04 February 2015 - The company

Fourth Quarter and Annual Results 2014

KPN ends transformational year 2014 with another quarter of good progress.

KPN ends transformational year 2014 with another quarter of good progress.

  • Strong customer base growth in The Netherlands in Q4 2014
    • Good uptake Consumer fixed-mobile bundles (+116k) and Business multi play seats (+44k)
    • Strong net add growth in broadband (+41k) and IPTV (+83k)

    • >2 million 4G customers in The Netherlands

    • High postpaid net adds in Consumer Mobile (+57k) and Business (+17k)
  • Continued pressure on traditional fixed voice and mobile price levels in Business segment
  • Simplification program ahead of plan, run-rate savings target increased to >EUR 400m by 2016
  • Strong improvement customer satisfaction, all-time high NPS for KPN The Netherlands
  • BASE Company reached >80% 4G coverage end-2014

Financial performance stabilizing

  • Adjusted revenues were flat y-on-y in Q4 2014. Customer base growth and a tax settlement benefit (EUR 44m) were offset by the impact of the ongoing decline of the business market size. Without the tax settlement benefit, adjusted revenues would have been down 2.1% y-on-y versus -4.9% y-on-y in Q3 2014
  • Adjusted EBITDA decreased by 3.0% y-on-y in Q4 2014 as investments in customer base growth and phasing out of handset lease were only partly offset by a tax settlement benefit (EUR 44m). Without the tax settlement benefit and impact of phasing out of handset lease, adjusted EBITDA would have been down 8.3% y-on-y versus -12% y-on-y in Q3 2014
  • Net profit (EUR -37m) in Q4 2014 was mainly impacted by higher financial expenses related to the bond tender (EUR 211m)
  • Capex in Q4 2014 reflected phasing. Capex FY 2014 was 13% lower due to lower customer driven investments (incl. phasing out handset lease) and Simplification program
  • Free cash flow in Q4 and FY 2014 was impacted by non-recurring items. Amended for these items free cash flow FY 2014 would have been EUR 405m

Message from the CEO, Eelco Blok

“2014 was a transformational year for KPN in which we made good strategic progress. Following the sale of E-Plus we acquired the remaining stake in the FttH joint-venture Reggefiber, further strengthening our position in The Netherlands. The investments in our customers, products and networks have resulted in growing customer bases and all-time high customer satisfaction. The Board of Management is now complete, including two new appointments. We will continue to build on solid fundamentals through strong customer focus, strengthening capacity of our networks and the Simplification program.

We took a number of important steps to reduce debt and other financial liabilities, which significantly increased our financial flexibility. The attractive 20.5% stake in Telefónica Deutschland provides additional flexibility and upside via potential dividends.

Supported by the excellent operational momentum we have seen a stabilizing financial performance through successive quarters of 2014. Also due to the benefits from the Simplification program we expect adjusted EBITDA to have stabilized by the end of the year and a growing free cash flow in 2015. On this basis, we are confident to grow our dividend per share.”

Press Release for download here