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 |
Q3 – 2013 |
Q3 – 2012 |
Change |
Jan.–Sept. |
Jan.–Sept. |
Change |
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Total revenues |
– |
– |
– |
– |
– |
– |
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Sales |
– |
– |
– |
– |
– |
– |
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Operating result (EBIT) |
–57.0 |
–74.1 |
–23.1% |
–187.3 |
–398.0 |
–53.0% |
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Margin (% of sales) |
n.m. |
n.m. |
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n.m. |
n.m. |
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EBITDA |
–53.3 |
–71.7 |
–25.7% |
–176.5 |
–391.9 |
–55.0% |
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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 |
–48.9 |
–80.1 |
–38.9% |
–142.9 |
–214.9 |
–33.5% |
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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 third quarter of 2013, administration expenses of Corporate and Other increased to € 50 million (Q3 2012: € 43 million). A net expense of € 7 million (Q3 2012: € 28 million) was reported under “Other operating income and expenses”. This sharp decrease compared to the year-earlier quarter was mainly attributable to the foreign currency result from operating activities as well as one-time items. Expenses classified as one-time items amounted to € 4 million in the third quarter of 2013 (Q3 2012: income of € 8 million). The difference compared to the previous year is mainly related to the restructuring charges for the “Fit for 2018” efficiency program as well as gains/losses from the divestment of businesses.
Overall, the aforementioned effects improved EBIT by 23.1% to € –57 million (Q3 2012: € –74 million) and EBITDA by 25.7% to € –53 million (Q3 2012: € –72 million). Adjusted for one-time effects, EBITDA pre amounted to € –49 million in the third quarter of 2013 (Q3 2012: € –80 million).
Performance in the first nine months of 2013
In the first nine months of 2013, EBITDA pre one-time items of Corporate and Other totaled € –143 million (Jan.-Sept. 2012: € –215 million). This development was mainly driven by hedging gains.