Operational highlights
• Solid performance in competitive Consumer market
? Record-high Consumer NPS of +17 (Q1 2018: +11)1
? +61k fixed-mobile postpaid customers, reaching 59% of postpaid base (Q1 2018: 53%)
? +14k fixed-mobile households, reaching 46% of broadband base (Q1 2018: 43%)
? Fixed ARPU increased 5.4% y-on-y to € 46; postpaid ARPU decreased 5.0% y-on-y to € 17
? +1k2 broadband, +16k IPTV and -6k postpaid net adds
• Progressing with customer migrations in Business
? Record-high Business NPS of +3 (Q1 2018: -5)1
? 50% of SME customers migrated from traditional fixed voice or legacy broadband services, negatively impacting Business revenues in short term
• Solid start to new cost savings program: € 27m net indirect opex savings3
• Full focus on the Netherlands; sale of iBasis completed on 7 February 2019
Key figures* Group financials (unaudited) Q1 2018 Q1 2019 ? y-on-y (in € m, unless stated otherwise) Adjusted revenues** 1,402 1,362 -2.9% EBITDA 598 570 -4.7% Adjusted EBITDA after leases** 565 563 -0.3% As % of Adjusted revenues 40.3% 41.4% Operating profit (EBIT) 216 189 -12% Net profit 99 89 -10% Capex 236 261 11% Free cash flow*** (excl. TEFD dividend) 121 69 -43%
* All non-IFRS terms are explained in the safe harbor section
** Adjusted revenues and adjusted EBITDA after leases reconciliations to be found on page 8
*** After leases
Financial highlights
• Adjusted revenues 2.9% lower y-on-y
? Growth in bundled services in Consumer and Professional Services in Business
? Offset by a decline in legacy services and continued pressure in mobile
• Adjusted EBITDA after leases in line with last year
? Effect of lower revenues offset by savings from accelerated simplification and digitalization
• Net profit 10% lower y-on-y
? Impacted by € 23m higher restructuring costs y-on-y, partly offset by lower net finance costs and lower income taxes
• Free cash flow (excluding TEFD dividend) of € 69m
? Decline y-on-y mainly driven by higher restructuring costs and higher Capex
? Higher Capex y-o-y mainly due to accelerated FttH roll-out
? Interest costs and change in working capital in the quarter reflecting intra-year phasing
1 2018 restated as result of recalibration of relative weights of underlying businesses
2 Corrected for migrations to, and new customers of, small business proposition (8k)
3 Net savings in adjusted indirect opex after leases

Message from the CEO, Maximo Ibarra
“Our performance in the first quarter reflects a mix of an ongoing competitive environment and the impact of the execution of our strategic actions. We are making good progress with the accelerated simplification and digitalization of our company, which delivered significant cost savings in the first quarter. On the other hand, in Business, customer migrations to our future proof KPN EEN portfolio and ‘value over volume’ approach had an adverse effect on revenues. We achieved Adjusted EBITDA AL in line with last year, and we are confident to deliver on our full-year outlook.
Customer satisfaction has increased in both Consumer and Business, a clear indication that our customers appreciate the quality of the connectivity and services we deliver. In addition, we announced our brand strategy to fully focus on the KPN brand. This will enable us to drive growth in the profitable convergence segment, as well as to further drive simplification of our company. As part of our accelerated FttH roll-out strategy, we opted to deploy the latest PON technology to strengthen the performance of our fiber network. This will make symmetrical speeds of up to 10Gbps possible, providing a true future-proof connection for our customers.”
IFRS 16 and financial KPIs
KPN adopted the IFRS 16 accounting standard, effective as of 1 January 2019. Under IFRS 16, lease expenses are reported below EBITDA. As a result, KPN introduced the following financial KPIs, taking into account the full impact of leases:
• Adjusted EBITDA after leases (‘Adjusted EBITDA AL’);
• Adjusted indirect opex after leases;
• Free cash flow after leases (‘FCF’); and
• Leverage ratio, defined as ‘Net debt (excl. all leases)’ divided by ‘Adjusted EBITDA AL’.
Outlook 2019 and 2019 – 2021 ambitions
Following the introduction of IFRS 16, KPN’s outlook and 2019 – 2021 ambitions now reflect the following KPIs: Adjusted EBITDA AL and FCF.
Outlook 2019 2019 – 2021 ambitions Adjusted EBITDA AL In line with 2018 Organic growth Capex € 1.1bn Stable at € 1.1bn annually FCF (excl. TEFD dividend) Front-end loaded restructuring charges leading to incidentally lower FCF compared with 2018 Three-year mid-single digit CAGR* driven by EBITDA AL growth Regular DPS € 12.5 cents Progressive dividend, supported by FCF
* Three-year CAGR calculated from the end of 2018 to the end of 2021
Shareholder remuneration and financial profile
KPN intends to pay a regular dividend per share of € 12.5 cents in respect of 2019. KPN aims for sustainable FCF (excl. TEFD dividend) growth, driving a progressive regular dividend per share and deleveraging.
At the end of Q1 2019, KPN owned a stake of 3.5% in Telefónica Deutschland, which provides KPN with additional financial flexibility and is treated as a financial investment.
KPN remains committed to an investment grade credit profile and aims for a leverage ratio of <2.5x in the medium-term (Q1 2019: 2.5x). In Q1 2019, S&P upgraded KPN’s credit rating to BBB with a stable outlook, from BBB- with a positive outlook. Furthermore, KPN has a credit rating of BBB with a stable outlook from Fitch Ratings and Baa3 with a stable outlook from Moody’s.

All related documents can be found on KPN’s website:
ir.kpn.com

tijd 09.25
KPN EUR 2,674 -1,1ct vol. 1,6 milj.