In accordance with our dividend policy, adopted on 21 February 2020, PostNL aims to pay a dividend that develops substantially in line with operational performance. Dividend distribution is conditional on being properly financed in accordance with PostNL’s financial framework. PostNL is steering for a solid balance sheet with a positive consolidated equity, aiming at a leverage ratio (adjusted net debt/EBITDA) not exceeding 2.0 and applying strict cash flow management. The dividend pay-out ratio will be around 70% - 90% of normalised comprehensive income. Shareholders are offered a choice to opt for cash or shares. Dividend will be distributed twice a year, with interim dividend set at ~ 1/3 of dividend over the prior year.
Due to the strong financial performance in 2021 and the strong financial position, the leverage ratio at the end of 2021 amounted to 0.4. This allows PostNL to propose a dividend of €0.42 per ordinary share for 2021 (2020: €0.28), based on normalised comprehensive income of €285 million for 2021 and a pay-out ratio of 75%. €0.10 was paid as an interim dividend, so the final dividend to be paid in May 2022 will be €0.32 per share. This will be proposed to the Annual General Meeting of Shareholders to be held on 19 April 2022.
The current dividend policy is to be applied on any profits over the financial year 2020 and subsequent years thereafter (until adjusted). This policy is available on PostNL’s corporate website.
On 25 January 2022, PostNL announced a share buyback programme to neutralise the assumed dilutive impact of shares issued in relation to dividends over 2021-23. The company will repurchase ordinary shares of PostNL N.V. to a value of around €250 million, spread over 2022 and 2023. Based on PostNL’s strong financial position and in line with its capital allocation framework, the company is well positioned to launch a share buyback programme. The programme further optimises PostNL’s capital structure while adhering to its financial framework. The announced share buyback programme will be executed using cash on balance sheet.
The first tranche will be executed in 2022 and is set at between €160 million and €170 million, covering the assumed amount of stock dividend over the financial years 2021 and 2022. The execution of the programme will start after 28 February 2022, and is expected to be completed no later than October 2022. It will be executed within the limitations of the existing authority granted by the Annual General Meeting on 20 April 2021, and will be carried out in compliance with the Market Abuse Regulation. Based on the closing price of PostNL’s ordinary shares on Euronext Amsterdam on 24 January 2022, the share buyback of between €160 million and €170 million to be executed in 2022 represents approximately 9.5% of ordinary shares issued. The second tranche will be executed in 2023.
PostNL intends to use any repurchased shares under the programme to cover its obligations under share-based remuneration arrangements and to deliver future dividend that may be partly paid in stock, at the choice of the shareholder. The remaining number of the bought-back shares will be cancelled.
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