Group Development

Since January 1, 2017, we have reported on the new Group Development operating segment. Group Development actively manages and increases the value of selected Group subsidiaries and equity investments. For further information on changes in the organizational structure, please refer to the notes in the section “Group organization” and the disclosures under Note 31 “Segment reporting” in the notes to consolidated financial statements.

CUSTOMER DEVELOPMENT

thousands
    Dec. 31, 2017 Dec. 31, 2016 Change Change % Dec. 31, 2015
Netherlands Mobile customers 3,850 3,746 104 2.8 3,677
Fixed-network lines 191 164 27 16.5
Broadband lines 191 164 27 16.5

Thanks to its successful repositioning in the market, T-Mobile Netherlands’ mobile business for both consumers and business customers grew 2.8 percent in the reporting year. This increase was mainly due to the new rate plan portfolio introduced in the first quarter of 2017 and to the enhanced market approach it enabled. The number of customers in the fixed-network consumer portfolio we acquired from Vodafone at the end of 2016 also increased in 2017, by 16.5 percent.

DEVELOPMENT OF OPERATIONS

millions of €
    2017 2016 Change Change % 2015
Total revenue   2,263 2,347 (84) (3.6) 2,428
Netherlands   1,355 1,331 24 1.8 1,394
Profit from operations (EBIT)   1,504 2,730 (1,226) (44.9) 1,264
Depreciation, amortization and impairment losses   (304) (760) 456 60.0 (342)
EBITDA   1,808 3,490 (1,682) (48.2) 1,606
Special factors affecting EBITDA   893 2,547 (1,654) (64.9) 556
EBITDA (adjusted for special factors)   915 943 (28) (3.0) 1,050
Netherlands   421 358 63 17.6 500
EBITDA margin (adjusted for special factors) % 40.4 40.2     43.2
Cash Capex   (290) (271) (19) (7.0) (373)

Total revenue

Total revenue in our Group Development operating segment decreased by 3.6 percent year-on-year, with the revenue lost following the sale of Strato having a negative impact. Revenue at DFMG remained virtually unchanged compared with 2016. The main positive effect was the revenue trend at T-Mobile Netherlands.

EBITDA, adjusted EBITDA

EBITDA decreased by EUR 1.7 billion year-on-year to EUR 1.8 billion. We are constantly analyzing our portfolio of shareholdings with a focus on ensuring adequate corporate growth. A consequence of this policy was our sale of Strato effective March 31, 2017 and of the remaining shares in Scout24 AG effective June 23, 2017. The disposals resulted in income of around EUR 0.7 billion being recognized as special factors. Positive special factors of EUR 0.2 billion originating from a settlement agreement with BT concluded in July 2017 also had an impact. T-Mobile Netherlands recognized provisions for new consumer credit regulations in its home market. The 2016 figure had included positive net special factors of EUR 2.5 billion, primarily from the sale of our stake in the EE joint venture.

Adjusted EBITDA in our Group Development operating segment was down by 3.0 percent year-on-year, with forgone earnings following the sale of Strato having a negative impact. In addition, there were non-recurring effects as well as effects from the assignment of DFMG to the Group Development operating segment at the beginning of the reporting year. Adjusted EBITDA at
T-Mobile Netherlands increased by 17.6 percent year-on-year, mainly because of lower market investment expenditure due to a higher proportion of SIM-only contracts, and of a significant reduction in overheads brought about by the transformation program.

EBIT

EBIT decreased by EUR 1.2 billion year-on-year to EUR 1.5 billion, due to the same factors described under EBITDA. Depreciation, amortization and impairment losses were lower than in the prior year, both due to the impairment loss of EUR 0.4 billion on goodwill recognized in the Netherlands in the previous year, and to the deconsolidation of Strato.

Cash Capex

Cash capex in our Group Development operating segment increased by 7.0 percent year-on-year, primarily due to the acquisition of Vodafone’s fixed-network consumer portfolio by T-Mobile Netherlands and to the expansion of mobile network capacities. For information on the effects of our equity investments on profit/loss from financial activities, please refer to the section “Development of business in the Group.”