KPN 19Q4: overview of details

The KPN share is down 6% on disappointing revenues, partly due to phasing and increased FTTH investment. Also, somewhat lower EBITDA outlook for 2020.

The results details (except the financial and operationals of the factsheets):

19Q4

• Divestments impact -EUR 2m on rev, -EUR 6m on EBITDA AL.
• Cost savings +EUR 38m to EUR 141m of 2019-2021 program of EUR 350m from simplification and digitalisation (IT stacks from 20 to 2, core networks from 5 to 1).
• FTTH HP additions 120k in 2019, roll-out currently in 70 areas, technology choice G-PON & XGS-PON.
• FTTH HA net additions 19Q4: 14k
• VDSL-FTTC roll-out (nearly completed) 2019: +1500 cabinets, +390k HP.
• FTTH vs FTTC in 2019: NPS +2, ARPU +EUR 6, convergence +6 pp, churn -40%.
• Mobile site modernisation (Massive MIMO, 5G-ready): 640 in 19Q4 (increases speed 30%, enables 3G switch-off).
• All-IP migration on track, 175k lines to go (enables SDH/TDM switch-off);
• Business portfolio (1): KPN Small Business for SoHo market, KPN EEN for SME market, KPN Smart Combinations and KPN Smart Integration for LE/Corporate market.
• Business portfolio (2): 1. Access and connectivity, 2. Cloud and workspace, 3. Security and business continuity.
• Integrated IT-activities of RoutIT, Divider, Startready, InSpark.

Outlook

• 2020: adjusted EBITDA AL stable to slightly up, capex EUR 1.1b, FCF growth >= MSD, DPS 13.0c.
• 2019-2021 maintained: adjusted EBITDA organic growth, capex stable EUR 1.1b per yr, FCF CAGR MSD, progressive DPS; capex mix shift from 35 to 50% for access, mobile network 5G-ready by YE 2021, add 300k converged HH, increase SIMs/HH 10%, converged postpaid base 70%, cost reduction to serve KPN EEN 25%, cost reduction IT 75%.