Comet Group accelerates growth

Media Release
Flamatt, November 22, 2017

Comet Group accelerates growth

The Comet Group is profitably and rapidly moving forward. At its Investor Day, CEO René Lenggenhager, who assumed office in May, is reaffirming the Group's existing strategic direction. For the full year 2017 the Comet Group confirms its guidance of sales of CHF 430-450 million and an EBITDA margin of 14-16%. It also expects to reach the targets for 2020 – sales of CHF 500 million and an EBITDA margin of 16-18% – ahead of schedule, in 2019. Using four additional strategic levers, the Group plans to gear up for future requirements and exploit potential more swiftly. In support of these initiatives and overall growth, the function of head of human resources will be filled as a separate position at the Executive Committee level.

The Comet Group has significantly accelerated its growth in 2017, with all segments expanding strongly, and is marking important milestones in the execution of its strategy. The ongoing initiatives are well on track and new sets of measures were launched in 2017. In procurement, among other efforts to boost operational excellence, product groups have been combined. The construction of the facility expansion in Flamatt is on plan and the move-in is expected for fall 2018. With Lab One, its service and application center in Silicon Valley, the Comet Group has created space for cross-segment collaboration and development of new applications, across all of the Group's technologies and with a very wide range of customers. For this it was recognized in November at Productronica in Munich with the SMT Global Award in the Test Services category.

 

To the next level with four additional strategic accelerators

 

To prepare the Group for the demands of the future and be able to seize opportunities more quickly, the Comet Group will invest in four additional levers – digitalization, diversification, speed & agility and go-to-market – and has launched projects to drive these themes forward.

 

•  Digitalization: The aims of this Group-level initiative include making production processes more efficient and rapid through automation, using ongoing analysis of product data for predictive maintenance and new product development, and optimizing customers’ processes. To best support these goals, the head of IT and human resources, Eric Dubuis, will concentrate on his responsibilities as Chief Information Officer, which are growing as a result of digitalization. The position of head of HR will be filled separately at the Executive Committee level to reflect the importance of the function for the future of the company.

•  Diversification: The package of diversification measures consists of an overall strategy for developing the Asian market; of the entry into new applications especially for ebeam and radio frequency (RF) technology; and of the further expansion of the offering, including in the service business.

•  Speed & Agility: To support customers’ ever-shorter development cycles, the Comet Group is moving to adopt faster processes at all levels of the company: for example, in setting up an RF test lab in Flamatt that will be accessible around the clock to fill requests from anywhere in the world for analyses and evaluations.

•  Market access: This lever comprises initiatives for heightening market access, for cross-selling between segments, and for lead management.

 

 

Success of RF technology a prime mover – PCT remains a strong growth driver for the Group

 

The Comet Group expects continuing vigorous growth to come from the Plasma Control Technologies (PCT) segment. The key underlying driver is the broad-based demand in the semiconductor market, which is fueled not just by more powerful memory chips, larger volumes of data and more brilliant and bigger displays but also by new applications such as virtual reality, artificial intelligence and autonomous cars. China is increasingly investing in local value generation and is becoming an ever more vital region for PCT. With its ultra-precise, high-end solutions and new forms of collaboration, the Comet Group operates in all OEM markets and works closely with all key players both in the USA and Asia. Currently the focus is on the development of an entirely new, modular and high-performing RF power system platform, for which the PCT segment is expanding the RF and software competency at all development locations. Thus, the existing sites in San José and Shanghai were expanded. New scope is now being created for plasma analysis and diagnostics in Flamatt. Urgently needed production capacity is also being added, at the end of 2018 through the Flamatt plant expansion.

 

X-ray: Strategy in systems business refined; focus on potential from Industry 4.0

 

Trends like digitalization, miniaturization and additive manufacturing translate into attractive growth potential for the Comet Group’s x-ray business. In the smart factories of the future, testing systems will double as sensors that collect the data from the process, analyze it and permit automated optimization. In this space, IXS as a leading provider of x-ray and computed tomography solutions considers itself perfectly positioned and has focused its strategy. The goal is to reinterpret and capitalize on its many years of experience as a solution provider. With this in mind, IXS is investing in new capabilities, technologies, products and services. One notable step is the recent purchase of software algorithms from Microvista which enable IXS to more rapidly develop the business with real-time inspection of components in the production process (inline CT). In the metrology market, IXS won the first orders thanks to the successful launch of the FF CT metrology systems this summer. To reap the full benefits of digitalization in the future, IXS is continually reducing complexity and is working on a cross-product platform for software and hardware. Together with partners in the electronics industry, a project is also running to raise productivity through direct data transfer between the various components involved in the production process.

 

In the x-ray modules business, Comet has made a significant advance by bringing to market the IoT-capable iVario™, a high-voltage generator that is attracting the first orders. The introduction of the new generator both strengthens the market position and is an important element of the Group-wide drive to digitalize products and services. Notable progress was also made in the ongoing project centered on security inspection, which was therefore upgraded to a growth initiative.

 

EBT: Treatment of hatching eggs as a new application; new rollout plan with Tetra Pak

 

The Comet Group's newest business segment, ebeam Technologies, reaffirms its strategy of developing the business through new applications. As part of this approach, ebeam Technologies has entered a partnership with Bell Food Group AG, the largest meat processor in Switzerland. The joint objective is to develop an alternative, efficient and environmentally friendly method for the treatment of hatching eggs. A demonstrator now being built is to be used in 2018 to test the benefits of ebeam for this new application. The rollout in the sterilization of beverage packaging is proceeding more slowly than expected. The rollout is being adapted to match Tetra Pak's updated strategy, under which ebeam is to be integrated directly into the new generation of platforms. This leads to a delay in sales revenue.
The project for the inactivation of microbes on granular foods, in partnership with Bühler, is progressing to plan. A field test has confirmed the expectations; the task now is to optimize the system for commercial applications and present it to the market in the course of the coming year.

An important step forward was taken in the digital printing space, at Labelexpo in fall 2017. Here ebeam Technologies presented a commercial digital printing system for the safe and resource-saving personalization of food packaging, developed together with partners UTECO Converting and INX Digital. ebeam enjoyed an enthusiastic reception and was honored with the Global Sustainability Award. Medium-term, the segment will expand its focus to include new applications outside the existing target markets of food and digital printing.

The ebeam system business took a number of measures to improve profitability. Its cost structures at the US location were optimized and the portfolio there was focused on standard products.

 

Outlook: Expecting early achievement of 2020 targets 

 

The Comet Group is active in growth markets, is opening up appealing new applications with its technologies and has made strong growth. The management and Board of Directors therefore expect the 2020 targets of CHF 500 million in sales and an EBITDA margin of 16% to 18% to be achieved early, in 2019. In the next few years the Comet Group will invest substantially in the expansion of production capacity, the development of new applications and in the four additional strategic levers. Despite this investment, the Group expects to sustain its continual generation of value. For 2017 the Group reiterates its forecast of sales of CHF 430-450 million and an EBITDA margin of 14-16%. Specific guidance for 2018 will be provided on March 15, 2018.

 

Media Relations
Ines Najorka
Corporate Communications
T +41 31 744 99 96
ines.najorka@comet.ch

 

Key dates

March 15, 2018             Publication of annual report 2017

August 16, 2018            Publication of half-year report

 

Comet Group

The Comet Group is a globally leading, innovative Swiss technology company focused on the x-ray, radio frequency and ebeam businesses. With premium high-tech components and systems, we enable customers in numerous industries to both enhance the quality of their products and make their manufacturing more efficient and eco-friendly. Our innovative solutions under the Comet, Yxlon and ebeam brands are in demand for applications such as non-destructive testing and security inspection, the coating and treatment of surfaces, and non-contact sterilization.

Based in Flamatt, Switzerland, the Comet Group has a presence in all world markets. We employ about 1,300 people worldwide, including approximately 500 in Switzerland. With production facilities in China, Denmark, Germany, Switzerland and the USA, we maintain various subsidiaries in the USA, China, Japan and Korea. Comet (COTN) is listed on the SIX Swiss Exchange.