Comet Holding Ag · SIX:COTN
Comet — FY2019 Earnings Presentation
37 slides from Comet's earnings presentation, Mar 19, 2020
Slide 1: Full-Year Results 2019
Full-Year Results 2019 Heinz Kundert Chairman of the Board and CEO Nicola Rotondo Vice President, Group Controlling Comet Holding AG Herrengasse 10 CH-3175 Flamatt T +41 31 744 90 00 www.comet-group.com
Slide 2: Agenda
Full-Year Results 2019 Agenda 01 Comet Group’s FY 2019 at a Glance Heinz Kundert 02 Strategic Direction Heinz Kundert 03 Financial Review Nicola Rotondo 04 Outlook Heinz Kundert 05 Questions & Answers
Slide 3: Comet masters the challenges of a demanding year
Performance at a glance Comet masters the challenges of a demanding year 371.6 10.8% 30.0 50.0% Net sales in CHFm EBITDA margin Free cash flow in CHFm Equity ratio (-14.8% vs. 2018) (vs. 9.8% in 2018) (vs. CHF 0.8m in 2018) Successful ramp-up along Above prior year and Substantially improved free Ro
Slide 4: Performance of Comet Group and divisions
Performance at a glance Performance of Comet Group and divisions PCT IXM IXS EBT (41%*) (17%*) (38%*) (4%*) Division 371.6 151.7 78.1 139.6 15.5 Net sales in CHFm -15% vs. 2018 -28.5% vs. 2018 -3.8% vs. 2018 +2.9% vs. 2018 -22.5% vs. 2018 in CHFm / margin 40.0 15.4 21.7 12.0 -6.2 EBITDA 10.8% 10.1%
Slide 5: PCT: Successful ramp-up in Q4; investments in future projects are reflected in earnings
Review PCT: Successful ramp-up in Q4; investments in future projects are reflected in earnings Full-year sales down 28% • Continued memory overcapacity in H1 Net sales EBITDA in CHF millions in CHF millions • Rapid ramp-up managed in Q4 212.2 43.5 EBITDA margin at 10.1% due to: • Low volume and cont
Slide 6: IXM: Increased profitability despite slowdown in core markets
Review IXM: Increased profitability despite slowdown in core markets Full-year sales down slightly (3.8%) • General slowdown in global Net sales EBITDA in CHF millions in CHF millions economic growth 81.2 78.1 21.7 27.8% EBITDA margin, increase by 20.7 2.3 pp vs. previous year • Thanks to tight over
Slide 7: IXS: Restructuring bearing fruit: Strongly improved profitability
Review IXS: Restructuring bearing fruit: Strongly improved profi- tability; Focus strategy to leverage even more potential +2.9% in sales vs. previous year • At guided level, driven primarily by Net sales EBITDA in CHF millions in CHF millions orders from electronics and aerospace 135.7 139.6 12 Inc
Slide 8: EBT: Positive effect from divestiture and cost savings
Review EBT: Positive effect from divestiture and cost savings – assessment of strategic options ongoing Full-year sales at guided level Net sales EBITDA in CHF millions in CHF millions Substantial CHF 13.7 improvement in EBITDA loss thanks to: 2018 2019 • Divestiture of loss-making US 20 systems man
Slide 9: The course for the future is set
02 The course for the future is set
Slide 10: Strategic direction is defined
Strategic Direction Strategic direction is defined Boost Growth Boost Efficiency Boost Culture Focus strategy Group-wide organizational Implementation of Boost is set “health check” with measures to initiated, comprising become a high-performing 20 initiatives organization Full-Year Results 2019 3/1
Slide 11: Strategy and company portfolio revised and refined
Strategic Direction Strategy and company portfolio revised and refined; Semiconductor & electronics as main market Now 2 established technologies, down from 3 Now 4 core markets, down from 9 Repositioning of X-Ray Systems business Focus on modular, standardized systems and digital services based on
Slide 12: Organizational health check done; implementation of initiatives well underway
Strategic Direction Organizational health check done; implementation of initiatives addressing findings is well underway High participation rate of 81% of employees worldwide Finding: Comet is functioning, but not high-performing More focused operating model as basis for addressing majority of findi
Slide 13: Boost strategy implementation program initiated
Strategic Direction “Boost” strategy implementation program initiated to increase growth and efficiency and create a high-performing organization Conceptual phase completed, implementation underway Boost 20 projects Growth 2020 2021 2022 2023 2024 2025 Boost Efficiency Boost Culture 2020 2021 2022 2
Slide 14: Joint program with IMD to strengthen culture
Boost Example Joint program with IMD to Boost strengthen culture Culture Program kicked off to enable change in behavior and put needed change into action with a diverse group of leaders and managers from across the organization • Shaping the organization, enabling leaders and talents Building on
Slide 15: Strengthen product and service offering to address new applications
Boost Example Strengthen product and service offering Boost to address new applications and increase Growth share of wallet Offering Purpose Goal Enter new market segment RF Generator Forward integration of RF generators, with a market size of PCT Generators approx. CHF 700m, from 2021 onwards Enter
Slide 16: Strengthening global footprint as enabler of growth and higher efficiency
Boost Example Strengthening global footprint as Boost enabler of growth and higher efficiency Growth Asset light approach New facility in Aachen, Germany Production facility in Penang, Malaysia Move from Stolberg into a new building in Legal entity established in early 2020, preparations Aachen as m
Slide 17: Initiatives ongoing in all divisions to reduce cost and improve performance
Boost Example Initiatives ongoing in all divisions Boost to reduce cost and improve performance Efficiency Examples at IXS - Similar initiatives underway in all divisions Reduction of Reduction of warranty costs throughput time (in % of sales) (in days for Cougar/Cheetah) 7 1.7% 6.4 1.4% 1.3% 4.7 In
Slide 18: Financial Review
03 Financial Review cemet group
Slide 19: Decreased net sales, stable profitability with strong free cash flow
Financial Results Decreased net sales, stable profitability with strong free cash flow Growth Profitability Net sales Net income EBITDA Free cash in CHF in CHF * margin * flow in CHF * Decrease of Decrease of Increase of Increase 14.8% 2.6% 1.0 pp year-over-year from year-over-year from year-over-ye
Slide 20: Reduced net debt and robust equity ratio
Financial Results Reduced net debt and robust equity ratio Quality of balance sheet Earning power Net debt Equity Economic Return on in CHF ratio profit in CHF capital employed * Decrease in net debt vs. 2018 from Down 2.1 pp vs. 2018 from Increase by Increase of 39.0m to 25.0m 52.1% to 50.0% 0.4m 0
Slide 21: Impact of IFRS 16 restatement on financial key indicators
Financial Results Impact of IFRS 16 restatement on financial key indicators 2019 2018 2018 in CHF millions Actual Restated IFRS 16 As reported • Full IFRS 16 restatement with EBITDA 40.0 43.0 5.2 37.8 adjustment of prior period In % of sales 10.8% 9.8% 1.1% 8.7% Depreciation & amortization -20.0 -24
Slide 22: Stable operating income and EBITDA despite decline in net sales
Financial Results Stable operating income and EBITDA despite decline in net sales Change in CHF millions 2019 2018* Absolute In % • Book-to-bill of 1.08 and New orders 402.3 436.5 -34.2 -7.8% an increased backlog Order backlog 137.4 113.9 23.5 20.6% Book-to-bill ratio 1.08 1.00 0.08 8.0% • Slightly
Slide 23: Strong cash flow as a result of rigorous net working capital management
Financial Results Strong cash flow as a result of rigorous net working capital management Change • Reduced NWC of CHF 12.6m in CHF millions 2019 2018* Absolute as driver of the improved Net cash provided by operating activities 48.7 27.7 21.0 operating cash flow In % of net sales 13.1% 6.4% • Free c
Slide 24: Ongoing sound balance sheet ratios
Financial Results Ongoing sound balance sheet ratios in CHF millions 2019 2018* • Increase in current assets related to the increase in cash Current assets 217.2 55.5% 206.1 54.2% (CHF 17.3m), offset partly by Non-current assets 174.5 44.5% 174.2 45.8% lower working capital items Total assets 391.7
Slide 25: Sales performance affected by downturn at PCT
Financial Results Sales performance affected by downturn at PCT CHF millions -14.8% 436.4 -62.0 +5.3 -1.9 -4.1 -1.0 371.6 -1.1 Volume effect Negative in local currencies currency effect CHF -63.6m (-14.6%) (-0.2%) Net sales 2018 PCT IXS IXM EBT Elim. Currency Net sales 2019 intersegment translation
Slide 26: EBITDA margin above prior year
Financial Results EBITDA margin above prior year (below prior year on a comparable basis) +1.0pp 2.4% 12.2% 0.6% 10.8% 4.0% 10.2% 1.1% 9.8% 8.7% 6.0% -2.0pp 2018 IFRS 16 2018 EBS & IXS 2018 Lower Sales Cost 2019@ fx impact 2019 as reported restatement Restated impact normalized reduction constant fx
Slide 27: Net income at prior-year level
Financial Results Net income at prior-year level (below prior year on a comparable basis) Impacts after tax in CHFm -0.3 12.0 24.3 25.1 -13.2 12.3 0.0 12.3 0.9 12.0 11.9 11.1 2018 IFRS 16 2018 EBS & IXS 2018 Cost 2019@ fx impact 2019 as reported restatement Restated impact normalized Lower Sales red
Slide 28: Decreasing USD exposure; structural cost base in CHF
FINANCIAL RESULTS Decreasing USD exposure; structural cost base in CHF 100% 5% EBIT of CHF 19.9m • Structural cost base in 90% CHF remains high Net USD exposure 80% 28% of CHF 89.8m • USD net exposure decreased 52% (2018: CHF 98m) due to lower PCT Sales in 70% USD 60% 10% • Natural hedge of EUR 50%
Slide 29: Dividend proposal of CHF 1.00 per share for shareholders
FINANCIAL RESULTS Dividend proposal of CHF 1.00 per share for shareholders 1.6 in CHF 80% 1.5 75% * The Board of Directors will 1.4 70% propose to distribute CHF 1.00 65% per share as a regular dividend 1.2 1.2 1.2 60% (with a pay-out ratio of 65% 1.1 based on EPS of CHF 1.55) 1.0 1.0 50% 50% 0.8 40
Slide 30: Sales started to increase again
Financial Results Sales started to increase again Growth vs. prior HY Net Sales (in Mio. CHF) • In H2_18 and again in 223 232 250000 H1_19, sales declined by a 30% 221 204 195 respective 12% and 13%, 183 177 200000 due to the downturn at PCT 20% 22% 22% 150000 • In H2_19, sales increased by 10% vs.
Slide 31: Outlook
Outlook cemet group
Slide 32: Fundamental market drivers intact; Digitalization is progressing
Outlook Fundamental market drivers intact; Digitalization is progressing Front-end: More safety-critical Digitalization from analog Tourism, immigration, AI, IoT, ML, 5G, electronics parts needing to digital film online commerce autonomous cars inspection fostering demand Energy-efficient drives for
Slide 33: The stage is set: Comet continues to rapidly implement improvement initiatives
Summary The stage is set: Comet continues to rapidly implement improvement initiatives Work on Fundamental improvement Clear strategic Strong financial growth drivers measures based focus footing intact on Health Check and Boost program Full-Year Results 2019 3/19/2020 33
Slide 34: Outlook for 2020
Outlook Outlook for 2020 Cautiously positive despite Industry analysts continue to expect semi market to Covid-19 recover vs. 2019 Impact on supply chains difficult to As visibility is assess, postponement of installations cannot be ruled out currently low amid the coronavirus Currently, 3 weeks o
Slide 35: cemet
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Slide 36: Important information regarding AGM on April 23, 2020
Important information regarding AGM on April 23, 2020 As a result of the exceptional situation around the coronavirus outbreak, and in reliance on section 6a (1) (b) of Ordinance 2 on Measures to Fight the Coronavirus (as amended March 16, 2020), Comet has decided to hold the Annual Shareholder Meet
Slide 37: cemet
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