Inside Information according to article 17 MAR
Hanover, 11 December 2019, 10:56am CET. TUI’s Executive Board, with the Supervisory Board’s approval, has today decided to update the Group’s dividend policy as one element of TUI’s revised capital allocation framework. The new policy will be applied for the first time for Financial Year 2020 (1 October 2019 - 30 September 2020), i.e. for dividend payments from 2021 onwards.
For Financial Year 2019 (1 October 2018 - 30 September 2019), we will submit a dividend proposal to the Annual General Meeting scheduled for 11 February 2020 of €0.54 per share, which remains in line with our current dividend policy (dividend per share growth in line with Underlying EBITA¹ at constant currency).
From Financial Year 2020 onwards, the Group’s dividend policy will change as follows:
- a core dividend payout of 30 - 40% of the Group’s Underlying EAT2 with
- a dividend floor (minimum payout) of €0.35 per share.
While the new dividend policy is expected to result in lower payouts, the dividend floor guarantees shareholders a minimum payout irrespective of the market environment of the tourism industry and subsequent impacts on Underlying EAT2. Based on TUI’s share price at the end of Financial Year 2019, the dividend floor would represent a dividend yield of 3.3% p.a.
The new dividend policy is one element of TUI’s updated capital allocation framework which reflects our financial priorities as follows:
(i) Organic growth
(ii) Payout of a core dividend
(iii) Accretive Mergers & Acquisitions and portfolio optimisation
(iv) Excess cash to be returned to shareholders
At the same time we are disciplined in maintaining a solid balance sheet and keep our target gross leverage ratio comfortably within the range of 3.0x - 2.25x.
This updated capital allocation framework will provide TUI Group with increased flexibility as it facilitates investments in our strategic initiatives and future growth opportunities, as well as an attractive dividend to shareholders, underpinned by a solid and robust financial structure.