Dividend guidelines
In accordance with our articles of association ("Articles"), we pay dividends out of profits as shown in our annual accounts or, by exception, out of the distributable part of our shareholders' equity. However, we cannot pay dividends if the payment would reduce shareholders' equity below the sum of the paid-up and requested part of the capital and any reserves required by Dutch law or our Articles. Subject to certain exceptions, if a loss is sustained in any year, we may not distribute dividends for that year and we may not pay dividends in subsequent years until the loss has been compensated for out of subsequent years' profits.
TNT Reserves and Dividend Guidelines 2009
Preference Shares B
In accordance with our Articles, if preference shares B have been issued, we first have to pay dividends on the paid-up part of the nominal value of such shares, at a rate of one to three percentage points above the average 12-monthly EURIBOR (EURO Interbank Offered Rate), weighted to reflect the number of days for which the payment is made over the financial year to which the distribution relates.
Ordinary Shares
Under our Articles, after payment of dividends on the preference shares B (if applicable), the Board of Management shall determine, subject to the approval of the Supervisory Board, what part of the profit is to be appropriated to the reserves. The part of the profit remaining after the appropriation to the reserves shall be proposed to the General Meeting of Shareholders to be distributed as dividend on the ordinary shares.
It is TNT’s intention to pay a dividend per share which develops substantially in line with the development of our operational performance. TNT intends to pay interim and final dividends annually in cash and/or in stock.
It is our intention in principle to pay a dividend per share which is aimed to increase from around 35% to around 40% of normalised net income per share by 2010. However, the year on year change in the dividend per share will reflect the impact of incidental share repurchases in the book year in order to have total dividend for the year in absolute terms developing in line with the underlying earnings development. Normalised net income per share is defined as “profit attributable to equity holders of the parent” adjusted for significant one time and special items, divided by the average of outstanding ordinary shares eligible for dividend over the book year. This normalising adjustment, in case it would be applied, will be separately explained in the Annual Report and is meant to better reflect the underlying earnings development.
In setting the reserves and dividend guidelines as outlined above, we also recognise the group’s requirement for financial flexibility, which is a key element of our financial strategy. Alongside organic growth, a part of the group’s total growth will come from acquisitions and these will continue as we expand our global presence.
These guidelines will be pursued subject to the financial results of TNT. Although these are our guidelines, the Board of Management may establish, with the approval of the Supervisory Board, the amount to be appropriated to the reserves in the light of particular circumstances either resulting in special cash requirements or excess cash medium term.
TNT Reserves and Dividend Guidelines will be annually reviewed to ascertain that we continue to maintain an efficient investment grade capital structure, capable of securing our growth ambitions whilst honouring our financial commitments on a sustainable basis.
Stock dividend
TNT annually intends to pay interim and final dividends in cash and/or stock. The Board of Management may resolve, subject to the approval of the Supervisory Board, that all or part of the dividend shall be paid in stock in TNT instead of in cash. Furthermore, stock may be offered as part of an optional dividend, which can either be subject to or free of withholding tax, depending on the source of the optional dividend. In addition, other forms of distribution of stock to shareholders are possible, which can either be subject to or free of withholding tax. The combination of stock and/or cash will depend amongst others on the continuation of an efficient investment grade capital structure, capable of securing our growth ambitions whilst honouring our financial commitments on a sustainable basis.
Approved by the Board of Management on 13 March 2009
Approved and adopted by the Supervisory Board on 13 March 2009