KPN Results for the period ending September 30, 2007

Tuesday, October 30th, 2007
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Q3 results: solid performance, on track to meet guidance
– Revenues and other income flat at EUR 3.0bn, YTD -0.5% or -0.7% per guidance
– EBITDA up 1.8% at EUR 1.2bn, YTD 0.0% or -0.1% per guidance definition
– Capex of EUR 0.4bn, YTD EUR 1.0bn
– Free cash flow of EUR 0.6bn, YTD EUR 1.8bn
– EPS up 12% to EUR 0.19 driven by continued share repurchases
Mobile International: continued profitable growth
– E-Plus postpaid net adds accelerating, EBITDA up 22% YTD, margin well above 35%
– New propositions and strengthened distribution through acquisitions by BASE
The Netherlands: resilient performance, increasing share of new services
– Consumer line loss improved (lowest since Q3 2005), record TV net additions
– Continued growth in Business, EBITDA up 14%, driven by new IP-based services
– Business profile strengthened by iBasis merger and Getronics acquisition
– In former Fixed decelerating revenue and EBITDA decline (lowest since Q1 2006)
All-IP strategy: well on track to migrate to IP-based network and services
– Preparations for All-IP mass rollout at advanced stage, installation capacity committed
– Sale of real estate top portfolio (~EUR 300m) in H1 2008 under consideration
Shareholder returns: increased to EUR 2.5bn
– Interim dividend of EUR 0.18 per share paid in August, EUR 337m in total
– EUR 1bn share repurchase program accelerated and completed in August
– Additional EUR 0.5bn program started in September, 47% completed to date

At of September 30, 2007, KPN served 5.5 million wireline voice subscribers, 9.1 million mobile customers, 2.6 million Internet customers and 0.4 million TV customers in the Netherlands as well as 16.8 million mobile customers in Germany and Belgium. With 27,155 individuals (24,890 FTEs), KPN posted revenues of EUR 8.9bn, with an EBITDA of EUR 3.7bn in the period January – September 2007.

TV growth accelerating, driven by new strategy

The successful re-launch of KPN’s new TV business model has played an important role in generating record levels of new KPN TV customers. In Q3 KPN recorded 77k new KPN TV customer additions, the highest since the launch of its DVB-T product ‘Digitenne’. At the end of the third quarter KPN had 414k TV subscribers, representing a 17% share of the Dutch digital TV market, up 3% points compared to the previous quarter.

The new low price points for TV of EUR 6.95 per month for ‘Digitenne’ and EUR 9.95 for ‘Interactieve TV’ make KPN more than ever the affordable alternative Dutch TV operator to cable TV. At the same time KPN continues upselling add-on packages, for example over 10% of ‘Digitenne’ customers subscribe to the live Dutch football package for an additional EUR 6 per month.

Piloting Mobile TV

In Q3 KPN launched ‘MobielTV’ as a value-added service offering 11 TV channels on 3G mobile phones. This launch forms part of a consumer pilot for DVB-H.