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Strong financial performance in 2006; Free cash flow in excess of EUR 2bn in each of ’07, ’08 and ’09, EUR 2bn shareholder returns for 2007



Den Haag, 6-2-07

2006 full year strong financial performance

  • Growth revenues and EBITDA in Mobile ahead of declines in Fixed
  • Guidance twice raised and subsequently met on all metrics
  • Revenues and other income up 1.0% to EUR 12.1bn, 1.3% up per guidance
  • EBITDA up 2.4% to EUR 4.8bn, 5.4% up per guidance
  • Free cash flow of over EUR 2.4bn, EPS up 20% to EUR 0.79

Q4 operational performance in line with first three quarters

  • Growth of revenues and EBITDA in Mobile (excluding NTT DoCoMo transaction) ahead of declines in Fixed
  • Decline in ‘Other’ revenues and EBITDA mainly on account of Xantic deconsolidation and Fixed-Mobile integration expenses

Mobile outperforming the market

  • Revenues and margin up in all three countries
  • E-Plus Q4 service revenues up 10%, full year EBITDA margin up 7.5% points y-on-y
  • KPN Mobile the Netherlands organic market share gains and improved
  • BASE increased market share and EBITDA margin

Fixed division resilient

  • Slow down in net line loss rate, supported by strong growth in VoIP
  • Over half a million households now using KPN VoIP
  • Continued growth in broadband and TV
  • Position in Business strengthened with acquisitions and contract wins

All-IP transformation on track

  • FTE reduction on track
  • Additional Capex for All-IP estimated at EUR 0.9bn (previously EUR 1.0 – 1.5bn)
  • Value of real estate confirmed at approximately EUR 1.0bn

Shareholder returns of EUR 2.6bn in 2006

  • EUR 1.0bn in dividends and EUR 1.6bn in share repurchases
  • Final 2006 dividend proposed of 34 cents, total dividend 50 cents, up 11%

EUR 2.0bn shareholder returns for 2007

  • Total dividend for FY 2007 will be at least EUR 950m
  • EUR 1.0bn of share repurchases in 2007, commencing tomorrow

Ad Scheepbouwer, CEO of KPN, said:

“We’re pleased to be reporting strong financial performance for 2006 and great progress on our strategic priorities. Key milestones delivered in 2006 were a turnaround of E-Plus and more than 500,000 VoIP customers in the Netherlands. Overall, we are on track to achieve the ambitious objectives we set in early 2005. As a result, we are confident that we will maintain cash generation above the EUR 2.0bn mark in the transformation years 2007, 2008 and 2009, despite the company turning into a tax paying position in 2007. This allows us to communicate today EUR 2.0bn of shareholder remuneration for 2007.”

Press release is available for download here