Note 8: Financing income and expenses
In € millions |
2019 |
2020 |
|---|---|---|
Financing income |
17 |
14 |
Financing expenses |
(76) |
(66) |
Net interest on net debt |
(59) |
(52) |
|
|
|
Other interest |
|
|
Financing income related to post-retirement benefits |
21 |
14 |
Interest charges on provisions |
(14) |
(10) |
Other items |
(24) |
(21) |
Net other financing credit/ |
(17) |
(17) |
Total financing income and expenses |
(76) |
(69) |
Net financing expenses for the year were €69 million (2019: €76 million). Significant variances are:
- Net interest on net debt decreased by €7 million to €52 million (2019: €59 million), mainly due to lower interest cost on debt
- Financing income related to post-retirement benefits decreased from €21 million in 2019 to €14 million in 2020 mainly due to the impact of lower discount rates
- Interest charges on provisions decreased from €14 million in 2019 to €10 million due to changes in discount rates
- Other items in 2020 and 2019 mainly include foreign currency results
The average interest rate used for capitalized interest was 1.9% (2019: 1.5%). Capitalized interest was negligible in both 2020 and 2019.
The average interest rate on total debt was 2.4% (2019: 2.8%).
Net debt
Defined as long-term borrowings plus short-term borrowings less cash, cash equivalents and short-term investments.