TDC Group Annual Report 2011(6,4MB) - TDC Annual Report 2011

Gross profit
Despite the TDC Group’s revenue increase, gross profit
decreased by 1.3% to DKK 19,172m.
• The decline was driven mainly by a shift in product mix.
Growth in areas with relatively low margins such as the
TV business, Nordic and especially terminal equipment
were more than offset by decreased activity in highmargin
areas such as landline voice and landline
broadband.
The gross profit margin decreased from 74.2% to 72.9%
despite being positively affected by the fact that only a
minor part of the regulation had a gross profit effect.
EBITDA
EBITDA increased by 1.6% driven by lower operational
expenses as a result of productivity gains throughout the
organisation.
• The introduction of TDC Rate resulted in a significant fall
in SAC/SRC costs. This changed sales from SAC-financed
TDC Group Annual Report 2011
handsets to instalment plans, which resulted in lower
costs for mobile subscriber acquisitions. This was partly
offset by higher marketing costs driven by the
competitive environment in the domestic residential
mobile market in particular.
• Continued improvements in efficiency through TDC’s
transformation programmes have led to fewer faults in
TDC’s products, fewer calls to customer centres and
further process optimisations, etc., which have enabled a
7.3% reduction in average employees excluding
acquisitions. As a result, organic wages, salaries and
pension costs decreased by 4.2%. This was achieved in
spite of a negative impact from termination of an old
incentive scheme and build up of new incentive
programmes.
• Lower IT and facility management costs, including
savings on rent and service and leasing agreements,
resulting from further consolidation of physical locations,
optimisation of processes and purchasing activities.
The EBITDA margin increased from 41.2% in 2010 to
41.6% in 2011.
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