Royal KPN NV · EURONEXT:KPN
Royal KPN NV — KPN — FY2017 Earnings Presentation
14 slides from Royal KPN NV's earnings presentation, Mar 9, 2018
Slide 1: Restated figures for 2017
Restated figures for 2017 9 March 2018
Slide 2: Safe harbor
Safe harbor Alternative performance measures and management estimates This financial report contains a number of alternative performance measures (non-GAAP figures) to provide readers with additional financial information that is regularly reviewed by management, such as EBITDA and Free Cash Flow (‘
Slide 3: Executive summary
Executive summary Main reporting changes in restated figures for 2017 Financial results restated for accounting under IFRS 15 New revenue breakdown for Business segment Product view provides improved visibility on trends within Communication services and growth buckets, such as IT services B
Slide 4: Main changes
Main changes 1. IFRS 15 2. Revenue breakdown Business
Slide 5: IFRS 15 changes revenue recognition rules
IFRS 15 changes revenue recognition rules Different timing revenue recognition impacting revenues and EBITDA FY ’17 (€ m) IFRS 15 Delta vs. IAS 18 Adjusted revenues KPN Group 6,371 -129 Adjusted EBITDA KPN Group 2,309 -108 Free Cash Flow (excl. TEFD dividend) 744 No change Equity (per 01/01/2017)1 3
Slide 6: IFRS 15 mainly impacts recognition of Consumer revenues
IFRS 15 mainly impacts recognition of Consumer revenues Largely driven by different timing of revenue recognition of handset transactions IFRS 15 impact on segment revenues Consumer postpaid ARPU €m 6,500 € 24 18 6 108 6,371 15 6 IAS 18 Handset IFRS 15 component Adj. revenues Consumer Business Whole
Slide 7: Example 1: Handset sales via own channels
Example 1: Handset sales via own channels Accounting for this example Contract components (€) Value Revenue / (€) Month 1 Month 2 … Month 24 Total cost Non-service revenue (handset) 528 - … - 528 Contract duration (months) 24 Service revenues 30 30 … 30 720 P&L Monthly subscription 50 1,200 Total re
Slide 8: Example 2: Handset sales via third parties
Example 2: Handset sales via third parties Accounting for this example Contract components (€) Value Revenue / (€) Month 1 Month 2 … Month 24 Total cost Service revenues 30 30 … 30 720 Contract duration (months) 24 P&L Total revenues 30 30 … 30 720 Monthly subscription 50 1,200 Opex (SAC) -5 -5 … -5
Slide 9: Main changes
Main changes 1. IFRS 15 2. Revenue breakdown Business
Slide 10: Simplified Business portfolio in 2017
Simplified Business portfolio in 2017 Reporting to be aligned with strategic focus Changing customer needs… Tailor made single Standardized Traditional Cloud-based (IT) Platform Shared access & OTT play solutions bundled services on-premise services services specific access (IPVPN, SDN) …require a s
Slide 11: New product-based revenue breakdown in Business
New product-based revenue breakdown in Business Fully reflecting operational model Portfolio Includes Communication services SME, LE and Corporate single-play mobile service revenues Mobile service revenues KPN ÉÉN SME & LE (multi play) and other integrated mobile service revenues M2M mobile service
Slide 12: New product-based revenue breakdown in Business (cont'd)
New product-based revenue breakdown in Business (cont’d) (€ m) 2017 Q4 ’17 Q3 ’17 Q2 ’17 Q1 ’17 Communication services 1,444 358 357 359 370 Mobile service revenues 536 130 132 137 137 IoT 45 13 13 11 8 Broadband & Network services 368 92 93 91 92 Fixed voice 306 69 75 79 83 Other 189 53 44 41 50 IT
Slide 13: New product-based revenue breakdown in Business (cont'd)
New product-based revenue breakdown in Business (cont’d) How our previous reporting… …corresponds with our new reporting Communication services Multi play 1 Mobile service revenues 1 3 5 Mainly 2 SME Traditional fixed IoT 6 Single play wireless 3 Broadband & Network services 1 2 4 LE&Corporate Netwo
Slide 14: Changes in Business KPIs
Changes in Business KPIs Mobile ARPU Broadband ARPU € € 29 71 23 42 IAS 18 IFRS 15 IAS 18 IFRS 15 (mobile-only; (all mobile (fixed-only (incl. LE mainly SME) subscribers) broadband broadband mainly SME) subscribers) Q4 ’17 Q4 ’17 Now based on IFRS 15 and also includes Now also includes Large Enterpr