Good day, ladies and gentlemen, and welcome to KPN's Q1 Earnings Webcast and Conference Call. Please note this event is being recorded. At this time, all participants are in listen-only mode. We'll be facilitating a question and answer session towards the end of today's prepared remarks. If you'd like to ask a question, you may do so by pressing star one on your telephone. I'll turn the call over to your host today, Matthijs van Leijenhorst, Head of Investor Relations. Please go ahead. Yeah. Good afternoon, everyone. Thank you for joining us. Welcome to KPN's first quarter 2024 results webcast. With me today are Joost Farwerck, our CEO, and Chris Figee, our CFO. As usual, before turning to our presentation, I would like to remind you of the safe harbor on page 2 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, Matthijs, and welcome everyone. Let's start with some of the highlights of the first quarter. Our group service revenues increased by 3.6%, 4% corrected for divestments. Within the mix, we continue to see positive developments in the consumer, driven by both fixed and mobile. Business service revenues continued to grow with SME as the main contributor. And as expected, growth in wholesale leveled off a bit, but this was mainly due to lower regulated tariffs. And together with joint venture Glaspoort, we added almost 160,000 households to our fiber footprint. We delivered EBITDA growth, while free cash flow was a bit lower due to phasing of working capital. Last month, our regulator approved the Youfone acquisition. The deal is important for us as this as it enables us a more effective base management strategy. And finally, our outlook. We have raised our full year guidance for EBITDA and free cash flow, reflecting the Youfone acquisition. And the other item, items in our outlook are reiterated, including our ambitions for 2027, as disclosed during our Capital Markets Day. As usual, Chris will give you more details on our financials later. Our Connect, Activate, and Grow strategy is supported by three key pillars. One, we continue to invest in our leading networks. Two, we continue to grow and protect our customer base. And three, we further modernize and simplify our operating model. Together, these strategic priorities support our ambition to grow our service revenues and adjusted EBITDA by 3% and our free cash flow by 7% per annum on average in the coming years, and this is simply our 3, 3, 7 framework. Let me now walk you through the business details. In the first quarter, we added 130,000 households to our fiber footprint. This number includes 21,000 households from acquisitions. Together with Glaspoort, we now cover almost 60% of the Netherlands with fiber, and we are well on track to reach 80% of the Dutch households by the end of 2026. After reaching that point, the CapEx will come down to a much lower sustainable level. Our fiber business case continues to deliver results. Year-on-year fiber service revenue growth has accelerated to 13%, and we currently generate more than EUR 1 billion of annualized fiber revenues, driven by a solid base inflow and attractive output. Let's now look at the consumer segment further. Our consumer segment started the year well, with the acceleration of our fixed service revenues and continued strong momentum in mobile. Customer satisfaction remains one of our top priorities, and I'm happy to see that we can really outperform against competition on Net Promoter Score. Let's take a deeper look into our first quarter KPIs. We saw another quarter of broadband base growth. We realized 5,000 organic broadband net adds, and our fixed output grew 2.7% year-on-year. We continue to see solid trends in mobile. Our postpaid base increased by 30,000, driven by the commercial success of our new speed tiering proposition, and our postpaid ARPU grew more than 5%. And combined, this led to a solid 8% growth in mobile service revenues. As mentioned, last month, we received green light for the acquisition of Youfone's Dutch activities, and I'm happy with this deal as it strengthens our position in the no-frills mobile segment. It enables us to play a more effective base management strategy by positioning the Youfone brand alongside our flanker brands, such as Simyo and XS4ALL, and of course, next to our main brand, KPN. And with this approach to our offerings, we remain relevant to all customers in all life phases. The closing date was fourth of April, and from that date, we added approximately 540,000 postpaid subscribers and 55,000 broadband subscribers to our customer base. Let's now move to B2B. Adjusted business service revenues grew 3.2% year-over-year, or 4.4% corrected for the divestments of smaller entities. Growth was mainly driven by continued strong growth in SME. Business net promoter score was in line with last year, and we also here see that we remain the Dutch market leader. SME continues to be the main growth engine in B2B, driven by solid commercial momentum, especially in cloud and workspace. Due to our future-proof propositions, we expect to deliver continued growth in SME going forward. Underlying LCE service revenues increased slightly, mainly driven by the continued strong performance in IoT. Internet of Things has been a very successful part of our LCE business over the last years, and now representing EUR 100 million of annualized revenues with good contribution margins. Nonetheless, LCE still requires some work to deliver sustainable growth. Lastly, the tailored solutions business was solid again, and this business remains subject to the timing of projects and related hardware sales, but the performance is moving to a much more profitable level. Then wholesale. In wholesale, service revenues increased 0.8% in the first quarter. As expected, the growth trend leveled off compared to previous quarters due to a decrease in low margin interconnect revenues, because of lower regulated tariffs in these traditional voice business. Broadband service revenues increased 6% year-on-year, driven by a higher base compared to last year. Mobile service revenues increased 2.6% year-on-year, and also driven by a growing mobile base and increased data volumes. Now, let me hand over to Chris to give you more details on our finances. Thank you, Joost. Let me now take you through our financial performance. Let's start by summarizing some key figures. First of all, adjusted revenues increased 3.3% in the first quarter, with growth visible across all segments, especially in consumer. Second, our adjusted EBITDA after leases grew by 3.6% year-over-year, driven by higher service revenues, but also due to, due to the phasing of some headwinds and tailwinds. Net-net, our underlying EBITDA growth is broadly in line with our reported EBITDA growth. Our EBITDA margin increased 16 basis points to 44%, despite wage indexation and higher lease costs. So overall, we had a solid start to the year, and are confident in our ability to reach our EBITDA targets and expect some fluctuation, of course, as a number during the quarters ahead. Third, free cash flow decreased 6% or EUR 10 million compared to Q1 last year, but will pick up in Q2. We'll give you more detail on the underlying cash developments later in this presentation. Group service revenues increased 3.6% year-on-year or 4%, corrected for divestments in the B2B space, and is thereby in line with growth in previous quarters. Our consumer service revenues increased by 4.5% year-on-year, driven by consistent strong growth in mobile and further improvement in fixed. Across consumer, we see solid base developments, especially in mobile. Business service revenues grew by 3.2% year-on-year or 4.4% corrected, corrected for divestments, mainly driven by the strong continued performance in SME. Wholesale revenues were up 0.8% year-on-year, driven by both broadband and mobile, and negatively affected by some changes in regulated tariffs. Our operational free cash flow increased by 6%, in line with our guidance for mid-single digit growth, and was mainly driven by EBITDA growth. The strong operating free cash flow did not yet fully trickle down to free cash flow. The delta as of last year is mainly explained by different phasing of working capital during the year. For the other free cash flow items, the effect of higher lease payments was fully offset by temporary low taxes. At EUR 154 million, our free cash flow margin was 11% of revenues. All in all, in line with 2023, we expect this year's free cash flow to be back-end loaded, reflecting mainly improvements related to working capital. So looking ahead, we expect a gradual improvement in this number throughout the year. Finally, we end the quarter with a strong cash position. We continue, therefore, to have a strong balance sheet. At the end of March, with a leverage ratio of 2.3 times, comfortably below our self-imposed ceiling of 2.5 times. Also, our interest coverage remains strong. Our exposure to floating rates is less than 15%, and the average cost of senior debt is 4%. Credit rating agencies acknowledge our strong balance sheet and market position, which is evidenced by solid rating and a stable outlook. Total liquidity remains robust and consists of about EUR 2.3 billion in cash and short-term investments, including the undrawn revolving credit facilities. This provides ample flexibility for, for example, the final cash payments of the Youfone acquisition, and pursue opportunities as they arrive, may arise, and of course, also to acquire spectrum in the upcoming 3.5 gigahertz auction, expected to take place in this summer. Early February, we issued a new senior bond and put out a tender on part of our outstanding sterling notes, due 2006 and 2029. With the successful placement in combination with the tender, we increased the average maturity of our outstanding debt and lowered the average cost of debt as well. Let's move to our outlook for 2024 and ambitions for 2027. Given the solid underlying business performance and momentum and the closing of the Youfone transaction, we've raised our full year 2024 outlook for EBITDA and free cash flow. We now expect an adjusted EBITDA after leases of approximately EUR 2.5 billion and a free cash flow of over EUR 890 million. Other outlook items have been reiterated. Group service revenue growth is set at approximately 3%, mainly driven by continued growth in consumer and B2B, and CapEx will remain stable at peak level of about EUR 1.2 billion. Finally, over the entire plan period until 2027, it remains our ambition to grow our service revenues and adjusted EBITDA by 3% and our free cash flow by 7% on average per annum. This reflected in our 3-3-7-year model. So wrapping up with the key takeaways, we had a solid start to the year, with consistent group service revenue growth drifting down into EBITDA growth. We had yet another quarter with solid commercial entry, especially in consumer mobile and SME. Our fiber rollout program remains solid pace as it improves an attractive return profile, and we've raised EBITDA and free cash flow full year 2024 outlook. Other output items, including our ambition for 2027, as disclosed during the CMD, are reiterated. And finally, we almost finalized the share buyback program of EUR 200 million in 2024, effectively again, distributing all of our free cash flow to our shareholders. Thanks for listening. Now turn to your questions. Yeah, thanks, Chris. Thank you. As usual, we will now open the floor for questions. As a reminder, please, please limit your questions to two, please. Thank you very much, sir. Ladies and gentlemen, as a reminder, if you wish to ask a question- Please go ahead. Please press star one. Yes, sir, we will. Our very first question is coming from Keval Khiroya, calling from Deutsche Bank. Please go ahead. Your line is open. Thank you. And I've got two questions, please. So firstly, Chris, can you give us your latest thoughts on EBITDA phasing for the rest of the year? I presume Q2 EBITDA should be quite strong, given the residual impact of the price rise and Youf one kicking in as well. And then secondly, we've seen the Ziggo price increase. Is it right to think about CPI and CLA as still being the reference points for your broadband price increase? And is there room for front-book price increase as well? Thank you. Thank you. All, all noted down. Very good. Yes, we obviously increased our guidance for the year. I think Q2 looks actually quite strong, and we always have a few also more spiky items in our EBITDA. So ones that are in our planning, but are due to discrete customer deals or some asset monetizations, and they will show up in Q2. So in Q2, we'll see quite high EBITDA growth. Underlying, to be up 3%+, like this quarter, but the headline number will be higher in Q2. In Q3, a bit more muted, closer compared to year-to-year comparison, and Q4 up again. So there's some volatility in the numbers, but expect, as I said, Q1 is a 3.5, 3.7% actual growth, excluding divestments in, in Q1. Q2 will be substantially higher. Q3, Q3 will be lower, and Q4 will be up again. So that's kind of the phasing, but expect certainly a solid Q2 from what we see right now. Yeah, and on the price increases, your question, yeah, of course, last year we had a price increase following CPI developments. In mobile consumer, we one-on-one follow CPI later in the year, first of October, if I'm not mistaking. Mid-year, we will do the broadband price increase. That will be a call we will make in the coming quarter, this quarter. And we have a look at CPI, CLA, but of course, we expect less of an increase than we did last year. So, it's also very important that with our new strategy, where we focus on the base and loyalty of customers, that we can explain why we do a price increase. So we always focus on price increases and do the best in there, but it's also important that we can explain it, and therefore, we use CPI and CLA developments as a good argument. And in B2B, we try to follow contracts and do the utmost as well. So it's a bit of a... In different phases, we do price increases, and every year we do that. And the first important moment there is mid this year in broadband consumer. Thank you. And so just to follow up, I'm not sure if you're able to say at this stage, but, but do you think there's room for a front-book price increase on, on broadband as well, as well as the back book, which obviously you usually do? Well, we can, we can do what we want, but, like I said, it's very important that we can explain to the market and, our existing customers why we do price increases. So that's exactly the call we're going to make, this quarter. That's very clear. Thanks, Chris. Well, thank you very much, sir. Next question, please. Thank you, sir. Our next question is coming from Andrew Lee, calling from Goldman Sachs. Please go ahead. Hi, good afternoon, everyone. Just two questions. First one was on wholesale broadband competition. So your wholesale broadband base fell a little this quarter. So, and just wondered if you could give a bit more insight into what is going on there, who you're losing to, and why you think that is? And then, I think, just wouldn't mind just asking, just following up on Keval's question on the consumer fixed side. So I understand that, obviously, you need to explain to your customer base why you're raising prices, but at the same time, you know, incumbents in strong markets across the sector, you know, are leading prices higher. And, you know, with reference to Ziggo raising prices more than you, why do you feel it, it's not just as important as the CLA rise is?... To really show strength and leadership in prices, to just make sure the market remains rational, given some, you know, fairly aggressive behavior by Ziggo over the last 18 months. Thank you. Let me pick up the first question on wholesale broadband. Obviously, broadband, you know, if we take one step back, broadband service revenues are still growing quite nicely. I think they will go down a bit in Q2 and steer back in, in Q3 and Q4. So it's good to also have that in line with, you know, what the, the stages of service revenue growth of the year. Then on broadband in particular, I mean, the market has been quite intensive, and there's a competition, and I think we see that some of our smaller broadband customers find it a little bit more difficult to compete with that. Broadband competition has increased a bit, but that's not very notable. It's mostly with the smaller broadband customers who find it difficult to compete with these, you know, more intense competition in the market, and they suffer from some churn on copper. Obviously, we're taking steps to support them here, to make sure they have the room to compete, but that's the main driver of the Delta and broadband, the broadband LS. For KPN as a whole, we see total network penetrations to go up. So across wholesale, across consumer, and across business markets, when we look at our total network penetration, it's still increasing. So, it also feels there's a bit of a shift between different segments going on in the background. Yeah, again, on the price increases, last year, we did the 6.4% in the broadband consumer, 8.4% on mobile, and the competition was more or less in the same area, a bit higher. Odido has announced at the beginning of this year something like 5.5%. And from Ziggo announced a 2.5% increase in the front book. So, we have to find the delicate balance between the utmost on price increases and a nice number to land on and explain to our customers again. So, we will announce the price increase if we do one end of this quarter. Okay. Thank you very much. Thank you, sir. We'll now move to Polo Tang of UBS. Please go ahead. Hi, thanks for taking the questions. I have 2. The first one is just on fiber. Can you talk through what you're seeing in terms of fiber build from competitors? And then how do you think about your own build rate for fiber? And then related to that, when you guided for EUR 1.2 billion of CapEx for 2024, was this guidance up to EUR 1.2 billion, or was it a rounded figure? So from memory, you guided towards EUR 1.2 billion last year, but ended up spending about EUR 1.25 billion. My second question is really just on competitive dynamics. So can you talk to me in a bit more detail in terms of what you're seeing in terms of competitive dynamics for both broadband and mobile? Specifically, what are you seeing from the likes of Delta Fiber and Odido, and do you expect the VodafoneZiggo to get more promotional when they start showing Champions League rights in August? Thank you. Yeah, Polo, it's Chris. On the fiber build, I think, look, we have actually delivered quite a fair amount of homes passed this year. And when we look at the first quarter, we're looking at 169, including CapEx. I think 140 inorganic CapEx plus last quarter, again, to the homes passed. We focused on more homes connect. We've got organically 90,000 homes connect, and we acquired around 100. So, I think about 100,000 connect homes, of which 90 is organic. And we're just continuing with that pace of building out. What we see competitors doing, I mean, it feels that certainly Delta is rounding up existing building streams, so I don't think they're gonna start new streams from here. So round up what they have and then focus, I think, on increasing penetration on their networks, which I think is a sensible strategy to do as well. Open Dutch Fiber appears to still grow. I'm not sure whether they will meet the entire 2 million that they initially announced, but it's for them. But I wouldn't be surprised if that goes not to the full amount, but that's of course, them. So what we're seeing is the build competition gradually become a bit less and less. We also see that when you talk to construction companies and the availability of construction capacity. So we create this feel that is, you know, KPN continues to build, it continues to plow along. We have a plan that we will fulfill and complete. It feels that our main alternative builders, one of these, the smaller ones or to larger ones, are gradually into either, you know, the mode of not adding new building streams or rounding up what they have. When it comes to CapEx, okay, round it to 1.2. Obviously, in the end, CapEx is a function, and the ultimate goal is free cash flow. So the free cash flow will be for sure, EUR 890 million. That's, that's the goal that we have. Will we be around what— It's, it's not up to 1.2, around 1.2, but rounded to EUR 1.2 billion for sure. But the key criterion and the goal is, of course, meet our free cash flow goal of at least EUR 890 million for the year. Yeah, and to add on that, on fiber, there's a big difference in how KPN is rolling out fiber footprints and the other initiatives mentioned by Chris. We are very strong in moving Homes Passed to also Homes Connect above 60%. And by migrating our own customers, increase in the first wave, above 30%, homes activated. While we see in the other footprints that they mainly struggle to get Homes Passed really to Homes Connected. So I think we're building the infrastructure of much higher value than the others are doing. On the competitive dynamics in the Dutch market, as it's a highly competitive market. On one hand, mobile is relatively healthy. The whole mobile market is growing. That's very good. We see KPN growing as front runner, and Vodafone is growing, Odido is growing. We see a strong inflow on KPN Unlimited, supported by that speed tiering, so customers now decide on what kind of download speed they want to buy their unlimited proposition. We see a very healthy inflow on that, so there's a good strong growth in our base both on the revenues per customer and in the base itself. So that's good for future revenues. I'm also therefore very happy that we consolidated Youfone to really position no frills segment in a completely different way than we run the KPN portfolio or the KPN base. On fixed, the market is yeah, quite challenging, driven by our fiber rollout. We're stirring up the market, so that's leading to competitive prices on the Ziggo side. Also, Odido and Delta are doing deep promotional offers. Every now and then, market is cooling down as well. So, I think the important announcement we did, and also Odido is making sounds in that direction, is that we want to focus on our base and on loyalty, and not on the acquisition side only. So, so we try to cool down that market a bit. Having said that, and at the end, I think we did great last year by growing 30,000. I think we will drive the growth in the broadband base further this year. But, when it comes to competition, it's mainly happening in broadband, and I expect that to continue until we've done the 80% rollout. What's interesting, perhaps to note, when we look at our fiber sales, and obviously the gross adds in fiber are a combination of, yeah, new, new clients and clients we migrate from copper, so copper to fiber migrates. If you strip out those migrations, if you look at the real net new customers, so new fiber customers, in the last, I think, 12-24 months, every month is between 4-7K, pretty stable. Never less than four, never more than seven, around 5 or 6 per month on average, real net new clients. And we've also seen it in the first quarter of this year, and something similar in the last quarter. So when you look at fiber, there's a steady inflow of real new customers, which is amplified and add to as the copper to fiber migration. That is almost independent, but less affected by the competitive dynamics. The competitive dynamics affect our copper base, where churn goes up and down. So you see this steady inflow of, you know, new fiber net adds of between 4 and 7 K a month, say 5 on average. Really, month after month after month, you add copper customers, you migrate to fiber, and the fluctuation really is in the copper churn of our copper customers who respond to, you know, competitive pricing. And now, when our broadband base is now 61% fiber, increased by 2%-3% per quarter, that dynamic should, you know, every quarter should improve gradually. I mean, that's the plan. But I think it's most important to note that the fiber inflow of real new clients is very steady. The Champions League impact, do you expect that to have any effect on KPN? Next, question, please. Okay, so the next question is coming from Maurice Patrick of Barclays. Could you, could you repeat the question? Hi, there. It's Maurice here from Barclays. Thanks for taking the question. If I could ask a little bit more about the wholesale loss. If I understand the negative net negative adds in wholesale, if I understand some of your comments in the previous questions, you seem to be indicating that some of your resellers effectively are struggling due to the retail dynamics. Are you losing wholesale subs in fiber areas and legacy copper areas? I'm curious whether that, whether this shift of losing wholesale is in both the new fiber areas, where maybe your 556 thousand new clients maybe is cannibalizing your copper base, or whether it's in the legacy areas where you, you don't have the fiber. Just a second question, just more broadly, could you give some more color on the Youfone acquisition? And specifically, you know, I think if I'm not, if I'm not wrong, when you announced the transaction, it sounded like the competition authorities were gonna have a good look at it, and in the end, it was approved without any remedies, unconditional. Just sort of your insights in terms of your conversations with the competition authorities, what their concerns were, and how you managed to allay those concerns. Thank you very much. Yeah, thank you. Maybe one on follow on the rebound on product question, Champions League. Let's see. Obviously, it's mandatory that Dutch teams have to be broadcasted and be available for the entire country. Now, obviously, our football teams don't have a history of making it very far into the European Football Championships, but, you know, there's always hope. But it means that Dutch teams will be visible and have to be broadcasted by anyone. And secondly, my early indication is that Ziggo Sport will be open. We are a customer of Ziggo Sport, and we remain so. So let's see, but we think that that might be an impact, but it feels it has to be, you know, manageable. Certainly, as the Dutch teams will be visible by anyone. That's the law. Yeah, by the way, we have been reselling Ziggo Sport over the last years for a typical niche content that's not available via KPN directly. A main part of UEFA European football matches will be visible in open channels. Yeah. And when it comes to wholesale, we really it's churn and copper, right? So you, what you see is that in the competitive market, the copper base is churn. So that's where churn happens, and new flow, inflow goes into fiber, and you find that these smaller resellers have built difficulty to getting new clients. So they have, like, elevated level of churns based on the competitive dynamics. And traditionally, you grow by fiber, but they have difficulty to growing with fiber. So fiber in wholesale should be still growing, that fiber wholesale base, and the churn is taking place in copper. And you find that this current environment that the smaller resellers have difficulty competing with fiber. They're not losing fiber, but traditionally you lose some copper and you win on fiber, and the fiber wins are more difficult for them in today's pricing environment. And obviously that we are taking steps to help them here and there. When it comes to Youfone and the acquisition, how ACM looked at it, look, I think they want to assess primarily the impact on the retail market and secondly, the impact on the wholesale market. So does the acquisition of Youfone by KPN constitute an undue concentration on the retail market, that's undue consequences for consumer retail pricing? And then secondly, the other question they asked is, if KPN buys Youfone, does that change KPN's perspective towards MVNOs? And will you be less forthcoming and less supportive of the MVNOs? Because with Simyo and Youfone, you're owning now a bigger chunk of no-frills, so will you be different towards different MVNOs? And we both think the impact on the retail market, ACM including, was manageable, and also our policy towards wholesale mobile MVNO business does not change because of the acquisition of Youfone. So I think they looked into that, they modeled it, they asked us questions, we did Q&A, and I think they concluded at the end that the acquisition of Youfone by KPN would not materially change the market dynamics in both mobile retail and mobile wholesale. So that's why the whole thing went through without any remedies. Although it took 9 months, which is quite long. So we are in the process of evaluating this with our regulator, because the questions they had, and matched by Chris, we were able to answer them pretty straightforward. So I understand that things sometimes move to phase two, but 9 months is long. So I think that it's very important to evaluate with our regulator why it took them so long. Thank you very much. Thank you, Mr. Patrick. Our next question will be from Luigi Minerva, calling from HSBC. Please go ahead. Yes, good morning, and thanks for taking my two questions. Now, the first one is on operational leverage. Now, if I look at your outlook, obviously 3% service revenue growth, 3% EBITDA growth, it's great, you know, in European telcos to see an incumbent that grows. But if one was to play devil's advocate, you know, you could argue that there is no operational leverage. So I was wondering, you know, what tools do you have to boost a bit more operational leverage? And what differences you see between 2024, where I think, you know, the 5.5% salary increase is probably difficult to match with broadband price increase, and 2025, where, you know, perhaps you see a more rosy outlook. And the second question is on regulation. I mean, the white paper from DG Connect has been widely praised by ETNO and other incumbents. It's currently under consultation until the end of June. And the key driving principle in the white paper seems to be deregulation. Now, I think the Netherlands is a step ahead other markets. I think of your agreement with the ACM on wholesale fiber access till 2030. Still, if you think about the white paper, do you see upside for the Netherlands? Thank you. With you on operating leverage, yeah, because, like, whatever you do, there's something to, there's something to challenge. I mean, with 3.5%, 3%-6% service revenue and EBITDA growth, I would expect everybody to cheer, but you obviously find the critical point. Look, the main... There are two factors. One, the most important point is the Glaspoort charging. So we have a JV with APG called Glaspoort, as you know, and the lines we rent from, we're a wholesale customer from them. They, the lines we rent from, of course, are charged through EBITDA, and we own 50%, as we get 50% back as minority interest below the line. So if you were to adjust for that, our EBITDA growth would probably be about 0.5%, 2% above the service revenue growth. It's simply the fact that, you know, the wholesale charges by Glaspoort to KPN are in our COGS cost of goods sold, and the ownership of that is actually below the line in the minority interest towards net income. So if you adjust for that, there's underlying operating leverage. Is it to our liking? No, I would like it to be higher. The main driver is these cost developments, and there appears to be some light at the end of the tunnel. When you look at our cost base, you know, the inflationary peak of last year still has an echo, like a, like a—some implication for this year. You know, CLA is 5.5%, is getting less and less. So for example, energy costs, last year we had a massive spike on energy costs. This year, energy costs are flat. Might be actually opportunities as the markets say we have to be slightly lower, and next year they'll certainly be lower. So the energy spike took a year to wash out. It's flat this year, lower next year. On our CLA increase, it's 5.5% this year, it's 3% next year, so that's fading out. On other areas, last year, anything you looked at was affected by inflation. Today, the inflation, you can see back on IT/TI, mostly platform costs and licenses, but relatively well ring-fenced. So when I look at our cost base, I think the indirect cost pressure from inflation is gradually fading out. 2025, 2024 is almost like a transition year in which you can see the impact still echoing in the numbers, but it's fading out into 2025. Obviously, what to do against it is reduce costs, reduce the cost drivers. So, that's what we're working on. I think the FTE decline this year, you have to look at the total workforce. Internal and external staff is about 250, like 2% less than last year. Obviously, we want that to be higher, and we will accelerate that in the coming years. Not this year, because we're still also hiring staff, and we're hiring especially specialist mechanics to include or accelerate our Homes Connect program. So but it's a cost program that introduces AI, robotization, optimization, business digitization. We'll start shutting down more offices, and next year, we'll start saving on energy. But I think we're trying these things to fade in. So long story short, operating leverage is higher than you think, but masked a bit by the Glaspoort allocation of costs. And secondly, going into 2025, you'll see it showing up as the cost pressures gradually start to fade. With that, I'll leave Joost to give some regulatory wisdom on. Yeah. We hope. Well, adding to that, you're right. A bit of operational leverage should kick in. So, if we do everything we plan for, then we probably will perform a bit better on the EBITDA side. We have a very clear vision on how we want to move this company to a new operating model, all kind of supported by AI work streams to really redesign the company. So, all in all, like Chris said, on top of the run rate and everything that happens there, really pushing down costs and really redesign the operating model of KPN could be an important program to benefit from in the coming years. Yeah, on regulation, yeah, the Netherlands is a bit of an exception because KPN is formally not regulated on the fixed broadband side on the internet, I must say. Recently, our regulator investigated the retail markets for internet again, and the conclusion is that it's very competitive, and they don't have to interfere. We have the KPN open wholesale access model as the framework in the Netherlands for, I believe, until 2030. So that's all quite good. When it comes to regulation, I think mainly from the competition point of view, things could improve further. Taking the Youfone acquisition as an example, we always consider that as a pretty straightforward consolidation, something we were able to explain in a pretty efficient way. Although it takes nine months, and we think that, especially on competition side, it would be nice if we could easily buy smaller operators here and there in the Netherlands. All in all, the Netherlands is a bit of an exception in the European landscape when it comes to regulation. I agree. Thank you very much. Thank you very much, sir. Our next question will be coming from Nuno Vaz of Bernstein. Please go ahead. Hi, good afternoon. Thank you for the opportunity. Two questions from my side. One is on the B2C postpaid ARPU growth, which, from what I see, it's very similar to the one from last quarter. Given that the CPI indexation was only two months last quarter, do you assume that this quarter you would see a bit more growth? Just wondering if there's anyone else there, what might explain a little bit the lack of growth. Then second question, just focusing on CPI indexation. First, partly, is whether you did CPI indexation for the wholesale broadband lines at the start of the year. It's my understanding you would have the right to do so. And if that might explain a bit the negative net adds on wholesale broadband. Second, on the B2C side, on CPI indexation, what is the flexibility for you to increase back book prices higher than average CPI without changing consumer contracts? My understanding is you could not be able to do so, but it would be helpful to have some color on that. Thank you. Good. Nuno, that's kind of three questions sneaked into two, but that's okay. You're forgiven for that. I'll give you the question one A and one B on the indexation. On ARPU mobile, we're actually quite okay with ARPU mobile. We look. If you open the hood and look what's going on underneath, you look at committed and the non-committed ARPU. So committed contracted ARPU. On that contracted ARPU, we can see the price rise really sink in almost one for one. So on the committed ARPU, part ARPU, price actually goes up with the indexation that we push through, and you'll see that going up over time. On the non-committed side, we see a little bit more pressure. One is sometimes for us to fix some insurance revenues, like the small additions on insurance. And secondly, we have unlimited customer base, of course, and we have MB sharing. Those kind of measures take out a bit of the top-ups and the out-of-bundle calling. So you see top-ups and out-of-bundles reduce a bit as a function of the more sales of unlimited and the MB sharing that we do. So I think there's a very small development on committed ARPUs. Our inflation indexation sinks in actually very nicely. There's hardly any leakage. Secondly, the more for more program that we have leads to higher ARPU's, higher unlimiteds from, higher unlimiteds and higher download speeds. So the speed tiering program starts to have actually quite a positive impact. That leads to growth in committed ARPU, and you pay for it with less top-ups in non-committed ARPU and slightly less insurance revenues, but on the latter, you make very low margins. So, I think ARPU will be developed actually to our liking. To our liking, actually, the margin on ARPU is getting a bit better, because we see growth in the margin component of the ARPU. On wholesale broadband, we hardly pushed through any price increase last year. There is an indexation framework that we agreed with the ACM. It was just at a very funny moment or depending how you look at it, that the moment at which the inflation was picked, and like the peak at which month the inflation was set, it was actually at a very low number. So wholesale price indexation was actually relatively small last year. I expect to be higher this year and will be a supportive towards, wholesale broadband revenues in the second half of the year. That's in the second half of the year, so you'll see support. Actually, last year, that's a very funny coincidence. The way the CPI was calculated, and the moment it was picked was really on the moment that it was at its lowest point. So, that will be actually a support for wholesale revenues in the second half of the year. Yeah, to your final question on the B2C CPI increases. Yes, you're right. We can, we can increase prices. If we do that above the CPI mid-year, then customers are allowed to move out of contract, customers in the front book, that is. So it's for us to call, do we go for a price increase of what is it? 3.84 kind of percent CPI increase or do we want to do more? We also changed the clause one and a half years ago, so all the customers we move into new contracts now, we lock in for two years instead of one year. So, that's also an important thing to take into account when we make a decision like this, that front group, we, the real, the real early customers in the base now are locked in for two years. So, that's important when we, when we look at the base and how to, optimize the value. Thank you. That's, that's very useful. Thank you. Thank you very much, sir. Well, now I move to Nawar Cristini, calling from Morgan Stanley. Please go ahead. Thank you very much. I have two questions, please. The first one is a follow-up on the competitive environment and also relating to your volume expectations. So the Q1 service revenue growth were very strong, which is great to see, but the 3% service revenue target you've got over the next year relies to a certain extent on the continuous delivery on volume growth. Obviously, it's early days, but I was keen to hear how the competitive environment and the volume dynamics in particular are developing versus your own expectations so far since you have provided the capital market targets. And secondly, a question on the fiber build landscape. We continue to see across a number of European markets a rising appetite for fiber M&A and partnerships. The partnerships and M&A we saw so far in the Dutch market have been mainly contained to small players. Do you believe that for now, this activity will continue to be focused on the smaller asset space, or do you also foresee a scenario where the action could move also to larger builders? And, in this scenario, would you consider inorganic actions to address the non-covered 20% of the country? Thank you very much. Well, I'll start, and then Chris will probably follow. So, when it comes to competitive environment and fiber, like Chris was explaining, our customer inflow on the fiber side is working really well. That's very important. 60% of the KPN base is on fiber, and the more customers we get on fiber, the more sticky the base is and the more easy it becomes for us to grow the base. So, our strategy is working. It's a bit time-consuming, it's capital intensive, but the plans we launched four years ago are really working, and quarter by quarter, we're meeting these plans. We're doing a bit little bit better. I'm convinced that we should continue the way we currently operate and push that fiber rollout in the Dutch country. Then we will be very successful, and perhaps later on, the base will grow faster than we're doing today. Our strategy is working. It's based on the fiber rollout and migrating our customers in the first place to fiber. We will continue that. When it comes to fiber build, yes, of course, we're always interested in a buy or build discussion, small or larger opportunities we will investigate. We've done some smaller acquisitions last quarters. A network last year, Primevest, some smaller networks last quarter. We're always interested in that. We're also interested in larger builders, but of course, still comes at the end to a price and value of the network, the others are building. And like I already mentioned, we're rolling out homes passed, and the whole market is reporting on Homes Passed. In reality, it's all about Homes Connect. Are you really connecting households or just rolling out fiber through streets? Because KPN is in 100% of all the streets in the Netherlands. We already... I mean, for us, it's very important that we connect households. ... when we roll out the real fiber thing and connecting 60%-70% of the households in our homes, cost per premise is the least we should do to really migrate our customer base and other customers to the fiber network. So, first of all, yeah, the price is one thing, and also the quality of the network. And that's why that's why we keep on building ourselves, because we're confident that that's an excellent network we're doing. Yeah, I mean, first of all, like, really a make versus buy decision, right? And, and in the make versus buy decision, you need to have. We are very confident of our financial framework, the returns that we make, as if we don't want to dilute the returns. So there's a very clear financial framework in which we evaluate all these transactions, big or small. And secondly, as Jo said, it's important to look at what the network actually constitutes homes passed or also homes connected. In the end, that's what it's all about. So that all features it. I think on the competitive environment, to me, mobile is actually better than what we expected. Our mobile performance than what we expected in the CMD. Broadband is still quite competitive, but I think our fiber business is holding up well. And I'm also particularly pleased with the performance in our SME business, where we continue to report high growth for longer than we ever envisioned. So the SME business still continuing to grow, and that looks set to continue as well. This is helpful. Thank you very much. Thank you, ma'am. We will be now moving to our next question, which is going to be coming from Joshua Mills of BNP Paribas Exane. Please go ahead. Hi, guys. Thanks for the questions. I've got one on the wholesale business and another on Youfone. So on the wholesale business, I think at CMD you were talking about a 1%-1.5% revenue growth target over the three years. And within that, if I understood it, the moving parts were some inflation linkage on pricing, some upsell to the privacy. And then on the negative side, I would assume maybe flat to negative volumes, and then the ongoing shift of customers from the VULA to the ODF products, which I believe is a bit cheaper. So I just want to check, is that still the playbook for you to get to the 1%-1.5% revenue growth on wholesale? And how much of a headwind do you expect volume losses to be? Is it expected that this will stabilize near term? And then the second question on Youfone, can you just give us a bit of color about what the recent net add trends have been in that business? And if you're able to maybe comment on where the, revenue and EBITDA growth settled in 2020. Great. Thanks very much. Yeah, on the wholesale side, look, the, I think 1.5%-2% is what the revenue growth in wholesale should be, but it's also absorbing some regulatory headwinds. So MTA tariffs have been, you know, slashed over time. So I think the assumption on also is not negative net adds over time. It's flattish to small growth in net adds over time. So you see growth in mobile, flattish to small growth in fixed, with a shift from copper to fiber. And in fiber, you actually see a shift from ODF to VULA gradually, because we're moving to, yeah, increasing share of PON technology, XGS-PON technology, where you offer the full product, which is the VULA part. So there's a powerful increase in there, set off by, you know, MTA tariffs, interconnect tariffs gradually going down over time. Now, obviously, next quarter, things will change also a bit because Youfone will be shifting from wholesale to retail. We'll give you full clarity in the Q note, Q2 number. But on a like flat basis, 1.5%-2% growth in wholesale after having absorbed regulatory tariff pieces. And we look at the Youfone performance. What we saw is that in line with small growth in mobile net adds and flattish in broadband, reflecting the fact that some of these smaller players had obviously difficulty to make the broadband work as a smaller broadband reseller, looking at, you know, Youfone had about 60,000 broadband net adds. Now, obviously, under the KPN flag and in the APG, KPN context, I think the situation for Youfone broadband will change differently, benefiting, benefiting from, KPN's organization, KPN scale. And obviously, there's no risk of at least the wholesale fees that are charged to, to Youfone will no longer matter. So I think Youfone in KPN will have an opportunity to regain, momentum in broadband over time, but in line with the market's growth in mobile subs and flattish on broadband subs. Then again, the latter, I think we should definitely be able to turn around in the, in the KPN environment. Thanks for that. And going forward, would you be willing to give maybe a bit more disclosure, say, next quarter on the split between the KPN main brand and then the sub-brand, customers and the net add share? Because it would be, we might expect that net adds to accelerate in postpaid, but I suppose that will be coming from lower quality customers or lower value customers, I should say. Is that something you're going to give us more detail on in future? Yeah, well, yeah, well, wrongly, I mean, we know Youfone for a long time because they always used our network, so the interaction with the company was always on an excellent level. Very strong in mobile, like Chris Figee said, very strong player on the mobile side. And we will keep Youfone a bit on a distance, of course, leveraging on the broadband side, the KPN machinery. But from a mobile point of view, I think it's very important to ... keep the brand alive and keep the very efficient organization like this. So, I think we can be transparent on what Youfone will do in the future. But the team is currently sitting together with Youfone, and let's see how we are going to disclose on Youfone in Q2. That's what we have to work out. Great. Thanks very much. Thank you, sir. Ladies and gentlemen, we have time for only one more question, and the last question will be coming from Georgios Ierodiaconou of Citi. Please go ahead. Yes, thank you for taking my questions. It's just a couple of follow-ups on topics that were discussed earlier. The first one is on wholesale broadband base. And I think, Chris, you mentioned that it's been some of the smaller operators that resellers are struggling. And I'm just curious whether you've already seen any impact from Odido's other wholesale partnerships in the market, and whether some of their traffic or migrations are going to other fiber networks, or whether that's not come through yet. And then the second question is around some of the pricing calls that you just made and particularly on the promotional side. What we saw in previous years is active price increases were reinvested promotionally by other players. You mentioned earlier that both you and Odido are making moves that suggest you are more focused on your broadband base. Do you mind commenting a bit on the behavior of Ziggo? Do you think now they've made smaller price increases, maybe there'll be a bit less promotional also, or whether you've already seen any signs of that? Thank you. Yes. George, on the first one, on the wholesale broadband competition, certainly the flattening of growth in growth is more the decline in smaller players. So basically, what happens is they churn on copper and have little chance, little success in growing on fiber. And I think we see where we can help them there. On wholesale broadband competition, we do not see any active migrations. So basically, we don't see anyone who has multiple wholesale points actively migrate wholesale customers away from KPN to other lines. And we don't expect it either, because typically, the customer, once you touch them, the risk of churn is way too high. So we see that happen, that we don't see it happening. It might be that the growth adds may be affected going forward, as, you know, they have alternatives to go to in terms of growth adds. But migrations, active migrations from KPN copper to others is actually not at play, not at stake at this point in time. So it's really the net effect of, I think, smaller players affected by the competitive intensity, having the ability to compensate with growth adds. And then, if at any broadband competition, it's a bit of less new inflow, but surely not additional outflow or active migration. That is not at play at this point. Yeah, and your question on our dear friends from Ziggo. Yeah, of course, we have to understand that we really are putting pressure on the company with our fiber strategy. And it's also a bit that they need a new kind of strategy, to be honest. They have been pretty tough on discounts in the market. Compared to us and other players, they went deeper. So it's important that we cool things down a bit in the Netherlands, at least for now, that is. So that's why I like our Household 3.0 strategy that much. It's a signal to the market that we want to cherish our base. To give you an example, for all existing customers, we have a renewal package ready in the app. You only have to click to get it, and it's all about the improvement of quality and download speed. So, but that's also for KPN, a bit of a change. It's easy to communicate, but it's also something we really have to implement as a company. And it also should signal to Ziggo that it's not only about acquiring customers and losing a lot of customers on the churn side, but it's also about cherishing your base. So if we do that, probably we will cool down the market a bit better. All right. Thank you. Thank you, everyone. As usual, we will confirm... Yeah. Okay, everybody ready? That concludes today's conference call. If you have any further questions, please reach out to the IR. Thank you. Thank you. Thank you. Ladies and gentlemen, this concludes today's presentation. Thank you for your participating. Have a nice day.