Coway Announces Expansion of Shareholder Return Policy
- Total Shareholder Return Rate* Increase: Doubling from 20% to 40% through 2027 to enhance shareholder value.
- Dividend Increase and Share Cancellation: For FY2024, cash dividends will more than double compared to the previous year, and 2.56% of all treasury shares will be canceled.
- Corporate Value-Up Program Participation: Scheduled participation in South Korea's Corporate Value-Up Program in 2025.
SEOUL, South Korea, Jan. 7, 2025 /PRNewswire/ -- Coway Co., Ltd., the "Best Life Solution Company," has announced the expansion of its shareholder return policy, reinforcing its commitment to enhancing shareholder value and long-term, sustainable financial growth.
Key Highlights of the Expanded Policy
Starting FY2024, Coway will increase its total shareholder return rate from 20% to 40%, a commitment that will extend through FY2027. Of this increased total shareholder return rate, 34% will be allocated for cash dividends, while 6% will be dedicated to treasury share cancellation.
As part of this latest commitment, Coway plans to cancel a total of 1,890,486 shares, representing 2.56% of its treasury shares, by the end of 2025. The enhanced total shareholder return rate is set to remain in place through FY2027.
Furthermore, Coway will participate in South Korea's Corporate Value-Up Program in 2025 in order to increase corporate value, with more detailed information to be provided through public disclosure set for release within the first quarter of 2025.
Strengthened Financial Foundations
The decision to expand shareholder returns reflects Coway's strengthened financial stability and business competitiveness, which the company has attained since its acquisition by the Netmarble Group in 2020.
Prior to the acquisition, Coway faced challenges stemming from a shareholder return policy that exceeded its free cash flow. This situation constrained the company's financial flexibility and limited investment in core operations and growth initiatives, thus weakening the competitiveness of its core businesses.
Since the acquisition, Coway has been implementing a capital allocation strategy aimed at restoring financial stability while fostering growth. In reducing its total shareholder return rate to approximately 20%, the company was able to reinvest in key business areas including research and development, marketing, and customer satisfaction as well as enhancing global market competitiveness and increasing brand awareness for BEREX, all in pursuit of sustainable growth.
These efforts have been successful in driving growth for Coway, resulting in the impressive performance of six consecutive quarters surpassing KRW 1 trillion in revenue, despite the challenges posed by the COVID-19 pandemic and ongoing global economic uncertainties.
Coway's Commitment to Sustainable Growth
Starting in FY2024, as the company's growth foundation stabilizes, Coway has decided to increase its total shareholder return resources from the current 20% of consolidated net income to 40% by FY2027.
"Coway plans to allocate resources toward shareholder returns, strategic investments for sustainable growth, and maintaining financial stability within the range of distributable profits, taking into account internal and external business conditions," said Jangwon Seo, CEO of Coway. "We will continue to implement shareholder-friendly policies in various ways going forward."
*Total Shareholder Return Rate is the ratio of consolidated net income distributed to shareholders through cash dividends, share buybacks, and cancellations. |
About Coway Co., Ltd.
Established in Korea in 1989, Coway, the "Best Life Solution Company," is a leading environmental home appliances company making people's lives healthy and comfortable with innovative home appliances such as water purifiers, air purifiers, bidets, and mattresses. The company's most recent venture, the BEREX brand, aims to improve sleep and wellness through cutting-edge mattresses and massage chairs. Since being founded, Coway has become a leader in the environmental home appliances industry, with intensive research, engineering, development, and customer service. The company has proven dedication to innovation with award-winning products, home health expertise, unrivaled market share, customer satisfaction, and brand recognition. Coway continues to innovate by diversifying product lines and accelerating overseas business in Malaysia, USA, Thailand, China, Indonesia, Vietnam, Japan, and Europe, based on the business success in Korea. For more information, please visit http://www.coway.com/ or http://newsroom.coway.com.
SOURCE Coway Co., Ltd.
Share this article