Considering Interim Dividends and Treasury Stock Cancellation
Major Subsidiaries Also Plan Value-Up Initiatives
Lotte Holdings, the holding company of Lotte Group, plans to increase its shareholder return ratio to over 35% by 2026 while also considering interim dividends and treasury stock cancellations.
According to the distribution industry on the 27th, Lotte Holdings announced a corporate value enhancement plan including these details on the 26th.
According to Lotte Holdings, Lotte Group's price-to-book ratio (PBR) is relatively low compared to six peer companies including SK, LG, and GS. Regarding this, Lotte Holdings explained, "It appears to be due to the relative underperformance of major business results," and added, "Portfolio management is necessary to resolve this."
It then described the current group portfolio, citing existing core businesses and new growth engines of the group. In addition to the existing core businesses identified by Lotte Holdings?food, distribution, chemicals, and infrastructure?it named ▲Lotte Biologics' contract development and manufacturing organization (CDMO) business ▲EVSIS's electric vehicle charging infrastructure business ▲Lotte Energy Materials' secondary battery materials ▲Lotte Innovate's metaverse platform Caliverse as new growth drivers.
Lotte Holdings diagnosed that although its dividend payout ratio and dividend yield are higher than those of peer companies, the proportion of treasury stock is high at 32.5%. Based on this, it presented goals to enhance corporate value by increasing the value of investment stocks, strengthening shareholder returns, and leading ESG (environmental, social, and governance) management.
Specifically, to strengthen shareholder returns, it aims for a shareholder return ratio of over 35% by 2026. Additionally, it plans to consider implementing interim dividends and canceling treasury stock.
To increase stock value, it will also pursue value-up of its subsidiaries. Lotte Wellfood aims for an overseas sales ratio of over 35% by 2028 and a return on equity (ROE) of 8-10% by 2028. Lotte Chilsung Beverage set targets of KRW 5.5 trillion in sales by 2028, ROE of 10-15% by 2028, and a debt ratio below 100% by 2028.
Lotte Shopping's sales target for 2030 is KRW 20 trillion (KRW 3 trillion overseas), operating profit of KRW 1.3 trillion, and a minimum dividend per share of KRW 3,500. Lotte GRS set goals to strengthen profitability of the Lotteria and Krispy Kreme brands, turnaround performance of Angel-in-us, and launch new brands. Korea Seven, which operates the convenience store Seven Eleven, aims to turn operating profit positive through opening premium stores and streamlining low-profit stores.
Lotte Biologics' top priority is the successful establishment of the Songdo Bio Campus Plant 1. The goal for Songdo Plant 1 is to complete production preparations in compliance with GMP (Good Manufacturing Practice) standards by 2027.
In terms of ESG management, it announced that all affiliates will achieve carbon neutrality by 2050. It also set a goal to increase compliance with the diversity charter and key governance indicators to 80%.
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