Dividend policy
The Capital Allocation Policy of Żabka Group aims to build a long-term value of the Company and its capital group (the “Group”), while at the same time maximizing shareholders’ returns, maintaining adequate financial stability, and ensuring flexibility in responding to changing market conditions.
The Policy is based on the following four guiding principles aimed at ensuring value creation over the long term:
- focus on growth: the primary focus of the Group’s operations and capital allocation is growth, with an increased target of 1,300+ new store openings per year in Poland and Romania (during the 2025 – 2028 period);
- targeted leverage ratio at 1.0x consolidated adjusted EBITDA post rent: the Group’s medium- and long-term plans should be designed with consideration given to maintaining a modest net leverage and retaining appropriate liquidity to maintain operational flexibility;
- M&A and payout optionality: the Group will maintain potential for allocation of capital to mergers and acquisitions aimed at enhancing strategic capabilities or extending the Group’s geographic footprint while keeping an organic expansion as the core of its growth strategy; significant capital allocations to investments such as mergers and acquisitions in a given year may limit the capital available for other purposes in that year, including shareholders’ payouts;
- dividend distribution: surplus of capital is intended to be returned to shareholders through dividends and in the longer-term share buyback programs may be introduced.
Taking the above guiding principles into account and subject to the condition of maintaining a net debt to consolidated adjusted EBITDA ratio at 1.0x (with net debt calculated excluding leases, and EBITDA referring to adjusted EBITDA pre-IFRS 16) and keeping a prudent and appropriate level of liquidity headroom, starting from the financial results for 2025, the Board intends to recommend to the General Shareholders’ Meeting of the Company (the “GSM”) the payment of a dividend in the amount representing 50% of the Group’s consolidated net profit achieved in the previous financial year, and in the following years in an amount representing from 50% to 70% of the Group’s consolidated net profit achieved in the previous financial year, depending on factors related to the business environment and planned investments.
The Board may, at its discretion, decide to recommend a higher dividend in the event of one-off earnings in a given financial year. Similarly, the Board may, at its discretion, decide to recommend a lower dividend or not recommend a dividend at all if significant investments, including mergers and acquisitions, are incurred or planned in a given financial year.
Taking into account the principles set out in the Policy and subject to Luxembourg law, the Board may also resolve to pay interim dividends out of the Company’s realized net profits or other distributable reserves.
The maximum dividend amount proposed by the Board in its recommendation to the GSM may not exceed an amount specified by Luxembourg law. The final decision regarding the distribution of profits and the payment of dividends rests with the GSM.
