Clariant Concludes Accounting Probe, Names new CFO

28.04.2022 - Swiss specialty chemicals producer Clariant has wrapped up an internal investigation into accounting irregularities in its 2020 financial results, unveiled minor adjustments to that year’s originally stated figures and published preliminary earnings figures for 2021, which it had held back pending completion of the probe.

Presenting the restated numbers on Apr. 27, the company also announced it plans to replace its chief financial officer, CFO Stephan Lynen. In a statement, Lynen said his stepping down will allow Clariant “a fresh start.”

The earnings adjustments, which CEO Conrad Keijzer said had no impact on sales, cash and cash equivalents previously reported for 2020 and 2021, boosted the original result by 50 basis points. The update showed a continuing operations EBITDA margin of 15.5% versus the earlier 15%. The concurrent figure for 2021 was 16.2%, which the CEO said was in line with guidance confirmed in February 2022.

The investigation, triggered by a whistleblower’s action, broke shortly before Conrad Keijzer, appointed as CEO at the end of 2020, planned to present financial results for 2021. Immediately following Clariant’s announcement of the investigation, its share price in Zurich fell by as much as 20%.

In light of this week’s update, however, analysts at Baader said the mainly minor adjustments indicate that the company’s accounting issues “were not material” and the underlying business is developing well, though its damaged reputation might depress its share price for some time.

The Swiss stock exchange SIX meanwhile has approved the chemical producer’s request to extend publication of its Integrated Report 2021 until Jun 15, 2022. The rules stipulate that the annual shareholders meeting must be scheduled for Jun. 30, 2022, when the company will also publish figures for the 2022 first quarter.

Clariant said it expects the figures for the first three months of this year to show “compelling growth” as a result of strong global demand driven by higher volumes and pricing, despite current macroeconomic uncertainty.“

In line with the investigation’s findings, the Muttenz-headquartered group said it has started to implement “necessary remedial action,” including immediately addressing internal controls over financial reporting (ICOFR), booking procedures, trainings and individual suspensions. Other measures are currently being “defined and developed.”

New Clariant CFO is American

Future Clariant CFO Bill Collins, an American national, has worked for some time in Europe, most recently serving as North American CEO as well as CFO of French energy group ENGIE, from 2018.  His European career also includes stints at AkzoNobel, Eaton Corporation and Schneider Electric. The appointment “brings further diversity to Clariant´s leadership team,” said Keijzer.

Author: Dede Williams, Freelance Journalist