Note 21: Net debt
in € millions |
Long-term borrowings |
Short-term borrowings |
Short-term investments |
Cash and cash equivalents |
Net debt |
|---|---|---|---|---|---|
Net debt at January 1, 2019 |
2,069 |
692 |
(5,460) |
(2,799) |
(5,498) |
Net cash from operating activities |
— |
— |
— |
(33) |
(33) |
Net cash from investing activities |
— |
— |
— |
102 |
102 |
Acquisitions |
7 |
— |
(16) |
224 |
215 |
Unwind of discount and amortized cost |
10 |
(1) |
— |
— |
9 |
Proceeds from borrowings |
3 |
7 |
— |
(10) |
— |
Borrowings repaid |
— |
(623) |
— |
623 |
— |
New/ |
34 |
18 |
— |
— |
52 |
Transfers from long-term to short-term |
(86) |
86 |
— |
— |
— |
Movement bankoverdrafts and short-term bank loans |
— |
2 |
— |
(2) |
— |
Investments in short-term investments |
— |
— |
(2,325) |
2,325 |
— |
Repayments of short-term investments |
— |
— |
7,663 |
(7,663) |
— |
Dividends |
— |
— |
— |
1,446 |
1,446 |
Capital repayments |
— |
— |
— |
2,000 |
2,000 |
Share buyback |
— |
— |
— |
2,520 |
2,520 |
Net cash from discontinued operations |
— |
— |
— |
10 |
10 |
Changes in exchange rates |
3 |
(6) |
— |
(15) |
(18) |
Other changes |
2 |
(6) |
— |
1 |
(3) |
Net debt at December 31, 2019 |
2,042 |
169 |
(138) |
(1,271) |
802 |
|
|
|
|
|
|
Net debt at January 1, 2020 |
2,042 |
169 |
(138) |
(1,271) |
802 |
Net cash from operating activities |
— |
— |
— |
(1,220) |
(1,220) |
Net cash from investing activities |
— |
— |
— |
202 |
202 |
Acquisitions |
7 |
— |
— |
112 |
119 |
Buy-out of non-controlling interests |
— |
— |
— |
44 |
44 |
Unwind of discount and amortized cost |
12 |
— |
— |
— |
12 |
Proceeds from borrowings |
756 |
214 |
— |
(970) |
— |
Borrowings repaid |
— |
(339) |
— |
339 |
— |
New/ |
82 |
— |
— |
— |
82 |
Transfers from long-term to short-term |
(117) |
117 |
— |
— |
— |
Movement bank overdrafts and short-term bank loans |
— |
(29) |
— |
29 |
— |
Investments in short-term investments |
— |
— |
(248) |
248 |
— |
Repayments of short-term investments |
— |
— |
136 |
(136) |
— |
Dividends |
— |
— |
— |
385 |
385 |
Share buyback |
— |
— |
— |
555 |
555 |
Net cash from discontinued operations |
— |
— |
— |
3 |
3 |
Changes in exchange rates |
(11) |
(13) |
— |
74 |
50 |
Net debt at December 31, 2020 |
2,771 |
119 |
(250) |
(1,606) |
1,034 |
In € millions |
2019 |
2020 |
|---|---|---|
Bonds issued |
1,741 |
2,486 |
Lease liabilities |
262 |
238 |
Other borrowings |
39 |
47 |
Long-term borrowings |
2,042 |
2,771 |
Current portion of long-term borrowings |
3 |
5 |
Current portion of lease liabilities |
90 |
86 |
Debt to credit institutions |
61 |
25 |
Other |
15 |
3 |
Short-term borrowings |
169 |
119 |
Total borrowings |
2,211 |
2,890 |
Short-term investments |
(138) |
(250) |
Cash and cash equivalents |
(1,271) |
(1,606) |
Net debt |
802 |
1,034 |
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, refer to Note 27.
The average effective interest rate of the bonds outstanding at year-end 2020 was 1.9% (year-end 2019: 1.9%).
In € millions |
2019 |
2020 |
|---|---|---|
2 5/8% 2012/22 (€750million) |
747 |
748 |
1 3/4% 2014/24 (€500million) |
498 |
498 |
1 1/8% 2016/26 (€500million) |
496 |
497 |
1 5/8% 2020/30 (€750million) |
— |
743 |
Total |
1,741 |
2,486 |
Long-term borrowings
We have a multi-currency revolving credit facility, which was amended in 2020 from €1.8 billion to €1.3 billion and extended to 2025. 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 2020 and 2019, this facility has not been drawn.
In April 2020, a bond was issued with a nominal value of €750 million maturing in 2030 at a coupon rate of 1.625%.
The blended incremental borrowing rate applied to the lease liabilities at year-end 2020 was 1.9% (2019: 2.2%).
At year-end 2020 and 2019, none of the borrowings was secured by collateral.
In € millions |
2022-2025 |
After 2025 |
|---|---|---|
Bonds issued |
1,246 |
1,240 |
Lease liabilities |
180 |
58 |
Other borrowings |
13 |
34 |
Total |
1,439 |
1,332 |
Short-term borrowings
We have US dollar and euro commercial paper programs in place, which can be used to the extent that the equivalent portion of the €1.3 billion multi-currency revolving credit facility is not used. We had no commercial paper outstanding at year-end 2020 and 2019.
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, refer to Note 27.
In € millions |
2019 |
2020 |
|---|---|---|
Short-term investments with life between three and 12 months |
138 |
250 |
Total |
138 |
250 |
Cash and cash equivalents
Deposits and money market funds within cash and cash equivalents almost entirely consist of time deposits immediately convertible into known amounts of 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, 2020, an amount of €14 million in cash and cash equivalents was restricted (2019: €21 million). Restricted cash is defined as cash that cannot be accessed centrally due to regulatory or contractual restrictions.
In € millions |
2019 |
2020 |
|---|---|---|
Cash on hand and in banks |
1,031 |
1,103 |
Deposits and money market funds with a life up to three months |
240 |
503 |
Included under cash and cash equivalents in the balance sheet |
1,271 |
1,606 |
Debt to credit institutions |
(61) |
(25) |
Total per statement of cash flows |
1,210 |
1,581 |
Defined as long-term borrowings plus short-term borrowings less cash, cash equivalents and short-term investments.