Clariant on the Capital Markets
Weak SMIM market performance in 2022
The Swiss Market Mid Cap Performance Index (SMIM or SMI MID) comprises the 30 largest mid-cap stocks on the Swiss equity market that are not included in the blue-chip Swiss Market Index. The SMIM exhibited a largely sideways development during the first two months of 2022 with a decidedly downward trend. Then, on 24 February 2022, the Russian invasion of Ukraine resulted in a significant negative market reaction. Following this downbeat development, the market moved largely sideways again until a substantial global reduction in COVID-19 cases generated a performance rebound in early May. By mid-June the index began losing ground again, in part due to rising commodity prices, which led to higher crude prices and had a cascading effect on food prices and other products and services. The stock market reacted negatively in September when European countries put out sanctions on Russia to condemn the attack on Ukraine, and reduced trade of fuel supplies such as oil and gas. Economic growth in Europe began slowing, and an alarming increase in the number of COVID-19 cases in China in early November resulted in a further negative market development into December 2022.
The SMIM (SMI Mid) closed the 2022 financial year with 2 477 points on 31 December 2022, which corresponds to a decrease of 28 % versus the end of the previous year. Closing at 1 141 points, the STOXX® Europe 600 Chemicals (SX4P) fell by 16.5 % across the same period.
Clariant share price decreased by 22.9 % throughout the course of the year
The Clariant share price ended the year 2022 at CHF 14.65. This corresponds to a decrease of 22.9 % compared to the closing price of the previous year (CHF 19.00). Including the CHF 0.40 distribution to shareholders, the total shareholder return (TSR) amounted to –21.2 % in 2022. With an opening price of CHF 19.00 on 2 January 2022, the shares trended upwards initially and reached the year’s high of CHF 20.40 on 21 January 2022. In mid-February the share price dropped significantly to CHF 16.80 on 14 February 2022, based on the news that Clariant delayed the publication of the Full Year 2021 results due to an investigation into accounting matters related to the booking of provisions and accruals during the financial years 2021 and 2020. The uncertainty regarding the potential magnitude of these discrepancies pulled the share price down to its low point in the year of CHF 13.90 on 8 March 2022. The shares recovered significantly on 27 April 2022 and rose to CHF 16.33 on the news that Clariant concluded the external investigation, met the original guidance for the full year 2021, and only made minor adjustments to the 2020 and quarterly 2021 results. The share price continued to rise slightly ahead of the full year 2021 results, which were published on 19 May 2022. The share price decreased slightly on reporting day to CHF 17.80. On 15 June 2022, Clariant reported markedly stronger growth in the first quarter of 2022, consequently the share price rose to CHF 18.71. The announcement of Clariant’s simplified organizational and leadership structure on 22 June 2022 resulted in a slight share price decline to CHF 17.98. Strong second quarter sales growth and a record high EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization. margin communicated on 28 July 2022 left the share price comparatively unaffected at CHF 17.60. For the next two months, Clariant’s share price moved largely in tandem with relevant indexes such as the SMIM and SX4P. On 27 October, the Group announced strong third quarter results, which did not lift the share price at CHF 16.80. The asset impairment of Clariant’s bioethanol plant in Romania was announced on 12 December 2022, and the share price fell to CHF 14.71 on this disappointing news. The Clariant shares ended the year with a closing price of CHF 14.65.
001CLARIANT SHARE PRICE PERFORMANCE 1 JANUARY – 31 DECEMBER 2022 IN CHF
Dividend
Dividend policy
Clariant’s dividend policy remains unchanged. The Group is committed to increasing the absolute dividend in Swiss francs on the back of profitable growth, while maintaining an attractive payout ratio.
Dividend proposal for 2022
The Board of Directors recommends an increased regular distribution of CHF 0.42 per share to the Annual General Meeting 2023 based on the Group’s strong performance in 2022. This distribution is proposed to be made through a share capital reduction by way of a par value reduction.
Shareholder structure (shareholders/distribution of free float)
In the 2022 financial year, Clariant maintained its well-diversified and stable shareholder structure. SABIC acquired 24.99 % of the shares of Clariant Ltd on 17 September 2018 and increased its participation by 6.51 % to 31.5 % on 9 September 2020. The governance agreement entered into by SABIC and Clariant on 17 September 2018 expired at the Annual General Meeting on 24 June 2022. Consequently, Clariant’s treasury shares are no longer combined with the shares held by SABIC to form one group, as was previously the case.
Based on the notifications received by Clariant and published by SIX Exchange Regulation, on 31 December 2022, the following shareholders held 3 % or more of the voting rights in Clariant Ltd:
- SABIC International Holdings B.V., 31.5 %
- BlackRock Inc., 3.8 %
- Blue Beteiligungsgesellschaft mbH and Maple Beteiligungsgesellschaft mbH, 3.5 % (According to a disclosure notification published on 18 December 2018, a group consisting of Konstantin Winterstein, 80333 Munich, Germany, and Elisabeth Prinzessin zu Sayn-Wittgenstein, 80333 Munich, Germany, was formed.)
Subject to certain limitations on voting by nominees, each registered share entitles the holder to one vote at shareholders’ meetings. Shareholders have the right to receive dividends and other such rights as granted by the Swiss Code of Obligations. However, only shareholders entered in the Clariant share register may exercise their voting rights. Shareholders representing shares with a total par value of CHF 1 million have the right to submit written requests that an item be included on the agenda at least 45 days prior to the 28th Annual General Meeting on 4 April 2023.
002GEOGRAPHIC DISTRIBUTION OF SHAREHOLDINGS IN %
Analyst coverage
In the 2022 financial year, Clariant was actively covered by 18 sell-side analysts tracking the financial performance of Clariant on behalf of their respective companies. Their analyses served as the basis for the performance estimates and recommendations published in the 2022 financial year. At the end of 2022, eleven analysts had a neutral recommendation on Clariant, while seven analysts recommended buying the share and no analyst recommended selling. The average target price of the 18 actively covering analysts was CHF 19.30, representing an upside of 31.7 % from the 2022 closing price of CHF 14.65. The target price range was between CHF 16.00 and CHF 24.00 on 31 December 2022. To facilitate an independent and transparent assessment of performance, Clariant provides analysts and investors with market consensus figures. This consensus is based solely on analyst estimates and in no way reflects the opinion of Clariant. An up-to-date analyst consensus is available on the Clariant website. This information reflects analyst forecasts as of 26 January 2023 and will change on a continuing basis.
Ratings
An overview of the most recent ratings of the Clariant share and bonds can be found on the Clariant website.
Dialogue with the capital market
Clariant’s corporate strategy is aimed at generating long-term value enhancement. That is why continuous and open communication with all capital market participants is important. Clariant primarily used physical meetings as well as virtual formats, such as video or telephone conferences, for the dialogue in 2022. Clariant connects with institutional investors and rating agencies in various one-on-one meetings as well as at roadshows and conferences worldwide. For private investors, the company provides insight at the Annual General Meeting.
Clariant – a sustainable investment
The Clariant shares are attractive for investors focusing on companies with a strong ESG performance. Several leading ESG rating agencies consider Clariant best in class within the chemical industry. Their ratings particularly recognize the company’s innovation power for sustainable products, Clariant’s business ethics, and the comprehensive measures in place to address relevant sustainability issues. Clariant actively participates in several ESG ratings and is listed in numerous sustainability indices. Read more about Ratings and Rankings.