KPN targets EUR 300 mln cost savings in new strategic plan

Nieuws Algemeen Nederland 7 MAR 2016
KPN targets EUR 300 mln cost savings in new strategic plan
KPN has unveiled its new strategic plan at its annual Capital Markets Day. The previous plan from 2011 was known as 'Simplify, grow and innovate' and the latest version is headed 'Strengthen, simplify and grow'. The focus is on customer satisfaction, which should support growing revenues on the consumer market. 

The Dutch operator aims to increase the number of customers and the number of services per customers. KPN Business will also work in improving its organisation, which should lead to stabilising revenues and improved profitability. Networks will also be integrated more and include more fibre. 

KPN's ongoing cost-reduction programme targets savings of EUR 450 million compared to 2013. Further simplification is expected to lead to another EUR 300 million in savings in the period 2017-19. This will be based on simplifying and rationalising IT, systems and networks. This should also contribute to improved quality of services and customer satisfaction. The Dutch activities should see an improvement in the EBITDA margin of at least three percent points in the medium term compared to 38.3 percent in 2015. 

KPN said it invested "ahead of the curve" and can now reduce capex to 15-17 percent of revenue in the medium term, after 20.8 percent last year. This, along with lower interest and taxes, should lead to strong growth in free cash flow and growth in dividends. Any excess cash will be returned to shareholders. 

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