in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2022 1
DKT Holdings ApS
Annual report 2022
Teglholmsgade 1
2450 København SV
CVR-nr.: 39186829
Generalforsamling: 31. marts 2023
Dirigent ved generalforsamlingen: Signe Johanne Helbo
in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2022 2
Management’s review
DKTH group in brief 3
Legal structure of DKTH group 4
Key events in 2022 5
Financial review 6
Key figures 6
Risk management 8
Risk management - Nuuday 10
Risk management – TDC NET 17
ESG 22
Financial statements
Financial statements 24
Consolidated financial statements 25
Parent Company Financial Statement 81
Management statement and independent auditor’s report 90
Foreward-looking statements 93
Content
in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2022 3
About DKTH
DKT Holdings ApS (DKTH) was established
22 December 2017 with the purpose of running an in-
vestment business through its 100% owned subsidiar-
ies, DKT Finance ApS (DKTF) and DK
Telekommunikation ApS (DKT). DKTH is owned
by a consortium comprising:
• DKTUK Limited (50%), managed by Macquarie In-
frastructure and Real Assets Europe Limited (MIRA)
• Arbejdsmarkedets Tillægspension (ATP) (16.7%)
• PFA Ophelia InvestCo I 2018 K/S (16.7%),
managed by PFA Asset Management A/S
• PKA Ophelia Holding K/S (16.7%), managed by AIP
Management P/S.
The business
All core activities relate to TDC Holding group (TDCH
group, formerly TDC Group), and are operated
through two legally and operationally individual sub-
sidiaries, TDC NET and Nuuday, with the purpose of
establishing two market leaders within their individ-
ual sectors.
TDCH group’s mission is to build and support an inno-
vative, open model to ensure all of Denmark connects
to the new digital opportunities.
TDC NET is Denmark’s largest mobile network and
broadband provider focused on building Denmark’s
future digital infrastructure. Nuuday is Denmark’s
largest connectivity, communication, and entertain-
ment service provider, consisting of nine leading
brands, delivering innovative digital solutions to a va-
riety of customer segments.
For further information, please see the Annual Report
for TDC Holding group for 2022.
DKTH group in brief
in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2022 4
DKT Holdings ApS (DKTH) was established on
22 December 2017 with the purpose of running an
investment business through its 100% owned subsidi-
aries, DKT Finance ApS (DKTF) and DK Telekommu-
nikation ApS (DKT). DKTH is owned by a consortium
comprising:
• DKTUK Limited (50%), managed by Macquarie In-
frastructure and Real Assets Europe Limited
(MIRA)
• Arbejdsmarkedets Tillægspension (ATP) (16.7%)
• PFA Ophelia InvestCo I 2018 K/S (16.7%),
managed by PFA Asset Management A/S
• PKA Ophelia Holding K/S (16.7%), managed by AIP
Management P/S.
TDC Holding A/S (formerly TDC A/S) was legally sepa-
rated on 11 June 2019. From the legal separation,
two new business units emerged; Nuuday A/S and
TDC Net A/S, which are subsidiaries 100% owned by
TDC Holding A/S.
On 3 February 2022, TDC Holding transferred its
shares in TDC NET to its newly established 100%
owned subsidiary, TDC NET Holding, whereby TDC
NET Holding became the direct parent company of
TDC NET. All figures for and references to TDC NET in
this Annual Report are for TDC NET Holding group.
Legal structure of DKTH group
in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2022 5
TDCH group
On 10 February 2023 the refinancing of the group was
completed. During 2022 and 2023 the loans in the
TDCH group, i.e. the Term Loan B,
the revolving credit facilities and the EMTN bonds
have been repaid. The loans were replaced by loans
issued in TDC NET and Nuuday, respectively.
TDC NET established a new secured infrastructure fi-
nancing platform in 2022 and is now
financed through the European bond market (EMTN),
bilateral term loans and the market for syndicated
senior secured bank loans (Senior Term Facilities -
STF). TDC NET also has a revolving credit facility to
support its daily liquidity management. The former in-
tercompany loan from TDC Holding has been repaid.
Nuuday is now financed through a term loan and a re-
volving credit facility. The former intercompany loan
from TDC Holding has been partially
repaid and the remaining outstanding loan
including accrued interests has been converted into
equity in December 2022.
TDC NET
In 2022 Michel Jumeau was appointed as new CEO
and Henrik Brandt joined as new CFO. They suc-
ceeded Andreas Pfisterer and Ulrik Laudrup Bølling,
respectively.
TDC NET announced that they was the first company
worldwide to obtain validation of its ambitious target
for being net-zero across its value chain by 2030.
Danish mobile customers are generally most satisfied
with TDC NET's network. According to a survey by Tel-
epristjek, Danish customers are generally most satis-
fied with the service providers that are using TDC
NET’s network.
In continuation of the power purchase agreement
(PPA) entered into with Better Energy in 2021 we acti-
vated all four solar parks during 2022, and
expect to be able to supply 140 GWh of green elec-
tricity in 2023, covering at least 60% of
TDC NET’s total energy consumption.
TDC NET 5G network brought TV viewers closer to the
Tour de France riders. Together with TV 2, TDC NET
dedicated 10% of the 5G network so that TV 2 could
broadcast live. That was a major milestone, highlight-
ing TDC NET’s position as a supplier of critical infra-
structure in Denmark.
Nuuday
On 1 August 2022, Henrik Christiansen was
appointed as new CFO of Nuuday. He succeeded Pe-
ter Charles.
Nuuday is now live on all major utility networks.
YouSee, TDC Erhverv and Hiper continued to launch
broadband and TV offerings on new utility fibre net-
works, notably Energi Fyn, Fibia and
Thy-Mors fibre networks. This way Nuuday now has a
genuine nationwide fibre footprint
Nuuday signed a contract with Netcracker to
replace the complex legacy systems with a new mod-
ern IT stack and to become a best-in-class digital ser-
vice provider.
Nuuday’s mobile voice customers have access to Den-
mark’s best network for the 8
th
consecutive year –
now with 5G access for customers of eesy and TDC
Erhverv one+.
Nuuday strengthened the entertainment universe by
adding SkyShowtime, Disney+ and more streaming
services to Telmore Play and YouSee, making Nuuday
the only provider of all streaming channels under one
roof.
Key events
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 6
This financial report includes the consolidated
financial statements for DKTH. The operating
activities of the DKTH group relate to activities
in TDCH group (TDC Holding group).
The acquisition of TDC Holding has resulted in a num-
ber of accounting adjustments to DKTH’s financial
statements, including purchase price allocation ad-
justments which have increased consolidated non-
cash expenses and contributed to the consolidated
net loss.
DKTH group’s EBITDA
DKTH group revenue, cost of sales, external expenses,
personnel expenses and other income, i.e. EBITDA
(Operating profit before depreciation, amortisation
and special items), largely corresponds to TDCH
group’s similar items. EBITDA for DKTH group
amounted to DKK 6,290m. Hereof DKK 6,294m stems
from TDC. The remaining negative EBITDA of DKK 4m
is primarily related to consultant fees.
Financial review
Key figures (DKKm)
2022
2021
2020
2019
2018
1
Income statements
DKKm
Revenue
16,042
16,002
16,089
17,044
11,581
Gross profit
11,067
11,088
11,463
12,099
8,266
EBITDA
6,290
6,419
6,412
6,512
4,342
Net financial expenses
(2,504)
(3,525)
(3,208)
(3,041)
(3,350)
Loss for the year from continuing operations excluding special items
(1,245)
(2,391)
(2,885)
(3,088)
(2,934)
Loss for the year
(1,440)
(2,707)
(3,028)
(3,244)
(2,951)
Capital expenditure
(4,589)
(4,399)
(5,547)
(4,801)
(2,443)
Mobile licences
-
(671)
-
(1,349)
-
Total assets
74,906
70,079
67,889
70,319
65,872
Total equity
(4,787)
(4,577)
(4,141)
(1,753)
893
Cash flow
Total cash flow from operating activities
4,394
4,714
4,573
4,456
2,737
Total cash flow from investing activities
(4,637)
(4,474)
(4,714)
(5,130)
(39,154)
Total cash flow from financing activities
3,636
173
(1,005)
(29)
21,250
Total cash flow from continuing operations
3,393
413
(1,146)
(703)
(15,167)
Total cash flow from discontinued operations
-
-
-
(3)
17,581
Total cash flow
3,393
413
(1,146)
(706)
2,414
Key financial ratios
Gross margin
%
69.0
69.3
71.2
71.0
71.4
EBITDA margin
%
39.2
40.1
39.9
38.2
37.5
Adjusted net interest-bearing debt (NIBD)
2
DKKm
(32,207)
(31,797)
(31,596)
(31,389)
(30,138)
Net interest-bearing debt (NIBD)
DKKm
(60,691)
(58,653)
(56,347)
(55,579)
(46,902)
NIBD/EBITDA
x
9.6
9.1
8.8
8.5
7.0
Adjusted NIBD
2
/EBITDA
x
5.5
5.3
5.3
5.1
4.5
1
As TDC was acquired by DKT as of 4 May 2018, the figures for the DKTH Group for 2018 do not include the operations of TDC for the full year.
2
Excl. shareholder loans, impact from IFRS 16 and spectrum licence liabilities
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 7
DKTH group’s financial performance 2022 vs.
2021
Revenue
In 2022, DKTH group’s revenue increased by 0.2% or
DKK 40m to DKK 16,042m compared with 2021. The
increase was driven mainly by growth in mobility ser-
vices.
Gross profit
DKTH group’s gross profit decreased by 0.2% or DKK
21m to DKK 11,067m in 2022. The decline was driven
primarily by ongoing migration from DSL to fibre and
increase in third party network and content costs.
Operating expenses
In 2022, operating expenses increased by 2.3% or DKK
108m to DKK 4,777m. The higher operating expenses
are mainly related to higher power costs.
EBITDA
In 2022, EBITDA decreased by 2.0% or DKK 129m to
DKK 6,290m. The development is primarily affected
by higher power costs and the on-going migration
from DSL to fibre.
Depreciation, amortisation and impairment losses
Depreciation, amortisation and impairment losses are
all related to the TDCH group and amounted to DKK
4,946m. Hereof DKK 862m was depreciation and
amortisation of assets recognised in connection with
the purchase price allocation performed in connec-
tion with the acquisition of TDC Holding. This included
primarily amortisation of customer relationships,
brands and software, recognised as separate assets as
part of the purchase price allocation performed in
connection with the acquisition of TDC Holding.
The customer relationships are amortised over the es-
timated useful lives of such relationships. Brands with
finite useful lives are amortised over the useful livers
of such brands. The useful life of the TDC brand is
deemed indefinite and consequently, DKTH does not
amortise the value of this brand.
The depreciation and amortisation decreased in 2022
by 0.6% or DKK 121m.
Special items
The total special items, representing a net expense of
DKK 205m before tax, all related to costs in the TDCH
group.
Financial income and expenses
Financial income and expenses represented a net ex-
pense of DKK 2,504m. Hereof DKK 2,770m
related to DKT, DKTF and DKTH. These financial ex-
penses related primarily to interest expenses on sen-
ior notes and shareholder loans. All other financial in-
come and expenses related to the
TDCH group.
The net expense decreased by DKK 1,070m compared
with 2021. The decrease was primarily due to fair
value adjustments of hedges related to debt in TDCH
group. See also note 4.5 to the financial statements.
Income taxes
DKTH group income taxes relate primarily to the
profit before income taxes in TDC Holding as well as
the impact from purchase price allocation adjust-
ments. The taxes are also affected by the Danish rules
on limitation on the tax deductibility of interest ex-
penses. DKTH group’s net financial expenses are ef-
fectively not tax deductible due to the limitations and
furthermore, DKTF and DKTH are impacted by the
rules regarding thin capitalisation applicable for the
joint taxation.
Loss for the year
The loss for the year of DKK 1,440m comprised a
profit for TDCH group of DKK 1,199m and a combined
loss in DKT, DKTF and DKTH of DKK 2,639m related
primarily to the net financial expenses.
Net interest-bearing debt
In 2022, net interest-bearing debt excluding share-
holder loans, impact from IFRS 16 and spectrum li-
cence liabilities increased by DKK 410m. The increase
was due primarily to the net negative cash flows from
operating and investing activities as well as lease re-
payments and Settlement of derivatives related to
long-term loans.
Guidance 2022 follow-up
2022 guidance assumed a slightly lower to flat EBITDA.
DKTH group delivered on the guided parameter as
EBITDA developed slightly lower in 2022 with a de-
crease of 2.0% YoY.
Guidance 2023
2023 guidance assumes flat development in revenue
and slightly lower to flat EBITDA.
We strive to continue the declining trend for operat-
ing expenses from earlier years driven by stable cost
savings from ongoing efficiency improvements. We
believe the underlying risks related to declining oper-
ating costs will lie within macroeconomic effects e.g.
inflation, wage increases and
higher electricity prices. Nonetheless, the volatile
electricity prices will be partly mitigated by increased
sourcing of renewable energy from our Power Pur-
chase Agreements.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 8
DKTH group faces both internal and external risks in
the short, medium and long term. Risk management
is an integrated, structured, and dynamic aspect of
Nuuday and TDC NET’s business operations and plan-
ning. The most essential risks and uncertainties that
impact DKTH group’s operations are described in the
following pages.
DKTH has assessed that potential ESG risks for the full
group, including the topics of human rights, anti-cor-
ruption, climate and environment and employee mat-
ters, are related primarily to the business activities of
TDC Net and Nuuday. Therefore, separate detailed
sections on ESG risks for these companies are in-
cluded in the following pages.
Internal control and risk management system
for financial reporting
1
Introduction
DKTH group’s internal control and risk management
systems for financial reporting are planned to provide
assurance that internal and external financial state-
ments are prepared in accordance with the interna-
tional Financial Reporting Standards (IFRS) as adopted
by the European Union and further requirements in
the Danish Financial Statements Act, and assurance
that true and fair financial statements without mate-
rial misstatements and irregularities are presented.
Internal control and risk management systems are up-
dated regularly and are designed to detect and
1
Statutory reporting on corporate governance in accordance with Sec-
tion 107 b of the Danish Financial Statements Act.
eliminate errors and inconsistencies in the financial
statements. Due to an inherent risk of misappropria-
tion of assets, unexpected losses, etc., the established
internal control and risk management systems pro-
vide only reasonable and not absolute assurance that
material misstatements and irregularities in the finan-
cial reporting will be detected and corrected.
Control environment
The Board of Directors has set up an Audit Committee
mainly to assist the Board of Directors in monitoring
financial reporting and the efficiency of DKTH group’s
internal control and risk management systems.
The Audit Committee has a supervising responsibility
and reports to the entire Board of Directors.
The Executive Committee is responsible for keeping
efficient internal control and risk management sys-
tems in connection with financial reporting. Powers
and responsibilities are defined in policies and proce-
dures.
The Board of Directors and the Executive Committee
define policies and procedures in significant areas
concerning the financial reporting process. Relevant
responsible functions define other guidelines and
control, and supervise that policies and procedures
are applied, including required separation of incom-
patible functions.
Based on recommendation from the Audit Commit-
tee, the Board of Directors has assessed and con-
cluded that the existing control environment within
DKTH group is adequate and that there is no basis for
establishing an internal audit.
Risk assessment
The Board of Directors and the Executive Committee
continuously assess the risks incumbent on DKTH
group, including risks that affect financial reporting.
The risk of errors for items in the financial statements
based on estimates and complex processes is rela-
tively higher than for other items.
The section ‘Critical accounting estimates and judge-
ments' in the Consolidated Financial Statements in-
cludes a description of the most significant identified
risks concerning financial reporting. Such matters are
subject to specific review and evaluation by the Audit
Committee and the Board of Directors.
Control activities
Control activities are based on risk assessments. The
purpose of the activities is to ensure that policies,
procedures, guidelines, manuals, etc. are complied
with, and that any errors and in-consistencies are pre-
vented, detected and corrected on a timely basis. The
control activities are an integral part of DKTH group’s
accounting and financial reporting procedure and
cover, e.g. authorisation, approval, reconciliation,
performance analyses, performance assessment and
fulfilment of agreed targets (Key Performance
Indicators, etc.), control of IT applications and general
IT control.
Information and communication
DKTH group keeps and maintains information and
communication systems to ensure correct financial
reporting. The accounting manual and other reporting
instructions, including budgeting and monthly closing
procedures, are updated regularly and when re-
quired. These and other policies, procedures and de-
scriptions of business procedures concerning financial
reporting are available for relevant employees.
Changes in procedures, etc. are reported and ex-
plained to the business lines in the relevant forums.
Information systems are designed to regularly iden-
tify, collect and communicate relevant in-formation at
relevant levels in compliance with the prescribed con-
fidentiality for listed companies.
Surveillance
DKTH group uses an extensive financial control sys-
tem to monitor performance, which facilitates detec-
tion and correction of any errors and irregularities in
the financial reporting at an early stage, including
weaknesses found in the internal control system and
non-compliance with policies and procedures.
The Group reporting process covers budget reporting
and monthly reporting of actual results, including var-
iance reports with regular estimates for the year. In
addition to the Income Statements, Balance Sheets
Risk management
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 9
and Statements of Cash Flow, notes and supplemen-
tary financial and operational data and analyses are
also part of the financial reporting.
The detailed reports from all Group companies are
analysed and monitored at Group and busi-ness line
levels as well as at relevant management levels in the
organisation. The auditors elected by the Annual Gen-
eral Meeting report any significant weaknesses in the
internal control systems in long-form audit reports to
the Board of Directors in connection with the financial
reporting process. Less material matters are reported
in management letters to the Executive Committee.
The Audit Committee follows up on weaknesses in in-
ternal controls detected and reported by the auditors
elected by the Annual General Meeting to assure that
such are corrected.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 10
Risk management governance
Nuuday involves all layers of the organisation in its
risk management approach. From enterprise risks af-
fecting Nuuday’s overarching strategic goals to opera-
tional or technical risks affecting our IT landscape, we
use risk management to weigh options and support
informed decision making. Based on internationally
recognised
standards such as ISO 31000, COSO ERM, and FAIR,
our policy framework is underpinned by procedures
and guidance, thus creating a strong foundation for
our risk management governance.
While Nuuday’s Board of Directors is ultimately
accountable for risk management and compliance, we
work with a three-lines of defence model. The first
line comprises our business units, each of which are
responsible for effective risk management (identifica-
tion, assessment, mitigation, etc.). The second line
consists of our nine domains, each with risk and com-
pliance specialists:
• Security & Fraud
• Human Resources
• Legal & Compliance
• Image, PR & Public Affairs
• Operations
• Finance
• Health & Safety
• Commercial
• Transformation Execution
Establishing these domains ensures that Nuuday fol-
lows the standardised risk management lifecycle and
receives centrally aligned risk and compliance support
across all business units from subject matter experts.
The second line assists the first line with assessments
and offers guidance regarding mitigation plans. Our
third line is an audit function responsible for inde-
pendently reviewing the risk and compliance design
and its effectiveness.
Risk appetite
Pursuing our business objectives involves taking risks,
with a potential for risks affecting the outcome of
these objectives. We have defined a risk appetite for
each of the nine domain areas, approved by the exec-
utive management team and
the Board of Directors.Nuuday’s risk appetite reflects
a desire to balance risk exposure and risk reluctance,
thus avoiding both excessive risk
taking and excessive caution.
Risk management lifecycle
Identification
Risks are identified in various ways, including via tar-
geted surveys, audit findings, management meetings,
or ad-hoc. Identified risks are reported through de-
fined channels, dependent on the
type of risk.
Assessment
Risk assessments take various forms but have the
same goal: to measure the likelihood and impact of
an identified risk being realised.
Risk management – Nuuday
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 11
Response
Based on the risk assessment, one or
multiple responses are appropriate. A response might
be to “Treat,” “Tolerate,” “Transfer,” “Terminate,” or
“Take no action.” Taking no action when facing a risk
is an acceptable solution only if the risk assessment
score indicates the risk is
within the approved risk appetite.
Action
Here we fulfil the action determined as the appropri-
ate response. This step also involves reviewing the
strategy to ascertain the efficacy of the response and
determine whether another
response activity is required.
Monitor
The risk picture, including relevant vulnerabilities or
threats that could affect the treatment or realisation
of a given risk, is monitored after actions have been
completed. Continuously, a mini picture changes sig-
nificantly, the risk returns to
the Assessment stage of the Risk Management Pro-
cess.
Documentation
To ensure accountability, the identification, assess-
ment, response to and treatment of risks is docu-
mented in adequate detail. The documentation can
be made available to internal and external stakehold-
ers on a need-to-know basis unless there are con-
cerns of confidentiality. In such
cases, management approval is required.
Integrated risk management
& reporting
Transparency is a key aspect of Nuuday’s risk manage-
ment. This is achieved by ensuring that appropriate
stakeholders are aware of risks.
Risks associated with e.g. incidents, changes, or sys-
tem operations are handled as an integrated part of
the given process to ensure that their potential im-
pact on the organisation is documented and a plan is
in place in case the risk materialises.
Risks associated with programmes and projects are
handled by the steering groups, with project/pro-
gramme managers receiving assistance from the do-
main risk managers when necessary.
Third-party risks are handled in collaboration with the
suppliers, i.e. we stipulate controls for the suppliers,
depending on the service provided. We mitigate any
Input
“Disclosure of information due to an
external attack”
Questionnaire
System/application/service
Risk details
1-6 x 1-6 Scale
Treat, tolerate, terminate
or transfer?
The process
Output
“Disclosure of information in Salesforce
due to leaked administrator
credentials”
How does the risk compare
with other risks?
“Validate that X, Y, Z have been
implemented to…”
Are we within risk appetite, or do we
need another response task?
Ensure the risk stays at the expected
level
Risk statements
Risk assessments
Entity
Risk criteria
Heatmap
Risk response task
Risk identification
– something worries us
Evaluation
– How severe?
Respond to risk
– Action to take?
Strategy implemented
– how do the actions affect
the risk?
Monitor risk
– regular checks and surveillance
for change
in status
Risk
Heatmap
Risk response task
Result
Reports and
dashboards
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 12
identified risks before entering contracts, and where
this is not possible, remaining risks are documented
and handled systematically.
Strategic risks identified in other contexts, including
management meetings, are discussed and docu-
mented, so appropriate response tasks can be estab-
lished in the relevant organisational
areas.
For each risk identified, responsibilities are assigned,
and progress is monitored and evaluated.
Risks identified are consolidated and presented to
Nuuday’s executive management on a quarterly basis.
Any risks falling outside the defined appetite are pre-
sented for approval.
The Nuuday Audit Committee receives a consolidated
risk overview and status as well as information about
the most critical risks on a quarterly basis.
On the following pages, we describe some of the main
risks that Nuuday faces, with information about the
risk’s trend, impact and mitigation initiatives.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 13
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
New or current competitors taking market share
Stable
Commercial
Denmark has a competitive telecommunications landscape. Increased com-
petition and continuing price pressure affect Nuuday’s ability to establish sus-
tainable pricing in B2C and B2B markets.
• Improve customer experience through fully digital customer journeys
• Retain best network status
• Continue to provide high-quality services and improve NPS
• New attractive product releases
Forced price increases
from suppliers
Stable
Commercial
Nuuday relies on a number of suppliers for support in delivering products and
services. Increases in prices from key suppliers can erode profit margins and
negatively affect Nuuday brands’ competitiveness.
• Improving contractual terms
• Reduce costs on major expenses (i.e. move to own
IP core)
Consumer savings – “downspin”
Increasing
Commercial
We are seeing inflation, pressure on salaries, with a trend of people generally
spending less money. Consequently, people are choosing to save on, for ex-
ample, mobile phone subscriptions by choosing cheaper packages, thus low-
ering the Average Revenue Per Unit. This could potentially spread into TV
and/broadband segments.
• Monitoring market tendencies
• Continue to strengthen areas of differentiation (network quality and 5G)
• Offer highly competitive and attractive propositions across all consumer
brands
• Address the entirety of the consumer and business
mobile market
Entertainment content: price increases and taxation
Increasing
Commercial
Content producers continue to raise their prices for entertainment, which
particularly affects the YouSee
& Telmore brands.
On TV, increasing price pressure from streaming providers coupled with in-
creasing content costs (especially related to premium sports) could further
accelerate existing downward trends, with customers ‘shaving’ or ‘cutting’
the cord on their TV subscriptions.
Additionally, the Government has suggested to submit a proposal to the Dan-
ish Parliament to add a value-added tax on copyrighted material. This would
have a heavy impact on the viability of existing business models.
• Optimise products and pricing to ensure that TV packages remain relevant
for as many customers as possible
• Invest in developing attractive next-generation entertainment products to
cater for the rapidly growing combi-viewer segment that values both
streaming and TV channel content
• Pursue a full household strategy and incentivise purchasing multiple
services and products
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 14
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
Cyber attacks
Stable
Security & Fraud
The Centre for Cyber Security’s latest report on threats against the Danish
telecommunication sector indicates that the threat of cyber crime is “Very
High.”
Depending on the nature of the cyber attack, the processing, confidentiality,
integrity, availability, stability, capacity, performance, continuity and/or the
resilience of the information technologies Nuuday uses can be impacted.
• Investing in security and operations of network infrastructure
• Focused efforts on network resilience through risk and incident
management
• Continued dialogue with Danish authorities and customers to ensure data
protection and confidentiality
Ransomware on core systems
Increasing
Security & Fraud /
Operations
With increased threats of cyber crime, the risk of ransomware also increases.
Depending on the attack vector and affected systems, ransomware could
have a high impact on Nuuday’s ability to continue its business.
• Establishing new ways to improve resilience
• Crisis management exercises
Network infrastructure downtime
Stable
Operations
Nuuday’s business relies on functioning telecommunication infrastructure
(mobile network, coaxial, fibre, etc.). When network providers face down-
time, Nuuday’s customers may be unable to make telephone calls, use the in-
ternet, or consume entertainment. Events that do not fulfil customer expec-
tations for security and quality can negatively impact retention.
• Working with infrastructure providers to ensure speedy recovery
• Review and testing of business continuity plans
Regulatory privacy
Stable
Legal & Compliance
European and national laws stipulate how Nuuday can process personal in-
formation. The current legislative landscape
regarding transferring personal data to non-EU countries has been in focus.
A general compliance risk relates to customer data being
processed in breach of relevant privacy laws and regulations, potentially re-
sulting in large fines or negative references in public arenas
• Data protection network with Data Privacy Managers anchored in each of
Nuuday’s organisational areas
• Integration of Data Processing Agreements & Transfer Impact Assessments
into the procurement process
• Dedicated resources to support with data subject requests
• Privacy by Design principles integrated into software development &
project lifecycles
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 15
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
IT & business transformation
Stable
Transformation Execution /
Human Resources
Nuuday is progressing with its transformation, which is key in engaging cus-
tomers, increasing productivity, and guaranteeing high-quality services in the
future.
A number of risks are associated with this transformation, such as employee
engagement, human resource management, technical integrations and de-
coupling of legacy IT.
The materialisation of risks affecting the transformation of Nuuday’s IT stack
and business is in focus, and the identified risks are being broken down at
programme and project level to prioritise appropriate mitigation efforts be-
fore the risks are realised.
• Management reiteration of transformation plan and Nuuday’s strategic
objectives at town hall meetings to inspire confidence in direction and
journey
• Handle programme risks in collaboration with risk domains and steering
groups to find suitable solutions
• Seconding of workforce supporting legacy IT systems to calm employee
concerns
• Use feedback from employee surveys to strengthen satisfaction,
motivation, loyalty and culture
• Ensure targets and expectations are clear to all employees
• Reinforce a culture of ongoing feedback, and focus on continuous
development
Political & legal changes
Stable
Image, PR & Public Affairs
EU and national governmental changes often lead to new political objectives.
With these new objectives, we often see political decisions or new legislation.
Depending on the magnitude, these changes can profoundly affect Nuuday’s
ability to carry out its business and/or fulfil operational targets.
• Nuuday participation in industry groups and discussions on proposed
legislation
• Continued dialogue with authorities, politicians and municipalities
Financial risks
Finance
See Financial Statements – Section 4.3 “Financial Risks”
for details
• N/A
Human rights
Stable
Image, PR & Public Affairs /
Legal & Compliance
Nuuday has responsibility for our direct employees, the employees of part-
ners and companies in our supply chain, including the risk of forced labour,
discrimination or harassment and misuse or loss of personal data, or data
breaches.
If Nuuday or Nuuday partners violate fundamental human rights, this may
lead to legal action as well as bad publicity and customer reactions negatively
impacting Nuuday.
• Procedures and policies & partner code of conduct
• Based on a thorough risk assessment, we conduct audits at our suppliers
each year, particularly screening for adherence to the UN Global Compact
Assessment
• Industry collaboration through JAC – the Joint Alliance
for CSR
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 16
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
Anti-corruption and bribery
Stable
Image, PR & Public Affairs /
Legal & Compliance
Nuuday is a large employer in Denmark with suppliers across the globe. With
multiple contract relationships there is always a risk that bribery or corrupt
practices could occur, influencing business decisions.
If corruption or bribery occurs, it may lead to legal action as well as bad pub-
licity and customer reactions negatively impacting Nuuday.
• Anti-corruption policy commits Nuuday to complying with the UN
Convention against corruption
• Raising awareness and putting in place resources and training for
employees
• Whistleblower policy that allows for the anonymous reporting of suspected
wrongdoings at the company
• Partner Code of Conduct for suppliers, partner organisations
and employees
Environment and climate
Stable
Image, PR & Public Affairs /
Legal & Compliance
Several potential environmental and climate risks may be linked to our oper-
ations and supply chain. Nuuday has a responsibility to try to reduce our own
resource consumption, emissions and waste in production and to influence
partners and suppliers to act equally responsibly.
If Nuuday does not show credible action on environment and climate mat-
ters, it may generate bad publicity and customer reactions negatively impact-
ing Nuuday.
• Nuuday has set ambitious carbon emissions reduction targets for Scopes 1,
2 & 3
• ISO 14001 certification covering our whole operation
• Detailed ESG reporting on climate and environment metrics
• Nuuday has embarked on a revised sustainability strategy with sustainable
procurement and products as a key pillar
• Nuuday aims to retain an Ecovadis platinum rating as a token of recognition
that Nuuday is a leader in sustainability
Social and employees
Stable
Human Resources / Health & Safety
Nuuday focuses on retaining the services of its key personnel and invests in
attracting suitable and qualified talents to ensure a good working environ-
ment e.g., with no accidents or stress incidents. Nuuday's success depends
largely on our ability to attract and retain key personnel. The competition for
qualified personnel is intense and with limited availability of candidates with
the required knowledge of the telecoms industry and relevant experience in
Denmark.
• 88% of employees are covered by collective agreements
• Occupational health and safety policy and certification to ISO 45001 stand-
ard
• Flexible working conditions
• Quarterly employee engagement surveys
• Diversity, equity, inclusion & belonging (DEIB) Policy
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 17
As a critical infrastructure provider, being exposed to
risks and uncertainties is expected and a natural part
of our business activities. At TDC NET, we work proac-
tively with risk management as our risk exposure
changes continuously. We aim to integrate risk man-
agement in our business operations and longterm
planning, as well as mitigate the risks to an acceptable
level that does
not threaten our business or strategic objectives.
Risk management approach
The risk management framework deployed
at TDC NET enables a consistent approach
for identifying, assessing, documenting, and
responding to risks. Risks are assessed based
on their potential financial impact and probability of
occurring and are captured in risk registers across the
organisation.
Each business line has its own risk coordinator re-
sponsible for their risk register. In collaboration with
risk owners, the risk coordinators ensure that risks are
assessed, and mitigation strategies are established. A
member of the leadership
team is accountable for each risk register, and
biannually, all risk registers are consolidated
centrally and reviewed by the Executive Management
to secure alignment on key risks and ensure execution
of mitigating plans.
The overall risk exposure and status of the
mitigating activities are submitted and reviewed by
the Audit Committee and Board of Directors biannu-
ally. The following section outlines the key risks facing
TDC NET and the mitigating strategies deployed.
Top six business risks:
#1 Inflation & European energy crisis
#2 Commercial trends
#3 Cyber & information security
#4 Financial liquidity
#5 IT landscape and roadmap execution
#6 Legal compliance
Top seven ESG risks:
#1 European energy crisis
#2 Electricity supply disruption
#3 Flooding of mobile equipment
#4 Inflation impacting salaries
#5 Security compliance
#6 Legal compliance
#7 Supply chain
Read more on the following pages.
Risk management – TDC NET
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 18
Business risk #1
Inflation & European energy crisis
Business risk #2
Commercial trends
Business risk #3
Cyber & information security
Business risk #4
Financial liquidity
See also note 4.3 Financial risks in the consolidated financial statements
Description
Together with the telecommunications
industry, we are affected by the new macroeco-
nomics era with high inflation and energy prices.
Operations and expansion of our
mobile and fixed networks are impacted by
increasing supplier prices, the European
energy crisis, and wage increases further driven by
an overheated labour market and competition for
talent.
Potential impact
Further increases in inflation on external spending
(e.g. electricity, fossil fuels, materials and services)
and pressure from the labour market would result
in additional operating costs and/or the require-
ment for additional capital expenditure to main-
tain our current rollout plan for our fixed and mo-
bile networks.
Mitigation action
We have a strong focus on driving efficiency
throughout our business, and we work with our
suppliers to mitigate rising prices on both local and
global scales. For example, our PPAs for buying
green energy from four solar parks across Den-
mark limit our exposure to the rising electricity
prices and reduce our CO2 footprint. We have also
initiated project ‘Green Fleet’ to ensure a faster
transition to electric vans and cars to limit our fos-
sil fuel spending.
Description
We have a strong commercial position, having cre-
ated connections in Denmark for more than 140
years. As such, we own and operate a
diverse portfolio of legacy technologies and prod-
ucts, some that we foresee will decrease in rele-
vance over time as high-speed fibre and mobile
networks are rolled out across Denmark.
Potential impact
If we are unsuccessful in anticipating and adapting
to market demands, this exposes us to either extra
operating costs for continuing the operation of leg-
acy technologies, or to
the loss of customers and existing business oppor-
tunities if we decommission faster than the market
demands. In addition, if we fail to deliver on our
customers' expectations, we
risk losing our customers and damaging the repu-
tation of our brand.
Mitigation action
We monitor the level of churn from legacy to
newer technologies and commercial trends in the
market to effectively anticipate and react to new
technological developments and to match these
trends in our services and product portfolio. We
make a persistent effort to attract customers and
to preserve a strong
relationship with current customers by ensuring
fast fixed connections and maintaining Denmark’s
best mobile network.
Description
We depend heavily on our information systems
and technologies to support our daily operations.
Breakdowns, interruptions, or other types of fail-
ures compromising circumstances resulting from
unintentional, intentional, or
coincidental events pose a significant risk.
Potential impact
The occurrence of one or more of these harmful
events could impair our ability to adequately pro-
vide our services and may lead to financial losses,
diversion of human resources, or reputational
damage. Furthermore, as we provide critical, na-
tional telecommunications infrastructure, any oc-
currence of such harmful events could have broad
implications on a national scale.
Mitigation action
We focus on network resilience through risk and
incident management and continue enhancing our
disaster recovery and business continuity plans.
We work in a structured way to continuously im-
prove our cyber resilience through the use of inter-
nationally recognised frameworks such as NIST and
ISO. We also educate our employees through
awareness to withstand potential threats and
avoid harmful behaviour
Description
We are a capital-intensive business where
several investments and capital outlays are
required to continue our fibre rollout plans,
develop our mobile network, and update our IT
and telecommunications systems to sustain our
operations and future ambitions. The
liquidity position for supporting our investments
depends on our cash flow generation and capital
expenditure as well as access to
financing and credit facilities. Our liquidity
position can be impacted through credit risks, li-
quidity risks, exchange rate risks, etc. arising from
macroeconomic uncertainties and debt instru-
ments.
Potential impact
Fluctuations in interest rates and exchange rates
may adversely impact the financial stability of our
business operations and our liquidity positions
through our cash flow generation.
Mitigation action
We apply prudent treasury management to
ensure stable financial risks. We regularly monitor
our financial exposures and follow an active hedg-
ing strategy. Moreover, we plan our liquidity, lev-
erage and cash flows with caution to ensure a sus-
tainable financial position. On an ongoing basis, we
optimise debt issuances depending on the funding
needs of the business.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 19
Business risk #5
IT landscape and roadmap execution
Business risk #6
Legal Compliance
Description
Our current IT landscape, consisting of over 500 applications, is heavily interconnected with Nuuday
and forms a legacy system that poses a substantial risk of disrupting our network operations. Our IT
transformation is underway to assure a fit-for-purpose IT landscape that will support TDC NET as a
standalone business. However, we foresee several risks related to such a large IT transformation
Potential impact
Our success depends largely on our ability to execute on our IT transformation ambitions and de-
commissioning journey. Besides being expensive to maintain and difficult to update, legacy applica-
tions require skilled resources to support and manage them. Until decommissioned, the legacy IT
applications pose financial, operational and security risks. Moreover, our shared applications with
Nuuday pose interdependencies with Nuuday’s ability to manage and update the applications, leav-
ing us with limited control of these shared applications.
Mitigation action
We are currently implementing and delivering on an IT transformation project to ensure transition-
ing to newer systems and technologies. This is a complex process but will ultimately bring benefits
such as increased efficiency and a simplified IT landscape. We also invest in our network infrastruc-
ture by optimising processes, systems and security to ensure continuous service improvements and
upgrades.
Description
We must provide access for service providers on our broadband networks in areas of Denmark where we are considered to
have a strong market position. As a provider of critical digital infrastructure, we are also subject to certain sector-specific regu-
lations e.g. an obligation to handle emergency communications, broadcast emergency calls via our mobile network, and en-
force] security regulations, and we must comply with foreign direct investment regulations and the adopted sanctions against
Russia and Belarus in accordance with EU and Danish legislation. Moreover, we must be compliant with the competition law
restriction and applicable data privacy rules in accordance with the EU General Data Protection Regulation (GDPR) and the ePri-
vacy legislation.
Potential impact
The telecom authorities and the Consumer and Competition Authority can impose decisions against and fine TDC NET if we do
not comply with relevant regulations. The Danish Business Authority can demand prior approval for certain transactions if
these are deemed foreign direct investments, and this can affect our legal requirements for investors, suppliers and customers.
Similarly, the Danish Centre for Cybersecurity can impose certain restrictions on agreements and arrangements in relation to
our infrastructure, including prohibiting us from contracting with certain foreign suppliers.
Other legal disputes and possible reputational damage could arise if consumers find our data retention procedures incompati-
ble with applicable data privacy rules, or if we are unable to comply with the sanctions against Russia
and Belarus.
Mitigation action
In accordance with the Danish competition law restrictions and Telecom Act, we have implemented a compliance programme
by e.g. training selected employees and conducting regulatory checks of prices, products and agreements. In addition, we mon-
itor the political and legal developments in the markets and maintain proactive and continuous close dialogues with politicians,
regulators and market stakeholders.
To comply with EU and Danish legislative sanctions against Russia and Belarus, we regularly conduct desktop studies of con-
tractual relations that may be subject to sanctions, and we investigate owner relations in connection with sanction rules.
To avoid complaints regarding handling of personal data and to avoid security breaches, we have implemented security and
data protection measures cf. the GDPR and Danish security regulation (e.g. all employees receive training in security and pri-
vacy awareness policies).
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 20
ESG Risk #1
European energy crisis
ESG Risk #2
Electricity supply disruption
ESG Risk #3
Flooding of mobile equipment
ESG Risk #4
Inflation impacting salaries
Description
Operation and expansion of our mobile and fixed
networks depend on a large amount
of electricity, which is compromised by the
European energy crisis.
Potential impact
The operational costs related to running our mo-
bile network will be affected by increasing electric-
ity prices.
Mitigation action
We have entered a Power Purchase Agreement
(PPA) with Better Energy on renewable electricity
from four solar parks, covering 60% of our total en-
ergy consumption. The four solar parks across
Denmark help limit our exposure to the rising elec-
tricity prices and reduce our CO2 footprint.
Description
As a result of the European energy crisis the Dan-
ish authorities have announced potential brown-
outs for up to two hours a day in times of energy
scarcity. The controlled power disruption is a
method to reduce overall usage and avoid uncon-
trolled blackouts. Hence, we must comply while
operating the mobile network in case of blackouts.
Potential impact
As brownouts can impact our critical infrastructure
and thereby our service providers and end users,
we risk reputational damage to our brand.
Mitigation action
Following the announcement of possible brown-
outs, we have reviewed our entre mobile network
to detect mobile sites that failed to meet our re-
quirements. The sites have been upgraded and are
now supported by at least two hours of battery
back-up. We have also increased our diesel stocks
to strengthen our back up resilience nationally –
enabling us to run on emergency reserves.
Description
The global climate change increases the risk
of potential weather-related disasters. The
effects of extreme weather include heavy down-
pours causing flooding and landslides.
Potential impact
The extreme weather events can result in
business disruption due to broken pipes on our fa-
cilities or flooding of our equipment
and mobile sites resulting in potential short circuit-
ing.
Mitigation action
To mitigate eventual short circuits we have
ensured that our mobile network operation is
based on three physical locations with full
redundancy policies. We can therefore
continue operating if one location is flooded
as the failover datacentres will compensate.
Description
TDC NET is depending on its ability to retain and
attract a skilled workforce. Increased inflation
causes massive pressure on our salary budgets. If
increased salary expenses cannot be related to in-
creased earnings, it can lead to a cap on our salary
budget.
Potential impact
If TDC NET is not able to meet the salary
expectations of existing and potential employees,
it may impact our ability to retain and
attract skilled workforce. It can impact general em-
ployee satisfaction and lead to higher
employee turnover.
Mitigation action
We have prepared for salary-negotiations in
March/April 2023 and are awaiting the cost level
of the central collective agreement negotiations
for the entire Danish labour market during spring
2023.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2022 21
ESG Risk #5
Security compliance
ESG Risk #6
Legal Compliance
ESG Risk #7
Supply chain
Description
In an increasingly digital world, we rely heavily on our information sys-
tems, which increases the impact of potential cyber attacks. Break-
downs, interruptions, and other types of failures can come from unin-
tentional, intentional, or coincidental events and can pose a significant
risk. As a result, it is crucial that employees are aware of security poli-
cies and company standards to minimise the risk of security breaches.
Potential impact
Such harmful events could impair our ability to adequately
provide our services and may lead to financial losses and
reputational damage.
Mitigation action
We work systematiccaly on continuously improving our cyber
resilience through the use of internationally recognised frameworks
such as NIST and ISO. We also educate our employees through aware-
ness to withstand potential threats and avoid harmful behaviour.
Description
As we provide access to critical digital infrastructure, we are
subject to certain sector-specific regulations e.g. obligations to handle
emergency communications, broadcast emergency calls via our mobile
network. Moreover, we must comply with the competition law re-
striction and applicable data privacy rules in accordance with the EU
General Data Protection Regulation (GDPR) and the ePrivacy legislation.
Potential impact
We are obligated to provide a reliable and secure network, hence repu-
tational damage could arise, if end users cannot call in case of an emer-
gency or if we are non-compliant with restrictions and regulations.
Mitigation action
We have decicated and specialised team that ensures compliance to
serve the sector specific and competition law regulations. We have im-
plemented data protection measures to avoid complaints regarding
handling of personal data cf. the GDPR, as all employees receive train-
ing in privacy awareness policies.
Description
TDC NET relies on a vast international network of suppliers/sub-suppli-
ers, who operate across legislative jurisdictions and have varying levels
of maturity regarding sustainability practices,
including environment, health & safety, labour & human rights, and
anti-corruption.
Potential impact
A supplier/sub-supplier of TDC NET could be found to be non-compliant
with environmental and social legislation or best practices. Such cases
can have a direct negative impact on TDC NET’s integrity and reputa-
tion, which may result in legal disputes and supply chain disruptions.
Mitigation action
Our supplier due diligence process applies a risk-based category man-
agement approach that determines which suppliers are in
focus for environment, health & safety, labour & human rights and
business ethics related risks. Medium and high-risk suppliers are eligible
for sustainability assessments through EcoVadis. High-risk suppliers are
eligible for on-site audits through JAC. In addition, our whistleblower
system makes it possible for our employees and partners to report mis-
conduct and violations.
in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2022 22
The DKTH group’s mission is to build and support an
innovative, open model to ensure all of
Denmark connects to the new digital opportunities
(see also ‘DKTH group in brief’).
Following the separation of the group into the two
stand-alone companies, Nuuday and TDC NET, there
are no longer ESG (human rights, employee matters,
environment/climate, anti-corruption) policies at
group level. However, the management of TDC Hold-
ing A/S oversees the two companies’ sustainability
ambitions and ethical values in relation to the matters
mentioned above.
As the group’s activities take place in the two subsidi-
aries, Nuuday and TDC NET, this is where ESG policies,
practices and performance have an impact. In addi-
tion, the most significant ESG risks are identified and
managed in Nuuday and TDC NET. See also the ‘Risk
management’ section.
The following pages comprise a summary of ESG in
Nuuday and TDC NET,
respectively.
Statement on the underrepresented gender in
management
DKTH has set a target to have one representative of
the underrepresented gender on the Board of Direc-
tors by 2023. The target has been achieved as two of
six members of the Board of Directors are women.
DKTH thereby have an equal gender split on the
Board of Directors according to the definition in the
law.
There are separate targets for the relevant subsidiar-
ies that are reported in the respective ESG reports.
Due to the separation of the group, and that TDC
Holding A/S has less than 50 employees, there is no
longer a policy on gender balance in the management
at group level. However, separate policies on gender
balance in management exist in the relevant subsidi-
aries that are reported in the respective ESG reports.
Statement on data ethics policy
Due to the separation of the group, there is no longer
a data ethics policy at group level in force. However,
Nuuday and TDC NET have taken the previous TDC
Group data ethics policy and implemented it into the
respective organisations to fit the specific business ac-
tivities and use of data in the two companies. This is
described in the respective sustainability reports, cf.
below.
ESG
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 23
Financial statements
Consolidated financial statement ....................... 24
Parent company financial statement ................... 81
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 24
Consolidated financial statements ........................................................... 25
Income statement ................................................................................... 25
Statement of comprehensive income ...................................................... 25
Balance sheet........................................................................................... 26
Statement of cash flows .......................................................................... 27
Statement of changes in equity ............................................................... 28
Notes to consolidated financial statements ............................................ 29
Parent Company Financial Statement ...................................................... 81
Statement of cash flows .......................................................................... 84
Statement of changes in equity ............................................................... 84
Management statement and independent auditor’s
report ....................................................................................................... 90
Management statement .......................................................................... 90
Independent auditor’s report .................................................................. 91
Section 1 - Basis of preparation
1.1. Accounting policies ......................................... 30
1.2. Critical accounting estimates and
judgements ..................................................... 30
1.3. New accounting standards ............................. 30
Section 2 - Profit/(loss) for the year
2.1. Segment reporting .......................................... 32
2.2. Revenue .......................................................... 34
2.3. Cost of sales .................................................... 37
2.4. External expenses ........................................... 37
2.5. Personnel expenses ........................................ 38
2.6. Depreciation, amortisation and
impairment losses ........................................... 39
2.7. Special items ................................................... 40
2.8. Income taxes ................................................... 41
Section 3 - Operating assets and liabilities
3.1. Intangible assets ............................................. 45
3.2. Property, plant and equipment ...................... 50
3.3. Lease assets and liabilities .............................. 52
3.4. Trade receivables ............................................ 54
3.5. Contract assets and liabilities ......................... 55
3.6. Provisions........................................................ 56
3.7. Pension assets and pension obligations .......... 58
Section 4 - Capital structure and financing costs
4.1. Equity .............................................................. 63
4.2. Loans and derivatives ...................................... 63
4.3. Financial risks .................................................. 67
4.4. Credit ratings and net interest-bearing
debt ................................................................. 68
4.5. Financial income and expenses ....................... 70
4.6. Maturity profiles of financial
instruments ..................................................... 72
Section 5 - Cash flow
5.1. Adjustment for non-cash items ....................... 75
5.2. Change in working capital ............................... 75
Section 6 - Other disclosures
6.1. Incentive programmes .................................... 77
6.2. Related parties ................................................ 78
6.3. Fees to auditors .............................................. 79
6.4. Other financial commitments ......................... 79
6.5. Pledges and contingencies .............................. 80
6.6. Events after the balance sheet date ................ 80
6.7. Overview of group companies at 31
December 2022 ............................................... 80
Financial statements
Content
Notes to consolidated financial statements
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 25
Income statement
(DKKm)
Note
2022
2021
Revenue
2.1,2.2
16,042
16,002
Cost of sales
2.3
(4,975)
(4,914)
Gross profit
11,067
11,088
External expenses
2.4
(2,158)
(1,891)
Personnel expenses
2.5
(2,833)
(2,959)
Other income
2.2
214
181
Operating profit before depreciation, amortisation and special items (EBITDA)
6,290
6,419
Depreciation, amortisation and impairment losses
2.6
(4,946)
(5,067)
Special items
2.7
(205)
(424)
Operating profit (EBIT)
1,139
928
Financial income and expenses
4.5
(2,504)
(3,525)
Loss before income taxes
(1,365)
(2,597)
Income taxes
2.8
(75)
(110)
Loss for the year
(1,440)
(2,707)
Statement of comprehensive income
(DKKm)
Note
2022
2021
Profit/(loss) for the year
(1,440)
(2,707)
Items that may subsequently be reclassified to the income statement:
Change in fair value adjustments of cash flow hedges transferred to financial ex-
penses
4.5
4
4
Items that cannot subsequently be reclassified to the income statement:
Remeasurement of defined benefit pension plans
3.7
1,573
2,907
Income tax relating to remeasurement of defined benefit pension plans
2.8
(346)
(640)
Other comprehensive income/(loss)
1,231
2,271
Total comprehensive income/(loss)
(209)
(436)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 26
Balance sheet
Assets (DKKm)
Note
2022
2021
Non-current assets
Intangible assets
3.1
33,906
34,961
Property, plant and equipment
3.2
18,336
17,590
Lease assets
3.3
3,094
3,195
Joint ventures, associates and other investments
8
8
Pension assets
3.7
10,893
10,562
Other receivables
42
43
Prepaid expenses
36
18
Total non-current assets
66,315
66,377
Current assets
Inventories
277
252
Trade receivables
3.4
1,497
1,444
Other receivables
18
20
Contract assets
3.5
491
395
Derivative financial instruments
1,479
133
Prepaid expenses
515
540
Cash
4,314
918
Total current assets
8,591
3,702
Total assets
74,906
70,079
Equity and liabilities (DKKm)
Note
2022
2021
Equity
Share capital
4.1
0
0
Other reserves
(1)
(4)
Retained earnings
(4,786)
(4,573)
Total equity
(4,787)
(4,577)
Non-current liabilities
Deferred tax liabilities
2.8
4,242
4,298
Provisions
3.6
362
415
Loans
4.2,4.6
44,912
49,210
Spectrum licence fee liabilities
4.6
1,636
1,774
Lease liabilities
3.3
3,585
3,657
Other payables
387
383
Total non-current liabilities
55,124
59,737
Current liabilities
Loans
4.2,4.3,4.4
14,213
3,734
Spectrum licence fee liabilities
4.6
190
190
Lease liabilities
3.3
489
475
Short-term bank loans
4.2
-
570
Trade payables
3,837
4,046
Other payables
2,998
3,144
Contract liabilities
2,419
2,382
Income tax payable
87
132
Derivative financial instruments
187
50
Provisions
3.6
149
196
Total current liabilities
24,569
14,919
Total liabilities
79,693
74,656
Total equity and liabilities
74,906
70,079
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 27
Statement of cash flows
(DKKm)
Note
2022
2021
Operating activities
EBITDA
6,290
6,419
Adjustment for non-cash items
5.1
94
143
Pension contributions
3.7
1,154
270
Payments related to provisions
3.6
(21)
(22)
Special items
2.7
(181)
(216)
Change in working capital
5.2
(307)
(63)
Interest received
4.5
407
576
Interest paid
4.5
(2,520)
(2,421)
Income tax paid
2.8
(522)
28
Total cash flow from operating activities
4,394
4,714
Investing activities
Investment in enterprises
-
Investment in property, plant and equipment
3.2
(3,031)
(3,390)
Investment in intangible assets
3.1
(1,618)
(1,341)
Investment in other non-current assets
(1)
(5)
Divestment of joint ventures and associates
-
97
Sale of other non-current assets
13
8
Payment received regarding settlement of loan to TDC Pensionskasse
-
149
Change of loans to joint ventures and associates
-
8
Total cash flow from investing activities
(4,637)
(4,474)
(DKKm)
Note
2022
2021
Financing activities
Proceeds from long-term loans
4.4
25,982
-
Repayment of long-term loans
4.4
(21,602)
(24)
Settlement of derivatives related to long-term loans
196
-
Cost related to long-term loans
(31)
(51)
Lease repayments
(339)
(317)
Change in short-term bank loans
4.4
(570)
565
Total cash flow from financing activities
3,636
173
Total cash flow
3,393
413
Cash and cash equivalents (beginning of period)
918
508
Effect of exchange-rate changes on cash and cash equivalents
3
(3)
Cash and cash equivalents at 31 December
4,314
918
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 28
Statement of changes in equity
(DKKm)
Share capital
Reserve for
cash flow hedges
Retained
earnings
Total
Equity at 1 January 2021
0
(8)
(4,133)
(4,141)
Profit/(loss) for the year
-
-
(2,707)
(2,707)
Change in fair value adjustments of cash flow hedges transferred to financial expenses
-
4
-
4
Remeasurement effects of defined benefit pension plans
-
-
2,907
2,907
Income tax relating to remeasurement effects of defined benefit pension plans
-
-
(640)
(640)
Total comprehensive income
-
4
(440)
(436)
Total transactions with shareholders
-
-
-
-
Equity at 31 December 2021
0
(4)
(4,573)
(4,577)
Profit/(loss) for the year
-
-
(1,440)
(1,440)
Change in fair value adjustments of cash flow hedges transferred to financial expenses
-
3
-
3
Remeasurement effects related to defined benefit pension plans
-
-
1,573
1,573
Income tax relating to remeasurement effects from defined benefit pension plans
-
-
(346)
(346)
Total comprehensive income
-
3
(213)
(210)
Total transactions with shareholders
-
-
-
-
Equity at 31 December 2022
0
(1)
(4,786)
(4,787)
1 See also note 4.1 for an explanation of distributable reserves and dividend.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 29
Section 1
Basis of preparation
This section sets out the basis of preparation, which relates to
the financial statements as a whole. Where an accounting policy
is specific to one note, the policy is described in the note to
which it relates. Similarly, critical sources of estimation uncer-
tainty are described in the notes to which they relate.
1. In this section
1.1. Accounting policies ........................................................... 30
1.2. Critical accounting estimates and judgements ................. 30
1.3. New accounting standards ............................................... 30
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 30
DKTH Group’s consolidated financial statements for
2022 have been prepared in accordance with the In-
ternational Financial Reporting Standards (IFRS) as
adopted by the European Union (EU) and further dis-
closure requirements in the Danish Financial State-
ments Act.
The consolidated financial statements are based on
the historical cost convention, except for financial as-
sets and liabilities that are initially measured at fair
value adjusted for transaction costs if they are not
subsequent measured at fair value through the in-
come statement. Trade receivables are measured at
their transaction price
When preparing the consolidated financial state-
ments, Management makes assumptions that affect
the reported amount of assets and liabilities at the
balance sheet date, and the reported income and ex-
penses for the accounting period. The accounting esti-
mates and judgements considered critical to the prep-
aration of the consolidated financial statements are
shown in note 1.2.
The accounting policies are unchanged compared
with the policies applied in the Annual Report 2021.
Consolidation policies
The consolidated financial statements include the fi-
nancial statements of the Parent Company and sub-
sidiaries in which DKT Holdings ApS has direct or indi-
rect control. Joint ventures in which the Group has
joint control and associates in which the Group has
significant influence are recognised using the equity
method.
The consolidated financial statements have been pre-
pared on the basis of the financial statements of DKT
Holdings ApS and its consolidated companies, which
have been restated to Group accounting policies,
combining items of a uniform nature.
On consolidation, intra-group income and
expenses; shareholdings, dividends, internal balances;
and realised and unrealised profits and losses on
transactions between the consolidated enterprises
have been eliminated.
The preparation of DKTH Group’s Annual Report re-
quires Management to exercise judgement in apply-
ing the Group’s accounting policies. It also requires
the use of estimates and assumptions that affect the
reported amount of assets, liabilities, income and ex-
penses. Actual results may differ from those esti-
mates.
DKTH Group has adopted the new standards, amend-
ments to standards and interpretations that are effec-
tive for the financial year 2022. None of the changes
have affected recognition or measurement in the fi-
nancial statements nor are they expected to have any
future impact
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions are
recognised during the period in which the estimates
are revised and during any future periods affected.
The following areas involve a higher degree of
estimates and judgements or complexity and are out-
lined in more detail in the related notes:
IASB has approved a number of new accounting
standards and changes to standards that are not yet
effective. DKTH group has evaluated the standards
and as none of them are expected to be relevant to
the Group they are not expected to impact on the fi-
nancial statements.
1.1 | Accounting policies
1.2 | Critical accounting estimates and judgements
Notes
Critical accounting estimates
and judgements
Estimates
/judgements
2.2
Revenue
Assessment of principal or agent
Judgement
Assessment of contracts involving complex sale of goods
and services
Estimate/
Judgement
2.7
Special items
Assessment of special events or transactions
Judgement
3.1
Intangible assets
Assumptions for useful lives
Estimate
Assumptions used for Impairment testing
Estimate/Judgement
3.2
Property, plant and equipment
Assumptions for useful lives
Estimate
3.3
Lease assets
Assumptions related to write-down of lease assets
re. vacant tenancies
Estimate
Assumptions related to extension options
Judgement
3.4
Trade receivables
Assessment of expected losses
Estimate
3.7
Defined benefit plans
Assumptions for discount rates, wage inflation and mor-
tality
Estimate
1.3 | New accounting standards
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 31
Section 2
Profit/(loss) for
the year
This section focuses on disclosures of details of the
DKTH Group’s results for the year, including segment reporting,
special items and taxation. A detailed review of revenue, EBITDA
and profit for the year is provided in the section
‘Financial review’ in the Management’s review.
2. In this section
2.1. Segment reporting ............................................................ 32
2.2. Revenue ............................................................................ 34
2.3. Cost of sales ...................................................................... 37
2.4. External expenses ............................................................. 37
2.5. Personnel expenses .......................................................... 38
2.6. Depreciation, amortisation and impairment losses ......... 39
2.7. Special items ..................................................................... 40
2.8. Income taxes .................................................................... 41
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 32
Worth noting
DKTH Group consists of the three operating
segments Nuuday, TDC NET and Group Func-
tions.
Nuuday develops and markets the best com-
munications and entertainment services, in-
cluding the development of new
innovative products and digital solutions.
TDC NET designs, builds, and runs
Denmark’s best broadband and mobile net-
works and delivers highly qualified
technical support to customers and the net-
works.
Group Functions governs, advises and
delivers shared services to the business units
including management and property services.
Operating segments are reported in a manner con-
sistent with the internal management and
reporting structure.
Profit before depreciation, amortisation and special
items (EBITDA) represents the profit earned by each
segment. The operating segments are managed pri-
marily on the basis of EBITDA.
Segment results are accounted for in the same way as
in the consolidated financial statements.
Segment income and segment expenses are those
items that, in our internal management reporting, are
directly attributable to individual segments. Interseg-
ment transactions are conducted on market terms.
2.1 | Segment reporting
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 33
Nuuday
TDC NET
Group functions
Activities (DKKm)
2022
2021
2022
2021
2022
2021
External revenue
14,635
14,597
1,407
1,401
-
4
Revenue across segments
39
60
5,232
5,273
-
-
Total revenue
14,674
14,657
6,639
6,674
-
4
Cost of sales
(9,827)
(9,664)
(262)
(318)
-
-
Gross profit
4,847
4,993
6,377
6,356
-
4
Operating expenses
(3,201)
(3,226)
(2,129)
(2,118)
(492)
(750)
Other income and expenses
63
56
272
260
882
1,198
EBITDA
1,709
1,823
4,520
4,498
393
452
Eliminations
Total
2022
2021
2022
2021
External revenue
-
-
16,042
16,002
Revenue across segments
(5,271)
(5,333)
-
-
Total revenue
(5,271)
(5,333)
16,042
16,002
Cost of sales
5,114
5,068
(4,975)
(4,914)
Gross profit
(157)
(265)
11,067
11,088
Operating expenses
831
1,244
(4,991)
(4,850)
Other income and expenses
(1,003)
(1,333)
214
181
EBITDA
(332)
(354)
6,290
6,419
2.1 | Segment reporting (continued)
Reconciliation of EBITDA to profit/(loss) before income taxes (DKKm)
2022
2021
Total EBITDA from reportable segments
6,290
6,419
Unallocated:
Depreciation, amortisation and impairment losses
(4,946)
(5,067)
Special items
(205)
(424)
Financial income and expenses
(2,504)
(3,525)
Consolidated profit/(loss) before income taxes
(1,365)
(2,597)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 34
2.2 | Revenue
Nuuday
Consumer
Business
Other
Nuuday total
External revenue specified by services (DKKm)
2022
2021
2022
2021
2022
2021
2022
2021
Landline voice
311
363
430
432
3
4
744
799
Mobile services
3,217
3,107
1,151
1,169
704
619
5,072
4,895
Internet & network
2,397
2,399
1,055
1,066
-
2
3,452
3,467
TV
3,400
3,368
18
20
28
43
3,446
3,431
Other services
757
852
1,159
1,150
5
3
1,921
2,005
External revenue, total
10,082
10,089
3,813
3,837
740
671
14,635
14,597
TDC NET
Group functions
Total
2022
2021
2022
2021
2022
2021
Landline voice
106
116
-
-
850
915
Mobile services
56
80
-
-
5,128
4,975
Internet & network
883
875
-
-
4,335
4,342
TV
-
-
-
-
3,446
3,431
Other services
362
330
4
2,283
2,339
External revenue, total
1,407
1,401
4
16,042
16,002
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 35
‘
The revenue is from domestic operations.
Revenue recognition for a telecom operator is a com-
plex area of accounting that requires management es-
timates and judgements.
Recognition of revenue depends on whether the
Group acts as a principal in a transaction or an agent
representing another company. Whether the Group is
considered to be the principal or agent in a transac-
tion depends on an analysis of both the form and sub-
stance of the customer agreement. When the Group
acts as the principal, revenue is recognised at the
agreed value, whereas when the Group acts as an
agent, revenue is recognised as the commission the
Group receives for arranging the agreement.
Judgements of whether the Group acts as a principal
or as an agent impact on the amounts of recognised
revenue and operating expenses, but do not impact
on net profit for the year or cash flows. Judgements
of whether the Group acts as a principal are used pri-
marily in transactions covering content.
When the Group concludes contracts involving com-
plex sale of goods and services, management judge-
ments are required to determine whether goods and
services shall be recognised together or as separate
goods and services.
Management estimates are also used for allocating
the transaction price to the individual elements based
on their respective fair values, if judged to be recog-
nised separately. For example, business customer
contracts can comprise several elements related to
mobile phones, subscriptions, leases, etc.
2.2 | Revenue (continued)
(DKKm)
2022
2021
Sales of goods recognised at a point in time
1,392
1,356
Sales of services recognised over time
14,650
14,646
Total
16,042
16,002
Critical accounting estimates and judgements
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 36
Revenue is measured at the fair value of the considera-
tion receivable after deduction of sales tax and discounts
relating directly to sales. Revenue comprises goods and
services provided during the year. Goods and services
may be sold separately or in bundled packages. Services
include traffic and subscription fees, interconnection
and roaming fees, fees for leased lines, network ser-
vices, TV distribution as well as connection and installa-
tion fees. Goods include customer premises equipment,
telephony handsets, PCs, set-top boxes, etc.
Consumer sells to households and the contracts are
primarily perpetual, with the same service provided
until the customer terminates the contract. Some of
the contracts include a non-cancellation period of 6
months. Consumer also has contracts with antenna
associations for longer periods.
Business sells digital solutions to enterprises and pub-
lic segments. Business offers modular solutions for
small and medium-sized enterprises, as well as cus-
tomised solutions for public and large enterprises.
Modular self-service contracts are perpetual, and con-
tracts with customised solutions are for longer peri-
ods, i.e. 3-5 years.
Wholesale delivers services from plain access to full
service packages to service providers. Wholesale rev-
enue is partly regulated.
The significant sources of revenue are recognised in
the income statements as follows:
• revenues from subscription fees and flat-rate ser-
vices are recognised over the subscription period
• revenues from telephony are recognised at the
time the calls are made
• sales related to prepaid services are deferred, and
revenues are recognised at the time of use
• revenues from leased lines are recognised over the
rental period
• revenues from the sale of equipment are recog-
nised on delivery. Revenues from equipment
maintenance are recognised over the contract pe-
riod
Revenue arrangements with multiple deliverables are
recognised as separate units of accounting, independ-
ent of any contingent element related to the delivery
of additional items or other performance conditions.
Such revenues include the sale of equipment located
at customer premises, e.g. switchboards and hand-
sets.
The transaction price in revenue arrangements with
multiple deliverables, such as handsets and subscrip-
tions, are allocated to each performance obligation
based on the stand-alone selling price. Where the
selling price is not directly observable, it is estimated
based on expected cost plus a margin. Discounts on
bundled sales are allocated to each element in the
contract.
Contracts with similar characteristics have been eval-
uated using a portfolio approach due to the large
number of similar contracts.
In case of contracts for longer periods and if the pay-
ment exceeds the services rendered, contract liabili-
ties are recognised, see note 3.5.
Revenues are recognised gross when DKTH Group
acts as the principal in a transaction. For content-
based services and the resale of services from content
providers where DKTH Group acts as the agent, reve-
nues are recognised net of
direct costs.
The percentage-of-completion method is used to rec-
ognise revenue from contract work in progress based
on an assessment of the stage of completion. Con-
tract work in progress includes installation of tele-
phone and IT systems, systems integration and other
business solutions.
Non-refundable up-front connection fees are included
in the total transaction price for the contract with the
customer and are thereby allocated to the identified
performance obligations (services).
The period between the transfer of the service to the
customer and the payment by the customer is not of
an extent that gives reason to adjust the transaction
prices for the time value of money.
Other income
Other income comprises mainly rental income, com-
pensation for cable breakages, investment advisory
fees from the related pension funds as well as profit
relating to divestment of property, plant and equip-
ment.
2.2 | Revenue (continued)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 37
Accounting policies
Cost of sales includes transmission costs and cost of
goods sold. Transmission costs include external ex-
penses related to operation of mobile and landline
networks and leased transmission capacity as well as
interconnection and roaming costs related directly to
the Group’s primary income.
Cost of goods sold includes terminal equipment and
transmission material as well as TV-programme rights
and other content costs.
Accounting policies
External expenses include expenses related to mar-
keting and advertising, IT, property, expenses related
to staff, capacity maintenance, service contracts, etc.
2.3 | Cost of sales
(DKKm)
2022
2021
Mobile services
(815)
(740)
Landline voice
(75)
(74)
Internet & network
(329)
(280)
TV
(1,954)
(1,974)
Other services
(1,802)
(1,846)
Total
(4,975)
(4,914)
2.4 | External expenses
(DKKm)
2022
2021
Marketing and advertising
(219)
(226)
Subscriber acquisition and retention, cf. note 3.5
(168)
(163)
Properties
(597)
(422)
IT
(402)
(332)
Temps and personnel-related expenses
(143)
(119)
Other
(629)
(629)
Total
(2,158)
(1,891)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 38
Key management consists of the Executive
Committee of TDCH as well as the CEOs and CFOs of
Nuuday and TDC NET. The member of
the Executive Committee in TDCH does not receive re-
muneration.
In 2021 the remuneration for the Executive
Committee amounted to DKK 54.4m of which DKK
2.5m constitutes pensions and DKK 3.6m comprises
other long-term benefits.
2.5 | Personnel expenses
(DKKm)
2022
2021
Wages and salaries (including short-term and long-term bonuses)
(3,696)
(3,773)
Pensions:
defined benefit plans
(83)
(82)
defined contribution plans
(287)
(293)
Social security
(77)
(80)
Total
(4,143)
(4,228)
Of which capitalised as tangible and intangible assets
1,310
1,269
Total personnel expenses recognised in the income statement
(2,833)
(2,959)
1
Primarily software and network infrastructure.
Remuneration for the key management of TDCH and
the Board of Directors of TDCH
2
(DKKm)
2022
2021
Base salary (incl. benefits)
13.9
20.2
Cash bonus
6.4
15.4
Pensions
2.2
3.7
Long-term incentive programme
2.7
3.3
Management incentive programme (cf. note 6.1)
4.9
2.1
30.1
44,7
Redundancy compensation
1
6.4
33.9
Key management in total
36.5
78.6
Fee to the Board of Directors
14.3
5.8
Total
50.8
84.4
1
Redundancy compensation in 2022 comprised the CFO of Nuuday A/S, who retired in Q1 2022, and the CFO of TDC NET A/S, who will retire in Q1 2023. The Re-
dundancy compensations are in accordance with the employment contracts.
2
During 2022, the remuneration to the key management (excluding redundancy compensation) comprised 3.6 members on average
(2021: 4.7 members). Management in DK Telekommunikation, DKT Finance and DKT Holdings receive no remuneration.
Number of full-time employee equivalents
1
2022
2021
1 January
6,659
7,032
Redundancy programmes
(166)
(324)
Insourcing
9
92
Hirings and resignations
(69)
(141)
31 December
6,433
6,659
Former Danish civil servants
51
56
Employees entitled to pension from TDC Group’s pension fund
598
677
Other employees
5,784
5,926
31 December
6,433
6,659
Average number of full-time employee equivalents, DKTH Group
2
6,477
6,759
1
The reported number of full-time employees does not include students, graduates, employees in ‘flexible job’ or job rotation (173 in 2022 and 200
in 2021).
2
The average number of full-time employee equivalents seconded to external parties in connection with outsourcing of tasks or divestment of operations and
entitled to pensions on conditions similar to those provided for Danish civil servants is not included in the reported figures (16 in 2022
and 44 in 2021).
Comments
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 39
Wages, salaries, social security contributions, paid
leave and sick leave, bonuses and other employee
benefits are recognised in the year in which the em-
ployee renders the related services.
Pension costs
See note 3.7.
Full-time employee equivalents
The number of full-time employee equivalents in-
cludes permanent employees and trainees.
Employees who are entitled to pensions on conditions
similar to those provided for Danish civil servants and
who are seconded to external parties in connection
with outsourcing of tasks or divestment of operations
are not included in the reported numbers.
Employees in acquired enterprises are included as the
average number of full-time employee equivalents
from the time of acquisition until 31 December. Em-
ployees in divested enterprises are included as the av-
erage number of full-time employee equivalents from
1 January until the time of divestment.
Employees in discontinued operations are not in-
cluded in the number of full-time employee equiva-
lents. The total number of full-time employee equiva-
lents including discontinued operations is disclosed in
a footnote.
Comments
The decrease in amortisation from 2021 to 2022 is due
primarily to lower customer and software amortisation
in 2022.
2.5 | Personnel expenses (continued)
Accounting policies
2.6 | Depreciation, amortisation
and impairment losses
(DKKm)
2022
2021
Amortisation of intangible assets, cf. note 3.1
(2,457)
(2,613)
Depreciation of property, plant and equipment, cf. note 3.2
(2,107)
(2,055)
Depreciation of lease assets, cf. note 3.3
(381)
(380)
Impairment losses, cf. notes 3.1 and 3.2
(30)
(47)
Of which capitalised as tangible or intangible assets
29
28
Total
(4,946)
(5,067)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 40
Worth noting
Special items are significant amounts that
Management considers are not attributable to
normal operations such as restructuring costs
and special write-downs for impairment of in-
tangible assets and property, plant and equip-
ment. Special items also include gains and
losses related to divestment of enterprises, as
well as transaction costs and adjustments of
purchase prices relating to the acquisition of
enterprises. Special items consist of both re-
curring and non-recurring items.
Critical accounting judgements
In the Group’s income statement, special items are
presented as a separate item. Special items include
income or costs that in Management’s judgement
shall be disclosed separately by virtue of their size,
nature or incidence. In determining whether an event
or transaction is special, Management considers
quantitative as well as qualitative factors such as the
frequency or predictability of occurrence of the trans-
action or event, including whether the event or trans-
action is recurring. This is consistent with the way
that financial performance is measured by Manage-
ment and reported to the Board of Directors and facil-
itates a meaningful analysis of the operating results of
the Group.
Accounting policies
Special items, as described above, are disclosed on
the face of the income statement. Items of a similar
nature for in joint ventures and associates are recog-
nised in profit from joint ventures and associates.
2.7 | Special items
(DKKm)
2022
2021
Costs related to redundancy programmes
(88)
(179)
Other restructuring costs, etc.
(21)
(76)
Distribution of excess capital from TDC Pension Fund to its members
(94)
(44)
Profit/(loss) on sale of enterprises
-
(103)
Loss from rulings
(2)
(16)
Costs related to acquisition of enterprises
-
(6)
Special items before income taxes
(205)
(424)
Income taxes related to special items
10
59
Special items related to joint ventures and associates
-
49
Total special items
(195)
(316)
Cash flow from special items (DKKm)
2022
2021
Redundancy programmes
(122)
(146)
Rulings
(1)
(15)
Other
(58)
(55)
Total
(181)
(216)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 41
Worth noting
A large part of DKTH Group’s deferred tax lia-
bilities relates to assets that are not expected
to be taxed in the foreseeable future (pension
assets, customer relations and brands). The
deferred tax liabilities relating to customer re-
lationships and brands stem primarily from the
acquisition of TDC A/S in May 2018 and the re-
sulting purchase price allocation.
2.8 | Income taxes
2022
2021
Income taxes (DKKm)
Income tax
income/
(expense)
Income tax
payable/
(receivable)
Deferred tax
liabilities/
(assets)
Income tax
income/
(expense)
Income tax
payable/
(receivable)
Deferred tax
liabilities/
(assets)
At 1 January
132
4,298
(229)
3,881
Income taxes for the year
(126)
514
(388)
(90)
333
(243)
Adjustment of tax for previous years
51
(37)
(14)
(20)
-
20
Tax relating to remeasurement effects from defined bene-
fit plans
-
-
346
-
-
640
Income tax paid
(522)
28
Total
(75)
87
4,242
(110)
132
4,298
Shown in the balance sheet as:
Tax payable/deferred tax liabilities
87
4,242
132
4,298
Tax receivable/deferred tax assets
Total
87
4,242
132
4,298
Income taxes are specified as follows:
Income excluding special items
(85)
(169)
Special items
10
59
Total
(75)
(110)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 42
DKT Holdings ApS participates in joint taxation with all
its Danish group companies. DKT Holdings ApS is the
administration company in the joint taxation. The
jointly taxed companies are jointly and severally liable
for the total income taxes, taxes paid on account and
outstanding residual tax (with additional payments
and interest) relating to the joint taxation.
2.8 | Income taxes (continued)
2022
2021
Deferred tax (DKKm)
Deferred
tax assets
Deferred
tax liabilities
Total
1
Intangible assets
-
170
170
306
Other
-
8
8
(3)
Current
-
178
178
303
Intangible assets
1,999
1,999
2,090
Property, plant and equipment
(151)
-
(151)
(179)
Lease assets and liabilities
(216)
-
(216)
(223)
Pension assets and pension liabilities
-
2,396
2,396
2,324
Tax value of tax-loss carried forwards
(12)
-
(12)
(12)
Other
-
48
48
(5)
Non-current
(379)
4,443
4,064
3,995
Deferred tax at 31 December
(379)
4,621
4,242
4,298
1
The total net deferred tax is recognised as a liability in the balance sheet.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 43
The change in effective tax rate (excluding special
items) was due primarily to an increased impact of
the Danish limitation on the deductibility of interest
partly offset by an increase of adjustment of tax for
previous years.
Tax for the year comprises current income tax,
changes in deferred tax and adjustments from prior
years and is recognised in the income statement, ex-
cept to the extent that it relates to items recognised
in other comprehensive income.
Current income tax liabilities and current income tax
receivables are recognised in the balance sheet as in-
come tax payable or income tax receivable.
Deferred tax is measured under the balance-sheet lia-
bility method on the basis of all temporary differ-
ences between the carrying amounts and the tax ba-
ses of assets and liabilities at the balance sheet date.
However, deferred tax is not recognised if the tempo-
rary difference arises from the initial recognition of
goodwill or if it arises from initial recognition of an as-
set or liability in a transaction other than a business
combination that affects neither accounting nor taxa-
ble profit/loss. Deferred income tax is provided on
temporary differences arising on investments in sub-
sidiaries, joint ventures and associates, except where
the timing of the reversal of the temporary difference
is controlled by DKT Holdings Group and it is probable
that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets including the tax value of tax-
losses carried forwards are recognised when it is likely
that these will be utilised in the foreseeable future.
Deferred tax is adjusted concerning elimination of un-
realised intra-group profit and losses.
Deferred tax is measured on the basis of the tax rules
and tax rates effective under the legislation in the re-
spective countries at the balance sheet date when the
deferred tax is expected to be realised as current in-
come tax. Changes in deferred tax as a result of
changes in tax rates are recognised in the income
statement except for the effect of items recognised
directly in other comprehensive income.
Deferred tax assets and liabilities are offset in the
consolidated balance sheet.
2.8 | Income taxes (continued)
2022
2021
Effective tax rate (DKKm)
DKKm
%
DKKm
%
Danish corporate income tax rate
255
22.0
489
22.0
Limitation on the tax deductibility of
interest expenses
(406)
(35.0)
(638)
(28.7)
Adjustment of tax for previous years
50
4.4
(20)
(0.9)
Other
16
1.3
-
-
Effective tax excluding special items
(85)
(7.3)
(169)
(7.6)
Special items
10
1.8
59
3.4
Effective tax including special items
(75)
(5.5)
(110)
(4.2)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 44
Section 3
Operating assets and
liabilities
This section shows the assets used to generate the Group’s perfor-
mance and the resulting liabilities incurred. Assets and liabilities
relating to the Group’s financing activities are
addressed in section 4. Deferred tax assets and liabilities
are shown in note 2.8.
3. In this section
3.1. Intangible assets ............................................................... 45
3.2. Property, plant and equipment ........................................ 50
3.3. Lease assets and liabilities ................................................ 52
3.4. Trade receivables.............................................................. 54
3.5. Contract assets and liabilities ........................................... 55
3.6. Provisions ......................................................................... 56
3.7. Pension assets and pension obligations ........................... 58
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 45
3.1 | Intangible assets
2022
2021
(DKKm)
Goodwill
Customer
relationships
Brands
Rights and
software, etc.
Total
Goodwill
Customer
relationships
Brands
Rights and,
software, etc.
Total
Cost at 1 January
22,201
10,573
2,539
10,925
46,238
22,201
10,573
2,539
9,115
44,428
Additions
-
-
-
1,426
1,426
-
-
-
1,895
1,895
Assets disposed of or fully amortised
-
-
-
(118)
(118)
-
-
-
(85)
(85)
Cost at 31 December
22,201
10,573
2,539
12,233
47,546
22,201
10,573
2,539
10,925
46,238
Amortisation and impairment losses at 1 January
-
(5,610)
(634)
(5,033)
(11,277)
-
(4,674)
(461)
(3,580)
(8,715)
Amortisation
-
(831)
(169)
(1,457)
(2,457)
-
(936)
(173)
(1,504)
(2,613)
Impairment losses for the year
-
-
-
(18)
(18)
-
-
-
(32)
(32)
Assets disposed of or fully amortised
-
-
-
112
112
-
-
-
83
83
Amortisation and impairment losses
at 31 December
-
(6,441)
(803)
(6,396)
(13,640)
-
(5,610)
(634)
(5,033)
(11,277)
Carrying amount at 31 December
22,201
4,132
1,736
5,837
33,906
22,201
4,963
1,905
5,892
34,961
Worth noting
DKTH Group’s intangible assets relate largely
to goodwill, customer relations and brands
stemming from the acquisition of TDC A/S in
May 2018, and the resulting purchase price al-
location.
Cash flow (DKKm)
2022
2021
Additions, cf. table above
(1,426)
(1,895)
Instalments regarding mobile licences, cf. note 4.4
(192)
(109)
Non-cash part of acquisition of mobile licences
-
663
Cash flow from investment in intangible assets
(1,618)
(1,341)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 46
Impairment of intangible assets, etc. totalled DKK
18m (2021: DKK 32m), of which DKK 14m related to
termination of various software projects in Nuuday.
The remaining 4m related to termination of various
software projects in TDC Net DKK 1m and in Group
functions DKK 3m.
Assets with indefinite useful lives other than goodwill
related to the TDC brand and were unchanged at DKK
833m compared with 2021.
The carrying amount of software amounted to DKK
2,861m (2021: DKK 2,707m). Of this, DKK 435m re-
lates to software in progress. The addition of inter-
nally developed software totalled DKK 595m (2021:
DKK 586m).
The carrying amount of individually material Danish
spectrum mobile licences included in rights, software,
etc., amounted to DKK 2,863m (2021: DKK 3,035m)
and is shown in the next table. Of this DKK 228m re-
lates to licences not yet in use.
Useful lives
Management estimates useful lives for intangible as-
sets based on periodic studies of customer churn or
actual useful lives and the intended use for those as-
sets. Such studies are completed or updated when
new events occur that may have the potential to im-
pact the determination of the useful life of the asset,
i.e. when events or circumstances occur that indicate
that the carrying amount of the asset may not be re-
coverable and should therefore be tested for impair-
ment. Any change in customer churn or the expected
useful lives of these assets is recognised in the finan-
cial statements, as soon as any such change has been
ascertained, as a change of a critical accounting esti-
mate.
Impairment testing of intangible assets
Intangible assets comprise a significant portion of
DKTH Group's total assets. The measurement of the
recoverable amount of intangible assets is a complex
process that requires significant Management judge-
ments in determining various assumptions to be used
in the calculation of cash-flow projections, discount
rates and terminal growth rates.
The sensitivity of changes in the assumptions used to
determine the recoverable amount may be signifi-
cant. Furthermore, the use of other estimates or as-
sumptions when determining the recoverable amount
of the assets may result in other values and could re-
sult in required impairment of intangible assets.
The assumptions used for the impairment testing of
goodwill are shown in the section Impairment testing
of goodwill and intangible assets with indefinite use-
ful lives.
3.1 | Intangible assets (continued)
Comments
Spectrum licences
Spectrum (MHz)
Bandwidth (MHz)
Licence expiry
700
2 x 15 + 1 x 20
2040
800
2 x 20
2034
900
2 x 10
2034
1500
45
2042
1800
2 x 20
2032
2100
2 x 20
2042
2300
100
2041
2600
2 x 20
2030
3500
130
2042
26000
1250
2042
Critical accounting estimates and judgements
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 47
Impairment testing of goodwill and intangible assets
with indefinite useful lives
Goodwill and intangible assets with indefinite useful
lives relate primarily to DKTH’s acquisition of TDC
Holding A/S. The carrying amount of goodwill relating
to the acquisition of TDC amounted to DKK 21,913m
and the carrying value of intangible assets with indefi-
nite useful lives amounted to DKK 833m. The carrying
amount of goodwill is tested for impairment annually
and if events or changes in circumstances indicate im-
pairment. The annual tests were carried out at 1 Oc-
tober 2022 and at 1 October 2021, respectively.
Impairment testing is an integral part of DKTH
Group’s budget and planning process, which is based
on long-term business plans with projection until
2030 to reflect the long-term investments in fibre in-
frastructure. The discount rates applied reflect spe-
cific risks relating to the individual cash-generating
unit. The recoverable amount is based on the value in
use determined on expected cash flows based on
long-term business plans approved by Management.
The business plans approved by Management follow
the operating segments as described in note 2.1.
Projections for the terminal period are based
on general expectations and risks, taking into
account the general growth expectations for the tele-
coms industry in Denmark.
The long-term business plans are based on current
trends. The budget period includes cash flow effects
from completed restructurings combined with effects
of strategic initiatives aimed at improving or main-
taining trend lines.
For the impairment testing of goodwill, TDC Group
uses a pre-tax discount rate for each cash-generating
unit.
Goodwill and intangible assets with indefinite useful
lives relate to Nuuday and TDC NET. The assumptions
for calculating the value in use for the most significant
goodwill amounts are given below.
3.1 | Intangible assets (continued)
Key assumptions for calculating the value in use for the significant
1
goodwill amounts (DKKm)
Nuuday
TDC NET
Carrying amount of goodwill at 31 December 2022 (DKKm)
4,883
17,318
Carrying amount of goodwill at 31 December 2021 (DKKm)
4,883
17,318
Market-based growth rate applied at 1 October 2022 to extrapolated pro-
jected future cash flows for the period following 2030
2.3%
2.3%
Market-based growth rate applied at 1 October 2021 to extrapolated pro-
jected future cash flows for the period following 2030
1.0%
1.0%
Applied pre-tax discount rate at 1 October 2022
11.7%
8.5%
Applied pre-tax discount rate at 1 October 2021
7.6%
5.3%
1
Representing 100% of the total carrying
amount in 2020.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 48
Assumptions regarding recoverable amounts
and projected earnings
The impairment test is sensitive to possible changes
in the key assumptions, which may
result in future impairments. A sensitivity analysis in-
dicates that EBITDA may be approximately 10% lower
in each year in the planning period before a write-
down would have to be recognised. If the weighted
average cost of capital (WACC) applied as the dis-
counting factor in the calculations increases/ de-
creases by 1.0% and all other things being equal, the
value in use would decrease/increase by DKK 11.4bn
and 17.8bn, respectively. Under the same assump-
tions, a 1.0% decrease/increase in the market-based
growth rate would decrease/increase the value in use
by DKK 8.4bn and 13.2bn, respectively. With the pre-
sent relation between WACC and growth rate the
WACC can increase approximately 1.7 percentage
points (pre-tax) before the carrying amount of good-
will in one of the segments will exceed the recovera-
ble value. The impairment test has been prepared on
the basis that the company continues to operate with
the current set-up.
Nuuday
Sensitivity driven by reasonably possible changes in the
key assumptions are disclosed below.
Projections are based on the assumption of positive
EBITDA growth in the long-term business plan based
on the following assumptions:
• Landline voice decline from continuation of higher
churn and partly offset by improved product mix
and higher ARPU
• Growth in mobility services from higher RGUs and
ARPU partly offset by the ambition to continue to
have superior networks
• Declining broadband gross profit trend due
to decreasing RGUs, however offset in the
long term by increased ARPUs as customers
migrate to high-speed technologies (e.g. Fibre and
Coax)
• TV gross profit decline due to pressure on the num-
ber of RGUs and increased content cost. Focus on
future-proof TV technology such as Bland Selv TV,
supporting higher ARPUs due to enhanced product
mix
• Savings driven by initiatives generated in an exten-
sive savings programme with reductions of external
and personnel expenses.
TDC NET
Any reasonably possible changes in the key assumptions
are not expected to cause the carrying amount of good-
will to exceed the recoverable value.
Projections show steady EBITDA growth and an in-
creasing EBITDA margin in the long-term business
plan based on the following assumptions:
• Steady growth in mobility services gross profit
• Increased gross profit from highspeed broad-
band, stemming from TDC NETs growing fibre
footprint, continued large coax customer base,
and increased ARPU from higher average speed
on products
• Customer base for legacy products such as land-
line, TV and DSL assumed to decrease at higher
rates than historically
• Savings driven by initiatives generated in
an extensive savings programme with
reductions of both external and personnel ex-
penses
• Decrease in capital expenditure from 2021 level,
due to cost optimisation of the fibre roll-out, as
well as optimisation of ongoing investments to
maintain capacity, quality, etc. in the networks.
3.1 | Intangible assets (continued)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 49
Goodwill and brands with indefinite useful lives are
recognised at cost less accumulated impairment
losses. The carrying amounts of goodwill and brands
with indefinite useful lives are tested for impairment
annually and whenever events or changes in circum-
stances indicate that the carrying amounts may not
be recoverable, and are subsequently written down
to the recoverable amounts in the income statement
if exceeded by the carrying amounts. Impairment of
goodwill are not reversed. For the purpose of impair-
ment testing in the consolidated financial statement,
goodwill is allocated to the Group’s cash-generating
units. The determination of cash-generating units is
based on the operating segments in the Group’s inter-
nal management reporting.
Brands with finite useful lives, licences, proprietary
rights, etc. are measured at cost less accumulated
amortisation and impairment losses, and are amor-
tised on a straight-line basis over their estimated use-
ful lives.
Customer-related assets are measured at cost less ac-
cumulated amortisation and impairment losses, and
are amortised using the diminishing-balance method
based on the percentage of churn (15% to 20%) corre-
sponding to the expected pattern of consumption of
the expected future financial benefits.
Development projects, including costs of computer
software purchased or developed for internal use, are
recognised as intangible assets if the cost can be cal-
culated reliably and if they are expected to generate
future economic benefits. Costs of development pro-
jects include wages, external charges, depreciation
and amortisation that are directly attributable to the
development activities as well as interest expenses in
the production period.
Development projects that do not meet the criteria
for recognition in the balance sheet are expensed as
incurred in the income statement.
The main amortisation periods are as follows:
Brands
Mobile licences
Software
3-10 years
16-22 years
3-5 years
Development projects in process and intangible as-
sets of indefinite useful lives are tested for impair-
ment at least annually and written down to recovera-
ble amounts in the income statement if exceeded by
the carrying amount.
Intangible assets are recorded at the lower of recov-
erable amount and carrying amount.
Impairment tests on goodwill and other intangible as-
sets with indefinite lives are performed at least annu-
ally and, if necessary, when events or changes in cir-
cumstances indicate that their carrying amounts may
not be recoverable.
3.1 | Intangible assets (continued)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 50
In 2022, impairment losses totalled
DKK 11m (2021: DKK 15m) related to assets
operated by TDC NET.
3.2 | Property, plant and equipment
2022
2021
(DKKm)
Land and
buildings
Network
infrastructure
Equipment
Assets under
construction
Total
Land and
buildings
Network
infrastructure
Equipment
Assets under
construction
Total
Cost at 1 January
412
24,502
1,257
498
26,669
414
21,661
981
628
23,684
Transfers (to)/from other items
2
494
53
(549)
-
-
544
65
(609)
-
Transfers from leased assets
-
-
-
-
-
-
13
3
-
16
Additions
5
2,148
178
542
2,873
-
2,306
215
479
3,000
Assets disposed of
(5)
(374)
(4)
(3)
(386)
(2)
(22)
(7)
-
(31)
Cost at 31 December
414
26,770
1,484
488
29,156
412
24,502
1,257
498
26,669
Depreciation and impairment losses at 1 January
(114)
(8,364)
(584)
(17)
(9,079)
(111)
(6,589)
(313)
(13)
(7,026)
Transfers (to)/from other items
-
-
-
-
-
-
31
(31)
-
-
Transfers from leased assets
-
-
-
-
-
-
(11)
(1)
-
(12)
Depreciation
(3)
(1,854)
(250)
-
(2,107)
(3)
(1,807)
(245)
-
(2,055)
Impairment losses for the year
-
(9)
-
(2)
(11)
-
(10)
(1)
(4)
(15)
Assets disposed of
-
374
3
-
377
-
22
7
-
29
Depreciation and impairment losses
at 31 December
(117)
(9,853)
(831)
(19)
(10,820)
(114)
(8,364)
(584)
(17)
(9,079)
Carrying amount at 31 December
297
16,917
653
469
18,336
298
16,138
673
481
17,590
Comments
Cash flow (DKKm)
2022
2021
Additions, cf. table above
(2,873)
(3,000)
Non-cash additions regarding decommissioning obligations
(35)
11
Change in additions not yet paid
(152)
(429)
Capitalised depreciations cf. note 2.6
29
28
Cash flow from investment in property, plant and equipment
(3,031)
(3,390)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 51
Depreciation are based on management’s estimates of
residual value, depreciation method and the useful lives
of property, plant and equipment. Estimates may
change due to technological developments, changes in
market conditions and other factors and may result in
changes in the estimated useful lives and in the depre-
ciation charges. Technological developments are diffi-
cult to predict and the Group’s views on the trends and
pace of development may change over time. The im-
pact of expected developments in technology and mar-
kets are critical estimates in the evaluation of useful
lives. The useful lives are reviewed at least annually tak-
ing into consideration the factors mentioned above and
all other important relevant factors. A change in esti-
mated useful life is a change in accounting estimate,
and depreciation plans are adjusted prospectively.
Property, plant and equipment are measured at cost
less accumulated depreciation and impairment losses.
Cost comprises purchase price and costs directly at-
tributable to the acquisition until the date on which the
asset is ready for use. The cost of self-constructed as-
sets includes directly attributable payroll costs, materi-
als, parts purchased, and services rendered by sub-sup-
pliers or contractors as well as interest expenses in the
construction period. Cost also includes estimated de-
commissioning costs if the related obligation meets the
conditions for recognition as a provision.
Directly attributable costs comprise personnel ex-
penses together with other external expenses calcu-
lated in terms of time spent on self-constructed as-
sets.
The depreciation base is measured at cost less resid-
ual value and any impairment. Depreciation is pro-
vided on a straight-line basis over the estimated use-
ful lives of the assets. The main depreciation periods
are as shown in the next table.
The useful lives and residual values of the assets are
reviewed regularly. If the residual value
exceeds the carrying amount of an asset, depreciation
is discontinued.
Property, plant and equipment that have been dis-
posed of or scrapped are eliminated from accumu-
lated cost and accumulated depreciation. Gains and
losses arising from sale of property, plant and equip-
ment are measured as the difference between the
sales price less selling expenses and the carrying
amount at the time of sale. The resulting gain or loss
is recognised in the income statement under other in-
come.
Software that is an integral part of telephone ex-
change installations, for example, is presented to-
gether with the related assets. Useful lives are esti-
mated individually.
Installation materials to be used in construction of as-
sets are measured at the lower of weighted average
cost and recoverable amount.
Customer-placed equipment (e.g., set-top boxes) is
capitalised and depreciated over the estimated useful
life of the individual asset, not exceeding five years.
3.2 | Property, plant and equipment (continued)
Accounting policies
Critical accounting estimates
Buildings
20 years
Network infrastructure:
mobile networks
20 years
copper
20 years
coax
20 years
fibre
30 years
exchange equipment
3-15 years
other network equipment
3-20 years
Equipment (computers, tools and of-
fice equipment)
3-15 years
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 52
The Group leases various offices, exchanges,
mobile sites, retail stores, vehicles and equipment.
Rental contracts are typically made for fixed periods
of 3 to 15 years but may have
extension options.
Lease terms are negotiated on an individual basis and
contain a wide range of different terms and condi-
tions. The lease agreements do not impose any cove-
nants other than the security interests in the leased
assets that are held by the lessor. Leased assets may
not be used as security for borrowing purposes.
The total cash outflow for leases in 2022 was DKK
526m (2021: DKK 508m). The amount is
excluding short-term leases and leases of low-value
assets.
At 31 December 2022, the future sublease payment
amounted to DKK 457m (2021: DKK 397m).
3.3 | Lease assets and liabilities
2022
2021
Lease assets (DKKm)
Land and
buildings
Network
infrastructure
Vehicles and
equipment
Total
Land and
buildings
Network
infrastructure
Vehicles and
equipment
Total
Carrying amount at 1 January
3,013
10
172
3,195
3,268
15
150
3,433
Additions
148
-
141
289
60
-
114
174
Transfer to property, plant and equipment
-
-
-
-
-
(2)
(2)
(4)
Disposals
(1)
-
(8)
(9)
(23)
-
(5)
(28)
Depreciation
(290)
(3)
(88)
(381)
(292)
(3)
(85)
(380)
Carrying amount at 31 December
2,870
7
217
3,094
3,013
10
172
3,195
Lease liabilities (DKKm)
2022
2021
Recognised in the balance sheet at present value:
4,074
4,132
Of which presented as current
(489)
(475)
Total non-current
3,585
3,657
Maturing between 1 and 3 years
858
816
Maturing between 3 and 5 years
719
703
Maturing between 5 and 10 years
1,184
1,203
Maturing between 10 and 20 years
824
935
Total non-current
3,585
3,657
Amounts recognised in the income statement (DKKm)
2022
2021
Expense relating to short-term leases
(94)
(83)
Expense relating to leases of low-value assets
(1)
(1)
Income from sublease
143
109
Depreciation charge of lease assets, cf. above
(381)
(380)
Interest expense (included in financing costs)
(187)
(191)
Comments
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 53
Impairment tests of lease assets require management
to make significant estimates related to
vacant tenancies. Management has estimated the ex-
pected sublease income net of operating cost. For
each category of lease assets (offices,
exchanges, etc.) and in consideration of the geo-
graphical location, the probability of obtaining
income from sublease and expected sublet rent rates
is estimated. The most critical assumptions used in
determining the write-down relate to the probability
of sublease and expected sublet rent rates that will be
impacted by e.g., changed market conditions for sub-
letting.
The Group has 172,737 square metres of leased ten-
ancies no longer used by the Group (2021: 173,023).
Of this, 124,305 square metres were sublet (2021:
116,918). The leases terminate in 2041 at the latest.
The Group is expected to vacate and sublet additional
tenancies in the future, following further
reductions in the number of employees and upgrad-
ing to technical equipment that requires fewer square
metres.
Significant judgements are involved when assessing
the future capacity needs for leases and as such, the
use of extension options.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease
liabilities include the net present value of the follow-
ing lease payments:
• fixed payments (including in-substance fixed pay-
ments), less any lease incentives receivable
• variable lease payments that are based on an index
or a rate, initially measured using the
index or rate as at the commencement date
• amounts expected to be payable by the Group un-
der residual value guarantees
• the exercise price of a purchase option if the Group
is reasonably certain to exercise that
option
• payments of penalties for terminating the lease, if
the lease term reflects the Group exercising that
option.
The lease payments to be made under reasonably
certain extension options are also included in the
measurement of the liability.
The lease payments are discounted using the interest
rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in
the Group, the lessee’s incremental borrowing rate is
used, which is the rate that the lessee would have to
pay to borrow the funds necessary to obtain an asset
of similar value to the lease asset in a similar eco-
nomic environment with similar terms, security and
conditions.
The incremental borrowing rates are based on our ex-
isting credit facilities and observable market data.
The Group is exposed to potential future
increases in variable lease payments based on an in-
dex or rate, which are not included in the lease liabil-
ity until they take effect. When adjustments to lease
payments based on an index or rate take effect, the
lease liability is reassessed and adjusted against the
lease asset.
Lease payments are allocated between instalments
and financing costs. The financing costs are charged
to the income statement over the lease period to pro-
duce a constant periodic rate of interest on the re-
maining balance of the liability for each period.
Lease assets are measured at cost less accumulated
depreciation and write-downs for impairment. Cost
comprises the following:
• the amount of the initial measurement of lease lia-
bility
• any lease payments made at or before the com-
mencement date less any lease incentives received
• any initial direct costs
• decommissioning costs.
Lease assets are generally depreciated over the
shorter of the asset’s useful life and the lease term on
a straight-line basis. If the Group is reasonably certain
to exercise a purchase option, the lease asset is de-
preciated over the underlying
asset’s useful life cf. note 3.2.
Impairment tests on lease assets are performed at
least annually and, if necessary, when circumstances
indicate their carrying amounts may not be recovera-
ble. Write-downs of lease assets
related to vacant tenancies are based on expectations
concerning timing and scope, future cost level, etc.
The calculation of the write-downs comprises rent
and operating costs for the contract period minus the
expected rental income from subleases.
Payments associated with short-term leases of equip-
ment and vehicles and all leases of low-value assets
are expensed as incurred. Short-term leases are
leases with a lease term of 12 months or less. Low-
value assets comprise IT equipment and small items
of office furniture.
3.3 | Lease assets and liabilities (continued)
Critical accounting estimates and judge-
ments
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 54
Comments
The carrying amount of the balance’s approximated
fair value is due to the short maturity of amounts re-
ceivable.
As at 1 January 2021, trade receivables from contracts
with customers amounted to DKK 1,656m (net of loss
allowance of DKK 204m).
Expected credit losses are assessed for portfolios of
trade receivables based on customer seg
ments, historical credit loss experience combined
with forward-looking information on macroeconomic
factors affecting the credit risk. The expected loss
rates are updated at each reporting date.
Accounting policies
Trade receivables are amounts due from customers
for goods sold or services performed in the ordinary
course of business. DKTH operates with standard cus-
tomer payment terms where customer subscriptions
are billed and paid in advance of the subscription pe-
riod, while usage and one-off services are billed and
paid after the subscription period. The receivables are
generally due for settlement within 20-30 days and
are therefore all classified as current. Trade receiva-
bles are recognised initially at the amount of consid-
eration that is unconditional. The Group holds the
trade receivables with the objective of collecting the
contractual cash flows and therefore measures them
subsequently at amortised cost using the effective in-
terest method.
DKTH applies the simplified approach to measure ex-
pected credit losses, which uses a lifetime
expected loss allowance for all trade receivables, con-
tract assets and lease receivables. To measure the ex-
pected credit losses, receivables have been grouped
based on shared credit risk characteristics and the
days past due. The expected loss rates are based on
the payment profiles of sales and the corresponding
historical credit losses experienced. The historical loss
rates are adjusted to reflect current and forward-
looking information on macroeconomic factors affect-
ing the ability of the customers to settle the receiva-
bles.
3.4 | Trade receivables
(DKKm)
2022
2021
Trade receivables
1,608
1,630
Expected credit losses
(111)
(186)
Trade receivables, net
1,497
1,444
Expected credit losses at 1 January
(186)
(204)
Expected credit losses
(60)
(46)
Realised credit losses
101
38
Reversed expected credit losses
34
26
Expected credit losses at 31 December
(111)
(186)
Trade receivables (DKKm)
Not yet due
Less than
1 month
past due
More than
1 month
past due
More than
3 months past
due
More than
6 months past
due
Total
2022
Expected loss rate
1%
1%
5%
24%
73%
7%
Gross carrying amount
1,231
170
64
25
118
1,608
Expected credit losses
(15)
(1)
(3)
(6)
(86)
(111)
2021
Expected loss rate
1%
2%
3%
11%
75%
11%
Gross carrying amount
1,135
166
61
44
224
1,630
Expected credit losses
(8)
(4)
(2)
(5)
(167)
(186)
Critical accounting estimates
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 55
Of the deferred subscription income, DKK 30m (2021:
DKK 38m) will be recognised as income
after more than one year.
Revenue recognised in 2022 that was included
in deferred subscription income at the beginning of
the period amounted to DKK 2,292m (2021: DKK
2,272m).
Costs recognised in 2022 that were included in assets
recognised from costs to obtain a contract (SAC) at
the beginning of the period amounted to DKK 123m
(2021: DKK 132m). Assets to fulfil a contract at the be-
ginning of the period DKK 36m (2021 DKK 25m) were
recognised as costs in 2022.
Of the assets recognised from costs to obtain a con-
tract (SAC), DKK 108m (2021: DKK 82m) and DKK
134m (2021: DKK 103m) of costs to fulfil a contract
will be recognised as costs after more than one year.
Subscriber acquisition costs
and fulfilment costs
The most common subscriber acquisition costs are
dealer commissions. Subscriber acquisition costs and
fulfilment costs are capitalised and recognised as ex-
penses in external expenses and personnel expenses
over the expected term of the related customer rela-
tionship. The term is estimated using historical cus-
tomer churn rates. Change of management estimates
may have a significant impact on the amount and tim-
ing of the expenses for any period.
Deferred subscription income recognised as a liability
comprises payments received from customers cover-
ing income in subsequent years.
3.5 | Contract assets and liabilities
(DKKm)
2022
2021
1 January 2021
Assets recognised from costs to obtain a contract (SAC)
248
204
212
Assets recognised from costs to fulfil a contract
186
139
109
Work in progress for the account of third parties
57
52
57
Total contract assets
491
395
378
Deferred subscription income
2,377
2,326
2,310
Other deferred income
37
39
43
Work in progress for the account of third parties,
liabilities
5
17
45
Total contract liabilities
2,419
2,382
2,398
Comments
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 56
3.6 | Provisions
2022
2021
(DKKm)
Decom
missioning
obligations
Restructuring
obligations
Other
provisions
Total
Provisions at 1 January
316
102
193
611
461
Provisions made
7
90
-
97
324
Change in present value
(32)
-
-
(32)
(2)
Provisions used (payments)
(5)
(130)
(7)
(142)
(165)
Reversal of unused provisions
(1)
-
(17)
(18)
(8)
Currency translation adjustments
-
-
(5)
(5)
1
Provisions at 31 December
285
62
164
511
611
Of which recognised through special items in the income state-
ment
-
56
101
157
207
Recognised as follows in the
balance sheet:
Non-current liabilities
285
13
64
362
415
Current liabilities
-
49
100
149
196
Total
285
62
164
511
611
Specification of how payments regarding provisions are recog-
nised in the statements of cash flow (DKKm)
2022
2021
Payments related to provisions
(21)
(22)
Cash flow related to special items
(121)
(143)
Total
(142)
(165)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 57
Provisions for decommissioning obligations relate to
the future dismantling of mobile stations and restora-
tion of property owned by third parties. The uncer-
tainties relate primarily to the timing of the related
cash outflows. The majority of these obligations are
not expected to result in cash outflow within the next
five years.
Provisions for restructuring obligations relate primar-
ily to redundancy programmes. The majority of the
provisions for redundancy programmes are expected
to result in cash outflows in the next five years. The
uncertainties relate primarily to the estimated
amounts and the timing of the related cash outflows.
Other provisions relate mainly to onerous contracts
and jubilee benefits for employees as well as legal
claims. The majority of these provisions are expected
to result in cash outflows in the next five years. The
uncertainties regarding legal claims and onerous con-
tracts relate to both timing and estimated amounts.
The uncertainties regarding jubilee benefits relate to
both salary and the number of employees included.
In pursuance of Section 32 of the Danish Civil Servants
Act, the Group has a termination benefit obligation to
former Danish civil servants and to employees with
civil-servant status hired before 1 April 1970 who are
members of the related Danish pension fund. In the
event of termination, such employees have a right to
special termination benefits in the amount of three
years’ salary (tied-over allowance) or three months’
full salary and two-thirds of their full monthly salary
for four years and nine months (stand-off pay).
The Group’s total termination benefits include wages
during the notice period, severance pay, stand-off
pay, payments pursuant to the Danish Salaried Em-
ployees Act, special termination benefits (in accord-
ance with IAS 19 Employee Benefits), social security
contributions and out-placement costs. The average
redundancy cost per full-time employee equivalent,
calculated as the total cost divided by the number of
full-time employee equivalents included in the redun-
dancy programmes during this period, is shown in the
table below.
Provisions are recognised when the Group has a legal or
constructive obligation arising from past events, it is
probable that economic benefits must be sacrificed to
settle it, and the amount can be estimated reliably.
Provisions for restructuring, etc. are recognised when a
final decision thereon has been made before or on the
balance sheet date and has been announced to the par-
ties involved, provided that the amount can be meas-
ured reliably. Provisions for restructuring are based on
a defined plan, which means that the restructuring
commences immediately after the decision has been
made.
When the Group is under an obligation to demolish an
asset or re-establish the site where the asset was used,
a liability corresponding to the present value of esti-
mated future costs is recognised and an equal amount
is capitalised as part of the initial carrying amount of
the asset. Subsequent changes in such a decommission-
ing liability that results from a change in the current
best estimate of cash Provisions are recognised when
the Group has a legal or constructive obligation arising
from past events, it is probable that economic benefits
must be sacrificed to settle it, and the amount can be es-
timated reliably.
Provisions are measured at Management’s best esti-
mate of the amount at which the liability is expected to
be settled. Provisions are discounted if the effect is ma-
terial to the measurement of the liability.
3.6 | Provisions (continued)
Comments
Average redundancy cost per
full-time employee equivalent
1
(DKK thousands)
2022
2021
Non-civil servants
411
388
Former Danish civil servants
129
1,118
Employees with civil-servant status
623
865
Weighted average per full-time employee equivalent
456
446
Number of redundancies
179
318
1
Excluding corporate management.
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 58
Defined benefit plan
Under conditions similar to those provided by the
Danish Civil Servants’ Pension Plan, 623 of DKTH
Group’s employees (2021: 712) were entitled to pen-
sions from the pension fund related to the Group. Of
these, 12 (2021: 21) employees were seconded to ex-
ternal parties in connection with outsourcing tasks or
divesting operations. In addition, 7,398 (2021: 7,514)
members of the pension fund receive or are entitled
to receive pension benefits. The pension benefits
comprise lifelong old-age and disability pensions as
well as certain benefits for spouses and children. Fu-
ture pension benefits are based primarily on years of
credited service and on participants’ compensation at
the time of retirement. Since 1990, no new members
have joined the pension fund plans, and the pension
fund is prevented from admitting new members in
the future due to the articles of association.
The pension fund operates defined benefit plans via a
separate legal entity supervised by the Danish Finan-
cial Supervisory Authority (FSA). In accordance with
existing legislation, articles of association and the
pension regulations, the Group is required to make
contributions to meet the capital adequacy require-
ments. When all pension obligations have been met,
the remaining funds will be distributed from the pen-
sion fund to DKTH Group.
With effect from 2019, TDC Pension Fund can under
certain circumstances distribute excess capital to
DKTH Group triggering a payment to members of the
pension fund as well. The members of the pension
fund receive 7.5% of a potential future distribution
from TDC Pension Fund. Pensioners receive the distri-
bution as part of the current pension payments, while
employees in service receive a supplement to their fu-
ture pension benefits. The pension members’ shares
of distribution are expensed when incurred and rec-
ognised in special items. In 2022, TDC’s Pensions
Fund distributed DKK 1,250m (2021: DKK 318m), of
which DKTH Group received DKK 1,156m (2021: DKK
274m).
Ordinary monthly contributions to the pension fund
are made corresponding to a percentage of wages.
The ordinary contributions have been
reduced from 1 January 2018. This decision was made
due to the positive funding situation of the pension
fund. Extraordinary contributions are made in con-
nection with redundancy programmes and other re-
tirements. Overall, the risk of additional capital contri-
butions to the pension fund can be categorised as in-
vestment, longevity and regulatory risks.
Investment risk is managed within risk tolerance lim-
its to mitigate excessive risk that could lead to contri-
butions. The fund invests in a wide variety of market-
able securities (predominantly fixed-income securi-
ties) and the return on the investments has implica-
tions for DKTH Group’s financial results. Uncompen-
sated risk related to nominal interest rates and infla-
tion has been hedged.
In 2011, the Danish FSA introduced the longevity
benchmark for statutory purposes, and the fund’s ac-
tuary has since on a yearly basis conducted a detailed
longevity statistical analyses that have generally un-
derpinned the fund’s assumptions regarding observed
current longevity. In line with the sector, however,
the fund has increased its provisions for future
expected improvements to longevity corresponding
to the updated Danish FSA benchmark.
Other risks relating to capital contributions in excess
of the planned ordinary contributions and extraordi-
nary contributions in connection with redundancies
going forward, relate primarily to future changes to
pension regulation and benefits over which the Group
does not have full control.
The surplus under the Danish FSA pension regulation
amounted to approximately DKK 3.6bn (2021: DKK
5.9bn). The equity of the pension fund amounted to
approx. DKK 4.5bn (2021: DKK 7.0bn). The equity dif-
fers from the pension assets recognised in accordance
with IFRS due to specific FSA pension regulation re-
quirements resulting in a higher pension obligation
for regulatory purposes. The method for determining
the fair value of plan assets is identical under the two
requirements. The pension assets recognised in ac-
cordance with IFRS amounted to approximately
DKK 10.9bn (2021: 10.6bn).
3.7 | Pension assets and pension obligations
Worth noting
In a defined contribution plan, DKTH Group pays
fixed contributions to a third party on behalf of
the employees and has no further obligations to-
wards the employees. The benefits for the em-
ployees ultimately depend on the third party’s
ability to generate returns.
In a defined benefit plan, members receive cash
payments on retirement, the values of which de-
pends on factors such as salary and length of ser-
vice. The Group underwrites investment, mortality
and inflation risks necessary to meet these obliga-
tions. In the event of returns not being sufficient to
honour obligations towards the employees, DKTH
Group needs to address this through increased
levels of contribution. The Group has defined a
benefit plan in TDC Pension Fund. In total, 623 of
TDCH group’s employees are covered by the de-
fined benefit plan, while all other employees are
covered by defined contribution plans.
DKTH Group makes contributions to TDC Pension
Fund, which is not consolidated in these financial
statements, but are reflected in the balance sheet
in pension assets. TDC Pension Fund can, under cer-
tain circumstances, distribute excess capital to
DKTH Group, triggering a payment to members of
the pension fund as well. DKTH Group’s pension as-
sets and pension obligations are outlined in more
detail in the following.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 59
3.7 | Pension assets and pension obligations (continued)
Assets and obligations (DKKm)
2022
2021
Specification of pension assets
Fair value of plan assets
27,561
34,379
Defined benefit obligation
(16,668)
(23,817)
Pension assets recognised in the balance sheet
10,893
10,562
Change in defined benefit obligation
Defined benefit obligation at 1 January
(23,817)
(23,954)
Additions relating to the acquisition of enterprises
(73)
(72)
Service cost
(10)
(10)
Administrative expenses
(224)
(82)
Interest cost on the defined benefit obligation
(11)
(14)
Termination benefits
(19)
(9)
Remeasurement effect:
Demographic experience
382
383
Financial assumptions
6,047
(1,135)
Benefit paid
1,057
1,076
Projected benefit obligations at 31 December
(16,668)
(23,817)
Change in fair value of plan assets
Fair value of plan assets at 1 January
34,379
31,982
Additions relating to the acquisition of enterprises
319
110
Interest income on plan assets
(4,856)
3,659
Actual return on plan assets greater/(less) than discount rate
(remeasurement effect)
(1,231)
(309)
TDC’s contribution
7
13
Benefit paid
(1,057)
(1,076)
Fair value of plan assets at 31 December
27,561
34,379
Change in pension assets
Pension assets at 1 January
10,562
8,028
Additions relating to the acquisition of enterprises
1
(68)
Pension (costs)/income
1,573
2,907
Remeasurement effects
(1,250)
(318)
TDC’s contribution (see also table below)
7
13
Pension assets recognised in the balance sheet at 31 December
10,893
10,562
Asset allocation by asset categories at 31 December (DKKm)
2022
2021
Assets with quoted prices:
Government and mortgage bonds (incl. hedges and repos)
8,359
14,254
High-yield bonds
5,142
6,126
Investment grade bonds
2,884
2,857
Emerging markets-debt
1,808
2,284
Property
2,437
2,381
Equities
1,166
1,304
Cash
745
154
Other
629
(176)
Assets without quoted prices:
High-yield bonds
785
639
Investment grade bonds
1,422
2,504
Property
2,184
2,052
Equities
-
-
Fair value of plan assets
27,561
34,379
Assumptions used to determine defined benefit obligations (balance sheet)
(%)
2022
2021
Discount rate
3.99
0.96
General price/wage inflation
2.58
2.13
Assumptions used to determine pension (costs)/income
(%)
2023
2022
2021
Discount rate
3.99
0.96
0.35
General price/wage inflation
2.58
2.13
1.19
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 60
The basis for determining the discount rate is the
yield of AA-rated euro-denominated corporate bonds
with an average maturity of 12 years, taking into ac-
count that the pension liability is in Danish kroner. For
purposes of determining DKTH Group’s pension costs,
the assumed discount rate was 0.96% (0.35% in 2021)
and inflation was 2.13% (1.19% in 2021). The assump-
tions for 2023 reflect a discount rate increase to
3.99% and an increase in the assumed inflation rate
to 2.58%.
In 2023, with these changed assumptions, pension
costs from the domestic defined benefit plan is ex-
pected to amount to DKK 386m (2022: cost of DKK
12m), assuming all other factors remain unchanged.
The Group’s contribution is expected to amount to
DKK 7m (2022: DKK 7m).
The remeasurement effects of DKK 1,573m in 2022
covered primarily a gain related to the benefit obliga-
tion (DKK 6,429m) resulting from the increasing dis-
count rate (from 0.96% to 3.99%), which was partly
offset by the plan assets (DKK 4,856m) as the actual
return was lower than the expected return
1
and a loss
related to the increasing inflation rate (from 2.13% to
2.58%).
The remeasurement effects in 2021 of
DKK 2,907m covered primarily a gain related to the
plan assets (DKK 3,659m) as the actual
return was higher than the expected return
1
and a
loss related to the benefit obligation (DKK 752m) re-
sulting from the increasing inflation rate (from 1.19%
to 2.13%), which was partly offset by the increasing
discount rate (from 0.35% to 0.96%).
The mortality assumptions are based on yearly mor-
tality studies. If TDC Pension Funds own observed
mortality deviates significantly from the Danish FSAs
benchmark mortality, TDC Pension Funds own ob-
served mortality is used. Otherwise, the Danish FSAs
benchmark mortality is used. The studies in 2022 and
2021 showed that the benchmark mortality should be
used for men and own observed mortality for women.
In addition, the allowance for future improvement is
in accordance with the Danish FSAs guidelines. The
mortality assumptions provide the best estimate for
the Group’s recent experience plus an allowance for
future improvement.
The table on the right side shows the estimated im-
pact of some of the risks to which DKTH Group is ex-
posed. The Group is also exposed to fluctuations in
the market value of assets. For some of these risks, if
the defined benefit obligation rises or falls, the mar-
ket value of assets may move in the opposite direc-
tion, thereby eliminating some part of the risk.
3.7 | Pension assets and pension obligations (continued)
Sensitivity analysis (DKKm)
2022
2021
Reported defined benefit obligation
16,668
23,817
Discount rate sensitivity
3.99%
0.96%
Assumption -0.5%
17,618
25,536
Assumption +0.5%
15,800
22,272
General price/wage inflation sensitivity
2.58%
2.13%
Assumption +0.25%
17,161
24,675
Assumption –0.25%
16,195
22,299
Mortality sensitivity
Assumption +1 year longevity
17,318
24,941
Assumption -1 year longevity
16,019
22,712
Pension (costs)/income (DKKm)
Expected 2022
2022
2021
Service costs
(38)
(73)
(72)
Administrative expenses
(12)
(10)
(10)
Personnel expenses (included in EBITDA)
(50)
(83)
(82)
Interest on pension assets
436
95
28
Pension (costs)/income
386
12
(54)
Domestic redundancy programmes recognised in special items
(11)
(14)
Members part of distribution of excess capital
(94)
(44)
Total pension (costs)/income recognised in the income statement
(93)
(112)
1
In accordance with International Financial Reporting Standards, the
expected return should be assumed to equal the discount
rate as of the end of the previous year.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 61
Other information
Ultimately, 466 members of the defined benefit plans
will have part of their pension payments
reimbursed by the Danish government. (2021: 478
members).
The related benefit obligations of DKK 290m (2021:
DKK 389m) have been deducted in the projected ben-
efit obligation.
Defined benefit plans
The pension liability regarding defined benefit plans is
estimated based on certain actuarial assumptions, the
most significant of which relate to discount rates,
wage inflation and mortality. The discount rate ap-
plied is based on the yield of corporate bonds and
may change over the years depending on interest rate
developments. Management estimates of actuarial
assumptions illustrate current market conditions. See
the separate section Sensitivity analysis for a state-
ment on the sensitivity of the defined benefit obliga-
tion to the discount rate, inflation and mortality.
In a defined benefit plan, DKTH Group is obliged to
pay a specific benefit at the time of retirement. A
pension asset or pension obligation corresponding to
the present value of the obligations less the defined
pension plans’ assets at fair value is recognised for
these benefit plans.
The obligations are determined annually by independ-
ent actuaries using the projected unit credit method
assuming that each year of service gives rise to an ad-
ditional unit of benefit entitlement, and each unit is
measured separately to build up the final obligations.
Estimation of future obligations is based on the
Group’s projected future developments in mortality,
early retirement, future wages, salaries and benefit
levels, interest rate, etc. The obligation does not take
into account potential distributions of "excess capital"
which is under DKTH's control. The defined pension
plan assets are estimated at fair value at the balance
sheet date.
Differences between the projected and realised de-
velopments in pension assets and pension obligations
are referred to as remeasurement effects and are rec-
ognised in other comprehensive income when gains
and losses occur.
Pension assets are recognised to the extent that they
represent future repayments from the pension plan.
Pension income/costs from defined benefit plans
comprise the items: service cost, administrative ex-
penses and interest on pension assets. Service cost
and administrative expenses are recognised in per-
sonnel expenses, whereas interest on pension assets
is presented as an item in financial income and ex-
penses.
Past service costs are recognised as an expense when
a plan amendment or curtailment occurs.
For the defined contribution plans, the Group will pay
in a fixed periodic contribution to separate legal enti-
ties and will have no further obligations after the pay-
ment has been made.
3.7 | Pension assets and pension obligations (continued)
Projected benefit payments
1
DKKm
1
The duration of the pension plan is approximately 12 years.
Critical accounting estimates
Accounting policies






Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 62
Section 4
Capital structure and
financing costs
This section includes disclosures related to the Group’s capital struc-
ture and related financing costs, net interest-bearing debt as well as
finance related risks and how these are managed.
4. In this section
4.1. Equity ................................................................................ 63
4.2. Loans and derivatives ....................................................... 63
4.3. Financial risks ................................................................... 67
4.4. Credit ratings and net interest-bearing debt .................... 68
4.5. Financial income and expenses ........................................ 70
4.6. Maturity profiles of financial instruments ........................ 72
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 63
The company’s share capital is DKK 195,000 divided
into shares of DKK 1 each or multiples thereof. All is-
sued shares have been fully paid up.
During 2022, total equity decreased by DKK 0.2bn due
to negative total comprehensive income.
During 2021, total equity decreased by DKK 0.4bn due
to negative total comprehensive income.
The Parent Company statement of changes in equity
specifies which reserves are available for distribution.
The distributable reserves amounted to DKK 4,407m
at 31 December 2022 (2021: DKK 4,283m). At the An-
nual General Meeting, the Board of Directors will not
propose any dividend for the financial year 2022.
There were no dividend payments during 2022 and
2021.
Dividends
Dividends expected to be distributed for the year are
recognised in a separate item in equity. Dividends and
interim dividends are recognised as a liability at the
time of adoption by the Annual General Meeting and
the meeting of the Board of Directors, respectively.
Reserve for cash flow hedges
The reserve for cash flow hedges in equity comprises
changes in the fair value of hedging transactions that
qualify for recognition as cash flow hedges and where
the hedged transaction has not yet been realised.
From 2018 and onwards, DKTH Group no longer ap-
plies hedge accounting. At this point values were
fixed and will be reversed to the income statement
over the lifetime of the underlying hedged item.
4.1 | Equity
Comments
Accounting policies
Loans
1
(DKKm)
2022
2021
Senior Term Facility (STF) loans
18,637
-
Senior Facility Agreement (SFA) loan
-
14,105
Senior Notes
10,634
10,429
EMTN
7,217
7,595
Bank loans
-
570
Total excl. shareholder loans
36,488
32,699
Shareholder loans
1
22,637
20,815
Total
59,125
53,514
Recognised as follows in the balance sheet:
Non-current liabilities
44,912
49,210
Current liabilities
14,213
4,304
Total
59,125
53,514
1
For maturity profiles of expected cash outflows and fair value of debt, see note 4.6.
4.2 | Loans and derivatives
Worth noting
DKTH Group is financed through the European
bond market (EMTN), the market for syndi-
cated senior secured bank loans, bilateral term
loans, the High Yield bond market (Senior
Notes) and Shareholder loans (SHL). DKTH
Group also has Revolving Credit Facilities to
support its daily liquidity management in the
operating companies.
The GBP 425m EMTN bond matured in Febru-
ary 2023.
The Group’s outstanding EMTN and Senior
Notes have been issued in EUR, GBP and
USD with fixed interest rates. Both the GBP
and USD notes was swapped to fixed EUR
rates.
The Group’s outstanding syndicated and bilat-
eral bank loans have been issued in EUR and
are primarily with floating interest rates. In
alignment with loan documents, almost all in-
terest rate risk has been swapped to fixed in-
terest rates in the EUR swap market.
Derivatives are used for hedging interest and
exchange-rate exposure only.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 64
4.2 | Loans and derivatives (continued)
2022
Euro Medium Term Notes (EMTNs), Senior
Facility Agreement (SFA) loan, Senior Notes
and Shareholder loans
2023
2023
2023
2024
2026
2027
2028
2029
2030
Total excl
SHL loans
2029
2029
Total SHL
loans
Total
Maturity
Feb 2023
Jun 2023
Jun 2023
Feb 2024
Jun 2026
Feb 2027
May 2028
Jun 2029
Oct 2030
Dec 2029
Dec 2029
Fixed/floating rate
Fixed
Fixed
Fixed
Floating
Floating
Floating
Fixed
Floating
Fixed
Fixed
Fixed
Coupon
6.875%
9.375%
7.000%
Margin +
floored
Euribor
1
Margin +
floored
Euribor
1
Margin +
floored
Euribor
1
5.056%
Margin +
floored
Euribor
1
5.870%
8.810%
8.150%
Margin (bps)
-
-
-
150
190
150
-
190
-
-
-
Currency
GBP
USD
EUR
EUR
EUR
EUR
EUR
EUR
EUR
DKK
DKK
Type
EMTN Bond
Senior Note
Senior Note
STF loan
STF loan
STF loan
EMTN Bond
STF loan
STF loan
SHL loan
SHL loan
Issuing company
TDCH
DKTF
DKTF
TDC NET
TDC NET
TDC NET
TDC NET
TDC NET
TDC NET
DKTH
DKTH
Nominal value (Currency)
425
410
1,050
1,400
50
900
500
50
818
20,653
1,984
Nominal value (DKKm)
3,567
2,845
7,806
10,410
372
6,692
3,718
372
818
36,600
20,653
1,984
22,637
59,237
1
EMTNs, Senior Notes and STF loans are in or swapped to nominal EUR and fixed EUR interest rates.
2
STF loans have a 0% Euribor floor.
EUR exposures are not considered a significant risk due to the fixed EUR/DKK exchange-rate policy.
Additionally, TDC NET has entered into EUR 250m notional interest rate swaps to fix the interest rate regarding the upcoming EMTN 2023 refinancing while Nuuday has entered into EUR 450m notional interest rate swaps to fix the interest rate on the Term loan drawn in 2023).
As at 31 December 2022 there were no drawings on Revolving Credit Facilities (RCF). That is, undrawn RCFs amounted to: DKT Finance: EUR 50m, maturing June 2024, TDC NET: EUR 350m, maturing February 2027 and Nuuday: EUR 135m, maturing July 2026.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 65
Comments
Events after the balance sheet date:
• On 19 January 2023, TDC NET signed a new Senior
Term Facility of EUR 75m with an availability period
until refinancing of the GBP EMTN,
23 February 2023. Proceeds were used for
the EMTN refinancing only.
• On 6 February 2023, TDC NET issued a new EMTN
EUR 500m bond. Proceeds were used for a partial
repayment of the Senior Term Facility on 6 Febru-
ary and the GBP EMTN refinancing on 23 February.
• On 1 February 2023, DKT Holdings received a
shareholder injection of EUR 475m in total. This did
not change the ownership structure of the com-
pany. The shareholder injection was part of the
funds used for the high yield notes redemption on
DKT Finance the 10 of February 2023.
• On 6 February 2023, DK Telekommunikation issued
a new EUR 475m term loan. Proceeds were used as
part of the high yield notes redemption at DKT Fi-
nance the 10 of February.
• On 10 February 2023, DKT Finance redeemed it’s
USD and EUR high yield notes.
• On 3 February 2023, Nuuday raised a
EUR 500m term loan, which was partially used to
repay the intercompany loan from TDC Holding
A/S.
Accounting policies
Loans
Loans are recognised initially at the proceeds
received net of transaction expenses incurred. In sub-
sequent periods, loans are measured at amortised
cost so that the difference between the proceeds and
4.2 | Loans and derivatives (continued)
2021
Euro Medium Term Notes (EMTNs), Senior Facility Agreement (SFA)
loan, Senior Notes and Shareholder loans
2022
2023
2023
2023
2024
2025
Total excl
SHL loans
2029
2029
Total SHL
loans
Total
Maturity
Mar 2022
Feb 2023
Jun 2023
Jun 2023
Jan 2024
Jun 2025
Dec 2029
Dec 2029
Fixed/floating rate
Fixed
Fixed
Fixed
Fixed
Floating
Floating
Fixed
Fixed
Coupon
5%
6.875%
9,375%
7%
Margin +
floored
Euribor
1
Margin +
floored
Euribor
1
8.81%
8.15%
Currency
EUR
GBP
USD
EUR
DKK
EUR
DKK
DKK
Type
EMTN Bond
EMTN Bond
Senior Notes
Senior Notes
RCF
Bank loan
SHL loan
SHL loan
Issuing company
TDCH
TDCH
DKTF
DKTF
TDCH
TDCH
DKTH
DKTH
Nominal value (DKKm)
3,718
3,754
2,677
7,807
565
14,130
32,651
18,982
1,883
20,865
53,516
Nominal value (Currency)
500
425
410
1,050
565
1,900
18,982
1,883
• Of which nominal value swapped to EUR or DKK (currency)
3
200
425
410
-
-
-
-
-
Nominal value of debt incl. currency hedging in DKKm
3,723
3,718
2,672
7,807
565
14,130
32,615
18,982
1,883
20,865
53,480
Of which nominal value swapped to or with floating interest rate (EURm)
3
100
-
-
-
76
1,775
1,951
-
-
-
1,951
Of which nominal value swapped to or with fixed interest rate (EURm)
3
400
500
359
1,050
-
125
2,434
2,552
246
2,798
5,232
1
The SFA loan has Euribor floor at zero and a margin of 3.00% per 31 December 2021. DKK 565m of RCF has a margin of 2.30%.
2
EUR exposures are not considered a significant risk due to the fixed EUR/DKK exchange rate policy.
3
The maturity of interest rate swaps used for hedging long-term EMTN bonds matches the maturity of the underlying EMTN bonds. The fixed GBP interest is swapped to fixed EUR. EUR 125m used for hedging long-term SFA loan matures in March 2022.
4.2 | Loans and derivatives (continued)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 66
the nominal value is recognised in the income state-
ment over the term of the loan.
Other financial liabilities are measured at amortised
cost.
Financial instruments
On initial recognition, financial derivatives are recog-
nised in the balance sheet at fair value and subse-
quently remeasured at fair value in the balance sheet
and in the income statement. Depending on the type
of instrument, different recognised measurement
methods are applied for
derivative financial instruments.
From 2018 and onwards, DKTH Group no long-er ap-
plies hedge accounting. At this point values were
fixed and will be reversed to the income statement
over the lifetime of the underlying hedged item.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 67
Interest-rate risks
DKTH Group is exposed to interest-rate risks in the
euro area, as 100% of the nominal gross debt is de-
nominated in or swapped to EUR or DKK.
The interest-rate risk emerges from fluctuations in
market interest rates, which affect the market value
of financial instruments and financial income and ex-
penses.
The TDC Groups interest rate risk is described in the
annual report 2022 for TDC Group, see note 4.3. In
the DKT companies, the two Senior Notes and the
Shareholder loans are all fixed rate facilities, which is
also the case for the new financing at DK Telekommu-
nikation.
2
The GBP EMTN and the USD high yield notes will both be redeemed
before publication of this Annual report.
Exchange-rate risks
DKTH Group is exposed primarily to exchange-rate
risks from USD, GBP and EUR. Both the GBP EMTN
bond and USD Senior notes have been swapped to
EUR
2
.
The USD exchange rate exposure relating to payables
and receivables from mainly roaming and intercon-
nection agreements with foreign operators as well as
equipment and handset suppliers.
Due to DKTH Group’s capital structure, the exposure
from financial activities in EUR is significant, as 62% of
the nominal gross debt (including derivatives) is de-
nominated in EUR. However, due to the fixed
EUR/DKK exchange rate policy of the Danish govern-
ment (in place since 1982), DKTH Group does not con-
sider its positions in EUR to constitute a significant
risk. The last 38% of the nominal debt is in DKK. The
Group’s EUR exposure was DKK 36.6bn at year-end
2022 (2021: 30.6bn).
The monitoring of the exchange-rate risks is described
in TDC Groups annual report 2022, (see note 4.3).
Credit risks
DKTH Group is exposed to credit risks principally as a
provider of telecommunications services in Denmark
and as a counterparty in financial contracts. The
credit risk arising from supplying telecommunications
services is handled by subsidiaries, whereas the credit
risks in relation to financial contracts are handled cen-
trally by Group Treasury. Credit risks arising in rela-
tion to financial contracts are governed by the finan-
cial strategy that defines a maximum exposure for
each counterparty. The maxima are based primarily
on the lowest credit ratings of the counterparties
from either Standard & Poor’s (S&P) or Moody’s In-
vestor Services (Moody’s).
The credit risk is described in TDCH Groups annual re-
port 2022, see note 4.3.
Liquidity risks
DKTH Group has short-term refinancing risk as
TDC Holding A/S’ 2023 EMTN matures in February
2023. The refinancing risk has been partly mitigated
during 2022 by committed long term bank facilities
totalling to EUR 210m, while the remaining refinanc-
ing risk was mitigated in the beginning of 2023 by an
additional EUR 75m committed long-term bank facil-
ity and a EUR 500m EMTN issuance in TDC NET.
In total, DKTH Group has EUR 485m committed Re-
volving Credit Facilities (RCF) available, which is pro-
vided by a group of banks under the financing agree-
ments in TDC NET and Nuuday respectively. EUR
350m of the total RCF commitment belongs to TDC
NET, while the remaining EUR 135m is with Nuuday.
In addition to the EUR 350m RCF commitment, TDC
NET also has a Debt Service Reserve (DSR) Liquidity
Facility Agreement of EUR 155m and Operational and
Capex Reserve (O&C) Liquidity Facility Agreement of
EUR 75m in place as of 31st December 2022.
Undrawn credit lines
At year-end 2022, DKTH Group had undrawn commit-
ted credit lines totaling EUR 715m
under the SFAs including the DSR and O&C
facilities.
4.3 | Financial risks
Worth noting
DKTH Group is exposed to financial market and
credit risks when buying and selling goods and
services denominated in foreign currencies as
well as due to the cash flow from investing in
the business and financing activities. Because
of DKTH Group’s capital structure and financ-
ing, the Group faces interest rate and ex-
change rate risks. Treasury identifies, monitors
and manages these risks through policies and
procedures that are revised and approved by
the Board of Directors on an annual basis.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 68
Worth noting
Credit rating
DKTH Group is rated by three international rat-
ing agencies: S&P, Moody’s and Fitch.
The high yield bonds issued by DKT Finance contain
change of control provisions customary for this type
of financing. Further, the high yield bonds contain
customary cross-default provisions (including a pay-
ment default provision and a cross-acceleration provi-
sion) in relation to certain other indebtedness of DKT
Holdings and its subsidiaries.
Separate external financings have been established
for Nuuday and TDC NET, respectively. The senior se-
cured credit facilities borrowed by Nuuday contain
customary change-of-control provisions as well as
cross-default provisions in relation to other debt of
the Nuuday group. The financing platform at TDC NET
contains customary cross-default provisions in rela-
tion to other debt of the TDC NET group. In addition,
certain credit facilities borrowed by TDC NET under
the financing platform contains customary change of
control provisions.
The EMTN notes issued by TDCH contain change-of-
control provisions customary for this type of
financing. Further, the EMTN notes contain customary
cross-default provisions in relation to
certain other indebtedness of TDCH and its principal
subsidiaries.
4.4 | Credit ratings and net interest-bearing debt
DKTH group’s company ratings at 31 Decem-
ber 2022
Moody’s
Fitch
S&P
Company
Instrument
Company
Instrument
Company
Instrument
Company
DKT Holdings
B2 (stable)
B- (neg outlook)
B (watch neg)
DKT Finance
Caa1 (stable)
B-
CCC+ (watch neg)
Nuuday
B2
B2
B (neg outlook)
BB-
B-
B
TDC NET
BB
BBB-
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 69
4.4 | Credit ratings and net interest-bearing debt(continued)
Net interest-bearing debt (DKKm)
Included in
cash flows from
Non-cash changes
2022
At
1 January
2022
Financing
activities
Acquisitions
and disposals
Debt from new
licences, leases and ac-
crued interest
Currency
translation
adjustment
Other
At
31 December
2022
Loans incl. short-term part
52,944
4,380
-
1,847
(26)
(20)
59,125
Short-term bank loans
570
(570)
-
-
-
-
0
Lease liabilities incl. short term part
4,132
(339)
(8)
289
-
-
4,074
Corrections for derivatives and reversals of fixed fair
values on loans due to hedge accounting
1
(38)
196
-
-
18
(197)
(21)
Spectrum licence fee liabilities incl. short-term part
1,964
1,826
Interest-bearing payables
2
2
Interest-bearing receivables and investments
(3)
(1)
Cash
(918)
(4,314)
Net interest-bearing debt
58,653
60,691
Shareholder loans
(20,815)
(22,637)
Net interest bearing debt excl. shareholder loans.
37,838
38,054
1
Currency adjustment and fair value effect from derivatives that hedge long-term loans and fixed hedge accounting effects that will be reversed to the income statement over the lifetime of the underlying hedged long-term loans. From 2018 and onwards, DKTH
Group no longer applies hedge accounting. At this point values were fixed and will be re-versed to the income statement over the lifetime of the underlying hedged item.
2
Includes amortisation of borrowing costs, , lease reassessment and fair value adjustments.
Included in
cash flows from
Non-cash changes
2021
At
1 January
2021
Financing
activities
Acquisitions
and disposals
Debt from new
licences, leases and ac-
crued interest
Currency
translation
adjustment
Other
At
31 December
2021
Loans incl. short-term part
50,989
(24)
-
1,698
415
(134)
52,944
Short-term bank loans
5
565
-
-
-
-
570
Lease liabilities incl. short term part
4,307
(317)
-
174
-
(32)
4,132
Corrections for derivatives and reversals of fixed fair
values on loans due to hedge accounting
1
352
-
-
(411)
21
(38)
Spectrum licence fee liabilities incl. short-term part
1,361
1,964
Interest-bearing payables
2
2
Interest-bearing receivables and investments
(161)
(3)
Cash
(508)
(918)
Net interest-bearing debt
56,347
58,653
Shareholder loans
(19,141)
(20,815)
Net interest bearing debt excl. shareholder loans.
37,206
37,838
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 70
In DKTH´s internal reporting, currency translation ad-
justments and interest from derivatives are
reported as such, as specified in the adjacent
table.
Interest, currency translation adjustments and fair
value adjustments represented an expense of DKK
2,599m in 2022. The improvement of DKK 1,002m
compared with 2021 was driven primarily by a favour-
able development in fair value adjustments that were
offset by higher interest expense:
Interest: Following the refinancing in the group in Q1
2022, the EUR 1.9bn Senior Facility Agreement was
repaid and the EMTN of EUR 0.5bn matured in Q1
2022, whereas TDC NET entered committed Senior
Term Facilities of EUR 3.01bn, of which EUR 0.5bn has
been refinanced with an EMTN bond. This resulted in
higher interest due to the higher level of long-term
loans as well as higher interest on the new facility, in-
cluding interest-rate swaps that swaps from floating
to fixed interest. Furthermore, a higher level of Share-
holder loans in 2022 also resulted in higher interest
expenses.
Fair value adjustments: TDC NET has hedged its Sen-
ior Term Facilities (and future debt issuances) from
floating interest rates to fixed interest rates (nominal
EUR 2.4bns) and additionally hedged the up-coming
EMTN '23 refinancing to fixed EUR interest rates (EUR
0.25bn). As interest rates has increased, this has re-
sulted in a gain in 2022. Furthermore, Nuuday has
partly hedged its future debt issuances to fixed inter-
est rates (nominal EUR 450m) and, as market interest
rates have increased, this has resulted in a gain in
2022. This was partly offset by a loss from repayment
of the EUR 1.9bn Senior Facility Agreement as well as
closing of existing revolving credit facilities in Q1
2022.
4.5 | Financial income and expenses
(DKKm)
2022
2021
Interest income
28
31
Interest expenses
(4,038)
(3,745)
Net interest
(4,010)
(3,714)
Currency translation adjustments
8
(422)
Fair value adjustments
1,403
535
Interest, currency translation adjustments and fair value adjustments
(2,599)
(3,601)
Profit/(loss) from joint ventures and associates
-
49
Interest on pension assets
95
27
Total
(2,504)
(3,525)
(DKKm)
Net
interest
Currency trans-
lation
adjustments
Fair value
adjustments
Total
2022
Shareholder loans
(1,956)
-
-
(1,956)
Senior Notes
(773)
2
(37)
(808)
Senior Term Facilities (STF) loans
(510)
12
(7)
(505)
Hedge of Senior Term Facilities/future debt
issuance
(172)
-
1,594
1,422
Euro Medium Term Notes (EMTNs)
(275)
4
7
(264)
Senior Facility Agreement (SFA) loans
(42)
(8)
(24)
(74)
Lease liabilities
(187)
-
-
(187)
Other
(169)
(30)
(28)
(227)
Total
(4,084)
(20)
1,505
(2,599)
2021
Shareholder loans
(1,799)
-
-
(1,799)
Senior Notes
(756)
(9)
(13)
(778)
Senior Facility Agreement (SFA) loans
(444)
11
1
(432)
Euro Medium Term Notes (EMTNs)
(220)
(6)
(3)
(229)
Lease liabilities
(191)
-
-
(191)
Other
(181)
(7)
16
(172)
Total
(3,591)
(11)
1
(3,601)
Comments
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 71
Comments
Net interest of DKK 2,113m paid in 2022 represented
a DKK 289m increase compared with 2021 (DKK
1,844m), driven primarily by a higher level of long-
term loans as well as higher interest on the new facil-
ity, including interest- rate swaps that swap from
floating to fixed interest.
4.5 | Financial income and expenses
Cash flow from net interest (DKKm)
2022
2021
Interest received
407
576
Interest paid
(2,520)
(2,472)
Net interest paid
(2,113)
(1,844)
Specified as follows:
Senior Term Facilities (STF) loans incl. hedges of Senior Term Facility/future debt
issuance
(439)
-
Senior Notes incl. hedges
(766)
(716)
Euro Medium Term Notes (EMTNs) incl. hedges
(407)
(401)
Senior Facility Agreement (SFA) loans incl. hedges
(236)
(433)
Lease liabilities
(187)
(191)
Other
(98)
(103)
Net interest paid
(2,113)
(1,844)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 72
Maturity profiles
The maturity analyses of financial assets and liabilities
are disclosed by category and class and are allocated
according to maturity period. All
interest payments and repayments of financial
liabilities are based on contractual agreements. Inter-
est payments on floating-rate instruments are deter-
mined using forward rates.
Financial assets and liabilities measured at fair value
relate to derivatives. The fair value of these
derivatives is calculated based on observable inputs
such as interest rates, etc. (Level 2 in the IFRS fair
value hierarchy).
4.6 | Maturity profiles of financial instruments
2022
Maturity profiles of expected cash flows
1
(DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial assets and liabilities measured at fair value
through profit or loss
Assets
2
:
Derivatives
Inflow
4,123
903
584
106
5,716
Outflow
(3,646)
(227)
(180)
(62)
(4,115)
Total derivatives assets
477
676
404
44
1,601
1,479
1,479
Liabilities:
Derivatives
Inflow
3,262
-
-
-
3,262
Outflow
(3,440)
-
-
-
(3,440)
Total derivatives liabilities
(178)
-
-
-
(178)
(187)
(187)
Total derivatives
299
676
404
44
1,423
1,292
1,292
Financial liabilities measured at amortised cost
Shareholder loan
-
-
-
(22,637)
(22,637)
(22,637)
(22,637)
Senior Term Facilities (STF) loan
-
(10,410)
(7,064)
(1,190)
(18,664)
(18,664)
(18,638)
Senior notes
(10,651)
-
-
-
(10,651)
(10,625)
(10,634)
Euro Medium Term Notes (EMTNs)
(3,567)
-
-
(3,718)
(7,285)
(7,231)
(7,217)
Total loans
(14,218)
(10,410)
(7,064)
(27,545)
(59,237)
(59,157)
(59,126)
Spectrum licence liabilities
(192)
(513)
(483)
(883)
(2,071)
(1,826)
(1,826)
Lease liability
(494)
(937)
(860)
(3,168)
(5,459)
(4,074)
(4,074)
Shareholder loan, SFA, Senior notes and EMTN, interest
3
(3,243)
(5,276)
(4,864)
(4,324)
(17,707)
(1,796)
(1,796)
Trade and other payables
4
(2,005)
-
-
-
(2,005)
(2,005)
(2,005)
Total financial liabilities measured at amortised cost
(20,152)
(17,136)
(13,271)
(35,920)
(86,479)
(68,858)
(68,827)
Total
(19,853)
(16,460)
(12,867)
(35,876)
(85,056)
(67,566)
(67,535)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 73
2021
Maturity profiles of expected cash flows
1
(DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial assets and liabilities measured at fair value
through profit or loss
Assets
2
:
Derivatives
Inflow
2,980
934
-
-
3,914
Outflow
(2,900)
(869)
-
-
(3,769)
Total derivatives assets
80
65
-
-
145
133
133
Liabilities:
Derivatives
Inflow
1,723
3,031
-
-
4,754
Outflow
(1,720)
(3,043)
-
-
(4,763)
Total derivatives liabilities
3
(12)
-
-
(9)
(50)
(50)
Total derivatives
83
53
-
-
136
83
83
Financial liabilities measured at amortised cost
Shareholder loan
-
-
-
(20,815)
(20,815)
(20,815)
(20,815)
Senior Facility Agreement (SFA) loan
-
-
(14,130)
-
(14,130)
(14,130)
(14,105)
Senior notes
-
(10,484)
-
-
(10,484)
(10,637)
(10,429)
Euro Medium Term Notes (EMTNs)
(3,718)
(3,754)
-
-
(7,472)
(7,743)
(7,595)
Bank loans
(570)
-
-
-
(570)
(570)
(570)
Total loans
(4,288)
(14,238)
(14,130)
(20,815)
(53,471)
(53,895)
(53,514)
Spectrum licence liabilities
(192)
(463)
(483)
(1,125)
(2,263)
(1,964)
(1,964)
Lease liability
(479)
(891)
(842)
(3,447)
(5,659)
(4,132)
(4,132)
Shareholder loan, STF loans, Senior notes and EMTN, interest
3
(3,528)
(5,217)
(4,101)
(5,465)
(18,311)
(1,838)
(1,838)
Trade and other payables
4
(2,099)
-
-
-
(2,099)
(2,099)
(2,099)
Total financial liabilities measured at amortised cost
(10,586)
(20,809)
(19,556)
(30,852)
(81,803)
(63,928)
(63,547)
Total
(10,503)
(20,756)
(19,556)
(30,852)
(81,667)
(63,845)
(63,464)
1
All cash flows are undiscounted. The table reflects only the cash flow from financial liabilities and derivatives recognised as financial assets. Other cash flow from financial assets is not disclosed.
2
Both assets and liabilities measured at fair value through profit or loss are disclosed in the above table because some of the derivatives are used for hedging financial liabilities measured at amortised cost, see table.
3
Fair value and carrying amount value consist of accrued interest on Shareholder Loans, STF loans, Senior Notes and EMTNs at 31 December.
4
As not all trade and other payables recognised in the balance sheet are financial instruments (e.g., unbilled payables do not constitute a financial liability), the amount differs from the amount disclosed in the balance sheet.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 74
Section 5
Cash flow
This section provides information on the Group’s cash flow. More in-
formation on development in the cash flow items is
included in note 2.7 Special items, note 3.1 Intangible assets, note
3.2 Property, plant and equipment, 3.3 Lease assets and liabilities,
3.6 Provisions, note 3.7 Pension assets and pension obligations as
well as note 4.5 Financial income and expenses.
5. In this section
5.1. Adjustment for non-cash items ........................................ 75
5.2. Change in working capital ................................................ 75
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 75
Cash flow from operating activities is presented using
the indirect method and is based on profit before in-
terest, taxes, depreciation, amortisation and special
items adjusted for non-cash operating items, cash
flow related to special items, changes in working capi-
tal, interest received and paid as well as income taxes
paid. Interest received and paid includes settlement
of interest-hedging instruments.
Cash flow from investing activities comprises acquisi-
tions and divestments of enterprises, purchases and
sales of intangible assets, property, plant and equip-
ment as well as other non-current assets, and pur-
chases and sales of securities that are not recognised
as cash and cash equivalents. Cash flows from ac-
quired enterprises are recognised from the time of ac-
quisition, while cash flows from enterprises divested
are recognised up to the time of divestment.
Cash flow from operating, investing and financing ac-
tivities of discontinued operations are presented with
comparative figures in separate lines of the statement
of cash flow.
Cash flow from financing activities comprises changes
in interest-bearing debt, lease instalments, purchase
of treasury shares and dividends to shareholders.
Cash and cash equivalents cover cash and
marketable securities with a remaining life not
exceeding three months at the time of acquisition,
and with an insignificant risk of changes in value.
The cash flow statement cannot be derived solely
from information presented in the financial state-
ments
5.1 | Adjustment for non-cash items
Accounting policies
5.2 | Change in working capital
(DKKm)
2022
2021
Change in inventories
(25)
(53)
Change in receivables
(51)
254
Change in contract assets
(95)
(17)
Change in trade payables
(30)
(282)
Change in contract liabilities
37
(16)
Change in prepaid expenses
(2)
182
Change in other items, net
(141)
(131)
Total
(307)
(63)
(DKKm)
2022
2021
Pension costs regarding defined benefit plans
83
82
(Gain)/loss on disposal of property, plant and equipment, net
6
(5)
Other adjustments
5
66
Total
94
143
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 76
Section 6
Other disclosures
This section contains statutory notes or notes that are
presumed to be less important for understanding the
Group’s financial performance.
6. In this section
6.1. Incentive programmes ...................................................... 77
6.2. Related parties ................................................................. 78
6.3. Fees to auditors ................................................................ 79
6.4. Other financial commitments ........................................... 79
6.5. Pledges and contingencies ............................................... 80
6.6. Events after the balance sheet date ................................. 80
6.7. Overview of group companies at31 December
2022 .................................................................................. 80
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 77
In order to support the delivery of short- and long-
term financial results, the Group has both short- and
long-term incentive programmes for executives and
managers.
Short-term incentive programmes (STI)
The short-term bonus programmes are closely linked
to our strategy. The performance measures are fo-
cused on EBITDA, capex, fibre connection perfor-
mance, dividend capacity and NPS, but with variance
between Nuuday, TDC NET and Group Functions.
Bonus payments are calculated as the individual em-
ployee’s basic salary multiplied by the bonus percent-
age multiplied by the degree of target fulfilment.
The bonus percentage for members of the Executive
Committee is usually 50%. For other managers, the
bonus percentage varies within a range of 10%-33%.
The target fulfilment can be maximum 200%.
Long-Term Incentive programme (LTI)
The LTI programme is cash based and its objectives
are linked to the long-term strategy. The programme
is revolving with grants given each year but with a 2
or 3-year vesting period, as the goals are principally
set for a 2 or 3-year period. The objectives are
EBITDA, cash flow, fibre connection performance, div-
idend capacity and NPS, but with variance between
Nuuday, TDC NET and Group Functions. The expenses
are recognised over the vesting period.
Bonus payments are calculated as the individual em-
ployee’s basic salary multiplied by an LTI percentage
multiplied by the degree of target fulfilment.
The LTI percentage usually varies within a range of
12%-36%. The target fulfilment can be maximum
200%.
Management Incentive Programme (MIP)
In July 2020, TDCH group established a new cash-
based incentive programme for the Executive Com-
mittee and certain key managers (38 participants in
all). Under the MIP, the participants are required to
place a deposit to the TDCH group to qualify for a re-
turn. The payback amounts are based on the develop-
ment in certain financial performance measures of
the group as well as certain business and Health &
Safety KPIs over the period until 2023. The invest-
ment programme covers the time period 2019-2023.
The participants have 40% of the deposits at risk of
being lost in downside scenarios and the expected
range of payouts is at 2x-4x of the participants’ de-
posit. The participants’ total deposits amounted to
DKK 40m and the expenses for 2022 relating to the
programme amounted to DKK 32m (2021: 5m). At 31
December 2022 the total liabilities related to the
management incentive programme amounted to DKK
84m (2021: DKK 57m).
6.1 | Incentive programmes
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 78
The Group has annual contributions paid to the pen-
sion fund, TDC Pensionskasse, see note 3.7.
The Group has property lease contracts with
Arbejdsmarkedets Tillægspension (ATP) and PFA, who
are shareholders of the company. The lease payments
amounted to DKK 235m (2021: DKK 231m). The prop-
erty lease contracts are a significant part of the lease
liabilities.
Related parties also included the Group’s joint ven-
tures and associates shown in note 6.7.
The Group has the following additional transactions
and outstanding balances with related
parties:
The company’s shareholders have provided share-
holder loans to the company. See note 4.2 for further
information.
The members of the Board of Directors and the Exec-
utive Committee do not receive remuneration. Chair-
man of the Board of Directors of TDC Holding, Mi-
chael Parton, provides consultancy services to.
DK Telekommunikation ApS. The DKT Holdings ApS
Group's key management personnel comprise TDC
Holding’s Board of Directors and Executive Commit-
tee as well as the CEO of Nuuday A/S and the CEO of
TDC NET A/S. Total remuneration to key management
personnel amounts to DKK 50m (2021: DKK 88m). See
note 2.5 for further information.
6.2 | Related parties
Name of related party
Nature of
relationship
Domicile
DKTUK Limited, managed by Macquarie Infrastructure and
Real Assets Europe Limited
Ownership
London,
United Kingdom
Arbejdsmarkedets Tillægspension (ATP)
Ownership
Hillerød, Denmark
PFA Ophelia InvestCo I 2018 K/S, managed by PFA Asset
Management A/S
Ownership
Copenhagen, Denmark
PKA Ophelia Holding K/S, managed by AIP Management P/S
Ownership
Hellerup, Denmark
TDC Pensionskasse
Pension fund
Copenhagen, Denmark
Related parties (DKKm)
2022
2021
TDC Pensionskasse
Other income
3
3
Interest income of subordinated loan
-
1
Joint ventures and associates
Income
1
6
Expenses
(4)
(3)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 79
Fee for services other than statutory audit services
rendered by Deloitte to the Group amounted to DKK
11m and consisted mainly of special purpose state-
ments and advisory services.
6.3 | Fees to auditors
Fees to auditors elected by the Annual General Meeting (DKKm)
2022
2021
Statutory audit
5
5
Other assurance engagements
3
1
Tax advisory services
-
-
Other services
8
1
Total non-statutory audit services
11
2
Total
16
7
6.4 | Other financial commitments
(DKKm)
2022
2021
Lease commitments for short-term and low value leases
Short-term leases
54
41
Low value leases
2
2
Total
56
43
Capital and purchase commitments
Investments in intangible assets
501
215
Investments in property, plant and equipment
99
415
Commitments related to outsourcing agreements
307
154
Other purchase commitments
1,370
1,356
Total
2,277
2,140
Worth noting
Commitments represent amounts that DKTH
Group has contractually committed to pay to
third parties in the future. This gives an indica-
tion of future cash flows.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 80
6.5 | Pledges and
contingencies
Pledges
Cash with a carrying amount of DKK 2,577m, rights
under spectrum licences (DKK 2,436m) and trade re-
ceivables (DKK 321m) are pledged
as security for finance agreements in the group.
See also note 10 to the Parent company financial
statements.
Contingent liabilities
DKTH Group is party to certain pending lawsuits and
cases pending with public authorities and complaints
boards. Based on a legal assessment of the possible
outcome of each of these lawsuits and cases, Man-
agement is of the opinion that these will have no sig-
nificant adverse effect on DKTH Group’s financial po-
sition.
6.6 | Events after the balance
sheet date
On 19 January 2023, TDC NET signed a new Senior
Term Facility of EUR 75m with an availability period
until refinancing of the GBP EMTN, 23 February 2023.
Proceeds were used for the EMTN refinancing only.
On 1 February 2023, DKT Holdings received a share-
holder injection of EUR 475m in total. This did not
change the ownership structure of the company. The
shareholder injection was part of the funds used for
the high yield notes redemption on DKT Finance the
10 of February 2023.
On 3 February 2023, Nuuday issued a EUR 500m term
loan, which was partially used to repay the intercom-
pany loan from TDC Holding A/S.
On 6 February 2023, TDC NET issued a new EMTN EUR
500m bond. Proceeds were used for a partial repay-
ment of the Senior Term Facility on 6 February and
the GBP EMTN refinancing on 23 February.
On 6 February 2023, DK Telekommunikation issued a
new EUR 475m term loan. Proceeds were used as part
of the high yield notes redemption at DKT Finance the
10 of February.
On 10 February 2023, DKT Finance redeemed it’s USD
and EUR high yield notes.
There have been no other events that materially af-
fect the assessment of this Annual Report 2022 after
the balance sheet date and up to
today.
6.7 | Overview of group companies
at 31 December 2022
Company name
1
Domicile
Currency
Ownership share (%)
Nuuday
Nuuday A/S
Copenhagen, Denmark
DKK
100
Hiper A/S
Copenhagen, Denmark
DKK
100
TDC Telco ApS
Taastrup, Denmark
DKK
100
4T af 1. oktober 2012 ApS
3
Copenhagen, Denmark
DKK
25
TDC NET
TDC NET Holding A/S
Copenhagen, Denmark
DKK
100
TDC NET A/S
Copenhagen, Denmark
DKK
100
TDC NET Finance B.V.
2
Amsterdam, the Netherlands
EUR
100
Dansk Kabel TV A/S
Copenhagen, Denmark
DKK
100
DKTV Anlæg ApS
Vemmelev, Denmark
DKK
100
Fiberkysten A/S
Gilleleje, Denmark
DKK
60
OCH A/S
3
Copenhagen, Denmark
DKK
25
Other
TDC Holding A/S
Copenhagen, Denmark
DKK
100
DK Telekommunikation ApS
Copenhagen, Denmark
DKK
100
DKT Finance ApS
Copenhagen, Denmark
DKK
100
1
In order to give readers a clear presentation, minor companies without activities are not listed separately in the overview. In pursuance
of Section 6 of the Danish Financial Statements Act, the following subsidiaries have chosen not to prepare an annual
report: Kaisai A/S, 4WEB A/S and TDCH III ApS.
2
TDC Net Finance B.V. was established in connection with the refinancing of the TDC Net group with the purpose of potentially issuing EUR denominated debt
instruments that are eligible for financing at ECB. The company is however currently without activities and there are no immediate plans for the use of the com-
pany. The company will be taxable in Denmark under the rules of Place of Effective Management and as such part of the Danish joint taxation.
3
The enterprise is included under the equity method.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 81
Annual report 2019
Parent company
financial statements
Income statement ............................................... 82
Statement of comprehensive income ................. 82
Balance sheet ...................................................... 83
Statement of cash flows ...................................... 84
Statement of changes in equity .......................... 84
Notes to parent company financial statements . 85
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 82
Income statement
(DKKm)
Note
2022
2021
External expenses
(3)
(2)
Operating profit (EBIT)
(3)
(2)
Financial income
4
1,962
1,800
Financial expenses
5
(1,957)
(1,799)
Profit/(loss) before income taxes
2
(1)
Income taxes
2
122
56
Profit/(loss) for the year
124
55
Statement of comprehensive income
(DKKm)
Note
2022
2021
Profit/(loss) for the year
124
55
Other comprehensive income
-
-
Total comprehensive income/(loss)
124
55
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 83
Balance sheet
Assets (DKKm)
Note
2022
2021
Non-current assets
Investments in subsidiaries
3
4,113
4,113
Receivables from group companies
22,691
20,841
Total non-current assets
26,804
24,954
Current assets
Receivables from group companies
1,351
1,242
Income tax receivable
46
57
Cash
193
84
Total current assets
1,590
1,383
Total assets
28,394
26,337
Equity and liabilities (DKKm)
Note
2022
2021
Equity
Share capital
6
-
-
Retained earnings
4,407
4,283
Total equity
4,407
4,283
Non-current liabilities
Shareholder loans
7, 8
22,637
20,815
Total non-current liabilities
22,637
20,815
Current liabilities
Payables to group companies
1
-
Other payables
1,349
1,239
Total current liabilities
1,350
1,239
Total liabilities
23,987
22,054
Total equity and liabilities
28,394
26,337
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 84
Statement of cash flows
Statement of changes in equity
(DKKm)
Share capital
Retained
earnings
Total
Equity at 1 January 2021
-
4,228
4,228
Profit for the year
-
55
55
Total comprehensive income
-
55
55
Total transactions with owners
-
-
-
Equity at 31 December 2021
-
4,283
4,283
Profit for the year
-
124
124
Total comprehensive income
-
124
124
Total transactions with owners
-
-
-
Equity at 31 December 2022
-
4,407
4,407
(DKKm)
Note
2022
2021
Operating profit (EBIT)
(3)
(2)
Change in working capital
2
-
Interest received
2
-
Interest paid
(1)
(4)
Tax received
133
65
Cash flow from operating activities
133
59
Repayments on long-term loans
(24)
(24)
Cash flow from financing activities
(24)
(24)
Total cash flow
109
35
Cash and cash equivalents at 1 January
84
49
Cash and cash equivalents at 31 December
193
84
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 85
Notes to parent company financial
statements
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 86
The financial statements 2022 of the parent company
has been prepared in accordance with the Interna-
tional Financial Reporting Standards (IFRS) as adopted
by the European Union (EU) and further disclosure re-
quirements in the Danish Financial Statements Act
(reporting class “C stor”).
The accounting policies are unchanged from
last year.
The parent company accounting policies are the same
as those applied for the Group, with the
additions mentioned below. See note 1.1 to the con-
solidated financial statements for the Group’s ac-
counting policies.
For information on new accounting standards for the
Group, see note 1.3 to the consolidated financial
statements.
Supplementary accounting policies for
the parent company
Investments in subsidiaries
Investments in subsidiaries are measured at cost.
Where cost exceeds the recoverable amount, the carry-
ing amount is written down to the recoverable amount.
Dividends received from investments in subsidiaries are
recognised as income in the financial year when the
dividends are distributed.
1 | Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 87
The effective tax rate deviates significantly from the
Danish corporate income tax rate of 22% due to the
Danish limitation on the tax deductibility of interest
expenses.
DKT Holdings ApS participates in joint taxation with all
its Danish subsidiaries. DKT Holdings ApS is the man-
agement company in the joint taxation. The jointly
taxed companies in the DKT Holdings Group are
jointly and severally liable for the total income taxes,
taxes paid on account and outstanding residual tax
(with additional payments and interest) relating to
the joint taxation.
2 | Income taxes
3 | Investments in subsidiaries
(DKKm)
2022
2021
Accumulated cost at 1 January
4,113
4,113
Additions
-
-
Accumulated cost at 31 December
4,113
4,113
Carrying amount at 31 December
4,113
4,113
Overview of subsidiaries at 31 December 2021
Company name
Domicile
Currency
Ownership share (%)
Subsidiaries:
DKT Finance ApS
Copenhagen, Denmark
DKK
100
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 88
For information on share capital see note 4.1 to the
consolidated financial statements.
The Company does not have exposure to changes in
interest rates as terms on loans and receivables from
group companies largely matches each other. As the
Shareholder Loans are denominated in DKK the Com-
pany does not have any currency exchange rate expo-
sure.
4 | Financial income
(DKKm)
2022
2021
Interest from group companies
1,961
1,800
Other interest income
1
-
Total
1,962
1,800
5 | Financial expenses
(DKKm)
2022
2021
Interest expenses on shareholder loans
(1,956)
(1,799)
Interest to group companies
(1)
-
Total
(1,957)
(1,799)
6 | Equity
7 | Shareholder Loans
Shareholder Loans
2029
2029
Total
Maturity
Dec 2029
Dec 2029
Fixed/floating rate
Fixed
Fixed
Coupon
8.81%
8.15%
Currency
DKK
DKK
Type
Shareholder Loans
Shareholder Loans
Nominal value (DKKm)
20,653
1,984
22,637
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 89
Maturity profiles
The maturity analyses of financial assets and liabilities
are disclosed by category and class and are allocated
according to maturity period. All interest payments
and repayments of financial liabilities are based on
contractual agreements. The future cashflows will be
financed by received interests and settlement on
Shareholder Loans provided to DKT Finance ApS.
For information about the related parties of the
Group, see note 6.2 to the consolidated financial
statements.
Receivables from group companies and payables to
group companies are shown in the balance sheet. In-
terest from/to group companies are shown in notes 4
and 5.
All transactions were made on an arm’s length basis.
The members of for the Board of Directors
and the Executive Committee do not receive
remuneration.
Shares in subsidiaries with a carrying amount of DKK
4,113m (2021: DKK 4,113m) and receivables from
group companies with a carrying amount of DKK
22,691m (2020: DKK 20,283m) are pledged as security
for the subsidiary’s long-term loans.
For information on events after the balance sheet
date, see note 6.6 to the consolidated financial state-
ments.
8 | Maturity profiles of financial instruments
9 | Related parties
Maturity profiles of expected cash flows
1
(DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial liabilities measured at amortised cost
Shareholder Loans
-
-
-
(22,637)
(22,637)
(22,637)
(22,637)
Shareholder Loans, interest
2
(1,981)
(3,962)
(3,962)
(3,962)
(13,867)
(1,348)
(1,348)
Trade and other payables
(1)
-
-
(1)
(1)
(1)
(1)
Total 2022
(1,982)
(3,962)
(3,962)
(26,599)
(36,505)
(23,986)
(23,986)
Maturity profiles of expected cash flows
1
(DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial liabilities measured at amortised cost
Shareholder Loans
-
-
-
(20,815)
(20,815)
(20,815)
(20,815)
Shareholder Loans, interest
2
(1,822)
(3,643)
(3,643)
(5,465)
(14,573)
(1,239)
(1,239)
Total 2021
(1,822)
(3,643)
(3,643)
(26,280)
(35,388)
(22,054)
(22,054)
1
All cash flows are undiscounted.
2
Fair value and carrying amount value consist of accrued interest on Shareholder Loans at 31 December.
10 | Pledges
11 | Events after the balance
sheet date
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 90
Today, the Board of Directors and the Executive Com-
mittee considered and approved the
Annual Report of DKT Holdings ApS for 2022.
The Annual Report has been prepared in accordance
with International Financial Reporting Standards
(IFRS) as adopted by the EU and further
requirements in the Danish Financial Statements Act.
In our opinion, the consolidated financial statements
and parent company financial statements give a true
and fair view of the financial position at 31 December
2022 of the Group and the
parent company and of the results of the Group and
parent company operations and cash flows for 2022.
In our opinion, the management's review includes a
true and fair account of the developments in the op-
erations and financial circumstances of the Group and
the parent company, of the results for the year and of
the financial position of the Group and the parent
company as well as a description of the most signifi-
cant risks and elements of
uncertainty facing the Group and the parent
company.
Management statement
We recommend that the Annual Report be adopted at the Annual General Meeting.
Copenhagen, 31 March 2023
Executive Committee
Susana Leith-Smith
Board of Directors
Nathan Andrew Luckey
Chair
Jørgen Høholt
Vice Chair
Peter Tind Larsen
Vice Chair
Ulrik Pallisø Bornø
Vice Chair
Natalia Axt
Susana Leith-Smith
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 91
To the shareholders of
DKT Holdings ApS
Opinion
We have audited the consolidated financial state-
ments and the parent financial statements of
DKT Holdings ApS for the financial year 01.01.2022 -
31.12.2022, which comprise the income statement,
statement of comprehensive income, balance sheet,
statement of changes in equity, cash flow statement
and notes, including a summary of significant ac-
counting policies, for the Group as well as the Parent.
The consolidated financial statements and the parent
financial statements are prepared in accordance with
International Financial Reporting Standards as
adopted by the EU and additional requirements of the
Danish Financial Statements Act.
In our opinion, the consolidated financial statements
and the parent financial statements give a true and
fair view of the Group’s and the Parent’s financial po-
sition at 31.12.2022, and of the results of their opera-
tions and cash flows for the financial year 01.01.2022
- 31.12.2022 in accordance with International Finan-
cial Reporting Standards as adopted by the EU and ad-
ditional requirements of the Danish Financial State-
ments Act.
Basis for opinion
We conducted our audit in accordance with Interna-
tional Standards on Auditing (ISAs) and the additional
requirements applicable in Denmark. Our responsibili-
ties under those standards and requirements are fur-
ther described in the "Auditor’s responsibilities for the
audit of the consolidated financial statements and the
parent financial statements" section of this auditor’s
report. We are independent of the Group in accord-
ance with the International Ethics Standards Board for
Accountants’ International Code of Ethics for Profes-
sional Accountants (IESBA Code) and the additional
ethical requirements applicable in Denmark, and we
have fulfilled our other ethical responsibilities in ac-
cordance with these requirements and the IESBA
Code. We believe that the audit evidence we have ob-
tained is sufficient and appropriate to provide a basis
for our opinion.
Statement on the management commentary
Management is responsible for the management
commentary.
Our opinion on the consolidated financial statements
and the parent financial statements does not cover
the management commentary, and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated
financial statements and the parent financial state-
ments, our responsibility is to read the management
commentary and, in doing so, consider whether the
management commentary is materially inconsistent
with the consolidated financial statements and the
parent financial statements or our knowledge ob-
tained in the audit or otherwise appears to be materi-
ally misstated.
Moreover, it is our responsibility to consider whether
the management commentary provides the infor-
mation required under the Danish Financial State-
ments Act.
Based on the work we have performed, we conclude
that the management commentary is in accordance
with the consolidated financial statements and the
parent financial statements and has been prepared in
accordance with the requirements of the Danish Fi-
nancial Statements
Act. We did not identify any material misstatement of
the management commentary.
Management’s responsibilities for the consolidated
financial statements and the parent financial state-
ments
Management is responsible for the preparation of
consolidated financial statements and parent financial
statements that give a true and fair view in accord-
ance with International Financial Reporting Standards
as adopted by the EU and additional requirements of
the Danish Financial Statements Act, and for such in-
ternal control as Management determines is neces-
sary to enable the preparation of consolidated finan-
cial statements and parent financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements
and the parent financial statements, Management is
responsible for assessing the Group’s and the Parent’s
ability to continue as a going concern, for disclosing,
as applicable, matters related to going concern, and
for using the going concern basis of accounting in pre-
paring the consolidated financial statements and the
parent financial statements unless Management ei-
ther intends to liquidate the Group or the Entity or to
cease operations, or has no realistic alternative but to
do so.
Independent auditor’s report
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2022 92
Auditor’s responsibilities for the audit of the consoli-
dated financial statements and the parent financial
statements
Our objectives are to obtain reasonable assurance
about whether the consolidated financial statements
and the parent financial statements as a whole are
free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that in-
cludes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an au-
dit conducted in accordance with ISAs and the addi-
tional requirements applicable in Denmark will always
detect a material misstatement when it exists. Mis-
statements can arise from fraud or error and are con-
sidered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these consolidated financial statements and these
parent financial statements.
As part of an audit conducted in accordance with ISAs
and the additional requirements applicable in Den-
mark, we exercise professional judgement and main-
tain professional scepticism throughout the audit. We
also:
• Identify and assess the risks of material misstate-
ment of the consolidated financial statements and
the parent financial statements, whether due to
fraud or error, design and perform audit proce-
dures responsive to those risks, and obtain audit ev-
idence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is
higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omis-
sions, misrepresentations, or the override of inter-
nal control.
• Obtain an understanding of internal control rele-
vant to the audit in order to design audit
procedures that are appropriate in the circum-
stances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s and the
Parent’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting esti-
mates and related disclosures made by Manage-
ment.
• Conclude on the appropriateness of Management’s
use of the going concern basis of accounting in pre-
paring the consolidated financial statements and
the parent financial statements, and, based on the
audit evidence obtained, whether a material uncer-
tainty exists related to events or conditions that
may cast significant doubt on the Group's and the
Parent’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s re-
port to the related disclosures in the consolidated
financial statements and the parent financial state-
ments or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our
auditor’s report. However, future events or condi-
tions may cause the Group and the Entity to cease
to continue as a going concern.
• Evaluate the overall presentation, structure and
content of the consolidated financial statements
and the parent financial statements, including the
disclosures in the notes, and whether the consoli-
dated financial statements and the parent financial
statements represent the underlying transactions
and events in a manner that gives a true and fair
view.
• Obtain sufficient appropriate audit evidence re-
garding the financial information of the entities or
business activities within the Group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision
and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with govern-
ance regarding, among other matters, the planned
scope and timing of the audit and significant audit
findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
Copenhagen, 31 March 2023
Deloitte
Statsautoriseret Revisionspartnerselskab
CVR No 33963556
Lars Siggaard Hansen
Christian Sanderhage
State Authorised Public Accountant
Identification No (MNE) mne32208
State Authorised Public Accountant
Identification No (MNE) mne23347
in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2022 93
Forward-looking statements
Forward-looking statements
This report may include statements about DKTH group’s expectations, beliefs, plans, objectives, assumptions or future events or performance that are not historical facts and may be forward-looking. These statements are often, but
not always, formulated using words or phrases such as “are likely to result”, “are expected to”, “will continue”, “believe”, “is anticipated”, “estimated”, “intends”, “expects”, “plans”, “seeks”, “projection” and “outlook” or similar
expressions or negatives thereof. These statements involve known and unknown risks, estimates, assumptions and uncertainties that could cause actual results, performance or achievements or industry results to differ materially
from those expressed or implied by such forward-looking statements.
Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this financial report. Key factors that may have a direct bearing on DKTH Group’s results include: the competitive
environment and the industry in which DKTH group operates; contractual obligations in DKTH group’s financing arrangements; developments in competition within the domestic and international communications industry; infor-
mation technology and operational risks, including DKTH group’s responses to change and new technologies; introduction of and demand for new services and products; developments in demand, product mix and prices in the mobile
and multimedia services market; research regarding the impact of mobile phones on health; changes in applicable legislation, including but not limited to tax and telecommunications legislation and anti-terror measures; decisions
made by the Danish Business Authority; the possibility of being awarded licences; increased interest rates; the status of important intellectual property rights; exchange-rate fluctuations; global and local economic conditions;
investments in and divestment of domestic and foreign companies; and supplier relationships.
As the risk factors referred to in this report could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made in this Report, undue reliance is not to be placed on any of these
forward-looking statements. New factors will emerge in the future that DKTH group cannot predict. In addition, DKTH group cannot assess the impact of each factor on its business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those described in any forward-looking statements.
Annual reportAuditor's report on audited financial statementsParsePort XBRL Converter2022-01-012022-12-312021-01-012021-12-31529900DQKWXN4TVCYP11Reporting class C, large enterpriseOpinionBasis for Opinion2023-03-312023-03-312023-03-31529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember529900DQKWXN4TVCYP112022-01-012022-12-31529900DQKWXN4TVCYP112021-01-012021-12-31529900DQKWXN4TVCYP112022-12-31529900DQKWXN4TVCYP112021-12-31529900DQKWXN4TVCYP112020-12-31529900DQKWXN4TVCYP112020-12-31ifrs-full:IssuedCapitalMember529900DQKWXN4TVCYP112021-01-012021-12-31ifrs-full:IssuedCapitalMember529900DQKWXN4TVCYP112021-12-31ifrs-full:IssuedCapitalMember529900DQKWXN4TVCYP112020-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900DQKWXN4TVCYP112021-01-012021-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900DQKWXN4TVCYP112021-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900DQKWXN4TVCYP112020-12-31ifrs-full:RetainedEarningsMember529900DQKWXN4TVCYP112021-01-012021-12-31ifrs-full:RetainedEarningsMember529900DQKWXN4TVCYP112021-12-31ifrs-full:RetainedEarningsMember529900DQKWXN4TVCYP112022-01-012022-12-31ifrs-full:IssuedCapitalMember529900DQKWXN4TVCYP112022-12-31ifrs-full:IssuedCapitalMember529900DQKWXN4TVCYP112022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900DQKWXN4TVCYP112022-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900DQKWXN4TVCYP112022-01-012022-12-31ifrs-full:RetainedEarningsMember529900DQKWXN4TVCYP112022-12-31ifrs-full:RetainedEarningsMember529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember1529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember1529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember2529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember3529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember4529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember5529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember6529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember1529900DQKWXN4TVCYP112022-01-012022-12-31cmn:ConsolidatedMember2529900DQKWXN4TVCYP112021-01-012021-12-31cmn:ConsolidatedMemberiso4217:DKKxbrli:pure