Friday, 22 September 2017

KPN expects EBITDA to stabilise by end 2015

KPN
Wednesday 04 February 15

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…

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

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.”

Outlook and shareholder remuneration 2015:
Adjusted EBITDA stabilized by end-2015
Capex < EUR 1.4bn
Growing free cash flow (excl. TEFD dividend)1

Additional cash flow via potential dividend from 20.5% stake in Telefónica Deutschland Free cash flow in FY 2014 was impacted by a number of large non-recurring items primarily aimed at reducing the amount of future liabilities. Amended for these non-recurring items (totaling EUR 574m) free cash flow in FY 2014 would have been EUR 405m, which forms the base level for KPN's outlook of a growing free cash flow in 2015. KPN expects limited tax cash out in The Netherlands in the coming years due to the tax loss on the sale of E-Plus. Furthermore, in the short-term free cash flow will be supported by lower interest payments, partly offset by expected higher cash out related to FTE reductions in 2015. In the medium-term, KPN sees additional cash flow potential driven by improved financial performance, further cost savings related to the Simplification program and opportunities to further improve its balance sheet efficiency given the relatively high gross debt and net cash position. Following the sale of E-Plus, KPN recommenced dividend payments with an interim dividend in respect of 2014 of EUR 0.02 per share, or in total EUR 85m, which was paid on 13 October 2014. KPN intends to pay a total dividend per share of EUR 0.07 in respect of 2014. The final dividend of EUR 0.05 per share is expected to be paid in April 20152. KPN intends to pay a total dividend per share of EUR 0.08 in respect of 2015. The dividend per share in respect of 2016 is expected to grow further. The 20.5% stake in Telefónica Deutschland is treated as a financial investment. KPN expects to benefit from dividend payments by Telefónica Deutschland and additional financial flexibility. KPN remains committed to an investment grade credit profile and expects to utilize excess cash for operational and financial flexibility, (small) in-country M&A and/or shareholder remuneration.

 


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