEx that went up. Non-fiber CapEx. Non-fiber, non-customer CapEx was flat, and it was the customer CapEx that was up, and it was really in the business segment where we had some CapEx related to the growth in our business areas. If you look at fiber was down a bit in EUR terms, but also last year we had an acquisition that was qualified as CapEx. EUR 20 million of EUR 30 million less fiber investments included last year, about EUR 17 million or so M&A. The net real decrease in fiber spend was about EUR 12 million. On the non-fiber CapEx, B2B customer CapEx, and the real, like, network CapEx was flat in the year and still well below 14% of revenues. Oh, great. Thank you. The next question comes from the line of David Vagman from ING. Please go ahead. Yes, good afternoon, everyone, thanks for taking my question. Sorry to come back on the fiber rollout. I'm referring to the standalone fiber rollout. Could you explain us how we should basically model the standalone fiber rollout until 2025? I think in the past you were referring to a 500,000 cruise speed. Given the technical change in the definition of homes passed, should we become more prudent on the takeup rate? That's on fiber. Secondly, on the Glaspoort JV. The homes passed, they've made quite some nice progress in 2022. What are the wholesale costs that you have budgeted for this year, so 2023, roughly? Thank you. Yeah. On the fiber rollout, we plan for this year, 2024, 2025 and 2026. Like I said, we wanna reach the level of 600,000, roughly. We'll see how that works. We're also changing the way we roll out. We go a bit faster. We have improved the customer process to connect households, so we don't need all these steps in between as often. We're also going to do something new, and that is to touch high buildings to connect. That's also a complete different ballgame compared to the lower build households. That's, yeah, the SDU steering compared to the MDU steering. It's very good not to try to connect 80% of all the households before we start the commercial process. On Glaspoort, your question is how we, yeah, distribute rollout capacity. Yeah. We have a plan on Glaspoort, which is up to 1 million households, roughly, to build for us. That's under construction. That's more, yeah, ring-fenced. That's ring-fenced when it comes to areas, capacity and numbers of households. The rest of the Netherlands is KPN's own, yeah, target. We run it in parallel. Especially this year, I would like to upscale KPN's rollout a bit more. Okay, thank you. When you're referring to the 600, that's KPN standalone, excluding Glaspoort? No, no, no. Excluding Glaspoort. That's consolidated. Standalone would be, yeah, a major trick. Mm. That is consolidated. It's important for us to look at the plan consolidated because we take the commercial approach consolidated as well. Okay. Thank you. On the wholesale costs that, you know, KPN has to pay, Glaspoort? We pay wholesale broadband access to Glaspoort, like T-Mobile is doing to KPN for a while, and until we come to the moment of consolidation. The, whatever KPN pays to wholesale is fully in line with the new ACM regulatory framework that's in place. KPN is, I'll say, almost an ordinary customer of Glaspoort in this regard, and we pay according to the ACM framework that Glaspoort has made public. I guess it's a bit of a headwind in 2023 given the install base, the home pass increasing. It's a bit of a funny thing, right? We are actually paying those costs out of EBITDA, and we're reconsolidating as a minority interest the results below EBITDA. Almost like until consolidation, Glaspoort is a bit of an EBITDA drag in this regard. I'm not sure whether my personal view, the market fully comprehends the value that's in Glaspoort, at this point, you're right. Up to consolidation, it's a drag on EBITDA and the plus is seen below the line, below EBITDA, which very few people see. That will turn around post-consolidation, in the midterm, it is an EBITDA drag. That also, you know, gives some color towards what I think is a fair, you know, achievement to deliver some growth in EBITDA next year, because it actually is some increase in cost rack. Okay, thank you. Thanks very much, Bob. The next question comes from the line of Georgios Ierodiaconou from Citi. Please go ahead. Yes, good afternoon, and thank you for taking my questions. The first one is another question on fiber. I think you stated, you mentioned the fact that you are already making the planning for 2024 and 2025. I was curious if you could share with us any indications around the costs involved in the rollout when you engage with some of the subcontractors, whether it's been any changes because of inflation. I understand there may be a change of mix to MDUs, but curious if like for like, you are seeing any significant changes in terms of the cost of deployment. My second question is just a couple of quick clarifications for 2024, and some of the answers that Chris gave earlier. Firstly, around energy, you mentioned that 40% is hedged for 2024. I was curious if you can give us roughly the price at which it was hedged. Maybe you mentioned it, but I missed it. Secondly, when you are discussing earlier the working capital moves and some of the benefits, I was curious to understand which ones may also continue to give incremental benefit in 2024. You have the EUR 7 million, which is sustainable for a few years. On working capital, some of the actions you are doing, is it gonna be not just sustainable, but also enhanced in 2024 versus 2023, the inflows that you may see? Thank you. Yeah. On the fiber planning, I mean, we have a plan until the end of 2026. It's about planning in areas and construction capacity. Of course, with our partners, we also negotiate labor cost. As you can understand, these go up. With most of the partners, we increased about 5% when it comes to labor. On the other hand, we also do a lot of innovation on the fiber side by rolling out in a more efficient way, connecting households from the outside instead of the inside. Listening to all your questions, by the way, I think later in the year, we should do a fiber update for you guys because there's a lot to say about fiber. We innovate a lot on moving from homes passed to homes connected to homes activated. We innovate in our commercial approach. All in all, I'm confident that the CapEx envelope of EUR 1.2 billion is enough for the coming years and that we can step down after 2026, completing the rollout for the main part and covering 75%-80% of the Netherlands. Giorgio, you sneaked in two questions into one, but they're follow-ups, so I'm allowing you to do it. Look, on the EUR 7 million on pension, that's what we sustainable for the next, you know, compared to plan, that's three to four years. At some point, the plan was actually supposed to end because of annual contributions, but we brought it forward. It's about EUR 7 million-EUR 8 million free cash flow tailwind for the coming, say, three to four years compared to at least the plan that I have. When it comes to energy 2024, we've, as you said, hedged about 38% on average price EUR 160-EUR 170 because we started buying that also quite early last year and even a bit before that. That means, you know, at this point in time, it feels that, with today's prices and with 2023 and 2024, that the energy bill for 2024 will not rise materially towards to 2023. You know, the average price we're paying for 2024 is about the average price of 2023. It's equal to the average price in the spot market today, and it's equal to the average price in the forward market for 2024. In a very fascinating situation, they're all aligned, which actually means that for 2024, you know, if prices stay where they are, you see energy prices being flat or being slightly less even than 2023. What does that mean for 2024 and cash generation? Going back to your first question, the third part, actually, the third question you sneaked in on working capital. The measures we took this year are technically one-off. You know, you can change your, you can invoice earlier. That's often a one-off measure. There could be some spill over into next year. I always find that two things. One is the more you look into it, the more you new ideas you find. Of course, increasingly they become marginal. I think the measures we take this year will predominantly in 2023, small spill over in 2024, and then we have to come up with new ideas. Also I'd expect that 2024, that the increase in EBITDA will be the leading factor in increasing our free cash flow again. Of course, it depends on how the world develops. If energy prices stay where they are, I think we should be able to resume the increase, the delta EBITDA that, you know, was paused with, you know, EUR 5 million-EUR 10 million or so in 2023, but it'll be larger next year. Excellent. Thank you. The last question that comes from the line of Keval Khiroya from Deutsche Bank. Please go ahead. Thank you. I've got two questions. Firstly, we've seen the helpful backbook price increases that you've talked about. Do you think the Dutch market can also sustain frontbook price increases on important tariffs like mobile, unlimited, and fixed broadband? I know some of the lower mobile tier tariffs have nudged up slightly. Secondly, can you comment at all on how you think about personal expenses in 2023? Is there any room for declines given you have the new CLA agreement too, and I guess there may be some workforce reduction beyond that. Thank you. Could you please re-repeat the first question, Keval? We think I missed the gist of the first one. Yeah, sure. Thanks, Chris. You've obviously seen backbook price increases in the Dutch markets, but do you think we'll also see frontbook price increases as well on tariffs like mobile, unlimited, and fixed broadband? I think some of the lower mobile tier tariffs have nudged up, but those haven't as yet. Keval, when it comes to price increases, we're not increasing backbook only. We look at more or less every proposition on its own, and then we decide on how to increase. For instance, older legacy is increased much higher than the newest version of what we introduced. We show you the blend of 3.5% in internet and 5.8% in mobile. It's not that we only focus on backbook. We really try to lift up the whole base when we do an increase. Your second question? Yeah. Keval, on your personal expenses, it's a very good question because it brings me to a point I'd like to make at the end on our quarter distribution of EBITDA next year. Personal expenses, can we bring it down in 2023? Well, obviously, we've got a CLA increase, which on average 6%, which will cost us EUR 45 million more in terms of total labor spent for 2023. We obviously counter this by reducing headcount, increasing productivity, and using attrition. Our total, you know, personal spend will not go down. You know, that's the 6% is too much for that, we'll try to nibble as much away from that increase as we can by increasing efficiency, by using attrition, by looking at smart restructuring certain, you know, units of KPN, and continuing the path of FTE decline. Last year we declined by about 350 FTEs. I think we should certainly do the same next year, do even more to make sure we continue to increase productivity and counter that. I know that you're asking. Well, you're not asking, I'm now using the opportunity to tell it. Remind you that we've set a 2024, you know, 10 EBITDA for next year. Say EUR 5 million growth, EUR 10 million growth, that order of magnitude. We feel pretty confident with that number. It should be seen as a bit of a floor. Again, the distribution will be a bit odd during the year. It will be back-end loaded Q1. Remember in Q1, last year was very good. Q1 2022 was a fantastic Q1. Year-on-year comps will be tough. The energy price will kick in, of course, in Q1, and be earned back during the year. Our CLA will have a first batch starting in February. The 6% is distributed over two rounds, and the first batch starting in February. That means that in Q1, expect the headline EBITDA to be declining for the last year. It will be growing ex energy, but of course, the number that counts as EBITDA will be see a small decline, and that will bring it back up to our growth during the year. As of course, during the year last year, we had these one-offs paid out during our staff that we won't do again. It's all embedded in the CLA. During the year, you can see the end of the benefits of our base growth. You can see the benefits of our price increases. It's important to note that while we fully underwrite the EBITDA commitment to the year, see it as a floor for 2023, it will be somewhat back-end loaded. It's good to flag that Q1 will probably be a negative EBITDA number, but then recover during the year. I wanna make sure we're all on the same page before we get to that reporting part of the season. Okay. Thank you, everyone. If there's any further questions, please contact the KPN Investor Relations team. Have a nice afternoon. Bye-bye. Thank you. Thank you.