[13] Financial expenses
in € million |
2024 |
2023 |
|---|---|---|
Interest expense from loans |
14.7 |
30.0 |
Interest expense from promissory notes |
32.5 |
16.5 |
Interest expense from bonds |
11.6 |
9.3 |
Interest expense from the commercial paper program |
2.5 |
12.0 |
Interest expense from lease and short-term rental business |
226.6 |
162.9 |
Interest expense from procurement leases |
27.8 |
22.1 |
Net interest expense from defined benefit plans and similar obligations |
26.4 |
28.3 |
Foreign currency exchange rate losses (financing) |
78.3 |
36.0 |
Changes in fair value of derivatives without hedge relationship |
16.4 |
28.6 |
Expense from fair value hedges |
22.6 |
34.5 |
Realized loss of interest rate derivatives |
8.3 |
4.9 |
Other interest expenses and similar charges |
22.3 |
23.5 |
Total financial expenses |
490.0 |
408.6 |
In 2024, financial expenses swelled by €81.4 million year on year to reach €490.0 million.
Interest expense from loans, promissory notes, bonds, and the commercial paper program decreased by €6.5 million year on year to €61.3 million (2023: €67.8 million). This was due to the lower average level of financial debt compared with the previous year.
Interest expense from the lease and short-term rental business arose from primarily variable-rate liabilities for financing the lease and short-term rental business. The €63.7 million increase in this interest expense to a total of €226.6 million (2023: €162.9 million) was due, in particular, to the higher volume of lease and short-term rental business and the concomitant growth in the financing required. 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 €97.4 million (2023: €74.1 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 decline in net interest expense from defined benefit plans and similar obligations was attributable to the lower 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, decreases in the fair value of the interest-rate derivatives that are used to hedge the lease portfolio resulted in an expense from fair value hedges of €22.6 million (2023: €34.5 million). The reason for this was the fall in long-term interest rates. There was also income from fair value hedges of €25.2 million (2023: €38.2 million) resulting from adjustments to the measurement of lease receivables designated as hedged items in fair value hedges (see note [12]).