The Executive Board of Adidas has launched a multi-year share buyback program. Starting in January 2022, the company plans to buy back shares in an amount of up to €4 billion until 2025.
Taking into consideration the €1 billion share buyback completed in 2021 already, the company intends to return up to €5 billion to its shareholders through regular share buybacks alone during the five-year strategic cycle. The buyback activities are complemented by its annual dividend payouts in a range of between 30 percent and 50 percent of net income from continuing operations.
Adidas said strong shareholder returns are a key component of the company’s new strategy ‘Own the Game’. As part of the strategy, Adidas plans to generate free cash flow until 2025 and return the majority of it, between €8 billion and €9 billion, to its shareholders via dividend payments and share buybacks. The company also plans to return the majority of the cash proceeds from the Reebok divestiture to the shareholders after the closing of the transaction, which is expected in the first quarter of 2022.
“Over the next couple of years, our business will become significantly more cash generative than ever before”, said Harm Ohlmeyer, CFO of Adidas. “And we will hit the road running in 2022 driven by strong top- and bottom-line improvements, we will once again generate a high free cash flow, which we will almost entirely return to our shareholders next year.”
As with previous share buybacks, Adidas intends to cancel most of the shares repurchased during the program, which would reduce the number of shares as well as the share capital accordingly.
Photo courtesy Adidas
