Royal KPN NV · EURONEXT:KPN
Royal KPN NV — FY2009 Earnings Presentation
88 slides from Royal KPN NV's earnings presentation, Jan 26, 2010
Slide 1: Annual Results 2009
Annual Results 2009 26 January 2010
Slide 2: Safe harbor
Safe harbor Non-GAAP measures and management estimates This presentation contains a number of non-GAAP figures, such as ‘existing’ and ‘disposed’ revenues and other income, EBITDA and free cash flow. These non-GAAP figures should not be viewed as a substitute for KPN’s GAAP figures. KPN defines EBIT
Slide 3: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Carla Smits-Nusteling, CFO Operating review International Eelco Blok, MD Mobile International/iBasis Operating review Netherlands Baptiest Coopmans, MD Dutch Telco Operating review Getronics Ad Scheepbouwer, Chairman and CEO
Slide 4: Highlights 2009
Highlights 2009 Focus on EBITDA, cash flow and market shares continues to deliver • Good full-year results meeting guidance on EBITDA and cash flow, revenues slightly below guidance • Impact of economic downturn mitigated by cost reductions • Strong profitability growth of Dutch Telco business, cont
Slide 5: Progress 'Back to Growth' strategy
Progress ‘Back to Growth’ strategy Solid progress on strategic objectives as announced in February 2008 Objectives ‘Back to Growth’ Achievements 2008-2009 strategy (2008-2010) • Leading service provider and • Strong position in all segments and best-in-class operator overall stable market shares Net
Slide 6: Cost efficiency
Cost efficiency Substantial results so far, more savings to come from simplification and FTEs FTE reductions SAC/SRC Supplier contracts x1,000 Own staff External staff -24% 43.5 33.1 -45% 7.1 3.8 Q4 '07 Q4 '09 Q4 '07 Q4 '09 • Number of own staff down 10k, • Carefully managing down • Spend on supplie
Slide 7: Capex
Capex Centralized budget with focus on ROCE to result in more efficient spend € mn Group Capex • Capex down 8% y-on-y in 2009 – Handset lease Capex Germany only in 2008 1,925 – Data center investments Getronics in 2008 1,688 1,767 1,650 – Network rollout driven by customer demand 653 555 615 577 – H
Slide 8: Results 'Back to Growth'
Results ‘Back to Growth’ Strong progress towards financial objectives for 2010 Revenues1 impacted by economic downturn Growing EBITDA1 € bn € bn 12.6 14.0 13.5 5.01 5.19 4.90 2007 2008 2009 2007 2008 2009 • Guidance adjusted downwards in 2009, driven • Guidance unchanged since February 2008 by focus
Slide 9: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Carla Smits-Nusteling, CFO Operating review International Eelco Blok, MD Mobile International/iBasis Operating review Netherlands Baptiest Coopmans, MD Dutch Telco Operating review Getronics Ad Scheepbouwer, Chairman and CEO
Slide 10: Performance versus outlook 2009
Performance versus outlook 2009 EBITDA, Capex and FCF guidance met, revenues slightly below guidance Outlook Reported 2009 2009 • Results reflect focus on Revenues and EBITDA, cash flow and € 13.6-13.8 bn € 13.5 bn other income1 market shares, rather than revenues Meaningful step EBITDA1 towards 2
Slide 11: Outlook for 2010 confirmed
Outlook Outlook for 2010 confirmed Reported Reported Outlook 2008 2009 2010 Revenues and In line with € 14.0 bn € 13.5 bn other income1 2009 • Contribution to EBITDA uplift in 2010 from across € 5.0 bn € 5.2 bn > € 5.5 bn the Group EBITDA1 Incl. real estate: Incl. real estate: Incl. real estate: € 1
Slide 12: Outlook 2011
Outlook 2011 ‘Back to Growth’ strategy continued • Confirming financial framework, prudent financing policy maintained – Net debt / EBITDA ratio between 2.0-2.5x Financial – Committed to minimum credit rating of BBB (S&P) and Baa2 (Moody’s) framework – Redemptions financed well ahead – Selective M&A
Slide 13: Group results
Group results Continued EBITDA growth despite revenue pressure € mn Q4 ’09 Q4 ’08 % FY ’09 FY ’08 % Revenues and other income (reported) 3,371 3,718 -9.3% 13,509 14,602 -7.5% – Getronics revenues (disposed) - 97 - 22 623 - Revenues and other income (existing) 3,371 3,621 -6.9% 13,487 13,979 -3.5% Op
Slide 14: Group cash flow Q4
Group cash flow Q4 Free cash flow of € 0.9 bn in Q4 ’09 € mn Q4 ’09 Q4 ’08 % • Free cash flow of € 936 mn in Operating result 724 592 22% Q4 ’09, down 4.9% y-on-y – € 157 mn positive tax effect from Depreciation and amortization1 583 689 -15% tax prepayment in Q1 and tax Interest paid/received -151
Slide 15: Group cash flow FY '09
Group cash flow FY ’09 Meeting full-year guidance for ~€ 2.4 bn free cash flow € mn FY ’09 FY ’08 % • Free cash flow over € 2.4 bn for Operating result 2,850 2,597 9.7% 2009, meeting guidance Depreciation and amortization1 2,342 2,461 -4.8% Interest paid/received -612 -597 2.5% • Positive FCF effect
Slide 16: Dutch Telco business
Dutch Telco business Strong performance, focus on profitability paying off in 2009 € mn EBITDA 8.6% • Focus on profitability paying off in 3.5% 6.2% 2009, EBITDA inflection reached 1.7% – Full-year revenues and other income down 1.5% y-on-y 853 868 880 883 922 895 876 – EBITDA up 4.9% y-on-y in 2009
Slide 17: Dutch Telco business by segment
Financial review Dutch Telco business by segment All segments contributing to solid profitability € mn 22.7% 22.7% 21.5% 23.7% 26.9% 26.0% 24.0% • Revenues down 3.6% in Q4, EBITDA Consumer 18.6% up 24% y-on-y • ~5% impact from regulation on 1,002 1,035 1,050 1,041 1,031 1,042 1,018 1,004 wireless se
Slide 18: The Netherlands by segment: Getronics and iBasis
Financial review the Netherlands by segment Ongoing revenue pressure at Getronics and iBasis € mn • Revenues and other income down 8.5% y-on-y in Q4 ’09 Getronics (existing) 7.3% 6.9% 6.4% – Continued impact from economic downturn, at presence no signs of 3.6% 3.6% further deterioration 1.7% 530 534
Slide 19: Mobile International
Mobile International Profitability focus underpinning strong margins, continued service revenue growth Wireless service € mn • Service revenues up 2.3% y-on-y 2009, flat in Q4 ’09 revenues 853 935 952 952 902 943 975 956 • No material downturn impact • Continued outperformance in Q1 '08 Q2 '08 Q3 '0
Slide 20: Mobile International by segment
Financial review Mobile International by segment Flat revenues and solid profitability, all segments contributing € mn 37.6% 38.1% 40.0% 38.9% 41.6% 41.8% 42.4% 41.8% • Revenues and other income down Germany 2.9% Q4 ’09 (-1.1% for FY ’09) • Service revenues down 1.3% in Q4, 808 840 815 774 797 819 7
Slide 21: Tax
Tax Dutch corporate income tax rate unchanged, tax gain from DTA reassessment • € 10 mn discount due to prepayment of corporate income tax Benefits in • Corporate income tax refunds in Q2 & Q4 totalling € 109 mn, relating to prior years 2009 • € 33 mn tax refund in Q4 as a result of an update of the
Slide 22: Group financial profile
Group financial profile Financial profile strengthened during 2009 following issue of several bonds € bn Debt Financing policy 14.5 13.6 13.7 13.8 13.0 11.9 12.1 12.1 2.5x 2.3 2.3 2.4 2.3 2.3 2.3 2.0x 11.7 11.7 11.8 11.7 2.2 2.1 10.9 11.3 10.9 11.1 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4
Slide 23: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Carla Smits-Nusteling, CFO Operating review International Eelco Blok, MD Mobile International/iBasis Operating review Netherlands Baptiest Coopmans, MD Dutch Telco Operating review Getronics Ad Scheepbouwer, Chairman and CEO
Slide 24: Strategic progress Mobile International
Strategic progress Mobile International Challenger strategy delivering continued market outperformance and profitability 2008 2009 • Slightly declining market, economic • Weak economic conditions, declining market Market conditions weakening in Q4 • Increased competition • Continued impact of regula
Slide 25: Operating review Germany
Operating review Germany Selective commercial activity in Q4, preparing for next growth phase Net adds • Selective commercial activity in Q4 ’09, 18.7 19.0 16.2 17.0 17.8 18.0 18.2 preparing for next growth phase 15.4 – Q4 traditionally characterized by strong commercial spending by competition 759
Slide 26: Operating review BASE
Operating review BASE Strong service revenue growth, driven by BASE relaunch and regional focus Net adds • Strong Post Paid net adds following 3.1 3.2 3.4 3.5 3.5 3.6 3.6 BASE relaunch and segment targeting 3.0 – Simplified BASE portfolio compares favourably versus competitor offerings 183 – Strengt
Slide 27: Operating review RoW: MVNOs in Spain and France
Operating review RoW MVNOs in Spain and France on track with low cost and scalable business model 2009 Going forward • Leading MVNO, > 350k customers • Scaling up brands, targeting selective • Continued growth in value-for-money segments: online, no-frills and cultural Spain • Simyo and Blau establi
Slide 28: Going forward
Going forward Success execution in Belgium to be replicated in German market Tactics Belgium Germany • Upscaling new initiatives • Ramp up execution of new Fixed-Mobile – Intensify regional sales and initiatives, applying similar initiatives Substitution marketing, targeting as in Belgium underrepre
Slide 29: Regionalization
Regionalization Deployment of regionalization approach, based on proven success in Belgium Regionalization framework Belgium: strong growth • Analyze distribution of market shares region • Relaunch and simplification of BASE portfolio by region • Apply differentiated strategy depending on • Local pr
Slide 30: Voice & data
Voice & data Continued growth in voice, selective in data through regional approach Voice Smartphones Data cards • Significant untapped Market trends • Still significant potential from • Consumer demand for ‘light’ potential from ‘heavy’ data fixed-mobile substitution data taking off users (laptop d
Slide 31: Network rollout
Network rollout Investment approach focused on ROCE, benefit from ZTE partnership Principles Partnership with ZTE • Focusing on ROCE, use of partnerships • ZTE is leading Asian telco (equipment) • Demand driven, serving customer needs supplier, building momentum across Europe • Strategic partnership
Slide 32: Spectrum Germany
Spectrum Germany Keen to obtain frequencies, value-driven investment approach Auction process E-Plus approach • 360 MHz auctioned on various frequency • Currently sufficient spectrum to serve bands, all suited for wireless broadband / LTE customer demand in voice, additional spectrum needed to fulfi
Slide 33: iBasis
iBasis Continued focus on profitability, successful completion of tender offer Operational performance Tender offer Minutes • Successful tender offer for outstanding 4.0 3.8 3.7 3.7 3.8 3.8 3.5 shares not owned by KPN 3.2 – Final offer $ 3.00/share or $ 93 mn in total – Merger completed on 21 Decemb
Slide 34: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Carla Smits-Nusteling, CFO Operating review International Eelco Blok, MD Mobile International/iBasis Operating review Netherlands Baptiest Coopmans, MD Dutch Telco Operating review Getronics Ad Scheepbouwer, Chairman and CEO
Slide 35: Dutch Telco business
Dutch Telco business Objective of being best-in-class service provider Strategic objectives ‘Back to Growth’ (announced February 2008) Consumer Business Wholesale & Operations • Strengthen position as • Leading infrastructure • Best-in-class network leading Consumer and managed ICT operator with ver
Slide 36: Strategic progress Consumer
Strategic progress Consumer Continued improvement at Consumer resulting in increased profitability Strategic priorities ‘Back to Growth’ Results 2008-2009 Customer focus Stop line loss • Line loss stable at low levels, driven by retention and upselling with broadband • Some pressure on broadband mar
Slide 37: Customer value
Customer value Profitability increase driven by value focus and cost reductions € value (ARPU) • Managing customer base for value Customer 29 31 25 26 with targeted propositions 22 23 6 8 • ARPUs overall stable in competitive Q1 ’08 Q2 ’08 Q3 ’08 Q4 ’08 Q1 ’09 Q2 ’09 Q3 ’09 Q4 ’09 market Traditional
Slide 38: Distribution and service
Distribution and service Further strengthened leading position in distribution with improved service Retail shops Online Quality of Service • Leading position in distribution • New KPN retail website • Focus on ‘Net Promotor Score’ based on three brands leading to increased sales to improve service
Slide 39: Consumer wireless
Consumer wireless1 Service revenues up 7%, including Debitel acquisition and regulatory impact € mn • Service revenues up 7.1% y-on-y in Q4 ’09, including Debitel acquisition Service 394 429 441 423 465 477 460 453 – ~5% impact of MTA and roaming revenues – Migraton of Debitel customer base to KPN b
Slide 40: Consumer wireline
Consumer wireline Net line loss at relatively low level of 50k in Q4, despite cable competition X 1,000 • PSTN/ISDN line loss stabilizing at Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 PSTN/ISDN relatively low levels loss • Outflow to cable stable compared to -112 -110 -103 -92 -77 -83 -
Slide 41: TV
TV Nearly 1 million TV customers KPN TV customers TV strategy X 1,000 886 924 970 • Nearly 1 million customers 835 700 775 – Credible position in Dutch TV market 636 553 – Both Digitenne and IPTV contributing to growth – Growth in IPTV accelerating with ~90k customers per Q4 ’09, up >100% y-on-y Q1
Slide 42: Key learnings fiber pilots
Key learnings fiber pilots Positive customer feedback, scalability issues in delivery processes and IT • Consumers moving towards single provider for all services • TV is key element of competitive triple play package Propositions • KPN offering superior TV proposition on fiber with multi- room HD a
Slide 43: Results fiber pilots
Results fiber pilots Positive business case for fiber, leading to regional rollout Homes Contracted • Overall market penetration up 3%-point, 50% in 5 pilot cities1 Penetration taking share from cable and other operators Ambition FttH 40% – Ambition of ~60% penetration (including 30% 29% wholesale)
Slide 44: Rollout objectives 2010-2012
Rollout objectives 2010-2012 Gradual migration to fiber, no material impact on Capex Rollout VDSL from Central Office Fiber rollout H1 ’10 2010 and beyond • VDSL upgrade on copper network • Targeting 600-800k active customers completed by Q2 ’10 on FttH/FttC by 2012 – 50% of households with higher •
Slide 45: Strategic progress - Business
Strategic progress - Business Maintaining market leading position with solid financial performance Strategic priorities ‘Back to Growth’ Results 2008-2009 Customer focus Leveraging leading position • Maintaining market leading position with overall stable market shares • Moving up the value chain wi
Slide 46: Business wireline
Business wireline Resilient performance in challenging markets, traffic volumes recovering € mn • Revenues down 6.0% y-on-y in Q4 ’09 – Voice & Internet down 6.3% y-on-y 373 378 371 384 374 371 359 361 Revenues1 – Data network services down 5.2% • Resilient performance in challenging Q1 '08 Q2 '08 Q
Slide 47: Business wireless
Business wireless Stable performance despite regulation and economic downturn € mn 234 243 238 244 247 246 234 247 • Service revenues up 1.2% y-on-y in Q4 • Headwind from regulation and Service economic downturn revenues – Decline in voice revenues, offset by growth in data revenues Q1 '08 Q2 '08 Q3
Slide 48: Strategic progress - W&O
Strategic progress - W&O Substantial cost reductions and further network upgrades Strategic priorities ‘Back to Growth’ Results 2008-2009 Proactive network rollout Open access model • Cost base lowered in line with revenue All-IP services and infrastructure Content Services trend, driven by efficien
Slide 49: Regulation the Netherlands
Regulation the Netherlands Clarity on regulated copper tariffs and design for spectrum auction in H1 ’10 • Final decision on regulated wholesale tariffs on copper for 2009-2011 published Wholesale – Tariff reductions of 10-25% for e.g. MDF Access, FTA and traditional voice Price Cap – Lower tariff r
Slide 50: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Carla Smits-Nusteling, CFO Operating review International Eelco Blok, MD Mobile International/iBasis Operating review Netherlands Baptiest Coopmans, MD Dutch Telco Operating review Getronics Ad Scheepbouwer, Chairman and CEO
Slide 51: Getronics
Getronics Continued impact of economic downturn, on track for EBITDA uplift in 2010 € mn Revenues and other income down 8.5% • Continued top-line pressure, mainly due to -6.7% economic downturn 534 534 587 537 – The Netherlands down 6.7% y-on-y in Q4 530 525 528 485 – International down 14% y-on-y,
Slide 52: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Carla Smits-Nusteling, CFO Operating review International Eelco Blok, MD Mobile International/iBasis Operating review Netherlands Baptiest Coopmans, MD Dutch Telco Operating review Getronics Ad Scheepbouwer, Chairman and CEO
Slide 53: Concluding remarks
Concluding remarks • Focus on EBITDA, cash flow and market shares continues to deliver • Good full-year results meeting guidance on EBITDA and cash flow, revenues slightly below guidance • Impact of economic downturn mitigated by cost reductions • Strong profitability growth of Dutch Telco business,
Slide 54: Outlook
Outlook Confirming outlook 2010, growth in EBITDA, cash flow and DPS in 2011 Outlook 2010 Outlook 2011 • Outlook confirmed on all metrics • Continuation of ‘Back to Growth’ strategy • Revenues and other income in line with 2009 • Growth in EBITDA, free cash flow and dividend per share • EBITDA uplif
Slide 55: Q&A
Q&A
Slide 56: Annex
Annex For further information please contact KPN Investor Relations Tel: +31 70 44 60986 Fax: +31 70 44 60593 ir@kpn.com www.kpn.com/ir
Slide 57: Analysis of results
Analysis of results Key items worth mentioning in results interpretation € mn Q4 ’09 Q4 ’08 FY ’09 FY ’08 Revenue effect MTA tariff reduction Group -58 -35 -198 -159 EBITDA effect MTA tariff reduction Group -21 -16 -85 -81 Book gain on sale of subsidiaries Other/W&O 8 Book gain on sale of real estat
Slide 58: MTA regulation
MTA regulation € cents per minute 1 July ’08 1 April ’09 1 July ’09 KPN 9.0 8.0 7.0 The Netherlands Vodafone 9.0 9.0 7.0 T-Mobile 10.4 10.4 8.1 Avg. asymmetry 1.4 2.4 1.1 • MTA tariffs valid from 1 April 2009 until 30 November 2010 Germany – T-Mobile / Vodafone lowered from € 7.92 to € 6.59 cents pe
Slide 59: Impact MTA reduction
Impact MTA reduction € mn Q4 ’09 FY ’09 1 1 Revenues EBITDA Revenues EBITDA Germany -21 -10 -62 -31 Belgium - - -12 -9 Rest of World - - - - Mobile International -21 -10 -74 -40 Consumer -20 -8 -73 -36 Of which: Mobile Wholesale NL -3 -1 -12 -7 Business -11 -2 -36 -8 Wholesale & Operations -11 -1 -3
Slide 60: Restructuring charges
Restructuring charges € mn Q4 ’09 FY ’09 Germany - -1 Belgium 1 1 Rest of World - - Mobile International 1 0 Consumer -2 -6 Business 1 1 Getronics -14 -44 IT NL -1 -1 Wholesale & Operations -5 -9 The Netherlands -21 -59 Other -1 3 KPN Group -21 -56 60
Slide 61: Operating expenses
Operating expenses € mn Q4 ’09 Q4 ’08 % Salaries and social security contributions 526 562 -6.4% Cost of materials 213 293 -27% Work contracted out and other expenses 1,136 1,338 -15% Own work capitalized -28 -25 12% Other operating expenses 217 269 -19% Depreciation1 383 397 -3.5% Amortization1 200
Slide 62: Analysis operating expenses: Salaries & Cost of materials
Analysis operating expenses Salaries & Cost of materials € mn Salaries Y-on-Y decrease • Continued reduction in FTE due to: 18.0% – Disposals Getronics 16.1% 15.5% 16.1% 15.9% 15.2% 15.7% – Ongoing restructuring 12.0% – Improved efficiency from ‘First time right’ and simplification 637 585 438 562 5
Slide 63: Analysis operating expenses: Work contracted out & Other
Analysis operating expenses Work contracted out & Other € mn Work contracted out Y-on-Y decrease • Lower traffic volumes national and iBasis 35.7% 36.5% 36.7% 37.0% 36.3% 34.7% 34.4% 33.9% • Lower regulated tariffs for MTA/Roaming • Decrease in temporary personnel and consultants • Lower costs at Ge
Slide 64: Analysis operating expenses: Depreciation & Amortization
Analysis operating expenses Depreciation & Amortization € mn Depreciation1 Y-on-Y decrease • Accelerated depreciation of € 16 mn copper network 11.6% 11.1% 11.1% 11.0% 11.6% 11.5% 11.6% 11.4% in Q4 ’08 409 407 401 397 392 391 384 383 Q1 ’08 Q2 ’08 Q3 ’08 Q4 ’08 Q1 ’09 Q2 ’09 Q3 ’09 Q4 ’09 Depreciati
Slide 65: Personnel
Personnel1 • Decrease of 3,554 FTE Y-on-Y – Reduction of 1,125 FTE in the Netherlands (excl. Getronics), mainly from Consumer, 43,409 W&O and SNT divestment 42,976 – Reduction of 1,953 FTE at Getronics, 8,372 38,919 mainly from divestments and restructuring 8,240 36,702 35,638 – Reduction of 476 FTE
Slide 66: Tax
Tax P&L Cash flow € mn Q4 ’09 Q4 ’08 Q4 ’09 Q4 ’08 Dutch activities -85 -87 59 -189 Getronics -3 5 -1 -2 German Mobile activities 654 -10 -2 -2 Belgian Mobile activities -8 -12 - - Other 51 -3 - - Total 609 -107 56 -193 • Tax gain of € 705 mn recorded in Germany in Q4 ’09 due to reassessment of defe
Slide 67: Net cash flow from operating activities
Net cash flow from operating activities € mn Q4 ’09 Q4 ’08 FY ’09 FY ’08 Operating Result 724 592 2,850 2,597 Depreciation, amortization and impairments 583 689 2,342 2,461 Interest paid -150 -217 -609 -597 Income tax paid 55 -193 -506 -522 Other income -22 -94 -54 -141 Share based compensation 12 7
Slide 68: Total cash flow
Total cash flow € mn Q4 ’09 Q4 ’08 FY ’09 FY ’08 Net cash flow from operating activities 1,423 1,329 3,776 4,030 1 Capex -565 -613 -1,767 -1,925 Acquisitions -84 -125 -180 -296 Disposals real estate 62 140 94 180 Disposals other 0 248 57 363 Other -23 -3 -33 -21 Net cash flow from investing activiti
Slide 69: Capex
Capex1 € mn Q4 ’09 Q4 ’08 % FY ’09 FY ’08 % Germany 144 182 -21% 450 514 -13% % Revenues Germany 18% 22% 14% 16% Belgium 31 58 -47% 101 130 -22% % Revenues Belgium 15% 29% 13% 17% Rest of World 2 4 -50% 4 9 -56% % Revenues Rest of World 6.5% 13% 4.2% 12% Mobile International 177 244 -28% 555 653 -15
Slide 70: Balance sheet
Balance sheet Assets Equity & liabilities € bn € bn 23.9 25.1 24.3 24.7 24.9 23.9 25.1 24.3 24.7 24.9 3.7 3.2 2.9 3.8 5.7 5.7 5.8 3.8 5.7 5.7 1.3 1.4 1.3 1.1 3 1.3 Goodwill Group equity 3.1 2.9 2.9 3.2 3.0 Licenses Provisions 7.7 7.5 1 14.4 13.8 15.5 14.7 7.7 7.6 Non-current 13.0 7.7 PPE liabilities
Slide 71: Share repurchase progress
Share repurchase progress Date1 Value (€ mn) mn shares Avg. share price (€) Q4 ’08 101.9 9.7 10.54 Q1 ’09 315.5 30.9 10.23 Q2 ’09 198.7 21.2 9.36 Q3 ’09 216.1 20.4 10.57 October 80.8 6.8 11.89 November 77.1 6.4 12.04 December 10.0 0.8 11.97 Q4 ’09 167.8 14.0 11.97 Total 1,000.0 96.2 10.39 • € 1 bn s
Slide 72: Debt summary
Debt summary¹ € bn Q4 ’09 Q3 ’09 Q4 ’08 Bonds 13.16 13.16 11.44 Eurobonds 11.60 11.56 9.12 Global bonds 1.56 1.60 2.32 Other debt 0.21 0.94 0.60 Other loans at Royal KPN2 0.16 0.15 0.14 Consolidated debt 0.05 0.79 0.46 Fair value financial instruments3 0.45 0.44 0.06 Total debt 13.82 14.54 12.10 – o
Slide 73: Debt portfolio
Debt portfolio Breakdown of € 13.8 bn gross debt1 12% 75% Financial Global bonds Other instrum ents 13% 11% 2% 3% EUR USD2 GBP2 7% Eurobonds 93% 84% Fixed Floating (incl. swapped) 1 Book value of interest bearing financial liabilities plus the fair value of financial instruments related to these fin
Slide 74: Consumer voice market
Consumer voice market1 mn Q4 ’09 Q3 ’09 Q4 ’08 KPN PSTN / ISDN 2.02 2.11 2.36 Wholesale Line Rental (WLR) 0.41 0.42 0.39 Total traditional voice 2.43 2.53 2.75 KPN VoIP 1.20 1.17 1.09 Cable VoIP 1.49 1.45 1.27 Alternative DSL VoIP 0.42 0.40 0.35 Total VoIP 3.11 3.02 2.71 Cable voice analogue 0.04 0.
Slide 75: Infrastructure
Infrastructure Deploying mix of technologies going forward ADSL on copper VDSL from FttC FttH Wireless central office (VDSL-CO) Central office Central office (ADSL2+) (VDSL2) ODF1 Street Street Street cabinet cabinet cabinet up to 20 Mb/s down up to 40 Mb/s down 30-50 Mb/s down >100 Mb/s >14 Mb/s do
Slide 76: Unbundling tariffs
Unbundling tariffs Unbundling in current network Category Monthly tariff Line sharing (LLU)1 € 0.10 / line MDF Node SDF Fully unbundled (LLU)1 € 6.52 / line colocation KPN / Telco MDF colocation1 € 776.40 / footprint / year ~28,000 1,350 street cabinets local exchanges MDF backhaul1 Commercial prici
Slide 77: Broadband: KPN service portfolio per Q2 '10
KPN service portfolio per Q2 ’10 Transparent multi-play packages, symmetrical speeds on FttH List prices Basic / Bronze Extra / Silver Premium / Gold (incl. VAT) 30 Mb download, 50 Mb download, 100 Mb download, FttH € 65 30 Mb upload € 80 50 Mb upload € 110 100 Mb upload Broadband Copper Up to 8 Mb
Slide 78: Spectrum Germany
Spectrum Germany in MHz Current allocation Auction 2010 Band T-Mobile Vodafone E-Plus O2 Total Blocks Total 800 MHz - - - - - 6 blocks 2 x 5 60 900 MHz 2 x 12.4 2 x 12.4 2x5 2x5 70 - - 1800 MHz 2x5 2x5 2 x 17.5 2 x 17.5 90 5 blocks 2 x 5 50 4 blocks 2 x 5 2.1 GHz 2 x 10 2 x 10 2 x 10 2 x 10 80 1 blo
Slide 79: Service revenue growth Mobile International
Service revenue growth Mobile International Service revenue growth Germany Service revenue growth Belgium (BASE) 12.2% 11.0% 6.8% 7.4% 7.7%7.7% 7.5% 7.5% 5.5% 6.2% 6.2% 4.1%4.1% 2.6% 2.3% 3.1% 1.4% 0.0% -0.4% -1.3% Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q4 ’08 Q1 ’09 Q2 ’09 Q3 ’09 Q4 ’09 Reported Underl
Slide 80: Dutch wireless services disclosure
Dutch wireless services disclosure Q4 ’09 Q3 ’09 Q4 ’08 Service revenues (€ mn) 758 757 754 − Consumer 453 460 423 − Business 247 234 244 − Other Dutch activities1 58 63 87 SAC / SRC (€) − Consumer 183 150 150 − Business2 272 287 284 1 Indicates amongst others Mobile Wholesale NL, Simyo and visitor
Slide 81: KPIs Consumer Wireline Voice
KPIs Consumer Wireline Voice Voice Q4 ’09 Q3 ’09 Q4 ’08 Market share1 – Voice2 ~55% ~55% >55% – Traditional voice3 >80% ~80% >75% – VoIP 39% 39% 41% Market penetration VoIP 53% 51% 46% Access lines (x 1,000) 3,218 3,273 3,444 – PSTN 1,819 1,894 2,124 – ISDN 200 212 234 – VoIP (packages broadband and
Slide 82: KPIs Consumer Broadband & TV
KPIs Consumer Broadband & TV Broadband Q4 ’09 Q3 ’09 Q4 ’08 Market penetration Broadband1 81% 81% 80% Broadband ISP customers (x 1,000) 2,540 2,550 2,536 – KPN 1,830 1,161 1,129 – Het Net 0 670 680 – XS4ALL 276 280 291 – Other 434 439 436 Broadband ARPU (€) 31 31 30 TV Q4 ’09 Q3 ’09 Q4 ’08 Market sh
Slide 83: KPIs Consumer Wireless & Mobile Wholesale NL
KPIs Consumer Wireless & Mobile Wholesale NL Wireless Q4 ’09 Q3 ’09 Q4 ’08 – Customers1 (x 1,000) 6,523 6,739 6,248 – Service revenues (€ mn) 453 460 423 – ARPU (€) 23 23 23 – MoU (originating, terminating) 109 105 111 – SAC/SRC (€) 183 150 150 Mobile Wholesale NL2 Q4 ’09 Q3 ’09 Q4 ’08 Customers (x
Slide 84: KPIs Business Infrastructure Services
KPIs Business Infrastructure Services Wireline Q4 ’09 Q3 ’09 Q4 ’08 Market share voice1 >45% ~50% ~ 50% Access lines (x 1,000) 1,469 1,501 1,581 – PSTN 691 706 745 – ISDN 749 767 812 – VoIP 29 28 24 Business DSL 141.8 133.7 119.0 Traditional voice ARPU (€) 51 49 52 − Access 27 27 27 − Traffic 24 22
Slide 85: KPIs Getronics
KPIs Getronics Q4 ’09 Q3 ’09 Q4 ’08 Service revenues (€ mn) 477 437 520 Workspaces (in mn) – Serviced IT workspaces1 1.8 1.7 n.a. – Serviced Voice workspaces 0.6 0.6 0.6 ICT Services Q4 ’09 Q3 ’09 Q4 ’08 Housing & Hosting (x 1,000) − Housing services (# m2) 25.0 25.0 21.6 − Hosting services (# serve
Slide 86: KPIs Wholesale & Operations
KPIs Wholesale & Operations Wholesale & Operations Q4 ’09 Q3 ’09 Q4 ’08 Retail voice (without ADSL) 3,460 3,579 3,915 Local loop (x 1,000) MDF access lines1 3,743 3,751 3,702 – of which line sharing2 1,374 1,434 1,612 Unbundling (mn) 1.1 1.1 1.1 – Shared unbundled lines3 0.2 0.2 0.3 – Fully unbundle
Slide 87: KPIs Germany
KPIs Germany Q4 ’09 Q3 ’09 Q4 ’08 Market share1 – Service revenue 15.5% 15.8% 15.4% – Base 17.3% 17.1% 16.4% Customers (x 1,000) 18,987 18,712 17,777 – Of which new brands 13,461 13,018 11,340 – Post Paid 6,768 6,800 6,676 – Pre Paid² 12,219 11,912 11,101 Service revenues (€ mn) 751 779 761 ARPU (€)
Slide 88: KPIs Belgium (Mobile)
KPIs Belgium (Mobile)¹ Q4 ’09 Q3 ’09 Q4 ’08 Market share2 – Service revenue ~18% >17% >16% – Base >25% >25% >24% Customers (x 1,000) 3,578 3,560 3,445 – Post Paid 678 646 569 – Pre Paid3 2,900 2,914 2,876 Service revenues (€ mn) 171 167 159 ARPU (€) 16 16 16 – Post Paid 48 50 50 – Pre Paid 9 8 9 Non