Note 29 - Debt
29.1 BREAKDOWN OF DEBT
The Group’s total debt breaks down as follows:
| 31 Dec. 2019 | 31 Dec. 2018 | ||
|---|---|---|---|
| Bonds | 1,291 | 794 | |
| Bank loans | 450 | 200 | |
| Debt related to put options granted to minority shareholders | 12 | 10 | |
| Medium-Term Notes (NEU MTN)(**) | 64 | - | |
| Other debt | 17 | 15 | |
| Non-current debt excluding financial instruments designated as hedges of debt | 1,834 | 1,019 | |
| Financial instruments designated as hedges of debt | 8 | 1 | |
| Non-current debt | 1,842 | 1,020 | |
| Bonds | - | 499 | |
| Bank loans | 13 | - | |
| Debt related to put options granted to minority shareholders | - | - | |
| Medium-Term Notes (NEU MTN)(**) | - | 19 | |
| Commercial paper (NEU CP)(*) | 449 | 477 | |
| Other debt | 70 | 70 | |
| Current debt excluding financial instruments designated as hedges of debt | 532 | 1,065 | |
| Financial instruments designated as hedges of debt | - | - | |
| Current debt | 532 | 1,065 | |
| Total debt | 2,374 | 2,085 | |
(*) Negotiable European Commercial Paper.
(**) Negotiable European Medium Term Notes.
The main movements in debt during 2019 were as follows:
- on 26 June 2019, Lagardère SCA announced that it had raised €253 million in financing through a Schuldscheindarlehen German law private placement. The placement consisted of several eurodenominated tranches issued with five- and seven-year maturities at fixed and floating rates, for €187 million and €66 million, respectively. The effective interest rate is 1.49%;
- the €500 million worth of seven-year bonds issued in 2014 were redeemed in September 2019;
- a new €500 million fixed-rate bond issue was launched in October 2019, maturing in 2026. The effective interest rate is 2.26%;
- continuation of the commercial paper (NEU CP) programme with a ceiling of €850 million. Debt issues under the programme represented €449 million at 31 December 2019 compared with €477 million at 31 December 2018;
- continuation of the Negotiable European Medium Term Notes programme with a ceiling of €200 million. Debt issues under the programme represented €64 million at 31 December 2019 compared with €19 million at 31 December 2018.
Movements in liabilities arising from financing activities – which include the breakdown of movements in debt presented in the statement of cash flows – can be analysed as follows:
| 31 Dec. 2018 | Cash flows |
Changes in scope of consolidation |
Effect of changes in exchange rates |
Changes in fair value |
Other movements (***) |
31 Dec. 2019 | |
|---|---|---|---|---|---|---|---|
| Bonds | 794 | 496 | - | - | - | 1 | 1,291 |
| Bank loans | 200 | 249 | - | - | - | 1 | 450 |
| Medium-Term Notes (NEU MTN)(**) |
- | 64 | - | - | - | - | 64 |
| Other debt | 15 | 10 | (9) | 1 | - | - | 17 |
| Financial instruments designated as hedges of debt |
1 | - | - | - | 15 | (8) | 8 |
| Non-current liabilities arising from financing activities |
1,010 | 819 | (9) | 1 | 15 | (6) | 1,830 |
| Bonds | 499 | (500) | - | - | - | 1 | - |
| Bank loans | - | (11) | 20 | - | - | 4 | 13 |
| Commercial Paper and debt securities (NEU CP and NEU MTN)(*) |
496 | (47) | - | - | - | - | 449 |
| Other debt | - | 2 | - | - | - | 6 | 8 |
| Financial instruments designated as hedges of debt |
- | - | - | - | - | - | - |
| Current liabilities arising from financing activities |
995 | (556) | 20 | - | - | 11 | 470 |
| Total liabilities arising from financing activities(****) |
2,005 | 263 | 11 | 1 | 15 | 5 | 2,300 |
| Debt related to put options granted to minority shareholders |
10 | - | 1 | - | - | 1 | 12 |
| Short-term bank loans and overdrafts |
50 | (10) | (4) | 4 | - | 5 | 45 |
| Accrued interest | 20 | (8) | - | - | 10 | (5) | 17 |
| Total debt | 2,085 | 245 | 8 | 5 | 25 | 6 | 2,374 |
(*) Negotiable European Commercial Papers – Titres négociables à court terme.
(**) Negotiable European Medium Term Notes – Titres négociables à moyen terme.
(***) Flux liés aux activités abandonnées et aux actifs destinés à être cédés.
(****) Les flux de trésorerie nets de passifs de 263 M€ issus des activités de financement correspondant aux augmentations (836 M€) et aux diminutions (-573 M€) des dettes financières dans l’état des flux de trésorerie.
Net debt breaks down as follows:
| (in millions of euros) | 31 Dec. 2019 | 31 Dec. 2018(*) | |||||
|---|---|---|---|---|---|---|---|
| Short-term investments and cash and cash equivalents | 913 | 710 | |||||
| Financial instruments designated as hedges of debt with a positive fair value(**) | - | 8 | |||||
| Non-current debt(***) | (1 842) | (1 020) | |||||
| Current debt | (532) | (1 065) | |||||
| Net debt | (1 461) | (1 367) | |||||
(*) Data at 31 December 2018 restated for the full retrospective application of IFRS 16 and for the reclassification of Lagardère Sports as a discontinued operation in accordance with IFRS 5 (see notes 1.1 and 4.3, respectively, to the consolidated financial statements).
(**) At 31 December 2018, financial instruments designated as hedges of debt with a positive fair value were included in “Other non-current assets” in an amount of €5 million and in “Other current assets” in an amount of €3 million.
(***) Non-current debt includes financial instruments designated as hedges of debt with a negative fair value, representing €8 million at 31 December 2019 and €1 million at 31 December 2018.
29.2 ANALYSIS OF DEBT BY MATURITY
Debt breaks down as follows by maturity at 31 December 2019:
| 2020 (*) | 2021 | 2022 | 2023 | 2024 | Beyond 5 years |
Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Bonds | - | - | - | 497 | 298 | 496 | 1 291 | ||||
| Bank loans | 13 | 147 | 50 | - | 187 | 66 | 463 | ||||
| Financial instruments designated as hedges of debt |
- | - | - | 1 | 7 | - | 8 | ||||
| Debt related to put options granted to minority shareholders |
- | 3 | - | 3 | - | 6 | 12 | ||||
| Commercial Paper(**) | 449 | 64 | - | - | - | - | 513 | ||||
| Other debt | 70 | 1 | 4 | 1 | 2 | 9 | 87 | ||||
| At 31 December 2019 | 532 | 215 | 54 | 502 | 494 | 577 | 2 374 | ||||
(*) Debt due within one year is reported in the consolidated balance sheet under “Current debt”.
(**) Commercial Paper and Medium-Term Notes.
Debt breaks down as follows by maturity at 31 December 2018:
| 2019 (*) | 2020 | 2021 | 2022 | 2023 | Beyond 5 years |
Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Bonds | 499 | - | - | - | 497 | 297 | 1 293 | ||||
| Bank loans | - | 2 | 151 | 47 | - | - | 200 | ||||
| Financial instruments designated as hedges of debt | - | - | - | - | - | 1 | 1 | ||||
| Debt related to put options granted to minority shareholders | - | 9 | - | 1 | - | - | 10 | ||||
| Commercial Paper(**) | 496 | - | - | - | - | - | 496 | ||||
| Other debt | 70 | 13 | - | - | - | 2 | 85 | ||||
| At 31 December 2018 | 1 065 | 24 | 151 | 48 | 497 | 300 | 2 085 | ||||
(*) Debt due within one year is reported in the consolidated balance sheet under “Current debt”.
(**) Commercial Paper and Medium-Term Notes.
29.3 CHARACTERISTICS OF BONDS AND MAIN BANK LOANS
The following tables provide an analysis of bonds and bank loans:
| 31 December 2019 | Carrying amount | Value of hedging instruments(*) |
Total | Effective interest rate(**) |
|---|---|---|---|---|
| 13 April 2016 seven-year bond issue, for €500 million |
497 | 1 | 498 | 2.90 % |
| 21 June 2017 seven-year bond issue, for €300 million |
298 | 7 | 305 | 1.81 % |
| 16 October 2019 seven-year bond issue, for €500 million |
496 | 496 | 2.26 % | |
| Bonds | 1,291 | 8 | 1,299 | |
| Other debt | 463 | - | 463 | |
| Bank loans | 463 | - | 463 | |
| Total | 1,754 | 8 | 1,762 |
(*) Fair value of derivative instruments designated as hedges of debt.
(**) The effective interest rate on bonds includes the amortisation of the bond issue costs.
| 31 December 2018 | Carrying amount | Value of hedging instruments(*) |
Total | Effective interest rate(**) |
|---|---|---|---|---|
| 19 September 2014 5-year bond issue, for €500 million |
499 | (3) | 496 | 2.37%(***) |
| 19 September 2014 5-year bond issue, for €500 million |
497 | (5) | 492 | 2.90% |
| 21 June 2017 seven-year bond issue, for €300 million |
297 | 1 | 298 | 1.81% |
| Bonds | 1,293 | (7) | 1,286 | |
| Other debt | 200 | - | 200 | |
| Bank loans | 200 | - | 200 | |
| Total | 1,493 | (7) | 1,486 |
(*) Fair value of derivative instruments designated as hedges of debt.
(**) The effective interest rate on bonds includes the amortisation of the bond issue costs.
(***) The effective interest rate includes the impact of the amortisation of the pre-hedge interest rate set up before the bond issue and terminated at the time of the issue. The termination payment is being amortised over the life of the bond.
29.4 ANALYSIS OF DEBT BY CURRENCY
The following table provides a breakdown of current- and non-current debt by currency before and after hedging:
| 31 December 2019 | Before hedging | After hedging | ||
|---|---|---|---|---|
| % | % | |||
| Eurozone | 2,325 | 97.9% | 1,492 | 62.8% |
| US dollar | 4 | 0.2% | 623 | 26.2% |
| Pound sterling | 18 | 0.8% | 74 | 3.1% |
| Australian dollar | - | 0.0% | 38 | 1.6% |
| Canadian dollar | - | 0.0% | 31 | 1.3% |
| Other | 27 | 1.1% | 116 | 4.9% |
| Total | 2,374 | 100% | 2,374 | 100% |