KPN plans rights issue after weak Q4 results

News General Netherlands 5 FEB 2013
KPN plans rights issue after weak Q4 results

KPN saw results deteriorate in the fourth quarter, mainly due to strong competition on the mobile market. Revenues fell 3.0 percent, or 2.4 percent on an underlying basis, to EUR 3.27 billion (including EUR 221 million in book gains). EBITDA fell 15 percent (underlying -16%) to EUR 1.12 billion, with the EBITDA margin losing almost 5 points to 34.2 percent. The operating result was EUR 129 million (-70%), and the net loss EUR 160 million (EUR 0.11 per share). The company's (reduced) targets for 2012 were reached as a whole, helped by asset sales. 

In the Netherlands, KPN said matters were stable; Germany meanwhile is heading towards a lower margin and lower sales growth.

KPN said it will be forced to hold a rights issue of EUR 4 billion to strengthen the balance sheet. An extraordinary general meeting (EGM) to approve the issue will follow on 19 March. KPN will also consider whether, subject to market conditions, part of the EUR 4 billion capital raised could be brought in through equity-linked or other capital instruments.

The operator has also formulated some new goals: 

  • Netherlands: the broadband market share must be at least 40 percent, and even 45 percent in the long term. 
  • Netherlands: the mobile market share must be at least 40 percent in the long term. 
  • Netherlands: KPN must lead the business/ICT market. 
  • Netherlands: the planned job cuts (4,000-5,000) will end in late 2013, but more efficiency measures will follow.
  • Netherlands: KPN wants an EBITDA margin of 40-45 percent in the medium term.
  • Germany: the operator wants a long-term market share of 20 percent, with a margin at 30-35 percent. 
  • Belgium: KPN will aim for a 25 percent market share, and 25-30 percent margin.

For 2013, KPN is currently guiding for:

  • Netherlands: stabilisation towards 2014.
  • Germany: lower margin.
  • Capex: up to a maximum EUR 2.3 billion. The total over 2013-2015 will be at EUR 7 billion, including Reggefiber, which will not be consolidated before H2 2014.
  • Dividend: EUR 0.03 in 2013 and 2014, and then a return to growth.
  • Net debt to EBITDA ratio: end 2013 at 2.0-2.5, due in part to the share issue which will push the ratio down by 0.9 point.

Categories:

General

Companies:

KPN,  Reggefiber

Countries:

Belgium,  Germany,  Netherlands

Tags:

Sales figures, Financial figures, Financial funding

Related Articles

NETHERLANDS 4 JUL 2014

KPN: new strategic plan, CFO needed

The confirmed sale of E-Plus in Germany has created fresh uncertainty at KPN. The stock market reacted as can be expected. Initially the share price rose in a relief rally, as the possible rejection of the sale by competition authorities was already somewhat priced in. Then the price dropped, as the possibility of KPN becoming a 'wallflower' on the market became more apparent. KPN is no longer a takeover candidate, but there are plenty of questions remaining for the Dutch operator.

GERMANY 23 JUL 2013

KPN sale of E-Plus long expected, but raises questions on strategy

KPN has agreed to sell its German mobile operator E-Plus to Telefonica. The Dutch operator will receive EUR 5 billion cash as well as a 17.6 percent stake in Telefonica Deutschland. A merger of E-Plus and Telefonica's O2, the third and fourth largest operators on the German market, has been rumoured for many years. As recently as last year the companies discussed a deal, but could not reach an agreement. They have now struck an agreement based on expected synergies (opex and capex) of EUR 5.0-5.5 billion.

NETHERLANDS 1 MEI 2013

KPN Q1 and rights issue: is EUR 4 bln in extra capital enough?

KPN recently announced its first-quarter results and the details of its rights offering. Underlying sales and EBITDA were down respectively 4.3 percent and 8.7 percent, and the EBITDA margin was at 34 percent. The rights issue is expected to raise EUR 3 billion, offering existing shareholders 2 new shares for every one share held, at a price of EUR 1.06 per share. This is a discount of 35 percent on the closing share price the day before the details of the issue were announced. The Dutch operator earlier ra

NETHERLANDS 25 APR 2013

KPN launches discounted share offering

KPN has launched its previously announced issue of 2.838 billion shares, at a price of EUR 1.06 each. The operator announced the issue on 20 February; it was then approved on 10 April at the company's AGM. The 2-for-1 share issue is at a 35.1 percent discount to an ex-rights price, a theoretical share price following the issue. The Dutch operator's largest shareholder, America Movil said it would subscribe to the issue pro rata for its 29.7 percent stake, and the rights offering is fully underwritten by a s

NETHERLANDS 23 APR 2013

KPN scraps dividend on weak Q1

KPN reported first-quarter revenues down 8.8 percent to EUR 2.91 billion, affected by the sale of Getronics International (-3.9), declining revenues at its units NetCo, Business, Germany and Consumer Mobile, and regulatory effects (-1.7%). Underlying revenues were 4.3 percent lower. Almost all KPN units witnessed sales declines this quarter, with the exception of Consumer Residential (+9.4%) and Mobile Wholesale (+2.4%). The results are in line with market expectations. KPN maintained its outlook but will s

NETHERLANDS 22 APR 2013

KPN Q1 preview: rights issue and mobile, broadband performance in focus

Dutch incumbent KPN will report its first-quarter results on 23 April. It's also expected to give more details on the earlier announced plans for a rights issue. Results will be affected by some small accounting changes (IAS 19) and the split-up of Corporate Market into KPN Business and IT Solutions (data centres, consulting, desktop management). Divestments and acquisitions will also affect the comparison with last year, including the takeover of assets from Reggefiber and Reggeborgh, the sale of Getronics

NETHERLANDS 7 MRT 2013

KPN now looking at capital increase of EUR 2 bln

KPN is still working on a final plan, assessing how much capital it can get and via which instruments, De Telegraaf reported. The original idea was a EUR 3 billion rights issue and the issue of hybrid capital instruments, bringing the total to EUR 4 billion. KPN is now looking at a capital increase of EUR 2 billion. The company will ask for the measure's approval at its upcoming AGM, scheduled for 10 April. According to Bloomberg, KPN and the banks involved have completed their roadshow, attracting enough i

NETHERLANDS 28 FEB 2013

Moody's gives low rating to KPN rights issue

Moody's has given a Ba1 long term rating to KPN's future rights issue, De Telegraaf reported. The credit rating agency have a negative outlook, saying the size and pay back of the company's hybrid debt remain dependent on market conditions. All the other KPN ratings and outlook remain unchanged. Fitch gave KPN's hybrid bonds, valued at EUR 1 billion, a BB-rating. KPN wants to raise a total of EUR 4 billion to reduce debt and to use for investments.

NETHERLANDS 27 FEB 2013

KPN publishes annual report

Dutch operator KPN has published its annual and corporate social responsibility reports for 2012. In the foreword, CEO Eelco Blok looked back at a tumultuous and challenging year and outlined the steps the company will take in future to successfully implement its strategy. The company will hold its AGM on 19 March.

NETHERLANDS 13 FEB 2013

America Movil demands changes at KPN - report

America Movil is seeking changes at KPN that may give it greater influence on the Dutch company's management before agreeing to support KPN's planned EUR 4 billion rights issue, people familiar with the matter told Bloomberg. America Movil, which holds a 28 percent stake in KPN, may impose conditions including a seat on KPN's board and the replacement of CEO Eelco Blok, the report said. America Movil will almost certainly not participate in the rights issue unless at least some conditions are met, according

BELGIUM 8 FEB 2013

KPN in Q4: FTTH adding more than LTE

KPN's results showed a further deterioration in the fourth quarter. In the end, 2012 as a whole came in at the low end of the Dutch operator's reduced targets. KPN expects the weaker profitability to continue (lower margins), forcing the company to also address its balance sheet through a rights issue worth EUR 4 billion. The leverage, net debt divided by EBITDA, was at 2.7 at the end of 2012, higher than KPN's targeted range of 2.0-2.5. If the planned buy-out of Reggefiber from Reggeborgh is included, the

NETHERLANDS 7 FEB 2013

Vodafone NL keeps stable customer base as Q3 sales dip 3.5%

Vodafone Netherlands reported preliminary operational revenues down 3.5 percent year-on-year to EUR 461 million for its fiscal third quarter 2012/13 to end December. Results were pulled down by less roaming and less calls made outside the bundle, both a result of the prevailing difficult economic conditions. The operator said it consolidated its market share. The number of connections remained steady at 5.3 million at the end of the quarter. The operator said on 10 January that it would reduce operational e

BELGIUM 5 FEB 2013

Base loses 286,000 customers in Q4

Belgian mobile operator Base lost another 286,000 customers in the fourth quarter, amid a continued clean-up of inactivity. Of the 3.424 million customers at year-end, 85 percent were considered active. Base's parent KPN said the clean-up in Q4 included 334,000 inactive Sims at MVNO Ortel. Excluding this, the operator added a net 48,000 new customers, of which 7,000 were postpaid. Traffic in Q4 was largely stable year-on-year at 1.6 billion, while minutes per customer increased 16 percent to 150. ARPU was u

GERMANY 5 FEB 2013

E-Plus ends 2012 with 23.4 million group customers

German mobile network operator E-Plus has reported full-year revenue of EUR 3.40 billion for 2012, up 5 percent from 2011, with revenue from mobile services up 1.6 percent to EUR 3.15 billion. Excluding negative regulatory effects, service revenue was up 2.1 percent. Smartphones accounted for over 80 percent of end device sales in 2012, with non-voice services accounting for 40 percent of revenue, up 4 percentage points year-on-year. EBITDA was down to EUR 1.29 billion in 2012, under pressure from price com

NETHERLANDS 5 FEB 2013

KPN FTTH customers rise sharply over 2012

KPN had 368,000 FTTH subscribers at New Year's. The figure grew sharply compared to previous quarters, boosted by the acquisition of a number of service providers, as well as by organic growth. In October, KPN asked Dutch competition watchdog the NMa for permission to take over Concepts, XMS, Edutel and KickXL. The operator added 126,000 FTTH customers in the fourth quarter. Of the total number, 109,000 take TV services (60,000 IPTV and 49,000 analogue), 100,000 take triple-play, and 116,000 broadband. It i

Just In

19 DEC 16:42

SLT-Mobitel launches 5G network in Sri Lanka

19 DEC 16:19

Dialog Axiata launches 5G network, connects 1.5 million subscribers

19 DEC 15:56

UK govt to ban AI-enabled nudification apps to protect women, girls

19 DEC 15:42

3 UK launches last-minute Christmas sale

Commentary

13:56

Video market set for slower growth ahead

11:38

Netflix buys Warner Bros to deepen content catalogue

11:11

KPN's mixed performance in Q3 raises questions for strategy day

15:26

Stock markets breaking records but what happened to Odido's IPO plans?

Background

01:04

The week in telecom: Wi-Fi bolt-ons take off to boost broadband growth, video market works on consolidation

01:39

The week in telecom: Netflix wins bidding for Warner Bros, Apple poaches new execs, Samsung debuts trifold

13:51

Proximus vs. Telenet: Proximus performs better in Q3 while Telenet uses up cash

14:16

Proximus Domestic still struggling with low margins

Complete profile

Before downloading the whitepaper, we would like to ask you to complete your profile with company and position. After confirming you will receive the white paper.