Cost of sales and other functional costs
The total cost of materials recognized under cost of sales in the consolidated income statement went down by €43.9 million to €4,007.7 million in 2020 (2019: €4,051.6 million).
The total personnel expenses recognized under cost of sales rose by €8.0 million to €2,300.8 million (2019: €2,292.8 million). They increased only marginally despite the increase in the average number of employees for the year and the personnel measures introduced in connection with the capacity and structural program. This was due to various countervailing effects resulting from the coronavirus pandemic, such as short-time working and similar measures as well as employees using up accumulated hours in their working-time accounts. These personnel expenses included wages and salaries of €1,817.6 million (2019: €1,820.6 million), social security contributions of €396.7 million (2019: €398.7 million), and expenses for pensions of €86.6 million (2019: €73.5 million). The interest cost from the unwinding of the discount on estimated pension obligations is not recognized under personnel expenses and is instead reported under financial expenses as a component of interest cost of the defined benefit obligation. Pension expenses essentially comprised the pension entitlements of €52.9 million vested in 2020 (2019: €41.5 million).
The cost of sales is reduced by the recognition of government grants amounting to €7.9 million (2019: €1.5 million). As a result of the coronavirus pandemic, this sum mostly related to the lump sum reimbursement of employer’s social security contributions in connection with short-time working allowances linked to the economic situation.
Impairment losses and depreciation expenses on property, plant, and equipment together with impairment losses and amortization expenses on intangible assets recognized under cost of sales came to a total of €937.8 million in the reporting year (2019: €898.0 million).