KPN 19Q1: opex down, capex up, outlook flat

Opex

• Cost savings (new program) EUR 27m (target 2019-2021: 350m from EUR 2.015b in 2018).
• 50% of SME base migrated to KPN EEN.
• KPN EEN reduces cost-to-serve 25% by 2021, reduces IT-systems 75%.

Capex

• Started 11 FTTH projects (XGS-PON from Nokia, max 10/10 Gb/s).
• Orders Huawei equipment for 5G radio network.
• Network to be 5G-ready by end 2021.

Outlook

• To focus on 4 KPIs: adjusted EBITDA After Leases, adjusted indirect opex AL, FCF, leverage ratio (net debt AL).
• Outlook 2019 maintained (EBITDA flat, capex 1.1b, FCF lower, div 12.5c).
• Outlook 2019-2021 maintained (EBITDA organic growth, capex flat, FCF CAGR MSD, progressive div with FCF), medium term leverage target max 2.5.

Other

• Telefonica DE stake reduced to 3.5%, from 4.4% end 2018.
• Revenue contribution KPN Wholesale up to 11.5%.