Review of 2021

Review of 2021

Comet delivers strong performance.

In the second year of the COVID-19 pandemic, Comet again achieved robust results. The Group successfully managed the pandemic-related bottlenecks in the global supply chains: Comet maintained the ability to deliver dependably to customers. The Group continued on its growth trajectory and achieved a strong improvement in EBITDA operating earnings.

2021 financials in 90 seconds.

“Our focus on executing the strategy paid off: Comet reached all-time high EBITDA operating earnings of CHF 102.7 million.”

Lisa Pataki

CFO of the Comet Group

Net sales grew by 29.8% from the prior year to CHF 513.7 million. Thanks to strong sales volumes and more efficient processes, the EBITDA margin improved from 14.8% to 20.0%. Net income rose by 143.8% to a new all-time high of CHF 67.4 million, or CHF 8.68 per share. The increase in profitability buoyed free cash flow, which grew from CHF 41.6 million to CHF 57.8 million. The Group’s balance sheet is very sound, with an equity ratio of 56.1% and a net debt/EBITDA ratio of –0.4.

Substantial growth amid the strong demand from digitalization, improving travel conditions and pick up in select automotive areas – overcoming supply bottlenecks

In 2021, the Group took advantage of its opportunities in the semiconductor and electronics industry. This market is booming thanks to the increasing interconnectedness of our world and the accelerated investment triggered by post-COVID-19 shortages and by the trend toward regional independence and resilience, all of which are driving a sharp rise in demand for semiconductors and electronics. In addition, the automotive, aerospace and security inspection markets picked up as travel increased, and despite the resurgence of the pandemic in the final months of the year. By taking swift and proactive measures, Comet was able to maintain its readiness to supply customers in spite of global bottlenecks. Furthermore, Comet continued to see a regional shift in its revenues. In 2020, Asia, Europe, and North America had accounted for a respective 33.0%, 17.8% and 47.0% of Group sales. In 2021, Asian regional sales grew by 60.3% year-over-year to 40.8% of Group sales. This shift is due both to the efforts of Asian nations to enter the semiconductor industry, and to Comet’s deliberate investments in this region.

The Plasma Control Technologies division, with sales growth of 36.2% to CHF 306.1 million, accounted for the largest portion of the Group’s sales of CHF 513.7 million. The x-ray businesses benefited from their increasing focus on the semiconductor and electronics market, the gradual recovery in their core automotive, aerospace and security markets, and successful new product launches: The X-Ray Systems division grew its sales by 30.1% to CHF 138.9 million, and sales of the X-Ray Modules division rose by 28.4% to CHF 78.9 million.

Net sales in CHF million

EBITDA in CHF million

Significant increase in profitability, ROCE almost doubled

In 2021, the sales growth combined with efficiency measures led to a 75.3% jump in the Comet Group’s operating earnings at EBITDA level from CHF 58.6 million to CHF 102.7 million – despite higher procurement costs due to bottlenecks in raw materials, components and logistics.

The lion’s share of the group’s growth came from Plasma Control Technologies (PCT): Double-digit sales growth and more efficient manufacturing processes helped the division to increase its EBITDA operating earnings from CHF 49.3 million to CHF 80.5 million, corresponding to an EBITDA margin of 26.3%. In the x-ray businesses as well, the high sales volume and efficiency gains through optimized, faster production processes were reflected in earnings. After a loss of CHF 1.0 million in 2020, the X-Ray Systems division (IXS) returned to profitability with EBITDA of CHF 8.9 million and an EBITDA margin of 6.4%. X-Ray Modules (IXM) improved its EBITDA by 69.2% from CHF 9.0 million to CHF 15.3 million, representing a margin of 19.4%.

Group net income rose markedly from CHF 27.7 million to CHF 67.4 million. Return on capital employed increased from 13.6% in the year before to 26.8%.

Comet Group key consolidated financial results

Efficiency, growth, culture – strategy execution broadly successful

Following the successful divestiture of the ebeam business in 2020, 2021 was the first year in which Comet was able to fully focus on the established technologies of plasma control and x-ray, as well as on the expansion of the service business based on artificial intelligence. The fruits of the strategy implementation are evident in all divisions and in all three dimensions of the strategy program: growth, efficiency and culture.

Strengthened product portfolio, full pipeline: With new RF design wins, four x-ray systems releases for faster and more precise non-destructive inspection, and a module portfolio reinforced with several innovations, Comet is positioned for broad-based future growth. Highlights include the first x-ray inspection workflow for electronics evaluation realized in collaboration with the ORS team acquired in 2020 and the first x-ray system sale for the inspection of advanced packages in the semiconductor market. The pipeline of RF power products is also full: Comet’s new RF generator was successful in customer beta tests, with the first sales planned for 2022. A new matching network controller and more powerful vacuum capacitors are close to their market launches.

Increased presence in the growing Asia region: With the opening of the new site in Taiwan, the expanded sales and service organization in Japan and the expansion of the R&D and demo center in Korea, Comet is ideally positioned to serve the needs of its clientele in Asia. Production was also successfully ramped up at the previously opened site in Malaysia.

More efficient organization and processes: In 2021, Comet boosted its productivity per employee. To drive further improvements, Comet established Operational Excellence and Strategic Purchasing functions at Group level. To improve interaction between functions as well as their collaboration across regions worldwide, it also aligned support functions more globally. A worldwide pulse survey of all employees confirmed the good progress made toward becoming a higher-performing organization.

Important advances were achieved in the realignment of the X-Ray Systems business; this led to close collaboration with major customers in the semiconductor industry.

Stronger culture – with shared values, large-scale training and global talent development program: Comet in 2021 refined its common values of collaboration, customer orientation and empowerment. These values were conveyed and reinforced in dedicated training sessions for 240 team leaders, who then each held a workshop for their own team. In addition, Comet enabled sales training for 75 employees and provided corporate governance-related training for all staff. Comet also launched a new program in 2021 to systematically identify and develop its existing talent.

Board changes

Tosja Zywietz was elected to the Board of Directors by shareholders in 2021. He is a proven expert in semiconductors, electronics, sensor technology and operations – areas of great importance for Comet. Tosja Zywietz succeeded Rolf Huber, who after 13 years of service as a Board member had decided not to stand for re-election.

Dividend

At the Annual Shareholder Meeting on April 14, 2022, the Board of Directors will propose a dividend of CHF 3.50 per share (2021: CHF 1.30). This represents a distribution of 40% of the Group’s net income (2021: 37%).