Implementation of organic growth strategy well on track
New in 2013, the COMET Group now reports in three market-based segments: X-Ray & ebeam Technologies and Plasma Control Technologies (which together previously made up the Modules & Components division) and X-Ray Systems (the former Systems division). Significant progress was made on all core thrusts of the strategy. The Group strengthened its capabilities in marketing and sales across all segments, stepped up business with key customers and developed new applications. With the opening of a new sales and application center in Korea, the Group expanded its network of sites to 13 locations worldwide and paved the way for further growth in the strategically important Asian market. The Group's emerging businesses also made good headway: The ebeam activities, within the X-Ray & ebeam Technologies segment, were made into a separate business unit with its own brand. Besides the preparations for the Tetra Pak rollout, the ebeam unit is focusing on tapping new applications for its technology. In portable YXLON x-ray systems, stronger market development activities were rewarded by sales growth of 36%, while COMET-branded RF generators made inroads in the laser industry. With new performance management tools – the worldwide implementation of Beyond Budgeting and the introduction of a new variable compensation system that, from 2014, ties profit-sharing compensation directly to the Group's net income – COMET continued in 2013 to build and refine the foundation for value-based management.
Plasma Control Technologies delivers record result
With sales growth of 40.0% from the year before, Plasma Control Technologies (PCT) contributed the largest share of the Group's revenue expansion (growth in local currencies: 40.8%). Sales of the PCT operating segment rose to CHF 81.5 million (2012: CHF 58.3 million). In 2013, Plasma Control Technologies benefited from the strong recovery in the semiconductor market, driven largely by the industry's transformational embrace of the new, 3D chip architecture. Through the development of new products and the expansion of its customer relationships, PCT had prepared itself very intensively for this technological course-change and, in 2013, began to reap the rewards of these efforts. As well, the market for high-resolution flat panel displays recovered and thus stimulated demand, especially for vacuum capacitors. With its high-quality RF generators, the segment was also able to position itself outside the semiconductor market, in the laser industry. The strong sales growth and leaner structures led to an increase in EBITDA operating earnings to CHF 10.7 million (2012: CHF 2.8 million) and an EBITDA margin of 13.1% (2012: 4.8%).
X-Ray & ebeam Technologies: solid growth thanks to intensified market development
Similarly, the X-Ray & ebeam Technologies (XET) segment significantly expanded its position with x-ray sources in the core business of non-destructive testing, buoyed by strong market development activities and customized products. New markets were created through new applications like the detection of precious minerals and metals. This helped the XET segment grow its sales by 14.7% to CHF 64.4 million (2012: CHF 56.1 million; growth in local currencies: 14.1%).
At ebeam, the new autonomous business unit, preparations are on track for the rollout with Tetra Pak of ebeam technology for the sterilization of beverage packaging. Through new applications, in the long term the unit intends to develop additional market segments for the environmentally friendly and cost-effective ebeam technology. Despite investment in the expansion of the ebeam business, the highly profitable X-Ray and ebeam Technologies segment achieved an EBITDA margin of 17.6% (2012: 22.3%). Operating earnings at EBITDA level were CHF 11.3 million (2012: CHF 12.5 million).
X-Ray Systems: further growth in profitability
A clear focus on high-margin products, the exploiting of market trends, and vigorous market development efforts were growth drivers for sales and profit margins in the X-Ray Systems segment. Bringing its many years of application experience to bear, the segment won new customers and boosted its sales by 5.6% to CHF 125.1 million (growth in local currencies: 7.3%). Business was very strong with laboratories and institutions that require high-resolution, high-performance computed tomography (CT) systems for 3D inspection. There was also brisk demand for microfocus systems in the electronics market and for automobile tire inspection systems. Within X-Ray Systems, the most rapid growth was realized in portable x-ray solutions, thanks to purposeful market development and marketing.
For the operating segment as a whole, the tight focus on high-margin products and lean processes led to a further improvement in EBITDA margin to 12.9% (2012: 9.7%). EBITDA earnings rose to CHF 16.1 million (2012: CHF 11.5 million).
Doubling of dividend
At the next Annual Shareholder Meeting, the Board of Directors will propose a distribution of CHF 8.00 per share to shareholders from distributable paid-in capital (2012: CHF 4.00 per share). This represents a payout of 38% of net income.
Outlook: Expecting continuous profitable growth
With its innovative technologies and products, the COMET Group is superbly positioned to exploit current market trends. The business strategy proved its worth in 2013. The Board and management are convinced that, unless there is a deterioration in the economic environment and currency situation, the Group will be able to steadily maintain its profitable growth. On this basis, the guidance for 2014 is for sales of CHF 270 million to CHF 290 million and an EBITDA margin slightly above the prior year.
Annual report 2013
The COMET Group's current annual report is available at www.comet-group.com.
Media and analyst conference
COMET will present the published financial results for 2013 today, March 20, 2014, at 10:00 a.m. at the media and analyst conference in Zurich (location: SIX Swiss Exchange, Convention Point, Selnaustrasse 30).
COMET Group conference call
Thursday, March 20, 2014, from 4:00 p.m. to 5:00 p.m. CET. Ronald Fehlmann, CEO, and Markus Portmann, CFO, will provide information about the Group’s full year results 2013 during a telephone conference call and answer questions. The dial-in conference call will be held in English. To participate in the conference call, please dial the following number (please call 10 to 15 minutes before the hour):
+41 (0)58 310 50 00 (Europe)
+44 (0)203 059 58 62 (UK)
+1 (1)631 570 5613 (USA)
Financial calendar for the COMET Group
April 24, 2014
Annual Shareholder Meeting
August 21, 2014
Publication of half-year report 2014
The COMET Group is one of the world’s leading manufacturers of systems and components for the non-destructive testing, security and semiconductor markets. Since acquiring the YXLON group, COMET has been the global market leader in x-ray-based non-destructive testing and examination. With core competencies in vacuum technology, high voltage engineering and materials science, and core products that include x-ray tubes and vacuum capacitors, COMET is a one-stop provider of a complete and highly flexible range of components, modules, systems and services. The activities are grouped into three segments: X-Ray & ebeam Technologies (under the COMET and ebeam brands), Plasma Control Technologies (under the COMET brand) and X-Ray Systems (under the YXLON brand).
COMET was founded in 1948 and is based in Flamatt near Berne, Switzerland. The COMET Group has a presence in all world markets. It operates production facilities in Switzerland, Germany, Denmark, China and the USA and maintains other subsidiaries in the USA, China Japan and Korea. COMET’s stock (COTN) is listed on the SIX Swiss Exchange.