The growth trajectory of the COMET Group continued in the first half of 2014 as expected. Growth was achieved in all segments and regions. Consolidated net sales increased by 25.0% year-over-year to CHF 132.6 million (HY1 2013: CHF 106.0 million), or by fully 29.3% in local currencies. COMET's fastest growth was in the Plasma Control Technologies segment, buoyed by the strong demand in the semiconductor market.

 
Operating earnings at the EBITDA level rose to CHF 10.7 million (HY1 2013: CHF 9.8 million), even with the strategic investment in future growth in areas such as ebeam, HF generators and CT. Adverse exchange rate effects trimmed CHF 1.8 million or 1.4% percentage points off the EBITDA margin, bringing it to 8.1% (HY1 2013: 9.2%).

 
Net income, helped by a good net financial items result, expanded by 64.9% to CHF 4.4 million (HY1 2013: CHF 2.7 million). Free cash flow also improved markedly, rising to a positive CHF 8.3 million (HY1 2013: cash use of CHF 3.3 million) on active working capital management. With an equity ratio of 59.3% the COMET Group continues to feature a very sound balance sheet (2013 year-end: 60.5%).

 
In the first half of the year, to raise more synergies in market development, the Group moved its portable x-ray modules business from the X-Ray Systems segment (IXS) to the X-Ray & ebeam Technologies segment (XET).

XET – market position expanded; investment in growth weighs on profitability
The X-Ray & ebeam Technologies segment (including the portable x-ray modules activities) expanded its market position in the core business of non-destructive testing thanks to its well-proven forward strategy of marketing complete x-ray sources and through intensified market development, while also achieving growth in security inspection with new projects. Sales grew by 5.9 % to CHF 35.4 million, or by 8.5% in local currencies (HY1 2013: CHF 33.4 million). The EBITDA margin, however, declined to 4.1%, or well below the year-ago level (HY1 2013: 17%). This lower EBITDA margin reflected not just strategic investment in building up the ebeam business but also spending to stimulate future growth in x-ray sources (such as expenditure for research and development, marketing and sales). The build-out of the ebeam activities, with the preparations for the rollout for Tetra Pak and the development of new applications, is progressing according to plan. A first commercial system equipped with ebeam has been delivered to Japan. For the second half of the year, XET is projecting continuous sales growth and an improvement in EBITDA margin to near the prior-year level.
 

PCT – Powerful, profitable growth with semiconductor industry
In the first half of 2014, as in 2013, Plasma Control Technologies (PCT) reaped the benefits of the previous years' investments. Sales surged 58.0% to a new total of CHF 52.6 million. In local currencies the increase was 64.2% year-over-year (HY1 2013: CHF 33.3 million). The critical driver of the growth was the switch by chip manufacturers to new, 3D chip technologies.

 
PCT optimally positioned its products, and expanded the business both with key accounts and new customers. At the recently opened site in Korea, projects progressed well and the collaboration with local customers was stepped up. Among other initiatives, new and powerful RF generator features were developed – thus also meeting an important requirement for the future use of the generators by the semiconductor industry. Thanks to higher volume, PCT sharply improved its EBITDA margin to 15.3% (HY1 2013: 8.7%). For the second half of the year, the segment expects demand in the semiconductor market to ease slightly from the high level of the first half.
 

IXS – Strong, profitable growth as intensified market development pays off
The X-Ray Systems segment (IXS), which since the beginning of the year focuses only on stationary x-ray systems, was able to increase sales in the first six months by 16.5% to CHF 53.0 million (HY1 2013: CHF 45.5 million). In local currencies, the segment grew by 20.5%.

Since January, IXS has focused its market development on growth segments, achieving its growth especially with standard systems for the automotive and casting industries. The highlight of the first-half reporting period, however, was the presentation of a new family of computed tomography equipment whose intuitive controls and precision made it an attention magnet for customers and other visitors at CONTROL, the world's leading trade show for quality assurance technology. The launch of the first of these systems is planned for early 2015. Despite investment in concentrating the Group's CT capabilities at the Hamburg location, the EBITDA margin improved to 5.3% (HY1 2013: 4.7%) as a result of lower functional costs relative to sales. For the second half of the year, IXS foresees a significant revenue increase, based in part on an order backlog that is 9% higher than a year ago.

 
Outlook: Vigorous sales growth with currency-driven slightly lower EBITDA margin
In view especially of brisk growth in the systems business, the Board of Directors and Executive Committee are predicting a stronger second half of 2014 compared to the first six months of the year. For the full year 2014, the COMET Group is slightly raising the existing sales forecast to between CHF 275 million and CHF 295 million.

The Board and executive management expect to further boost the return on capital employed year-over-year, and thus remain committed to the planned investment in the strategic growth initiatives. In the context of this investment, a study was commissioned to evaluate the facility expansion at the Flamatt site in preparation for the expected growth in the ebeam segment. The strong Swiss franc will mean an easing in the EBITDA margin to between 13% and 14% (2013: 14.4%). In absolute terms, EBITDA operating earnings are expected to come in slightly above the prior year’s and net income is also predicted to grow.

Media and analyst conference
COMET will present the published financial results for the first half of 2014 today, August 21, 2014, at 10:00 am 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 21, 2014 from 3:30 pm to 4:30 pm 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)