Corporate and Other comprises Group administration expenses for Group functions that cannot be directly allocated to the divisions. This includes Group functions such as Finance, Procurement, Legal, Communications, and Human Resources. Corporate costs also include expenses for central, non-allocated IT functions, also 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 are also reported in Corporate and Other.
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Corporate and Other | Key figures | ||||||
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€ million |
Q2 – 2013 |
Q2 – 2012 |
Change |
Jan.–June 2013 |
Jan.–June 2012 |
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) |
–77.9 |
–252.1 |
–69.1% |
–130.3 |
–323.9 |
–59.8% |
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Margin (% of sales) |
n.m. |
n.m. |
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n.m. |
n.m. |
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EBITDA |
–74.5 |
–250.2 |
–70.2% |
–123.2 |
–320.1 |
–61.5% |
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Margin (% of sales) |
n.m. |
n.m. |
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n.m. |
n.m. |
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EBITDA pre one-time items |
–48.7 |
–67.4 |
–27.8% |
–94.0 |
–134.8 |
–30.3% |
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Margin (% of sales) |
n.m. |
n.m. |
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n.m. |
n.m. |
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In the second quarter of 2013, administration expenses of Corporate and Other increased by 5.5% to € 51 million (Q2 2012: € 48 million). Other operating expenses amounted to € 26 million (Q2 2012: € 205 million). The sharp decrease is attributable to one-time items recorded here totaling € 26 million (Q2 2012: € 183 million). In the second quarter of 2013, one-time items included € 4 million in one-time expenses for the “Fit for 2018” efficiency program, while in the year-ago quarter one-time expenses of € 158 million were reported for this program. Other one-time items amounting to € 17 million (Q2 2012: € 25 million) reported under Corporate and Other, relate to expenses in connection with businesses already divested.
The decline in other operating expenses (net) was also due to gains from cash flow hedges, which had generated losses in the prior-year quarter.
Overall, the aforementioned effects improved EBIT by 69.1% to € –78 million € (Q2 2012: € –252 million) and EBITDA by 70.2% to € –74 million (Q2 2012: € –250 million). Adjusted for one-time costs, EBITDA pre amounted to € –49 million in the second quarter of 2013 (Q2 2012: € –67 million).
Half-year 2013 Performance
In the first six months of 2013, EBITDA pre one-time items of Corporate and Other totaled € –94 million (January–June 2012: € –135 million), driven by hedging gains, among other things.