23. Finance income and expenses
The Group’s net finance expense is mainly related to finance expenses for its loans and borrowings, fair value changes on associated derivative instruments and foreign currency exchange gains and losses relating to the loans and borrowings.
Composition of net finance expense
(In € million) |
|
Year ended |
|
Year ended |
|---|---|---|---|---|
Interest income |
|
2.1 |
|
4.6 |
Net foreign currency exchange gain |
|
8.8 |
|
11.4 |
Realised gain on settlement of deal-contingent derivative |
|
15.5 |
|
– |
Net change in fair value of financing-related derivatives |
|
9.0 |
|
– |
Net interest income on interest rate swap |
|
0.5 |
|
– |
Finance income |
|
35.9 |
|
16.0 |
Interest expense on: |
|
|
|
|
– Loan and borrowings (excluding lease liabilities) |
|
(35.9) |
|
(25.4) |
– Lease liabilities |
|
(10.8) |
|
(9.1) |
Amortisation of original issue discount |
|
(0.3) |
|
(0.3) |
Amortisation of transaction costs |
|
(7.0) |
|
(3.6) |
Net effect of early repayment of loans |
|
(1.0) |
|
(3.7) |
Other |
|
(6.9) |
|
(5.3) |
Finance expenses |
|
(61.9) |
|
(47.4) |
Net finance expense |
|
(26.0) |
|
(31.4) |
For the year ended 31 December 2022, the net foreign currency exchange gain primarily consists of positive translation effects on the portion of the Euro-denominated term loan that is held by an entity with the US Dollar as its functional currency resulting from the strengthening of the US Dollar against the Euro. For the year ended 31 December 2021, the net foreign currency exchange gain primarily consisted of positive translation effects on Euro-denominated debt held by an entity with the US Dollar as its functional currency resulting from the strengthening of the US Dollar against the Euro.
The settlement of the deal-contingent foreign currency derivative that the Group entered into relating to the repayment of the external US Dollar loan of Scholle IPN resulted in a realised gain of €15.5 million in the year ended 31 December 2022 (see note 27).
See notes 25 and 33 for information about the net change in fair value of financingrelated derivatives (an interest-rate swap) and the net interest income on the interest swap.
For the year ended 31 December 2021, interest income included interest of €3.1 million on out-of-period indirect tax recoveries (see note 8).
Other finance expenses primarily consist of revolver commitment fees, securitisation and factoring expenses and interest expense on current tax liabilities.