When it comes to the buzzword “artificial intelligence” (AI), most investors first think of US technology companies such as semiconductor giant Nvidia, internet titan Amazon.com or software powerhouse Microsoft. Representatives of the specialty chemicals industry, however, are rarely associated with this megatrend. Yet AI is likely to have played a certain role in the fact that Clariant has shown signs of life on the stock market in recent days. Within a week, the battered mid cap gained 6.5%. Prior to that, the company had signed a ten-year contract with SECCO Petrochemicals for the delivery of “CLARITY Prime Digital Services.” The Chinese company will install the platform at its ethylene plant in Shanghai. There, AI will help optimise catalyst performance, improving the reliability, safety and profitability of the entire facility.
During the presentation of the quarterly figures at the end of October, Clariant CEO Conrad Keijzer was already full of praise regarding AI. This technology, he said, was making enormous progress within the company. “Generative AI is really developing new formulations,” he noted. He also reported double-digit growth in flame retardants used in high-voltage cables for data centres and electric vehicles - another area driven by AI. Of course, this positive development cannot rescue the specialty chemicals group from its difficult overall situation. Several damages claims continue to weigh heavily on the company. In 2020, Clariant and three other companies were sanctioned by the EU for a buyers’ cartel in the European ethylene market. Most recently, BP Europe and ExxonMobil took the quartet to court. They are jointly seeking damages of nearly EUR 2 billion.
Clariant is vigorously contesting the allegations and aims to prove that the criticised practices had no impact on the market. Nevertheless, the legal proceedings are slowing down the SMIM stock. On top of that, the company is facing a challenging operating environment. Customers - both industrial and consumer-focused - are reluctant to place orders. A strong Swiss franc is also weighing on revenues: in the first nine months of 2025, sales shrank by 6% to just under CHF 2.9 billion. In local currencies, the decline was 1%. The company, however, achieved progress on the earnings side. Operating profit (Ebitda), before one-off effects, increased by 4% to CHF 521 million. As a result, the margin rose by 160 basis points to 18.0%. “This result underscores the success of our performance programmes as well as our effective pricing and cost management across all business areas,” commented the CEO.
Keijzer is maintaining the full-year guidance. In addition to an Ebitda margin of 17% to 18%, he expects revenue growth - in local currencies - between 1% and 3%. However, he recently narrowed the outlook and now anticipates growth at the lower end of the range. Analysts believe Clariant can achieve these targets. According to the company’s own published consensus, they expect an average Ebitda margin of 17.5% for 2025. Profitability is set to increase further over the following two years (see chart). Despite these prospects, and even though the price-earnings ratio (2026) is now in the single digits, Clariant’s share remains stuck in a downward trend, even after its recent uptick.
Investors can bet on a potential bottoming-out with a new soft-callable barrier reverse convertible. The CHF-denominated product offers a guaranteed coupon of 8% p.a. The barrier is set at 59% of the initial level. As long as the underlying does not fall to or below this mark, Leonteq will repay the nominal amount in full at the end of the term. If the strategy does not work out, the investment is exposed to the full price risk of the mid cap.
Investors with a preference for shorter-term positions will find what they are looking for in Leonteq's range of leveraged products. Mini-futures and warrants make it possible to take into account the continuation of Clariant's recent countermovement. Traders can also speculate on new price losses with short products or puts.
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