The Board of Directors Report

Transcription

1 The Board of Directors Report The Company's Activities in 2017 Submission of the Annual Report for approval 1

2 Our journey We started an ambitious journey in January 2016 Improving EBITDA trend towards growth in Reduce opex by DKKm in 2018 compared to 2015 level and decrease our cash out-flow to capex investments CAPITAL MARKETS DAY GOALS 3 EFCF towards growth reaching >2.3DKKbn 1 in Ambition to grow DPS 5 Ambition to have best in class customer satisfaction 1. Adjusted for divestment of TDC Sweden 2

3 Our journey We have come far over the past two years CREATING A SIMPLE FOUNDATION Consolidated brands (YouSee/TDC) Consolidated platforms Simplified organisation Value based pricing strategy INVEST AND STABLISE New digital model tested in Yousee Quality and efficiency of processes in new setup First Cloud solutions in B2B New people development foundation Mobile voice in Norway SCALE AND HARVEST Scaling Digital First across all business lines Holistic approach to Net Promoter Score Quality in our core network Nordic next generation TV Scale and expand B2B cloud position (new segments and verticals) Leverage people foundations to drive more digital culture

4 Our journey Maintaining our strong market positions across all main product areas TOTAL MARKET SHARE POSITION RESIDENTIAL MARKET SHARE POSITION 41% #1 56% #1 19% #2 52% #1 18% #2 60% #1 4

5 Our journey 2018 will be an important milestone in our transformation Actuals Guidance EBITDA 1 DKKbn ~ EFCF DKKbn Customer satisfaction 2 % 49 Positive customer experiences Negative customer experiences YTD YTD : Get is included in EBITDA as of November 2014, however, Gets historical figures before acquisition are included for purpose of comparison 2: Customer Satisfaction: Chat touchpoints for YouSee and Business are added from Jan Mail for large Business customers and Business Mail, Support are added from Jan

6 Our journey Our shareholders have been greatly rewarded by our performance TDC Group 1 Core Peers average 2 SXKP Initial Public Offering, December Annualised TSR 5 pct. incl. dividends paid out Capital Markets Day, January Annualised TSR pct. incl. dividends paid out TDC Price sale price at DKK50.25; Bloomberg, dividends reinvested 2. KPN, Proximus 3. Bloomberg, period 10 December March 2018, dividends reinvested 4. Bloomberg, period 27 Januar March 2018, dividends reinvested 5. Total shareholder return combines share price appreciation and dividends paid to show the total return to the shareholder 6. Bloomberg, period 31 December February 2018, dividends reinvested 7. Bloomberg, period 29 January March 2018, dividends reinvested 6

7 Key trends in 2017 Five key trends shaped our business in Demand for cloud solutions 1 Accelerated change in TV behavior 2017 Trends 2 Changing competitive dynamics in broadband 4 Continued growth in mobility services 3 Increasing importance of being digital 7

8 Key strategic deliveries in 2017 Strategic initiatives to deliver on our ambitions Always simpler and better Better connectivity Better Offerings Better customer experience Maintained our position as best mobile network in Denmark Upgraded 70% of our cable network to gigaspeed Improved stability and speed of broadband solutions Launched household benefit programme YouSee More Introduced new flexible TV package in Get Grew our cloud-based collaboration solutions Improvement in positive and negative customer experiences Reached >2 million unique users on our YouSee website Took back the full customer ownership through insourcing Simplified digital operating model Introduced our Digital First programme Simplified and consolidated our IT platforms Strengthening digital citizenship and future skills 8

9 Key strategic deliveries in 2017 We have upgraded 70% of our cable network to gigaspeed Gigaspeed broadband roll out on TDC Network in Denmark +1 Gbps download and 500 Mbps upload Secure better and future-proof broadband and meet traffic and customer demands Better customer experience for our TV and broadband customers 9

10 Key strategic deliveries in 2017 Strategic initiatives to deliver on our ambitions Always simpler and better Better connectivity Better Offerings Better customer experience Maintained our position as best mobile network in Denmark Upgraded 70% of our cable network to gigaspeed Improved stability and speed of broadband solutions Launched household benefit programme YouSee More Introduced new flexible TV package in Get Grew our cloud-based collaboration solutions Improvement in positive and negative customer experiences Reached >2 million unique users on our YouSee website Took back the full customer ownership through insourcing Simplified digital operating model Introduced our Digital First programme Simplified and consolidated our IT platforms Strengthening digital citizenship and future skills 10

11 Group 2017 key take-aways achievements TDC Group in 2017; launch of next-generation TV packages Get YouSee New flexible TV package including streaming services and new point system was introduced in Q2 17 and more than 60% of TV customers have already used the selection menu Building on-top of our SVoD integration in 2017 we introduced flexible packaging in Q1 18 which includes a point-based selection system enabling users to select streaming services as part of their YouSee subscription 11

12 Key strategic deliveries in 2017 Strategic initiatives to deliver on our ambitions Always simpler and better Better connectivity Better Offerings Better customer experience Maintained our position as best mobile network in Denmark Upgraded 70% of our cable network to gigaspeed Improved stability and speed of broadband solutions Launched household benefit programme YouSee More Introduced new flexible TV package in Get Grew our cloud-based collaboration solutions Improvement in positive and negative customer experiences Reached >2 million unique users on our YouSee website Took back the full customer ownership through insourcing Simplified digital operating model Introduced our Digital First programme Simplified and consolidated our IT platforms Strengthening digital citizenship and future skills 12

13 Group 2017 key take-aways achievements TDC Group in 2017; Digital First one of our biggest value drivers Mit YouSee self-service universe had more than 500k users every month in 2017 < Reduction of 6% in legacy IT systems Established a new business unit Digital in Feb 2018 Organic opex savings of DKK ~400m in 2017 Reduction of 18% in support and billing calls 52% of customers scored us 9 or 10 on a scale from 1-10 after being in contact with TDC Group 13

14 Key strategic deliveries in 2017 Strategic initiatives to deliver on our ambitions Always simpler and better Better connectivity Better Offerings Better customer experience Maintained our position as best mobile network in Denmark Upgraded 70% of our cable network to gigaspeed Improved stability and speed of broadband solutions Launched household benefit programme YouSee More Introduced new flexible TV package in Get Grew our cloud-based collaboration solutions Improvement in positive and negative customer experiences Reached >2 million unique users on our YouSee website Took back the full customer ownership through insourcing Simplified digital operating model Introduced our Digital First programme Simplified and consolidated our IT platforms Strengthening digital citizenship and future skills 14

15 TDC Group and the society Continued focus on TDC Group s role in society For more than 130 years, TDC Group has ensured that people are connected More than 8000 people work at TDC Group TDC Group is the tenth-largest 1 corporate taxpayer in Denmark TDC Group is the tenth-largest private employer in Denmark In 2017 TDC Group invested DKK 4.5bn of which 56% was in our networks 1. From the income year

16 Key strategic deliveries in 2017 Strategic initiatives to deliver on our ambitions Always simpler and better Better connectivity Better Offerings Better customer experience Maintained our position as best mobile network in Denmark Upgraded 70% of our cable network to gigaspeed Improved stability and speed of broadband solutions Launched household benefit programme YouSee More Introduced new flexible TV package in Get Grew our cloud-based collaboration solutions Improvement in positive and negative customer experiences Reached >2 million unique users on our YouSee website Took back the full customer ownership through insourcing Simplified digital operating model Introduced our Digital First programme Simplified and consolidated our IT platforms Strengthening digital citizenship and future skills 16

17 2017 results Income statement TDC Group, DKKm Revenue , % , % Income statement EBITDA 1 8, % 8, % Balance sheet Profit for the year from continuing operations 1, % 2, % Profit for the year 1,553-3,037 - Cash flow Note: The percentages state changes compared with the year before 1. Operating profit before depreciation, amortisation and special items 17

18 2017 results Balance sheet TDC Group, DKKm Assets , ,332 Income statement Equity 25,177 Liabilities 37,991 24,207 40,125 Balance sheet Adjusted net interestbearing debt (22,874) (24,909) Cash flow 18

19 2017 results Statement of cash flow TDC Group, DKKm 2017 EBITDA 1 8, % , % Income statement Change in working capital % Cash flow from capital expenditure (4,491) -0.8% (4,454) -4.0% Balance sheet Other 2 (1,763) (2,103) Equity free cash flow 2, % 2, % Cash flow Note: The percentages state changes compared with the year before 1. Operating profit before depreciation, amortisation and special items 2. Other primarily includes cash flow from special items, interests and income tax 19

20 2018 strategic initiatives Key strategic themes going forward STRATEGIC THEMES Digital First enabled customer experience Next generation entertainment Nordic cloud based solutions provider Value through superior network connectivity Customer loyalty through convergence Efficient operations leveraging Nordic scale FOUNDATION Drive capabilities and culture to digital & entertainment 20

21 2018 guidance 2018 guidance 1 EBITDA (organic development) EFCF Dividend per share 0% (corresponding to reported DKK ~8.2bn assuming NOK/DKK rate of 0.77) DKKbn 2.4 DKK Including expected impact from new IFRS requirements 21