Tuesday, 22 August 2017

KPN announces Q1 2014 results

KPN
Friday 25 April 14

KPN announces its results for Q1 2014 after a quarter of good strategic progress and remains on track for stabilizing financial performance towards the end of 2014. The outlook is therefore maintained. Good strategic progress with continued growth in 4G, IPTV and multi play in The Netherlands Nationwide 4G coverage in The Netherlands, >1 million 4G subscribers 62k IPTV net adds leading to TV market share of 26% Triple play penetration increased to 46%…

KPN announces its results for Q1 2014 after a quarter of good strategic progress and remains on track for stabilizing financial performance towards the end of 2014. The outlook is therefore maintained.

Good strategic progress with continued growth in 4G, IPTV and multi play in The Netherlands
Nationwide 4G coverage in The Netherlands, >1 million 4G subscribers
62k IPTV net adds leading to TV market share of 26%
Triple play penetration increased to 46%, 62k quad play net adds
Business multi play seats increased by 26k to 181k
Service revenues remain under pressure in competitive Dutch mobile market but retail postpaid net adds (+26k) promising
Business market size declining due to continued customer rationalization and optimization
Underlying service revenue growth in Germany of 3.8%, market outperformance in Belgium
Confident of obtaining regulatory approval in June for sale of E-Plus

Financial performance

Adjusted revenues 7.7% lower y-on-y in Q1 2014 due to the continued competitive environment and price pressure in all mobile markets, and the ongoing decline of the Business market size
Adjusted EBITDA decreased by 21% y-on-y in Q1 2014 as a result of declining revenues and phasing out of handset lease at the KPN and Hi brands. Adjusted EBITDA excluding phasing out of handset lease in Q1 2014 was down 15% y-on-y
Capex 22% lower y-on-y driven by phasing out handset lease and less elevated investment levels
Free cash flow impacted by intrayear phasing, lower EBITDA, EUR 50m payment related to the KPNQwest settlement in Q1 2014, and Q1 2013 benefited from EUR 167m prepayments in Q4 2012

Message from the CEO, Eelco Blok

“In the first quarter of 2014 we have made good progress with the execution of our strategy. We have completed the roll-out of 4G in The Netherlands and are substantially ahead of the competition. These investments can now be scaled back leading to lower Capex levels, also supported by the phasing out of the handset lease model and the first results of our Simplification program. Commercially, we have seen high postpaid net adds and continued good IPTV net adds in the Consumer market. The focus on our market leading products, such as 4G and IPTV leads to growing numbers of multi play customers in Consumer and Business. In Belgium, the combination of high network quality and price leadership, translated into another quarter with high postpaid net adds. Also in Germany we have seen good performance with high postpaid net adds leading to growing service revenues.

Our financial results in the first quarter were impacted by the competitive environment in our mobile markets, leading to continued decline of ARPUs, and pressure on the total market size in Business. Corporate customers remain cost constrained, leading to continued rationalization and optimization. To improve the performance of our Business segment we focus on de-risking our revenues by flat fee propositions, growing revenues from multi play and new services, and continue to execute on our cost saving plans.

The E-Plus sale is currently subject to a Phase II review by the European Commission. We are confident we will obtain regulatory approval in June and that the sale will complete shortly thereafter. This will allow us to pay a sustainable and growing dividend combined with a solid financial profile. Post completion, we will own a 20.5% stake in Telefónica Deutschland and will potentially benefit from dividend payments.”


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