Note 19: Net debt
In € millions |
2017 |
2018 |
Bonds issued |
2,237 |
1,739 |
Other borrowings |
63 |
60 |
Long-term borrowings |
2,300 |
1,799 |
Current portion of long-term borrowings |
805 |
516 |
Debt to credit institutions |
156 |
67 |
Other |
12 |
16 |
Short-term borrowings |
973 |
599 |
Total borrowings |
3,273 |
2,398 |
Cash and cash equivalents |
(1,322) |
(2,799) |
Short-term investments |
– |
(5,460) |
Net debt |
1,951 |
(5,861) |
AkzoNobel’s net debt is mainly denominated in euro.
The part of long-term borrowings that is due within one year is presented under short-term borrowings. For details on the exposure to interest rate and foreign currency risk, see Note 25.
In € millions |
2017 |
2018 |
||
|
||||
2 5/8% 2012/22 (€750 million) |
745 |
746 |
||
1 3/4% 2014/24 (€500 million) |
497 |
498 |
||
1 1/8% 2016/26 (€500 million) |
494 |
495 |
||
3mE + 2/10% 2017/19 (€500 million)* |
501 |
– |
||
Total |
2,237 |
1,739 |
||
The average effective interest rate of the bonds outstanding at year-end 2018 was 1.9 percent (year-end 2017: 2.1 percent).
In € millions |
2020 – 2023 |
After 2023 |
Bonds issued |
746 |
993 |
Other borrowings |
27 |
33 |
Total |
773 |
1,026 |
in € millions |
Long-term borrowings |
Short-term borrowings |
Short-term investments |
Cash and cash equivalents |
Net debt |
Net debt equivalents at January 1, 2017 |
2,644 |
87 |
– |
(1,479) |
1,252 |
Net cash from operating activities |
– |
– |
– |
(278) |
(278) |
Net cash from investing activities |
– |
– |
– |
284 |
284 |
Proceeds from borrowings |
501 |
755 |
– |
(1,256) |
– |
Borrowings repaid |
– |
(345) |
– |
345 |
– |
Transfers from long-term to short-term |
(812) |
812 |
– |
– |
– |
Dividends |
– |
– |
– |
1,187 |
1,187 |
Movements bankoverdrafts and short term bank loans |
– |
11 |
– |
(11) |
– |
Buyback of shares |
– |
– |
– |
160 |
160 |
Net cash from operating and investing activities of |
– |
– |
– |
(337) |
(337) |
Held for sale |
(45) |
(341) |
– |
– |
(386) |
Changes in exchange rates |
(5) |
(6) |
– |
62 |
51 |
Other changes |
17 |
– |
– |
1 |
18 |
Net debt at year-end 2017 |
2,300 |
973 |
– |
(1,322) |
1,951 |
Net cash from operating activities |
– |
– |
– |
(162) |
(162) |
Net cash from investing activities |
– |
– |
|
207 |
207 |
Proceeds from borrowings |
7 |
600 |
– |
(607) |
– |
Borrowings repaid |
– |
(1,529) |
– |
1,529 |
– |
Transfers from long-term to short-term |
(526) |
526 |
– |
– |
– |
Investments in short-term investments |
– |
– |
(5,541) |
5,541 |
– |
Repayments of short-term investments |
– |
– |
80 |
(80) |
– |
Dividends |
– |
– |
– |
636 |
636 |
Movements bankoverdrafts and short term bank loans |
– |
33 |
– |
(33) |
– |
Net cash from discontinued operations |
– |
– |
– |
(8,958) |
(8,958) |
Buy out of non-controlling interests |
– |
– |
– |
437 |
437 |
Changes in exchange rates |
– |
(9) |
– |
17 |
8 |
Other changes |
18 |
5 |
1 |
(4) |
20 |
Net debt at year-end 2018 |
1,799 |
599 |
(5,460) |
(2,799) |
(5,861) |
Long-term borrowings
We have a €1.8 billion multi-currency revolving credit facility which runs until 2022. This facility does not contain financial covenants or acceleration provisions that are based on adverse changes in ratings or material adverse change. At year-end 2018 and 2017, this facility has not been drawn.
At year-end 2018 and 2017, none of the borrowings was secured by collateral.
Financial lease liabilities are included in Other borrowings and aggregated €37 million (2017: €40 million). An amount of €5 million (2017: €5 million) will mature within one year, €18 million will mature in the period 2020 through 2023 and €14 million after 2023.
Short-term borrowings
In December 2018, a bond of €800 million matured. In November 2019, a bond of €500 million will mature. This bond is classified as a short-term borrowing.
We have US dollar and euro commercial paper programs in place, which can be used to the extent that the equivalent portion of the €1.8 billion multi-currency revolving credit facility is not used. We had no commercial paper outstanding at year-end 2018 (2017: €112 million).
Cash and cash equivalents
Deposits and money market funds within cash and cash equivalents almost entirely consist of time deposits immediately convertible into cash and with a maturity of three months or less from the date of purchase and marketable securities that can be redeemed immediately when called.
At December 31, 2018, an amount of €8 million in cash and cash equivalents was restricted (2017: €11 million). Restricted cash is defined as cash that cannot be accessed centrally due to regulatory or contractual restrictions.
In € millions |
2017 |
2018 |
Cash on hand in banks |
815 |
896 |
Deposits and money market funds with a life up to 3 months |
507 |
1,903 |
Included under cash and cash equivalents in the balance sheet |
1,322 |
2,799 |
Debt to credit institutions |
(44) |
(67) |
Total per cash flow statement |
1,278 |
2,732 |
Short-term investments
Short-term investments almost entirely consist of time deposits, money market funds and other marketable securities with a life time at investment date longer than three months but shorter than twelve months. For more information on credit risk management, see Note 25.
In € millions |
2017 |
2018 |
Short-term investments with life between 3 and 12 months |
– |
5,460 |
Total |
– |
5,460 |
Defined as long-term borrowings plus short-term borrowings less cash and cash equivalents and short-term investments.