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Beiersdorf Proposes To Increase Dividend, Announces Share Buyback Programme

By Dayeeta Das
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Beiersdorf Proposes To Increase Dividend, Announces Share Buyback Programme

Skincare company Beiersdorf plans to increase dividend payment following positive performance by the business in recent years.

Beiersdorf will propose €1.00 per dividend-bearing share to the annual general meeting on 18 April 2024 for its financial year 2023, it noted.

In previous financial years, the company distributed €0.70 per dividend-bearing share, and the new proposal corresponds to an increase of around 43% compared to the previous year.

With the approval of the supervisory board, the Nivea-maker's executive board has also announced a share repurchase programme worth €500 million.

The programme is expected to commence in May 2024 and close by the end of 2024.

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Treasury shares held by the Company will be cancelled to the extent necessary to carry out the share buyback, the company noted.

Vincent Warnery, CEO of Beiersdorf stated, “Our proposed dividend is based on the positive business results of recent years. The significant increase reflects our confidence in the company’s sustainable profitability. We are pleased to enable our shareholders to participate more strongly in Beiersdorf’s profitable growth.

“The share buyback underlines our continued strong financial position. With this programme, we are actively creating value for our shareholders and at the same time sending a clear signal to the capital market.”

Analyst Comment

According to an analyst note from Barclays, the dividend increase, a first for the company since 2007, and the share buyback programme buyback, a first since 2004, is a meaningful step towards a more 'normal' balance sheet structure for Beiersdorf.

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Barclays expects Beiersdorf to deliver annual organic sales growth of more than 6% and around 10% annual organic EBIT growth in the consumer division in the medium term as it continues to benefit from more focused innovation, shifting media spend online, and rolling out in geographic white space.

It anticipates that for Beiersdorf's management team to have secured family approval for a capital return suggests that operational performance is impressive.

However, as noted in Barclays previous note for 2024, Beiersdorf's balance sheet has the potential to drive extra returns at the EPS level.

'We expect increasing net finance income to be the primary driver of this, but buybacks are also useful,' it added.

Beiersdorf will publish financial figures for fiscal year 2023 on 29 February 2024.

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