In the first half of the year the COMET Group recorded consolidated net sales of CHF 104.1 million. In local currencies, sales eased by 10.9% from the strong year-earlier period (on a currency-adjusted basis the decrease was 10.8%). This was attributable mainly to the Systems division’s weak start into the year after the sales surge in late 2011, and also to reduced demand in the semiconductor market during the second quarter. Geographically the COMET Group remains broad-based, with revenue split fairly evenly between Asia, North America and Europe (at a respective 36%, 34% and 27%of Group sales).
The Group adjusted production capacity to match demand, but maintained the purposeful investment in R&D and in the marketing of technologies with high strategic potential. This in combination with the lower revenue led to an EBITDA margin of 10.6% (H1 2011: 13.3%). Operating income (EBIT) was reduced from CHF 9.4 million to CHF 4.6 million.
Thanks to stable currency relations and lower debt, COMET significantly improved its net financing expense from EUR 4.0 million to CHF 1.9 million. Net income in the first half of 2012 was CHF 2.7 million (H1 2011: CHF 5.4 million).
Free cash flow amounted to CHF 5.2 million (H1 2011: CHF 7.2 million) and the equity ratio was a sound 56.4% (December 31, 2011: 57.2%).
The strategic initiatives of the COMET Group are on track, with further progress made in the profitability of the Systems business, the marketing of new products, and forward integration.
Systems division – Enhanced profitability, high order backlog
In H1 2012 the Systems division registered sales of CHF 51.5 million (H1 2011: CHF 59.6 million). The year-on-year decrease of 13.6% in sales largely represented a base effect in the wake of the high sales of December 2011 (currency-adjusted decrease: 12.7%). Despite the sales reduction, Systems achieved a clear increase in gross margin. The consistent further development of the service business, the focus on higher-margin products and applications along with the continual refinement of internal processes all paid dividends. In spite of the lower volume, these improvements were reflected in a somewhat wider EBITDA margin of 7.6% (H1 2011: 6.6%). While demand from the automotive and energy markets in Europe and Asia showed macroeconomy-driven weakness, the aerospace industry in North America picked up. There, Systems, on the strength of its extensive application knowledge among other factors, delivered several customized systems and considerably boosted sales relative to the first half of the prior year. Steady new orders and the high order backlog, which was up 39% year-on-year, justify optimism about the division’s sales trend in the second half of the year.
Modules & Components division
In the first six months the Modules & Components division posted a sales decrease of 5.8% to CHF 62.5 million (H1 2011: CHF 66.3 million; currency-adjusted decrease of 5.9%). In industrial x-ray sources, sales and profitability continued to improve from the already strong year-earlier period. At the same time, the weak demand from the semiconductor industry weighed on sales and earnings in Plasma Control Technologies. For the Modules & Components division as a whole, this translated to an EBITDA margin of 13.8% (H1 2011: 18.5%).
Industrial X-Ray surpasses strong H1 2011, buoyed by new products
Industrial X-Ray, at CHF 27.5 million, bettered its strong year-ago sales by 3.8% (H1 2011: CHF 26.5 million). In constant-currency terms, the business grew by 5.2%. The new products (high energy and low energy x-ray sources, and e-beam) impressed customers, leading to attractive design wins and gains in market share. In its core business of non-destructive testing, Industrial X-Ray defended its position. The development of the e-beam business is progressing according to plan. Thus, the field testing of e-beam emitters was concluded successfully. Another key milestone was reached with the presentation of the non-contact sterilization technology by Tetra Pak at Anuga Foodtec 2012. With continued programs to optimize the operating margin, Industrial X-Ray also further improved its profitability compared to the year-earlier period.
Plasma Control Technologies – Forward strategy begins to yield results
Plasma Control Technologies in the first six months saw a sales decrease of 12.2% to CHF 35.0 million (H1 2011: CHF 39.8 million; currency-adjusted decrease of 13.4%). The reasons were the – expected – low demand from the semiconductor sector in the second quarter, and investment halts and project postponements in the flat panel and solar markets in Asia due to overcapacity. The shortened work hours currently in place help COMET to keep employees’ expertise in-house and to stay prepared for the anticipated upswing. Strategically, Plasma Control Technologies remained fully on course and benefited from the acquisition of the Stolberg activities. Thus, in Europe, COMET gained ground thanks to the successful marketing of products outside the semiconductor market (in high frequency applications such as MRI). Despite the currently difficult demand situation, COMET continues to invest judiciously in research & development and marketing in order to leverage the potential of important, promising technologies (for example, 450 mm wafers) and expand its market position.
The COMET Group reiterates its forecast for the full year 2012: As previously stated, COMET expects the second half of 2012 to be significantly stronger than the first six months. The high existing orders in the Systems business will have a positive effect in the second half of the year. The Group also believes that demand from the semiconductor market will increase in the fourth quarter. For 2012 as a whole, the Board of Directors and executive management are projecting sales and EBITDA operating profit at the prior-year level.
The COMET Group operates in growth markets and has a strong customer network worldwide. With its innovative, high-performing products and technologies, it is superbly positioned to exploit the ample potential for sustained profitable growth offered by applications such as, among others, mobile communication, non-contact sterilization that is environmentally friendly, and 3D imaging.
Media and analyst conference
COMET will present the published financial results for the first half of 2012 today, August 23, at 10:00 a.m. at the media and analyst conference in Zurich (location: SIX Swiss Exchange, Convention Point, Selnaustrasse 30).
Financial calendar for the COMET Group
November 14, 2012
Investor Day 2012
March 14, 2013
Publication of 2012 full-year results