KPN’s FY20 sales, profits drop 3.9%, 8.7%; 5G network reaches 70% population

27 Jan 2021

Dutch fixed and mobile operator KPN reported a 2.8% year-on-year drop in revenues to EUR1.354 billion (USD1.645 billion) in Q4 2020 as growth in its Wholesale and Consumer Fixed divisions was offset by lower revenues in Business and Consumer Mobile segments. Full-year revenue reached EUR5.275 billion, down 3.9% y-o-y. Quarterly EBITDA was flat y-o-y at EUR561 million as the effect of lower revenues was offset by continued cost control measures, with annual EBITDA improving marginally (up 0.1%) to EUR2.320 billion. KPN posted a 4Q20 net profit of EUR174 million compared to EUR84 million in 4Q19 supported by tax revaluation, although FY20 net profit fell 8.7% to EUR561 million. CAPEX spending reached EUR289 million in Q4 2020, as full-year CAPEX increased by EUR33 million to EUR1.147 billion driven by accelerated fibre-to-the-home (FTTH) rollout and mobile network modernisation. FY20 fibre rollout CAPEX increased by EUR167 million, while combined other CAPEX was EUR135 million lower y-o-y.

KPN’s FTTH network footprint passed 2.784 million households by end-2020, up from 2.672 million at end-3Q20 and 2.465 million at end-2019. KPN will accelerate its fibre rollout to approximately 500,000 homes passed per year to cross the 50% national household coverage mark in 2023 and reach approximately 65% of Dutch homes by 2025. In its mobile network modernisation programme, 2,803 sites boasted the latest RAN equipment by end-2020, up from 2,210 three months earlier and 641 sites at end-2019, in turn enabling KPN’s 5G services – launched in July 2020 – to reach 70% of the population by the year-end.

KPN CEO Joost Farwerck stated: ‘During the year we saw encouraging base developments in our Consumer segment with growth in our post-paid [mobile] base and a stabilising broadband base driven by fibre. Encouragingly, this quarter fibre service revenue growth outweighed the loss on copper service revenues for the first time. Although we face COVID-19 related headwinds in the Business segment, we are on track to migrate our SME and LCE [large corporate/enterprise] customers to a future-proof proposition and we see growth on our core products broadband and mobile.’ 87% of KPN’s SME customers had migrated from legacy services (traditional fixed voice and/or legacy broadband/data) by end-2020, up from 74% at end-2019, while 76% of LCE customers had migrated (2019: 53%), which the telco said was ‘on track’ with its aim for 100% migration in 2021. TeleGeography notes that clients can switch to ‘future-proof’ alternative packages including ‘Small Business’ (up to ten employees), ‘EEN MKB’ (up to 150 employees), ‘Smart Combinations’ (>150 employees, launched in 2019 to combine network, ICT and security services), ‘Business Connect’ or ‘Smart Integration’ (introduced in 2020 for KPN’s ‘top 100 business customers’).

Netherlands, KPN