[13] Financial expenses
in € million |
2022 |
2021 |
|---|---|---|
Interest expense from loans |
14.4 |
5.3 |
Interest expense from promissory notes |
5.0 |
6.6 |
Interest expense from bonds |
9.3 |
9.3 |
Interest expense from lease and short-term rental business |
69.9 |
50.7 |
Interest expense from procurement leases |
16.1 |
12.2 |
Net interest expense from defined benefit plans and similar obligations |
15.1 |
10.3 |
Foreign currency exchange rate losses (financing) |
120.5 |
40.6 |
Changes in fair value of derivatives without hedge relationship and ineffectiveness |
9.9 |
0.7 |
Expense from fair value hedges |
56.3 |
9.0 |
Other interest expenses and similar charges |
17.1 |
11.5 |
Total financial expenses |
333.5 |
156.2 |
In 2022, financial expenses swelled by €177.3 million year on year to reach €333.5 million.
Interest expense from loans, promissory notes, and bonds increased to €28.7 million. This rise of €7.5 million compared with 2021 was mainly due to further new loans being taken out in the reporting year.
Interest expense from the lease and short-term rental business, which totaled €69.9 million (2021: €50.7 million), was attributable both to liabilities from financing the lease business and to liabilities from financing the short-term rental fleet. Leases entered into with customers in connection with these financing transactions and that constitute an operating lease relationship, together with the financing of the short-term rental fleet, resulted in interest expense of €35.3 million (2021: €27.5 million). The income from corresponding customer leases and short-term rental agreements is a component of the lease and rental payments received and is therefore reported within revenue rather than as interest income.
The growth of net interest expense from defined benefit plans and similar obligations is attributable to the higher discount rate compared with the previous year.
Foreign currency exchange rate losses predominantly arise in connection with foreign currency positions in internal financing and the related hedging transactions that are not part of a formally documented hedge.
Furthermore, adjustments to the measurement of lease receivables designated as hedged items in fair value hedges also had an impact on the expense from fair value hedges owing to the rise in interest rates. There was a countervailing impact from positive changes in the fair value of the interest-rate derivatives that are used to manage interest-rate risk in the lease portfolio, which are recognized in income from fair value hedges.