[13] Financial expenses
in € million |
2023 |
2022 |
|---|---|---|
Interest expense from loans |
30.0 |
14.4 |
Interest expense from promissory notes |
16.5 |
5.0 |
Interest expense from bonds |
9.3 |
9.3 |
Interest expense from the commercial paper program |
12.0 |
2.7 |
Interest expense from lease and short-term rental business |
162.9 |
69.9 |
Interest expense from procurement leases |
22.1 |
16.1 |
Net interest expense from defined benefit plans and similar obligations |
28.3 |
15.1 |
Foreign currency exchange rate losses (financing) |
36.0 |
120.5 |
Changes in fair value of derivatives without hedge relationship |
28.6 |
9.9 |
Expense from fair value hedges |
34.5 |
56.3 |
Realised loss of interest rate derivatives |
4.9 |
2.7 |
Other interest expenses and similar charges |
23.5 |
11.6 |
Total financial expenses |
408.6 |
333.5 |
In 2023, financial expenses swelled by €75.1 million year on year to reach €408.6 million.
Interest expense from loans, promissory notes, bonds, and the commercial paper program increased by €36.4 million to €67.8 million (2022: €31.4 million). The main reasons for this were the further rise in interest rates and the rise in average debt in the reporting year.
Interest expense from the lease and short-term rental business totaling €162.9 million (2022: €69.9 million) arose from primarily variable-rate liabilities from financing the lease and short-term rental business. 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 €74.1 million (2022: €35.3 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, financial income was reduced by changes in the fair value of interest-rate derivatives that are used to hedge the lease portfolio and are designated as part of a fair value hedge or are accounted for separately. The reason for this was the fall in long-term interest rates over the course of the year. Positive changes in the measurement of lease receivables designated as hedged items in fair value hedges had a countervailing impact.