12. Financial expenses
in € million |
2025 |
2024 |
|---|---|---|
Interest expense from loans |
6.4 |
14.7 |
Interest expense from promissory notes |
19.6 |
32.5 |
Interest expense from bonds |
27.6 |
11.6 |
Interest expense from the commercial paper program |
0.1 |
2.5 |
Interest expense from lease and short-term rental business |
213.5 |
226.6 |
Interest expense from procurement leases |
30.0 |
27.8 |
Net interest expense from defined benefit plans and similar obligations |
25.5 |
26.4 |
Foreign currency exchange rate losses (financing) |
41.9 |
78.3 |
Changes in fair value of derivatives without hedge relationship |
6.6 |
16.4 |
Expense from fair value hedges |
12.3 |
22.6 |
Realized loss of interest rate derivatives |
16.3 |
8.3 |
Other interest expenses and similar charges |
19.1 |
22.3 |
Total financial expenses |
419.0 |
490.0 |
Interest expense from loans, promissory notes, bonds, and the commercial paper program decreased by €7.6 million year on year to €53.7 million (2024: €61.3 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 €13.1 million decrease in this interest expense to a total of €213.5 million (2024: €226.6 million) was due to the lower level of interest rates. Of the interest expense from the lease and short-term rental business, €92.2 million was attributable to leases entered into with customers that constitute an operating lease relationship (2024: €97.4 million) and to the financing of the short-term rental fleet. 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.
Net interest expense from defined benefit plans and similar obligations declined slightly. Although the discount rate in Germany was higher than in the previous year, this was countered by a decrease in the discount rate in the other countries.
Foreign currency exchange rate losses (financing) 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 €12.3 million in 2025 (2024: €22.6 million). The reason for this was the fall in short-term interest rates. There was also income from fair value hedges of €12.4 million (2024: €25.2 million) resulting from adjustments to the measurement of lease receivables designated as hedged items in fair value hedges (see note [11]).
The rise in losses realized on interest-rate derivatives was due to the falling level of short-term interest rates.