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Corporate and Other

Corporate and Other comprises Group administration expenses for 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 Merck Group.

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CORPORATE AND OTHER

Key figures
Change
€ million 2016 2015 € million in %
Operating result (EBIT) – 492 – 432 – 60 13.8%
EBITDA – 465 – 411 – 54 13.1%
EBITDA pre exceptionals – 396 – 360 – 36 10.0%
Business free cash flow – 485 – 421 – 64 15.1%

In 2016, administration expenses reported under Corporate and Other amounted to € 276 million (2015: € 246 million). Other operating expenses (net) rose to € – 207 million (2015: € – 180 million), particularly as a result of higher expenses from exceptionals, for example costs of special IT projects or environmental protection measures for businesses divested in prior years. Consequently, in 2016 the operating result (EBIT) amounted to € – 492 million (2015: € – 432 million) and EBITDA was € – 465 million (2015: € – 411 million). Adjusted for exceptionals, EBITDA pre exceptionals totaled € – 396 million (2015: € – 360 million). The increase in negative EBITDA pre exceptionals and higher capital spending had a significant impact on the development of business free cash flow, which amounted to € – 485 million in 2016 (2015: € – 421 million).