Dufry Group CEO Julián Díaz

The Dufry AG board of directors is to launch a planned one-time share buyback programme of up to CHF400m ($415m) over a period of up to 12 months.

It will also propose to the Ordinary General Meeting on 3 May the payment of a cash dividend of CHF3.75 ($3.89) per share.

The proposed dividend will be paid out of capital contribution reserves and not be subject to Swiss withholding tax.

A Dufry statement said: “As Dufry has a strong cash flow generation and expects sustainable organic growth, the Board of Directors believes that returning cash to shareholders, including by means of annual dividend payments, should be part of Dufry’s capital allocation strategy.

CASH DIVIDEND PROPOSAL

“For future years, the Board of Directors intends to propose a dividend that is at least equal to the one paid the previous year and will target a sustainable return to shareholders of 40% of Dufry’s cash net earnings.”

The statement added that the Board of Directors believes the company is undervalued and that buying back shares at current price levels represents an efficient way of returning additional capital to shareholders.

“The shares repurchased will be cancelled and the share buyback will therefore be accretive to earnings per share.”

More generally, Dufry will continue to grow organically and “make targeted investments at attractive returns through M&A bolt-on acquisitions.”

The company commented: “Dufry’s strong cash flow generation allows it to fund such investments while at the same time reward its shareholders with a sustainable dividend of at least CHF200m going forward.”

Meanwhile, the Board of Directors will propose the re-election of Lynda Tyler-Cagni and Steven Tadler as new independent members. Xavier Bouton and Joaquín Moya-Angeler Cabrera will not stand for re-election.