Celltrion(068270) said on the 31st it has established a mid- to long-term policy to use one-third of annual net income on a consolidation basis each year as resources for shareholder returns going forward. To implement this preemptively, the board on the same day also approved a 100 billion won share buyback.
The buyback totals 524,384 shares, worth about 100 billion won based on the closing price the day before the board resolution. Acquisition will proceed through on-exchange purchases starting Sept. 1, and the repurchased shares will be canceled after going through related procedures such as a board resolution.
Celltrion set a principle to use about 33% of annual net income based on consolidation financial statements each year starting this year for shareholder returns. The specific method will be decided among cash dividends and share buybacks and cancellations, comprehensively considering the share price level, market conditions, financial structure, cash flow, and investment plans.
If the share price is judged to be significantly undervalued relative to corporate value, the company will actively use share buybacks and cancellations, and if stable, direct shareholder returns are deemed effective, it will increase the weight of cash dividends. The specific scale and method of returns each year will be finalized and disclosed through procedures such as a board resolution and a general meeting of shareholders, based on settlement of account results and business conditions.
Celltrion plans not only to acquire and hold treasury shares but also to link them to cancellations to enhance shareholder returns. If treasury shares are canceled and the number of shares outstanding decreases, key indicators such as earnings per share (EPS) and book value per share (BPS) can also be expected to improve.
Including this decision, the treasury shares that Celltrion decided to buy this year total 1,600,288 shares, worth about 300 billion won. The cumulative buyback volume over the past three years amounts to about 8.93 million shares. The company will continue to consider additional share buybacks and cancellations if it judges there is a large gap between the share price and corporate value, taking into account available resources and market conditions.
Celltrion is maintaining growth in results based on expanded prescriptions of biosimilar products in key markets such as the United States and Europe and the market establishment of new high-margin products. The company's strategy is to use stable cash generation in a balanced way for investment to enhance corporate value and for shareholder returns.
A Celltrion official said, "We will not stop at a one-off measure but will continue a mid- to long-term policy of using one-third of annual net income on a consolidation basis each year for shareholder returns," adding, "We will implement a predictable and consistent shareholder return policy so that the company's growth performance can translate into shareholders' tangible gains by combining cash dividends with share buybacks and cancellations in line with market conditions."