Hyundai Department Store Group to Strengthen Shareholder Returns with Transition to Single Holding Company

Establishment of Mid-to-Long-Term Dividend Policies by 10 Listed Companies
Greenfood, Jinus, and Hansome Share Buyback and Cancellation

Hyundai Department Store Group, which transitioned to a single holding company system, announced on the 8th that it has established a mid- to long-term dividend policy and plans to strengthen its 'shareholder return efforts.' Hyundai Department Store Group became a single holding company system last November with the official launch of Hyundai G.F. Holdings.

Hyundai Department Store Group stated that its 10 listed affiliates, including the holding company Hyundai G.F. Holdings, Hyundai Department Store, Hyundai Home Shopping, and Hyundai Green Food, each held board meetings on the same day to establish a mid- to long-term dividend policy (2024?2026). A group official said, "We established the mid- to long-term dividend policy in response to social demands to increase the corporate value of companies with low price-to-book ratios (PBR) and to strengthen shareholder returns, aiming to enhance shareholder rights and value."

According to the mid- to long-term dividend policy, Hyundai Department Store raised its minimum dividend amount over the next three years from the existing minimum of 1,000 KRW to at least 1,300 KRW. Hyundai Home Shopping guarantees a dividend of at least 2,500 KRW per share for three years. Hyundai Green Food and Hyundai G.F. Holdings decided to set the total dividend amount at a higher level than before the spin-off and paid-in capital increase, in line with the dividend policy announced in January last year. Hyundai Green Food will pay a minimum dividend of 325 KRW per share over three years. Hyundai G.F. Holdings also established a policy to pay at least 150 KRW per share and announced a dividend of 200 KRW per share for 2023.

Five affiliates?Hansome, Hyundai Livart, Hyundai Easywell, Daewon Kangup, and Hyundai Everdigm?also established mid- to long-term dividend policies for the first time. These companies plan to maintain a minimum dividend payout ratio of 10?20% over the next three years. A Hyundai Department Store Group official said, "Although this year’s operating performance of each affiliate is a variable, we expect the dividend scale in 2024 to increase compared to last year due to the establishment of the mid- to long-term dividend policy." The total dividend scale of Hyundai Department Store Group for 2023 is expected to be around 166.9 billion KRW, a 16.4% increase from 143.4 billion KRW in 2022.

Hyundai Department Store Group will also proceed with treasury stock cancellation, a representative shareholder return policy. Hansome plans to cancel about 5% of the total issued shares by the end of this month, including additional treasury stock purchases. As of the 2nd, it purchased 492,600 treasury shares on the market and will cancel a total of 1,231,500 shares, including 738,900 treasury shares previously acquired.

Jung Ji-sun, Chairman of Hyundai Department Store Group

Zinus will also cancel about 2.3% of its total issued shares. Zinus plans to purchase 237,972 treasury shares on the market by March 29 and cancel a total of 475,944 treasury shares, including 237,972 shares already held, within April. A Hyundai Department Store Group official explained, "Despite Zinus’s temporarily poor operating performance last year, it maintained the 2023 dividend payout ratio at the same level as the previous year and decided to cancel treasury shares. This means that all of last year’s net income will be used for shareholder returns."

Hyundai Green Food plans to newly purchase and cancel 10.6% of its treasury shares by 2028. A group official said, "The combined cost of treasury stock cancellation and dividends over the next five years will amount to about 20 billion KRW annually. This means that about 50% of Hyundai Green Food’s net income last year will be used for shareholder returns every year."

Earlier, Hyundai G.F. Holdings, the holding company of Hyundai Department Store Group, canceled all of its treasury shares (about 4.0% of total issued shares) in December last year. A Hyundai G.F. Holdings official said, "We plan to pursue a more progressive shareholder-friendly policy by gathering various market opinions. Now that a new governance structure centered on a single holding company has been established, we will strive to enhance the corporate value of subsidiaries and increase shareholder value at the group level."