Notes to the consolidated financial statements
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.
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.
|
|
|
|
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.
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.
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).
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 |
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 |
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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).
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 |
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.
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.
|
|
|
|
|
|
|
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 |
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 |
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.
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.
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.
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.
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).
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 |
|