Company to purchase and cancel 524,384 shares starting Tuesday; total buyback reaches 300 billion won this year

Cash dividends and buybacks to be flexibly combined; cancellation share to rise when stock is undervalued

Strong global earnings drive virtuous cycle; cumulative buyback reaches 8.93 million shares over three years

An exterior view of Celltrion's headquarters. [Celltrion]
An exterior view of Celltrion's headquarters. [Celltrion]

Celltrion has established a medium- to long-term shareholder return policy under which it will allocate one-third — about 33 percent — of its annual consolidated net profit for the period to shareholders each year. As an initial step, the company has decided to buy back 100 billion won ($72.6 million) worth of its own shares and cancel all of them.

Celltrion said Monday its board had resolved to acquire 524,384 treasury shares through open-market purchases. The acquisition is valued at approximately 100 billion won based on the closing share price the day before the board meeting, with the buyback period set to begin Tuesday.

With this decision, Celltrion's total share buyback commitment this year rises to 1,600,288 shares worth 300 billion won. Cumulative buybacks over the past three years have reached approximately 8.93 million shares.

Celltrion plans to cancel all 524,000-plus shares acquired in this round following board approval and other required procedures. By linking the purchase directly to cancellation — rather than simply holding the shares — the company aims to reduce the number of shares in circulation and directly improve per-share profitability metrics such as earnings per share and book value per share.

In addition, Celltrion has set a clear standard starting this year: one-third of annual consolidated net profit for the period will go toward shareholder returns each year. The company said it will flexibly combine cash dividends and share buyback and cancellation, taking into account the share price level, market conditions, financial structure, cash flow and investment plans.

When management judges the share price to be undervalued relative to the company's intrinsic worth, it will lean more heavily on buybacks and cancellations; when stable direct returns are needed, it will raise the proportion of cash dividends. The specific scale and composition for each year will be disclosed after final earnings are confirmed, following board and shareholder meeting approval.

Celltrion's management said Monday it takes seriously shareholder concerns about recent share price volatility, and said the new policy represents an ongoing management principle rather than a one-time measure. With strong earnings continuing on the back of expanding prescriptions for its key biosimilars and the successful launch of new pipeline products in the United States, Europe and other global markets, the company said it aims to build a virtuous cycle in which earnings growth translates into enhanced shareholder value.

"This buyback is a proactive step grounded in our confidence in the company's medium- to long-term growth potential and corporate value," a Celltrion official said. "We will harmoniously combine cash dividends and share buyback policy to continuously share the fruits of our growth with shareholders and maintain predictable shareholder returns."


silverpaper@heraldcorp.com