Koninklijke Kpn N V - Report of Foreign Issuer (6-K)
February 19 2008 - 5:05AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For February 5, 2008
KONINKLIJKE KPN N.V.
Maanplein 55
2516 CK The Hague
The Netherlands
(Exact
name of registrant and address of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F.
Form 20-F
x
Form 40-F
o
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes
o
No
x
If
Yes is marked, indicate below the file under assigned to the registrant in
connection with Rule 12g3-2(b):
This
Report on Form 6-K contains a copy of the following press releases:
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KPN sells Getronics Australia to UXC Ltd., dated
February 5, 2008;
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·
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Solid performance in all markets, dated
February 5, 2008.
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Press release
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KPN sells Getronics Australia
to UXC Ltd.
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Date
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5 February 2008
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Number
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006pe
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KPN announces that
Getronics has today executed a binding agreement in relation to the sale of the
Getronics activities in Australia to UXC Limited, a listed Australian business
solutions company. Completion is scheduled for 29 February 2008. The
initial consideration is based on a multiple of current earnings and will be
payable in cash at completion.
Getronics Australia, with employees in excess of 500
and a comprehensive agent network across Australia, provides workspace
management, communication and professional ICT services to large and medium
sized Australian, Government and International blue chip clients.
About KPN
KPN is the leading telecommunications and ICT service
provider in the Netherlands, offering wireline and wireless telephony, internet
and TV to consumers and end-to-end telecom and ICT services to business
customers. KPNs subsidiary Getronics operates a global ICT services company
with a market leading position in the Benelux, offering end-to-end solutions in
infrastructure and network-related IT. In Germany and Belgium, KPN pursues a
multi-brand strategy in its mobile operations and holds number three market
positions through E-Plus and BASE. KPN provides wholesale network services to
third parties and operates an efficient IP-based infrastructure with global
scale in international wholesale through iBasis.
At December 31, 2007, KPN served over 35 million
customers, of which 27 million in wireless services, 5.4 million in wireline
voice, 2.4 million in broadband Internet and 0.5 million in TV. With 25,500
FTEs (43,531 FTEs including Getronics), KPN posted revenues of EUR 12.6bn in
2007, with an EBITDA of EUR 4.9bn. KPN was incorporated in 1989 and is listed
on the Amsterdam, New York, London and Frankfurt stock exchanges.
About UXC Limited
UXC Limited is an S&P / ASX 300
listed Australian business solutions company. UXC has a successful history of
creating shareholder wealth and has established a strong track record in
growing revenue, earnings, EPS and dividends over an extended period. Revenue
in the mid $500 millions is targeted for the 2008 financial year, and the group
employs some 3,000 employees. UXC aims to be Australasias leading Solutions
House and the investment of choice in the Information Technology sector.
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Press Release
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Full year results
2007 and strategy update 2008-2010
Solid performance in
all markets
Strategy update
2008-2010: Back to Growth
Targeting dividend
per share of EUR 0.80 in 2010
Corporate
Communication
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Investor Relations
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Press Office
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Tel:+31 70
4466300
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Tel:+31 70
4460986
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E-mail:
press@kpn.com
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E-mail:
ir@kpn.com
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GROUP
HIGHLIGHTS FY 2007 guidance met, EUR 2.0 bn shareholder returns for 2008
Q4 2007
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Q4 2006
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In millions of euro, unless indicated otherwise
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FY 2007
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FY 2006
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3,659
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3,039
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Revenues
and other income
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12,632
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12,057
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3,579
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3,022
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- of
which Revenues
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12,461
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11,941
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634
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367
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Operating result
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2,500
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2,223
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1,581
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426
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Profit for the period
(net result)
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2,649
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1,583
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0.85
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0.22
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Earnings
per share (in EUR)
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1.42
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0.79
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0.36
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0.34
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Dividend
per share (in EUR)
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0.54
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0.50
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1,212
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815
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Cash flow from
operating activities
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3,890
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4,071
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-707
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-533
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Capital expenditures
(PP&E and software)
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-1,688
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-1,650
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19
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21
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Proceeds from real
estate
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143
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56
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524
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303
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Free
cash flow(1)
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2,345
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2,477
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634
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367
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Operating result
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2,500
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2,223
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582
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785
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Depreciation,
amortization and impairments
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2,400
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2,614
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1,216
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1,152
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EBITDA
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4,900
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4,837
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Full-year guidance
for 2007 met
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Revenues and other income and EBITDA
flat per guidance definition(2)
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Capex of EUR 1.7bn and free cash flow
of EUR 2.3bn
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Net profit up 67%, EPS up 80% to EUR
1.42 due to EUR 1.2bn tax gain at E-Plus
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(1)
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Net cash flow
from operating activities plus proceeds from real estate minus Capex
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(2)
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Reported numbers
for guidance purposes, excluding acquisitions of Tiscali, iBasis and
Getronics
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Strategy update
2008-2010 announced today: Back to Growth
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Revenue and EBITDA inflection in the
Netherlands
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Continued growth at Mobile
International
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Further FTE and cost reductions beyond
Attack-Defend-Exploit strategy
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Acceleration of shareholder
remuneration
Solid performance
in the Netherlands
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Consumer net line loss declining, TV
customer base nearly doubled
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Strong EBITDA growth in wireless
services, as a result of successful Telfort integration
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Continued growth in the Business
market, migration to new services accelerating
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FttC / FttH rollout taken to the
implementation stage
Continued
profitable growth at Mobile International
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E-Plus outperforming competitors,
exceeding growth and margin objectives
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Strategic initiatives creating growth
platform in Belgium
Strategic M&A
and business development with a focus on value creation
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Market leader in workspace management
through the acquisition of Getronics
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Created a leading position in
international wholesale through iBasis
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MVNO launched in Spain with proven
Simyo brand and wholesale partners
Committed to
continuing industry leading shareholder returns
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Shareholder returns of EUR 2.5bn in
2007, DPS for FY 2007 up 8% to EUR 0.54
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EUR 2bn shareholder returns for 2008,
of which EUR 1bn of share repurchases
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Targeting 2010 dividend per share of
EUR 0.80, updated medium-term dividend policy
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Ad Scheepbouwer,
CEO of KPN, said:
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I am delighted to
report that KPN has again delivered a solid performance in 2007, in line with
our guidance. Today, we are announcing our strategy update, following an
extensive review, which will be for the period 2008 to 2010. Markets are
changing and we continue to adapt too and feel confident in putting growth
back at the top of our agenda, by building scale in recently introduced new
services. We have also taken a further look at our cost base and decided that
more needs to be done in cost and FTE reductions. The Back to Growth
strategy will result in the continued strong free cash flow generation and
industry-leading shareholder returns that our shareholders have come to
expect.
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GROUP
STRATEGY UPDATE Back to Growth
Strategy update
2008-2010
announced today
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KPN announces
today the next phase in the evolution of its strategic agenda: Back to Growth,
setting objectives for the next three years to 2010. As with the launch of Attack-Defend-Exploit
in 2005, the Back to Growth strategy follows an extensive strategic review
and has been devised to address the challenges of todays telecoms markets.
KPN has set new strategic priorities in order to return to growth in the
coming years. With this Back to Growth strategy, KPN will remain a top
performer among European telecom operators and will continue to be a
front-runner in the sector in identifying the market challenges and setting
strategic benchmarks accordingly.
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Track record of
delivering value
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Over the past
five years, KPN has made significant strategic progress. Between 2002 and
2004, KPN achieved a successful turnaround of the business with strong focus
on cash flow. In 2005, KPN entered its next phase with the announcement of
its Attack- Defend-Exploit strategy for the Netherlands and the challenger
strategy at E-Plus. Since then, market shares have grown in nearly all
segments and cost reductions are well on track. In addition, KPN made
strategic acquisitions with significant value-creation opportunities, most
notably Telfort, Getronics and iBasis.
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KPN has a track
record of solid free cash flow generation and industry-leading shareholder
returns. Since 2001, net debt has decreased by EUR 13bn, equity value has increased
tenfold and nearly EUR 10bn has been returned to shareholders as dividends and
share repurchases.
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Back to Growth
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Growth will be
the result of the Netherlands reaching inflection, continued growth at Mobile
International and additional growth from recent acquisitions, as will be achieved
with Getronics and iBasis. Growth is set to be achieved in the face of regulatory
tariff reductions and the impact of shrinking traditional wireline services
in the Netherlands. Key components of the strategy are the ramping up of new
services launched in recent years and cost reductions. A new incentive scheme
for senior management has been implemented reflecting the objectives.
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The Netherlands
reaching inflection
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In the period to
2010 the Netherlands business will undergo a radical transformation. The
All-IP network announced in March 2005 will move into its final phase with
the implementation of a new access network. In addition, KPN will pursue a
radical simplification of its business, both at the front-end in retail
segments and at the backend in network operations. The significant cost reductions
that will be generated by this simplification will be used firstly for
re-investment in revenue growth, leading to an acceleration of recent growth
initiatives, such as broadband and TV in Consumer and IP-based services in
Business. Secondly, cost reductions will lead to margins improving. EBITDA
inflection is expected to be reached after 2008 followed by revenue inflection
the latest in 2010.
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A detailed
strategy update by business segment can be found in
The
Netherlands Review
section of this press release.
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Reduction of 4,500
FTE over
the period 2008-2010
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In order to
sustain its competitive position during the period 2008-2010, KPN intends to reduce
the number of FTEs by 4,500 (excluding Getronics), or an additional 2,000
FTEs compared to the 8,000 FTE reduction target that was announced in March
2005 with the Attack-Defend-Exploit strategy. The reduction will result in
about EUR 110m of additional annual cost savings by 2010. In addition, KPN
intends to reduce the number of external staff by 1,300 FTEs in the period
2008 to 2010, resulting in about EUR 130m additional annual cost savings. The
remaining external staff base will act as a flexible source of labour during
the transition phase.
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Continued growth at
Mobile International
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The strategic
objective for Mobile International is to continue the profitable growth path
that was initiated through its successful challenger strategy. KPN will
continue to pursue additional value-creating opportunities in wireless
services throughout Europe, such as the recent entry into the Spanish market.
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GROUP
FINANCIAL HIGHLIGHTS - Dividend up 8%, shareholder returns of EUR 2bn for 2008
2007 dividend of
EUR 0.54, up 8%
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KPN proposes a
dividend for 2007 of EUR 0.54 per share, up 8% compared to 2006. This is in
line with KPNs mid-term dividend policy of paying out a dividend of between
35% and 50% of the annual free cash flow and its commitment to pay at least a
total dividend of EUR 950m for FY 2007. Following the interim dividend of EUR
0.18 paid in August 2007, the proposed final dividend for 2007 is EUR 0.36
per share. The dividend proposal will be submitted for approval at the AGM on
April 15, 2008.
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Updated mid-term
dividend policy; payout of 40-50% of FCF as dividend
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KPN announces
today an updated mid-term dividend policy, increasing the percentage of
annual free cash flow paid out as dividend. The percentage paid out as
dividend will increase from 35-50% under the current free cash flow
definition (EUR 2.3bn in 2007) to 40-50% in the medium term, based on an
adjusted definition for free cash flow going forward (> EUR 2.4bn in
2010), which is defined in the Outlook below.
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Capital structure
objectives unchanged
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KPN will
maintain its self-imposed financial framework with a target Net Debt to EBITDA
ratio between 2.0 and 2.5x, whilst maintaining a minimum BBB/Baa2 rating.
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EUR 1bn share
repurchases in 2008
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KPN reaffirms
that it has no intention of holding unutilized surplus cash and today announces
EUR 1bn of share repurchases for FY 2008, assuming no material acquisitions
in the year. The share repurchase program will commence shortly and will run
until the end of the year.
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EUR 2bn shareholder
returns for 2008
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With the commitment
to pay out EUR 1bn in dividends and EUR 1bn share repurchases, KPN is
announcing today planned shareholder returns of EUR 2bn for 2008.
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Outlook 2010
provided today
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Based on the
Back to Growth strategy announced today, KPN is providing a three-year outlook
through to 2010.
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Including
contributions from Getronics and iBasis, KPN expects total revenues and other
income to exceed EUR 15bn in 2010, with EBITDA exceeding EUR 5.5bn. This
revenue and EBITDA outlook is based on the following assumptions:
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High-single digit revenue and EBITDA growth at Mobile International;
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The Netherlands showing revenue inflection latest in 2010;
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EBITDA in the Netherlands showing its last decrease in 2008 of a maximum EUR
100m (on a comparable basis(3)) and increasing thereafter;
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Benefits of cost savings in the Netherlands expected to come through in H2
2008;
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About EUR 1.5bn revenues and about EUR 125m EBITDA at Getronics in 2010.
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(3)
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Excluding EBITDA
contributions in 2007/2008 from Getronics, iBasis/KGCS and sale of real
estate, base figure for 2007 being EUR 3,274m.
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Capex includes
investments for the All-IP transformation. Free cash flow includes proceeds
from the sale of real estate, but henceforth excludes the temporary tax recapture
for net operating losses at E-Plus, which amounts to 25.5% of the EBITDA of EPlus,
or some EUR 0.3-0.4bn per year until after 2012.
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Outlook 2010
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Guidance metric
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Reported
2007(a)
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Outlook
2010
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Revenues and other income
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EUR 12.6bn
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> EUR 15bn
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EBITDA(b)
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EUR 4.9bn
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> EUR 5.5bn
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Capex 2008-2010
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EUR 1.7bn
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~ EUR 2bn/yr
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Free cash flow 2008-2010(c)
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EUR 2.5bn
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> EUR 2.4bn/yr
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Dividend per share (DPS)
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EUR 0.54
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EUR 0.80
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(a) Reported numbers, including Tiscali, Getronics and iBasis,
excluding E-Plus tax recapture
(b) Defined as Operating result plus depreciation, amortization
and impairments
(c) Defined as Net cash flow from operating activities, plus real
estate proceeds, minus Capex and excluding tax recapture at E-Plus
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DPS of EUR 0.80 in
2010
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Dividend per
share is expected to increase from EUR 0.54 in 2007 to EUR 0.80 in 2010, driven
by the Back to Growth strategy and supported by continued share
repurchases.
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4
GROUP FINANCIAL HIGHLIGHTS
Revenue and EBITDA growth driven by acquisitions
Q4 2007
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Q4 2006
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in
millions of euro
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FY 2007
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FY 2006
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3,659
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3,039
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Revenues
and other income
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12,632
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12,057
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2,710
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2,149
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- The Netherlands
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9,013
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8,517
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1,039
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993
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- Mobile International
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3,960
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3,819
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2
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7
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- Other
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10
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97
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-92
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-110
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- Intercompany
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-351
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-376
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634
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367
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Operating
result
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2,500
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2,223
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516
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312
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- The Netherlands
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1,901
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1,771
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147
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78
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- Mobile International
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646
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418
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-29
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-23
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- Other
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-47
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34
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1,216
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1,152
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EBITDA
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4,900
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4,837
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885
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861
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- The Netherlands
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3,479
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3,524
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359
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312
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- Mobile International
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1,466
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1,276
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-28
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-21
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- Other
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-45
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37
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GROUP
FINANCIAL REVIEW 4TH QUARTER AND FY 2007 Solid performance in challenging
markets
Limited
comparability of Q4 results, due to acquisitions and tax
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In the fourth
quarter, group revenues and other income increased by 20.4%, EBITDA was up
5.6%. The fourth quarter and full year y-on-y comparison were affected mainly
by acquisition effects and a tax gain at E-Plus:
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Q4: book gain on
the sale of KPN Global Carrier Services (KGCS) to iBasis of EUR 66m, included
in Other income, Operating Result and EBITDA;
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Q4: external
revenues and EBITDA iBasis (incl. KGCS) of EUR 200m and EUR 7m respectively;
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Q4: external
revenues and EBITDA of Getronics of EUR 482m and EUR 23m respectively;
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Q4: recognition
of a deferred tax asset at E-Plus of EUR 1.2bn with a positive effect on net result
of EUR 1.2bn;
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·
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H1 2007:
additional costs to resolve VoIP issues of EUR 45m;
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·
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FY 2007: book
gains on sale of real estate of EUR 96m.
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Group revenues and
other income up 4.8% to EUR 12.6bn, driven by acquisitions
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Group revenues
and other income for the full year 2007 increased by 4.8% or EUR 575m y-on-y
to EUR 12.6bn, due to the net effect of the consolidation of iBasis and
Getronics and the growth in Mobile International compensating for the
continued decline in wireline the Netherlands.
Full-year
revenues and other income for the Netherlands were up 5.8% or EUR 496m. This
increase was mainly the result of the above-mentioned acquisitions of
Getronics (external revenues of EUR 482m) and iBasis (external revenues of
EUR 200m), book gains on the sale of real estate (EUR 71m) and the sale of
KGCS to iBasis (EUR 66m), as well as revenue growth in the Business segment.
These increases were to a large extent offset by a decrease in wireline
revenues.
Full-year
revenues and other income for Mobile International increased by 3.7% or EUR
141m. Excluding the negative MTA effect of EUR 144m, revenues were up 7.5% in
2007. This increase was mainly driven by organic growth of E-Plus and Mobile Wholesale
NL and the acquisition of Tele2 / Versatel Belgium.
Revenues and
other income for Other decreased by EUR 87m to EUR 10m for FY 2007, caused by
the EUR 74m book gain on the sale of KPNs Xantic subsidiary in 2006. In 2006,
revenues of Xantic amounted to EUR 18m.
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5
Operating result up
EUR 277m or 12.5%, predominantly from E-Plus
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KPN delivered an
operating result of EUR 2,500m in 2007, up EUR 277m or 12.5% compared to
2006. The Netherlands delivered an increase of EUR 130m which arose mainly
from a EUR 135m increase at Wholesale & Operations (of which book gains were
EUR 139m) and at Business (EUR 37m), partly offset by a decline in Consumer (EUR
31m). The operating result at Mobile International increased by EUR 228m, predominantly
due to the continued growth at E-Plus (EUR 210m). The decrease of EUR 81m in
Other was mainly caused by the EUR 74m book gain on the sale of Xantic in 2006.
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EBITDA up 1.3%
driven by Mobile International, with the Netherlands nearly flat
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In 2007, EBITDA
improved by EUR 63m or 1.3% to EUR 4.9bn. In the Netherlands, EBITDA
decreased by EUR 45m or 1.3% as the EBITDA increase in Business (EUR 48m) and
the acquisition of Getronics (EUR 23m) did not quite compensate for the
decline in voice wireline and the line loss impact at Wholesale & Operations.
Within Mobile International, EBITDA increased by 14.9% or EUR 190m despite
the impact of MTA (EUR 82m) and roaming tariff reductions.
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Finance costs up
nearly 8% due to increased leverage
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Net finance
costs increased from EUR 520m in 2006 to EUR 560m this year, up 7.7%, due to
refinancing transactions in 2006 and 2007 and higher leverage following the
EUR 1.0bn Getronics acquisition and EUR 0.5bn additional share repurchases in
H2 2007.
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Tax gain of EUR
1.2bn at E-Plus in Q4
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In 2007, E-Plus
moved into a tax paying position in Germany. The increase in its taxable income
is related to the success of E-Plus challenger strategy and the financial restructuring
of the company. This resulted in a EUR 1.2bn increase in the deferred tax asset
for tax loss carry forwards and temporary differences, bringing the total
deferred tax assets to EUR 1.3bn at December 31, 2007. This includes EUR
0.3bn of expected tax payment savings and a EUR 1.0bn realization of
temporary differences for goodwill and UMTS license for tax purposes. E-Plus
expects tax payments, which are not significant for the medium term and are
currently estimated at EUR 30-50m per year. For more information please refer
to a separate tax paper, available on www.kpn.com/ir.
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Agreement with
Dutch tax authorities
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In Q4 2007, an
agreement was reached with the Dutch tax authorities on a number of issues
relating to the years 2001 to 2005. In Q4 2007, this resulted in a EUR 25m
partial reversal of the tax charge recorded in previous quarters, in
anticipation of the outcome of a settlement with the tax authorities.
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Effective tax rate
of 23.4%
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Excluding the
EUR 1.2bn tax gain at E-Plus, the effective tax rate for 2007 was 23.4%, compared
to 7.4% in 2006. The lower effective tax rate in 2006 is caused amongst other
factors by a EUR 100m tax gain relating to the Telfort fiscal restructuring,
a one-off tax gain of EUR 148m related to a decrease in the Dutch statutory
tax rate and a EUR 73m tax gain on the valuation of loss carry forwards at BASE.
|
|
|
|
EUR 550m Dutch
corporate income tax for FY 2008
|
|
In the course of
2007, Royal KPN and KPN Mobile reached the point where all tax losses from
prior years have been utilized. As a result, KPN has come into a tax paying position
in the Netherlands in 2007. In FY 2008, KPN expects to pay approximately EUR
550m in Dutch corporate income tax. This is roughly equivalent to the
statutory tax rate of 25.5% of Dutch profit before tax, plus 25.5% of E-Plus
EBITDA, less a Dutch corporate income tax refund related to prior years as a
result of carry back of tax losses.
|
|
|
|
EUR 800-900m tax
payment in the medium term
|
|
For the medium
term, KPN estimates its Dutch corporate tax payments at EUR 800-900m per
year. The tax payments in the Netherlands for EBITDA generated at E-Plus will
continue until the E-Plus losses of EUR 11.5bn incurred in 2002 have been recaptured.
Following that period, KPN will come into a normal tax paying position in the
Netherlands, which is expected after at least 2012, depending on the future
EBITDA generated by E-Plus.
|
|
|
|
2007 EPS up 80% due
to tax gain at E-Plus
|
|
The net result
for 2007 is up 67% or EUR 1,066m compared to full year 2006. Supported by
share repurchases and the tax gain at E-Plus, earnings per share nearly
quadrupled to EUR 0.85 in Q4. Full-year 2007 earnings per share are EUR 1.42,
up 80% compared to full year 2006. Excluding the tax gain at E-Plus, FY 2007
earnings per share are nearly flat at EUR 0.80, up 1.3%.
|
6
Solid free cash flow of EUR 2.3bn
|
|
Full-year free cash flow amounted to EUR 2,345m, EUR
132m less than for the full year 2006. Cash flow from operating activities
amounted to EUR 3,890m for FY 2007, down 4.4% compared to full year 2006 due
to higher tax payments and despite an improvement in working capital. With
investments in the new All-IP access network coming through, Capex in Q4
amounted to EUR 0.7bn. In total, Capex for the full year 2007 was EUR 1.7bn,
up 2.3% on prior year.
|
|
|
|
EUR 1.25bn Eurobond issued
|
|
On November 6, 2007, KPN issued a EUR 1.25bn
Eurobond with a five year maturity and a coupon of 5.00%. The proceeds were
used to redeem drawings on the credit facility and for general corporate
purposes. Subsequently, KPN terminated its EUR 1.25bn bilateral backstop
agreements, which were signed in September 2007.
|
|
|
|
Gross debt up to EUR 12.1bn
|
|
Gross debt at the end of Q4 (EUR 12.1bn) was EUR
1.4bn higher than in the previous quarter, mainly as a result of the EUR
1.25bn bond issue in November and an increase in drawings on the credit
facility of EUR 100m (to EUR 800m per December 31, 2007). At December 31,
2007, KPNs gross cash position amounted to EUR 1.1bn, EUR 0.5bn higher than
at the end of Q3 2007, partly due to an increase of non-notional cash pools.
|
|
|
|
Net debt to EBITDA(4) increased to 2.3x
|
|
Net debt at the end of Q4 2007 (EUR 11.0bn) was EUR
1.0bn higher than in the previous quarter. The increase is mainly the result
of the acquisition of Getronics of EUR 1.0bn and share repurchases of EUR
0.4bn. This resulted in a Net debt to EBITDA (3) ratio of 2.3x (Q3 2007:
2.1x) which is within the range of KPNs self-imposed financial framework of
2.0-2.5x. KPNs credit ratings remained unchanged at BBB+ with a negative
outlook (Standard & Poor's) and Baa2 with a stable outlook (Moodys).
|
(4)
|
|
12 month rolling average excluding book gains and
restructuring costs, both over EUR 20m
|
|
|
|
EUR 1.5 bn share repurchases in 2007
|
|
During 2007, KPN executed two share repurchase
programs for a total of EUR 1.5bn. The first EUR 1bn program was announced in
February and ended on August 30, following accelerated repurchases. An
additional EUR 500m share repurchase program was announced on September 3,
ending on December 20, 2007.
Under the additional EUR 0.5bn program, KPN
repurchased 40.6m shares (average price of EUR 12.32 per share) of which
30.4m were acquired in the fourth quarter for a total amount of EUR 379.8m
(average price of EUR 12.48 per share). In total in 2007, KPN repurchased
125.6m shares for EUR 1.5bn (average price of EUR 11.94 per share).
|
|
|
|
4.4% of outstanding shares cancelled in Q4 2007
|
|
On October 5 and November 30, 2007, KPN concluded
the cancellation of 42,767,654 and 42,301,459 ordinary shares respectively
which were repurchased as part of the EUR 1bn share repurchase program. The
remaining treasury shares, related to the additional EUR 0.5bn program, will
be cancelled around April 1, 2008.
Following the cancellations in 2007, KPN has
1,843,482,213 shares outstanding as of December 31, 2007. Since October 2004,
KPN has cancelled 651m shares, representing 26% of the total number of
outstanding shares at that date.
|
7
GROUP
OPERATING REVIEW Restructuring well on track
FTE reductions on
track
|
|
The
implementation of the FTE restructuring initiatives announced in the
Attack-Defend-Exploit strategy review of March 2005 is ahead of plan. In
2007, KPN reduced the number of FTEs in the Netherlands by 1,740, compared to
1,567 FTEs in 2006. In the fourth quarter, the number of FTEs was down 403.
Since year-end 2004, KPN has reduced its workforce in the Netherlands by 25%
or 5,412 FTEs, exceeding the March 2005 reduction target by 412 FTE.
Outside the
Netherlands the number of FTEs increased by 1,013 (excluding Getronics, with
approximately 400 FTEs at SNT International, 180 FTEs related to the Tele2 / Versatel
Belgium acquisition and 350 FTEs related to the merger of KGCS with iBasis). Including
Getronics, KPNs workforce in the Netherlands amounts to 26,686 FTEs (17,668
excluding Getronics) and, as a Group, KPN employed 43,531 FTEs (25,500 excluding
Getronics).
|
|
|
|
EUR 59m
restructuring charges in 2007
|
|
Restructuring
charges for 2007 amounted to EUR 59m, a decrease of EUR 5m compared to 2006
(including a EUR 21m restructuring charge at E-Plus in 2006). In the fourth quarter
of 2007, restructuring charges amounted to EUR 33m, compared to EUR 17m in the
same quarter last year. Of this EUR 33m, EUR 21m related to the Netherlands (Q4
2006: EUR 11m, excluding Getronics), EUR 6m to Getronics and EUR 6m to Other (Q4
2006: EUR 8m).
|
PERFORMANCE
VS. GUIDANCE Full-year guidance met
Full-year guidance
met
|
|
Full-year
guidance for 2007 was met. Full-year 2007 revenues and other income were down
0.8%, broadly in line with the flat guidance. EBITDA was down 0.6% at
year-end 2007, also in line with the flat guidance. Capex amounted to EUR
1.7bn, within the guidance range of EUR 1.6-1.8bn. Free cash flow for 2007
amounted to EUR 2.3bn, somewhat exceeding the guidance of at least EUR 2bn.
|
Outlook 2007
|
|
Guidance metric
|
|
2006
reported
|
|
FY 2007
|
|
Outlook FY 2007 (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues and other income(a)
|
|
EUR 12,057m
|
|
-0.8%
|
|
Flat
|
|
|
|
EBITDA(a),(b)
|
|
EUR 4,837m
|
|
-0.6%
|
|
Flat
|
|
|
|
Capex
|
|
EUR 1,650m
|
|
EUR 1,688mn
|
|
EUR 1.6 1.8bn
|
|
|
|
Free cash flow 2007(c)
|
|
EUR 2,477m
|
|
EUR 2,345mn
|
|
> EUR 2.0bn
|
|
(a)
Reported
numbers excluding iBasis, Tiscali and Getronics
(b)
Defined
as Operating result plus depreciation, amortization and impairments
(c)
Defined
as Net cash flow from operating activities minus Capex plus real estate
proceeds
|
|
|
E-Plus exceeding H2
2007 growth and margin guidance
|
|
As part of the
Half Year Results 2007 press release, KPN announced that service revenue
growth at E-Plus in H2 2007 would exceed growth reported for Q2 2007 of 2.5%
and that EBITDA margin would be at least 35%. Service revenue growth in Q4
amounted to 4.2%, higher than the 2.9% growth in Q3 and exceeding guidance.
EBITDA margin exceeded guidance with a 36.6% EBITDA margin in Q4 2007, which
was slightly lower than the 37.6% margin in Q3 2007.
|
8
THE
NETHERLANDS FINANCIALS
Q4 2007
|
|
Q4 2006
|
|
In
millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
|
|
|
|
|
|
|
|
|
|
2,710
|
|
2,149
|
|
Revenues
and other income
|
|
9,013
|
|
8,517
|
|
1,011
|
|
1,057
|
|
- Consumer
|
|
4,133
|
|
4,236
|
|
855
|
|
847
|
|
- Business
|
|
3,382
|
|
3,316
|
|
488
|
|
|
|
- Getronics
|
|
488
|
|
|
|
1,076
|
|
994
|
|
- Wholesale &
Operations (incl. iBasis(5))
|
|
3,870
|
|
3,938
|
|
-720
|
|
-749
|
|
- Other (incl.
intercompany revenues)
|
|
-2,860
|
|
-2,973
|
|
|
|
|
|
|
|
|
|
|
|
2,194
|
|
1,837
|
|
Operating
expenses
|
|
7,112
|
|
6,746
|
|
369
|
|
549
|
|
Of
which depreciation, amortization and impairments
|
|
1,578
|
|
1,753
|
|
|
|
|
|
|
|
|
|
|
|
516
|
|
312
|
|
Operating
result
|
|
1,901
|
|
1,771
|
|
82
|
|
62
|
|
- Consumer
|
|
460
|
|
491
|
|
156
|
|
149
|
|
- Business
|
|
650
|
|
613
|
|
5
|
|
|
|
- Getronics
|
|
5
|
|
|
|
282
|
|
105
|
|
- Wholesale &
Operations (incl. iBasis(5))
|
|
815
|
|
680
|
|
-9
|
|
-4
|
|
- Other
|
|
-29
|
|
-13
|
|
|
|
|
|
|
|
|
|
|
|
885
|
|
861
|
|
EBITDA
|
|
3,479
|
|
3,524
|
|
151
|
|
163
|
|
- Consumer
|
|
707
|
|
729
|
|
185
|
|
178
|
|
- Business
|
|
759
|
|
711
|
|
23
|
|
|
|
- Getronics
|
|
23
|
|
|
|
527
|
|
521
|
|
- Wholesale &
Operations (incl. iBasis(5))
|
|
1,995
|
|
2,087
|
|
-1
|
|
-1
|
|
- Other
|
|
-5
|
|
-3
|
|
(5)
|
|
iBasis included
in KPN financials as from acquisition date of October 1, 2007
|
THE
NETHERLANDS REVIEW Solid performance in the Netherlands
|
|
CONSUMER FINANCIAL REVIEW
|
Revenues and other income down 2.4% in 2007
|
|
Revenues and other income in 2007 decreased by 2.4%
or EUR 103m to EUR 4,133m, due to sustained growth in broadband (EUR 155m),
wireless services (EUR 71m) and TV services, offset by a continued decline in
traditional voice revenues (EUR 364m). In the fourth quarter, revenues and
other income declined by a higher percentage, caused by a slowdown in
wireless services due to the impact of MTA (EUR 19m) and roaming.
|
|
|
|
EBITDA down 3.0% in 2007
|
|
Over the full year 2007, EBITDA declined by 3.0% or
EUR 22m to EUR 707m, while EBITDA margin was flat at around 17%. Wireless
showed strong EBITDA growth in 2007, due to continued SAC/SRC reductions
(down 19% y-on-y). The EBITDA decrease in Q4 2007 was higher at -7.4% or EUR
12m, caused by the full effect of MTA (EUR 7m) and roaming in Q4 and a
continued decline in traditional wireline voice.
|
|
|
|
|
|
CONSUMER OPERATING REVIEW
|
Strong underlying trends in wireless
|
|
Excluding the regulatory tariff cuts, Consumer
wireless services showed continued revenue growth, reflecting its strong
position in the Dutch market. Q4 service revenues were down 1.2%, with a
negative impact of about 6% related to MTA and roaming. The customer base continued
to grow in Q4 2007 with 122k net adds, reaching a total of 6.2m customers at
year end 2007. The percentage of post paid customers went up 2%-points y-on-y
to 41%. KPNs new proposition Flexibel is expected to contribute to further
post paid growth, allowing consumers to change their post paid bundle
monthly, according to usage.
|
|
|
|
Acceleration in VoIP growth
|
|
The VoIP issues encountered in H1 2007 were solved
fully by the third quarter, after which VoIP advertising and order intake
resumed. As a result, market share in VoIP net adds increased from 37% in Q3
to 42% in Q4. At December 31 2007 the VoIP customer base counted 847k
customers, equivalent to a market share of approximately 39%. Compared to
2006, the number of VoIP subscribers went up 330k or 64%.
|
9
Net line loss down to 90k,
lowest since Q3 2005
|
|
For the third consecutive quarter net line loss
improved. At 90k in Q4, this is the lowest net line loss since Q3 2005,
mainly due to an acceleration in VoIP and successful retention offers in
PSTN/ISDN. In the fourth quarter the PSTN/ISDN line loss amounted to 190k,
the lowest since Q1 06 and 167k less than the 357k line loss in fourth
quarter of 2006.
|
|
|
|
Broadband market share up 3% y-on-y; Telfort as successful
challenger
|
|
Broadband market share was up 3.0% to 43.9% in 2007,
predominantly the result of the Tiscali acquisition in June 2007. However,
market share was down 0.4% on the prior quarter, due to intensified
competition and churn related to the amalgamation of acquired customer bases.
To counter this trend, Telfort was launched as a challenger with a
value-for-money broadband offer. So far, order intake is above expectations.
|
|
|
|
Milestone of 500k TV
subscribers reached
|
|
In January 2008, KPN reached the milestone of half a
million TV subscribers. Growth continued to accelerate in Q4 2007, adding 83k
new customers, compared to 77k in Q3. TV growth was mainly driven by
Digitenne, KPNs DVB-T proposition. Growth in KPNs IPTV proposition
Interactieve TV accelerated, adding customers at a rate of ~1,000 new
subscribers per week by the end of December with positive consumer feedback.
|
|
|
|
|
|
CONSUMER STRATEGY UPDATE
|
Strengthening position as
leading service provider
|
|
As part of the Back to Growth strategy, KPN
anticipates reaching EBITDA inflection in the Consumer segment in the next
three years until 2010. KPN has the ambition to strengthen its position as a
leading service provider, in terms of market share and consumer preference.
Revenue growth will come from sustained subscriber and ARPU growth, through a
strong customer focus and investments in market share. Simplification of the
business will allow for cost reductions to fund growth and improve margins.
|
|
|
|
Continued growth in
wireless through customer
focus
|
|
In wireless services, KPN intends to consolidate its
position as best-in-class mobile operator in the Netherlands and to
strengthen its market position. Revenue growth will come from focus on the
most profitable customers, leveraging distribution and brands, and growth in
both minutes and data. EBITDA will also increase from ongoing SAC/SRC
reductions, simplified processes and further benefits from the Telfort
network integration.
|
|
|
|
Growth in wireless data
|
|
Wireless data will be an important source of future
revenue growth. In 2007, the volume of data bundles increased rapidly,
following the introduction of flat-fee data bundles. Even though revenues
from wireless data are so far small in the context of the wireless voice
business, they are expected to have a significant contribution by 2010. In
addition, Mobile TV based on DVB-H will be commercially launched by mid 2008,
following successful pilots in the second half of 2007. By early 2008, KPN
expects to have network coverage in almost all Dutch cities.
|
|
|
|
Dual play to stop line loss
|
|
KPNs focus in wireline is on stopping line loss by
2010 and on enhancing KPNs leading position in voice and broadband. The most
important instruments in stopping line loss are KPNs dual play offerings, as
initiated in 2007. KPN will up-sell PSTN customers with broadband to retain
customer value and cross-sell to KPN VoIP offers for retention purposes. The
Telfort brand is used to address the value-for-money segment, in addition to
the premium KPN brand.
|
|
|
|
Step up in TV
|
|
In TV, KPN will further step up its value-for-money
DVB-T product Digitenne. KPN is poised to reach its earlier communicated
share of the TV market of 10% well before 2010, with the vast majority of
Digitenne subscribers cancelling their cable connection. Alongside Digitenne,
KPNs Interactive Television based on IPTV is positioned as a premium TV
offering. The IPTV service is used as the stepping stone for providing TV in
the fiber roll-out that will start in 2008. IPTV is expected to make a
significant contribution to KPNs share of the triple-play market in 2010.
|
|
|
|
Fiber roll-out as of 2008
with a mix of FttC and FttH
|
|
KPN will start the mass roll-out of its All-IP
access network in early 2008. In the Consumer market, KPN will deploy a mix
of Fiber-to-the-Curb (FttC, based on VDSL) and Fiber-to-the-Home (FttH).
|
10
|
|
FttC provides a superior offer compared to those
currently available in the market, with a full triple-play capability and
with bandwidths of up to 50 Mb/s. KPN will engage in selective regional FttH
initiatives, partnering with building corporations and municipalities. Early
examples include Almere and Enschede where KPN has partnerships to connect
c.100k households by 2008. FttH will offer up to 100 Mb/s with voice,
broadband, multi-room TV, pilots for HDTV and potential ARPU uplift amongst others
from value-added services.
|
|
|
|
Radical simplification of the business
|
|
The fiber roll-out will go hand-in-hand with a
radical simplification of operations and will increase installation and
service quality in particular the percentage of first time right customer
calls. Examples of simplification are a reduction from 10 brands to 3, from 8
portfolios to 1 and from 8 helpdesks to 1. This should result in substantial
cost savings, which will be partly re-invested in revenue growth in
broadband, TV, FttH and wireless, and partly allocated to improve margins to
best-in-class levels.
|
|
|
|
|
|
BUSINESS FINANCIAL REVIEW
|
Revenue growth from
wireless and IP-based
services
|
|
Full year revenue growth was 2.0%, mainly caused by
strong revenue growth in Corporate Solutions (EUR 80m), network services (EUR
29m) and wireless services (EUR 48m). This revenue growth more than
compensated for the revenue decline in traditional voice of EUR 58m.
|
|
|
|
|
|
Revenues and other income in the Business segment in
Q4 2007 increased by 0.9% or EUR 8m to EUR 855m y-on-y. In Q4 2006 a
correction was made for discounts in the Belzakelijk proposition, resulting
in a EUR 23m negative revenue and EBITDA effect. Adjusting Q4 2006 for this
correction, revenues would have decreased by 1.7% in Q4, mainly due to the
full quarter effects of MTA (EUR 6m) and roaming. In Q4, revenues from
Corporate Solutions increased by more than 13% y-on-y, driven by revenue growth
from the major contract wins of 2006 and 2007 becoming operational.
|
|
|
|
Full year EBITDA up 6.8%
|
|
Full year EBITDA growth amounts to 6.8% based on the
strong performance of network services, wireless services and Corporate
Solutions. In Q4 2007, EBITDA increased by 3.9% or EUR 7m y-on-y to EUR 185m.
The EBITDA margin increased to 21.6% due to the aforementioned correction of
Belzakelijk discounts in 2006 more than compensating for full quarter
effects of MTA and roaming tariff reductions. The operating result was up
4.7% to EUR 156m compared to the same quarter last year.
|
|
|
|
|
|
BUSINESS OPERATING REVIEW
|
Continued migration to
IP-based services
|
|
The migration from traditional wireline services to
IP-based services accelerated in 2007. The migration is underpinned by the
increase in the number of Ethernet VPN and Business DSL connections, which
grew by almost 80% and 70% respectively compared to last year. At the same
time, leased lines decreased by 10% to 33k y-on-y and PSTN/ISDN connections
decreased by 8% to 1.7m over the same period.
|
|
|
|
Wireless impacted by MTA and roaming cuts
|
|
The number of wireless business customers in Q4 2007
increased by 12% compared to the same quarter last year, passing 1.3m, driven
by continued growth in data applications. Service revenues dropped 1.3%, due
to a full quarter of new MTA and roaming tariffs with a downward impact of 7%
on service revenue growth. Nevertheless, 2007 showed a strong performance
with 4% service revenue growth.
|
|
|
|
Growth in application
management, housing &
hosting
|
|
In 2007, KPN successfully launched Applications
Online in the SME/SoHo segment, which are standardized online ICT
applications provided for a monthly fee. In addition, these applications were
also launched in the large and medium enterprise segment. Distribution for
Applications Online was strengthened through a partnership with Sony and a
partnership with Liquix, making the package available in retail stores.
|
|
|
|
|
|
Demand for housing and hosting services remained
strong in Q4 and now generates close to EUR 100m in annual revenues. The
number of square meters (sqm) occupied surpassed the 10,000 sqm mark, up 84%
compared to last year. The number of hosted servers increased to 1,825,
doubling y-on-y. To cater for the increasing demand for housing and hosting
services, KPN is meanwhile building its fifth cybercenter, which will
increase the available capacity by another 5,000 sqm by the end of 2008.
|
11
Major contract win with
insurance company
Achmea
|
|
KPN and Getronics signed a major contract with Dutch
insurance company Achmea in Q4 2007. The contract has a value of EUR 150m for
KPN and EUR 120m for Getronics over a period of 5 years. Achmea will
outsource the management of its ICT infrastructure to a consortium of KPN,
Getronics and Atos Origin.
|
|
|
|
|
|
BUSINESS STRATEGY UPDATE
|
Leading managed ICT
provider in the Netherlands
|
|
KPN has the ambition to be the leading end-to-end
ICT service provider in the Netherlands by 2010. Based on a strong customer
focus, KPN intends to be the preferred Business market supplier in three
segments of Infrastructure Services, Application Management and ICT
Outsourcing. In Infrastructure Services, KPN intends to maintain its strong
market position, based on wireline and wireless services and converged
offers. To underpin the ambition of moving up the value chain, KPN will step
up its market share in Application Management and ICT outsourcing.
|
|
|
|
Continued growth in
wireless, data accelerating
|
|
Wireless will continue to be a growth business,
despite regulatory tariff cuts in MTA and roaming. Revenue growth will in
particular come from data services, such as laptop data cards, Blackberry and
M2M. These services are supported by KPNs superior 3G network based on HSDPA
3.6, offering higher bandwidths and population coverage than competitors. A
further upgrade to HSDPA 7.2/14.4 is under consideration. To drive EBITDA
margins, KPN will continue to reduce SAC/SRC where possible.
|
|
|
|
Proactively migrate to IP-
based services; phase-out
legacy services
|
|
In wireline, KPN is proactively migrating its
business customers to IP-based services and intends to accelerate this
migration in the next three years. By 2010, the portfolio will be simplified
and predominantly consist of IP-based services. Legacy services will be phased
out, as already initiated in 2007, when the Frame Relay and FlexiStream platforms
were switched off. While migrating customers, KPN will consolidate its market
leading position in wireline services.
|
|
|
|
|
|
New revenues are also expected from Fixed-Mobile
integrated offers, following the success of amongst others ONE, a fully
integrated Fixed-Mobile offer with a continuously expanding range of
services.
|
|
|
|
Step-up in FttO initiatives
|
|
The demand for higher bandwidths is being addressed
with a step up in regional Fiber-to-the-Office (FttO) initiatives in
cooperation with selected partners. At the current rate, around 15 business
parks are being connected each month and KPN has the ambition to have
connected a substantial part of the business parks by 2010.
|
|
|
|
Accelerating growth in ICT services
|
|
The ICT Services business is earmarked as a growth
area. Following the rapid uptake of Online Applications, housing &
hosting and outsourcing, revenues are expected to accelerate in the period
2008-2010. The move up the value chain is further supported by the Getronics
acquisition.
|
|
|
|
Organic revenue and
EBITDA growth
|
|
The Business segment will show organic growth in
both revenues and EBITDA after 2008. Savings from simplification,
standardization and lower operating costs are being used to invest in growth
initiatives such as FttO and ICT Services, and to increase margins towards
best-in-class levels. On top of organic revenue and EBITDA growth in Business,
KPN has identified additional synergies with Getronics.
|
|
|
|
|
|
GETRONICS FINANCIAL REVIEW
|
Strong revenues in
professional services
|
|
Getronics has been consolidated as of October 23,
2007, following the closing of the transaction the previous day. Revenues for
the period were supported by strong performance in consulting and
transformation services, and by a strong uplift in the application services
business for the public sector. Revenues for the period include EUR 46m for
Spain and Portugal, which operations have since been divested. Reference is
also made to Appendix E for further disclosures on Business Combinations.
|
|
|
|
EBITDA impacted by
restructuring and
integration costs
|
|
EBITDA amounted to EUR 23m, including EUR 6m
restructuring costs and EUR 8m integration costs. Salary-related costs were
adversely impacted by a shortage in specific segments of the labour market,
which caused an increase in work contracted out in both volume and price.
Expenses include EUR 46m for divested operations in Spain and Portugal.
|
12
|
|
GETRONICS OPERATING REVIEW
|
Turnaround plan completed
|
|
After the first 100 days, the new Board of
Management has completed its turnaround plan. The strategies for Getronics
Benelux and global businesses have been defined and headquarter integration
is in progress.
|
|
|
|
|
|
Management has identified additional value-creating
opportunities on top of the opportunities announced upon acquisition. Cost
synergies are expected to comfortably exceed the earlier announced target of
EUR 50m annual savings by 2009. The integration of KPN ICT Services into
Getronics is planned for January 1, 2009, which is expected to generate
additional revenue synergies. The majority of large clients have indicated
that they are supportive of the combination between KPN and Getronics.
|
|
|
|
Divestments completed in
Hong Kong, China, Spain
and Portugal
|
|
On October 15, the Application Services businesses
in Hong Kong and China were divested to Hyro. To continue delivering managed
services to Getronics customers in Hong Kong and China, a joint venture was
created with ServiceOne.
|
|
|
|
|
|
On December 20, Getronics concluded the sale of the
Getronics activities in Spain and Portugal to Tecnocom for an enterprise
value of EUR 86m. The total consideration was paid 60% in cash and the other
40% will be deferred for nine months, and could either be paid in cash or
Tecnocom shares. Getronics now operates in a partnership with Tecnocom to
service customers in the Iberian peninsula.
|
|
|
|
|
|
GETRONICS STRATEGY UPDATE
|
Market leader in the
Benelux
|
|
In the Benelux, Getronics is strengthening its
market leadership position in infrastructure and network-related IT services
and consulting. Getronics will offer end-to-end solutions with workspace
management at the center, being one of the key strengths of Getronics. Other
services offered are data center and hosting services, connectivity solutions
and Software as a Service (SaaS). These services are complemented by
independent consulting and professional services through its separate
business Getronics Consulting.
|
|
|
|
Build and expand global
services
|
|
In the global workspace management business,
Getronics intends to expand and strengthen its global delivery capability.
This delivery capability is based on own operations in countries with
sufficient scale and on partnerships in other countries.
|
|
|
|
|
|
The launch of a new workspace management solution
Future Ready Workspace 2.0 (FRW 2.0) in Q2 2008 will support the global
delivery capability for serving international clients and drive
profitability. FRW 2.0 is an integrated solution covering a large part of the
KPN-Getronics service portfolio.
|
|
|
|
Focus on core operations
|
|
Going forward, Getronics will focus on its core
operations, where Getronics will continue to operate the activities in
network-related IT services and connectivity. Activities further up the value
chain such as Business Process Outsourcing and Business Applications are
considered to be non-core.
|
|
|
|
|
|
Accordingly, Getronics is considering the divestment
of a number of strong businesses, either in part or in full. The businesses
considered generate in total about EUR 800m in annual revenues, both in the
Benelux and globally. In the Netherlands in particular, Getronics is
considering the divestment of several non-core businesses with strong EBIT
margins, being Business Applications Services and Business Solutions for
local governments and healthcare. A final decision will be made depending on
interest from potential buyers and the detailed carve-out plan. The
divestment of these non-core assets will allow KPN to recoup part of the
acquisition consideration.
|
|
|
|
|
|
WHOLESALE & OPERATIONS
FINANCIAL REVIEW
|
Revenues down in FY 2007, up in Q4 due to iBasis
|
|
Revenues decreased in FY 2007 by 5.3% or EUR 207m to
EUR 3,706m, which was mainly the result of continued line loss in Consumer
and Business. In Q4 2007, revenues were up 0.7% (or EUR 7m) to EUR 999m
y-on-y as the decline in wireline was more than offset by the consolidation
of iBasis from October 1, 2007. Other income amounted to EUR 164m for FY 2007
(2006: EUR 25m), due to a EUR 66m book gain on the sale of KGCS to iBasis in
Q4 and a EUR 96m book gain on the sale of real estate.
|
13
EBITDA down; EBITDA
margin diluted by lower
iBasis margins
|
|
EBITDA decreased 4.4% for the full year 2007,
related to the decline in traditional voice. In Q4 2007, EBITDA grew by 1.2%
(or EUR 6m) to EUR 527m compared to the same quarter last year, whereas the
EBITDA margin decreased to 49.0%, due to lower margins at iBasis. Moreover,
cost savings from FTE reductions contributed to profitability. The Q4
operating profit of EUR 282m more than doubled compared to the same quarter
last year (EUR 105m) due to the book gains on the sale of KGCS to iBasis and
the sale of real estate and one-off items in Q4 2006, e.g. EUR 61m Telfort
network integration costs and accelerated D&A.
|
|
|
|
|
|
WHOLESALE & OPERATIONS OPERATING REVIEW
AND STRATEGY UPDATE
|
iBasis consolidated as of
October 1, 2007
|
|
On October 1, 2007, the merger of KPNs
international wholesale voice business into iBasis was closed and iBasis was
subsequently consolidated. As a result of this transaction, iBasis obtained
KGCS and USD 55m in cash from KPN, in exchange for approximately 40m shares
of its common stock. KPN is now a 51% shareholder of iBasis on a fully
diluted basis. Reference is also made to Appendix E for further disclosures
on Business Combinations.
|
|
|
|
|
|
iBasis published its Q4 (and FY 2007) results on
February 4, 2008. For a more extensive description of the financial and
operating review in Q4 and FY 2007, reference is made to the iBasis press
release available at www.ibasis.com.
|
|
|
|
Construction All-IP
exchange started
|
|
In Rotterdam, KPN started the construction of the
first All-IP exchange in Q4 2007. This exchange will be operated as part of
the new All-IP back-end infrastructure and replaces part of the legacy
network, e.g. local exchanges.
|
|
|
|
Mass roll-out access
network starting in 2008
|
|
The mass roll-out for the VDSL access network will
start in the first half of 2008, as announced in Q3 2007. Installation
capacity for the FttC roll-out was committed in the second half of 2007 and
in the meantime the roll-out plan has been detailed further. KPN will engage
in selective initiatives with partners to roll-out FttH and FttO as described
in the strategy update for Consumer and Business.
|
|
|
|
Confirming additional
All-IP Capex at EUR 0.9bn
|
|
KPN confirms additional Capex for All-IP at EUR
0.9bn (over and above a base-line of about EUR 0.7bn per annum for wireline
infrastructure), of which EUR 250m will be spent in 2008 and 2009, and EUR
200m in 2010. About EUR 200m has already been invested in total in 2006 and
2007. Selective FttH initiatives will not result in materially higher Capex
levels, due the partnership model for sharing investments.
|
|
|
|
KPN to sell first part of real estate portfolio
in H1 2008
|
|
The sale of a significant part of the EUR 1bn real
estate portfolio is planned for the first half of 2008 and is expected to
generate proceeds of about EUR 300m. The Top-34 properties in this portfolio
are mainly located in city centers throughout the Netherlands and provide
significant redevelopment opportunities. The sale of the remaining real
estate is expected to take place in subsequent years, with proceeds spread
over the years 2009 to 2011.
|
|
|
|
EUR 143m proceeds from real estate in 2007
|
|
Proceeds from real estate in 2007 amounted to EUR
143mn with a book gain of EUR 96m. In Q4 2007, proceeds amounted to EUR 19m
with a book gain of EUR 10m.
|
|
|
|
Best-in-class network
operator
|
|
Wholesale & Operations has the ambition by 2010
to remain a highly efficient and best-in-class network operator through a
radical simplification of the business with solid EBITDA margins. The
implementation of the All-IP access network is being used as an enabler to
redesign the whole front-end and back-end of the business, including service
platforms, IT and services.
|
|
|
|
Further cost and FTE
reductions
|
|
The infrastructure and process redesign is expected
to lead to substantial cost savings and additional FTE reductions. IT
simplification will result in halving IT spend by the end of 2010, as a
result of outsourcing, application rationalization and FTE reductions.
Furthermore, KPN is considering the outsourcing of several parts of
operations to third-party suppliers. A small amount of these cost reductions
will be re-invested in growing the wholesale business, but the majority of
savings will be reflected in best-in-class EBITDA margins.
|
14
MOBILE
INTERNATIONAL FINANCIALS
Q4 2007
|
|
Q4 2006
|
|
In
millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
|
|
|
|
|
|
|
|
|
|
1,039
|
|
993
|
|
Revenues
and other income
|
|
3,960
|
|
3,819
|
|
760
|
|
747
|
|
- E-Plus
|
|
2,963
|
|
2,894
|
|
155
|
|
160
|
|
- BASE
|
|
613
|
|
622
|
|
88
|
|
85
|
|
- Mobile Wholesale NL
|
|
344
|
|
303
|
|
36
|
|
1
|
|
- Other (incl.
intercompany revenues)
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
956
|
|
934
|
|
Service
Revenues
|
|
3,754
|
|
3,609
|
|
721
|
|
692
|
|
- E-Plus
|
|
2,816
|
|
2,698
|
|
148
|
|
157
|
|
- BASE
|
|
595
|
|
609
|
|
87
|
|
85
|
|
- Mobile Wholesale NL(6)
|
|
341
|
|
303
|
|
|
|
|
|
- Other (incl.
intercompany revenues)
|
|
2
|
|
-1
|
|
|
|
|
|
|
|
|
|
|
|
892
|
|
915
|
|
Operating
expenses
|
|
3,314
|
|
3,401
|
|
212
|
|
234
|
|
Of
which depreciation, amortization and impairments
|
|
820
|
|
858
|
|
|
|
|
|
|
|
|
|
|
|
147
|
|
78
|
|
Operating
result
|
|
646
|
|
418
|
|
104
|
|
51
|
|
- E-Plus
|
|
437
|
|
227
|
|
22
|
|
41
|
|
- BASE
|
|
117
|
|
147
|
|
27
|
|
-14
|
|
- Mobile Wholesale NL
|
|
101
|
|
49
|
|
-6
|
|
|
|
- Other
|
|
-9
|
|
-5
|
|
|
|
|
|
|
|
|
|
|
|
359
|
|
312
|
|
EBITDA
|
|
1,466
|
|
1,276
|
|
278
|
|
220
|
|
- E-Plus
|
|
1,113
|
|
905
|
|
50
|
|
64
|
|
- BASE
|
|
230
|
|
264
|
|
34
|
|
28
|
|
- Mobile Wholesale NL
|
|
129
|
|
112
|
|
-3
|
|
|
|
- Other
|
|
-6
|
|
-5
|
|
MOBILE
INTERNATIONAL REVIEW Profitable growth at Mobile International
|
|
E-PLUS FINANCIAL REVIEW
|
Revenues and other income up 2.4% over 2007
|
|
Revenues and other income increased by 2.4% over
2007, compared to full-year 2006, a continued success of the challenger
strategy. In Q4 2007, revenues and other income increased by 1.7% or EUR 13m
q-on-q. The MTA impact in Q4 on revenues amounted to EUR 17m or 2.2%.
|
|
|
|
EBITDA up 23%, margin
almost 38% in 2007
|
|
Full-year EBITDA was up 23.0%, or EUR 208m compared
to 2006, as a result of continued SAC/SRC reductions and the outsourcing of
network operations and maintenance to Alcatel-Lucent in March 2007. EBITDA
margin was 37.6% for the full year, 6.3%-points higher than in 2006.
Subscriber acquisition and retention costs went down by 31% q-on-q to EUR 70
in Q4. EBITDA in Q4 2007 amounted to EUR 278m, an increase of 26.4% or EUR
58m compared to the same quarter last year. The operating result in Q4
increased by EUR 53m or over 100% to EUR 104m.
|
|
|
|
|
|
E-PLUS OPERATING REVIEW
|
Accelerating customer
growth, highest net adds
since Q4 2000
|
|
In 2007, E-Plus continued to outperform competitors
in Germany. Net additions in the fourth quarter accelerated to 695k, the
highest number since 2000, resulting from continued growth in new brands on
the E-Plus network. The total customer base at year-end amounted to 14.8m, up
17% compared to year-end 2006. The new brands now represent 51% of the total
customer base, or 7.6m customers. Moreover, postpaid net adds accelerated and
going forward will benefit from the acquisition of the retail chain SMS
Michel in January 2008.
|
15
Service revenue growth of
4.2% despite MTA cuts
|
|
Despite further MTA cuts since December 1, 2007,
service revenue growth for the quarter was 4.2% compared to Q4 2006, in what
KPN estimates to be a declining German market. Underlying service revenue
growth excluding MTA, VAT and roaming impact would have been around 10% in
2007.
|
|
|
|
|
|
Service revenue growth in Q4 2007 exceeded the
guidance given during the Half Year Results 2007 of at least 2.5%. Service
revenue market share increased by 1%-point y-on-y to 14.4%. Q4 2007 was the
fourth and last quarter impacted by the VAT increase in January 2007, that
was not passed on to customers, which had a negative impact of about 2.4% on
service revenues. E-Plus expects the overall market to gradually return to
growth, driven by continued usage growth.
|
|
|
|
Wireless data continues to
grow
|
|
Wireless data continued to grow, in addition to
continued voice growth from Fixed-Mobile substitution. E-Plus experienced a
rapid increase in data usage, following the launch of flat fees in November
2005. Data bundles are predominantly used for internet connectivity. In
selective areas with proven data demand, E-Plus will invest in UMTS capacity,
but this is not expected to have a significant impact on overall Capex spending
and will follow proven demand for data services.
|
|
|
|
Launch of new
propositions, MVNOs and
branded resellers
|
|
In 2007, E-Plus launched several new propositions; Zehnsation
with a monthly fee of EUR 10 and a price per minute / SMS of EUR 0.10, and a
Prepaid Flatrate offered via Medion, Simyo and Blau. E-Plus also continued to
grow in wholesale partnerships, by starting cooperation with Air Berlin, the
MVNO NetCologne and the branded reseller Televersa.
|
|
|
|
Contract with Alcatel-
Lucent extended
|
|
Following good network quality and improvements
during the transition phase, E-Plus has extended its contract with
Alcatel-Lucent for the expansion, maintenance and operation of its mobile
network from three to five years. On March 1, 2007, Alcatel-Lucent took over
the operational business units, which are responsible for building, running
and maintaining the mobile network of E-Plus. The outsourcing resulted in the
transfer of around 750 E-Plus employees throughout Germany to Alcatel-Lucent.
|
|
|
|
|
|
BASE FINANCIAL REVIEW
|
Regulation impacting
revenues and EBITDA
|
|
Revenues and other income in 2007 were down 1.4% or
EUR 9m to EUR 613m, due to challenging market conditions arising from
regulation and strong competition. The negative impact from MTA on revenues
amounted to EUR 51m in 2007, equivalent to a 8.2% downward impact on revenue
growth. Revenues and other income include the acquisition of Allo Telecom,
whereas Tele2 Belgium is included in Other within Mobile International.
|
|
|
|
Lower EBITDA, mainly from MTA regulation
|
|
In 2007, EBITDA decreased by 12.9% or EUR 34m to EUR
230m, mainly as a result of MTA and roaming regulation. EBITDA margin for
2007 amounted to 37.5%, compared to 42.4% for 2006. In Q4 2007, EBITDA
decreased by EUR 14m or 22% compared to the same period last year, due to
increased ICT expenditure and higher operating expenses related to Allo
Telecom, in addition to the impact of regulation.
|
|
|
|
|
|
BASE OPERATING REVIEW
|
Customer base up 21% to
2.9 million
|
|
During the fourth quarter of 2007, BASE increased
its customer base by 133k, resulting in a total customer base of 2.9m at the
end of 2007, up 21% compared to the same period last year. The new BASE Gold
and Platinum propositions were successfully launched in Q3 2007, driving the
postpaid share of net additions in Q4.
|
|
|
|
Service revenues down
due to MTA reductions
|
|
Service revenues in 2007 decreased by EUR 14m or
2.3% to EUR 595m. Excluding the MTA impact, service revenues would have
increased by EUR 37m or 6.1%. Service revenues in Q4 2007 decreased by EUR 9m
or 5.7% to EUR 148m compared to the same period last year.
|
16
Strengthened distribution
to re-ignite growth
|
|
The acquisitions of Allo Telecom and Tele2 Belgium
by KPN created a platform for further growth in Belgium. In December, Tele2
Belgium became a BASE branded reseller using the Tele2 brand name, further
expanding regional distribution in the Southern part of the country and
creating cross and upselling opportunities. Fixed-Mobile substitution
together with bundled broadband offerings provides BASE with a competitive
advantage. BASE will explore further opportunities to expand its national
distribution.
|
|
|
|
|
|
MOBILE WHOLESALE NL FINANCIAL
REVIEW
|
Market outperformance,
revenues up 14%
|
|
In 2007, Mobile Wholesale NL has outperformed the
market with a revenue growth of more than 14% compared to 2006. Most notably
business customers contributed to this growth. Revenues and other income at
Mobile Wholesale NL increased by 3.5% y-on-y to EUR 88m in Q4 2007, a lower
growth rate compared to the first half of 2007. The slowdown was the result
of continued price pressure in the Dutch mobile wholesale market and negative
effects from MTA and roaming.
|
|
|
|
EBITDA increase of 15%;
margin stable at 38%
|
|
Full year EBITDA increased by 15% y-on-y to EUR
129m. EBITDA margin over full year 2007 remained stable at around 38%. In Q4
2007, EBITDA increased by EUR 6m to EUR 34m. Operating expenses were lower
y-on-y due to non-recurring items, resulting in an EBITDA increase of 21% in
Q4. Operating result in Q4 is EUR 41m higher than last year, due to EUR 35m
lower amortization costs.
|
|
|
|
|
|
MOBILE WHOLESALE NL OPERATING REVIEW
|
Customer base up 21%
|
|
Net adds at Mobile Wholesale NL amounted to 96k in
Q4 2007. The customer base amounted to a total of 1.8m customers, up 21%
compared to the same quarter last year and with a substantial share of
postpaid.
|
|
|
|
Service revenues up 13%
|
|
Full-year service revenues were up 13% to EUR 341m
compared to last year. Despite regulatory tariff cuts, service revenues in Q4
were up 2.4% to EUR 87m, predominantly driven by an increase in usage.
|
|
|
|
|
|
OTHER OPERATING REVIEW
|
Acquisition Tele2 Belgium
closed on October 1
|
|
The acquisition of Tele2 / Versatel Belgium was
closed on October 1, 2007 on a cash and debt free basis with a net purchase
price of EUR 107m. Reference is made to Appendix E for further disclosures on
Business Combinations. As of October 31, Versatel Belgium N.V. was renamed as
KPN Belgium N.V. and Tele2 Belgium N.V. was renamed as T2 Belgium N.V.
|
|
|
|
T2 Belgium as branded
reseller on BASE network
|
|
In Q4, T2 Belgium launched its first mobile
services, offering prepaid (Tele2 Smart) and postpaid (Tele2 Champion)
propositions, following its earlier successful propositions in wireline
telephony and broadband.
|
17
OTHER
FINANCIALS
Q4 2007
|
|
Q4 2006
|
|
in
millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
7
|
|
Revenues and other
income
|
|
10
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
-29
|
|
-23
|
|
Operating result
|
|
-47
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
-28
|
|
-21
|
|
EBITDA
|
|
-45
|
|
37
|
|
Other no longer includes Xantic
|
|
Revenues and other income in Other are close to
zero following the disposal of Xantic in Q1 2006 and now predominantly
contains operating costs, mainly those relating to the corporate center.
EBITDA in Other in Q4 2007 decreased by EUR 7m compared to Q4 2006, mainly
resulting from an additional book gain on the sale of Xantic amounting to EUR
6m in Q4 2006 (EUR 74m for the full year 2006).
|
PRO
FORMA FORMER REPORTING STRUCTURE
Pro forma disclosure to enable peer comparisons
|
|
KPN provides additional
pro forma
disclosure based on the former KPN Mobile the Netherlands and Fixed divisions
to allow for comparability with peers. Please also refer to the Safe harbor
statement on page 22 and Appendix (I) on page 37.
|
|
|
|
|
|
KPNs old disclosure has the same totals as
reported under the new structure but with a different segmentation. There is
no difference between the financials for E-Plus and BASE under the new
structure as the Fixed-Mobile Integration has only affected operations in the
Netherlands. Further details on E-Plus and BASEs performance in Q4 2007 can
be found in the Mobile International Review section.
|
Q4 2007
|
|
Q4 2006
|
|
In
millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
|
|
|
|
|
|
|
|
|
|
3,659
|
|
3,039
|
|
Revenues
and other income
|
|
12,632
|
|
12,057
|
|
915
|
|
907
|
|
- E-Plus & BASE
|
|
3,576
|
|
3,516
|
|
736
|
|
765
|
|
- KPN Mobile the
Netherlands
|
|
3,062
|
|
2,980
|
|
2,008
|
|
1,367
|
|
- Fixed (incl. Other
and Intercompany eliminations)
|
|
5,994
|
|
5,561
|
|
|
|
|
|
|
|
|
|
|
|
1,216
|
|
1,152
|
|
EBITDA
|
|
4,900
|
|
4,837
|
|
328
|
|
284
|
|
- E-Plus & BASE
|
|
1,343
|
|
1,169
|
|
285
|
|
294
|
|
- KPN Mobile the
Netherlands
|
|
1,211
|
|
1,092
|
|
603
|
|
574
|
|
- Fixed (incl. Other)
|
|
2,346
|
|
2,576
|
|
Strong EBITDA growth at KPN Mobile the Netherlands
in FY 2007
|
|
Over the full year 2007, KPN Mobile the Netherlands
showed a strong EBITDA growth of 11% to EUR 1,211m, mainly as a result of the
successful Telfort acquisition which delivered all of the expected synergies,
whilst the Telfort brand itself has continued to deliver strong performance
after its integration. In Q4, EBITDA decreased by 3.1% (EUR 9m) to EUR 285m
which is attributable to MTA tariff reductions, partly offset by lower
subscriber acquisition and retention costs.
|
|
|
|
|
|
In Q4, KPN Mobile the Netherlands added 234k
customers and 750k during FY 2007, to reach a customer base of 9.4m at the end
of 2007. Of the total customer base, 46% of the customer base is postpaid,
1%-point higher than last year. MTA and roaming regulation led to a decrease
in revenues and other income of EUR 29m in Q4 2007.
|
18
Q4 2007
|
|
Q3 2007
|
|
Q2 2007
|
|
Q1 2007
|
|
Fixed(7)
|
|
Q4 2006
|
|
Q3 2006
|
|
Q2 2006
|
|
Q1 2006
|
|
In
millions of euro
|
|
2,008
|
|
1,334
|
|
1,337
|
|
1,315
|
|
Revenues
and other income
|
|
1,367
|
|
1,337
|
|
1,364
|
|
1,493
|
|
-791
|
|
-30
|
|
-55
|
|
-4
|
|
Notable items(8)
|
|
-119
|
|
|
|
-3
|
|
-83
|
|
|
|
|
|
|
|
|
|
Revenues
and other income
|
|
|
|
|
|
|
|
|
|
1,217
|
|
1,304
|
|
1,282
|
|
1,311
|
|
(excl.
notable items)
|
|
1,248
|
|
1,337
|
|
1,361
|
|
1,410
|
|
-2.5
|
%
|
-2.5
|
%
|
-5.8
|
%
|
-7.0
|
%
|
Y-on-Y%
|
|
-4.9
|
%
|
-6.5
|
%
|
-7.9
|
%
|
-7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
603
|
|
580
|
|
589
|
|
574
|
|
EBITDA
|
|
574
|
|
610
|
|
654
|
|
738
|
|
-105
|
|
-30
|
|
-55
|
|
-4
|
|
Notable items(8)
|
|
-19
|
|
|
|
-3
|
|
-67
|
|
498
|
|
550
|
|
534
|
|
570
|
|
EBITDA
(excl. notable items)
|
|
555
|
|
610
|
|
651
|
|
671
|
|
-57
|
|
-60
|
|
-117
|
|
-101
|
|
Y-on-Y
|
|
-89
|
|
-69
|
|
-64
|
|
-49
|
|
40.9
|
%
|
42.2
|
%
|
41.7
|
%
|
43.5
|
%
|
EBITDA
margin (excl. notable items)
|
|
44.5
|
%
|
45.6
|
%
|
47.8
|
%
|
47.6
|
%
|
Revenue decline Fixed(7) stabilizing
|
|
Revenues and other income from KPNs former Fixed
division (including Other and Intercompany eliminations) increased to EUR
2,008m in Q4 2007, compared to EUR 1,367m in Q4 2006. Excluding the external
revenues of Getronics and iBasis (external revenues of EUR 482m and EUR 200m
respectively), the book gain on the sale of KGCS to iBasis (EUR 66m) and book
gains on the sale of real estate (EUR 10m), the total revenues and other
income decreased by EUR 31m. This decrease is caused by the consolidation of
Tiscali and revenue growth in Business, offset by a decline in traditional
voice of EUR 84m.
|
|
|
|
EBITDA decline of Fixed(7) stabilizing
|
|
Excluding book gains on the sale of real estate in
2006 and 2007 and excluding the book gain on the sale of KGCS, EBITDA
decreased by EUR 57m in Q4 compared to Q4 2006. The stabilization relates to
the continued migration from traditional voice to new IP-based services (both
within Consumer and Business) offset by improved performance in Business and
the consolidation of Tiscali. Furthermore, non-recurring items in the first
half of 2007 did not recur in the second half of 2007, such as EUR 45m
additional costs for VoIP in H1 2007.
|
(7)
|
|
Fixed defined as
former Fixed division including division Other and intercompany eliminations
|
(8)
|
|
Book gains from
sale of real estate in 2007, disposal of Xantic in 2006 and Q1 2007,
consolidation effect of Getronics and iBasis and book gain on sale of KPN
Global Carrier Services
|
Disclosure on Dutch wireless in 2008
|
|
In 2008, KPN will no longer provide the same pro
forma disclosure as provided during 2007. Instead, total service revenues for
wireless services offered by the segments Consumer, Business and Mobile
Wholesale International will be provided. This serves as the best
approximation of the former Mobile division in the Netherlands. In addition,
KPN will disclose SAC/SRC per segment for these three segments, included in the
previously mentioned segments. With the restructuring of the former Mobile
and Fixed business units having been fully implemented, the accuracy of the
disclosure for KPN Mobile the Netherlands can no longer be guaranteed.
|
Q4 2007
|
|
Q4 2006
|
|
In
millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
|
|
|
|
|
|
|
|
|
|
723
|
|
729
|
|
Service
revenues
|
|
2,971
|
|
2,832
|
|
87
|
|
85
|
|
- Mobile Wholesale NL
|
|
341
|
|
303
|
|
407
|
|
412
|
|
- Segment Consumer
|
|
1,700
|
|
1,635
|
|
229
|
|
232
|
|
- Segment Business
|
|
930
|
|
894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SAC/SRC
|
|
|
|
|
|
130
|
|
161
|
|
Segment Consumer
|
|
134
|
|
166
|
|
315
|
|
261
|
|
Segment Business
|
|
325
|
|
295
|
|
19
OTHER
DEVELOPMENTS
|
|
REGULATORY DEVELOPMENTS
|
Intention to delist KPN from New York, London and
Frankfurt stock exchanges as of Q1 2008
|
|
KPN announced on December 17, 2007 its intention to delist
its American Depositary Receipts (ADRs) from the New York Stock Exchange
and to delist its ordinary shares from the London and Frankfurt Stock
Exchanges in the first quarter of 2008. KPN will concentrate all trading of
its ordinary shares on Euronext in Amsterdam and is considering a Level 1 ADR
program for over-the-counter trading. The deregistration from the U.S.
Securities Exchange Act by KPN will also cover KPNs outstanding USD denominated
bonds issued in 2000. KPNs obligations to its bondholders will not be affected
by the deregistration.
|
|
|
|
Getronics shares delisted as of December 12,
2007
|
|
On December 12, 2007, the listing and trading of the
issued and outstanding ordinary shares and the outstanding unsubordinated
convertible bonds 2008 of Getronics on Euronext Amsterdam were terminated. On
January 28, 2008, the listing of the unsubordinated convertible bonds 2010
and 2014 on the Luxembourg Stock Exchange was terminated.
|
|
|
|
OPTA on All-IP
|
|
KPN signed MoUs with three more alternative DSL
operators, and continued negotiations with the others on the principles of
the future use of MDF locations and alternative access methods for those MDF
locations that will be discontinued as part of the All-IP roll-out. A
progress update and copies of the (latest version) of the MoUs were submitted
to OPTA on December 21, 2007. OPTA has not yet indicated whether it will
resume the review of the Wholesale Broadband Access market, or that it will postpone
the review further to allow the DSL operators to reach bilateral agreements with
KPN.
|
|
|
|
|
|
As announced earlier, OPTA published a draft
decision for consultation amending the December 21, 2005 decision on the
wholesale unbundled access market, in which it is established that SDF
Backhaul is an associated facility of sub-loop unbundling. If the draft
decision takes effect after the consultation period, KPN will be required to provide
SDF Backhaul under non-discriminatory and transparent terms and at cost-based
tariffs.
|
|
|
|
MTA tariff reductions the Netherlands
|
|
On July 30, 2007, OPTA published its decision for
MTA tariffs in the Netherlands until 2010. All mobile operators have
implemented the OPTA decision as of August 15, 2007. Tele2 / Versatel and UPC
appealed against the decision to the Dutch commercial court (
College van Beroep voor het Bedrijfsleven (CBb)
). In a
reaction to this appeal, the mobile operators also appealed to prevent
reductions further than mandated by OPTA.
|
|
|
|
New MTA regulation in Germany as of December 1, 2007
|
|
On November 30, 2007, BNetzA approved for the period
between December 1, 2007 and March 31, 2009 an MTA tariff of 8.80 ct/min for
E-Plus (previously 9.94 ct/min) and O
2
and an MTA tariff of 7.92
ct/min for Vodafone and T-Mobile.
|
|
|
|
|
|
According to the regulatory order in relation to
the market for call termination on individual mobile networks, all four
mobile operators were qualified by BNetzA as dominant players for the
termination of calls on their networks and BNetzA has imposed several
obligations upon the mobile network operators (MNOs). On March 17, 2007, the
Administrative Court of Cologne (VG Köln) (partly) annulled the regulatory order
by BNetzA with respect to the ex-ante cost based regulation of all MNOs. The regulatory
order remains valid for the designation as having significant market power. BNetzA
and the MNOs have appealed the judgment. Several lawsuits against the previous
MTA tariffs until November 30, 2007 are still pending.
|
|
|
|
Proposed MTA tariff reductions in Belgium
|
|
On December 18, 2007, BIPT issued a decision to
further reduce the average MTA for BASE and Mobistar and to increase the
average MTA of Proximus as of February 1, 2008 in comparison with BIPTs
initial decision of August 6, 2006. This decision also includes a preliminary
extension of the glide path until the end of 2009.
|
20
In EUR/minute
|
|
1 Jan
2008
|
|
1 Jul
2008
|
|
1 Jan
2009
|
|
1 Jul
2009
|
|
|
|
|
|
|
|
|
|
|
|
- Proximus
|
|
8.02 ct
|
|
7.96 ct
|
|
7.85 ct
|
|
7.73 ct
|
|
- Mobistar
|
|
8.84 ct
|
|
7.96 ct
|
|
7.85 ct
|
|
7.73 ct
|
|
- BASE
|
|
10.36 ct
|
|
8.75 ct
|
|
8.62 ct
|
|
8.49 ct
|
|
|
|
According to BIPT, the MTA-levels as from July 1,
2008 are to be considered as indicative pending the official publication by
the ERG workgroup on a common position in relation to symmetric versus
asymmetric termination rates. Depending on the outcome of the ERG workgroup,
BIPT may decide to revise its decision. BASE will launch both suspension and
annulment proceedings against BIPTs new decision.
|
|
|
|
UMTS 900 - Belgium
|
|
On May 11, 2007, the Royal Decree authorizing the
use of 900 MHz frequencies for UMTS services was published in the Belgian
Official Journal. Under the Royal Decree, the 2G frequency holders in the
880-915 MHz and 925-960 MHz bands can use the GSM 900 frequencies for UMTS
services as of July 1, 2008. The right to use such 900 MHz frequencies for
UMTS is not subject to the imposition of any additional license fee. Because
BASE does not have the same number of radio channels in the GSM 900 band as
its competitors, BASE has appealed the Royal Decree at the State Council.
|
|
|
|
1.8 GHz, 2 GHz and 2.6 GHz Frequencies
|
|
On July 18, 2007, the regulator BNetzA published its
decision on a public invitation to tender the 1.8 GHz, 2 GHz and 2.6 GHz
Frequencies. The frequencies will be offered by an auction. The terms of the
auction will be published later on in a second decision.
|
|
|
|
E-GSM Frequencies
|
|
The regional court of Cologne announced its decision
in the proceedings regarding the E-GSM 900 frequency allocation. The actions
of DB Netz AG and AirData against the frequency allocation were dismissed.
Accordingly, the frequency allocations are valid in their initial form and
E-Plus may further use the E-GSM 900 frequencies.
|
|
|
|
|
|
SUBSEQUENT EVENTS
|
Acquisition of SMS Michel
|
|
On January 23, 2008, E-Plus announced the
acquisition of the German retail chain SMS Michel Communication GmbH,
effective from January 1, 2008. With the acquisition of the approximately 200
shops, E-Plus has expanded its retail footprint in prime city locations to
over 700 locations, strengthening its position in the German mobile market in
the long term. In the medium term, E-Plus will convert around half of the shops
to E-Plus shops and the remaining branches will continue to operate independently.
|
|
|
|
MVNO in Spain launched on January 29
|
|
KPN has announced the launch of an MVNO in Spain on
the Orange network on January, 29, 2008. Through this MVNO, KPN will leverage
its expertise in executing MVNOs and multi-brand strategy outside its current
footprint. Following the success in Belgium, Germany and the Netherlands, KPN
has launched its own no-frills Simyo brand in the Spanish market. In
addition, KPN has committed several wholesale partners such as Euphony and
Interbank to offer wireless services in cooperation with KPN.
|
|
|
|
|
|
KPN will explore similar opportunities in other
European countries, with possibilities currently being investigated for
France, Poland, Italy and UK. This would allow KPN to offer wholesale
partnerships to MVNOs on a larger European footprint.
|
21
GENERAL
Accounting principles
|
|
These condensed consolidated interim financial
statements have been prepared in accordance with IAS 34,
Interim
Financial Reporting
. They do not include all of the information
required for full annual financial statements and should be read in conjunction
with the 2006 Annual Report and Form 20-F. The applied accounting principles
are in line with those as described in the 2006 Annual Report and Form 20-F. The
2006 Annual Report and Form 20-F has been filed with the SEC on March 1,
2007. All figures in this quarterly report are unaudited and based on IFRS.
|
|
|
|
|
|
KPN has early adopted IFRS 8
Operating
Segments
, as from January 1, 2007 which was endorsed by the EU in
2007. This is a change in accounting policy which has no material impact on
KPNs consolidated financial position. KPNs operating segments are reported
in a manner that is consistent with the internal reporting provided to the Chief
Executive Officer (CEO), which is the chief operating decision maker
according to IFRS 8.
|
|
|
|
Safe harbor
|
|
Certain statements contained in this quarterly
report constitute forward-looking statements. These statements may include,
without limitation, statements concerning future results of operations, the
impact of regulatory initiatives on KPNs operations, its and its joint
ventures' share of new and existing markets, general industry and
macro-economic trends and KPNs performance relative thereto, and statements
preceded by, followed by or including the words believes, expects,
anticipates or similar expressions. These forward-looking statements rely
on a number of assumptions concerning future events and are subject to
uncertainties and other factors, many of which are outside KPNs control that
could cause actual results to differ materially from such statements. A
number of these factors are described (not exhaustively) in the 2006 Annual
Report and Form 20-F. KPNs 2007 Annual Report and Form 20-F will be available
in early March 2008.
|
|
|
|
|
|
All figures in this quarterly report are unaudited
and based on IFRS. This quarterly report contains a number of non-GAAP
figures, such as EBITDA and free cash flow. These non-GAAP figures should not
be viewed as a substitute for KPNs GAAP figures. All market share
information in this quarterly report is based on management estimates based
on externally available information, unless indicated otherwise.
|
|
|
|
|
|
KPN defines EBITDA as operating result before
depreciation and impairments of PP&E and amortization and impairments of
intangible assets. Note that KPNs definition of EBITDA deviates from 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. In all cases, a reconciliation
of EBITDA and the nearest GAAP measure (operating result) is provided. In the
net debt/EBITDA ratio, KPN defines EBITDA as a 12 month rolling average excluding
book gains and restructuring costs, both over EUR 20m. For 2007, KPN defines
free cash flow as cash flow from operating activities plus proceeds from real
estate, minus capital expenditures (Capex), being expenditures on PP&E
and software. For 2008 and subsequent years, free cash flow is defined as
cash flow from operating activities plus proceeds from real estate, minus
capital expenditures (Capex), being expenditures on PP&E and software,
and excluding tax recapture at E-Plus.
|
|
|
|
Pro-Forma financial information
|
|
The unaudited pro-forma financial information for
KPN Mobile The Netherlands and the Fixed division (including Other) for 2007
has been prepared based on the former organizational structure in place as at
December 31, 2006 and on the transfer pricing, roaming and intercompany
charges associated with that former structure. Although KPN believes that the
pro-forma financial information has been prepared based on reasonable
assumptions, this information is provided for illustrative purposes only and KPN
cannot assure that the pro-forma financial information based on the former organizational
structure would be identical to the actual results which might have been reported
had KPNs organization structure not changed.
|
22
Profile
|
|
KPN is the leading telecommunications and ICT
service provider in the Netherlands, offering wireline and wireless
telephony, internet and TV to consumers and end-to-end telecom and ICT services
to business customers. KPNs subsidiary Getronics operates a global ICT
services company with a market leading position in the Benelux, offering end-to-end
solutions in infrastructure and network-related IT. In Germany and Belgium, KPN
pursues a multi-brand strategy in its mobile operations and holds number
three market positions through E-Plus and BASE. KPN provides wholesale
network services to third parties and operates an efficient IP-based
infrastructure with global scale in international wholesale through iBasis.
|
|
|
|
|
|
At December 31, 2007, KPN served over 35 million
customers, of which 27 million in wireless services, 5.4 million in wireline
voice, 2.4 million in broadband Internet and 0.5 million in TV. With 25,500
FTEs (43,531 FTEs including Getronics), KPN posted revenues of EUR 12.6bn in
2007, with an EBITDA of EUR 4.9bn. KPN was incorporated in 1989 and is listed
on the Amsterdam, New York, London and Frankfurt stock exchanges.
|
23
APPENDICES
For the operating metrics reference
is made to the quarterly factsheets as published on www.kpn.com/ir
24
Appendix
(A) Consolidated Income Statement
Q4 2007
|
|
Q4 2006
|
|
In millions of euro, unless indicated otherwise
|
|
FY 2007
|
|
FY 2006
|
|
|
|
|
|
|
|
|
|
|
|
3,579
|
|
3,022
|
|
Revenues
|
|
12,461
|
|
11,941
|
|
80
|
|
17
|
|
Other income
|
|
171
|
|
116
|
|
3,659
|
|
3,039
|
|
Revenues
and other income
|
|
12,632
|
|
12,057
|
|
|
|
|
|
|
|
|
|
|
|
-40
|
|
-26
|
|
Own work capitalized
|
|
-143
|
|
-112
|
|
280
|
|
266
|
|
Cost of materials
|
|
914
|
|
900
|
|
1,327
|
|
1,078
|
|
Work contracted out and
other expenses
|
|
4,569
|
|
4,314
|
|
587
|
|
355
|
|
Salaries and social
security contributions
|
|
1,632
|
|
1,435
|
|
582
|
|
785
|
|
Depreciation, amortization
and impairments
|
|
2,400
|
|
2,614
|
|
289
|
|
214
|
|
Other operating
expenses
|
|
760
|
|
683
|
|
3,025
|
|
2,672
|
|
Total
operating expenses
|
|
10,132
|
|
9,834
|
|
|
|
|
|
|
|
|
|
|
|
634
|
|
367
|
|
Operating
result
|
|
2,500
|
|
2,223
|
|
|
|
|
|
|
|
|
|
|
|
13
|
|
12
|
|
Finance income
|
|
37
|
|
43
|
|
-167
|
|
-146
|
|
Finance costs
|
|
-584
|
|
-542
|
|
1
|
|
-27
|
|
Other financial results
|
|
-13
|
|
-21
|
|
-1
|
|
|
|
Share of the profit of
associates and joint ventures
|
|
1
|
|
7
|
|
480
|
|
206
|
|
Profit
before income tax
|
|
1,941
|
|
1,710
|
|
|
|
|
|
|
|
|
|
|
|
1,101
|
|
220
|
|
Income tax
|
|
708
|
|
-127
|
|
1,581
|
|
426
|
|
Profit
for the period
|
|
2,649
|
|
1,583
|
|
|
|
|
|
|
|
|
|
|
|
-2
|
|
-1
|
|
Profit attributable to
minority shareholders
|
|
-3
|
|
|
|
1,583
|
|
427
|
|
Profit attributable to
equity holders
|
|
2,652
|
|
1,583
|
|
|
|
|
|
|
|
|
|
|
|
0.85
|
|
0.22
|
|
Earnings per ordinary
share/ADS, basic (in EUR)
|
|
1.42
|
|
0.79
|
|
0.85
|
|
0.22
|
|
Earnings per ordinary
share/ADS on a fully diluted basis (in EUR)(9)
|
|
1.42
|
|
0.79
|
|
(9)
|
|
The quarterly
earnings per share (EPS) are calculated as the difference between the
year-to-date EPS minus last quarters year-to-date EPS.
|
25
Appendix
(B) Consolidated Balance Sheet
ASSETS
In millions of euro
|
|
December 31, 2007
|
|
December 31, 2006
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
|
|
Goodwill
|
|
5,781
|
|
4,569
|
|
Licenses
|
|
3,457
|
|
3,865
|
|
Software
|
|
410
|
|
315
|
|
Other intangibles
|
|
776
|
|
302
|
|
Total intangible assets
|
|
10,424
|
|
9,051
|
|
|
|
|
|
|
|
Property, plant & equipment
|
|
|
|
|
|
Land and buildings
|
|
793
|
|
733
|
|
Plant and equipment
|
|
6,070
|
|
6,310
|
|
Other tangible fixed assets
|
|
211
|
|
238
|
|
Assets under construction
|
|
792
|
|
684
|
|
Total property, plant & equipment
|
|
7,866
|
|
7,965
|
|
|
|
|
|
|
|
Investments in joint ventures and associates
|
|
27
|
|
11
|
|
Derivative financial instruments
|
|
11
|
|
13
|
|
Deferred tax assets
|
|
2,185
|
|
1,018
|
|
Trade and other receivables
|
|
197
|
|
112
|
|
|
|
|
|
|
|
Total non-current assets
|
|
20,710
|
|
18,170
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
Inventories
|
|
150
|
|
113
|
|
Trade and other receivables
|
|
2,759
|
|
2,138
|
|
Available-for-sale financial assets
|
|
3
|
|
4
|
|
Cash and cash equivalents
|
|
1,148
|
|
803
|
|
Total current assets
|
|
4,060
|
|
3,058
|
|
|
|
|
|
|
|
Non-current assets and disposal groups held for
sale
|
|
27
|
|
30
|
|
|
|
|
|
|
|
TOTAL
|
|
24,797
|
|
21,258
|
|
26
Appendix (B) Consolidated
Balance Sheet - continued
LIABILITIES
In millions of euro
|
|
December 31, 2007
|
|
December 31, 2006
|
|
|
|
|
|
GROUP EQUITY
|
|
|
|
|
|
Equity attributable to equity holders
|
|
4,490
|
|
4,195
|
|
Minority interests
|
|
28
|
|
1
|
|
Total group equity
|
|
4,518
|
|
4,196
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
Borrowings
|
|
9,454
|
|
8,426
|
|
Derivative financial instruments
|
|
329
|
|
925
|
|
Deferred tax liabilities
|
|
2,055
|
|
1,992
|
|
Retirement benefit obligations
|
|
1,198
|
|
1,236
|
|
Provisions for other liabilities and charges
|
|
390
|
|
374
|
|
Other payables and deferred income
|
|
276
|
|
260
|
|
Total non-current liabilities
|
|
13,702
|
|
13,213
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
Trade and other payables
|
|
3,897
|
|
2,936
|
|
Borrowings
|
|
2,301
|
|
642
|
|
Derivative financial instruments
|
|
28
|
|
2
|
|
Current tax liabilities
|
|
278
|
|
202
|
|
Provisions for other liabilities and charges
|
|
73
|
|
67
|
|
Total current liabilities
|
|
6,577
|
|
3,849
|
|
|
|
|
|
|
|
Liabilities
directly associated with non-current assets and disposal groups classified as
held for sale
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
24,797
|
|
21,258
|
|
27
Appendix
(C) Consolidated Cash Flow Statement
Q4 2007
|
|
Q4 2006
|
|
In millions of euro, unless indicated otherwise
|
|
FY 2007
|
|
FY 2006
|
|
|
|
|
|
|
|
|
|
|
|
480
|
|
206
|
|
Profit
before income tax
|
|
1,941
|
|
1,710
|
|
153
|
|
161
|
|
Finance costs net
|
|
560
|
|
520
|
|
1
|
|
0
|
|
Share of the profit of
associates and joint ventures
|
|
-1
|
|
-7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
for:
|
|
|
|
|
|
582
|
|
785
|
|
Depreciation,
amortization and impairments
|
|
2,400
|
|
2,614
|
|
1
|
|
4
|
|
Share based
compensation(
10)
|
|
8
|
|
11
|
|
-80
|
|
-17
|
|
Other income
|
|
-171
|
|
-116
|
|
-90
|
|
-54
|
|
Changes in provisions
(excluding deferred taxes)
|
|
-288
|
|
-176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes
in working capital:
|
|
|
|
|
|
14
|
|
10
|
|
Inventories
|
|
9
|
|
20
|
|
-27
|
|
14
|
|
Trade receivables
|
|
-30
|
|
8
|
|
105
|
|
80
|
|
Prepayments and accrued
income
|
|
30
|
|
-96
|
|
62
|
|
-14
|
|
Other current assets
|
|
39
|
|
-38
|
|
174
|
|
-35
|
|
Accounts payables
|
|
-24
|
|
-109
|
|
200
|
|
7
|
|
Accruals and deferred
income
|
|
158
|
|
124
|
|
-69
|
|
-41
|
|
Current liabilities
(excluding short-term financing)
|
|
-26
|
|
-71
|
|
|
|
3
|
|
Received dividends
|
|
7
|
|
9
|
|
-171
|
|
-66
|
|
Taxes received (paid)
|
|
-251
|
|
147
|
|
-123
|
|
-228
|
|
Interest paid
|
|
-471
|
|
-479
|
|
1,212
|
|
815
|
|
Net
cash flow provided by operating activities
|
|
3,890
|
|
4,071
|
|
|
|
|
|
|
|
|
|
|
|
-1,157
|
|
-9
|
|
Acquisition of
subsidiaries, associates and joint ventures
|
|
-1,690
|
|
-369
|
|
58
|
|
|
|
Disposal of
subsidiaries, associates and joint ventures
|
|
73
|
|
72
|
|
-1
|
|
-1
|
|
Investments in
intangible assets (excluding software)
|
|
-8
|
|
-1
|
|
|
|
|
|
Disposal of intangibles
|
|
16
|
|
|
|
-707
|
|
-533
|
|
Investments in
property, plant & equipment and software(
11)
|
|
-1,688
|
|
-1,650
|
|
19
|
|
21
|
|
Disposal of property,
plant & equipment and software
|
|
143
|
|
56
|
|
|
|
5
|
|
Other changes and
disposals
|
|
|
|
14
|
|
-1,788
|
|
-517
|
|
Net
cash flow used in investing activities
|
|
-3,154
|
|
-1,878
|
|
|
|
|
|
|
|
|
|
|
|
-395
|
|
-101
|
|
Share repurchase
|
|
-1,569
|
|
-1,615
|
|
|
|
|
|
Share repurchases for
option plans
|
|
|
|
-18
|
|
|
|
|
|
Dividends paid
|
|
-982
|
|
-982
|
|
3
|
|
15
|
|
Exercised options
|
|
28
|
|
38
|
|
2,603
|
|
1,056
|
|
Proceeds from
borrowings
|
|
4,321
|
|
2,932
|
|
-1,290
|
|
-1,161
|
|
Repayments of
borrowings
|
|
-2,300
|
|
-2,373
|
|
|
|
-6
|
|
Other changes in
interest-bearing current liabilities
|
|
0
|
|
-6
|
|
921
|
|
-197
|
|
Net
cash flow used in financing activities
|
|
-502
|
|
-2,024
|
|
|
|
|
|
|
|
|
|
|
|
345
|
|
101
|
|
Changes
in cash and cash equivalents
|
|
234
|
|
169
|
|
|
|
|
|
|
|
|
|
|
|
318
|
|
328
|
|
Net
Cash and cash equivalents at beginning of period
|
|
429
|
|
261
|
|
345
|
|
101
|
|
Changes in cash and cash
equivalents
|
|
234
|
|
169
|
|
-1
|
|
|
|
Exchange rate
differences
|
|
-1
|
|
-1
|
|
662
|
|
429
|
|
Net
Cash and cash equivalents at end of period
|
|
662
|
|
429
|
|
486
|
|
374
|
|
Add: Debit cash
balances
|
|
486
|
|
374
|
|
1,148
|
|
803
|
|
Cash
and cash equivalents at end of period
|
|
1,148
|
|
803
|
|
|
|
|
|
of
which classified as held for sale
|
|
|
|
|
|
(10)
|
|
Certain
reclassifications have been performed in the 2006 cash flow statement in
order to conform with this years presentation
|
(11)
|
|
Of which
investments related to software (2007 YTD: EUR 316m, 2006 YTD: EUR 199m)
|
28
Appendix
(D) Consolidated Statement of Changes in Group Equity
|
|
Attributable to
|
|
Minority
|
|
Total Group
|
|
In millions of euro (except for
number of shares)
|
|
equity holders
|
|
Interests
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2006
|
|
5,076
|
|
28
|
|
5,104
|
|
|
|
|
|
|
|
|
|
- Cash flow hedges, net of taxes
|
|
58
|
|
|
|
58
|
|
- Currency
translation adjustments
|
|
-8
|
|
|
|
-8
|
|
Net income recognized directly in equity
|
|
50
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
- Profit for the year 2006
|
|
1,583
|
|
|
|
1,583
|
|
Total recognized income 2006
|
|
1,633
|
|
|
|
1,633
|
|
|
|
|
|
|
|
|
|
- Share-based compensation
|
|
11
|
|
|
|
11
|
|
- Exercised options
|
|
38
|
|
|
|
38
|
|
- Shares repurchased (including for option plans and
repurchase cost)
|
|
-1,581
|
|
|
|
-1,581
|
|
- Sale Xantic
|
|
|
|
-16
|
|
-16
|
|
- Dividends paid
|
|
-982
|
|
-11
|
|
-993
|
|
- New consolidations / other
|
|
|
|
|
|
|
|
Total changes
|
|
-2,514
|
|
-27
|
|
-2,541
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2006
|
|
4,195
|
|
1
|
|
4,196
|
|
|
|
|
|
|
|
|
|
Number of issued shares as of December 31, 2006
|
|
1,928,551,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of outstanding shares during 2006
(excluding average number of
repurchased shares and shares for option plans)
|
|
2,005,326,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2007
|
|
4,195
|
|
1
|
|
4,196
|
|
|
|
|
|
|
|
|
|
- Cash flow hedges, net of taxes
|
|
83
|
|
|
|
83
|
|
- Currency translation adjustments
|
|
-1
|
|
|
|
-1
|
|
Net income recognized directly in equity
|
|
82
|
|
|
|
82
|
|
|
|
|
|
|
|
|
|
- Profit for the year 2007
|
|
2,652
|
|
-3
|
|
2,649
|
|
Total recognized income up to
December 31, 2007
|
|
2,734
|
|
-3
|
|
2,731
|
|
|
|
|
|
|
|
|
|
- Share-based compensation
|
|
8
|
|
|
|
8
|
|
- Tax on share-based compensation
|
|
9
|
|
|
|
9
|
|
- Exercised options
|
|
28
|
|
|
|
28
|
|
- Shares repurchased (including for option plans and
repurchase cost)
|
|
-1,500
|
|
|
|
-1,500
|
|
- Dividends paid
|
|
-982
|
|
|
|
-982
|
|
- Interest on dividend tax paid (net effect)
|
|
-2
|
|
|
|
-2
|
|
- New consolidations
|
|
|
|
30
|
|
30
|
|
Total changes
|
|
-2,439
|
|
30
|
|
-2,409
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2007
|
|
4,490
|
|
28
|
|
4,518
|
|
|
|
|
|
|
|
|
|
Number of issued shares as of December 31, 2007(
12)
|
|
1,843,482,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of outstanding shares during the period from January 1, 2007
up to December 31, 2007
(excluding
average number of repurchased shares
and shares for option plans)
|
|
1,862,566,702
|
|
|
|
|
|
(12)
|
|
In Q4 2007 KPN
cancelled 85,069.113 shares repurchased under the 2007 repurchase programs.
After cancellation of the remaining 40,579,700 repurchased shares under the
2007 repurchase program, the total number of issued shares will amount to
1,802,902,513.
|
29
Appendix
(E) Other Disclosures
Business
combinations
|
|
During the
period up to December 31, 2007, KPN acquired companies and activities, which
qualify as business combinations under IFRS. Consequently, the provisions of IFRS
3 are to be applied for those acquisitions. The main acquisitions in 2007
were Getronics, iBasis, Tele2/ Versatel Belgium and Tiscali Netherlands.
|
In millions of euro
|
|
|
|
Total
acquisition of subsidiaries, associates and joint ventures net of acquired
cash
|
|
|
|
1,690
|
|
Total paid for
other associates, not qualifying as a business combination
|
|
|
|
-6
|
|
Subsequent
earn-out payments and settlements prior year
|
|
|
|
-12
|
|
|
|
|
|
|
|
Considerations
paid for business combinations (net of cash)
|
|
|
|
1,672
|
|
Total cash
included in acquired companies
|
|
|
|
124
|
|
Total deferred
consideration Getronics
|
|
|
|
12
|
|
Total
gross consideration for business combinations including transaction costs
|
|
|
|
1,808
|
|
|
|
|
|
|
|
Of which for:
|
|
|
|
|
|
-
Tiscali (Q2 2007)
|
|
236
|
|
|
|
-
iBasis
|
|
42
|
|
|
|
-
Tele2/ Versatel Belgium
|
|
108
|
|
|
|
-
Getronics
|
|
1,349
|
|
|
|
- Other
business combinations
|
|
73
|
|
|
|
Fair value net
assets acquired
|
|
|
|
596
|
|
Goodwill
paid for new business combinations
|
|
|
|
1,212
|
|
Tiscali Netherlands
|
|
On May 23, 2007,
the Dutch competition Authority NMa approved KPNs acquisition of Tiscali
Netherlands with no remedies. KPN completed the acquisition of Tiscali SpAs
Dutch operations for a consideration of EUR 236m on June 19, 2007. If the
acquisition had occurred on January 1, 2007, we estimate consolidated
revenues would have been approximately EUR 30m higher. Profit for the year
would have been EUR 5m higher.
|
|
|
Fair value as of
|
|
In millions of euro
|
|
acquisition dates
|
|
Tradename
|
|
1
|
|
Customer relationships
|
|
66
|
|
Property, plant and equipment
|
|
36
|
|
Inventory
|
|
1
|
|
Other current assets
|
|
12
|
|
Cash and cash equivalents
|
|
7
|
|
Long-term interest bearing debt
|
|
-7
|
|
Short-term interest bearing debt
|
|
-2
|
|
Current liabilities
|
|
-21
|
|
Net assets at fair value at acquisition date
|
|
93
|
|
Total consideration paid for Tiscali
|
|
236
|
|
Goodwill
|
|
143
|
|
iBasis
|
|
In June 2006,
KPN agreed to merge its international voice wholesale business into iBasis
Inc. As of October 1, 2007 KPN acquired approximately 40m shares or 51% of iBasis
common stock on a fully diluted basis (54% on a non-diluted basis) in exchange
for the KPN Global Carrier Services business unit and USD 55m in cash. If the
acquisition had occurred on January 1, 2007, group revenues would have been approximately
EUR 340m higher and profit would have been stable.
|
30
Determination
Purchase Price iBasis
|
|
The purchase
price of the 51% interest on fully diluted iBasis is derived as follows:
|
In millions (except stated otherwise)
|
|
|
|
|
|
iBasis number of
outstanding shares of common stock on September 30, 2007
|
|
|
|
34.5
|
|
Market price per
iBasis share as per September 30, 2007
|
|
USD
|
|
10.75
|
|
Total
Market Capitalization of iBasis
|
|
USD
|
|
370
|
|
|
|
|
|
|
|
Dividend payable
immediately prior to closing
|
|
|
|
-58
|
|
Accrued dividend
for unexercised warrants
|
|
|
|
-2
|
|
Dilution
effects:
|
|
|
|
|
|
Total Fair Value
of iBasis Options
|
|
|
|
13
|
|
Fair Value of
iBasis Warrants
|
|
|
|
5
|
|
iBasis working
capital & debt adjustment
|
|
|
|
-12
|
|
Total Purchase
consideration
|
|
|
|
316
|
|
Estimated
Transaction Costs
|
|
|
|
8
|
|
Total
Purchase Price on a fully diluted basis (100%)
|
|
USD
|
|
324
|
|
|
|
|
|
|
|
51% on a fully
diluted basis purchased by KPN
|
|
USD
|
|
165
|
|
Purchase
price 51% interest in iBasis, including transaction costs (on a fully diluted
basis)
|
|
EUR
|
|
116
|
|
Determination book
profit KPN GCS to iBasis
|
|
The bookprofit
on the sale of our 49% interest in KGCS and KPN INS Inc. to iBasis is derived
as follows:
|
In millions of euro
|
|
|
|
Implied
purchase price, including transaction costs
|
|
|
|
116
|
|
|
|
|
|
|
|
- Total cash
paid (USD 55m)
|
|
|
|
-42
|
|
- Total
additional transaction costs
|
|
|
|
-3
|
|
Implied
market value of 49% of KGCS as per October 1, 2007
|
|
|
|
71
|
|
Total book value
of KGCS as per October 1, 2007
|
|
|
|
5
|
|
Total non cash book profit sale KPN GCS to
iBasis
|
|
|
|
66
|
|
Purchase Price
Allocation ibasis
|
|
The assets and
liabilities arising from the acquisition of iBasis are as follows:
|
|
|
|
|
Fair value as of
|
|
In millions of euro
|
|
acquisition dates
|
|
Tradename
|
|
|
|
15
|
|
Customer relationships and other intangibles
|
|
|
|
53
|
|
Property, plant and equipment
|
|
|
|
16
|
|
Other current assets
|
|
|
|
51
|
|
Cash
|
|
|
|
38
|
|
Long-term interest bearing debt
|
|
|
|
-1
|
|
Short-term interest bearing debt
|
|
|
|
|
|
Current liabilities
|
|
|
|
-121
|
|
Net assets at fair value at acquisition date
|
|
|
|
51
|
|
Minority interest (49%)
|
|
|
|
25
|
|
Net assets acquired (51%)
|
|
|
|
26
|
|
Total purchase price (see above)
|
|
|
|
116
|
|
Goodwill iBasis
|
|
|
|
90
|
|
31
Tele2/
Versatel Belgium
|
|
On October 1, 2007 KPN acquired Versatel and Tele2
Belgium. KPN performed a preliminary purchase price allocation. The assets and
liabilities arising from the acquisition of Versatel and Tele2 Belgium are as
follows:
|
In
millions of euro
|
|
Fair value as of acquisition
dates
|
|
|
|
|
|
|
|
Tradename
|
|
|
|
2
|
|
Customer relationships and other
intangibles
|
|
|
|
20
|
|
Property, plant and equipment
|
|
|
|
71
|
|
Deferred tax asset
|
|
|
|
11
|
|
Inventory
|
|
|
|
1
|
|
Other current assets
|
|
|
|
24
|
|
Cash and cash equivalents
|
|
|
|
5
|
|
Deferred tax liability
|
|
|
|
-7
|
|
Current liabilities
|
|
|
|
-39
|
|
Net assets at fair value at
acquisition date
|
|
|
|
88
|
|
Total consideration paid
|
|
|
|
-107
|
|
Transaction costs
|
|
|
|
-1
|
|
Total Goodwill
|
|
|
|
20
|
|
|
|
If the acquisitions had occurred on January
1, 2007, we estimate consolidated revenues would have been approximately EUR
100m higher. Profit for the year would have been approximately EUR 5m lower.
|
|
|
|
Getronics
|
|
Getronics On October 22, 2007, KPN
completed the acquisition of Getronics. KPN performed a preliminary purchase
price allocation. The assets and liabilities arising from the acquisition of
Getronics NV are as follows:
|
In
millions of euro
|
|
Fair value as of acquisition
dates
|
|
|
|
|
|
|
|
Tradename
|
|
|
|
42
|
|
Customer relationships and other
intangibles
|
|
|
|
293
|
|
Computer software
|
|
|
|
53
|
|
Other financial non-current assets
|
|
|
|
31
|
|
Associates and Joint Ventures
|
|
|
|
18
|
|
Deferred tax asset
|
|
|
|
237
|
|
Property,
plant and equipment
|
|
|
|
129
|
|
Inventory
|
|
|
|
44
|
|
Other
current assets
|
|
|
|
529
|
|
Assets
held for sale
|
|
|
|
91
|
|
Cash
and cash equivalents (net)
|
|
|
|
73
|
|
Long-term
interest bearing debt
|
|
|
|
-6
|
|
Short-term
interest bearing debt
|
|
|
|
-50
|
|
Provisions
and other long term payables
|
|
|
|
-257
|
|
Deferred
tax liabilities
|
|
|
|
-79
|
|
Current
liabilities
|
|
|
|
-706
|
|
Net
assets at fair value at acquisition date
|
|
|
|
442
|
|
Total
consideration Getronics
|
|
|
|
1,349
|
|
Total
Goodwill
|
|
|
|
907
|
|
|
|
|
|
|
|
-Of which allocated to Business
Segment
|
|
|
|
137
|
|
-Of which allocated to
Getronics Segment
|
|
|
|
770
|
|
|
|
As
a result of the acquisition of Getronics, KPN expects to realize cost
synergies with respect to Telecom and ICT expenses and Network services. In
addition, KPN expects to realize additional revenues as we can offer more services
to our existing costumer base and to the custumer of acquired companies. Total
revenues and operating profit of Getronics for the period from October 22, 2007
up to December 31, 2007 amount to EUR 488m and zero respectively. If the acquisition
had occurred on January 1, 2007, group revenues would have been EUR 2.0bn
higher, and profit would have been stable.
|
32
Other business combinations
|
|
During 2007 we acquired several minor new business combination. The
assets and liabilities arising from these acquisition are as follows:
|
In millions of euro
|
|
Fair value as of
acquisition dates
|
|
|
|
|
|
|
|
Tradename
|
|
|
|
1
|
|
Customer relationships and other
intangibles
|
|
|
|
8
|
|
Deferred tax asset
|
|
|
|
2
|
|
Property, plant and equipment
|
|
|
|
15
|
|
Inventory
|
|
|
|
2
|
|
Other current assets
|
|
|
|
4
|
|
Cash and cash equivalents
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
-4
|
|
Deferred tax liabilities
|
|
|
|
-2
|
|
Current liabilities
|
|
|
|
-5
|
|
Net assets at fair value
at acquisition date
|
|
|
|
21
|
|
Total consideration paid for other
business combinations
|
|
|
|
73
|
|
Goodwill
|
|
|
|
52
|
|
|
|
If the acquisitions had occurred on
January 1, 2007, KPN estimates consolidated revenues would have been
approximately EUR 10m higher.
|
|
|
|
Off-balance sheet commitments
|
|
The off-balance sheet commitments as of December
31, 2007, amounting to EUR 4.3bn, are EUR 0.5bn higher compared to those as
of December 31, 2006 (EUR 3.8bn) disclosed in the 2006 Annual Report and Form
20-F. The difference is mainly caused by an increase in the rental and
operating lease contracts of EUR 0.5bn.
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix (F) Impact of MTA
tariff reductions
|
|
|
|
Q4 2007
|
|
|
|
FY 2007
|
|
Revenues and other income
|
|
Operating result
|
|
Additional decline
compared to the same period last year
|
|
Revenues and other income
|
|
Operating result
|
|
(In millions of euro)
|
-17
|
|
-9
|
|
-
E-Plus
|
|
-90
|
|
-45
|
|
-11
|
|
-8
|
|
- BASE(13)
|
|
-51
|
|
-35
|
|
-2
|
|
-1
|
|
-
Mobile Wholesale NL
|
|
-3
|
|
-2
|
|
-30
|
|
-18
|
|
Total Mobile International
|
|
-144
|
|
-82
|
|
|
|
|
|
|
|
|
|
|
|
-13
|
|
-7
|
|
-
Consumer
|
|
-19
|
|
-11
|
|
-6
|
|
-1
|
|
-
Business
|
|
-9
|
|
-2
|
|
|
|
|
|
-
Getronics
|
|
|
|
|
|
-5
|
|
|
|
- Wholesale & Operations (incl.
iBasis)
|
|
-8
|
|
|
|
-24
|
|
-8
|
|
Total KPN The Netherlands
|
|
-36
|
|
-13
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
Intercompany eliminations
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-50
|
|
-26
|
|
KPN Consolidated
|
|
-174
|
|
-95
|
|
(13)
|
|
Restated figures
for all quarters 2007 until and including Q3 2007 with EUR -11m cumulative
effect for revenues and EUR -9m for EBITDA / operating result.
|
33
Appendix (G) Segmental
analysis: The Netherlands(14)
|
|
|
|
The Netherlands - Consumer
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
243
|
|
334
|
|
-
Voice wireline
|
|
1,080
|
|
1,444
|
|
428
|
|
431
|
|
-
Wireless services
|
|
1,776
|
|
1,705
|
|
242
|
|
208
|
|
- Internet wireline
|
|
917
|
|
762
|
|
98
|
|
84
|
|
-
Other (incl. intercompany revenues)
|
|
360
|
|
325
|
|
1,011
|
|
1,057
|
|
Revenues and other income
|
|
4,133
|
|
4,236
|
|
|
|
|
|
|
|
|
|
|
|
929
|
|
995
|
|
Operating expenses
|
|
3,673
|
|
3,745
|
|
69
|
|
101
|
|
of which: Depreciation,
amortization and impairments
|
|
247
|
|
238
|
|
|
|
|
|
|
|
|
|
|
|
82
|
|
62
|
|
Operating result
|
|
460
|
|
491
|
|
|
|
|
|
|
|
|
|
|
|
151
|
|
163
|
|
EBITDA
|
|
707
|
|
729
|
|
14.9
|
%
|
15.4
|
%
|
EBITDA margin
|
|
17.1
|
%
|
17.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
The Netherlands - Business
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
163
|
|
144
|
|
-
Corporate Solutions
|
|
585
|
|
505
|
|
252
|
|
245
|
|
-
Voice wireline
|
|
1,028
|
|
1,086
|
|
224
|
|
226
|
|
-
Wireless services
|
|
916
|
|
868
|
|
196
|
|
190
|
|
-
Network Services
|
|
776
|
|
746
|
|
132
|
|
132
|
|
-
Application Services
|
|
477
|
|
467
|
|
-112
|
|
-90
|
|
-
Other (incl. intercompany revenues)
|
|
-400
|
|
-356
|
|
855
|
|
847
|
|
Revenues and other income
|
|
3,382
|
|
3,316
|
|
|
|
|
|
|
|
|
|
|
|
699
|
|
698
|
|
Operating expenses
|
|
2,732
|
|
2,703
|
|
29
|
|
29
|
|
of which: Depreciation,
amortization and impairments
|
|
109
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
156
|
|
149
|
|
Operating result
|
|
650
|
|
613
|
|
|
|
|
|
|
|
|
|
|
|
185
|
|
178
|
|
EBITDA
|
|
759
|
|
711
|
|
21.6
|
%
|
21.0
|
%
|
EBITDA margin
|
|
22.4
|
%
|
21.4
|
%
|
|
|
|
|
|
|
|
|
|
|
The Netherlands - Getronics
|
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
488
|
|
|
|
Revenues
|
|
488
|
|
|
|
|
|
|
|
Other income
|
|
|
|
|
|
488
|
|
|
|
Revenues and other income
|
|
488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
483
|
|
|
|
Operating expenses
|
|
483
|
|
|
|
18
|
|
|
|
of which: Depreciation,
amortization and impairments
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
Operating result
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
EBITDA
|
|
23
|
|
|
|
4.7
|
%
|
|
|
EBITDA margin
|
|
4.7
|
%
|
|
|
(14)
|
|
For the
operating metrics reference is made to the quarterly factsheets as published
on www.kpn.com/ir
|
34
The Netherlands - Wholesale
& Operations (incl. iBasis)
|
|
|
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
999
|
|
992
|
|
Revenues
|
|
3,706
|
|
3,913
|
|
245
|
|
N/A
|
|
of which: iBasis
|
|
245
|
|
N/A
|
|
88
|
|
88
|
|
of which: Real Estate
|
|
359
|
|
347
|
|
77
|
|
2
|
|
Other income
|
|
164
|
|
25
|
|
|
|
|
|
of which: iBasis
|
|
|
|
|
|
10
|
|
2
|
|
of which: Real Estate
|
|
96
|
|
25
|
|
1,076
|
|
994
|
|
Revenues and other income
|
|
3,870
|
|
3,938
|
|
|
|
|
|
|
|
|
|
|
|
794
|
|
889
|
|
Operating expenses
|
|
3,055
|
|
3,258
|
|
245
|
|
416
|
|
of which: Depreciation,
amortization and impairments
|
|
1,180
|
|
1,407
|
|
|
|
|
|
|
|
|
|
|
|
282
|
|
105
|
|
Operating result
|
|
815
|
|
680
|
|
|
|
|
|
of which: iBasis
|
|
|
|
|
|
30
|
|
20
|
|
of which: Real Estate
|
|
185
|
|
126
|
|
|
|
|
|
|
|
|
|
|
|
527
|
|
521
|
|
EBITDA
|
|
1,995
|
|
2,087
|
|
7
|
|
|
|
of which: iBasis
|
|
7
|
|
|
|
44
|
|
35
|
|
of which: Real Estate
|
|
244
|
|
191
|
|
49.0
|
%
|
52.4
|
%
|
EBITDA margin
|
|
51.6
|
%
|
53.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Appendix (G) Segmental
analysis: Mobile International(15)
|
|
Mobile International - E-Plus
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
721
|
|
692
|
|
Service revenues
|
|
2,816
|
|
2,698
|
|
39
|
|
55
|
|
Hardware and other revenues
|
|
147
|
|
196
|
|
760
|
|
747
|
|
Revenues and other income
|
|
2,963
|
|
2,894
|
|
|
|
|
|
|
|
|
|
|
|
656
|
|
696
|
|
Operating expenses
|
|
2,526
|
|
2,667
|
|
174
|
|
169
|
|
of which: Depreciation,
amortization and impairments
|
|
676
|
|
678
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
51
|
|
Operating result
|
|
437
|
|
227
|
|
|
|
|
|
|
|
|
|
|
|
278
|
|
220
|
|
EBITDA
|
|
1,113
|
|
905
|
|
36.6
|
%
|
29.5
|
%
|
EBITDA margin
|
|
37.6
|
%
|
31.3
|
%
|
|
|
|
|
|
|
|
|
|
|
Mobile International - BASE
|
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
148
|
|
157
|
|
Service revenues
|
|
595
|
|
609
|
|
7
|
|
3
|
|
Hardware and other revenues
|
|
18
|
|
13
|
|
155
|
|
160
|
|
Revenues and other income
|
|
613
|
|
622
|
|
|
|
|
|
|
|
|
|
|
|
133
|
|
119
|
|
Operating expenses
|
|
496
|
|
475
|
|
28
|
|
23
|
|
of which: Depreciation,
amortization and impairments
|
|
113
|
|
117
|
|
|
|
|
|
|
|
|
|
|
|
22
|
|
41
|
|
Operating result
|
|
117
|
|
147
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
64
|
|
EBITDA
|
|
230
|
|
264
|
|
32.3
|
%
|
40.0
|
%
|
EBITDA margin
|
|
37.5
|
%
|
42.4
|
%
|
(15)
|
|
For the
operating metrics reference is made to the quarterly factsheets as published
on kpn.com/ir
|
35
Mobile International Mobile
Wholesale NL(16)
|
|
|
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
87
|
|
85
|
|
Service revenues
|
|
341
|
|
303
|
|
1
|
|
|
|
Hardware and other revenues
|
|
3
|
|
|
|
88
|
|
85
|
|
Revenues and other income
|
|
344
|
|
303
|
|
|
|
|
|
|
|
|
|
|
|
61
|
|
99
|
|
Operating expenses
|
|
243
|
|
254
|
|
7
|
|
42
|
|
of which: Depreciation,
amortization and impairments
|
|
28
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
-14
|
|
Operating result
|
|
101
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
34
|
|
28
|
|
EBITDA
|
|
129
|
|
112
|
|
38.6
|
%
|
32.9
|
%
|
EBITDA margin
|
|
37.5
|
%
|
37.0
|
%
|
(16)
|
|
The amounts for
Service revenues and Hardware and other revenues have been restated for 2006
and 2007; there are no changes regarding the amounts for Revenues and other
income for both 2006 and 2007
|
Appendix (G) Segmental analysis: Other
|
|
Other
|
|
|
|
|
|
|
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
3
|
|
-1
|
|
Revenues
|
|
7
|
|
22
|
|
-1
|
|
8
|
|
Other income
|
|
3
|
|
75
|
|
2
|
|
7
|
|
Revenues and other income
|
|
10
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|
30
|
|
Operating expenses
|
|
57
|
|
63
|
|
1
|
|
2
|
|
of which: Depreciation,
amortization and impairments
|
|
2
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
-29
|
|
-23
|
|
Operating result
|
|
-47
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
-28
|
|
-21
|
|
EBITDA
|
|
-45
|
|
37
|
|
< -100
|
%
|
< -100
|
%
|
EBITDA margin
|
|
< -100
|
%
|
38.1
|
%
|
|
|
|
|
|
|
Appendix (H) Noteworthy items
for results comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2007
|
|
In millions of euro
|
|
Q4 2006
|
|
Group
|
|
Mobile Int.
|
|
KPN NL
|
|
Other
|
|
Revenues and other income
|
|
Group
|
|
Mobile Int.
|
|
KPN NL
|
|
Other
|
|
|
|
66
|
|
|
|
66
|
|
|
|
Book gain on sale of subsidiaries
|
|
6
|
|
|
|
|
|
6
|
|
10
|
|
|
|
10
|
|
|
|
Book gain on sale real estate
|
|
2
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76
|
|
|
|
76
|
|
|
|
Adjusted for results
comparison
|
|
8
|
|
|
|
2
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
66
|
|
|
|
66
|
|
|
|
Book gain on sale of subsidiaries
|
|
6
|
|
|
|
|
|
6
|
|
10
|
|
|
|
10
|
|
|
|
Book gain on sale real estate
|
|
2
|
|
|
|
2
|
|
|
|
-33
|
|
|
|
-27
|
|
6
|
|
Restructuring charges
|
|
-17
|
|
2
|
|
-11
|
|
-8
|
|
-29
|
|
|
|
-29
|
|
|
|
Integration / migration costs
|
|
-26
|
|
|
|
-13
|
|
-13
|
|
-12
|
|
|
|
-12
|
|
|
|
All-IP implementation costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
8
|
|
-6
|
|
Adjusted for results
comparison
|
|
-35
|
|
2
|
|
-22
|
|
-15
|
|
36
FY 2007
|
|
In millions of euro
|
|
FY 2006
|
|
Group
|
|
Mobile Int.
|
|
KPN NL
|
|
Other
|
|
Revenues and other income
|
|
Group
|
|
Mobile Int.
|
|
KPN NL
|
|
Other
|
|
|
|
70
|
|
|
|
66
|
|
4
|
|
Book gain on sale of subsidiaries
|
|
74
|
|
|
|
|
|
74
|
|
96
|
|
|
|
96
|
|
|
|
Book gain on sale real estate
|
|
25
|
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166
|
|
|
|
162
|
|
4
|
|
Adjusted for results comparison
|
|
99
|
|
|
|
25
|
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
70
|
|
|
|
66
|
|
4
|
|
Book gain on sale of subsidiaries
|
|
74
|
|
|
|
|
|
74
|
|
96
|
|
|
|
96
|
|
|
|
Book gain on sale real estate
|
|
25
|
|
|
|
25
|
|
|
|
-59
|
|
|
|
-40
|
|
-19
|
|
Restructuring charges
|
|
-64
|
|
-21
|
|
-24
|
|
-19
|
|
-63
|
|
|
|
-63
|
|
|
|
Integration / migration costs
|
|
-58
|
|
|
|
-31
|
|
-27
|
|
-36
|
|
|
|
-36
|
|
|
|
All-IP implementation costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
23
|
|
-15
|
|
Adjusted for results
comparison
|
|
-23
|
|
-21
|
|
-30
|
|
28
|
|
Appendix (I) 2007
pro forma
, based on 2006 reporting structure
|
|
Reference is made to the Safe harbor paragraph
on page 22.
|
|
KPN Mobile The Netherlands (2007
pro forma
, based on 2006 reporting structure)
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
736
|
|
765
|
|
Revenues and other income
|
|
3,062
|
|
2,980
|
|
285
|
|
294
|
|
EBITDA
|
|
1,211
|
|
1,092
|
|
38.7%
|
|
38.4%
|
|
EBITDA margin
|
|
39.5%
|
|
36.6%
|
|
|
|
|
|
|
|
|
|
|
|
KPIs
|
|
Q4 2007
|
|
Q4 2006
|
|
Market share service revenue (in %)
|
|
47.1
|
|
47.2
|
|
Service revenues (in millions of euro)
|
|
724
|
|
735
|
|
Weighted monthly ARPU (euro)
|
|
26
|
|
29
|
|
Customers (in thousands)
|
|
9,392
|
|
8,642
|
|
- Postpaid
|
|
4,312
|
|
3,855
|
|
- Prepaid
|
|
5,080
|
|
4,787
|
|
Total traffic (in millions of minutes)
|
|
3,570
|
|
3,467
|
|
Weighted monthly MoU (in minutes)
|
|
128
|
|
135
|
|
Subscriber acquisition and retention
costs (euro)
|
|
163
|
|
180
|
|
|
|
|
Fixed including Other (2007
pro forma
,
based on 2006 reporting structure)
|
|
|
|
Q4 2007
|
|
Q4 2006
|
|
In millions of euro
|
|
FY 2007
|
|
FY 2006
|
|
2,008
|
|
1,367
|
|
Revenues and other income(17)
|
|
5,994
|
|
5,561
|
|
603
|
|
574
|
|
EBITDA
|
|
2,346
|
|
2,576
|
|
30.0%
|
|
42.0%
|
|
EBITDA margin
|
|
39.1%
|
|
46.3%
|
|
(17)
|
|
Including
intercompany elimination
|
37
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
|
KONINKLIJKE KPN N.V.
|
|
|
Dated: February 18, 2008
|
By:
|
/s/ MICHEL
HOEKSTRA
|
|
|
|
Michel Hoekstra
|
|
|
|
Legal Counsel
|
|
38
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