Corporate and Other comprises Group administration expenses for Group functions such as Finance and Accounting, Tax, Procurement, Communications, Investor Relations and Human Resources that are not directly managed by the divisions. Corporate costs also include expenses for central, non-allocated IT functions and corporate IT projects related to the expansion and harmonization of IT systems within the Merck Group. As a result, Corporate and Other has no sales to report. Gains or losses on currency hedging also are reported in Corporate and Other.
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Corporate and Other | Key figures | ||||||
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€ million |
Q3 2012 |
Q3 2011 |
Change |
Jan.–Sept. 2012 |
Jan.–Sept. 2011 |
Change |
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Total revenues |
– |
– |
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– |
– |
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Sales |
– |
– |
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– |
– |
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Operating result (EBIT) |
–56.9 |
–33.2 |
71.5% |
–343.7 |
–118.1 |
191.0% |
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Margin (% of sales) |
n.m. |
n.m. |
|
n.m. |
n.m. |
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EBITDA |
–54.6 |
–32.1 |
70.0% |
–337.6 |
–114.4 |
195.2% |
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Margin (% of sales) |
n.m. |
n.m. |
|
n.m. |
n.m. |
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EBITDA pre one-time items |
–62.9 |
–31.9 |
97.0% |
–160.6 |
–96.9 |
65.7% |
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Margin (% of sales) |
n.m. |
n.m. |
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n.m. |
n.m. |
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During the third quarter of 2012, administration expenses of Corporate and Other increased 7.7% to € 31 million (Q3 2011: € 28 million). Other operating expenses totaled € 22 million (Q3 2011: € 2 million). This increase is the net result of losses from cash-flow hedging, a provision of € 48 million related to discontinued businesses and a credit of € 59 million related to a reallocation of restructuring costs to divisional income statements. Initially, € 158 million of restructuring costs were booked in Q2 2012 in the Corporate and Other segment as a proxy related to the Group’s “Fit for 2018” efficiency program and planned to be reallocated to the respective divisions as the actual restructuring progressed.
Accordingly, the increase in other operating expenses lowered EBIT and EBITDA to € –57 million (Q3 2011: € –33 million) and € –55 million (Q3 2011: € –32 million), respectively. Adjusted for one-time charges, EBITDA pre one-time items was € –63 million in the third quarter of 2012 (Q3 2011: € –32 million).
First Nine Months Performance 2012
In the first nine months of 2012, EBITDA pre one-time items for the segment Corporate and Other totaled € –161 million (9M 2011: € –97 million), mainly due to changes in booking of hedging gains and losses as explained above.
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