Systems Solutions

Order entry

Development of business

The first nine months of 2021 continued to be dominated by the focusing of our systems solutions business on growth and future viability and the continuation of our transformation program. Under the transformation program, we continued to drive forward the alignment of our organization, workflows and capacities, and the fine-tuning of the strategy for our portfolio. Stand-alone portfolio units assume responsibility not only for our growth areas (e.g., public cloud and security) but also for our traditional IT business.

We have defined selected industries (automotive, healthcare, public sector, and public transport), for which we will increase our offer of vertical solutions based on our expertise. In addition, we have agreed partnerships with leading cloud service providers (e.g., Amazon, Google, Microsoft), so as to be able to offer our customers an even broader and more flexible range of cloud solutions. Consistent with our efforts to implement the Group’s strategy pillar “Lead in business productivity,” we transferred our IoT (Internet of Things) portfolio unit to the Germany operating segment effective January 1, 2021.

Order entry in our Systems Solutions operating segment was up by 13.5 % year-on-year in the first nine months of 2021. This trend reflects the recovery from the effects of the coronavirus pandemic on the economic situation of our business customers and the restraint in awarding contracts in the prior year. There was a clear positive trend in our growth areas in particular.

Development of operations

Total revenue

Total revenue in our Systems Solutions operating segment in the first nine months of 2021 amounted to EUR 3.0 billion, down 2.9 % on the prior-year level. This decrease was mainly driven by the expected decline in traditional IT infrastructure business, due in part to targeted business decisions such as the reduction in end-user services. By contrast, our growth areas are growing significantly, especially public cloud (+21.0 %), digital solutions (+13.4 %), and road charging (+12.4 %).

Adjusted EBITDA AL, EBITDA AL

In the first nine months of 2021, adjusted EBITDA AL at our Systems Solutions operating segment increased by 3.9 % year-on-year to EUR 215 million. Efficiency effects from our transformation program and effects from increased revenue in our growth areas exceeded the decline in earnings in the traditional IT infrastructure business. EBITDA AL decreased by EUR 4 million compared with the prior-year period to EUR 47 million. Special factors were up EUR 11 million on the prior year at EUR ‑168 million, mainly due to a loss on deconsolidation in connection with the sale of a business operation and a contrasting effect of lower restructuring costs.

Adjusted EBIT, EBIT

Adjusted EBIT in our Systems Solutions operating segment in the first nine months of 2021 improved by EUR 92 million year-on-year, coming in at EUR 109 million, mainly as a result of declines in depreciation and amortization. EBIT increased by EUR 384 million compared with the prior-year period to EUR ‑129 million. The expense arising from special factors decreased by EUR 292 million on the prior-year period, to EUR 238 million. In the third quarter of the prior year, a non-cash impairment loss on non-current assets reduced EBIT by EUR 0.4 billion, which resulted in a reduction in the depreciation and amortization base. In the first nine months of 2021, non-cash impairment losses on non-current assets of EUR 0.1 billion were recorded as special factors. These impairment losses were also primarily a consequence of the impairment testing carried out in the Systems Solutions cash-generating unit in the third quarter of the prior year.

Cash capex

Cash capex in the Systems Solutions operating segment stood at EUR 146 million in the first nine months of 2021, which was on a par with the prior-year period. Going forward, we will continue to focus our investments on developing our growth business.