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23 Finance income and expenses

The Group’s net finance expense is mainly related to finance expenses for the Group’s loans and borrowings, fair value changes on associated derivative instruments and foreign exchange gains and losses relating to the loans and borrowings.

Composition of net finance expenses

(In € million)


Year ended
31 Dec. 2020


Year ended
31 Dec. 2019

Interest income





Net foreign currency exchange gain




Net change in fair value of derivatives




Finance income





Interest expense on:





– Senior unsecured notes




– Senior unsecured/secured credit facilities





– Lease liabilities





Amortisation of original issue discount





Amortisation of transaction costs





Net foreign currency exchange loss




Net change in fair value of derivatives




Net interest expense on interest rate swaps





Net effect of early repayment of secured term loans









Finance expenses





Net finance expense





The Group used proceeds from its new term loan and issue of notes in June 2020 as well as available cash to repay its existing secured term loans. The net expense effect of the early repayment of the existing secured term loans is €19.7 million, of which €2.1 million relates to cash settlement of interest rate swaps. For additional details, see notes 22 and 25.

Net change in fair value of derivatives consists of fair value changes on financing-related derivatives.

In the year ended 31 December 2020, the net foreign currency exchange loss primarily consists of negative translation effects on Euro-denominated debt held by a US Dollar functional currency entity and on intra-group loan payables, primarily resulting from the weakening of the Brazilian Real against the Euro.

Other finance expenses primarily consist of revolver commitment fees, securitisation and factoring expenses and interest expense on current tax liabilities.