16 Equity

Dividend

For the year 2022, the following dividends were proposed by the Managing Board.

The proposed final dividend on ordinary shares is subject to approval by the Annual General Meeting of Shareholders. See also the paragraph on Profit appropriation in Note 6 Shareholders’ equity  to the Parent company financial statements.

For a description of the rules of profit appropriation and of the statutory rights attached to Cumulative Preference Shares A and B, see Note 6 Shareholders’ equity to the Parent company financial statements.

Share capital

On 31 December 2022, the authorized capital amounted to €1,125 million (2021: €1,125 million), distributed over 330,960,000 ordinary shares, 44,040,000 Cumulative Preference Shares A and 375,000,000 Cumulative Preference Shares B. All shares have a nominal value of €1.50 each. The outstanding shares provide an entitlement of one vote per share at the General Meeting of Shareholders. All rights attached to the Company’s shares held by the Group (treasury shares) are suspended until those shares are reissued.

Every year the Managing Board, with the approval of the Supervisory Board, shall decide which part of the profit shall be set aside. Out of the profit remaining, a dividend based on EURIBOR, plus a premium at the company’s discretion, shall be distributed insofar as possible on the Cumulative Preference Shares B. From the amount remaining of the profit, a dividend shall be distributed insofar as possible on the Cumulative Preference Shares A, the percentage based on the effective return on government loans, increased by a mark-up to be determined at the company’s discretion. If, for any financial year, the distributions on the Cumulative Preference Shares B and A cannot be effected or cannot be fully effected because the profit after reservation does not suffice, the deficit shall be distributed to the debit of the following financial years. In that case, each time as much as possible, the overdue dividend, augmented by the dividend for the last expired financial year, shall be distributed, first on Cumulative Preference Shares B and next on Cumulative Preference Shares A. The remaining profit shall be put at the disposal of the General Meeting of Shareholders.

The changes in the number of issued and outstanding shares in 2021 and 2022 are shown in the following table.

The average number of ordinary shares outstanding in 2022 was 172,826,732 (2021: 172,647,995). All shares issued are fully paid.

The Cumulative Preference Shares A have been classified as equity, because there is no mandatory redemption and distributions to the shareholders are at the discretion of DSM. On 31 December 2022, no Cumulative Preference Shares B were outstanding (same as 2021).

Share premium

Of the total share premium of €471 million (2021: €471 million), an amount of €87 million (2021: €89 million) can be regarded as entirely free of tax.

Treasury shares

In 2022, DSM repurchased 0.7 million shares for an amount of €116 million to cover commitments for stock dividend, and 0.6 million shares for an amount of €95 million to fulfill its obligations under share-based compensation plans.

At 31 December 2022, DSM possessed 1,710,632 (2021: 1,817,299) ordinary shares with a nominal value of €3 million, or 0.78% (2021: 0.83%) of the share capital. The average purchase price of the ordinary treasury shares as at 31 December 2022 was €114.81 (2021: €97.50). At 31 December 2022, 1,647,106 (2021: 1,665,073) of the total number of treasury shares outstanding were held for servicing share-option rights and share plans and 63,526 (2021: 152,226) shares for stock dividend.

The increase in the Translation reserve in 2022 is mainly caused by a weakening of the euro against the US dollar, Swiss franc and Brazilian real versus a strengthening against the Chinese renminbi. As a consequence, the total value of the subsidiaries increased, which led to a positive exchange difference of €267 million.

The Translation reserve, Hedging reserve and Fair value reserve (partly) are legal reserves in accordance with Dutch law and cannot be distributed to shareholders. Additional information is provided in Note 6 Shareholders’ equity to the Parent company financial statements.