10Corporate and Other comprises Group administration expenses for Group functions that cannot be directly allocated to the divisions, such as Finance, Procurement, Legal, Communications, and Human Resources. Corporate costs additionally encompass expenses for central, non-allocated IT functions, including expenses related to the expansion and harmonization of IT systems within the Merck Group. Accordingly, Corporate and Other has no sales to report. Gains or losses on currency hedging are also disclosed in Corporate and Other.
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Corporate and Other | Key figures |
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€ million |
Q2 – 2014 |
Q2 – 2013 |
Change in % |
Jan.–June 2014 |
Jan.–June 2013 |
Change in % |
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Operating result (EBIT) |
–48.3 |
–77.9 |
–37.9 |
–91.3 |
–130.3 |
–29.9 |
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EBITDA |
–44.9 |
–74.5 |
–39.7 |
–84.4 |
–123.2 |
–31.5 |
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EBITDA pre one-time items |
–39.8 |
–48.7 |
–18.3 |
–68.1 |
–94.0 |
–27.6 |
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Business free cash flow |
–46.3 |
–111.3 |
–58.4 |
–78.2 |
–159.4 |
–50.9 |
In the second quarter of 2014, administration expenses reported under Corporate and Other decreased to € 48 million (Q2 2013: € 51 million). Other operating expenses (net) dropped to € –1 million (Q2 2013: € –25 million). The decline resulted mainly from lower one-time expenses, which decreased from € –26 million to € –5 million, as well as from a significantly higher foreign currency result, which totaled € 14 million in the second quarter of 2014 (Q2 2013: € 5 million). Overall, the aforementioned effects improved EBIT to € –48 million € (Q2 2013: € –78 million) and EBITDA to € –45 million (Q2 2013: € –74 million). Adjusted for one-time effects, EBITDA pre totaled € –40 million in the second quarter of 2014 (Q2 2013: € –49 million). The improvement in business free cash flow from € –111 million to € –46 million was primarily due to lower investments in property, plant and equipment as well as to the positive development of EBITDA pre one-time items.
In the first half of 2014, EBITDA pre one-time items of Corporate and Other totaled € –68 million (January-June 2013: € –94 million). Business free cash flow also improved considerably and amounted to € –78 million (January-June 2013: € –159 million).
