21. Equity 21.1. Capital management Colruyt Group’s aim in managing its equity is to maintain a healthy financial structure with a minimal dependency on external financing as well as to create shareholders’ value. The Board of Directors strives to at least increase the annual dividend per share in proportion to the increase in group profits (excluding the profit participation of the employees). The pay-out ratio over the past years has always been higher than one third of the group’s profit and amounts to 47,2%(1) for this financial year. According to the bylaws, at least 90% of distributable profits (excluding the profit sharing of employees) are reserved for shareholders and a maximum of 10% can be reserved for directors. Furthermore, in addition to its organic growth, Colruyt Group seeks to increase shareholders’ value by purchasing treasury shares. The Board of Directors is authorised to acquire treasury shares up to a maximum of 20% of the shares issued. As employee commitment to the group’s growth is one of Colruyt Group’s priorities, an annual capital increase reserved for employees has been organised since 1987. (1) More details can de found under notes 21.4 Dividends and 21.5 Stability allowance reference shareholders.
21.2. Share capital As a result of the resolution of the Extraordinary General Meeting of Shareholders on 10 October 2018 the capital was increased by 355.738 shares; the related capital increase amounted to EUR 15,2 million. The Company’s share capital on 31 March 2019 amounted to EUR 331,2 million divided into 143.552.090 fully paid up ordinary shares without par value. All shares, except treasury shares, participate in the profits. The Board of Directors is authorised to increase the share capital in one or more times by a total amount of EUR 315 million. The capital increases executed under this authorisation can be performed by a contribution in cash or kind, by converting any reserves, by issuing convertible bonds, and can generally be organised in any given way, provided that legal prescriptions are respected. The conditions of the capital increases executed under this authorisation, and the rights and obligations attached to the new shares are determined by the Board of Directors, taking into account the legal prescriptions. This authorisation is valid for a period of three years starting from the day of the Extraordinary General Meeting of Shareholders that will decide on this subject. This authorisation can be extended one or more times, each time for a maximum period of five years, by means of a decision from the General Meeting of Shareholders, deliberating according to the guidelines that apply for changes in bylaws. The current authorisation will come to an end in October 2021.
21.3. Treasury shares Treasury shares are recognised at the cost of the treasury shares purchased. On 31 March 2019 Colruyt Group held 5.695.660 treasury shares; this represents 3,97% of the shares issued at reporting date. For many years the Extraordinary General Meeting of Shareholders authorised the Board of Directors to acquire treasury shares up to 20% of the number of shares issued. The Board of Directors regularly discusses its buy-in policy and has approved on 27 September 2017 the launch of a share buyback programme. Within the scope of this programme Colruyt Group purchases treasury shares up to a maximum amount of EUR 350 million. The buyback programme started on 2 October 2017 and has an expected term of two years. In the period up to 31 March 2019, EUR 338,5 million of the maximum amount allocated to the programme was used, of which EUR 47,4 million during the financial year 2018/19. The aim of the buyback programme is to reduce the company’s excess cash and to decrease capital. Purchases are made in accordance with the applicable laws and regulations and are in line with the mandate granted by the Extraordinary General Meeting of Shareholders. No treasury shares were purchased between 1 April 2019 and 12 June 2019. In accordance with article 622, paragraph 1 of the Companies Code, the voting rights of shares held by the company or its subsidiaries are suspended. In December 2018 7.000.000 treasury shares were cancelled. By notarial deed of 8 May 2019 the Board of Directors of Etn. Fr. Colruyt NV cancelled 5.500.000 of the purchased treasury shares.
FINANCIAL REPORT | Consolidated statements • Statement • Independent auditor’s report • Notes • Definitions
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