Note 18: Net debt
In € millions |
2016 |
2017 |
Bonds issued |
2,531 |
2,237 |
Other borrowings |
113 |
63 |
Long-term borrowings |
2,644 |
2,300 |
Current portion of long-term borrowings |
45 |
805 |
Debt to credit institutions |
38 |
156 |
Other |
4 |
12 |
Short-term borrowings |
87 |
973 |
Total borrowings |
2,731 |
3,273 |
Cash and cash equivalents |
(1,479) |
(1,322) |
Net debt |
1,252 |
1,951 |
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 24.
In € millions |
2016 |
2017 |
||
|
||||
4% 2011/18 (€800 million) |
797 |
– |
||
2 5/8% 2012/22 (€750 million) |
743 |
745 |
||
1 3/4% 2014/24 (€500 million) |
497 |
497 |
||
1 1/8% 2016/26 (€500 million) |
494 |
494 |
||
3-months EURIBOR+0.2% 2017/19 (€500 million)* |
– |
501 |
||
Total |
2,531 |
2,237 |
||
The average effective interest rate of the bonds outstanding at year-end 2017 was 2.1 percent (year-end 2016: 2.6 percent).
In € millions |
2019 – 2022 |
After 2022 |
Bonds issued |
1,246 |
991 |
Other borrowings |
22 |
41 |
Total |
1,268 |
1,032 |
Long-term borrowings
We have a €1.8 billion multi-currency revolving credit facility, which was extended in 2017 by one additional year to 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 2017 and 2016, this facility has not been drawn.
At year-end 2017 and 2016, none of the borrowings was secured by collateral.
In November 2017, a floating rate note was issued with a nominal value of €500 million maturing in 2019 at a coupon of 3-months EURIBOR plus 0.20 percent mark-up, floored at zero percent.
Financial lease liabilities are included in Other borrowings and aggregated €40 million (2016: €70 million). An amount of 5 million (2016: €9 million) will mature within one year, €18 million will mature in the period 2019 through 2022 and €17 million after 2022.
in € millions |
Long-term |
Short-term |
Cash |
Net debt |
Net debt equivalents at January 1, 2016 |
2,161 |
430 |
(1,365) |
1,226 |
Net cash from operating activities |
– |
– |
(1,297) |
(1,297) |
Net cash from investing activities |
– |
– |
979 |
979 |
Proceeds from borrowings |
498 |
418 |
(916) |
– |
Borrowings repaid |
– |
(776) |
776 |
– |
Transfers from long-term to short-term |
(46) |
46 |
– |
– |
Dividends |
– |
– |
336 |
336 |
Buy-out of non-controlling interests |
(7) |
– |
7 |
– |
New financial leases |
24 |
4 |
– |
28 |
Changes in exchange rates |
6 |
(27) |
(14) |
(35) |
Other changes |
8 |
(8) |
15 |
15 |
Net debt at year-end 2016 |
2,644 |
87 |
(1,479) |
1,252 |
Net cash from operating activities |
– |
– |
(969) |
(969) |
Net cash from investing activities |
– |
– |
638 |
638 |
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 |
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 |
Short-term borrowings
In December 2018, a bond of €800 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 €112 million commercial paper outstanding at year-end 2017 (2016: €nil).
In € millions |
2016 |
2017 |
||
|
||||
Cash on hand and in banks |
925 |
815 |
||
Short-term investments |
554 |
507 |
||
Included under cash and cash equivalents in the balance sheet |
1,479 |
1,322 |
||
Debt to credit institutions* |
(38) |
(44) |
||
Total per cash flow statement |
1,441 |
1,278 |
||
Cash and cash equivalents
Short-term investments almost entirely consist of cash loans, time deposits, marketable private borrowings and marketable securities immediately convertible into cash. For more information on credit risk management, see Note 24.
At December 31, 2017, an amount of €11 million in cash and cash equivalents was restricted (2016: €30 million). Restricted cash is defined as cash that cannot be accessed centrally due to regulatory or contractual restrictions.
Held for sale
Net debt classified as held for sale amounts to €386 million and relates to items that have been specifically designated as held for sale, e.g. specific local financing and debt related to finance leases held in relation to the Specialty Chemicals assets. For more information on discontinued operations and held for sale, see Note 2.