Note 8: Financing income and expenses

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/(charges)

(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 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.