KPNQwest N.V. Doubles Revenues in First Quarter 2001

* Total revenue of 162.7 million euros, grows 106.7% over Q1 2000

* Sequentially, revenue grows 12.6% over Q4 2000

* Communication services revenue up 105% over Q1 2000 and 15.2%

sequentially to 155 million euros

* Strong Growth across products and market segments

* Significant improvement in margins year over year and sequentially



Apr 23, 2001, 01:00 ET from KPNQwest N.V.

    HOOFDDORP, Netherlands, April 23 /PRNewswire/ -- KPNQwest (Nasdaq: KQIP),
 the leading pan-European data communications company, today reported strong
 growth in first quarter 2001 revenues.  For the first quarter of 2001, the
 company reported total revenue of 162.7 million euros and communication
 services revenue of 155.0 million euros -- more than doubling each of these
 figures compared to the same period in 2000.
     Sequentially, total revenue grew by 12.6% over the fourth quarter of 2000,
 and communication services revenue increased 15.2%.  For the seventh
 consecutive quarter, the company's results met or exceeded the consensus of
 analysts' estimates for revenue, earnings before interest, taxes, depreciation
 and amortisation ("EBITDA") and earnings per share ("EPS").
     "KPNQwest continues to experience strong growth across its product lines
 in all segments of the European data communications market.  We are also
 demonstrating our forecasted improvement in gross margins, Selling General &
 Administrative (SG&A) costs as a percentage of revenues, and EBITDA margins as
 we execute our business plan.  Our focused execution has delivered measurable
 results," said Jack McMaster, President and CEO of KPNQwest.
     "We believe that we can achieve the financial objectives we have set for
 2001 of approximately 780 million euros in revenue for the year and EBITDA
 positive for the fourth quarter."
 
     Revenues
     During the first quarter of 2001, KPNQwest reported total revenue of
 162.7 million euros, an increase of approximately 106.7%, compared to total
 revenue of 78.7 million euros for the first quarter of 2000.  In addition,
 total revenue grew sequentially by 12.6% from 144.5 million euros for the
 fourth quarter of 2000.
     "Financial discipline and focused execution have allowed KPNQwest to
 continue strong revenue development in the high-growth European data
 communications market," said Willem Ackermans, Executive Vice President and
 Chief Financial Officer.  "This discipline and focus have led us to a point
 where for the first quarter in KPNQwest history we have achieved gross margins
 of 40%.  Our discipline also resulted in SG&A costs achieving real
 quarter-on-quarter reductions and improving by 130 basis points to 52.9% of
 revenue.  These financial improvements were achieved without impacting revenue
 growth and are sustainable.  This financial performance led to a significant
 improvement in EBITDA, both in margin and in absolute terms."
 
     Communication Services Revenue
     Communication services revenue increased 105.0% from 75.6 million euros
 for the quarter ended 31 March 2000, and 15.2% sequentially to 155.0 million
 euros.  This growth was largely attributable to increased market penetration
 and first-mover advantage in the hosting and IP value added services (IP VAS)
 products.  The largest growth for IP VAS was driven by strong demand and
 increased provisioning of hosting services, which grew more than two-fold over
 the prior quarter.
     As of the end of the quarter, the company had over 125,000 customer
 accounts, which was comprised of approximately 100,000 business Internet
 accounts -- a growth of 25% over the previous year.  Specifically, we
 experienced double digit sequential growth in revenue from global accounts and
 from the National SME segment, demonstrating our ability to grow revenues
 across all market segments.
 
     Infrastructure Revenue
     For the first quarter of 2001, KPNQwest reported a total of 7.7 million
 euros in infrastructure sales, compared to 3.1 million euros of infrastructure
 sales for the same period in 2000 and 9.9 million euros for the fourth quarter
 of 2000.
     The Company closed additional infrastructure contracts valued at
 90 million euros during the first quarter.  The cumulative closed
 infrastructure contracts to date amount to approximately 765 million euros, of
 which over 90% will be recognised as revenue in subsequent periods.
 
     Operating Costs and Margins
     For the first quarter of 2001 cost of sales totaled 97.5 million euros,
 resulting in a gross margin of 40.1% -- the first time in the company's
 history that it has entered the 40% range.  The 40.1% gross margin for the
 first quarter represents a significant improvement compared to a 25.4% gross
 margin for the same period in 2000, and 38.0% in the fourth quarter of 2000.
     Continued migration of traffic from leased facilities, the expanded Swiss
 footprint and increased on-net sales were the primary drivers behind the
 improvement in gross margin of 35.7% for communications services for the
 fourth quarter of 2000 to the reported 39.4% for the current quarter.
     In addition to the sizeable improvement in gross margin, KPNQwest
 successfully improved SG&A costs from 87.8 million euros, or 60.8% of total
 revenue, in the fourth quarter to 86.1 million euros, or 52.9% of revenue for
 the first quarter of 2001.  The improvement in SG&A spending is the result of
 centralised back-office support, as well as top-line revenue growth driven by
 the sales channel investments made throughout 2000.
 
     EBITDA
     The company reported an EBITDA loss for the first quarter (20.9) million
 euros, representing (12.8)% of revenues compared to (31.9) million euros, or
 (40.5)% of revenues in the same period of the prior year.  Sequentially, the
 reported EBITDA loss improved from (32.9) million euros, or (22.8)% of
 revenues.
 
     EARNINGS
     The company's first quarter net loss of (46.4) million euros, or
 (0.10) euros loss per share, improved 18.3% over the net loss of
 (56.8) million euros or loss per share of (0.13) euros per share for the
 fourth quarter of 2000.  For the first quarter of 2000, KPNQwest reported a
 net loss of (27.7) million euros or (0.06) euros loss per share.
 
     Construction of the KPNQwest Network
     Through the end of March 31, 2001 KPNQwest had completed three of the
 seven self-healing, fibre optic, EuroRings and announced completion 2,000 km
 of the Swiss portion in the Southern Ring.  Currently, the KPNQwest network
 spans 8,200 km and provides unparalleled connectivity to 30 European cities.
 With the recently completed ring in Switzerland, KPNQwest's network provides
 more than one million fibre kilometres -- Europe's premier, wholly owned
 end-to-end network based on a single protocol.
 
     About KPNQwest
     KPNQwest (NASDAQ & ASE: KQIP) is a leading facilities-based, pan-European
 provider of data-centric services based on Internet Protocol (IP).  It is
 deploying a technologically advanced 20,000 km fibre-optic network connecting
 50 cities throughout Europe and provides a full portfolio of data-centric
 IP-based services and other advanced telecommunications services.  KPNQwest is
 one of the largest business ISPs in Europe with operations in 15 countries.
 KPNQwest has thirteen CyberCenters and two regional mega-CyberCentres in
 operation with a third under construction, on its high-capacity fibre-optic
 network to provide web-hosting, application sharing and telehousing services.
 Website - www.kpnqwest.com
 
     This release may contain forward-looking statements that involve risks and
 uncertainties.  These statements may differ materially from actual future
 events or results.  Readers are referred to the documents filed by KPNQwest
 with the U.S. Securities and Exchange Commission, specifically the most recent
 reports which identify important risk factors that could cause actual results
 to differ from those contained in the forward-looking statements, including
 failure to complete our network as planned and on time, failure of European
 internet use to increase as expected, significant competition, rapid
 technological change and adverse changes in the regulatory environment.  This
 release may include analyst estimates and other information prepared by third
 parties, for which KPNQwest assumes no responsibility.  KPNQwest undertakes no
 obligation to review or confirm analyst expectations or estimates or to
 release publicly any revisions to any forward-looking statements to reflect
 events or circumstances after the date hereof or to reflect the occurrence of
 unanticipated events.
 
     KPNQwest N.V.
     Condensed Consolidated Statements of Operations
     For the Three Months Ended March 31, 2001 and 2000
     (In Millions, Except per Share Information)
     (unaudited)
 
                                                          Three Months Ended
                                                         2001           2000
 
     Revenue:
       Communication services                  Euro     155.0    Euro   75.6
       Infrastructure sales                               7.7            3.1
     Total revenue                                      162.7           78.7
 
     Cost of sales:
       Communication services                            94.0           56.7
       Infrastructure sales                               3.5            2.0
     Total cost of sales                                 97.5           58.7
 
     Gross margin                                        65.2           20.0
     Gross margin percentage                             40.1%          25.4%
 
     Selling, general and administrative expenses        86.1           51.9
     EBITDA                                             (20.9)         (31.9)
 
     Depreciation and amortization expense               42.1           12.8
 
     Loss from operations                               (63.0)         (44.7)
 
     Interest and other, net                             (1.1)          (7.8)
 
     Loss before income taxes                           (61.9)         (36.9)
 
     Income tax benefit                                 (15.5)          (9.2)
 
     Net loss                                  Euro     (46.4)    Euro (27.7)
 
     Basic and diluted loss per share          Euro     (0.10)    Euro (0.06)
 
     Weighted average shares outstanding
      - basic and diluted                               451.5          450.6
 
 
      KPNQwest N.V.
      Condensed Consolidated Balance Sheets
      As of March 31, 2001 and December 31, 2000 (In Millions)
 
                                                     March 31,   December 31,
                                                         2001           2000
                                                   (unaudited)
 
     Assets
 
     Cash                                     Euro      554.7  Euro    298.3
     Other current assets                               374.7          348.3
 
     Total current assets                               929.4          646.6
 
     Property and equipment, net                      2,058.3        1,905.6
     Prepayment for construction-in-progress            144.5           80.0
     Excess of cost over net assets acquired            163.2          168.8
     Other, net                                         227.9           96.4
 
     Total assets                             Euro    3,523.3  Euro  2,897.4
 
     Liabilities and shareholders' equity:
 
     Total current liabilities                Euro      585.9  Euro    553.8
 
     Long-term debt and capital lease obligations     1,440.3          863.9
     Other long-term liabilities                        192.1          188.6
 
     Total shareholders' equity                       1,305.0        1,291.1
 
     Total Liabilities and
      shareholders' equity:                   Euro    3,523.3  Euro  2,897.4
 
 

SOURCE KPNQwest N.V.
    HOOFDDORP, Netherlands, April 23 /PRNewswire/ -- KPNQwest (Nasdaq: KQIP),
 the leading pan-European data communications company, today reported strong
 growth in first quarter 2001 revenues.  For the first quarter of 2001, the
 company reported total revenue of 162.7 million euros and communication
 services revenue of 155.0 million euros -- more than doubling each of these
 figures compared to the same period in 2000.
     Sequentially, total revenue grew by 12.6% over the fourth quarter of 2000,
 and communication services revenue increased 15.2%.  For the seventh
 consecutive quarter, the company's results met or exceeded the consensus of
 analysts' estimates for revenue, earnings before interest, taxes, depreciation
 and amortisation ("EBITDA") and earnings per share ("EPS").
     "KPNQwest continues to experience strong growth across its product lines
 in all segments of the European data communications market.  We are also
 demonstrating our forecasted improvement in gross margins, Selling General &
 Administrative (SG&A) costs as a percentage of revenues, and EBITDA margins as
 we execute our business plan.  Our focused execution has delivered measurable
 results," said Jack McMaster, President and CEO of KPNQwest.
     "We believe that we can achieve the financial objectives we have set for
 2001 of approximately 780 million euros in revenue for the year and EBITDA
 positive for the fourth quarter."
 
     Revenues
     During the first quarter of 2001, KPNQwest reported total revenue of
 162.7 million euros, an increase of approximately 106.7%, compared to total
 revenue of 78.7 million euros for the first quarter of 2000.  In addition,
 total revenue grew sequentially by 12.6% from 144.5 million euros for the
 fourth quarter of 2000.
     "Financial discipline and focused execution have allowed KPNQwest to
 continue strong revenue development in the high-growth European data
 communications market," said Willem Ackermans, Executive Vice President and
 Chief Financial Officer.  "This discipline and focus have led us to a point
 where for the first quarter in KPNQwest history we have achieved gross margins
 of 40%.  Our discipline also resulted in SG&A costs achieving real
 quarter-on-quarter reductions and improving by 130 basis points to 52.9% of
 revenue.  These financial improvements were achieved without impacting revenue
 growth and are sustainable.  This financial performance led to a significant
 improvement in EBITDA, both in margin and in absolute terms."
 
     Communication Services Revenue
     Communication services revenue increased 105.0% from 75.6 million euros
 for the quarter ended 31 March 2000, and 15.2% sequentially to 155.0 million
 euros.  This growth was largely attributable to increased market penetration
 and first-mover advantage in the hosting and IP value added services (IP VAS)
 products.  The largest growth for IP VAS was driven by strong demand and
 increased provisioning of hosting services, which grew more than two-fold over
 the prior quarter.
     As of the end of the quarter, the company had over 125,000 customer
 accounts, which was comprised of approximately 100,000 business Internet
 accounts -- a growth of 25% over the previous year.  Specifically, we
 experienced double digit sequential growth in revenue from global accounts and
 from the National SME segment, demonstrating our ability to grow revenues
 across all market segments.
 
     Infrastructure Revenue
     For the first quarter of 2001, KPNQwest reported a total of 7.7 million
 euros in infrastructure sales, compared to 3.1 million euros of infrastructure
 sales for the same period in 2000 and 9.9 million euros for the fourth quarter
 of 2000.
     The Company closed additional infrastructure contracts valued at
 90 million euros during the first quarter.  The cumulative closed
 infrastructure contracts to date amount to approximately 765 million euros, of
 which over 90% will be recognised as revenue in subsequent periods.
 
     Operating Costs and Margins
     For the first quarter of 2001 cost of sales totaled 97.5 million euros,
 resulting in a gross margin of 40.1% -- the first time in the company's
 history that it has entered the 40% range.  The 40.1% gross margin for the
 first quarter represents a significant improvement compared to a 25.4% gross
 margin for the same period in 2000, and 38.0% in the fourth quarter of 2000.
     Continued migration of traffic from leased facilities, the expanded Swiss
 footprint and increased on-net sales were the primary drivers behind the
 improvement in gross margin of 35.7% for communications services for the
 fourth quarter of 2000 to the reported 39.4% for the current quarter.
     In addition to the sizeable improvement in gross margin, KPNQwest
 successfully improved SG&A costs from 87.8 million euros, or 60.8% of total
 revenue, in the fourth quarter to 86.1 million euros, or 52.9% of revenue for
 the first quarter of 2001.  The improvement in SG&A spending is the result of
 centralised back-office support, as well as top-line revenue growth driven by
 the sales channel investments made throughout 2000.
 
     EBITDA
     The company reported an EBITDA loss for the first quarter (20.9) million
 euros, representing (12.8)% of revenues compared to (31.9) million euros, or
 (40.5)% of revenues in the same period of the prior year.  Sequentially, the
 reported EBITDA loss improved from (32.9) million euros, or (22.8)% of
 revenues.
 
     EARNINGS
     The company's first quarter net loss of (46.4) million euros, or
 (0.10) euros loss per share, improved 18.3% over the net loss of
 (56.8) million euros or loss per share of (0.13) euros per share for the
 fourth quarter of 2000.  For the first quarter of 2000, KPNQwest reported a
 net loss of (27.7) million euros or (0.06) euros loss per share.
 
     Construction of the KPNQwest Network
     Through the end of March 31, 2001 KPNQwest had completed three of the
 seven self-healing, fibre optic, EuroRings and announced completion 2,000 km
 of the Swiss portion in the Southern Ring.  Currently, the KPNQwest network
 spans 8,200 km and provides unparalleled connectivity to 30 European cities.
 With the recently completed ring in Switzerland, KPNQwest's network provides
 more than one million fibre kilometres -- Europe's premier, wholly owned
 end-to-end network based on a single protocol.
 
     About KPNQwest
     KPNQwest (NASDAQ & ASE: KQIP) is a leading facilities-based, pan-European
 provider of data-centric services based on Internet Protocol (IP).  It is
 deploying a technologically advanced 20,000 km fibre-optic network connecting
 50 cities throughout Europe and provides a full portfolio of data-centric
 IP-based services and other advanced telecommunications services.  KPNQwest is
 one of the largest business ISPs in Europe with operations in 15 countries.
 KPNQwest has thirteen CyberCenters and two regional mega-CyberCentres in
 operation with a third under construction, on its high-capacity fibre-optic
 network to provide web-hosting, application sharing and telehousing services.
 Website - www.kpnqwest.com
 
     This release may contain forward-looking statements that involve risks and
 uncertainties.  These statements may differ materially from actual future
 events or results.  Readers are referred to the documents filed by KPNQwest
 with the U.S. Securities and Exchange Commission, specifically the most recent
 reports which identify important risk factors that could cause actual results
 to differ from those contained in the forward-looking statements, including
 failure to complete our network as planned and on time, failure of European
 internet use to increase as expected, significant competition, rapid
 technological change and adverse changes in the regulatory environment.  This
 release may include analyst estimates and other information prepared by third
 parties, for which KPNQwest assumes no responsibility.  KPNQwest undertakes no
 obligation to review or confirm analyst expectations or estimates or to
 release publicly any revisions to any forward-looking statements to reflect
 events or circumstances after the date hereof or to reflect the occurrence of
 unanticipated events.
 
     KPNQwest N.V.
     Condensed Consolidated Statements of Operations
     For the Three Months Ended March 31, 2001 and 2000
     (In Millions, Except per Share Information)
     (unaudited)
 
                                                          Three Months Ended
                                                         2001           2000
 
     Revenue:
       Communication services                  Euro     155.0    Euro   75.6
       Infrastructure sales                               7.7            3.1
     Total revenue                                      162.7           78.7
 
     Cost of sales:
       Communication services                            94.0           56.7
       Infrastructure sales                               3.5            2.0
     Total cost of sales                                 97.5           58.7
 
     Gross margin                                        65.2           20.0
     Gross margin percentage                             40.1%          25.4%
 
     Selling, general and administrative expenses        86.1           51.9
     EBITDA                                             (20.9)         (31.9)
 
     Depreciation and amortization expense               42.1           12.8
 
     Loss from operations                               (63.0)         (44.7)
 
     Interest and other, net                             (1.1)          (7.8)
 
     Loss before income taxes                           (61.9)         (36.9)
 
     Income tax benefit                                 (15.5)          (9.2)
 
     Net loss                                  Euro     (46.4)    Euro (27.7)
 
     Basic and diluted loss per share          Euro     (0.10)    Euro (0.06)
 
     Weighted average shares outstanding
      - basic and diluted                               451.5          450.6
 
 
      KPNQwest N.V.
      Condensed Consolidated Balance Sheets
      As of March 31, 2001 and December 31, 2000 (In Millions)
 
                                                     March 31,   December 31,
                                                         2001           2000
                                                   (unaudited)
 
     Assets
 
     Cash                                     Euro      554.7  Euro    298.3
     Other current assets                               374.7          348.3
 
     Total current assets                               929.4          646.6
 
     Property and equipment, net                      2,058.3        1,905.6
     Prepayment for construction-in-progress            144.5           80.0
     Excess of cost over net assets acquired            163.2          168.8
     Other, net                                         227.9           96.4
 
     Total assets                             Euro    3,523.3  Euro  2,897.4
 
     Liabilities and shareholders' equity:
 
     Total current liabilities                Euro      585.9  Euro    553.8
 
     Long-term debt and capital lease obligations     1,440.3          863.9
     Other long-term liabilities                        192.1          188.6
 
     Total shareholders' equity                       1,305.0        1,291.1
 
     Total Liabilities and
      shareholders' equity:                   Euro    3,523.3  Euro  2,897.4
 
 SOURCE  KPNQwest N.V.