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Money for the shareholders – Who in Switzerland bought back all their own shares News

Tuesday, August 22nd, 2017 | Economy

A few weeks ago Nestlé, the food company, surprisingly announced a share buyback program. The traditional company from Vevey wants to acquire own titles for the astronomical sum of 20 billion francs. A Swiss record.
While stock repurchase programs are part of the New York Stock Exchange, they are not very popular with companies from Switzerland. According to surveys conducted by Julius Baer's stock proj- ects, just 13 percent of all annual profits were returned to shareholders by way of share buybacks between 2012 and 2016. By way of comparison, the shareholders paid a good dividend of 60 percent during this period as a dividend. The difference is attributable to interest costs and the repayment of borrowed capital.
Therefore, it is not surprising that only 11 of the companies traded on the Swiss stock exchange have run repurchase programs. According to the experts of Julius Baer, ​​their seven own shares are traded on a daily basis. These include: Adecco, Bâloise, Geberit, LafargeHolcim, Nestlé, Novartis and the Swatch Group.
Share repurchase programs at a glance:

Companies

Magnitude

Thereof

Adecco

300 million euros

31 percent

Baloise

3 million shares

6 percent

BB Biotech

5.54 million shares

no

GAM

16 million shares

no

Geberit

450 million francs

3 percent

LafargeHolcim

1 billion francs

9 percent

Nestlé

20 billion francs

0.1 percent

Novartis

5 billion francs

52 percent

SGS

250 million francs

no

Sonova

500 million francs

48 percent

Swatch Group

1 billion francs

47 percent

(Source: Bloomberg, Julius Baer)
BB Biotech, GAM and SGS could buy back their own shares, but they have not done so at the moment, and the buy-back program at Sonova has been on hold since the takeover of Audionova. Swiss Re could also access CHF 1 billion at any time. As the strategists write, however, the reinsurance company has only been active in the months between November and February in recent years. The reason: at the end of October, the Hurricane season comes to an end in the USA.
Sika and Roche are regarded as special situations
In the search for the next candidate for a share buyback, the experts will find two special situations. In its view, Roche may be interested in the share package held by Novartis if it is to be sold. It would not be so easy to look at Roche's ownership structure.
This could be the case at Sika, if the sale of the majority stakeholding controlled by the Schenker-Winkler-Holding to France fail. Some analysts do not in any case conclude that Sika will jump into the Presche in the event of a failure of the transaction for the Saint-Gobain building group and the Schenker-Winkler-Holding will buy the shares.
Of share buybacks do not close on rising prices
As far as the impact of stock repurchase programs on the price development is concerned, the strategists of Julius Baer are rather cautious. They acknowledge that the repurchase of treasury shares is a sign of financial strength and an attitude-friendly attitude of the company's representatives.
Nevertheless, there is no significant statistical evidence that the repurchase of own shares helps in the long term, so the rather sobering conclusion. This can be explained as follows: The titles bought back are not always destroyed. For Richemont and Logitech, for example, they are fed into employee participation programs. At least a supportive effect is said, however, to buy back shares at Julius Baer.

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