In brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2023 2
Management’s review
DKTH group in brief 3
Legal structure of DKTH group 4
Financial review 6
Five-year overview 6
Financial review 7
Risk management 9
Risk management – Nuuday 10
Risk management – TDC NET 17
ESG 22
ESG 22
Sustainability highlights 23
Innovation & sustainability 25
People mobilisation 26
Addressing our material impacts 27
Our sustainability priorities 29
Financial statements
Financial statements 32
Consolidated financial statements 33
Parent company financial statement 91
Management statement and independent auditor’s report 101
Forward-looking statements 104
Content
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 3
The business
The group’s mission is to build and support an in-
novative, open model to ensure all of Denmark
connects to the new digital opportunities.
To achieve our mission, we have two stand-alone
companies, Nuuday and TDC NET.
Nuuday’s business model produces reliable
high-quality solutions for almost six million cus-
tomers across consumer and business segments
through a strong brand portfolio comprising of
Demarks leading telecommunications brands.
Nuuday’s brands provide Danish consumers and
businesses with high- speed broadband and
best-in-class mobile connectivity, flexible TV &
streaming propositions, and a broad suite of
advanced business solutions, including cyber-
security, unified communications and digital
collaboration.
TDC NET’s business model takes responsibility
for ensuring the continued development and
building of fast mobile and fixed connections that
support Denmark’s continued progress, because
societies with strong infrastructure do better –
both socially and economically.
As an end-to-end infrastructure provider, TDC
NET owns and operates all critical assets neces-
sary for operating the mobile and landline net-
works in order to service retail service providers.
TDC Holdings activities comprise certain facility
management activities and the TDC Pension fund.
TDC Holding is subleasing properties and cars to
Nuuday and TDC NET and properties to external
parties. TDC Holding have assumed the pension
obligations for the defined benefit plan of
TDC Pension fund, TDC Pensionskasse. Nuuday,
TDC NET and external parties employ a number of
employees who are members of the pension fund
and are liable to pay wages as well as certain
costs in case of early retirement for other rea-
sons than age or illness. Approximately 93% of
the pension funds’ members have retired now or
left the group as the pension fund closed for new
members in 1990.
All the group’s operating activities are related to
Nuuday, TDC NET and TDC Holding. The purpose
of the three DKT holding companies is to sup-
port the HoldCo loan in DKT Telekommunikation.
DKTH group in brief
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 4
DKT Holdings ApS (DKTH) was established on
22 December 2017 with the purpose of running
an investment business through its 100% owned
subsidiaries, DKT Finance ApS (DKTF) and DK
Telekommunikation ApS (DKT). DKTH is owned
by a consortium comprising:
• DKTUK Limited (50%), managed by Macquarie
Infrastructure and Real Assets Europe Limited
(MIRA)
• Arbejdsmarkedets Tillægspension (ATP)
(16.7%)
• PFA Ophelia InvestCo I 2018 K/S (16.7%),
managed by PFA Asset Management A/S
• PKA Ophelia Holding K/S (16.7%), managed by
AIP Management P/S.
Legal structure of DKTH group
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 5
DKTH group
On 10 February 2023 the refinancing of the
group was completed. During 2022 and 2023 the
loans in the TDCH group, i.e. the Term Loan B,
the revolving credit facilities and the EMTN bonds
have been repaid. The loans were replaced by
loans issued in TDC NET and Nuuday, respec-
tively.
TDC NET established a new secured infrastruc-
ture financing platform in 2022 and is now
financed through the European bond market
(EMTN), bilateral term loans and the market for
syndicated senior secured bank loans (Senior
Term Facilities - STF). TDC NET also has a revolv-
ing credit facility to support its daily liquidity man-
agement. The former intercompany loan from
TDC Holding has been repaid.
Nuuday is now financed through a term loan and
a revolving credit facility. The former intercom-
pany loan from TDC Holding was partially
repaid and the remaining outstanding loan
including accrued interests was converted into
equity in December 2022.
1
Teknologisk Institut 2023.
TDC NET
Denmark's best mobile network for the eighth
year in a row
For the eighth year in a row, TDC NET proudly
maintains the position as Denmark's best mobile
network with an 88% flawless experience, un-
matched download and upload speeds, near-per-
fect mobile calls, and a leading 99.7% in 5G video
streaming, supported by the fully developed na-
tionwide 5G network with 99% accessibility
1
.
TDC NET records 59% CO2 cut in
emissions from own operations
In 2023, we achieved a historic 59% reduction in
Scope 1 and 2 CO2 emissions compared with our
2020 baseline. This achievement is driven by in-
vestments in renewable electricity from our four
solar parks, underscoring our dedication to
minimising our carbon footprint and leading the
climate agenda.
Additional 95k new adresses passed with fibre
from TDC NET
We have successfully surpassed 95k new ad-
dresses with fibre technology, bringing our total
to 702k. This achievement underscores our com-
mitment to advancing our fibre roll-out strategy
at full speed, aligning seamlessly with our antici-
pated trajectory of expansion and connectivity ex-
cellence.
Nuuday
Live on +90% fibre networks across Denmark
Nuuday launched on more third party fibre net-
works, enabling +90% of Danish households with
fibre access to receive fibre services from
YouSee, TDC Erhverv and Hiper.
Launched unique digital solutions for business
TDC Erhverv launched the groundbreaking pa-
tented CloudKeyTM solution, solving some
of the biggest pain points for business clients in
the data storage & privacy field.
Next-gen digital sign-up flow in just 2 minutes
eesy launched its new best-in-class digital app
and a new onboarding process, enabling mobile
voice sign-ups in just two minutes with e-SIM. A
true gamechanger for Nuuday’s MV challenger
brand.
Live on Dawn - our new IT stack
Nuuday is progressing well on the IT transfor-
mation journey and successfully launched our
new IT stack in the first stores.
Steady bNPS progress on top
of 2022 progress
Nuuday reached an all-time high bNPS, up two
points from last year – a tangible sign of progres-
sion towards becoming the preferred choice by
Danish households and businesses.
Highlights
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 6
2023
2022
2021
2020
2019
Income statements (DKKm)
Revenue
15,819
16,042
16,002
16,089
17,044
Gross profit
10,951
11,067
11,088
11,463
12,099
EBITDA
6,351
6,290
6,419
6,412
6,512
Operating profit/(loss) (EBIT)
1,076
1,139
928
0
(512)
Profit/(loss) before income taxes
(3,646)
(1,365)
(2,597)
(3,208)
(3,553)
Profit/(loss) for the year
(3,786)
(1,440)
(2,707)
(3,028)
(3,244)
Income statements, excluding special items
Operating profit/(loss) (EBIT)
1,250
1,344
1,352
180
(318)
Profit/loss before income taxes
(3,472)
(1,160)
(2,173)
(3,028)
(3,359)
Profit/(loss) for the year
(3,634)
(1,245)
(2,391)
(2,885)
(3,088)
Balance sheets (DKKm)
Total assets
73,095
74,906
70,079
67,889
70,319
Adjusted net interest-bearing debt (NIBD)
1
(33,931)
(38,054)
(37,838)
(37,206)
(37,980)
Shareholder funding
(24,598)
(22,637)
(20,815)
(19,141)
(17,599)
Total equity
(4,830)
(4,787)
(4,577)
(4,141)
(1,753)
Capital expenditure
(4,283)
(4,589)
(4,399)
(5,547)
(4.801)
Capital expenditure Mobile licences
-
-
(671)
-
(1,349)
Statements of cash flow (DKKm)
Operating activities
4,766
4,394
4,714
4,573
4,453
Investing activities
(5,063)
(4,637)
(4,474)
(4,714)
(5,130)
Financing activities
(839)
3,636
173
(1,005)
(29)
Total cash flow
(1,136)
3,393
413
(1,146)
(706)
Key financial ratios
2023
2022
2021
2020
2019
Financial ratios
Gross margin (%)
69.2
69.0
69.3
71.2
71.0
EBITDA margin (%)
40.1
39.2
40.1
39.9
38.2
Adjusted NIBD/EBITDA
1
(x)
5.3
6.0
5.9
5.8
5.8
Employees
FTEs (end-of-year)
5,823
6,433
6,659
7,032
7,498
¹ Excluding shareholder funding.
Five-year overview
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 7
Revenue
In 2023, DKTH group’s revenue decreased by
1.4% or DKK 223m to DKK 15,819m compared
with 2022. The decline was primarily caused by
lower sales in Nuuday of terminal equipment in
both the consumer and business segments.
Gross profit
DKTH group’s gross profit decreased by 1.0% or
DKK 116m to DKK 10,951m in 2023. The decline
was driven primarily by ongoing migration from
DSL to fibre and increase in third party network
and content costs.
Operating expenses
In 2023, operating expenses decreased by 3.7%
or DKK 177m to DKK 4,777m. The lower operat-
ing expenses are mainly related to lower power
costs and efficiencies, partly offset by higher con-
sultancy costs.
EBITDA
In 2023, EBITDA increased by 1.0% or DKK 61m
to DKK 6,351m. The development is primarily af-
fected by lower power costs and efficiencies,
partly offset by the on-going migration from DSL
to fibre.
Financial income and expenses
Financial income and expenses represented a net
expense of DKK 4,722m, an increase of DKK
2,218m compared with 2022. The development
was driven primarily by an unrealised fair value
adjustment related to the hedge of the floating
Senior Term Facility loans in TDC NET. TDC NET
hedges the risk of future interest increases via in-
terest rate derivatives and fixed rate loans. As in-
terest rate have decreased significantly in 2023
there is an unrealised mark-to-market loss on the
hedging derivatives of DKK 422m compared with
a gain of DKK 1,144m in 2022 due to increasing
interest rates during 2022. The fair value fluctua-
tions reflect a longer-term hedging strategy,
which is affected by the development in interests.
In addition, net interest expenses increased fol-
lowing the refinancing in the group. The men-
tioned negative developments were partly offset
by increasing interest income on the pension as-
set.
Income taxes
Income taxes are affected by the Danish rules on
limitation on the tax deductibility of interest ex-
penses. DKTH group’s net financial expenses are
effectively not tax deductible due to the limita-
tions and furthermore, DKT, DKTF and DKTH are
impacted by the rules regarding thin capitalisa-
tion applicable for the joint taxation. Conse-
quently, the group is incurring tax expenses even
though the group makes a loss before income
taxes.
Loss for the year
The loss for the year amounted to DKK 3,786m
compared with DKK 1,440m in 2022. The in-
crease was driven primarily by an unrealised fair
value adjustment of DKK 2,162m related to the
hedge of the floating Senior Term Facility loans in
TDC NET. The loss comprised a loss for Nuuday,
TDC NET and TDCH totalling DKK 1,025m (2022:
DKK 1,199m) and a combined loss in DKT, DKTF
and DKTH of DKK 2,761m (2022: DKK 2,639m)
related primarily to the net financial expenses.
Financial review
Key figures (DKKm)
2023
2022
Change In %
Income statements
DKKm
Revenue
15,819
16,042
(1,4)
Gross profit
10,951
11,067
(1,0)
Operational expenses
(4,600)
(4,777)
(3.7)
EBITDA
6,351
6,290
1.0
Net financial expenses
(4,722)
(2,504)
88.6
Hereof accruing interest on shareholder funding
(2,130)
(1,956)
8.9
Loss for the year
(3,786)
(1,440)
191.9
Comprehensive income/(loss)
(3,576)
(210)
-
Capital expenditure
(4,283)
(4,589)
(6.7)
Cash flow
Total cash flow from operating activities
4,766
4,394
8.5
Total cash flow from investing activities
(5,063)
(4,637)
9.2
Total cash flow from financing activities
(839)
3,636
(123.1)
Total cash flow
(1,136)
3,393
(133.5)
Key financial ratios
Gross margin
%
69.2
69.0
EBITDA margin
%
40.1
39.2
Adjusted net interest-bearing debt (NIBD)
1
DKKm
(33,931)
(38,054)
(11.7)
Adjusted NIBD¹/EBITDA
x
5.3
6.0
1
Excluding shareholder funding.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 8
Comprehensive income
Total comprehensive loss increased by
DKK 3,366m to DKK 3,576m. In addition to the
DKK 2,346m higher loss for the year there was a
negative development in defined benefit plans
(DKK 1,018m after tax)
2
.
Capital expenditure
Capital expenditure totalled DKK 4,283m in 2023,
down by 6.7% or DKK 306m, related primarily to
TDC NET. The investment level in TDC NETs core
business remained at the same high level as in
2022, as TDC NET continued the focus on ensur-
ing Denmark's best mobile network and rolling
out fibre as well as connecting more homes to
our high-speed platforms. In 2023 investments
was also made in moving a critical service from
power intensive legacy technologies to a more
advanced and resilient technology platform.
Cash flow
Total cash flow decreased by DKK 4,529m to a
cash outflow of DKK 1,136m.
Cash flow from operating activities increased by
DKK 372m to DKK 4,766m. The positive develop-
ment in net working capital (DKK 433m), the
lower net interest payments (DKK 386m) and
lower tax payments (DKK 180m) were partly off
by the lower (DKK 695m) distribution of excess
capital from the TDC Pension Fund.
The DKK 426m increase in cash outflow from in-
vesting activities, up to DKK 5,063m, was driven
primarily by lower investments in TDC Net and
Nuuday DKK 462m more than offset by net in-
vestments in short-term bonds (DKK 879m).
2
See also note 3.8. to the consolidated financial statements.
The cash inflow from financing activities devel-
oped from an inflow of DKK 3,636m in 2022 to an
outflow of DKK 839m in 2023. Lower net pro-
ceeds in connection with refinancing were only
partly offset by the capital contribution of
DKK 3,533m.
Equity
The group’s equity decreased to DKK (4,830)m
from DKK (4,787)m. The loss in 2023 (DKK
3,786m) was almost offset by the cash injection
(DKK 3,533m) and remeasurement effects re-
lated to defined benefit plans (DKK 209m). The
negative equity of the group is impacted by the
accumulated accrued interests on shareholders
funding, maturing in December 2029.
The group’s capital structure supports the
strategy and the long-term value creation in the
interest of the group as well as the shareholders.
The group has sufficient cash and credit facilities
to fund its operations in accordance with the
business plans for the group companies.
The parent company’s equity increased to DKK
7,985m from DKK 4,407m following the cash in-
jection as well as the profit for the year of DKK
45m.
Net interest-bearing debt
In 2023, net interest-bearing debt excluding
shareholder funding decreased by DKK 4,123m.
The decrease was due primarily to the capital
contribution of DKK 3,533m. The resulting lever-
age ratio decreased from 6.1x in 2022 to 5.3x
in 2023.
Guidance 2023 follow-up
2023 guidance assumed flat development in rev-
enue and slightly lower to flat EBITDA.
DKTH group delivered on the guided revenue pa-
rameter with the 1.4% decrease YoY. The 1.0% in-
crease in EBITDA was better than expected driven
primarily by a decrease in opex in TDC Net caused
by lower power prices in 2023 combined with opex
efficiencies in 2023.
Guidance 2024
2024 guidance assumes a flat development in
revenue and a slightly lower EBITDA.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 9
DKTH group faces both internal and external risks
in the short, medium and long term. Risk manage-
ment is an integrated, structured, and dynamic
aspect of Nuuday and TDC NET’s business opera-
tions and planning. The most essential risks and
uncertainties that impact DKTH group’s opera-
tions are described in the following pages.
DKTH has assessed that potential ESG risks for
the full group, including the topics of human
rights, anti-corruption, climate and environment
and employee matters, are related primarily to
the business activities of TDC Net and Nuuday.
Therefore, separate detailed sections on ESG
risks for these companies are included in the fol-
lowing pages.
Risk management
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 10
Risk management governance
Nuuday involves all layers of the organisation in its risk manage-
ment approach. From enterprise risks affecting Nuuday’s overarch-
ing strategic goals to operational or technical risks affecting our IT
landscape, we use risk management to weigh options and support
informed decision making. Based on internationally recognised
standards such as ISO 31000, COSO ERM, and FAIR, our policy
framework is underpinned by procedures and guidance, thus creat-
ing a strong foundation for our risk management governance.
While Nuuday’s Board of Directors is ultimately accountable for risk
management and compliance, we work with a three-lines of defence
model. The first line comprises our business units, each of which are
responsible for effective risk management (identification, assess-
ment, mitigation, etc.). The second line consists of our nine do-
mains, each with risk and compliance specialists:
• Security & Fraud
• Human Resources
• Legal & Compliance
• Image, PR & Public Affairs
• Operations
• Finance
• Health & Safety
• Commercial
• Transformation Execution
Establishing these domains ensures that Nuuday follows the stand-
ardised risk management lifecycle and receives centrally aligned
risk and compliance support across all business units from subject
matter experts. The second line assists the first line with assess-
ments and offers guidance regarding mitigation plans.
Risk management – Nuuday
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 11
Our third line is an audit function responsible for
independently reviewing the risk and compliance
design and its effectiveness.
Risk appetite
Pursuing our business objectives involves taking
risks, with a potential for risks affecting the out-
come of these objectives. We have defined a risk
appetite for each of the nine domain areas,
approved by the executive management team
and the Board of Directors.
Nuuday’s risk appetite reflects a desire to balance
risk exposure and risk reluctance, thus avoiding
both excessive risk taking and excessive caution.
Risk management lifecycle
Identification
Risks are identified in various ways, including via
targeted surveys, audit findings, management
meetings, or ad-hoc. Identified risks are reported
through defined channels, dependent on the
type of risk.
Assessment
Risk assessments take various forms but have
the same goal: to measure the likelihood and im-
pact of an identified risk being realised.
Response
Based on the risk assessment, one or multiple re-
sponses are appropriate. Aresponse might be to
“Treat,” “Tolerate,” “Transfer,” “Terminate,” or
“Take no action.” Taking no action when facing a
risk is an acceptable solution only if the risk as-
sessment score indicates the risk is within the ap-
proved risk appetite.
Action
Here we fulfil the action determined as the appro-
priate response. This step also involves reviewing
the strategy to ascertain the efficacy of the re-
sponse and determine whether another response
activity is required.
Monitor
The risk picture, including relevant vulnerabilities
or threats that could affect the treatment or reali-
sation of a given risk, is monitored after actions
have been completed. Continuously, a minimum
of once annually, or if the risk picture changes
Input
“Disclosure of information due to
an external attack”
Questionnaire
System/application/service
Risk details
1-6 x 1-6 Scale
Treat, tolerate, terminate
or transfer?
The process
Output
“Disclosure of information in
Salesforce due to leaked
administrator credentials”
How does the risk compare
with other risks?
“Validate that X, Y, Z have been
implemented to…”
Are we within risk appetite, or do
we need another response task?
Ensure the risk stays at the
expected level
Risk statements
Risk assessments
Entity
Risk criteria
Heatmap
Risk response task
Risk identification
– something worries us
Evaluation
– How severe?
Respond to risk
– Action to take?
Strategy
implemented
– how do the actions affect the
risk?
Monitor risk
– regular checks and
surveillance for change
in status
Risk
Heatmap
Risk response task
Result
Reports and
dashboards
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 12
significantly, the risk returns to the Assessment
stage of the Risk Management Process.
Documentation
To ensure accountability, the identification,
assessment, response to and treatment of risks
is documented in adequate detail.
The documentation can be made available to
internal and external stakeholders on a need-to-
know basis unless there are concerns of confi-
dentiality. In such cases, management approval is
required.
Integrated risk management
& reporting
Transparency is a key aspect of Nuuday’s risk
management. This is achieved by ensuring that
appropriate stakeholders are aware of risks.
Risks associated with e.g. incidents, changes, or
system operations are handled as an integrated
part of the given process to ensure that the po-
tential impact to the organisation is documented
and a plan is in place in case the risk materialises.
Risks associated with programmes and projects
are handled by the steering groups, with pro-
ject/programme managers receiving assistance
from the domain risk managers when necessary.
Third-party risks are handled in collaboration with
the suppliers, i.e. we stipulate controls for the
suppliers, depending on the service provided. We
mitigate any identified risks before entering con-
tracts, and where this is not possible, remaining
risks are documented and handled systemati-
cally.
Strategic risks identified in other contexts, includ-
ing management meetings, are discussed and
documented, so appropriate response tasks
can be established in the relevant organisational
areas.
For each risk identified, responsibilities are as-
signed, and progress is monitored and evaluated.
Risks identified are consolidated and presented
to Nuuday’s executive management on a quar-
terly basis. Any risks falling outside the defined
appetite are presented for approval.
The Nuuday Audit Committee receives a consoli-
dated risk overview and status as well as infor-
mation about the most critical risks on a quarterly
basis.
On the following pages, we describe some of the
main risks that Nuuday faces, with information
about the risk’s trend, impact, and mitigation ini-
tiatives.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 13
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
New or current competitors taking market
share
Increasing
Commercial
Denmark has a competitive telecommunications landscape. Increased
competition and continuing price pressure affect Nuuday’s ability to es-
tablish sustainable pricing in B2C and B2B markets.
• Improve customer experience through fully digital customer journeys
• Retain best network status
• Continue to provide high-quality services and
improve NPS
• New attractive product releases
• Increased adoption of differentiating offerings, reducing B2B churn
Consumer savings – “downspin”
Decreasing
Commercial
We are seeing less inflation, but people are still choosing to save on,
for example, mobile phone subscriptions by choosing cheaper pack-
ages, thus lowering the Average Revenue Per Unit. This could poten-
tially spread into TV and broadband segments.
• Monitoring market tendencies
• Continue to strengthen areas of differentiation (network quality
and 5G)
• Offer highly competitive and attractive propositions across all
consumer brands
• Address the entirety of the consumer and business mobile market
Entertainment content: price increases and
taxation
Increasing
Commercial
Content producers continue to raise their prices for entertainment,
which particularly affects the YouSee
& Telmore brands.
On TV, increasing price pressure from streaming providers coupled
with increasing content costs (especially related to premium sports)
could further accelerate existing downward trends, with customers
‘shaving’ or ‘cutting’ the cord on their TV subscriptions.
• Optimise products and pricing to ensure that TV packages remain
relevant for as many customers
as possible
• Invest in developing attractive next-generation entertainment
products to cater for the rapidly growing combi-viewer segment that
values both streaming and TV channel content
• Pursue a full household strategy and incentivise purchasing multiple
services and products
Large antenna association market in turmoil
Increasing
Commercial
VIOS, ASOM and others are "pitching" to antenna associations to "re-
take ownership of their network" and start producing own broadband
rather than relying on Norlys, TDC Net and YouSee. This marginalizes
YouSee to a TV only provider if not dealt with and could even put pres-
sure on TV pricing as VIOS et al. aggregate content demand/bargaining
power across associations.
• Sharper offers to keep associations in TDC Net/YouSee fold - requires
larger incentives to the association and zero charged DVB-C/TV
distribution costs
• With Dawn, a larger array of services - like association admin and
white label offering
• Own Nuuday broadband/TV production
• Potentially partnering w OpenNet to have an alternative to TDC Net
as network enabler
•
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 14
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
Cyber attacks
Stable
Security & Fraud
The Centre for Cyber Security’s latest report on threats against the
Danish telecommunication sector indicates that the threat of cyber
crime is “Very High.”
Depending on the nature of the cyber attack, the processing, confiden-
tiality, integrity, availability, stability, capacity, performance, continuity
and/or the resilience of the information technologies Nuuday uses can
be impacted.
• Investing in security and operations of network infrastructure
• Focused efforts on network resilience through risk and incident
management
• Continued dialogue with Danish authorities and customers to ensure
data protection and confidentiality
Ransomware on core systems
Increasing
Security & Fraud /
Operations
With increased threats of cyber crime, the risk of ransomware also in-
creases. Depending on the attack vector and affected systems, ran-
somware could have a high impact on Nuuday’s ability to continue its
business.
• Establishing new ways to improve resilience
• Crisis management exercises
Network infrastructure downtime
Stable
Operations
Nuuday’s business relies on functioning telecommunication infrastruc-
ture (mobile network, coaxial, fibre, etc.). When network providers face
downtime, Nuuday’s customers may be unable to make telephone
calls, use the internet, or consume entertainment. Events that do not
fulfil customer expectations for security and quality can negatively im-
pact retention.
• Working with infrastructure providers to ensure speedy recovery
• Review and testing of business continuity plans
Regulatory privacy
Stable
Legal & Compliance
European and national laws stipulate how Nuuday can process per-
sonal information. The current legislative landscape regarding transfer-
ring personal data to non-EU countries has been in focus.
A general compliance risk relates to customer data being processed in
breach of relevant privacy laws and regulations, potentially resulting in
large fines or negative references in public arenas.
• Data protection network with Data Privacy Managers anchored in
each of Nuuday’s organisational areas
• Integration of Data Processing Agreements & Transfer Impact
Assessments into the procurement process
• Dedicated resources to support with data subject requests
• Privacy by Design principles integrated into software development &
project lifecycles
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 15
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
IT & business transformation
Stable
Transformation Execution /
Human Resources
Nuuday is progressing with its transformation, which is key in engaging
customers, increasing productivity, and guaranteeing high-quality ser-
vices in the future.
A number of risks are associated with this transformation, such as em-
ployee engagement, human resource management, technical integra-
tions and de-coupling of legacy IT.
The materialisation of risks affecting the transformation of Nuuday’s IT
stack and business is in focus, and the identified risks are being broken
down at programme and project level to prioritise appropriate mitiga-
tion efforts before the risks are realised.
• Management reiteration of transformation plan and Nuuday’s
strategic objectives at town hall meetings to inspire confidence in
direction and journey
• Handle programme risks in collaboration with risk domains and
steering groups to find suitable solutions
• Seconding of workforce supporting legacy IT systems to calm
employee concerns
• Use feedback from employee surveys to strengthen satisfaction,
motivation, loyalty and culture
• Ensure targets and expectations are clear to all employees
• Reinforce a culture of ongoing feedback, and focus on continuous
development
Political & legal changes
Stable
Image, PR & Public Affairs
EU and national governmental changes often lead to new political ob-
jectives. With these new objectives, we often see political decisions or
new legislation. Depending on the magnitude, these changes can pro-
foundly affect Nuuday’s ability to carry out its business and/or fulfil op-
erational targets.
• Nuuday participation in industry groups and discussions on
proposed legislation
• Continued dialogue with authorities, politicians and municipalities
Financial risks
Finance
See Financial Statements – Section 4.3 “Financial Risks” for details
• N/A
Human rights
Stable
Image, PR & Public Affairs /
Legal & Compliance
Nuuday has responsibility for our direct employees, the employees of
partners and companies in our supply chain, including the risk of forced
labour, discrimination or harassment and misuse or loss of personal
data, or data breaches.
If Nuuday or Nuuday partners violate fundamental human rights, this
may lead to legal action as well as bad publicity and customer reactions
negatively impacting Nuuday.
• Procedures and policies & partner code of conduct
• Based on a thorough risk assessment, we conduct audits at our
suppliers each year, particularly screening for adherence to the UN
Global Compact Assessment
• Industry collaboration through JAC – the Joint Alliance for CSR
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 16
Risk & trend
Risk domain
Details & impact
Mitigation initiatives
Anti-corruption and bribery
Stable
Image, PR & Public Affairs /
Legal & Compliance
Nuuday is a large employer in Denmark with suppliers across the globe.
With multiple contract relationships there is always a risk that bribery
or corrupt practices could occur, influencing business decisions.
If corruption or bribery occurs, it may lead to legal action as well as bad
publicity and customer reactions negatively impacting Nuuday.
• Anti-corruption policy commits Nuuday to complying with the UN
Convention against corruption
• Raising awareness and putting in place resources and training for
employees
• Whistleblower policy that allows for the anonymous reporting of
suspected wrongdoings at the company
• Partner Code of Conduct for suppliers, partner organisations and
employees
Environment and climate
Stable
Image, PR & Public Affairs /
Legal & Compliance
Several potential environmental and climate risks may be linked to our
operations and supply chain. Nuuday has a responsibility to try to re-
duce our own resource consumption, emissions and waste in produc-
tion and to influence partners and suppliers to act equally responsibly.
If Nuuday does not show credible action on environment and climate
matters, it may generate bad publicity and customer reactions nega-
tively impacting Nuuday.
• Nuuday has set ambitious carbon emissions reduction targets for
Scopes 1, 2 & 3
• ISO 14001 certification covering our whole operation
• Detailed ESG reporting on climate and environment metrics
• Nuuday has embarked on a revised sustainability strategy with
sustainable procurement and products as a key pillar
• Nuuday aims to retain an Ecovadis platinum rating as a token of
recognition that Nuuday is a leader in sustainability
Social and employees
Stable
Human Resources / Health &
Safety
Nuuday focuses on retaining the services of its key personnel and in-
vests in attracting suitable and qualified talents to ensure a good work-
ing environment e.g., with no accidents or stress incidents. Nuuday's
success depends largely on our ability to attract and retain key person-
nel. The competition for qualified personnel is intense and with limited
availability of candidates with the required knowledge of the telecoms
industry and relevant experience in Denmark.
• 88% of employees are covered by collective agreements
• Occupational health and safety policy and certification to ISO 45001
standard
• Flexible working conditions
• Projects to increase personal resilience and prevention of abuse of
substances
• Quarterly employee engagement surveys
• Diversity, equity, inclusion & belonging (DEIB) Policy
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 17
The purpose of risk management
Embedded in our risk management framework is
a clear chain of command, ensuring the integra-
tion of risk and opportunity management in our
business activities. We follow a process that in-
volves identifying and assessing risks, formulat-
ing response plans, implementing those plans,
and reassessing outcomes. Our risk management
process extends to maintaining a portfolio of
risks that fosters an information flow to ensure
that key risk insights reach decision makers.
Our risk management process
The risk management framework deployed at
TDC NET enables a consistent approach for iden-
tifying, assessing, documenting and responding
to risks. Risks are assessed based on their poten-
tial financial impact and probability of occurring
and are captured in risk registers across the or-
ganisation. We also prioritise GDPR compliance
by utilising separate consolidation frameworks
for risks affecting registers, specifically address-
ing data protection and privacy concerns.
Each business line has its own risk coordinator
responsible for its risk register and a Data Protec-
tion Manager responsible for GDPR compliance.
In collaboration with risk owners, the risk coordi-
nators ensure that risks are assessed, and miti-
gation strategies are established. A member of
the Executive Leadership Team is accountable for
each risk register, and biannually, all risk registers
are consolidated centrally and reviewed by the
Executive Leadership Team to secure alignment
on key risks and ensure execution of mitigating
plans. The overall risk exposure and status of the
mitigating activities are submitted and reviewed
by the Audit Committee and Board of Directors
biannually. In the following pages, each risk will
be analysed and met with strategic mitigating ac-
tions.
Risk management – TDC Net
As a critical infrastructure provider, we navigate a landscape with
many risks. From macroeconomic uncertainties associated with build-
ing the digital network in Denmark to the challenges posed by our
technological transformation journey, our exposure is diverse. Risks
are an inherent part of our business activities, and we aim to continu-
ously mitigate them to an acceptable level as the risk exposures
evolve.
Top 8 business risks:
#1
Commercial trends and competition
#2
Funding and capital market risk
#3
Cyber and information security
#4
IT landscape
#5
Supply chain conduct
#6
Legal compliance and data privacy
#7
Recruiting a skilled workforce
#8
Climate change adaptation
Read more on the following pages →
Environment
Social
Governance
Not ESG
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 18
Risk #1
Commercial trends and competition
Risk #2
Funding and capital markets risk
Description
Over the years, we have created a strong commercial position within our broadband and mobile infra-
structure market. We own and operate a broad range of different technologies. As the industry is fac-
ing increasing consumer demand for faster connectivity, we embrace the deployment of high-speed
infrastructure in our platforms. Simultaneously, we foresee a decrease in relevance over time for leg-
acy technologies and products, as more and more consumers can connect to the new infrastructure
offerings.
Potential impact
If we become unsuccessful in anticipating and aligning with market demands, we may encounter added
operating costs linked to the continued use of legacy technologies. Conversely, decommissioning our
legacy platforms at a pace exceeding market demand could potentially result in the loss of customers
and missed business opportunities.
Mitigation action
We actively track market trends and the shift from legacy to future-proof technologies, which enables
us to anticipate and respond to technological developments. This positions us to align our portfolio
with prevailing market dynamics. Hence, we prioritise the decommissioning of legacy platforms, ensur-
ing our customers are seamlessly connected to resilient new infrastructure. Simultaneously, we con-
centrate on enhancing the customer experience in our fibre roll-out, adopting a "first time right" ap-
proach. Our commitment to delivering fast fixed connections and maintaining Denmark’s premier mo-
bile network remains central to our overall strategy.
Not ESG
Description
As part of the transformation, we have an extensive investment programme. Our capital expenditure is
funded with the strong resilient cash flow from operations. We are leveraged with debt consisting of
loans, bonds and credit facilities and are dependent on access to capital markets for funding and li-
quidity management, including derivatives for hedging of interest-rate and foreign currency exposure.
Potential impact
Fluctuating interest rates may adversely impact future interest costs, and fluctuations in foreign cur-
rency prices may impact on procurement costs, debt levels or interest costs.
Mitigation action
We apply prudent treasury management to ensure stable financial risks. We regularly monitor our fi-
nancial exposures and follow an active hedging strategy whereby interest rates are hedged for an av-
erage of 5 years, and foreign currency risks are hedged to DKK or EUR with very limited room for other
exposures. Intra quarter cash flow movements are mitigated through cash and revolving credit facili-
ties. Moreover, we plan our liquidity, refinancing, leverage and cash flows with caution to ensure a sus-
tainable financial position. On an ongoing basis, we optimise debt issuances depending on develop-
ments in the capital markets and the funding needs of TDC NET.
Not ESG
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 19
Risk #3
Cyber and information security
Risk #4
IT landscape
Description
We greatly rely on information systems and technologies to facilitate our daily operations. As a
major provider of digital infrastructure, we are aware of the risks associated with cyber attacks.
These risks could extend beyond our organisation, potentially leading to unauthorised access to
critical infrastructure.
Potential impact
A cyber security breach could pose a concern for our integrity, with the possibility of sensitive data
being at risk, potential service disruptions, financial impacts, and damage to our reputation. Fur-
thermore, a cyber security incident might have the potential to escalate beyond our organisation.
Mitigating actions
To enhance our resilience against cyber threats, we have implemented key strategic measures to
strengthen risk management and reinforce disaster recovery and business continuity planning.
This broad approach enhances our agility and operational integrity in facing digital threats and mini-
malises potential operational disruption. Our Cyber Defense Center has earned a top industry certi-
fication in incident response, marking us as a leader in cyber security in Denmark. This achievement
highlights our capability in managing cyber incidents. Adhering to NIST and ISO frameworks, we sys-
tematically manage and prioritise cyber security, ensuring our preparedness against emerging
threats. Our comprehensive approach ensures that we remain a steadfast and trustworthy partner
to our customers, protecting their interests and our own with immense dedication and expertise.
Governance
Description
Our current IT landscape includes several legacy applications that may raise concerns about system
efficiency and security. Additionally, we are in the process of separating our remaining shared
systems with Nuuday. Our ongoing transformation of IT, while aimed at addressing these issues,
involves complexities that require meticulous management.
Potential impact
Operating legacy IT applications could potentially entail risks such as security vulnerabilities and
operational challenges. This dependence often involves relying on specific personnel and incurring
ongoing expenses to support and manage ageing systems. Sharing systems with Nuuday can intro-
duce some additional considerations, and if our transformation efforts overlap, unexpected costs
may arise. The shared systems could potentially raise security concerns and reliance on Nuuday for
vulnerability management.
Mitigating actions
Our transformation of IT is designed to handle the challenges our organisation faces to enhance our
operational efficiency and strategically position us for the future. One aspect involves our plans to
decommision legacy applications and introduce new solutions. This transition is expected to yield
efficiency gains, improve workflow and increase productivity. We maintain a strict adherence to the
highest standards in both cybersecurity and general IT practices. We have a proactive collaboration
with Nuuday, as we continuously monitor and address potential threats, ensuring that our IT eco-
system remains robust and secure. Our proactive approach is integral to maintaining uninterrupted
operations and protecting our organisation from any unforeseen challenges.
Governance
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 20
Risk #5
Supply chain conduct
Risk #6
Legal compliance and data privacy
Description
We rely on an international network of suppliers that operate in diverse legislative jurisdictions and
with varying degrees of maturity across various practices, including sustainability and compliance.
Sustainability practices encompass considerations related to environment, health and safety,
labour, and human rights and anti-corruption measures. We face risks related to labour-intensive
services resulting from general cost and wage inflation locally and internationally.
Potential impact
The risk of suppliers being non-compliant with environmental and social legislation poses an ongo-
ing threat to our operations, integrity and reputation. Such instances may give rise to legal disputes
and require supply chain changes. The risk of price increases on labour- intensive services could add
pressure to our financial and business activities.
Mitigating actions
Our process for supplier selection employs a risk-based and vendor management approach. Based
on their sustainability practices, it identifies suppliers for focused scrutiny. Sustainability assess-
ments are conducted for medium and high-risk suppliers, with selected high-risk suppliers undergo-
ing additional audits through Joint Alliance for CSR. Ongoing category and supplier performance
management, competitive sourcing processes and standardised contracts with our suppliers are
instrumental tools in responding to increasing price pressure and securing a stable cost base.
Environment Social Governance
Description
Our strong market position in specific areas subjects us to sector-specific regulations, including
emergency communications, security measures, sanctions aligned with EU, US and Danish legisla-
tion, and compliance with data privacy rules, notably GDPR.
Potential impact
Non-compliance may result in fines and adverse decisions from the Danish Business Authority,
as well as the Danish Competition and Consumer Authority. Legal requirements for investors,
customers and suppliers could be affected by Danish authorities. The Danish Centre for Cybersecu-
rity could impose restrictions on agreements and arrangements in relation to our infrastructure.
Furthermore, any GDPR compliance shortfalls could lead to potential legal disputes and reputational
damage.
Mitigating actions
We are implementing a comprehensive compliance programme that involves training employees to
conduct regulatory checks to ensure a proactive approach. Vigilantly monitoring legal and political
developments in the market allows us to adapt swiftly. We conduct desktop studies on contractual
relations in alignment with sanction regulations. Further, we have implemented security and data
protection measures aligned with GDPR and Danish security regulations regarding security
breaches and threats to personal data.
Governance
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 21
Risk #7
Recruiting a skilled workforce
Risk #8
Legal compliance and data privacy
Description
Recruiting resources with a background in IT, artificial intelligence, data and transformation with
hands-on experience is particularly challenging. This is due to the rapidly evolving technological
landscape, and overall high demand for specialised skill sets globally. Additionally, female re-
sources in IT with the right capabilities are scarce in the industry, which makes recruitment of a
diverse workforce challenging.
Potential impact
Recruiting challenges for IT and transformation backgrounds may result in a skills gap, hindering
our transformation initiatives. The difficulty in recruiting international and female resources in IT
hampers gender diversity, potentially limiting the organisation’s ability to tap into a diverse talent
pool.
Mitigating actions
We are adjusting our strategic recruitment approach and strengthening our value proposition in the
market to attract national and international resources with IT and artificial intelligence backgrounds,
and investing in ongoing training programmes to bridge skill gaps and ensure the workforce re-
mains adaptable to evolving technologies. We prioritise succession planning by identifying key
roles, and cross-train existing specialists to bridge technological gaps. In addition, we actively pro-
mote diversity and inclusion initiatives internally and externally to address the challenges of diver-
sity. This involves fostering an inclusive workplace culture and establishing outreach programmes
through partnerships to attract a more diverse talent pool.
Social
Description
Climate change and weather-related disasters pose a potential threat to our infrastructure, specifi-
cally heavy downpours causing flooding or landslides on our mobile equipment and crucial infra-
structure at our sites, which are essential for maintaining uninterrupted telecommunication ser-
vices.
Potential impact
The impacts of climate-induced events, such as flooding, can be severe. Direct exposure to water
poses a threat to mobile equipment, power switchboards and batteries across our sites. Such dam-
age can disrupt our operational capabilities and result in service outages. Furthermore, the financial
implications of repairing or replacing equipment, coupled with potential service disruptions, could
result in revenue losses and reputational damage.
Mitigating actions
Establishing three physical locations for our mobile network operation ensures full redundancy. In
the event of a site being flooded, seamless continuity is assured through fail-over datacentres safe-
guarding against service disruptions. Furthermore, multiple climate protection activities at exposed
sites are carried out, with more to come in the short-term future.
Environment
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 22
Gender diversity
Management level
Status 2023
Target
Year for reaching target
Board of Directors
Total number of shareholder elected board members: 6
(2022: 6 members)
4 men / 2 women
(2022: 4 men / 2 women)
67% men / 33 % women
(2022: 67% men / 33 % women)
Other management level
Total number of management: 1
(2022: 1 member)
1 woman / 100 % woman
(2022: 1 woman / 100 % woman)
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 23
Nuuday’s Sustainability Report addresses the
reporting requirements under sections 99a and
99d of the Danish Financial Statements Act,
except for the business model that is described
on pages 12-13 in Nuuday’s Annual Report. The
statutory statement on gender balance in top
management in accordance with section 99b of
the
Danish Financial Statements Act is also to be
found in Nuuday’s Annual Report.
For a full account of Nuuday’s activities and
achievements throughout 2023 within the areas
of sustainability, see Nuuday’s 2023 Sustainabil-
ity Report at Nuuday.com/sustainability.
Our approach
At Nuuday, we are committed to running our busi-
ness in a responsible and sustainable manner,
as we believe this is both vital for the long-term
sustainability of our business and a necessity for
existing and competing in modern society. As a
company, we seek to address our most material
issues, and we take a stand to make a difference
and make technology a force for good.
Since 2009, we have been a signatory to the UN
Global Compact, and our approach to sustainabil-
ity is based on the ten principles on human rights,
labour, environment and anti-corruption. Since
2022, we have been a member of the telco
industry Joint Alliance for CSR (JAC), which
serves as a multilateral forum on top of our indi-
vidual efforts to enhance sustainability.
Our sustainability framework
Nuuday’s sustainability strategy is centred on
three key pillars: combating climate change; chil-
dren’s digital lives; sustainable procurement &
products. These pillars stand on a foundation
of responsible operations and diversity, equity,
inclusion, and belonging (DEIB) that are deeply
engrained in the way Nuuday operates its busi-
ness internally.
We are committed to the UN Sustainable Devel-
opment Goals and have aligned our sustainability
strategy with the goals, namely Quality Education
(SDG #4), Gender Equality (SDG #5), Decent
Work & Economic Growth (SDG #8), Responsible
Consumption and Production (SDG #12) and
Climate Action (SDG #13).
Key activities – combating
climate change
2023 was a memorable year as we met our
interim carbon emissions reduction target of
halving Scope 1 & 2 emissions by the end of
2023 before becoming net zero by 2028. This
milestone was reached through several reduction
activities, most importantly renewable energy
sourcing.
Sustainability
highlights
Strategic focus areas
Foundation
Sustainability framework
Sustainable procure-
ment & products
Maximise supply chain
sustainability by engag-
ing with top suppliers,
while offering a range of
sustainable solutions
and integrating efforts
into our brand proposi-
tions
Children’s
digital lives:
Offer support to chil-
dren so they can have a
safe digital life, and
provide IT development
learning opportunities
for pupils acquiring
skills for a digital future
Combating
climate change
Eliminate Scopes 1 & 2
emissions by 2028, and
achieve net zero across
the entire value chain
(Scope 3) by 2040
Responsible operations
Ensure the highest standards for
issues such as safety, security,
employee well-being, GDPR, privacy
and tax transparency to take care of
our employees and meet stake-
holder expectations
Diversity, equity, inclusion
& belonging (DEIB)
Ensure equal opportunities, build an
inclusive workplace where our col-
leagues feel they belong, develop
leaders and employees, and strive to
obtain gender equality in senior man-
agement
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 24
In 2023, Nuuday received its fair share of the
power produced by four recently erected solar
parks across Denmark based on fixed power pur-
chasing agreements contracted by TDC NET. In
January 2023, the last of the four parks went into
operation, ensuring that Nuuday now covers 70%
of its energy consumption from these green
power sources.
We also progressed with energy-saving initia-
tives, accelerating the phase-out of natural gas at
our locations while we gradually convert the com-
pany fleet to electric vehicles – with the last fos-
sil-fuelled car set to be newly leased in 2025 at
the latest.
In 2023, we decided to recalibrate the Nuuday
Scope 3 net zero target that was set by and inher-
ited from the dissolved TDC Group. This was
done to properly reflect Nuuday’s Scope 3 emis-
sions on a stand-alone basis and consider our
limited options for influencing suppliers’ emis-
sions before 2030. With “purchased goods &
services and capital goods” constituting close to
90% of Nuuday’s Scope 3 emissions, we have
decided to recalibrate our Scope 3 target, intro-
ducing an interim reduction target of 60% of
Scope 3 emissions in 2030 compared to baseline
before reaching net zero in 2040. With this tar-
get, Nuuday will remain among the most ambi-
tious companies in the telco industry fuelled by
these reductions targets.
Key activities – children’s digital lives
For numerous years, Nuuday has partnered with
the NGO Børns Vilkår to support initiatives that
strengthen children’s digital skills and digital life
in general. In 2023, we continued to support
Børns Vilkår’s work to assist children with
navigating in an often-deceptive digital world and
equip them with tools to operate safely online.
We also supported the Children’s Helpline
(Børnetelefonen) & various fundraising activities
during the year through the particular and exten-
sive partnership between TDC Erhverv and Børns
Vilkår. Financial and technical assistance with
operating the Children’s Helpline enabled Børns
Vilkår to effectuate more than 63,000 counselling
conversations with children and youngsters
in 2023.
As a founding partner of Coding Class, we once
again – now for the eighth consecutive year –
hosted school classes at our Copenhagen offices
that introduce pupils to computer programming
and exploring programming-based solutions at
YouSee. Together with IT-Branchen, our advocacy
efforts also bore fruit as the Government has now
proposed that “technology & digital literacy” will
become part of the school curriculum.
Lastly, in 2023, we again hosted Girls’ Day in Sci-
ence, where a group of schoolgirls came to visit
Nuuday for a talk about careers, education and
jobs within IT to inspire these young women to
pursue educations within Science, Technology,
Engineering and Mathematics (STEM).
Key activities – sustainable
procurement & products
In 2022, Nuuday joined the telco industry Joint
Alliance for CSR (JAC) with a view to gaining ac-
cess to and further developing the joint auditing
system. In 2023, Nuuday conducted three on-site
supplier audits with two further audits still in pro-
gress, and we gained access to +100 joint telco
audits. These audits have all led to a number of
corrective measures towards our suppliers,
clearly demonstrating that the JAC cooperation
generates a strong supplier control regime. On
top of this, we strengthened our supplier due dili-
gence process with further screening of new sup-
pliers and top supplier self-assessment systems.
We also explored various initiatives with partners
to launch new products and services. A new col-
laboration with handset producer Fairphone was
launched in 2023, along with a new mobile take-
back programme for YouSee as well as TDC
Erhverv’s enrolment in the Cisco “Environmental
Sustainability Specialization Program”. Striving to
be an inclusive partner for all Danish customers,
YouSee partnered with the app “Inklusiv” to offer
personal service at four stores for people with au-
tism, reduced mobility or other special needs.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 25
Simplification
A key strategic priority is to streamline, simplify
and standardise our operations to efficiently pave
the way for new technologies. A company-wide
transformation was launched at the beginning of
2023 to orchestrate cross-functional efforts, in-
cluding process optimisation, IT modernisation,
data enablement and people mobilisation. The
transformation reaches far into all business areas
to ensure that our strategy is strongly anchored
in daily operations.
Through controlled decommissioning of selected
platforms, the simplification process includes re-
placing old technologies. Like our peers in neigh-
bouring countries, we have announced that our
copper network will be decommissioned by 2030.
The first customer migrations have already
started in 10 carefully selected areas.
Closing the copper network aligns with our strate-
gic objective of streamlining operations, enhanc-
ing product sustainability through energy-effi-
cient solutions, and crucially, enabling us to
effectively address rising customer needs for
high-speed connectivity.
Digitalisation
By simplifying our business and procedures, we
can unleash the potential from digital technolo-
gies such as automation, machine- learning mod-
els and artificial intelligence. The digital agenda is
a top priority for TDC NET, with strategic invest-
ments enabling us to secure operational con-
sistency, improve decision making and assist
technicians with improved tools. During 2023, we
nearly tripled the size of our AI team with top tal-
ents dedicated to delivering on value-driven use
cases. Highlights include developing a fault pre-
diction algorithm to help prevent specific coax
faults, a real-time technician support chatbot pi-
lot, as well as use cases for advanced fraud de-
tection.
ESG
In 2022, we were the first company in the world
to have a 2030 net-zero target validated by the
Science Based Targets initiative – an achievement
that clearly underlines our leadership position on
the climate agenda. We are now expanding our
environmental commitment to include nature and
biodiversity. For the broader ESG agenda, we also
aim to lead the field within social and govern-
ance-related areas such as health & safety, diver-
sity & inclusion, digital trust and business con-
duct.
Innovation & sustainability
At TDC NET, our vision to make Denmark a digital pioneer goes be-
yond cables and radios. As a stand-alone network provider, we con-
sistently concentrate on strengthening our core network capabilities.
We drive technology innovation to realise sustainable opera-
tions for our customers, society and the planet – ensuring that
we always have a positive impact on the world around us.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 26
People
We are firm believers in passionate people driving
technology and not vice versa. We are therefore
committed to creating the best possible founda-
tion for our employees to do so. We have previ-
ously implemented our ‘Pioneering Digital Collab-
oration’ concept as our way of working, and con-
tinuously evaluate how to provide our employees
with more flexibility and further enable cross- or-
ganisational collaboration. We closely assess
how we organise our company to face the future
and support technology shifts while also making
sure our talent pool is filled with the capabilities
required for tomorrow. All these elements are
tied together by the passionate, inclusive and
courageous culture that empowers our organisa-
tion.
People mobilisation
Mobilising our organisation is fundamental for succeeding with
our transformation and strategy. We pioneer ‘hybrid digital
collaboration’ to develop and attract tomorrow’s talent,
building on a passionate, inclusive and courageous culture.
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 27
TDC NET’s materiality analysis helps us
identify environmental, social and govern-
ance (ESG) issues that either have a large
potential impact on TDC NET’s business or a
potential negative impact on society. We
respond to the most material issues via
sustainability programmes for each of our
sustainability priorities.
Materiality process
Our materiality approach builds on guidance from international
reporting standards such as the Global Reporting Initiative (GRI).
The analysis is conducted in depth every third year, most recently
in 2021, and is revised annually to ensure continued relevance
of the ESG issues. In 2023, our annual revision led to slight adjust-
ments in our materiality matrix. Material issues are identified and
evaluated through a comprehensive process based on internal
and external input. Key internal stakeholders are consulted via
interviews, including board members, executive leadership and se-
lected employees. Stakeholder insights are combined with analyses
of external reports, sustainability trends and peer strategies.
Addressing
our material impacts
Infrastructure development
Human & labour rights
GHG emissions
Biodiversity
Training and education
Circularity
Materiality assessment
Board interviews
Executive workshops
Investor interactions
Management interviews
Regulatory analysis
Society perspectives
Supplier engagement
Trends research
materiality
assessment
Environmental
Social
Governance
Key changes
High
Relative significance of impact on business
Very high
Transparency reporting
Responsible
supply chain
Corporate governance
Diversity and inclusion
Energy efficiency
Digitalisation
Regulatory compliance
Business conduct
Health and safety
Renewably energy
Cyber security
Social initiatives
High
Relative importance to stakeholders
Very high
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 28
The result of the assessment is shown in our materiality matrix. The
upper right quadrant covers issues most relevant to TDC NET’s
stakeholders and with the greatest possible impact on our busi-
ness. The relative significance of the impact on our business is cal-
culated as an average of stakeholder input based on the principle of
double materiality. This means topics scored high on impact (hori-
zontal axis) indicate a large potential impact on our business and/or
an opportunity for TDC NET to mitigate an impact on society.
In the 2023 assessment, biodiversity was identified as material. We
have therefore expanded our focus on the climate priority area to
include nature. Several governance-related issues increased in level
of importance and impact, leading to the inclusion of a new sustain-
ability priority area ‘Governance, compliance and conduct’, which
also creates a foundation for the remaining priority areas. Infra-
structure development and digitalisation continue to be part of our
core business.
Preparing for double materiality
As part of our ongoing preparations for complying with the EU Cor-
porate Sustainability Reporting Directive (CSRD), we are running a
process to update the materiality assessment to ensure full align-
ment with the double materiality approach as stated in the CSRD
and related European Sustainability Reporting Standards.
Focusing on the most material issues
The materiality matrix indicates which ESG issues are most material. ESG Leadership addresses the most
material issues through five different sustainability priority areas.
ESG area
Most material issues
Strategic priority areas
Environment
Energy efficiency
Climate and nature
GHG emissions
Renewable energy
Biodiversity
Governance
Cyber security
Digital trust
Data privacy
Business conduct
Governance, compliance
and conduct
Corporate governance
Regulatory compliance
Infrastructure development
Part of our core business
Digitalisation
Social
Diversity and inclusion
Diversity and inclusion
Health and safety
Health and safety
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 29
As an outcome of the latest materiality assessment revision, we will
focus on driving progress within the following five sustainability
priorities:
• Climate and nature
• Health and safety
• Diversity and inclusion
• Digital trust
• Governance, compliance and conduct
Ambitions, targets and initiatives have been defined for the first
four priority areas – and we closely monitor progress towards
targets to deliver clear results. For ‘Governance, compliance and
conduct’, short-term targets will involve compliance with the CSRD
and NIS2. Long-term targets will be defined in 2024 as part of this
process.
Decision making related to our sustainability priorities is anchored
with our Executive Leadership Team and Board of Directors, includ-
ing Board-level committees.
Our direction for sustainability
Our sustainability priorities
ESG Leadership sets the strategic directions for our sustainability
work towards 2025.
Build reliable, resilient and sustainable digital infrastructure
ESG Leadership
Sustainability as a core element of the corporate strategy and transformation
Protect the network,
personal data and
privacy rights
Diversity and
inclusion
Ensure equal
opportunities and
an inclusive culture
Become one of the
Achieve zero neg-
ative climate and
nature impacts
from our business
Governance, compliance and conduct
Ensure strong governance, compliance and good business conduct
In brief Financial review Risk management ESG Consolidated Financial statements
DKT Holdings Annual Report 2023 30
Supporting the UN Sustainable Development Goals
TDC NET is an active participant in the UN Global Compact. Since
2009, we have supported its 10 principles on environment, human
and labour rights and anti-corruption. We are committed to contrib-
uting to achieving the UN Sustainable Development Goals (SDGs)
by maximising our positive impact and reducing our negative impact
on the environment and society. We support relevant SDGs through
our different sustainability priorities and related initiatives.
Driving progress across programmes
To drive progress in our sustainability priorities, we follow a system-
atic approach – from defining a situation to execution and evalua-
tion. For each priority area we:
1. Outline the situation and targets to establish a solid baseline.
2. Define topics and initiatives in close collaboration with the
business.
3. Develop roadmaps to reach the targets. Roadmaps and key ini-
tiatives are subject to approval by the Executive Leadership
Team and the Board of Directors.
4. Execute in collaboration with relevant business units to inte-
grate initiatives in day-to-day operations.
5. Track and report on progress to ensure alignment with targets.
6. Share consolidated quarterly reporting with the executive man-
agement in internal governance forums, where evaluation and
adjustments are decided.
See TDC NET’s corporate governance model, including sustainabil-
ity governance, on page 60 → in TDC NET Holding’s annual report.
Our direction for sustainability
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 32
Consolidated financial statements ............................................ 33
Income statement .................................................................................33
Statement of comprehensive income .................................................33
Balance sheet ........................................................................................34
Statement of cash flows .......................................................................35
Statement of changes in equity ...........................................................36
Notes to consolidated financial statements ............................ 37
Parent company financial statement ........................................ 91
Statement of changes in equity ...........................................................94
Management statement and independent
auditor’s report ........................................................................... 101
Management statement .................................................................... 101
Independent auditor’s report ........................................................... 102
Section 1 - Basis of preparation
1.1. Accounting policies ..................................... 38
1.2. Critical accounting estimates and
judgements .................................................. 38
1.3. New accounting standards ......................... 38
Section 2 - Profit/(loss) for the year
2.1. Segment reporting ...................................... 40
2.2. Cost of sales ................................................ 45
2.3. External expenses ....................................... 45
2.4. Personnel expenses .................................... 46
2.5. Depreciation, amortisation and
impairment losses ....................................... 47
2.6. Special items ................................................ 48
2.7. Income taxes ................................................ 50
Section 3 - Operating assets and
liabilities
3.1. Impairment ................................................... 54
3.2. Intangible assets ......................................... 57
3.3. Property, plant and equipment .................. 60
3.4. Lease assets and liabilities......................... 62
3.5. Trade receivables ........................................ 64
3.6. Contract assets and liabilities .................... 65
3.7. Provisions ..................................................... 66
3.8. Pension assets and pension
obligations ................................................... 68
Section 4 - Capital structure and
financing costs
4.1. Equity ............................................................ 73
4.2. Loans and derivatives ................................. 73
4.3. Financial risks ............................................... 77
4.4. Credit ratings and net interest-
bearing debt ................................................. 78
4.5. Financial income and expenses ................. 80
4.6. Maturity profiles of financial
instruments .................................................. 82
Section 5 - Cash flow
5.1. Adjustment for non-cash items ............... 85
5.2. Change in working capital ........................... 85
Section 6 - Other disclosures
6.1. Incentive programmes ................................ 87
6.2. Related parties ............................................. 88
6.3. Fees to auditors ........................................... 89
6.4. Other financial commitments .................... 89
6.5. Pledges and contingencies ......................... 90
6.6. Events after the balance sheet date .......... 90
6.7. Overview of group companies at 31
December 2023 ........................................... 90
Financial statements
Content
Notes to consolidated financial statements
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 33
Income statement
Statement of comprehensive income
(DKKm)
Note
2023
2022
Revenue
2.1,2.2
Cost of sales
2.3
(4,868 )
(4,975 )
Gross profit
External expenses
2.4
(2,066 )
(2,158 )
Personnel expenses
2.5
(2,795 )
(2,833 )
Other income
2.2
Operating profit before depreciation, amortisation and special items
(EBITDA)
Depreciation, amortisation and impairment losses
2.6
(5,101 )
(4,946 )
Special items
2.7
(174 )
(205 )
Operating profit (EBIT)
Financial income and expenses
4.5
(4,722 )
(2,504 )
Loss before income taxes
(3,646 )
(1,365 )
Income taxes
2.8
(140 )
(75 )
Loss for the year
(3,786 )
(1,440 )
(DKKm)
Note
2023
2022
Profit/(loss) for the year
(3,786 )
(1,440 )
Items that may subsequently be reclassified to the income statement:
Change in fair value adjustments of cash flow hedges transferred to finan-
cial expenses
4.5
Items that cannot subsequently be reclassified to the income statement:
Remeasurement of defined benefit pension plans
3.8
Income tax relating to remeasurement of defined benefit pension plans
2.8
(59 )
(346 )
Other comprehensive income/(loss)
Total comprehensive income/(loss)
(3,576 )
(210 )
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 34
Balance sheet
Assets (DKKm)
Note
2023
2022
Non-current assets
Intangible assets
3.1,3.2
Property, plant and equipment
3.3
Lease assets
3.4
Joint ventures, associates and other investments
Pension assets
3.8
Other receivables
Prepaid expenses
Total non-current assets
Current assets
Inventories
Trade receivables
3.5
Other receivables
Contract assets
3.6
Derivative financial instruments
Prepaid expenses
Short-term bonds
Cash
Total current assets
Total assets
Equity and liabilities (DKKm)
Note
2023
2022
Equity
Share capital
Other reserves
(1 )
Retained earnings
(4,830 )
(4,786 )
Total equity
4.1
(4,830 )
(4,787 )
Non-current liabilities
Shareholder funding
4.2,4.6
Deferred tax liabilities
2.8
Provisions
3.7
Loans
4.2,4.6
Spectrum licence fee liabilities
4.6
Lease liabilities
3.4
Other payables
Total non-current liabilities
Current liabilities
Loans
4.2,4.3,4.4
Spectrum licence fee liabilities
4.6
Lease liabilities
3.4
Trade payables
Other payables
Contract liabilities
3.6
Income tax payable
2.8
Derivative financial instruments
Provisions
3.7
Total current liabilities
Total liabilities
Total equity and liabilities
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 35
Statement of cash flows
(DKKm)
Note
2023
2022
Operating activities
EBITDA
Adjustment for non-cash items
5.1
Pension contributions
Payments related to provisions
3.7
(23 )
(21 )
Special items
2.7
(142 )
(181 )
Change in working capital
5.2
(307 )
Interest received
4.5
Interest paid
4.5
(2,371 )
(2,520 )
Income tax paid
2.8
(342 )
(522 )
Total cash flow from operating activities
Investing activities
Investment in enterprises
Investment in property, plant and equipment
3.3
(2,680 )
(3,031 )
Investment in intangible assets
3.2
(1,506 )
(1,618 )
Investment in other non-current assets
(2 )
(1 )
Investment in short-term bonds
(1,876 )
Sale of other non-current assets
Sale of short-term bonds
Total cash flow from investing activities
(5,063 )
(4,637 )
(DKKm)
Note
2023
2022
Financing activities
Proceeds from long-term loans
4.4
Repayment of long-term loans
4.4
(19,599 )
(21,602 )
Settlement of derivatives related to long-term loans
Cost related to long-term loans
(31 )
Lease repayments
4.4
(368 )
(339 )
Change in short-term bank loans
4.4
(570 )
Capital contribution
-
Total cash flow from financing activities
(839 )
Total cash flow
(1,136 )
Cash and cash equivalents (beginning of period)
Effect of exchange-rate changes on cash and cash equivalents
Cash and cash equivalents at 31 December
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 36
Statement of changes in equity
(DKKm)
Share capital
Reserve for
cash flow
hedges
Retained earn-
ings
Total
Equity at 1 January 2022
(4 )
(4,573 )
(4,577 )
Profit/(loss) for the year
(1,440 )
(1,440 )
Change in fair value adjustments of cash flow hedges transferred to financial expenses
Remeasurement effects of defined benefit pension plans
Income tax relating to remeasurement effects of defined benefit pension plans
(346 )
(346 )
Total comprehensive income
(213 )
(210 )
Total transactions with shareholders
Equity at 31 December 2022
(1 )
(4,786 )
(4,787 )
Profit/(loss) for the year
(3,786 )
(3,786 )
Change in fair value adjustments of cash flow hedges transferred to financial expenses
Remeasurement effects related to defined benefit pension plans
Income tax relating to remeasurement effects from defined benefit pension plans
(59 )
(59 )
Total comprehensive income
(3,577 )
(3,576 )
Capital contribution
Total transactions with shareholders
Equity at 31 December 2023
(4,830 )
(4,830 )
1See also note 4.1 for an explanation of distributable reserves and dividend.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 37
Section 1
Basis of preparation
This section sets out the basis of preparation, which relates to the fi-
nancial statements as a whole. Where an accounting policy is specific
to one note, the policy is described in the note to which it relates.
Similarly, critical sources of estimation uncertainty are described in
the notes to which they relate.
1. In this section
1.1. Accounting policies ..................................................... 38
1.2. Critical accounting estimates and
judgements ................................................................... 38
1.3. New accounting standards ......................................... 38
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 38
DKTH Group’s consolidated financial statements
for 2023 have been prepared in accordance with
IFRS Accounting Standards as issued by the Inter-
national Accounting Standards Board (IASB) as
adopted by the European Union (EU) and further
disclosure requirements in the Danish Financial
Statements Act.
The consolidated financial statements are based
on the historical cost convention, except for fi-
nancial assets and liabilities that are initially
measured at fair value adjusted for transaction
costs if they are not subsequent measured at fair
value through the income statement. Trade re-
ceivables are measured at their transaction price
When preparing the consolidated financial state-
ments, Management makes assumptions that af-
fect the reported amount of assets and liabilities
at the balance sheet date, and the reported in-
come and expenses for the accounting period.
The accounting estimates and judgements con-
sidered critical to the preparation of the consoli-
dated financial statements are shown in note 1.2.
The accounting policies are unchanged compared
with the policies applied in the Annual Report
2022.
Consolidation policies
The consolidated financial statements include the
financial statements of the Parent Company and
subsidiaries in which DKT Holdings ApS has direct
or indirect control. Joint ventures in which the
Group has joint control and associates in which
the Group has significant influence are recog-
nised using the equity method.
The consolidated financial statements have been
prepared on the basis of the financial statements
of DKT Holdings ApS and its consolidated compa-
nies, which have been restated to Group account-
ing policies, combining items of a uniform nature.
On consolidation, intra-group income and
expenses; shareholdings, dividends, internal bal-
ances; and realised and unrealised profits and
losses on transactions between the consolidated
enterprises have been eliminated.
The preparation of DKTH Group’s Annual Report
requires Management to exercise judgement in
applying the Group’s accounting policies. It also
requires the use of estimates and assumptions
that affect the reported amount of assets, liabili-
ties, income and expenses. Actual results may dif-
fer from those estimates.
DKTH Group has adopted the new standards,
amendments to standards and interpretations
that are effective for the financial year 2023.
None of the changes have affected recognition or
measurement in the financial statements nor are
they expected to have any future impact
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions are
recognised during the period in which the esti-
mates are revised and during any future periods
affected.
The following areas involve a higher degree of
estimates and judgements or complexity and are
outlined in more detail in the related notes:
IASB has approved a number of new accounting
standards and changes to standards that are not
yet effective. DKTH group has evaluated the
standards and as none of them are expected to
be relevant to the Group they are not expected to
impact on the financial statements.
1.1 | Accounting policies
1.2 | Critical accounting estimates and judgements
Notes
Critical accounting estimates
and judgements
Estimates
/judgements
2.2
Revenue
Assessment of principal or agent
Judgement
Assessment of contracts involving complex sale of
goods and services
Estimate/
Judgement
2.7
Special items
Assessment of special events or transactions
Judgement
3.1
Impairment
Assumptions used for Impairment testing
Estimate/Judgement
3.2
Intangible assets
Assumptions for useful lives
Estimate
3.3
Property, plant and equip-
ment
Assumptions for useful lives
Estimate
3.4
Lease assets
Assumptions related to write-down of lease assets
re. vacant tenancies
Estimate
Assumptions related to extension options
Judgement
3.5
Trade receivables
Assessment of expected losses
Estimate
3.8
Defined benefit plans
Assumptions for discount rates, wage inflation and
mortality
Estimate
1.3 | New accounting standards
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 39
Section 2
Profit/(loss) for
the year
This section focuses on disclosures of details of the
DKTH Group’s results for the year, including segment reporting, special
items and taxation. A detailed review of revenue, EBITDA and profit for
the year is provided in the section
‘Financial review’ in the Management’s review.
2. In this section
2.1. Segment reporting ...................................................... 40
2.2. Cost of sales ................................................................. 45
2.3. External expenses ........................................................ 45
2.4. Personnel expenses .................................................... 46
2.5. Depreciation, amortisation and impairment
losses ............................................................................. 47
2.6. Special items ................................................................. 48
2.7. Income taxes ................................................................. 50
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 40
Worth noting
DKTH Group consists of the three operat-
ing segments Nuuday, TDC NET and Group
Functions.
Nuuday develops and markets the best
communications and entertainment ser-
vices, including the development of new
innovative products and digital solutions.
TDC NET designs, builds, and runs
Denmark’s best broadband and mobile
networks and delivers highly qualified
technical support to customers and the
networks.
Group Functions governs, advises and
delivers shared services to the business
units including management and property
services.
Operating segments are reported in a manner
consistent with the internal management and
reporting structure.
Profit before depreciation, amortisation and spe-
cial items (EBITDA) represents the profit earned
by each segment. The operating segments are
managed primarily on the basis of EBITDA.
Segment results are accounted for in the same
way as in the consolidated financial statements.
Segment income and segment expenses are
those items that, in our internal management re-
porting, are directly attributable to individual seg-
ments. Intersegment transactions are conducted
on market terms.
2.1 | Segment reporting
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 41
2.1 | Segment reporting (continued)
Nuuday
TDC NET
Group functions
Activities (DKKm)
2023
2022
2023
2022
2023
2022
Landline voice
693
744
96
106
-
-
Mobile services
5,169
5,072
26
56
-
-
Internet & network
3,535
3,452
919
883
-
-
TV
3,316
3,446
-
-
-
-
Other services
1,708
1,921
357
362
-
-
External revenue
14,421
14,635
1,398
1,407
-
-
Revenue across segments
57
39
5,063
5,232
-
-
Total revenue
14,478
14,674
6,461
6,639
-
-
Cost of sales
(9,673)
(9,827)
(236)
(262)
-
-
Gross profit
4,805
4,847
6,225
6,377
-
-
Operating expenses
(3,305)
(3,201)
(1,908)
(2,129)
(280)
(492)
Other income and expenses
71
63
378
272
731
882
EBITDA
1,571
1,709
4,695
4,520
451
390
Eliminations
Total
2023
2022
2023
2022
Landline voice
-
-
789
850
Mobile services
-
-
5,195
5,128
Internet & network
-
-
4,454
4,335
TV
-
-
3,316
3,446
Other services
-
-
2,065
2,283
External revenue
-
-
15,819
16,042
Revenue across segments
(5,120)
(5,271)
-
-
Total revenue
(5,120)
(5,271)
15,819
16,042
Cost of sales
5,041
5,114
(4,868)
(4,975)
Gross profit
(79)
(157)
10,951
11,067
Operating expenses
632
831
(4,861)
(4,991)
Other income and expenses
(919)
(1,003)
261
214
EBITDA
(366)
(329)
6,351
6,290
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 42
2.1 | Segment reporting (continued)
Reconciliation of EBITDA to profit/(loss)
before income taxes (DKKm)
2023
2022
Total EBITDA from reportable segments
6,351
6,290
Unallocated:
Depreciation, amortisation and impairment losses
(5,101)
(4,946)
Special items
(174)
(205)
Financial income and expenses
(4,722)
(2,504)
Consolidated profit/(loss) before income taxes
(3,646)
(1,365)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 43
‘
The revenue is from domestic operations.
Revenue recognition for a telecom operator is a
complex area of accounting that requires man-
agement estimates and judgements.
Recognition of revenue depends on whether the
Group acts as a principal in a transaction or an
agent representing another company. Whether
the Group is considered to be the principal or
agent in a transaction depends on an analysis of
both the form and substance of the customer
agreement. When the Group acts as the principal,
revenue is recognised at the agreed value,
whereas when the Group acts as an agent, reve-
nue is recognised as the commission the Group
receives for arranging the agreement.
Judgements of whether the Group acts as a prin-
cipal or as an agent impact on the amounts of
recognised revenue and operating expenses, but
do not impact on net profit for the year or cash
flows. Judgements of whether the Group acts as
a principal are used primarily in transactions cov-
ering content.
When the Group concludes contracts involving
complex sale of goods and services, management
judgements are required to determine whether
goods and services shall be recognised together
or as separate goods and services.
Management estimates are also used for allocat-
ing the transaction price to the individual ele-
ments based on their respective fair values, if
judged to be recognised separately. For example,
business customer contracts can comprise sev-
eral elements related to mobile phones, subscrip-
tions, leases, etc.
2.2 | Revenue (continued)
(DKKm)
2023
2022
Sales of goods recognised at a point in time
1,157
1,392
Sales of services recognised over time
14,662
14,650
Total
15,819
16,042
Critical accounting estimates and judgements
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 44
Revenue is measured at the fair value of the consid-
eration receivable after deduction of sales tax and
discounts relating directly to sales. Revenue com-
prises goods and services provided during the year.
Goods and services may be sold separately or in
bundled packages. Services include traffic and
subscription fees, interconnection and roaming
fees, fees for leased lines, network services, TV
distribution as well as connection and installation
fees. Goods include customer premises equipment,
telephony handsets, PCs, set-top boxes, etc.
Consumer sells to households and the contracts
are primarily perpetual, with the same service
provided until the customer terminates the con-
tract. Some of the contracts include a non-cancel-
lation period of 6 months. Consumer also has
contracts with antenna associations for longer
periods.
Business sells digital solutions to enterprises and
public segments. Business offers modular solu-
tions for small and medium-sized enterprises, as
well as customised solutions for public and large
enterprises. Modular self-service contracts are
perpetual, and contracts with customised solu-
tions are for longer periods, i.e. 3-5 years.
Wholesale delivers services from plain access to
full service packages to service providers. Whole-
sale revenue is partly regulated.
The significant sources of revenue are recog-
nised in the income statements as follows:
• revenues from subscription fees and flat-rate
services are recognised over the subscription
period
• revenues from telephony are recognised at the
time the calls are made
• sales related to prepaid services are deferred,
and revenues are recognised at the time of use
• revenues from leased lines are recognised over
the rental period
• revenues from the sale of equipment are rec-
ognised on delivery. Revenues from equipment
maintenance are recognised over the contract
period
Revenue arrangements with multiple deliverables
are recognised as separate units of accounting,
independent of any contingent element related to
the delivery of additional items or other perfor-
mance conditions. Such revenues include the sale
of equipment located at customer premises, e.g.
switchboards and handsets.
The transaction price in revenue arrangements
with multiple deliverables, such as handsets and
subscriptions, are allocated to each performance
obligation based on the stand-alone selling price.
Where the selling price is not directly observable,
it is estimated based on expected cost plus a
margin. Discounts on bundled sales are allocated
to each element in the contract.
Contracts with similar characteristics have been
evaluated using a portfolio approach due to the
large number of similar contracts.
In case of contracts for longer periods and if the
payment exceeds the services rendered, contract
liabilities are recognised, see note 3.5.
Revenues are recognised gross when DKTH
Group acts as the principal in a transaction. For
content-based services and the resale of services
from content providers where DKTH Group acts
as the agent, revenues are recognised net of
direct costs.
The percentage-of-completion method is used to
recognise revenue from contract work in progress
based on an assessment of the stage of comple-
tion. Contract work in progress includes installa-
tion of telephone and IT systems, systems inte-
gration and other business solutions.
Non-refundable up-front connection fees are in-
cluded in the total transaction price for the con-
tract with the customer and are thereby allocated
to the identified performance obligations (ser-
vices).
The period between the transfer of the service to
the customer and the payment by the customer is
not of an extent that gives reason to adjust the
transaction prices for the time value of money.
Other income
Other income comprises mainly rental income,
compensation for cable breakages, investment
advisory fees from the related pension funds as
well as profit relating to divestment of property,
plant and equipment.
2.2 | Revenue (continued)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 45
Accounting policies
Cost of sales includes transmission costs and
cost of goods sold. Transmission costs include
external expenses related to operation of mobile
and landline networks and leased transmission
capacity as well as interconnection and roaming
costs related directly to the Group’s primary in-
come.
Cost of goods sold includes terminal equipment
and transmission material as well as TV-pro-
gramme rights and other content costs.
Comments
The lower costs of properties are primarily due to
costs related to power. The reduction is caused
by lower prices and a switch to solar power.
Accounting policies
External expenses include expenses related to
marketing and advertising, IT, property, expenses
related to staff, capacity maintenance, service
contracts, etc. Contracts regarding solar parks
are accounted as external expenses.
2.3 | Cost of sales
(DKKm)
2023
2022
Mobile services
(853)
(815)
Landline voice
(66)
(75)
Internet & network
(460)
(329)
TV
(1,913)
(1,954)
Other services
(1,576)
(1,802)
Total
(4,868)
(4,975)
2.4 | External expenses
(DKKm)
2023
2022
Marketing and advertising
(216)
(219)
Subscriber acquisition and retention, cf. note 3.6
(200)
(168)
Properties
(393)
(597)
Contractors and consultants
(311)
(248)
IT
(424)
(402)
Temps and personnel-related expenses
(151)
(143)
Other
(371)
(381)
Total
(2,066)
(2,158)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 46
Key management consists of the Executive
Committee of TDCH as well as the CEOs and
CFOs of Nuuday and TDC NET. The member of
the Executive Committee in DKTH does not re-
ceive remuneration.
2.5 | Personnel expenses
(DKKm)
2023
2022
Wages and salaries (including short-term and long-term bonuses)
(3,599)
(3,696)
Pensions:
defined benefit plans
(50)
(83)
defined contribution plans
(297)
(287)
Social security
(67)
(77)
Total
(4,013)
(4,143)
Of which capitalised as tangible and intangible assets¹
1,218
1,310
Total personnel expenses recognised in the income statement
(2,795)
(2,833)
Remuneration for the key management of DKTH and
the Board of Directors of DKTH² (DKKm)
2023
2022
Base salary (incl. benefits)
16,8
13,9
Cash bonus
9,1
6,4
Pensions
2,4
2,2
Long-term incentive programme
12,0
2,7
Management incentive programme (cf. note 6.1)
0,1
4,9
40,4
30,1
Redundancy compensation¹
2,7
6,4
Key management in total
43,1
36,5
Fee to the Board of Directors
16,5
14,3
Total
59,6
50,8
1
Redundancy compensation in 2022 and 2023 comprised the CFO of Nuuday A/S, who retired in Q1 2022, and the CFO of TDC NET A/S, who will retire
in Q1 2023. The Redundancy compensations are in accordance with the employment contracts.
2
During 2023, the remuneration to the key management (excluding redundancy compensation) comprised 4.0 members on average
(2022: 3.6 members). Management in TDC Holding, DK Telekommunikation, DKT Finance and DKT Holdings receive no remuneration.
Number of full-time employee equivalents¹
2023
2022
1 January
6,433
6,659
Redundancy programmes
(277)
(166)
Insourcing
-
9
Outsourcing
(169)
-
Hirings and resignations
(164)
(69)
31 December
5,823
6,433
Former Danish civil servants
40
51
Employees entitled to pension from TDC Group’s pension fund
492
598
Other employees
5,291
5,784
31 December
5,823
6,433
Average number of full-time employee equivalents, DKTH Group²
5,960
6,477
1
The reported number of full-time employees does not include students, graduates, employees in ‘flexible job’ or job rotation (167 in 2023 and 173
in 2022).
2
The average number of full-time employee equivalents seconded to external parties in connection with outsourcing of tasks or divestment of opera-
tions and entitled to pensions on conditions similar to those provided for Danish civil servants is not included in the reported figures (18 in 2023
and 16 in 2022).
Comments
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 47
Wages, salaries, social security contributions,
paid leave and sick leave, bonuses and other em-
ployee benefits are recognised in the year in
which the employee renders the related services.
Pension costs
See note 3.8.
Full-time employee equivalents
The number of full-time employee equivalents in-
cludes permanent employees and trainees.
Employees who are entitled to pensions on condi-
tions similar to those provided for Danish civil
servants and who are seconded to external par-
ties in connection with outsourcing of tasks or di-
vestment of operations are not included in the re-
ported numbers.
Employees in acquired enterprises are included
as the average number of full-time employee
equivalents from the time of acquisition until
31 December. Employees in divested enterprises
are included as the average number of full-time
employee equivalents from 1 January until the
time of divestment.
Employees in discontinued operations are not in-
cluded in the number of full-time employee equiv-
alents. The total number of full-time employee
equivalents including discontinued operations is
disclosed in a footnote.
2.5 | Personnel expenses (continued)
Accounting policies
2.6 | Depreciation, amortisation
and impairment losses
(DKKm)
2023
2022
Amortisation of intangible assets, cf. note 3.2
(2,296)
(2,457)
Depreciation of property, plant and equipment, cf. note 3.3
(2,373)
(2,107)
Depreciation of lease assets, cf. note 3.4
(391)
(381)
Impairment losses, cf. notes 3.2 and 3.3
(326)
(30)
Reversal of impairment losses, cf. note 3.4
258
-
Of which capitalised as tangible or intangible assets
27
29
Total
(5,101)
(4,946)
Comments
Impairment losses in 2023 are affected by reassessment of software that lead to a write-down
of DKK 279m.
Depreciation, amortisation and impairment losses all related to the TDCH group and amounted
to DKK 5,101m. Hereof DKK 877m was depreciation and amortisation of assets recognised in
connection with the purchase price allocation performed in connection with the acquisition of
TDC Holding. This included primarily amortisation of customer relationships, brands and soft-
ware, recognised as separate assets as part of the purchase price allocation performed in con-
nection with the acquisition of TDC Holding.
The customer relationships are amortised over the estimated useful lives of such relationships.
Brands with finite useful lives are amortised over the useful livers of such brands. The useful life
of the TDC brand is deemed indefinite and consequently, DKTH does not amortise the value of
this brand.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 48
Worth noting
Special items are significant amounts that
Management considers are not attributa-
ble to normal operations such as restruc-
turing costs and special write-downs for
impairment of intangible assets and prop-
erty, plant and equipment. Special items
also include gains and losses related to di-
vestment of enterprises, as well as trans-
action costs and adjustments of purchase
prices relating to the acquisition of enter-
prises. Special items consist of both recur-
ring and non-recurring items.
2.7 | Special items
(DKKm)
2023
2022
Costs related to redundancy programmes
(113)
(88)
Other restructuring costs, etc.
(7)
(21)
Distribution of excess capital from TDC Pension Fund to its members
(38)
(94)
Loss from rulings
(6)
(2)
Costs related to acquisition of enterprises
(10)
-
Special items before income taxes
(174)
(205)
Income taxes related to special items
22
10
Total special items
(152)
(195)
Cash flow from special items (DKKm)
2023
2022
Redundancy programmes
(113)
(122)
Rulings
(5)
(1)
Other
(24)
(58)
Total
(142)
(181)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 49
Critical accounting judgements
In the Group’s income statement, special items
are presented as a separate item. Special items
include income or costs that in Management’s
judgement shall be disclosed separately by virtue
of their size, nature or incidence. In determining
whether an event or transaction is special, Man-
agement considers quantitative as well as quali-
tative factors such as the frequency or predicta-
bility of occurrence of the transaction or event, in-
cluding whether the event or transaction is recur-
ring. This is consistent with the way that financial
performance is measured by Management and
reported to the Board of Directors and facilitates
a meaningful analysis of the operating results of
the Group.
Accounting policies
Special items, as described above, are disclosed
on the face of the income statement. Items of a
similar nature for in joint ventures and associates
are recognised in profit from joint ventures and
associates.
2.7 | Special items (continued)
2023
2022
Special items bridge (DKKm)
Reported
income
statement
Special items
Adjusted
income
statement
Reported
income
statement
Special items
Adjusted
income
statement
Revenue
15,819
-
15,819
16,042
-
16,042
Cost of sales
(4,868)
-
(4,868)
(4,975)
-
(4,975)
Gross profit
10,951
-
10,951
11,067
-
11,067
External expenses
(2,066)
(19)
(2,085)
(2,158)
(18)
(2,176)
Personal expenses
(2,795)
(143)
(2,938)
(2,833)
(187)
(3,020)
Other income
261
(12)
249
214
-
214
Operating income before depreciation and amortisa-
tion
6,351
(174)
6,177
6,290
(205)
6,085
Depreciation, amortisation and impairment
(5,101)
-
(5,101)
(4,946)
-
(4,946)
Special items
(174)
174
-
(205)
205
-
Operating profit
1,076
-
1,076
1,139
-
1,139
Financial income and expenses
(4,722)
-
(4,722)
(2,504)
-
(2,504)
Loss before income taxes
(3,646)
-
(3,646)
(1,365)
-
(1,365)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 50
Worth noting
A large part of DKTH Group’s deferred tax
liabilities relates to assets that are not ex-
pected to be taxed in the foreseeable fu-
ture (pension assets, customer relations
and brands). The deferred tax liabilities re-
lating to customer relationships and
brands stem primarily from the acquisition
of TDC A/S in May 2018 and the resulting
purchase price allocation.
2.8 | Income taxes
2023
2022
Income taxes (DKKm)
Income tax
income/
(expense)
Income tax
payable/
(receivable)
Deferred tax
liabilities/
(assets)
Income tax
income/
(expense)
Income tax
payable/
(receivable)
Deferred tax
liabilities/
(assets)
At 1 January
87
4,242
132
4,298
Income taxes for the year
(147)
305
(158)
(126)
514
(388)
Adjustment of tax for previous years
7
22
(29)
51
(37)
(14)
Tax relating to remeasurement effects from defined
benefit plans
-
-
59
-
-
346
Income tax paid
(342)
(522)
Total
(140)
72
4,114
(75)
87
4,242
Shown in the balance sheet as:
Tax payable/deferred tax liabilities
72
4,114
87
4,242
Tax receivable/deferred tax assets
-
-
-
-
Total
72
4,114
87
4,242
Income taxes are specified as follows:
Income excluding special items
(162)
(85)
Special items
22
10
Total
(140)
(75)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 51
DKT Holdings ApS participates in joint taxation
with all its Danish group companies. DKT Hold-
ings ApS is the administration company in the
joint taxation. The jointly taxed companies are
jointly and severally liable for the total income
taxes, taxes paid on account and outstanding re-
sidual tax (with additional payments and interest)
relating to the joint taxation.
2.8 | Income taxes (continued)
2023
2022
Deferred tax (DKKm)
Deferred tax
assets
Deferred tax li-
abilities
Total1
Intangible assets
-
158
158
170
Other
(8)
-
(8)
8
Current
(8)
158
150
178
Intangible assets
-
1,805
1,805
1,999
Property, plant and equipment
(161)
-
(161)
(151)
Lease assets and liabilities
(163)
-
(163)
(216)
Pension assets and pension lia-
bilities
-
2,429
2,429
2,396
Tax value of tax-loss carried for-
wards
-
-
-
(12)
Other
-
54
54
48
Non-current
(324)
4,288
3,964
4,064
Deferred tax at 31 December
(332)
4,446
4,114
4,242
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 52
The change in effective tax rate (excluding special
items) was due primarily to a decreased impact of
the Danish limitation on the deductibility of inter-
est
Tax for the year comprises current income tax,
changes in deferred tax and adjustments from
prior years and is recognised in the income state-
ment, except to the extent that it relates to items
recognised in other comprehensive income.
Current income tax liabilities and current income
tax receivables are recognised in the balance
sheet as income tax payable or income tax receiv-
able.
Deferred tax is measured under the balance-
sheet liability method on the basis of all tempo-
rary differences between the carrying amounts
and the tax bases of assets and liabilities at the
balance sheet date. However, deferred tax is not
recognised if the temporary difference arises
from the initial recognition of goodwill or if it
arises from initial recognition of an asset or liabil-
ity in a transaction other than a business combi-
nation that affects neither accounting nor taxable
profit/loss. Deferred income tax is provided on
temporary differences arising on investments in
subsidiaries, joint ventures and associates, ex-
cept where the timing of the reversal of the tem-
porary difference is controlled by DKT Holdings
Group and it is probable that the temporary dif-
ference will not reverse in the foreseeable future.
Deferred tax assets including the tax value of tax-
losses carried forwards are recognised when it is
likely that these will be utilised in the foreseeable
future.
Deferred tax is adjusted concerning elimination of
unrealised intra-group profit and losses.
Deferred tax is measured on the basis of the tax
rules and tax rates effective under the legislation
in the respective countries at the balance sheet
date when the deferred tax is expected to be real-
ised as current income tax. Changes in deferred
tax as a result of changes in tax rates are recog-
nised in the income statement except for the ef-
fect of items recognised directly in other compre-
hensive income.
Deferred tax assets and liabilities are offset in the
consolidated balance sheet.
2.8 | Income taxes (continued)
2023
2022
Effective tax rate (DKKm)
DKKm
%
DKKm
%
Danish corporate income tax rate
764
22.0
255
22.0
Limitation on the tax deductibility of in-
terest expenses
(932)
(26.8)
(406)
(35.0)
Adjustment of tax for previous years
7
0.2
50
4.4
Other
(1)
(0.1)
16
1.3
Effective tax excluding special items
(162)
(4.7)
(85)
(7.3)
Special items
22
0.9
10
1.8
Effective tax including special items
(140)
(3.8)
(75)
(5.5)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 53
Section 3
Operating assets and
liabilities
This section shows the assets used to generate the Group’s perfor-
mance and the resulting liabilities incurred. Assets and liabilities relat-
ing to the Group’s financing activities are
addressed in section 4. Deferred tax assets and liabilities
are shown in note 2.8.
3. In this section
3.1. Impairment.................................................................... 54
3.2. Intangible assets .......................................................... 57
3.3. Property, plant and equipment.................................. 60
3.4. Lease assets and liabilities ........................................ 62
3.5. Trade receivables ......................................................... 64
3.6. Contract assets and liabilities ................................... 65
3.7. Provisions ...................................................................... 66
3.8. Pension assets and pension obligations ................. 68
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 54
Impairment test of assets
Goodwill and intangible assets with indefinite
useful lives relate primarily to DKTH’s acquisition
of TDC Holding A/S. The carrying amount of
goodwill relating to the acquisition of TDC
amounted to DKK 21,913m and the carrying
value of intangible assets with indefinite useful
lives amounted to DKK 833m. The carrying
amount of assets with indefinite useful lives is
tested for impairment annually and if events or
changes in circumstances indicate impairment.
The annual tests were carried out at 1 October
2023 and at 1 October 2022, respectively.
Management has concluded that any reasonably
possible changes in the key assumptions are not
expected to cause the carrying amount of assets
to exceed the recoverable value.
There are identified two cash-generating units in
DKTH – Nuuday and TDC NET which reflects the
way management makes decisions for the future
activities and assesses the business perfor-
mance.
Impairment testing is an integral part of DKTH
Group’s budget and planning process, which is
based on long-term business plans with projec-
tion until 2030 to reflect the long-term invest-
ments in fibre infrastructure. The discount rates
applied reflect specific risks relating to the indi-
vidual cash-generating unit. The recoverable
amount is based on the value in use determined
on expected cash flows based on long-term busi-
ness plans approved by Management. The busi-
ness plans approved by Management follow the
operating segments as described in note 2.1.
Projections for the terminal period are based
on general expectations and risks, taking into
account the general growth expectations for the
telecoms industry in Denmark.
The long-term business plans are based on cur-
rent trends. The budget period includes cash flow
effects from completed restructurings combined
with effects of strategic initiatives aimed at im-
proving or maintaining trend lines.
For the impairment testing of goodwill, DKTH
Group uses a pre-tax discount rate for each cash-
generating unit.
Goodwill and intangible assets with indefinite
useful lives relate to Nuuday and TDC NET. The
assumptions for calculating the value in use for
the most significant goodwill amounts are given
below.
3.1 | Impairment
Nuuday
TDC NET
Total
Key assumptions for calculating the value in use for the significant goodwill amounts (DKKm)
2023
2022
2023
2022
2023
2022
Carrying amount of goodwill at 31 December (DKKm)
4,883
4,883
17,318
17,318
22,201
22,201
Market-based expected inflation rate applied at 1 October to extrapolated projected future cash flows for the
period following 2030
2.3%
2.3%
2.3%
2.3%
Applied pre-tax discount rate at 1 October
10.6%
11.7%
8.2%
8.5%
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 55
Assumptions regarding recoverable
amounts and projected earnings
The impairment test is sensitive to possible
changes in the key assumptions, which may
result in future impairments. A sensitivity analy-
sis indicates that a 10% increase/decrease in
EBITDA during the forecast period as well as the
terminal period would change the value in use by
DKK 8.9bn. If the weighted average cost of capital
(WACC) applied as the discounting factor in the
calculations increases/ decreases by 1.0% and all
other things being equal, the value in use would
decrease/increase by DKK 12.0bn and 19.2bn, re-
spectively. Under the same assumptions, a 1.0%
decrease/increase in the market-based growth
rate would decrease/increase the value in use by
DKK 9.5bn and 15.2bn, respectively. With the
present relation between WACC and growth rate
the WACC can increase approximately 1.3 per-
centage points (pre-tax) before the carrying
amount of net assets in one of the segments will
exceed the recoverable value. The impairment
test has been prepared on the basis that the
company continues to operate with the current
set-up.
Nuuday
Sensitivity driven by reasonably possible changes in
the key assumptions are disclosed below.
Projections are based on the assumption steadily
declining EBITDA in YouSee and steadily increas-
ing EBITDA in Nuubrands and Business in the
long-term business plan based on the following
assumptions:
• Landline voice RGU will decline in line with mar-
ket trends however partly offset by slightly in-
creasing ARPU development due to the price
development in the market
• A decline in mobility services gross profit from
a slightly declining customer base, however
partly offset by inflationary ARPU increases
throughout the period
• A decline in broadband gross profit due to de-
creasing RGUs on particularly DSL, as custom-
ers migrate to high-speed technologies (e.g. fi-
bre and coax). Gross profit is expected to stabi-
lise from 2026 and onwards as increases in fi-
bre will be offsetting diminishing declines in
other technologies. Inflationary ARPU in-
creases will also partly offset the gross profit
decline
• TV gross profit expected to decline slightly to-
wards 2030, however the large RGU decline is
partly offset by increasing ARPUs
• Savings throughout the planning period driven
by savings in both external and personnel ex-
penses, driven by the extensive IT transfor-
mations and general cost focus, respectively
TDC NET
Any reasonably possible changes in the key
assumptions are not expected to cause the carry-
ing amount of assets to exceed the recoverable
value. Projections show steady EBITDA growth
and an increasing EBITDA margin in the long-term
based on the following assumptions:
• Steady growth in mobility services gross profit
• Increased gross profit from highspeed broad-
band, stemming from the group’s growing fibre
footprint, continued large coax customer base
and increased ARPU from higher average
speed on products
• Customer base for legacy products such as
landline, TV and DSL assumed to decrease at
higher rates than historically
• Short term increase in capital expenditure as
part of our end-to-end transformation to sup-
port long term profitability in terms of both
revenue growth and cost savings. From 2025
and onwards there will be a steady decrease in
capex due to cost optimisation and optimiza-
tion of ongoing investments to maintain capac-
ity, quality etc. in the networks
• Savings driven by initiatives generated by our
end-to-end transformation programme with re-
ductions of both external and personnel ex-
penses.
3.1 | Impairment (continued)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 56
Intangible assets comprise a significant portion
of DKTH Group's total assets. The measurement
of the recoverable amount of intangible assets is
a complex process that requires significant Man-
agement judgements in determining various as-
sumptions to be used in the calculation of cash-
flow projections, discount rates and terminal
growth rates.
The sensitivity of changes in the assumptions
used to determine the recoverable amount may
be significant. Furthermore, the use of other esti-
mates or assumptions when determining the re-
coverable amount of the assets may result in
other values and could result in required impair-
ment of intangible assets.
The assumptions used for the impairment testing
of goodwill are shown in the section Impairment
testing of goodwill and intangible assets with in-
definite useful lives.
Impairment tests on goodwill and other assets
with indefinite lives are performed at least annu-
ally and, if necessary, when events or changes in
circumstances indicate that their carrying
amounts may not be recoverable. All assets are
tested if an event or circumstance indicates that
the carrying amount may not be recoverable. If an
asset’s carrying amount exceeds its recoverable
amount, an impairment loss is recognised. The
recoverable amount is the higher of the asset’s
fair value less costs of disposal and its value in
use.
3.1 | Impairment (continued)
Critical accounting estimates and
judgements
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 57
3.2 | Intangible assets
2023
2022
(DKKm)
Goodwill
Customer
relationships
Brands
Rights and
software, etc.
Total
Goodwill
Customer
relationships
Brands
Rights and
software, etc.
Total
Cost at 1 January
22,201
10,573
2,539
12,233
47,546
22,201
10,573
2,539
10,925
46,238
Additions
-
-
-
1,314
1,314
-
-
-
1,426
1,426
Assets disposed of or fully amortised
-
(106)
(4)
(29)
(139)
-
-
-
(118)
(118)
Cost at 31 December
22,201
10,467
2,535
13,518
48,721
22,201
10,573
2,539
12,233
47,546
Amortisation and impairment losses at 1 January
-
(6,441)
(803)
(6,396)
(13,640)
-
(5,610)
(634)
(5,033)
(11,277)
Amortisation
-
(718)
(171)
(1,407)
(2,296)
-
(831)
(169)
(1,457)
(2,457)
Impairment losses for the year
-
-
-
(279)
(279)
-
-
-
(18)
(18)
Assets disposed of or fully amortised
-
106
4
29
139
-
-
-
112
112
Amortisation and impairment losses at 31 De-
cember
-
(7,053)
(970)
(8,053)
(16,076)
-
(6,441)
(803)
(6,396)
(13,640)
Carrying amount at 31 December
22,201
3,414
1,565
5,465
32,645
22,201
4,132
1,736
5,837
33,906
Worth noting
DKTH Group’s intangible assets relate
largely to goodwill, customer relations and
brands stemming from the acquisition of
TDC A/S in May 2018, and the resulting
purchase price allocation.
Cash flow (DKKm)
2023
2022
Additions, cf. table above
(1,314)
(1,426)
Instalments regarding mobile licences
(192)
(192)
Cash flow from investment in intangible assets
(1,506)
(1,618)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 58
Impairment of intangible assets, etc. totalled DKK
279m (2022: DKK 18m), of which DKK 14m re-
lated to termination of various software projects
in Nuuday. The remaining 265m related to termi-
nation of various software projects in TDC Net.
Assets with indefinite useful lives other than
goodwill related to the TDC brand and were un-
changed at DKK 833m compared with 2022.
The carrying amount of software amounted to
DKK 2,698m (2022: DKK 2,861m). Of this, DKK
530m relates to software in progress. The addi-
tion of internally developed software totalled DKK
492m (2022: DKK 595m).
The carrying amount of individually material Dan-
ish spectrum mobile licences included in rights,
software, etc., amounted to DKK 2,672m (2022:
DKK 2,863m) and is shown in the next table. Of
this DKK 228m relates to licences not yet in use.
Useful lives
Management estimates useful lives for intangible
assets based on periodic studies of customer
churn or actual useful lives and the intended use
for those assets. Such studies are completed or
updated when new events occur that may have
the potential to impact the determination of the
useful life of the asset, i.e. when events or circum-
stances occur that indicate that the carrying
amount of the asset may not be recoverable and
should therefore be tested for impairment. Any
change in customer churn or the expected useful
lives of these assets is recognised in the financial
statements, as soon as any such change has
been ascertained, as a change of a critical ac-
counting estimate.
3.2 | Intangible assets (continued)
Comments
Spectrum licences
Spectrum (MHz)
Bandwidth (MHz)
Licence expiry
700
2 x 15 + 1 x 20
2040
800
2 x 20
2034
900
2 x 10
2034
1500
45
2042
1800
2 x 20
2032
2100
2 x 20
2042
2300
100
2041
2600
2 x 20
2030
3500
130
2042
26000
1250
2042
Critical accounting estimates and
judgements
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 59
Goodwill and brands with indefinite useful lives
are recognised at cost less accumulated impair-
ment losses. Impairment of goodwill are not re-
versed. For the purpose of impairment testing in
the consolidated financial statement, goodwill is
allocated to the Group’s cash-generating units.
The determination of cash-generating units is
based on the operating segments in the Group’s
internal management reporting.
Brands with finite useful lives, licences, proprie-
tary rights, etc. are measured at cost less accu-
mulated amortisation and impairment losses,
and are amortised on a straight-line basis over
their estimated useful lives.
Customer-related assets are measured at cost
less accumulated amortisation and impairment
losses, and are amortised using the diminishing-
balance method based on the percentage of
churn (15% to 20%) corresponding to the ex-
pected pattern of consumption of the expected
future economic benefits.
Development projects, including costs of com De-
velopment projects, including costs of computer
software purchased or developed for internal use,
are recognised as intangible assets if the cost can
be calculated reliably and if they are expected to
generate future economic benefits. Costs of de-
velopment projects include wages, external
charges, depreciation and amortisation that are
directly attributable to the development activities
as well as interest expenses in the production pe-
riod.
Development projects that do not meet the crite-
ria for recognition in the balance sheet are ex-
pensed as incurred in the income statement.
The main amortisation periods are as follows:
Brands
Mobile licences
Software
3-10 years
16-22 years
3-5 years
Development projects in process and intangible
assets of indefinite useful lives are tested for im-
pairment at least annually and written down to re-
coverable amounts in the income statement if ex-
ceeded by the carrying amount.
Intangible assets are recorded at the lower of re-
coverable amount and carrying amount.
3.2 | Intangible assets (continued)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 60
In 2023, impairment losses totalled
DKK 47m (2022: DKK 11m) related to assets
operated by TDC NET.
3.3 | Property, plant and equipment
2023
2022
(DKKm)
Land and
buildings
Network
infra-
structure
Equipment
Assets under
construction
Total
Land and
buildings
Network
infra-
structure
Equipment
Assets under
construction
Total
Cost at 1 January
414
26,770
1,484
488
29,156
412
24,502
1,257
498
26,669
Transfers (to)/from other items
1
465
77
(543)
-
2
494
53
(549)
-
Additions
1
2,180
138
482
2,801
5
2,148
178
542
2,873
Assets disposed of
(3)
(159)
(38)
-
(200)
(5)
(374)
(4)
(3)
(386)
Cost at 31 December
413
29,256
1,661
427
31,757
414
26,770
1,484
488
29,156
Depreciation and impairment losses at 1 January
(117)
(9,853)
(831)
(19)
(10,820)
(114)
(8,364)
(584)
(17)
(9,079)
Depreciation
(2)
(2,119)
(252)
-
(2,373)
(3)
(1,854)
(250)
-
(2,107)
Impairment losses for the year
-
(29)
(1)
(17)
(47)
-
(9)
-
(2)
(11)
Assets disposed of
2
159
38
-
199
-
374
3
-
377
Depreciation and impairment losses at 31 De-
cember
(117)
(11,842)
(1,046)
(36)
(13,041)
(117)
(9,853)
(831)
(19)
(10,820)
Carrying amount at 31 December
296
17,414
615
391
18,716
297
16,917
653
469
18,336
Comments
Cash flow (DKKm)
2023
2022
Additions, cf. table above
(2,801)
(2,873)
Non-cash additions regarding decommissioning obligations
(39)
(35)
Change in additions not yet paid
125
(152)
Capitalised interest
8
-
Capitalised depreciations cf. note 2.6
27
29
Cash flow from investment in property, plant and equipment
(2,680)
(3,031)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 61
Depreciation are based on management’s esti-
mates of residual value, depreciation method and
the useful lives of property, plant and equipment.
Estimates may change due to technological devel-
opments, changes in market conditions and other
factors and may result in changes in the estimated
useful lives and in the depreciation charges. Tech-
nological developments are difficult to predict and
the Group’s views on the trends and pace of devel-
opment may change over time. The impact of ex-
pected developments in technology and markets
are critical estimates in the evaluation of useful
lives. The useful lives are reviewed at least annually
taking into consideration the factors mentioned
above and all other important relevant factors. A
change in estimated useful life is a change in ac-
counting estimate, and depreciation plans are ad-
justed prospectively.
In 2023 copper estimated useful lives are revalu-
ated due to the technological developments and
depreciation plans are adjusted in accordance to
this. The effect in 2023 are DKK 77m higher depre-
ciations.
Property, plant and equipment are measured at
cost less accumulated depreciation and impair-
ment losses.
Cost comprises purchase price and costs directly
attributable to the acquisition until the date on
which the asset is ready for use. The cost of self-
constructed assets includes directly attributable
payroll costs, materials, parts purchased, and ser-
vices rendered by sub-suppliers or contractors as
well as interest expenses in the construction pe-
riod. Cost also includes estimated decommission-
ing costs if the related obligation meets the condi-
tions for recognition as a provision.
Directly attributable costs comprise personnel ex-
penses together with other external expenses cal-
culated in terms of time spent on self-con-
structed assets.
The depreciation base is measured at cost less
residual value and any impairment. Depreciation
is provided on a straight-line basis over the esti-
mated useful lives of the assets. The main depre-
ciation periods are as shown in the next table.
The useful lives and residual values of the assets
are reviewed regularly. If the residual value
exceeds the carrying amount of an asset, depreci-
ation is discontinued.
Property, plant and equipment that have been
disposed of or scrapped are eliminated from ac-
cumulated cost and accumulated depreciation.
Gains and losses arising from sale of property,
plant and equipment are measured as the differ-
ence between the sales price less selling ex-
penses and the carrying amount at the time of
sale. The resulting gain or loss is recognised in
the income statement under other income.
Software that is an integral part of telephone ex-
change installations, for example, is presented
together with the related assets. Useful lives are
estimated individually.
Installation materials to be used in construction
of assets are measured at the lower of weighted
average cost and recoverable amount.
Customer-placed equipment (e.g., set-top boxes)
is capitalised and depreciated over the estimated
useful life of the individual asset, not exceeding
five years.
3.3 | Property, plant and equipment (continued)
Accounting policies
Critical accounting estimates
Buildings
20 years
Network infrastructure:
mobile networks
20 years
copper
17-20 years
coax
20 years
fibre
30 years
exchange equipment
3-15 years
other network equipment
3-20 years
Equipment (computers, tools and
office equipment)
3-15 years
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 62
The Group leases various offices, exchanges,
mobile sites, retail stores, vehicles and equip-
ment. Rental contracts are typically made for
fixed periods of 3 to 15 years but may have
extension options.
Lease terms are negotiated on an individual basis
and contain a wide range of different terms and
conditions. The lease agreements do not impose
any covenants other than the security interests in
the leased assets that are held by the lessor.
Leased assets may not be used as security for
borrowing purposes.
The total cash outflow for leases in 2023 was
DKK 550m (2022: DKK 526m). The amount is
excluding short-term leases and leases of low-
value assets.
At 31 December 2023, the future sublease pay-
ment amounted to DKK 514m (2022: DKK
457m).
3.4 | Lease assets and liabilities
2023
2022
Lease assets (DKKm)
Land and
buildings
Network in-
frastructure
Vehicles and
equipment
Total
Land and
buildings
Network in-
frastructure
Vehicles and
equipment
Total
Carrying amount at 1 January
2,870
7
217
3,094
3,013
10
172
3,195
Additions
94
-
73
167
148
-
141
289
Disposals
-
-
(16)
(16)
(1)
-
(8)
(9)
Reversal of impairment losses
258
-
-
258
-
-
-
-
Depreciation
(306)
(2)
(83)
(391)
(290)
(3)
(88)
(381)
Carrying amount at 31 December
2,916
5
191
3,112
2,870
7
217
3,094
Lease liabilities (DKKm)
2023
2022
Recognised in the balance sheet at present value:
3,856
4,074
Of which presented as current
(517)
(489)
Total non-current
3,339
3,585
Maturing between 1 and 3 years
848
858
Maturing between 3 and 5 years
700
719
Maturing between 5 and 10 years
1,108
1,184
Maturing between 10 and 20 years
683
824
Total non-current
3,339
3,585
Amounts recognised in the income statement (DKKm)
2023
2022
Expense relating to short-term leases
(77)
(94)
Expense relating to leases of low-value assets
(1)
(1)
Income from sublease
148
143
Reversal of impairment losses
258
-
Depreciation charge of lease assets, cf. above
(391)
(381)
Interest expense (included in financing costs)
(182)
(187)
Comments
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 63
Impairment tests of lease assets require manage-
ment to make significant estimates related to
vacant tenancies. Management has estimated the
expected sublease income net of operating cost.
For each category of lease assets (offices,
exchanges, etc.) and in consideration of the geo-
graphical location, the probability of obtaining
income from sublease and expected sublet rent
rates is estimated. The most critical assumptions
used in determining the write-down relate to the
probability of sublease and expected sublet rent
rates that will be impacted by e.g., changed mar-
ket conditions for subletting.
The Group has 193,544 square metres of leased
tenancies no longer used by the Group (2022:
172,737). Of this, 120,422 square metres were
sublet (2022: 124,305). The leases terminate in
2041 at the latest.
The Group is expected to vacate and sublet addi-
tional tenancies in the future, following further
reductions in the number of employees and up-
grading to technical equipment that requires
fewer square metres.
Significant judgements are involved when as-
sessing the future capacity needs for leases and
as such, the use of extension options.
Assets and liabilities arising from a lease are ini-
tially measured on a present value basis. Lease
liabilities include the net present value of the fol-
lowing lease payments:
• fixed payments (including in-substance fixed
payments), less any lease incentives receivable
• variable lease payments that are based on an
index or a rate, initially measured using the
index or rate as at the commencement date
• amounts expected to be payable by the Group
under residual value guarantees
• the exercise price of a purchase option if the
Group is reasonably certain to exercise that
option
• payments of penalties for terminating the
lease, if the lease term reflects the Group exer-
cising that option.
The lease payments to be made under reasona-
bly certain extension options are also included in
the measurement of the liability.
The lease payments are discounted using the in-
terest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case
for leases in the Group, the lessee’s incremental
borrowing rate is used, which is the rate that the
lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value to
the lease asset in a similar economic environ-
ment with similar terms, security and conditions.
The incremental borrowing rates are based on
our existing credit facilities and observable mar-
ket data.
The Group is exposed to potential future
increases in variable lease payments based on an
index or rate, which are not included in the lease
liability until they take effect. When adjustments
to lease payments based on an index or rate take
effect, the lease liability is reassessed and ad-
justed against the lease asset.
Lease payments are allocated between instal-
ments and financing costs. The financing costs
are charged to the income statement over the
lease period to produce a constant periodic rate
of interest on the remaining balance of the liabil-
ity for each period.
Lease assets are measured at cost less accumu-
lated depreciation and write-downs for impair-
ment. Cost comprises the following:
• the amount of the initial measurement of lease
liability
• any lease payments made at or before the
commencement date less any lease incentives
received
• any initial direct costs
• decommissioning costs.
Lease assets are generally depreciated over the
shorter of the asset’s useful life and the lease
term on a straight-line basis. If the Group is rea-
sonably certain to exercise a purchase option, the
lease asset is depreciated over the underlying
asset’s useful life cf. note 3.3.
Impairment tests on lease assets are performed
at least annually and, if necessary, when circum-
stances indicate their carrying amounts may not
be recoverable. Write-downs of lease assets
related to vacant tenancies are based on expecta-
tions concerning timing and scope, future cost
level, etc. The calculation of the write-downs com-
prises rent and operating costs for the contract
period minus the expected rental income from
subleases.
Payments associated with short-term leases of
equipment and vehicles and all leases of low-
value assets are expensed as incurred. Short-
term leases are leases with a lease term of 12
months or less. Low-value assets comprise IT
equipment and small items of office furniture.
3.4 | Lease assets and liabilities (continued)
Critical accounting estimates and
judgements
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 64
Comments
The carrying amount of the balance’s approxi-
mated fair value is due to the short maturity of
amounts receivable.
Expected credit losses are assessed for portfolios
of trade receivables based on customer seg-
ments, historical credit loss experience combined
with forward-looking information on macroeco-
nomic factors affecting the credit risk. The ex-
pected loss rates are updated at each reporting
date.
Accounting policies
Trade receivables are amounts due from custom-
ers for goods sold or services performed in the
ordinary course of business. DKTH operates with
standard customer payment terms where cus-
tomer subscriptions are billed and paid in ad-
vance of the subscription period, while usage and
one-off services are billed and paid after the sub-
scription period. The receivables are generally
due for settlement within 20-30 days and are
therefore all classified as current. Trade receiva-
bles are recognised initially at the amount of con-
sideration that is unconditional. The Group holds
the trade receivables with the objective of collect-
ing the contractual cash flows and therefore
measures them subsequently at amortised cost
using the effective interest method.
DKTH applies the simplified approach to measure
expected credit losses, which uses a lifetime
expected loss allowance for all trade receivables,
contract assets and lease receivables. To meas-
ure the expected credit losses, receivables have
been grouped based on shared credit risk charac-
teristics and the days past due. The expected loss
rates are based on the payment profiles of sales
and the corresponding historical credit losses ex-
perienced. The historical loss rates are adjusted
to reflect current and forward-looking information
on macroeconomic factors affecting the ability of
the customers to settle the receivables.
3.5 | Trade receivables
(DKKm)
2023
2022
Trade receivables
1,557
1,608
Expected credit losses
(117)
(111)
Trade receivables, net
1,440
1,497
Expected credit losses at 1 January
(111)
(186)
Expected credit losses
(48)
(60)
Realised credit losses
22
101
Reversed expected credit losses
20
34
Expected credit losses at 31 December
(117)
(111)
Trade receivables (DKKm)
Not yet due
Less than
1 month
past due
More than
1 month
past due
More than
3 months
past due
More than
6 months
past due
Total
2023
Expected loss rate
2%
1%
9%
29%
65%
8%
Gross carrying amount
1,084
265
57
24
127
1,557
Expected credit losses
(19)
(3)
(5)
(7)
(83)
(117)
2022
Expected loss rate
1%
1%
5%
24%
73%
7%
Gross carrying amount
1,231
170
64
25
118
1,608
Expected credit losses
(15)
(1)
(3)
(6)
(86)
(111)
Critical accounting estimates
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 65
Of the deferred subscription income, DKK 26m
(2022: DKK 30m) will be recognised as income
after more than one year.
Revenue recognised in 2023 that was included
in deferred subscription income at the beginning
of the period amounted to DKK 2,346m (2022:
DKK 2,292m).
Costs recognised in 2023 that were included in
assets recognised from costs to obtain a contract
(SAC) at the beginning of the period amounted to
DKK 140m (2022: DKK 123m). Assets to fulfil a
contract at the beginning of the period DKK 51m
(2022 DKK 36m) were recognised as costs in
2023.
Of the assets recognised from costs to obtain a
contract (SAC), DKK 160m (2022: DKK 108m)
and DKK 137m (2022: DKK 134m) of costs to ful-
fil a contract will be recognised as costs after
more than one year.
Subscriber acquisition costs
and fulfilment costs
The most common subscriber acquisition costs
are dealer commissions. Subscriber acquisition
costs and fulfilment costs are capitalised and rec-
ognised as expenses in external expenses and
personnel expenses over the expected term of
the related customer relationship. The term is es-
timated using historical customer churn rates.
Change of management estimates may have a
significant impact on the amount and timing of
the expenses for any period.
Deferred subscription income recognised as a lia-
bility comprises payments received from custom-
ers covering income in subsequent years.
3.6 | Contract assets and liabilities
(DKKm)
2023
2022
Assets recognised from costs to obtain a contract (SAC)
336
248
Assets recognised from costs to fulfil a contract
201
186
Work in progress for the account of third parties
69
57
Total contract assets
606
491
Deferred subscription income
2.308
2.377
Other deferred income
105
37
Work in progress for the account of third parties, liabilities
4
5
Total contract liabilities
2.417
2.419
Comments
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 66
3.7 | Provisions
2023
2022
(DKKm)
Decom
missioning
obligations
Restructuring
obligations
Other
provisions
Total
Provisions at 1 January
285
62
164
511
611
Provisions made
5
135
3
143
97
Change in present value
(29)
-
-
(29)
(32)
Provisions used (payments)
(1)
(126)
(1)
(128)
(142)
Reversal of unused provisions
-
-
(1)
(1)
(18)
Currency translation adjustments
-
-
(6)
(6)
(5)
Provisions at 31 December
260
71
159
490
511
Of which recognised through special items in the income statement
-
61
94
155
157
Recognised as follows in the
balance sheet:
Non-current liabilities
260
10
66
336
362
Current liabilities
-
61
93
154
149
Total
260
71
159
490
511
Specification of how payments regarding provisions are recog-
nised in the statements of cash flow (DKKm)
2023
2022
Payments related to provisions
(23)
(21)
Cash flow related to special items
(105)
(121)
Total
(128)
(142)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 67
Provisions for decommissioning obligations re-
late to the future dismantling of mobile stations
and restoration of property owned by third par-
ties. The uncertainties relate primarily to the tim-
ing of the related cash outflows. The majority of
these obligations are not expected to result in
cash outflow within the next five years.
Provisions for restructuring obligations relate pri-
marily to redundancy programmes. The majority
of the provisions for redundancy programmes are
expected to result in cash outflows in the next five
years. The uncertainties relate primarily to the es-
timated amounts and the timing of the related
cash outflows.
Other provisions relate mainly to onerous con-
tracts and jubilee benefits for employees as well
as legal claims. The majority of these provisions
are expected to result in cash outflows in the next
five years. The uncertainties regarding legal
claims and onerous contracts relate to both tim-
ing and estimated amounts. The uncertainties re-
garding jubilee benefits relate to both salary and
the number of employees included.
In pursuance of Section 32 of the Danish Civil
Servants Act, the Group has a termination benefit
obligation to former Danish civil servants and to
employees with civil-servant status hired before 1
April 1970 who are members of the related Dan-
ish pension fund. In the event of termination,
such employees have a right to special termina-
tion benefits in the amount of three years’ salary
(tied-over allowance) or three months’ full salary
and two-thirds of their full monthly salary for four
years and nine months (stand-off pay).
The Group’s total termination benefits include
wages during the notice period, severance pay,
stand-off pay, payments pursuant to the Danish
Salaried Employees Act, special termination ben-
efits (in accordance with IAS 19 Employee Bene-
fits), social security contributions and out-place-
ment costs. The average redundancy cost per full-
time employee equivalent, calculated as the total
cost divided by the number of full-time employee
equivalents included in the redundancy pro-
grammes during this period, is shown in the table
below.
Provisions are recognised when the Group has a le-
gal or constructive obligation arising from past
events, it is probable that economic benefits must
be sacrificed to settle it, and the amount can be esti-
mated reliably.
Provisions for restructuring, etc. are recognised
when a final decision thereon has been made be-
fore or on the balance sheet date and has been an-
nounced to the parties involved, provided that the
amount can be measured reliably. Provisions for
restructuring are based on a defined plan, which
means that the restructuring commences immedi-
ately after the decision has been made.
When the Group is under an obligation to demolish
an asset or re-establish the site where the asset
was used, a liability corresponding to the present
value of estimated future costs is recognised and
an equal amount is capitalised as part of the initial
carrying amount of the asset. Subsequent changes
in such a decommissioning liability that results
from a change in the current best estimate of cash
Provisions are recognised when the Group has a le-
gal or constructive obligation arising from past
events, it is probable that economic benefits must
be sacrificed to settle it, and the amount can be esti-
mated reliably.
Provisions are measured at Management’s best
estimate of the amount at which the liability is ex-
pected to be settled. Provisions are discounted if
the effect is material to the measurement of the li-
ability.
3.7 | Provisions (continued)
Comments
Average redundancy cost per full-time employee equivalent¹
(DKK thousands)
2023
2022
Non-civil servants
363
411
Former Danish civil servants
1,635
129
Employees with civil-servant status
583
623
Weighted average per full-time employee equivalent
421
456
Number of redundancies
249
179
1 Excluding corporate management.
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 68
Defined benefit plan
Under conditions similar to those provided by the
Danish Civil Servants’ Pension Plan, 524 of DKTH
Group’s employees (2022: 623) were entitled to
pensions from the pension fund related to the
Group. Of these, 19 (2022: 12) employees were
seconded to external parties in connection with
outsourcing tasks or divesting operations. In ad-
dition, 7,257 (2022: 7,398) members of the pen-
sion fund receive or are entitled to receive pen-
sion benefits. The pension benefits comprise life-
long old-age and disability pensions as well as
certain benefits for spouses and children. Future
pension benefits are based primarily on years of
credited service and on participants’ compensa-
tion at the time of retirement. Since 1990, no new
members have joined the pension fund plans,
and the pension fund is prevented from admitting
new members in the future due to the articles of
association.
The pension fund operates defined benefit plans
via a separate legal entity supervised by the
Danish Financial Supervisory Authority (FSA). In
accordance with existing legislation, articles of
association and the pension regulations, the
Group is required to make contributions to meet
the capital adequacy requirements. When all pen-
sion obligations have been met, the remaining
funds will be distributed from the pension fund to
DKTH Group.
With effect from 2019, TDC Pension Fund can un-
der certain circumstances distribute excess
capital to DKTH Group triggering a payment to
members of the pension fund as well. The mem-
bers of the pension fund receive 7.5% of a poten-
tial future distribution from TDC Pension Fund.
Pensioners receive the distribution as part of the
current pension payments, while employees in
service receive a supplement to their future pen-
sion benefits. The pension members’ shares of
distribution are expensed when incurred and rec-
ognised in special items. In 2023, TDC’s Pen-
sions Fund distributed DKK 500m (2022: DKK
1,250m), of which DKTH Group received DKK
437m (2022: DKK 1,156m).
Ordinary monthly contributions to the pension
fund are made corresponding to a percentage of
wages. The ordinary contributions have been
reduced from 1 January 2018. This decision was
made due to the positive funding situation of the
pension fund. Extraordinary contributions are
made in connection with redundancy pro-
grammes and other retirements. Overall, the risk
of additional capital contributions to the pension
fund can be categorised as investment, longevity
and regulatory risks.
Investment risk is managed within risk tolerance
limits to mitigate excessive risk that could lead to
contributions. The fund invests in a wide variety
of marketable securities (predominantly fixed-in-
come securities) and the return on the invest-
ments has implications for DKTH Group’s finan-
cial results. Uncompensated risk related to nomi-
nal interest rates and inflation has been hedged.
In 2011, the Danish FSA introduced the longevity
benchmark for statutory purposes, and the fund’s
actuary has since on a yearly basis conducted a
detailed longevity statistical analyses that have
generally underpinned the fund’s assumptions
regarding observed current longevity. In line with
the sector, however, the fund has increased its
provisions for future expected improvements to
longevity corresponding to the updated Danish
FSA benchmark.
Other risks relating to capital contributions in ex-
cess of the planned ordinary contributions and
extraordinary contributions in connection with re-
dundancies going forward, relate primarily to fu-
ture changes to pension regulation and benefits
over which the Group does not have full control.
The surplus under the Danish FSA pension regu-
lation amounted to approximately DKK 4.7bn
(2022: DKK 3.6bn). The equity of the pension
fund amounted to approx. DKK 5.6bn (2022: DKK
4.5bn). The equity differs from the pension as-
sets recognised in accordance with IFRS due to
specific FSA pension regulation requirements re-
sulting in a higher pension obligation for regula-
tory purposes. The method for determining the
fair value of plan assets is identical under the two
requirements. The pension assets recognised in
accordance with IFRS amounted to approximately
DKK 11.0bn (2022: 10.9bn).
3.8 | Pension assets and pension obligations
Worth noting
In a defined contribution plan, DKTH Group
pays fixed contributions to a third party on
behalf of the employees and has no further
obligations towards the employees. The ben-
efits for the employees ultimately depend on
the third party’s ability to generate returns.
In a defined benefit plan, members receive
cash payments on retirement, the values of
which depends on factors such as salary and
length of service. The Group underwrites in-
vestment, mortality and inflation risks neces-
sary to meet these obligations. In the event of
returns not being sufficient to honour obliga-
tions towards the employees, DKTH Group
needs to address this through increased
levels of contribution. The Group has defined a
benefit plan in TDC Pension Fund. In total, 623
of TDCH group’s employees are covered by the
defined benefit plan, while all other employees
are covered by defined contribution plans.
DKTH Group makes contributions to TDC Pen-
sion Fund, which is not consolidated in these fi-
nancial statements, but are reflected in the bal-
ance sheet in pension assets. TDC Pension
Fund can, under certain circumstances, distrib-
ute excess capital to DKTH Group, triggering a
payment to members of the pension fund as
well. DKTH Group’s pension assets and pension
obligations are outlined in more detail in the
following.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 69
3.8 | Pension assets and pension obligations (continued)
Assets and obligations (DKKm)
2023
2022
Specification of pension assets
Fair value of plan assets
27,459
27,561
Defined benefit obligation
(16,416)
(16,668)
Pension assets recognised in the balance sheet
11,043
10,893
Change in defined benefit obligation
Defined benefit obligation at 1 January
(16,668)
(23,817)
Service cost
(38)
(73)
Administrative expenses
(12)
(10)
Interest cost on the defined benefit obligation
(645)
(224)
Termination benefits
(5)
(11)
Past service cost - distribution of excess capital
(7)
(19)
Remeasurement effect:
Demographic experience
264
382
Financial assumptions
(410)
6,047
Benefit paid
1,105
1,057
Projected benefit obligations at 31 December
(16,416)
(16,668)
Change in fair value of plan assets
Fair value of plan assets at 1 January
27,561
34,379
Interest income on plan assets
1,071
319
Actual return on plan assets greater/(less) than discount rate
414
(4,856)
(remeasurement effect)
Distribution of excess capital
(493)
(1,231)
TDC’s contribution
11
7
Benefit paid
(1,105)
(1,057)
Fair value of plan assets at 31 December
27,459
27,561
Change in pension assets
Pension assets at 1 January
10,893
10,562
Pension (costs)/income
371
1
Remeasurement effects
268
1,573
Distribution of excess capital
(500)
(1,250)
TDC’s contribution (see also table below)
11
7
Pension assets recognised in the balance sheet at 31 December
11,043
10,893
Asset allocation by asset categories at 31 December (DKKm)
2023
2022
Assets with quoted prices:
Government and mortgage bonds (incl. hedges and repos)
9,840
8,359
High-yield bonds
4,178
5,142
Investment grade bonds
3,365
2,884
Emerging markets-debt
1,927
1,808
Property
2,224
2,437
Equities
1,379
1,166
Cash
153
745
Other
627
629
Assets without quoted prices:
High-yield bonds
804
785
Investment grade bonds
888
1,422
Property
2,074
2,184
Fair value of plan assets
27,459
27,561
Assumptions used to determine defined benefit obligations
(balance sheet) (%)
2023
2022
Discount rate
3.33
3.99
General price/wage inflation
2.19
2.58
Assumptions used to determine pension
(costs)/income (%)
2024
2023
2022
Discount rate
3.33
3.99
0.96
General price/wage inflation
2.19
2.58
2.13
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 70
The basis for determining the discount rate is the
yield of AA-rated euro-denominated corporate
bonds with an average maturity of 11 years, tak-
ing into account that the pension liability is in
Danish kroner. For purposes of determining
DKTH Group’s pension costs, the assumed dis-
count rate was 3.99% (0.96% in 2022) and infla-
tion was 2.58% (2.13% in 2022). The assump-
tions for 2024 reflect a discount rate decrease to
3.33% and a decrease in the assumed inflation
rate to 2.19%.
In 2024, with these changed assumptions, pen-
sion costs from the domestic defined benefit plan
is expected to amount to DKK 323m (2023: cost
of DKK 386m), assuming all other factors remain
unchanged. The Group’s contribution is expected
to amount to DKK 11m (2023: DKK 7m).
The remeasurement effects of DKK 268m in
2023 covered primarily a gain related to the plan
assets (DKK 414m) as the actual return was
higher than the expected return
1
, which was
partly offset by a loss related to the benefit obli-
gation (DKK 146m) resulting from the decreasing
discount rate (from 3.99% to 3.33%) and de-
creasing inflation rate (from 2.58% to 2.19%).
The remeasurement effects in 2022 of DKK
1,573m in 2022 covered primarily a gain related
to the benefit obligation (DKK 6,429m) resulting
from the increasing discount rate (from 0.96% to
3.99%), which was partly offset by the plan as-
sets (DKK 4,856m) as the actual return was lower
than the expected return
1
and a loss related to
the increasing inflation rate (from 2.13% to
2.58%).
The mortality assumptions are based on yearly
mortality studies. If TDC Pension Funds own ob-
served mortality deviates significantly from the
Danish FSAs benchmark mortality, TDC Pension
Funds own observed mortality is used. Other-
wise, the Danish FSAs benchmark mortality is
used. The studies in 2023 and 2022 showed that
the benchmark mortality should be used for men
and own observed mortality for women. In addi-
tion, the allowance for future improvement is in
accordance with the Danish FSAs guidelines. The
mortality assumptions provide the best estimate
for the Group’s recent experience plus an allow-
ance for future improvement.
The table on the right side shows the estimated
impact of some of the risks to which DKTH Group
is exposed. The Group is also exposed to fluctua-
tions in the market value of assets. For some of
these risks, if the defined benefit obligation rises
or falls, the market value of assets may move in
the opposite direction, thereby eliminating some
part of the risk.
3.8 | Pension assets and pension obligations (continued)
1
In accordance with International Financial Reporting Standards,
the expected return should be assumed to equal the discount
rate as of the end of the previous year.
Pension (costs)/income (DKKm)
Expected
2024
2023
2022
Service costs
(32)
(38)
(73)
Administrative expenses
(14)
(12)
(10)
Personnel expenses (included in EBITDA)
(46)
(50)
(83)
Interest on pension assets
369
426
95
Pension (costs)/income
323
376
12
Domestic redundancy programmes recognised in special
items
(5)
(11)
Members part of distribution of excess capital
(38)
(94)
Total pension (costs)/income recognised in the income
statement
333
(93)
Sensitivity analysis (DKKm)
2023
2022
Reported defined benefit obligation
16,416
16,668
Discount rate sensitivity
3.33%
3.99%
Assumption -0.5%
17,334
17,618
Assumption +0.5%
15,576
15,800
General price/wage inflation sensitivity
2.19%
2.58%
Assumption +0.25%
16,892
17,161
Assumption –0.25%
15,959
16,195
Mortality sensitivity
Assumption +1 year longevity
17,089
17,318
Assumption -1 year longevity
15,747
16,019
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 71
Other information
Ultimately, 454 members of the defined benefit
plans will have part of their pension payments
reimbursed by the Danish government. (2022:
466 members).
The related benefit obligations of DKK 272m
(2022: DKK 290m) have been deducted in the
projected benefit obligation.
Defined benefit plans
The pension liability regarding defined benefit
plans is estimated based on certain actuarial as-
sumptions, the most significant of which relate to
discount rates, wage inflation and mortality. The
discount rate applied is based on the yield of cor-
porate bonds and may change over the years de-
pending on interest rate developments. Manage-
ment estimates of actuarial assumptions illus-
trate current market conditions. See the separate
section Sensitivity analysis for a statement on the
sensitivity of the defined benefit obligation to the
discount rate, inflation and mortality.
In a defined benefit plan, DKTH Group is obliged
to pay a specific benefit at the time of retirement.
A pension asset or pension obligation corre-
sponding to the present value of the obligations
less the defined pension plans’ assets at fair
value is recognised for these benefit plans.
The obligations are determined annually by inde-
pendent actuaries using the projected unit credit
method assuming that each year of service gives
rise to an additional unit of benefit entitlement,
and each unit is measured separately to build up
the final obligations. Estimation of future obliga-
tions is based on the Group’s projected future de-
velopments in mortality, early retirement, future
wages, salaries and benefit levels, interest rate,
etc. The obligation does not take into account po-
tential distributions of "excess capital" which is
under DKTH's control. The defined pension plan
assets are estimated at fair value at the balance
sheet date.
Differences between the projected and realised
developments in pension assets and pension ob-
ligations are referred to as remeasurement ef-
fects and are recognised in other comprehensive
income when gains and losses occur.
Pension assets are recognised to the extent that
they represent future repayments from the pen-
sion plan.
Pension income/costs from defined benefit plans
comprise the items: service cost, administrative
expenses and interest on pension assets. Service
cost and administrative expenses are recognised
in personnel expenses, whereas interest on pen-
sion assets is presented as an item in financial in-
come and expenses.
Past service costs are recognised as an expense
when a plan amendment or curtailment occurs.
For the defined contribution plans, the Group will
pay in a fixed periodic contribution to separate le-
gal entities and will have no further obligations
after the payment has been made.
3.8 | Pension assets and pension obligations (continued)
Projected benefit payments
1
DKKm
1
The duration of the pension plan is approximately 11 years.
Critical accounting estimates
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 72
Section 4
Capital structure and
financing costs
This section includes disclosures related to the Group’s capital structure
and related financing costs, net interest-bearing debt as well as finance re-
lated risks and how these are managed.
4. In this section
4.1. Equity ............................................................................. 73
4.2. Loans and derivatives ................................................. 73
4.3. Financial risks ............................................................... 77
4.4. Credit ratings and net interest-bearing debt .......... 78
4.5. Financial income and expenses ................................. 80
4.6. Maturity profiles of financial instruments .............. 82
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 73
The company’s share capital is increased with
DKK 92,478 in 2023 from DKK 195,000 to DKK
287.478 divided into shares of DKK 1 each or
multiples thereof. All issued shares have been
fully paid up.
During 2023, total equity decreased by DKK 43m
as a result of capital contribution DKK 3,533m
offset by negative total comprehensive income.
During 2022, total equity decreased by DKK
0.2bn due to negative total comprehensive in-
come.
The Parent Company statement of changes in eq-
uity specifies which reserves are available for dis-
tribution. The distributable reserves amounted to
DKK 7,985m at 31 December 2023 (2022: DKK
4,407m). At the Annual General Meeting, the
Board of Directors will not propose any dividend
for the financial year 2023.
There were no dividend payments during 2023
and 2022.
Dividends
Dividends expected to be distributed for the year
are recognised in a separate item in equity. Divi-
dends and interim dividends are recognised as a
liability at the time of adoption by the Annual
General Meeting and the meeting of the Board of
Directors, respectively.
4.1 | Equity
Comments
Accounting policies
4.2 | Loans and derivatives
Worth noting
DKTH Group consists of three ring-fenced
groups with respect to financings.
In 2023, DK Telekommunikation has estab-
lished a fixed rate term loan with a group of
private lenders in size of EUR 500m.
TDC NET is financed through a combination
of funding from European bond market
(EMTN) and term loans with a group of
banks and infrastructure investors. Nuuday
has a term loan syndicated to a group of
lenders. DKTH Group also have a Revolving
Credit Facilities to support its daily liquidity
management in the operating companies.
The Group’s outstanding syndicated and
bilateral bank loans have been issued in
EUR and are primarily with floating interest
rates. In alignment with loan documents,
almost all interest rate risk has been
swapped to fixed interest rates in the EUR
swap market or as a fixed rate loan.
Excess liquidity is invested into deposits
and short term bonds.
Derivatives are used for hedging interest
and exchange-rate exposure only.
Loans¹ (DKKm)
2023
2022
Senior Term Facility (STF) loans
21,400
18,637
Senior Notes
-
10,634
EMTN
11,084
7,217
Total excl. shareholder funding
32,484
36,488
Shareholder funding
24,598
22,637
Total
57,082
59,125
Recognised as follows in the balance sheet:
Non-current liabilities
51,977
44,912
Current liabilities
5,105
14,213
Total
57,082
59,125
1 For maturity profiles of expected cash outflows and fair value of debt, see note 4.6.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 74
Events after the balance sheet date:
• In January 2024 EUR 650m of the STF loan ma-
turing in 2024 was extended into 2025 with an
option for an extension of +1+1.
4.2 | Loans and derivatives (continued)
2023
Euro Medium Term Notes (EMTNs),
Senior Term Facility (STF) loan,
Senior Notes and Shareholder
funding
2024
2026
2027
2027
2027
2028
2028
2029
2030
2030
2031
Total
excl. SH
funding
2029
2029
Total SH
funding
Total
Maturity
Feb
2024
3
Jun 2026
Feb 2027
Feb 2027
Feb 2027
Feb 2028
May
2028
Jun 2029
Feb 2030
Oct 2030
Jun 2031
Dec 2029
Dec
2029
Fixed/floating rate
1
Floating
Floating
Floating
Floating
Fixed
Floating
Fixed
Floating
Fixed
Fixed
Fixed
Fixed
Fixed
Coupon
Margin +
floored
Euribor
2
Margin +
floored ci-
bor
2
Margin +
floored
Euribor
2
Margin +
floored
Euribor
2
Fixed
swap rate
Margin +
floored
Euribor
2
5.056%
Margin +
floored
Euribor
2
5.618%
5.870%
6.500%
8.810%
8.150%
Currency
EUR
DKK
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
DKK
DKK
Type
STF loan
STF loan
STF loan
STF loan
Holdco
loan
STF loan
EMTN
bond
STF loan
EMTN
Bond
EMTN
Bond
EMTN
bond
SHL loan
SHL loan
Issuing company
TDC NET
TDC NET
TDC NET
TDC NET
DK Tele
Nuuday
TDC NET
TDC NET
TDC NET
TDC NET
TDC NET
DKTH
DKTH
Nominal value (DKKm)
5,106
400
559
6,709
3,727
3,727
3,727
745
3,727
820
3,727
32,974
22,450
2,148
24,598
57,572
Nominal value (Currency)
685
400
75
900
500
500
500
100
500
110
500
22,450
2,148
1
EMTNs and STF loans are in EUR, apart from one STF loan nominated in DKK. Nominal EUR 1bn is swapped to fixed DKK interest rates and the remaining part is in or swapped to fixed EUR interest rates.
2
STF loans have a 0% Euribor or Cibor floor.
3
In January 2024 EUR 650m of the STF loan maturing in 2024 was extended into 2025 with an option for an extension of +1+1.
EUR exposures are not considered a significant risk due to the fixed EUR/DKK exchange rate policy. NET has hedged nominal EUR 1bn to DKK.
As at 31 December 2023 there were no drawings on Revolving Credit Facilities (RCF). That is, TDC NET: EUR 350m, maturing February 2027 and Nuuday: EUR 135m, maturing July 2026.
Comments
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 75
4.2 | Loans and derivatives (continued)
2022
Euro Medium Term Notes (EMTNs), Senior Term Facility
Agreement (STF) loan,
Senior Notes and Shareholder
funding
2023
2023
2023
2024
2026
2027
2028
2029
2030
Total
excl.
SH
funding
2029
2029
Total
SH
funding
Total
Maturity
Feb
2023
Jun
2023
Jun
2023
Feb 2024
Jun
2026
Feb 2027
May
2028
Jun
2029
Oct
2030
Dec 2029
Dec 2029
Fixed/floating rate
Fixed
Fixed
Fixed
Floating
Floating
Floating
Fixed
Floating
Fixed
Fixed
Fixed
Coupon
6.88%
9.38%
7.00%
Margin +
floored
Euribor1
Margin +
floored
Euribor1
Margin +
floored
Euribor1
5.06%
Margin +
floored
Euribor1
5.87%
8.81%
8.15%
Currency
GBP
USD
EUR
EUR
EUR
EUR
EUR
EUR
EUR
DKK
DKK
Type
EMTN
Bond
Senior
Note
Senior
Note
STF loan
STF loan
STF loan
EMTN
Bond
STF loan
STF loan
SHL loan
SHL loan
Issuing company
TDCH
DKTF
DKTF
TDC NET
TDC NET
TDC NET
TDC NET
TDC NET
TDC NET
DKTH
DKTH
Nominal value (DKKm)
3,567
2,845
7,806
10,410
372
6,692
3,718
372
818
36,600
20,653
1,984
22,637
59,237
Nominal value (Currency)
425
410
1,050
1,400
50
900
500
50
818
20,653
1,984
1
EMTNs, Senior Notes and STF loans are in or swapped to nominal EUR and fixed EUR interest rates.
2
STF loans have a 0% Euribor floor.
EUR exposures are not considered a significant risk due to the fixed EUR/DKK exchange-rate policy.
Additionally, TDC NET has entered into EUR 250m notional interest rate swaps to fix the interest rate regarding the upcoming EMTN 2023 refinancing while Nuuday has entered into EUR 450m notional interest rate swaps to fix the interest rate on the Term loan drawn in 2023).
As at 31 December 2022 there were no drawings on Revolving Credit Facilities (RCF). That is, undrawn RCFs amounted to: DKT Finance: EUR 50m, maturing June 2024, TDC NET: EUR 350m, maturing February 2027 and Nuuday: EUR 135m, maturing July 2026.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 76
Loans
Loans are recognised initially at the proceeds
received net of transaction expenses incurred. In
subsequent periods, loans are measured at
amortised cost so that the difference between
the proceeds and the nominal value is recognised
in the income statement over the term of the
loan.
Other financial liabilities are measured at amor-
tised cost.
Financial instruments
On initial recognition, financial derivatives are
recognised in the balance sheet at fair value and
subsequently remeasured at fair value in the bal-
ance sheet and in the income statement. Depend-
ing on the type of instrument, different recog-
nised measurement methods are applied for
derivative financial instruments.
From 2018 and onwards, DKTH Group no long-er
applies hedge accounting. At this point values
were fixed and will be reversed to the income
statement over the lifetime of the underlying
hedged item.
4.2 | Loans and derivatives (continued)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 77
Interest-rate risks
DKTH Group is exposed to interest-rate risks in
the euro area, as 100% of the nominal gross debt
is denominated in or swapped to EUR or DKK.
The interest-rate risk emerges from fluctuations
in market interest rates, which affect the market
value of financial instruments and financial in-
come and expenses.
The interest-rate risk is monitored by the Treas-
ury functions for respectively TDC NET, Nuuday
and holding companies.
Exchange-rate risks
DKTH Group has very limited exchange-rate risk
in relation to its loan portfolio or RCF commit-
ment, as all are issued in or swapped to EUR or
DKK (EURDKK pegged).
The USD exchange rate exposure relating to pay-
ables and receivables from mainly roaming and
interconnection agreements with foreign opera-
tors as well as equipment and handset suppliers
is handled in Treasury.
Counterparty risks
DKTH Group is exposed to credit risks principally
as a provider of telecommunications services in
Denmark and as a counterparty in financial con-
tracts. The credit risk arising from supplying tele-
communications services is handled by subsidiar-
ies, whereas the credit risks in relation to financial
contracts are handled centrally by Group Treas-
ury.
Liquidity risks
In total, DKTH Group has EUR 485m committed
Revolving Credit Facilities (RCF) available, which is
provided by a group of banks under the financing
agreements in TDC NET and Nuuday respectively.
EUR 350m of the total RCF commitment belongs
to TDC NET, while the remaining EUR 135m is
with Nuuday.
In addition to the EUR 350m RCF commitment,
TDC NET also has a Debt Service Reserve (DSR)
Liquidity Facility Agreement of EUR 155m and
Operational and Capex Reserve (O&C) Liquidity
Facility Agreement of EUR 75m in place as of 31st
December 2023.
In January 2024, EUR 650m of the STF loan ma-
turing in 2024 was extended into 2025 with an
option for an extension of +1+1.
Undrawn credit lines
At year-end 2023, DKTH Group had undrawn
committed credit lines totaling EUR 715m
under the SFAs including the DSR and O&C
facilities.
4.3 | Financial risks
Worth noting
DKTH Group is exposed to financial market
and credit risks when buying and selling
goods and services denominated in foreign
currencies as well as due to the cash flow
from investing in the business and financ-
ing activities. Because of DKTH Group’s
capital structure and financing, the Group
faces interest rate and ex-change rate
risks. Treasury identifies, monitors and
manages these risks through policies and
procedures that are revised and approved
by the individual Board of Directors in the
operational subsidiaries and the holding
companies on an annual basis.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 78
Separate external financings have been estab-
lished for Nuuday and TDC NET, respectively. The
senior secured credit facilities borrowed by
Nuuday contain customary change-of-control
provisions as well as cross-default provisions in
relation to other debt of the Nuuday group. The fi-
nancing platform at TDC NET contains customary
cross-default provisions in relation to other debt
of the TDC NET group. In addition, certain credit
facilities borrowed by TDC NET under the financ-
ing platform contains customary change of con-
trol provisions.
4.4 | Credit ratings and net interest-bearing debt
DKTH group’s company ratings at
31 December 2023
Moody’s
Fitch
S&P
Company
Instrument
Company
Instrument
Company
Instrument
Company
Nuuday
B2 (Stable)
B2
B (Stable)
BB-
B- (Stable)
B-
TDC NET
BB
BBB-
DKTH group’s company ratings at 31
December 2022
Moody’s
Fitch
S&P
Company
Instrument
Company
Instrument
Company
Instrument
Company
DKT Holdings
B2 (stable)
B- (neg outlook)
B (watch neg)
DKT Finance
Caa1 (stable)
B-
CCC+ (watch neg)
Nuuday
B2
B2
B (neg outlook)
BB-
B-
B
TDC NET
BB
BBB-
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 79
¹ Exclusive shareholder funding.
2
Includes amortisation of borrowing costs, , lease reassessment and fair value adjustments.
4.4 | Credit ratings and net interest-bearing debt(continued)
Net interest-bearing debt (DKKm)¹
Non-cash changes
2023
At
1 January
2023
Cash flow
Acquisitions
and disposals
Debt from leases
Currency
translation
adjustment
Other
At
31 December
2023
Loans incl. short-term part
36,488
(4,189)
-
-
81
104
32,484
Lease liabilities incl. short term part
4,074
(368)
(17)
167
-
-
3,856
Corrections for derivatives and reversals of fixed fair values on loans due to hedge accounting
(21)
207
-
-
(182)
-
4
Spectrum licence fee liabilities incl. short-term part
1,826
1,685
Interest-bearing payables/(receivables)
1
2
Short-term bonds
-
(899)
Cash
(4,314)
(3,201)
Net interest-bearing debt
38,054
33,931
Net interest-bearing debt (DKKm)¹
Non-cash changes
2022
At
1 January
2022
Cash flow
Acquisitions
and disposals
Debt from leases
Currency
translation
adjustment
Other
At
31 December
2022
Loans incl. short-term part
32,129
4,380
-
-
(26)
5
36,488
Short-term bank loans
570
(570)
-
Lease liabilities incl. short term part
4,132
(339)
(8)
289
-
-
4,074
Corrections for derivatives and reversals of fixed fair values on loans due to hedge accounting
(38)
196
-
-
18
(197)
(21)
Spectrum licence fee liabilities incl. short-term part
1,964
1,826
Interest-bearing payables/(receivables)
(1)
1
Short-term bonds
-
-
Cash
(918)
(4,314)
Net interest-bearing debt
37,838
38,054
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 80
In DKTH´s internal reporting, currency translation
adjustments and interest from derivatives are
reported as such, as specified in the adjacent
table.
Interest, currency translation adjustments and
fair value adjustments represented an expense of
DKK 5,147m in 2023. The increase of DKK
2,548m compared with 2022 was driven primar-
ily by a negative development in fair value adjust-
ments as well as higher interest expense:
Interest: As of end 2023 the groups Senior Term
Facilities amounts to EUR 2.37bn, the EMTN
amounts to EUR 1.5bn and the HoldCo loan
amounts to EUR 0.5bn. This resulted in a higher
interest expense due primarily to higher interest
rates partly offset by a lower level of long-term
loans compared with 2022.
Fair value adjustments: The group has hedged its
floating Senior Term Facilities (and future debt is-
suances) from floating interest rates to fixed in-
terest rates (nominal EUR 2.11bns as of 31 De-
cember 2023). In 2022 increasing market inter-
est rates impacted the period positively. In 2023
the positive unrealized fair value declined due to
decreasing market interest rates in 2023 as well
as time value, this was partly offset by an interest
saving from the derivatives relating to the STF.
Currency adjustments: During 2023, the EUR ex-
change rate increased, resulting in unrealised
losses relating to loans denominated in or
swapped to EUR.
4.5 | Financial income and expenses
(DKKm)
2023
2022
Interest income
70
28
Interest expenses
(4,718)
(4,038)
Net interest
(4,648)
(4,010)
Currency translation adjustments
(45)
8
Fair value adjustments
(454)
1,403
Interest, currency translation adjustments and fair value adjustments
(5,147)
(2,599)
Interest on pension assets
425
95
Total
(4,722)
(2,504)
(DKKm)
Net interest
Currency
translation
adjustments
Fair value ad-
justments
Total
2023
Shareholder funding
(2,130)
-
-
(2,130)
Senior Term Facility (STF) loans
(1,146)
(44)
(3)
(1,193)
Hedge of Senior Term Facilitiy loans/fu-
ture debt issuance
273
(3)
(729)
(459)
Euro Medium Term Notes (EMTNs)
(572)
(20)
20
(572)
HoldCo loan
(406)
(4)
-
(410)
Senior Notes
(88)
(26)
(13)
(127)
Lease liabilities
(181)
-
-
(181)
Other
(110)
15
20
(75)
Total
(4,360)
(82)
(705)
(5,147)
2022
Shareholder funding
(1,956)
-
-
(1,956)
Senior Notes
(773)
2
(37)
(808)
Senior Term Facility (STF) loans
(510)
12
(7)
(505)
Hedge of Senior Term Facilitiy loans/fu-
ture debt issuance
(172)
-
1,594
1,422
Euro Medium Term Notes (EMTNs)
(275)
4
7
(264)
Senior Facility Agreement (SFA) loans
(42)
(8)
(24)
(74)
Lease liabilities
(187)
-
-
(187)
Other
(169)
(30)
(28)
(227)
Total
(4,084)
(20)
1,505
(2,599)
Comments
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 81
Comments
Net interest of DKK 1,727m paid in 2023 repre-
sented a DKK 386m decrease compared with
2022, driven primarily by a lower level of long-
term loans partly offset by higher interest rates.
Furthermore, the refinancing in 2022 changed
the timing of interest payments.
4.5 | Financial income and expenses
Cash flow from net interest (DKKm)
2023
2022
Interest received
644
407
Interest paid
(2.371)
(2.520)
Net interest paid
(1.727)
(2.113)
Specified as follows:
Senior Term Facility (STF) loans incl. hedges of Senior Term Facility loans/future
debt issuance
(800)
(439)
Euro Medium Term Notes (EMTNs) incl. hedges
(423)
(407)
HoldCo loan
(210)
-
Senior Notes incl. hedges
(78)
(766)
Senior Facility Agreement (SFA) loans incl. hedges
-
(236)
Lease liabilities
(171)
(187)
Shareholder funding
(3)
-
Other
(42)
(78)
Net interest paid
(1.727)
(2.113)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 82
Maturity profiles
The maturity analyses of financial assets and lia-
bilities are disclosed by category and class and
are allocated according to maturity period. All
interest payments and repayments of financial
liabilities are based on contractual agreements.
Interest payments on floating-rate instruments
are determined using forward rates.
Financial assets and liabilities measured at fair
value relate to derivatives. The fair value of these
derivatives is calculated based on observable in-
puts such as interest rates, etc. (Level 2 in the
IFRS fair value hierarchy).
4.6 | Maturity profiles of financial instruments
2023
Maturity profiles of expected cash flows¹ (DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial assets and liabilities measured at fair value
through profit or loss
Assets²:
Derivatives
Inflow
466
2.283
144
38
2.931
Outflow
(125)
(2.086)
(98)
(31)
(2.340)
Total derivatives assets
341
197
46
7
591
574
574
Liabilities:
Derivatives
Inflow
654
5.912
73
13
6.652
Outflow
(649)
(5.964)
(133)
(19)
(6.765)
Total derivatives liabilities
5
(52)
(60)
(6)
(113)
(130)
(130)
Total derivatives
346
145
(14)
1
478
444
444
Financial liabilities measured at amortised cost
Shareholder funding
-
-
-
(24.598)
(24.598)
(24.598)
(24.598)
Senior Term Facilities (STF) loan
(5.106)
(400)
(10.995)
(1.565)
(18.066)
(18.107)
(17.777)
HoldCo Loan
-
-
(3.727)
-
(3.727)
(3.876)
(3.623)
Euro Medium Term Notes (EMTNs)
-
-
(3.727)
(7.454)
(11.181)
(11.696)
(11.084)
Total loans
(5.106)
(400)
(18.449)
(33.617)
(57.572)
(58.277)
(57.082)
Spectrum licence liabilities
(271)
(483)
(483)
(642)
(1.879)
(1.685)
(1.685)
Lease liability
(529)
(927)
(842)
(2.777)
(5.075)
(3.856)
(3.856)
Shareholder funding, SFA, Senior notes and EMTN, interest³
(2.008)
(3.558)
(2.217)
(15.619)
(23.402)
(2.334)
(2.334)
Trade and other payables⁴
(2.155)
(2.155)
(2.155)
(2.155)
Total financial liabilities measured at amortised cost
(10.069)
(5.368)
(21.991)
(52.655)
(90.083)
(68.307)
(67.112)
Total
(9.723)
(5.223)
(22.005)
(52.654)
(89.605)
(67.863)
(66.668)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 83
4.6 | Maturity profiles of financial instruments (continued)
2022
Maturity profiles of expected cash flows¹ (DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial assets and liabilities measured at fair value
through profit or loss
Assets²:
Derivatives
Inflow
4.123
903
584
106
5.716
Outflow
(3.646)
(227)
(180)
(62)
(4.115)
Total derivatives assets
477
676
404
44
1.601
1.479
1.479
Liabilities:
Derivatives
Inflow
3.262
-
-
-
3.262
Outflow
(3.440)
-
-
-
(3.440)
Total derivatives liabilities
(178)
-
-
-
(178)
(187)
(187)
Total derivatives
299
676
404
44
1.423
1.292
1.292
Financial liabilities measured at amortised cost
Shareholder funding
-
-
-
(22.637)
(22.637)
(22.637)
(22.637)
Senior Term Facilities (STF) loan
-
(10.410)
(7.064)
(1.190)
(18.664)
(18.664)
(18.638)
Senior notes
(10.651)
-
-
-
(10.651)
(10.625)
(10.634)
Euro Medium Term Notes (EMTNs)
(3.567)
-
-
(3.718)
(7.285)
(7.231)
(7.217)
Total loans
(14.218)
(10.410)
(7.064)
(27.545)
(59.237)
(59.157)
(59.126)
Spectrum licence liabilities
(192)
(513)
(483)
(883)
(2.071)
(1.826)
(1.826)
Lease liability
(494)
(937)
(860)
(3.168)
(5.459)
(4.074)
(4.074)
Shareholder loan, SFA, Senior notes and EMTN, interest³
(1.669)
(1.314)
(902)
(14.229)
(18.114)
(1.796)
(1.796)
Trade and other payables⁴
(2.005)
-
-
-
(2.005)
(2.005)
(2.005)
Total financial liabilities measured at amortised cost
(18.578)
(13.174)
(9.309)
(45.825)
(86.886)
(68.858)
(68.827)
Total
(18.279)
(12.498)
(8.905)
(45.781)
(85.463)
(67.566)
(67.535)
1
All cash flows are undiscounted. The table reflects only the cash flow from financial liabilities and derivatives recognised as financial assets. Other cash flow from financial assets is not disclosed.
2
Both assets and liabilities measured at fair value through profit or loss are disclosed in the above table because some of the derivatives are used for hedging financial liabilities measured at amortised cost, see table.
3
Fair value and carrying amount value consist of accrued interest on Shareholder funding, STF loans, Senior Notes and EMTNs at 31 December.
4
As not all trade and other payables recognised in the balance sheet are financial instruments (e.g., unbilled payables do not constitute a financial liability), the amount differs from the amount disclosed in the balance sheet.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 84
Section 5
Cash flow
This section provides information on the Group’s cash flow. More infor-
mation on development in the cash flow items is
included in note 2.7 Special items, note 3.2 Intangible assets, note 3.3
Property, plant and equipment, 3.4 Lease assets and liabilities, 3.7 Provi-
sions, note 3.8 Pension assets and pension obligations as well as note 4.5
Financial income and expenses.
5. In this section
5.1. Adjustment for non-cash items................................. 85
5.2. Change in working capital .......................................... 85
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 85
Cash flow from operating activities is presented
using the indirect method and is based on profit
before interest, taxes, depreciation, amortisation
and special items adjusted for non-cash operat-
ing items, cash flow related to special items,
changes in working capital, interest received and
paid as well as income taxes paid. Interest re-
ceived and paid includes settlement of interest-
hedging instruments.
Cash flow from investing activities comprises ac-
quisitions and divestments of enterprises, pur-
chases and sales of intangible assets, property,
plant and equipment as well as other non-current
assets, and purchases and sales of securities that
are not recognised as cash and cash equivalents.
Cash flows from acquired enterprises are recog-
nised from the time of acquisition, while cash
flows from enterprises divested are recognised
up to the time of divestment.
Cash flow from operating, investing and financing
activities of discontinued operations are pre-
sented with comparative figures in separate lines
of the statement of cash flow.
Cash flow from financing activities comprises
changes in interest-bearing debt, lease instal-
ments, purchase of treasury shares and divi-
dends to shareholders.
Cash and cash equivalents cover cash and
marketable securities with a remaining life not
exceeding three months at the time of acquisi-
tion, and with an insignificant risk of changes in
value.
The cash flow statement cannot be derived solely
from information presented in the financial state-
ments.
5.1 | Adjustment for non-cash items
(DKKm)
2023
2022
Pension costs regarding defined benefit plans
49
83
(Gain)/loss on disposal of property, plant and equipment, net
(1)
6
Other adjustments
16
5
Total
64
94
5.2 | Change in working capital
(DKKm)
2023
2022
Change in inventories
51
(25)
Change in receivables
24
(51)
Change in contract assets
(115)
(95)
Change in trade payables
(278)
(30)
Change in contract liabilities
(1)
37
Change in prepaid expenses
(17)
(2)
Change in other items, net
462
(141)
Total
126
(307)
Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 86
Section 6
Other disclosures
This section contains statutory notes or notes that are
presumed to be less important for understanding the
Group’s financial performance.
6. In this section
6.1. Incentive programmes ................................................ 87
6.2. Related parties ............................................................. 88
6.3. Fees to auditors ........................................................... 89
6.4. Other financial commitments .................................... 89
6.5. Pledges and contingencies ......................................... 90
6.6. Events after the balance sheet date ......................... 90
6.7. Overview of group companies at 31
December 2023 ............................................................ 90
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 87
In order to support the delivery of short- and
long-term financial results, the Group has both
short- and long-term incentive programmes for
executives and managers.
Short-term incentive programmes (STI)
The short-term bonus programmes are closely
linked to our strategy. The performance
measures are focused on EBITDA, capex, fibre
connection performance, dividend capacity and
NPS, but with variance between Nuuday and TDC
NET.
Bonus payments are calculated as the individual
employee’s basic salary multiplied by the bonus
percentage multiplied by the degree of target ful-
filment.
The bonus percentage for members of the Execu-
tive Committee is between 25% and 50%. For
other managers, the bonus percentage varies
within a range of 10%-33%. The target fulfilment
can be maximum 200%.
Long-Term Incentive programme (LTI)
The LTI programme is cash based and its objec-
tives are linked to the long-term strategy. The
programme is revolving with grants given each
year but with a 2 or 3-year vesting period, as the
goals are principally set for a 2 or 3-year period.
The objectives are EBITDA, cash flow, fibre con-
nection performance, dividend capacity and NPS,
but with variance between Nuuday and TDC NET.
The expenses are recognised over the vesting pe-
riod.
Bonus payments are calculated as the individual
employee’s basic salary multiplied by an LTI per-
centage multiplied by the degree of target fulfil-
ment.
The LTI percentage usually varies within a range
of 12%-40%. The target fulfilment can be maxi-
mum 200%.
Management Incentive Programme (MIP)
In July 2020, TDCH group established a new
cash-based incentive programme for the Execu-
tive Committee and certain key managers (38
participants in all). Under the MIP, the partici-
pants are required to place a deposit to the TDCH
group to qualify for a return. The payback
amounts are based on the development in certain
financial performance measures of the group as
well as certain business and Health & Safety KPIs
over the period until 2023. The investment pro-
gramme covers the time period 2019-2023. The
participants have 40% of the deposits at risk of
being lost in downside scenarios and we have
recognised an accrual of 1.21x in payout to the
participants’ deposit.
The participants’ total deposits amounted to DKK
36m and the expenses for 2023 relating to the
programme amounted to DKK 3m (2022: 32m).
At 31 December 2023 the total liabilities related
to the management incentive programme
amounted to DKK 83m (2022: DKK 84m).
6.1 | Incentive programmes
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 88
The Group has annual contributions paid to the
pension fund, TDC Pensionskasse, see note 3.8.
The Group has property lease contracts with
Arbejdsmarkedets Tillægspension (ATP) and PFA,
who are shareholders of the company. The lease
payments amounted to DKK 243m (2022: DKK
235m). The property lease contracts are a signifi-
cant part of the lease liabilities.
Related parties also included the Group’s joint
ventures and associates shown in note 6.7.
The Group has the following additional transac-
tions and outstanding balances with related
parties:
The company’s shareholders have provided
shareholder funding to the company. See note
4.2 for further information.
The members of the Board of Directors and the
Executive Committee do not receive remunera-
tion. Chairman of the Board of Directors of TDC
Holding, Michael Parton, provides consultancy
services to TDC Holding.
The DKT Holdings ApS Group's key management
personnel comprise TDC Holding’s Board of Di-
rectors and Executive Committee as well as the
CEO of Nuuday A/S and the CEO of TDC NET A/S.
See note 2.5 for further information.
6.2 | Related parties
Name of related party
Nature of
relationship
Domicile
DKTUK Limited, managed by Macquarie Infrastructure and
Real Assets Europe Limited
Ownership
London,
United Kingdom
Arbejdsmarkedets Tillægspension (ATP)
Ownership
Hillerød, Denmark
PFA Ophelia InvestCo I 2018 K/S, managed by PFA Asset
Management A/S
Ownership
Copenhagen, Denmark
PKA Ophelia Holding K/S, managed by AIP Management P/S
Ownership
Hellerup, Denmark
TDC Pensionskasse
Pension fund
Copenhagen, Denmark
Related parties (DKKm)
2023
2022
TDC Pensionskasse
Other income
3
3
Receivables
1
-
Joint ventures and associates
Income
6
6
Expenses
(3)
(4)
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 89
Fee for services other than statutory audit ser-
vices rendered by Deloitte to the Group
amounted to DKK 19m and consisted mainly of
special purpose statements and advisory ser-
vices.
6.3 | Fees to auditors
Fees to auditors elected by the Annual General Meeting (DKKm)
2023
2022
Statutory audit
6
5
Other assurance engagements
1
3
Tax advisory services
-
-
Other services
18
8
Total non-statutory audit services
19
11
Total
25
16
6.4 | Other financial commitments
(DKKm)
2023
2022
Lease commitments for short-term and low value leases
34
54
Short-term leases
Low value leases
1
2
Total
35
56
Capital and purchase commitments
Investments in intangible assets
299
501
Investments in property, plant and equipment
236
99
Commitments related to outsourcing agreements
323
307
Other purchase commitments
850
1,370
Total
1,708
2,277
Worth noting
Commitments represent amounts that
DKTH Group has contractually committed
to pay to third parties in the future. This
gives an indication of future cash flows.
Purchase commitments
As part of DKTH’s commitment to reduce
our emissions, the subsidiary TDC NET has
entered into 10 years Power Purchase
Agreements (PPA) with Better Energy deliv-
ering electricity from their solar parks.
The PPA is fixed 140 GWh and the solar
parks covered 71% of TDC NET’s electricity
consumption in 2023. These agreements
are fixed price agreements. As these agree-
ments are entered into and will continue to
be held for the purpose of receiving energy
for own usage within TDC NET’s opera-
tions, they are recognized as power costs
(note 2.4) and other purchase commit-
ments.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 90
6.5 | Pledges and
contingencies
Pledges
Cash with a carrying amount of DKK 2,463m
(2022: DKK 2,577), rights under spectrum li-
cences DKK 2,288m (2022: DKK 2,436m) and
trade receivables DKK 329m (2022: DKK 321m)
are pledged as security for finance agreements in
the group.
See also note 10 to the Parent company financial
statements.
Contingent assets
In the spring of 2023, TDC NET received a deci-
sion from the Center for Cyber Security (CFCS)
necessitating the discontinuation of our current
Central Transport (DWDM) network supplier by
January 1, 2027. TDC NET will comply with the
security policy decision of the authorities and ad-
heres to CFCS's decision to replace the supplier
for its DWDM network. However, as TDC NET has
assessed this action as an expropriation, this led
TDC NET to initiate legal proceedings. It is Man-
agement's opinion that the matter is fundamental
to protect the company's rights, but the outcome
of the legal proceedings is not virtually certain,
and therefore no asset has been recognised in
the financial position of TDC NET.
Contingent liabilities
DKTH Group is party to certain pending lawsuits
and cases pending with public authorities and
complaints boards. Based on a legal assessment
of the possible outcome of each of these lawsuits
and cases, Management is of the opinion that
these will have no significant adverse effect on
DKTH Group’s financial position.
6.6 | Events after the
balance sheet date
In January 2024 EUR 650m of the STF loan in
TDC NET maturing in 2024 was extended into
2025 with an option for an extension of +1+1
There have been no other events that materially
affect the assessment of this Annual Report
2023 after the balance sheet date and up to
today.
6.7 | Overview of group companies
at 31 December 2023
Company name
1
Domicile
Currency
Ownership share (%)
Nuuday
Nuuday A/S
Copenhagen, Denmark
DKK
100
Hiper A/S
Copenhagen, Denmark
DKK
100
TDC Telco ApS
Taastrup, Denmark
DKK
100
4T af 1. oktober 2012 ApS
3
Copenhagen, Denmark
DKK
25
TDC NET
TDC NET Holding A/S
Copenhagen, Denmark
DKK
100
TDC NET A/S
Copenhagen, Denmark
DKK
100
TDC NET Finance B.V.
2
Amsterdam, the Netherlands
EUR
100
Dansk Kabel TV A/S
Copenhagen, Denmark
DKK
100
DKTV Anlæg ApS
Vemmelev, Denmark
DKK
100
Fiberkysten A/S
Gilleleje, Denmark
DKK
60
OCH A/S
3
Copenhagen, Denmark
DKK
25
Other
TDC Holding A/S
Copenhagen, Denmark
DKK
100
DK Telekommunikation ApS
Copenhagen, Denmark
DKK
100
DKT Finance ApS
Copenhagen, Denmark
DKK
100
1
In order to give readers a clear presentation, minor companies without activities are not listed separately in the overview. In pursuance
of Section 6 of the Danish Financial Statements Act, the following subsidiaries have chosen not to prepare an annual
report: Kaisai A/S, 4WEB A/S and TDCH III ApS.
2
TDC Net Finance B.V. was established in connection with the refinancing of the TDC Net group with the purpose of potentially issuing EUR denomi-
nated debt instruments that are eligible for financing at ECB. The company is however currently without activities and there are no immediate plans
for the use of the company. The company will be taxable in Denmark under the rules of Place of Effective Management and as such part of the Danish
joint taxation.
3
The enterprise is included under the equity method.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 91
Annual report 2019
Parent company
financial statements
Income statement ........................................... 92
Statement of comprehensive income ......... 92
Balance sheet ................................................... 93
Statement of cash flows ................................ 94
Statement of changes in equity ................... 94
Notes to parent company financial
statements ...................................................... 95
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 92
Income statement
Statement of comprehensive income
(DKKm)
Note
2023
2022
External expenses
(3)
(3)
Operating profit (EBIT)
(3)
(3)
Financial income
4
2,140
1,962
Financial expenses
5
(2,130)
(1,957)
Profit before income taxes
7
2
Income taxes
2
38
122
Profit for the year
45
124
(DKKm)
Note
2023
2022
Profit for the year
45
124
Total comprehensive income
45
124
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 93
Balance sheet
Assets (DKKm)
Note
2023
2022
Non-current assets
Investments in subsidiaries
3
7,646
4,113
Receivables from group companies
24,704
22,691
Total non-current assets
32,350
26,804
Current assets
Receivables from group companies
1,472
1,351
Income tax receivable
87
46
Cash
140
193
Total current assets
1,699
1,590
Total assets
34,049
28,394
Equity and liabilities (DKKm)
Note
2023
2022
Equity
Share capital
-
-
Retained earnings
7,985
4,407
Total equity
6
7,985
4,407
Non-current liabilities
Shareholder funding
7, 8
24,598
22,637
Total non-current liabilities
24,598
22,637
Current liabilities
Payables to group companies
1
1
Other payables
1,465
1,349
Total current liabilities
1,466
1,350
Total liabilities
26,064
23,987
Total equity and liabilities
34,049
28,394
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 94
Statement of cash flows
Statement of changes in equity
(DKKm)
Note
2023
2022
Operating profit (EBIT)
(3)
(3)
Adjustment for non-cash items
(1)
-
Change in working capital
-
2
Interest received
5
2
Interest paid
(4)
(1)
Tax received
(3)
133
Cash flow from operating activities
(6)
133
Investment in subsidiaries
(3,533)
-
Cash flow from investing activities
(3,533)
-
Repayments on long-term loans
(47)
(24)
Capital contribution
3,533
-
Cash flow from financing activities
3,486
(24)
Total cash flow
(53)
109
Cash and cash equivalents at 1 January
193
84
Cash and cash equivalents at 31 December
140
193
(DKKm)
Share capital
Retained earn-
ings
Total
Equity at 1 January 2022
-
4,283
4,283
Profit for the year
-
124
124
Total comprehensive income
-
124
124
Total transactions with owners
-
-
-
Equity at 31 December 2022
-
4,407
4,407
Profit for the year
-
45
45
Total comprehensive income
-
45
45
Capital contribution
3,533
3,533
Total transactions with owners
-
3,533
3,533
Equity at 31 December 2023
-
7,985
7,985
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 96
The financial statements 2023 of the parent com-
pany has been prepared in accordance with IFRS
Accounting Standards as issued by the Interna-
tional Accounting Standards Board (IASB) as
adopted by the European Union (EU) and further
disclosure requirements in the Danish Financial
Statements Act (reporting class “C stor”).
The accounting policies are unchanged from
last year.
The parent company accounting policies are the
same as those applied for the Group, with the
additions mentioned below. See note 1.1 to the
consolidated financial statements for the Group’s
accounting policies.
For information on new accounting standards for
the Group, see note 1.3 to the consolidated finan-
cial statements.
Supplementary accounting policies for
the parent company
Investments in subsidiaries
Investments in subsidiaries are measured at cost.
Where cost exceeds the recoverable amount, the
carrying amount is written down to the recoverable
amount.
Dividends received from investments in subsidiar-
ies are recognised as income in the financial year
when the dividends are distributed.
1 | Accounting policies
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 97
The effective tax rate deviates significantly from
the Danish corporate income tax rate of 22% due
to the Danish limitation on the tax deductibility of
interest expenses.
DKT Holdings ApS participates in joint taxation
with all its Danish subsidiaries. DKT Holdings ApS
is the management company in the joint taxation.
The jointly taxed companies in the DKT Holdings
Group are jointly and severally liable for the total
income taxes, taxes paid on account and out-
standing residual tax (with additional payments
and interest) relating to the joint taxation.
2 | Income taxes
3 | Investments in subsidiaries
(DKKm)
2023
2022
Accumulated cost at 1 January
4,113
4,113
Capital injection
3,533
-
Accumulated cost at 31 December
7,646
4,113
Carrying amount at 31 December
7,646
4,113
Overview of subsidiaries at 31 December 2023
Company name
Domicile
Currency
Ownership share (%)
Subsidiaries:
DKT Finance ApS
Copenhagen, Denmark
DKK
100
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 98
For information on share capital see note 4.1 to
the consolidated financial statements.
The Company does not have exposure to changes
in interest rates as terms on loans and receiva-
bles from group companies largely matches each
other. As the Shareholder funding is denomi-
nated in DKK the Company does not have any
currency exchange rate exposure.
4 | Financial income
(DKKm)
2023
2022
Interest from group companies
2,136
1,961
Other interest income
4
1
Total
2,140
1,962
5 | Financial expenses
(DKKm)
2023
2022
Interest expenses on shareholder funding
(2,128)
(1,956)
Interest to group companies
(2)
(1)
Total
(2,130)
(1,957)
6 | Equity
7 | Shareholder funding
Shareholder funding
2029
2029
Total
Maturity
Dec 2029
Dec 2029
Fixed/floating rate
Fixed
Fixed
Coupon
8.81%
8.15%
Currency
DKK
DKK
Type
Shareholder
funding
Shareholder
funding
Nominal value (DKKm)
22,450
2,148
24,598
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 99
Maturity profiles
The maturity analyses of financial assets and lia-
bilities are disclosed by category and class and
are allocated according to maturity period. All in-
terest payments and repayments of financial lia-
bilities are based on contractual agreements. The
future cashflows will be financed by received in-
terests and settlement on Shareholder funding
provided to DKT Finance ApS.
8 | Maturity profiles of financial instruments
Maturity profiles of expected cash
flows¹ (DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial liabilities measured at amortised
cost
Shareholder funding
-
-
-
(24.598)
(24.598)
(24.598)
(24.598)
Shareholder Loans, interest²
-
-
-
(14.360)
(14.360)
(1.465)
(1.465)
Trade and other payables
-
Total 2023
-
-
-
(38.958)
(38.958)
(26.063)
(26.063)
Maturity profiles of expected cash
flows¹ (DKKm)
< 1 year
1-3 years
3-5 years
> 5 years
Total
Fair value
Carrying
amount
Financial liabilities measured at amortised
cost
Shareholder funding
-
-
-
(22.637)
(22.637)
(22.637)
(22.637)
Shareholder Loans, interest²
-
-
-
(13.867)
(13.867)
(1.348)
(1.348)
Trade and other payables
(1)
-
-
(1)
(1)
(1)
Total 2022
(1)
-
-
(36.504)
(36.505)
(23.986)
(23.986)
1)
All cash flows are undiscounted.
2)
Fair value and carrying amount value consist of accrued interest on Shareholder funding at 31 December.
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 100
For information about the related parties of the
Group, see note 6.2 to the consolidated financial
statements.
Receivables from group companies and payables
to group companies are shown in the balance
sheet. Interest from/to group companies are
shown in notes 4 and 5.
All transactions were made on an arm’s length
basis.
The members of for the Board of Directors
and the Executive Committee do not receive
remuneration.
There are no pledges in 2023. In 2022 shares in
subsidiaries with a carrying amount of DKK
4,113m and receivables from group companies
with a carrying amount of DKK 22,691m was
pledged as security for the subsidiary’s long-term
loans.
For information on events after the balance sheet
date, see note 6.6 to the consolidated financial
statements.
9 |Related parties
10 | Pledges
11 | Events after the
balance sheet date
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 101
Executive Committee
Board of Directors
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 102
Management’s responsibilities for the consoli-
dated financial statements and the parent
financial statements
Independent auditor’s report
Management review Consolidated financial statements Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Parent company Other
DKT Holdings Annual Report 2023 103
Auditor’s responsibilities for the audit of the
consolidated financial statements and the par-
ent financial statements
CVR No 33963556
Identification No (MNE) mne 32208
Identification No (MNE) mne 2334 7
in brief Financial review ESG Consolidated Financial statements Disclaimer
DKT Holdings Annual Report 2023 104
Forward-looking statements
Forward-looking statements
This report may include statements about DKTH group’s expectations, beliefs, plans, objectives, assumptions or future events or performance that are not historical facts and may be forward-looking. These state-
ments are often, but not always, formulated using words or phrases such as “are likely to result”, “are expected to”, “will continue”, “believe”, “is anticipated”, “estimated”, “intends”, “expects”, “plans”, “seeks”,
“projection” and “outlook” or similar expressions or negatives thereof. These statements involve known and unknown risks, estimates, assumptions and uncertainties that could cause actual results, performance or
achievements or industry results to differ materially from those expressed or implied by such forward-looking statements.
Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this financial report. Key factors that may have a direct bearing on DKTH Group’s results include: the
competitive environment and the industry in which DKTH group operates; contractual obligations in DKTH group’s financing arrangements; developments in competition within the domestic and international
communications industry; information technology and operational risks, including DKTH group’s responses to change and new technologies; introduction of and demand for new services and products; develop-
ments in demand, product mix and prices in the mobile and multimedia services market; research regarding the impact of mobile phones on health; changes in applicable legislation, including but not limited to tax
and telecommunications legislation and anti-terror measures; decisions made by the Danish Business Authority; the possibility of being awarded licences; increased interest rates; the status of important intellectual
property rights; exchange-rate fluctuations; global and local economic conditions; investments in and divestment of domestic and foreign companies; and supplier relationships.
As the risk factors referred to in this report could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made in this Report, undue reliance is not to be placed
on any of these forward-looking statements. New factors will emerge in the future that DKTH group cannot predict. In addition, DKTH group cannot assess the impact of each factor on its business or the extent to
which any factor, or combination of factors, may cause actual results to differ materially from those described in any forward-looking statements.