TDC : Continued revenue pressure in Q2; strong cash flow

·   Gross profit decline of 4.3% in Q2 affected by weak quarter in TDC Nordic including the adverse

    exchange rate development and different timing of Easter Holiday compared with 2013; YTD decline

    of 3.4%

·   EBITDA down by 3.2% in Q2 as gross profit decline was partly offset by opex savings (5.8%);

    organic EBITDA down 1.9%

·   Strong Equity free cash flow  growth of 40.1% in Q2 driven by NWC improvements;

    H1 EFCF up by 14.4%

·   The divestment of TDC Finland completed for a total cash consideration of DKK 1.15bn after

    approval by Finnish authorities; TDC Finland reclassified as “Discontinued operations”

·   2014 guidance confirmed: Organic revenue will decrease less than in 2013 (2013: -3.5%),

    EBITDA > DKK 9.6bn, capex of DKK 3.7bn and DPS of DKK 3.70;

    Interim dividend of DKK 1.50/share will be paid on 13 August

    residential mobile ARPU stable YoY; positive indications for Q3 with Telmore Play off to a

    promising start with more than 20k sign ups  since launch end of Q2

·   TV net adds  of 3k in Q2 due to growth in the TDC brand/Fullrate (11k) partly offset by loss of both

    individual and organised subscribers in YouSee (-8k)

·   Three large public tenders (SKI) finalised in Q2 with effect from H2 2014; TDC renegotiated one

    contract at lower prices but lost the other two contracts which were settled at price levels that

    TDC Group was unable to match in the specific cases due to competition law restrictions

·   Accelerated network roll-out resulted in 4G coverage increasing from 71% to 85%

·   Additional call centre staff but service levels suffered due to an extensive number of calls;

    service levels expected to improve significantly as skills among new staff members are improved

    and call levels return to normal

·   Development of TDC Group’s future operating model prompted outsourcing of customer support

    (approx. 800 TDC employees) to Sitel from H2 2014 resulting in both savings on operational

    expenses and expected positive impact on customer satisfaction