Adidas has completed its second share buyback program this year. Between October 18, 2021, and November 25, 2021, the company bought back 1,619,683 shares. Taking into consideration the first share buyback conducted during the third quarter, Adidas bought back 3,471,205 shares.
Strong cash returns are an essential part of the company’s new strategy. Driven by the significant topline growth and strong bottomline expansion, Adidas will generate substantial cumulative free cash flow until 2025. The majority of this will be distributed to shareholders through regular dividend payouts in a range of between 30 per cent and 50 per cent of net income from continuing operations, complemented with share buybacks.
Dividends as well as share buybacks are key components of this strategy aimed at resulting in significant value creation. Against this background, Adidas plans to continue regular share buyback activities early next year. This will be complemented by returning the majority of the cash proceeds from the Reebok divestiture to its shareholders after closing of the transaction, which is expected to occur during the first quarter of 2022. As announced in October 2021, Adidas intends to cancel the majority of the shares repurchased as part of its buyback activities. For the third quarter Adidas’ inventories decreased 22 per cent.