COMET Group: Strong, profitable growth – Outlook confirmed

  • Revenue growth of 15.1% to CHF 149.8 million
  • EBITDA margin of 11.1% on plan (H1 2015: 9.4%)
  • Intensified investment in new applications, as per strategy
  • Net income rises substantially to CHF 8.6 million (H1 2015: CHF 1.7 million)
  • Outlook for 2016 reaffirmed: Sales of CHF 300-320 million and EBITDA margin of 11-13%
  • Construction launch of expansion and successful CHF 60 million bond issue
With a strong first half of 2016 the COMET Group is confirming its strategic growth trajectory. Sales expanded by 15.1% year-over-year to CHF 149.8 million (H1 2015: CHF 130.1 million), or by 11.4% in local currencies. All four segments contributed to this vigorous performance. The COMET Group saw its strongest growth in the X-Ray Systems business (IXS), thanks to its high-resolution computed tomography systems. Business was also good in x-ray sources for non-destructive testing (the IXM segment) and in the PCT segment’s high-end impedance matching networks for the semiconductor market. Important headway was also made by the Group’s newest business segment, ebeam Technologies (EBT).

Executing its growth strategy, the COMET Group stepped up investment in the development of new applications based on its three core technologies of x-ray, radio frequency and ebeam. The higher sales and improved gross margin enabled EBITDA earnings to be pushed up by 35.4% to CHF 16.6 million (H1 2015: CHF 12.3 million). The EBITDA margin was on plan at 11.1% (H1 2015: 9.4%). Besides the heightened operating efficiency, there was also a positive effect of CHF 1.6 million from the adjustment of the conversion rate for certain pension obligations in Switzerland. Net income rose markedly to CHF 8.6 million (H1 2015: CHF 1.7 million). This result was helped by this year’s absence of one-time currency translation losses of CHF 3.5 million that had weighed on the first half of 2015.

With the start of construction for the building expansion in Flamatt, the COMET Group created an important prerequisite for achieving its 2020 growth targets. To finance this construction project, the Group successfully placed a fixed-rate, five-year bond in the amount of CHF 60 million. As a result of this and the strong growth, total assets increased significantly from one year earlier and the equity ratio decreased as expected, to 51.7% (H1 2015: 58.2%).

To support an exclusive focus in the development of the individual business activities, the X-Ray & ebeam Technologies segment was split into two segments from January 2016: ebeam Technologies (EBT) and X-Ray Modules (IXM). The review of the segment results and the prior-year data have been adjusted (restated) accordingly in the segment reporting.

Segment results

IXS – Strong growth in CT systems; investment in metrology as new application

In the first half of the year, X-Ray Systems benefited especially from the growing demand for YXLON computed tomography (CT) solutions, which allow the three-dimensional visualization and inspection of the ever more complex components used in manufacturing. The segment boosted its sales by 25% to CHF 54.1 million (H1 2015: CHF 43.3 million). IXS registered its fastest growth in the aerospace, labs and R&D and foundries sectors. Under the Group’s Strategy 2020, the segment invested in further building up its capabilities to move into metrology as a new application. This in combination with a higher share of project business in the revenue mix led to an EBITDA margin of 4.7% (H1 2015: 6.0% 1). For the full year 2016 the IXS segment expects revenue growth to be in the mid single digits.

PCT – Continued profitable growth through high-end solutions

Plasma Control Technologies (PCT) in the first six months delivered further growth from the strong comparative first half of the prior year. Sales of the segment rose 4.1% to CHF 60.4 million (H1 2015: CHF 58.0 million). Fueled by continued improvement in operational excellence, profitability increased at the gross margin level. Despite investment in new customer projects, this raised the EBITDA margin to 20.2% (H1 2015: 19.2% 1). The strongest growth driver was the semiconductor market, as more and more manufacturers of mobile devices are deploying 3D memory chips in their products. The equipping of fabrication plants for the latest-generation, V-NAND memory chips gained momentum, particularly from the second quarter onward. PCT did well with its proven high-quality impedance matching networks. Additionally, PCT achieved various important design wins that will support future growth. With its high-performance vacuum capacitors, the business segment capitalized on the trend toward new display technologies in the flat panel market. For the year as a whole, PCT expects continuing stable demand from the semiconductor and flat panel industries, and thus a revenue trend in line with the growth of the Group.

IXM – Back on growth trajectory; forward integration strategy generates sales in core business

Sales in the x-ray sources and portable x-ray modules business, operating as the Industrial X-Ray Modules segment since January 2016, grew by 12.1% to a new total of CHF 34.5 million (H1 2015: CHF 30.8 million). Next to a positive prevailing market sentiment, IXM’s sales growth was driven by the complete modules for non-destructive testing and inspection that are offered under the successful strategy of forward integration. In the market for security inspection, the segment expanded its position and grew through new applications. The higher sales and the diverse measures to raise operating efficiency yielded a significant improvement in EBITDA margin to 24.1% (H1 2015: 14.4%). For the full year the management foresees continued revenue growth in the low double digits compared to 2015.

EBT – Investment in new applications and integration of PCT Engineered Systems LLC

In the first half of the year the ebeam business, operating as the separate "ebeam Technologies" (EBT) segment since January 2016, focused on entering new applications and regions and on the integration of PCT Engineered Systems LLC, acquired in May 2015. Sales were CHF 8.1 million, which represented growth of 73.1% percent year-on-year. To help drive the planned strong growth, the segment is ramping up investment
in areas of attractive potential in the food and digital printing sectors. For digital printing, EBT launched the ebeam Inkjet Dryer at drupa, the world’s largest trade fair for the printing industry. The ebeam Inkjet Dryer is a novel product which allows the food-safe and individualized printing of packaging. In the food sector, the rollout with Tetra Pak is progressing on schedule. The project work with Bühler is also advancing, with the first field tests planned for 2017. Despite the increased investment in new applications and the integration of the acquired systems business, the EBITDA result improved slightly to a deficit of CHF 4.4 million (H1 2015: loss of CHF 5.0 million). For fiscal 2016 the segment is projecting sales growth at a rate above that of the Group as a whole.

Confirming outlook: COMET Group well-positioned for on-track growth

With its Strategy 2020, the COMET Group continues to focus on new areas of application for all three core technologies and on the intensified collaboration with key partners. What is critical is to take timely advantage of the attractive opportunities in the fields of ebeam, the Internet of Things, metrology and security inspection. With the accelerated capital expenditures for these growth initiatives, the COMET Group set the stage in the first half of 2016 for achieving its objectives. In terms of personnel, too, the COMET Group is positioned well, with new Executive Committee members Detlef Steck as head of the x-ray systems business since April 2016 and Thomas Polzer as Chief Operating Officer since August 2016. From January 1, 2017 the open position of head of corporate human resources will be assumed by Eric Dubuis, in addition to his responsibilities as IT director of the Group. Eric Dubuis has already previously led the human resources department on an interim basis and has provided key support to it in strategy matters. By filling the HR leadership role internally, the Group is assuring continuity in the implementation of its strategic goals to 2020.

For 2016 the COMET Group reaffirms its forecast from March of this year: The Board and management continue to expect the full year to see sales growth of CHF 300-320 million and an EBITDA margin of 11-13%.

Media and analyst conference

The published results for the first half of 2016 will be presented today, August 18, 2016 at 10:00 a.m. at the media and analyst conference in Zurich (location: SIX Swiss Exchange, Convention Point, Selnaustrasse 30).

Conference call in English

A conference call in English will be held today, August 18, 2016 from 3:45 p.m. to 4:30 p.m. CET, with Ronald Fehlmann, CEO, and Markus Portmann, CFO. To participate, please dial in 10 to 15 minutes before the scheduled start of the call, using one of the following telephone numbers:
+ 41 (0)58 310 50 00 (Europe)
+ 44 (0)203 059 58 62 (UK)
+ 1 (1)631 570 5613 (USA)