TDC A/S : Group announces a new strategy for 2016 — 2018, preliminary financial results for 2015 and guidance for 2016

January 27, 2016

TDC will during its Capital Markets Day in London starting today at 10:00 am CET/9:00 London time (GMT) launch a new strategy for TDC Group for 2016 - 2018.

TDC Group is reinvigorating its strategic plan and intensifying its execution focus via its new 2016 - 2018 strategy, centred around two metrics: customer satisfaction and cash flow generation.

The new strategy's guiding principle is 'Always Simpler and Better', describing how the overall customer experience will be, as well as how TDC Group seeks to operate as a streamlined business.

To deliver on its new strategy, TDC is committed to differentiating itself in a highly competitive marketplace by focusing on three customer promises:

- Better connectivity, by continuing to deliver the best speed, quality and coverage through the uniting of

TDC Group's unique assets;

- Better offerings and entertainment, by delivering relevant products both today and tomorrow; and

- Better customer experience, driven by the best customer insights and digitalisation, which will also reduce

organisational complexity and deliver opex efficiency savings.

A simplified and standardised digital operating model, a clear focus on people (employees and society) and a diligent focus on financial and commercial management shall enable TDC Group to deliver on these core customer promises.

Preliminary high level financial results for 2015

During the Capital Markets Day, TDC will report on preliminary high level financial results for 2015, which are set out in the table on the next page. The figures for 2015 are unaudited. Final audited financial statements will be announced on 5 February 2016.

Se table in attached PDF

As it appears revenue, EBITDA and capex for 2015 are in line with guidance. TDC has also guided for a 2015 Dividend Per share (DPS) of DKK 2.5 of which DKK 1.0 was paid in August 2015. The remainder of the 2015 DPS of DKK 1.5 is cancelled due to the continued deterioration in financial results expected for 2016, cf. guidance 2016 below.

Profit/(loss) for the year is negatively impacted by non-cash impairment losses of DKK 4.6bn relating to the Danish business activities following the annual test for goodwill impairment. The declining profit level in the Danish business lines has resulted in a need for write-down of the goodwill amounts stemming from NTC's acquisition of TDC in 2006 and the subsequent merger between TDC A/S and NTC ApS in 2009. The impairment loss stems mainly from the development in Business in recent years.

Guidance for 2016

During the Capital Markets Day, TDC will also provide its guidance for 2016, which is set out in the table on the next page:

(DKKbn)	Preliminary results 2015	Guidance 2016
EBITDA	9.8	~ 8.8
EFCF	3.2	~ 1.9
DPS (DKK per share)	1.00	1.00

Note: Assuming NOK/DKK and SEK/DKK of approx. 0.80

Revision of TDC's shareholder remuneration policy

As part of the new strategy, TDC's shareholder remuneration policy has been revised. It is TDC's ambition to pay an attractive return to shareholders subject to financial performance, investment needs and investment grade rating commitment and to be paid as either dividends or through share buy backs.

Dividends shall be paid out annually following approval at the Annual General Meeting of the Board of Directors' proposal for distribution of profits; thus there shall be no interim dividend going forward.

For the financial year 2016, the DPS guidance is DKK 1.0 as stated above.

From 2017 it is the ambition to keep DPS stable or to grow it, dependent on financial performance, investment needs and TDC's ability to honour its commitment to maintain an investment grade rating.

Key elements of the new strategy

Better connectivity:

To continue providing Better Connectivity, TDC will leverage its world-class 4G mobile network, accelerate the upgrading and future-proofing of its coaxial cable network to market-leading 1 Gigabit speeds and deliver optimal connectivity irrespective of network type. TDC Group's customers, both consumers and businesses, will consequently benefit from best-in-class, ubiquitous broadband connectivity across all fixed and mobile access networks. In Norway, Get will move to offer its own 1 Giga services and will expand its coax cable footprint into attractive new local markets which currently do not have access to Get's leading service proposition.

Better offerings:

To deliver on Better Offerings, TDC Group will unify its premium consumer household offerings by merging TDC and youSee with youSee as continuing brand. As of 1 July 2016, TDC will no longer be in use as a Danish consumer market brand. This initiative will involve the full integration of youSee into TDC, including combining IT platforms and backhaul; merging channels, go-to-market-strategy and branding; and offering an integrated portfolio of services with a consistent product roadmap. Through this unified household brand, TDC Group's customers will benefit from a leading suite of integrated services across mobile, broadband, TV and landline telephony covering all of Denmark. It will also simplify TDC Group's operating model, optimise investment and marketing spend and reduce complexity and duplication.

In Norway, Get will be launching MVNO-based mobility services during 2016, allowing it for the first time to offer new and existing customers an exciting triple-play bundle of services. Going forward Get will capitalise on emerging customer propositions, such as Smart Home services, that can be bundled on top of existing products. Together with the youSee integration, these initiatives will serve to further strengthen what is already the leading cable platform across Denmark and Norway.

Within Business, a comprehensive program will simplify its operating model and reduce complexity in the product portfolio. All business customers will benefit from the roll-out of more standardised products and a more clearly defined customer proposition. In the SMB segment, a radically different go-to-market model will enable more effective selling of solutions such as enhanced unified communications. In Enterprise, the focus will be on standardised off-the-shelf products, as well as a new incentive structure that will favour focus on gross profit over sales. Looking ahead, new revenue streams will be developed in areas of IT security and location-based commerce.

Better customer experience:

To deliver on its promise of Better Customer Experience, TDC Group will take advantage of enhanced customer insights to shape its product development efforts and increase the share of customers utilising online and digital self-servicing tools. Through these measures, TDC Group will substantially reduce churn, increase customer loyalty and cross-sell / up-sell opportunities and deliver improved customer satisfaction scores. As a concrete manifestation of its promise to deliver Better Customer Experience, TDC Group will offer 24/7 service to premium consumer and business customers. In Norway, Get will be rolling out its own 24/7 e-customer service and moving to 100% digital interaction across all of its channels in order to continue building on its leading brand perception among customers.

Simplified digital operating model:

As a consequence of the decision to merge the premium consumer household brands and to substantially simplify the product portfolio in Business, a consolidation of platforms and IT systems will be possible, and further simplification efforts will lead to a simplified digital operating model, which will deliver more efficiency.

Financial ambitions of the new strategy

- After 2016, EBITDA is expected to be on an improving trend towards growth in 2018, as Consumer mobile and the current trends in Business are expected to improve and

new opex reduction initiatives under the simplified operating model will show effect.

- The simplified operating model is expected to yield annual costsavings in Denmark of DKK 600 - 700m by 2018.

- Cash outflow related to capex is expected to be stable in 2016 and with a slight decrease in the following years and this includes the funding of TDC's Better connectivity

ambition.

- EFCF is expected to improve from 2017, driven by increase in EBITDA and decrease in both capex and special items cash flow with the ambition to total approx. DKK 2.5bn

by 2018.

Temporary change to the Corporate Management Team of TDC

The merger between the TDC and youSee brands requires full commercial attention and for that reason the Board of Directors has decided to release Michael Moyell Juul, Head of Online Brands and member of TDC's Corporate Management Team, from his additional responsibility as acting Head of Household Brands, cf. stock exchange announcement no. 34 of 8 December 2015, and to temporarily appoint René Brøchner as acting Head of Household Brands and member of TDC's Corporate Management Team until a new head of this business line is found. René Brøchner comes from a position as director of youSee in Household Brands. Prior to that he was director of TDC in the former business unit Consumer.

The presentations at the Capital Markets Day will be webcasted during the event and can be accessed from

http://edge.media-server.com/m/p/5f6rz99c

The slides used during the presentation can be accessed on the website tdc.com/investor from approx. 13:00 CET/12:00 London time (GMT) today.

TDC A/S
Teglholmsgade 1
0900 Copenhagen C
DK-Denmark
tdc.com

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