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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 “Comet Yxlon” brands, the Group helps its customers optimize the quality, reliability and efficiency of their products and processes. Comet 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.

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, 2022, Comet has applied the following new or adjusted IFRS/IFRIC for the first time:

  • IAS 37 – Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
  • IAS 16 – Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
  • IFRS 3 – Business Combinations: Reference to the Conceptual Framework (Amendments to IFRS 3)

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: nil).

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 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

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

*

Jan. 1, 2024

Fiscal year 2024

IFRS 16 – Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)

*

Jan. 1, 2024

Fiscal year 2024

IAS 1 – Non-current Liabilities with Covenants (Amendments to IAS 1)

*

Jan. 1, 2024

Fiscal year 2024

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

02.3 Correction in the presentation of contract assets and contract liabilities

As part of a review of the finance processes, Comet challenged the presentation of contract assets and contract liabilities and concluded that prepayments from clients in contract liabilities should have been netted with already invoiced contract assets in “trade and other receivables”. The adjustment amounts to CHF 8.1 million in prior year. 

The prior-year comparatives have been restated as shown below. These restatements have no effect on net loss/income.

 

 

 

 

 

 

 

In thousands of CHF

Note

Dec. 31, 2022

Dec. 31, 2021 - Restated

 

Adjustment

Dec. 31, 2021 - Reported

Assets

 

 

 

 

 

 

Trade and other receivables

12

89,103

72,692

 

(8,075)

80,767

Total current assets

 

344,761

296,299

 

(8,075)

304,373

Total assets

 

556,801

482,341

 

(8,075)

490,415

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

Contract liabilities

3

16,609

27,086

 

(8,075)

35,161

Total current liabilities

 

128,002

117,957

 

(8,075)

126,033

Total liabilities

 

225,269

207,359

 

(8,075)

215,435

Total equity attributable to shareholders of Comet Holding AG

 

331,532

274,981

 

274,981

Total equity attributable to shareholders of Comet Holding AG in %

 

59.5%

57.0%

 

 

56.1%

Total liabilities and shareholders' equity

 

556,801

482,341

 

(8,075)

490,415

Interim Report 2022

The Board of Directors of Comet also approved retrospective restatements in the Interim Report 2022 Comet issued on July 12, 2022. The adjustment of trade and other receivables and contract liabilities amounted to CHF 4.2 million. These restatements have no effect on net loss/income.

02.4 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 18 and 19): 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 23) are, by definition, liabilities of uncertain amount. Future events can thus lead to adjustments that affect income.
  • Deferred tax assets (see note 10) 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 24): 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 24.
Business environment, including impacts of COVID-19

Driven by the digitalization of society, the underlying long-term demand for semiconductor chips, and thus for products of the PCT division (vacuum capacitors and RF impedance matching networks), continues to be strong. In 2022, the x-ray divisions, IXM and IXS, benefited again from robust demand in their primary end markets: semiconductor & electronics, automotive, aerospace and security. Although the economic environment deteriorated toward the end of the year and is likely to weigh on business performance in the short term, robust growth is expected in our markets and – thus for Comet – in the medium to long term.

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.

Comet received no pandemic-related government support in fiscal year 2022 (prior year: nil).

02.5 Consolidation

02.5.1 Basis of consolidation

In 2022, there were no changes in the basis of consolidation from the prior year.

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

 

 

 

 

 

Company

Registered office

Equity interest and voting rights in %

 

 

2022

 

2021

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%

Comet Yxlon GmbH 1

Hamburg, Germany

100%

 

100%

Comet Technologies Denmark A/S

Taastrup, Denmark

100%

 

100%

Comet Technologies Japan KK

Yokohama, Japan

100%

 

100%

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

Beijing, China

100%

 

100%

Comet Technologies Malaysia Sdn. Bhd.

Penang, Malaysia

100%

 

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 Yxlon GmbH” from “Yxlon International GmbH”.

02.5.2 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 partly 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, 2022

 

Dec. 31, 2021

 

2022

 

2021

USA

USD

1

0.925

 

0.914

 

0.955

 

0.915

Eurozone

EUR

1

0.990

 

1.035

 

1.005

 

1.079

China

CNY

1

0.134

 

0.143

 

0.142

 

0.142

Japan

JPY

100

0.705

 

0.794

 

0.731

 

0.831

Denmark

DKK

1

0.133

 

0.139

 

0.135

 

0.145

Republic of Korea

KRW

1,000

0.734

 

0.768

 

0.742

 

0.797

Malaysia

MYR

1

0.210

 

0.219

 

0.217

 

0.221

Canada

CAD

1

0.683

 

0.718

 

0.734

 

0.729

Taiwan

TWD

100

3.007

 

3.294

 

3.209

 

3.279

02.6 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. In principle, 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 include short-term highly liquid cash investments and time deposits with original maturities of up to three months. Time deposits and similar instruments with original maturities of more than three months, but less than twelve months, are classified as other current financial assets.

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 and liabilities 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 and liabilities are recognized at fair value in the balance sheet. Changes in fair 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. In addition, Comet evaluates at year-end whether there are any indications of impairment of non-financial assets. 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.

Net sales

03 Net sales

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)

Consolidated

 

2022

2021

2022

2021

2022

2021

2022

2021

Geographic region

 

 

 

 

 

 

 

 

Europe

9,710

10,644

26,299

33,936

28,341

32,280

64,350

76,860

North America

184,290

184,871

16,167

13,746

21,487

18,261

221,944

216,879

Asia

187,211

110,263

81,017

81,309

24,133

17,907

292,361

209,479

Rest of world

213

312

6,461

9,381

1,065

811

7,739

10,503

Total net sales

381,424

306,091

129,944

138,371

75,026

69,259

586,395

513,721

 

 

 

 

Sales split by market sector

 

 

 

In thousands of CHF

2022

 

2021

PCT

 

 

 

Semiconductor

358,800

 

286,329

Others

22,624

 

19,762

Total, PCT

381,424

 

306,091

 

 

 

 

IXS

 

 

 

Automotive

37,598

 

51,254

Electronics

58,095

 

47,276

Science & new materials

17,359

 

21,836

Aerospace

11,978

 

13,587

Others

4,915

 

4,418

Total, IXS

129,944

 

138,371

 

 

 

 

IXM

 

 

 

Non-destructive testing 1

43,698

 

39,630

Security

14,551

 

12,428

Others

16,778

 

17,202

Total, IXM

75,027

 

69,259

 

 

 

 

 

 

 

 

Total net sales

586,395

 

513,721

1 In the year under review the IXM division revised its sales split by market sector. The prior year was adjusted accordingly.

Unsatisfied performance obligations

The unsatisfied or partly unsatisfied performance obligations (so-called order backlog) as of December 31, 2022 amounted to CHF 200 million (prior year: CHF 255 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 12. Contract liabilities from contracts with customers are presented on the face of 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 2022 from contract liabilities existing at the beginning of the reporting period amounted to CHF 20.3 million (prior year: CHF 33.4 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.

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, as well as financing income, financing expenses 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 2022

 

 

 

 

In thousands of CHF

Plasma Control Technologies (PCT)

X-Ray Systems (IXS)

Industrial X-Ray Modules (IXM)

Elimination of intersegment activity

Corporate

Consolidated

Net sales

 

 

 

 

 

 

External net sales

381,424

129,944

75,026

586,395

Intersegment sales

407

13,616

(14,023)

Total net sales

381,424

130,351

88,643

(14,023)

586,395

Segment operating income

94,497

(3,104)

10,868

(1,227)

101,033

Unallocated costs

(2,059)

(2,059)

Operating income

94,497

(3,104)

10,868

(1,227)

(2,059)

98,975

Interest income

 

 

 

 

 

440

Interest (expenses)

 

 

 

 

 

(1,715)

Net gains or (losses) on derivative fair value

 

 

 

 

 

(192)

Net gains or (losses) on foreign exchange

 

 

 

 

 

(2,140)

Income before tax

 

 

 

 

 

95,368

Income tax

 

 

 

 

 

(17,259)

Net income

 

 

 

 

 

78,109

 

 

 

 

 

 

 

EBITDA

104,915

1,607

15,677

(1,227)

(2,059)

118,913

EBITDA in % of net sales

27.5%

1.2%

17.7%

 

 

20.3%

 

 

 

 

 

 

 

Assets and liabilities at Dec. 31, 2022

 

 

 

 

 

 

Segment assets

216,730

103,496

88,108

148,467

556,801

Segment liabilities

(75,364)

(53,689)

(17,222)

(78,994)

(225,269)

Net assets

141,365

49,807

70,886

69,473

331,532

Other segment information

 

 

 

 

 

 

Additions to right-of-use asset

20,714

1,558

239

22,511

Additions to property, plant and equipment & intangible assets

16,958

2,384

3,412

22,753

Depreciation, amortization and impairment

10,419

4,711

4,809

19,939

Change in provisions

(318)

1,509

(166)

1,026

Other non-cash expense or (income)

(345)

93

4

58

24

(166)

Number of employees at year-end

998

430

335

1,763

 

 

 

 

 

 

 

Fiscal year 2021

 

 

 

 

In thousands of CHF

Plasma Control Technologies (PCT)

X-Ray Systems (IXS)

Industrial X-Ray Modules (IXM)

Elimination of intersegment activity

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

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

Interest income

 

 

 

 

 

222

Interest (expenses)

 

 

 

 

 

(1,544)

Net gains or (losses) on derivative fair value

 

 

 

 

 

(495)

Net gains or (losses) on foreign exchange

 

 

 

 

 

(60)

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

 

 

 

 

 

 

Additions to right-of-use asset

1,165

861

1,597

3,623

Additions to 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 or (income)

(203)

(293)

(47)

24

400

(119)

Number of employees at year-end

826

435

310

1,571

Reconciliation of aggregate segment assets and liabilities to consolidated results

 

 

 

 

In thousands of CHF

2022

 

2021

Operating segments' assets

408,334

 

355,519

Total cash and cash equivalents

125,945

 

115,533

Other assets

3,718

 

4,863

Tax receivables

501

 

2,612

Deferred tax assets

17,940

 

11,398

Comet Holding AG's receivables from third parties

363

 

490

Total assets

556,801

 

490,415

 

 

 

 

Operating segments' liabilities

(146,276)

 

(146,678)

Non-current debt

(59,669)

 

(59,571)

Derivatives used for foreign exchange hedging

(11)

 

(177)

Tax payables

(17,368)

 

(7,132)

Deferred tax liabilities

(676)

 

(676)

Comet Holding AG's payables to third parties

(1,270)

 

(1,201)

Total liabilities

(225,269)

 

(215,435)

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

2022

 

2021

Switzerland

6,271

 

7,918

Germany

26,557

 

30,887

Rest of Europe

31,522

 

38,055

Total, Europe

64,350

 

76,860

Total, North America

221,944

 

216,879

China

105,848

 

98,561

Japan

29,500

 

26,552

Rest of Asia

157,013

 

84,365

Total, Asia

292,361

 

209,479

Rest of world

7,739

 

10,503

Total

586,395

 

513,721

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

2022

 

2021

Switzerland

107,764

 

107,062

Germany

41,127

 

44,288

North America

35,543

 

13,428

Rest of world

6,839

 

6,743

Total

191,273

 

171,521

04.3 Sales with key accounts

In the year under review, the Plasma Control Technologies division recorded sales of CHF 211 million with its largest customer, which represented 36.1% of Group sales (prior year: CHF 156 million and 30.4%, respectively).

Other operating income

05 Other operating income

 

 

 

 

In thousands of CHF

2022

 

2021

Income from the development of prototypes

3,353

 

2,134

Customers' contributions to development projects

94

 

327

Government grants

413

 

128

Miscellaneous income

1,039

 

1,093

Total other operating income

4,899

 

3,682

Staff costs and staff count

06 Staff costs and staff count

06.1 Staff costs

 

 

 

 

In thousands of CHF

2022

 

2021

Wages and salaries

160,286

 

143,010

Employee benefits

26,244

 

23,246

Total staff costs

186,530

 

166,256

06.2 Staff count

 

 

 

 

 

2022

 

2021

Number of employees at year-end

1,763

 

1,571

Average full-time equivalents during the year

1,599

 

1,432

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. 

Amortization, depreciation and impairment

08 Amortization, depreciation and impairment

 

 

 

 

In thousands of CHF

2022

 

2021

Amortization of intangible assets

2,837

 

3,579

Depreciation of right-of-use assets

5,745

 

4,765

Depreciation of property, plant and equipment

10,895

 

10,319

Total amortization and depreciation

19,478

 

18,663

 

 

 

 

Impairment of property, plant and equipment

461

 

Total impairment

461

 

 

 

 

 

Total amortization, depreciation and impairment

19,939

 

18,663

The impairment of CHF 0.5 million was in relation to planning costs incurred due to a planned building conversion that will not be realized in the near future.

Financing income and expenses

09 Financing income and expenses

 

 

 

 

In thousands of CHF

2022

 

2021

Interest income from leases

60

 

67

Interest income other

380

 

155

Total interest income

440

 

222

 

 

 

 

Interest expense for bond

(879)

 

(1,053)

Interest expense for leases

(749)

 

(414)

Interest expense other

(87)

 

(77)

Total interest expenses

(1,715)

 

(1,544)

Net interest income or (expenses)

(1,275)

 

(1,322)

 

 

 

 

Gains on derivative fair value

1,623

 

514

Losses on derivative fair value

(1,815)

 

(1,009)

Net gains or (losses) on derivative fair value

(192)

 

(495)

 

 

 

 

Gains on foreign currency translation

8,065

 

2,493

Losses on foreign currency translation

(10,205)

 

(2,553)

Net gains or (losses) on foreign currency translation

(2,140)

 

(60)

 

 

 

 

Total net financing income or (expense)

(3,607)

 

(1,877)

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

Income tax

10 Income tax

10.1 Current and deferred income tax expense

 

 

 

 

In thousands of CHF

2022

 

2021

Current income tax expense in respect of the current year

26,103

 

17,904

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

(273)

 

(1,643)

Deferred income tax expense/(credit)

(8,572)

 

(1,490)

Total income tax expense

17,259

 

14,771

10.2 Reconciliation of tax expense

 

 

 

 

In thousands of CHF

2022

 

2021

Income before tax

95,368

 

82,208

Expected income tax at base tax rate of 20.5% (prior year: 22%)

19,550

 

18,086

Effect of tax rates other than base tax rate

(223)

 

(231)

Effect of tax relief

(2,310)

 

(1,060)

Effect of non-tax-deductible expenses

70

 

88

Effect of change in tax rate on deferred income tax

60

 

16

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

68

 

Effect of credits for R&D and domestic manufacturing

(809)

 

(535)

Effect of income tax from other periods

(273)

 

(1,643)

Effect of non-refundable withholding tax

667

 

190

Other effects

355

 

(141)

Income tax reported in the income statement

17,259

 

14,771

Effective income tax rate in % of income before tax

18.1%

 

18.0%

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 up to fiscal year 2022. For 2022 the tax reduction amounted to 50% (prior year: 50%).

10.3 Deferred tax assets and liabilities

Deferred tax assets and liabilities can be analyzed as follows: 

 

 

 

 

 

 

 

2022

 

2021

In thousands of CHF

Assets

Liabilities

 

Assets

Liabilities

Financial instruments

46

(102)

 

46

(44)

Receivables

727

(698)

 

2,431

(436)

Inventories

6,656

(516)

 

5,778

(1,399)

Property, plant and equipment

279

(333)

 

154

(430)

Right-of-use assets

(10,973)

 

(5,616)

Intangible assets

216

(986)

 

288

(1,976)

Trade payables and other liabilities

716

(108)

 

572

(328)

Lease liabilities

11,689

 

5,822

Accrued expenses

9,097

 

2,630

Provisions

1,158

 

1,084

Employee benefit plan liabilities

26

(98)

 

1,499

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

468

 

647

Total gross deferred tax of Group companies

31,078

(13,814)

 

20,951

(10,229)

Netting of deferred tax by Group companies

(13,138)

13,138

 

(9,553)

9,553

Amounts in the consolidated balance sheet

17,940

(676)

 

11,398

(676)

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 196.2 million (prior year: CHF 141.7 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.

10.4 Movement in deferred tax assets and liabilities

 

 

 

 

In thousands of CHF

2022

 

2021

Net asset at January 1

10,722

 

9,508

Origination and reversal of temporary differences recognized in the income statement

8,345

 

1,780

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

227

 

287

Use of tax loss carryforwards

 

(577)

Deferred tax credit in the income statement

8,572

 

1,490

Origination and reversal of temporary differences recognized in other comprehensive income

(1,483)

 

(283)

Foreign currency translation differences

(548)

 

6

Net asset at December 31

17,264

 

10,722

Reported as assets

17,940

 

11,398

Reported as liabilities

(676)

 

(676)

10.5 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, 2022, tax loss carryforwards stood at CHF 3.1 million (prior year: CHF 2.5 million). Including tax credits for R&D and domestic manufacturing, the resulting deferred tax assets were CHF 0.5 million (prior year: CHF 0.6 million). The existing loss carryforwards can be carried forward indefinitely.

In the fiscal year, there were unrecognized deferred tax assets on tax loss carryforwards of CHF 1.1 million (prior year: nil).

Earnings per share

11 Earnings per share

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

 

 

 

 

 

2022

 

2021

Weighted average number of shares outstanding

7,772,023

 

7,768,812

Net income in thousands of CHF

78,109

 

67,437

Net income per share in CHF, diluted and basic

10.05

 

8.68

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

Trade and other receivables

12 Trade and other receivables

 

 

 

 

In thousands of CHF

2022

 

2021

Trade receivables, gross

79,217

 

66,007

Impairment of trade receivables

(920)

 

(950)

Trade receivables, net

78,297

 

65,057

Refundable sales taxes and value-added taxes

3,482

 

2,291

Prepayments to suppliers

4,724

 

1,475

Contract assets 1

453

 

1,718

Sundry receivables

2,147

 

2,151

Total other receivables

10,806

 

7,635

Total trade and other receivables

89,103

 

72,692

1 In the year under review and in the prior year, the IXS division's prepayments from customers in "contract liabilities" were netted with already invoiced contract assets in "trade receivables" (see note 2.3).

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

 

 

 

 

In thousands of CHF

2022

 

2021

January 1

950

 

933

Used

(33)

 

Added

444

 

92

Released

(418)

 

(74)

Foreign currency translation differences

(23)

 

(2)

December 31

920

 

950

The impairment test of trade receivables performed 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 0.6 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 2022

 

 

 

 

In thousands of CHF

Expected loss rate

Gross carrying amount

Expected credit loss

Net carrying amount

Trade receivables

 

79,217

920

78,297

Not past due

0.4%

72,937

256

72,681

Over 30 days past due, impairment recognized

0.5%

2,840

13

2,827

Over 60 days past due, impairment recognized

0.8%

1,107

8

1,098

Over 90 days past due, impairment recognized

1.3%

1,015

13

1,003

Over 120 days past due, impairment recognized

1.8%

184

3

181

Over 150 days past due, impairment recognized

55.3% 1

1,133

627

506

1 Individual impairment allowances included.

 

 

 

 

 

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.

Other assets (including financial assets) and financial liabilities

13 Other assets (including financial assets) and financial liabilities

13.1 Other assets, including financial assets

 

 

 

 

In thousands of CHF

2022

 

2021

Other assets at fair value through profit or loss

 

 

 

Derivatives used for foreign exchange hedging

634

 

133

Total other assets at fair value through profit or loss

634

 

133

 

 

 

 

Other assets at amortized cost

 

 

 

Lease receivable

2,548

 

2,842

Restricted cash – post-combination compensation

371

 

1,171

Restricted cash – purchase price holdback for warranties

 

718

Other non-current financial assets

576

 

184

Total other assets at amortized cost

3,495

 

4,914

 

 

 

 

Total other assets

4,129

 

5,047

Total current

1,303

 

1,925

Total non-current

2,826

 

3,122

13.2 Other financial liabilities

 

 

 

 

In thousands of CHF

2022

 

2021

Other financial liabilities at fair value through profit or loss

 

 

 

Derivatives used for foreign exchange hedging

11

 

176

Total other financial liabilities at fair value through profit or loss

11

 

176

 

 

 

 

Other financial liabilities at amortized cost

 

 

 

Liability for purchase price holdback for warranties

 

718

Total other financial liabilities at amortized cost

 

718

 

 

 

 

Total other financial liabilities

11

 

894

Total current

11

 

894

13.3 Derivative financial instruments

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

 

 

 

 

In thousands of CHF

2022

 

2021

USD forward exchange contracts

 

 

 

Contract amounts

14,723

 

21,573

Positive fair values

634

 

129

Negative fair values

 

160

 

 

 

 

JPY forward exchange contracts

 

 

 

Contract amounts

 

385

Positive fair values

 

4

 

 

 

 

CNY forward exchange contracts

 

 

 

Contract amounts

1,336

 

502

Negative fair values

11

 

16

The gains and losses from foreign exchange contracts are recognized as financing income or expense (see note 27). 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.

13.4 Other assets at amortized cost

Lease receivables

Lease receivables showed the following movement in 2022: 

 

 

 

Lease receivable movement

2022

2021

in thousands of CHF

Lease receivable

Lease receivable

 

 

 

January 1

2,842

1,465

Additions

1,688

Accretion of interest

60

66

Lease payments received

(353)

(378)

December 31

2,548

2,842

The maturity analysis of the lease receivable is as follows:

 

 

 

 

 

Lease receivable maturity analysis

 

 

 

 

In thousands of CHF

2023

2024 – 2027

After 2027

Total lease receivable

Maturity analysis as of December 31, 2022

 

 

 

 

Undiscounted lease payments

352

1,407

1,027

2,786

Interest portion

(54)

(149)

(35)

(238)

Lease receivable

298

1,259

991

2,548

 

 

 

 

 

 

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

 

 

 

 

 

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.

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. In fiscal year 2022, further payments were released. The payments included CHF 0.8 million of post-combination compensation and CHF 0.7 million of purchase price holdback. As of December 31, 2022, the restricted cash amounted to CHF 0.4 million after the payments (prior year: CHF 1.9 million).

13.5 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 13.4). In December 2021, a first payment of CHF 0.7 million of purchase price holdback was issued. The remaining amount was released as of December 31, 2022.

Inventories

14 Inventories

 

 

 

 

In thousands of CHF

2022

 

2021

Raw materials and semi-finished products

73,749

 

46,176

Work in process

12,364

 

17,111

Finished goods

36,355

 

35,980

Total inventories

122,468

 

99,268

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 2.2 million (prior year: CHF 2.8 million).

Trade restrictions are identified as an additional risk for inventory in stock, especially items which entail US technology and are intended to be sold within the Chinese market. Comet is periodically reviewing all items at risk; no impact was identified as of December 31, 2022.

Prepaid expenses

15 Prepaid expenses

 

 

 

 

In thousands of CHF

2022

 

2021

Contract costs

257

 

539

Other prepaid expenses

5,184

 

3,730

Total prepaid expenses

5,441

 

4,269

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 1.8 million were recognized in the income statement (prior year: CHF 2.9 million).

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

Property, plant and equipment

16 Property, plant and equipment

 

 

 

 

 

 

Fiscal year 2022

 

 

 

 

 

In thousands of CHF

Real estate

Plant and equipment

Other tangible assets

Assets under construction

Total property, plant and equipment

Cost

 

 

 

 

 

January 1, 2022

97,991

100,810

18,956

5,688

223,446

Additions

171

2,646

1,773

16,090

20,681

Commissioning of assets under construction

4,442

614

(5,056)

(0)

Disposals

(1,465)

(1,554)

(3,019)

Foreign currency translation differences

(727)

(387)

(300)

(1,414)

December 31, 2022

98,162

105,704

19,403

16,423

239,693

 

 

 

 

 

 

Accumulated depreciation and impairment

 

 

 

 

 

January 1, 2022

33,207

65,330

13,205

111,743

Additions

2,528

5,830

2,537

 

10,895

Impairment

 

461

 

 

461

Disposals

(1,240)

(1,515)

 

(2,755)

Foreign currency translation differences

(354)

(264)

 

(618)

December 31, 2022

35,735

70,027

13,963

119,725

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

January 1, 2022

64,784

35,479

5,752

5,688

111,703

December 31, 2022

62,427

35,677

5,440

16,423

119,968

 

 

 

 

 

 

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

Acquisition of a subsidiary

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 and impairment

 

 

 

 

 

January 1, 2021

30,689

60,998

13,517

105,204

Additions

2,518

5,560

2,242

 

10,320

Reclassifications

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

Assets pledged or assigned as collateral for Group obligations

At December 31, 2022 and December 31, 2021, 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

17 Right-of-use assets and lease liabilities

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

 

 

 

 

 

 

Fiscal year 2022

 

Right-of-use assets

Lease liabilities

In thousands of CHF

Buildings

Equipment

Other assets

Total

January 1, 2022

18,185

595

10

18,791

19,840

Additions

22,244

267

22,511

22,511

Disposals

(1,920)

(5)

(1,925)

(1,925)

Depreciation, amortization and impairment

(5,389)

(346)

(10)

(5,745)

Accretion of interest

749

Repayment of lease liabilities

(4,338)

Lease incentive 1

 

 

 

 

3,530

Payment of interest on lease liabilities

(749)

Foreign currency translation differences

(1,209)

(21)

(1,230)

(1,420)

December 31, 2022

31,912

490

(0)

32,401

38,197

Reported on the face of the balance sheet as:

 

 

 

 

 

Current lease liability

 

 

 

 

3,955

Non-current lease liability

 

 

 

 

34,242

1 The Landlord agreed to contribute a total of CHF 8.4 million toward the cost of performing the tenant improvements in preparation of Comet’s occupancy of the premises. In fiscal year 2022, the "tenant improvement allowance" amounted to CHF 3.5 million.

The non-current lease liabilities largely have remaining maturities of two to ten years. The expected future lease payments are presented in note 28.2.3.

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 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

Acquisition of a subsidiary

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)

0

(642)

(662)

December 31, 2021

18,185

595

10

18,791

19,840

Reported on the face of the balance sheet as:

 

 

 

 

 

Current lease liability

 

 

 

 

3,949

Non-current lease liability

 

 

 

 

15,891

The composition of the lease expenses in fiscal 2022 and 2021 is shown below:

 

 

 

 

In thousands of CHF

2022

 

2021

Depreciation, amortization and impairment

5,745

 

4,765

Interest expenses

749

 

414

Expenses for short-term leases and other items

449

 

59

Expense for low-value leases

12

 

7

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

2

 

33

Total lease expenses

6,956

 

5,277

Comet has lease agreements containing extension and termination options (see note 2.5). At December 31, 2022, 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, 2022 amounted to CHF 1.4 million due within the subsequent five years (prior year: CHF 3.0 million) and to CHF 28.6 million for option periods of more than five years (prior year: CHF 9.1 million).

Intangible assets

18 Intangible assets

 

 

 

 

 

 

 

Fiscal year 2022

 

 

 

 

 

 

In thousands of CHF

Goodwill and trademarks

Customer lists

Technology

Software

Other intangible assets

Total intangible assets

Cost

 

 

 

 

 

 

January 1, 2022

31,547

21,210

5,032

26,237

164

84,190

Additions

1,949

124

2,072

Disposals

(157)

(157)

Foreign currency translation differences

(1,097)

(790)

(215)

(360)

(3)

(2,464)

December 31, 2022

30,450

20,421

4,817

27,669

285

83,641

 

 

 

 

 

 

 

Accumulated amortization

 

 

 

 

 

 

January 1, 2022

1

18,861

2,413

21,837

50

43,163

Additions

1

870

366

1,557

44

2,837

Disposals

(157)

(157)

Foreign currency translation differences

(0)

(707)

(115)

(283)

(1)

(1,106)

December 31, 2022

2

19,024

2,664

22,954

93

44,737

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

January 1, 2022

31,545

2,349

2,619

4,400

114

41,027

December 31, 2022

30,447

1,397

2,153

4,715

192

38,904

The categories “goodwill and trademarks”, “customer lists” and “technology” were capitalized in connection with business combinations. 

Comet is following a long-term brand strategy. To leverage the strength of the established Comet brand and Yxlon brand even better, a re-branding took place in fiscal year 2022 to create the “Comet Yxlon” brand. Comet deems the capitalized, existing standalone Yxlon brand to have an indefinite useful life, as Yxlon remains an important registered brand.

 

 

 

 

 

 

 

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

Impairment test of goodwill and intangible assets with indefinite useful lives

19 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 October 31, 2022. 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 2023 to 2025. 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.

 

 

 

 

 

 

 

 

 

 

 

 

Carrying amount of the assets tested

 

 

 

 

 

 

 

 

 

 

 

 

X-Ray Systems (IXS) CGU

 

Industrial X-Ray Technology (IXT) CGU

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

In thousands of CHF

2022

 

2021

 

2022

 

2021

 

2022

 

2021

Goodwill

21,593

 

22,601

 

6,873

 

6,873

 

28,467

 

29,475

Trademarks (Yxlon)

1,980

 

2,071

 

 

 

1,980

 

2,071

Total carrying amount

23,573

 

24,672

 

6,873

 

6,873

 

30,447

 

31,545

 

 

 

 

 

 

 

Assumptions applied in the valuation model

 

 

 

 

 

 

 

X-Ray Systems (IXS) CGU

Industrial X-Ray Technology (IXT) CGU

 

 

 

 

 

 

 

 

YoY movement in %

2022

2021

YoY movement in %

2022

2021

Discount rate (WACC) before tax

1.8%

12.1%

10.3%

1.1%

12.4%

11.2%

Growth rate of terminal value

0.0%

1.5%

1.5%

0.0%

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 (2023 to 2025):

  • Growth assumptions: Sales revenue is projected by product group and market segment. Based on the recovering situation of 2022 as the starting point, the average annual rate of sales growth is assumed to be 22.2% for IXS (prior year: 9.5%) and 20.8% for IXT (prior year: 16.2%).
  • Gross margins: Gross margins in the medium term are expected to average approximately 42.7% for IXS (prior year: 39.7%) and 51.6% for IXT (prior year: 50.3%). 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 October 2022 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

20 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 uncommitted credit facilities of CHF 56.2 million (prior year: CHF 57.3 million). Of this total, CHF 1.7 million (prior year: CHF 3.8 million) was reserved for hedging transactions and bank guarantees.

20.1 Movement in debt

 

 

 

 

 

 

 

Fiscal year 2022

 

 

 

 

 

 

In thousands of CHF

Jan. 1, 2022

Cash flows

Reclassif. from non-current to current

Unwinding of discount, and remeasurement

Foreign currency translation differences

Dec. 31, 2022

Non-current debt

59,571

98

59,669

Total debt

59,571

98

59,669

 

 

 

 

 

 

 

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

Trade and other payables

21 Trade and other payables

 

 

 

 

In thousands of CHF

2022

 

2021

Trade payables

31,191

 

26,095

Sundry payables

5,903

 

5,428

Sales commissions

2,809

 

3,593

Total financial liabilities

39,903

 

35,116

Sales tax and value-added tax

1,014

 

1,321

Total other payables

1,014

 

1,321

Total trade and other payables

40,917

 

36,437

Accrued expenses

22 Accrued expenses

 

 

 

 

In thousands of CHF

2022

 

2021

Accrued staff costs

24,475

 

21,256

Other accrued expenses

17,713

 

14,460

Total accrued expenses

42,188

 

35,716

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

23 Provisions

 

 

 

 

Fiscal year 2022

 

 

 

In thousands of CHF

Warranties

Other provisions

Total provisions

January 1, 2022

6,137

873

7,010

Added

8,722

771

9,493

Used

(6,733)

(88)

(6,821)

Released

(1,600)

(47)

(1,647)

Foreign currency translation differences

(46)

(61)

(107)

December 31, 2022

6,480

1,448

7,929

Of which:

 

 

 

January 1, 2022

 

 

 

Current provisions

6,137

605

6,743

Non-current provisions

267

267

December 31, 2022

 

 

 

Current provisions

6,480

475

6,955

Non-current provisions

973

973

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

24 Employee benefits

24.1 Employee benefit plan liabilities

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

 

 

 

 

In thousands of CHF

2022

 

2021

Defined benefit liability in Switzerland

 

10,806

Defined benefit liability in Germany

308

 

776

Total defined benefit liability

308

 

11,582

Provision for length-of-service awards

1,399

 

1,415

Total employee benefit plan liabilities

1,707

 

12,997

24.2 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

 

 

 

 

 

 

 

 

 

2022

 

2021

 

2022

 

2021

Discount rate at January 1

0.30%

 

0.15%

 

0.80%

 

0.40%

Discount rate at December 31

2.20%

 

0.30%

 

3.60%

 

0.80%

Expected rate of salary increases

1.50%

 

1.00%

 

 

Life tables used as basis for life expectancies

BVG 2020 GT

 

BVG 2020 GT

 

Heubeck 2018 GT

 

Heubeck 2018 GT

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

 

 

 

 

Fiscal year 2022

 

 

 

In thousands of CHF

Present value of defined benefit obligation

Fair value of plan assets

Net carrying amount recognized in balance sheet

January 1

(79,329)

67,747

(11,582)

Current service cost

(3,493)

(3,493)

Past service cost

605

605

Administration cost, excl. cost of managing plan assets

(39)

(39)

Current service cost

(2,928)

(2,928)

Interest (expense) or income

(257)

219

(39)

Defined benefit cost recognized in the income statement

(3,185)

219

(2,966)

Return on plan assets, excluding interest income

123

123

Actuarial gain arising from changes in financial assumptions

16,020

16,020

Actuarial loss arising from changes in demographic assumptions

(227)

(227)

Actuarial loss arising from experience adjustments

(4,949)

(4,949)

Effect of asset ceiling under IAS 19.57(b)

(81)

(81)

Defined benefit cost recognized in other comprehensive income

10,844

42

10,886

Benefits paid-in/deposited

(1,277)

1,298

20

Employee contributions

(2,466)

2,466

Employer contributions

3,305

3,305

Foreign currency translation differences

73

(44)

29

December 31

(75,341)

75,032

(308)

Reported on the face of the balance sheet as:

 

 

 

An asset

 

 

A liability

 

 

(308)

The actuarial gain arising from changes in financial assumptions was mainly attributable to the increase in the discount rate and, as an offsetting effect, the increase in expected salary increases.

The actuarial loss arising from experience adjustments represents the change that is not attributable to changes in assumptions. This relates in particular to the difference between the actuarial assumptions in the prior year and the actual outcomes with regard to the entry and exit of insured employees, effective salary adjustments, death and disability of insured persons, and retirements.

The board of directors of the pension fund decided in April 2022 to further reduce the pension conversion rates with effect from the year 2024. 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 0.6 million. 

The board of directors of the pension fund 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 9.7 years.

 

 

 

 

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) or 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)

 

 

 

 

 

 

 

 

Key figures by country

 

 

 

 

 

 

 

 

Switzerland

 

Germany

 

 

 

 

 

 

 

 

In thousands of CHF

2022

 

2021

 

2022

 

2021

Present value of defined benefit obligation

(74,076)

 

(77,525)

 

(1,264)

 

(1,804)

Fair value of plan assets

74,157

 

66,719

 

956

 

1,028

Effect of asset ceiling under IAS 19.57(b)

(81)

 

 

 

Net carrying amount recognized in the balance sheet

 

(10,806)

 

(308)

 

(776)

 

 

 

 

 

 

 

 

Defined benefit cost recognized in the income statement

(2,960)

 

(3,038)

 

(6)

 

(4)

Defined benefit cost recognized in other comprehensive income

10,461

 

1,890

 

425

 

64

The employer contributions to the plans in Switzerland for fiscal year 2023 are expected to amount to CHF 3.4 million.

 

 

 

 

Major categories of plan assets

 

 

 

In thousands of CHF

2022

 

2021

Assets from insurance contract

75,032

 

67,747

Total plan assets without a quoted market price

75,032

 

67,747

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

2022

 

2021

 

2022

 

2021

Discount rate: 0.25% decrease

75,884

 

79,861

 

1,296

 

1,749

Discount rate: 0.25% increase

72,378

 

75,339

 

1,233

 

1,859

Expected rate of salary growth: 0.25% decrease

74,057

 

77,405

 

1,264

 

1,803

Expected rate of salary growth: 0.25% increase

74,080

 

77,633

 

1,264

 

1,803

Life expectancy: 1-year increase

74,535

 

78,282

 

1,324

 

1,889

Life expectancy: 1-year decrease

73,619

 

76,770

 

1,204

 

1,717

24.3 Defined contribution plans

The contributions paid to defined contribution plans in the fiscal year amounted to CHF 7.7 million (prior year: CHF 6.8 million).

24.4 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

2022

 

2021

Provision at January 1

1,415

 

1,468

Current service cost

253

 

184

Interest cost

6

 

4

Benefits paid

(185)

 

(188)

Actuarial losses or (gains)

(78)

 

(10)

Changes in scope of consolidation 1

25

 

Foreign currency translation differences

(37)

 

(43)

Provision at December 31

1,399

 

1,415

1 In the reporting period, length-of-service award policies were rolled out in two subsidiaries.

Equity capital structure and shareholders

25 Equity capital structure and shareholders

25.1 Capital stock

The capital stock at January 1, 2022 was CHF 7,769,534, divided into 7,769,534 registered shares with a par value of CHF 1.00 per share.

In fiscal year 2022 the capital stock was increased by 4,432 shares from the portion of authorized capital designated for equity-based compensation. Including the increase of 4,432 shares from this portion of authorized capital, Comet Holding AG at December 31, 2022 thus had a new total of CHF 7,773,966 of capital stock, divided into 7,773,966 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, 2022 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.

 

 

 

 

 

 

 

 

2022

 

 

2021

 

Number of shares

Par value in CHF

 

Number of shares

Par value in CHF

January 1

7,769,534

7,769,534

 

7,767,887

7,767,887

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

4,432

4,432

 

1,647

1,647

December 31

7,773,966

7,773,966

 

7,769,534

7,769,534

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

25.2 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 2022, in accordance with the compensation plan, the members of the Board of Directors were granted a total of 500 shares of stock in payment of CHF 131,930 of fixed retainers due for fiscal year 2021. In addition, as part of their compensation for 2022, the members of the Board of Directors were granted a total of 250 shares in payment of CHF 65,965 of fixed retainers due for the period from January 1, 2022 to the 2022 Annual Shareholder Meeting. The fully paid shares were applied to the retainers due at a price of CHF 263.86 per share.

Members of the Executive Committee were granted a total of 3,682 shares in payment of CHF 973,557 of profit-sharing compensation due for fiscal year 2021. The fully paid shares were applied to the compensation due at a price of CHF 263.86 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 4,432 shares made in 2022, the Company’s unissued authorized capital for equity-based compensation showed the following movement:

 

 

 

 

 

 

 

 

2022

 

 

2021

 

Number of shares

Par value in CHF

 

Number of shares

Par value in CHF

January 1

193,586

193,586

 

195,233

195,233

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

(4,432)

(4,432)

 

(1,647)

(1,647)

December 31

189,154

189,154

 

193,586

193,586

At the end of the year, the remaining unissued authorized capital for equity-based compensation was CHF 189,154, or 2.4% of the existing capital stock.

25.3 Significant shareholders

At December 31, 2022 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

Pictet Asset Management SA (Direction de Fonds)

 

5.27%

UBS Fund Management (Switzerland AG)

 

5.23%

Credit Suisse Funds AG

 

3.22%

Ruth Wertheimer

7-Industries Holding B.V.

3.13%

The Company has not been notified 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

26 Off-balance sheet transactions

26.1 Contingent asset

Comet Technologies USA Inc., Comet AG and Comet Yxlon GmbH (collectively, “Comet”) filed a lawsuit in the U.S. District Court for the Northern District of California asserting that XP Power LLC (“XP”) improperly acquired and used Comet trade secrets relating to its radio frequency matching network and generator technologies. A jury trial began on March 14, 2022 and on March 23, 2022, the jury found in favor of Comet, awarding it USD 20 million in compensatory damages and USD 20 million in punitive damages for a total of USD 40 million in monetary damages. On September 30, 2022, Comet was awarded an injunction preventing XP from developing, marketing or selling any product derived from the misappropriated Comet trade secrets. Comet is also eligible to recover from XP certain legal expenses related to the lawsuit; the value of such recovery was unknown as of December 31, 2022. XP is challenging the monetary and non-monetary awards through post-trial motions. Based on the current status of the lawsuit, the final outcome and award amount remained uncertain and the potential award was therefore considered a contingent asset at the end of fiscal year 2022. 

On or about December 9, 2022, XP secured a USD 48.4 million bond to stay enforcement of the current judgment through the outcome of an appeal to the U.S. Court of Appeals for the Ninth Circuit. XP may file its motion for appeal once post-trial motions are resolved. Based on the current status of the lawsuit, the amount of Comet’s award was still classified as a contingent asset as of December 31, 2022. 

26.2 Contingent liabilities

With respect to the XP Power lawsuit, Comet has agreed to a contingent success fee with its legal advisors in the form of a percentage of monetary and non-monetary recovery. The success fee is payable if and when Comet actually receives the recovery, which will happen upon a successful (i) full and final resolution of all post-trial motions and any subsequent appeal or (ii) resolution of the lawsuit via executed settlement agreement. Based on the current status of the lawsuit, the final outcome and award amount remained uncertain as of December 31, 2022 and the success fee was therefore considered to be a contingent liability.

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.

26.3 Other off-balance sheet obligations

As part of its operating activities, Comet had purchase obligations at the balance sheet date totaling CHF 63.2 million (prior year: CHF 37.9 million), of which CHF 27.8 million were current in nature (prior year: CHF 20.3 million) and CHF 35.4 million mature in the five-year period that begins in 2023 (prior year: CHF 17.6 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, 2022 (prior year: nil).

Financial instruments

27 Financial instruments

27.1 Classes of financial instruments

 

 

 

 

 

 

 

Fiscal year 2022

 

 

 

 

 

 

In thousands of CHF

 

Financial assets

Financial liabilities

 

 

Note

FVTPL 1

At amortized cost

FVTPL 1

At amortized cost

Fair value

 

 

 

 

 

 

 

Cash and cash equivalents

 

125,945

*

Trade and other receivables, net

12

80,444

*

Derivatives

13

634

11

623

Other assets – financial assets, excluding derivatives

13

3,124

*

Trade and other payables

21

39,903

*

Liability for purchase price holdback for warranties

13

*

Lease liabilities

17

38,197

*

Non-current debt, fixed rate

20

59,669

58,800

Total

 

634