Royal KPN N : Koninklijke KPN N.V., Halfjaarlijkse financiële verslaggeving

March 19, 2024 at 10:02 pm EDT

Interim

Financial Statements

For the six months ended 30 June 2023

kpn. The network of the Netherlands

Interim Financial Statements

24 July 2023

Unaudited Condensed Consolidated Interim Financial Statements

for the six months ended 30 June 2023

Unaudited Consolidated Statement of Profit or Loss	3
Unaudited Consolidated Statement of Other Comprehensive Income	4
Unaudited Consolidated Statement of Financial Position	5
Unaudited Consolidated Statement of Changes in Group Equity	7
Unaudited Consolidated Statement of Cash Flows	8
General notes to the Condensed Consolidated Interim Financial Statements	10
Notes to the Condensed Consolidated Statement of Profit or Loss	13
Notes to the Condensed Consolidated Statement of Financial Position	16

All related documents can be found on KPN's website (ir.kpn.com), including the KPN Management Report Q2 2023.

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

Unaudited Consolidated Statement of Profit or Loss

		For the three months	For the six months
		ended 30 June	ended 30 June
(in € m, unless indicated otherwise)	Notes	2023	2022	2023	2022
		(restated)		(restated)

Revenues		1,330	1,310	2,662	2,618
Other income	[10]	5	16	15	28
Total revenues and other income	[4/5/10]	1,334	1,326	2,678	2,645
Cost of goods & services		324	334	669	656
Personnel expenses		206	201	411	410
Information technology/Technical infrastructure (IT/TI)		77	74	147	147
Other operating expenses		94	77	190	160
Depreciation, amortization & impairments (DA&I)		296	333	606	675
Total operating expenses	[4/6]	997	1,019	2,024	2,047
Operating profit	[4/6]	337	307	653	598
Finance income		5	1	11	2
Finance costs		-64	-48	-126	-99
Other financial results		1	-17	-3	-27
Finance income and expenses	[7/11]	-58	-64	-118	-124
Share of the profit/loss (-) of associates	[10]	-	-	-2	2
Profit/Loss (-) before income tax from continuing operations		280	243	533	475
Income taxes	[8]	-64	-57	-121	-110
Profit/Loss (-) for the period from continuing operations		216	186	412	365
Profit/Loss (-) for the period from discontinued operations		-	-	-	-1
Profit/Loss (-) for the period		216	186	412	364
Profit/Loss (-) attributable to non-controlling interest		-	-	-	-
Profit/Loss (-) attributable to equity holders		216	185	411	364
Earnings per ordinary share after taxes attributable to
equity holders for the period (in €)
- Basic (continuing operations)		0.05	0.05	0.10	0.09
- Diluted (continuing operations)		0.05	0.05	0.10	0.09
- Basic (discontinued operations)		-	-	-	-
- Diluted (discontinued operations)		-	-	-	-
- Basic (total, including discontinued operations)		0.05	0.05	0.10	0.09
- Diluted (total, including discontinued operations)		0.05	0.05	0.10	0.09
Weighted average number of ordinary shares
- Non-diluted				3,999,821,034	4,116,433,176
- Diluted				4,003,617,169	4,120,691,699

[..] Bracketed numbers refer to the related notes to these Condensed Consolidated Interim Financial Statements.

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

Unaudited Consolidated Statement of Other Comprehensive Income

	For the three months ended	For the six months ended
	30 June		30 June
(in € m)	2023		2022	2023	2022
Profit for the period	216		186	412	364
Other comprehensive income, net of tax
Other comprehensive income to be reclassified subsequently to
profit or loss when specific conditions are met:
- Net gain/loss (-) on cashflow hedges	-48		42	-43	45
- Currency translation differences	-2		1	-3	2
Net other comprehensive income/loss (-) to be reclassified to
profit or loss in subsequent periods	-50		43	-46	47
Items of other comprehensive income not to be reclassified
subsequently to profit or loss:
- Retirement benefit remeasurements	9		11	9	11
- Net gain/loss (-) on equity instruments designated at fair value
through other comprehensive income	-		-	-4	3
Net other comprehensive income/loss (-) not to be reclassified
to profit or loss in subsequent periods	9		11	5	14

Other comprehensive income/loss (-) for the period, net of tax	-41		54	-41	61
Total comprehensive income/loss (-) for the period, net of tax	174		240	370	425
Total comprehensive income for the period, net of tax,
attributable to:
- Equity holders of the company	174		240	370	425
- Non-controlling interest	-		-	-	-
Total comprehensive income/loss (-) attributable to equity
holders arises from:
- Continuing operations	174		240	370	426
- Discontinued operations	-		-	-	-1

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

Unaudited Consolidated Statement of Financial Position

Assets	Notes	30 June	31 December
(in € m)
		2023	2022
Non-current assets
Land and buildings		362	377
Plant and equipment		5,006	5,018
Other tangible non-current assets		25	24
Assets under construction		275	148
Total property, plant and equipment		5,667	5,568
Goodwill			1,439
	1,440
Licenses		882	932
Software		409	380
Other intangibles		117	133
Total intangible assets		2,848	2,884
Right-of-use assets			848
	830
Equity investments accounted for using the equity method	[10]	544	496
Equity investments measured at fair value through other comprehensive income		73	76
Advance payment on acquisition of subsidiaries	[3]	40	-
Derivative financial instruments	[18]	109	125
Other financial asset at fair value through profit or loss	[10/11/18]	138	168
Deferred income tax assets	[10/8]	197	261
Trade and other receivables		92	95
Contract assets and contract costs	[10]	43	50
Total non-current assets		10,581	10,571
Current assets
Inventories		57	49
Trade and other receivables		620	632
Contract assets and contract costs	[10]	77	84
Income tax receivables	[8]	12	76
Derivative financial instruments	[18]	1	23
Other financial asset at fair value through profit or loss	[10/11/18]	33	28
Other current financial assets	[12]	130	100
Cash and cash equivalents	[13]	237	399
Total current assets		1,168	1,392

Total assets		11,748	11,963

[..] Bracketed numbers refer to the related notes to these Condensed Consolidated Interim Financial Statements.

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

Group equity and liabilities	Notes		30 June	31 December
(in € m)
		2023	2022
Equity
Share capital			161	161
Share premium			7,960	7,960
Other reserves			-428	-106
Retained earnings			-5,352	-5,356
Equity attributable to holders of perpetual capital securities			990	990
Equity attributable to equity holders of the company			3,333	3,650
Non-controlling interests			2	2
Total equity	[14]		3,335	3,652
Non-current liabilities
Borrowings	[15]		5,220	5,171
Lease liabilities			745	770
Derivative financial instruments	[18]		353	366
Deferred income tax liabilities			-	2
Provisions for retirement benefit obligations	[16]		37	49
Provisions for other liabilities and charges	[17]		121	131
Contract liabilities	[10]		133	130
Other payables			6	8
Total non-current liabilities			6,614	6,629
Current liabilities
Trade and other payables			1,119	1,140
Contract liabilities	[10]		167	169
Borrowings	[15]		355	196
Lease liabilities			139	153
Derivative financial instruments	[18]		-	1
Provision for other liabilities and charges	[17]		19	23
Total current liabilities			1,799	1,682

Total equity and liabilities			11,748	11,963

[..] Bracketed numbers refer to the related notes to these Condensed Consolidated Interim Financial Statements.

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

Unaudited Consolidated Statement of Changes in Group Equity

							Equity
							attributable to	Equity	Non-
		Subscribed	Share	Share	Other	Retained	holders of	attributable to	Total
	Notes	controlling
	ordinary shares	capital	premium	reserves	earnings	perpetual	equity holders	equity
		interests
							capital	of the company

(in € m, except number of shares)							securities
Balance at 1 January 2022		4,202,844,404	168	8,445	-358	-5,523	496	3,228	2	3,230
Change in accounting policies	[2]	-	-	-		-11	-	-11	-	-11
Balance at 1 January 2022		4,202,844,404	168	8,445	-358	-5,534	496	3,217	2	3,219
Profit for the period		-	-	-	-	364	-	364	-	364
Other comprehensive income		-	-	-	47	14	-	61	-	61
Total comprehensive income		-	-	-	47	378	-	425	-	425
Share based compensation		-	-	-	-	-13	-	-13	-	-13
Sold treasury shares		-	-	-	14	-	-	14	-	14
Treasury shares withdrawn	[14]	-73,684,157	-3	-197	200	-	-	-	-	-
Paid coupon perpetual hybrid bond			-	-	-	-10	-	-10	-	-10
Dividends paid	[14]	-	-	-	-	-375	-	-375	-	-375
Share repurchase		-	-	-	-81	-	-	-81	-	-81
Total transactions with owners,
recognized directly in equity		-73,684,157	-3	-197	133	-398	-	-465	-	-465
Balance at 30 June 2022		4,129,160,247	165	8,248	-178	-5,554	496	3,178	2	3,180

Balance at 1 January 2023		4,037,319,593	161	7,960	-106	-5,356	990	3,650	2	3,652
Profit for the period		-	-	-	-	411	-	411	-	412
Other comprehensive income		-	-	-	-46	5	-	-41	-	-41
Total comprehensive income		-	-	-	-46	416	-	370	-	370
Share based compensation		-	-	-	-	-20	-	-20	-	-20
Sold treasury shares		-	-	-	22	-	-	22	-	22
Paid coupon perpetual hybrid bond			-	-	-	-10	-	-10	-	-10
Dividends paid	[14]	-	-	-	-	-382	-	-382	-	-382
Share repurchase		-	-	-	-300	-	-	-300	-	-300
Other		-	-	-	2	-	-	2	-	2
Total transactions with owners,
recognized directly in equity		-	-	-	-276	-412	-	-688	-	-688
Balance at 30 June 2023		4,037,319,593	161	7,960	-428	-5,352	990	3,333	2	3,335

[..] Bracketed numbers refer to the related notes to these Condensed Consolidated Interim Financial Statements.

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

Unaudited Consolidated Statement of Cash Flows

(in € m)	Notes	30 June 2023	30 June 2022
Profit before income tax from continuing operations		533	475
Adjustments for:
- Net financial expenses	[7]	118	124
- Share-based compensation		-2	1
- Share of the profit/loss (-) of associates		2	-2
- Depreciation, amortization and impairments	[4/6]	606	675
- Other non-cash income and expenses		-15	-27
- Changes in provisions (excl. deferred taxes)	[6/16/17]	-14	-22
Changes in working capital relating to:
- Current assets		5	-47
- Current liabilities		-91	-42
Income taxes paid/received	[8]		-29
-42
Interest paid/received		-61	-65
Net cash flow from operating activities from continuing operations		1,040	1,042
Net cash flow from operating activities from discontinued operations		-	-
Net cash flow from operating activities		1,040	1,042
Acquisition of and investments in subsidiaries, associates and joint ventures (net of cash)	[3/10]		-
-34
Acquisition of subsidiaries that do not constitute a business	[3]	-40	-
Tax received / paid (-) on disposal of subsidiaries and associates	[8/10]	60	-
Investments in software		-135	-105
Investments in other intangibles assets		-	-
Investments in property, plant & equipment		-467	-448
Disposals of property, plant & equipment		51	-5
Changes in other financial assets	[12/13]	-33	104
Net cash flow from investing activities from continuing operations		-598	-453
Net cash flow from investing activities from discontinued operations		-1	-3
Net cash flow from investing activities		-599	-457
Dividends paid	[14]		-375
-382
Share repurchase	[14]	-300	-81
Paid coupon perpetual hybrid bonds		-10	-10
Proceeds from borrowings	[13]	295	180
Repayments of borrowings and settlement of derivatives	[15]	-123	-569
Repayment lease liabilities		-86	-82
Other		2	-3
Net cash flow from financing activities from continuing operations		-603	-940
Net cash flow from financing activities from discontinued operations		-	-
Net cash flow from financing activities		-603	-940

[..] Bracketed numbers refer to the related notes to these Condensed Consolidated Interim Financial Statements.

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

		For the six months ended
(in € m)	Notes	30 June 2023	30 June 2022
Continued from previous page

Total net cash flow from continuing operations		-160	-351
Total net cash flow from discontinued operations		-1	-3
Total net cash flow (changes in cash and cash equivalents)		-161	-354

Net cash and cash equivalents at beginning of period		399	793
Exchange rate difference		-	-
Changes in cash and cash equivalents		-161	-354
Net cash and cash equivalents at end of period		237	438
Bank overdrafts			-
	-
Cash and cash equivalents at end of period	[13]	237	438

[..] Bracketed numbers refer to the related notes to these Condensed Consolidated Interim Financial Statements.

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

Interim Financial Statements

24 July 2023

General notes to the Condensed Consolidated Interim Financial Statements

[1] Company profile

KPN is a leading telecommunications and IT provider in the Netherlands, offering fixed and mobile telephony, fixed and mobile broadband internet and TV to retail and business customers. KPN is market leader in the Netherlands in infrastructure and network-related IT solutions to business customers. KPN also provides wholesale network services to third parties.

[2] Accounting policies

Basis of preparation

These Condensed Consolidated Interim Financial Statements ('Interim Financial Statements') for the six months ending 30 June 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting and endorsed by the EU, and should be read in conjunction with KPN's Integrated Annual Report 2022 as this document does not include all the information and disclosures required in the annual financial statements. These Interim Financial Statements have not been audited by KPN's external auditor.

All amounts are presented in millions unless stated otherwise. Certain figures may not tally exactly due to rounding. In addition, certain percentages may have been calculated using rounded figures.

In preparing the Interim Financial Statements, KPN has applied the concept of materiality to the presentation and level of disclosures. Only essential and mandatory information is disclosed which is relevant to a reader's understanding of these Interim Financial Statements.

Significant accounting estimates, judgments and assumptions

These are evaluated continuously and are based on historic experience and other factors, including expectations of future events thought to be reasonable under the circumstances. Actual results may deviate from the estimates applied. Estimates are revised when material changes to the underlying assumptions occur. For more information on KPN's significant accounting estimates, judgments and assumptions, refer to the Notes to the Consolidated Financial Statements of the Integrated Annual Report 2022.

The accounting estimates, judgments and assumptions deemed significant to KPN's Financial Statements relate to:

determination of deferred tax assets for losses carry forward and provisions for tax contingencies;
determination of value in use of cash-generating units for goodwill impairment testing;
assessment of exposure to credit risk and financial market risks;
the 'more likely than not' assessment required to determine whether or not to recognize a provision for idle cables, which are part of a public electronic communications network;
the assessment of the lease terms deemed reasonably certain of KPN's lease contracts and the incremental borrowing rate used to measure the lease liabilities;
the assessment whether revenue for variable considerations is probable or highly probable. This concerns revenue related to disputes and revenue related to VAT regarding unused multipurpose bundles; and
several assessments related to KPN's 50% interest in Glaspoort B.V. (classified as a joint venture);

the assessment whether KPN has joint control over Glaspoort;

the assessment whether operational contracts between Glaspoort and KPN are at arms' length;

the valuation of KPN's interest in the joint venture (initially set at fair value, subsequently accounted for using the equity method and subject to periodic impairment testing); and

the valuation of the contingent cash consideration (financial asset at fair value through profit or loss).

KPN Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2023

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Koninklijke KPN NV published this content on 19 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 March 2024 02:01:09 UTC.

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Apr. 24	Transcript : Koninklijke KPN N.V., Q1 2024 Earnings Call, Apr 24, 2024
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KPN : A FCF growth machine which should accelerate in 2024-25	Jan. 31
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Koninklijke KPN N.V. Reports Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2023	Jan. 30	CI
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KPN expects growth, pledges $4 bln for shareholders by 2027	Nov. 07	RE
KPN : 55% of Dutch households covered by ftth vs 45% a year ago	23-10-25
Transcript : Koninklijke KPN N.V., Q3 2023 Earnings Call, Oct 25, 2023	23-10-25
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