Second quarter 2016 results


  • Strong growth of bundled services in consumer driven by excellent customer experience: o Fixed-mobile bundles now represent 38% of postpaid base (Q2 2015: 26%) and 33% of broadband base (Q2 2015: 23%); o +15k broadband net adds, +33k IPTV net adds and +23k postpaid net adds1 driven by ongoing focus on high value KPN brand; o NPS for Consumer improved further (Residential NPS: 8, Mobile NPS: 10);
  • Solid growth in multi play and IT related services in Business offset by continued rationalization and repricing of traditional telco services: o Good progress on reducing indirect costs; o Dedicated programs in place to improve NPS for Business (-9):
  • Simplification program delivered approximately EUR 350m run-rate savings by end Q2 2016;
  • EUR 35.5 cents per share returned to shareholders in Q2 2016; interim dividend of EUR 3.3 cents per share to be paid in August.

Financial performance

  • Adjusted revenues were 4.3% lower y-on-y in Q2 2016. In Consumer, the positive impact of base growth was offset by lower hardware sales during the quarter and the absence of a tax benefit recorded in Q2 2015. In Business, growth in multi play and IT related services was offset by the decline of traditional telco services;
  • Adjusted EBITDA decreased by 1.7% y-on-y in Q2 2016. This was a result of lower revenues in Business and investments in subscriber retention in Consumer, partly offset by the positive impact of cost savings;
  • Operating profit increased by 21% y-on-y driven by lower depreciation and restructuring costs;
  • Capex in H1 2016 decreased by 1.6% due to lower customer Capex and structurally lower network investments which follows a period of elevated investment levels;
  • Free cash flow (excl. TEFD dividend) in H1 2016 of EUR 104m was influenced by phasing of costs, Capex and working capital within the year

Message from the CEO, Telco Blok

“The execution of our strategy “Simplify, Grow, Innovate” we presented in March is firmly on track. In the second quarter of 2016 we again saw strong growth of our bundled services, delivered over our best-in-class networks and supported by continued product innovations. We launched a 4K TV pilot in the Consumer market and introduced our managed hybrid cloud proposition in the business market. Furthermore, we concluded several important multi-year agreements with major business customers, illustrating our growth in the IT market. In the first half of this year we completed the migration of the majority of our Consumer customers to a new integrated order management IT platform, which is an important milestone in our Simplification program. Together with the execution of other parts of the program and strong commercial progress, this is expected to support our financial performance in the second half of this year."

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