Note 21: Net debt

Net debt

in € millions

Long-term borrowings

Short-term borrowings

Short-term investments

Cash and cash equivalents

Net debt

Net debt equivalents at January 1, 2020

2,042

169

(138)

(1,271)

802

Net cash from operating activities

(1,220)

(1,220)

Acquisitions

7

112

119

Investments in short-term investments

(248)

248

Repayments of short-term investments

136

(136)

Net cash from other investing activities

202

202

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/modification of lease contracts

82

82

Transfers from long-term to short-term

(117)

117

Movement bankoverdrafts and short-term bank loans

(29)

29

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

 

 

 

 

 

 

Net debt at January 1, 2021

2,771

119

(250)

(1,606)

1,034

Net cash from operating activities

(605)

(605)

Acquisitions

2

13

73

88

Investments in short-term investments

(56)

56

Repayments of short-term investments

247

(247)

Net cash from other investing activities

252

252

Buy-out of non-controlling interests

1

1

Unwind of discount and amortized cost

8

1

9

Proceeds from borrowings

1,143

(1,143)

Borrowings repaid

(590)

590

New/modification/disposal of lease contracts

62

(1)

61

Transfers from long-term to short-term

(855)

855

Movement bank overdrafts and short-term bank loans

19

(19)

Dividends

391

391

Share buyback

1,135

1,135

Net cash from discontinued operations

1

1

Changes in exchange rates

6

(2)

(31)

(27)

Net debt at December 31, 2021

1,994

1,556

(58)

(1,152)

2,340

Analysis of net debt by category

In € millions, at December 31

2020

2021

Bonds issued

2,486

1,740

Lease liabilities

238

212

Other borrowings

47

42

Long-term borrowings

2,771

1,994

Current portion of long-term borrowings

5

754

Current portion of lease liabilities

86

87

Debt to credit institutions

25

711

Other

3

4

Short-term borrowings

119

1,556

Total borrowings

2,890

3,550

Short-term investments

(250)

(58)

Cash and cash equivalents

(1,606)

(1,152)

Net debt

1,034

2,340

AkzoNobel’s is mainly denominated in euro.

Long-term borrowings

We have a multi-currency revolving credit facility of €1.3 billion which was extended in 2021 to 2026. 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 2021 and 2020, this facility has not been drawn.

Bonds issued

In € millions, at December 31

2020

2021

2 5/8% 2012/22 (€750million)

748

1 3/4% 2014/24 (€500million)

498

499

1 1/8% 2016/26 (€500million)

497

497

1 5/8% 2020/30 (€750million)

743

744

Total

2,486

1,740

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 included in long-term and short-term borrowings at year-end 2021 was 1.9% (year-end 2020: 1.9%).

Aggregated maturities of long-term borrowings

In € millions

2023-2026

After 2026

Bonds issued

996

744

Lease liabilities

165

47

Other borrowings

10

32

Total

1,171

823

The blended incremental borrowing rate applied to the lease liabilities at year-end 2021 was 1.8% (2020: 1.9%).

At year-end 2021 and 2020, none of the borrowings was secured by collateral.

Short-term borrowings

In July 2022, a bond of €750 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 €1.3 billion multi-currency revolving credit facility is not used. We had €371 million commercial paper outstanding at year-end 2021 (2020: €nil) against an average negative interest rate of 0.5%. At year-end 2021, we had a €300 million short-term bank loan outstanding (2020: €nil) against a negative interest rate of 0.6%. Neither of these facilities contains financial covenants.

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.

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, 2021, an amount of €14 million in cash and cash equivalents was restricted (2020: €14 million). Restricted cash is defined as cash that cannot be accessed centrally due to regulatory or contractual restrictions.

Cash and cash equivalents

In € millions, at December 31

2020

2021

Cash on hand and in banks

1,103

877

Deposits and money market funds with a life up to three months

503

275

Included under cash and cash equivalents in the balance sheet

1,606

1,152

Debt to credit institutions

(25)

(40)

Total per statement of cash flows

1,581

1,112

Net debt

Defined as long-term borrowings plus short-term borrowings less cash, cash equivalents and short-term investments.