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Notes to the consolidated financial statements

 

 

 

Nature of the business activities

01 Nature of the business activities

The Comet Group (“Comet”, the “Group”) is one of the world’s leading vendors of x-ray and radio frequency (RF) power technology. With high-quality components, systems and services, marketed under the “Comet” and “Yxlon” brands, the Group helps its customers optimize the quality, reliability and efficiency of their products and processes. Yxlon x-ray systems for non-destructive inspection are supplied to end customers in the electronics, automotive, aerospace and energy sectors. Under the Comet brand, the Group builds components and modules such as x-ray sources, vacuum capacitors, RF generators and impedance matching networks, marketed to manufacturers in the semiconductor, automotive and aerospace industries as well as the security sector. Under the ebeam brand, Comet also developed, manufactured and marketed compact ebeam sets for the treatment of surfaces in the food and printing industries. Comet sold the ebeam lamp business to Tetra Pak eBeam Systems SA, Pully, Switzerland, effective November 30, 2020 (see notes 4 and 8).

Accounting policies

02 Accounting policies

The consolidated financial statements (except with respect to certain financial instruments) have been drawn up under the historical cost convention. The fiscal year-end for the financial statements of all Group companies is December 31. These consolidated financial statements have been prepared in compliance with Swiss stock corporation law and International Financial Reporting Standards (IFRS). All IFRS in force at the balance sheet date and all interpretations (IFRIC) of the International Accounting Standards Board (IASB) were applied. Comet did not early-adopt new standards and interpretations unless specifically stated. The significant accounting policies applied are unchanged from the prior year except as set out below.

As a result of rounding and the presentation in thousands of Swiss francs, totals in the consolidated financial statements may not add.

02.1 Changes in accounting policies

Revised and new accounting rules

With effect from January 1, 2020, Comet has applied the following new or adjusted IFRS/IFRIC for the first time:

  • IFRS 3 – Business Combinations (amendment): Definition of a Business
  • IAS 1 – Presentation of Financial Statements, and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors (amendments): Definition of Material
  • IFRS 7 – Financial Instruments: Disclosures, IFRS 9 – Financial Instruments, and IAS 39 – Financial Instruments: Recognition and Measurement (amendments): Interest Rate Benchmark Reform
  • Conceptual Framework for Financial Reporting (revision, issued March 29, 2018)
  • IFRS 16 – Leases (amendment): Covid-19-Related Rent Concessions

On May 28, 2020, the International Accounting Standards Board (IASB) published an amendment to IFRS 16 concerning Covid-19-related rent concessions. Lessees have the option to waive the assessment of whether a rent concession related to Covid-19 represents a lease modification as defined in IFRS 16. Instead, the lessee may treat such lease concessions as if they were not a modification and recognize the effect as a variable lease payment in profit or loss. The amendment is effective from June 1, 2020 and applies to rent concessions granted until and including June 30, 2021. Earlier application is permitted, including in financial statements not yet authorized for issue at May 28, 2020. Comet has applied this practical expedient. This provided a relief effect of CHF 0.1 million in income before tax in the year under review.

The new or amended standards and interpretations had no material effect on the Group’s financial position, results of operations and cash flows.

02.2 New accounting rules becoming effective in subsequent periods

 

 

 

 

Standard

Expected impact

Effective date

Planned adoption by Comet

IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

(1)

Jan. 1, 2021

Fiscal year 2021

IAS 37 – Provisions, contingent liabilities and contingent assets: Onerous Contracts, Cost of Fulfilling a Contract (Amendments to IAS 37)

(1)

Jan. 1, 2022

Fiscal year 2022

IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

(1)

Jan. 1, 2022

Fiscal year 2022

IFRS 3 – Business combinations: Reference to the Conceptual Framework (Amendments to IFRS 3)

(1)

Jan. 1, 2022

Fiscal year 2022

IAS 1 – Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

(1)

Jan. 1, 2023

Fiscal year 2023

(1) Expected to have no, or no significant, impact on the financial position, results of operations and cash flows.

02.3 Estimates

Comet’s consolidated financial statements contain assumptions and estimates that affect the reported financial position, results of operations and cash flows. These assumptions and estimates were made on the basis of management’s best knowledge at the time of preparation of the accounts. Actual results may differ from the values presented. The following estimates have the greatest effects on the consolidated financial statements:

  • Intangible assets (see notes 19 to 21): For acquisitions, the fair value of the acquired net assets (including acquired intangible assets) is estimated. Any amount paid in excess of this estimate represents goodwill. Intangible assets with a finite life are written off over the expected period of use; those with an indefinite life (primarily goodwill and rights to trademarks and names) are not amortized but are tested annually for impairment. Especially in the determination of the value in use of goodwill and rights to trademarks and names, differences between assumed and actual outcomes could lead to changes in the results of impairment testing. The assumptions concerning the achievable margins and the growth rates have a significant impact on impairment test outcomes. The valuation of goodwill and other intangibles, as well as the estimation of useful life, have an effect on the consolidated financial statements.
  • Provisions (see note 25) are, by definition, liabilities of uncertain amount. Future events can thus lead to adjustments that affect income.
  • Deferred tax assets (see note 11) are recognized only if it is likely that taxable profits will be earned in the future. The tax planning is based on estimates and assumptions as to the future profit trajectories of the Group companies that may later prove incorrect. This can lead to changes with an effect on income.
  • Employee benefit plans (see note 26): The Group operates employee benefit plans for its staff that are classified as defined benefit plans under IFRS. These defined benefit plans are valued annually, which requires the use of various assumptions. Differences between the actual outcomes and the assumptions, particularly as to the discount rate for future obligations and as to life expectancy, may have effects on the valuation of plan assets and thus on the financial position of the Group. The impact of the most important parameters on the net present value of the obligation is presented in note 26.
Impacts of Covid-19

The effects of the Covid-19 crisis on the global economy as a whole and on Comet’s markets remain uncertain. With respect to these impacts, Comet has critically reviewed the assumptions and estimates that affect the financial position, results of operations and cash flows. In this review, no relevant changes have been identified that would have a material impact on these financial statements. Comet is able to meet its contractual and financial obligations in full.

In connection with the Covid-19 pandemic, Comet received one-time government assistance in the year under review. This consisted mainly of reductions in social security contributions. The positive effect on income before tax was CHF 0.9 million. The assistance received has been recognized as offsets within the corresponding expense items in the consolidated income statement.

02.4 Consolidation

02.4.1 Basis of consolidation

Effective December 31, 2020, Comet acquired sole ownership of the software developer Object Research Systems (ORS) Inc., based in Montreal, Canada. The related information is provided in note 20.

As well, two subsidiaries, Comet Technologies Malaysia Sdn. Bhd., Penang, Malaysia, and Comet Solutions Taiwan Ltd., Hsinchu County, Taiwan, were founded in the year under review. The companies are wholly owned by Comet Holding AG.

The consolidated financial statements thus comprise the accounts of the companies listed below:

 

 

 

 

 

Company

Registered office

Equity interest in %

 

 

2020

 

2019

Comet Holding AG

Flamatt, Switzerland

100%

 

100%

Comet AG

Flamatt, Switzerland

100%

 

100%

Comet Electronics (Shanghai) Co. Ltd.

Shanghai, China

100%

 

100%

Comet Mechanical Equipment (Shanghai) Co. Ltd.

Shanghai, China

100%

 

100%

Comet Technologies USA, Inc.

Shelton, CT, USA

100%

 

100%

Comet Technologies Korea Co. Ltd.

Suwon, Korea

100%

 

100%

Yxlon International GmbH

Hamburg, Germany

100%

 

100%

Comet Technologies Denmark A/S 1

Taastrup, Denmark

100%

 

100%

Yxlon International KK

Yokohama, Japan

100%

 

100%

Yxlon (Beijing) X-Ray Equipment Trading Co. Ltd.

Beijing, China

100%

 

100%

Comet Technologies Malaysia Sdn. Bhd.

Penang, Malaysia

100%

 

Object Research Systems (ORS) Inc.

Montreal, Canada

100%

 

Comet Solutions Taiwan Ltd.

Hsinchu County, Taiwan

100%

 

1 Renamed to “Comet Technologies Denmark A/S” from “Yxlon International A/S”.

02.4.2 Method of consolidation

The consolidated financial statements represent the aggregation of the annual accounts of the individual Group companies, which are prepared using uniform accounting principles. Those companies controlled by Comet Holding AG are fully consolidated. This means that these companies’ assets, liabilities, equity, expenses and income are entirely included in the consolidated financial statements. All intragroup balances and transactions, unrealized gains and losses resulting from intragroup transactions, and dividends are eliminated in full.

Acquisitions and goodwill

Companies are consolidated from the date on which effective control passes to the Group. Consolidation ends only when effective control ceases. On acquisition, the identifiable assets, liabilities and contingent liabilities are measured at fair value and included in the accounts using the acquisition method. For acquisitions, intangible assets that arise from a contractual or legal right or are separable from the business entity, and whose fair value can be measured reliably, are reported separately. Goodwill, being the excess of the aggregate consideration transferred over the fair value of the net assets of the acquired subsidiary, is initially measured at cost. If the aggregate consideration transferred is lower than the fair value of the acquired net assets, the difference is recognized as negative goodwill in other operating income at the acquisition date. Goodwill and other intangible assets are allocated on acquisition to those cash generating units expected to benefit from the acquisition or to generate future cash flows as a result of it. When Group companies are sold, the difference between their sale price and their net assets, plus accumulated currency translation differences, is recognized as operating income in the consolidated statement of income.

Foreign currency translation

The functional currency of the Group companies is the respective national currency. Transactions in a currency other than the functional currency are translated at the exchange rate prevailing at the transaction date. Financial assets and liabilities are translated at the balance sheet date at the exchange rate as of that date; the resulting currency translation differences are reported in the income statement. The consolidated financial statements are presented in Swiss francs. The financial statements of the Group companies are translated at the average exchange rates for the year (the “average rate” in the table below) for the income statement and at year-end rates (the “closing rate”) for the balance sheet. The resulting currency translation differences are recognized in other comprehensive income. Currency translation differences from intragroup loans for the long-term financing of Group companies are also recognized in other comprehensive income, to the extent that repayment is neither planned nor is likely to occur in the foreseeable future.

The exchange rates used to translate the most important currencies are listed below:

 

 

 

 

 

 

 

 

 

 

 

 

 

Closing rate

 

Average rate

 

 

 

 

 

 

 

 

 

 

Country or region

 

 

Dec. 31, 2020

 

Dec. 31, 2019

 

2020

 

2019

USA

USD

1

0.882

 

0.968

 

0.939

 

0.994

Eurozone

EUR

1

1.084

 

1.085

 

1.070

 

1.113

China

CNY

1

0.135

 

0.139

 

0.136

 

0.144

Japan

JPY

100

0.855

 

0.891

 

0.879

 

0.912

Denmark

DKK

1

0.146

 

0.145

 

0.144

 

0.149

Republic of Korea

KRW

1,000

0.812

 

0.838

 

0.796

 

0.853

Malaysia

MYR

1

0.220

 

 

0.222

 

Canada

CAD

1

0.692

 

 

0.692

 

Taiwan

TWD

100

3.141

 

 

3.166

 

02.5 Measurement and recognition policies

Revenue recognition (sales and other income)

Net sales represent the revenue from the sale of goods and services to third parties, net of rebates and other price reductions. The Group’s revenue is derived from the sale of goods (including spare parts) by the PCT and IXM divisions and the sale of systems (including services such as installation) by the IXS division. Revenue from the sale of goods, including spare parts, systems and system-related services, is as a rule recognized on the basis of a single performance obligation, which is satisfied at a specific point in time. The performance obligation is satisfied, and the revenue recognized, when the customer acquires control of the product or service. In the sale of goods that are not systems, the transfer of control generally occurs at the time of delivery. Performance obligations for system sales (including for installation) are fulfilled at the time of acceptance by the customer. In connection with both non-system goods and with systems, Comet also offers services. Warranty obligations for providing an additional service to the customer (service-type warranties), such as an extension of the warranty period, are separate performance obligations and the revenue associated with them is recognized over time. For general maintenance services and defect correction intended to ensure that the delivered good is, or performs, as specified in the contract (assurance-type warranties), the estimated cost of the liability is recognized as a provision in accordance with IAS 37.

Customer contributions to development projects and payments for the delivery of the respective first prototype are recorded in other operating income; subsequent deliveries of prototypes are reported as sales.

Variable price elements (variable consideration) exist both in retroactive rebates when the quantity of products purchased exceeds a certain threshold in the calendar year, and in individual discounts on products. The amount of the rebate is estimated using the most-likely-amount method and as a rule is allocated proportionately to all performance obligations under the contract.

Sales commissions owed for agent activities are capitalized at contract inception as incremental costs attributable to obtaining a contract and a liability of equal amount is recognized for sales commissions. Their recognition as an expense occurs as soon as Comet has transferred control of the products to the customer. No interest effect is recognized for contract liabilities and prepayments by customers, as the period between the time of transfer of a promised good or service to the customer and the time of payment is not more than one year.

Cash and cash equivalents

In addition to cash on hand and balances in checking accounts at banks, cash and cash equivalents can also include fixed-term deposits with original maturities of up to three months.

Trade and other receivables and contract assets

Trade receivables, other receivables and contract assets are reported at their face value less any necessary impairment charges. Comet provides for impairment using the simplified approach by recognizing an allowance in the amount of the losses expected over the remaining life of the instruments (known as the expected credit loss model). For specific doubtful arrears with objective indications of impairment, impairment charges are applied individually.

Whether a receivable or a contract asset is recognized is governed by whether the right to consideration is unconditional (leading to recognition of a receivable) or conditional (leading to recognition of a contract asset).

Financial assets and liabilities

Financial assets are initially measured at fair value (market value), including transaction costs, except in the case of financial assets categorized as at fair value through profit or loss, for which transaction costs are recorded directly in financing expenses. All purchases and sales of financial assets are recognized at the transaction date.

  • Financial items at fair value through profit or loss: These include all derivatives, trading positions, and certain financial assets and liabilities designated as falling into this category. These assets are recognized at fair value in the balance sheet. Changes in value are reported as financing income or expense in the reporting period in which they occur.
  • Financial items at amortized cost: These are measured at cost using the effective interest method.

Fair value is determined based on quoted or other market prices. In the fiscal year as in the prior year, no hedge accounting under IFRS 9 or IAS 39 was applied to any hedging transactions. Financial assets are recognized as soon as Comet acquires control of them, and derecognized when it ceases to have control, i.e., when it has sold the rights or they have lapsed. Financial liabilities are derecognized when the obligation specified in the contract is discharged or is canceled or expires.

Inventories

Inventories are recorded at the lower of cost and net realizable value. Net realizable value represents the estimated normal sale price less the costs of completion, marketing, selling and distribution. Raw materials and purchased products are measured using the weighted-average method; internally produced goods are measured at standard costs. Inventories include proportionate shares of production overheads.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Borrowing costs related to qualifying assets form part of the historical cost. Depreciation is provided on a straight-line basis over the estimated useful life of the assets. The expense for depreciation of property, plant and equipment is recognized in the income statement under that expense category which corresponds to the function of the particular asset in the Group. Land values are not depreciated. Impairment charges are recognized as a separate line item under accumulated depreciation and impairment. Maintenance costs are recognized as assets only if the maintenance extends the expected life of the asset, expands production capacity or otherwise increases asset values. The costs of maintenance and repair that do not increase asset values are charged directly to income. The following estimated useful lives are applied in determining depreciation:

 

 

Buildings

20 – 40 years

Plant and equipment

6 – 10 years

Other tangible assets

3 – 10 years

Right-of-use assets and lease liabilities

As a lessee, Comet recognizes leases on the basis of a right-of-use model. At the inception of every contract, Comet assesses whether it includes a lease, separating lease components from non-lease components. No assets and liabilities are recognized for leases with a term of one year or less and for leases of low-value assets (with a value when new of less than CHF 5,000); the expenses for these are recognized directly in the income statement. The initial measurement of the right of use for a leased asset is made by calculating the present value of the lease payments, plus initial direct costs, plus estimated costs for dismantling, removal and restoration, less lease incentives received. The lease liabilities correspond to the present value of the discounted payment obligations. For discounting the lease payments, Comet uses the interest rate implicit in the lease. In doing so, the currency area in which the leased asset is located and the Comet-specific credit risk are taken into account. Comet primarily has leases with fixed payments, which includes leases with rent-free periods and ones with rising payments. Leases with variable payments are immaterial.

Comet’s leases may include renewal options. These are included in the calculations only if, taking into account all significant determining factors, they are considered highly likely to be exercised. For indefinite leases, the following principles apply (the extension periods cited are from the lease inception or from the expiry of the minimum lease term):

 

 

 

Maximum extension

Buildings and warehouses

3 years

Plant and equipment

2 years

Other tangible assets

1 year

In the event of a material modification, Comet remeasures the lease liability at the date of the change. Adjustments to the lease liability are deducted from or added to the corresponding right-of-use asset. Any difference remaining upon early termination of a lease is recognized through profit or loss. 

Where Comet is the lessor, the lease is accounted for either as an operating or a finance lease, depending on its terms.

Intangible assets

The intangible assets recognized are goodwill, rights to trademarks and names, customer lists, technology, licenses, patents, and software. Intangible assets are recognized at cost and generally amortized on a straight-line basis over their expected useful life. Goodwill and acquired rights to trademarks and names are not amortized but are tested annually for impairment (see section “Impairment of non-current assets”). The expense for amortization of intangible assets with finite useful lives is recognized in the income statement under that expense category which corresponds to the function of the particular asset in the Group. The following estimated useful lives are generally applied in determining amortization:

 

 

Customer lists

10 – 15 years

Technology

5 – 10 years

Computer software

3 – 5 years

Provisions

Provisions are recognized only where Comet has a present obligation to a third party arising from a past event and the amount of the obligation can be estimated reliably. No provisions are recognized for possible losses that may result from future events.

Provisions are classified as current to the extent that the related cash outflows are expected to occur within one year from the balance sheet date. Conversely, the cash outflows in respect of non-current provisions are expected to occur more than twelve months after the balance sheet date. If the interest effect is material, the cash outflows are discounted.

Post-employment benefits

Comet maintains post-employment benefit plans for its employees which differ according to the local circumstances of the individual Group companies. The benefit plans are financed by contributions to benefit arrangements that are separate legal entities (foundations or insurance companies) or by the accumulation of reserves in the balance sheet of the respective Group company. In the case of defined contribution plans or economically equivalent arrangements, the expenses accrued in the reporting period represent the agreed contributions of the Group company. For defined benefit plans, the service costs and the present value of the defined benefit obligation are calculated in actuarial valuations by independent experts, using the projected unit credit method. The calculations are updated annually. The surplus or deficit recognized in the balance sheet is equal to the present value of the defined benefit obligation as determined by the actuary, less the fair value of plan assets. Any resulting net surplus is recognized as an asset only to the extent of the potential economic benefit that may be realized from this asset in the future, taking into consideration IFRIC 14. The expense charged to income is the actuarially determined service cost plus the net interest cost. Actuarial gains and losses are recognized in other comprehensive income. They comprise experience adjustments (the effects of differences between the previous actuarial assumptions and the observed outcomes) and the effects of changes in actuarial assumptions (particularly regarding the discount rate and life expectancy).

Long-term employee benefits

Comet grants length-of-service awards to its employees after a certain number of years of service, in the form of lump-sum payments that increase in amount with the number of years of employment. Comet calculates the resulting obligation using the projected unit credit method. The calculation is updated annually. Any actuarial gains or losses from the remeasurement are immediately taken to income.

Share-based payments

Part of the variable compensation of the members of the Executive Committee under the short-term incentive plan (STIP), and part of the fixed compensation of the Board of Directors, is paid in stock. In addition, the Executive Committee is granted stock under a long-term incentive plan (LTIP). The expense is recognized at the value of the stock earned, measured at the quoted market price (fair value) at the grant date. The amount accrued for those components of compensation which must be equity-settled (i.e., for which there is no option of cash payment) is recognized directly in equity. For components which the beneficiary can choose to receive in equity or in cash, the value of the option which this choice represents is determined and recognized as an increase in equity, while the rest of the obligation is recorded as a liability.

Income tax

The income tax expense for the reporting period is composed of current taxes and deferred taxes.

Current taxes

Current tax liabilities and assets for the current period and prior reporting periods are recognized based on the amount expected to be payable to or refunded by the tax authorities. They are calculated based on the tax regulations and tax rates in effect at the balance sheet date.

Deferred taxes

Deferred taxes are accounted for by the liability method. Under this approach, the income tax effects of temporary differences between the tax bases and the values used in the consolidated financial statements are recorded as non-current liabilities or non-current assets. Deferred taxes are calculated at actual or expected local tax rates. Changes in deferred taxes are included in income tax expense in the income statement, except for deferred taxes in respect of items that are recognized outside profit or loss. These latter deferred taxes are likewise recognized outside profit or loss; according to the underlying accountable event, they are recognized either in other comprehensive income or directly in equity. Deferred tax liabilities are recognized on all taxable temporary differences except for goodwill. Deferred tax assets are recognized for all deductible temporary differences, the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carryforward of unused tax credits and unused tax losses can be utilized, except:

  • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit for the period nor taxable profit or loss.
  • In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future.
Impairment of non-current assets

The value of property, plant and equipment and other non-current assets, including intangibles, is reviewed whenever it appears possible, as a result of changed circumstances or events, that the assets’ carrying amount represents an overvaluation. Intangible assets that are in the process of being generated are tested for impairment annually. If the carrying amount exceeds the amount recoverable through use or sale of the asset, the carrying amount is reduced to this recoverable amount and the difference is recorded as an impairment charge in the income statement. The recoverable amount is the higher of realizable value or value in use. Value in use is determined on the basis of discounted expected future cash flows. Any acquired goodwill and any rights to trademarks or names with an indefinite useful life are not amortized but are reviewed annually at the same date for impairment. This impairment test is based on the results for the fiscal year, the rolling multi-quarter forecast and the rolling multi-year plan.

Revenue from contracts with customers

03 Revenue from contracts with customers

In the following tables, sales revenue is analyzed by region and by market sector. 

 

 

 

 

 

 

 

 

 

 

 

In thousands of CHF

Plasma Control Technologies (PCT)

X-Ray Systems (IXS)

Industrial X-Ray Modules (IXM)

ebeam Technologies (EBT)

Consolidated

 

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

Geographic region

 

 

 

 

 

 

 

 

 

 

Europe

7,878

9,236

29,116

34,192

21,363

26,689

12,137

12,448

70,494

82,564

USA

157,125

109,230

12,886

18,866

13,718

22,446

553

1,218

184,281

151,760

Asia

59,516

33,099

58,021

75,462

11,493

13,814

1,611

1,097

130,641

123,472

Rest of world

200

169

6,426

10,826

3,478

2,096

297

718

10,401

13,810

Total

224,718

151,734

106,449

139,346

50,052

65,045

14,598

15,481

395,816

371,606

 

 

 

 

Sales split by market sector

 

 

 

In thousands of CHF

2020

 

2019

PCT

 

 

 

Semiconductor

192,232

 

127,716

Flat panel

18,613

 

8,627

Others

13,872

 

15,391

Total PCT

224,718

 

151,734

 

 

 

 

IXS

 

 

 

Automotive

35,430

 

52,889

Electronics

34,972

 

41,692

Science & new materials

21,825

 

16,377

Aerospace

10,508

 

20,758

Others

3,715

 

7,630

Total IXS

106,449

 

139,346

 

 

 

 

IXM

 

 

 

Non-destructive testing

32,380

 

43,320

Security

8,151

 

11,253

Others

9,522

 

10,472

Total IXM

50,052

 

65,045

 

 

 

 

Total EBT

14,598

 

15,481

 

 

 

 

Total net sales

395,816

 

371,606

Comet sold the ebeam lamp business to Tetra Pak eBeam Systems SA, Pully, Switzerland, effective November 30, 2020 (see note 8). Assets and liabilities having a future value in use and remaining with Comet after the divestiture were allocated to other divisions of the Group according to their intended use, and the ebeam Technologies (EBT) division was dissolved with effect from January 1, 2021.

Unsatisfied performance obligations

The aggregate amount of the transaction prices allocated to performance obligations that were unsatisfied or partly unsatisfied at December 31, 2020 was CHF 166 million (prior year: CHF 138 million). Comet will realize this revenue as soon as the performance obligations have been fulfilled and the customers have acquired control of the products or services. This is expected generally to be the case in the next 12 to 24 months.

Contract balances

Opening and closing balances of receivables and contract assets are reported in note 13. Contract liabilities from contracts with customers are presented in the balance sheet. The contract assets consisted mainly of the rights to consideration for product deliveries and services of the X-Ray Systems division that were completed but not yet billed at the balance sheet date. The contract liabilities consisted of prepayments received from customers. The revenue recognized in 2020 from contract liabilities existing at the beginning of the reporting period amounted to CHF 18.4 million (prior year: CHF 14.7 million). Material changes in contract balances result from the receipt of customer payments and the invoicing of satisfied performance obligations.

Segment reporting

04 Segment reporting

The Group is managed on the basis of the following four operating divisions, which are delineated based on their products and services. For financial reporting purposes the divisions are also referred to here as “operating segments” or “segments”.

  • The Plasma Control Technologies (PCT) division develops, manufactures and markets vacuum capacitors, radio frequency (RF) generators and RF impedance matching networks for the high-precision control of plasma processes required, for instance, in the production of memory chips and flat panel displays.
  • The X-Ray Systems (IXS) division develops, manufactures and markets x-ray systems, and provides related services, for non-destructive examination using x-ray and microfocus technology and computed tomography.
  • The Industrial X-Ray Modules (IXM) division develops, manufactures and markets highly compact x-ray sources and portable x-ray modules for non-destructive examination, steel metrology, and security inspection.
  • The ebeam Technologies (EBT) division developed, manufactured and marketed compact ebeam sets for the treatment of surfaces in the food and printing industries. Comet sold the ebeam lamp business to Tetra Pak eBeam Systems SA, Pully, Switzerland, effective November 30, 2020 (see note 8). Assets and liabilities having a future value in use and remaining with Comet after the divestiture were allocated to other divisions of the Group according to their intended use, and the EBT segment was dissolved with effect from January 1, 2021.

Segment operating income represents all revenues and expenses attributable to a particular division. The only revenues and expenses not allocated to the segments are those of Comet Holding AG, net financial items and income taxes. These unallocated expenses and revenues are reported in the “Corporate” column. Transactions between the segments are invoiced at prices also charged to third parties.

The segment assets and liabilities represent all operating items. The following assets and liabilities are not allocated to operating segments: the assets and liabilities of Comet Holding AG, all cash and cash equivalents, all debt and all income tax assets and liabilities. These unallocated assets and liabilities are reported in the “Corporate” column.

04.1 Operating segments

 

 

 

 

 

 

 

 

Fiscal year 2020

 

 

 

 

In thousands of CHF

Plasma Control Technologies (PCT)

X-Ray Systems (IXS)

Industrial X-Ray Modules (IXM)

ebeam Technologies (EBT) 1

Elimination of intersegment sales

Corporate

Consolidated

Net sales

 

 

 

 

 

 

 

External net sales

224,718

106,449

50,052

14,598

395,816

Intersegment sales

314

11,351

(11,665)

Total net sales

224,718

106,762

61,403

14,598

(11,665)

395,816

Earnings

 

 

 

 

 

 

 

Segment operating income/(loss)

41,781

(6,677)

3,997

2,242

156

41,498

Unallocated costs

(2,169)

(2,169)

Operating income

41,781

(6,677)

3,997

2,242

156

(2,169)

39,329

Financing expenses

 

 

 

 

 

 

(8,657)

Financing income

 

 

 

 

 

 

2,816

Income before tax

 

 

 

 

 

 

33,487

Income tax

 

 

 

 

 

 

(5,827)

Net income

 

 

 

 

 

 

27,661

 

 

 

 

 

 

 

 

EBITDA

49,338

(1,009)

8,956

3,344

156

(2,169)

58,616

EBITDA in % of sales

22.0%

– 0.9%

14.6%

22.9%

 

 

14.8%

 

 

 

 

 

 

 

 

Assets and liabilities at Dec. 31, 2020

 

 

 

 

 

 

 

Segment assets

129,908

124,183

83,828

91,351

429,271

Segment liabilities

(44,235)

(86,261)

(16,793)

(67,025)

(214,315)

Net assets

85,673

37,923

67,035

24,326

214,956

Other segment information

 

 

 

 

 

 

 

Capital expenditure

11,823

11,369

3,669

254

27,115

Depreciation and amortization

7,557

5,669

4,959

1,102

19,287

Change in provisions

700

(353)

(35)

(364)

(52)

Other non-cash expense/(income)

646

(495)

359

(102)

14

1,438

1,860

Number of employees at year end

679

431

293

1,403

1 Comet sold the ebeam lamp business effective November 30, 2020. The EBT segment was dissolved with effect from January 1, 2021.

 

 

 

 

 

 

 

 

Fiscal year 2019

 

 

 

 

In thousands of CHF

Plasma Control Technologies (PCT)

X-Ray Systems (IXS)

Industrial X-Ray Modules (IXM)

ebeam Technologies (EBT)

Elimination of intersegment sales

Corporate

Consolidated

Net sales

 

 

 

 

 

 

 

External net sales

151,734

139,346

65,045

15,481

371,606

Intersegment sales

205

13,095

(13,301)

Total net sales

151,734

139,551

78,141

15,481

(13,301)

371,606

Earnings

 

 

 

 

 

 

 

Segment operating income/(loss)

8,206

6,301

16,338

(7,903)

(473)

22,468

Unallocated costs

(2,530)

(2,530)

Operating income

8,206

6,301

16,338

(7,903)

(473)

(2,530)

19,939

Financing expenses

 

 

 

 

 

 

(6,738)

Financing income

 

 

 

 

 

 

2,162

Income before tax

 

 

 

 

 

 

15,363

Income tax

 

 

 

 

 

 

(3,336)

Net income

 

 

 

 

 

 

12,027

 

 

 

 

 

 

 

 

EBITDA

15,366

12,026

21,742

(6,156)

(473)

(2,530)

39,974

EBITDA in % of sales

10.1%

8.6%

27.8%

– 39.8%

 

 

10.8%

 

 

 

 

 

 

 

 

Assets and liabilities at Dec. 31, 2019

 

 

 

 

 

 

 

Segment assets

109,507

112,813

82,941

16,801

69,648

391,710

Segment liabilities

(31,904)

(66,320)

(15,610)

(6,164)

(75,764)

(195,762)

Net assets

77,603

46,493

67,331

10,637

(6,116)

195,948

Other segment information

 

 

 

 

 

 

 

Capital expenditure

7,855

8,003

4,474

860

21,194

Depreciation and amortization

7,160

5,725

5,404

1,746

20,035

Change in provisions

(2,080)

(482)

(152)

151

(2,563)

Other non-cash expense/(income)

1,104

(58)

(623)

420

38

162

1,044

Number of employees at year end

544

439

279

68

1,330

Reconciliation of aggregate segment assets and liabilities to consolidated results

 

 

 

 

In thousands of CHF

2020

 

2019

Operating segments' assets

337,919

 

322,062

Total cash and cash equivalents

74,681

 

60,255

Other assets

4,791

 

271

Tax receivables

1,168

 

609

Deferred tax assets

10,653

 

8,397

Comet Holding AG's receivables from third parties

60

 

115

Total assets

429,271

 

391,710

 

 

 

 

Operating segments' liabilities

(147,289)

 

(119,998)

Current and non-current debt

(59,976)

 

(71,893)

Derivatives used for foreign exchange hedging

(45)

 

(41)

Tax payables

(4,399)

 

(2,480)

Deferred tax liabilities

(1,145)

 

Comet Holding AG's payables to third parties

(1,461)

 

(1,350)

Total liabilities

(214,315)

 

(195,762)

04.2 Geographic information

Comet markets its products and services throughout the world and has its own companies in Switzerland, Germany, Denmark, the USA, China, Japan, South Korea, Malaysia, Canada and Taiwan. Net sales are allocated to countries on the basis of customer location.

 

 

 

 

Net sales by region

 

 

 

In thousands of CHF

2020

 

2019

Switzerland

11,581

 

11,446

Germany

26,914

 

32,821

Rest of Europe

31,998

 

38,297

Total Europe

70,494

 

82,564

Total North America

186,057

 

151,760

China

55,101

 

57,287

Japan

21,775

 

24,175

Rest of Asia

53,765

 

42,010

Total Asia

130,641

 

123,472

Rest of world

8,625

 

13,810

Total

395,816

 

371,606

 

 

 

 

Property, plant and equipment, right-of-use assets and intangible assets by region

 

 

 

In thousands of CHF

2020

 

2019

Switzerland

108,786

 

115,218

Germany

48,343

 

39,951

North America

14,053

 

6,958

Rest of world

5,918

 

3,575

Total

177,101

 

165,702

04.3 Sales with key accounts

In the year under review, the Plasma Control Technologies division recorded sales of CHF 128 million with its largest customer, which represented 32.4% of Group sales (prior year: CHF 84 million and 22.7%, respectively).

Other operating income

05 Other operating income

 

 

 

 

In thousands of CHF

2020

 

2019

Customers' contributions to development projects

2,039

 

1,623

Government grants

227

 

142

Income from the development of prototypes

3,134

 

3,166

Miscellaneous income

28

 

120

Total other operating income

5,428

 

5,051

Staff costs and staff count

06 Staff costs and staff count

06.1 Staff costs

 

 

 

 

In thousands of CHF

2020

 

2019

Wages and salaries

125,669

 

117,106

Employee benefits

20,505

 

20,810

Total staff costs

146,174

 

137,917

06.2 Staff count

 

 

 

 

 

2020

 

2019

Number of employees (year-end)

1,403

 

1,330

Average full-time equivalents during the year

1,325

 

1,261

Development expenses

07 Development expenses

Development expenses comprise the costs of new-product development, improvement of existing products, and process engineering. Comet’s development activities focus on the fields of vacuum technology, high voltage engineering and material science, and on the further development of the divisions’ core products. In view of the uncertainty of future economic benefits that may flow from development projects, Comet as a rule does not capitalize development costs but charges them directly to the income statement.

Gain on disposal of businesses

08 Gain on disposal of businesses

Effective November 30, 2020, Comet sold the ebeam lamp business (part of the EBT division) to Tetra Pak eBeam Systems SA, Pully, Switzerland. The following assets and liabilities were transferred as an asset group to the new owner:

 

 

 

In thousands of CHF

 

Carrying amount at Nov. 30, 2020

Prepaid expenses

 

256

Inventories

 

1,266

Property, plant and equipment

 

2,492

Total assets

 

4,015

Accrued expenses

 

(246)

Provisions

 

(474)

Total liabilities

 

(720)

Total net assets

 

3,295

Cash payment from new owner

 

7,542

Liability for purchase price adjustment

 

(261)

Gain on disposal of businesses

 

3,986

The gain of CHF 4.0 million on the disposal is taxable. The expected tax rate is 13% and the tax effect is therefore CHF 0.5 million.

Comet did not divest any businesses in the prior year.

Amortization, depreciation and impairment

09 Amortization, depreciation and impairment

 

 

 

 

In thousands of CHF

2020

 

2019

Amortization of intangible assets

4,526

 

4,602

Depreciation of right-of-use assets

4,280

 

4,433

Depreciation of property, plant and equipment

10,481

 

10,537

Total amortization and depreciation

19,287

 

19,572

 

 

 

 

Impairment of property, plant and equipment

 

463

Total impairment

 

463

Financing income and expenses

10 Financing income and expenses

 

 

 

 

In thousands of CHF

2020

 

2019

Interest expense

1,916

 

1,999

Losses on derivatives used for currency hedging

1,642

 

1,104

Foreign currency translation losses

5,099

 

3,635

Total financing expenses

8,657

 

6,738

 

 

 

 

In thousands of CHF

2020

 

2019

Interest income

77

 

108

Gains on derivatives used for currency hedging

2,155

 

636

Foreign currency translation gains

584

 

1,418

Total financing income

2,816

 

2,162

 

 

 

 

In thousands of CHF

2020

 

2019

Net interest expense

1,838

 

1,890

Net foreign currency translation losses or (gains)

4,002

 

2,685

Foreign currency translation gains and losses resulted largely from items denominated in US dollars and euros.

Income tax

11 Income tax

11.1 Current and deferred income tax expense

 

 

 

 

In thousands of CHF

2020

 

2019

Current income tax expense in respect of the current year

9,791

 

4,694

Current income tax expense in respect of prior years

(1,161)

 

(662)

Deferred income tax expense or (credit)

(2,802)

 

(696)

Total income tax expense

5,827

 

3,336

11.2 Reconciliation of tax expense

 

 

 

 

In thousands of CHF

2020

 

2019

Income before tax

33,487

 

15,363

Expected income tax at base tax rate of 24% (prior year: 24%)

8,037

 

3,687

Effect of tax rates other than base tax rate

(625)

 

671

Effect of tax relief from canton of Comet AG

(351)

 

(399)

Effect of non-tax-deductible expenses

215

 

202

Effect of change in tax rate on deferred income tax

121

 

(128)

Recognition and offset of tax loss carry-forwards not recognized in prior years

(248)

 

Effect of credits for R&D and domestic manufacturing

(435)

 

(382)

Effect of income tax from other periods

(1,161)

 

(662)

Effect of non-refundable withholding tax

201

 

277

Other effects

74

 

70

Income tax reported in the income statement

5,827

 

3,336

Effective income tax rate in % of income before tax

17.4%

 

21.7%

The expected income tax rate represents the Group’s experience-based long-term tax rate and takes into account the local income tax rates of the individual Group companies.

Comet AG, based in Flamatt, has been granted conditional tax relief by the canton of Fribourg in the form of a reduction in cantonal and municipal taxes for the period to 2022. For 2020 the tax reduction amounted to 50% (prior year: 50%).

11.3 Deferred tax assets and liabilities

Deferred tax assets and liabilities can be analyzed as follows: 

 

 

 

 

 

 

 

2020

 

2019

In thousands of CHF

Assets

Liabilities

 

Assets

Liabilities

Financial instruments

46

(95)

 

41

(58)

Receivables

4,272

(854)

 

2,121

(985)

Inventories

5,420

(2,370)

 

4,312

(1,426)

Property, plant and equipment

266

(461)

 

267

(625)

Right-of-use assets

(6,286)

 

1

(2,376)

Intangible assets

353

(2,466)

 

0

(3,184)

Trade payables and other liabilities

323

(498)

 

851

(420)

Lease liabilities

6,535

 

3,802

Accrued expenses

1,797

 

1,243

(0)

Provisions

886

 

894

(1)

Employee benefit plan liabilities

1,577

 

1,748

(0)

Tax loss carryforwards, and tax credits for R&D and domestic manufacturing

1,061

 

2,192

Total gross deferred tax of Group companies

22,537

(13,030)

 

17,473

(9,076)

Netting of deferred tax by Group companies

(11,885)

11,885

 

(9,076)

9,076

Amounts in the consolidated balance sheet

10,653

(1,145)

 

8,397

The deferred tax assets and liabilities were measured at local tax rates, ranging from 13% to 33%. No deferred tax liabilities were established for temporary differences of CHF 85.2 million (prior year: CHF 68.0 million) in respect of the value of the ownership interests in Group companies. Distributions of retained earnings by subsidiaries are not expected to have an effect on income taxes, except for future distributions from China, Korea, Taiwan and Canada. There were no tax provisions for non-refundable withholding taxes on future distributions of foreign subsidiaries to Comet Holding AG. Distributions by Comet Holding AG to its shareholders have no effect on the reported or future income taxes.

11.4 Movement in deferred tax assets and liabilities

 

 

 

 

In thousands of CHF

2020

 

2019

Net asset at January 1

8,397

 

7,516

Origination and reversal of temporary differences recognized in the income statement

3,360

 

2,549

Recognition of deferred tax assets on loss carryforwards and R&D credits

83

 

451

Use of tax loss carryforwards

(641)

 

(2,304)

Deferred tax credit in the income statement

2,802

 

696

Deferred tax liability related to the acquisition of a subsidiary

(1,019)

 

Origination and reversal of temporary differences recognized in other comprehensive income

(181)

 

361

Foreign currency translation differences

(490)

 

(177)

Net asset at December 31

9,508

 

8,397

Reported as assets

10,653

 

8,397

Reported as liabilities

(1,145)

 

11.5 Tax loss carryforwards

Deferred tax assets, including tax loss carryforwards and expected tax credits, are recognized only if it is likely that future taxable profits will be available to which these deferred tax assets can be applied. Temporary differences for which no tax assets were recognized were nil (prior year: nil).

At the balance sheet date of December 31, 2020, tax loss carryforwards stood at CHF 3.2 million (prior year: CHF 5.0 million). Including tax credits for R&D and domestic manufacturing, the resulting deferred tax assets were CHF 1.1 million (prior year: CHF 2.2 million). The existing loss carryforwards can be carried forward indefinitely.

In the fiscal year, there were no unrecognized deferred tax assets from tax loss carryforwards (prior year: nil).

Earnings per share

12 Earnings per share

Basic earnings per share represents the reporting period’s consolidated net income divided by the average number of shares outstanding.

 

 

 

 

 

2020

 

2019

Weighted average number of shares outstanding

7,766,108

 

7,762,845

Net income in thousands of CHF

27,661

 

12,027

Net income per share in CHF, diluted and basic

3.56

 

1.55

There are no outstanding stock options or stock subscription rights that could lead to a dilution of earnings per share.

Trade and other receivables

13 Trade and other receivables

 

 

 

 

In thousands of CHF

2020

 

2019

Trade receivables, gross

51,232

 

54,818

Impairment of trade receivables

(933)

 

(495)

Trade receivables, net

50,299

 

54,323

Refundable sales taxes and value-added taxes

2,415

 

4,392

Prepayments to suppliers

1,206

 

2,097

Contract assets

5,561

 

Sundry receivables

2,303

 

1,815

Total other receivables

11,485

 

8,304

Total trade and other receivables

61,784

 

62,627

The allowance account for impairment of trade receivables showed the following movement:

 

 

 

 

In thousands of CHF

2020

 

2019

January 1

495

 

614

Added

575

 

128

Released

(116)

 

(230)

Foreign currency translation differences

(21)

 

(17)

December 31

933

 

495

The impairment test of trade receivables performed in light of the effects of the Covid-19 pandemic identified a moderately higher risk of default in the year under review.

At the balance sheet date, complete impairment was recognized on CHF 0.7 million (prior year: CHF 0.4 million) of trade receivables. Within the item “total other receivables” and within contract assets, there were no amounts past due or written down. The Group does not hold security against trade and other receivables.

The aging schedule for past-due trade receivables on which impairment has been recognized is summarized in the table below:

 

 

 

 

 

Fiscal year 2020

 

 

In thousands of CHF

Expected loss rate

Gross carrying amount Dec. 31, 2020

Expected credit loss Dec. 31, 2020

Net carrying amount Dec. 31, 2020

Trade receivables

 

51,232

933

50,299

Not past due

0.4%

48,257

180

48,077

Over 30 days past due, impairment recognized

1.0%

1,261

13

1,248

Over 60 days past due, impairment recognized

1.0%

463

4

458

Over 90 days past due, impairment recognized

38.4% 1

179

69

110

Over 120 days past due, impairment recognized

2.0%

74

1

72

Over 150 days past due, impairment recognized

67.0% 1

998

666

333

1 Individual impairment allowances included.

 

 

 

 

 

Fiscal year 2019

 

 

In thousands of CHF

Expected loss rate

Gross carrying amount Dec. 31, 2019

Expected credit loss Dec. 31, 2019

Net carrying amount Dec. 31, 2019

Trade receivables

 

54,818

495

54,323

Not past due

0.1%

49,078

48

49,030

Over 30 days past due, impairment recognized

0.2%

3,827

8

3,819

Over 60 days past due, impairment recognized

0.5%

698

4

694

Over 90 days past due, impairment recognized

1.0%

15

0

15

Over 120 days past due, impairment recognized

1.5%

1

0

1

Over 150 days past due, impairment recognized

36.3% 1

1,199

435

764

1 Individual impairment allowances included.

Other assets (including financial assets) and financial liabilities

14 Other assets (including financial assets) and financial liabilities

14.1 Other assets, including financial assets

 

 

 

 

In thousands of CHF

2020

 

2019

Other assets at fair value through profit or loss

 

 

 

Derivatives used for foreign exchange hedging

394

 

271

Total other assets at fair value through profit or loss

394

 

271

 

 

 

 

Other assets at amortized cost

 

 

 

Lease receivable

1,465

 

Restricted cash – post-combination compensation

1,506

 

Restricted cash – purchase price holdback for warranties

1,426

 

Other non-current financial assets

231

 

367

Total other assets at amortized cost

4,628

 

367

 

 

 

 

Total other assets

5,022

 

638

Total current

1,813

 

271

Total non-current

3,209

 

367

14.2 Other financial liabilities

 

 

 

 

In thousands of CHF

2020

 

2019

Other financial liabilities at fair value through profit or loss

 

 

 

Derivatives used for foreign exchange hedging

45

 

41

Total other financial liabilities at fair value through profit or loss

45

 

41

 

 

 

 

Other financial liabilities at amortized cost

 

 

 

Liability for purchase price holdback for warranties

1,426

 

Total other financial liabilities at amortized cost

1,426

 

 

 

 

 

Total other financial liabilities

1,471

 

41

Total current

1,471

 

41

14.3 Derivative financial instruments

At the balance sheet date, open positions in forward exchange contracts were as follows:

 

 

 

 

In thousands of CHF

2020

 

2019

USD forward exchange contracts

 

 

 

Contract amounts

11,728

 

14,741

Positive fair values

394

 

176

Negative fair values

1

 

12

 

 

 

 

JPY forward exchange contracts

 

 

 

Contract amounts

2,181

 

5,248

Positive fair values

 

93

Negative fair values

11

 

24

 

 

 

 

CNY forward exchange contracts

 

 

 

Contract amounts

1,239

 

902

Positive fair values

 

2

Negative fair values

33

 

5

The gains and losses from foreign exchange contracts are recognized as financing income or expense (see note 29). The contract amounts shown represent the notional principal amounts of the forward contracts. Consistent with the nature of the Group’s activities, the forward exchange contracts have maturities of less than one year; most are due within six months.

14.4 Other assets at amortized cost

Lease receivables

As part of the divestiture of the ebeam lamp business, property, plant and equipment is leased with a financing component to Tetra Pak eBeam Systems SA (non-variable rent payments). In connection with this, equipment with a residual carrying amount of CHF 1.5 million has been reclassified from property, plant and equipment to other assets. In the year under review, this lease contract had no impact on the income statement.

 

 

 

 

 

Lease receivable maturity analysis

 

 

 

 

In thousands of CHF

2021

2022 – 2025

After 2025

Total lease receivable

Undiscounted lease payments

181

621

737

1,539

Interest portion

(12)

(42)

(19)

(74)

Net investment lease

169

578

718

1,465

Restricted cash

In relation to the acquisition of Object Research Systems (ORS) Inc., an agree­ment for compensation of CHF 1.5 million in the post-combination period was concluded with key ORS personnel as a separate transaction. There is also a purchase price holdback of CHF 1.4 million for warranties regarding acquired software technology. For the settlement of these elements, cash was transferred to an escrow account, thus restricting access to these funds (see note 20).

14.5 Other financial liabilities at amortized cost

As part of the acquisition of Object Research Systems (ORS) Inc., a purchase price holdback of CHF 1.4 million was agreed for warranties regarding the acquired software technology (also see explanations in note 14.4).

Inventories

15 Inventories

 

 

 

 

In thousands of CHF

2020

 

2019

Raw materials and semi-finished products

37,646

 

41,639

Work in process

16,198

 

17,128

Finished goods

40,344

 

26,417

Total inventories

94,188

 

85,184

The inventory amounts reflect any necessary individual write-downs for items with a market value below manufacturing cost. The expense recognized for inventory write-downs was CHF 4.7 million (prior year: CHF 4.6 million).

The sale of the ebeam lamp business resulted in a decrease of CHF 1.3 million in inventories. Note 8 provides further information on this transaction. 

Prepaid expenses

16 Prepaid expenses

 

 

 

 

In thousands of CHF

2020

 

2019

Contract costs

1,754

 

1,164

Other prepaid expenses

2,920

 

7,132

Total prepaid expenses

4,674

 

8,296

The contract costs represent capitalized sales commissions for agent activities (incremental costs directly attributable to obtaining a contract). In the fiscal year, sales commissions of CHF 2.4 million were recognized in the income statement (prior year: CHF 3.4 million).

The other prepaid expenses consisted largely of prepayments made for the subsequent fiscal year.

Property, plant and equipment

17 Property, plant and equipment

 

 

 

 

 

 

Fiscal year 2020

 

 

 

 

 

In thousands of CHF

Real estate

Plant and equipment

Other tangible assets

Assets under construction

Total property, plant and equipment

Cost

 

 

 

 

 

January 1, 2020

96,236

94,832

18,262

9,940

219,269

Acquisition of a subsidiary

34

 

34

Additions

1,965

4,260

883

5,473

12,581

Commissioning of assets under construction

15

5,428

2,182

(7,625)

Reclassifications

683

(683)

 

Disposals

(528)

(9,725)

(2,551)

 

(12,804)

Foreign currency translation differences

(7)

(919)

(501)

180

(1,247)

December 31, 2020

97,681

94,593

17,593

7,968

217,834

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

January 1, 2020

28,524

61,519

13,524

103,568

Additions

2,479

5,827

2,176

 

10,482

Reclassifications

18

(18)

 

Disposals

(310)

(5,734)

(1,867)

 

(7,911)

Foreign currency translation differences

(4)

(631)

(299)

 

(934)

December 31, 2020

30,689

60,998

13,517

105,204

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

January 1, 2020

67,712

33,312

4,738

9,940

115,702

December 31, 2020

66,991

33,595

4,076

7,968

112,629

The disposals of plant and equipment included costs of CHF 4.7 million and cumulative depreciation of CHF 2.2 million associated with the divestiture of the ebeam lamp business (see note 8).

Also in connection with the sale of the ebeam lamp business, property, plant and equipment with a financing component is leased to Tetra Pak eBeam Systems SA (with non-variable rent payments). As a result, plant and equipment with a residual carrying amount of CHF 1.5 million has been reclassified to other assets. This reclassification did not lead to an outflow of funds in the consolidated cash flow statement.

The disposals of other tangible assets in the fiscal year included the reclassification of CHF 0.5 million (prior year: CHF 0.1 million) of internally produced demonstration equipment to inventories, which did not result in an outflow of funds.

Assets pledged or assigned as collateral for Group obligations

At December 31, 2020 and December 31, 2019, all real estate liens (mortgage notes in the amount of CHF 30.0 million) were held within the Group.

 

 

 

 

 

 

Fiscal year 2019

 

 

 

 

 

In thousands of CHF

Real estate

Plant and equipment

Other tangible assets

Assets under construction

Total property, plant and equipment

Cost

 

 

 

 

 

January 1, 2019

96,919

85,491

19,275

8,637

210,322

Additions

951

5,761

453

6,540

13,705

Commissioning of assets under construction

225

4,417

612

(5,254)

Reclassifications

(1,706)

1,646

60

Disposals

(132)

(1,960)

(1,735)

(3,827)

Foreign currency translation differences

(21)

(523)

(403)

17

(930)

December 31, 2019

96,236

94,832

18,262

9,940

219,269

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

January 1, 2019

26,230

57,672

12,829

96,731

Additions

2,512

5,467

2,558

10,537

Impairment

463

463

Reclassifications

(75)

69

6

Disposals

(132)

(1,805)

(1,599)

(3,536)

Foreign currency translation differences

(11)

(347)

(270)

(629)

December 31, 2019

28,524

61,519

13,524

103,568

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

January 1, 2019

70,689

27,819

6,446

8,637

113,591

December 31, 2019

67,712

33,312

4,738

9,940

115,702

Right-of-use assets and lease liabilities

18 Right-of-use assets and lease liabilities

The rights of use and liabilities arising from leases showed the following movement:

 

 

 

 

 

 

Fiscal year 2020

 

Right-of-use assets

Lease liabilities

In thousands of CHF

Buildings

Equipment

Other assets

Total

January 1, 2020

11,033

640

9

11,682

13,389

Acquisition of a subsidiary

69

69

69

Additions

13,207

387

10

13,604

13,604

Disposals

(316)

(316)

(343)

Depreciation, amortization and impairment

(3,878)

(393)

(9)

(4,280)

Accretion of interest

446

Repayment of lease liabilities

(5,160)

Foreign currency translation differences

(142)

(8)

(149)

(162)

December 31, 2020

19,973

626

11

20,610

21,842

The non-current lease liabilities largely have remaining maturities of two to ten years. The expected future lease payments are presented in note 30.

The increase in right-of-use assets and in lease liabilities is related mainly to the extension of the lease for the Hamburg site.

The additions to right-of-use assets and lease liabilities were non-cash items and are thus not included in cash flow from investing activities.

 

 

 

 

 

 

Fiscal year 2019

 

Right-of-use assets

Lease liabilities

In thousands of CHF

Buildings

Equipment

Other assets

Total

January 1, 2019

11,428

610

17

12,055

14,163

Additions

3,858

504

1

4,363

4,363

Disposals

(62)

Depreciation, amortization and impairment

(3,973)

(451)

(9)

(4,433)

Accretion of interest

573

Repayment of lease liabilities

(5,440)

Foreign currency translation differences

(279)

(23)

(302)

(207)

December 31, 2019

11,033

640

9

11,682

13,389

The composition of the lease expenses in fiscal 2020 and 2019 is shown below:

 

 

 

 

In thousands of CHF

2020

 

2019

Depreciation, amortization and impairment

4,280

 

4,433

Interest expenses

446

 

573

Expenses for short-term leases

51

 

103

Expense for low-value leases

4

 

7

Expense for variable lease payments not included in the measurement of lease liabilities

29

 

40

Total lease expenses

4,809

 

5,155

Comet has lease agreements containing extension and termination options (see note 2.5). At December 31, 2020, all options either deemed highly likely to be exercised or not to be exercised were taken into account in the valuation of the lease liabilities.

The undiscounted payments of options that were not exercised as at December 31, 2020 amounted to CHF 5.8 million due within the subsequent five years (prior year: CHF 6.4 million) and to CHF 11.8 million for option periods of more than five years (prior year: CHF 11.8 million).

Intangible assets

19 Intangible assets

 

 

 

 

 

 

 

Fiscal year 2020

 

 

 

 

 

 

In thousands of CHF

Goodwill and trademarks

Customer lists

Technology

Software

Other intangible assets

Total intangible assets

Cost

 

 

 

 

 

 

January 1, 2020

27,615

20,382

2,357

24,613

34

75,000

Acquisition of a subsidiary

4,780

1,793

2,667

9,241

Additions

843

88

931

Disposals

(169)

(169)

Foreign currency translation differences

(11)

(445)

(1)

(64)

(0)

(521)

December 31, 2020

32,385

21,730

5,023

25,222

122

84,482

 

 

 

 

 

 

 

Accumulated amortization

 

 

 

 

 

 

January 1, 2020

0

17,138

1,737

17,774

34

36,683

Additions

1,254

273

2,998

4,525

Disposals

(152)

(152)

Foreign currency translation differences

(396)

2

(42)

(0)

(436)

December 31, 2020

0

17,996

2,012

20,578

34

40,620

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

January 1, 2020

27,615

3,244

620

6,839

0

38,318

December 31, 2020

32,385

3,734

3,012

4,644

88

43,862

The categories “goodwill and trademarks”, “customer lists” and “technology” were capitalized in connection with business combinations. More details on the acquisition in the year under review are presented in note 20.

Under a long-term brand strategy, the established Yxlon name is used alongside the Comet brand. The Group therefore deems the capitalized Yxlon brand to have an indefinite useful life.

 

 

 

 

 

 

 

Fiscal year 2019

 

 

 

 

 

 

In thousands of CHF

Goodwill and trademarks

Customer lists

Technology

Software

Other intangible assets

Total intangible assets

Cost

 

 

 

 

 

 

January 1, 2019

28,412

20,916

2,432

21,614

276

73,650

Additions

3,126

3,126

Reclassifications

241

(241)

Disposals

(67)

(67)

Foreign currency translation differences

(797)

(534)

(75)

(301)

(1)

(1,709)

December 31, 2019

27,615

20,382

2,357

24,613

34

75,000

 

 

 

 

 

 

 

Accumulated amortization

 

 

 

 

 

 

January 1, 2019

0

16,278

1,516

14,994

35

32,823

Additions

1,301

281

3,020

4,602

Disposals

(67)

(67)

Foreign currency translation differences

(441)

(60)

(173)

(1)

(676)

December 31, 2019

0

17,138

1,737

17,774

34

36,683

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

January 1, 2019

28,412

4,638

916

6,620

241

40,827

December 31, 2019

27,615

3,244

620

6,839

0

38,318

Acquisitions

20 Acquisitions

20.1 Acquisitions in 2020

At December 31, 2020, Comet acquired sole ownership of Object Research Systems (ORS) Inc., Montreal, Canada. ORS is a leading provider of 3D visualization and analysis solutions for research and industrial applications. Through the acquisition, Comet has expanded its expertise in machine learning and artificial intelligence. The subsidiary is reported under the Group’s IXS division.

20.2 Acquisitions in 2019

In fiscal year 2019, no companies were acquired or divested, and there were no changes in the ownership interests that the Group controlled in companies.

20.3 Acquired net assets

The assets and liabilities identified within Object Research Systems (ORS) Inc. at the acquisition date are shown in the following table.

 

 

 

In thousands of CHF

 

Fair value at acquisition date

Cash and cash equivalents

 

488

Trade receivables

 

152

Other receivables

 

11

Tax receivables

 

459

Property, plant and equipment

 

34

Right-of-use assets

 

69

Intangible assets – brand name

 

2

Intangible assets – technology

 

2,667

Intangible assets – client relationships

 

1,793

Total assets

 

5,677

Trade payables

 

(8)

Other payables

 

(235)

Accrued expenses

 

(78)

Short term lease liabilities

 

(23)

Deferred taxes

 

(1,019)

Non-current lease liabilities

 

(46)

Total liabilities

 

(1,408)

Total identified net assets, at fair value

 

4,268

Total consideration transferred

 

9,046

Goodwill, capitalized

 

4,778

The measurement of the assets and liabilities will be completed within fiscal year 2021.

The purchase was treated as a share deal and therefore no deferred taxes on the goodwill arose at the acquisition date. In the future, deferred taxes are expected to be incurred on the intangible assets capitalized (i.e., on technology and client relationships). 

20.4 Purchase price

 

 

In thousands of CHF

Cash flow from acquisition

Non-contingent consideration

7,620

Purchase price holdback at date of acquisition

1,426

Total consideration

9,046

Liability for purchase price adjustment

(167)

Cash and cash equivalents acquired

(488)

Net cash outflow on acquisition

8,391

The non-contingent consideration was paid in cash, with the exception of the liability for purchase price adjustment at the balance sheet date. As part of the acquisition, a purchase price holdback of CHF 1.4 million was agreed for warranties regarding the acquired software technology. This purchase price holdback was paid into an escrow account (see note 14).

To ensure the full transfer of expertise, arrangements for contingent compensation of CHF 1.5 million were agreed with key personnel. This is deemed compensation for post-combination services and is therefore not counted as part of the consideration for the acquisition. Cash for the payment of this contingent compensation was likewise transferred to an escrow account (see note 14).

20.5 Effect on consolidated results

The 2020 consolidated income statement does not include any sales or net income from the acquisition, as the transaction closed on December 31, 2020.

If the acquisition had been completed one year earlier, at January 1, 2020, additional sales of CHF 1.6 million and a net loss of CHF 0.5 million from the subsidiary would have been recognized by the Comet Group in fiscal 2020.

20.6 Transaction costs

The transaction costs of CHF 0.3 million incurred are recognized in general and administrative expenses. 

Impairment test of goodwill and intangible assets with indefinite useful lives

21 Impairment test of goodwill and intangible assets with indefinite useful lives

The impairment test for goodwill and other intangible assets with indefinite useful lives was performed as at September 30, 2020. For the purpose of the impairment test, the assets to be tested were allocated to and measured as the following two cash generating units, at the level of the IXS division and (within the IXM division) at the level of the IXT business unit:

  • X-Ray Systems (IXS), as the relevant cash generating unit for all activities of the historically acquired Yxlon group and for the FeinFocus product group, with the exception of the generator business;
  • Industrial X-Ray Technology (IXT), for the generator business acquired as part of the acquisition of Yxlon.

The impairment test is based on the value in use method. The recoverable amount is determined from the present value of the future cash flows (DCF valuation). The calculations are based on the Board-approved rolling forecast current at the time of the impairment test, and on the Board-approved rolling medium-term plan for 2021 to 2023. Using experience-based estimates, the amounts in the forecast and in the medium-term plan are based on growth projections for net sales, operating income and other parameters, taking into consideration the estimated market trends in the various regions. Cash flows beyond the forecast period are extrapolated using an assumed growth rate of 1% to 1.5%, which is within the expected rate of market growth. The assumptions applied in determining value in use correspond to the expected long-term average growth rate of the X-Ray Systems division’s operating business and of the generator business of Industrial X-Ray Modules. Input variables with a critical impact on the outcome of the impairment test are the assumed rates of sales growth and the projected trend in operating income.

In connection with the acquisition of Object Research Systems (ORS) Inc. effective December 31, 2020, the X-Ray Systems (IXS) division recognized goodwill in the amount of CHF 4.8 million. This goodwill was not tested for impairment.

 

 

 

 

 

 

 

 

 

 

 

 

Carrying amount of the assets tested

 

 

 

 

 

 

 

 

 

 

 

 

X-Ray Systems (IXS) CGU

 

Industrial X-Ray Technology (IXT) CGU

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

In thousands of CHF

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Goodwill

23,341

 

18,573

 

6,873

 

6,873

 

30,214

 

25,446

Trademarks (Yxlon)

2,171

 

2,169

 

 

0

 

2,171

 

2,169

Total carrying amount

25,512

 

20,742

 

6,873

 

6,873

 

32,385

 

27,615

 

 

 

 

 

 

 

 

Assumptions applied in the valuation model

 

 

 

 

 

 

 

 

X-Ray Systems (IXS) CGU

 

Industrial X-Ray Technology (IXT) CGU

 

 

 

 

 

 

 

 

 

2020

 

2019

 

2020

 

2019

Discount rate (WACC) before tax

12.0%

 

12.5%

 

11.1%

 

11.4%

Growth rate of terminal value

1.0%

 

1.5%

 

1.5%

 

1.5%

Sensitivities to the assumptions applied in the valuation model

The measurement of the values in use of the X-Ray Systems CGU (IXS) and the Industrial X-Ray Technology CGU (IXT) is sensitive to the following assumptions in the planning period (2021 to 2023):

  • Growth assumptions: Sales revenue is projected by product group and region. Based on the recovering situation of 2020 as the starting point, the average annual rate of sales growth is assumed to be 17% for IXS (prior year: 7%) and 12% for IXT (prior year: 11%).
  • Gross margins: Gross margins in the medium term are expected to average approximately 37% for IXS (prior year: 38%) and 44% for IXT (prior year: 46%). Target achievement also depends in part on the trend in the purchasing prices of materials.
  • Foreign exchange rates: The movement in exchange rates between the Swiss franc and the euro and US dollar has an effect on company value. The forecasts are based on September 2020 exchange rates.
  • Discount rate (WACC): The capital costs were determined based on borrowing costs (before tax) and on the long-term risk-free rate, a small-cap premium, and a market risk premium weighted by a Comet-specific beta factor.

No impairment was recognized in the year under review and Comet believes that, with a realistic change in the material assumptions, the recoverable amount would not fall below the carrying amount.

Debt

22 Debt

On April 20, 2016 a five-year, CHF 60 million bond was issued. The bond has a coupon rate of 1.875% and is listed on the SIX Swiss Exchange (ticker symbol COT16; Swiss security number 32061943). Its effective interest rate is 2%. In the first half of 2020 the bond, which is due April 20, 2021 and was recognized at CHF 60 million in the balance sheet at December 31, 2020, was reclassified from non-current to current debt. The Group did not have non-current debt at December 31, 2020.

At the end of the fiscal year under review, Comet had undrawn credit facilities of CHF 58.5 million (prior year: CHF 46.6 million). Of this total, CHF 6.2 million (prior year: CHF 4.3 million) was reserved for hedging transactions.

22.1 Movement in debt

 

 

 

 

 

 

 

Fiscal year 2020

 

 

 

 

 

 

In thousands of CHF

Jan. 1, 2020

Cash flows

Reclassif. from non-current to current

Unwinding of discount, and remeasurement

Foreign currency translation differences

Dec. 31, 2020

Current debt

12,000

(12,000)

59,893

83

59,976

Non-current debt

59,893

(59,893)

Total debt

71,893

(12,000)

83

59,976

 

 

 

 

 

 

 

Fiscal year 2019

 

 

 

 

 

 

In thousands of CHF

Jan. 1, 2019

Cash flows

Reclassif. from non-current to current

Unwinding of discount, and remeasurement

Foreign currency translation differences

Dec. 31, 2019

Current debt

5,000

4,000

3,000

12,000

Non-current debt

62,812

(3,000)

81

0

59,893

Total debt

67,812

4,000

81

0

71,893

Trade and other payables

23 Trade and other payables

 

 

 

 

In thousands of CHF

2020

 

2019

Trade payables

26,733

 

26,306

Sundry payables

4,985

 

3,889

Sales commissions

4,890

 

4,204

Total financial liabilities

36,608

 

34,398

Sales tax and value-added tax

681

 

2,211

Total other payables

681

 

2,211

Total trade and other payables

37,289

 

36,609

Accrued expenses

24 Accrued expenses

 

 

 

 

In thousands of CHF

2020

 

2019

Accrued staff costs

8,613

 

5,733

Other accrued expenses

12,816

 

12,737

Total accrued expenses

21,429

 

18,470

Accrued staff costs consist mainly of the amount accrued for performance-based compensation, and employees’ vacation and overtime credits. The item “other accrued expenses” relates to outstanding invoices and payables of the fiscal year.

Provisions

25 Provisions

 

 

 

 

Fiscal year 2020

 

 

 

In thousands of CHF

Warranties

Other provisions

Total provisions

January 1, 2020

7,113

2,244

9,357

Added

6,235

1,225

7,460

Used

(4,342)

(450)

(4,792)

Released

(2,710)

(482)

(3,192)

Foreign currency translation differences

(295)

(2)

(297)

December 31, 2020

6,000

2,535

8,535

Of which:

 

 

 

January 1, 2020

 

 

 

Current provisions

7,113

2,233

9,346

Non-current provisions

11

11

December 31, 2020

 

 

 

Current provisions

6,000

2,466

8,466

Non-current provisions

69

69

The provision for warranties covers the risk of expenses for defects that have not occurred to date, but could potentially occur until the end of the warranty periods. Warranty provisions are measured based on historical experience.

The divestiture of the ebeam lamp business resulted in a decrease of CHF 0.5 million in warranty provisions in the year under review. The provision was transferred to the new owner with the entire asset group. Further information on the disposal is provided in note 8.

The additions to “other provisions” were related to the ongoing restructuring of the IXS division.

Employee benefits

26 Employee benefits

26.1 Defined benefit plans

Comet maintains defined benefit pension plans in Switzerland and Germany. These plans differ according to their particular purpose (retirement, disability, and/or survivor benefits) and are based on the legal requirements in the respective countries.

Switzerland

The defined benefit plans are managed within a multi-employer pension fund. This is a separate legal entity falling under the Swiss Federal Act on Occupational Retirement, Survivors’ and Disability Pensions (the BVG). The pension fund maintains a main (“base”) plan for employees that provides the legally required benefits, and a supplemental plan that provides benefits in respect of pay components above the statutory range. The base plan was switched to a fully insured pension model effective January 1, 2018, as was the supplemental plan with effect from January 1, 2019. From 2019, all investment risk is thus carried by the pension fund, or ultimately by the insurer. Both plans are administered by the multi-employer pension fund, which is in the form of a foundation organized by an insurance company. The pension fund is managed by the foundation’s board of directors, which is composed of equal numbers of employee and employer representatives and is required to act in the interests of the plan participants.

Plan participants are insured against the financial consequences of old age, disability and death. The benefits are specified in a set of regulations. Minimum levels of benefits are prescribed by law. Contribution levels are set as a percentage of the insured portion of employees’ pay. The retirement benefit is calculated as the retirement pension asset existing at the time of retirement, multiplied by the conversion rate specified in the regulations. Plan participants can opt to receive their principal as a lump sum instead of drawing a pension. The supplemental plan as a rule pays out a lump sum, but a pension can be drawn on request. The amounts of the disability and survivor pensions are defined as a percentage of insured pay.

Germany

In Germany there is a closed plan with pension commitments which no longer has active participants. The obligations in respect of current pension payments and deferred pensions are recognized in the balance sheet.

 

 

 

 

 

 

 

 

Principal actuarial assumptions

 

 

 

 

 

 

 

 

Switzerland

 

Germany

 

 

 

 

 

 

 

 

 

2020

 

2019

 

2020

 

2019

Discount rate at January 1

0.20%

 

0.70%

 

0.60%

 

1.60%

Discount rate at December 31

0.15%

 

0.20%

 

0.40%

 

0.60%

Expected rate of salary increases

1.00%

 

1.00%

 

 

Life tables used as basis for life expectancies

BVG 2015 GT

 

BVG 2015 GT

 

Heubeck 2018 GT

 

Heubeck 2018 GT

Movement in present value of defined benefit obligation, in plan assets and in net carrying amount for defined benefit plans

 

 

 

 

Fiscal year 2020

 

 

 

In thousands of CHF

Present value of defined benefit obligation

Fair value of plan assets

Net carrying amount recognized in balance sheet

January 1

(88,042)

74,268

(13,774)

Current service cost

(3,561)

(3,561)

Administration cost, excl. cost of managing plan assets

(43)

(43)

Current service cost

(3,604)

(3,604)

Interest (expense)/income

(179)

147

(32)

Defined benefit cost recognized in the income statement

(3,782)

147

(3,636)

Return on plan assets, excluding interest income

248

248

Actuarial loss arising from changes in financial assumptions

(463)

(463)

Actuarial gain arising from experience adjustments

1,607

1,607

Defined benefit cost recognized in other comprehensive income

1,144

248

1,392

Benefits paid-in/deposited

15,903

(15,880)

24

Employee contributions

(2,049)

2,049

Employer contributions

2,654

2,654

Foreign currency translation differences

2

(1)

1

December 31

(76,823)

63,484

(13,340)

Reported as an asset

 

 

Reported as a liability

 

 

(13,340)

The average duration of the defined benefit obligation was 12.7 years.

 

 

 

 

Fiscal year 2019

 

 

 

In thousands of CHF

Present value of defined benefit obligation

Fair value of plan assets

Net carrying amount recognized in balance sheet

January 1

(84,452)

74,513

(9,939)

Current service cost

(3,703)

(3,703)

Past service cost

648

648

Administration cost, excl. cost of managing plan assets

(41)

(41)

Current service cost

(3,096)

(3,096)

Interest (expense)/income

(609)

530

(79)

Defined benefit cost recognized in the income statement

(3,705)

530

(3,175)

Return on plan assets, excluding interest income

(39)

(39)

Actuarial losses arising from changes in financial assumptions

(3,668)

(3,668)

Actuarial gains arising from experience adjustments

283

283

Defined benefit cost recognized in other comprehensive income

(3,385)

(39)

(3,425)

Benefits paid-in/deposited

5,474

(5,454)

20

Employee contributions

(2,051)

2,051

Employer contributions

2,712

2,712

Foreign currency translation differences

77

(45)

33

December 31

(88,042)

74,268

(13,774)

Reported as an asset

 

 

Reported as a liability

 

 

(13,774)

For the defined benefit plans in Switzerland, the board of directors of the pension fund had decided in 2019 to reduce the pension conversion rates with effect from the year 2022. These plan amendments led to a negative past service cost (i.e., they resulted in income) and a corresponding reduction in the defined benefit obligation. The positive pre-tax effect of CHF 0.6 million was distributed across the 2019 operating income of the divisions as follows: PCT: CHF 0.2 million; IXM: CHF 0.3 million; EBT: CHF 0.1 million.

 

 

 

 

 

 

 

 

Key figures by country

 

 

 

 

 

 

 

 

Switzerland

 

Germany

 

 

 

 

 

 

 

 

In thousands of CHF

2020

 

2019

 

2020

 

2019

Present value of defined benefit obligation

(74,829)

 

(85,969)

 

(1,994)

 

(2,072)

Fair value of plan assets

62,381

 

73,116

 

1,103

 

1,152

Net carrying amount recognized in the balance sheet

(12,448)

 

(12,854)

 

(892)

 

(920)

 

 

 

 

 

 

 

 

Defined benefit cost recognized in the income statement

(3,631)

 

(3,164)

 

(5)

 

(11)

Defined benefit cost recognized in other comprehensive income

1,382

 

(3,195)

 

10

 

(230)

The employer contributions to the plans in Switzerland for fiscal year 2021 are expected to amount to CHF 3.5 million.

 

 

 

 

Major categories of plan assets

 

 

 

In thousands of CHF

2020

 

2019

Assets from insurance contract

63,484

 

74,268

Total plan assets without a quoted market price

63,484

 

74,268

As the base plan and the supplemental plan are managed under a fully insured model, all investment risk is carried by the pension fund, or ultimately by the insurer. The plan assets are therefore reported as the item “assets from insurance contract”.

Companies of the Comet Group do not make loans to the pension plans and do not utilize any real estate held by the plans.

Sensitivities

The following table presents an analysis of how the reported present value of the defined benefit obligation would change in response to hypothetical changes in the actuarial assumptions.

 

 

 

 

 

 

 

 

Sensitivity of present value of defined benefit obligation to different scenarios

 

 

 

 

 

 

 

 

Switzerland

 

Germany

 

 

 

 

 

 

 

 

In thousands of CHF

2020

 

2019

 

2020

 

2019

Discount rate: 0.25% decrease

77,294

 

88,712

 

2,059

 

2,143

Discount rate: 0.25% increase

72,529

 

83,412

 

1,932

 

2,006

Expected rate of salary growth: 0.25% decrease

74,704

 

85,839

 

1,994

 

2,072

Expected rate of salary growth: 0.25% increase

74,947

 

86,086

 

1,994

 

2,072

Life expectancy: 1-year increase

75,601

 

86,803

 

2,089

 

2,171

Life expectancy: 1-year decrease

74,055

 

85,138

 

1,900

 

1,974

26.2 Defined contribution plans

The contributions paid to defined contribution plans in the fiscal year amounted to CHF 5.7 million (prior year: CHF 6.1 million).

26.3 Length-of-service awards

Comet grants length-of-service awards to its employees after a certain number of years of service, in the form of lump-sum payments that increase in amount with the number of years of employment. The provision for this item changed as follows in the year under review:

 

 

 

 

In thousands of CHF

2020

 

2019

Provision at January 1

1,476

 

1,368

Current service cost

181

 

192

Interest cost

5

 

16

Benefits paid

(143)

 

(135)

Actuarial losses/(gains)

(46)

 

64

Foreign currency translation differences

(5)

 

(29)

Provision at December 31

1,468

 

1,476

Equity capital structure and shareholders

27 Equity capital structure and shareholders

27.1 Capital stock

The capital stock at January 1, 2020 was CHF 7,764,208, divided into 7,764,208 registered shares with a par value of CHF 1.00 per share.

In fiscal year 2020 the capital stock was increased by 3,679 shares from the portion of authorized capital designated for equity-based compensation. Including the increase of 3,679 shares from this portion of authorized capital, Comet Holding AG at December 31, 2020 thus had a new total of CHF 7,767,887 of capital stock, divided into 7,767,887 registered shares with a par value of CHF 1.00 per share. The capital stock is fully paid in.

At its meeting on June 26, 2020 the Board of Directors established that the capital increase from authorized capital for equity-based compensation was properly performed. The information in the commercial register, and the Bylaws of Comet Holding AG, were updated to reflect the change in capital stock.

 

 

 

 

 

 

 

 

2020

 

 

2019

 

Number of shares

Par value in CHF

 

Number of shares

Par value in CHF

January 1

7,764,208

7,764,208

 

7,759,882

7,759,882

Increase in capital from the portion of authorized capital designated for equity compensation

3,679

3,679

 

4,326

4,326

December 31

7,767,887

7,767,887

 

7,764,208

7,764,208

At the balance sheet date, Comet Holding AG held no treasury stock (prior year: nil).

27.2 Authorized capital for equity compensation

Under section 3b of its Bylaws, a portion of the Company’s unissued authorized capital is designated for use only as equity-based compensation (in German this portion is known as “bedingtes Aktienkapital”). In such a capital increase, stock is issued to Executive Committee members and/or Board members of Comet Holding AG. With respect to this portion of authorized capital, the other shareholders’ pre-emptive rights are excluded. The issuance of stock or stock subscription rights is based on a compensation plan (in the form of a written regulation) adopted by the Board of Directors.

In May 2020, in accordance with the compensation plan, the members of the Board of Directors were granted a total of 1,751 shares of stock in payment of CHF 176,028 of fixed retainers due for fiscal year 2019. In addition, as part of their compensation for 2020, the members of the Board of Directors were granted a total of 873 shares in payment of CHF 87,763 of fixed retainers due for the period from January 1, 2020 to the 2020 Annual Shareholder Meeting. The fully paid shares were applied to the retainers due at a price of CHF 100.53 per share.

Members of the Executive Committee were granted a total of 1,055 shares in payment of CHF 106,059 of profit-sharing compensation due for fiscal year 2019. The fully paid shares were applied to the compensation due at a price of CHF 100.53 per share.

As a result of these grants of a total of 3,679 shares made in 2020, the Company’s unissued authorized capital for equity-based compensation showed the following movement:

 

 

 

 

 

 

 

 

2020

 

 

2019

 

Number of shares

Par value in CHF

 

Number of shares

Par value in CHF

January 1

198,912

198,912

 

203,238

203,238

Increase in capital (awards to Board of Directors for prior term’s retainer and to Executive Committee for prior year’s profit-sharing compensation)

(3,679)

(3,679)

 

(4,326)

(4,326)

December 31

195,233

195,233

 

198,912

198,912

At the end of the year, the remaining unissued authorized capital for equity-based compensation was CHF 195,233, or 2.5% of the existing capital stock.

27.3 Authorized capital for other capital increases

At December 31, 2020, in addition to shares outstanding and to unissued authorized capital for equity compensation, the Company had unissued authorized capital for purposes set out in section 3a of the Bylaws (in German: “genehmigtes Aktienkapital”). The Annual Shareholder Meeting on April 23, 2020 authorized the Board of Directors to increase the capital stock, at any time until April 23, 2022, by a maximum of CHF 0.8 million by issuing up to 800,000 fully payable registered shares with a par value of CHF 1.00 per share, which represents 10.3% of the existing capital stock. Increases by way of firm commitment underwriting and increases by part of the total authorized amount are permitted. The amount of the respective issue, the date when entitlement to dividend commences, the terms of any exercise of pre-emptive rights and the nature of the contributions are determined by the Board of Directors.

The Board of Directors is authorized to exclude shareholders’ subscription rights and assign these rights to third parties if the shares in question are to be used for the acquisition of companies via equity swaps or to finance the cash purchase of companies or parts of companies, or to finance new investment projects of Comet Holding AG, or for providing an ownership interest to an industrial partner (either in order to cement a strategic alliance or in the event of a takeover offer for the Company). Stock for which pre-emptive rights are granted but not exercised must be sold by the Company at market prices.

27.4 Significant shareholders

At December 31, 2020 the Company, according to disclosure notifications, had the following significant shareholders (defined for this purpose as shareholders with voting rights representing 3% or more of the Comet capital stock recorded in the Swiss commercial register of companies):

 

 

 

Beneficial owner

Direct shareholder

Share of voting rights as disclosed by shareholders

Haldor Foundation

Tringle Investment Pte Ltd

10.13%

Pictet Asset Management SA (Direction de Fonds)

 

5.07%

UBS Fund Management (Switzerland AG)

 

3.63%

The Company has not been notified of nor is aware of any other shareholders that held 3% or more of its shares. To the best of the Company’s knowledge, there were no voting pool agreements.

Off-balance sheet transactions

28 Off-balance sheet transactions

28.1 Contingent liabilities

As a global company, Comet is exposed to numerous legal risks. These can include, especially, risks relating to product liability, patent law, export regulations, tax law and competition law. The outcomes of currently pending and future legal proceedings cannot be predicted with certainty. Expenses may therefore be incurred that are not, or not fully, covered by insurance benefits and which may thus have effects on the business trajectory and on future financial results.

Provisions are established inasmuch as the financial consequences of a past event can be estimated reliably and the estimate can be confirmed by independent expert opinion. Contingent liabilities that are likely to result in an obligation are included under provisions.

28.2 Other off-balance sheet obligations

As part of its operating activities, Comet had purchase obligations at the balance sheet date totaling CHF 17.5 million (prior year: CHF 16.6 million), of which CHF 9.4 million were current in nature (prior year: CHF 10.7 million) and CHF 8.1 million mature in the five-year period that begins in 2022 (prior year: CHF 5.9 million). The payment obligations arise from off-balance sheet offtake agreements with suppliers, most of which are set out in master agreements.

There were no investment or capital commitments at December 31, 2020 (prior year: nil).

Financial instruments

29 Financial instruments

29.1 Classes of financial instruments

 

 

 

 

 

 

Fiscal year 2020

 

 

 

 

 

In thousands of CHF

Financial assets

Financial liabilities

 

 

FVTPL 1

At amortized cost

FVTPL 1

At amortized cost

Fair value

 

 

 

 

 

 

Cash and cash equivalents

 

74,681

 

 

*

Trade and other receivables, net

 

52,602

 

 

*

Contract assets

 

5,561

 

 

*

Derivatives

394

 

45

 

349

Other assets – financial assets, excluding derivatives

 

3,122

 

 

*

Current debt, fixed rate

 

 

 

59,976

60,180

Trade and other payables

 

 

 

36,608

*

Liability for purchase price holdback for warranties

 

 

 

1,426

*

Lease liabilities

 

 

 

21,842

*

Total

394

135,966

45

119,852

 

Interest income or (expense)

77

(1,916)

 

Gain or (loss) on derivatives

2,155

(216)

 

Change in impairment and losses on trade receivables

 

(438)

 

 

 

Total net gain or (loss) recognized in the income statement

2,155

(361)

(216)

(1,916)

 

1 At fair value through profit or loss.

* The carrying amount approximates fair value.

IFRS require all financial instruments which are held at fair value, and all reported fair values, to be categorized into three classes (or “levels”) according to whether the fair values are based on quoted prices in active markets (Level 1), on models using other observable market data (Level 2), or on models using unobservable inputs (Level 3).

The only financial instruments that Comet recognized at fair value are derivatives held for currency hedging. The measurement of the derivatives falls into Level 2 of the fair value measurement hierarchy under IFRS 13.

 

 

 

 

 

 

Fiscal year 2019

 

 

 

 

 

In thousands of CHF

Financial assets

Financial liabilities

 

 

FVTPL 1

At amortized cost

FVTPL 1

At amortized cost

Fair value

 

 

 

 

 

 

Cash and cash equivalents

 

60,255

 

 

*

Trade and other receivables, net

 

56,138

 

 

*

Derivatives

271

 

41

 

230

Non-current financial assets

 

367

 

 

*

Current debt

 

 

 

12,000

12,042

Trade and other payables

 

 

 

34,398

*

Lease liabilities

 

 

 

13,389

*

Non-current debt, fixed rate

 

 

 

59,893

60,870

Total

271

116,760

41

119,680

 

Interest income or (expense)

108

(1,999)

 

Gain or (loss) on derivatives

636

(1,104)