Group Headquarters & Group Services
For information on changes in the organizational structure, please refer to the section “Group organization, strategy, and management” and to the disclosures under segment reporting in the interim consolidated financial statements.
Development of Operations
|millions of €|
|Q1 2018||Q2 2018||Q2 2017||Change %||H1 2018||H1 2017||Change %||FY 2017|
|Loss from operations|
|Depreciation, amortization and impairment losses||(162)||(269)||(192)||(40.1)||(431)||(341)||(26.4)||(657)|
|Special factors affecting EBITDA||(92)||(54)||1||n. a.||(146)||(15)||n. a.||(119)|
|EBITDA (ADJUSTED FOR SPECIAL FACTORS)||(70)||41||(76)||n. a.||(29)||(189)||84.7||(661)|
Total revenue in our Group Headquarters & Group Services segment in the first half of 2018 decreased by 6.8 percent year-on-year. This decline was mainly due to the fact that, as of January 2016, the costs of intragroup development services newly commissioned from Deutsche Telekom IT in Germany are no longer charged internally. Other reasons for the decrease were forgone revenue from DeTeMedien, which was sold effective June 2017, and lower revenue from land and buildings, essentially due to further optimization of the use of space. Higher intragroup revenue at Deutsche Telekom IT from the licensing of the Group-wide ERP system had a positive effect.
EBITDA, adjusted EBITDA
Adjusted EBITDA in the Group Headquarters & Group Services segment improved by EUR 160 million year-on-year in the reporting period, essentially due to higher revenue at Deutsche Telekom IT from the licensing of the Group-wide ERP system, which do not impact on earnings at Group level. The reduction in headcount brought about by ongoing restructuring of the Vivento workforce also had a positive effect. By contrast, lower revenue from land and buildings had a negative impact on adjusted EBITDA.
Overall, negative net special factors of EUR 146 million affected EBITDA in the first half of 2018. Expenses for staff-related measures were partially offset by the positive effect of the reversal of provisions for legal risks in connection with the Toll Collect arbitration proceedings. In the prior-year period, negative net special factors totaled EUR 15 million and mainly comprised expenses for staff-related measures on the one hand and income from the sale of DeTeMedien on the other.
EBIT declined by EUR 61 million year-on-year largely as a result of the same effects described under EBITDA and a EUR 90 million increase in depreciation, amortization and impairment losses. This increase was due, in particular, to higher depreciation and amortization caused by increased levels of capitalization at Deutsche Telekom IT. The latter were attributable to the fact that the costs of newly commissioned intragroup development services in Germany are no longer charged internally. This development was partially offset by lower depreciation, amortization and impairment losses from land and buildings as a result of our continued optimization of the real estate portfolio.
Cash capex grew by EUR 14 million year-on-year. Higher capital expenditure on technology and innovation – essentially for development services – was partially offset by lower expenditure for the purchase of vehicles.