The board of directors’ intention is for the H&M group to continue to provide shareholders with a good return while ensuring that growth and investments in the business can proceed with a continued strong financial position and freedom of action. Based on this, the board of directors has proposed a dividend policy stating that the ordinary dividend over time is to exceed 50 percent of profit after tax and additionally that identified surplus liquidity – taking into consideration the capital structure target and investment requirements – can be distributed to shareholders through an extra dividend or a buyback programme.
The annual meeting 4 May 2022 decided in accordance with the dividend policy on the board’s proposal of an ordinary dividend as well as authorisation for a share buyback programme.
On 4 May 2022 H & M Hennes & Mauritz AB held its annual general meeting. The AGM approved the board’s proposal that a dividend of SEK 6.50 per share be distributed to the shareholders. The dividend will be paid in two instalments during the year, in May and November. The record date for the first dividend payment of SEK 3.25 per share is 6 May 2022. The dividend is expected to be paid out by Euroclear Sweden AB on 11 May 2022. To be entitled to receive the dividend H&M shares must have been purchased no later than 4 May 2022. The ex-dividend date is 5 May 2022.
The record date for the second dividend payment of SEK 3.25 per share is 11 November 2022. The dividend is expected to be paid out by Euroclear Sweden AB on 16 November 2022. To be entitled to receive the second dividend instalment H&M shares must have been purchased no later than 9 November 2022. The ex-dividend date is 10 November.
The AGM 2022 approved the board’s proposal to authorise the board of directors to decide on purchases of the company’s own Series B shares. The board is authorised to pass resolutions on the buyback of shares for a total amount of SEK 3 billion in the period up to and including the 2023 annual general meeting. The intention is that the repurchased shares will be withdrawn, thereby reducing the group’s share capital. It is intended that the reduction will be met by a corresponding bonus issue so that the level of share capital is restored.
The board’s assessment is that the distribution of earnings and the authorisation for a buyback programme is justifiable taking into consideration the full-year result, the good cash flow, the continued strong financial position and the ability to make future investments (capex). The distribution of earnings and the authorisation for a buyback programme take into consideration the financial position and continued freedom of action of the group and the parent company, the capital structure target and the requirements that the nature and extent of the business, and its risks, expansion and development plans impose on the group’s and the parent company’s equity and liquidity.
The H&M group advocates a conservative leverage ratio, aiming for a strong capital structure with strong liquidity and financial flexibility. It is essential that, as in the past, expansion and investments can proceed with continued freedom of action. The capital structure is defined as net debt in relation to EBITDA. It should not exceed 1.0 x EBITDA over time. Net debt/EBITDA excluding IFRS effects was -0.7 (0.0) as at 30 November 2021.
IFRS 16 Leases, which is being applied from 1 December 2019, has substantial effects on the reporting of liabilities, assets and EBITDA. However, the H&M group will continue to define the capital structure exclusive of IFRS 16 effects. The company considers this to provide a clearer picture of the actual debt/equity ratio, and it is also the measure used in internal monitoring.