Comet Group: Difficult market environment weighs on first-half results – Cost reduction measures executed – Strategic direction set

Media Release

Flamatt, Switzerland – August 15, 2019

Comet Group: Difficult market environment weighs on first-half results – Cost reduction measures executed – Strategic direction set

First half of 2019

  • Sales decrease of 23.8% to CHF 177.0 million
  • EBITDA margin reduction from 13.8% to 4.8%
  • Increase in operating cash flow margin from 2% to 8%
  • High equity ratio of 48.8%


  • Moderate recovery in semiconductor market expected in 2020
  • Strengthening of the two core businesses, plasma control and x-ray technology
  • Repositioning of x-ray systems business (Yxlon)
  • Development of strategic options for ebeam business
  • Measures to substantially boost efficiency

In the first half of 2019, as expected, the Comet Group experienced a sharp cyclical reduction in revenue in the semiconductor market. Compared to the strong first half of 2018, the Group registered a decrease of 23.8% in consolidated net sales to CHF 177.0 million. The first restructuring measures in the X-Ray Systems and ebeam divisions, already initiated in 2018, had a positive impact, but were not able to counterbalance the effects of the revenue drop in the Plasma Control Technologies division. Management implemented a Group-wide, further package of measures to lower the cost base, while purposefully continuing the program of investment in projects of strategic significance for the future. Operating earnings at EBITDA level were CHF 8.5 million (H1 2018: CHF 32.1 million) and the EBITDA margin was 4.8% (H1 2018: 13.8%). The Group’s net loss of CHF 3.1 million in the first half of the year represented a significant change from the year-earlier result (H1 2018: net income of CHF 14.5 million). With the first-time application of IFRS 16, the prior-year comparative results were also adjusted accordingly, raising the EBITDA margin for the first half of 2018 by 1.1 percentage points and increasing net income for that period by CHF 0.1 million.


The consolidated equity ratio at June 30, 2019 continues to be high at 48.8%. With this and its healthy liquidity level, the Comet Group remains on a robust financial footing.


PCT: Bottom of cyclical market downturn reached – New, innovative generator presented to key accounts

Amid the continued downswing in the semiconductor market, sales of the Plasma Control Technologies division (PCT) declined by 40.9% from the strong year-earlier period to CHF 73.1 million, or (as expected) by 17.6% sequentially from the second half of 2018. Management adjusted costs in line with current demand, but continued the investment in the new radio frequency (RF) power generator and other new products. The presentation of the innovative generator to key customers met with strong interest and heralds an important milestone.


As reported by the Semiconductor Industry Association (SIA), the first half of the year witnessed a stabilization in memory chip prices and brought an unexpected rise in deliveries. Comet therefore expects that the semiconductor cycle has reached bottom and the company is preparing for the gradual recovery of demand in 2020. As a result of the market situation in combination with the existing cost structures and the consciously maintained investment in new products, EBITDA operating earnings declined to CHF 3.2 million (H1 2018: CHF 30.9 million).


IXS: Slight growth and significant earnings improvement

The improvement program launched in the prior year in the X-Ray Systems division (IXS) has been bearing fruit. Sales increased by 3.5% to CHF 67.3 million. Despite the uncertain macroeconomic environment, IXS was able to grow sales of its x-ray and computed tomography (CT) systems in the aerospace, automotive and electronics markets. A significant contribution was also made by recent product innovations like the proprietary, innovation-award-winning Geminy software platform for CT systems, which enables synergies between the product groups while cutting complexity. The division’s EBITDA operating earnings rose significantly to CHF 3.5 million (H1 2018: CHF 0.4 million). The high new orders and the operational improvements are cause for optimism regarding target achievement in 2019.


IXM: Sales down for market reasons – Continuing high EBITDA profitability

The Industrial X-Ray Modules division (IXM) in the first half of 2019 had to contend with a slowdown in its core markets of non-destructive testing and security inspection, but was able to maintain its high market share. In the oil and gas sector in the USA, customer investment fell considerably from the exceptionally high level of the prior year. As well, customers in the security inspection space temporarily reduced their capital expenditures for freight and baggage screening. Sales eased by 9.8% year-over-year to CHF 36.8 million. The cost-saving measures taken were not able to make up for the effects of the sales decrease and a changed product mix. EBITDA operating earnings were CHF 7.8 million (H1 2018:  CHF 10.6 million). The EBITDA margin remained high at 21.1% (H1 2018: 25.9%).


EBT: Improvement from year-earlier level – Reduction of risks and costs initiated

Last year’s focusing of the ebeam business through the disposal of the US systems arm had a positive impact in the first half of 2019. The ebeam Technologies division significantly reduced its EBITDA loss from the year-ago level of CHF 7.5 million to CHF 3.0 million. Sales in the remaining business of components and modules reached CHF 7.0 million (H1 2018: CHF 9.6 million). 


Strategic focus on core business

As an outcome of its strategic review, the Comet Group has decided to realign itself. It will focus on the core business – plasma control and industrial x-ray technology – and is exploring strategic options for the ebeam business. It is also reorienting the x-ray systems business, where it will concentrate on profitable growth markets for innovative standardized systems. A Group-wide priority is to adjust structures, processes and costs and make them more flexible in order to boost profitability and more effectively buffer future market volatility. As well, Comet its reducing the size of its Executive Committee from seven to six members by removing the Human Resources position at this level of management.


Strengthening of the Plasma Control Technologies core business

Comet plans to further expand its position in the semiconductor market and leverage the upside drivers of progressive digitalization and big data. The aim is to exploit the potential to the fullest through new products and applications with existing and new customers, especially in Asia. An important requirement for this is the further successful development of the new generator, which was recently unveiled to a small group of customers. In addition, the service business is being expanded.


Reorientation of the x-ray systems business

The Comet Group also sees attractive potential in the industrial x-ray business, as a vendor of inspection systems for safety-sensitive components and as a manufacturing partner for the predictive improvement of production processes by means of data analytics, artificial intelligence and machine learning. By offering modular, standardized systems, the x-ray systems activities will be focused on high-growth market segments, particularly the electronics, aerospace and automotive sectors. The x-ray module business still remaining with Yxlon will be transferred to Comet. Throughput times are to be further reduced in order to strongly raise profitability. The service business, which is being strongly expanded, is also to play a major role in the profit growth.


Expansion of x-ray module business

Comet also sees very high potential in the x-ray modules activities and plans to step up their expansion. The most important strategic thrust for this is the continual broadening of the product portfolio to enable applications such as the inspection of ever smaller components, 3D-printed parts and composite materials and the efficient examination of products in-process in the manufacturing line.


Expanding in Asia

The share of the Asia business will continue to grow. To support this growth, Comet will push ahead with the expansion of sales, service and operations in this region.



While the effects of geopolitical tensions remain difficult to predict, Comet believes that the bottom of the semiconductor cycle has been reached and demand will recover in 2020 both in the semiconductor market and the x-ray sector. For the full year 2019 the Group expects sales of between CHF 350 million and CHF 370 million and an EBITDA margin of 7.0% to 8.5%.


Publication of the half-year report

The detailed half-year results and the fundamental strategic direction will be presented today at 10:00 a.m. CEST at the media and analyst conference in Zurich. In addition, at 4:15 p.m. CEST today, a conference call in English will be held with Comet Group Chairman and CEO Heinz Kundert and Chief Financial Officer Beat Malacarne.


To participate, please dial in 10 minutes before the conference or join by webcast:

+ 41 (0)58 310 50 00 (Europa)

+ 44 (0)203 059 58 62 (UK)

+ 1 (1)631 570 56 13 (USA)


Investor Day on November 21, 2019

The Comet Group’s annual Investor Day will be held on November 21, 2019 in Flamatt, Switzerland.

Ines Najorka
VP Corporate Communications
T +41 31 744 99 96


Key dates

November 21, 2019: Investor Day

March 19, 2020: Publication of annual results

April 23, 2020: Annual Shareholder Meeting


The Comet Group

The Comet Group is a globally leading, innovative Swiss technology company with a focus on x-ray, radio frequency power and ebeam. 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 more than 1,300 people worldwide, including over 500 in Switzerland. Besides production facilities in China, Denmark, Germany, Switzerland and the USA, we maintain various other subsidiaries in the USA, China, Japan and Korea. Comet (COTN) is listed on the SIX Swiss Exchange.