Koninklijke KPN N.V. (KPN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to this Extraordinary General Meeting of KPN shareholders. As Chair of the Supervisory Board, I will be the Chair of this meeting. I designate Mr. Spanbroek, Secretary to the Corporation next to me to serve as secretary to this meeting. At the table are also seated on behalf of the Supervisory Board, Mr. Noteboom, Vice Chair of the Supervisory Board. And on behalf of the Board of Management, the CEO and Chair, Mr. Farwerck, the other members of the Board of Management; Mr. Figee, Ms. Garssen, and Ms. Snoep who are also present in this room. We also have present here Ms. Leemrijse, civil law notary in Amsterdam who will draft the report on behalf of the Central Works Council and present on behalf of the Executive Committee, Ms. [indiscernible]. Welcome the envisaged members of the Board of Management, i.e., Ms. Vergouw and Mr. Stammeijer, whose nominations will be presented to the meeting today's announcements. And the envisaged member of the Supervisory Board, Ms. de Jager, who -- is also present. Her appointment is a voting item on the agenda today. Welcome, Marga, and welcome all. This meeting is convened in time and according to the requirements by placing an invitation and the agenda on the KPN website on 19 April 2023. Now a few general remarks. Shareholders in the room have the opportunity to take the floor during the meeting. If you would like to speak, please raise your hand so that I may give you the floor. For the sake of the report, please state your name and place of residence and state your question or remark as briefly specifically as possible. For the report, this meeting is being recorded. The official language of this meeting is Dutch. I hope you will all have an informative meeting and we'll now move on to agenda item 2, which is the announcement of the intended appointments to the Board of Management of Mrs. Chantal Vergouw and Mr. Wouter Stammeijer. The Supervisory Board intends to appoint these 2 candidates to the Board of Management from 1 June 2023, in accordance with the press release dated 27 March of this year where the company announced that Mr. Fouladi and Mr. Van Overbeke will step down. Both gentlemen as of 1 May 2023 have step down from the Board of Management. Mr. Van Overbeke was succeeded on 1 May 2023 by Mrs. Snoep as Chief Consumer Market. Mrs. Snoep was already a member of the Board of Management and served as Chief Business Market. Her term will continue until the AGM to be held in 2024. Pursuant to the above, the Supervisory Board intends to appoint Mrs. Vergouw and Mr. Stammeijer for a 4-year term, i.e., until the AGM that is held in 2027 as members of the KPN Board of Management. The Central Works Council has issued a favorable recommendation regarding the intended appointment of Mrs. Vergouw and Mr. Stammeijer. I will introduce all of them to you. I will introduce both of them to you, and we'll also give them the floor briefly to describe their motivation. After explaining the intended appointments, you will have the opportunity to ask questions. First, I will notify you about the intended appointment of Mrs. Vergouw then Mr. Stammeijer, the Supervisory Board intends to appoint Mr. Chantal Vergouw as member of the Board of Management as of 1 June 2023. Chantal will assume the role and responsibility of Chief Business Market, Chief B2B as Mrs. Snoep who held that role until today has been appointed as Chief Consumer Market. As I indicated, Mrs. Vergouw is still a member of the KPN Supervisory Board. As of tomorrow, she will discontinue this role, if in keeping with the nomination she has appointed as member of the KPN Board of Management. Regarding the vacancy that will arise when Mrs. Vergouw steps down from the Supervisory Board, we will provide you with additional information later on and discuss that. First, I would like to introduce Mrs. Vergouw given the announcement on the agenda. Chantal is presently Chair of the Board at Interpolis, the Dutch insurance company and part of Achmea. Chantal will step down from this position as of tomorrow in connection with her intention to join the KPN Board of Management. Prior to joining Interpolis in 2016, she held various management positions at ING for over 15 years. The supervisory Board is familiar with Chantal as a zealous and dedicated leader with extensive managerial experience at large organizations and has vast knowledge in fields such as digitalization, customer service operations, marketing, branding and omnichannel sales in B2B and B2C. To be complete, please see the information and the agenda for Chantal's curriculum vitae. Chantal is present in this room and I will now give her the floor to introduce herself briefly. Chantal, you have the floor.

Thank you, Gerard. I will be brief. It's very simple. It's an honor and a pleasure to join KPN from tomorrow. To me, KPN is a company with an illustrious history and even more illustrious future build with prospects, and I find this a very special moment to be able to be part of that. When I look at KPN, some elements are crucial to me. The staff are very inspired and very special. I have met some of them already. And the infrastructure network is top notch and perhaps still more important, it has some very special branches and services that need to be elaborated. And I look forward to figuring in that accelerate to grow strategy of KPN. And I would like to be part of it, and I'm very proud of what Marieke and her team have deployed, and I would like to take the next steps thereafter. So many years of experience working at banks and insurance companies find it very special to be able to do this in a different sector. And I'm looking forward to it. We have a beautiful sunny day. Thank you for listening.

Thank you, Chantal. Next, the announcement of the intended appointment to the KPN Board of Management of Mr. Stammeijer. The Supervisory Board intends to appoint Wouter Stammeijer to the Board of Management as of 1 June 2023. Wouter will assume the rolling responsibility of Chief Technology and Digital Officer, CTDO. Mr. Stammeijer has extensive experience within KPN and as KPN's Chief Strategy and Development Officer in recent years, he's figured prominently in designing the KPN strategy and has vigorously shown his commitment in its implementation. Before Mr. Stammeijer was appointed Chief Strategy and Development Officer, he headed up the Investor Relations department at KPN. Before joining KPN in 2010, he held various senior corporate finance positions within ING. To be complete, please see the information in the agenda for Wouter's curriculum vitae. Woutern is present here, and I'm pleased to give him the floor now to introduce himself briefly. Wouter?

Thank you, Gerard. Yes, I have been responsible for strategy and mergering acquisitions at our innovation departments in recent years, and this job is an incredible responsibility for the vital digital infrastructure in the Netherlands. If you look at all the major transitions and the care and mobility and energy. Well, KPN can do wonderful things to contribute to all these transitions, so it's a great honor and a privilege to work with the team in the coming years. We have to be incredibly good with our fiber and 5G networks as well as core network infrastructure, which is less visible. Security and safety are becoming increasingly important as our customer data -- customers entrust their data to KPN, so heading up technology and the KPN digital office, that's where technology and people converge. And that's what matters to me, connecting people with technology, looking ahead and letting people rely on the technological developments. It's an incredible priority. We're also working with artificial intelligence and automation, everything that can help KPN and consequently the Netherlands move ahead. Thank you for your trust. I'm very eager to get to work with the team.

Thank you very much, Wouter. As for the remuneration of the envisaged Board of Management members, this is entirely within the existing KPN remuneration policy that was approved by the General Meeting of Shareholders. The base salaries of both Chantal Vergouw and Wouter Stammeijer equals EUR 663,000. They are both eligible for the short term incentive in cash and a variable long-term incentive based on conditional shares based on achieving financial and nonfinancial targets of the group. And as far as the other special terms, the packages meet the remuneration policy approved by the AGM. Both appointments will be for a 4-year term pursuant to our Articles of Association. They will extend until the Annual General Shareholders Meeting in 2027. Pursuant to our Articles of Association and Dutch legislation, members of the Board of Management are appointed by the Supervisory Board. Prior to that, the General Meeting of Shareholders needs to be notified and I just did that. You have the opportunity to take the floor to ask questions about this agenda item. Does anybody have any questions about the intended appointments to the Board of Management, as I just explained? Apparently, there are no questions. I determine that there are no questions about this agenda item, and this agenda item is not a voting item. After the meeting, we will perform the additional formalities. And on behalf of the Supervisory Board, I am congratulating Chantal and Wouter on their appointments. So all the best, and of course, we have very high expectations as an organization. Now on to the third agenda item, which is the opportunity to make recommendations to appoint a member of the KPN Supervisory Board. As I just informed you, Mrs. Chantal Vergouw will step down from the Supervisory Board of KPN. When in keeping with the nomination as of tomorrow, she is appointed as a member of the KPN Board of Management. The Supervisory Board intends to fill the vacancy arising from her resignation by nominating a candidate for appointment by this Extraordinary General Meeting of Shareholders. The vacancy that has arisen must correspond with the profile of the Supervisory Board. The Supervisory Board aims for a diverse composition with respect to experience, skill, age and gender. In addition, the candidate needs to have knowledge and experience with management of large companies, national and/or international corporate industry, finance and/or relations between companies and society. In addition, the candidates need to have some affinity with telecommunications and ICT industries. We intend to propose that Mr. Marga de Jager be appointed, but first in keeping with the article of Association, the Extraordinary General Meeting of Shareholders has the right to make a recommendation to appoint a member of the Supervisory Board. Does anybody here in the room have any suggestions or recommendations for a candidate? Nobody does. I note that the Extraordinary General Meeting of Shareholders has not recommended any candidate. Now on to the fourth item on the agenda, which is the proposal to appoint Mrs. Marga de Jager as a member of the KPN Supervisory Board. The Supervisory Board recommends Marga de Jager for appointment as a member of the KPN Supervisory Board by this Extraordinary General Meeting of Shareholders. I will briefly elaborate on this nomination and we'll also refer to the additional information in the agenda. Mrs. de Jager, in our view, will be a valuable addition to the Supervisory Board and meets the requirements of the Supervisory Board profile. Mrs. de Jager is an experienced executive with extensive experience in public and private domains. She is presently the CEO of the ANWB, an association comprising over 5 million members that is known for services such as road assistance. Previously her positions included being Director of the Alarmcentrale of ANWB, responsible for marketing sales in the consumer market and for B2B assistant. Prior to working at the ANWB, she worked in various commercial positions at Leaseplan. Mrs. de Jager is independent in the sense of the Dutch Corporate Governance Code. The nomination of Mrs. de Jager supported by the Board of Management and the Central Works Council. The position of the Central Works Council regarding this nomination peers on the corporate website, together with the documents for the meeting. For these reasons, the Supervisory Board is nominating Mrs. de Jager for appointment to the Supervisory Board for a 4-year term concluding at the end of the Annual General Meeting of Shareholders to be held in 2027. Marga is present in the room, and I am pleased to give her the floor for a brief introduction. Marga, you have the floor.

Thank you very much, Mr. Chairman. Now that I'm here, I would like to take this opportunity to congratulate Wouter and Chantal with their intended appointments. And I hope that they truly enjoy this work, and I believe that as a result, we have a balanced and strong board of management and they have my entire trust for the future. Now I'll introduce myself briefly. As stated -- details appear on my curriculum vitae, but I'd like to explain why I find it such a privilege to stand before you and do this work at KPN, well probably because Chantal's position and work are changing, but also because I think it's so wonderful to clash ahead toward a green heart. It's a genuine Dutch brand and has a wonderful position with many Dutch people and is known for its thinking ability, so I believe that the benefit of KPN can be elaborated and the potential can be further expanded. And I envisage my contribution in ensuring that the social role of KPN for example, security, and connectivity and becoming more sustainable. We want to ensure that we have an advantage over others there, and I also want to ensure that my experience at Leaseplan and ANWB are put to good use as well. And it's a great privilege to be able to contribute to this to ensure that the 2 roles that we have public and private as KPN are best served. And thank you very much for your trust in me and confidence. Thank you.

Thank you, Marga. Now on to any questions about this agenda item, does anybody have any questions about the proposed appointment? You may now cast your vote on this agenda item. This concerns the appointment of Marga de Jager as member of the Supervisory Board, the proposed appointment before proceeding to the vote. The Secretary would like to announce the number of shareholders present and the number of votes that is represented. He will also explain the voting procedure. Jasper, you have the floor.

Thank you, Mr. Chairman. Ladies and gentlemen, at the meeting, we have 5 shareholders and proxy holders present in person and the holders of exactly 2,999,155,171 shares with an equal number of votes are thereby present at the meeting. This rounds off to 75.6% of the voting subscribed capital. Of this number, over 2.3 billion votes were received via proxy with voting instructions by the civil law notary via the e-voting system and over 653 million votes by the company secretary also with voting instructions. Given the limited number of those present, we will not conduct the voting electronically, but we'll vote by roll call. I will, therefore, ask you to indicate whether and if so, how many votes are being cast against the proposal or abstaining from the proposal. The remaining number of votes will then automatically be cast in favor. And based on your number of votes, I will determine whether or not the proposal has been adopted, and the exact voting results will be posted on our website shortly after the meeting. Are there any questions? If not, then I will now open the vote on the proposal to appoint Mrs. de Jager as a Supervisory Board members. Shortly before the meeting, the civil law notary gave me the voting instructions issued to her. In addition, there were voting instructions to me as a secretary. The total equals 2,983,051,505 votes in favor of the proposal of 11,992,573. Abstention 4,104,493 votes against the proposal. Please raise your hand if you would like to take the floor to vote against the proposal. I see no hands raised, no votes against. May I ask you to raise your hand if you would like to abstain from the vote? I see no hands raised to abstain from the vote. I note that all remaining votes and those are the votes present here are being cast in favor of the proposal, and I thereby note that the proposal has been adopted, and the exact figures will follow on our website.

Thank you, Jasper. Then I note that Mrs. de Jager has been appointed to the Supervisory Board. Marga, congratulations on your appointment. We're delighted to be able to welcome you at KPN and as a member of our team. Wouter and Chantal, the announcement to the EGM has been made. In a moment, we will cover the formalities, and we very much look forward to working with you. Now on to the fifth and final agenda item, which is any other business for this Extraordinary General Meeting of Shareholders. Does anybody here have anything for any other business? Questions or comments? No? Thank you. That takes us to the end of this meeting. And the lights go off. Thank you very much for attending. And in the lobby when you leave the room the stairs to the right going up, you will have the opportunity to chat afterwards, and I hereby close this Extraordinary General Meeting of KPN shareholders. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]