At an investor meeting held in Boston, The Goodyear Tire & Rubber Company discussed industry trends, its financial performance targets and its capital allocation plan, among other topics. The company increased its dividends as well as reaffirmed its fiscal 2016 financial targets.
The company’s Chairman, Chief Executive Officer and President, Richard J. Kramer, said that the tyre industry is healthy and growing and offers attractive opportunities to raise profitability, even after US retail sales fell in August due to weak purchases of automobiles and other goods.
“Our strategy is built to take advantage of key industry drivers including the transition to increasingly complex, large-rim diameter tyres and the growing influence of empowered consumers in all aspects of the tyre buying process,” he said.
He also believes that the combination of Goodyear’s innovation and technology leadership, industry-leading products and strong global brand will give the company a competitive advantage to execute its strategy and deliver on their performance targets.
The Akron, Ohio-based tyre manufacturing company’s financial targets include achieving an annual segment operating income of US$3 billion in 2020 and a cumulative free cash flow of US$4.3 to US$4.9 billion from 2017 going through 2020.
Goodyear’s capital allocation plan that includes growth capital expenditures, restructuring, debt repayment and a shareholder return program of up to US$4 billion has also been updated.
Goodyear’s Board of Directors has declared a quarterly dividend of US$0.10 per share of common stock, showing a 43% increase, as part of the said program.The dividend is payable December 1, 2016, to shareholders of record on November 1, 2016. The payout represents an annual rate of US$0.40 per share. Future dividends will be subject to Board approval.
“Our capital allocation plan demonstrates Goodyear’s commitment to creating value by maintaining financial flexibility to execute our strategic plan, continuing to strengthen our balance sheet and investing for future growth while also providing significant direct returns to shareholders,” said Kramer.