Q4 & FY 2018 RESULTS - KPN Corporate NL
Q4 &FY 2018RESULTSPRESS CONFERENCE30 January 2019CEO Maximo IbarraCFO Jan Kees de Jager
Safe harborAlternative performance measures and management estimatesThis financial report contains a number of alternative performance measures (non-GAAP figures) to provide readers with additional financial information that is regularly reviewed by management, such as EBITDA andFree Cash Flow (‘FCF’). These non-GAAP figures should not be viewed as a substitute for KPN’s GAAP figures and are not uniformly defined by all companies including KPN’s peers. Numerical reconciliations are includedin KPN’s quarterly factsheets and in the Integrated Annual Report 2017. KPN’s management considers these non-GAAP figures, combined with GAAP performance measures and in conjunction with each other, mostappropriate to measure the performance of the Group and its segments. The non-GAAP figures are used by management for planning, reporting (internal and external) and incentive purposes. KPN’s main alternativeperformance measures are listed below. The figures shown in this financial report were rounded in accordance with standard business principles. As a result, totals indicated may not be equal to the precise sum of theindividual figures.Financial information is based on KPN’s interpretation of IFRS as adopted by the European Union as disclosed in the Integrated Annual Report 2017 and do not take into account the impact of future IFRS standards orinterpretations. KPN defines EBITDA as operating result before depreciation (including impairments) of PP&E and amortization (including impairments) of intangible assets. Note that KPN’s definition of EBITDA deviatesfrom the literal definition of earnings before interest, taxes, depreciation and amortization and should not be considered in isolation or as a substitute for analyses of the results as reported under IFRS as adopted by theEuropean Union. In the Net Debt / EBITDA ratio, KPN defines Net Debt as the nominal value of interest bearing financial liabilities excluding derivatives and related collateral, representing the net repayment obligationsin Euro, taking into account 50% of the nominal value of the hybrid capital instruments, less net cash and short-term investments, and defines EBITDA as a 12 month rolling total excluding restructuring costs, incidentalsand major changes in the composition of the Group (acquisitions and disposals). Free Cash Flow is defined as cash flow from continuing operating activities plus proceeds from real estate, minus capital expenditures(Capex), being expenditures on PP&E and software. Operating free cash flow is defined as adjusted EBITDA minus Capex. Revenues are defined as the total of revenues and other income unless indicated otherwise.Adjusted revenues and adjusted EBITDA are derived from revenues (including other income) and EBITDA, respectively, and are adjusted for the impact of restructuring costs and incidentals.All market share information in this financial report is based on management estimates based on externally available information, unless indicated otherwise. For a full overview on KPN’s non-financial information,reference is made to KPN’s quarterly factsheets available on ir.kpn.comForward-looking statementsCertain statements contained in this financial report constitute forward-looking statements. These statements may include, without limitation, statements concerning future results of operations, the impact of regulatoryinitiatives on KPN’s operations, KPN’s and its joint ventures' share of new and existing markets, general industry and macro-economic trends and KPN’s performance relative thereto and statements preceded by, followedby or including the words “believes”, “expects”, “anticipates”, “will”, “may”, “could”, “should”, “intends”, “estimate”, “plan”, “goal”, “target”, “aim” or similar expressions. These forward-looking statements rely on a number ofassumptions concerning future events and are subject to uncertainties and other factors, many of which are outside KPN’s control that could cause actual results to differ materially from such statements. A number ofthese factors are described (not exhaustively) in the Integrated Annual Report 2017. Forward-looking financial information does not take into account the impact of new IFRS standards or interpretations effective forfuture reporting periods (such as IFRS 16 Leasing). All forward-looking statements and ambitions stated in this financial report that refer to a growth or decline, refer to such growth or decline relative to the situation per31 December 2018, unless stated otherwise.2
Highlights FY 2018SuccessfulSimplificationDelivered onfull-year outlookStrategy update2019 – 2021Adjusted EBITDA 225mrun-rate Capex and opexsavings1 0.8%y-on-yFY 2018: 2,303mFCF (excl. TEFD dividend) 10%1 Realized: end Q4 2018 vs. end Q4 20163y-on-yFY 2018: 804mORGANICSUSTAINABLEGROWTH
Highlights 2018 – products & servicesmyImprovingin-homeexperience withnew WiFi-tunerand Voice overWiFi4New mobilesubscriptions forsmall businesscustomersNew MyKPN appand IPTV appto improvecustomerexperience
Highlights 2018 – network5GField Labs toexplore valueof 5G5IoTLaunch ofnationwideLTE-M networkHybrid fixedmobile solutionto boost speedin rural areas
Awards & recognition 2018'Best all-in-one provider' and'Best mobile provider’ by Consumentenbond in Q4Two Computable awards: ‘Service integrator of theYear’ and ‘Digital Transformation of the Year’KPN Finance 2.0 awarded most innovativefinance project of the year by IMAKPN Red Team ‘sector C’ World Championat Global Cyberlympics6
Doing business in a sustainablemannerLeading position in benchmarksAchievements in Q4 2018Expanded circular manifesto with suppliers toachieve a near to 100% circular company by 202570%of annual spend on networkequipment and hardware for theprovision of services to customerscovered by agreementsReputation rankingTOP 3 EuropeanTelcosRepTrak Pulse 20177160New KlasseContactplacements in Q4 2018
The best convergedsmart infrastructure.Focus on profitablegrowth segments.Acceleration ofsimplification anddigitalization.8
Preparing for accelerated fiber roll-outStrong startingpoint 30%of households2.36mIncrease accessinvestments 1m FttHhouseholdsPreparations for 1m FttH householdsin 2019 – 2021 40%FttHhouseholdsFttH YE 201895G trials and mobilenetwork modernizationin progressof householdsby end 2021
Full focus on KPN brandBecoming theundisputedquality leaderServing allcustomersegments withKPN brandStrengtheningKPN brand withstrong features ofindividual brandsXS4ALL serviceTelfort affordabilityYes Telecom B2B expertise10
Growing converged base.Improving customerexperience.RESULTS11Delivered on full-yearoutlook.
Further strengthening household relationshipsgrowing converged baseConvergedhouseholdsSIMs perhouseholdConvergedpostpaid baseAll brands(FY 2018)146%1.54FY 2017: 1.5157%70%KPN brand1 As % of broadband customers12
Continued focus on value in Consumer in Q4 2018and improving customer experiencePostpaid ARPU in-lineBroadband base1Best-in-class NPS2 25convergedQ4 2017: 181 Corrected for migrations to and new customers of small business proposition (7k) launched in Q4 20172 Source: Kantar TNS13Q4 2017: 13
Progress made in Business, but still work to doAdjusted revenuesy-on-y growth trendCommunication ServicesMobile service revenuesIoTBroadband & Network ServicesFixed voiceOtherIT Services (a.o. security, cloud, workspace)Professional Services & ConsultancyTotal1 Revenues for FY 2017 and FY 2018 excluding M&A and hardware14Gradually improving 1organic revenue trendQ4 2018-7.6%-6.3%-10%-3.6%-9.2%-15%FY %-1.9%-8.6%2015-7.3%2016-5.9%2017-4.3%2018
Financial highlights FY 2018delivered on full-year outlook15Adjusted revenuesAdjusted EBITDAFreecashflow(excl. TEFD dividend) 5,639m 2,303m 804m-1.9% y-on-y 0.8% y-on-y 10% y-on-yFY 2017: 5,749mFY 2017: 2,285mFY 2017: 730m
Financial performance Q4 and FY 2018key P&L metricsQ4 2018Q4 2017FY 2017766562159-35Δ y-on-y-1.1%-2.2%-1.5%-22%FY Δ -1.9%Adjusted direct costsAdjusted indirect .6%-3.1%Adjusted 1-0.2%2,1862,1690.8%EBITNet profit2177-45169564.4%n.m.7892807553904.4%-28% mConsumerBusinessWholesaleOtherAdjusted revenues111 Adjusted for the impact of restructuring costs and incidentals2 Q4 and FY 2018 net profit impacted by 107m one-off related to revaluation of DTA due to reduction of corporate income tax rate16
2nd wave Simplification yielded 225m savingsthe final year will roll-over in new program2nd wave Simplification program realizedrun-rate Capex and opex savings 225mend Q4 201811 Realized: end Q4 2018 vs. end Q4 20162 Indirect opex adjusted for the impact of restructuring costs and incidentals17New net opex reduction programsavings target2 350m2019 – 2021
Outlook 2019 and 2019 – 2021 ambitionsorganic sustainable growthOutlook 20192019 – 2021 ambitionsAdjusted EBITDAIn line with 2018Organic growthCapex 1.1bnStable at 1.1bn annuallyFCFFront-end loaded restructuring charges leadingto incidentally lower FCF compared with 2018Three-year mid-single digit CAGR1 drivenby EBITDA growth 12.5 centsProgressive dividend, supported by FCF(excl. TEFD dividend)Regular DPS1 Three-year CAGR calculated from the end of 2018 to the end of 202118
RESULTS19
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in KPN’s quarterly factsheets and in the Integrated Annual Report 2017. KPN’s management considers these non-GAAP figures, combined with GAAP performance measures and in conjunction with each other, most appropriate to measure the performance of the Group and its segments.
KPN, Telfort and Hi to be the best mobile providers ý KPN increased the capacity and speed of its 4G network and confirmed KPN’s leading 4G position with activation of LTE Advanced ý KPN no longer placed under intensified supervision by the Netherlands Authority for Consumers & Markets (ACM) July ý KPN and Fon started roll-out of
II. KPN WACC II.A. COST OF DEBT The ACM methodology specifies that we should use KPN’s actual or ‘embedded’ cost of debt when estimating the WACC. Accordingly, as in the May 2013 report, we have calculated KPN’s cost of debt as the weighted average coupon cost of all Euro denominated KPN bonds outstanding as of 21 st April 2015. We do .
KPN Integrated Annual Report 2019 17 For more than 100 years, KPN has ensured that everyone in the Netherlands is properly connected – with each other and now, with all the exciting things made possible by the latest digital techniques. We will continue doing this in the future. KPN’s ambition is to have about one
Static KPN Model. KPN model. The first is that KPN lacks implicit data-level paral-lelism. In order to express it, application developers have to explic-itly specify a parallel topology of the process network, as well as the workload distribution, at compile-time (W1-W4 in the exam-ple). Similarly, another difficulty is that most KPN-based models
KPN’s competitors argued that KPN also had SMP in the wholesale market for single call services. The ACM was well aware that the market was shrinking, that KPN’s market share would fall, and that ISDN would be phased out by September, 2019. Accordingly, the Court held that the ACM could consider KPN to have SMP in the wholesale
De Engelse PDF van het gecontroleerde verslag (Integrated Annual Report 2018) en de inhoud ervan prevaleert boven het Verkort Jaarverslag 2018. . KPN -7,4% 2018 Telecom-index -8,2% 2018 3,00 2,80 2,60 2,40 2,20 2,00 KPN Stoxx Europe 600 Telecommunications Index 6
KPN Integrated Annual Report 2018 Contents KPN at a glance Who we are and what we do Introduction by the CEO. 1111 telecom industry, will lead to more organizational simplification and result in around EUR 350m net indirect opex savings over the period 2019–2021.
Prof. Andreas Wagner Karlsruhe Institute of Technology (KIT) Published: April 2014 Third edition: May 2015 2. The significance of thermal insulation Arguments aimed at overcoming misunderstandings 3. 4 Preamble. The energy renovation of existing build-ings represents a key component of the “Energiewende” (energy revolution). The building envelope and the system technology used within the .
