TDC: Satisfactory development in Q1

TDC Group navigated the first quarter with a satisfactory development in both EBITDA and cash flows. This progress was driven by e.g. the best development in organic gross profit in three years and higher organic opex savings than expected. Though revenue remains challenged, TDC affirms its guidance for 2014.

Carsten Dilling, TDC's President and CEO, says:

"Our landline business continues to deliver solid results with growth in TV and broadband subscriber bases. Organic gross profit from mobility services also showed satisfactory results, confirming our focus on profitability. That said, we delivered a disappointing trend in our mobile subscriber base due partly to the loss of low-spending customers, and are therefore planning a number of new and interesting product launches in the residential market in Q2 without compromising on profitability.

In line with our strategic plan for 2013-15, we launched a number of new products and services in Q1, including attractive TDC TV packages,  and we expanded our footprint within the strategically important area of digital content services as we entered the sports betting market through our ownership of Bet25 (a ~DKK 2bn market).

We have now successfully transferred the mobile network operation to Huawei and have upgraded our 4G network in Northern Zealand and Bornholm with satisfactory results. We expect to provide the remainder of Zealand (including Copenhagen) with superior 4G coverage within the coming six months.

In Q1, customer satisfaction scores were affected by unsatisfactory service levels in our call centres, where increased sales of more complex household solutions are naturally producing longer customer inquiries. We will continue to target improved service levels by raising staff levels and competencies in customer services.

Our focus on productivity will, however, continue unchanged, e.g. by ambitiously transforming TDC Group's digital profile and establishing a call centre in Flensburg at very attractive costs.

Recently, we announced the divestment of our Finnish activities as a result of further focusing on our Nordic business. At the same time, we have signed a strategic cooperation agreement with DNA Oy that enables us to continue to service both existing and new pan-Nordic customers. We have earmarked DKK 500m from the proceeds of this for investment in profitable growth initiatives over the period 2014-2015."