Adidas said its Executive Board has decided to launch a share buyback program in the second half of 2021 amid confidence the company’s latest strategy, ‘Own the Game,’ would generate “substantial” cumulative free cash flow over the next five years.
Starting on July 1, 2021, the company plans to buy back shares worth up to € 550 million until the end of the year. Taking into consideration the dividend payment of € 585 million which was made in May, the total amount of cash which the company will return to its shareholders in 2021 is expected to exceed € 1 billion.
Adidas plans to share the majority of its expected cash flow generation in the next five years—between €8 billion and € 9 billion— with its shareholders through regular dividend pay-outs in a range of between 30 percent and 50 percent of net income from continuing operations, complemented with share buybacks. The ‘Own the Game’ strategy is also expected to drive “significant top-line growth and strong bottom-line expansion” until 2025.
“The decision to resume our share buyback activities reflects Adidas’ strong financial profile, our positive outlook for the current year and the successful start to our new strategy ‘Own the Game’,” said Harm Ohlmeyer, CFO of Adidas. “While we are increasing our investments into our brand, our direct-to-consumer channel as well as the digital transformation of the company, Adidas is becoming a more free cash flow generative business than ever before.”
While the company may use the repurchased shares for all purposes in accordance with the authorization granted by the Annual General Meeting in May 2021, the company intends to cancel most of the repurchased shares, which would reduce the number of shares and the share capital accordingly.
Photo courtesy Adidas
