Adidas launches new share buyback program

Adidas has announced plans to buy back shares in an amount of up to 4 billion euros from 2022 until 2025.

It comes after the German sportswear giant completed a share buyback of 1 billion euros this year.

The company said it plans to return up to 5 billion euros to its shareholders through regular share buybacks alone during the five-year strategic cycle.

It also aims to provide annual dividend payouts in a range of between 30 percent and 50 percent of net income from continuing operations in that period.

‘Own the Game’ strategy

The company said on Thursday: “Strong shareholder returns are a key component of Adidas’ new strategy ‘Own the Game’. As part of ‘Own the Game’, Adidas plans to generate substantial free cash flow until 2025 and return the majority of it - between 8 billion and 9 billion euros - to its shareholders via dividend payments and share buybacks.”

The company also said it plans to return the majority of the cash proceeds from the Reebok divestiture to shareholders after the transaction is completed, which is expected in the first quarter of 2022.

Adidas agreed to sell its under-performing Reebok brand to Authentic Brands Group for 2.1 billion euros earlier this year.

“Over the next couple of years, our business will become significantly more cash generative than ever before,” said Adidas finance chief Harm Ohlmeyer in a statement Thursday.

“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.”

Adidas said it intends to cancel most of the shares repurchased during the program, as it has done with previous programs, which would reduce the number of shares and share capital.