Comet Holding AG (XSWX:COTN) (H1 2026) Earnings Call Highlights: Strong Q2 Acceleration and ...

Negative Points

• Comet Holding AG ( XSWX:COTN ) faced significant currency headwinds, particularly from the US dollar, which negatively impacted reported sales growth and IXM's EBITDA margin, with a 12.7% constant currency growth versus 5.6% in Swiss francs.

• The IXS division remains EBITDA negative due to continued heavy investments in the CA20 product portfolio, with break-even not expected until fiscal year 2028 at the latest.

• Free cash flow was negative CHF19.3 million in H1, driven by high capital expenditures for the Penang facility and a buildup of inventory and receivables, leading to a temporary net debt position.

• The company's H1 ROSI of 8.7% was below its cost of capital of roughly 9%, indicating that economic value creation was not achieved in the first half.

• The full-year 2026 guidance includes one-off costs of approximately 3 percentage points on EBITDA margin (CHF15-18 million), related to the efficiency program and Penang ramp-up, which will weigh on profitability.

• Geopolitical tensions and trade disputes continue to create uncertainty in the semiconductor supply chain and industrial markets, with manufacturing activity remaining subdued and volume markets like smartphones and PCs recovering at a muted pace.

Q & A Highlights

Q: Can you provide more color on the order intake run rate? The Q2 book-to-bill implies orders of around $210 million. Is this sustainable, and does the guidance imply conservatism or that some orders are for 2027? A: Christian Witt (CFO): The guidance reflects our expectations for H2. We expect continued strong order flow, but the book-to-bill will be lower in H2 versus H1 because H1 was "a bit extreme" and we will have more deliveries. We do have some orders in the backlog for 2027, as some customers place one-year orders (PCT) or have longer lead times for complex equipment (IXS).

Q: Given the strong order momentum, should we expect orders to trend upwards or stay at this level over the medium term? Are there any one-offs in the Q2 order composition? A: Stephan Haferl (CEO) and Christian Witt (CFO): The fundamental demand is steadily increasing, driven by customer CapEx plans in WFE and advanced packaging. However, H1 included some "stockpile orders" (customers asking for everything immediately). While the absolute order intake in H2 might not be much higher than H1 due to this, the underlying demand is clearly growing. The NAND CapEx cycle is just beginning to contribute, and the sales funnel is growing much faster than incoming orders, indicating strong potential for future growth.

Q: What is your pricing strategy, and when will price increases be visible in the P&L? A: Stephan Haferl (CEO) and Christian Witt (CFO): We are committed to value-based pricing and have already started to adapt prices across the full product spectrum since the beginning of the year to adjust for inflationary pressures on inputs and transportation. The price increases are gradual and will be visible in H1 and H2 of 2026, continuing as a trend rather than a one-time event.

Q: Can you comment on whether your current and planned capacity can serve the potential demand for 2028, and how are you managing your downstream supply chain? A: Stephan Haferl (CEO): With the build-out in Penang, we have capacity until 2028 that will be comfortably above an output of CHF1 billion per year. Regarding our own supply chain, we currently have no serious choke points. We are managing escalations with a handful of vendors daily, but so far, we have avoided the severe disruptions seen in 2021-22.

Q: Can you speak about consignment inventory at your customers? What level of growth are you seeing, and is it factored into the 2026 guidance? A: Christian Witt (CFO): We see clear increases in consignment. Customers are requesting we put more inventory into their consignment bins. A good piece of our increased inventory is consignment as demanded by customers. We are watching to ensure it is being used, and we see that the stuff flows, confirming our plans for H2 and beyond.

Q: Regarding the margin guidance of 14% to 17% for 2026, why is the range so wide given we are late in the year? A: Christian Witt (CFO): The wide range is due to two factors: the exact final volume for the year and uncertainties on the product mix. We have quite a variance in margins per product, even within PCT, which makes the range relatively wide.

Q: Regarding the CA20, you mentioned doubling orders. Are we at a point of market acceptance where customers are making repeat orders, or is it still for niche applications? A: Stephan Haferl (CEO): We have repeat orders from customers that have gone beyond qualifying and testing and are now incorporating the CA20 into their workflows as a proven tool of record. We have created a bridgehead and are now penetrating the market, with a handsomely growing sales opportunity funnel.

Q: You mentioned NAND is starting to recover. How should we look at the pattern for 2027, given your NAND exposure? A: Stephan Haferl (CEO): The growth in H1 was mostly associated with DRAM and Logic. I expect the NAND cycle to sit on top of that and accelerate growth throughout the second half of the year and presumably into 2027, and maybe even 2028.

Q: Do you still see the cycle peaking in 2028, or will we see a jump in 2027 and then flat in 2028? A: Stephan Haferl (CEO): We are not differing from what we said at the Capital Market Day last fall, where we alluded to a potential peak of the cycle in mid-2028. We don't have more visibility than you on how the market will evolve after the peak.

Q: What is the expected CapEx for the full year 2026? A: Christian Witt (CFO): We expect CapEx for the full year 2026 to be clearly above 7% but also clearly below 10% of sales.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .