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Deutsche Telekom AG - Interim Group report - January 1 to September 30, 2011

17Interim Group management report EBITDA. In the first nine months of 2011, we generated EBITDA from continuing operations of EUR 10.2 billion, down 5.8 percent compared with the first three quarters of 2010. Besides a decline in operations, the negative effect was attributable to the change in the composition of the Group due to the deconsoli- dation of T-Mobile UK and the consequent loss of the company’s contribution to EBITDA of EUR 0.2 billion. Special factors of EUR 1.1 billion also negatively affected EBITDA from continu- ing operations in the first three quarters of 2011. They comprised in particular expenses for staff-related measures. In the first three quarters of 2010, EBITDA from continuing operations was negatively impacted by special factors total- ing EUR 1.0 billion. This mainly related to expenses for the deconsolidation of T-Mobile UK (EUR 0.4 billion), staff-related measures (EUR 0.2 billion), and from the write-off of receivables from the German Main Customs Office for the years 2005 to 2009 in the amount of EUR 0.1 billion. Adjusted EBITDA. EBITDA from continuing operations adjusted for special factors amounted to EUR 11.3 billion in the first nine months of 2011, compared with EUR 11.8 billion in the prior-year period. This was primarily due to the change in the composition of the Group due to the deconsolidation of T-Mobile UK, amounting to EUR 0.2 billion. Excluding this effect, adjusted EBITDA from continuing operations decreased by EUR 0.3 billion or 2.8 percent year-on-year. Contribution of the operating segments to adjusted Group EBITDA. Q1 2011 millions of € Q2 2011 millions of € Q3 2011 millions of € Q3 2010 millions of € Change % Q1 – Q3 2011 millions of € Q1 – Q3 2010 millions of € Change % FY 2010 millions of € Germany 2,384 2,439 2,490 2,523 (1.3) 7,313 7,260 0.7 9,618 Europe 1,226 1,316 1,388 1,465 (5.3) 3,930 4,483 (12.3) 5,748 United States 871 892 1,025 1,028 (0.3) 2,788 3,156 (11.7) 4,156 Systems Solutions 189 197 204 222 (8.1) 590 649 (9.1) 948 Group Headquarters & Shared Services (163) (140) (150) (192) 21.9 (453) (546) 17.0 (870) Reconciliation (27) (17) (50) (25) n. a. (94) (79) (19.0) (127) EBITDA (adjusted for special factors) in the Group (continuing and discontinued operations) 4,480 4,687 4,907 5,021 (2.3) 14,074 14,923 (5.7) 19,473 Discontinued operations (United States) (871) (892) (1,025) (1,028) 0.3 (2,788) (3,156) 11.7 (4,156) Reconciliation 0 (2) 2 (1) n. a. 0 1 n. a. 2 EBITDA (adjusted for special factors) in the Group (continuing operations) 3,609 3,793 3,884 3,992 (2.7) 11,286 11,768 (4.1) 15,319 The Germany operating segment generated a 0.7-percent increase in adjusted EBITDA despite a 3.8-percent decline in revenue. A key contribution came from our effective cost management measures as part of Save for Service. Various technology and sales initiatives and the improvement of support processes further reduced operational costs. In addition, the reduction in termination rates and the discontinuation of certain operations as part of our strategy of value-driven growth also contributed to lowering the cost base. Our Europe operating segment generated adjusted EBITDA of EUR 3.9 billion in the first nine months of 2011, a year-on-year reduction of 12.3 percent. As with the development of revenue, adjusted EBITDA was significantly impacted by the change in the composition of the Group due to the deconsolidation of T-Mobile UK. In addition, the special tax imposed in Hungary and the real estate tax introduced by the Greek government in September 2011 had an adverse effect on the segment’s adjusted EBITDA. The slightly positive exchange rate effects against the euro were driven by the Czech koruna and the Hungarian forint. Excluding the aforementioned effects, adjusted EBITDA declined by