The Company's management board and the supervisory board intend to make suggestions for the distribution of dividend to the general shareholders' meeting taking into account: (i) the profit for the year; (ii) historical and forecasted free cash flow and liquidity; (iii) distributable reserves available; (iv) benchmarking against other telecommunications companies; (v) the current and expected leverage and financial condition of the Company; (vi) the general economic and business conditions; (vii) any applicable legal and regulatory requirements; and (viii) any other factors the management board and supervisory board may deem relevant.
Our management board and supervisory board intend to maintain the Company's leverage ratio (calculated by dividing net financial debt by OIBDA) below 1.0x over the medium term (the "Target Leverage"). In order to assess compliance with the Target Leverage, net financial debt will be measured as interest-bearing financial liabilities less interest-bearing financial assets, cash and cash equivalents, taking into account the value of financial derivatives and hedge arrangements. According to its financing policy, the Company aims to:
(i) refrain from paying dividends, distributing capital or capital reserves in cash or bying back shares, if the ratio of net financial debt/OIBDA materially and consistently exceeds the Target Leverage; and
(ii) restrict the use of new debt to pay dividends, allowing it only if the ratio of net financial debt/OIBDA complies with the Target Leverage.
The management board intends to maintain a high payout ratio in relation to free cash flow. With regards to the integration of the E-Plus Group, the management board and the supervisory board might also consider synergies expected to be realized in the near future when making a dividend proposal.