Stellantis Announces Launch of First Tranche

Rhea-AI Summary

Stellantis initiates the first phase of its 2024 Share Buyback Program, aiming to repurchase up to €3 billion worth of shares. The company has signed an agreement for the first tranche of €1 billion, which will run from February 28 to June 5, 2024. Stellantis plans to cancel acquired shares except for €0.5 billion for employee stock plans. The buyback is authorized for up to 10% of the company's capital, with the purchase price capped at 110% of the market price on NYSE, Euronext Milan, or Euronext Paris.

Insights

Financial Analyst

Stellantis N.V.'s initiation of a €1 billion share buyback as part of its larger €3 billion program represents a significant capital allocation decision, reflecting the company's current financial health and management's confidence in its intrinsic value. The intention to cancel the majority of the acquired shares is a move typically aimed at enhancing shareholder value by reducing the number of shares outstanding, which can result in an increase in earnings per share (EPS) and potentially boost the stock price. This could be seen as a positive signal to the market, suggesting that the management believes the stock is undervalued.

However, the impact of such buybacks on the company's balance sheet and future investment capacity must be considered. The capital used for share repurchases is capital not being invested in growth opportunities or held in reserve for potential downturns. It is essential to evaluate the company's debt levels, cash flow generation and investment needs to assess the sustainability of this program. Furthermore, the stipulation that a portion of the repurchased shares will be used for employee stock purchase plans and equity-based compensation can help align employee interests with those of shareholders, potentially driving performance improvements.

Market Research Analyst

The share buyback announcement by Stellantis N.V. aligns with broader market trends where companies use buybacks as a tool for returning excess capital to shareholders. The timing and size of the tranche, set to end by June 5, 2024, will influence Stellantis's stock liquidity and could lead to increased volatility in the short term. Market participants often react to such news with optimism, as buybacks can be perceived as a company's commitment to its shareholders.

It is important to monitor the share price performance in the days following the announcement to gauge investor sentiment. Additionally, the price cap of 110% of the market price suggests a limit on the premium the company is willing to pay, which is a prudent measure to avoid overpaying for its shares. Market conditions, regulatory compliance and the remaining authorization for share buybacks will also play a crucial role in the program's execution and its eventual success.

Legal Expert

Stellantis's share buyback program must adhere to stringent regulatory frameworks, including the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052, which govern the execution of buybacks in the European Union. These regulations ensure that the buyback is conducted in a transparent manner, preventing market manipulation and protecting investors. The independent agreement with an investment firm to make trading decisions is a measure to ensure that the buyback process is free from insider influence.

The authorization by the general meeting of shareholders and the adherence to the maximum limit of 10% of the company's capital are also critical legal considerations. These safeguards are in place to prevent adverse effects on corporate governance and ensure that the buyback serves the best interest of all stakeholders. It is essential for investors to be aware of these legal frameworks as they provide a level of security and predictability in the execution of such financial operations.

Stellantis Announces Launch of First Tranche

of Its 2024 Share Buyback Program

AMSTERDAM, February 28, 2024 - Stellantis N.V. (“Stellantis” or the “Company”) announced today that pursuant to its Share Buyback Program (or the “Program”) announced on February 15, 2024, covering up to €3 billion (total purchase price excluding ancillary costs) to be executed in the open market, Stellantis has signed a share buyback agreement for the first tranche of its Program with an investment firm that will make its trading decisions concerning the timing of purchases independently of Stellantis.

This agreement will cover a maximum amount of up to €1 billion (of the €3 billion Share Buyback Program). The first tranche of the Program shall start on February 28, 2024 and end no later than June 5, 2024.

The Company intends to cancel the common shares acquired through its €3 billion Share Buyback Program apart from a portion of up to €0.5 billion, which will be utilized to execute future employee stock purchase plan activities and equity-based compensation. This is intended to support the benefits of expanding and strengthening the ownership culture of our teams, while avoiding dilution of existing shareholders.

The buyback of common shares in relation to this announcement will be carried out under the authority granted by the general meeting of shareholders held on April 13, 2023, up to a maximum of 10% of the Company’s capital, or any renewed or extended authorization to be granted at a future general meeting of the Company. The purchase price per common share will be no higher than an amount equal to 110% of the market price of the shares on the NYSE, Euronext Milan or Euronext Paris. The market price will be calculated as the average of the highest price on each of the five days of trading prior to the date on which the acquisition is made, as shown in the official price list of the NYSE, Euronext Milan or Euronext Paris. The share buybacks will be carried out subject to market conditions and in compliance with applicable rules and regulations, including the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052.

As of today, the remaining authorization stands at approximately 181 million shares and the Company held in treasury a total of 142,090,297 common shares equal to 3.52% of the total issued share capital including common shares and special voting shares.

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About Stellantis

Stellantis N.V. (NYSE: STLA / Euronext Milan: STLAM / Euronext Paris: STLAP) is one of the world’s leading automakers aiming to provide clean, safe and affordable freedom of mobility to all. It’s best known for its unique portfolio of iconic and innovative brands including Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep_®, Lancia, Maserati, Opel, Peugeot, Ram, Vauxhall, Free2move and Leasys. Stellantis is executing its Dare Forward 2030, a bold strategic plan that paves the way to achieve the ambitious target of becoming a carbon net zero mobility tech company by 2038, with single-digit percentage compensation of the remaining emissions, while creating added value for all stakeholders. For more information, visit www.stellantis.com.

@Stellantis

Stellantis

Stellantis

Stellantis

For more information, contact:

Fernão SILVEIRA +31 6 43 25 43 41 – fernao.silveira@stellantis.com

communications@stellantis.com
www.stellantis.com

FORWARD-LOOKING STATEMENTS

This communication contains forward-looking statements. In particular, statements regarding future events and anticipated results of operations, business strategies, the anticipated benefits of the proposed transaction, future financial and operating results, the anticipated closing date for the proposed transaction and other anticipated aspects of our operations or operating results are forward-looking statements. These statements may include terms such as “may”, “will”, “expect”, “could”, “should”, “intend”, “estimate”, “anticipate”, “believe”, “remain”, “on track”, “design”, “target”, “objective”, “goal”, “forecast”, “projection”, “outlook”, “prospects”, “plan”, or similar terms. Forward-looking statements are not guarantees of future performance. Rather, they are based on Stellantis’ current state of knowledge, future expectations and projections about future events and are by their nature, subject to inherent risks and uncertainties. They relate to events and depend on circumstances that may or may not occur or exist in the future and, as such, undue reliance should not be placed on them.

Actual results may differ materially from those expressed in forward-looking statements as a result of a variety of factors, including: the ability of Stellantis to launch new products successfully and to maintain vehicle shipment volumes; changes in the global financial markets, general economic environment and changes in demand for automotive products, which is subject to cyclicality; Stellantis’ ability to successfully manage the industry-wide transition from internal combustion engines to full electrification; Stellantis’ ability to offer innovative, attractive products and to develop, manufacture and sell vehicles with advanced features including enhanced electrification, connectivity and autonomous-driving characteristics; Stellantis’ ability to produce or procure electric batteries with competitive performance, cost and at required volumes; Stellantis’ ability to successfully launch new businesses and integrate acquisitions; a significant malfunction, disruption or security breach compromising information technology systems or the electronic control systems contained in Stellantis’ vehicles; exchange rate fluctuations, interest rate changes, credit risk and other market risks; increases in costs, disruptions of supply or shortages of raw materials, parts, components and systems used in Stellantis’ vehicles; changes in local economic and political conditions; changes in trade policy, the imposition of global and regional tariffs or tariffs targeted to the automotive industry, the enactment of tax reforms or other changes in tax laws and regulations; the level of governmental economic incentives available to support the adoption of battery electric vehicles; the impact of increasingly stringent regulations regarding fuel efficiency requirements and reduced greenhouse gas and tailpipe emissions; various types of claims, lawsuits, governmental investigations and other contingencies, including product liability and warranty claims and environmental claims, investigations and lawsuits; material operating expenditures in relation to compliance with environmental, health and safety regulations; the level of competition in the automotive industry, which may increase due to consolidation and new entrants; Stellantis’ ability to attract and retain experienced management and employees; exposure to shortfalls in the funding of Stellantis’ defined benefit pension plans; Stellantis’ ability to provide or arrange for access to adequate financing for dealers and retail customers and associated risks related to the operations of financial services companies; Stellantis’ ability to access funding to execute its business plan; Stellantis’ ability to realize anticipated benefits from joint venture arrangements; disruptions arising from political, social and economic instability; risks associated with Stellantis’ relationships with employees, dealers and suppliers; Stellantis’ ability to maintain effective internal controls over financial reporting; developments in labor and industrial relations and developments in applicable labor laws; earthquakes or other disasters; risks and other items described in Stellantis’ Annual Report on Form 20-F for the year ended December 31, 2023 and Current Reports on Form 6-K and amendments thereto filed with the SEC; and other risks and uncertainties.

Any forward-looking statements contained in this communication speak only as of the date of this document and Stellantis disclaims any obligation to update or revise publicly forward-looking statements. Further information concerning Stellantis and its businesses, including factors that could materially affect Stellantis’ financial results, is included in Stellantis’ reports and filings with the U.S. Securities and Exchange Commission and AFM.

Attachment

• EN-20240228-Stellantis-Launch-Share Buyback-Program-FINAL

FAQ

What is the purpose of Stellantis' 2024 Share Buyback Program?

Stellantis aims to repurchase up to €3 billion worth of shares to support employee stock plans and strengthen the ownership culture while avoiding dilution of existing shareholders.

When will the first tranche of the Share Buyback Program run?

The first tranche of €1 billion will start on February 28, 2024, and end no later than June 5, 2024.

How much of the acquired shares will Stellantis cancel?

Stellantis plans to cancel all acquired common shares except for up to €0.5 billion, which will be used for future employee stock purchase plan activities.

What is the maximum percentage of the company's capital that can be repurchased?

The buyback is authorized for up to 10% of the Company's capital.

What is the purchase price cap for the common shares?

The purchase price per common share will not exceed 110% of the market price on NYSE, Euronext Milan, or Euronext Paris.