THE HAGUE (dpa-AFX) - Dutch telecommunication firm Royal KPN NV (KPN, KKPNY, KKPNF) announced the second wave of simplification program for the coming three years 2017 to 2019. It will realize at least 300 million euros additional savings per annum by the end of 2019, making at least 750 million euros in total since 2013. The additional savings will primarily be realized through further simplification and rationalization of back-end IT processes and systems, and network infrastructure.
KPN expects its adjusted EBITDA margin for The Netherlands to increase by at least three percentage points in the medium-term, compared to 2015. KPN has invested ahead of the curve and expects Capex intensity for The Netherlands to trend down towards 15 - 17% of sales in the medium-term. Together, these trends will result in strong free cash flow growth potential, also supported by lower interest payments and limited cash taxes in The Netherlands. KPN expects to distribute a large part of excess cash to its shareholders while remaining committed to an investment grade credit profile.
The company noted that its existing Simplification program is on track to realize run-rate savings (opex and Capex) of approximately 450 million euros per annum by the end of 2016, compared to the end of 2013.
Today, KPN's Board of Management will host a Capital Markets Day for investors and analysts. KPN will present its strategic priorities, which translate into its medium-term ambitions for the coming three to five years.
Consumer revenues are expected to grow further supported by increasing fixed-mobile penetration and growing revenues per household. In Business, KPN is focused on finalizing the transformation into a Business ICT service provider, which will result in improving profitability and stabilizing revenues.
Copyright RTT News/dpa-AFX