Cost of sales and other functional costs
The total cost of materials recognized under cost of sales in the consolidated income statement went up by €1,079.4 million to €5,087.1 million in 2021 (2020: €4,007.7 million), mainly due to the increase in revenue.
The total personnel expenses recognized under functional costs rose by €311.2 million to €2,612.0 million (2020: €2,300.8 million). This rise can be explained by the growth in the average number of employees for the year, general salary increases, and higher variable remuneration components. In 2020, personnel measures in connection with the coronavirus pandemic, such as short-time working and employees’ using up of accumulated hours in their working-time accounts, had reduced personnel expenses.
Personnel expenses included wages and salaries of €2,098.2 million (2020: €1,817.6 million), social security contributions of €453.7 million (2020: €396.7 million), and post-employment benefit costs and other benefits of €60.1 million (2020: €86.6 million). Post-employment benefit costs and other benefits comprised a current service cost from defined benefit pension plans of €57.3 million (2020: €52.9 million). Overall, the reduction in post-employment benefit costs and other benefits was mainly due to the change in the pension benefit conditions in Germany, which resulted in unrecognized past service income of €32.7 million. The interest cost from the unwinding of the discount on estimated pension obligations is not recognized under personnel expenses and is instead reported under financial expenses as a component of interest cost of the defined benefit obligation.
Functional costs were reduced by the recognition of government grants amounting to €4.2 million (2020: €7.9 million). This sum mostly related to the lump-sum reimbursement during the coronavirus pandemic of employers’ social security contributions in connection with short-time working allowances linked to the economic situation.
Impairment losses and depreciation expenses on property, plant and equipment together with impairment losses and amortization expenses on intangible assets, as well as reversals of impairment losses, were recognized under functional costs in a total amount of €940.9 million in the reporting year (2020: €937.8 million).