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Stellantis Reports Lower Q3 2024 Net Revenues Amid Transitional Period
of Product Upgrades and Inventory Reduction; Confirms Full-Year Guidance

• Net revenues of €33.0 billion, down 27% compared to Q3 2023, primarily due to lower shipments and unfavorable mix as well as pricing and foreign exchange impacts
• Consolidated shipments⁽¹⁾ of 1,148 thousand units, were down 279 thousand, or 20% year-over-year. Q3 2024 included production gaps in several models as a global product transition begins, planned North American inventory reductions, and headwinds from a challenging European market environment
• Product blitz remains on track to deliver approximately 20 new models in 2024. Temporary gaps in our line-up are due in part to the transformational upgrade of the product portfolio, which expands market coverage, consolidates platforms, and delivers unique multi-energy flexibility
• Total inventory of 1,330 thousand units at September 30, 2024 was down 129 thousand units year-to-date. The U.S. dealer inventory level, a focus priority, was reduced by over 80 thousand units at October 30, 2024 from June 30, 2024, and is on track to reach our previously communicated 100 thousand unit reduction target in November 30, 2024
• Reception for new products is strong, including orders for more than 50 thousand units for the all-new Citroën C3, approximately 75 thousand units for the all-new Peugeot 3008, and over 200 dealers in place for the European Leapmotor launch
• The Company’s €3 billion buyback program was completed in October (Including €0.9B in Q3), returning a total of €7.7 billion to shareholders in 2024. Consistent capital policy will support early 2025 dividend calibration and buybacks
• The Company reiterates its 2024 financial guidance, which was updated on September 30, 2024

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All reported data is unaudited. Reference should be made to the section “Safe Harbor Statement” included elsewhere within this document.

AMSTERDAM, October 31, 2024 – Stellantis reports lower Q3 2024 Net revenues amid transitional period of product upgrades and inventory reduction actions. The Company reiterates its 2024 financial guidance, which was updated on September 30, 2024. Net revenues declined 27% year-over-year, primarily due to lower shipments and unfavorable mix, as well as pricing and foreign exchange impacts. Consolidated shipments⁽¹⁾ for the three months ending September 30, 2024, were 1,148 thousand units, representing a 20% decline year-over-year.

Product Blitz

The Company plans approximately 20 new product launches in 2024. This next-generation product blitz features the initial offerings from the STLA platform family imbued with superior multi-energy flexibility (hybrid, all-electric, and gasoline powertrains). Three products launched in the third quarter:

• Alfa Romeo Junior – The new compact car brings Alfa Romeo sportiness and best-in-class driving dynamics back into the hotly contested B-segment in the European market and is offered with the widest powertrain line-up to meet all customer requirements. Junior already has more than 10,000 orders.
• Citroën C3 – The all-electric ë-C3 leads the fourth-generation line-up of Citroën’s most popular B-segment car and has more than 25,000 orders since opening. The ë-C3 is priced at €23,300 for the 320km electric range version and €19,900 for the 200km range option coming soon, making electric mobility more accessible. The iconic, all-new C3 with a new Hybrid version has more than 50,000 orders.
• Citroën Basalt – Already launched in India, the Basalt arrived in South America (Brazil) starting at R$89,990, combining interior space and Coupe style as the most affordable SUV on the market.

The upcoming wave of American product launches kicks off soon with the all-electric Dodge Charger Daytona, the all-electric Jeep® Wagoneer S, the all-new, all-electric Ram 1500 REV; and the Ram 1500 Ramcharger range-extended EV pickup. 

In Europe, Leapmotor International, a joint venture led by Stellantis in collaboration with Chinese automaker Leapmotor, distributed the first vehicles supported by over 200 dealers. This includes the C10, a D-segment SUV with a 420 km range (WLTP) and the T03, a 5-door A-segment BEV compact car with a 265 km range and priced below €20,000. The partnership offers European buyers access to advanced, high-value BEV technology, bolstered by Stellantis’ organizational and retail expertise, distinguishing Leapmotor International from its competitors.

Stellantis charged into the Paris Motor Show in October with new and upgraded electrified vehicles in the lineup to give customers a wide range of options for clean, safe and affordable mobility:

• The Peugeot E-408 was unveiled, expanding the brand’s lineup of BEVs to 12 vehicles, the most comprehensive of any European mainstream manufacturer. Launched in the first half, the all-new Peugeot 3008 has approximately 75,000 orders, with a 25% BEV mix.
• The debut of the refreshed Citroën C4 and C4 X vehicles – both available in all-electric – along with the all-new C5 Aircross concept, based on STLA Medium, mark the next step in the makeover of the brand’s vehicle lineup. The brand also celebrates four years of the Ami micromobility vehicle, and showed the next generation Ami, which will go on sale in 2025.
• Alfa Romeo staged the world debut of Junior IBRIDA, the compact car with 136-hp, 48-volt Hybrid Variable Geometry Turbo, which complements the ELETTRICA’s 54-kWh battery, available in two power variants, the 156hp and the top-of-the-range, VELOCE, at 240hp with 410km of range. The brand also previewed the Tonale MY2025 with new features and a revamped interior.
• Leapmotor made an impressive entrance at the Paris Motor Show with the global debut of the highly anticipated B10 C-SUV, the first model in its B-series built on the advanced LEAP 3.5 architecture.

Technology Push

Stellantis will offer 40 BEV models in Europe this year, the vast majority built on its innovative, flexible multi-energy platforms. These platforms enable Stellantis to meet evolving customer demands, adapting to local and regional needs. The Peugeot E-3008 and E-5008, based on the STLA Medium platform, offer up to 700km of range in the WLTP combined cycle, making them the best-in-class in their segment. In the U.S., Stellantis announced an investment of over $406 million in three Michigan facilities to support multi-energy technology and manufacturing flexibility, allowing for adaptation to various electrification scenarios.

Stellantis has partnered with the French Alternative Energies and Atomic Energy Commission (CEA) to develop next-generation battery cells. This collaboration aims to create high-performance, longer-lasting cells with a lower carbon footprint, driving future affordability & sustainability in battery electric vehicles. Stellantis also plans to incorporate Factorial’s solid-state batteries into a demonstration fleet of all-new Dodge Charger Daytona vehicles based on the STLA Large platform by 2026, a key step in bringing solid-state battery technology to mass production.

Value Creation

Stellantis Pro One inaugurated its new global commercial vehicles hub at the Mirafiori Automotive Park 2030 in Turin, Italy, enhancing efficiency and decision-making speed. The commercial vehicles business accounts for one-third of Stellantis’ Net revenues. Stellantis Pro One closed the third quarter ranked #1 in the EU30 commercial vehicles market with over 29% market share year-to-date September and a 1% year-over-year volume increase, and maintains segment leadership in BEVs at 32.8%.

On October 31, 2024 at 1:00 p.m. CET / 8:00 a.m. EDT, a live webcast and conference call will be held to present Stellantis’ Third Quarter 2024 Shipments and Revenues, with the presentation expected to be posted at approximately 8:00 a.m. CET / 3:00 a.m. EDT. The webcast and recorded replay will be accessible under the Investors section of the Stellantis corporate website (www.stellantis.com).

SEGMENT PERFORMANCE

Reconciliations
Net revenues from external customers to Net revenues

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(*) Other activities, unallocated items and eliminations

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(*) Other activities, unallocated items and eliminations

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(*) Other activities, unallocated items and eliminations

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(*) Other activities, unallocated items and eliminations

NOTES

(1) Combined shipments include shipments by Company’s consolidated subsidiaries and unconsolidated joint ventures, whereas Consolidated shipments only include shipments by Company’s consolidated subsidiaries. This includes the vehicles produced by our joint ventures and associates (including Leapmotor) which are distributed by our consolidated subsidiaries. In addition to the volumes included in consolidated shipments, combined shipments also includes the vehicles distributed by our joint ventures (such as Tofas). Figures by segments may not add up due to rounding. China shipments from DPCA are no longer included in Combined shipments as of November 2023; prior periods have not been restated.

(2) Adjusted operating income/(loss) margin is calculated as Adjusted operating income/(loss) divided by Net revenues.

(3) Industrial free cash flows is our key cash flow metric and is calculated as Cash flows from operating activities less: (i) cash flows from operating activities from discontinued operations; (ii) cash flows from operating activities related to financial services, net of eliminations; (iii) investments in property, plant and equipment and intangible assets for industrial activities; (iv) contributions of equity to joint ventures and minor acquisitions of consolidated subsidiaries and equity method and other investments; and adjusted for: (i) net intercompany payments between continuing operations and discontinued operations; (ii) proceeds from disposal of assets and (iii) contributions to defined benefit pension plans, net of tax. The timing of Industrial free cash flows may be affected by the substantive timing of monetization of receivables, factoring and the payment of accounts payables, as well as changes in other components of working capital, which can vary from period to period due to, among other things, cash management initiatives and other factors, some of which may be outside of the Company’s control.

Rankings, market share and other industry information are derived from third-party industry sources (e.g. Agence Nationale des Titres Sécurisés (ANTS), Associação Nacional dos Fabricantes de Veículos Automotores (ANFAVEA), Ministry of Infrastructure and Sustainable Mobility (MIMS), S&P Global, Ward’s Automotive) and internal information unless otherwise stated.

For purposes of this document, and unless otherwise stated industry and market share information are for passenger cars (PC) plus light commercial vehicles (LCV), except as noted below:

• Enlarged Europe excludes Russia and Belarus; Q3 2023 and year to date 2023 figures have been restated;
• Middle East & Africa exclude Iran, Sudan and Syria;
• South America excludes Cuba;
• India & Asia Pacific reflects aggregate for major markets where Stellantis competes (Japan (PC), India (PC), South Korea (PC + Pickups), Australia, New Zealand and South East Asia);
• China represents PC only and includes licensed sales from DPCA; and
• Maserati reflects aggregate for 17 major markets where Maserati competes and is derived from S&P Global data, Maserati competitive segment and internal information.

Prior period figures have been updated to reflect current information provided by third-party industry sources.

EU30 = EU 27 (excluding Malta), Iceland, Norway, Switzerland and UK.

Low emission vehicles (LEV) = battery electric (BEV), plug-in hybrid (PHEV), range-extender electric vehicle (REEV) and fuel cell electric (FCEV) vehicles.

All Stellantis reported BEV and LEV sales include Citroën Ami, Opel Rocks-e and Fiat Topolino; in countries where these vehicles are classified as quadricycles, they are excluded from Stellantis reported combined sales, industry sales and market share figures.

About Stellantis

Stellantis N.V. STLASTLAP 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. Contacts: communications@stellantis.com or investor.relations@stellantis.com

SAFE HARBOR STATEMENT

This document, in particular references to “FY 2024 Guidance”, contains forward looking statements. Statements regarding future financial performance and the Company’s expectations as to the achievement of certain targeted metrics, including revenues, industrial free cash flows, vehicle shipments, capital investments, research and development costs and other expenses at any future date or for any future period 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 the Company’s 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 Company’s ability 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; the Company’s ability to successfully manage the industry-wide transition from internal combustion engines to full electrification; the Company’s ability to offer innovative, attractive products and to develop, manufacture and sell vehicles with advanced features including enhanced electrification, connectivity and autonomous-driving characteristics; the Company’s ability to produce or procure electric batteries with competitive performance, cost and at required volumes; the Company’s 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 the Company’s 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 the Company’s 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; the Company’s ability to attract and retain experienced management and employees; exposure to shortfalls in the funding of the Company’s defined benefit pension plans; the Company’s 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; the Company’s ability to access funding to execute its business plan; the Company’s ability to realize anticipated benefits from joint venture arrangements; disruptions arising from political, social and economic instability; risks associated with the Company’s relationships with employees, dealers and suppliers; the Company’s 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; and other risks and uncertainties.

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

• EN-Stellantis NV Q3 2024 Press Release

BRUSSELS, Oct. 31, 2024 /PRNewswire/ — Results for the first nine months of 2024

Highlights

Euroclear’s business income and interest earnings reached record levels

•  Underlying operating income increased by 6% to reach €2.18 billion. Net profit increased by 8% to €890 million.
•  Underlying business income is up by 5% to €1,302 million, driven by record levels in settlement and safe keeping activities, with assets under custody crossing the €40 trillion mark for the first time ever. In Q3 2024, business income increased by 8% compared to Q3 2023, driven by strong performance especially in the Eurobonds & European assets and funds business.
•  Underlying interest income continues to increase, up 9% to €882 million in the context of sustained high interest rates environment and gradual policy rate cuts.

Pace of cost growth continues to slow

•  After a step-up in investment in digital capabilities, workforce and IT infrastructure in 2023, the growth of underlying operating expenses slowed to 3% for the first nine months of 2024.
•  In Q3 2024, underlying costs decreased by 1.5% compared to Q3 2023, reflecting Euroclear’s continued focus on cost mitigation and non-recurrence of specific items. 
•  As a result, the business income operating margin improved to 24.7% for the first nine months of 2024.

Strong shareholder return and capital position

•  Underlying earnings per share increased by 8% to €283 in line with continued increase in net profit. 
•  Euroclear group retains a very strong capital position, comfortably above regulatory requirements with an underlying Common Equity Tier 1 capital ratio slightly below 60%^[1].

Russian sanctioned assets

• Following the implementation of the EU windfall contribution regulation, Euroclear provisioned €2.9 billion as windfall contribution for the first nine months of 2024, of which a first tranche of €1.55 billion for H1 2024 was paid to the European Fund for Ukraine in July 2024.
• Gradual rate cuts have led to a decline in interest income related to the Central Bank of Russia’s assets in Q3 2024 with the outlook for future interest earnings dependent on policymaking decisions.
• The impacts of the Russian sanctions are detailed in the last section of this press release.

Valerie Urbain, Chief Executive Officer of Euroclear, commented:

“We are maintaining our trajectory of strong financial results and excellent performance, with our settlement and safe keeping activities reaching once again record levels. We remain focused on the execution of our strategy and delivering outstanding service to our customers, while continuing to invest to support our long-term growth.

We believe digital assets offer significant benefits and our teams have continued to innovate to advance their adoption across geographies and asset classes. After two successful issuances, Euroclear now welcomed the first issuance in USD by an Asia-based issuer on its Digital Securities Issuance (D-SI) platform. Euroclear took part in a groundbreaking pilot project to tokenise gold, Gilts and Eurobonds for collateral management and completed the dress rehearsal of its trial for Eurosystem wholesale Central Bank Digital Currency (CBDC) exploratory work. Finally, Euroclear joined forces with Singapore-based Marketnode to help establish a key market infrastructure in Asia-Pacific designed to simplify the management of fund flows and reduce settlement times by using Distributed Ledger Technology (DLT).

As a group with European roots, Euroclear reiterated its commitment to supporting the European Capital Markets Union. With Europe entering a new political cycle, Euroclear presented a detailed memorandum on the competitiveness in Europe’s markets and engaged with key stakeholders to chart the course for enhanced market development and integration in Europe. I firmly believe that by attracting more issuers and investors, by removing barriers to efficiency, competition and integration and by supporting innovation, European capital markets can become more liquid, resilient and competitive.”

Business performance

The key operating metrics (end of period unless stated otherwise) demonstrate an excellent business performance during the period.

Euroclear’s assets under custody reached a record €40 trillion, growing for the eighth quarter in a row, thanks to solid stock exchange performances coupled with robust results in fixed income.

Despite the usual summer slowdown, settlement volumes hit a new high due to sustained activity since the beginning of the year.

Funds depot is boosted by the success of ETFs, combined with the positive evolution of the stock valuations, and breaks its all-time record level close to €3.4 trillion.

The Collateral Highway’s outstanding continues to increase and is now very close to the early 2022 peak.

Business milestones

Reshaping traditional financial services

Euroclear made significant progress in its journey to become a digital, data-enabled Financial Market Infrastructure by welcoming the first Digital Native Note (DNN) issued by the Asian Infrastructure Investment Bank on its Digital Securities Issuance (D-SI) platform. This marks the first digital issuance in USD for Euroclear and the first such issuance by an Asia-based issuer on its platform. Euroclear’s DSI service enables the issuance, distribution and settlement of fully digital international securities on Distributed Ledger Technology (DLT).

In the related digital securities space, Euroclear, alongside Digital Asset and The World Gold Council, has successfully completed a groundbreaking pilot to tokenise gold, Gilts and Eurobonds for collateral management. This initiative showcases how DLT can revolutionise collateral mobility, enhance liquidity and boost transactional efficiency.

Furthermore, with the support of Paris Europlace, Euroclear has brought together a group of French banks around its D-SI platform and Banque de France’s DL3S platform for Central Bank Digital Currency (CBDC). As a result, these financial institutions will issue the first Digital Native Note (DNN) under French Law and settle it in CBDC.

Advancing the funds business

In October 2024, Euroclear acquired a strategic stake in Marketnode, a Singapore-based digital market infrastructure operator. By joining forces with Marketnode and its existing shareholders – the Singapore Exchange (SGX Group), Temasek and HSBC – Euroclear will contribute to establish a key market infrastructure in Asia-Pacific designed to simplify the management of fund flows and reduce settlement times by using new technology. This first strategic investment in Asia reinforces the region’s importance to Euroclear’s positioning and business growth. 

In line with its commitment to make private markets more accessible to a wider range, Euroclear announced a pioneer collaboration with BlackRock. Both companies join forces to expand the distribution of BlackRock’s private market funds via Euroclear’s FundsPlace. With a global reach serving over 2,500 clients across the globe, FundsPlace is well-equipped to extend BlackRock’s diverse range of private market funds to an even broader array of investors.

Simplification of Euroclear’s group structure  

On 1 October 2024, Euroclear completed the previously announced simplification of its group structure. Two out of the four financial holding companies of the Euroclear group, Euroclear AG and Euroclear Investments SA/NV, were successively merged into Euroclear Holding SA/NV, the ultimate parent entity of the Euroclear group.

This simplification of the corporate structure results in a significant reduction of complexity both in terms of governance and financial administration, while keeping direct participations in regulated entities at the level of Euroclear SA/NV. This merger also streamlines and accelerates the dividend upstreaming process.

A call for unlocking scale and competitiveness in Europe’s markets

As a trusted market infrastructure having contributed to the integration of European and global markets over decades, Euroclear is committed to advance the European Capital Markets Union. To instigate a meaningful dialogue with all involved stakeholders, Euroclear published a thought leadership paper on the European capital markets highlighting, key challenges, real opportunities and the critical need to improve integration and competitiveness, specifically in the post-trade sector.

To read the full paper, go to https://www.euroclear.com/content/dam/euroclear/news%20&%20insights/Format/Whitepapers-Reports/Whitepaper-Unlocking-Europe-capital-markets.pdf 

Supporting academic research on sustainable finance

In line with its ambition to advancing the understanding of sustainable finance, Euroclear announced its sponsorship of a new Chair in Sustainable Finance at the Solvay Brussels School of Economics and Management of the Université Libre de Bruxelles (ULB). Professor Dr Guntram Wolff will be the first holder of this newly created Chair, which will contribute to the creation of knowledge on sustainable finance, executive training as well as teaching.

Russian sanctions impacts 

Financial impacts of the Russian assets

•  The Russian sanctions continue to have a significant impact on Euroclear’s earnings.
•  Interest earnings related to Russian assets, which are subject to Belgian corporate tax, generated €1.27 billion tax revenue.
• Following the implementation of the EU windfall contribution regulation applicable to the Central Bank of Russia’s (CBR) assets dating from 15 February 2024 onwards, Euroclear provisioned €2.9 billion as windfall contribution for the first nine months of 2024.
• Euroclear made a first payment for H1 2024 of approx. €1.55 billion to the European Fund for Ukraine in July 2024.
•  The sanctions and Russian countermeasures resulted in direct costs of €68 million and a loss of business income of €20 million.
•  Gradual rate cuts have led to a decline in interest income related to the Central Bank of Russia’s assets in Q3 2024 (see quarterly evolution in the table below) with the outlook for future interest earnings dependent on policymaking decisions. As a reference, an interest rate cut of 0.25% in Euro would have a potential impact of €51 million on the windfall contribution on quarterly basis.

Update on Russian sanctions and countermeasures

Russia’s invasion of Ukraine in February 2022 resulted in market-wide application of international sanctions. Euroclear considers the application of international sanctions as a key obligation. Therefore, well established processes are in place which have allowed the group to implement the sanctions while maintaining our normal course of business.

As a result of the sanctions, blocked coupon payments and redemptions owed to sanctioned entities continue to accumulate on Euroclear Bank’s balance sheet. At the end of September 2024, Euroclear Bank’s balance sheet totalled €216 billion, of which €176 billion relate to sanctioned Russian assets.

In line with Euroclear’s risk appetite and policies and as expected by the EU Capital Requirements Regulation, Euroclear’s cash balances are re-invested to minimise risk and capital requirements. In the first nine months of 2024, interest arising on cash balances from Russian-sanctioned assets was approximately €5.15 billion. Such interest earnings are driven by the prevailing interest rates and the amount of cash balances that Euroclear is required to invest. Subject to Belgian corporate tax, these earnings generated €1.27 billion tax revenue for the Belgian State. As such, future earnings will be influenced by the evolving interest rate environment.

Effective 15 February 2024, the EU Council adopted a Regulation requiring Central Securities Depositories (CSDs) holding reserves and assets of the Central Bank of Russia with a total value of more than €1 million to apply specific rules in relation to the cash balances accumulating due to restrictive measures. These CSDs, such as Euroclear Bank, should account for and manage such extraordinary cash balances separately from their other activities, should keep separate the net profit generated and should not dispose of these ensuing net profits (e.g. in the form of dividends to shareholders).

In May 2024, the European Commission has adopted a new regulation about a windfall contribution applicable to CSDs holding Russian Central Bank assets with a total value of more than €1 million. The profits generated by the reinvestment of these sanctioned amounts dating from 15 February 2024 onwards are required to be contributed to the European Fund for Ukraine. Consequently, Euroclear made a first payment of approx. €1.55 billion to the European Fund for Ukraine in July 2024.

Euroclear continues to act prudently and to strengthen its capital by retaining the remainder of the Russian sanction related profits as a buffer against current and future risks. Euroclear is focused on minimising potential legal, financial, and operational risks that may arise for itself and its clients, while complying with its obligations.

As a direct consequence of the sanctions and countermeasures, Euroclear faces multiple proceedings in Russian courts. Since Russia considers international sanctions against public order, Russian claimants initiated legal proceedings aiming mainly to access assets blocked in Euroclear Bank’s books, by claiming an equivalent amount in Russian Ruble and enforcing their claim in Russia. Despite all legal actions taken by Euroclear and the considerable resources mobilised, the probability of unfavourable rulings in Russian courts is high since Russia does not recognise the international sanctions.

Euroclear Bank and Euroclear Investments are the two group issuing entities. The summary income statements and financial positions at Q3 2024 for both entities are shown below.

The drop in Q3 2024 figures compared to Q3 2023 reflects the booking of the windfall contribution related to the Central Bank of Russia’s (CBR) assets dating from 15 February 2024.

The evolution of Q3 2024 figures compared to Q3 2023 reflects the increase in intragroup dividend.

About Euroclear

Euroclear group is the financial industry’s trusted provider of post trade services. Guided by its purpose, Euroclear innovates to bring safety, efficiency, and connections to financial markets for sustainable economic growth. Euroclear provides settlement and custody of domestic and cross-border securities for bonds, equities and derivatives, and investment funds. As a proven, resilient capital market infrastructure, Euroclear is committed to delivering risk-mitigation, automation, and efficiency at scale for its global client franchise. The Euroclear group comprises Euroclear Bank, the International and Irish CSD, as well as Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & International.

1 Post deduction of dividend relating to 2023 earnings, including Sept. 2024 YTD profit and based on estimated underlying RWA of around EUR 7.4bn. Assuming a 60% dividend pay-out on the Sept. 2024 profit, the CET1 ratio would be 52%.

Pascal Brabant / pascal.brabant@euroclear.com / +32 475 78 36 62

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SOURCE Euroclear

Quarterly total revenues reached RMB42.9 billion (US$6.1 billion)¹
Quarterly deliveries reached 152,831 vehicles

BEIJING, China, Oct. 31, 2024 (GLOBE NEWSWIRE) — Li Auto Inc. (“Li Auto” or the “Company”) LI HKEX: 2015)), a leader in China’s new energy vehicle market, today announced its unaudited financial results for the quarter ended September 30, 2024.

Operating Highlights for the Third Quarter of 2024

• Total deliveries for the third quarter of 2024 were 152,831 vehicles, representing a 45.4% year-over-year increase.

• As of September 30, 2024, in China, the Company had 479 retail stores in 145 cities, 436 servicing centers and Li Auto-authorized body and paint shops operating in 221 cities, and 894 super charging stations in operation equipped with 4,286 charging stalls.

Financial Highlights for the Third Quarter of 2024

• Vehicle sales were RMB41.3 billion (US$5.9 billion) in the third quarter of 2024, representing an increase of 22.9% from RMB33.6 billion in the third quarter of 2023 and an increase of 36.3% from RMB30.3 billion in the second quarter of 2024.

• Vehicle margin² was 20.9% in the third quarter of 2024, compared with 21.2% in the third quarter of 2023 and 18.7% in the second quarter of 2024.

• Total revenues were RMB42.9 billion (US$6.1 billion) in the third quarter of 2024, representing an increase of 23.6% from RMB34.7 billion in the third quarter of 2023 and an increase of 35.3% from RMB31.7 billion in the second quarter of 2024.

• Gross profit was RMB9.2 billion (US$1.3 billion) in the third quarter of 2024, representing an increase of 20.7% from RMB7.6 billion in the third quarter of 2023 and an increase of 49.3% from RMB6.2 billion in the second quarter of 2024.

• Gross margin was 21.5% in the third quarter of 2024, compared with 22.0% in the third quarter of 2023 and 19.5% in the second quarter of 2024.

• Operating expenses were RMB5.8 billion (US$825.4 million) in the third quarter of 2024, representing an increase of 9.2% from RMB5.3 billion in the third quarter of 2023 and an increase of 1.5% from RMB5.7 billion in the second quarter of 2024.

• Income from operations was RMB3.4 billion (US$489.2 million) in the third quarter of 2024, representing an increase of 46.7% from RMB2.3 billion in the third quarter of 2023 and an increase of 633.4% from RMB468.0 million in the second quarter of 2024.

• Operating margin was 8.0% in the third quarter of 2024, compared with 6.7% in the third quarter of 2023 and 1.5% in the second quarter of 2024.

• Net income was RMB2.8 billion (US$401.9 million) in the third quarter of 2024, representing an increase of 0.3% from RMB2.8 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.1 billion in the second quarter of 2024. Non-GAAP net income³ was RMB3.9 billion (US$548.8 million) in the third quarter of 2024, representing an increase of 11.1% from RMB3.5 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.5 billion in the second quarter of 2024.

• Diluted net earnings per ADS⁴ attributable to ordinary shareholders was RMB2.66 (US$0.38) in the third quarter of 2024, compared with RMB2.67 in the third quarter of 2023 and RMB1.05 in the second quarter of 2024. Non-GAAP diluted net earnings per ADS attributable to ordinary shareholders was RMB3.63 (US$0.52) in the third quarter of 2024, compared with RMB3.29 in the third quarter of 2023 and RMB1.42 in the second quarter of 2024.

• Net cash provided by operating activities was RMB11.0 billion (US$1.6 billion) in the third quarter of 2024, compared with RMB14.5 billion net cash provided by operating activities in the third quarter of 2023 and RMB429.4 million net cash used in operating activities in the second quarter of 2024.

• Free cash flow⁵ was RMB9.1 billion (US$1.3 billion) in the third quarter of 2024, compared with RMB13.2 billion in the third quarter of 2023 and negative RMB1.9 billion in the second quarter of 2024.

Key Financial Results

(in millions, except for percentages and per ADS data)

Recent Developments

One Million Deliveries Milestone

• On October 18, 2024, the Company hit the one million cumulative vehicle deliveries milestone, becoming the first emerging new energy automotive brand in China to reach this benchmark. Notably, the Company hit this milestone just 58 months after delivering its first vehicle in December 2019.

OTA 6.4 Update

• In October 2024, the Company released the OTA update version 6.4 for Li MEGA and the Li L series, significantly enhancing the user experience with a range of new and upgraded autonomous driving, smart space, and smart electric features. With this update, the Company also rolled out its latest autonomous driving solution, which integrates an end-to-end (E2E) model and a vision-language model (VLM), on a full scale to over 320,000 Li AD Max users. Additionally, “Li Xiang Tong Xue” has evolved further with an upgraded voice model and a newly added eye tracking function, along with several other features, enabling more natural and human-like interaction with users.

Safety and Health Assessment Results

• In September 2024, Li MEGA and Li L6 successfully passed the China Insurance Automotive Safety Index (C-IASI) crash tests, adhering to the latest assessment protocols. Both models received a “G+” rating – the highest safety rating – across occupant safety, pedestrian safety, and assistance safety categories and an “A” rating in the crashworthiness and repair economy category. Notably, Li MEGA became the first MPV to receive a “G” rating in crash tests of 25% frontal offset impact on both the driver and the passenger sides under C-IASI’s latest assessment protocols.

• In September 2024, Li L6 received a record-setting overall score under the latest assessment protocols of the China Automobile Health Index (C-AHI) assessment conducted by the China Automotive Engineering Research Institute Co., Ltd. Li L6 received the highest ratings across all three categories assessed: the Clean Air Index, the Health Protection Index, and the Energy Efficiency and Emission Index.

Environmental, Social, and Governance (ESG) Performance

• In September 2024, the Company was awarded the highest “AAA” rating by MSCI ESG Research for the second consecutive year, recognizing its excellence in key areas such as corporate governance, product quality and safety, clean technologies, and its commitment to sustainable development and social responsibility.

CEO and CFO Comments

Mr. Xiang Li, chairman and chief executive officer of Li Auto, commented, “We achieved record-breaking deliveries in the third quarter, further cementing our leadership among Chinese automotive brands in the RMB200,000 and above NEV market. In October, we celebrated a major milestone: one million cumulative deliveries, a first for emerging new energy automotive brands in China. These remarkable results highlighted our rapidly growing brand influence and users’ strong recognition of our advancements in intelligentization. As our vehicle deliveries continue to grow, we are creating a virtuous cycle of innovation and advancement, driving the intelligentization of Li Auto vehicles to new heights. Notably, our latest autonomous driving solution, which integrates an end-to-end (E2E) model and a vision-language model (VLM), received overwhelmingly positive feedback from test users. In October, we rolled out this new solution on a full scale to over 320,000 Li AD Max users. Looking ahead, we remain committed to harnessing the power of technology to drive innovation, reinforcing our position as an industry leader as we continue to grow alongside our over one million user families.”

Mr. Tie Li, chief financial officer of Li Auto, added, “In the third quarter, we maintained our robust business performance. Our record vehicle deliveries boosted revenues to a historic high of RMB42.9 billion, representing an increase of 23.6% year-over-year. With sales across our model lineup steadily growing, our economies of scale continued to expand which, combined with Li AD Max vehicles accounting for a larger proportion of our sales mix driven by breakthroughs in intelligentization, allowed us to meaningfully expand our gross margin to 21.5%. Additionally, our net income reached RMB2.8 billion and operating cash flow reached RMB11.0 billion in the third quarter. Building on our solid execution across the organization and strong profitability, we are poised to maintain a relentless pursuit of business growth and technological innovation, which will propel us forward on our journey to achieving our long-term vision.”

Financial Results for the Third Quarter of 2024

Revenues

• Total revenues were RMB42.9 billion (US$6.1 billion) in the third quarter of 2024, representing an increase of 23.6% from RMB34.7 billion in the third quarter of 2023 and an increase of 35.3% from RMB31.7 billion in the second quarter of 2024.

• Vehicle sales were RMB41.3 billion (US$5.9 billion) in the third quarter of 2024, representing an increase of 22.9% from RMB33.6 billion in the third quarter of 2023 and an increase of 36.3% from RMB30.3 billion in the second quarter of 2024. The increase in revenue from vehicle sales over the third quarter of 2023 and second quarter of 2024 was primarily attributable to the increase in vehicle deliveries, partially offset by the lower average selling price mainly due to different product mix.

• Other sales and services were RMB1.6 billion (US$220.9 million) in the third quarter of 2024, representing an increase of 45.8% from RMB1.1 billion in the third quarter of 2023 and an increase of 14.1% from RMB1.4 billion in the second quarter of 2024. The increase in revenue from other sales and services over the third quarter of 2023 and second quarter of 2024 was mainly attributable to the increased provision of services and sales of accessories, which is in line with higher accumulated vehicle sales, and increased sales of embedded products and services offered together with vehicle sales, which is in line with higher vehicle deliveries.

Cost of Sales and Gross Margin

• Cost of sales was RMB33.6 billion (US$4.8 billion) in the third quarter of 2024, representing an increase of 24.5% from RMB27.0 billion in the third quarter of 2023 and an increase of 32.0% from RMB25.5 billion in the second quarter of 2024. The increase in cost of sales over the third quarter of 2023 and second quarter of 2024 was mainly attributable to increase in vehicle deliveries, partially offset by the lower average cost of sales due to different product mix and cost reduction.

• Gross profit was RMB9.2 billion (US$1.3 billion) in the third quarter of 2024, representing an increase of 20.7% from RMB7.6 billion in the third quarter of 2023 and an increase of 49.3% from RMB6.2 billion in the second quarter of 2024.

• Vehicle margin was 20.9% in the third quarter of 2024, compared with 21.2% in the third quarter of 2023 and 18.7% in the second quarter of 2024. The vehicle margin remained relatively stable over the third quarter of 2023. The increase in vehicle margin over the second quarter of 2024 was mainly due to cost reduction, partially offset by lower average selling price mainly due to different product mix.

• Gross margin was 21.5% in the third quarter of 2024, compared with 22.0% in the third quarter of 2023 and 19.5% in the second quarter of 2024. The gross margin remained relatively stable over the third quarter of 2023. The increase in gross margin over the second quarter of 2024 was mainly due to the increase in vehicle margin.

Operating Expenses

• Operating expenses were RMB5.8 billion (US$825.4 million) in the third quarter of 2024, representing an increase of 9.2% from RMB5.3 billion in the third quarter of 2023 and an increase of 1.5% from RMB5.7 billion in the second quarter of 2024.

• Research and development expenses were RMB2.6 billion (US$368.6 million) in the third quarter of 2024, representing a decrease of 8.2% from RMB2.8 billion in the third quarter of 2023 and a decrease of 14.6% from RMB3.0 billion in the second quarter of 2024. The decrease in research and development expenses over the third quarter of 2023 and second quarter of 2024 was mainly attributable to decreased design and development costs for new products and technologies, and decreased employee compensation.

• Selling, general and administrative expenses were RMB3.4 billion (US$478.7 million) in the third quarter of 2024, representing an increase of 32.1% from RMB2.5 billion in the third quarter of 2023 and an increase of 19.3% from RMB2.8 billion in the second quarter of 2024. The increase in selling, general and administrative expenses over the third quarter of 2023 and second quarter of 2024 was primarily due to increased employee compensation associated with the recognition of share-based compensation expenses regarding the chief executive officer’s performance-based awards in the third quarter of 2024 as the achievement of the related performance condition was deemed probable as well as the growth in the number of staff.

Income from Operations

• Income from operations was RMB3.4 billion (US$489.2 million) in the third quarter of 2024, representing an increase of 46.7% from RMB2.3 billion in the third quarter of 2023 and an increase of 633.4% from RMB468.0 million in the second quarter of 2024. Operating margin was 8.0% in the third quarter of 2024, compared with 6.7% in the third quarter of 2023 and 1.5% in the second quarter of 2024. Non-GAAP income from operations was RMB4.5 billion (US$636.0 million) in the third quarter of 2024, representing an increase of 49.1% from RMB3.0 billion in the third quarter of 2023 and an increase of 412.9% from RMB870.1 million in the second quarter of 2024.

Net Income and Net Earnings Per Share

• Net income was RMB2.8 billion (US$401.9 million) in the third quarter of 2024, representing an increase of 0.3% from RMB2.8 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.1 billion in the second quarter of 2024. Non-GAAP net income was RMB3.9 billion (US$548.8 million) in the third quarter of 2024, representing an increase of 11.1% from RMB3.5 billion in the third quarter of 2023 and an increase of 156.2% from RMB1.5 billion in the second quarter of 2024.

• Basic and diluted net earnings per ADS attributable to ordinary shareholders were RMB2.82 (US$0.40) and RMB2.66 (US$0.38) in the third quarter of 2024, respectively, compared with RMB2.86 and RMB2.67 in the third quarter of 2023, respectively, and RMB1.11 and RMB1.05 in the second quarter of 2024, respectively. Non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders were RMB3.85 (US$0.55) and RMB3.63 (US$0.52) in the third quarter of 2024, respectively, compared with RMB3.53 and RMB3.29 in the third quarter of 2023, respectively, and RMB1.51 and RMB1.42 in the second quarter of 2024, respectively.

Cash Position, Operating Cash Flow and Free Cash Flow

• Cash position⁷ was RMB106.5 billion (US$15.2 billion) as of September 30, 2024.

• Net cash provided by operating activities was RMB11.0 billion (US$1.6 billion) in the third quarter of 2024, compared with RMB14.5 billion net cash provided by operating activities in the third quarter of 2023 and RMB429.4 million net cash used in operating activities in the second quarter of 2024. The change in net cash provided by operating activities over the third quarter of 2023 was mainly due to increased payment related to inventory purchase, partially offset by the increase in cash received from customers. The change in net cash provided by operating activities over the second quarter of 2024 was mainly due to the increase in cash received from customers as a result of the increase in vehicle deliveries.

• Free cash flow was RMB9.1 billion (US$1.3 billion) in the third quarter of 2024, compared with RMB13.2 billion in the third quarter of 2023 and negative RMB1.9 billion in the second quarter of 2024.

Business Outlook

For the fourth quarter of 2024, the Company expects:

• Deliveries of vehicles to be between 160,000 and 170,000 vehicles, representing a year-over-year increase of 21.4% to 29.0%.

• Total revenues to be between RMB43.2 billion (US$6.2 billion) and RMB45.9 billion (US$6.5 billion), representing a year-over-year increase of 3.5% to 10.0%.

This business outlook reflects the Company’s current and preliminary views on its business situation and market conditions, which are subject to change.

Conference Call

Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on Thursday, October 31, 2024 (8:00 p.m. Beijing/Hong Kong Time on October 31, 2024) to discuss financial results and answer questions from investors and analysts.

For participants who wish to join the call, please complete online registration using the link provided below prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, passcode, and a unique access PIN. To join the conference, please dial the number provided, enter the passcode followed by your PIN, and you will join the conference instantly.

Participant Online Registration: https://s1.c-conf.com/diamondpass/10042773-bt4saz.html

A replay of the conference call will be accessible through November 7, 2024, by dialing the following numbers:

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.lixiang.com.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as non-GAAP cost of sales, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP income from operations, non-GAAP net income, non-GAAP net income attributable to ordinary shareholders, non-GAAP basic and diluted net earnings per ADS attributable to ordinary shareholders, non-GAAP basic and diluted net earnings per share attributable to ordinary shareholders and free cash flow, in evaluating its operating results and for financial and operational decision-making purposes. By excluding the impact of share-based compensation expenses and release of valuation allowance on deferred tax assets, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company’s past performance and future prospects. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

The non-GAAP financial measures are not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measures have limitations as analytical tools and when assessing the Company’s operating performance, investors should not consider them in isolation, or as a substitute for financial information prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.

For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliation of U.S. GAAP and Non-GAAP Results” set forth at the end of this press release.

Exchange Rate Information

This press release contains translations of certain Renminbi amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi are made at a rate of RMB7.0176 to US$1.00, the exchange rate on September 30, 2024, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollars amounts referred could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

About Li Auto Inc.

Li Auto Inc. is a leader in China’s new energy vehicle market. The Company designs, develops, manufactures, and sells premium smart electric vehicles. Its mission is: Create a Mobile Home, Create Happiness (创造移动的家, 创造幸福的家). Through innovations in product, technology, and business model, the Company provides families with safe, convenient, and comfortable products and services. Li Auto is a pioneer in successfully commercializing extended-range electric vehicles in China. While firmly advancing along this technological route, it builds platforms for battery electric vehicles in parallel. The Company leverages technology to create value for users. It concentrates its in-house development efforts on proprietary range extension systems, innovative electric vehicle technologies, and smart vehicle solutions. The Company started volume production in November 2019. Its current model lineup includes Li MEGA, a high-tech flagship family MPV, Li L9, a six-seat flagship family SUV, Li L8, a six-seat premium family SUV, Li L7, a five-seat flagship family SUV, and Li L6, a five-seat premium family SUV. The Company will continue to expand its product lineup to target a broader user base.

For more information, please visit: https://ir.lixiang.com.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “targets,” “likely to,” “challenges,” and similar statements. Li Auto may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) and The Stock Exchange of Hong Kong Limited (the “HKEX”), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Li Auto’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Li Auto’s strategies, future business development, and financial condition and results of operations; Li Auto’s limited operating history; risks associated with extended-range electric vehicles and high-power charging battery electric vehicles; Li Auto’s ability to develop, manufacture, and deliver vehicles of high quality and appeal to customers; Li Auto’s ability to generate positive cash flow and profits; product defects or any other failure of vehicles to perform as expected; Li Auto’s ability to compete successfully; Li Auto’s ability to build its brand and withstand negative publicity; cancellation of orders for Li Auto’s vehicles; Li Auto’s ability to develop new vehicles; and changes in consumer demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Li Auto’s filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and Li Auto does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Li Auto Inc.
Investor Relations
Email: ir@lixiang.com

Christensen Advisory
Roger Hu
Tel: +86-10-5900-1548
Email: Li@christensencomms.com

___________________________

¹ All translations from Renminbi (“RMB”) to U.S. dollars (“US$”) are made at a rate of RMB7.0176 to US$1.00, the exchange rate on September 30, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board.

² Vehicle margin is the margin of vehicle sales, which is calculated based on revenues and cost of sales derived from vehicle sales only.

³ The Company’s non-GAAP financial measures exclude share-based compensation expenses and release of valuation allowance on deferred tax assets. See “Unaudited Reconciliation of U.S. GAAP and Non-GAAP Results” set forth at the end of this press release.

⁴ Each ADS represents two Class A ordinary shares.

⁵ Free cash flow represents operating cash flow less capital expenditures, which is considered a non-GAAP financial measure.

⁶ Except for vehicle margin, gross margin, and operating margin, where absolute changes instead of percentage changes are presented.

⁷ Cash position includes cash and cash equivalents, restricted cash, time deposits and short-term investments, and long-term time deposits and financial instruments included in long-term investments.

⁸ Non-GAAP basic net earnings per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods. Non-GAAP diluted net earnings per share attributable to ordinary shareholders is calculated by dividing non-GAAP net income attributable to ordinary shareholders by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods, including the dilutive effects of convertible senior notes as determined under the if-converted method and the dilutive effect of share-based awards as determined under the treasury stock method.

The Company Expects 2024 Normalized EBITDA to be in the Upper End of Guidance Range, Based on Strong Utilities and Midstream Performance

CALGARY, AB, Oct. 31, 2024 /CNW/ – AltaGas Ltd. (“AltaGas” or the “Company”) ALA reported third quarter 2024 financial results and provided an update on its operations and other corporate developments.

HIGHLIGHTS

(all financial figures are unaudited and in Canadian dollars unless otherwise noted)

• Normalized EPS¹ was $0.14 in the third quarter of 2024 compared to $0.08 in the third quarter of 2023, while GAAP EPS² was $0.03 in the third quarter of 2024 compared to a loss of $0.18 in the third quarter of 2023. Year-over-year normalized EPS growth was primarily driven by strong Utilities performance.
• Normalized EBITDA¹ was $294 million in the third quarter of 2024 compared to $252 million in the third quarter of 2023, while income before income taxes was $20 million in the third quarter of 2024 compared to a loss before income taxes of $51 million in the third quarter of 2023. The 17 percent year-over-year growth in normalized EBITDA was principally driven by strong Utilities performance, as outlined below.
• Normalized FFO per share¹ was $0.35 in the third quarter of 2024 compared to $0.50 in the third quarter of 2023, while cash from operations per share³ was $0.07 in the third quarter of 2024 compared to $0.01 in the third quarter of 2023.
• The Utilities segment reported normalized EBITDA of $117 million in the third quarter of 2024 compared to $71 million in the third quarter of 2023, while income before taxes was $24 million in the third quarter of 2024 compared to a loss of $16 million in the third quarter of 2023. Strong year-over-year growth was principally driven by the partial settlement of Washington Gas’ post-retirement benefit pension plan, contributions from rate base and accelerated replacement programs (“ARP”) investment, and enhanced cost controls.
• The Midstream segment reported normalized EBITDA of $181 million in the third quarter of 2024 compared to $185 million in the third quarter of 2023, while income before taxes was $123 million in the third quarter of 2024 compared to $61 million in the third quarter of 2023. Despite rail outages due to the Alberta wildfires and national rail strike that drove higher one-time operating costs, AltaGas was able to deliver strong financial performance due to operational execution.
• AltaGas exported a record of 128,272 Bbl/d of liquified petroleum gases (“LPGs”) to Asia in the quarter, a nine percent year-over-year increase. Strong export volumes and contributions from the Pipestone assets were offset by lower export margins (including the impact of higher percentage of tolling contracts), higher long-term incentive costs due to AltaGas’ rising share price, and a lower year-over-year contribution from the Mountain Valley Pipeline (“MVP”) as the asset was placed into service with equity earnings below the Allowance for Funds Used During Construction (“AFUDC”) in the third quarter of 2023.
• AltaGas continued to advance key Midstream commercial priorities during and subsequent to the quarter, including:
  • Entering two agreements that have a high-single digit average contract length with a large investment grade international energy company in Northeastern B.C. (“NEBC”) for a total of 100 Mmcf/d of gas processing capacity at the Townsend facility, along with associated liquids handling and fractionation services;
  • Extending the contract term with a large Canadian investment grade producer at the Pipestone I gas processing facility in the Alberta Montney for an additional five years, including gas processing, liquids handling and marketing services; and
  • Advancing long-term tolling arrangements across the global exports platform with a number of agreements now in definitive documentation stages. This includes AltaGas having contracts in hand or being in active negotiations for more than 100 percent of first phase capacity for the Ridley Island Energy Export Facility (“REEF”). AltaGas continues to target having 60 percent of its export volumes under long-term tolling agreements by the start of the 2027 NGL year.
  • The ongoing commercial success reiterates the strategic advantages of AltaGas’ assets across NEBC, the Alberta Montney, and the global exports value chain. The Company continues to look forward to leveraging its assets to connect upstream and downstream customers and markets and drive the best collective outcomes for all stakeholders.
• AltaGas remained active from a regulatory perspective during the third quarter, including filing a rate case and proposed accelerated replacement program (“ARP”) extension in the District of Columbia (“D.C.”). The District Strategic Accelerated Facility Enhancement (“District SAFE”) is Washington Gas’ third modernization program in D.C. and is focused on long-term safety and reliability.
• AltaGas continued to advance key Midstream growth projects during the third quarter. Strong progress was made on REEF’s in-water piling work for the jetty and the site’s overburden activities, while compression, refrigeration and vessel fabrication work is advancing in controlled operating environments at offsite manufacturing facilities. At Pipestone II, construction is progressing to plan, including completion of the two acid gas injection wells and the majority of the gas gathering system, while compression, processing and fabrication work is progressing at offsite manufacturing facilities. Both midstream growth projects remain on schedule and on budget with 50 percent of REEF and 92 percent of Pipestone II project costs either incurred or under fixed price contracts.
• MVP in the Appalachian Basin moved into full commercial operations in the quarter with 20-year firm service contracts with investment grade counterparties coming into effect July 1, 2024. The 2.0 Bcf/d pipeline is fully subscribed and is expandable by an additional 475 MMcf/d through low cost compression with extension into North Carolina through the Southgate project. AltaGas’ 10 percent, non-operated equity stake in the pipeline remains non-core and is a divestiture candidate for the coming period.
• AltaGas had two financings in the third quarter of 2024, including:
  • On July 9, 2024, AltaGas issued $250 million of senior unsecured medium-term notes with a 5.60 percent coupon, due on March 14, 2054. The net proceeds were used to pay down amounts drawn on the syndicated credit facility, which was incurred when the Company repaid its term loan on June 28, 2024.
  • On September 23, 2024, AltaGas issued US$900 million of 7.20 percent Fixed-to-Fixed Rate Junior Subordinated Hybrid Notes, due 2054 (the “Hybrid Notes”). The Hybrid Notes are callable at the first reset date of October 15, 2034. AltaGas also executed a cross-currency swap arrangement to convert the underlying proceeds and interest costs into Canadian dollars, resulting in an effective annual interest rate of 6.90 percent over the initial ten year period of the notes. AltaGas intends to use the net proceeds of the Hybrid Notes to reduce the Company’s outstanding senior notes and bank debt, and will receive 50 percent equity treatment for credit rating metrics.
• On September 30, 2024, AltaGas announced the conversion of the Cumulative Redeemable Floating Rate Preferred Shares, Series H (the “Series H Shares”) into Cumulative Redeemable Five-Year Rate Reset Preferred Shares, Series G (the “Series G Shares”) on a one for one basis and the subsequent cancellation and de-listing of the Series H Shares from the Toronto Stock Exchange (“TSX”).
• On October 1, 2024, Washington Gas executed a note purchase agreement to issue US$200 million in private placement notes. US$100 million of these notes were issued on October 1, 2024 at 5.40 percent with a maturity date of October 1, 2054 and the remaining US$100 million will be issued on April 1, 2025 at 4.84 percent with a maturity date of April 1, 2035. The proceeds will be used for general corporate purposes.
• Following a strong third quarter, AltaGas anticipates delivering fiscal 2024 results that will include normalized EBITDA¹ in the upper end of the guidance range of $1,675 million to $1,775 million while normalized EPS¹ is expected to be around the midpoint of the guidance range of $2.05 to $2.25.

CEO MESSAGE

“We’re pleased with our strong third quarter results, which reflect the strength of our assets, strong demand for natural gas and NGLs and the continued execution of our strategic priorities,” said Vern Yu, President and Chief Executive Officer. “Following the strong performance in the first nine months of the year, we are well positioned to deliver on our 2024 guidance and expect to produce normalized EBITDA towards the upper end of our guidance range while normalized EPS is expected to be closer to the midpoint of the guidance range.”

“Performance in our Utilities business was ahead of our expectations and continues to deliver strong earnings, despite warmer-than-normal weather in Michigan and D.C. Strong year-over-year growth was driven by the partial settlement of Washington Gas’ post-retirement benefit pension plan, continued capital investments across the network, and active cost management. We remain active advancing our regulatory priorities and ensuring rates are current and reflective of current capital investments and operating costs.

“Midstream performance was in line with our expectations, despite the rail interruptions due to the Alberta wildfires and the national rail strikes. The quarter included record global export volumes and double digit year-over-year growth in gas processing, fractionation and liquids handling, and extraction volumes. We continued to advance key Midstream commercial priorities, including a two new long-term agreements for gas processing, liquids handling and fractionation services at the Townsend facility, and extending the contract term for a marquee Canadian investment grade customer for an additional five years at Pipestone I. We also continued to advance long-term tolling arrangements across the global exports platform and expect to exceed previously committed tolling targets and will likely need to shift certain tolling volumes to the second phase of REEF.

“The fundamentals of our businesses are robust. Our gas utilities continue to realize strong growth from new customer additions, asset modernization investments, and system expansion. These robust demand trends are being augmented from the rapid rise in energy draws from data center growth in our service territory, which is providing AltaGas with incremental rate base growth opportunities in Northern Virginia and reinforcing the need for even more natural gas over the long-term.

“The outlook for our Midstream business is equally strong. Canadian natural gas supply will increase significantly through 2030 due to Canadian LNG exports and rising local demand. This will deliver strong associated natural gas liquids (“NGLs”) supply that will need to be exported to global markets. Asia will continue to be the best market for Canadian LPGs where demand is expected to grow 45 percent through 2040.

“As we look ahead, we continue to expect the strategic importance of our assets to grow as they serve to link increasing energy supply to high demand centers, enabling AltaGas to deliver continued value for our customers.”

RESULTS BY SEGMENT

BUSINESS PERFORMANCE

Midstream

The Midstream segment reported normalized EBITDA of $181 million in the third quarter of 2024 compared to $185 million in the third quarter of 2023, while income before income taxes was $123 million in the third quarter of 2024 compared to $61 million in the third quarter of 2023. These results were strong and in line with our expectations, despite the rail interruptions in Canada due to the Alberta wildfires and national rail strikes, which caused business interruptions and higher one-time operating costs. The quarter included record global export volumes and strong performance across the balance of the value chain, including double digit year-over-year growth in gas processing, fractionation and liquids handling, and extraction volumes.

AltaGas exported 128,272 Bbls/d of LPGs to Asia in the third quarter of 2024, including 11 Very Large Gas Carriers (“VLGCs”) at RIPET, and 10 VLGCs at Ferndale. This represented a nine percent increase from the third quarter of 2023, which was principally driven by Ferndale volumes increasing by 22 percent and offsetting the majority of rail interruptions which largely impacted RIPET. This strong operating performance, despite these interruptions, reiterates the value of having multiple export terminals to overcome short-term impacts.

Despite extremely low Canadian natural gas prices during the third quarter of 2024, AltaGas did not experience any decline in throughput volumes due to production shut-ins. Year-over-year performance included a 10 percent increase in gas processing volumes, 12 percent increase in fractionation and liquids handling volumes, and 29 percent increase in extraction volumes. Volume growth was heavily weighted to AltaGas’ Montney footprint, a trend we expect will continue in the years ahead. The strong fractionation volume growth was seen at North Pine, Harmattan and Younger. At North Pine, AltaGas completed optimization work that should allow the facility to consistently operate near 25,000 Bbls/d and meet our NEBC customers’ desire for increased fractionation capacity.

MVP moved into full commercial operations in the quarter with 20-year firm service contracts with investment grade counterparties coming into effect July 1, 2024. The 2.0 Bcf/d pipeline is fully subscribed and is expandable by an additional 475 MMcf/d through low cost compression with extension into North Carolina through the Southgate project. MVP’s financial contribution was modestly lower on a year-over-year basis in the third quarter of 2024, due to the larger AFUDC booked in the third quarter of 2023 versus the equity earnings that AltaGas is now recording with the pipeline in service.

AltaGas continued to advance key Midstream growth projects during the third quarter. Strong progress was made on REEF’s in-water piling work for the jetty and the site’s overburden activities, while compression, refrigeration and vessel fabrication work is advancing in controlled operating environments at offsite manufacturing facilities. At Pipestone II, construction is progressing to plan, including completion of the two acid gas injection wells and the majority of the gas gathering system, while compression, processing and fabrication work is progressing at offsite manufacturing facilities. Both midstream growth projects remain on schedule and on budget with 50 percent of REEF and 92 percent of Pipestone II project costs either incurred or under fixed price contracts.

Consistent with the Company’s de-risking focus, AltaGas’ Midstream operations are well-hedged for 2024 with approximately 87 percent of the remaining 2024 expected global export volumes tolled or financially hedged. Merchant volumes are hedged at an average Far East Index (“FEI”) to North American financial hedge price of US$18.06/Bbl. Tolling volumes are in line with historical tolls. Approximately 80 percent of the Company’s 2024 expected frac exposed volumes are hedged at US$24.54/Bbl, prior to transportation costs.

In line with AltaGas’ traditional risk management activities, the Company expects to be actively locking in margins and further reducing commodity exposure over the fourth quarter of 2024 and first quarter of 2025 as we move into the 2025 NGL season, which runs from April 1, 2025 to March 31, 2026.

Utilities

Utilities reported normalized EBITDA of $117 million in the third quarter of 2024 compared to $71 million in the third quarter of 2023, while income before income taxes was $24 million in the third quarter of 2024 compared to a loss of $16 million in the third quarter of 2023. Strong year-over-year growth was principally driven by the partial settlement of Washington Gas’ post-retirement benefit pension plan, which was a de-risking activity that should reduce volatility of pension income in the years ahead, as well as contributions from continued capital investments focused on safety and reliability of the network, and active cost management. These positive factors were partially offset by the negative impact of the Maryland rate case, decreased asset optimization activities at Washington Gas and lower contributions from Retail due to the outsized performance present in the same quarter last year.

During the third quarter of 2024, AltaGas continued efforts on ensuring long-term operating costs are aligned with existing rate structures and allowed costs in each jurisdiction. These cost efficiencies will provide additional room for AltaGas to continue to make ongoing rate base investments to expand and modernize the network while minimizing the increase to customer bills. The Company will continue to prioritize cost management for the long-term benefit of our customers while maintaining regulatory and capital discipline.

AltaGas continued to actively invest across its Utilities assets during the third quarter of 2024 with $187 million of capital deployed across the Company’s Utilities networks. This included investing nearly $100 million in the quarter through the Company’s various asset modernization programs and an additional $70 million for system betterment. These investments continue to be directed towards improving the safety and reliability of the system and connecting customers to the critical energy they require to carry out everyday life. AltaGas remains committed to making these investments, while balancing the need for ongoing customer affordability.

During the quarter, Washington Gas filed a rate case application to the Public Service Commission (“PSC”) of D.C., seeking a US$46 million increase to base rates, including the transfer of US$12 million from the PROJECTpipes 2 rate rider. Included in the filing was a proposed weather normalization adjustment that seeks to remove fluctuations in weather-related usage. Washington Gas also submitted its District SAFE ARP application, which aims to invest US$215 million over three years beginning May 2025. A final order for the ARP program is anticipated to align with the expiry of PROJECTpipes 2, which would allow for uninterrupted pipeline modernization work to ensure the ongoing safety of our customers while ensuring the timely recovery of capital.  

Corporate/Other

In the Corporate/Other segment, normalized EBITDA was a loss of $4 million in the third quarter of 2024, consistent with the same quarter of 2023, while loss before income taxes was $127 million in the third quarter of 2024 compared to a loss of $96 million in the third quarter of 2023. Normalized EBITDA in the quarter was impacted by higher year-over-year contributions from Blythe, offset by higher expenses related to employee incentive plans, primarily as a result of the increasing share price in the third quarter of 2024. 

CONSOLIDATED FINANCIAL RESULTS

Normalized EBITDA for the third quarter of 2024 was $294 million compared to $252 million for the same quarter in 2023. The largest factors contributing to the year-over-year increase are described in the Business Performance sections above.

Income before income taxes was $20 million for the third quarter of 2024 compared to loss before income taxes of $51 million for the same quarter in 2023. The decrease in loss was mainly due to lower unrealized losses on risk management contracts, the same previously referenced factors impacting normalized EBITDA, proceeds received from an escrow account related to the 2019 disposition of AltaGas’ investment in Meade Pipeline Co. LLC (“Meade”), which held WGL Midstream’s indirect, non-operating interest in Central Penn pipeline (“Central Penn”), and lower transaction costs related to acquisitions and dispositions, partially offset by higher transition and restructuring costs, higher interest expense, higher depreciation and amortization expense, and lower foreign exchange gains. Please refer to the “Three Months Ended September 30” section of the Q3 2024 management’s discussion and analysis (“MD&A”) for further details on the variance in loss before income taxes and net income applicable to common shareholders. 

Normalized net income was $42 million or $0.14 per share for the third quarter of 2024, compared to $23 million or $0.08 per share reported for the same quarter of 2023.

Normalized FFO was $105 million or $0.35 per share for the third quarter of 2024, compared to $142 million or $0.50 per share for the same quarter in 2023. The decrease was mainly due to the impact of non-cash items included in normalized EBITDA, higher normalized current income tax expense, higher interest expense, and foreign exchange losses compared to foreign exchange gains in the third quarter of 2023, partially offset by the same previously referenced factors impacting normalized EBITDA.

Interest expense for the third quarter of 2024 was $110 million, compared to $95 million for the same quarter in 2023. The increase was mainly due to higher average debt balances, incremental hybrid interest costs due to the issuance of additional Hybrid Notes in the third quarter of 2024 as well as the fourth quarter of 2023, higher average interest rates, and a higher average Canadian/U.S. dollar exchange rate, partially offset by higher capitalized interest. Interest expense recorded on the Hybrid Notes in the third quarter of 2024 was $15 million, compared to $9 million in the third quarter of 2023.

Income tax expense was $3 million for the third quarter of 2024, compared to an income tax recovery of $12 million for the same quarter of 2023. The decrease in income tax recovery was mainly due to higher income before income taxes.

FORWARD FOCUS, GUIDANCE AND FUNDING

AltaGas continues to execute on its long-term strategy of building a diversified platform that operates long-life energy infrastructure assets that connect customers and markets and are positioned to provide resilient and growing value for the Company’s stakeholders.

Following a strong third quarter of 2024, AltaGas is reiterating its previously disclosed 2024 guidance and expects to deliver results in the upper end of the normalized EBITDA range and near the midpoint of the normalized EPS range, as follows:

• 2024 normalized EPS guidance of $2.05 – $2.25, compared to normalized EPS of $1.90 and GAAP EPS of $2.27 in 2023; and
• 2024 normalized EBITDA guidance of $1,675 million – $1,775 million, compared to normalized EBITDA of $1,575 million and income before taxes of $912 million in 2023.

AltaGas is focused on delivering resilient and growing normalized EPS and normalized FFO per share while targeting lower leverage ratios. This strategy is designed to support steady dividend growth and provide the opportunity for ongoing capital appreciation for long-term shareholders.

AltaGas is maintaining a disciplined, self-funded 2024 capital program of approximately $1.3 billion, excluding asset retirement obligations (“ARO”). The Company is allocating approximately 53 percent of AltaGas’ consolidated 2024 capital to its Utilities business, approximately 43 percent to the Midstream business and the balance to the Corporate/Other segment.

The Company expects to maintain an equity self-funding model in 2024, for the fifth consecutive year, and will fund capital requirements through a combination of internally generated cash flows and investment capacity associated with rising EBITDA levels. Asset sales will be considered on an opportunistic basis, with any potential proceeds to be used to reduce outstanding debt and continue to increase the financial flexibility of AltaGas.

QUARTERLY COMMON SHARE DIVIDEND AND PREFERRED SHARE DIVIDENDS

The Board of Directors approved the following schedule of Dividends:

CONFERENCE CALL AND WEBCAST

AltaGas will hold a conference call today, October 31, 2024, at 9:00 a.m. MT (11:00 a.m. ET) to discuss third quarter of 2024 results and other corporate developments.

Date:                            Thursday, October 31, 2024

Time:                            9:00 a.m. MT (11:00 a.m. ET)

Webcast:                      https://app.webinar.net/5lXWpwZbZJM

Dial-in (Audio only):      +1 437-900-0527 or toll free at +1 888-510-2154

Shortly after the conclusion of the call a replay will be available on the Company’s website or by dialing +1 289 819 1450 or toll free +1 888 660 6345. Passcode 13027 #.

AltaGas’ Consolidated Financial Statements and accompanying notes for the third quarter of 2024, as well as its related MD&A, are now available online at www.altagas.ca. All documents will be filed with the Canadian securities regulatory authorities and will be posted under AltaGas’ SEDAR+ profile at www.sedarplus.ca.

NON-GAAP MEASURES

This news release contains references to certain financial measures that do not have a standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other entities. The non-GAAP measures and their reconciliation to U.S. GAAP financial measures are shown below and within AltaGas’ Management’s Discussion and Analysis (MD&A) as at and for the period ended September 30, 2024. These non-GAAP measures provide additional information that Management believes is meaningful regarding AltaGas’ operational performance, liquidity and capacity to fund dividends, capital expenditures, and other investing activities. Readers are cautioned that these non-GAAP measures should not be construed as alternatives to other measures of financial performance calculated in accordance with U.S. GAAP.

Change in Composition of Non-GAAP Measures

In the fourth quarter of 2023, Management changed the composition of certain of AltaGas’ non-GAAP measures such that normalized net income now excludes the impact of unrealized intercompany foreign exchange gains (losses) resulting from intercompany balances between a U.S. subsidiary and a Canadian entity, where the foreign exchange impact in the U.S. subsidiary is recorded through gain (loss) on foreign currency translation in the Consolidated Statements of Comprehensive Income (Loss) and the Canadian entity revaluation is recorded through the foreign exchange gain (loss) line item on the Consolidated Statements of Income (Loss). This change was made as a result of Management’s assessment that excluding these intercompany foreign exchange impacts from normalized net income is more representative of the Company’s ongoing financial performance. Prior period calculations of the relevant non-GAAP measures have been restated to reflect this change. The following table summarizes the impact of this change on the periods presented in this news release:

Normalized EBITDA

EBITDA is a measure of AltaGas’ operating profitability prior to how business activities are financed, assets are amortized, or earnings are taxed. EBITDA is calculated from the Consolidated Statements of Income (Loss) using income (loss) before income taxes adjusted for pre–tax depreciation and amortization and interest expense.

AltaGas presents normalized EBITDA as a supplemental measure. Normalized EBITDA is used by Management to enhance the understanding of AltaGas’ earnings over periods, as well as for budgeting and compensation related purposes. The metric is frequently used by analysts and investors in the evaluation of entities within the industry as it excludes items that can vary substantially between entities depending on the accounting policies chosen, the book value of assets, and the capital structure.

Normalized Net Income 

Normalized net income and normalized net income per share are used by Management to enhance the comparability of AltaGas’ earnings, as these metrics reflect the underlying performance of AltaGas’ business activities.

Normalized Funds from Operations

Normalized funds from operations and funds from operations are used to assist Management and investors in analyzing the liquidity of the Corporation. Management uses these measures to understand the ability to generate funds for capital investments, debt repayment, dividend payments, and other investing activities.

Invested Capital and Net Invested Capital

Invested capital is a measure of AltaGas’ use of funds for capital expenditure activities. It includes expenditures relating to property, plant, and equipment and intangible assets, capital contributed to long term investments, and contributions from non-controlling interests. Net invested capital is invested capital presented net of proceeds from disposals of assets in the period. Net invested capital is calculated based on the investing activities section in the Consolidated Statements of Cash Flows, adjusted for items including the net change in non-cash capital expenditures and contributions from non-controlling interests. Invested capital and net invested capital are used by Management, investors, and analysts to enhance the understanding of AltaGas’ capital expenditures from period to period and provide additional detail on the Company’s use of capital.

CONSOLIDATED FINANCIAL REVIEW