Stellantis Announces Launch of Second Tranche of Its 2024 Share Buyback Program
Stellantis has announced the launch of the second tranche of its 2024 Share Buyback Program, which started on May 23, 2024, and will conclude by August 30, 2024. This tranche involves a maximum of €1 billion, part of the overall €3 billion Program initiated on February 15, 2024. The buyback will be executed by an independent investment firm. The company plans to cancel most of the repurchased shares, but up to €0.5 billion will be reserved for employee stock plans and equity compensation to avoid shareholder dilution. The buyback will adhere to the rules and regulations, including the Market Abuse Regulation 596/2014.
- Launch of a €1 billion share buyback within a €3 billion program.
- Independent investment firm to manage buyback decisions, adding objectivity.
- Up to €0.5 billion in buybacks reserved for employee stock plans, fostering ownership culture.
- Shareholders’ approval allows for buybacks up to 10% of the company's capital.
- Buyback aims to cancel shares, potentially increasing shareholder value.
- Compliance with Market Abuse Regulation 596/2014 ensures transparency.
- The buyback program might not significantly impact the stock price in a short term.
- The allocation of €0.5 billion for employee compensation could be seen as dilutive in the future.
- Buyback execution is contingent on market conditions, introducing uncertainty.
- Remaining authorization allows for further potential dilution up to 297 million shares.
Insights
Stellantis’ announcement of the second tranche of its 2024 Share Buyback Program is a significant move for investors. Share buybacks are generally viewed positively as they reduce the number of outstanding shares, thereby potentially increasing the value of remaining shares. By committing up to
It's essential to note that Stellantis plans to cancel the majority of these repurchased shares. This strategic cancellation can lead to a higher earnings per share (EPS) since the company's net income would be spread over fewer shares. Additionally, by reserving up to
The execution of this buyback under the authority granted by the shareholders and the adherence to market regulations reflect a well-structured approach. However, investors should be aware that the effectiveness and impact of buybacks also depend heavily on the timing and market conditions during the execution period. Overpaying for shares could negate the anticipated benefits.
In the short term, this move may buoy the stock price, providing a positive signal to the market. In the long term, consistent buybacks, coupled with robust financial health, can create substantial shareholder value.
From a market perspective, Stellantis' share buyback program indicates a strong vote of confidence in its future growth and valuation. By reducing the supply of shares, the company may generate a positive impact on its stock price, benefiting existing shareholders.
The market often interprets share buybacks as a sign that the company's management believes the stock is undervalued. This perception can positively influence investor sentiment and attract more investments. However, it’s important to recognize that such programs must be weighed against alternative uses of capital, such as further investments in the company’s strategic initiatives or paying down debt.
Stellantis' decision to utilize a portion of the repurchased shares for employee stock purchase plans enhances its appeal as an employer and can improve employee performance and retention. This strategy can be particularly beneficial in the highly competitive automotive industry, where talent plays a important role in driving innovation and operational efficiencies.
Stellantis Announces Launch of Second Tranche
of Its 2024 Share Buyback Program
AMSTERDAM, May 23, 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
This agreement will cover a maximum amount of up to
The Company intends to cancel the common shares acquired through its
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 16, 2024, up to a maximum of
As of today, the remaining authorization stands at approximately 297 million shares and the Company held in treasury a total of 172.498.930 common shares equal to
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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.
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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.
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FAQ
What is the purpose of Stellantis' 2024 Share Buyback Program?
When does the second tranche of Stellantis' Share Buyback Program start and end?
What is the maximum amount allocated for the second tranche of Stellantis' Share Buyback Program?
What percentage of the company’s capital is Stellantis authorized to buy back?
How will the price of shares be determined in Stellantis' buyback program?
What regulations does Stellantis' Share Buyback Program comply with?
