Royal Kpn Nv · EURONEXT:KPN
Royal Kpn Nv — KPN — Investor Day (May 2011)
28 slides from Royal Kpn Nv's investor day presentation, May 10, 2011
Slide 1: KPN Investor Day: Group strategy
KPN Investor Day: Group strategy Strengthen - Simplify - Grow London, 10 May 2011
Slide 2: Safe harbor
Safe harbor Non-GAAP measures and management estimates This financial report contains a number of non-GAAP figures, such as EBITDA and free cash flow. These non-GAAP figures should not be viewed as a substitute for KPN’s GAAP figures. KPN defines EBITDA as operating result before depreciation and im
Slide 3: Agenda
Agenda Group strategy Eelco Blok, CEO Simplification and quality Baptiest Coopmans Finance Carla Smits-Nusteling, CFO Concluding remarks Eelco Blok, CEO 3
Slide 4: 2015 strategic vision: Focus on core principles
2015 strategic vision Focus on 3 core principles • Market positions in the Netherlands • Cost leadership (synergies, outsourcing/off-shoring) Strengthen • Financial framework (tax, treasury) • Reputation & Quality • Portfolio of businesses & Innovation Simplify • Customer offerings and processes • O
Slide 5: Strategy highlights
Strategy highlights • Anticipating changing industry dynamics • Building on a strong platform and management team • Balancing interests of customers, employees, and shareholders • Making fundamental choices – Strengthening market leadership in the Netherlands – Growing successful Challenger model –
Slide 6: KPN Group profile
KPN Group profile Building on our strong platform and management team Industry-leading incumbent Successful Challenger • Market leader in the Netherlands • Growing profitability in Germany and – Fixed and mobile Belgium – Strong growth in digital TV • Ortel leading in cultural segment • Leading ICT
Slide 7: Macro trends
Macro trends Global forces impacting KPN Changing demographics Digital world • Ageing: ~35% (Netherlands), >40% • Communication anytime, everywhere (Germany, Belgium) of population aged above 50 • Increasing role of social media and apps • Cultural minorities: ~20% of Western-European population • W
Slide 8: Telecom trends
Telecom trends New technologies and services are redrawing the landscape Multifunctional devices Broadband technologies Mobile Fixed • Smartphones FTTH • Road to 4G • Tablets • xDSL upgrades LTE – Pair bonding • Internet TV HSPA+ Copper Euro- – Vectoring ++ Docsis3 – Phantoming • Connected game Euro
Slide 9: Current trends amongst early adopters
Current trends amongst early adopters Use of applications lead to accelerating decline in SMS & out of bundle revenues (Advanced) smartphone penetration1 18% 18% 19% 18% 18% 30% 28% 14% 18% 20% Growth in outgoing SMS per customer 5% 10% 6% 8% y-on-y Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q
Slide 10: 2015 strategic challenges
2015 strategic challenges Input from customers, employees and shareholders Stakeholder input 2015 strategic challenges • High-quality • Customer service centricity experience Dutch market positions • Investment in the future • Value for money Our • Group-wide collaboration customers Continued profit
Slide 11: 2015 strategic objectives
2015 strategic objectives Strengthen - Simplify - Grow Consumer Consumer Business market - Cost wireline wireless Getronics leadership • >45% broadband • Successful migration • Further step-by-step • Reduction of market share1 of voice to data integration of 4,000-5,000 FTE • RGUs2 per • Sustained m
Slide 12: Operational structure
Operational structure Board of Management Mobile Dutch Telco Getronics iBasis International Rest Consumer Business Wholesale & IT NL Germany Belgium of market market Operations World Dutch Telco to report to Eelco Blok Thorsten Dirks CEO of Mobile International and CEO of E-Plus 12
Slide 13: Consumer wireline and Consumer wireless
Consumer wireline and Consumer wireless Strategic initiatives Key 2015 objectives Consumer • Customer-centric value proposition • >45% broadband wireline differentiated from competitors market share • Hybrid FttH-VDSL network strategy • RGUs per • Long-term fiber ambition (Reggefiber JV) connection
Slide 14: Business market and Getronics
Business market and Getronics Strategic initiatives Key 2015 objectives Business market, • Getronics rebranding to KPN in 2011 • SME/SoHo challenger brand • Further step-by-step Getronics • Focus on the Netherlands & Belgium integration of • Cloud services, video-conferencing Business and • Targeted
Slide 15: Germany, Belgium, Rest of World, iBasis
Germany, Belgium, Rest of World, iBasis Strategic initiatives Key 2015 objectives Germany • Grow challenger model through data • Private label smartphone offering • >20% market share • HSPA+ network and LTE pilots with 35%-40% EBITDA • Sufficient spectrum for data margin • Further exploit regionaliz
Slide 16: FTE reduction program
FTE reduction program Entering a next phase in cost optimization • Scope for off-shoring & outsourcing FTE 800-1,100 4,000-5,000 – Dutch Telco: back 1,400-1,700 office, network and IT 1,800-2,200 – Getronics: back office Off-shoring Out- Efficiency Total • Cost advantage sourcing – ~20-30% for outso
Slide 17: Agenda
Agenda Group strategy Eelco Blok, CEO Simplification and quality Baptiest Coopmans Finance Carla Smits-Nusteling, CFO Concluding remarks Eelco Blok, CEO 17
Slide 18: Simplification and quality management
Simplification and quality management Driving customer satisfaction and reputation in the Netherlands Key 2015 objectives ‘First time right’ Net Promoter Score Reputation ranking NL1 End-to-end service chain Rising above industry level 1 Philips 77 Company 1 2 Rabobank 76 Company 2 3 KLM 73 Company
Slide 19: Simplification and quality management (cont'd)
Simplification and quality management (cont’d) Driving customer satisfaction and reputation in the Netherlands KPN brand Quality program 1 • One purpose and clear customer 1 • Visual and daily top leadership promises across segments commitment for quality 2 • Simplification of customer 2 • Product p
Slide 20: Simplification and quality management (cont'd)
Simplification and quality management (cont’d) Driving customer satisfaction and reputation in the Netherlands Clear examples of value creation for customer and organization Customer calls Call center re-design -/- ~25% Online self-care • Easy routing • Shift focus website • Multi-skilled agents fro
Slide 21: Agenda
Agenda Group strategy Eelco Blok, CEO Simplification and quality Baptiest Coopmans Finance Carla Smits-Nusteling, CFO Concluding remarks Eelco Blok, CEO 21
Slide 22: Detail on Q1 '11 results announcement
Detail on Q1 ’11 results announcement Strengthening Dutch Telco Outlook adjustment 2011 Negative trends Dutch Telco • Consumer wireless Previous EBITDA outlook >€ 5.5bn − Substitution voice, SMS by data − Competition in lower value segment Negative trends Dutch Telco ~€ 100m • Business – of which Co
Slide 23: Finance optimization
Finance optimization Further optimizations driving free cash flow Annual savings as of 2012 Capex efficiency & procurement savings Capex & • Savings from network equipment Procurement • Further optimization of Group purchasing ~€ 100m • Capex efficiency by integrated technology roadmap Tax benefits1
Slide 24: Strategy 2015 - financing principles
Strategy 2015 - financing principles Strong commitment to prudent financing and sustainable shareholder remuneration Prudent financing policy Growing dividend per share Share repurchases 0.95 € 0.90 ≥0.85 2.5x 2.2 2.3 2.3 2.2 2.2 2.0x 0.80 0.69 0.54 0.60 2007 2008 2009 2010 2011 2012 2013 Q1 '10 Q2
Slide 25: Outlook
Outlook Reported Outlook 2010 2011 EBITDA € 5.5bn >€ 5.3bn1 Capex € 1.8bn <€ 2bn Free cash flow2 € 2.4bn Growth3 Dividend per € 0.80 ≥€ 0.85 share • € 1bn share repurchase program for 2011 continued • Outlook 2012: – Free cash flow2: ~€ 2.4bn – DPS: € 0.90 • Outlook 2013: – DPS: € 0.95 1 Excluding 2
Slide 26: Agenda
Agenda Group strategy Eelco Blok, CEO Simplification and quality Baptiest Coopmans Finance Carla Smits-Nusteling, CFO Concluding remarks Eelco Blok, CEO 26
Slide 27: 2015 strategic vision: Focus on core principles
2015 strategic vision Focus on 3 core principles • Market positions in the Netherlands • Cost leadership (synergies, outsourcing/off-shoring) Strengthen • Financial framework (tax, treasury) • Reputation & Quality • Portfolio of businesses & Innovation Simplify • Customer offerings and processes • O
Slide 28: Q&A
Q&A