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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 note 2.4.1 and 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, individual numbers in the consolidated financial statements may not sum precisely to the totals indicated.

02.1 Changes in accounting policies

Revised and new accounting rules

With effect from January 1, 2021, Comet has applied the following new or adjusted IFRS/IFRIC for the first time:

  • 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)

On May 28, 2020, the International Accounting Standards Board (IASB) published an amendment to IFRS 16 concerning COVID-19-relat­ed rent concessions. The amendment was effective from June 1, 2020 and initially applied to rent concessions granted up to and including June 30, 2021. On March 31, 2021, the IASB published an additional amendment to extend the applicability period to cover grant dates up to and including June 30, 2022. Comet applies this practical expedient. However, in the year under review this had no impact on the consolidated financial statements (prior period: relief effect of CHF 0.1 million in income before tax).

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

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

*

Jan. 1, 2022

Fiscal year 2022

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

*

Jan. 1, 2022

Fiscal year 2022

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

*

Jan. 1, 2022

Fiscal year 2022

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

*

Jan. 1, 2023

Fiscal year 2023

IAS 1 – Presentation of Financial Statements: Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)

*

Jan. 1, 2023

Fiscal year 2023

IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (Amendments to IAS 8)

*

Jan. 1, 2023

Fiscal year 2023

IAS 12 - Income Taxes: Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)

*

Jan. 1, 2023

Fiscal year 2023

* 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

Driven by the digitalization of society, the demand for semiconductor chips, and thus for products of the PCT division (vacuum capacitors and matchboxes), continues to be strong. After a decline in 2020, the x-ray divisions, IXM and IXS, are benefiting again from stable demand in their primary end markets: semiconductor & electronics, automotive, aerospace and security. With respect to on-going uncertainties (for example, potential supply chain issues) and geopolitical tensions, Comet critically reviewed the assumptions and estimates that affect the financial position, results of operations and cash flows. In this review, no relevant changes were identified that would have a material impact on these financial statements.

In connection with the COVID-19 pandemic, Comet received no government support in fiscal year 2021 (prior year: government support with a positive effect of CHF 0.9 million on income before tax, mainly consisting of reductions in social security contributions).

02.4 Consolidation

entities

02.4.1 Basis of consolidation

In 2021, there were no changes in the basis of consolidation from the prior year.

Effective November 30, 2020, Comet sold the ebeam lamp business to Tetra Pak eBeam Systems SA, Pully, Switzerland. As a result, the ebeam Technologies division (EBT) was dissolved with effect from January 1, 2021. Therefore, the segment reporting for 2020 has been restated in accordance with IFRS 8. Any activities of the former EBT division that remain with Comet are allocated to the respective divisions, while the divested EBT activities are included under “Corporate” (see notes 4 and 8).

In addition, effective December 31, 2020, Comet acquired sole ownership of the software developer Object Research Systems (ORS) Inc., a leading provider of 3D visualization and analysis solutions for research and industrial applications based in Montreal, Canada. The related information is provided in note 20.

Two subsidiaries, Comet Technologies Malaysia Sdn. Bhd., Penang, Malaysia, and Comet Solutions Taiwan Ltd., Hsinchu County, Taiwan, were founded in fiscal year 2020. 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 and voting rights in %

 

 

2021

 

2020

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

Taastrup, Denmark

100%

 

100%

Comet Technologies Japan KK 1

Yokohama, Japan

100%

 

100%

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

Beijing, China

100%

 

100%

Comet Technologies Malaysia Sdn. Bhd.

Penang, Malaysia

100%

 

100%

Object Research Systems (ORS) Inc.

Montreal, Canada

100%

 

100%

Comet Solutions Taiwan Ltd.

Hsinchu County, Taiwan

100%

 

100%

1 The company was renamed “Comet Technologies Japan KK” from “Yxlon International KK”.

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, 2021

 

Dec. 31, 2020

 

2021

 

2020

USA

USD

1

0.914

 

0.882

 

0.915

 

0.939

Eurozone

EUR

1

1.035

 

1.084

 

1.079

 

1.070

China

CNY

1

0.143

 

0.135

 

0.142

 

0.136

Japan

JPY

100

0.794

 

0.855

 

0.831

 

0.879

Denmark

DKK

1

0.139

 

0.146

 

0.145

 

0.144

Republic of Korea

KRW

1,000

0.768

 

0.812

 

0.797

 

0.796

Malaysia

MYR

1

0.219

 

0.220

 

0.221

 

0.222

Canada

CAD

1

0.718

 

0.692

 

0.729

 

0.692

Taiwan

TWD

100

3.294

 

3.141

 

3.279

 

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

Vehicles and 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).

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. 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

 

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Geographic region

 

 

 

 

 

 

 

 

 

 

Europe

10,644

7,878

33,936

29,116

32,280

21,363

12,137

76,860

70,494

North America

184,871

157,125

13,746

12,980

18,261

15,400

553

216,879

186,057

Asia

110,263

59,516

81,309

58,021

17,907

11,493

1,611

209,479

130,641

Rest of world

312

200

9,381

6,331

811

1,796

297

10,503

8,625

Total

306,091

224,718

138,371

106,449

69,259

50,052

14,598

513,721

395,816

 

 

 

 

Sales split by market sector

 

 

 

In thousands of CHF

2021

 

2020

PCT

 

 

 

Semiconductor

286,329

 

205,171

Others

19,762

 

19,548

Total, PCT

306,091

 

224,718

 

 

 

 

IXS

 

 

 

Automotive

51,254

 

35,430

Electronics

47,276

 

34,972

Science & new materials

21,836

 

21,825

Aerospace

13,587

 

10,508

Others

4,418

 

3,715

Total, IXS

138,371

 

106,449

 

 

 

 

IXM

 

 

 

Non-destructive testing

41,646

 

32,380

Security

12,358

 

8,151

Others

15,254

 

9,522

Total, IXM

69,259

 

50,052

 

 

 

 

Total, EBT

 

14,598

 

 

 

 

Total net sales

513,721

 

395,816

Comet sold the ebeam lamp business to Tetra Pak eBeam Systems SA, Pully, Switzerland, effective November 30, 2020 (see notes 4 and 8).

Unsatisfied performance obligations

The unsatisfied or partly unsatisfied performance obligations (so-called order backlog) as of December 31, 2021 amounted to CHF 255 million (prior year: CHF 166 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 2021 from contract liabilities existing at the beginning of the reporting period amounted to CHF 33.4 million (prior year: CHF 18.4 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 three 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.

Comet sold the ebeam lamp business to Tetra Pak eBeam Systems SA, Pully, Switzerland, effective November 30, 2020. The ebeam Technolo­gies (EBT) division developed, manufactured and marketed compact ebeam sets for the treatment of surfaces in the food and printing in­dustries. 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. Therefore, the segment reporting for fiscal year 2020 has been restated in accordance with IFRS 8. Any activities remaining with Comet are allocated to the respective divisions, while the divested EBT activities are included under “Corporate” for the prior year.

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 2021

 

 

 

 

In thousands of CHF

Plasma Control Technologies (PCT)

X-Ray Systems (IXS)

Industrial X-Ray Modules (IXM)

Elimination of intersegment sales

Corporate

Consolidated

Net sales

 

 

 

 

 

 

External net sales

306,091

138,371

69,259

513,721

Intersegment sales

535

9,687

(10,222)

Total net sales

306,091

138,906

78,946

(10,222)

513,721

Earnings

 

 

 

 

 

 

Segment operating income

71,864

3,634

10,548

294

86,340

Unallocated costs

(2,255)

(2,255)

Operating income

71,864

3,634

10,548

294

(2,255)

84,085

Financing expenses

 

 

 

 

 

(5,106)

Financing income

 

 

 

 

 

3,229

Income before tax

 

 

 

 

 

82,208

Income tax

 

 

 

 

 

(14,771)

Net income

 

 

 

 

 

67,437

 

 

 

 

 

 

 

EBITDA

80,487

8,931

15,292

294

(2,255)

102,749

EBITDA in % of net sales

26.3%

6.4%

19.4%

 

 

20.0%

 

 

 

 

 

 

 

Assets and liabilities at Dec. 31, 2021

 

 

 

 

 

 

Segment assets

153,907

116,142

85,470

134,897

490,415

Segment liabilities

(50,890)

(75,497)

(20,290)

(68,757)

(215,435)

Net assets

103,017

40,645

65,180

66,140

274,981

Other segment information

 

 

 

 

 

 

Expenditure for right-of-use asset

1,165

861

1,597

3,623

Expenditure for property, plant and equipment & intangible assets

6,586

1,870

3,011

11,467

Depreciation, amortization and impairment

8,622

5,297

4,744

18,663

Change in provisions

262

(1,887)

77

(1,549)

Other non-cash expense/(income)

(203)

(293)

(47)

24

400

(119)

Number of employees at year end

826

435

310

1,571

 

 

 

 

 

 

 

Fiscal year 2020 - Restated

 

 

 

 

In thousands of CHF

Plasma Control Technologies (PCT)

X-Ray Systems (IXS)

Industrial X-Ray 1 Modules (IXM)

Elimination of intersegment sales 1

Corporate 1

Consolidated

Net sales

 

 

 

 

 

 

External net sales

224,718

106,449

51,268

13,382

395,816

Intersegment sales

314

10,218

(10,532)

Total net sales

224,718

106,762

61,486

(10,532)

13,382

395,816

Earnings

 

 

 

 

 

 

Segment operating income/(loss)

41,781

(6,677)

4,080

156

2,158

41,498

Unallocated costs

(2,169)

(2,169)

Operating income or (loss)

41,781

(6,677)

4,080

156

(11)

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)

9,040

156

1,091

58,616

EBITDA in % of sales

22.0%

– 0.9%

14.7%

 

 

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

 

 

 

 

 

 

Expenditure for right-of-use asset

3,292

10,279

33

 

 

13,604

Expenditure for property, plant and equipment & intangible assets

8,531

1,090

3,636

254

13,511

Depreciation, amortization and impairment

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

14

1,336

1,860

Number of employees at year end

679

431

293

1,403

1 The ebeam Technologies division (EBT) was dissolved with effect from January 1, 2021. Therefore, the segment reporting for the fiscal year 2020 has been restated in accordance with IFRS 8. Any of the EBT activities remaining with Comet are allocated to the respective divisions, while the divested EBT activities are included under "Corporate".

Reconciliation of aggregate segment assets and liabilities to consolidated results

 

 

 

 

In thousands of CHF

2021

 

2020

Operating segments' assets

355,519

 

337,919

Total cash and cash equivalents

115,533

 

74,681

Other assets

4,863

 

4,791

Tax receivables

2,612

 

1,168

Deferred tax assets

11,398

 

10,653

Comet Holding AG's receivables from third parties

490

 

60

Total assets

490,415

 

429,271

 

 

 

 

Operating segments' liabilities

(146,678)

 

(147,289)

Current and non-current debt

(59,571)

 

(59,976)

Derivatives used for foreign exchange hedging

(177)

 

(45)

Tax payables

(7,132)

 

(4,399)

Deferred tax liabilities

(676)

 

(1,145)

Comet Holding AG's payables to third parties

(1,201)

 

(1,461)

Total liabilities

(215,435)

 

(214,315)

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

2021

 

2020

Switzerland

7,918

 

11,581

Germany

30,887

 

26,914

Rest of Europe

38,055

 

31,998

Total, Europe

76,860

 

70,494

Total, North America

216,879

 

186,057

China

98,561

 

55,101

Japan

26,552

 

21,775

Rest of Asia

84,365

 

53,765

Total, Asia

209,479

 

130,641

Rest of world

10,503

 

8,625

Total

513,721

 

395,816

Property, plant and equipment, right-of-use assets and intangible assets are allocated to the regions based on the country entities’ location. 

 

 

 

 

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

 

 

 

In thousands of CHF

2021

 

2020

Switzerland

107,062

 

108,786

Germany

44,288

 

48,343

North America

13,428

 

14,053

Rest of world

6,743

 

5,918

Total

171,521

 

177,101

04.3 Sales with key accounts

In the year under review, the Plasma Control Technologies division recorded sales of CHF 156 million with its largest customer, which represented 30.4% of Group sales (prior year: CHF 128 million and 32.4%, respectively).

Other operating income

05 Other operating income

 

 

 

 

In thousands of CHF

2021

 

2020

Income from the development of prototypes

2,134

 

3,134

Customers' contributions to development projects

327

 

2,039

Government grants

128

 

227

Miscellaneous income

1,093

 

28

Total other operating income

3,682

 

5,428

Staff costs and staff count

06 Staff costs and staff count

06.1 Staff costs

 

 

 

 

In thousands of CHF

2021

 

2020

Wages and salaries

143,010

 

125,669

Employee benefits

23,246

 

20,505

Total staff costs

166,256

 

146,174

06.2 Staff count

 

 

 

 

 

2021

 

2020

Number of employees (year-end)

1,571

 

1,403

Average full-time equivalents during the year

1,432

 

1,325

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

08.1 Disposal of businesses in 2021

In fiscal year 2021, no businesses were divested and there were no changes in the ownership interests that the Group controlled in companies. 

In January 2021, the liability for purchase price adjustment of CHF 0.3 million (see note 8.2) was paid to Tetra Pak eBeam Systems SA, Pully, Switzerland. 

08.2 Disposal of businesses in 2020

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 was taxable in 2020. The expected tax rate was 13% and the tax effect was therefore CHF 0.5 million.

Amortization, depreciation and impairment

09 Amortization, depreciation and impairment

 

 

 

 

In thousands of CHF

2021

 

2020

Amortization of intangible assets

3,579

 

4,526

Depreciation of right-of-use assets

4,765

 

4,280

Depreciation of property, plant and equipment

10,319

 

10,481

Total amortization and depreciation

18,663

 

19,287

 

 

 

 

Impairment of property, plant and equipment

 

Total impairment

 

Financing income and expenses

10 Financing income and expenses

 

 

 

 

In thousands of CHF

2021

 

2020

Interest expense

1,544

 

1,916

Losses on derivatives used for currency hedging

1,009

 

1,642

Foreign currency translation losses

2,554

 

5,099

Total financing expenses

5,106

 

8,657

 

 

 

 

In thousands of CHF

2021

 

2020

Interest income

222

 

77

Gains on derivatives used for currency hedging

514

 

2,155

Foreign currency translation gains

2,493

 

584

Total financing income

3,229

 

2,816

 

 

 

 

In thousands of CHF

2021

 

2020

Net interest expense

1,322

 

1,838

Net foreign currency translation losses

556

 

4,002

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

2021

 

2020

Current income tax expense in respect of the current year

17,904

 

9,791

Current income tax expense/(credit) in respect of prior years

(1,643)

 

(1,161)

Deferred income tax expense/(credit)

(1,490)

 

(2,802)

Total income tax expense

14,771

 

5,827

11.2 Reconciliation of tax expense

 

 

 

 

In thousands of CHF

2021

 

2020

Income before tax

82,208

 

33,487

Expected income tax at base tax rate of 22% (prior year: 24%)

18,086

 

8,037

Effect of tax rates other than base tax rate

(231)

 

(625)

Effect of tax relief

(1,060)

 

(351)

Effect of non-tax-deductible expenses

88

 

215

Effect of change in tax rate on deferred income tax

16

 

121

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

 

(248)

Effect of credits for R&D and domestic manufacturing

(535)

 

(435)

Effect of income tax from other periods

(1,643)

 

(1,161)

Effect of non-refundable withholding tax

190

 

201

Other effects

(141)

 

74

Income tax reported in the income statement

14,771

 

5,827

Effective income tax rate in % of income before tax

18.0%

 

17.4%

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, Switzerland, in the form of a reduction in cantonal and municipal taxes for the period to 2022. For 2021 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: 

 

 

 

 

 

 

 

2021

 

2020

In thousands of CHF

Assets

Liabilities

 

Assets

Liabilities

Financial instruments

46

(44)

 

46

(95)

Receivables

2,431

(436)

 

4,272

(854)

Inventories

5,778

(1,399)

 

5,420

(2,370)

Property, plant and equipment

154

(430)

 

266

(461)

Right-of-use assets

(5,616)

 

(6,286)

Intangible assets

288

(1,976)

 

353

(2,466)

Trade payables and other liabilities

572

(328)

 

323

(498)

Lease liabilities

5,822

 

6,535

Accrued expenses

2,630

 

1,797

Provisions

1,084

 

886

Employee benefit plan liabilities

1,499

 

1,577

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

647

 

1,061

Total gross deferred tax of Group companies

20,951

(10,229)

 

22,537

(13,030)

Netting of deferred tax by Group companies

(9,553)

9,553

 

(11,885)

11,885

Amounts in the consolidated balance sheet

11,398

(676)

 

10,653

(1,145)

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 141.7 million (prior year: CHF 85.2 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

2021

 

2020

Net asset at January 1

9,508

 

8,397

Origination and reversal of temporary differences recognized in the income statement

1,780

 

3,360

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

287

 

83

Use of tax loss carryforwards

(577)

 

(641)

Deferred tax credit in the income statement

1,490

 

2,802

Deferred tax liability related to the acquisition of a subsidiary

 

(1,019)

Origination and reversal of temporary differences recognized in other comprehensive income

(283)

 

(181)

Foreign currency translation differences

6

 

(490)

Net asset at December 31

10,722

 

9,508

Reported as assets

11,398

 

10,653

Reported as liabilities

(676)

 

(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, 2021, tax loss carryforwards stood at CHF 2.5 million (prior year: CHF 3.2 million). Including tax credits for R&D and domestic manufacturing, the resulting deferred tax assets were CHF 0.6 million (prior year: CHF 1.1 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.

 

 

 

 

 

2021

 

2020

Weighted average number of shares outstanding

7,768,812

 

7,766,108

Net income in thousands of CHF

67,437

 

27,661

Net income per share in CHF, diluted and basic

8.68

 

3.56

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

2021

 

2020

Trade receivables, gross

66,007

 

51,232

Impairment of trade receivables

(950)

 

(933)

Trade receivables, net

65,057

 

50,299

Refundable sales taxes and value-added taxes

2,291

 

2,415

Prepayments to suppliers

1,475

 

1,206

Contract assets

9,793

 

5,561

Sundry receivables

2,151

 

2,303

Total other receivables

15,710

 

11,485

Total trade and other receivables

80,767

 

61,784

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

 

 

 

 

In thousands of CHF

2021

 

2020

January 1

933

 

495

Added

92

 

575

Released

(74)

 

(116)

Foreign currency translation differences

(2)

 

(21)

December 31

950

 

933

The impairment test of trade receivables performed in light of the effects of the COVID-19 pandemic identified no material change in the 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 0.7 million) of trade receivables. Within the item “total other receivables”, 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 2021

 

 

In thousands of CHF

Expected loss rate

Gross carrying amount

Expected credit loss

Net carrying amount

Trade receivables

 

66,007

950

65,057

Not past due

0.3%

59,922

209

59,713

Over 30 days past due, impairment recognized

0.5%

3,133

14

3,118

Over 60 days past due, impairment recognized

0.8%

741

6

736

Over 90 days past due, impairment recognized

1.3%

1,050

13

1,037

Over 120 days past due, impairment recognized

1.8%

124

2

122

Over 150 days past due, impairment recognized

68.0% 1

1,036

706

331

1 Individual impairment allowances included.

 

 

 

 

 

Fiscal year 2020

 

 

In thousands of CHF

Expected loss rate

Gross carrying amount

Expected credit loss

Net carrying amount

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.

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

2021

 

2020

Other assets at fair value through profit or loss

 

 

 

Derivatives used for foreign exchange hedging

133

 

394

Total other assets at fair value through profit or loss

133

 

394

 

 

 

 

Other assets at amortized cost

 

 

 

Lease receivable

2,842

 

1,465

Restricted cash – post-combination compensation

1,171

 

1,506

Restricted cash – purchase price holdback for warranties

718

 

1,426

Other non-current financial assets

184

 

231

Total other assets at amortized cost

4,914

 

4,628

 

 

 

 

Total other assets

5,047

 

5,022

Total current

1,925

 

1,813

Total non-current

3,122

 

3,209

14.2 Other financial liabilities

 

 

 

 

In thousands of CHF

2021

 

2020

Other financial liabilities at fair value through profit or loss

 

 

 

Derivatives used for foreign exchange hedging

176

 

45

Total other financial liabilities at fair value through profit or loss

176

 

45

 

 

 

 

Other financial liabilities at amortized cost

 

 

 

Liability for purchase price holdback for warranties

718

 

1,426

Total other financial liabilities at amortized cost

718

 

1,426

 

 

 

 

Total other financial liabilities

894

 

1,471

Total current

894

 

1,471

14.3 Derivative financial instruments

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

 

 

 

 

In thousands of CHF

2021

 

2020

USD forward exchange contracts

 

 

 

Contract amounts

21,573

 

11,728

Positive fair values

129

 

394

Negative fair values

160

 

1

 

 

 

 

JPY forward exchange contracts

 

 

 

Contract amounts

385

 

2,181

Positive fair values

4

 

Negative fair values

 

11

 

 

 

 

CNY forward exchange contracts

 

 

 

Contract amounts

502

 

1,239

Positive fair values

 

Negative fair values

16

 

33

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 in fiscal year 2020, property, plant and equipment is leased to Tetra Pak eBeam Systems SA, some of it with a financing component (non-variable rent payments). In connection with this, equipment with a residual carrying amount of CHF 1.5 million was reclassified to other assets at the end of 2020. The lease receivable showed the following movement in 2021:

 

 

Lease receivable movement

 

in thousands of CHF

Lease receivable

 

 

January 1, 2021

1,465

Additions

1,688

Accretion of interest

66

Lease payments received

(378)

December 31, 2021

2,842

The maturity analysis of the lease receivable is as follows:

 

 

 

 

 

Lease receivable maturity analysis

 

 

 

 

In thousands of CHF

2022

2023 – 2026

After 2026

Total lease receivable

Maturity analysis as of December 31, 2021

 

 

 

 

Undiscounted lease payments

412

1,407

1,321

3,141

Interest portion

(61)

(176)

(62)

(299)

Lease receivable

351

1,231

1,259

2,842

 

 

 

 

 

 

2021

2022 – 2025

After 2025

Total lease receivable

Maturity analysis as of December 31, 2020

 

 

 

 

Undiscounted lease payments

181

621

737

1,539

Interest portion

(12)

(42)

(19)

(74)

Lease receivable

169

578

718

1,465

 

 

 

 

 

Restricted cash

At the time of 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. An initial purchase price holdback of CHF 1.4 million for warranties regarding acquired software technology was also agreed. For the settlement of these elements, cash was transferred to an escrow account in fiscal year 2020, thus restricting access to these funds (see note 20).

In December 2021, the first payments to the former shareholders of ORS and key ORS personnel were released. The payments included CHF 0.3 million of post-combination compensation and CHF 0.7 million of purchase price holdback. As of December 31, 2021, the restricted cash amounted to CHF 1.9 million after the payments (prior year: CHF 2.9 million). 

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). In December 2021, a first payment of CHF 0.7 million of purchase price holdback was issued. As of December 31, 2021, the liability for purchase price holdback for warranties therefore amounted to CHF 0.7 million.

Inventories

15 Inventories

 

 

 

 

In thousands of CHF

2021

 

2020

Raw materials and semi-finished products

46,176

 

37,646

Work in process

17,111

 

16,198

Finished goods

35,980

 

40,344

Total inventories

99,268

 

94,188

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 2.8 million (prior year: CHF 4.7 million).

Prepaid expenses

16 Prepaid expenses

 

 

 

 

In thousands of CHF

2021

 

2020

Contract costs

539

 

1,754

Other prepaid expenses

3,730

 

2,920

Total prepaid expenses

4,269

 

4,674

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 2.9 million were recognized in the income statement (prior year: CHF 2.4 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 2021

 

 

 

 

 

In thousands of CHF

Real estate

Plant and equipment

Other tangible assets

Assets under construction

Total property, plant and equipment

Cost

 

 

 

 

 

January 1, 2021

97,681

94,593

17,593

7,968

217,834

Additions

34

3,539

3,272

3,098

9,943

Commissioning of assets under construction

276

4,231

826

(5,333)

Reclassifications

33

(33)

Disposals

(1,409)

(2,635)

(4,045)

Foreign currency translation differences

(176)

(66)

(45)

(287)

December 31, 2021

97,991

100,810

18,956

5,688

223,446

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

January 1, 2021

30,689

60,998

13,517

105,204

Additions

2,518

5,560

2,242

 

10,320

Reclassifications

(0)

25

(25)

 

Disposals

(1,289)

(2,475)

 

(3,763)

Foreign currency translation differences

36

(54)

 

(18)

December 31, 2021

33,207

65,330

13,205

111,743

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

January 1, 2021

66,991

33,595

4,076

7,968

112,629

December 31, 2021

64,784

35,480

5,751

5,688

111,703

The disposals of other tangible assets in the fiscal year included no reclassifications of internally produced demonstration equipment to inventories (prior year: CHF 0.5 million), which thus did not result in an flow of funds.

 

 

 

 

 

 

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

In 2020, 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 was 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 was reclassified in 2020 to other assets (see note 14.4). This reclassification did not lead to an outflow of funds in the consolidated cash flow statement.

Assets pledged or assigned as collateral for Group obligations

At December 31, 2021 and December 31, 2020, all real estate liens (mortgage notes in the amount of CHF 30.0 million) were held within the Group.

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 2021

 

Right-of-use assets

Lease liabilities

In thousands of CHF

Buildings

Equipment

Other assets

Total

January 1, 2021

19,973

626

11

20,610

21,842

Additions

3,236

378

9

3,623

3,623

Disposals

(36)

(0)

(36)

(36)

Depreciation, amortization and impairment

(4,372)

(383)

(10)

(4,765)

Accretion of interest

414

Repayment of lease liabilities

(4,927)

Payment of interest on lease liabilities

(414)

Foreign currency translation differences

(616)

(26)

(642)

(662)

December 31, 2021

18,185

595

10

18,791

19,840

The non-current lease liabilities largely have remaining maturities of two to ten years. The expected future lease payments are presented in note 30.2.3.

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 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

(4,715)

Payment of interest on lease liabilities

(445)

Foreign currency translation differences

(142)

(8)

0

(149)

(162)

December 31, 2020

19,973

626

11

20,610

21,842

The increase in right-of-use assets and in lease liabilities in 2020 was related mainly to the extension of the lease for the Hamburg site.

The composition of the lease expenses in fiscal 2021 and 2020 is shown below:

 

 

 

 

In thousands of CHF

2021

 

2020

Depreciation, amortization and impairment

4,765

 

4,280

Interest expenses

414

 

446

Expenses for short-term leases and other items

59

 

51

Expense for low-value leases

7

 

4

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

33

 

29

Total lease expenses

5,277

 

4,809

Comet has lease agreements containing extension and termination options (see note 2.5). At December 31, 2021, 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, 2021 amounted to CHF 3.0 million due within the subsequent five years (prior year: CHF 5.8 million) and to CHF 9.1 million for option periods of more than five years (prior year: CHF 11.8 million).

Intangible assets

19 Intangible assets

 

 

 

 

 

 

 

Fiscal year 2021

 

 

 

 

 

 

In thousands of CHF

Goodwill and trademarks

Customer lists

Technology

Software

Other intangible assets

Total intangible assets

Cost

 

 

 

 

 

 

January 1, 2021

32,385

21,730

5,023

25,222

122

84,482

Acquisition of a subsidiary

(67)

(67)

Additions

1,473

52

1,525

Disposals

(92)

(9)

(101)

Foreign currency translation differences

(772)

(519)

9

(365)

(1)

(1,649)

December 31, 2021

31,547

21,210

5,032

26,237

164

84,190

 

 

 

 

 

 

 

Accumulated amortization

 

 

 

 

 

 

January 1, 2021

0

17,996

2,012

20,578

34

40,620

Additions

1

1,426

494

1,632

26

3,579

Disposals

(92)

(9)

(101)

Foreign currency translation differences

(560)

(93)

(280)

(1)

(934)

December 31, 2021

1

18,861

2,413

21,837

50

43,163

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

January 1, 2021

32,385

3,734

3,012

4,644

88

43,862

December 31, 2021

31,545

2,349

2,619

4,400

114

41,027

The categories “goodwill and trademarks”, “customer lists” and “technology” were capitalized in connection with business combinations. More details on the acquisition in fiscal year 2020 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 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

Acquisitions

20 Acquisitions

20.1 Acquisitions in 2021

In fiscal year 2021, no companies were acquired and there were no changes in the ownership interests that the Group controlled in companies. 

20.2 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.

20.3 Acquired net assets

The measurement of the assets and liabilities was completed within fiscal year 2021. The liability for purchase price adjustment had been estimated at CHF 0.2 million as of December 31, 2020. The actual payment of the purchase price adjustment amounted to CHF 0.1 million, while the remaining CHF 0.1 million was recorded as a goodwill adjustment in the period under review. As a result, the presentation of the assets and liabilities identified at acquisition has been restated to the following:

 

 

 

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 1

 

8,978

Goodwill, capitalized 1

 

4,710

1 After adjustment of the liability for purchase price and goodwill in 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 1

7,552

Purchase price holdback at date of acquisition

1,426

Total consideration

8,978

Liability for purchase price adjustment 1

(101)

Cash and cash equivalents acquired

(488)

Net cash outflow on acquisition

8,389

1 After adjustment of the liability for purchase price and goodwill in fiscal year 2021.

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 did 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 were recognized in general and administrative expenses in fiscal year 2020. 

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, 2021. 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 2022 to 2024. 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 1.5%, 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 4.7 million (see note 20). The goodwill was included in the impairment testing as of September 30, 2021.

 

 

 

 

 

 

 

 

 

 

 

 

Carrying amount of the assets tested

 

 

 

 

 

 

 

 

 

 

 

 

X-Ray Systems (IXS) CGU

 

Industrial X-Ray Technology (IXT) CGU

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

In thousands of CHF

2021

 

2020

 

2021

 

2020

 

2021

 

2020

Goodwill

22,601

 

23,341

 

6,873

 

6,873

 

29,475

 

30,214

Trademarks (Yxlon)

2,071

 

2,171

 

 

 

2,071

 

2,171

Total carrying amount

24,672

 

25,512

 

6,873

 

6,873

 

31,545

 

32,385

 

 

 

 

 

 

 

 

Assumptions applied in the valuation model

 

 

 

 

 

 

 

 

X-Ray Systems (IXS) CGU

 

Industrial X-Ray Technology (IXT) CGU

 

 

 

 

 

 

 

 

 

2021

 

2020

 

2021

 

2020

Discount rate (WACC) before tax

10.3%

 

12.0%

 

11.2%

 

11.1%

Growth rate of terminal value

1.5%

 

1.0%

 

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 (2022 to 2024):

  • Growth assumptions: Sales revenue is projected by product group and region. Based on the recovering situation of 2021 as the starting point, the average annual rate of sales growth is assumed to be 9.5% for IXS (prior year: 17%) and 16.2% for IXT (prior year: 12%).
  • Gross margins: Gross margins in the medium term are expected to average approximately 39% for IXS (prior year: 37%) and 50% for IXT (prior year: 44%). 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 2021 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

The bond maturing on April 20, 2021 was repaid and refinanced using a new bond issued by Comet Holding AG on April 20, 2021 in the amount of CHF 60 million. The bond was issued at par. The term of the bond is five years and it matures on April 20, 2026. The fixed coupon rate over the term is 1.30%, payable annually on April 20. The bond is listed on the SIX Swiss Exchange (Swiss security number 110 109 656, ticker symbol COT21).

At the end of the fiscal year under review, Comet had undrawn credit facilities of CHF 57.3 million (prior year: CHF 58.5 million). Of this total, CHF 3.8 million (prior year: CHF 6.2 million) was reserved for hedging transactions.

22.1 Movement in debt

 

 

 

 

 

 

 

Fiscal year 2021

 

 

 

 

 

 

In thousands of CHF

Jan. 1, 2021

Cash flows

Reclassif. from non-current to current

Unwinding of discount, and remeasurement

Foreign currency translation differences

Dec. 31, 2021

Current debt

59,976

(60,000)

24

Non-current debt

59,503

68

59,571

Total debt

59,976

(497)

93

59,571

 

 

 

 

 

 

 

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

Trade and other payables

23 Trade and other payables

 

 

 

 

In thousands of CHF

2021

 

2020

Trade payables

26,095

 

26,733

Sundry payables

5,428

 

4,985

Sales commissions

3,593

 

4,890

Total financial liabilities

35,116

 

36,608

Sales tax and value-added tax

1,321

 

681

Total other payables

1,321

 

681

Total trade and other payables

36,437

 

37,289

Accrued expenses

24 Accrued expenses

 

 

 

 

In thousands of CHF

2021

 

2020

Accrued staff costs

21,256

 

8,613

Other accrued expenses

14,460

 

12,816

Total accrued expenses

35,716

 

21,429

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 2021

 

 

 

In thousands of CHF

Warranties

Other provisions

Total provisions

January 1, 2021

6,000

2,535

8,535

Added

6,717

307

7,024

Used

(5,624)

(1,524)

(7,148)

Released

(1,015)

(410)

(1,425)

Foreign currency translation differences

59

(35)

24

December 31, 2021

6,137

873

7,010

Of which:

 

 

 

January 1, 2021

 

 

 

Current provisions

6,000

2,466

8,466

Non-current provisions

69

69

December 31, 2021

 

 

 

Current provisions

6,137

605

6,743

Non-current provisions

267

267

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.

Employee benefits

26 Employee benefits

26.1 Employee benefit plan liabilities

The employee benefit plan liabilities of the Group are summarized in the following table. 

 

 

 

 

In thousands of CHF

2021

 

2020

Defined benefit liability in Switzerland

10,806

 

12,448

Defined benefit liability in Germany

776

 

892

Total defined benefit liability

11,582

 

13,340

Provision for length-of-service awards

1,415

 

1,468

Total employee benefit plan liabilities

12,997

 

14,808

26.2 Defined benefit plans

Comet maintains defined benefit pension plans in Switzerland and Germany. These plans differ according to their particular purpose and are based on the legal requirements in the respective countries.

Switzerland

The defined benefit plans are managed within a collective foundation. 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. Both plans are managed under a fully insured pension model and thus, all investment risk is carried by the pension fund, or ultimately by the insurer. The plans are administered by the collective foundation, 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. 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

 

 

 

 

 

 

 

 

 

2021

 

2020

 

2021

 

2020

Discount rate at January 1

0.15%

 

0.20%

 

0.40%

 

0.60%

Discount rate at December 31

0.30%

 

0.15%

 

0.80%

 

0.40%

Expected rate of salary increases

1.00%

 

1.00%

 

 

Life tables used as basis for life expectancies

BVG 2020 GT

 

BVG 2015 GT

 

Heubeck 2018 GT

 

Heubeck 2018 GT

In the year under review, the life expectancy for Switzerland is based on the generation table BVG 2020, which is the latest available database (prior year: generation table BVG 2015). 

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

 

 

 

 

Fiscal year 2021

 

 

 

In thousands of CHF

Present value of defined benefit obligation

Fair value of plan assets

Net carrying amount recognized in balance sheet

January 1

(76,823)

63,484

(13,340)

Current service cost

(3,482)

(3,482)

Past service cost

545

545

Administration cost, excl. cost of managing plan assets

(37)

(37)

Current service cost

(2,974)

(2,974)

Interest (expense)/income

(169)

101

(68)

Defined benefit cost recognized in the income statement

(3,143)

101

(3,042)

Return on plan assets, excluding interest income

310

310

Actuarial gain arising from changes in financial assumptions

746

746

Actuarial gain arising from changes in demographic assumptions

1,786

1,786

Actuarial loss arising from experience adjustments

(889)

(889)

Defined benefit cost recognized in other comprehensive income

1,644

310

1,954

Benefits paid-in/deposited

1,015

(996)

19

Employee contributions

(2,107)

2,107

Employer contributions

2,790

2,790

Foreign currency translation differences

86

(50)

36

December 31

(79,329)

67,747

(11,582)

Reported on the face of the balance sheet as:

 

 

 

an asset

 

 

a liability

 

 

(11,582)

The board of directors of the foundation decided in March 2021 to reduce the pension conversion rates with effect from the year 2022 and 2023. Under IAS 19, 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 with a positive pre-tax effect of CHF 0.5 million.

The average duration of the defined benefit obligation was 11.7 years.

 

 

 

 

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 on the face of the balance sheet as:

 

 

 

an asset

 

 

a liability

 

 

(13,340)

 

 

 

 

 

 

 

 

Key figures by country

 

 

 

 

 

 

 

 

Switzerland

 

Germany

 

 

 

 

 

 

 

 

In thousands of CHF

2021

 

2020

 

2021

 

2020

Present value of defined benefit obligation

(77,525)

 

(74,829)

 

(1,804)

 

(1,994)

Fair value of plan assets

66,719

 

62,381

 

1,028

 

1,103

Net carrying amount recognized in the balance sheet

(10,806)

 

(12,448)

 

(776)

 

(892)

 

 

 

 

 

 

 

 

Defined benefit cost recognized in the income statement

(3,038)

 

(3,631)

 

(4)

 

(5)

Defined benefit cost recognized in other comprehensive income

1,890

 

1,382

 

64

 

10

The employer contributions to the plans in Switzerland for fiscal year 2022 are expected to amount to CHF 3.6 million.

 

 

 

 

Major categories of plan assets

 

 

 

In thousands of CHF

2021

 

2020

Assets from insurance contract

67,747

 

63,484

Total plan assets without a quoted market price

67,747

 

63,484

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 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

2021

 

2020

 

2021

 

2020

Discount rate: 0.25% decrease

79,861

 

77,294

 

1,749

 

2,059

Discount rate: 0.25% increase

75,339

 

72,529

 

1,859

 

1,932

Expected rate of salary growth: 0.25% decrease

77,405

 

74,704

 

1,803

 

1,994

Expected rate of salary growth: 0.25% increase

77,633

 

74,947

 

1,803

 

1,994

Life expectancy: 1-year increase

78,282

 

75,601

 

1,889

 

2,089

Life expectancy: 1-year decrease

76,770

 

74,055

 

1,717

 

1,900

26.3 Defined contribution plans

The contributions paid to defined contribution plans in the fiscal year amounted to CHF 6.8 million (prior year: CHF 5.7 million).

26.4 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

2021

 

2020

Provision at January 1

1,468

 

1,476

Current service cost

184

 

181

Interest cost

4

 

5

Benefits paid

(188)

 

(143)

Actuarial losses/(gains)

(10)

 

(46)

Foreign currency translation differences

(43)

 

(5)

Provision at December 31

1,415

 

1,468

Equity capital structure and shareholders

27 Equity capital structure and shareholders

27.1 Capital stock

The capital stock at January 1, 2021 was CHF 7,767,887, divided into 7,767,887 registered shares with a par value of CHF 1.00 per share.

In fiscal year 2021 the capital stock was increased by 1,647 shares from the portion of authorized capital designated for equity-based compensation. Including the increase of 1,647 shares from this portion of authorized capital, Comet Holding AG at December 31, 2021 thus had a new total of CHF 7,769,534 of capital stock, divided into 7,769,534 registered shares with a par value of CHF 1.00 per share. The capital stock is fully paid in.

At its meeting on June 10, 2021 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 Articles of Association of Comet Holding AG, were updated to reflect the change in capital stock.

 

 

 

 

 

 

 

 

2021

 

 

2020

 

Number of shares

Par value in CHF

 

Number of shares

Par value in CHF

January 1

7,767,887

7,767,887

 

7,764,208

7,764,208

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

1,647

1,647

 

3,679

3,679

December 31

7,769,534

7,769,534

 

7,767,887

7,767,887

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

27.2 Authorized capital for equity compensation

Under article 3b of its Articles of Association, 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 2021, in accordance with the compensation plan, the members of the Board of Directors were granted a total of 570 shares of stock in payment of CHF 131,864 of fixed retainers due for fiscal year 2020. In addition, as part of their compensation for 2021, the members of the Board of Directors were granted a total of 283 shares in payment of CHF 65,469 of fixed retainers due for the period from January 1, 2021 to the 2021 Annual Shareholder Meeting. The fully paid shares were applied to the retainers due at a price of CHF 231.34 per share.

Members of the Executive Committee were granted a total of 794 shares in payment of CHF 183,684 of profit-sharing compensation due for fiscal year 2020. The fully paid shares were applied to the compensation due at a price of CHF 231.34 per share.

The shares are issued at the applicable stock price at the time of issuance, which may differ from the above-mentioned allotment price. As a result of these grants of a total of 1,647 shares made in 2021, the Company’s unissued authorized capital for equity-based compensation showed the following movement:

 

 

 

 

 

 

 

 

2021

 

 

2020

 

Number of shares

Par value in CHF

 

Number of shares

Par value in CHF

January 1

195,233

195,233

 

198,912

198,912

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

(1,647)

(1,647)

 

(3,679)

(3,679)

December 31

193,586

193,586

 

195,233

195,233

At the end of the year, the remaining unissued authorized capital for equity-based compensation was CHF 193,586, or 2.5% of the existing capital stock.

27.3 Authorized capital for other capital increases

At December 31, 2021, in addition to shares outstanding and to unissued authorized capital for equity compensation, the Company had unissued authorized capital for purposes set out in article 3a of the Articles of Association (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, 2021 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

UBS Fund Management (Switzerland AG)

 

5.23%

Pictet Asset Management SA (Direction de Fonds)

 

4.85%

Credit Suisse Funds AG

 

3.22%

The Capital Group Companies Inc.

Capital Research and Management Company

3.16%

Universal Investment Gesellschaft mit beschränkter Haftung

 

3.04%

Blackrock Inc.

 

3.02%

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, trade secret misappropriation, patent law, export regulations, tax law and competition law. The outcomes of currently pending and future legal proceedings cannot be predicted with certainty and may thus have adverse or positive 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 37.9 million (prior year: CHF 17.5 million), of which CHF 20.3 million were current in nature (prior year: CHF 9.4 million) and CHF 17.6 million mature in the five-year period that begins in 2023 (prior year: CHF 8.1 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, 2021 (prior year: nil).

Financial instruments

29 Financial instruments

29.1 Classes of financial instruments

 

 

 

 

 

 

Fiscal year 2021

 

 

 

 

 

In thousands of CHF

Financial assets

Financial liabilities

 

 

FVTPL 1

At amortized cost

FVTPL 1

At amortized cost

Fair value

 

 

 

 

 

 

Cash and cash equivalents

115,533

*

Trade and other receivables, net

67,208

*

Derivatives

133

176

(44)

Other assets – financial assets, excluding derivatives

3,744

*

Trade and other payables

35,116

*

Liability for purchase price holdback for warranties

718

*

Lease liabilities

19,840

*

Non-current debt, fixed rate

59,571

62,820

Total

133

186,484

176

115,244

 

Interest income or (expense)

222

(1,544)

 

Gain or (loss) on derivatives

514

(1,009)

 

Change in impairment and losses on trade receivables

(17)