Prospectus-Final (clean) - Malta Financial Services Authority

Development of Operations2011 2010 Change Change(millionsof €)(millionsof €)(millionsof €) %Total revenue 9,249 9,057 192 2.1Profit (loss) fromoperations (43) 44 (87) n.m.Depreciation, amortisationand impairment losses (640) (623) (17) (2.7)EBITDA 597 667 (70) (10.5)Special factors affectingEBITDA 1 (275) (281) 6 2.1EBITDA (adjusted forspecial factors) 872 948 (76) (8.0)Cash capex (553) (725) 172 23.7Average number ofemployees 48,224 47,588 636 1.3n.m. – not meaningful1 For more information on special factors affecting EBITDA, see "Reconciliation of EBITDA" and "adjusted EBITDA".- Total RevenueThe 2011 increase in revenue was mainly attributable to the transfer of business customers fromMagyar Telekom in the Europe operating segment to T-Systems, which accounted for a revenueincrease of approximately EUR 129 million. To a lesser extent, a revenue increase resulting fromdeals concluded in 2010 and 2011 offset the general negative price trend in IT and communications.Revenue generated with Deutsche Telekom's other operating segments amounted to EUR 2.7 billionin 2011, an increase of 1.4%.The increase in total revenue in 2010 resulted from a number of new contracts that were concluded in2009 and 2010. The increase in volume from these new contracts offset the general negative pricetrend in IT and communications. In addition, revenue generated with Deutsche Telekom's otheroperating segments amounted to EUR 2.6 billion in 2010, a decrease of 2.5%. As a service providerfor Deutsche Telekom's Group, T-Systems plays a key role in Deutsche Telekom's IT costs. T-Systems standardised and improved the IT environment for the Group, making a major contribution toDeutsche Telekom's cost savings initiatives.In 2012, Deutsche Telekom expects total revenue to stabilise. Revenue generated with third parties isexpected to grow, while intra-group revenue is anticipated to decline due to efficiency measures. Frommid-2012, the internal IT activities of Deutsche Telekom will be consolidated in the Systems Solutionsoperating segment in order to accelerate processes and respond more rapidly to competition.Revenue expectations are based on the assumption of an unchanged consolidation structure thatdoes not yet include this consolidation of IT activities.- Net RevenueT-Systems increased its business volume with customers outside the Group in 2011. The operatingsegment generated net revenue of EUR 6.6 billion, 2.4 % more than in 2010. This increase wasprimarily attributable to the transfer of business customers from Hungary, as described above. It wasalso attributable to the growing systems integration business, which benefited in particular from thedevelopment and operation of customer applications (Application Management & Development).Revenue from the telecommunications business also rose, despite falling prices. Deals closed in 2010also had a positive effect on 2011 net revenue.98