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Group Headquarters & Group Services

Development of operations

millions of €

 

 

 

 

 

 

2021

2020

Change

Change
%

2019

Total revenue

2,515

2,556

(41)

(1.6)

2,627

Service revenuea

984

970

14

1.4

n.a.

Profit (loss) from operations (EBIT)

(1,764)

(1,655)

(109)

(6.6)

(1,631)

Depreciation, amortization and impairment losses

(1,463)

(1,304)

(159)

(12.2)

(1,143)

EBITDA

(300)

(350)

50

14.3

(488)

Special factors affecting EBITDA

(182)

(277)

95

34.3

(237)

EBITDA (adjusted for special factors)

(118)

(73)

(45)

(61.6)

(251)

EBITDA AL

(622)

(707)

85

12.0

(887)

Special factors affecting EBITDA AL

(182)

(277)

95

34.3

(237)

EBITDA AL (adjusted for special factors)

(440)

(429)

(11)

(2.6)

(650)

Cash capex

(1,007)

(990)

(17)

(1.7)

(1,010)

a

The definition of “service revenue” was not applied consistently Group-wide for the years prior to 2020.

Total revenue, service revenue

Total revenue in our Group Headquarters & Group Services segment decreased in 2021 by 1.6 % year-on-year, mainly as a result of lower revenue from land and buildings due to the ongoing optimization of space. Higher intragroup service revenues at Deutsche Telekom IT from the licensing of the ERP system had an offsetting effect.

Adjusted EBITDA AL, EBITDA AL

Adjusted EBITDA AL at Group Headquarters & Group Services decreased by EUR 11 million year-on-year to EUR ‑440 million, largely as a result of falling revenue from land and buildings, and lower income from real estate sales. Increased service revenues at Deutsche Telekom IT from the licensing of the ERP system and from lower operating expenses at our Group Services had a positive effect.

Overall, EBITDA AL was negatively impacted in the reporting year by special factors amounting to EUR 182 million, especially for staff-related measures. This contrasts with special factors of EUR 277 million in the prior-year period, also in particular for staff-related measures.

EBIT

The year-on-year decline in EBIT of EUR 109 million to EUR ‑1.8 billion was largely a result of two contrasting effects: the significant increase in depreciation and amortization on the one hand, and the positive development of EBITDA AL on the other. The increase in depreciation, amortization and impairment losses is mainly attributable to the increased volume of output in connection with the introduction of agile processes and shorter project runtimes at Deutsche Telekom IT. In addition, depreciation, amortization and impairment losses increased due to higher capitalization in connection with the licensing of the ERP system. By contrast, depreciation, amortization and impairment losses from land and buildings decreased as a result of our continued optimization of the real estate portfolio. Impairment losses were also recognized by the Group Headquarters & Group Services segment in the reporting year totaling EUR 21 million on software used by the Systems Solutions operating segment. In the prior year, EUR 44 million had related to the Group Headquarters & Group Services segment in this connection.

Cash capex

Cash capex increased year-on-year by EUR 17 million. Increased investment at Group Headquarters contrasted with lower cash capex for vehicles and lower investment in technology and innovation, mainly for development activities.

AL – After Leases
Since the start of the 2019 financial year, we have taken the effects of the first-time application of IFRS 16 “Leases” into account when determining our financial performance indicators. “EBITDA after leases” (EBITDA AL) is calculated by adjusting EBITDA for depreciation of the right-of-use assets and for interest expenses on recognized lease liabilities. When determining “free cash flow after leases” (free cash flow AL), free cash flow is adjusted for the repayment of lease liabilities.
Glossary
ERP – Enterprise Resource Planning
Refers to systems that help deploy an organization’s resources such as capital, equipment, and human resources as efficiently as possible in order to optimize business processes.
Glossary