Strategy and goals

With its Strategy 2020 the Comet Group focused on new applications that leverage fast-growing trends, on bringing the Group's strengths together for maximum effect, and on working in close partnership with key accounts. To prepare the Group for the demands of the future and fully utilize its potential, the Comet Group will invest in four additional levers – digitalization, diversification, agility & speed, and go-to-market – as well as in the expansion of production capacity and the development of new applications (see graphic on p. 27). Projects along these lines have been launched.

Future-ready with four additional strategic accelerators

In the pursuit of digitalization (lever 1), the Comet Group will expand its software capabilities and invest in data analysis and data exchange with customers. The aim is to make its own production processes more efficient and faster through automation, use analysis of data from the Group's products for predictive maintenance and new product development, and optimize customers’ processes. The Comet Group sees a second important lever in the diversification of its geographic markets and its technologies. The growing significance of the Asian market is addressed through an overall strategy for this region. The Group will also invest in new applications, especially for ebeam and radio frequency (RF) power technology, as well as in the further expansion of the offering, including in the service business.

Customers’ development cycles are becoming ever shorter. To support customers optimally in the fast-paced and demanding process of product development, the Comet Group, under lever 3 (agility & speed), is moving to adopt more rapid processes at all levels of the company – for instance, by developing increasingly modular and flexible products. Another example is the installation of the Smart Lab, the RF test laboratory in Flamatt that will sharply accelerate product development. The Group plans to focus its go-to-market approach (lever 4) even more consistently on customers and strengthen it through inter-segment cross-selling and sales lead management. Its production capacity, especially for PCT, will be expanded in 2018 with state-of-the-art facilities in the newly enlarged plant at the headquarters, as well as in Germany.

“Through investment in four accelerators – digitalization, diversification, agility & speed, and go-to-market – we are further exploiting our potential.”

René Lenggenhager, CEO

Core business: Ready for further growth

The main growth driver remains the core business. The greatest increase in sales is expected to come from PCT. Its basis is the broad-based, sustained demand in the semiconductor market, which is fueled not just by more powerful memory chips, larger volumes of data and more brilliant and bigger displays but also by new applications such as virtual reality, artificial intelligence and autonomous cars. China, which is increasingly investing in local value generation, is becoming a more and more important market for PCT. In the Group's x-ray business, trends like digitalization, miniaturization and additive manufacturing are creating attractive growth potential. In the smart factories of the future, test systems will double as sensors that collect the data from the process, analyze it and allow automated optimization. With its sharpened strategic focus, IXS plans to position itself even more strongly than before as a solution provider for the smart factory. Having introduced the new, IoT-capable generator, the IXM segment is now ideally placed to address new market potential. The Group also expects further vigorous growth in the area of security inspection, as soon as the current projects with customers have reached market readiness. With the evaluation and development of new applications and markets, including ones outside food and printing, the developing ebeam business plans to broaden its base and its growth opportunities.

“We are preparing for tomorrow's opportunities and needs. Collaboration and pooling our strengths will mobilize new resources for this.”

Hans Hess, Chairman of the Board

New development and market launches

In 2018 the Group will systematically pursue its development projects for new applications, with a focus on ebeam and the x-ray systems business; it will also further its growth initiatives, with one project in each of its four operating segments. Increased emphasis will be placed on close collaboration between its segments, the exploiting of synergies, and lean management.

The introduction of a lead buyer concept, of lean production and greater manufacturing automation will make the Comet Group leaner, more efficient and more effective, and will free up resources for the development of new applications.

Early target achievement, in 2019

In view of the strong results already achieved, the management and Board of Directors expect the 2020 targets of CHF 500 million in sales and an EBITDA margin of 16-18% to be met ahead of schedule, in 2019. Despite the costs for significant investments – in production capacity expansion and automation, in the development of new applications and in the four additional strategic levers – the Group expects to continue its steady value generation. For 2018 the Group is projecting sales of CHF 460-490 million and a return on capital employed (ROCE) of 17-20%. This implies an EBITDA margin of 14-16%.

Four additional levers for the growth engine

The Comet Group is rounding out its successful growth engine model with four new levers to gear up for coming needs. The Group continues to utilize the potential in its core business, systematically explores new growth opportunities through developing businesses, and judiciously implements promising Group-level growth initiatives. These initiatives are funded with cost savings realized through the methodical, continuous improvement of its operational excellence.