KPN reported fourth-quarter revenues down 8.1 percent year-on-year to EUR 1.75 billion, and adjusted EBITDA fell 7.6 percent to EUR 582 million. Excluding a tax refund, organic revenues fell 5.9 percent. KPN reported continued growth in customers, but suffered from the weak enterprise market, declining traditional services and some changes in mobile pricing. The company said its simplification programme delivered EUR 280 million in annual savings by the end of 2015, and it upgraded its target for total savings to EUR 450 million by the end of 2016.
Net profit improved to EUR 254 million in Q4 compared to a loss of EUR 16 million a year earlier, thanks to a profit on the sale of shares in Telefonica Deutschland. Part of the sale proceeds will go to a special dividend of 13 cents per share, to be paid June 2016. KPN reduced investments by 14 percent in the quarter to EUR 355 million, helping free cash flow return to a positive EUR 223 million versus a negative 179 million a year ago. For 2016, the Dutch operator forecast stable EBITDA, capital expenditure down slightly to EUR 1.2 billion, free cash flow of EUR 650 million versus 698 million last year, and an increase in the dividend to EUR 0.10 per share from EUR 0.8.
The company's consumer residential division showed sales growth of 2.3 percent in the quarter to EUR 491 million, and EBITDA rose 3.1 percent to EUR 99 million. KPN gained another 40,000 broadband customers in the three months, as well as 69,000 new IPTV customers and 46,000 triple-play subscribers. The share of broadband customers also taking mobile services from KPN rose to 28 percent from 17 percent a year ago. At year-end, the company delivered 100 Mbps or more to 68 percent of households in the Netherlands, up from 51 percent at end-2014. It also increased its broadband market share to 41 percent from 40 in 2014, and the TV market share rose to 29 percent from 26. ARPU was stable at EUR 44.In consumer mobile, revenues were up 4.3 percent to EUR 367 million, and adjusted EBITDA jumped 25.6 percent to EUR 49 million. KPN added 88,000 postpaid subscribers in the quarter and said 50 percent took a data bundle of 5 or 10 GB, up from 30 percent a year ago. The operator also increased the share of contract customers also taking fixed services to 33 percent (1.1 million) from 21 percent in 2014. KPN confirmed it's testing VoLTE and plans to launch the service in 2016.
The main weak spot in the quarter was the enterprise division, where revenues fell 10 percent to EUR 672 million, and adjusted EBITDA was down 22.8 percent to EUR 115 million. Revenues from traditional services continued to fall, and hardware sales were also lower. KPN has responded with simplifying its product offer, lowering costs and introducing new services. It still lost 4,000 business mobile customers in the three months, and mobile ARPU fell to EUR 33 from EUR 37 a year ago. The number of fixed lines fell to 719,000 from 864,000 at the end of 2014, while fixed ARPU was stable at EUR 51.
