Note 8: Financing income and expenses
In € millions |
2020 |
2021 |
|---|---|---|
Financing income |
14 |
12 |
Financing expenses |
(66) |
(74) |
Net interest on net debt |
(52) |
(62) |
|
|
|
Other interest |
|
|
Financing income related to post-retirement benefits |
14 |
13 |
Interest charges on provisions |
(10) |
3 |
Other items |
(21) |
7 |
Net other financing credit/ |
(17) |
23 |
Total financing income and expenses |
(69) |
(39) |
Net financing expenses for the year were €39 million (2020: €69 million). Significant variances are:
- Net interest on net debt increased by €10 million to €62 million (2020: €52 million) mainly as a result of higher interest cost on debt
- Interest on provisions changed from a €10 million charge in 2020 to an income of €3 million in 2021 due to discounting at higher discount rates
- Other items in 2021 include €28 million interest income from the Brazil ICMS case (refer to Note 4 for further details on the Brazil ICMS case) and foreign currency results.
The average interest rate used for capitalized interest in 2021 and 2020 was 1.9%. Capitalized interest was negligible in both 2021 and 2020.
The average interest rate on total debt was 2.3% (2020: 2.4%).
Net debt
Defined as long-term borrowings plus short-term borrowings less cash, cash equivalents and short-term investments.