Stellantis NV unveiled a share buyback of as much as €1.5 billion ($1.6 billion), following Mercedes-Benz AG and BMW AG in returning cash to shareholders after strong results on the back of high vehicle prices and pent-up demand.
(Bloomberg) — Stellantis NV unveiled a share buyback of as much as €1.5 billion ($1.6 billion), following Mercedes-Benz AG and BMW AG in returning cash to shareholders after strong results on the back of high vehicle prices and pent-up demand.
The carmaker, forecasting another year of double-digit returns, expects vehicle price increases to slow this year compared with 2022 as chip shortages ease and production picks up, it said Wednesday. The company’s operating return rose to 13% last year, beating expectations.
“Price increases were substantial in 2022 and they will be lower in 2023,” Chief Financial Officer Richard Palmer said on a call with reporters. “The challenge for 2023 is to offset inflation with pricing but also with an improvement in the industrial efficiency.”
Carmakers are still struggling to source enough parts, with logistics disruptions adding to the fray to delay deliveries. Truck driver and train shortages during the second half left thousands of cars stuck around at Stellantis’s Sochaux plant in eastern France, with peer Volkswagen AG also reporting that disruptions left it with a glut of unsold vehicles.
The difficulties in getting vehicles to car buyers are adding to manufacturers’ already long order books they say will buffer against a slowing global economy. While price cuts at carmakers including Tesla Inc. and Ford Motor Co. on EVs don’t bode well for the months ahead, Stellantis rival Renault SA this month said it expects rising returns after overhauling its model offering.
Stellantis said all of its regions were growing and delivering record profitability last year, including Europe. Returns during the second half of the year declined compared to the first because of the supply-chain snarls.
The shares rose as much as 2.7% in Milan and were up 1.2% at 9:06 am.
The manufacturer, formed from the merger of Fiat Chrysler and PSA Group, will pay a dividend of €1.34 a share, up from €1.04 the previous year. Its buyback will run through the end of the year, it said.
(Updates with supply-chain comment in second, third, share price in seventh paragraph. A previous version of the story corrected the currency.)
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