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Corporate and Other

Corporate and Other comprises Group administration expenses for central Group functions that cannot be directly allocated to the business sectors, 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 Group as well as research and development costs spanning business sectors.

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Corporate and Other

Key figures1

Change
€ million 2018 2017 € million in %
Operating result (EBIT)2 –548 –437 –111 25.5%
EBITDA2 –488 –391 –97 24.8%
EBITDA pre2 –381 –292 –89 30.6%
Business free cash flow2 –497 –429 –68 15.9%
1
Previous year’s figures have been adjusted, see Note (49) ‟Effects from new accounting standards and other presentation and measurement changes” in the Notes to the Consolidated Financial Statements.
2
Not defined by International Financial Reporting Standards (IFRSs).

In 2018, administration expenses reported under Corporate and Other increased to € 320 million (2017: € 295 million). Cross-business research and development costs amounting to € 47 million in 2018 (2017: € 42 million), such as expenses for the Innovation Center, were allocated to Corporate. Other operating expenses (net) rose to € – 197 million (2017: € – 101 million), due among other things to a deterioration in the foreign exchange result. A reversal of an impairment loss for other receivables amounting to € 37 million had a positive effect on the operating result. The reversal was made in connection with contractual refund claims from the sale of the Generics business in 2007. After eliminating depreciation, amortization and adjustments, EBITDA pre amounted to € – 381 million in 2018 (2017: € – 292 million). The increase in negative business free cash flow to € – 497 million (2017: € – 429 million) was mainly due to the development of EBITDA pre.