Ørsted Salg & Service A/S

�

Salg & Service

Annual report 2023

Contents

Overview

Company information � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 4

Performance highlights � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 5

Statement by the Executive Board and the

Board of Directors � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 6

Independent auditor's report � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 7

Management's review � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 9

Financial statements

Statement of comprehensive income � � � � � � � � � � � � � � � � � � � � � � � � � � � � 14

Balance sheet � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 15

Statement of shareholder's equity � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 16

Statement of cash flows � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 17

Notes

1 Basis of reporting � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 19

2 Revenue � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 21

3 Cost of sales � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 23

4 Employee costs � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 24

5 Share-based payment � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 25

6 Other operating income and expenses � � � � � � � � � � � � � � � � � � � � � 26

7 Financial income � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 27

8 Financial expenses � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 27

9 Tax on profit (loss) for the year � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 28

10 Discontinued operations � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 29

11 Intangible assets � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 30

12 Property, plant and equipment � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 32

13 Investment in subsidaries � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 34

14 Derivatives � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 35

15 Fair value measurement � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 39

16 Maturity analysis of financial liabilities � � � � � � � � � � � � � � � � � � � � � 40

17 Deferred tax � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 41

18 Inventories � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 42

19 Trade receivables � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 43

20 Other receivables and other payables � � � � � � � � � � � � � � � � � � � � � � 44

21 Income tax receivable and payable � � � � � � � � � � � � � � � � � � � � � � � � � 45

22 Cash, cash equivalents and securities � � � � � � � � � � � � � � � � � � � � � � � 45

23 Equity � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 46

24 Provisions � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 47

25 Contract liabilities � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 48

26 Change in working capital � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 48

27 Financial risks and risk management � � � � � � � � � � � � � � � � � � � � � � � 49

28 Contingent liabilities and other liabilities � � � � � � � � � � � � � � � � � � � 52

Other notes

29 Auditors fees � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 54

30 Related-party transactions � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 55

31 Calculation of financial ratios � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 56

2 Ørsted Salg & Service A/S annual report 2023

Overview

4 Company information

5 Performance highlights

6 Statement by the Executive Board and the Board of Directors

7 Independent auditor's report

9 Management's review

3 Ørsted Salg & Service A/S annual report 2023

Company information

Company

Ørsted Salg & Service A/S

Kraftværksvej 53

Skærbæk

7000 Fredericia

Denmark

Telephone: +45 99 55 11 11

Email: orsted@orsted�com

Company registration number: 27210538

Shareholder

The entire share capital is held by Ørsted A/S

Board of Directors

Rasmus Errboe (Chair)

Anja Forup (Deputy Chair)

Heidi Lohse

Executive Board

Rune Sonne Bundgaard-Jørgensen

Auditor

PricewaterhouseCoopers, Statsautoriseret

Revisionspartnerselskab

Consolidated financial statements

The company is reflected in the group report of

the parent company Ørsted A/S, Fredericia, CVR no�

36 21 37 28

The group report of Ørsted A/S, Fredericia,

CVR no� 36 21 37 28 can be obtained at the following

address:

https://orsted�com/en/investors/ir-material/financial-

reports-and-presentations#financial-reports-

presentations-and-fact-sheets-2023

Annual general meeting

4 June 2024

4 OverviewØrsted Salg & Service A/S annual report 2023

Performance highlights

DKKm 2023 2022 2021 2020 2019

Statement of comprehensive income

Revenue

44,671 75,751 45,785 20,519 31,201

Operating profit (loss) before depreciation

and amortisation (EBITDA) 6,051 516 79 (169) 2,004

Operating profit (loss) (EBIT) 5,980 419 (893) (280) 1,618

Net financial income and expenses 406 (326) 146 (152) (81)

Profit (loss) before tax 6,399 96 (748) (432) 1,536

Profit (loss) for the year 5,002 67 (267) (638) 694

Balance sheet

Equity 29,468 19,215 5,903 9,348 10,067

Assets 50,100 88,299 69,215 21,007 26,345

Cash flows

Operating activities 17,884 (7,067) (10,682) 2,324 (359)

Investments in property, plant, and equipment (17) - - - (9)

Other investing activities 394 (1) (45) (3) -

Financing activities (19,440) 8,120 11,474 (79) (78)

Financial ratios

EBITDA margin 14 % 1 % 0 % (1 %) 6 %

EBIT margin (profit margin) 13 % 0 % (2 %) (1 %) 5 %

Net interest-bearing debt (22,516) (4,513) 3,428 (7,955) (7,546)

Capital employed 6,633 19,633 12,506 1,393 2,521

Average number of employees 277 269 256 267 295

Financial ratios have been calculated in accordance with ‘Recommendations & Ratios’ published by the

Danish Society of Financial Analysts� For definitions, see note 31 ‘Calculation of financial ratios‘�

In 2023, we changed our accounting policy on recognition of revenue from the settlement of failed

own-use contracts related to power� The change only impacts revenue and cost of sales with no impact

on EBITDA� The comparisons for 2022 have been adjusted� The related power volumes in 2022 and

2023 have consequently been netted� See more in note 1 ‘Basis of reporting’�

5 Overview

Ørsted Salg & Service A/S annual report 2023

Statement by the Executive

Board and the Board of Directors

The Board of Directors and the Executive Board

have today considered and adopted the annual

report of Ørsted Salg & Service A/S for the financial

year 1 January – 31 December 2023�

The Financial Statements of Ørsted Salg & Service A/S,

have been prepared in accordance with IFRS Accounting

Standards as adopted by the EU and further re quire-

ments in the Danish Financial Statements Act�

In our opinion, the Financial Statements give a true

and fair view of the company's assets, liabilities, and

financial position at 31 December 2023, and of the

results of the company's operations and cash flows for

the financial year 1 January – 31 December 2023�

In our opinion, the Management's Review represents

a true and fair account of the development in the

company's operations and financial circumstances,

of the results for the year, and of the financial position

of the company�

We recommend that the annual report is adopted

at the annual general meeting�

Gentofte, 27 May 2024

Rune Sonne Bundgaard-Jørgensen

CEO Executive Board

Rasmus Errboe

Chair Board of Directors

Anja Forup

Deputy Chair Board of Directors

Heidi Lohse

Member Board of Directors

6 OverviewØrsted Salg & Service A/S annual report 2023

Independent auditor's report

To the Shareholder of Ørsted Salg & Service A/S

Opinion

In our opinion, the Financial Statements give a true and

fair view of the financial position of the Company at

31 December 2023, and of the results of the Company's

operations and cash flows for the financial year

1 January – 31 December 2023 in accordance with IFRS

Accounting Standards as adopted by the EU and further

requirements in the Danish Financial Statements Act�

We have audited the Financial Statements of Ørsted

Salg & Service A/S for the financial year 1 January

– 31 December 2023, which comprise statement of

comprehensive income, balance sheet, statement of

cash flows, statement of changes in equity and notes,

including material accounting policy information

(‘financial statements‘)�

Basis for Opinion

We conducted our audit in accordance with Interna-

tional Standards on Auditing (ISAs) and the additional

requirements applicable in Denmark� Our responsi-

bilities under those standards and requirements are

further described in the Auditor's Responsibilities for

the Audit of the Financial Statements section of our

report� We are independent of the Company in accord-

ance with the International Ethics Standards Board for

Based on the work we have performed, in our view,

Management's Review is in accordance with the Finan-

cial Statements and has been prepared in accordance

with the requirements of the Danish Financial State-

ments Act� We did not identify any material misstate-

ment in Management's Review�

Management's Responsibilities for the

Financial Statements

Management is responsible for the preparation of

Financial Statements that give a true and fair view in

accordance with IFRS Accounting Standards as adopted

by the EU and further requirements in the Danish

Financial Statements Act, and for such internal control

as Management determines is necessary to enable the

preparation of financial statements that are free from

material misstatement, whether due to fraud or error�

In preparing the financial statements, Management

is responsible for assessing the Company's ability to

continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going

concern basis of accounting in preparing the financial

statements unless Management either intends to

liquidate the Company or to cease operations, or has

no realistic alternative but to do so�

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

accordance with these requirements and the IESBA

Code� We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a

basis for our opinion�

Statement on Management's Review

Management is responsible for Management's Review�

Our opinion on the financial statements does not

cover Management's Review, and we do not express

any form of assurance conclusion thereon�

In connection with our audit of the financial statements,

our responsibility is to read Management's Review and,

in doing so, consider whether Management's Review is

materially inconsistent with the financial statements or

our knowledge obtained during the audit, or otherwise

appears to be materially misstated�

Moreover, it is our responsibility to consider whether

Management's Review provides the information

required under the Danish Financial Statements Act�

Auditor's Responsibilities for the Audit

of the Financial Statements

Our objectives are to obtain reasonable assurance

about whether the financial statements as a whole

are free from material misstatement, whether due

to fraud or error, and to issue an auditor's report

that includes our opinion� Reasonable assurance is a

high level of assurance, but is not a guarantee that

an audit conducted in accordance with ISAs and the

additional requirements applicable in Denmark will

always detect a material misstatement when it exists�

Misstatements can arise from fraud or error and are

considered material if, individually or in the aggre-

gate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of

these financial statements�

As part of an audit conducted in accordance with

ISAs and the additional requirements applicable in

Denmark, we exercise professional judgement and

maintain professional scepticism throughout the

audit� We also:

· Identify and assess the risks of material misstate-

ment of the financial statements, whether due to

fraud or error, design and perform audit procedures

7 OverviewØrsted Salg & Service A/S annual report 2023

responsive to those risks, and obtain audit evidence

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 collu-

sion, forgery, intentional omissions, misrepresenta-

tions, or the override of internal control�

· Obtain an understanding of internal control rele vant

to the audit in order to design audit procedures that

are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness

of the Company's internal control�

· Evaluate the appropriateness of accounting policies

used and the reasonableness of accounting estimates

and related disclosures made by Management�

· Conclude on the appropriateness of Management's

use of the going concern basis of accounting in

preparing the financial statements and, based on

the audit evidence obtained, whether a material

uncertainty exists related to events or conditions

that may cast significant doubt on the Company'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 report to the related

disclosures in the financial statements 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 conditions may cause the

Company to cease to continue as a going concern�

· Evaluate the overall presentation, structure and

contents of the financial statements, including the

disclosures, and whether the financial statements

represent the underlying transactions and events in

a manner that gives a true and fair view�

We communicate with those charged with governance

regarding, among other matters, the planned scope

and timing of the audit and significant audit findings,

including any significant deficiencies in internal control

that we identify during our audit�

Hellerup, 27 May 2024

PricewaterhouseCoopers

Statsautoriseret Revisionspartnerselskab

CVR No 3377 1231

Thomas Wraae Holm

State Authorised Public Accountant

mne30141

Daniel Kønigsfeld Sitch

State Authorised Public Accountant

mne47889

8 OverviewØrsted Salg & Service A/S annual report 2023

Management's review

Financial performance 2023

The power portfolio and trading business related to

hedging of power generation showed a strong perfor-

mance in 2023� Reduced balancing cost and inter-

mittency costs had a positive impact� In addition, the

decreasing power prices gave a positive impact from

fair-value recognised derivates used for hedging of the

Ørsted groups power portfolio� Good performance

in our power trading activities contributed to the

increased earnings�

After years with very strong performance, our gas

business had good, but more normalised earnings�

In 2023, we had lower optimisation opportunities

related to gas storages and sourcing contracts�

Revenue

Total revenue amounted to DKK 44�7 billion�

The decrease of 41 % relative to 2022 was primarily

due to the significantly lower power and gas prices

across all markets as well as lower power and gas

volumes sold�

Revenue from sale of power decreased with DKK 22�9

billion (47 % decrease) mainly due to decrease in aver-

age power prices� Sold power volumes amounted to

34�7 TWh in 2023, which was in line with last year�

Higher offtake of power generation from Ørsted wind-

farms, including investor power purchase agreements,

due to the ramp-up of Hornsea II, was offset by lower

offtake on 3rd party power purchase agreements and

reduced sale to end-customers�

Revenue from sale of gas decreased with DKK 12�4

billion, driven by both generally lower prices through-

out the year compared to last year and a 31 %

reduction in the sold gas volumes� The decrease in

sold gas volumes was primarily due to the Gazprom

contracts, ceased in 2022, and wholesale contracts

expired in 2022, which has reduced gas volumes in

2023 compared to 2022�

EBITDA

EBITDA amounted to DKK 6�1 billion compared to

DKK 0�5 billion in 2022�

To reflect end-to end value chain thinking in Ørsted,

earnings from trading related to hedging of power

exposures and power portfolio optimisation activities

are reported as Offshore earnings�

EBITDA from Offshore sales amounted to DKK 5�5

billion compared to a loss of DKK 2�6 billion in 2022�

The increase was mainly due to a positive impact

of 5�6 billion from fair-value recognised financial

contracts, used for hedging purpose in the Ørsted

Group, but recognised in the income statement in

Ørsted Salg & Service A/S� Earnings in 2022 was

significantly negatively impacted from hedges which

was not repeated in 2023� Lower balancing and

Performance highlights 2023 2022 %

Business drivers

Gas sales (continued operations)

TWh 17�7 25�8 (31 %)

Power sales (continued operations)

2, 3

TWh 34�7 35�1 (1 %)

Gas price, TTF EUR/MWh 41�4 120�5 (66 %)

Power price, DK EUR/MWh 89�3 213�7 (58 %)

Power price, LEBA UK GBP/MWh 94�5 252�0 (63 %)

Financial results

Revenue DKKm 44,671 75,751 (41 %)

EBITDA (continued operations) DKKm 6,051 516 1,073 %

Offshore 5,461 (2,573) n�a

Gas Markets & Infrastructure 559 3,070 (82 %)

Other, incl� B2B 31 19 63 %

EBITDA (discontinued operations) DKKm - (23) (100 %)

Depreciation and amortisation DKKm (71) (97) (27 %)

EBIT DKKm 5,980 419 1,327 %

Cash flows from operating activities DKKm 17,884 (7,067) n�a

Gross investments DKKm (26) (3) 733 %

Divestments DKKm 498 65 666 %

Cash flows from financing activities DKKm (19,440) 8,120 (339 %)

Free cash flow from continued operations DKKm (1,084) 1,114 (197 %)

Free cash flow from discontinued operations DKKm - (18) (100 %)

Capital employed DKKm 6,115 14,537 (58 %)

Gas volumes from discontinued operations 0 TWh (2022: 6�2 TWh)�

Power volumes from discontinued operations 0 TWh (2022: 1�1 TWh)�

Power sales volumes for 2022 is changed due to the change of accounting policy

described in note 1 ‘Basis of reporting‘�

9 Financial statements

Ørsted Salg & Service A/S annual report 2023

Route-to-market and trading

We serve as an efficient route-to-market for

both Ørsted companies and third parties, by

providing balancing services for renewable

generation portfolios and by selling green

certificates to the market� In doing so, we

manage large volumes of power contracts

that we optimise by leveraging the size of our

combined portfolio and our origination and

trading capabilities�

We spearhead market risk management for

Ørsteds generation assets and contracts by

trading power, green certificates and other

commodities� We mitigate risks and create

value through time-to-market decisions, proxy

hedging and netting�

We ensure efficient operations and maximise

the commercial value of our legacy gas

portfolio�

We are utilizing our gas and power portfolio

by part of the volumes being sold to our B2B

customers in Denmark and the southern part

of Sweden�

Gas pipelines and storage facilities

We handle the commercial activities relating to

parts of the Ørsted Group's gas infrastructure�

We own pipelines in the Danish sector of the

North Sea and have leased capacity across

the European pipeline system, securing access

to most gas markets in Northern Europe�

We have access to gas storage facilities

in Denmark and Germany, where we have

capacity on long-term or short-term�

Besides higher security of supply, these

storage facilities provide flexibility in our

gas optimisation and trading�

Environment

As part of the Ørsted Group, we work for

an increase in the use of renewable energy,

while remaining dependent on traditional

energy sources to ensure a stable distribution

of power�

Reference is made to the Ørsted Group's

2023 annual report, which includes the

Group's statutory environmental statement�

Introduction to Ørsted Salg & ServiceBSUoS (Balancing Service Use of System) costs in 2023

had a positive impact on the earnings�

EBITDA from Gas Markets & Infrastructure contributed

with earnings of DKK 0�6 billion, DKK 2�5 billion lower

than last year� The decrease was driven by strong

earnings from our gas trading in 2022, when we were

able to lock in gains from optimising the offtake

flexibility in some of our sourcing contracts and storages,

which was partly offset by our decision to unwind gas

hedges related to the Gazprom Export contract�

EBITDA from Other business activities amounted to

DKK 31 million, an increase of DKK 12 million, which

was primarily due to reduced operating costs and

increased earnings from end-customer sales�

Cash flows

Cash flows from operating activities amounted to DKK

17�9 billion in 2023 compared to DKK -7�1 billion in 2022�

The positive impact in 2023 was due to release of DKK

8�9 billion, net, in variation margin payments on un real-

ised financial derivatives and initial margin payments

at clearing houses because of falling and less volatile

power and gas prices� In 2022, we tied up DKK 6�8 billion�

· the initial margin payments (part of change in other

receivables), which were a cash inflow of DKK 2�4

billion versus a cash inflow of DKK 3�5 billion in 2022

· in 2022, we issued parent company guarantees (PCG)

in total of EUR 1 billion to reduce our initial margin

payments and, to some extent, variation margin

payments� The PCG were only partly utilised at the

end of 2023�

Furthermore, cash flows from operating activities

were positively impacted by lower receivables, only

partly offset by lower payables and the lower value of

gas at storage due to the falling prices in 2023�

Received income tax amounted to DKK 0�4 billion

compared to a tax payment of DKK 2�5 billion�

Cash flows from divestment of subsidiaries and other

securities amounted to DKK 0�5 billion�

Negative cash flow from financing activities amounted

to DKK 19�4 billion mainly due to transactions with

Ørsted internal bank and instalment on loans�

Earnings related to expected development assumed

in previous report

Financial performance for 2023 was higher than

expectations primarily driven by:

· Earnings in Offshore ended up higher than expected,

mainly due to a partial reversal of negative

temporary IFRS 9 adjustments in 2022 together

with good performance in power trading activities

and lower balancing costs due to power prices

decreasing at a faster pace than expected�

· In ‘Gas Markets & Infrastructure’, we achieved

higher earnings from our gas storage activities than

expected�

Consequently, realised EBITDA ended higher than

our expected range of DKK 1�5-1�8 billion for 2023 as

stated in our 2022 annual report�

10 Financial statementsØrsted Salg & Service A/S annual report 2023

Outlook 2024

For 2024, a lower EBITDA is expected� EBITDA is

expected to total DKK 3�2-3�8 billion in 2024�

· ‘Offshore’ earnings are expected to decrease due to

lower positive impact from reversal of temporary

IFRS 9 adjustments�

· ‘Gas Markets & Infrastructure’ are expected to

increase compared to 2023� The positive impact on

EBITDA in 2024 is driven by earnings from our off-

shore gas pipelines, which are expected to increase

due increased transportation of gas from the Tyra

gas field�

Events after the end of the financial year

No events have occurred after the end of the

financial year which have influenced the evaluation

of this annual report�

Risk management

The activities, financial position, results, and

future growth of the Ørsted Salg & Service A/S are

affected by a number of non-financial and financial

commercial risks� Therefore, we regularly review

our risk profile and the associated risk policies to

ensure the appropriate balancing of risk exposure

and activities at all times�

Formalised risk management is divided into:

· management of general commercial risks,

· management of financial risks and

· management of insurable risks�

Commercial risks are defined as events that may, with

a certain probability, adversely impact the realisation

of the Ørsted Salg & Service A/S financial results or

strategy� The management of commercial risks is

anchored in the individual segments in the Ørsted Salg

& Service A/S and consolidated at corporate level�

Once annually, the Ørsted Salg & Service A/S identifies

and prioritises its risks in a risk matrix based on

materiality and probability� For further details of risk

management, reference is made to note 27 ‘Financial

risks and risk management‘�

In addition to these risks, we are involved in litigation

and arbitration proceedings, the outcome of which

may impact our financial position� Reference is made

to note 28 ‘Contingent liabilities and other liabilities’�

Management

The member of the Executive Board is:

Rune Sonne Bundgaard-Jørgensen

CEO

The members of the Board of Directors are:

Rasmus Errboe

Chair of the Board of Directors

Anja Forup

Deputy Chair of the Board of Directors

Heidi Lohse

Member of the Board of Directors since

28 March 2023

For further details regarding remuneration, see note 4

‘Employee costs’ and note 5 ‘Share-based payment’�

Retention and development of skills

Our business is generally highly complex, requiring

special skills� Coupled with the growing demand

for talent, this increases the challenge of attracting

and retaining employees� Much emphasis is placed

on making us an attractive workplace, and various

initiatives have been put in motion for this purpose�

These include management development, skills

development, perform ance systems, talent

development, and collaboration with educational

institutions�

Liquidity and financing risks

Our liquidity and financing risks are managed

centrally by the Ørsted Group in accordance with

the defined principles and delegated authorities laid

down by the Board of Directors of Ørsted A/S, in such

a way as to ensure that we have an adequate capital

base and adequate cash resources at all times� One

of the most important financial management tasks

in the Ørsted Group is to secure sufficient and flexible

financial resources in relation to the Ørsted Group's

day-to-day operations and investment programme�

For this purpose, internal management objectives

have been established determining required level

of financial resources, taking into account primarily

factors such as the investment programme, cash

flows from operating activities, and the debt maturity

profile� It is the Ørsted Group's financing policy to

concentrate loans in the parent company in order to

optimise the loan portfolio on a consolidated basis�

Insurable risks

The Ørsted Group has an extensive facility and

liability insurance programme, while the scope of

consequential loss insurance is very limited� Also,

separate insurance is taken out for certain large

construction projects� The facilities insurance

largely relates to the membership of the reinsurance

company ´Oil Insurance Ltd�´ Through this, assets

up to USD 450 million are insured, with an excess

of USD 10 million per insurance event� With a view

to achieving adequate cover for a number of large

assets, this cover has been supplemented by a

number of supplementary

insurance policies through

the commercial insurance market� As part of the

optimisation of its insurance portfolio, the Ørsted

Group has established a captive, Ørsted Insurance

A/S, that is authorised to carry on insurance business

and is subject to supervision by the Danish Financial

Supervisory Authority� Ørsted Insurance A/S is

primarily used to provide insurance cover for facilities

and certain construction projects�

Environmental, social, and governance

statement (ESG)

In pursuance to Section 99a (7) of the Danish Financial

Statements Act, the Company has omitted information

on corporate social resonsibility� We are part of the

Ørsted Group, and reference is consequently made to

the Ørsted Group's 2023 annual report, which includes

the Group's statutory ESG report�

Further details on ESG can be found at:

https://orsted.com/en/who-we-are/

sustainability/sustainability-report/

esg-ratings-and-reporting#reporting

11 Financial statementsØrsted Salg & Service A/S annual report 2023

Policies for the underrepresented gend

Pursuant to Section 99b of the Danish Financial State-

ments Act, the table to the right reports the number

of indiciduals and gender composition in the three

highest management levels.

All employees working for Ørsted Salg & Service A/S are

legally employed by other Ørsted Group companies.

Therefore, the company falls below the threshold of

less than 50 employees and is not required to prepare

policies or set targets on the underrepresented gender

at other executive levels�

Statement of policy for data ethics

In pursuance of Section 99d of the Danish Financial

Statements Act, the Company has omitted information

on data ethics�

Reference is made to the Data Ethics statement 2023

for Ørsted A/S:

https://orsted.com/en/who-we-are/our-organisation/

corporate-governance/data-ethics-report

Overview regarding gender diversity pursuant to Section

99b of the Danish Financial Statements Act 2023

The Board of Directors

Total number of members elected by the general meeting 3

Underrepresented gender (percentage)

Target (percentage) and year to meet target

– no target as Ørsted Salg & Service A/S has equal

representation on the Board of Directors -

Other managerial levels – the Executive Board and

people managers employeed by Ørsted Salg & Service A/S

reporting to the Executive Board

Total number of members 1

Underrepresented gender 0 %

Targe

t (percentage) and year to meet target

– no target. In the recent financial year, Ørsted Salg &

Service A/S had an average number of full-time

employees below 50.

12 Financial statements

Ørsted Salg & Service A/S annual report 2023

33.3 %

Financial

statements

1 January – 31 December 2023

13 Financial statementsØrsted Salg & Service A/S annual report 2023

Statement of comprehensive income

1 January – 31 December

Note DKKm 2023 2022

2 Revenue 44,671 75,751

3 Cost of sales (37,920) (73,193)

Other external expenses (446) (573)

4, 5 Employee costs (292) (272)

6 Other operating income and expenses 38 (1,197)

Operating profit (loss) before depreciation, amortisation and impairment losses (EBITDA) 6,051 516

11, 12 Depreciation, amortisation and impairment losses on intangible assets and property, plant and equipment (71) (97)

Operating profit (loss) (EBIT) 5,980 419

Gain on disposal of enterprises 13 3

7 Financial income 2,030 2,567

8 Financial expenses (1,624) (2,893)

Profit (loss) before tax 6,399 96

9 Tax on profit (loss) for the year (1,397) (11)

Profit (loss) for the year from continuing operations 5,002 85

10 Profit (loss) for the year from discontinued operations - (18)

Profit (loss) for the year 5,002 67

Other comprehensive income

Value adjustments of cash flow hedging 2,725 (5,276)

Cash flow hedging transferred to revenue 3,979 4,223

Cash flow hedging transferred to other operating expenses 27 (1,197)

Tax on comprehensive income (1,481) 494

Total comprehensive income 10,252 (1,689)

Profit (loss) for the year is attributable to:

Shareholder in Ørsted Salg & Service A/S 5,002 67

Profit (loss) for the year 5,002 67

Total comprehensive income for the year is attributable to:

Shareholder in Ørsted Salg & Service A/S 10,252 (1,689)

Total comprehensive income 10,252 (1,689)

All items in ‘Other comprehensive income’ may be recycled to the income statement

14 Financial statements

Ørsted Salg & Service A/S annual report 2023

Balance sheet

31 December

Note

Assets

DKKm 2023 2022

Rights 4 4

Completed development projects 56 20

Development projects in progress 12 78

11 Intangible assets 72 102

Land and buildings 2 2

Production assets 323 356

Production assets under construction 17 -

12 Property, plant and equipment 342 358

13 Investments in subsidiaries 87 177

14, 15, 16 Derivatives 351 2,016

17 Deferred tax - 3,442

Other receivables 7 3

Other non-current assets 445 5,638

Non-current assets 859 6,098

18 Inventories 3,572 5,450

14, 15, 16 Derivatives 13,781 48,179

19 Trade receivables 4,883 7,733

Receivables from group enterprises 24,151 11,777

20 Other receivables 779 3,755

21 Income tax 2,035 1,758

22 Securities - 380

22 Cash 40 3,169

Current assets 49,241 82,201

Assets 50,100 88,299

Note

Equity and liabilities

DKKm 2023 2022

Share capital 2,610 2,610

Hedging reserve 319 (4,931)

Development cost reserve 12 79

Retained earnings 16,527 21,457

Proposed dividend 10,000 -

23 Equity 29,468 19,215

24 Provisions 1,173 1,179

14, 15, 16 Derivatives 288 10,523

25 Contract liabilities 4 4

17 Deferred tax 154 -

Other payables 7 1

Non-current liabilities 1,626 11,707

24 Provisions 21 3

Lease liabilities - 19

14, 15, 16 Derivatives 11,930 39,358

25 Contract liabilities 113 121

Trade payables 4,160 7,223

Payables to group enterprises 2,566 10,370

20 Other payables 214 283

Bank loans 2 -

Current liabilities 19,006 57,377

Liabilities 20,632 69,084

Equity and liabilities 50,100 88,299

15 Financial statements

Ørsted Salg & Service A/S annual report 2023

Statement of shareholder's equity

1 January – 31 December

2023 2022

DKKm

capital

Hedging

Reserve

Development

cost reserve

Retained

earnings

Proposed

dividend Tota l

capital

Hedging

Reserve

Development

cost reserve

Retained

earnings Tota l

Equity at 1 January 2,610 (4,931) 79 21,457 - 19,215 1,110 (3,175) 110 7,858 5,903

Adjustment opening, merger - - - - - - - - - 3 3

Comprehensive income for the year:

Profit (loss) for the year - - (67) 5,069 - 5,002 - - (31) 98 67

Impact from cash flow hedging - 6,731 - - - 6,731 - (2,250) - - (2,250)

Tax on cash flow hedging - (1,481) - - - (1,481) - 494 - - 494

Total comprehensive income - 5,250 (67) 5,069 - 10,252 - (1,756) (31) 98 (1,689)

Transactions with owners:

Capital injection - - - - - - 1,500 - - 13,500 15,000

Share-based payment - - - 1 - 1 - - - (2) (2)

Proposed dividend - - - (10,000) 10,000 - - - - - -

Total changes in equity - 5,250 (67) (4,930) 10,000 10,253 1,500 (1,756) (31) 13,596 13,309

Equity at 31 December 2,610 319 12 16,527 10,000 29,468 2,610 (4,931) 79 21,457 19,215

Hedging reserve after tax at 31 December 2023

amounting to DKK 319 million is further specified on

page 36 (note 14 ‘Derivaties‘)� Hedging reserve before

tax at 31 December 2023 amounts to DKK 409 million�

The merger of Orsted Pipelines A/S at 1 January 2023

has been adjusted in the opening balance for 2022�

The impact on the opening balance for ‘Retained

earnings‘ is DKK 3 million� Accounting policies are

described in note 1 ‘Basis of reporting‘�

16 Financial statementsØrsted Salg & Service A/S annual report 2023

Note DKKm 2023 2022

Operating profit (loss) before depreciation and amortisation (EBITDA) 6,051 516

Change in derivatives 5,130 (7,220)

Change in provisions (14) (598)

Other items 50 (140)

26 Change in working capital 5,897 3,094

Interest income and similar items 1,849 2,291

Interest expenses and similar items (1,520) (2,470)

Income tax paid 441 (2,540)

Cash flows from operating activities 17,884 (7,067)

11 Purchase of intangible assets (9) (3)

12 Purchase of property, plant and equipment (17) -

13 Divestment of subsidiaries 104 -

Other investments 394 -

Dividends received - 65

Cash flows from investing activities 472 62

Financial transactions with the Ørsted Croup's internal bank (16,465) (10,005)

Capital transactions principal shareholders - 15,000

Loan proceeds from Ørsted Group - 5,008

Instalments on loans from Ørsted Group (5,001) -

Deposit of restricted cash 2,045 (1,805)

Instalments on leases (19) (75)

Paid dividend - (3)

Cash flows from financing activities (19,440) 8,120

Cash flows from continuing operations (1,084) 1,114

10 Cash flows from discontinuing operations - (18)

Total net change in cash and cash equivalents (1,084) 1,096

Cash and cash equivalents at 1 January 1,124 28

Total net change in cash and cash equivalents (1,084) 1,096

22 Cash and cash equivalents at 31 December 40 1,124

Statement of cash flows

1 January – 31 December

§ Accounting policies

The statement of cash flows shows cash flows

for the year from operating, investing, and

financing activities, the year's changes in cash

and cash equivalents, and cash and cash equiv-

alents at the beginning and end of the year�

The cash flow effect of acquisitions and divest-

ments of enterprises is disclosed separately

under ‘Cash flows from investing activities‘�

Cash flows relating to acquired enterprises are

recognised in the statement of cash flows from

the date of acquisition, and cash flows relating

to divested enterprises are recognised up to the

date of divestment�

‘Cash flows from operating activities‘ are deter-

mined using the indirect method as operating

profit adjusted for non-cash operating items,

changes in working capital, interest received and

paid, dividends received, and income tax paid�

‘Cash flows from investing activities‘ comprise

payments in connection with the acquisition

and divestment of enterprises and activities;

purchase and sale of intangible assets, property,

plant and equipment and other non- current

assets; and purchase and sale of securities that

are not recognised as cash and cash equivalents�

‘Cash flows from financing activities‘ comprise

changes in the size or composition of share

capital and costs associated with such changes

as well as the raising of loans, repayment of

interest -bearing debt, purchases and sales of

treasury shares, instalments on leases and pay-

ment of dividends to owners�

Cash flows relating to assets held under leases

are recognised as payment of interest and

repayment of debt�

Cash and cash equivalents comprise cash as

well as securities that form part of the ongoing

cash management, are readily convertible to

cash, and are subject to an insignificant risk of

changes in value�

Cash flows in currencies other than the func-

tional currency are translated at the average

exchange rates for the month in question,

unless these differ significantly from the rates

at the transaction date�

17 Financial statements

Ørsted Salg & Service A/S annual report 2023

Notes

1 January – 31 December 2023

18 Financial statementsØrsted Salg & Service A/S annual report 2023

Basis of reporting

Note 1

Pursuant to sections §112, of the Danish Financial

Statements Act, the company has not prepared

consolidated financial statements�

Change in accounting policy

From gross to net presentation of revenue and cost

of sales from power trading activities�

We have changed our accounting policy regarding

presentation of revenue and related costs from the

settlement of failed own-use power contracts� These

are contracts settled with delivery of physical power

where the purpose of entering into them are hedging or

optimisation of our revenue� Previously, we recognised

revenue and the cost of sales on a gross basis when

these contracts were settled� As the gross presentation

does not reflect the magnitude of the companys power

trading activities, we have changed the presentation

Accounting policies

Ørsted Salg & Service A/S is a public limited liability

company based in Denmark�

The financial statements for the period 1 January –

31 December 2023 comprise the parent company

Ørsted Salg & Service A/S�

The financial statements have been prepared in

accordance with IFRS Accounting Standards as

adopted by the EU and further requirements in the

Danish Financial Statements Act (Årsregnskabs-

loven)� We provide a more detailed description of

the accounting policies applied in the specific notes�

The accounting policy have been applied consitently

in the financial year and for comparative figures, except

for one change in accounting policy – see below�

to at net presentation of revenue and related costs�

It is management´s view that such presentation better

reflects the power trading activities�

The change only impacts revenue and the cost of sales

and thus our EBITDA is not impacted� The 2022 com-

parisons have been adjusted accordingly�

The impact on our 2023 and 2022 numbers is illustrated

in the table to the left�

Merger of subsidary

Ørsted Pipelines A/S, a 100 % owned subsidary, was

merged into Ørsted Salg & Service A/S per 1 January

2023� Comparison numbers for 2022 were impacted

with use of the predecessor value method using

carrying values of the acquired assets and liabilities

to reflect the merger�

Equity was impacted with DKK 3 million, which is pre-

sented in ‘Statement of shareholders equity‘ on page

16� The ‘Cost‘ of the investment in subsidaries was

reduced with DKK 280 million and ‘Value adjustments‘

with DKK 257 million� Total impact on the carrying

amount of ‘Investments in subsidaries‘ at 1 January

2022 was DKK 23 million� We refer to note 13 ‘Invest-

ments in subsidaries‘�

Finally, the opening balance at 1 January 2022 of

‘Receivables from Group companies‘ was adjusted

with DKK 25 million�

Measurement basis

The financial statements have been prepared on

historical cost basis, except for derivatives, financial

instruments in the trading portfolio, and carbon

emission allowances in trading portfolio which are

measured at market value�

Foreign currency translation

The financial statements are presented in million

Danish kroner (DKK), unless otherwise stated�

Transactions in currencies, other than the functional

currency of DKK, are accounted for as transactions in

foreign currencies and translated on initial recognition at

the exchange rate at the transaction date� Exchange dif-

ferences arising between the exchange rate at the trans-

action date and at the date of payment are recognised in

profit (loss) for the year as financial income or expenses�

Receivables, payables, and other monetary items

in foreign currencies are translated at the exchange

rates at the balance sheet date� The difference

between the exchange rate at the balance sheet date

and the date at which the receivable or payable arose

is recognised in profit (loss) for the year as financial

income or expenses�

Balance sheet items are translated at the exchange

rates at the balance sheet date� All exchange differ-

ences are recognised in profit (loss) for the year�

2023 Previous accounting policy Change New accounting policy

Revenue

53,898 (9,227) 44,671

Cost of sales

47,147 (9,227) 37,920

2022 Reported Change Adjusted

Revenue

93,611 (17,860) 75,751

Cost of sales

91,053 (17,860) 73,193

The table illustrates the change in accounting policy regarding presentation of revenue and related costs from settlement of failed own-use contracts�

The line item ‘Sale of power’ is impacted in note 2 ‘Revenue’�

The line item ‘Power’ is impacted in note 3 ‘Cost of sales’�

19 Financial statements

Ørsted Salg & Service A/S annual report 2023

Key accounting estimates and judgements

The use of reasonable estimates and judgements is

an essential part of the preparation of the financial

statements�

Given the uncertainties inherent in our business

activities, we make a number of estimates regarding

judgements� The estimates and judgements are based

on assumptions concerning future developments

which affect our application of accounting policies

and reported amounts of our assets, liabilities, sales,

costs, cash flows, and related disclosures� Actual

amounts may differ from the amounts estimated

and estimates made, as more detailed information

becomes available�

We regularly reassess these estimates and judgements

based, on among other things, historical experience,

the current situation in the financial markets, and a

number of other relevant factors�

Change in estimates are recognised in the period in

which the estimate in question is revised�

Accounting estimates, judgements and assumptions

which may entail a risk of material adjustments in

subsequent years are listed in the table on page 19�

In addition, we make judgements when we apply the

accounting policies�

Reference is made to the specific notes for further

information on the key accounting estimates and

judgements as well as the assumptions applied�

Implementation of new and changed accounting

standards and interpretations

The International Accounting Standards Board (IASB)

has issued amended standards that are effective for

the first time in 2023� None of them required a change

in our accounting policies�

New standards and interpretations

IASB has issued new or amended standards and

interpretations that have not yet become effective

and have consequently not been implemented in the

financial statements for 2023� The new or amended

standards or interpretations are not expected to have

a significant impact on our financial statements�

Note Key accounting estimates and judgements Estimate/judgement Potential impact from accounting estimates and judgements

24, 28 ‘Provisions‘ and ‘Contingent liabilities and other liabilities‘

Assumptions for decommissioning obligations Estimate

Estimate of onerous contracts Estimate

Estimate of litigation outcomes Estimate

27 ‘Financial risk and risk management‘

Valuation of long-term power purchase agreements Estimate/judgement

Hedge accounting Estimate/judgement

The impact relates to objectivity and business practice�

Very objective/market-conforming

Objective/partially conforming

Partially subjective/partially distinctive

Subjective/distinctive for Ørsted Salg & Service A/S

Basis of reporting

Note 1 – continued

20 Financial statementsØrsted Salg & Service A/S annual report 2023

Revenue

Note 2

DKKm Offshore

Gas Markets

and Infra-

structure

Other,

incl. end-

customers

sales

2023

To t a l Offshore

Gas Markets

and Infra-

structure

Other ,

incl. end-

customers

sales

2022

To t a l

Sale of gas 91 4,907 1,315 6,313 254 16,519 1,989 18,762

Sale of power 23,495 94 1,906 25,495 44,308 90 4,006 48,404

Sale of renewable energy certificates 6,921 - - 6,921 6,150 - - 6,150

Other revenue 7 172 - 179 2 233 - 235

Total revenue from customers 30,514 5,173 3,221 38,908 50,714 16,842 5,995 73,551

Trading activities, net 1,283 740 - 2,023 964 2,922 - 3,886

Miscellaneous revenue 3,584 156 - 3,740 (1,980) 294 - (1,686)

Total revenue 35,381 6,069 3,221 44,671 49,698 20,058 5,995 75,751

Timing of revenue recognition from customers

At a point in time 25,485 3,811 - 29,296 48,868 12,182 - 61,050

Over time 5,029 1,362 3,221 9,612 1,846 4,660 5,995 12,501

Total revenue from customers 30,514 5,173 3,221 38,908 50,714 16,842 5,995 73,551

Revenue

‘Total revenue from sale of goods‘ in 2023 amounted

to DKK 44,471 million (2022: 75,441 million) and

‘Total revenue from sale of services‘ 2023 amounted

to DKK 200 million (2022: 310 million)�

On 1 January 2023, we changed our accounting policy

with respect to presentation of revenue and related

costs from the settlement of failed own-use power

contracts� See more in note 1 ´Basis of reporting´�

Timing of revenue

The timing of transfer of goods or services to customers

is categorized as follows:

‘At a point in time’ mainly comprises:

· sale of gas or power in the market, e�g� Nord Pool, TTF

and NBP�

‘Over time’ mainly comprises:

· delivery of gas and power to end-customers

· long-term contracts with customers

to deliver gas or power�

21 Financial statementsØrsted Salg & Service A/S annual report 2023

§ Accounting policies

Revenue is measured based on the consideration

specified in a contract with a customer (transaction

price) and excludes amounts collected on behalf of

third parties, i�e� VAT� We recognise revenue when

we transfer control over a product or service to a

customer�

We adjust the transaction price for the time value of

money if the payments exceed twelve months�

Sales agreements are divided into individually identi-

fiable performance obligations� If a sales agreement

includes several performance obligations, the sales

agreement's transaction price is allocated to each

performance obligation's stand-alone selling price�

Sale of gas

Revenue is recognised when control of the gas is

transferred to the buyer� Transfer of control occurs

either when the gas is injected into the distribution

system or physically delivered to the customer�

Sales contracts for a fixed amount of gas at a variable

price, or where we are exclusive suppliers to the

customer at a variable price, are considered one

performance obligation with multiple deliveries to be

satisfied over time� For such contracts, we recognise

revenue in the amount up to which we have a right

to invoice�

In most cases, the consideration for the gas is due

when the gas is injected into the distribution system

or delivered to the customer� The delivery of gas is

invoiced on a monthly basis, and the payment is due

within 10-30 days�

Sale of power

Revenue from sale of power includes the sale of power

produced at Ørsted owned wind farms, the sale of

power sourced from other producers, and the sale of

ancillary services�

Revenue is recognised when control of the goods is

transferred to the buyer� Transfer of control occurs

when the actual power is delivered to the customer,

which for power generated by us occurs when it is

produced�

Sales contracts for a fixed amount of power at a

variable price, or where we are exclusive suppliers to

the customer at a variable price, are considered one

performance obligation with multiple deliveries to be

satisfied over time� For such contracts and for long-

term agreements on selling power at a fixed price, we

recognise revenue in the amount up to which we have

a right to invoice�

In most cases, the consideration for the power is due

when the actual power is delivered to the customer�

The delivery of power is invoiced on a monthly basis,

and the payment is due within 10-30 days�

Renewable energy certificates

Revenue from sale of certificates includes the sale of

renewable energy certificates bought from Ørsted

owned wind farms and external windfarms�

Revenue is recognised when control of the certificates

are transferred to the customer�

Other revenue

Other revenue primarily includes consultancy services�

Revenue from providing services is recognised in the

accounting period in which the services are rendered�

For fixed-priced contracts, revenue is recognised

based on the actual service rendered at the end of the

reporting period as a proportion of the total services to

be rendered because the customer receives and uses

the benefits simultaneously� This is determined based

on the actual labour hours spent relative to the total

labour hours expected�

Fixed-price contracts are invoiced on a monthly basis,

and consideration is payable when invoiced� Variable

fee services are generally due after the services are

rendered�

Trading activities net

Income from trading activities comprises net realised

and unrealised fair value changes, realised gains and

losses arising from trading within energy commodity

derivatives and inventory held for trading� The energy

commodity derivatives make up Ørsted Salg & Service

A/S trading portfolio which includes futures, options,

swaps, transport, capacities and certain forward sales

and forward purchases commodity contracts that are

either financially or physically settled�

As the physically settled contracts are managed on a

portfolio basis, a practice of net settlement is present,

and the contracts are considered in scope of IFRS 9

and treated as derivatives� Net changes in fair value of

commodity derivatives and net changes in fair value

of inventory held for trading represents unrealised

changes in the fair value of commodity derivatives and

net changes in fair value of inventory held for trading

at the balance sheet date�

Miscellaneous revenue

Miscellaneous revenue primarily comprises income

from unrealised fair value changes from derivative

financial instruments that acts as economic hedning of

energy generation in related Ørsted Group companies,

but where the exposure is not yet transferred to Ørsted

Salg & Service A/S, or value adjustment of derivative

financial instruments that acts as economic hedges

of the company´s primary activities, but where hedge

accounting are not applied�

22 Financial statements

Ørsted Salg & Service A/S annual report 2023

Cost of sales

Note 3

§ Accounting policies

Cost of sales

Cost of sales for fuel and energy comprises the

purchases of fuel in the form of gas and power

and transportation costs in connection with the

purchase as well as costs related to carbon

emission allowances� Costs are recognised in

profit for the year as incurred�

Other external expenses

Other external expenses comprise expenses for

maintenance of production equipment, rent,

external assistanse, research and development

and office supplies, etc��

DKKm 2023 2022

Gas (5,631) (18,448)

Power (31,225) (54,300)

Distribution and transmission costs (766) (217)

Other cost of sales (298) (228)

Cost of sales (37,920) (73,193)

On 1 January 2023, we changed our accounting policy with respect to presentation of revenue and related costs from the settlement of failed

own-use power contracts� See more in note 1 ‘Basis of reporting’�

23 Financial statements

Ørsted Salg & Service A/S annual report 2023

Employee costs

Note 4

Remuneration for key management personnel

DKKm 2023 2022

Fixed salary (6�6) (5�0)

Short-term cash-based incentive scheme (2�6) (2�9)

Share-based payments (0�9) (0�6)

Pension, incl� social security and benefits (2�0) (1�9)

Salary in notice period and severance payment (1�8) (0�7)

Severance payment (2�4) (0�5)

To t a l (16.3) (11.6)

DKKm 2023 2022

Wages, salaries, and remuneration (270) (252)

Share-based payment (1) (1)

Pensions (20) (18)

Other social security costs (1) (1)

Total employee costs (292) (272)

Number of full-time employees

Average for the financial year 277 269

§ Accounting policies

Employee costs comprise wages, salaries,

remuneration, pensions, social security costs

and other employee-related costs�

Number of employees

Employee data is recognised based on records

from the Group's ordinary registration systems�

The number of employees is determined as the

number of employees at the end of each month

converted to full-time equivalents (FTEs)�

Employees who have been made redundant

are recognised until the expiry of their notice

period, regardless of whether they have been

released from all or some of their duties during

their notice period�

All employees are legally employed in other

Ørsted Group companies�

The total remuneration stated in the note only

includes remuneration attributable to Ørsted Salg

& Service A/S�

In 2023, 277 full-time employees are disclosed, as

the employees have spend their full working time for

Ørsted Salg & Service A/S� All employees are however

legally employed by other Ørsted Group companies�

Therefore, the company has less than 50 employees

and is not required to prepare policies on the under-

represented gender at other executive levels�

The Executive Board is in 2023 made up of one person,

who is also key management person� Therefore we

have applied the exemption in §98 b) stk 3 in the Danish

Annual Report Act and not shown the salary to the

Executive Board� In 2022 the salary to the Executive

Board amounted to DKK 2�1 million�

24 Financial statementsØrsted Salg & Service A/S annual report 2023

Share-based payment

Note 5

Share programme

The Executive Board and a limited number of other

members of senior management parti cipate in our

share programme established in 2016� Five senior

executives from Ørsted Salg & Service participate in

the programme� As a condition for the granting of

perfor mance share units (PSUs), the participant must

own a number of shares in Ørsted corresponding to

a portion of the individual participant's annual fixed

salary� The ownership requirement is between 15-75 %

of the fixed salary�

If the participants fulfil the shareholding requirement

at the time of granting, they will be granted a number

of PSUs each year, representing a value of 15-20 % of

the annual fixed salary on the date of granting�

The granted PSUs have a vesting period of approximately

three years� Then, each PSU entitles the holder, without

payment, to receive a number of shares corresponding

to 0-200 % of the number of PSUs granted� The vesting

is conditional upon continued employment� Assuming

no share price development since the grant, the value

would correspond to 0-30 % or 0-40 %�

The final number of shares for each participant will

be determined on the basis of the total shareholder

return delivered by Ørsted, benchmarked against ten

comparable European energy companies�

The highest rate (200 %) will be triggered if Ørsted's

results, measured as the total return to sharehold-

ers, outperform those of the comparable companies�

For each lower ranking, the number of shares granted

will fall by 20 percentage points� If, for example,

Ørsted ranks third, the participants will be entitled to

160 % of the target�

If Ørsted ranks 11 in the comparison, no shares will

be granted to the participants� The right to shares is

conditional upon continued employment�

§ Accounting policies

The share programme is classified as an

equity-based programme, as the programme

is settled in shares� The market value of the

PSUs and the estimated number of PSUs

granted are measured at the time of granting

and recognised in the income statement under

employee costs over the vesting period and

in the balance sheet under equity over the

vesting period�

The valuation of the PSUs and the estimated

number of PSUs granted are carried out as a

probability simulation based on the expected

performance of Ørsted's total shareholder

return relative to ten comparable European

energy companies� The expectations are

factored into the market value and are not

adjusted subsequently�

25 Financial statements

Ørsted Salg & Service A/S annual report 2023

Other operating income

DKKm 2023 2022

Ineffective hedges, etc� 27 -

Miscellaneous operating income 11 -

To t a l 38 -

Other operating income and expenses

Note 6

Ineffective hedges includes volume-ineffective

hedges as a consequence of lower-than-expected

offshore generation, resulting in us having hedged

too large volumes�

Furthermore, it includes other hedges, which

we cannot document as being effective from

a hedge accounting perspective and therefore

have recognised in the income statement�

Other operating expenses

DKKm 2023 2022

Ineffective hedges, etc� - (1,197)

To t a l - (1,197)

§ Accounting policies

Other operating income and expenses com-

prises items secondary to the activities�

Losses from our market trading activities

are presented as other operating income or

expenses as ‘Ineffective hedges, etc�‘

26 Financial statements

Ørsted Salg & Service A/S annual report 2023

Financial income

Note 7

Financial expenses

Note 8

DKKm 2023 2022

Interest income 12 3

Interest income from group enterprises 631 15

Foreign exchange gains 1,346 2,484

Other financial income 41 65

Financial income 2,030 2,567

Revenue for the year includes exchange rate and fair value adjustments of: (36) 15

DKKm 2023 2022

Interest expenses (209) (161)

Interest expenses to group enterprises (13) (141)

Interest element of provisions (26) (37)

Foreign exchange losses (1,376) (2,554)

Financial expenses (1,624) (2,893)

§ Accounting policies

Financial income and financial expenses

comprise interest, capital gains and losses,

and impairment losses relating to securities,

payables, and transactions denominated in

foreign currencies, amortisation of financial

assets and liabilities, including lease commit-

ments under finance leases, as well as sur-

charges and refunds under the on-account

tax scheme, etc�

Financial income and financial expenses

also include realised and unrealised gains

and losses relating to derivative financial

instruments that have not been entered into

to hedge revenue or production costs� Interest

is recognised in accordance with the accrual

basis of accounting�

Borrowing costs relating to general borrowing

or loans directly attributable to the acquisition,

construction, or development of qualifying

assets form part of the cost of such assets�

27 Financial statements

Ørsted Salg & Service A/S annual report 2023

DKKm 2023 2022

Tax for the year can be specified as follows:

Tax on profit (loss) for the year (1,397) (11)

Tax on other comprehensive income (1,481) 494

Total tax for the year (2,878) 483

Tax on profit (loss) for the year can be broken down as follows:

Current tax 3,705 777

Deferred tax (5,100) (783)

Adjustments to current tax in previous years (1,506) (5)

Adjustments to deferred tax in previos years 1,504 -

Tax on profit (loss) for the year (1,397) (11)

Tax on profit (loss) for the year can be explained as follows:

Calculated 22 % tax on profit (loss) before tax (1,408) (21)

Tax effect of:

Non-deductible costs - (14)

Non-taxable income 13 29

Adjustments to tax in previous years (2) (5)

Tax on profit (loss) for the year (1,397) (11)

Effective tax rate 22 % 12 %

Tax on profit (loss) for the year

Note 9

§ Accounting policies

The Ørsted Group is subject to the Danish

rules on compulsory joint taxation and has

also opted for international joint taxation with

the Group's foreign subsidiaries� The Group's

subsidiaries are included in the joint taxation

from the date they are included in the

consolidation in the consolidated financial

statements and up to the date at which they

are no longer included in the consolidation�

The parent company, Ørsted A/S, is the

administration company in relation to the

joint taxation and thus settles all payments

of income tax with the tax authorities�

The current Danish income tax is allocated

among the jointly taxed Danish subsidiaries

in proportion to their taxable income� In this

connection, Danish subsidiaries with tax losses

receive a joint taxation contribution from the

parent company corresponding to the tax value

of the unutilised losses (full allocation), while

companies that use tax losses in other Danish

companies pay a joint taxation contribution to

the parent company corresponding to the tax

value of the utilised losses�

Being made up of the year's current income

tax, the year's joint taxation contributions

and changes in deferred tax, including – as a

consequence of changed tax rates – tax for

the year is recognised in the income statement

with the part attributable to the profit (loss)

for the year and directly in equity with the part

attributable to entries directly in equity�

The Group is included in a Danish on-account

tax scheme� Tax refunds and tax surcharges

are allocated between the jointly taxed Danish

companies in accordance with the allocation

of the Danish income tax and recognised

as financial income and financial expenses,

respectively�

28 Financial statements

Ørsted Salg & Service A/S annual report 2023

Discontinued operations

Note 10

Profit from discontinued operations

DKKm 2023 2022

Revenue - 3,900

Cost of sales - (3,900)

Other external expenses - (23)

Operating profit (loss) (EBITDA) - (23)

Financial expenses - -

Profit (loss) before tax - (23)

Tax on profit (loss) for the year - 5

Profit from discontinued operations - (18)

Tax for the year, discontinued operations

DKKm

Current tax - 5

Total tax - 5

Cash flows for the year, discontinued operations

DKKm

Cash flows from operating activities - (18)

Total cash flows - (18)

Following the decision and closure of our UK B2B

business, the activity is presented as discontinued

operations�

During 2022 the phaseout of the UK B2B activities

was finalised, whereafter the company do not have

end-customers activities in the UK and the company's

sales office in the country was closed in April 2023�

29 Financial statementsØrsted Salg & Service A/S annual report 2023

Intangible assets

Note 11

DKKm Rights

Completed

development

projects

Development

projects in

progress To t a l

Cost at 1 January 2023 68 411 78 557

Addition - - 10 10

Disposals - (22) - (22)

Reclassified assets - 76 (76) -

Cost at 31 December 2023 68 465 12 545

Amortisation and impairment losses at 1 January 2023 (64) (391) - (455)

Amortisation and impairment losses - (38) - (38)

Disposals - 20 - 20

Amortisation and impairment losses at 31 December 2023 (64) (409) - (473)

Carrying amount at 31 December 2023 4 56 12 72

Cost at 1 January 2022 68 411 75 554

Additions - - 3 3

Cost at 31 December 2022 68 411 78 557

Amortisation and impairment losses at 1 January 2022 (64) (376) - (440)

Amortisation and impairment losses - (15) - (15)

Amortisation and impairment losses at 31 December 2022 (64) (391) - (455)

Carrying amount at 31 December 2022 4 20 78 102

Amortised over 5 - 20 years 3 - 5 years - -

Impairment testing

The carrying amounts of development projects in

progess, rights and completed development projects

are assessed annually to determine whether there is

any indication of impairment� If any such indication

exists, an impairment test is carried out�

There were no indications of impairment in 2023�

Rights

Rights consist predominantly of customer- related rights

and a connection right relating to gas transportation�

At 31 December 2023, the carrying amount of rights

was DKK 4 million (2022: DKK 4 million)�

There were no indications of impairment of rights

in 2023�

Development projects

Completed development projects related to IT

software� At 31 December 2023, the carrying

amount of development projects was DKK 56 million

(2022: DKK 20 million)�

Development projects in progress are related to

development of IT software�

30 Financial statementsØrsted Salg & Service A/S annual report 2023

§ Accounting policies

Rights

Rights comprise acquired customer rights,

IT software licences, etc�, and are measured

at cost less accumulated amortisation and

impairment losses�

Development projects

Development projects comprise development

of IT systems, etc�

Development projects that are clearly defined

and identifiable, and for which technical

feasibility, adequate resources, a potential future

market, or an application in the company can be

demonstrated, and which the company intends

to manufacture, market, or use, are recognised

in intangible assets if the cost can be determined

reliably, and if there is reasonable certainty

that the future earnings or the net selling

price will cover production costs, selling costs,

administrative expenses, and development

costs� Other development costs are recognised

in the income statement as incurred�

Recognised development costs are measured

at cost less accumulated depreciation and

impairment losses� Cost comprises salaries,

amortisation, and other costs attributable

to the company's development activities as

well as borrowing costs relating to specific

and general borrowing directly attributable

to development projects�

On completion, development projects are

amortised on a straight-line basis over their

assessed future useful lives from the date the

asset is available for use� The amortisation

period is usually five years� The basis of

amortisation is reduced by any impairment

losses�

Amortisation and impairment losses relating

to intangible assets are recognised in the

statement of comprehensive income�

Impairment of non-current assets

Intangible assets with an indefinite useful life

are tested for impairment annually, initially

before the end of the year of acquisition�

Development projects in progress are also

tested annually for impairment�

An impairment loss is recognised whenever the

carrying amount of an asset or cash- generating

unit exceeds the recoverable amount of the

asset or the cash-generating unit� Impairment

losses are recognised in the income statement

under production costs and administrative

expenses, respectively�

Impairment losses are reversed to the extent

that the assumptions or estimates that led to

the impairment have changed� Impairment

losses are only reversed to the extent that the

asset's new carrying amount does not exceed

the value of the asset after depreciation

or amortisation, had no impairment losses

been charged�

31 Financial statements

Ørsted Salg & Service A/S annual report 2023

Property, plant, and equipment

Note 12

DKKm

Land and

buildings

Production

assets

Fixtures

and fittings,

tools and

equipment

Property, plant,

and equipment

under

construction To ta l

Cost at 1 January 2023 11 8,336 4 - 8,351

Additions - - - 17 17

Cost at 31 December 2023 11 8,336 4 17 8,368

Depreciation and impairment losses at 1 January 2023 (9) (7,980) (4) - (7,993)

Depreciation and impairment losses - (33) - - (33)

Depreciation and impairment losses at 31 December 2023 (9) (8,013) (4) - (8,026)

Carrying amount at 31 December 2023 2 323 - 17 342

Cost at 1 January 2022 11 8,290 4 - 8,305

Adjustment of decommissioning obligations - 45 - - 45

Disposals - 1 - - 1

Cost at 31 December 2022 11 8,336 4 - 8,351

Depreciation and impairment losses at 1 January 2022 (9) (7,898) (4) - (7,911)

Depreciation and impairment losses - (82) - - (82)

Depreciation and impairment losses at 31 December 2022 (9) (7,980) (4) - (7,993)

Carrying amount at 31 December 2022 2 356 - - 358

Depreciated over 20 years 20 - 40 years 3 - 10 years - -

Impairment testing of property, plant and equipment

The carrying amounts of property, plant and equipment

are assessed annually to determine whether there is

any indication of impairment� If any such indication

exists, an impairment test is carried out�

There were no indications of impairment of property,

plant and equipment in 2023�

32 Financial statementsØrsted Salg & Service A/S annual report 2023

§ Accounting policies

Property, plant and equipment comprise land

and buildings, production assets and other

tools and equipment� Property, plant and

equipment which are not leases are measured

at cost less accumulated depreciation and

impairment losses�

Cost comprises the purchase price and any

costs directly attributable to the acquisition

until the date the asset is available for use�

The cost of self- constructed assets comprises

direct and indirect expenses for materials,

components, sub-suppliers, and wages� Finance

costs that can be attributed to a preparation

or production period are recognised in the

income statement as finance costs� Specific

and general borrowing costs attributable to a

construction period are recognised in the cost

of the asset constructed�

Cost is increased by the present value of the

estimated costs for dismantling and removing

the asset and restoring the site to the extent that

they are recog nised as a provision� The cost of

an assembled asset can be divided into separate

components that are each depreciated

separately if the useful lives of the individual

components differ�

In the case of assets held under lease agree-

ments, cost is determined as the lower of the

fair value of the assets and the present value of

future minimum lease payments� The present

value is determined using the interest rate

implicit in the lease as the discount rate or an

approximated value�

Subsequent costs, for example in connection

with replacement of parts of an item of property,

plant and equipment, are recognised in the

carrying amount of the asset in question when

it is probable that future economic benefits

will flow to the company from the expenses

incurred� Replaced parts are derecognised

from the balance sheet, and their carrying

amounts are taken to the income statement�

All other general repair and maintenance

expenses are recognised in the income

statement as incurred�

Development and construction costs relating to

property, plant and equipment are recognised,

until entry into service, in the balance sheet

under property, plant and equipment under

construction� Following entry into service,

these assets are transferred to the relevant

items in property, plant and equipment�

In the case of gas activities, cost is depreciated

using the unit-of-production method, taking

into account the expected earnings profile,

so that the depreciation pattern reflects the

expected earnings patterns�

In the case of other property, plant and equip-

ment, cost is basically depreciated on a straight-

line basis over the estimated future useful lives�

Depreciation periods for property, plant and

equipment:

The basis of depreciation is determined on

the basis of the asset's residual value less any

impairment losses� The residual value is deter-

mined at the acquisition date and reassessed

annually� Depreciation ceases if the residual

value exceeds the carrying amount�

If the depreciation period or the residual value

changes, the effect on depreciation is recog-

nised prospectively as a change in accounting

estimates�

Depreciation and impairment losses are

recognised in the statement of comprehensive

income to the extent that depreciation is not

recognised in the cost of self-constructed

assets�

Gains and losses on the disposal of property,

plant and equipment are determined as the

difference between the selling price less selling

costs and the carrying amount at the date of

disposal� Gains and losses are recognised in the

income statement as ‘Other operating income’

or ‘Other operating expenses’�

Useful lifes Years

Buildings used for own purposes

Production assets: gas treatment plant

20-40

Production assets: marine pipelines

20-40

Fixtures and fittings, tools and equipment 3-10

Assets under construction

Land is not depreciated�

The depreciation profile takes into account that the use of the assets

changes substantially over the lives of the assets�

Depreciation does not commence until the date of entry into service,

at which date the assets are transferred to production assets�

33 Financial statements

Ørsted Salg & Service A/S annual report 2023

Investments in subsidiaries

Note 13

DKKm 2023 2022

Cost at 1 January 1,585 1,928

Adjustment opening, merger - (280)

Divestment of shares (455) -

Adjustments to liquidated companies - (63)

Cost at 31 December 1,130 1,585

Value adjustments at 1 January (1,408) (1,666)

Adjustment opening, merger - 257

Adjustments to liquidated companies - 1

Divestment of shares 365 -

Value adjustments at 31 December (1,043) (1,408)

Carrying amount at 31 December 87 177

Ørsted Salg & Service A/S subsidaries

Company name Registered office Currency

Share capital

in million

Ownership

interest

Ørsted Sales GmbH Hamburg, Germany EUR 1�0 100 %

Ørsted AB Gothenburg, Sweden SEK 5�0 100 %

Danish Offshore Gas Systems A/S Fredericia, Denmark DKK 1�0 100 %

Valified ApS Copenhagen, Denmark DKK 0�1 4�29 %

Ørsted S&D (UK) Limited London, UK GBP 48�0 100 %

Ørsted Salg & Service NL, branch of Ørsted

Salg & Service A/S Denmark 's-Gravenhage, the Netherlands EUR - 100 %

Ørsted Commercial Commodities A/S

Fredericia, Denmark DKK 0�4 100 %

20 February 2024 the name is changed to Ørsted nr� 1 2023 A/S

We have tested investments in subsidiaries for impair-

ment by comparing the expected future income in the

individual subsidiary with their carrying amounts�

In 2023 Orsted Markets GmbH, with a carrying

amount of DKK 90 million is divested internally to a

related company in the Ørsted Group� The divestment

has reduced costs with DKK 455 million and value

adjustments with DKK 365 million� Ørsted Salg &

Service A/S has received a payment of DKK 103 million,

resulting in a gain of DKK 13 million in Ørsted Salg &

Service A/S�

Ørsted Pipelines A/S, a 100 % owned subsidary, is

merged into Ørsted Salg and Service A/S per 1 January

2023� Comparison numbers for 2022 is adjusted

to reflect the merger� The cost of ‘Investments in

subsidaries‘ was reduced with DKK 280 million and

‘Value adjustments‘ with DKK 257 million� Total impact

on carrying amount at 1 January 2022 is DKK 23 million�

In 2022, Orsted Energy Solutions (UK) Limited is

liquidated and dividends of DKK 64 million is received�

§ Accounting policies

Investments in subsidiaries are measured at

cost� Cost is written down to the recoverable

amount whenever it exceeds the recoverable

amount�

34 Financial statements

Ørsted Salg & Service A/S annual report 2023

Derivatives

Note 14

Financial instruments by category

DKKm

2023 2022

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Assets

Derivative financial instruments held for trading 12,717 12,717 46,675 46,675

Securities - - 380 380

Financial assets measured at fair value via the income statement 12,717 12,717 47,055 47,055

Derivative financial instruments held for hedging 1,415 1,415 3,520 3,520

Derivatives (assets) used ad hedging instruments 1,415 1,415 3,520 3,520

Trade receivables 4,883 4,883 7,733 7,733

Other receivables, cash, and cash equivalents 24,963 24,963 18,507 18,507

Financial assets measured at amortised cost 29,846 29,846 26,240 26,240

Equity and liabilities

Derivative financial instruments held for trading 10,760 10,760 40,103 40,103

Financial liabilities measured at fair value via the income statement 10,760 10,760 40,103 40,103

Derivatives finacial instruments held for hedging 1,458 1,458 9,778 9,778

Derivatives (liabilities) used as hedging instruments 1,458 1,458 9,778 9,778

Bank loans 2 2 - -

Other payables 6,802 6,802 17,969 17,969

Financial liabilities measured at amortised cost 6,804 6,804 17,969 17,969

In 2023, we recognised volume ineffectiveness related to power, gas and oil hedges, primarily related to exposure in 2023 and 2024�

In total, these amounted to DKK 27 million (2022: DKK -1,197 million)�

Categories of financial instruments

Financial instruments are used for various purposes�

The purpose determines the category, and whether

the value adjustment of the instrument should be

recognised in the profit (loss) for the year or as part of

the hedging reserve in equity�

The fair value of financial instruments measured at

amortised cost is identical to the carrying amount�

Fair value measurement

All assets and liabilities measured at fair value are

measured on a recurring basis�

Quoted prices comprise derivative financial instruments

that are traded in active markets� It is customary to

settle these trades on a daily basis�

Observable inputs comprise derivative financial

instruments where valuation models with observable

inputs are used to measure fair value� For commodity

derivatives we can directly apply the observable

commodity price adjusted for the credit risk on the

counterparty�

Significant non-observable inputs

Market values based on non-observable input com-

prise primarily long-term contracts on the purchase

or sale of power� Since there are no active markets

for the long-term prices of power, the market values

have been determined through an estimate of the

future prices based on an extrapolation of the forward

curve adjusted for inflation�

Estimating non-observable power prices

Since our corporate power puchase agreements

(CPPAs) are normally settled on the actual production,

and the power prices available in the market are based

on a constant production (flat profile), we take into

account that our expected production is not constant,

and thus our CPPAs will not be settled against a

flat profile price (intermittency adjustment)� For the

majority of our markets, the flat profile power price

can be observed for a maximum of four to six years in

the market, after which an active market no longer

exists�

Valuation principles and material assumptions

In order to minimise the use of subjective estimates or

modifications of parameters and calculation models,

it is our policy to determine fair values based on the

external information that most accurately reflects the

market values�

We use pricing and benchmark services to increase

data quality� Market values are determined by the

Group Treasury & Risk Management function, which

reports to the Group CFO� The developments in

market values are monitored on a continuing basis

and reported to the Executive Committee�

35 Financial statementsØrsted Salg & Service A/S annual report 2023

Energy price cash flow

hedge accounting 2022

DKKm

2023 2024 After 2024 2023 2024 After 2024

EBITDA impact

Power swaps, futures and options 5,285 1,897 1,820 1,568 2,467 7,981 (4,585) (2,401) (1,414) (770)

Gas swaps and futures 865 196 259 411 349 991 (1,556) (508) (733) (315)

Oil futures 15 9 6 - - - (10) (10) - -

Carbon emmision alloqances 46 46 - - - - (70) (70) - -

Currency, forwards 5,452 5,076 111 265 704 806 (102) (83) (4) (15)

To t a l 3,520 9,778 (6,323) (3,072) (2,151) (1,100)

Energy price cash flow

hedge accounting 2023

DKKm

Contractual

principal

amount

Maturity analysis Market value

Recognised in

comprehensive

income

Expected transfers to EBITDA

2024 2025 After 2025 Asset Liability 2024 2025 After 2025

EBITDA impact

Power swaps, futures and options 2,899 1,302 1,196 401 1,067 1,048 1,128 614 335 179

Gas swaps and futures 1,005 351 596 58 154 207 (710) (594) (43) (73)

Oil futures 8 8 - - - - - - - -

Currency, forwards 1,272 1,268 (28) 32 194 203 (9) (3) (2) (4)

To t a l 1,415 1,458 409 17 290 102

Derivatives

Note 14 – continued

36 Financial statementsØrsted Salg & Service A/S annual report 2023

Economic hedging of fair values

DKKm

2023 2022

Receivables Payables

Hedging

instruments Net position Receivables Payables

Hedging

instruments Net position

EUR 13,417 (7,449) - 5,968 38,804 (16,674) - 22,130

USD 137 (527) - (390) 171 (814) - (643)

GBP 6,366 (8,987) - (2,621) 29,789 (37,203) - (7,414)

Other 24 - - 24 - (21) - (21)

To t a l 19,944 (16,963) - 2,981 68,764 (54,712) - 14,052

Contracts accounted for at fair value through profit or loss (EBITDA)

DKKm

2023 2022

Nominal

amount Fair value

Nominal

amount Fair value

Oil swaps and options 277 (492) 507 (803)

Gas swaps 1,504 2,307 3,093 2,339

Gas options 179 - 748 -

Power swaps 5,242 (419) 5,145 2,630

Power options 4,202 573 661 2,414

Coal forwards - - - (8)

Carbon emission allowances 175 - 50 -

Currency forwards 191 (13) - -

To t a l 1,956 6,572

Derivatives

Note 14 – continued

§ Accounting policies

Derivative financial instruments are used to

hedge currency and risks related to the price of

oil, gas, and power�

Derivative financial instruments are recognised

from the trading date as receivables (positive

fair values) and other payables ( negative fair

values), respectively, and are measured in the

balance sheet at fair value� Transaction costs

are added to the fair value on initial recognition,

unless the financial asset or financial liability is

measured at fair value with recognition of fair

value adjustments in profit (loss) for the year�

Positive and negative values are only offset if

the company is entitled to and intends to settle

several financial instruments net (in cash)�

The fair value of derivative financial

instruments is determined on the basis of

current market data and assumptions as well

as recognised valuation methods�

Value adjustments of derivative financial

instruments that act as economic hedges of the

company´s primary activities, but do not satisfy

the criteria for hedge accounting, are recognised

as revenue� Likewise, value adjustments of

financial contracts offered to customers

with a view to price hedging are recognised

as revenue� Value adjustments of financial

contracts that are not used as economic

hedges of the company's principal activities or

are part of the company's trading portfolio, are

recognised as financial income and expenses�

Under IFRS, contracts that involve physical

delivery may, in certain circumstances, be

accounted for as derivative financial instru-

ments� The classification is determined based

on an evaluation of the purpose of the contract

compared with the companys's other activities�

37 Financial statements

Ørsted Salg & Service A/S annual report 2023

§ Accounting policies – Continued

Contracts entered into in the course of the

company's trading activities or as part of

certain hedging activities are classified

and accounted for as derivative financial

instruments, even though they are settled on

physical delivery�

Netting of financial assets

DKKm

Recognised

financial

assets,

gross

Financial

liabilities,

offset

Related amounts not netted in the balance sheet

Financial

assets

presented in

the balance

sheet

Liabilities

with

offsetting

rights

Security

received

Net

amount

31 December 2023

Derivative financial instruments 17,333 (7,273) 10,060 (1,718) (182) 8,160

Trade receivables 21,728 (16,849) 4,879 - - 4,879

31 December 2022

Derivative financial instruments 39,398 (21,641) 17,757 (5,266) (3,322) 9,169

Trade receivables 121,693 (114,438) 7,255 - - 7,255

Netting of financial liabilities

DKKm

Recognised

financial

liabilities,

gross

Financial

assets,

offset

Related amounts not netted in the balance sheet

Financial

liabilities

presented in

the balance

sheet

Assets

with

offsetting

rights

Security

provided in

the form

of bonds

Net

amount

31 December 2023

Derivative financial instruments 13,977 (7,273) 6,704 (1,718) - 4,986

Trade payables 20,981 (16,849) 4,132 - - 4,132

31 December 2022

Derivative financial instruments 55,861 (21,641) 34,220 (5,266) (380) 28,574

Trade payables 121,661 (114,438) 7,223 - - 7,223

Derivatives

Note 14 – continued

Netting of financial assets and liabilities

The netting agreements with the individual

counterparties are often limited to offsetting

within specific products� In addition, the

settlement of liabilities and the realisation of

assets do often not take place simultaneously�

We only offset positive and negative values if

we are entitled to and intend to settle several

financial instruments net�

Consequently, only some of the company's

netting agreements meet the provisions in IFRS

on offsetting�

The table to the left show financial assets and

liabilities that are subject to netting agreements

and related security�

Net derivative assets valued on the basis of

non- observable inputs are specified in the table

on page 39�

38 Financial statementsØrsted Salg & Service A/S annual report 2023

Derivatives valued on the basis of non-observable inputs

DKKm 2023 2022

Market value at 1 January (86) 620

Gains and losses recognised in profit (loss) for the year as revenue 1,220 1,531

Sales and redemptions (1,619) (2,849)

Purchases and issues 179 612

Market value at 31 December (306) (86)

Net assets can be specified as follows:

Assets 1,910 8,084

Liabilities (2,216) (8,170)

The main non-observable input is German power prices in the period 2025-2034� The average power price for the

period is estimated at DKK 440 per MWh, based on an inflation- adjusted extrapolation of the observable price�

An increase or decrease in the German power prices of 25 % would impact the fair value by +/- DKK 1,256 million�

Fair value measurement

Note 15

Unobservable input per commodity price

DKKm 2023 2022

German power prices (1,269) (3,892)

Dutch power prices 424 2,285

Nordic system power prices 415 752

Other power prices 133 852

Gas prices (9) (83)

To t a l (306) (86)

Valuation techniques and significant

unobservable inputs

We use a discounted cash flow model for the valuation

of power derivatives�

We have entered into long-term power purchase

agreements exposing us to long term power prices�

The power prices are observable for up to five years

in the markets we trade� When power prices are no

longer observable in the market, we have estimated

the power price by extrapolating the last year with an

observable power price, taking expected inflation and

seasonality into account�

Fair value hierarchy of financial instruments

DKKm

2023 2022

Quoted prices

Observable

inputs

Non-observa-

ble inputs To ta l Quoted prices

Observable

inputs

Non-observa-

ble inputs To ta l

Commodity derivatives 4,381 7,561 1,910 13,852 14,539 27,270 8,084 49,893

Currency derivatives - 280 - 280 - 302 - 302

Total derivatives 4,381 7,841 1,910 14,132 14,539 27,572 8,084 50,195

Securities - - - - - 380 - 380

Inventories 1,723 - - 1,723 3,492 - - 3,492

Total assets measured at fair value 1,723 - - 1,723 18,031 27,952 8,084 54,067

Commodity derivatives 5,110 4,590 2,216 11,916 12,829 28,482 8,170 49,481

Currency derivatives - 302 - 302 - 400 - 400

Total liabilities measured at fair value 5,110 4,892 2,216 12,218 12,829 28,882 8,170 49,881

39 Financial statements

Ørsted Salg & Service A/S annual report 2023

Maturity analysis of financial liabilities

Note 16

Maturity analysis of financial liabilities 2023

DKKm

Carrying

amount

Payment

obligation 2024 2025 2026-2027 After 2027

Payables to group enterprises 2,566 2,620 2,620

Trade payables 4,160 4,160 4,160 - - -

Fair value of derivative financial instruments 12,218 13,516 8,798 2,372 1,164 1,182

Other payables 204 204 204 - - -

31 December 19,148 20,446 15,728 2,372 1,164 1,182

Maturity analysis of financial liabilities 2022

DKKm

Carrying

amount

Payment

obligation 2023 2024 2025-2025 After 2026

Payables to group enterprises 10,370 10,408 10,408 - - -

Trade payables 7,223 7,223 7,223 - - -

Fair value of derivative financial instruments 49,881 52,525 29,338 13,942 4,791 4,454

Other payables 283 283 283 - - -

31 December 67,757 70,439 47,252 13,942 4,791 4,454

40 Financial statements

Ørsted Salg & Service A/S annual report 2023

Deferred tax

Note 17

DKKm 2023 2022

Deferred tax at 1 January (3,442) (4,226)

Deferred tax for the year recognised in profit (loss) 5,100 784

Adjustments in respect of prior years (1,504) -

Deferred tax at 31 December 154 (3,442)

Deferred tax is recognised in the balance sheet as follows:

Deferred tax (assets) - (3,442)

Deferred tax (liability) 154 -

Deferred tax at 31 December, net 154 (3,442)

Deferred tax concerns:

Non-current assets 74 73

Non-current liabilities (312) (314)

Current assets 2 2

Current liabilities 511 (3,202)

Tax loss carry-forward (121) -

Deferred tax at 31 December 154 (3,442)

Deferred tax

Deferred tax assets are expected to be utilised for

offsetting against the settlement of deferred tax

liabilities in companies included in joint taxation in

the Ørsted Group�

§ Accounting policies

Deferred tax assets are reviewed annually and

recognised only to the extent that it is probable

that they will be utilised�

Deferred tax is measured using the balance

sheet liability method in respect of all tem-

porary differences arising between the tax

bases of assets and liabilities and their carry-

ing amounts for financial reporting purposes�

However, deferred tax on temporary differ-

ences in respect of office properties, and other

items – apart from business combinations – is

not recognised where temporary differences

have arisen at the acquisition date without

having any effect on profit (loss) or taxable

income� When the tax base can be determined

applying different taxation rules, deferred tax

is measured on the basis of management's

intended use of the asset or settlement of the

liability, respectively�

Deferred tax assets, including the tax base of

tax loss carryforwards, are recognised as other

non-current assets at the value at which they

are expected to be utilised either by elimination

against tax on future earnings or by set-off

against deferred tax liabilities within the same

legal tax entity and jurisdiction�

Deferred tax assets and deferred tax liabil-

ities are offset if the company has a legally

enforceable right to set off current tax assets

and current tax liabilities or intends either to

settle on a net basis or to realise the asset and

settle the liability simultaneously� Adjustment

of deferred tax is made relating to eliminations

made of unrealised intragroup profits and

losses� Deferred tax is measured in accordance

with the tax rules and tax rates in the respective

countries that will apply under the legislation

enacted at the balance sheet date when the

deferred tax is expected to crystallise in the

form of current tax�

Changes in deferred tax as a result of changes

in tax rates are recognised in the income

statement�

Development in deferred tax assets and liabilities

DKKm

Deferred tax balances

at 1 January, net Movements

Deferred tax balances

at 31 December, net

2023

Intangible assets 5 8 13

Property, plant, and equipment 48 (7) 41

Current assets 1 1 2

Decommissioning obligations (134) (5) (139)

Other non-current liabilities (158) 6 (152)

Current liabilities and derivatives (3,204) 3,714 510

Tax loss carryforwards - (121) (121)

To t a l (3,442) 3,596 154

2022

Intangible assets 8 (3) 5

Property, plant, and equipment 55 (7) 48

Current assets 49 (48) 1

Decommissioning obligations (120) (14) (134)

Other non-current liabilities (278) 120 (158)

Current liabilities and derivatives (3,940) 736 (3,204)

To t a l (4,226) (784) (3,442)

41 Financial statements

Ørsted Salg & Service A/S annual report 2023

§ Accounting policies

Inventories

Inventories consist of gas in storage facilities

and in gas pipelines, acquired carbon emission

allowances, and green certificates�

Gas storage in non-Danish facilities are managed

on a fair value basis, and therefore the gas in

these storage facilities is recognised at fair

value less sales costs� Changes in the fair value

less costs to sell are recognised in cost of sales

in the period of the change�

Gas in Danish storage facilities are recognised

at cost and determined as a weighted average

of the previous month´s purchase price,

including transportation costs�

Purchased carbon emission allowances are

measured at fair value with value adjustments

recognised in the income statement�

Other inventories are measured at the lower of

cost using the first-in, first-out (FIFO) principle

or net realisable value� The net realisable value

of inventories is determined as the expected

selling price less any costs of completion

and costs incurred to execute the sale and is

determined taking into account marketability,

obsolescence, and development of expected

selling price�

Inventories

Note 18

Inventories

DKKm 2023 2022

Gas 2,165 4,556

Green certificates 1,183 843

Carbon emission allowances (purchased) 213 49

Other inventories 11 1

Total inventories 3,572 5,450

Inventories

The carrying amount of inventories

recognised at fair value was DKK 1,723 million

(2022: DKK3,492 million)�

42 Financial statementsØrsted Salg & Service A/S annual report 2023

Trade receivables

Note 19

Trade receivables that are overdue, but not individually impaired

DKKm 2023 2022

Days past due:

Up to 30 days 11 543

30-90 days 49 182

More than 90 days 43 400

Trade receivables, write-downs (8) (13)

Trade receivables overdue at 31 December 95 1,112

Expected credit losses on trade receivables are

assessed on the basis of due date and historical

experience� For receivables with a general credit

risk, a write-down of 0-1 % is carried out on initial

recognition�

§ Accounting policies

Receivables

We keep our receivables until maturity, and

therefore, they are measured at amortised cost�

Write-downs are carried out from initial

recognition of our receivables� Write-down

is calculated as the difference between the

carrying amount of the receivable and the net

present value of expected future cash flows

from the receivable� The discount rate used

is the effective interest rate for the individual

receivable or the individual portfolio�

We apply the simplified approach to the write-

down of trade receivables, which permits

calculating the write-downs as the full loss

during the entire term of the receivable�

Other receivables include positive fair values

of derivative financial instruments, etc�

Financial liabilities

Trade payables, payable income tax, and other

payables are measured at net realisable value�

Other payables include negative fair values of

derivative financial instruments, etc�

Financial liabilities whose values have been

effectively hedged are adjusted to fair value to

the extent of the hedged risk� The value adjust-

ment is recognised in the income statement as

financial income or financial expenses�

43 Financial statements

Ørsted Salg & Service A/S annual report 2023

Other receivables and other payables

Note 20

Other receivables

DKKm 2023 2022

Collateral provided 599 2,985

Margin calls 54 327

Deposits 100 431

Renewables Obligation Certificates (ROC) factoring recycle value 12 -

Other receivables 14 11

Total other receivables 779 3,755

Collateral provided are margin account depositis, which have been pledged as collateral for trading in financial instruments�

Margin calls are receivables from banks regarding market development in financial instruments used for trading�

Other payables

DKKm 2023 2022

VAT and other indirect taxes 69 108

Other payables 145 175

Total other payables 214 283

44 Financial statements

Ørsted Salg & Service A/S annual report 2023

Income tax receivable

Note 21

Cash, cash equivalents, and securities

Note 22

DKKm 2023 2022

Income tax receivable (asset) (2,035) (1,758)

Income tax payable (liability) - -

Income tax at 31 December, net (2,035) (1,758)

Income tax eceivable/payable at 1 January (1,758) 2,049

Adjustments to current tax in respect of prior years 1,506 5

Payments in respect of prior years 443 (2,535)

Current tax for the year (2,224) (1,272)

Current tax discontinued operations - (5)

Payments in respect of the year (2) -

Income tax receivable at 31 December (2,035) (1,758)

Cash, cash equivalents, and securities

DKKm 2023 2022

Cash and cash equivalents can be specified as follows:

Cash, available 40 1,124

Total cash and cash equivalents at 31 December, cf. Statements of cash flows 40 1,124

Cash at 31 December can be specified as follows:

Cash, available 40 1,124

Cash, not available for use - 2,045

Total cash at 31 December, cf. balance sheet 40 3,169

Securities at 31 December can be specified as follows:

Securities, not available for use - 380

Total securities at 31 December, cf. balance sheet - 380

§ Accounting policies

Income tax receivable and payable

Current tax liabilities and current tax receivables

are recognised in the balance sheet as tax

calculated on the year's taxable income

adjusted for tax on previous years' taxable

income and tax paid on account�

Cash, cash equivalents, and securities

Securities not available for use comprise securities

pledged as collateral for:

· trading in financial instruments:

DKK 0 million at 31 December 2023

(2022: DKK 380 million)�

Cash not available for use comprises:

· payables for the purchase of gas that has not yet

been settled placed on a restricted account:

DKK 0 million (2022 : DKK 2,045 million)�

45 Financial statementsØrsted Salg & Service A/S annual report 2023

Share capiral

The company's annual report forms part of the

consolidated financial statements of Ørsted A/S,

Fredericia, which owns the entire share capital�

Ørsted Salg & Service A/S´s capital is

DKK 2,610,000,000 (2022: 2,610 million) divided

into shares of DKK 1,000� All shares rank equally�

There are no restrictions on voting rights�

Dividend

The Board of Directors recommends dividend of

DKK 10 billion to be paid for the financial year

2023 (2022: DKK 0 million)�

Capital management

Ørsted Salg & Service A/S's liquidity and financing

risks are managed centrally by Ørsted A/S

in accordance with principles and delegated

authorities laid down by the Board of Directors

of Ørsted A/S in order to ensure that Ørsted Salg

& Service A/S has an adequate capital base and

adequate cash resources at all times� One of the

most important financial management tasks in the

Ørsted Group is to secure sufficient and flexible

financial resources in relation to the day-to-day

operations and the Ørsted Group's investment

programme� For this purpose, internal management

objectives have been set for the required level of

financial resources, primarily considering factors

such as the investment programme, cash flows from

operating activities, and the debt maturity profile�

It is the Ørsted Group's financing policy to concentrate

loans in the parent company in order to optimise the

loan portfolio on a consolidated basis�

Equity

Note 23

§ Accounting policies

Dividends

Proposed dividends are recognised as a liability

at the date of their adoption at the annual

general meeting (declaration date)� Up to

the declaration date, proposed dividends are

disclosed as a separate item in equity�

46 Financial statements

Ørsted Salg & Service A/S annual report 2023

Provisions

Note 24

Decommissioning obligations

Decommissioning obligations relates to expected

future costs for restoration and decommissioning of

gas infrastructure assets�

Onerous contracts

Onerous contracts comprise a contract for gas

storage capacity in Germany of DKK 146 million

(2022: DKK 154 million)�

Other liabilities

Other liabilities comprise primarily other contractual

obligations�

Provisions

DKKm

2023 2022

Decom-

missioning

obligations

Onerous

contracts

Other

liabilities Tota l

Decom-

missioning

obligations

Onerous

contracts

Other

liabilities Tota l

Provisions at 1 January 607 154 421 1,182 543 618 538 1,699

Used during the year - (13) - (13) - (182) - (182)

Provisions reversed

during the year - - (2) (2) - (300) (117) (417)

Provisions made during

the year - - 1 1 - - 1 1

Interest element of

obligations 21 5 - 26 19 18 - 37

Change in other

abandonment factors - - - - 45 - - 45

Total provisions 628 146 420 1,194 607 154 421 1,182

Falling due as follows:

In 0-1 year - 20 1 21 - - 3 3

In 1-5 years - 126 419 545 - 154 418 572

After 5 years 628 - - 628 607 - - 607

§ Accounting policies

Provisions are recognised when the following

criteria are fulfilled:

· We have a legal or constructive obligation

as a result of an earlier event�

· The settlement of the obligation is expected to

result in an outflow of resources�

· The obligation can be measured reliably�

For onerous contracts, a provision is made when

the expected income to be derived from a contract

is lower than the unavoidable cost of meeting our

obligations under the contract�

Decommissioning obligations are measured at

the present value of the future liability in respect

of decommissioning as expected at the balance

sheet date� The present value of the provision is

recognised as part of the cost of property, plant

and equipment and depreciated together with

the associated asset� The addition of interest on

provisions is recognised in the income statement

under financial expenses�

Key accounting estimate

In the course of Ørsted Salg & Service A/S

operations, a number of commercial contracts

have been entered into with fixed terms of contract

that may result in the contracts becoming onerous

depending on market developments, etc�, and the

obligations incurred by the Ørsted Salg & Service

A/S as a result of these contracts may also be

subject to uncertainty� The judgements concerning

these complex contracts and their future effects

are subject to significant uncertainties�

Decommissioning obligations comprise estimated

expenses related to decommissioning and disposal

of production assets� Estimates of the obligations

are based on expectations of the future cost level,

timing of decommissioning and the structural risk-

free interest rate� The expectation for calculating

the provision may depend on future events which

are uncertain by nature�

The estimated obligations have been discounted

to present value using either the structural risk-

free interest rate or the incremental borrowing

rate� The structural risk-free rate is used for

decommissioning liabilities and onerous contracts�

It is calculated as the sum of real return (Gross

Domestic Product growth rate), inflation, and

inflation premium for other risks�

47 Financial statements

Ørsted Salg & Service A/S annual report 2023

Contract liabilities

Note 25

Change in working capital

Note 26

Contract balances

DKKm 2023 2022

Contract liabilities

Non-current contract liabilities 4 4

Current contract liabilities 113 121

Total contract liabilities 117 125

DKKm 2023 2022

Change in inventories 1,878 (362)

Change in contract assets and liabilities (8) (262)

Change in trade receivables 6,940 (2,495)

Change in current receivables from group - (137)

Change in other receivables 2,945 4,373

Change in trade payables (5,817) 1,868

Change in other payables, etc� (41) 109

Change in working capital 5,897 3,094

Contract liabilities primarily relate to prepayments

of gas and power contracts�

§ Accounting policies

We recognise a contract liability when the

invoicing on account and expected losses

exceed the transaction price of the goods or

services transferred to our customer�

48 Financial statements

Ørsted Salg & Service A/S annual report 2023

Financial risks and risk management

Note 27

Financial risks

Ørsted Salg & Service A/S is exposed to several differ-

ent financial risks, including fluctuations in commodity

prices, exchange rates, credit risks, and interest rates�

The management of these risks is an important focus

area in the company�

Risk management is aimed at identifying the various

risk areas and determining a strategy for managing

them� A special Risk Committee has been appointed

who is responsible for monitoring the Ørsted Group's

risk management and risk control relating to market

and credit risks� A centralised group risk management

function has been set up in Ørsted to support the Risk

Committee�

Various strategies have been put in place to man-

age the risks and align the risk profile� The risk profile

is managed through the conclusion of financial and

physical contracts for commodities, and currencies�

The operating profit may fluctuate considerably from

year to year because of price developments�

Managing short-term market risks

Our focus is on actively managing the market risks for

the first five years� We primarily hedge future prices

using derivatives to reduce cash flow fluctuations

after tax�

Minimum hedging levels are currently deter mined by

the Ørsted group Board of Directors� In the first year,

price risks are almost fully hedged� The degree of

hedging declines in subsequent years due to:

· reduced certainty about long-term production

volumes

· increasing hedging costs in the medium to long

term, both spread costs and costs of collateral

· adverse impacts from collateral, potentially tying

up large amounts of capital if hedging contracts

become unfavourable�

Market trading

When the Ørsted Group's desired hedging level has

been determined, the exposures are transferred to the

market trading function, which is part of Ørsted Salg &

Service A/S� Market Trading is responsible for execut-

ing the physical and financial transactions in the mar-

ket� It is not always possible to hedge the transferred

price risks in full� Therefore, Ørsted Salg & Service A/S

has some remaining exposure resulting from these

activities�

The Salg & Service A/S also balances the physical

energy volumes in the market and, to a lesser extent,

engages in active position taking to ensure an ongoing

market presence and thus gain more detailed mar-

ket insights� Furthermore, Ørsted Salg & Service A/S

has assumed the role of market maker in the Danish

power market, which entails further market risks�

Market risk policy

Our most significant market risks relate to:

· energy and commodity prices

· production variability

· foreign exchange rates

· interest rates and inflation�

The overall objective of our financial risk manage-

ment is to:

· increase the predictability of our short-term

income and construction costs

· protect our current and future investment

capacity by stabilising key rating metrics like

FFO/NIBD

· protect the long-term real value of the

shareholders' investment in Ørsted

The governance for managing market, credit,

and liquidity risks are based on the three lines of

defence model:

The first line of defence is responsible for all risks we

take on through our business, hedging,

and trading activities�

The second line of defence is Risk Management,

which oversees the activities of the first line,

challenges, monitors, and reports risk exposures,

and mandate compliance�

The third line of defence is Internal Audit�

Key accounting estimate

Valuation of long-term power purchase

agreements

When we measure our power purchase

agreements at fair value, we use estimates

of non-observable prices such as:

· production forecasts – intermittency

(expected profiled production versus

constant (flat) production)

· forecasted long-term power prices and

exchange rates

· forecasted inflation expectations

The development in market values is monitored

on a continuing basis and reported to the Group

Executive Team�

Hedge accounting

Hedge effectiveness is measured using

forecasted production as well as estimates

regarding energy prices, intermittency, interest,

currency and inflation� For periods where we

are close to fully hedged, volume overhedging

is possible if the forecasted production does

not materialize which will lead to recognition

of ineffectiveness�

49 Financial statements

Ørsted Salg & Service A/S annual report 2023

Key accounting judgement

Valuation of long-term power purchase

agreements

We measure our power purchase agreements

at fair value, but they cannot always be meas-

ured on quoted prices in active markets due

to the long duration of the contracts� We use

elements of judgements determining models to

measure the fair value and we aim to limit the

use of subjective estimates and base the fair

values on external information including exter-

nal pricing and benchmark services�

Hedge accounting

Judgements are used to consider whether

forecasted transactions are highly probable

exposures as hedged item in a hedge relation-

ship, eg� expected production from wind farms,

and judgment is applied in whether the hedge

instruments applied in the hedge relationships

identified are effective�

Managing long-term market risks

Beyond the period where we actively hedge, our market

risk picture is determined by our portfolio of assets and

long-term contracts� We actively manage the long-

term market risk through the investment decisions we

take and contracts we enter into� Our power exposure

is partly mitigated through long-term corporate

power purchase agreements (CPPAs), and we use debt

to manage our long-term currency, interest rate, and

inflation risks�

Commodity price risks

Our price risk arise from the purchase and sale of power

and gas� The price risks associated with the purchase

and sale of gas result from differences in the indexing

of sales and purchase prices� Our largest gas purchase

contracts include the option of renego tiating the

contract price if it no longer reflects market conditions�

The price risks associated with power purchases and

sales are given by the difference between the purchase

and sales prices� The price risks primarily relate to timing

differences between purchases, sales, and the related

hedges, and is therefore considered to be limited�

Currency risks

Currency risks arise primarily from:

· Purchase and sale of power and gas�

· Energy trading, which is typically priced

in currencies other than DKK�

Currency exposure is hedged using forward exchange

contracts, swaps, and options�

Interest rate risks

Interest rate risks primarily relate to loan portfolio,

cash, and financial hedging� These risks are managed

in relation to the Ørsted Salg & Service A/S´s net

financing requirement and capital structure�

Interest rate risk is measured on a net basis, and both

debt and any placing of excess cash are included�

Interest rate risk is adjusted through the interest terms

attaching to the Group's loans�

Credit risks

Credit risks arise primarily from transacting in power

and gas – both wholesale, physical, and financial

transactions, including placing surplus cash�

We conclude contracts with customers and suppliers

on the physical delivery of energy products and

hedging contracts with other energy companies,

specialised trading houses and international banks�

Physical contracts with a term of more than one year

are normal, and gas purchase contracts can have

terms of more than five years� All such contracts

involve a risk of loss in the event of a counterparty

failing to perform its obligations� Such risks are

quantified and managed as credit risks and are a

significant focus area in Ørsted Salg & Service A/S�

Credit risk is managed based on internal credit limits

for counterparties and structured monitoring of the

actual exposure� Credit limits are established based

on an assessment of the counterparty's credit rating�

If the counterparty has an external credit rating, for

example from Moody's or Standard & Poor's, this is an

important factor in determining the counterparty's

credit rating�

Credit risks are coordinated in relation to all business

activities, so that Ørsted Salg & Service A/S does

not assume inappropriately large exposures to

individual counterparties� With a view to reducing its

credit exposure, the company endeavours, as far as

possible, to clear transactions via a clearing centre,

such as Nord Pool, and uses formalised framework

agreements, such as ISDA and EFET agreements and

master netting agreements� To this should be added

the limited use of security, such as bank guarantees�

As part of its risk management, the Group monitors its

credit exposure in relation to all trading counterparties

daily as well as monthly or quarterly in the case

of other counterparties� Historically, losses due to

default by counterparties have been small�

Financing and capital resources

One of the main financial management responsibilities

is to secure sufficient, flexible financial resources for the

day-to-day operations and for the implementation of

Financial risks and risk management

Note 27 – Continued

50 Financial statementsØrsted Salg & Service A/S annual report 2023

Ørsted Salg & Service's strategy, considering the Ørsted

Group's rating� To this end, internal management

objectives have been established for the required level

of financial resources, taking into account factors such

as investment programme, operating cash flow, and

debt maturity profile�

Sensitivity analysis

The sensitivity analysis in the tabel shows the effect of

market value changes assuming a relative price change

at 31 December� The illustrated effect on profit (loss)

comprises financial instruments that remained open at

the balance sheet date and have an effect on profits

in the financial year in question� Besides derivative

financial instruments on commodities and currency,

financial instruments in this context include receivables

and payables in foreign currencies�

It should be noted that the illustrated sensitivities

only comprise Ørsted Salg & Service A/S's financial

instruments and therefore exclude the effect from

contracts concluded under which physical delivery

of the underlying assets is made, as these are not

recognised as financial instruments in accordance

with IFRS 9� Thus, the sensitivity only comprises the

derivative financial instruments and not the physical

contracts they hedge�

Estimated effect on profit (loss)

The illustrated effect on profit (loss) is the effect

from financial instruments that remained open

at the balance sheet date and have an effect on

profit (loss) in the financial year in question� Besides

derivative financial instruments on commodities

and currencies, financial instruments in this context

include receivables and payables in foreign currencies�

It should be noted that the shown sensitivities only

comprise the company's financial instruments and

consequently are not representative of the company's

total risk profile in relation to commodity prices and

exchange rates� Furthermore, the sensitivities only

reflect the effect of changes at the balance sheet

date and not for an entire accounting period�

Estimated effect on equity

The illustrated effect on equity is the effect from

financial instruments that remained open at the

balance sheet date and affect equity at the balance

sheet date, excluding instruments that affect the

income statement� Here, financial instruments include

derivative financial instruments on commodities

and currency, which are accounted for as hedges of

cash flows�

Financial risks and risk management

Note 27 – Continued

Sensitivity Analysis

Risks

DKKm Price change

Estimated effect on profit (loss)

31 December

Estimated effect on equity

31 December

2023 2022 2023 2022

Oil +25 % 27 43 2 4

-25 % (18) (42) (2) (4)

Gas +25 % (375) (944) (106) (218)

-25 % 387 964 106 218

Power +25 % (1,340) (2,329) (836) (2,864)

-25 % 1,324 2,427 836 2,864

Carbon emission allowances +25 % (24) (25) - -

-25 % 25 25 - -

USD +10 % (67) (103) - -

-10 % 67 103 - -

GBP +10 % (305) (1,030) 142 (71)

-10 % 305 1,030 (142) 71

EUR +1 % 70 248 (3) (8)

-1 % (70) (248) 3 8

Credit quality of counterparties

DKKm 2023 2022

AA (22) 6

A 293 221

BBB

23,455 7,245

B - 2

Other

4,977 11,532

Total credit exposure 28,703 19,007

In 2023 DKK 22,481 million (2022: DKK 5,990 million) is related to Ørsted A/S and the Inhouse Clearing Bank�

DKK 1,671 million (2022: DKK 5,761 million) is related to group companies which are not individually rated�

51 Financial statements

Ørsted Salg & Service A/S annual report 2023

Contingent liabilities and other liabilities

Note 28

At year-end, Ørsted Salg & Services A/S had the

following contingent and other liabilities:

Indemnities

The company is taxed jointly with other companies

in the Ørsted Group� The companies have unlimited

as well as joint and several liability together with the

other taxed companies for Danish income taxes and

withholding taxes on dividends, interest, and royalties

within the jointly taxed companies�

Ørsted A/S is the management company� Reference is

made to the Ørsted Group's annual report 2023�

Liability to pay compensation (absolute liability)

According to legislation, Ørsted Salg & Service

A/S is liable in tort for any damage caused by the

companies' gas activities even where there is no proof

of negligence (absolute liability)� The usual insurance

has been taken out to cover any such claims�

Litigation

The company is party to a number of litigation

proceedings and legal disputes that are not estimated

to have any material effect on the financial position,

neither individually nor collectively�

The outcome of litigation proceedings and legal

disputes is based on the expeceted legal assessment,

which is updated quarterly� The expectations may

depend on future events which are uncertain by nature�

52 Financial statementsØrsted Salg & Service A/S annual report 2023

Other notes

1 January – 31 December 2023

53 Financial statementsØrsted Salg & Service A/S annual report 2023

Auditor's fees

Note 29

PwC is Ørsted's auditor appointed by the general

meeting� PwC audits the consolidated financial

statements of Ørsted and the subsidiaries' financial

statements in all the countries where we are

represented�

DKKm 2023 2022

Statutory audit (2) (2)

Total fees to PwC (2) (2)

54 Financial statements

Ørsted Salg & Service A/S annual report 2023

Related-party transactions

Note 30

DKKm

Ørsted A/S Subsidiaries Group enterprises Joint ventures and associates

2023 2022 2023 2022 2023 2022 2023 2022

Sale of goods and services 5 12 669 4,391 4,620 16,806 - -

Purchase of goods and services - - (122) (3) (17,621) (31,100) (191) (220)

Interest, net 618 (126) - - - - - -

Dividends - - - 65 - - - -

Receivables 26 219 40 1,976 3,497 27,843 - -

Ørsted Group´s internal bank receivables

22,481 5,990 331 824 1,340 4,800 - -

Payables 384 334 5 2,697 3,518 10,479 25 18

Ørsted Salg & Service have the right to require the receivable from Ørsted Group´s internal bank settled with short notice�

Related parties with a controlling interest is Ørsted A/S

and the Danish state, represented by the Danish Ministry

of Finance, which has a majority holding in the parent

company Ørsted A/S�

Related parties with significant influence include the

companies' boards of directors, executive boards,

executive employees, and members of their families�

Related parties also comprise companies in which

the persons referred to above have significant

influence and group enterprises and associates in

the Ørsted Group�

As part of its ordinary operations, Ørsted Salg &

Service A/S sells to and buys its products from related

parties on market terms�

The company was involved in the following trans-

actions with related parties in the financial

year under review�

Ørsted Salg & Service A/S uses the exception set out

in IAS 24�25 concerning entities in which the state is a

related party, and transactions with state enterprises

are therefore not disclosed�

Specific transactions

The company has had transactions with group

enterprises as part of its responsibility for the trading

function for the Ørsted Group's companies in relation

to commodity instruments, etc� Furthermore, balances

with group enterprises have been established as part

of the normal financing of the Group's activities�

In 2023 Orsted Markets GmbH is divested internally�

Remuneration of the Board of Directors and the

Executive Board is disclosed in note 4 ‘Employee costs’

and note 5 ‘Share-based payment’� All employees are

legally employed by other Ørsted group companies,

but the employees spend full-working time in Ørsted

Salg & Service A/S why employee costs are recharged

to Ørsted Salg & Service A/S�

55 Financial statementsØrsted Salg & Service A/S annual report 2023

Calculation of financial ratios

Note 31

Unless otherwise stated, financial ratios have been

calculated in accordance with ‘Recommendations

& Financial Ratios’ published by the Danish Society

of Financial Analysts�

Financial ratios have been calculated as follows:

EBITDA margin Earnings before interest, tax, depreciation, and amortisation

Revenue

EBIT margin (profit margin)

Earnings before interest and tax

Revenue

Net interest-bearing debt Interest-bearing liabilities − interest-bearing assets

Capital employed Equity plus/minus gains/losses relating to hedging instruments on equity

+ net interest-bearing debt

Bank overdrafts that are included in the statement of cash flows as cash and cash equivalents

are included as negative interest-bearing assets�

The definition deviates from ‘Recommendations & Financial Ratios 2015’ published by the

Danish Society of Financial Analysts�

56 Financial statements

Ørsted Salg & Service A/S annual report 2023

Ørsted Salg & Service A/S

Kraftværksvej 53

DK-7000 Fredericia

Tel�: +45 99 55 11 11

CVR no� 27210538

orsted�com

Design and layout

e-Types with The Agency

Publication:

June 2024