Group Headquarters & Group Services
For 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.
DEVELOPMENT OF OPERATIONS
|millions of €|
|Loss from operations (EBIT)||(1,495)||(1,919)||424||22.1||(1,750)|
|Depreciation, amortization and impairment losses||(657)||(676)||19||2.8||(780)|
|Special factors affecting EBITDA||(121)||(574)||453||78.9||(416)|
|EBITDA (adjusted for special factors)||(716)||(670)||(46)||(6.9)||(554)|
Total revenue in our Group Headquarters & Group Services segment in 2017 decreased by 15.1 percent year-on-year. This decline was mainly due to the fact that the costs of intragroup development services newly commissioned from Deutsche Telekom IT in Germany have no longer been charged internally since January 2016. Other reasons for the decrease were forgone revenue from DeTeMedien, the sale of which was completed in June 2017, and lower intragroup revenue from land and buildings, essentially due to further optimization of the use of space. In addition, lower intragroup revenue from Telekom Training and Deutsche Telekom IT – due to a reduction in the amounts charged for licenses and a narrower revenue-relevant cost base – had a negative impact. There was a positive effect on revenue from the structural further development of Deutsche Telekom Services Europe (DTSE).
EBITDA, adjusted EBITDA
Adjusted EBITDA at Group Headquarters & Group Services decreased by EUR 46 million compared with 2016 in the reporting year, primarily due to lower intragroup revenue from land and buildings, forgone earnings following the sale of DeTeMedien, and higher additions to provisions. By contrast, the following factors had a positive effect on adjusted EBITDA: the establishment of our Board department Technology and Innovation, higher income from the sale of real estate, the reduction in headcount brought about by ongoing restructuring of the Vivento workforce, and lower operating costs at Group Services.
Overall, negative special factors of EUR 121 million impacted EBITDA in 2017, largely due to staff-related expenses. Proceeds from the sale of DeTeMedien had an offsetting effect. Negative special factors of EUR 574 million in 2016 were mainly due to staff-related expenses.
The improvement in EBITDA was the main cause of the year-on-year increase of EUR 424 million in EBIT. Depreciation, amortization and impairment losses were down EUR 19 million year-on-year, due in particular to lower depreciation and impairment losses on land and buildings as a result of our ongoing efforts to optimize our real estate portfolio.
Cash capex increased by EUR 69 million year-on-year, primarily owing to increased development activities in the Board department Technology and Innovation.