Enabling

the green digital

transition

Annual Report 2022

Teglholmsgade 1

2450 København SV

CVR-nr.: 40075267

08 Key figures

Who we are

10 Our business

12 Our strategy and priorities

2022 results

15 Revenue and gross profit

16 Operating expenses and EBITDA

17 Capex, cash flow and profit for the year

19 Guidance

26 Executive Leadership Team

In the report our compliance with sections 99a, 99b

and 99d in the Danish Financial Statements Act is

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The big picture

It has been a changeable year where the macroeconomic

development with high energy prices and inflation, and the

geopolitical situation in Europe impacted our business and

everyday lives. In that context, being an owner and provider

of critical, digital and telecommunications infrastructure has

made it even more important to ensure strong and resilient

networks and connections, while adapting our security profile

to suit the environment, we operate in.

a reliable, secure, resilient, and digital infrastructure with

no negative climate and environmental impacts. In 2022,

Denmark’s position as world leader in digital infrastructure was

once again underlined in the UN 2022 E-Government Survey.

To maintain such a position requires continued investments

and in 2022, that amount totalled DKK 3,248m. We invested in

both further roll-out of fibre connections, passing over a total

of 600k addresses by year-end, as well as increased network

security, while continuing to provide Denmark’s best 5G mobile

This summer, Tour de France visited Denmark, and new 5G

solutions were tested. They successfully enabled high-speed

media production in areas, where large crowds were live

streaming, which would normally put pressure on network

science-based targets for becoming a net-zero emissions

company by 2028 across our own operations and by 2030 in

our full value chain. As a frontrunner, we believe our obligation

is to lead the way and share our learnings. Achieving our

detailed action plan in place and will work closely with our

suppliers and stakeholders in our value chain to achieve these

targets.

In spring 2022, we fully integrated our climate ambitions in our

business plan, including by issuing sustainability-linked bonds

with a value of EUR 500m, to replace part of our long-term

secured bank facility of EUR 3.3bn.

declining trend in operating expenses from earlier years driven

by stable cost savings and ongoing efficiency improvements.

In total, revenue and operating expenses are expected to

generate low single-digit growth in EBITDA. Lastly, we expect

to maintain the investment level from 2022 in our core business

In continued collaboration with our dedicated, committed

employees and trusted business partners, we have a

strong foundation for pursuing our strategic ambitions

and investments in enabling the green, digital transition of

Scope 1 and 2

)

↓13%

by 13% compared with 2021 and by 4%

compared with 2020

Scope 3

)

↓11%

Reduced emissions from our value chain

by 11% compared with 2021 and by 17%

compared with 2020

(0.1)%

compared with 2021 despite increased

EBITDA

(Development)

year-over-year driven mainly by investments

in futureproof product offerings

Photo: © Better Energy

Changes in the executive committee

In 2022, we entered a new phase

in our separation from TDC

Science-based targets

We proudly announced that

TDC NET was the first company

worldwide to obtain validation of its

Who we are

In 2022, our operating expenses were stable, corresponding to

0.1%, and amounted to DKK -1,857m. The development was

driven by significantly higher electricity prices as well as an

increase of FTE's. However, this was offset by cost optimisation

programmes across the organisation with lower spending on

external expenses.

External expenses improved by 3.2%, or DKK 37m, to DKK

-1,102m, driven by synergies related to our separation from TDC

Group, as well as reduced spending on service contracts and

consultants. This was partly offset by significant increases in

electricity prices. However, the higher electricity prices were

(PPA) with Better Energy and establishment of four new solar

parks – two on Funen and two in Jutland. All four solar parks

now supply renewable energy to the network. When all four

Personnel expenses increased by 4.9%, or DKK 48m in 2022,

FTEs transferring from TDC Group to TDC NET in Q3 2021.

Other income

Other income increased by 4.6%, or DKK 12m year-over-year,

driven mainly by services sold to holding companies. This

was partly offset by reduced costs related to infrastructure

EBITDA

In 2022, EBITDA increased by DKK 22m to DKK 4,520m, despite

significant increases in electricity costs. This was attributable

to stable operating expenses combined with the improved

gross profit margin, resulting in an improved EBITDA margin of

0.7 percentage points year-over-year to 68.1% in 2022.

(DKKm)

and EBITDA

Photo: © TV2

Cash flow

In relation to the separation from TDCGroup,

we were funded by intra-group loans to

TDC Holding. In 2022, we established a

secured infrastructure financing platform

that ring fences TDC NET from TDC Holding.

For further description see note 4.2 Financial risks in the consolidated financial statements

We achieved a relatively flat -0.5% development in revenue,

driven primarily by a decline in revenue streams from legacy

products. In terms of EBITDA, we delivered an increase of DKK

22m or 0.5%, accelerated by efficiency improvements, though

these were more than offset by increasing electricity costs

initiatives, including new 5G solutions and preventive measures

such as PPAs to minimise risk and ensure stable operations.

This resulted in a similar investment level in 2022 compared

with 2021. Hence, we can conclude a full-year result in line with

continued growth in mobile and high-speed broadband

products set to counterbalance the declining revenue from

legacy products.

We strive to continue the declining trend for operating

risks related to declining operating costs will lie within

macroeconomic effects e.g. inflation, wage increases and

higher electricity prices. Nonetheless, the volatile electricity