2008 millions of € 2007 millions of € Change millions of € Change % 2006 millions of € Total revenue 3,573 3,868 (295) (7.6) 3,758
EBIT (loss from operations) (1,198) (1,973) 775 39.3 (2,138)
EBIT margin (%) (33.5) (51.0) (56.9)
Depreciation, amortization and impairment losses (831) (967) 136 14.1 (947)
EBITDA a (367) (1,006) 639 63.5 (1,191)
Special factors affecting EBITDA a (336) (898) 562 62.6 (730)
Adjusted EBITDA a (31) (108) 77 71.3 (461)
Adjusted EBITDA margin a (%) (0.9) (2.8) (12.3)
Cash capex b (435) (471) 36 7.6 (508)
Number of employees c 22,808 27,023 (4,215) (15.6) 30,755
Of which: at Vivento d 8,200 10,200 (2,000) (19.6) 13,500
a Deutsche Telekom defines EBITDA as profit/loss from operations before depreciation, amortization and impairment losses. For a detailed explanation of the special factors affecting EBITDA, adjusted EBITDA, and the adjusted EBITDA margin, please refer to the section on “Development of business in the Group.”
b Investments in property, plant and equipment, and intangible assets (excluding goodwill) as shown in the cash flow statement. c Average number of employees.
d Number of employees at the balance sheet date, including Vivento’s own staff and management; figures rounded.
Deutsche Telekom sold its wholly owned subsidiary DeTe Immobilien, which provides real estate services for Deutsche Telekom, to the Austrian company Strabag SE in the third quarter of 2008 as part of its strategy of focusing on its core business. The sale also included the two foreign subsidiaries of DeTe Immobilien, DeTeImmobilien – Hungary Szolgáltató Zártkörü Részvénytársaság and DeTeImmobilien-Slovakia s.r.o. Deutsche Telekom concluded far-reaching agreements to safeguard the jobs and to regulate the financial conditions of employment of the around 5,900 employees affected by the sale. In addition, a comprehensive service agreement with an initial term of ten years was concluded with Deutsche Telekom based on market and industry benchmarks. Deutsche Telekom’s real estate is not affected by the sale.
Streamlining and improving the real estate portfolio remained a key property management issue in the 2008 financial year. Deutsche Telekom closed a total of 298 sales deals in the reporting year, involving 153,000 square meters of floor space and 1.1 million square meters of land. Cash inflows from the disposal of real estate totaled EUR 0.1 billion in 2008. Deutsche Telekom reduced leased floor space by another 172,000 square meters, thanks to the ongoing activities to optimize floor space and corporate sites. Overall, the Group again cut its leasing and facility management costs in 2008. To increase its competitiveness and safeguard the future of its accounting in Germany, Deutsche Telekom established Deutsche Telekom Accounting GmbH on April 1, 2008 with the objective of modernizing and streamlining the financial accounting process and utilizing economies of scale by merging locations. To this end, Deutsche Telekom has efficiently bundled accounting functions that were previously assigned to the operating seg- ments in a function-oriented shared service center which standardizes and automates mass accounting processes throughout the Group. The new company successfully completed its first location migrations in the report- ing period, thus initiating the intended cost improvement process.
Total revenue in the Group Headquarters & Shared Services operating segment fell by 7.6 percent year-on-year in 2008. A major factor behind this trend was the revenue decrease at Vivento due in particular to the sale of VTS operations, the disposal of call center locations of VCS and price cuts in the call center unit. In addition, revenue declined in the Real Estate Services unit. This was primarily the consequence of the decline in revenue at Deutsche Funkturm GmbH, the sale of DeTe Immobilien to Strabag, and the lower level of facility management services, in particular for collocation, billed to the operating segments of the Group by the Real Estate Services unit. Volume-driven growth in revenue at Power and Air Condition Solution Management GmbH & Co. KG and increased revenue at DeTeFleetServices GmbH as a result of a higher level of proceeds from vehicle sales as part of a regular replacement process both had a positive effect on total revenue. Deutsche Telekom Accounting GmbH, which was established in the 2008 financial year, additionally generated revenue from charging the operating segments for accounting services.
Year-on-year, Group Headquarters & Shared Services improved its adjusted EBITDA by EUR 0.1 billion. This is primarily attributable to higher EBITDA achieved by the Real Estate Services unit and at Vivento, the former profit- ing in the reporting period from income from the reclassification of real estate from assets held for sale to non-current assets in particular as well as income from the recognition of a receivable for a refund of electricity tax paid and lower provisions. The sale of the VTS operations, the disposal of call center locations, and a year-on-year reduction in headcount due to the staff fluctuation at Vivento also had a positive effect on adjusted EBITDA. Lower income from real estate sales and the decline in revenue following price cuts in the call center unit partially offset these factors contributing to the improvement in EBITDA. EBIT (loss from operations) improved by EUR 0.8 billion year-on-year in 2008, mainly as a result of the decrease in expenses for staff-related measures. Furthermore, the decrease in depreciation, amortization and impairment losses, which principally affect Deutsche Telekom AG’s real estate assets, and the substantial improve- ment in adjusted EBITDA also had a positive effect.
The average number of employees during the reporting period was 22,808. The decrease of 4,215 employees compared with the 2007 financial year is primarily attributable to the continued staff reduction at Vivento, which is mainly due to the sale of the VTS operations and the disposal of call center locations. The disposal of DeTe Immobilien was also reflected in the average number of employees.
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Group management report
As part of the further development of its corporate responsibility (CR) strategy in 2008, the Deutsche Telekom Group set itself the goal of becom- ing an international leader in the field of CR. The strategy defines a common understanding of corporate responsibility throughout Deutsche Telekom, establishing a framework of activities for all Group units. A separate CR department, which also carries out tasks such as environmental manage- ment and CR reporting, has provided the interface to a new, efficient orga- nizational structure since early 2008. Assigning this department to the Chairman of the Board of Management has enabled corporate responsibility to be managed uniformly throughout the Group. In the future, CR will focus on three new fields of activity: climate protection (“low-carbon society”), equality of opportunity in the information society (“connect the uncon- nected”), and “connected life and work.” With this approach, Deutsche Telekom intends to unite social and environmental commitments with economic growth in its core business. The printed CR report for 2008 and the CR online report at http://www.telekom.com/cr-report2008 contain further information on the CR strategy and the core CR topics.