Koninklijke KPN N.V. ($KPN)

Ladies and gentlemen, I warmly welcome you to KPN's Annual Shareholders Meeting from our headquarters in Rotterdam. We are delighted to welcome you again this year both in person and virtually. This means that our shareholders can fully participate in this meeting, both in person and virtually, including asking questions and casting their votes. As Chairman of the Supervisory Board, I will preside over the meeting. I hereby appoint Mr. Spanbroek, the Company Secretary, he's next to me as secretary of the meeting. And now I would like to introduce a few of those present. Here at the table behind me are the members of the Executive Board and the Supervisory Board. And in the room, we have Ms. [indiscernible] and Mr. [indiscernible] on behalf of PwC who is our auditor. Ms. [indiscernible], she's civil [indiscernible] notary in Amsterdam, and Ms. Bosman, a candidate notary also in Amsterdam. They will be drafting the minutes. And then on behalf of the Executive Committee of the Central Works Council, we have Mr. [indiscernible] and on behalf of the KPN Preferred Shares B Foundation, we have Ms. Ares, Mr. [indiscernible] and Mr. [indiscernible]. The meeting was convened in a timely manner and in accordance with the required formalities by posting the notice and the agenda on KPN's website on the fourth of March of this year. I would also like to address a few administrative announcements and formalities starting with a note regarding the voting process. The shareholders in this room will vote using their own smartphone or tablet or the tablet that was given to them at the registration desk. To vote, you have to be logged in to the voting platforms. And insofar, if you have not logged in yet, then do so right now because we will be closing the registration in a few moments. If however, you're participating online, you can also vote online provided you've registered and are logged in. During the entire meeting, so already right now, you can cast your vote on all voting items. Voting on all items will not close until the end of the meeting before the question-and-answer session and the voting results on all items will be announced after the Q&A session. This minimizes disruption to the meetings proceedings caused by potential internet connection delays for shareholders participating virtually. And obviously, if you use KPN, there will be no such delay, let me say that as a side note. Then one final note regarding the language of this meeting, the official language will be Dutch. However, questions may be asked in either Dutch or English. For our -- we translated in English. Questions can be asked in English. Answers will be given in Dutch and then translate it into English. As announced on our website, the following options are available for asking questions. So for those in the room, if you'd like to take the floor, then please raise your hand so that we can give you the floor. For shareholders participating online. In the online environment, you can use the button request to speak to indicate that you wish to ask a question, and that will place you in the virtual waiting room and KPN operator will then connect you to the room. Please note that there is a slight delay in the video connection. So we will first address questions on the room and then any questions from virtual participants. Now to assist the person taking -- drafting the minutes, I would like to ask everyone to state their name and place of residence and to formulate their questions as briefly as concisely as possible. And a recording will also be made for the purpose of drafting the minutes. Now I would like you all to put your phones in silent mode for as long as you've not done that yet, and I wish you, of course, an interesting and very informative meeting. Let's start with agenda item 2, which is the fiscal year 2025 report of the Executive Board. In the following presentations, we will discuss that year. And for that, I'd like to first give the floor to our CEO, Mr. Joost Farwerck; and then to our CFO, Mr. Chris Figee. Afterwards, you may ask questions about both presentations. So Joost, take it away.

Thank you. And apologies for the noise. There was a bottle of water next to my feet that I didn't see. So thank you, Gerard, and welcome, everyone. It's great to see you all here in Rotterdam at this Annual Shareholders Meeting. 2025 was the second year of our Connect, Activate and Grow strategy, which we launched at the end of 2023. Last year, we achieved our financial targets, and we further strengthened our strategic core. And we see that innovations, including the rapid development of AI are creating new opportunities to further improve our network services and customer experience. And this puts us on track to realize our medium-term strategic and financial ambitions. Let's take a look first at the fundamentals of our strategy. During the strategy update in November of last year, we confirmed the course of our Connect, Activate and Grow strategy. We've set our ambition for nationwide fiber optic coverage at a maximum of 85% by 2030. And we will continue to invest heavily in our digital infrastructure and customer environment in the next few years as well as in our resilience and in cyber. At the same time, we're focusing on growing our client base and further simplifying our operations. And this way, we want to further strengthen our leading position as the #1 Internet provider in the country, grow our revenue and operating profit by an average of approximately 3% per year and continue to offer our shareholders an attractive return, supported by growing free cash flow. And I'm convinced that our strategy will enable us to create sustainable value for all stakeholders, i.e., our customers, our shareholders, our colleagues, obviously, and the Dutch society as a whole. Our strategy includes a fully integrated ESG agenda with ambitious goals in the areas of responsibility inclusive of sustainability. In doing so, we're actively committed to a better Internet, right? And this means not only that we provide a super fast connection but also that we work toward a green, safe and more social online environment. In an environment where everyone can feel welcome and connected. Safety comes first. And under this security first principle, we continuously protect our network and offer simple, reliable security solutions for consumers, businesses and governments. In this way, we ensure that everyone can be safer on that. In addition, we're strongly committed to digital and social inclusion. Through our campaign and also jointly with social partners, we help young people, for example, and their parents to prevent online exclusions. Also in the field of sustainability, we're making clear progress. We have further reduced our emissions across all 3 nation scopes, and we have set the goal of using only sustainable electricity at every hour of the day. Last year, we began purchasing solar energy directly. And starting next year, the majority of our power will come directly from wind and solar sources. All right. Let me walk you through our results of 2025. So revenue from services rose by 2.7% with contributions from all segments. In addition, the EBITDA, operating profit and free cash flow exceeded our guidance, our expectations at the end of the year. After years of rising cost, we succeeded this year reduce our indirect costs by EUR 10 million, which is a very important turning point. Last year, we've also invested heavily in our infrastructure. For example, together with our joint venture Glaspoort, we connected about 400,000 additional households to fiber optics. And once again, last year, we were recognized with the award for the best mobile network in the Netherlands. And we also achieved the highest score worldwide. As said, we indeed have achieved our targets, our goals. So the financials, the revenues from services, for example, grew by approximately EBITDA, slightly above guidance. Free cash flow at EUR 952 million, exceeding the increased outlook we provided in our half year results despite a slightly higher CapEx and the regular dividend of EUR 0.82 per share for 2025 is still on the agenda for later this afternoon. In addition, we bought back EUR 250 million worth of shares. Let me also tell you something about our operational performance. We hold a clear leading position in the Dutch fiber optic part together with Glaspoort, that joint venture, we now cover nearly 6 million households, which represents about 70% of the company. And to maintain this leading position, we have further optimized our rollout process, and we're increasingly focusing on connecting not only households and activating customers, right, by -- in that way, increasing our footprint. And we see this reflected in a rapidly growing number of fiber optics or consumers. And in the consumer market, the revenue grew by 2%, driven by that consistent growth in optic fiber and also mobile services. Also, our client base has continued to grow this year. The number of broadband customers rose by a record number of 38,000 and we also added 129,000 mobile subscription, and this growth exceeded our market share. Throughout the year, we saw the net promoter score, let's say, customer satisfaction continue to rise. And that was thanks to operational excellence the new services that we call CombiVoordeel and initiatives that strengthen digital engagement. And as a result, customers are increasingly really experiencing difference when they are a client of KPN. In the business market, we see that the revenue from services rose by 3.6% year-on-year. driven by all 3 divisions, in particular, the SMEs and also tailored solutions, i.e., projects for large clients, once again grew strongly. And security is also a core component of our business propositions. And currently, about 70% of our SME clients have additional protections by default, and we block large numbers of cyber threats every single day. For vital critical sectors, we provide customized solutions, including DDoS protection and high availability of securities. So in this way, we strengthened the Netherland's digital resilience by really focusing on the business market. And in that very same market, we also saw our NPLs improving over the year, reflecting customer confidence in stability, reliability and quality of our network and services. Then finally, wholesale revenue from services rose by 3.5%, driven by both the strong in fiber optic services and the continued growth in mobile and especially international sponsored roaming, which is a rapidly growing market. in which we enable other providers to utilize our global roaming deals and KPN hereby sales capacity to, among others, travel SIM providers, among others so that they can serve their customers worldwide. Now I'd like to hand the floor to Chris to discuss our financial performance in more detail. Thank you.

Thank you, Joost. Good afternoon. As Joost mentioned, we achieved our financial targets from last year, and we are fully confident that we will be successful again this year. The financial results last year were solid and form a strong foundation for the future. Let me highlight a few. Firstly, the adjusted revenue increased by 3.5%, driven by growth in service revenue across all segments and higher others. Secondly, the adjusted EBITDA after leases, our operating profit rose last year by 5.1%, supported by higher revenue and lower indirect costs. The EBITDA margin improved by 70 basis points to 45.2%. Thirdly, our underlying net profit rose by 0.9%. Fourth, our free cash flow amounted to EUR 952 million despite or perhaps even thanks to the fact that we once again invested more than EUR 1.2 billion. This represents a 5.8% compared to 2024. EBITDA grew this year, largely driven by strong underlying performances. Even excluding the positive contribution from the acquisition of [ Althio ] and 2 onetime settlements related to patent uses, our EBITDA grew by 3.1%. This means underlying growth exceeded our 3% CMD guidance with the onetime effect for the boosting total growth. The growth was driven by higher revenues from services and also supported by strict cost control. Direct costs rose mainly due to mix effect in B2B and higher access costs with third parties, like Glaspoort joint venture. In 2025, we reduced our indirect costs by EUR 10 million, which is a clear turnaround after 2 years of inflation. So the savings resulted from disciplined cost management, a focus on automation and digitization, optimization of the lease portfolio and a reduction in the workforce of approximately 300 FTEs on an annual basis. And already, as explained during the strategy update, we're aiming for EUR 100 million in savings on indirect costs over the next 5 years. The operational free cash flow measured as the operating profit minus tax grew by nearly 10% or approximately 6% excluding the settlements and [indiscernible]. In 2027, following the completion of the peak of the fiber optic rollout, we expect a reduction in CapEx of about EUR 250 million bringing our CapEx below EUR 1 billion growth in our cash flows in the coming years. As said, our free cash flow amounted to EUR 952 million, which is an increase of 5.8% compared to last year and accounts for 16% of our revenue. This growth was primarily driven by a higher EBITDA, but was partially offset by changes in working capital, higher taxes and higher interest expenses. Our cash position remains strong with over EUR 500 billion in cash and short-term investments. KPN remains focused on greater value as evidenced by the strong return on capital deployed. Our ROCE improved by 30 basis points in 2025 to 14.7%, bringing us closer to our medium-term target of 15%, slowly getting there. This improvement is attributable to our operational efficiency and shows our ongoing commitment to value creation within all our operations and investments. Before I continue, let me briefly explain our risk management statement in the [ VOR ] in Dutch. In this statement, we describe how we identify and manage our most risks and which level of assurance is provided by our internal controls. In 2025, the scope of the VOR was expanded in line with the Dutch government whereas the statement previously related exclusively to risks surrounding financial reporting. It now also covers sustainability reporting and compliance and operational processes. Strategic risks fall outside of the scope. At the same time, this call is less explicit about certain financial risks, like financing and tax risks. Therefore, for the purposes of the VOR, we classify funding risks at strategic risks and tax risks as compliance risks. And KPN has been investing for many years in a robust internal risk management and control systems, including for operational risks. And this is also closely aligned with our structural investments in fixed and mobile networks and also our security first initiatives. The expanded VOR largely built on existing systems and processes and helps us further codifying them. And since 2025 is the first year of this broader statement, we have established a dedicated project organization with close involvement of both the Executive Board and the Supervisory Board particularly through the Audit Committee, but our auditor was also involved, not to provide assurance because that's explicitly not requested, but to advise us and to also verify consistency. All right. Within the control framework, we distinguish basic measures and supplementary measures. Basic measures apply organization-wide and to all risk categories. We then implement additional measures where our risk appetite is lower and a higher level of assurance is required. And we've explained this approach in more detail in the annual report. In short, the lower the risk appetite and the higher the desired level of assurance the greater the emphasis on supplementary measures, right? And we apply this approach consistently within KPN and is also explained in the VOR. And this brings me to the essence of the risk management statement. For financial and sustainability reporting, the level of assurance aligned with the codes requirement. For operational and compliance risks, we use a double negative statement, in line with standard market factors. The VOR itself does not provide an unambiguous indication of the period to which it relates but in line with our risk management system and how it operates and in line with the scope of the annual report, you may read our VOR as a statement that relates to the entire fiscal year and not just to the situation as of the balance sheet date. Any areas for improvement identified were addressed in consultation with the [indiscernible] auditor and have not resulted in errors in external financial reporting. And having said that, I would now like to give the floor to our Chair.

Thank you, Joost and Chris. Ladies and gentlemen, I would like to point out that the slides from this presentation will be available on the KPN website after the meeting. Does anyone have questions about these presentations, either in the room or via the video link, the presentations of Mr. Vreeken. Once again, if you would like to say who you are and where you are from, that would be convenient for the minutes -- excuse me, an audible to the interpreter.

Be well. My name is Robert Vreeken of We Connect You. And I'm from Amsterdam. I am specialized with -- on a dialogue with businesses in the government. When I look at KPN and Ziggo, I noticed the following. At least when figures are correct, KPN is doing fine, slight growth, 3% to 4% a year, stable revenue from subscriptions and mainly from fiber and bundles. And when we look at Ziggo, that their revenue is decreasing by 2% to 3%. It's losing broad broadband clients and needs to adapt the strategy. That is my view on the matter. If you don't agree, please tell me so. Something else, looking back in time 1972, we had the ROM report. And now 50 years later, the global heating is 2.5 degrees as of the year 1900. And in 1973, we had an energy crisis and 50 years later, we don't just have an oil crisis but also gas crisis. So worldwide, it's one big miss. KPN should put more emphasis on sustainability. By AI, we get large data centers all over the place, and it's very difficult to stop that. But of course, you can use the heat and use solar panels on the roofs and use plants, but you can use the heat to warm or houses geothermal, it's a great battery to make sure that we store all of the heat, and we are not so dependent on fossil fuels because KPN is a very smart business. They are really innovative [indiscernible] was a member of the world's Wildlife Fund, which is very important because the earth is heating up and forests will help you to cool down. And I was Suriname and the size of the country is 4x as big as the Netherlands, and we only have 500,000 inhabitants, and 95% is covered in jungle. So KPN could contribute to make it more sustainable to increase the amount of forests. And you have nice positions. It would be such a good idea if somebody from the Board of Directors of KPN would become a Supervisory Board member at the Worldwide Life Fund and make sure that we make the earth greener and protect forests. [indiscernible] knows what the journey is towards that Indonesia has a lot of forests, but these are affected because they have so many inhabitants too, and we could help that. Now [indiscernible] is doing worse, even I was at ING, and there were lots of people that were protesting and they are becoming more sustainable. But you can ask ING, for instance, why don't you accelerate? You can do it a lot faster because the less we provide grants and use money to make the company more sustainable worldwide -- excuse me, inaudible to the interpreter. Well, I believe that I have very clear questions. My question is, one, to summarize, can KPN be very clear towards ING from the chain to become more sustainable. Furthermore, plant roots with this earth that's heating so much the Worldwide Life front can assist you. And it's not just responsibility of KPN but also for other businesses in the Netherlands to accelerate because the issue right now is we had a home report and we had the energy crisis in the '70s, and we hardly learned to the contrary. So we need a lot of activity, and this applies to your grandchildren and the nephews and the niches you have ask your children, ask your grandchildren will love this if you become more sustainable and plant a lot of forests. So these are my questions. And I can give you more clarification if you need it.

No, I do think you've made yourself very clear, and you've had an ample opportunity to elaborate. Well, I can be brief. If it's about what we have to do towards other businesses, it's not in our nature to dictate to other businesses, what they should do. Obviously, we do discuss matters with other businesses and also those businesses that you've mentioned. So indeed, we have consultations, but it's not our position to tell these people what to do with regards to engagements of other members of this Executive Board with NGOs such as Worldwide Life Fund. We have a very clear policy if members of the Executive Board would want that or have ambitions to do. So we will allow them an opportunity to do so, and we will support them. With regard to our own sustainable efforts. You've heard it from Mr. Farwerck that we are on track and it's fully integrated in our operations. So let me leave it at that. Thank you so much. Moving on to Mr. [indiscernible].

So thank you, Mr. Chair, [indiscernible] on behalf of the Dutch Stockholders Association. And fortunately, they allowed me in. Now your annual report and the explanations was red clearly by us. And we noticed that the strategy that you've started is really creating value and becoming effective and is very good. KPN is performing very well with a lot of investments to increase fiber. But we do notice that it's positive distinction from the entire industry in Europe. Now in the years before this and also last year, you are aiming for value over growth. And the cash flow, of course, towards the shareholders is something we appreciate. And I believe that KPN is for many investors and many people that are members of the VEB has become very attractive. For those investors that are looking forward to a predictable cash flow and return on investment now. What we wonder about is how viable is it? And will it -- will you be able to continue this? And will the pressure on the markets increase and questions about that. When we talk about the rollout of glass fiber and the customers in October last year, you confirmed the goal to have about 80% of households in the Netherlands on fiber and the strategy in November changed that up to 85% and then in the year 2030. So you've increased your time line. Now is it because this delay? Or is there a different reason for that? Please explain. And you say that KPN is shifting its focus from cabling from putting glass fiber in the streets towards the houses, the households and home pass and home activator the changeover. It is stabilizing at around 47%. Are you happy with us with optic fiber. Now is it -- is that what you want? Or will it put pressure on the rates and on the margins. And we were wondering as well, what is the actual cost price to make sure that you connect people. And of course, there is inflation in the chain. So does that have an impact? And in other words, what does the shift of your focus mean for the expected return IRR on optic fiber projects. And what variables are decisive, are these the investment costs, the returns per customers or development of the margin. This is about optic fiber. Now a second item of concern is dependability on third parties if glass fiber is slowing down, to what extent would KPN need to hire or lease capacity from companies such as Delta Fiber? And what does it structurally have an effect -- how does this structurally have an effect on the cost level? And I believe there are about 200,000 connections of Delta fiber that you are intending to take over ACM has announced that they will investigate it. That's why it's taking long. Do you take into account that it may not materialize that takeover and what's plan B? And I would also like to ask another question about the 337 strategy. I don't know whether I've exceeded the number of questions I can ask, but growth of the group service revenues in 2025 was 2.7%. When the guidance for last year was 2% to 2.5%. And now if the revenue growth is structurally below 3%, that 37 ambition may be under pressure or not. And you've stated that it's difficult to make sure that the growth of the consumer service revenues is over 1.5%. Now what specific indicators grant you the covenants that in 2027 or 2028, you can achieve that? And a final question about cost and AI. When we look at the Q4 presentation, we've read that, of course. And if we read it correctly, the indirect operational cost after increasing for 2 years have decreased by EUR 10 million in 2025 to approximately EUR 1.7 billion, number of FTEs was lowered by 307 and the cost developments towards 2030, you aim to decrease cost by EUR 100 million. You are expecting EUR 25 million decrease. And does it mean that in the period, '27 to '30 will you achieve the rest? What does the recently agreed increase of wages for 5% for everybody at KPN. But what will the effect be on that? Will these agreements hit the margins, affect the margins. When we're discussing AI in your annual report, you state that AI is at the core of our transformation. It would lead -- should lead to lower costs and better service. You mentioned applications as client interaction via chat bots and other items. My final question, what part of the intended EUR 100 million cost savings towards the year 2030 will specifically be addressed to AI. And does AI already provide you with tangible efficiency improvements, higher productivity? Can you control the costs to comply with the EU AI act and controlling the algorithm risk so that -- do you, in other words, make sure that ROI on AI investments is, do you keep track of that? Now if you allow me and other speakers do a few individual questions, they are related to last year's results. And of course, we have some questions for your auditor.

Thank you for your questions. About optic fiber, I would like to ask Mr. Farwerck to reply and feasibility and the 337 and the costs I would like to give Chris Figee the floor.

Well, thank you for your questions. You've asked quite a number of questions. Let me see if I can reply in a structural manner. Indeed, extending the optic fiber, yes, we had a target for 80%. We did so at a time when we believe that 350,000 to 400,000 each year was the maximum. But we scaled up so much that we managed 600,000, 650,000 households house pass. And when you realize that delta and another company we're also rolling out an ODF we're also rolling out now. About 90% has already been provided and about 70% by KPN. Now it used to be true that KPN would connect all the households to copper and have large subscription. The government paid for it. We allow private business. We have to choose. We chose for a higher threshold, 85%, but that will be the limit because all of the Netherlands will be connected. That's one. And we are proud of where we are. Will we go beyond the 70%? Yes, that's why we put the limit at 85%. But it's very important that you use what your rollout, it was claiming regions what's people do to make sure that you can impose your business on that. And it is very important that we connect houses, not just making sure that indeed the cables are in the street as competitors do. We are activating a lot nearly 50%. You mentioned the numbers of house pass 2 activated, which is a very high number. When you look at the older regions, we are over 60%, and I can bet that we may hit 70% because when you move, you want to take a new glass fiber connection because it's already available in new areas, we need to cover a lot of ground, it's only 30%. So in the mix, nearly 50% of homes activated is actually better than what we believe was possible when we started out. So we're very enthusiastic, but there is a limit. It's important for the shareholders. We can't continue unlimitedly we need to yield what we've built. I think 85% is quite a stretch if we would achieve that by 2030, I would be very happy. And I think it is a very good pillar to -- for the Connect and Growth strategy. You asked for the cost price, well rolling out glass optic fiber is, of course for construction. It's all about building points of presence and activating equipment. Now those prices, of course, have increased. Maybe Chris can give you more information about that later. But we are also innovating together with our contractors. 8 years ago, we started with a rollout in a manner that has changed over time. So it takes a lot less time to achieve that. Of course, labor costs make sure that our rollout costs increase, but we also know how to reduce those costs. using third-party networks. Of course, we are a company that builds assets and then uses the network. We serve our customers on a copper network that's of high quality, mainly in cities, it can last for a few more years. We were looking for other regions to switch and serve our customers. And our earnings model we see, yes, in our own network. In some cases, we use other people's network, I think, near [indiscernible] we have optic fiber company that we've made agreements with so that we can serve customers over there. But in general, you would like to say the KPN strategy is to serve asset-heavy customers. 200,000 is what we want to take over by -- from Delta by Glaspoort joint venture. It's taking a long time. Will it materialize? We don't know the fact that it's taking so long indicates that ACM has a lot of doubts about it to put it clearly. But it's a very straightforward transaction between Delta and Glaspoort and KPN about 200,000 houses, you would say just a few months of work for us. So it's not a game changer for us, but it's interesting to see what the arguments of ACM are when they finally approve. I don't know why they shouldn't approve but it's taking very long. Well, that's the Netherlands for you. 337, Chris. Maybe about AI. We have no strategy, which we say AI will make sure that we earn so many millions. We have clear programs, clear targets in the operating autonomous operations to summarize everything in the customer environment, everything in other domains will be supported by AI, AI solutions. We're very enthusiastic in the transformation programs, together with other activities, will make sure that we reduce cost by EUR 100 million. So AI is really important for us, important on how to serve customers and how to improve that for our customers. and also in transformation to the new business that can operate at a lower cost level. It's not like AI is an independent strategic theme. It's part of the transformation of the business. costs, the final matter. Minus EUR 10 million is the rest all back loaded. Well, in the past few years, we were increasing by about EUR 50 million. And if you move from EUR 50 million plus to minus EUR 10 million, the difference is EUR 60 million. That's how I approach '24, '25. It was a very important transitional year. And the inflection point is very important. If we were able to achieve minus EUR 10 million now, we will end up at minus EUR 10 million in the next year and then accelerate. So actually, it is very realistic.

I don't think I could put it any better. So first, the question about 337. The first 3 is our revenue growth. The second one is EBITDA and profit growth and 7% is the average cash flow growth. And you're right that the revenue growth, the first 3 is now 2.2, 2.5, and our profit growth will be maintained at 3, that means that we have to do more with the costs. So the model to achieve the 3% EBITDA growth was in the past, largely because of revenue growth. And for the next period, it will be mixed a little bit more with cost decrease over the last year. This year, we see the same thing. But to get the EUR 100 million, we have to accelerate the cost savings every year. And that's part of the plans also as part of the transformation programs that he spoke about. So the second 3 will be achieved. That was the second one. And it might be 2.8%, 2.9% and then in 2026, maybe 3%, but that is -- depends a bit on the technicalities. And the 7% of free cash flow growth is largely dependent on the tax business is going to make the difference. So that's why the 337 which will apply for the entire plan period will be achieved. And for now, it will be 3.57, but the average will be 337. And for the cost side, indeed, we will accelerate things. through transformation programs, but also by simply looking at how you spend, right? And whether or not all your expenses are indeed useful. And there was one question about consumer in the -- or growth in the consumer market and what can we do to accelerate it? Well, in volumes, it is for us a way to basically keep clients for a longer period as a client, and we see that is indeed happening. The migration number is going down and also we see the number of new sales increasing. And if we have a rise and moderate price policy subject obviously to annual inflation indexation. We have -- we see that clients are keeping -- are staying, right, especially because of [indiscernible]. And so to stimulate really clients to move to bigger bundles, faster speeds, et cetera. And I think that is my -- that's my answer.

Are there any other questions.

I represent the VBDO, and we are establishing [indiscernible] for sustainable [indiscernible]. Thank you all for the talk we had prior to the meeting. This year, we have 3 questions about an affordable wage and CSR D, and I will ask them in one go. Firstly, I would like to come compliment you with identifying wages that might have a potentially negative impact because they are below the livable wage. However, in your policy documents, you use different terms with different meanings, for example, adequate wages, fair wages, and wages above living standards. So my first question is, would you consider to monitor the implementation of a livable wage under your own employees and then implement that in your next annual report? And tell us what the time line is for Tier 1 providers. Second question about livable wage. Can you explain how the ILO definition of livable wage has been implemented in your policy documents and whether or not you have clear expectations for providers. And then about CSRD, KPN as made sustainability statements included in the annual report and the EU Omnibus Act also came into force in March. And how do you plan to ensure transparency and consistency in your sustainability report. And specifically, which CSRD related disclosures will be initiated voluntarily. And how can you assure that investors can keep comparing risks, et cetera. despite a possible reduction in the mandatory report.

Thank you for your question. First thing, the wages, Hilde.

Yes, the wage matter is about our own employees and the ones in the chain, right? And from your perspective, you see difference in the conditions that we use. But what I think is exporting to mention is that the living wage is a very important topic to us. And we believe that, especially for our own employees, we have a very good package of employment conditions that really put -- represent the living wage at a very nice and good level. In the chain, we have agreements with our suppliers also through a code that we use, whereby we really determine through EcoVadis and JAC, which is an industry organization. They help us to ensure that also very focused audits take place and that actions are taken when necessary. Finally, something we could report more on towards the future is about us having set up a working group on taking steps in the future.

Thank you, Hilde, for that. And the CSR question is for you, CSRD actually.

Yes. As Joost said, sustainability and social entrepreneurial is part of our DNA. And you do that with or without the CSRD. We report, of course, in accordance with those guidelines. And in our annual report, I think that it has really transitioned now to make it more readable. The first time it was a little bit more certain, and now it's become more compact and more easy to read. And we see the Omnibus regulations in the same way. not to reduce their reporting, but to simply make it more legible, make it simpler and make sure that you don't keep track of the most important point. So climate, governance, et cetera, they are very important for us. And they will be topics that we continue to report on. And we will also do a new SD&A analysis this year. So we really see the numbers as a way to simplify things to focus. Now through this and the comparability is definitely an important topic for us. And even if the simplification should result in a switch to different types of measures, then of course, will come with comparable data. So for us, it's a simplification, but not a recent reduction in the reporting at all.

All right. Thank you. Any other questions in the room, perhaps or online. Oh, yes. someone in the room. Please use the microphone.

[indiscernible] from VEB. You gave a very clear answer to my other question. So I might just ask a few more, right? So the recent hack that took place at Oddo underline, of course, the importance of cybersecurity in the telecoms industry. To what extent does this give rise to for KPN to invest more in security and how do you assess your own risk profile in this regard? This KPN as a result of the incident, see any commercial effects, for example, an inflow of more customers or have clients change their behavior? This is one. I have 5 brief questions. Then frequency licenses. They and, I think, in 2029, 2030, and they will be auctioned off by the again. And can you please tell us which costs you take into account for this and how sensitive they are to a less positive option? And what can possible higher result mean for the plant shareholders payouts, which are now around EUR 6 billion. Then number three, mission-critical applications, i.e., defense. KPN positions itself very gladly as a partner for among others, the Ministry of Defense. Can you tell us precisely what contracts and services they are as far as they are not bound to confidentiality and what do they do for the revenue and the profitability. Then photonica, photonics, many people say that, that is even beyond AI, the new investors tip you are also involved in that because KPN Ventures invested technology companies in a very early stage, what is the strategic objective behind these investments? And on basis of which criteria do you determine whether they indeed create value for the company. And the final question before I go on a other topic, the business market. In the business market, we see especially that SMEs are growing that segment but the big industry -- sorry, the big companies are lagging behind. What are the most important reasons for this lagging behind of the growth of very big companies. And what concrete steps are you taking to have that part to grow? And then, of course, the risk management statement deserves attention, and Chris has already address that he's involved in all different ways. It's part of the corporate governance code. And in -- this was the first year that you had to report on it. And you're right that the introduction of the VOR, that statement has led to a separate structure. So -- and that it applies company-wide. It involves all the relevant parties and that also you have selected international frameworks and have set reliability levels or standards. How has that implementation of the VOR affected the internal review of the framework, especially last year, what has completely changed vis-a-vis previous years and which parts are manifestly more severe or more strict onto has become more formal. You're saying that there are no major failings as it's called, but you do mention 2 main points for improvement. Governance around authorizations and monitoring of access rights and more consistency in change management processes and controls. So my question is, why does qualify KPN not identify these as material shortcomings where does the limit lie between the improvement area and a major failings for you and which could create KPIs and deadlines are part of these 2 improvement processes. And when do you expect these topics to have been completed? You're saying that certain things are outside of the scope of influenceability of KPN because there are external factors but which ones are there. And I mean not all of them, but the most material ones because there might be more than 100, but which are the most relevant ones for the in-control statement. And does it concern, for example, the bendability of the rollout of Glaspoort or is it something else? And how did you concretely include these considerations in the conclusion.

Before I pass these to the members of the Executive Board, I'd like to make a remark because you mentioned the name of one of our competitors, and we will not address that. This is KPN's GMM and of course, we will share with you what KPN is doing with respect to serve security, but not other companies. So I would like to give the cybersecurity questions, increase the licenses to Joost. Mission critical and defense, I will pass on to Mr. Vergouw and the large business market. And Joost, can you also do the final one? Sorry, Chris, yes. And the VOR is his specialty. So of course. Joost.

Yes. This only shows how important cybersecurity and how sensitive the digital infrastructure is. And generally, it is doing very well compared to other companies. It's also very important to our economy and this growth. Since 2012, we have taken enormous steps in investments and in the organization respect to cybersecurity. The hack and as such was a small pack, but of course, it was seen as a triggering event by us as well to change our whole mindset and the security. First is thing that's been part of our DNA for more than a decade. So we invested a lot of money in the resilience of our own environment and do you have a seasonal organization as it's called, that is, I think, 1 of the best of the country, and our compliance is fully focused and directed on it. And with everything that we do, the security first mindset is very important. And our people are also changed train, sorry, on how to use the interface correctly, our operations, and we made the step also to services because we believe that we can help the country by offering good solutions in this regard. Large companies have to take care of their own line of defense, and we can help them. And Chantal will say something about it in the context of mission critical, but the SMEs don't have the time or the budget or the people to work on this. That's why we have services for the SMEs, for of charge, and it's not something we can switch on because then we would formally filter traffic. But like I said in my introduction, 70% of our clients are using it, and that means you work in a safe environment. And we did the same thing now for the consumer market. All clients -- customers of KPN can turn on functionality that enables them to work in a safe environment. And we trade, of course, clients as well as to what can you do to operate safely and to work safely. For us, it is super important. Why is it so important? Well, because we believe that this is what KPN represents. It is part of our brand. That's also why people see us as a very important player in the domain. That's also the same reason that the Ministry of Defense selected us as a preferred partner. That's why I'm part of the cybersecurity council advising the government. So it's not only an opportunity, but also an obligation that we really distinguish ourselves here. And we do that. So that with respect to security. Then the licenses for 2029, there is indeed a multi auction, multi broadband, whatever thing going. Probably several licenses will be auctioned at once. We've had good and bad auctions. The good ones are the ones whereby the costs don't go up too high. And the most recent one, the 5G was a very good one, whereby the Ministry of Economic Affairs, really opted to not go for the highest price in the market, but really motivate the mobile operators to invest as much as they can in the network with all kinds of obligations, of course, attached to the network. And the result is the 2 best model networks are in the Netherlands. And so I hope that the ministry uses the same wisdom and vision to set up the auction for or 2028 or '29 or '30, we don't know exactly when it will take place. And obviously, we're talking with them frequently to point to the necessity and the need and use for it because the digital economy is super important for the Netherlands, and it will be start to lose that great position that we have now. It's part of our financial framework, which parts from our financial strategy to allocate money to our shareholders. And of course, we have some room left for an auction, but also other events that may present themselves. So with respect to our balance sheet, we do anticipate for the auction. Photonics, Chris, where are we?

Let me address the KPN Ventures, that is indeed our -- it has a little bit less than EUR 100 million, and we invest here in companies that we have something with and then we can add something, too, right? So they have a product or a service that we would like to have in our portfolio, like our clients that we would like to help develop or services that we would like to actually procure because as we become more adult, they may be useful to us in the photonics event. And also 11 labs is another example. It's a very successful platform for speech genetic AI tooling and ALO is a travel party, TravelSIM party, 1 of our biggest partners, [indiscernible] is also a developer of software that identify theft from stores. So when you buy something at the supermarket or whatever clothing storing is still something they can see that. So we have a whole range of products. So it always will be a minority investment share, but there are companies that we believe could be something either for our clients or for us ourselves, right? And Photonics is one of them. And until now, they have been very successful investments. So thank you. Yes, indeed, risk management statement. We spent a lot of time on that. For us, it was a way to make sure there's a risk management framework on compliance, et cetera, was scrutinized. And what is our approach is something we wanted to decide. Is the framework good enough. This is robust enough. So the model of the base control measures and enhanced control measures was developed in that perspective, it was a way to address the risk and the VOR was indeed the starting point, it was a latency in the organization, but now we were forced to really detail it and to classify all the risks, so it did assist us. And I believe we are much more aware of the urgency to make sure that the risk tolerance on network level must be very low. The network must be in operation always. And that's something that we really and we aligned the network framework along those lines. So it helped us to make sure that the risk in which we control -- the framework in which we control the risk ourselves was really helpful. authorization management change, management, these are items for improvement because they were finalized at the end of the year. So earlier in the year, they were not in control, but we did a lot of manual controls to make sure that -- and in 2025, at the end of the year, everything was under control. So these were items to be improved over the year. And that's what we wanted to do. But I think that indeed the risk management statement helped us to be more determined about it, but we want to be honest. These are examples of matters that we could improve. So change management is now where we want to be but we are indeed looking forward to improving on that and the auditors will also make some statements about that later.

Thank you, Chris. I would now like to give the floor to Mr. Vergouw for the market items.

Let me start with the Ministry of Defense or rather mission-critical. Indeed, it's correct. As Josh said, it's an important partner to us and a big customer. But as you understand, I can't discuss customers, what I can inform you about this because the Ministry of Defense has indeed published it themselves is that, of course, indeed publishes the state secret cloud. And we are indeed engaged in projects like this and that we breathe along with the desires that would fit into the KPN business. Now obviously, question about your SME market and the growth figures in volume, which is also applies to the returns. We have 2 flavors in the mass-market business. That's what we opted for last has caught up with us, and we are able to make sure that we can serve a lot more digitally. So the volumes are -- what were the Executive Board, the Audit Committee and the Supervisory Board. Of course, the reports are also the subject of discussions between the Supervisory Board and the Executive Board. In addition, both the chair of the Audit Committee and the Chair of the Supervisory Board holds several findings. The relationship with the auditor can be characterized as open, critical, professional and constructive. -- based on the various consultations as well as the content of PwC's Board reports, we as superfund have concluded that relevant topics and considerations were discussed in the affluent transparent manner between the management and the auditor and are fairly reflected in KPN's financial statements.

I would now like to give the floor to the auditor, Mr. [indiscernible] to provide an explanation of the audit work that PwC has performed for KPN. In order to address the shareholders with full transparency, KPN has, for this occasion released PwC from its professional duty of confidentiality. It's also worth noting that PwC's external auditor has a duty to correct any material misstatement that is to save KPN makes any announcements today that present a materially incorrect picture of the financial statements, the sustainability report all the order to support PwC will request a correction, no later than the final adoption of the minutes of this meeting. I would now like to give the floor to Mr. Brinkman.

Thank you, Chair. My name is Jamie Brinkman. I am KPN's external auditor on behalf of PwC. In this role, I'm responsible for auditing KPN's 2025 financial statements. and for the insurance engagements related to the sustainability report in the tax governance section, I would like to explain our work. We've issued an unqualified orders opinion on KPN's 2025 financial statements. This means that, in our opinion, the financial statements retained a true and fair view of KPN's financial position as of December 31, 2025, and of its results and cash flows for the year 2025. In accordance with IFRS and Book 2 of the Dutch SivoCat. With regard to sustainability reporting, we've concluded that nothing has come to our attention that leads us to believe that the sustainability presentation contains material misstatements. In other words, we've issued an unqualified and modified limited assurance conclusion. In addition to the limited assurance on the entire sustainability statement, we've audited KPN Scope 1 and 2 emissions meth reasonable assurance and issued an unqualified assurance report. Finally, in 2025, KPN expanded the tax governance section in the integrated report in line with GRI 207. This section was subject of a limited assurance engagement on which we issued an unqualified conclusion. Now for the group audit, we applied a materiality threshold of EUR 50 million based on EBITDA. -- excuse me, revenue, in which 89% of the consolidated revenue, 99% of total assets and 97% of the adjusted EBITDA were covered. -- the first year of collaboration. 2025 was PwC's first year as KPM auditor. Last year, we devoted extra attention to getting to know the company, its strategy the revenue model, the internal controls and the IT environment. We also reviewed and discussed the files from the previous auditor to gain sufficient comfort with the 2025 opening balance sheet. I should have changed my slide. And we coordinated the transition with the Board and the Audit Committee all alone. Both KPN and PW invested heavily in ensuring a smooth transition. This resulted in a successful transition and the solid foundation for the coming years. And now I would like to highlight the key areas of focus for our audit that we've identified for the year 2025. The first is the acquisition of [indiscernible] and secondly, the reliability of the IT systems, including cybersecurity. First of all, the acquisition of [indiscernible] by KPN in the year 2025. Reporting of this acquisition requires significant assumptions by management. For example, regarding where the KPN has controlled the allocation of purchase price across the various assets and liabilities and the valuation of the divested infrastructure. We reviewed the transaction documentation valuation reports, critically assessed management analysis and consulted our own valuation, tax and accounting experts. Based on this work, we consider the assumptions used and the treatment of the acquisition, the financial statements to be appropriate. Second key audit matter concerns KPN's IT environment. Ken processes a large volume of transactions fully automated by means of a complex landscape of billing and supporting systems. Reliability and continuity of these systems, including cybersecurity are therefore, crucial. Following on last year's conclusions, KPN continued to work on 2 areas for improvement in year 2025. We identity and access management, managing and monitoring access rights to systems and IT management. The consistent and controlled implementation of IT changes. We mapped out KPN's IT environment and tested design and operation of IT controls. Where necessary, we performed additional more data-oriented procedures. This means that in certain areas, we rely less on the systems and more on the underlying data and transactions. In addition, we assess the measures that KPN has implemented in 2025 to mitigate the identified areas for improvement regarding identity and access management and IT change management. And based on our work, we've attained reasonable assurance regarding the reliability of financial information Important estimates and judgments. In our orders, we always pay attention to the significant estimates in the financial statements such as deferred tax assets, the valuation of derivatives and obligations related to the decommissioning of Networks, asset retirement obligations and the Glaspoort joint venture. For items like this, management's future expectations and assumptions are of great importance. We've tested these assumptions compared them with external information on possible and the system for potential buyers. We consider the estimates used to be within an acceptable range. Following on from the management report, I would like to address fraud risks briefly. KPN has further developed this road risk management. This includes the use of thematic fraud risk assessments and an overarching fraud risk analysis. In our role, as usual, we specifically examine fraud risks and based on this work have found no indications of fraud. Now the risk management statement. KPN. As stated before, KPN has included this VOR for the first time, it's our all to determine that this does not conflict the information together during our audit. We monitored the preparation of the VOR and concluded that this process was thorough at KPN. I will now briefly address sustainability. We've reviewed KPN sustainability statement. This means that using a combination of document reviews, interviews, data analysis and sampling we assessed whether the sustainability information is aligned with the ESRS requirements. In addition to limited assurance on the entire sustainability statement. We also provided reasonable assurance comparable to an audit of the financial figures regarding KPN Scope 1 and Scope 2 emission measurements. A number of errors were identified in the 2024 sustainability data, including Scope 1 emissions and other indicators. These errors have been corrected, explained and the comparative figures have been adjusted. Finally, the reliability of the report has been improved this year. The DMA has been enhanced and steps have been taken to further develop the internal control framework for nonfinancial data. Ladies and gentlemen, this concludes my remarks. I would like to thank the Executive Board, the employees and Supervisory Board for the Professional and Open Corporation in the past year. and I would now be happy to answer your questions.

Thank you. Mr. Brinkman. Do we have any questions in the back of the room.

[indiscernible] once again. Thank you for explaining [indiscernible]. You discussed the IT systems, including cyber systems. These were a key audit matter. And in your presentation, you clarified room for improvement in the identity and access management and IT change management. My question to you but also to the Executive Board because that's the first partly to apply, but I knew what specific deadlines and milestones does KPN apply for completing these matters with room for improvement. And when do you expect that these will no longer require an additional audit procedures. So that's a question to the Executive Board and a question to the auditor. We read the goodwill impairment test, and we read that carefully. We noticed that for consumer this year, you assumed an EBITDA margin of 51% to 54% when over the past few years, adjusted margins of over 65% were achieved. So my question to the auditor is, why is there such a difference between 51% to 54% and 65? And what assumptions are the basis for that? Final question, but to both of you, important, I believe, for the obligations to make sure that cables you no longer use to remove them from land held by third parties. There is no provision on the balance. According to KPN, there cannot -- you cannot give us a reliable estimate. We do see outpacing of the copper network, not everywhere, but in a part of the Netherlands, don't you think it's logical that this obligation will materialize over time? And to what extent is there still a latent obligation that you do not show in your balance sheet. And what do you estimate to be the risk or the opportunities that these become material. And I note, as we noticed, digging in soil presents the highest costs you will have to dig Will it put pressure on your cash flow? That's the question.

Thank you for your questions. First of all, I would like to ask the Executive Board to reply to the first question. Mr. [indiscernible].

All right. The question was about [ IN ] and the improvement of change management, IT change management. Look for both topics, we have short-term improvement plans and structural improvements that we believe are necessary and identity and access management is, of course, a broad topic in the entire industry. There are many companies that are addressing this because the systems landscape is emerging and increasingly we have a program that ensures that yes have one central application that you can manage on with better. It requires a number of connections. So it's a multiannual program because it also requires architectural strangers sorry, changes. So it will take some more years and it will always require maintenance. And in the short term, we've done a lot for reconciliations extra, and we believe that we are in control of the things we have now. That's the most important for this year to continue to ensure, but we will also use and need short-term fixes, so to speak, or measures because the program will be completed in a couple of years. And in the end, this means that you have to select right supplier. And for change management, the same thing basically applies for the short term there are improvements that we have made is important, of course, to sure the changes are always well in order and that they take place in different systems. So it requires the coupling to a central system to have a better overview. So there too, that is also a long-term improvement that will take place over the next 1 to 2 years. And then we believe we'll have taken the right step. So that with respect to Yan and change management. And also, we have to set up an integrated control system because you have to comply with all kinds of rules, reservation, sharing. The more you have set up integrated controls, the better it will be a clear for the entire company. So we're taking steps there, too, but this is also a multiannual program. And so we are addressing all these points that you mentioned. And we'll keep doing that, obviously. And we'll keep reporting on it in our reports.

Thank you, Walter. Let me give the floor to this [indiscernible] at the same point, but that from her respecting and also the question about the margin differences.

Yes, I can only confirm what you just said. And indeed, you are looking at in my direction, and I was nodding because what you said is correct. This year, we will look at this also very carefully. And as I said, last year, we checked the improvement points necessary for IT, and we really argued just like Walter and the other sad for making it a structural solution because in hindsight, it's always easy to say, "Oh, look, those and those had access to the system, and it was all fine. But you have to also be sure beforehand, right? And so it's important to ensure that this is always something you can now. And this requires a structural approach. But we're working very hard on it. And important steps have already been taken. In 25, it was not fully done, and this is already said also last year, but we haven't just still -- and by the way, things can always be improved. So yes, we keep working on it. And then the next question about the margins, I don't know exactly what causes the difference, but what we do, do is that we look very extensively at dates -- we use market data. We have valuation specialists to also take a look with us, and we always look back to because the whole testing has a lot of assumptions from management, we always look at what about the spin and assumptions from last year? Did they materialize? Yes, or not because no because if they do they indicate to a certain trend. And if not, then we have to take into account the -- and it's a model, of course, that is very much future oriented. And so we are very, very critical of it. And we use market data, look back, look ahead and have the right specialists. I mean -- so -- and for them, it's a daily job. But I don't know exactly what the difference is -- what caused the difference?

All right. Thank you. Well, perhaps we can get back to that offline. If that's okay just story about the cables in the ground and the provisions Look, there is no statutory obligation to take cables out of the ground, if they're no longer used. However, it is our policy to decommission network. That is an introductory remark and so it's a policy. But if you roll out a new infracypt, you cannot immediately remove the old one from the ground, so to speak, right, because you force have to migrate all your clients. And we have 1,800 copper lines in 1 cable, and now all that has been replaced by optic fiber. And when we have to go inside, we do take them out and then we sell that. But that has already all been done. So then a bit lower in the network. You have the connections to the home, right? They are very, very thin copper wires that we will not remove and tests also show that it has no negative effect on the environment whatsoever, they are protective cables that coating around them and with most municipalities, we have a covenant in which we have agreed that we do not have to remove those copper home connections. We only do it once the land is open, and we have access. So many thresholds do not play a role. We did have the discussions in the past with the government, but now it turns out that there is no need. So in all reasonability, I think that we have a good and prudent policy and that it's also in line with what the government expects from us.

Thank you, Joost. Any other questions? No questions. Do we have any online questions?

No?

Okay. Good. Then I can state that there are indeed no questions. So thank you, Ms. [indiscernible] for your very extensive explanation. And we can now proceed to the vote. This is the first voting item on the agenda. And the Secretary will inform you of the number of shareholders present and the number of votes are presented by those people. He will also explain how you can vote. So take it away.

Thank you, Mr. Chair. [indiscernible] ladies and gentlemen, and good after shareholders are represented here in the meeting. In addition to shareholders are participating online. In total, the holders of EUR 3,017785,287 shares are here represented and that is 79% of the issued capital with voting rights. -- of them, more than EUR 3 billion have been issued to the civil notary, through a power of attorney. They're all with a voting instruction they have already been introduced in the system and the numbers of votes that you'll see at the end of the meeting on the screen also include those votes and a great explanation about how to vote. So the shareholders if they've logged into the system can do their own device and the ones in we'll have to vote on their own tablet or smartphone. And you should already be locked in with the information that you received upon registration. And if not, then please let us know now -- is there someone we can help and please just raise your hand. Now if you look at your screen, you will see 3 options in favor, against or abstention. As soon as you've voted screen will tell you what you voted, you can cast your vote right now or later on, up to the other business item. And the voting will be open all in items until the moment you can even change your vote if you wish. And as said, the results will only be displayed on the screen after the meeting. So after the another business item. Does anyone have a question about this. No. Goodheart. Thank you, Jasper. I would like to now request you to vote on this topic, which is the proposal to adopt the financial statements for the fiscal year 2025. Number four, Item 4 is the proposal to approve the remuneration report for the fiscal -- we would now like to inform you about the implementation of the remuneration policy for members of the Executive Board and the Supervisory Board during the past fiscal year. You may have an advisory vote on this matter. I will get back to that shortly. But first, I'd like to give the floor to Mr. Nota because as the Chair of that committee, he will inform you about the implementation of the remuneration policy for the Executive and Supervisory Board in 2025. So Ben, the floor is yours. Thank you, Mr. Chair. I love this. The remuneration report, I love or what that sounds like in Dutch. Anyway, so to begin with, -- the remuneration policy is based on principles that are aligned with market and social standards. And I would like to explain the principles of the current remuneration policy for the Executive Board, which was already approved in 2020. for -- like I said, it is based on principles that are in line with market and social standards and the Executive Board's compensation package consists of a day salary. Short term and the long-term variable compensation and additional benefits the short-term variable compensation is cash based with a on-target level of 90% of the base salary for the CEO. It's 60% for the other members of the Executive Board. The compensation is contingent upon achieving 3 financial and 2 nonfinancial objectives weighed at 70% and 30% respective. The maximum payout of the STI, the short-term incentive plan is 150% of the on-target level. long-term variable compensation is based on performance-related shares with an on-target level of 135% of the base salary for the CEO and 9% for the other members of the Executive Board. This compensation also depends upon achieving 3 financial and 2 nonfinancial objectives with respective weightings of 70 and again 30%. The maximum performance under the LTI, the long-term incentive plan is 200% of the on-target level. Looking back to 2025, I would like to first like to explain the results of the variable compensation plans for the past period. And you can see the results on the screen. The outcome of the short-term variable compensation plan, the SDI for the calendar year 2025 totals 90% of the on-target level. compared to the financial targets set at the beginning of the year, performance on adjusted EBITDA after leases and free cash flow exceeded the target and fell between the target and the maximum level. Service revenues showed further growth during the year, but ended up just below the preset target on the balance regarding the nonfinancial targets, the NPS, the Net Promoter Score that you also already referred to in the business market exceeded the maximum level. And in the consumer market, the NPL was just above the threshold level. partly due to external factors such as increasing living costs. Regarding the broadband lines objective, we spoke a lot about optic fiber already. But in any case, we observed that developments in the consumer and business market proceeded according to plan. However, the development of wholesale broadband lines fell short of expectations, underscoring also the more volatile nature of that segment. Due to this composition of the total broadband portfolio, the outcome for this objective fell below the threshold level. All in all, this results in a total STI outcome for 2025 of 90.9% of the on-target lane. In line with the existing remuneration policy up to 50% of the short-term variable compensation after deduction of statutory taxes will be paid out in the form of shares if the Board members do not yet meet the share ownership guidelines. And that guideline is based for the CEO of 250% of the base salary and for the other members of the Executive Board on 150% of the base salary. Then the long-term variable competition plan. It reflects the outcome based on the LTI plan because it has a duration of 3 years, for which the financial and nonfinancial targets were measured over the years '23, 4 and 5. The performance of the long-term variable remuneration amounted to 89.7% of the on target level. This outcome is the result of the performance of the financial targets in the areas of relative total shareholder return, free cash flow and the nonfinancial targets in the areas of sustainability and gender diversity. Relative TSR performance is measured against the stocks Europe 600 telecommunications Index. It's a reference group that consisted of 21 companies at the end of last year. Although KPN achieved a strong absolute total shareholder return over the 3-year performance period, the LTI plan focuses on the relative TSR position compared to this reference group. Within this reference group, KPN finished in the 13th place. And this means the performance was below the median of the reference group, and that means that no vesting occurred for this component, so 0%. The free cash performance, measured there's a cumulative target for these years, 23 through 25. So between the on-target and maximum levels. Regarding the nonfinancial targets, sustainability target based on the reduction of Scope 3 emissions across the entire supply chain exceeded the maximum level. The gender diversity target for the senior management population fell just short of the targets. However, further growth was again achieved compared to the previous year. The target for the sub top level fell below the threshold. So again, all in all, this results in a total vesting of the 2023 LTI plan at 89.7% of the on-target level. On the screen, you can see the number of shares to be received on the basis of this plan. And those shares may not be sold for a period of 6 years, and that is known as the lockup period. interpret notes that on the screen, it says 3 years, but the speaker said 6 years. As it does every year, the Compensation Committee assessed whether this was caused cost to adjust the outcome, but we saw no reason to do that. However, the committee did decide to increase the base salaries of the members of the Executive Board by 3% as for July 1, 2025. For the CEO, it was a 5.5% increase. This decision was taken taking into account the development of the CLA agreement salaries within KPI -- KPN, sorry, general market trends and the results of external benchmarks. And the higher increase for the CEO reflects the fact that his compensation was relatively lower within the peer group, while the compensation other board members was closer to the market benchmark. The 2025 remuneration report also provides insight into the company's internal payroll. This ratio shows the relationship between the CEO's compensation and the average compensation of other employees and based on IFRS principles, this pay ratio for 2025 is 28 million for the short-term variable compensation, in addition to the financial targets, we will again consider the same ones that were last used in 2025. So we will also look at the Net Promoter Score and the number of broadband lines. For the long-term variable compensation, the LTI plan 2026 in addition to the financial targets, the reduction of Scope 3 emissions and general diversity within the senior management population will remain included. And we believe that these objectives also align well with the company's purpose the strategy and the long-term ambitions and that they contribute to sustainable value creation.

Thank you, Ben. We will now move on to questions regarding this agenda item. Who would like to be given the floor. Someone in the back of the room. I love being the back bencher.

Thank you, Mr. Chair. So we have a lot of appreciation for everything that went well in KPN. But now we have some critical remarks to make as well. Mr. Norton to say that for the STI, 19.9% of the target was achieved. But if we look closer at the underlying calculations, then there are a few critical remarks to be made. Firstly, the adjusted EBITDA AL, the 50% weigh, right, in the home. You use the realized performance of EUR 2.636 billion. So very close to the maximum of 2.62%. That's why this score is high, of course, 135% resulting in a payout of 33.8% article part. However, the growth in the adjusted EBITDA was 5.1% compared to the previous year. And that also explains that it's well beyond the average of 3% and also above your own outlook for last year, which also amounted to 3%. However, in the figure reported, there are 2 items that change average a little bit. And this was also acknowledged in the explanation on the annual report. IBR benefit, which is about EUR 50 million that KPN received as a result of a settlement in the patent case. So that was not related to operational performance, but the result of legal negotiations. And this was for the second quarter and was explicitly listed as a one-off that should not be part of the underlying figures. The second item, and we discussed Alto already is related to deconsolidation of Auto, which is a separate company with activities that was part of a joint venture. But this also is a company that generates external income from us that are not part of KPN. And still, the EBITDA, therefore, grows mechanically. I mean it's correct, but it doesn't improve your own performance, right? So if you were not to include these 2 items for the EBITDA, it will be 3.1% growth. So just above the threshold, not bad. -- it's above the threshold for the variable remuneration, but well below the 135% or well below justification of the 135%. -- also nothing was corrected. So can the Supervisory Board specialty remuneration committee, explain why items of which KPN explicitly said that these are one-off things. Why were they included in the calculation of variable remuneration. Then one final question about service revenue, the other 25% post or items. This amounted to EUR 5.57 billion, so below the target of EUR 5.37 billion just below, in the score of 89% regardless results in a payout of 22.2% for this part of the 25% that will be the maximum because the threshold was well below well below target. So 2.7% is the revenue growth also in the mid- to long-term you parted from 3%. So a payout of 22.2% for this part is attributed to a performance that is not even meeting its own goal. So does the supervisor believe that the threshold is sufficiently ambitious, especially given the fact that it still results in very high bonus even though the objective wasn't met. And I know that this is an advisory vote, but still to what's the future? Would the Supervisory Board having heard this be willing in the future remuneration policy or report to split it between organic and nonorganic components. So continuous activities that are fine and to separate those from the one-offs.

Thank you. Let me start by the LatAm manner. It's complicated because if you invest capital, for instance, with Alto, you will include it in all other aspects of the financial results. We do know that both items that you mentioned as one-off as a part of KPN. We do not state that these are very large one-off items. -- such as matters that happen outside the control of KP -- and then we want to make an exception, but we believe that this is part of operations. And one more -- you need to detail everything and we still believe that it is part of normal operations. The [indiscernible] oh, yes, service revenues, Joost, Chris.

Well, it was about the topic of the IBRs a part of which -- we achieved a lot of revenue each year. That's what we've been working on for many years. It's an organic flow. I think that what Mr. Fire meant was that -- we cannot take into account extra revenue each year because this was a very good year. I wouldn't like to call it a one-off that would not really contribute to the work that people do and the people that protect IPR for us. And it was a very good year. Mr. Figee has won the market that every year will not be as good as this year was.

Well I hear what you say, but let's lay that down properly. These are integrated parts. So the one-off of the consolidations, I'm still not quite certain about it. But regard to the Legal revenue, I can imagine that, but let's agree that this is laid down that you agreed with the shareholder. That's an integrated part of the activities of -- so if in other years, on litigations may turn out with less of a benefit, it mustn't be corrected because in this case, ladies and gentlemen, couldn't help it. that has happened to them. So that means that everything is included within KPI. I don't think we will redefine this now, and I do believe that patent matters cannot be mixed with all litigation that could happen. And it is rather nontransparent to agree that now. But as always, we will detail why we do what with regard to remuneration. It will always be within the policy that we agreed. We attempt not to intervene or hardly ever -- and it was an agreement that we've made. So we don't need to make a new agreement now. So unfortunately, we will not. So the other item was actually not replied to the target, you said the 3%, you are below the target still -- there is a rather large extra remuneration. We believe that variable remuneration is good, but exceptional good achievement must be reached. And if you don't meet your own targets, it is rather odd to remunerate people a lot extra because the performance was not as expected or as required. So if you are really underperforming, shouldn't you have a bigger decrease in the remuneration. I don't know, perhaps -- in addition to what Mr. Nodes already said, of course, we run the risk to compare apples and oranges. The 3% you refer to as a long-term 3% growth. That is integrated in the Capital Day markets presentations. To be clear, the budgets or the remuneration, both long term and short term are linked to the budgets that we agree in budgets must be feasible, but challenging. That's the rule. Next, we don't intervene. So it means that and you can call it windfalls or a bit more than usual, it's all money that was owned. It's not about accounting adaptations, -- it's money that we've received and is in the bank, and then the Executive Board will have to accept windfalls and things that don't turn out right. So this is what we manage. It's exactly what the argument was all about.

Any other matters about the remuneration policies? So I adopt that there are no further questions. I would like to ask you now to cast your advising votes on the remuneration report. So please cast as you would like for or in favor means that you are accepting the report against -- you mean that you cannot accept it. Your votes will not have any effect on the report for 2025. And you can now cast your votes, and you can also can cast your votes until we end this meeting until any other business. Now let's clarify the financial and dividend policy, and I would like to give the floor to Mr. Figee to provide with an explanation on the dividend and financial policy.

An attractive dividend, combined with a solid financial profile is important for both KPN and for the stakeholders. All of our decisions are therefore made with careful consideration, prioritizing financial soundness and taking into account the interest of all stakeholders. That is why I would like to walk you through an explanation of KPN's financial position. In 2025, we maintained a strong and resilient balance sheet with a leverage ratio of 2.4x, net debt and EBITDA, which was stable and below our sales in bonds limit of 2.5x. The interest coverage remains strong. The average cost of senior debt decreased by 30 basis points, primarily due to an automation of the derivatives portfolio. Exposure to variable interest rate remains limited to 14%. Liquidity position of approximately EUR 1.6 billion remains strong and covers repayments up to the end of 2028. We've announced our intention to pay dividends of EUR 0.182 per common share for the 2025 fiscal tax year. After deducting the interim dividend payment of EUR 0.03 per share, a proposed final dividend of EUR 0.109 per common share remains. And the final dividend will, upon approval, we paid out on 27 April next. Our financial framework is focused on long-term value creation for all stakeholders. And therefore, we remain committed to distributing all free cash flow to shareholders. For the year 2026, we intend to pay a regular dividend of EUR 0.20 per share, which is an increase of 10% compared to last year. And that's thanks to the successful execution of our strategy and our healthy financial position, so we can supplement the annual growing dividend with structural additional payouts to our shareholders. And in 2025, we repurchased EUR 250 million in value of treasury shares since launched a buyback program for 2026 also valued at EUR 250 million. On the entire period from the year 2024 to 2027. We expect to repurchase up to EUR 1 billion worth of treasury shares. That was my clarification on the financial and dividend policy. And I would like to hand the floor back to our Chairman.

Thank you, Mr. Farwerck. We will now move on to questions. With regard to this item on the agenda, there's anybody or in the video link have anything to add or to ask no, not in the room, not online. I established that there are no further questions or income questions. So I would like to conclude the discussion of this agenda item by noting that the Annual General Meeting of Shareholders has been informed about KPN's financial and dividend policy. We will move on to item on 6 proposal to determine the dividend for the 2025 year. Mr. Farwerck just provided an explanation on the financial and dividend policy and also addressed the previously stated intention with regard to the dividend for the 2025 year. In line with the intention. And as explained in Supervisory Board proposes to the Annual General Meeting of Shareholders at a total dividend of EUR 0.82 per common share can be declared for the year 2025. And if you approve to this proposal, the final dividend for the year 2025 will amount to EUR 0.109 for ordinary share. In accordance with Article 33 of KPN's articles of association, and it will be paid out on 27 April 2026. Do you have any questions about this topic? If not, not online either I see that no questions have arrived, and I would like to invite you now to cast your vote on this agenda item. The vote concerns the proposal to set the dividend for the 2025 tax year at EUR 0.82 per share. As announced, you can cast your vote now or later during the meeting. Up until the -- any other business item on the agenda. We will now move on to items 7 and 8 on the agenda. With regard to the proposal to grant discharge to the members of the Executive Board and Item 8, with the proposal to grant discharge to the members of the Supervisory Board. As we do every year, following the adoption of the financial statements, we ask you to grant discharge to the Executive Board and the Supervisory Board. This is chart pertains to the policy as reflected in the financial statements or as communicated to you otherwise. We've already addressed this on the agenda item to the executive board report on the 2025 tax year. 1 voting under this charge as a sanctions made between the Executive Board and Supervisory Board. Since you may vote on all agenda items throughout this entire meeting, I will combine the discussion of these 2 items. Discharge of the Executive Board concerns all current members of the Board, and this charter Supervisory Board concerns all current members of the Board as well as Mr. [indiscernible], who stepped down in 2025. We will now move on to questions with regard to this agenda item. Does anyone have anything to ask or add to this topic either in the room or in the video link, I establish that no questions have arrived. I would now like to invite you to vote. These votes concern the proposal to grant discharge to the Executive Board agenda Item 7 and to grant this charge to the Supervisory Board agenda Item 8. Voting will be open until the -- any other business item on the agenda. We will now move on to item on agenda 9 opportunity to make recommendations regarding the appointment of a member of the Supervisory Board. Upon the conclusion of the shareholders meeting, Mr. [indiscernible] first term of appointment and on the Supervisory Board intends to fill this vacancy, which arises due to the expiration of this term of office by nominating candidates for appointment by this Annual General Meeting of Shareholders. The vacancy must be filled in accordance with the profile of the Supervisory Board, in particular, Supervisory Board seeks a diverse composition in terms of age, gender, experience and expertise. Furthermore, candidate must possess knowledge of or experience with the management of large businesses, National and/or international businesses, finance and our corporate social responsibility. In addition, candidates must have an affinity with the telecommunications and IT industry. Specifically for this vacancy, it's subject to the Central Works Council's enhanced right of recommendation. As you've read in the agenda, we intend to propose the reappointment of Mrs. [indiscernible]. However, in accordance with the Articles of Association, I would first like to give the general meeting an opportunity to make a recommendation for the appointment of a member of the Supervisory Board. Does anybody wish to make a recommendation for a member of the Supervisory Board. Prior to this meeting, we did not receive any recommendations for candidate either. I note that the general meeting has not made a recommendation for a candidate. So we can proceed immediately to the proposed reappointment Agenda Item 10, proposal to reappoint Mrs. [indiscernible] as a member of the Supervisory Board. I will briefly explain the nomination to you. I would also like to refer you to the additional information in the agenda. As I mentioned earlier, the nomination for this position is subject to the Central Works Councils enhanced right of recommendation and the Central Works Council has recommended Mr. [indiscernible] nomination. The Central Works Council's recommendation can be found on the company's website, and you can find them where the meeting documents are available. Mr. [indiscernible] meets the requirements of the Supervisory Board's profile. As a Professor of Marketing at [indiscernible] Business University and thanks to her other roles and experience, she possesses extensive knowledge of marketing, supply chain management, innovation, digital transformation, retail and e-commerce which the Supervisory Board was able to use during her first term. Mrs. [indiscernible] is considered independent within the meaning of the Dutch Corporate Governance Code. Mrs. [indiscernible] was appointed as a member of the Supervisory Board for a first time on 13 April 2022. She's performed duties adequately and meets the Board's expectations and she made valuable contributions and exercise oversight through our roles on both the Nomination Corporate Governance Committee and the Remuneration Committee. The working relationship with the Central Works Council is constructive. In 2025, Mr. [indiscernible] attended all regular meetings of the Supervisory Board with the exception of 1 ad hoc meeting. The nomination is also supported by the Executive Board. We will now move on to any questions with regard to this item on the agenda. Does anyone have any questions on this topic, either in the room or online. I established that no questions have arrived. So you can now cast your vote. We may now vote. This concerns proposal to report Mr. [indiscernible] as a member of the Supervisory Board for a term of 4 years, ending at the close of the Annual Shareholders Meeting to be held in the year 2030. Voting on this item is open now until when we start item on the agenda, any other business. We will move on to Agenda Item 11 information with regard to future composition of the Supervisory Board at the close of the meeting to be held in 2025, 5 vacancies will arise. As Mr. [indiscernible] will complete their first 4-year terms and Mr. [indiscernible] will have reached the end of the final term and will step down permanently. So that will be quite different for her. Now the Supervisory Board intends to fill these vacancies and will nominate candidates for this purpose to the general meeting. Of course, Supervisory Board aims to maintain a good balance of expertise, diversity and knowledge. In accordance with the profile, we will discuss below. The vacancy level Mr. [indiscernible] is also subject to the General Works Council's enhanced right of recommendation. Do you have any questions? With regard to this item on the agenda, not any questions online. So I established that there are no more questions. And that brings us to item 12, 13, 14 and 15. Item 11 is the proposal to authorize the Board of Management to resolve that the company may acquire its own shares. 13 is a proposal to reduce the capital by cancellation of its own shares is a proposal to designate the Board of Management Executive Board as the competent body to issue ordinary shares. And 15 is a proposal to designate the Executive Board as the competent body to restrict or exclude preemptive rights upon issuing ordinary shares. So these 4 agenda items are very closely related. So I'll explain them to all at once. You may, however, vote on them separately. The proposals grant the Executive Board under the supervision of the Supervisory Board, some flexibility regarding the issuance and the buyback of shares. These provisions are on the agenda annually and are fully in line with standard practice in the Dutch market. We, therefore, ask you, as we do every year to one, authorize the Executive Board to repurchase up to of the company's own shares; two, to cancel shares, thus repurchased, thereby reducing the issued capital; and three, to grant the executive or the authority to issue up to 10% of ordinary shares and 4 to grant Executive Board Authority to exclude or limit the statutory preemptive right in connection with such an issue. And for the exact details of these agenda items, I would like to refer you to the explanatory notes of the agenda. Finally, I'd like to remember -- remind you that these resolutions are valid for a period of 18 months as of today. And if approved, they will replace your resolutions from last year. Are there any questions about this agenda item. No, not online either. Good. Then I note that no questions are raised on each of these agenda items you may now vote. So I would like to request you to do that because after this item, we will conclude the full voting process. So number 12 is according to all the specs that you saw in the agenda, the proposal to authorize the Executive Board to resolve that the company may acquire its own shares, 13 the proposal to reduce the capital by cancellation or withdrawal of its own shares, 14 proposals to designate the Executive Board to as a competent body to issue ordinary shares and the last one, 15 to designate Executive Board as a competent party to restrict or exclude preemptive rights upon issuing ordinary shares. So I would like to request you now to cast your votes and also give the floor to the Secretary to conclude the voting process.

Yes. Ladies and gentlemen, these agenda items are the last voting items this afternoon. And in a few moments, we will close the vote. So please cast your votes on all your all the items in so far as you've not done that already. And now looking around the room, whether anyone is to look at the screen heavily voting, it seems not to be the case. So I hereby conclude and close the voting for all agenda items. And in a moment, after the any other business item, we will show you the results. Thank you.

Then let's move on to item 16, the any other business. Is there -- yes, I already see hand raised. Please state your name. And before we give you the floor, are there any other people would like to ask a question? No.

I do have a few, but they're all brief. The first one, I'd like to make a remark about the excellent organization of this meeting. I think that deserves a compliment. And secondly, I have a question because last year, I received a letter that my SIM card was almost or has become obsolete and so I went to a KPN store, and I was giving a new one, but it didn't work. And I put it in this very phone. And really, it's not a museum phone just until recently it worked, but then suddenly it no longer worked. So I started to try all kinds of things. And in the end, I found out that the SIM card that came out was a Telfort SIM card, and this was a locked Telfort phone apparently. I went back to the store, but no 1 knew how to unlock anymore. So -- and this phone actually saved me during the NATO Summit. It avoided me having to go to jail because I was just checking out a post and I took some -- was told you cannot take any pictures. And I said, I'm not even carrying a phone. And I don't have an iPhone and he said and I said, "No, I have a Nokia phone. But I do have a big mouth and you know where I learned that, and he said, no idea. And you know the military service. So when the military police heard me say that, and that I only had an opiate moved away and didn't throw me in jail. So I'm still very happy with my phone is all I'm trying to say. And the employee at the Alexandria stores found all this so exciting that he said, "You know what, I'm going to give you a new phone, a KPN phone, a Nokia your phone, nothing special, but still. That's my first remark. Then internet. I have KPN Internet I've had now for more than almost the year, actually, because it was right after last year's meeting, that the problems occurred. 5 times have had a mechanic and still after 5 different routers, it doesn't work. Now I went to a KPN store and the employee asked, was Optic Fiber perhaps placed or did the prep work take place in your street. And I said, what does that have to do with it? Well, she said, once there's optic fiber, the signal basically is cabotage by KPN, the signal over the copper line. And that really concerned me. I don't know if it's true, but that's a story that's going around people, and that's not good. So something needs to happen. And so now I have perfectly working Internet, but it is Ziggo. It's no longer KPN. And I think this should be on your radar because you're now moving away, you're pushing people away. Last year, I also made a remark about the fact that I like KPNs being reticent with respect to what they're going to do. What they were going to do with the European championships, football in car. And now it's even more up for debate. So what is your view?

Thank you for your questions and your complement. I got a little concerned when you started thinking -- talking about Telfort and old SIM card in Nokia, and I was like, oh my god, how do we solve this, but I'm glad it was solved. And of course, we want you to be a client at KPN and not go to Ziggo. So if you could please go to Mr. [indiscernible] after the meeting, then he will personally arranges for you. And about the football championships, I give the floor to your host.

Yes, I was saying, so 5 mechanic visits, 2 store visits -- and so that's like it seems to be the -- you seem to be the only person next to [indiscernible] still using Nokia. So apparently, we invested a lot in news. I really hope that this era of moving to a competitor is a very temporary error because, of course, you have to stay with KPN. You are very welcome. And indeed, these 2 people Store will tell you how to go to the KPN network because obviously, it's much better. So we are a sponsor of DKB and we sponsored the Dutch selection. -- the Dutch national team, I mean, sorry. And we are no longer a sponsor of the Premier League, but we follow the policies of the -- so the Dutch team is going to play in the U.S. and partly in Mexico, I believe. And so we will all watch it, of course. We're not going there, I think. -- or maybe a few of us, but we're not going there formally, but we see no reason to not support the championships. And of course, we leave all that in the hands of the KB the Dutch National Football Association. All right. So there were no other questions for any other business? Not on my neither. I assume good, then I hereby note that there are no other questions, and then I can move on to the results. And for that, I give the floor to the Secretary.

Yes, let's take a look at those results. I would like you to show them on the screen here they are. So per item #3, you can see the proposal to adopt the financial statements was completed with 99.65% in favor and 0.35% against. -- in Item 4, the proposal to approve the remuneration report adopted by 96.57% in favor, 3.43 against. That dividend also approved and adopted with 99.7% in favor, 0.3% against the discharge of the members of the Executive Board 99% in favor and 2.41% against also adopted. The next page shows the discharge of the members of the Executive Board also adopted 97.58% with 2.42% votes against the proposal to reappoint Ms. [indiscernible], as a member of the Supervisory Board also adopted by 29% in favor, 6.71% against. The proposal to designated management board -- sorry, to authorize the Executive Board to resolve that the company may acquire its own shares, also adopted -- the withdrawal of its own shares also adopted 99.74% and 2.26% against the proposal to appoint or designate the Executive Board as the company body to issue ordinary shares. Also 9.77 in favor, 0.23% against. And the final 1 also adopted namely to designate the Executive Board as the company Baidu restrict or exclude preemptive rights upon issuing ordinary shares, 99.49% voted in favor and 0.51% against. All items adopted.

Thank you very much, Jesper. So this means that the General Meeting of Shareholders has approved all proposals submitted to it. And this result also means that I can congratulate me Solvay or Kitty, as we call our honor reappointment. Citygate that you'll continue to be part of our team. Finally, I would like to thank you all, our shareholders, staff, suppliers, et cetera, and of course, also the Executive Board on behalf of the Supervisory Board. for all your efforts and your support in the last year. I would like to thank you all for being -- for attending the meeting, either in the room or virtually, and I really hope to see you later at the drinks and snacks that we have available for you, you'll see once you leave the room. The next annual meeting will take place mid-April. And of course, the final date will be announced as soon as it's known on the KPN website. And I hereby close this Annual General Meeting of Shareholders. Thank you.