Adidas Announces Share Buyback Programme with 3rd Tranche

UTC by Teuta Franjkovic · 3 min read
Adidas Announces Share Buyback Programme with 3rd Tranche
Photo: Pixabay

Adidas buyback program complements the company’s policy to pay annual dividends to shareholders in the range of 30-50% of the net income from continuing operations.

On January 7, 2020, the sporting goods giant Adidas AG announced the third tranche kick-off of the share buyback program. An aggregate acquisition costs €1 billion (excluding incidental purchasing costs). However, the company said that no more than 10 million shares shall be repurchased in the period until December 31, 2020.

In total, under the current program, Adidas plans to buy back its own shares for up to €3 billion between March 2018 and May 2021.

In the previous two tranches of the program, the company stated it had bought back a total of 8.3 million shares, corresponding to 4.1% of the company’s stock capital, for a total consideration of € 1.8 billion.

The buyback program complements Adidas’ policy to pay an annual dividend to its shareholders in the range of 30-50% of net income from continuing operations. Taking dividend payments into consideration, the company has returned a total of €3 billion to its shareholders since the start of the current program in March 2018.

As the company then announced, Adidas plans to cancel the majority of the repurchased shares. A total of 8.8 million treasury shares have been canceled since the start of the current program, reducing the company’s share count and stock capital respectively.

Last year, the company announced that its third-quarter net income attributable to shareholders decreased 1.8% percent to 646 million euros from 658 million euros in the prior year. But, earnings per share were 3.27 euros, the same as last year.

Kasper Rorsted, Adidas CEO then said:

“We confirm our full-year outlook and remain confident about a significant top-line acceleration during the fourth quarter. 2019 will be a record year, despite some challenges, and another important milestone toward achieving our 2020 targets.”

However, we would like to think that 2020 would be certainly better for Adidas. The company started using SAP’s Leonardo technology to “speed up processes, bring customers closer and build trust.” We are talking about pure blockchain technology here that has it all: machine learning, analytics and data intelligence.

Blockchain and High Fashion

Adidas is now focusing on co-creating a new supply chain with its customers to increase efficiency. Delivery time frames have always been an issue when it comes to physical products.

Leonardo blockchain feature will solve some of these problems. The blockchain network is transparent and thus makes it easy to track delivery progress. This network reduces the number of intermediaries that have been delaying the delivery process in the past.

Since, last year’s media stories about Adidas company have been trending pretty much negatively, meaning the media sentiment score of -5.00 on Infotrie’s scale. InfoTrie also assigned headlines about the company a news buzz score of 0 out of 10, indicating that recent media coverage is extremely unlikely to have an impact on the stock’s share price in the near future.

Be it as it may, what definitely will help is the company’s new collaboration with Beyonce. In April last year, it was announced that the singer and Adidas will make a partnership but we have to wait until this year. Adidas collaborated with Prada in its last collection as well. Do we have to say that everything is sold already?

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Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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