A difficult year with much dialogue and impressive performance

2022 was an extraordinary year in every sense. In the shadow of war, Denmark and the rest of Europe suffered an energy crisis and high inflation. After decades of taking a secure supply of electricity, water and heating for granted, we faced a situation where there were no guarantees everyone would get through the winter with adequate heating.

The energy crisis also meant a challenging year for Verdo, with more pressure in all areas of the business. The district heating roll-out to replace Russian gas had to be as rapid as possible. Concerned owners of wood pellet boilers hoarded pellets. Other customers were left waiting for new efficient energy plants to be completed, due to the global shortage of components.

The crisis also had positive effects. We have never before had so much dialogue with so many customers, seeking advice regarding their energy consumption and bills. This meant we had to expand our customer centre several times, and the more extensive dialogue also led to other initiatives. We will maintain these, even after the energy crisis is over.

We look back with pride at the efforts employees have made during a difficult year. We maintained a secure energy supply, and while no consumers in Denmark fully escaped the impacts, we limited the economic fluctuations consumers faced as much as possible – within the political framework we operate under.

Under difficult conditions, we successfully accelerated the district heating roll-out, contributed to energy savings in municipalities and companies, and took a wide range of other steps that you can read about in this annual report. In autumn 2022, we also made an extraordinary payment to heating consumers in Randers and Herning (in collaboration with Ørsted in Herning) – in an attempt to limit price increases for district heating as much as possible.

Despite everything, Verdo’s commercial business areas delivered historically good earnings. This is very satisfying for a turbulent year filled with challenges. It is also extraordinary in the sense that we cannot expect it to happen again.

The strong earnings will also benefit the local community. As a consumer-owned and purpose-driven company, they put

Verdo in a stronger position to accelerate the green transition, for example through the district heating roll-out.

2022 was also the year when the Danish Competition and Consumer Authority approved the acquisition of Verdo’s fibre network by the Norlys energy and telecommunications group, resulting in 26,000 fibre connections in Randers and Hobro being transferred to Norlys.

It was also the year we confirmed that Verdo is on the right track with the Group’s new strategy. This work was initiated at the same time as Verdo was transformed into a cooperative back in 2020, and was built on last year with three new strategic focus areas: 1) Competencies and the future workplace, 2) Stronger sustainable development, and 3) Digitalisation and data.

We have entered a new era, in which energy has become a matter of security policy and global warming is becoming more critical. This places new demands on all energy sector players, but we are ready to face these and see reason for optimism.

With a stronger financial and strategic foundation, we look forward to continuing to make a difference through greater focus on developing the local community, more gas conversions and more cooperation towards the green transition.

Finally, we would like to say thank you to our customers, employees and partners for the year just passed. We look forward to working together in the new year.

We hope you enjoy reading the Verdo Annual Report for 2022.

Torben Høeg Bonde Jakob Flyvbjerg Christensen Chairman of the Board CEO