Royal KPN NV · EURONEXT:KPN
Royal KPN NV — KPN — H1 2009 Earnings Presentation
81 slides from Royal KPN NV's earnings presentation, Jul 23, 2009
Slide 1: Half Year Results 2009
Half Year Results 2009 23 July 2009
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 Ad Scheepbouwer, Chairman and CEO Operating review Netherlands Baptiest Coopmans, MD Consumer Eelco Blok, MD Business/W&O/Getronics Operating review Mobile Int’l Stan Miller, MD Mobile International Concluding remarks Ad Sch
Slide 4: Highlights Q2
Highlights Q2 • Resilient results reflect continued focus on EBITDA and free cash flow, whilst maintaining market shares • Solid performance Dutch Telco business, strong EBITDA growth • Mobile International service revenues flat, Challenger strategy resulting in continued EBITDA growth • Early antic
Slide 5: Financial highlights
Financial highlights • Financial performance Q2 ’09 – Revenues and other income from existing operations € 3,411 mn, down 2.0% y-on-y – EBITDA of € 1,322 mn, up 5.3% y-on-y – Capex of € 386 mn, down 14% y-on-y – Free cash flow1 of € 739 mn, down 7.4% y-on-y – Earnings per share of € 0.22, up 10% y-o
Slide 6: Economic downturn
Economic downturn Impact predominantly apparent in business market Scenarios Impact so far • Consumer – No material impact, except roaming • Optimistic: ‘Short but painful’ • Business – ‘Normal’ recession – Decline traffic volumes and roaming – Requests for contract renegotiations • Most likely: ‘Su
Slide 7: Economic downturn (cont'd)
Economic downturn (cont’d) Pre-emptive and corrective measures paying off Measures taken Results • Reduction in temporary staff • Resilient financial performance given current market conditions • Tariff reduction of 20% for services from third parties • Reduction of ~1,000 FTE in temporary staff • R
Slide 8: Outlook
Outlook Confirming EBITDA and free cash flow outlook for 2009 and 2010 Reported1 Outlook Outlook • Focus on EBITDA and cash 2008 2009 2010 flow, rather than revenues • Confirming EBITDA, free cash Revenues and In line with € 14.0 bn € 13.6-13.8 bn flow and dividend projections for other income1 2009
Slide 9: FCF guidance 2009
FCF guidance 2009 On track to meet full-year guidance of ~€ 2.4 bn free cash flow for 2009 € mn EBITDA making € 150-200 mn from regular seasonality meaningful step in 2009 towards € 150-300 mn structural improvements 2010 target • accelerating current collections ~1,150 • optimized inventory managem
Slide 10: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Ad Scheepbouwer, Chairman and CEO Operating review Netherlands Baptiest Coopmans, MD Consumer Eelco Blok, MD Business/W&O/Getronics Operating review Mobile Int’l Stan Miller, MD Mobile International Concluding remarks Ad Sch
Slide 11: Group results
Group results Strong profitability across the group, lower revenues mainly due to iBasis € mn Q2 ’09 Q2 ’08 % YTD ’09 YTD ’08 % Revenues and other income (reported) 3,411 3,662 -6.9% 6,807 7,232 -5.9% – Getronics revenues (disposed) - 181 - 14 373 - Revenues and other income (existing) 3,411 3,481 -
Slide 12: Group cash flow Q2 '09
Group cash flow Q2 ’09 Free cash flow of € 0.7 bn in Q2 ’09 € mn Q2 ’09 Q2 ’08 % • Free cash flow of € 739 mn, Operating result 742 656 13% down 7.4% y-on-y Depreciation and amortization1 580 611 -5.1% – € 75 mn positive effect from Interest paid/received -123 -145 -15% tax prepayment in Q1 ’09 Tax
Slide 13: Dutch Telco business
Dutch Telco business Solid performance with flat revenues and EBITDA up 6.2% € mn Revenues and other income • Revenues and other income flat -0.2% y-on-y in Q2 ’09 – € 31 mn negative MTA impact – Expecting revenue pressure of € 60-80 mn from MTA in H2 ’09 1,842 1,862 1,832 1,824 1,838 1,787 • Contin
Slide 14: Dutch Telco business by segment
Financial review Dutch Telco business by segment Resilient revenue and profitability trends, despite economy and regulation € mn 22.7% 22.7% 23.7% 26.9% 21.5% 18.6% • Flat revenues, EBITDA up 19% y-on-y Consumer • Continued upward trend in wireless, 1,002 1,035 1,050 1,041 1,031 1,042 but impacted b
Slide 15: Getronics and iBasis results
Financial review the Netherlands by segment Improving performance at Getronics, iBasis focusing on margins € mn • Revenues improving in challenging 7.2% economic conditions Getronics (existing) − Down 1.3% y-on-y in Q2 ’09, in line 3.7% 3.2% with Q1 ’09 1.7% • EBITDA of € 9 mn in Q2 ’09 534 538 533
Slide 16: Mobile International by segment
Financial review Mobile International by segment Flat revenues and continued growth in EBITDA € mn 37.6% 38.1% 40.0% 38.9% 41.6% 41.8% • Revenues and other income down Germany 1.4% y-on-y 808 840 815 774 797 • € 20 mn MTA impact in Q2 ’09 755 • Continued strong EBITDA, growing by Q1 '08 Q2 '08 Q3 '0
Slide 17: Group financial profile
Group financial profile Redemption profile smoothed following tender offer for part of 2010 bonds € bn Debt Financing policy 13.6 13.7 13.0 11.9 12.1 12.1 2.5x 2.3 2.3 2.4 2.3 2.3 2.0x 2.2 11.7 11.7 11.8 10.9 11.3 10.9 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '
Slide 18: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Ad Scheepbouwer, Chairman and CEO Operating review Netherlands Baptiest Coopmans, MD Consumer Eelco Blok, MD Business/W&O/Getronics Operating review Mobile Int’l Stan Miller, MD Mobile International Concluding remarks Ad Sch
Slide 19: Strategic progress Consumer
Strategic progress Consumer Consumer strategy delivering results ‘Back to Growth’ strategy Achievements H1 ’09 Strengthen position as • Increase in EBITDA and margins leading consumer − Managing customer base for value service provider − Cost reductions from simplification • Net line loss at low lev
Slide 20: Wireline services
Wireline services Profitability increase driven by managing customer base for value € 29 30 29 30 30 • Managing customer base for value Customer • Stable ARPUs in increasingly value 26 25 26 25 26 competitive markets • Multi-brand strategy targeting different Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '0
Slide 21: Wireline services (cont'd)
Wireline services (cont’d) Net line loss of 50k, due to lower market growth in broadband X 1,000 PSTN/ISDN Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 • Success of retention offers driving substantial slowdown in PSTN/ISDN loss -112 -110 -103 -92 -77 loss since 2007 -190 -1
Slide 22: Fiber
Fiber Balanced approach in fiber rollout, evaluation of 2x5 cities by end of 2009 Key principles Current status and next steps • Fiber rollout driven by fast return on • Fiber initiatives in 2x5 cities, based on investment and proven customer FttC and FttH demand • Evaluation by end 2009, determinin
Slide 23: TV
TV Securing competitive position in Dutch TV market Current status TV Fiber 835 886 • Triple-play packages offered in focus 775 636 700 cities for FttC or FttH 553 497 296 337 414 • Video-on-Demand (VOD) with superior functionalities Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2
Slide 24: Wireless services
Wireless services1 Maintaining market leading position in wireless € mn • Service revenues up 11% in Q2 ’09 – Like-for-like growth rate of 3.7% y-on-y Service 465 477 (excluding Debitel) 394 429 441 423 revenues – Impact from MTA reductions of 4.0% • Some further headwind from regulation Q1 '08 Q2 '
Slide 25: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Ad Scheepbouwer, Chairman and CEO Operating review Netherlands Baptiest Coopmans, MD Consumer Eelco Blok, MD Business/W&O/Getronics Operating review Mobile Int’l Stan Miller, MD Mobile International Concluding remarks Ad Sch
Slide 26: Strategic progress Business
Strategic progress Business Solid performance in challenging markets ‘Back to Growth’ strategy Achievements H1 ’09 Benefit from leading • Solid financial performance in challenging position in infrastructure markets − Revenue growth slowing down to 0.2% YTD − Strong growth in EBITDA and margins − Ac
Slide 27: Business wireline
Business wireline Resilient performance in wireline services € mn • Revenues down 1.9% y-on-y in Q2 ’09 – Voice & internet down 4.4% y-on-y Revenues1 373 378 371 384 374 371 – Data network services up 4.7% y-on-y • Solid profitability as a result of focus Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 on
Slide 28: Business wireless
Business wireless Continued growth in data, gradual decline in voice mainly due to regulation € mn 234 243 238 244 247 246 • Service revenues almost flat – Decline in voice revenues, growth in Service data revenues revenues – Impact from MTA reductions of 3.7% • Some further headwind from Q1 '08 Q2
Slide 29: Economic impact in business market
Economic impact in business market Mitigating actions paying off Impact economic climate Actions taken and results • Focus on maintaining revenues and • Increase in requests for contract market share (LE / SME / SoHo) KPN Business renegotiations – Tightening profitability criteria for new contracts
Slide 30: Strategic progress Getronics
Strategic progress Getronics Improving performance despite challenging market conditions ‘Back to Growth’ strategy Achievements H1 ’09 • Improving revenue and profitability trends − Better than expected in challenging markets Benelux market leader • Created Benelux market leader following integratio
Slide 31: Getronics Q2 '09
Getronics Q2 ’09 Resilient performance in the Netherlands, contraction in International € mn Revenues • Resilient performance in the Netherlands +3% – Revenues up 3% y-on-y 534 538 531 585 528 531 – Improving underlying margins – Market shares maintained • Contraction in international operations – R
Slide 32: Global Workspace Alliance
Global Workspace Alliance Established strategic alliance in March to strengthen international operations Partners Key benefits • Getronics (founder) • Strong global presence for Getronics without • APX Synstar (France) need for own operations in each country • CompuCom Systems (US) • Providing globa
Slide 33: W&O National
W&O National Reduction in operating expenses in line with revenue decline € mn • Total revenues down 5.5% y-on-y -3.3% 759 766 741 755 735 724 • Internal revenues, mainly from Consumer and Business, down 6.2% Revenues 181 183 173 170 174 177 y-on-y 578 583 568 585 561 547 – Lower installed base – Lo
Slide 34: iBasis
iBasis1 Focus shifted to gross margin, KPN to launch cash tender offer for minority Margins 13.2% • Focus shifted to margins, rather than 10.9% 10.4% 12.1% revenues and volumes 10.3% 9.6% – Strong increase in gross margin, from 10.4% in Q2 ’08 to 13.2% in Q2 ’09 3.4% 3.5% 3.8% 4.4% – Reduced non-pro
Slide 35: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Ad Scheepbouwer, Chairman and CEO Operating review Netherlands Baptiest Coopmans, MD Consumer Eelco Blok, MD Business/W&O/Getronics Operating review Mobile Int’l Stan Miller, MD Mobile International Concluding remarks Ad Sch
Slide 36: Mobile International
Mobile International Focus on profitable growth with strong cash flow through Challenger model 935 952 943 • Service revenue growth 853 952 902 – Service revenues up 0.9% y-on-y revenues Service in Q2 ’09 – € 25 mn MTA impact in Q2 ’09, € 40-45 mn impact in H2 ’09 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09
Slide 37: Strategy going forward
Strategy going forward Confident to achieve outperformance with Challenger strategy Strategy going forward Regional approach • Unlocking substantial untapped market potential through further intensifying execution of Challenger Hamburg strategy Berlin Germany Dusseldorf • Expanding addressable marke
Slide 38: Strategy execution
Strategy execution Tactics for achieving ambition of 20-25% market share in next few years Tactics Examples • Capture untapped potential from • Move to SME/SoHo and high-value Fixed-Mobile low mobile share of voice Post Paid Substitution • Focus on voice, which will be • Further refining existing pr
Slide 39: Capex
Capex Network rollout and investments driven by return on capital employed € bn Capex Mobile International • Focus on optimizing network cost and 0.65 Capex per subscriber 0.61 0.52 0.57 – Capex relatively flat over past couple of 0.12 0.13 0.13 years, despite substantial growth in 0.12 subscriber b
Slide 40: Operating review Germany
Operating review Germany Flat service revenues in Q2, expecting increased growth in two to three quarters Net adds • Net adds of 197k in Q2 ’09 17.8 18.0 18.2 – 46k Post Paid net adds 16.2 17.0 15.4 – Increased churn of ~320k inactive, low- value Pre Paid customers in cultural segment 688 759 616 –
Slide 41: Operating review BASE
Operating review BASE Continued solid growth based on revitalized BASE propositions and wholesale Net adds • Customer base falling by 10k in Q2 ’09 3.1 3.2 3.4 3.5 3.5 – Clean-up of ~180k inactive Pre Paid 3.0 customers – Strong net adds in Post Paid of 29k 183 132 131 87 38 29 • Service revenue gro
Slide 42: Rest of World
Rest of World MVNOs in Spain and France on track, Ortel lagging behind but actions taken • Fastest growing MVNO with stable ARPU from value-for-money offers Spain • Growth accelerating following new Simyo marketing campaign • Continued growth from blau and wholesale partners • Expecting to become ca
Slide 43: Data strategy
Data strategy Data strategy based on those services that consumers want Data usage patterns (% of users) • Smart follower in wireless data MMS 32% 10% – Focus on consumer market, different requirements and usage patterns than Navigation 2% 25% in corporate markets – Investing in data networks now In
Slide 44: Spectrum
Spectrum Lobby for competitive level playing field for all operators Germany Belgium • Auction of over 360 MHz of spectrum • Spectrum allocation fairly balanced – 800 MHz, 1,800 MHz, 2.1 GHz, 2.6 GHz – Relatively less 900 MHz spectrum for KPN Group Belgium • E-Plus disadvantaged on 900 MHz, – Additi
Slide 45: Agenda
Agenda Chairman’s review Ad Scheepbouwer, Chairman and CEO Financial review Ad Scheepbouwer, Chairman and CEO Operating review Netherlands Baptiest Coopmans, MD Consumer Eelco Blok, MD Business/W&O/Getronics Operating review Mobile Int’l Stan Miller, MD Mobile International Concluding remarks Ad Sch
Slide 46: Operating principles
Operating principles Executing our strategy along clear principles Country-specific strategies Customer focus Multi-branding / distribution Price • Strategy tailored to local markets • Services based on customer needs Value • Integrated market leader in NL • No technology push • Segmented market app
Slide 47: Financing principles
Financing principles Prudent financing policy and strong focus on shareholder remuneration Prudent financing policy Growing dividend per share Share repurchases • Combining attractive • Targeting dividend per share of • Using surplus cash for share shareholder remuneration and € 0.80 in 2010 as part
Slide 48: Concluding remarks
Concluding remarks • Resilient results reflect continued focus on EBITDA and free cash flow, whilst maintaining market shares • Solid performance Dutch Telco business, strong EBITDA growth • Mobile International service revenues flat, Challenger strategy resulting in continued EBITDA growth • Early
Slide 49: Q&A
Q&A
Slide 50: 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 51: Analysis of results
Analysis of results Key items worth mentioning in results interpretation € mn Q2 ’09 Q2 ’08 YTD ’09 YTD ’08 Revenue effect MTA tariff reduction Group -56 -36 -81 -79 EBITDA effect MTA tariff reduction Group -32 -18 -43 -43 Book gain on sale of subsidiaries Other/W&O 6 Book gain on sale of real estat
Slide 52: MTA regulation
MTA regulation 15 Aug ’07 € cents per minute 1 July ’08 1 April ’09 1 July ’09 KPN 10.0 9.0 8.0 7.0 The Netherlands Vodafone 10.0 9.0 9.0 7.0 T-Mobile 11.4 10.4 10.4 8.1 Avg. asymmetry 1.4 1.4 2.4 1.1 • MTA tariffs valid from 1 April 2009 until 30 November 2010 Germany – T-Mobile / Vodafone lowered
Slide 53: Impact MTA reduction
Impact MTA reduction € mn Q2 ’09 YTD ’09 1 1 Revenues EBITDA Revenues EBITDA Germany -20 -10 -20 -10 Belgium -5 -3 -12 -9 Rest of World - - - - Mobile International -25 -13 -32 -19 Consumer -21 -15 -32 -19 Of which: Mobile Wholesale -4 -3 -6 -4 Business -9 -4 -14 -5 Wholesale & Operations -6 - -11 -
Slide 54: Restructuring charges
Restructuring charges € mn Q2 ’09 YTD ’09 Germany -1 -1 Belgium - - Rest of World - - Mobile International -1 -1 Consumer -5 -4 Business - - Getronics -26 -29 Wholesale & Operations -3 -5 The Netherlands -34 -38 Other 6 4 KPN Group -29 -35 54
Slide 55: Operating expenses
Operating expenses € mn Q2 ’09 Q2 ’08 % Salaries and social security contributions 541 438 24% Cost of materials 223 236 -5.5% Work contracted out and other expenses 1,182 1,335 -12% Own work capitalized -28 -23 22% Other operating expenses 171 409 -58% Depreciation1 391 407 -3.9% Amortization1 189
Slide 56: Analysis operating expenses: Salaries & Cost of materials
Analysis operating expenses Salaries & Cost of materials € mn Salaries Y-on-Y increase • € 199 mn release of pension provision in 18.0% Q2 ’08 16.1% 15.5% 16.1% 15.9% • Reduction in FTE due to disposals at Getronics 12.0% and restructuring 637 585 562 546 541 438 Q1 ’08 Q2 ’08 Q3 ’08 Q4 ’08 Q1 ’09 Q
Slide 57: Analysis operating expenses: Work contracted out & Other
Analysis operating expenses Work contracted out & Other € mn Work contracted out Y-on-Y decrease 37.0% • Lower traffic volume national and iBasis 35.7% 36.5% 36.7% 36.3% 34.7% • Lower number of temporary staff and consultants Q-on-Q decrease 1,335 1,332 1,338 • Further decline in traffic volume nati
Slide 58: Analysis operating expenses: Depreciation & Amortization
Analysis operating expenses Depreciation & Amortization € mn Depreciation1 Y-on-Y decrease • Lower asset base due to less Capex spending in 11.6% 11.1% 11.1% 11.0% 11.6% 11.5% prior years 409 407 401 397 392 391 Q1 ’08 Q2 ’08 Q3 ’08 Q4 ’08 Q1 ’09 Q2 ’09 Depreciation % of Revenues € mn Amortization1
Slide 59: Personnel
Personnel1 • Decrease of 7,474 FTE y-on-y – Reduction of 643 FTE in the Netherlands (excl. Getronics and acquisitions) – Reduction of 6,595 FTE at Getronics, mainly 43,409 from divestments 42,976 – Reduction of 319 FTE at KPN abroad, 38,919 mainly in call centers 8,372 8,240 36,702 35,638 35,502 4,8
Slide 60: Tax
Tax P&L Cash flow Fiscal units (€ mn) Q2 ’09 Q2 ’08 Q2 ’09 Q2 ’08 Dutch activities -98 -82 60 -85 Getronics 5 -1 - - German Mobile activities -53 -32 -1 - Belgian Mobile activities -10 -13 - - Other -2 - -1 - Total -158 -128 58 -85 • Higher tax expense in the Netherlands due to higher taxable income
Slide 61: Net cash flow from operating activities
Net cash flow from operating activities € mn Q2 ’09 Q2 ’08 YTD ’09 YTD ’08 Operating Result 742 656 1,374 1,304 Depreciation, amortization and impairments 580 611 1,182 1,194 Interest paid -123 -145 -281 -274 Income tax paid 58 -85 -554 -191 Other income -2 -8 -7 -23 Share based compensation 1 -1 7
Slide 62: Total cash flow
Total cash flow € mn Q2 ’09 Q2 ’08 YTD ’09 YTD ’08 Net cash flow from operating activities 1,120 1,177 1,179 1,825 1 Capex -386 -451 -842 -807 Acquisitions -20 -110 -100 -162 Disposals real estate 5 1 19 14 Disposals other 1 -9 48 -2 Other -5 -4 -3 -13 Net cash flow from investing activities -405 -5
Slide 63: Capex
Capex1 € mn Q2 ’09 Q2 ’08 % YTD ’09 YTD ’08 % Germany 83 119 -30% 225 187 20% % Revenues Germany 10% 15% 14% 12% Belgium 22 14 57% 40 32 25% % Revenues Belgium 11% 6.9% 10% 8.3% Rest of World 1 1 0% 2 3 -33% % Revenues Rest of World 4.5% 7.1% 5.3% 15% Mobile International 106 134 -21% 267 222 20% %
Slide 64: Balance sheet
Balance sheet Assets Equity & liabilities € bn € bn 24.2 24.4 23.9 25.1 24.3 24.2 24.4 23.9 25.1 24.3 3.7 3.2 5.7 4.0 3.5 5.7 5.7 3.8 5.7 5.7 1.4 1.4 1.3 3 1.4 1.3 Goodwill Group equity 3.1 3.3 3.2 3.2 3.0 Licenses Provisions 7.7 1 12.8 13.0 14.4 13.8 13.0 7.7 7.7 7.7 7.7 PPE Non-current liabilities
Slide 65: 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 April 59.2 6.2 9.55 May 119.3 12.9 9.27 June 20.2 2.1 9.31 Q2 ’09 198.7 21.2 9.36 July 40.5 4.1 9.82 Total 656.6 65.9 9.97 • € 1 bn share repurchase program for 2009 started on
Slide 66: Debt summary
Debt summary € bn Q2 ’09 Q1 ’09 Q2 ’08 Bonds 12.73 12.96 10.89 Eurobonds 10.68 10.62 9.13 Global bonds 2.05 2.34 1.76 Other debt 0.69 0.59 0.71 Other loans at Royal KPN1 0.14 0.14 0.06 Consolidated debt 0.55 0.45 0.65 Fair value financial instruments 0.32 0.08 0.50 Total debt 13.74 13.63 12.10 – of
Slide 67: Debt portfolio
Debt portfolio Breakdown of € 13.7 bn gross debt1 6% Financial 16% instrum ents 78% Other 2% Global bonds 5% 15% EUR USD2 GBP2 8% Eurobonds 92% 78% Fixed Floating (incl. swapped) 1 Book value of interest bearing financial liabilities plus the fair value of financial instruments related to these fina
Slide 68: Consumer voice market
Consumer voice market1 mn Q2 ’09 Q1 ’09 Q2 ’08 KPN PSTN / ISDN 2.19 2.27 2.57 Wholesale Line Rental (WLR) 0.43 0.41 0.36 Total traditional voice 2.62 2.68 2.93 KPN VoIP 1.14 1.13 0.98 Cable VoIP 1.35 1.32 1.17 Alternative DSL VoIP 0.37 0.35 0.32 Total VoIP 2.86 2.80 2.47 Cable voice analogue 0.04 0.
Slide 69: Unbundling tariffs
Unbundling tariffs SLU, ODF, colocation set by OPTA; backhaul and WBA based on deal pricing Unbundling in current network Category Monthly tariff Line sharing (LLU) € 0.19 / line MDF Node Fully unbundled (LLU) € 7.83 / line SDF colocation KPN / Telco MDF colocation € 874 / footprint / year ~28,000 1
Slide 70: Pricing: Triple-play packages FttH and FttC
Pricing Triple-play packages FttH and FttC Gold Silver Bronze Price per month € 110 € 80 € 65 Up to 100 Mb download 50 Mb download 30 Mb download Broadband 6 Mb upload 5 Mb upload 3 Mb upload >100 channels >70 channels >50 channels FttH TV (incl. football package) IPTV IPTV IPTV Unlimited calls to n
Slide 71: Service revenue growth Mobile International
Service revenue growth Mobile International Service revenue growth Germany Service revenue growth Belgium (BASE) 12.2% 11.0% 9.9% 9.5% 8.1% 8.0% 8.6% 6.8% 7.3% 7.4% 6.4% 6.2% 6.2% 5.5% 5.4% 4.1%4.1% 2.6% 3.1% 0.0% Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Reported Underly
Slide 72: Dutch wireless services disclosure
Dutch wireless services disclosure Q2 ’09 Q1 ’09 Q2 ’08 Service revenues (€ mn) 783 767 756 − Consumer 477 465 429 − Business 246 247 243 − Other Dutch activities1 60 55 84 SAC / SRC (€) − Consumer 116 139 150 − Business2 323 289 274 1 Indicates amongst others Mobile Wholesale NL, Simyo and visitor
Slide 73: KPIs Consumer Wireline Voice
KPIs Consumer Wireline Voice Voice Q2 ’09 Q1 ’09 Q2 ’08 Market share1 – Voice2 ~55% ~55% >55% – Traditional voice3 >75% >75% ~75% – VoIP 40% 41% 40% Market penetration VoIP 49% 48% 44% Access lines (x 1,000) 3,331 3,395 3,554 – PSTN 1,971 2,040 2,314 – ISDN 218 226 257 – VoIP (packages broadband and
Slide 74: KPIs Consumer Broadband, TV & Wireless
KPIs Consumer Broadband, TV & Wireless Broadband Q2 ’09 Q1 ’09 Q2 ’08 Market penetration Broadband1 80% 80% 78% Broadband ISP customers (x 1,000) 2,549 2,556 2,471 – KPN 1,155 1,145 1,108 – Het Net 681 684 672 – XS4ALL 286 289 286 – Other 427 438 405 Broadband ARPU (€) 30 31 29 TV Q2 ’09 Q1 ’09 Q2 ’
Slide 75: KPIs Consumer Wireless & Mobile Wholesale NL
KPIs Consumer Wireless & Mobile Wholesale NL Wireless Q2 ’09 Q1 ’09 Q2 ’08 – Customers1 (x 1,000) 1,616 1,592 1,424 – of which data users 44% 42% 38% – Service revenues (€ mn) 246 247 243 – ARPU (€) 51 53 58 – MoU (originating, terminating) 211 226 253 – SAC/SRC3 (€) 323 289 274 Mobile Wholesale NL2
Slide 76: KPIs Business Infrastructure Services
KPIs Business Infrastructure Services Wireline Q2 ’09 Q1 ’09 Q2 ’08 Market share voice1 ~50% ~50% >50% Access lines (x 1,000) 1,533 1,565 1,632 – PSTN 719 735 774 – ISDN 786 803 837 – VoIP 28 27 21 Business DSL 130.3 126.9 107.6 Traditional voice ARPU (€) 51 52 52 − Access 27 27 26 − Traffic 24 25 2
Slide 77: KPIs Getronics
KPIs Getronics Q2 ’09 Q1 ’09 Q2 ’08 Service revenues (€ mn) 495 448 466 Workspaces1 (in mn) – Serviced IT workspaces2 1.7 1.7 n.a – Serviced Voice workspaces 0.6 0.6 0.5 ICT Services Q2 ’09 Q1 ’09 Q2 ’08 Housing & Hosting (x 1,000) − Housing services (# m2) 24.9 24.9 15.4 − Hosting services (# serve
Slide 78: KPIs Wholesale & Operations
KPIs Wholesale & Operations Wholesale & Operations Q2 ’09 Q1 ’09 Q2 ’08 Retail voice (without ADSL) 3,694 3,804 4,182 Local loop (x 1,000) MDF access lines1 3,760 3,751 3,580 – of which line sharing2 1,494 1,548 1,726 Unbundling3 (mn) 1.1 1.1 1.0 – Shared unbundled lines 0.2 0.3 0.3 – Fully unbundle
Slide 79: KPIs Germany
KPIs Germany Q2 ’09 Q1 ’09 Q2 ’08 Market share1 – Service revenue 15.5% 15.4% 15.0% – Base 16.9% 16.4% 15.5% Customers (x 1,000) 18,235 18,038 16,163 – Of which new brands 12,313 11,908 9,387 – Post Paid 6,785 6,739 6,437 – Pre Paid2 11,450 11,299 9,726 Service revenues (€ mn) 757 734 757 ARPU (€) 1
Slide 80: KPIs Belgium (Mobile)
KPIs Belgium (Mobile) Q2 ’09 Q1 ’09 Q2 ’08 Market share1 – Revenue >17% >16% ~16% – Base >25% >25% ~24% Customers (x 1,000) 3,487 3,497 3,094 – Post Paid 612 583 533 – Pre Paid2 2,875 2,914 2,561 Service revenues (€ mn) 167 154 162 ARPU (€) 16 15 18 – Post Paid 50 47 53 – Pre Paid 9 8 11 Non-voice a
Slide 81: Cash tender offer iBasis
Cash tender offer iBasis On 13 July 2009 KPN announced its intention to launch a cash tender offer for all outstanding shares of iBasis, not already owned by KPN. KPN intends to offer USD 1.55 per share. Given the current challenging economic and competitive environment faced by iBasis, KPN believes