Review of 2022

More record results for Comet

Comet delivered the best results in its history in 2022, despite a volatile and challenging environment.

2022 financials in 90 seconds.

The strong demand in the semiconductor market in the first three quarters and the tangible recovery in the automotive, aerospace and security markets coincided with complexities in navigating supply chains, rising material and logistics prices, China’s zero-COVID policy and trade restrictions. The fourth quarter witnessed the start of a cyclical slowdown in the semiconductor market, led by inventory corrections in memory products.

The Group generated sales growth of 14.1% from the prior year to a new total of CHF 586.4 million. EBITDA operating earnings rose by 15.7% to CHF 118.9 million. Net income increased by 15.8% to CHF 78.1 million, or CHF 10.05 per share. Free cash flow decreased from CHF 57.8 million to CHF 42.2 million, due in part to higher investment. With an equity ratio of 59.5% and debt factor of –0.2, Comet enjoys a sound financial position.

Exploiting growth opportunities in the core markets

Comet took advantage of the period of strong demand in its core markets. The expanded product portfolio paid dividends, as did the increase in production capacity in Switzerland and Malaysia. The Plasma Control Technologies (PCT) division generated the largest share of Group sales, posting sales growth of 24.6% to CHF 381.4 million (prior year: CHF 306.1 million). The x-ray business, consisting of two divisions, showed mixed results. At X-Ray Systems (IXS), the deliberate focus on high-margin orders in the semiconductor/electronics market and the impact of the zero-COVID policy in China are reflected in the results, with a decline of 6.2% in sales to CHF 130.4 million (prior year: CHF 138.9 million). X-Ray Modules (IXM) benefited from pent-up demand in its core market of non-destructive testing and from its successful entry into new markets, such as the inspection of batteries and additively manufactured components: Sales of the IXM division grew by 12.3% to CHF 88.6 million (prior year: CHF 78.9 million).

Net sales in CHF million

EBITDA in CHF million

Continued earnings growth despite a difficult environment

Comet increased its operating earnings at EBITDA level from CHF 102.7 million to CHF 118.9 million, with the EBITDA margin rising from 20.0% to 20.3%. Excluding the impact from Comet’s legal expense for its litigation to protect its trade secrets against XP Power, the adjusted EBITDA margin was 21.8%. Inflationary pressures, longer lead times in the supply chain and shutdowns in China contributed to margin pressures throughout the year.

The PCT division made the largest contribution to the Group’s EBITDA growth. It delivered EBITDA of CHF 104.9 million, up 30.4% from the prior year. The EBITDA margin rose by 120 basis points to 27.5% and – on an adjusted EBITDA basis – by 360 basis points to 29.9%. In the X-Ray Systems business (IXS), a combination of lower sales and higher investment in the development of strategic products resulted in EBITDA of CHF 1.6 million, down from CHF 8.9 million in the year before. The EBITDA margin narrowed from 6.4% to 1.2%. The X-Ray Modules business (IXM) generated EBITDA of CHF 15.7 million, slightly above the previous year’s CHF 15.3 million. The margin eased by 170 basis points to 17.7% owing to higher procurement costs resulting from bottlenecks in raw materials, components and logistics.

The Group’s net income increased by 15.8% from CHF 67.4 million to CHF 78.1 million. At 26.3%, the return on capital employed remained almost at the previous year’s level (26.4%).

Comet’s overall working capital requirements increased. To mitigate the bottlenecks in the supply chain, Comet raised the safety stock. As a result, operating cash flow fell below the prior year. With capital investments up significantly, free cash flow therefore decreased from CHF 57.8 million to CHF 42.2 million.

Comet Group key consolidated financial results


In thousands of CHF	2022	2021	2020	2019	2018
Net sales	586,395	513,721	395,816	371,606	436,356
Operating income	98,975	84,085	39,329	19,939	18,771
In % of net sales	16.9%	16.4%	9.9%	5.4%	4.3%
EBITDA	118,913	102,749	58,616	39,974	42,966
In % of net sales	20.3%	20.0%	14.8%	10.8%	9.8%
Net income	78,109	67,437	27,661	12,027	12,347
In % of net sales	13.3%	13.1%	7.0%	3.2%	2.8%
Free cash flow 1	42,173	57,767	41,649	30,112	825
In % of net sales	7.2%	11.2%	10.5%	13.1%	6.4%
Total assets	556,801	482,341	429,271	391,710	380,266
Shareholders' equity	331,532	274,981	214,956	195,948	198,292
In % of total assets	59.5%	57.0%	50.1%	50.0%	52.1%
Number of employees (year-end)
Switzerland	647	565	474	494	509
International	1,116	1,006	929	836	837
Total	1,763	1,571	1,403	1,330	1,346

1 Net cash provided by operating activities and net cash (used in) investing activities, as per consolidated statement of cash flows.

Implementation of the strategic Boost program successfully continued

Despite the volatile environment, Comet maintained its strategic focus, with progress in all three dimensions of the Boost program – growth, efficiency and culture (Boost strategic program: What we achieved in 2022).

Strong portfolio for future growth: In 2022, Comet reached a milestone in the expansion of the product and service portfolio for its customers in the semiconductor and electronics market. It launched the innovative Synertia® RF power delivery platform, which offers customers unique and energy-efficient ways to control critical plasma processes in real time. Meanwhile, with the award-winning MesoFocus x-ray module, the company entered and made inroads into the battery testing market. In the x-ray systems business, Comet introduced new software offerings, such as VistaX, a software that helps to improve customers’ productivity. The Group also made important headway in developing new solutions, in close collaboration with a strategic customer, for the inspection of advanced packages containing vertically stacked microchips.

More flexibly positioned: Comet continued the systematic expansion of its geographic presence in its strategic growth regions. The aim is to gain customer proximity, create access to new supply chains and boost operational flexibility and business continuity. With this in mind, Comet decided in 2022 to expand its production facilities in Malaysia earlier than planned, as well as to bring the individual sites in Silicon Valley together under one roof.

Becoming a scalable organization: The Group made critical progress toward a more scalable global organization, in the continuous optimization of supply chains, the standardization of products, the automation of processes, and in digital infrastructure. Comet introduced a more robust Global Operational Excellence function and reinforced the global sales organization in the X-Ray Systems business. These moves, among others, will allow Comet to operate more efficiently and better meet customer needs.

Strengthened identity, values and employer attractiveness: In 2022, Comet continued the culture, training and sustainability programs (Sustainability 2022) for its employees launched as part of the strategic Boost program. A notable initiative is the Up & Beyond Award, which was launched in 2022 and presented to 175 employees for modeling the company’s values in exemplary ways. A milestone for the shared corporate identity was achieved in the third quarter with the completion of the rebranding from Yxlon to Comet Yxlon.

To address the industry’s skills shortage, Comet stepped up its collaboration with universities and invested in the better differentiation of its employer brand. It invested in a training workshop for apprentices at its Swiss site, increased its engagement for talent recruitment at trade shows in the semiconductor market, and devised a new compensation model to be introduced in 2023 (Compensation report 2022).

New management team

Comet has been under new executive leadership since September 2022: Stephan Haferl, the former President of the X-Ray Modules division, who has more than 15 years of experience at Comet, took over as CEO from Kevin Crofton, who left the company at the end of August. The new President of the X-Ray Modules division is Michael Berger, who previously served for several years as the division’s Vice President of Operations. In July, for the vacant position of President of the X-Ray Systems division, Comet also brought on board Dionys van de Ven, an internationally proven expert in the x-ray business. Lastly, Michael Kammerer, President of the Plasma Control Technologies division, retired at the end of 2022. Taking over for him at the helm of PCT on March 1, 2023 is Joeri Durinckx, who brings over 20 years of experience in the semiconductor industry.

At the Board level, the election of Edeltraud Leibrock at the 2022 Annual Shareholder Meeting strengthened the Board in the important areas of innovation, digitalization, transformation and governance of IT- and technology-driven organizations.

Dividend

At the Annual Shareholder Meeting on April 14, 2023, the Board of Directors will propose a dividend of CHF 3.70 per share (prior year: CHF 3.50). This corresponds to a distribution of 36.8% of the Group’s net income (prior year: 40.3%).

Statement of the Chairman and the CEO

Plasma Control Technologies review