Comet Holding AG (COTN) Earnings Call Transcript & Summary

So good morning, ladies and gentlemen, here in the room, but also welcome -- a warm welcome to the guests that are joining us by live video webcast. Good morning to all. After 2 Capital Markets Day in virtual format, it's really great to see you all and many familiar faces here in the room. So thanks already now for coming. What we have prepared for you today, you see the agenda on the screen, respectively, in the webcast. So that reminds me that I kindly ask you to switch off your mobile phones. That would be a great thing that we do not disturb the speakers too much. So after 1 hour of presentation, we'll have a short break where you can grab coffee outside. We'll reconvene at quarter to 11:00 to do the second part then. To start with the disclaimer, as usual, please read it. You know that we're making forward-looking statements today during the presentation. So you're familiar with that. But kindly ask you to read through that carefully. So with that, I've already completed my part, and it is now the pleasure to hand over to our CEO, Stephan Haferl. Stephan, please?

Well, thank you, Uli, and welcome to Comet's Capital Market Day 2022. So a couple of things upfront. First of all, I'd like to welcome 2 new colleagues in the executive team. So I have Dionys van de Ven, new President of IXS. He will be on stage later on. So you don't have to turn your heads, not yet. And Michael Berger, who's hiding behind there, the new President of IXM, my successor. Let me also upfront comment on today's media release. We've already had a couple of questions this morning. There is a complex short notice impact on our business in China. We, therefore, indicated today that we assume that we will be rather on the lower end of the guidance. We're not changing the guidance, just being a little bit more precise. We might be at the lower end of our guidance, if no other, call it, force majeure events occur. Lastly, we will speak on the 2023 guidance in March next year when we present the full year results '22. So today is going to be on the mid- and long-term outlook, and you will see the perspectives for us are bright. So we defined Comet's strategy in 2019. And as we -- as I have stressed and emphasized on many occasions, we will not make any fundamental changes to the strategy. So as a result of our strategy process back in 2019, we divested ebeam -- divested and disentangled ebeam during '20 and '21. And as a result, today, we are one company. We fostered 2 technologies: RF power and X-ray. We go to market with 3 divisions addressing mainly 4 market segments: semi, automotive, aerospace and security. All 3 divisions focus, however, mainly on growth in the semiconductor industry. Why is that? Well, there is better structural growth. We have better margins, more opportunities than in our traditional markets and, very important, more synergies between the divisions. However, our other 3 traditional key end markets, automotive as well as aerospace and security, we continue to serve. They are interesting but not as interesting in terms of growth and volume as the semiconductor industry. So we execute our strategy with our company-wide and pervasive Boost program, featuring laser focus on and investment into growth, efficiency and culture. So with this focus, Comet is very well positioned to work towards the 2025 targets of CHF 830 million in sales, 25% EBITDA and 30% of ROCE. So we are today in strong positions in all our businesses, in 2 divisions as clear #1 and at IXS among the top 3. PCT is a very clear market leader for vacant capacitors and RF matchboxes, but we have constantly gained market share over the past couple of years. We haven't been all too competitive with the RF generators we offered in the past. This will clearly change with Synertia. We are projecting to achieve around 10% of market share in 2025. At IXS, we are in our focused market semi-electronics #3, with a sizable market share already close behind #1 and #2. We will catch up further with our new products and our refocused strategy. IXM, where I come from, is small but beautiful and equally clear, maybe even more so, market leader for metal ceramic X-ray tubes, where we invested heavily in product development in the last 3 years, also during the downturn. We have had good success in the marketplace with new products, semi electronics and battery inspection. So to summarize, we are very well positioned in our markets. We have strong product basis for further profitable growth. So where are our markets geographically? Although we are headquartered in Switzerland, we generate most of our revenues in the key North American and Asian markets, both contributing slightly more than 40% of revenue. Europe remains mainly a market for X-ray, both X-ray divisions, less so for the heavy semi-related PCT business. Positioning ourselves as technology leaders, it is important to be very close to our customers for co-development projects. And therefore, we've taken several expansion steps in the last 3 years, examples being Malaysia, Penang, where we just have the official inauguration 5, 6 weeks ago, but also in Taiwan, Japan and South Korea. I'll talk about expansion and future plans on one of the next slides. Key message here, we are present where our markets and customers are, and we are convinced, both in terms of product offering and market presence that we are very well positioned to grow within our markets. So let's talk about our markets. Our main -- our focus market, as already emphasized earlier, is the semiconductor industry, where as critical component supplier, we play a vital role in the entire global semiconductor value chain. This is especially true for PCT but increasingly also for both X-ray divisions. Until '25, we estimate that we will generate around 75% of the group's revenue within this industry. For PCT alone, the current TAM including the new RF generator platform, Synertia, amounts to approximately $2.1 billion. Our customers are the wafer fab equipment manufacturers in the front end for PCT and the OSATs in the back end for our X-ray divisions and with advanced packaging, and that is sort of the interesting play going forward. With advanced packaging solutions, increasingly also the IDMs and foundries in the middle. We supply with PCT an industry, which is highly consolidated, with 3 players accounting for approximately 80% of the wafer fab equipment market, whereas up the value chain as you move further to the semi device manufacturers and also the OSATs, the value chain, the field gets wider. Now common to all the players in the industry along the entire value chain is that there are very high requirements in terms of the technology you have to offer, reliability and quality. Only a few companies are meeting those requirements across the entire value chain. Comet is one of them. So to summarize, Comet's products are critical in one of the fastest-growing and most demanding industries of our times. Our TAM is approximately $2.1 billion, which is a nice volume and market to be growing in. And it is highly consolidated with high barriers of entry and, ultimately, critical for a market -- an entire market, which is $2.4 trillion. So as one group, we have the advantage that we are present along the entire value chain, with critical RF subsystems in the front end, a nondestructive X-ray testing in the back end, both serving increasingly, and that is interesting, partially the same customers. So let me exemplify this with a video. And I hope technology is not going to fail me. There you go. The magic of [indiscernible]. [Presentation]

So what are the success factors to achieve all of this? In the front end, precise control of the process conditions, so the plasma conditions, which is crucial for improved yield and enabling smaller and smaller technology nodes. In the back end, nondestructive methods for quality inspection, such as X-ray as well as process optimization, relying on low total X-ray dose, highest resolution and also high speed. And increasingly, as shown in the -- and stipulated in the video, AI plays an important, very important role for automated defect recognition and process optimization. So to summarize, combining our X-ray businesses with PCT makes perfect sense. So where is our main industry headed? Now looking beyond the expected dip in 2023, the semiconductor market will experience secular growth going forward. And that is driven by an increasing number of trends from general digitalization to edge computing, big data, AI, smart mobility, connectivity to consumer electronics. Semi demand remains fueled by this data-driven economy and society and is expected to reach at least $1 trillion by 2030. Now the anticipated cyclical semi downturn, which is almost asked for in the media, happens probably earlier than previously anticipated and is pulled forward into 2023 rather than previously reported to 2024. The current driver of the down cycle in spend is sort of, as usual, memory where, over the past couple of quarters, a strong demand and supply imbalance existed and probably still exists. Logic/foundry are still expected to grow. As a matter of fact, shortages are still something that we, at Comet, battle every day. So the projected revenue growth in 2023 for the semiconductor industry, the entire industry, is probably a negative 3% to 4%. Excluding memory, we anticipate it would be a positive 1%. So to summarize, despite a dip that is forecasted to be less pronounced than downturns in the past, Comet is focused on the right industry, showing robust growth past 2023. Given the increasing number of trends supporting the semi industry amplitudes and duration of down cycles, our projected -- or we anticipate that they will become smaller. So why do we believe that the dip is going to be less pronounced this time around? Our semiconductor growth is significantly less dependent on the consumer sector -- that is one thing -- and on memory chips compared to the last down cycle in 2018. So the current macro uncertainties weigh mainly on consumer electronics, smartphones, PCs. However, nonconsumer segments have reached a level of more than 50% of the market. That's good news. Also good news, the share of market helped by memory has been going from 2/3 down to about 1/3 of the market today. Foundry/logic, on the other hand, has done exactly the opposite and is close to 70%, and they continue to invest. So equally important, Comet's exposure to memory used to be rather large. It was approximately 70% in 2018, while it has dropped below 50% today. So a lower contribution from memory to semi growth, a lower exposure of Comet's portfolio to memory, the impact on our business is expected to be significantly lower than in 2018. So why are we convinced that the leading-edge foundry and logic business continues to invest? Well, as you can see here on those technology road maps, the leading edge companies each push very aggressive multiyear technology road maps, racing ever closer to the edge of physics, really the end of Moore's Law and probably also economic viability. It's an arms race for technological supremacy, fueled by geopolitical considerations and certainly not stopped by market weakness. So new and more complex technologies, smaller technology nodes, all of which heavily rely on increasing use of RF plasma technologies, our products. And there is evidence for that. So while we anticipate a growth for wafer fab equipment spend of almost 9% in '22, we anticipate a drop in '23 of 13% to 14%. But at the same time, our share of our product in wafer fab equipment is growing. There is a shift from previously about 1.6% of the BOM, the bill of materials, to 2% of the BOM. So the bill of materials for RF subsystems per production unit increases because of the technology road map, higher complexity in chip architectures and smaller technology nodes. So on average, we expect that revenue generated by critical RF subsystems supplied by Comet will grow at 10% annually between '20 and '25. So weakness in semiconductor device production does not translate 1:1 into our business activities as our share of the bill of material is increasing. And with the Synertia generator, our overall share of wallet is increasing strongly as well. So let's change gear and move to another market we serve: automotive, in itself, a market with a low single-digit growth of 4% to 5%. So as such, not super interesting. However, there is a pronounced shift from internal combustion engines to electric vehicles. Now the share of EV production is anticipated to go from approximately 8.5% back in '21 to 25% of total output in 2025. Why is this relevant? So electromobility leads to higher microchip content, batteries and power electronics. So in 2020, on average, there was approximately $500 worth of chip content per car. In 2026, it is anticipated that there will be double the content by value. All the higher microchip content is obviously an underlying driver for PCT's business. But more importantly, the higher microchip content or the higher electronics content, in general, which is high-reliability electronics leads to more high-end X-ray inspection. This is equally true for batteries. So EV penetration helps driving growth in all our divisions. PCT profits indirectly while IXS and IXM are perfectly positioned in the transformation of their sort of legacy key industry automotive. Last but not least, the air traffic-related industries of aerospace, inspection and security. Now after the COVID-related downturn in 2020, the aerospace industry has returned to solid growth and is already contributing to good growth in our X-ray businesses. So air traffic volumes are forecast to return to 2019 levels by '24. Growth from '24 to '30 is anticipated to be in excess of 5% per year. Now this is highly relevant as air traffic volumes correlate with IXS and IXM sales into aerospace as well as security markets. So similar to automotive, aerospace will remain a good contributor to our results as the industry is expected to grow in the coming years. So looking at our TAM and SAM, we can state that Comet serves highly attractive markets. Our SAM features nearly double the growth potential going from '21 to '25 than the total available market that we're serving. Noteworthy, the importance of our target market, semi/electronics, will grow in the next 3 years. Also, since our last Capital Market Days, market analysis shows even bigger markets for 2025. This drives, obviously, further growth and supports our targets for 2025. So Comet has the right focus on growth markets. The strategy is right. Execution is key. So let's take look at some elements of execution. As mentioned in my intro, Comet's ambition are based on a sound, strategic framework, the Boost program. It is based on investments in R&D to create the product portfolio in order to allow -- to boost growth. It is based on investments in efficiency gains from regional setups to productivity gains in operations in order to boost profitable growth. And it is based on investments in our culture, in our people, our talent, in our business system, in sustainability. Now the outcome of these investments and proper execution are customer success and value for all our stakeholders, a high-performing and scalable organization also beyond 2025 and paying all that into our ambitions to be the pacesetters, technology and market leaders in our industry. So our strategy is confirmed and will be leading us towards our targets for '25 and beyond, all of this relying on execution, I will turn to a number of examples as proof points. So over the past 3 years, we turned the focus strategy into reality and expanded our footprint to be closer to our customer base. The focus has been on Asia, the region with the highest growth potential. This is obviously, not only China, but also places like South Korea where we have a design center today, Taiwan, Japan or Malaysia, which has become our manufacturing hub in Asia. We have, thereby, pursued 2 approaches: increased productivity and efficiency, that will be Penang; improved design, sales and service capabilities in the region, that would be South Korea, Taiwan, Japan. Besides Asia, we have also further invested in Germany for the new RF generator family and in Switzerland for our increased vac cap demand, so increased vac cap capacities. And as we speak, we are expanding our match production site in Malaysia, in Penang as well as consolidating and expanding our San Jose flagship site in the U.S. in the heart of the Silicon Valley. Also looking beyond 2025, we are already investigating future locations to put capacity in for vac caps, for matchboxes but also for X-ray systems and modules. The group is, therefore, diligently expanding the footprint to master future growth. Now especially noteworthy is Penang as the Asian manufacturing hub. The Penang footprint is of utmost importance for our 2025 targets and makes us, as a group, much more resilient as we were before. We have been filling up Penang with high-volume production transferred from San Jose and also partially now from China. San Jose, very important, remains the most important place for matchbox R&D and higher manufacturing at PCT. It's nicely situated in the neighborhood of all our important customers, enabling us to enter into co-development activities. We are ahead of plan in Penang. Therefore, we announced further expansion back in September. Penang was a super great choice. Transfer is almost completed, and there is already need for more space and capacity. Now besides Penang and now turning to the divisions. The new Synertia generator platform is clearly the single most important program over the last couple of years for PCT but also for the group as a whole. We have, so far, received overwhelming positive feedback from customers, also exemplified by orders. The market introduction is progressing well, and we are well ahead of plan. So important to understand, Synertia is not just a product. It is a product family. It is a product and technology platform. In combination with the Synertia matchbox, you might see that also as the generation 3 matchbox. We can offer RF subsystems with unparalleled benefits for our customers. We are currently fully engaged with customer tests while we continue to develop and introduce further variants, different frequency ranges, different power ranges, serving the specific needs of our customers in the different applications that we serve. Now André Grede, which sits somewhere behind there and is at least half the brain in the conception of the Synertia technology and product platform, will talk more about the benefits for the customers and the USPs after the break. And just to point out, you have a little booth behind there where you can -- probably not play around, but he can play, and you can watch. So we are convinced that we will capture significant market share with our Synertia platform generator as well as matchboxes in the next 2 to 3 years. Now turning to IXS. The repositioning and the focus on semi and electronics is making very good progress. It is back-end loaded. When looking at our 2025 targets, well, repositioning takes time. We've always said that. But so far, we have very successfully decluttered IXS offering and reduced hardware as well as software platforms to target level. We have enhanced productivity at customers through integration of AI-based visualization software with first launches in 2022. And the focus on high-growth semiconductor and electronics markets is really on track, especially in the area of advanced packaging inspection. So we are well on track and are already seeing attractive opportunities beyond 2025. Last but not least, investments in R&D to drive product portfolio expansion at IXM has led to an even better market position in general at the X-Ray Module division. The focus on semiconductors, electronics and battery inspection has led to excellent opportunities and first good business specifically. Now new products developed and launched during the pandemic already make about 13% of revenue in 2022. Market share in semi and electronics is growing very fast. We have ramped up our sales and service as well as marketing activities in our focus market, Asia, strongly as a matter of fact. And we have achieved a very strong entry into battery inspection markets based on our new product platform, MesoFocus. So the strategic pivot of IXM out of what used to be focus areas like automotive and security into semi is happening successfully. IXM is the smallest division but a reliable contributor to the Comet growth story. So kind of getting to the home stretch. We talked about uncertainties already early on before the meeting started. Uncertainties have certainly increased over the past 12 months, but we are absolutely convinced that as Comet, we are very well positioned to weather the headwinds ahead. We talked about the topics in black letters many times before. What is sort of new is added in red letters. All those topics will be certainly familiar to you. So on the challenges side, clearly, recruiting and retention remain a challenge worldwide. It's still difficult to hire people. Retention and talent management are very important. On the trade conflict side, yes, that is kind of the conundrum right now. The new U.S. export restrictions for China, they have an impact. It is a challenge to our business. How much is difficult to say. We have a little bit of direct business to China but then quite a bit of business through our customers in the U.S. to China. Moving to the supply chain. The supply chain remains very volatile. It is still difficult, especially in order to get logic chips. But in other areas, we also see that it is partially easing. So very difficult to say in 2023 how the impact will be on our performance. You've probably seen that our backlog has grown very, very strongly this year. Main reason for that is that we haven't been able to deliver all that we wanted to. Energy shortages, well, that's something that impacts mainly us in Europe. The impact on Comet, thus far, is rather limited. And we are convinced that we will get through the winter unharmed. Armed conflicts. I mean this is sort of the nasty one. And what a terrible situation that we have a war basically at our doorsteps. Now the war itself poses no direct impact on Comet, but effects on the general economy surely do influence us. Moving to the opportunity side. Clearly, I've been talking about new products and the markets with Synertia, artificial intelligence workflows at IXS, new systems, new services at IXS as well as new technologies at IXM. I think I've made the point. We are very well positioned for growth going forward. Our financial flexibility remains very strong. Lisa will talk about this later. And long term, we have very favorable markets shown in my market overview. Certainly, we are riding on one of the strongest and most fascinating trends, digitalization in general of our generation. Mindset change. We have just started to change our mindset at Comet. Comet, as a Swiss SME, we have been, for 70-plus years, very technology-centric. This is not opportune going forward. So we have changed over the past couple of years in direction of becoming much more customer-centric. That is also one of the reasons why we have been expanding our footprint into our markets where the customers sit. Last but not least, regionalization of the semi industry, clearly, an opportunity for us if more and more fabs are being built, say, in Europe and the U.S. But the regionalization is basically breaking a supply chain that was one of the first ones and, today, one of the strongest in terms of globalization. So regionalizing it, bringing it back home, it's certainly not going to increase efficiencies for the industry. But I remain with my statement it is an opportunity for us. So to end, although uncertainties have increased during 2022, we feel very well positioned to benefit from the structural mid- and long-term drivers in the markets we address. We are on track to meet our 2025 targets despite an expected softening of the business environment in 2023. And with this, I'd like to thank you for your attention, your patience and would like to hand over to Lisa for financial updates. Lisa?

All right. Good morning, everyone. It's a fantastic opportunity to be here. It's really nice to see all of you in person. This is my third Capital Markets Day. And the good news for me is that my story is actually quite easy and very simple because it has not changed. So with that, let's go into the financials supporting our 2025 targets. So first of all, the story really has not changed. The financial pillars of how we think about our target model in 2025 remain robust. And what I hope to do today is to give you a few examples of what we have done since this focus strategy was launched in 2019. So first things first, what we want to do is we need to focus on our growth. And so that means primarily outperform the markets that we are in, serve our customer needs, make sure that we are customer-centric, and we have done a lot of those things over the past few years to make sure that we have increased our proximity to customers through our geographic expansion and also about how we think about production and manage our supply chains. The second thing is that we need to introduce new technology into the semi and electronics markets that serve customer needs and are yield-enhancing. And so we'll talk a little bit about that when we look at how we prioritize our research and development investments. The next major focus, number 2, is operating leverage. So how do we make sure that we are executing in a profitable way and that we are thinking through investments that are really focused on our strategy? So how do we make sure that we are outperforming in semi and electronics? And how do we make sure that we are delivering technology on time to our customers to meet their needs? The third pillar is, I'm going to call it resiliency, and it's really talking about our balance sheet and the strength of the financial model at Comet. We've had tremendous success over the past few years. We're in a very, very good position now to be able to absorb any uncertainties that we see going into 2023. We can absorb the cycles a little bit better in the semiconductor market. And so we feel very good that we can remain committed to our prioritization of investments and our capital return to shareholders. So then that brings us to the fourth pillar, which is our capital allocation. We have questions from you all the time on this particular one, but the answer really has not changed. Our first priority is to invest in organic business growth. Our model for 2025 is based on organic growth. We will, of course, look at merger and acquisition opportunities as they present themselves. What's really important to us is that the opportunity fills a niche on our technological road map or gets us access to processes or geographic regions that support our overall focus strategy on semi and electronics. So with that, those are the major 4 pillars. Why don't we take a look at our progress on the first 2, which is growth and operating leverage? So it's really important, I think, to help provide some proof points about what we've actually done over the past few years. So we launched this strategy in 2019. If you look at 2021, we had a historic record year for Comet. It was the first time that we broke CHF 500 million in terms of revenue. Our growth grew on an annual basis of about 30%. If you look at 2022, we're expected to grow the business again to another record year. And we should end the year at probably about a 13% growth even at the lower end of the guided range of CHF 580 million. So we're really proud about what we've been able to accomplish over the last 2 years. And it's really because we have been very focused on the strategy that we have laid out for all of you. So if we look at what needs to happen to go into 2025, the first thing is that in our Plasma Control Technologies business, PCT, we expect to grow on average of 15% towards that 2025 goal, starting from a baseline of 2022. If you look at it, we're saying it's about CHF 200 million in additional revenue from today's standpoint. And how do you get there? The first thing is that we have -- we need to launch the Synertia platform, which you'll have a demonstration of later today. Our expectation has always been and continues to be that it will achieve about a 10% market share based on about $1 billion market. And so that's how you can think about that. The remainder of growth that we're expecting from the matchboxes and the vacuum capacitors needs to outperform market over that period of time. So that's how we think about PCT. On the X-Ray Systems side, it's very important for us that we are focused on profitable and sustainable growth. So that means that we introduce technologies like the MesoFocus in IXM that achieves a penetration into the battery market in electronic vehicles markets. We're also expecting that in the X-Ray Systems business that we have targeted opportunities in advanced packaging inspection. And that's how our model is built on the growth portfolio. Shifting over to operating profit as measured by EBITDA margins. We have seen a lot of success over the past couple of years. And I want to highlight some of those successes because it really is going to be the bridge that allows us to get to the 25% EBITDA margins by 2025. So if we take a look at what happened in 2020. So in 2020, we had 400 basis points worth of margin growth. A full basis point -- I'm sorry, not a full basis point. A full percentage point actually came from our decision to divest the ebeam business because investment in this business was no longer core to our strategy in semi and electronics. That has positioned us well going into what could be a more uncertain year into 2023. If you look at 2021, what happened there? We had very, very good customer success in the semi business with PCT. We also showed proof points in the realignment of the X-Ray Systems business. And the third major thing is that we started to see the benefits of expanding our production capacity in Asia. We took a -- we used to manufacture our matchboxes in San Jose, California. We started the transition over to Penang, Malaysia, and that achieved a few things for us. It's -- we were able to regionalize supply chains in Southeast Asia. We also had access to a labor market that was more best cost than San Jose, California. So if we think about those pillars going forward, we have to obtain about 400 basis points more of margin improvement going from 2022 into 2025. We feel we are much better positioned to do that now based on the actions that we've taken over the past few years to make that 25% a reality. So overall, we feel that we're well on track from a sales and an operating performance perspective. So let's talk a little bit about how we think about investments. So first and foremost, as I've mentioned before, our primary priority is to invest in organic growth. We will invest in talent, in technology, in global infrastructure, all things that will enable us to achieve a scalable growth going forward. On the CapEx side, we've said it many times, but I think it is worth repeating. Over the past few years, we've expanded operations in Penang, Malaysia. We will continue to make sure that we are expanding our capabilities to meet our customer needs. We have also announced plans to consolidate our 4 sites in San Jose, California into 1 site. It will be a more geo-friendly facility. It will also be an opportunity for our employees and our customers to be at one site in San Jose, California, focused on research and development and new product introduction. Going forward, the way you can still continue to think about CapEx is that we will be closer to the 5% of sales range over that period, 2022 through 2025 as we continue to think about expanding our vacuum capacitor production facilities in Flamatt, thinking through alternative sites for manufacturing in Southeast Asia. Now on the R&D side, R&D in our PCT business has been focused on Synertia, and it has been focused on our generation 3 development of our matchbox and our platforms that André will explain to you a little bit later. The second thing is that in IXM, we'll continue to focus on investments such as the MesoFocus that will provide access to us to electronic vehicles to the battery markets. And in IXS, we're going to be very, very focused on using our capabilities with our acquisition, ORS, to develop software applications for our customers in the advanced packaging inspection arena that should increase yield for our customers. And that's really our selling proposition in the X-Ray Systems business going forward. So our investments will be focused on organic growth opportunities. They will be focused on expanding our portfolio in semi and electronics. And that's how we will continue to guide the financial model going through the 2025 year. All right. So with that, on the capital allocation side, we've been focused on providing dividends to our shareholders. It's only fair that shareholders participate in the success of the business. That is our first -- our first and foremost priority for cash is to reinvest in the business. We do -- we are a growth stock. We're a growth opportunity, and we want to make sure that we're focused in engaging in profitable, sustainable growth activities for the company. We will continue to guide on dividends that we will pay out 25% to 40% of net income on an annual basis. We are in discussions with our Board of Directors on an annual basis in terms of share buybacks or other types of vehicles to return capital to shareholders. But at this time, the best way to think about our capital allocation is in the form of a dividend. Ultimately, our major goal is to make sure that we achieve flexibility with our balance sheet and that we have a robust financial position. So as I've mentioned, Comet is a growth story. We continue to be a growth story. What we wanted to do here is just to give you a picture of how we have performed over the past 10 years. We've achieved sales growth on average over the past 10 years of approximately 9%. We have expanded margins and have ultimately increased earnings per share over the 10-year period, achieving a growth of 20.7%. So we're happy with what we have been able to do. We feel that we've -- we're on track for another very good year going into 2022. We're well positioned to absorb some of the uncertainties that we will see going into the 2023 semiconductor cycle. And at this point, we can still confirm that we're on track for 2025. We feel good about hitting our goal of CHF 830 million in sales at a 25% EBITDA margin and our return on capital of 30%. So I hope that gives you a bit of a flavor for consistency in our message. We will continue to be focused on sustainable growth, new product introduction, executing to our customer needs and doing so at best cost. We will continue to make sure that we have all of the levers at our disposal to work on our resiliency. And we will continue to deploy cash to organic growth and also in the form of a dividend for our shareholders. So at this point, I'm the last word before coffee, so I will hand it over to Uli.

Well, thank you, Lisa. Thank you, Stephan. So the next agenda point is announced here. It's the 15-minute break. Coffee served outside. We will be back on stage at 20 minutes to 11:00, so 15 minutes. Thank you. [Break]

Ladies and gentlemen, welcome back to the second part of our Capital Markets Day. I hope you all are refreshed a little bit from the break. It's a pleasure for me now to turn the floor over to André Grede. André is Vice President of our Global Research and Development at Plasma Control Technologies division. And as Stephan perfectly pointed out, together with his global team, he's actually the brain behind the Synertia platform, the new flagship product that Comet launched in summer this year, and that is opening the door to the $1.7 billion RF generator market for us. So André, we are very excited to hear all the magic that Synertia does. The floor is yours, and you can also use the water.

All right. Welcome again to the Capital Market Days from Comet -- of Comet from my side as well. So you got a lot of insight to our numbers, strategy, where we are going. I hope we won some confidence that things are really going to the right direction. But for the next 30 minutes, you are mine, and we're going to dive a little bit deeper into technology, what is behind it. We will not go into the details like to the bits and bites we are shoveling forth and back every day. But at least, we want to give you some understanding why what we are doing makes sense. And we also want to give some feedback from the customer, how well it hit the market and how well it's on its way to be accepted in the market. Before we speak about the new Synertia product platform, I want to rewind for a second and speak again about where do we find Comet products in the semiconductor manufacturing process. You saw in our video at the beginning how a chip is made. And I want to show quickly where you find us. So what you see on the left side, the picture is actually a picture of a clean room in a semiconductor fab. You see one of the tools there. It's -- such a clean room is huge, right? There are many of these tools. There can be hundreds in a fab. And depending on what this tool is doing, if it works with plasma, it has where we offer not just one of these plasma chambers but many. And you can see there on the left side, in the chambers, you see some wafers. In the middle, you see the system with a robot, which is distributing the wafers to the different plasma chambers. And there, the process takes place. And finally, on the right side, you see such a wafer and how a completely processed microchip looks like, which is then separated as you learned in the video going into all the electronics we are using every day. What exactly is Comet PCT's part in all of this? So let's start on the very wide side, where you see how a modern 3D NAND chip is made. You see the main things happening are, actually, you put layers material on the wafer. You remove certain parts of this material of this layer. This is how you structure the chip. And then you may put additional material, remove it, and you go on, go on like this. These are different materials. And the last thing or another thing, important step, which you see -- can see here in detail is, you're also modifying material, right? You may have heard about doping material, for example, to make transistors. And the job of Comet is actually delivering the energy, the process energy needed to ignite the plasma to sustain the plasma to run or to control it. So you may say how difficult can this be, right? I mean just use, I don't know, 220-volt AC plug at the wall, and you have your energy. You put it in the chamber, and somehow, this thing will work. Luckily for us, it is not that easy. So plasma or the plasma needed or used in semiconductor manufacturing is very often requiring high-frequency energy. So -- and if I speak about high frequency, it's really what you use on your phones for mobile communication as well. Lower frequency, much higher power, but the concepts are actually the same. And what Comet is doing is we are generating the power. We are controlling the power very precisely, not just the amount of energy, which is going into the chamber, but also the envelope, the shape, the waveform. And all this has, of course, a big influence on the plasma itself and, therefore, on the process and the result, the chip you see on the wafer. So you could see easily without us, right, nothing would work at all because, I mean, if there is no energy, you cannot produce something. If you put -- get no high-frequency energy into the chamber, you can have the wafer laying around. Therefore, 3 weeks, nothing will happen, right? So that's how substantial our contribution to all of this is. Without going in all the details, but as I just described, if what we are doing has such an important impact on how the plasma is behaving and how precisely you can make a chip, it must come with very strict requirements. And these requirements, of course, get more and more challenging as soon as you want to build more layer, if you want to make structures smaller and smaller. And therefore, for us in our industry or our part of the industry, there is a never-ending demand for higher resolution and repeatability in anything we are doing. This is not just for the generators. This is for the matchboxes. This is for the vacuum capacitors. So accuracy, repeatability in our life is one of the most important things. And of course, it's about more. It's about efficiency, right, because if you take power from an AC plug and you transform it into high frequency, very likely you will not do this with 100%. And everything that is not transferred into high frequency must be transformed into something else, and that's normally heat that needs to be removed. Nobody likes it because additional cost for the fab, may warm up your clean room, a lot of cost. And cooling demands are increasing and increasing because these fabs need more and more energy. So efficiency is very important. Footprint is another thing. If you can get more power into a smaller package, you save place in a -- you save place in the semiconductor fab. And I mean you can imagine there is nothing more expensive than place in such a clean room. Faster control and tuning. As I just said, the process has become very complex, very fast transitions. So the faster you can react with your system, how you generate the energy, how you format, how you react to the behavior of the plasma, how you tune it. What needs tuning? Our vacuum capacitors. This all makes a difference for modern processes. Stability is another big point. Plasma is a quite -- you could call it a wild animal, right? It's highly nonlinear. So the way how it is reacting or what you are doing or reacting back can cause instabilities very quickly. So you have to make sure your equipment works under any condition. And last but not least, yes, you have these requirements. As I mentioned several times, you need to shape the energy, the high-frequency power, the envelope in the right way to finally enable semiconductor manufacturing. If you do all this, is this enough? Is this how you become a leader in the RF subsystem business? And if I ask this question, the answer is very likely, no, it is not. It is just the basics, right? If you don't have this, if you can't do it, you will even not be invited to talk to our customers. You don't even have to show up. So the real interaction with our customer actually starts when you have challenges or let's call them problems. So no matter where and why, immediate customer support anywhere, anytime. That's the key to the new customers. This is how our customers rate us. When they call you on a Saturday at 8:00 p.m. and say, "I have a problem here and there, and I need a solution in the next 3 hours. Can you help? Get your team together. We're going to work it out this weekend." This may sound strange, but this is how the whole semiconductor industry works. Samsung, TSMC, they all work the same way with our customers because there's nothing worse than the semiconductor tool, which is standing still not producing semiconductors. That's incredibly expensive. So our ability to support and make sure we innovate and we are not behind our customers but we also help our customers to innovate, to optimize and to solve problems, challenges quickly, this is one of the main key enablers, as I said, to win new customers and new business. So if you develop a new future product, it's not just about the product. It's about the team, which is behind, doing development and after and your environment, which hopefully enables you to do everything what I said in a more consistent and always in a faster way. So some of the main requirements which were important for us for the new platform, like more flexibility in freely shaping this up, envelop. So your customer wants more knobs he can turn to make -- to optimize everything, right? And they want to do this on their own. They don't always want to call you, and they don't want you to change the hardware. They want it in some kind of digital way, maybe with some kind of optimizer, so you can even help them. You must be able to adapt to their request very quickly. They have a new idea every day, and we are very early in the chain when they develop a new tool. So what happens very often is that on the way they found out, this is not the right generator or match. This is not the right frequency. This is not the right shape. This is not the right way we do frequency tuning. Can you quickly adapt? And you need a product and environment which is able to do this. Latencies, as one of the more technical points, is a very important one, right? It's not just about being fast. It's about the latencies in function but also in communication. I already spoke about the problem solving. There will always be challenges. In the moment, you go to the tool, but also in the moment, the tool goes to the end customer and is really manufacturing semiconductor. There are always challenges, issues. The faster you can solve them, the more money is saved at the end customer, and that means better reputation, relationship with our customers, with the end customers. So one of the key points. And the way to do this, of course, is delivering more power inside, right, more of data because what we are doing on such a semiconductor tool is really the fastest thing. There's nothing changing faster more often than the RF signal. And the way the plasma reacts on it and how we can measure it gives a fantastic insight. A lot of things you can learn about your process or the challenges you have on your tool if you are able to measure fast and deliver the data. Last but not least, you need improved subsystems. This is why Synertia is a platform, an interlinked platform. It's not enough anymore to have a good match and a good generator and a good cap. You need to interlink these things. They must communicate. There are problems and challenges in the semiconductor industry now, which you cannot just solve by advancing or improving a single product. You need to improve and optimize the whole system. So what is our answer to all these requirements? I mean, obviously, already announced, it is the new Synertia RF platform. And we are very happy after 5 years that we can say we have successfully launched the first Synertia products into the market. As you can see there on the small -- or in the small video, it happened this year in summer in July at the SEMICON West. And what was maybe not explain so far is why have you chosen this name, Synertia, right? Synertia really stands for synergy. We want to create something new. RF is important. Precision is important. Quality is important. But as I said, these are all basic things. If you don't have them, you will never succeed. We want to add more. And Synertia is really an interconnected system where the RF system finally can deliver beyond the capabilities of just single products. What you saw there at the Boost at the SEMICON, the first products we introduced where actually our Synertia generators, power levels from 1.5 to 5 kilowatts, 13.56 megahertz. And at the booths and to the customer, we also showed the latest prototype of our Synertia match, which we will launch next year. Additionally to this, we had a lot of expert this year joining in San Francisco. One reason, of course, it was a launch, and they did this all. They did this fantastic platform. The other thing was, as I said, it's all about this relationship and trust. And they had fantastic discussions with our customers. They did not just explain the product or spoke to them about future projects. We also had, after the SEMICON, product live demonstrations in our labs in San Jose, which are not far away from our customers. So we are very proud, and this is something we are not afraid to say because this was the main feedback from our customer. Synertia is not just another generator, another RF generator or match. It is really a revolution. It is really the smartest RF generator available today on the market. Just introduced brand new, still has to go its way, but that's the feedback we get from the customer. All these new functions, capabilities, they have been long waiting for it, and now they are there. Important to understand is this is just the start. It's really just the start. So we put 5 years into this, but we are not done. And that's a good message because we have delivered and launched the first product. But there will be more to come. This is not just a product as Stephan explained before. It is really a product platform. It is highly modular, not just in hardware but also in software. We can do already now hundreds of variants. It's not just the main products. Our customers need special customized solution, and we can easily do them now in variant configuration because there is a clever modular platform behind all this. This platform is scalable. And this is what I tried to explain at the beginning. Very often, during its development process, the customer finds out, he needs something else, more power, less power because of cost, additional functions, frequency. We can deliver all this in the same box in the same shape. So for him, it will feel like plug and play. There is no difference. If I can do something on one frequency functionality-wise, I can do it on the next one as well. So that's a big advantage for our customers if they do experiments and try to find the best solution. A lot functionality has moved from hardware to software. I mean this is the new age, right, about digitalization, about making everything what is analog digital in your product as fast as possible because if it is digital, I can just influence it by software. And software, I wouldn't say it does not break. I'm careful with this. We all know this. But it doesn't age. It doesn't drift. And you can easily change it in the field. This is a big advantage. A customer has new requirements, wants to upgrade things in the field, and he can now do it just by rolling out new software. You can say this was possible before as well. But now it's really possible on a different level. Last but not least, as I say, it's a platform which will grow. The generators will grow in frequency and power level, different variants. We will have lower frequency. It's all on the road map, but we can also do new things like interconnected system, like integrated systems, match and generator in a box. We can do a lot of new things in the field of sensors, which can be stand-alone, but they are now integrated into our products as well. And of course, all the digital capabilities come with a possibility to release completely new digital products or digital function and services. So what is behind this Synertia product platform? So the last 5 years, it was not developing, as I said, 1 or 2 or 3 generators in a match. We called it Synertia. We really had the possibility to start from the green grass. And this is now turning out to be a big advantage, right? The generators, matches we had we decided we will -- we don't need to be backward-compatible with the technology we are using. We want to develop something that does not only work and perform in the moment we launch a product. We want something that carries us like for the next 10 years, which is extendable, which can be easily adapted to new requirements, which can easily be used to make complete products, which we have no clue about today. And what is behind this Synertia platform is our so-called generation 3 technology platform. This is what we actually started developing in 2017. And you see some examples here, and I can only show you some because it's really a modular platform and construction kit that has a lot of different elements. A very important one, if you speak about smart products, is our new control, communication, measurement and data analysis stack, which you see on the right side. On the right side, actually, you see the -- some of the hardware as much as we can show here. And without going into the details because there it quickly becomes complicated. This is really using different new control concepts. It's adapting high-level operation systems as you know it from your computer like Windows or Linux where you can work with things like user management or with encryption of data, which is becoming more important because if you generate a lot of data, a lot of insight, this definitely has a lot of value, and your customers want to be sure that -- or, let's say, your customer will consider this IP. So he needs to be sure that this is safe. It's using advanced, real-time operating systems where you do things, as I described before, with very small latencies. And it's using a lot of hardware-accelerated technologies. So we can do things on FPGAs really in real time. All the measurement, the control has moved from processors to hardware-accelerated approaches where we do everything in real time. Another big step for us in terms of strategy and technology strategy is this new brain, as we call it, will go into all our products. It is the first time that all of our products at all development locations will use the same technology. So there are a lot of synergies we are creating, and especially, efficiency is much higher. It gives us a lot of flexibility because if there is a challenge or a problem that needs to be solved in San Jose, when they go to sleep, Flamatt and Aachen wakes up, and they can take over, and maybe when the team in San Jose is back online, they already have the solution. They just need to install it and hopefully make the customer happy. So we can really work around the clock, and we are not wasting any efficiency by duplicating things or by inventing things 2 or 3 times. Next, I have already mentioned this. Yes, this new control stack brings completely new capabilities for fully interlinked RF systems, and we're going to have what this means in detail. We're going to look at a little bit later. So summary, this is really in the moment, the industry-leading solution. It enables complete, new levels of real-time control but also real-time data insights into plasma and to plasma processes. And the big value for the customer is simply they will be able to use what we give them to solve their challenges and problems in their labs but also at their customers faster. And this is one of the biggest value because, I mean, if a machine at Samsung stops and you can solve the problem in 1 hour instead of 1 day or 1 week, I mean that's a clear advantage. And that's something everybody is actually looking for. This all sounds like very fancy, right? You have this great technology, and you can scale it, as I said, and you can make all these new products. But I said it already, this is not enough. There must be more behind it. And our customer is not just buying products. The products we are delivering, these boxes, yes, that's what makes our revenue. But when we win the customer, when we win a new application, this is just a vehicle. It is a vehicle, which transports our capabilities to help the customer. And for this, you need more than just the technology itself. The second question is, how can you develop such a complex technology platform? And that's what this slide is about. There's more behind this. And the first thing is a worldwide team. So we have really built a worldwide team of specialists for many different subjects. Here on the bullet points, you see some of them, right? So high-frequency technology specialists. We have increased our capabilities and team dramatically in the field of embedded software and electronics, also high-power electronics. You need mechanical engineers, and for the caps, especially, you need material scientists. Digitalization in R&D is a big topic. You later have a possibility here to have some -- have a look at our running Synertia platform. You will see it's all about data, about digitalization. And if you develop something like this, you must be able to handle this amount of data yourself in your lab. DVT and compliance sounds simple. You have always done this. But now you have a more complex product with extremely complex software. So I mean you are all used to this, right? Using the newest Windows software or whatever means always you are the beta tester. You will find issues, and then they have an update, and they fix it. This will not work in our industry. I cannot give something to our customers and they find out if it is good or not. It goes on the tool. It goes to the customer, to the end customer. And in the moment, something happens in the fab, it's immediately an escalation. So we must test things to a complete different level to make sure they cannot fail. It's never 100% fail safe. But in this case, you have to be fast finding the failure. That means you need this modern environment. What is a big advantage for us for PCT is that we can hire really at 3 continents. So I mean you all have heard, especially in the last years about the war for talents. Actually, it's not new to us. It was always there in the Silicon Valley and everywhere what has to do with semiconductor. But it's really -- it really increased again. So being able to hire in 4 countries on 3 continents in Asia, in Europe and in the U.S., that has turned out to be a big advantage for us. not only finding talents everywhere but also supporting our customers everywhere. The message is really, we will not only deliver the best and smartest product with the greatest data insight you ever had. Our customers also get access via these products to the best team. They get access to the best team and support on R&D level worldwide anywhere, anytime. The second pillar of building block behind this generation 3 technology platform is a modern environment. I spoke so much about what this thing can do, but that means also if you have a complex product, very likely, you need a complex production to put it together. So this is what we have built in Aachen. It was a clear decision to stay in Europe, close to one of the R&D teams with this production. This production is highly automated, easily fulfilled standard of Industry 4.0 and more, and this is really needed to put such a complex product together and launch new variants on new products quickly. The next thing what you can already see here is we have invested a lot in bringing our development and qualification environment onto the next level. So we now have worldwide what we call our smartLABs. These are high-power RF labs, and they are all interconnected because in these new labs with new products, we are generating so much data, you cannot simply transfer this anyway. We speak about terabyte. We can easily speak about hundreds of terabytes, right? Nothing you can easily copy or transfer over the ocean. So you must be able to analyze data where it was recorded. So all the teams are virtually interconnected. All these labs, these RF power labs actually virtually behave as one. And this also gives the team a big ability to collaborate and work on the same thing. It also gives us a lot of possibilities to get the customer into our lab and collaborate with the customer on site. This includes some other points like in-house prototyping. This is becoming more and more important for us. The cycles in semiconductor business are getting faster and faster. Our customers like we have more and more ideas they want to try. So you need to be fast in prototyping. And last but not least, hardware-in-the-loop testing is one of the concepts we really implemented down to the detail. And hardware in the loop means is we can -- means we can deliver any time. If we are doing something new, right, normally, you made -- in the older days, you made the plan. You said, "I want to do this, that. I need a function. I need to debug something, repair something. Let's get started in 1 week. We meet, and we see where it is and if it works, and we test it." This has completely changed. Our whole software, which is quite complex, is tested every night completely, fully automatically. It is automatically tested by itself, software testing software, and it's then downloaded to all our products, and they are running through thousands of tests every night. So our engineers come in the morning, and they see, did -- what I did last day, does it work, right? And this is a big change because this means we can continuously deliver solutions if the customer needs them. So long story short, adaption to new customer requests in no time and faster. This is one of the challenges, and this is what we can deliver with this new data-driven environment, especially with our smartLAB environment. Last but not least, a very important point as well is the tool and processing, right? Going digital is everywhere, not just in R&D. And beyond the hardware and the software, if you have a big team worldwide, far over 100 engineers and they should collaborate, you have to make sure they can collaborate and work together. So there was a strong continuous investment into R&D, into digitalization of R&D in the last 5 years. And this now enables us to really handle and deliver the most complex solution and products. I already spoke about the continuous deployment of new solutions to productions to our customer, which is handled in our application life cycle management. We spoke about the platform, which will be many products but especially hundreds of variants, and we really speak about hundreds, and you have to sustain them. You have to sustain them according to special rules, which are called Copy Exact, what makes life in semiconductor industry, more complex than in other industries. So how can you trace everything? How can you make sure, doesn't matter when, you always know who did what, when and why? How do you have this insight to the smallest detail what happened? This is all the background you have to create the environment you have to set up, which was happening in the last time, for example, in our product life cycle management, but all the digital processes we have. So this is maybe more a soft point but very important if you want to collaborate with a lot of customers. And if you want to work with them in a collaborative way on quite difficult projects. Last but not least, all this leads to what we are finally looking for. It leads to the technology platform itself. And this technology platform is then used in all our products. This is what finally enables the Synertia platform, product platform as we just introduced it to the market. When you have succeeded and launched the first products as we did, of course, you need to bring them to the customer. And as I already said, we launched the first product at the SEMICON, but we did more. We were really thinking about like, how can we get the customer involved? How can we catch their interest? So what we did at the SEMICON show was we built a complete showroom, a private showroom, where we invited our most important customers to private meetings, to a private show where we really showed the whole technology platform and the synergy of products. And I have to say that the -- for me, at least, the feedback was actually overwhelming. So I was quite confident that we did something cool and new. But the feedback we really got was fantastic. And I was so happy for the team to hear things like the first innovative generator after years. And what they mean is, of course, everybody who is working in this has made improvements, right? But improvements can also limit you. You have a technology. You need to stick to it. You make only small changes. We had the big possibilities to start from the green grass to throw all the stuff overboard and say, this is how you can do it today, and that's how we do it. And yes, this enables new things and the customer clearly saw it. One of the statements I personally love most was like, our customers saw these things they can do in future with the data we can deliver, which we can measure and analyze but which we can also continuously stream to their tool. So one of our -- actually, most critical customers said like, "I'm impressed. You have really thought ahead. You have not just thought about RF generators. You have thought about how can you help me? How can you help me to make my processes better?" The lab environment we showed as well, that was actually well received. We even had people or customers asking us if they can do -- if we can do it for them, if they can buy such a smartLAB. And yes, we are not the first ones trying such a modernized platform. This was mentioned very often that this is the first time they see such a platform working. They said, "It seems you really nailed it. You really developed a platform which can scale, which is really modular because it's not that easy." Another point which was where we see it was the automated production, we had people from our production in Aachen there showing how our smart production in Aachen works that it is not about labor cost but about automation. And this was well received. Actually, we got a lot of request to visit this production. Last but not least -- and that's why we had all these experts there. We got a lot of positive feedback about our team. And again, having the right team makes the difference. Coming to the end, I want to show you at least a little bit about what is new, right? I will not speak about how much better we can create and shape up. As I said, this is more becoming a basic requirement. But what is really about -- what is really new about this interlink about the smart platform is what we can do with data. So this platform has several levels of how we can data -- take data or measure data and analyze it. One is the IoT capabilities. What you see there in the background and what you may take a look at during the coffee break is showing the IoT capabilities. So all these units have now thousands of parameters, which are not somewhere hidden. We can measure them constantly. Our customer can do it as well, and we enable them to do this either remotely. You could build a cloud solution, what people don't like in the fab. Why? They're always scared about their data. You can also do it locally. We have further integrated onboard data logging. So if you don't want to stream data out, if you want to leave everything on the device, we still have a new kind of data logging, which makes sure that you can never ever miss an event. Something goes wrong on the tool, you can be quite sure the generator, the match, the sensor captured it. You can quickly dive into it and solve the issue. We have a complete built-in high-frequency measurement studio. So normally, what happens, right, if customer develop a new process or a new tool, they have our generators, matches. And they have all this expensive RF measurement equipment in their lab. They needed it to see what's going on from an RF perspective in the tool, and then they optimize, they debug, and that's how they develop. This has now all been integrated into the product. So they cannot do this just on one tool in their lab. They can do this on every tool in their lab. And they can do this on hundreds and thousands of tools at the customer. So it gives a complete new insight, not just, how is it working in my lab, but how is it working at the customer? What is the difference between these 2 tools? What is the difference between this tool and that tool in different fabs or different environments? And the way we even expanded this was like, okay, we can do this with our equipment. But what if the customer wants to use this new data? This data was higher resolution than ever on his tool because finally, there's a lot of things going on in this tool -- on these tools, right? They are really complex machines. And now we can really stream this data live in very high resolution to our customer, and they can either use it for real-time decision-making on their tool with their own real-time controls, or they can stream it, as you see in the picture there, to big servers. So at the end of the day, they can really see every step of the recipe, and they don't see the recipe as once. They see every single pulse in the nanosecond range. And they can now compare recipe to recipe, wafer to wafer, tool to tool. This gives you a complete new level of possibilities how to optimize your tool, how to optimize your process, how to debug it. And especially, it gives you -- it saves a lot of time if you develop and qualify something new. Coming to the end. So a quick summary of the last 30 minutes. The first Synertia products have been successfully launched in San Francisco at SEMICON West. It's not just these products, as I explained. It's a whole technology platform behind it, right? That's what we were doing in the last 5 years. From now on, we can develop and release products quickly without big technical risk. That was our goal, to have something which we can take and put into new products. The customer feedback is very positive. More or less everybody we speak to says like, "This is really a new innovative approach. I like it. I want to see it on my tool. You still have to prove that it is doing what you claim." But so far, they are all excited. And the new functionalities which we have thought about, this thing can do a lot of things the customer has never asked for because I mean, this is your competitive advantage. If I only do what the customer tells me, very likely he tells the competitors as well. So these new functions, we have thought about have really been well accepted. Customer evaluation is going on. You heard this from Stephan, and it's quite successful. After the launch at the SEMICON, the demand has strongly increased again. Our focus on PCT is now supporting our customers to evaluate the product and to qualify it for mass production. Last but not least, we are, of course, working on releasing new products, and we will already release, as Stephan showed, the next Synertia products next year. The scalability is a big chance for Comet PCT. This technology platform, as I said, which is behind the Synertia product portfolio, has just started, and it will not just allow generators, matches, sensors. It will give us the opportunity to develop a lot of new digital service and products, which, of course and for sure, will lead to additional revenue. Last point before I leave the stage, and I have to make it, is a big thank you to everyone who supported this in the last year. This was a long and important journey for us. We had a lot of people who trusted in us, who have the trust that we will be able to tame this complex beast called RF power. And last but not least, the biggest thank you goes to a fantastic team, which is behind this. And beyond all these smart products and services and environment, I think building this team of specialists or fantastic individuals is the greatest achievement for the future of Comet PCT. Thanks a lot.

Thank you, André, for this very insightful presentation. So ladies and gentlemen, if you are as excited as André, you can either buy one Synertia platform or you can join him during lunch break and get a closer look at the system that is up and running there. With this, I think we are moving to the next part through the panel discussion for this, I need panelists. So please join me on the stage 2 Michaels and Dionys. So let's stay with PCT since we are in such a nice flow here already. We have heard many things about the market development from Stephan. Now we have had a deep dive into technology from André. And now let's come to Michael Kammerer. Michael has been with the company since 2008, right?

Yes. 15 years.

Yes, 15 years. That's quite a time, right? So in fact, many of you know him already from previous Capital Markets Day, right? And now the question is, did this change anything in your priorities?

Before we go to the questions, let me say thank you to André. It was a great presentation, great performance. And I hope we brought you Synertia a little bit closer and covered some of your questions. You, of course, had to pose what is this new product doing? What is enabling us with this product? I hope he gave you some insights. And as I said, you will get more information in the background after that. And it's really great to have such outstanding people on board. That really makes a difference for the entire company. And let me move to that to our strategic initiatives. I mean the PCT business and the entire Comet business is based on 3 strategic initiatives, pillars. You see them here. You will see them with my colleagues. And the good thing about that is they have been there for many years, have not really changed, and that just means to further execute on them. And this is clearly for execution, we need such people as you just had for the presentation in person of André. And we need to stay focused and the management's job is to enable all the organization and the teams to exactly execute on these pillars. And then we will succeed in all instances. I do not have to repeat what you already heard. But focus is commercialization of bring the Synertia platform to the market next year. Wind projects, then further developed the Asian market, the design center, what already had paid off this year, we have accelerated our development cycles we can much better serve the Asian direct agent customers. We have a lot of potential still in Korea that still have more or less white paper for us, especially regarding the RFs, the new RF product. And there are many other opportunities still in Asia. It's a huge market. We also have successfully started the direct business in Taiwan. So we already see the over exceeded business we had before to the distributor. So also that is paying off well. And then the last pillar, of course, is have a focus on further capacity expansion. We have to look into the future. It's a long-term business. And in the past, we were too reactive with that. We have to go a bit ahead of what is needed in the future. And this is why we have to really invest further invest in Penang, further invest in Flamatt and wherever we think it's the appropriate place to be.

Many things, Michael, but now playing the devil's advocate a little bit. And we see quite some clouds coming up from the geopolitical side but also in terms of the semiconductor market. And now you are actually pushing the capacity expansion and emphasizing how important it is, isn't there a contradiction in that?

There is no contradiction. And in the past, we made such mistakes, I must say that we were too much focused on what is next year stop investments. and then suffering from that 2 years later, and that is what we really have to avoid. Of course, what we have to do is to allocate the money to the right thing, where we will earn more money in the future and accelerate our growth. This is what we have to do. And as I said before, we have to look into the future. It's a structural growth market.

Yes. I think that made it clear. Thanks a lot for sharing this. André in his presentation emphasized that Synertia is not just a product, it's a whole ecosystem around it. And now I would like to know which part of this ecosystem triggered actually most interest from the customers?

He made a great summary. It's not only 1 or 2, it's all of it. Of course, all the functionalities and the capabilities of the product, excited all of the customers, but it was really also the ecosystem what is behind it, the part, what is behind it also impressed them very much the lab environment we set up. I mean, that was one of the first things to set up before you can start such an exciting development. And then, of course, last but not least, also the entire manufacturing production environment, highly automated, highly sophisticated. All that is a package that really impressed our customers.

And we are talking here not just about Tier 2 customers, but also Tier 1 customer.

I think -- what we are real honor of it. This is on the Tier 1 customer comments. And I can tell you that was high level, high level attendance of the Tier 1s at the Semicon West and the feedback came directly from them.

Cool. So you will stick to the 10% market share by 2025 or increase it?

Thank you, you could sit there. Yes, I stick to it.

Thanks a lot, Michael. With this, I move to the next, Michael and our team, Michael Berger. It's the first Capital Market Day, isn't it?

Yes, that's true.

Welcome to the team. Welcome to the stage. Michael has been with the company also already quite a long time. He joined in 2013 and took over as Co-President, Comet X-Ray in September this year. So basically, that means you were part of the strategy formulation at IXM already when you were before September. So now that you are President Comet X-Ray, did anything change for you? Or do you stick to your priorities?

First of all, the focus as well, the strategy will remain the same. So thank you for giving me the possibility to explain or present the focus strategy for the first time in this context. So we will have 3 strategic pillars, and I will give you a short overview regarding these 3 strategic pillars in the following. So first, we want to be able to push from micro to nano-focused resolution to be able to serve the semi market. This, together with our colleagues from Comet Yxlon because they have the know-how regarding the whole image chain, and we are quite in a good way. We have [ developed ] the first prototype to Comet Yxlon, and we are convinced that with this product and with this technology, we are able to create a more of added value for X-ray inspection in the semi world. Third, bringing new technology into the existing entity market with our MesoFocus, as mentioned before. The first feedback we got back from our customers are quite promising that we have developed the right product for the right industry to create a good image or X-ray image regarding a battery market for EV as well for additive manufacturing market. And third, achieving margin improvements for the entire group with the focus of best cost manufacturing as cost supply chain, and we are in the final stage of a project to replace the existing X-ray generator with a new design and also simplifying the assembling to achieve a better margin and also a better cost structure up to 25 -- between 25% and 30%. That's in a short overview of the main strategic priorities.

Yes. Many thanks for giving this in a nutshell. You mentioned the battery market. And as far as I recall, the battery market is mentioned now first time to be a relevant market segment for Comet X-Ray. So please, can you give me a little bit more flesh to the bone and say something about the size of the opportunity? What kind of products you have? Have you actually already recognized sales here?

This market is quite huge. Have in mind that only in Europe, there are more than 25 gigafactories for batteries for EV batteries are built up for the time being. So with MesoFocus, we're addressing exactly this market. And we have also already got orders from Asia, bulk orders from Asia.

And where exactly is our product used in the batteries testing kind of line or production or whatever? And why?

Yes. So our MesoFocus can be used in a battery line, in-line inspection for doing the end test have in mind to do a proper testing of a battery cell, it's quite crucial considering that defect can cause that the whole car can catch fire and people are in the car can be injured seriously.

Well, yes, that's a very important reason to buy more Comet products, I would say. And well, anyway, MesoFocus you mentioned. And last week, you won the innovation price or innovation award of the Canton Fribourg. So also congratulations for this. So there must be also something special about this product. What we was growing quite successfully with it. So what makes it special with regards to what competition is actually offering?

Yes. As I mentioned before, the big benefit of MesoFocus is that the MesoFocus can be used in line in a battery inspection. And the main benefit of doing that is that we are able to do this fast really fast and also have the capability to change the focus spot on the fly to do different image changes in a production line, and that's unique, no other tube can do that.

That sounds cool. So good luck with this. And I would say I go last but not least, now to Dionys. Dionys van de Ven, our new kid on the block. Dionys van de Ven is an industry expert actually for X-Ray System. He has been with the industry for many, many years. And -- so you are inside out an X-Ray Systems guy having worked for renowned companies before. And now you have with Comet since more than 100 days and...

136 to be exact. And I'm not counting.

It's 136. So the question is, yes, what struck you most when you joined Comet?

And when you actually outside a competitor in this case, you're always wondering what is coming next. And then going into Comet Yxlon, you actually have the chance to look into the kitchen. And you see the product road map and you engage with the people and see the passion and also see really the transition actively in place and working. And that was really very excited to see. So you don't have to wonder what's coming next. You see what's coming next. And that really was a very nice experience.

And now that you are the master chef in this Comet Yxlon kitchen, what will be your priorities?

Now the priorities are when you see behind media screen all around customer experience. delivering insights for our customers, it's important that when they make an image that they can actually make decisions based on these images. And if you do that right, you will create value and then you can grow the business profitable. Now I personally believe very strong in customer experience. So customer experience is actually more than being customer-centric. And everybody knows that probably when you buy the smartphone and you do the unboxing and actually the whole experience to buy maybe such a thing gives you a feeling that you did something right. Now also for us in this business, it's very important that you actually give that experience to the customer. So it starts at the buying journey. It starts at the delivery. It's then with the installation, then with the usage and with the aftersales. And this whole experience, that's where we want to be best. And if you do that, you change your business from having a capital equipment as a cost in their production to having a value in their value chain. I think that's very important. Now on top of that, if you look to how X-ray systems are used in the past, you buy a tool, you make an image, you have a quality department. And then they look to these images, they maybe do some annotation and say this is good or this is wrong. We are going to deliver fact-based decision material to improve yields, increase productivity, reduce costs in an automated form. So delivering insights that you actually are enabling yourself or your customer to make this fact-based decision, that's what we call insights. And that's a very, I would say, inspirational challenge. It's really making a difference if you do that right. And then last but not least, already mentioned, if you add value with your systems in this value chain, you actually drive a change in how this business is perceived and you can get more value out of the market, and that will drive our profitability.

Well, many thanks, and I believe we will come back to what you said before. But first of all, I mean, let's take it. Comet Yxlon has made quite some progress with the transformation to a more focused organization. Stephan mentioned before, we went from customized systems to standardized or modular standardized systems. We went from 7 software platform to 1 software platform and we made successful inroads into the semi market and the application of advanced packaging. And the interesting question, I think that people will have is when will this be visible in the financial results of the company?

So it is actually already visible in the financial results. So the business is, of course, based on more areas than only our focused areas. But in this focused area, we have delivered systems and solutions into the market that create more value. So we already see that the seeds that we planted are actually returning and it's giving us actually the confidence that we are on the right track. Now this transition is not just going overnight. We continue to push it. But we are really making the right anyway.

Yes. And the expectation with regards to the profitability improvements are quite high. The question is, do you have now a secret ingredient how you will approach this?

I think the secret ingredient in this kitchen is actually the acquisition, for example, of our team in Montreal. So adding value creation software solutions. So from a box delivery, a tool delivery to delivering these insights that you really can materially change the yield or drive costs out or increase productivity at your customers that will create value, and that's why we will be more profitable.

And can you share something about status here? I mean it's integrated workflows for automated decision-making, right? So how far are you here?

Yes. We have already -- 2 of these automated workflows delivered into the market, and we have sold already more than double-digit numbers of these. So it's really making the right traction. And it gives us -- again, I mentioned it, it gives us the confidence that we are on the right track. This change from having a review tool that looks to images to having an integrated workflow into your system and actually have real-time decision-making, that's a real difference.

Many thanks. So maybe last question. What do you see as your biggest risk to success currently?

I think Stephan Haferl already mentioned that geopolitical material supplies, that is something that keeps us awake all the time. We are pivoting when we need to pivot. We are looking to how we can best serve our customers, and that's the biggest risk, but we are on top of it.

Thank you very much, Dionys. This is -- we are at the end of the panel discussion. I hope we could stimulate a couple of questions in yourself, so that you can now take the microphone and ask the question to the management team yourself. So with this, I hand over to Uli. Thanks a lot.

Okay. So thank you a lot of information you have to digest first probably. But now it's your turn to go into the active mode. [Operator Instructions] I think the first hand I see is from Michael.

Michael Foeth, Vontobel. Two questions. The first one is regarding -- you mentioned that you are under restrictions from the U.S. sanctions to deliver to China, if you can be more specific as to which product, which technologies and what impact it has on you? And the second question is the regionalization of chip production, which is happening as a consequence of the geopolitical situations. How do you see the impact on you? You mentioned it's an opportunity eventually for you even if it creates friction in the market? So where do you see the opportunity?

Thank you for the 2 questions. First one, export restrictions business with China. It's a very complex field to start with. You have to look at that from several perspectives. One is we deliver directly, Comet to customers in China. And there, it is rather clear. Everything that has no U.S. content in, we can deliver. If it has U.S. content in, we need to ask for permission. That means we have to apply for a license at the Bureau of Industry and Security in the U.S., if granted, we can deliver. So to make it a little bit more complicated. The text, which is kind of spread over 140 pages, also contains wording of the sort that if -- what you deliver enables Chinese companies to manufacture leading-edge technology or close to leading-edge technology. I think 28 nanometers and below is mentioned, then you are asked not to do it. So basically, you're restricted to do that, which is obviously complex because we don't necessarily know where matchboxes are being [ flanged ] to. So that's one side of the situation. The other side is kind of easier for us in terms of we don't have to do anything. It's our customers in the U.S. who are affected. Obviously, they take care of the restrictions themselves, but it may have an influence on us in terms of they can deliver fewer tools to China. So I hope that answers part one. Part two, the regionalization I mentioned that it is an opportunity for us as more fabs and I mean a lot of fabs are being built right now. But if more fabs are being built out of geopolitical considerations, that means more business for us. However, as I mentioned, the semi industry was one of the first and probably today one of the most globalized industries, if you start to pull that back into the West, you also have to pull back the entire supply chain in certain areas. And it definitely doesn't make it more efficient. So in the long term, for consumers, be it industrial consumers or private consumers probably prices will go up. So that is the downside. I hope that sort of answers your second question.

Then please pass on to Michael.

This is Michael Inauen from Stifel. So also 2 questions, then. But the first one could be long answer actually. But I was just wondering on Synertia I mean, it sounds almost too good to be true, but you also have a competition in this market. There's MKS, Advanced Energy, for example. It has struggled, I would say, in the last 2 years, a bit with their supply chain. But I mean they also see your products and they see what you can do. How are they behaving at the moment? Or how far advanced are you now? And second question is more for Lisa. I mean we have seen in the last downturn also a massive drop in the EBIT margin or EBITDA margin, which was partially, I think, IXS related. But how flexible is your cost base these days, let's say, if there was a harder downturn than expected in '23, what kind of margin could we look at? Or do we have to expect again like a 50% drop in the margin.

Okay. A very good question. You heard a lot about feedback, customer feedback. And I mean, this clearly told us where are the real differentiators of Synertia to our competitors. There are a lot of commonalities, as André said, you have to have otherwise, you don't have to go to competition. But we know now some of the real differentiators to our competitors through our customers. And the good thing is all named the same. It was not a variation of no, no, it's this or it's that. It's all said the same thing. That is a -- that is a real differentiator. And that makes us, of course, very confident that we have these differentiators. How will they react? We'll see. It's not in the market yet. It's still in a closed environment, test environment. It's also very important for us that we can gain more and more data from our customers, making improvements, further improvements in software, et cetera, but there will be a reaction, that's for sure. And we have to be fast. We have to speed up now the process in bringing into the market and gain advantage and time advantage and technology advantage.

Maybe I can add to that. I mean, we don't know where they are on the road map. But if they're not far along in their road maps in sort of mimicking what we have accomplished, and they have years of struggle ahead that we know because we went through that ourselves.

We know their current product. I mean, we analyzed -- completely analyzed their current latest products that we know for sure. But the road map, yes, we will see.

All right. My turn. So everybody wants to know about 2023. So as we did show, we are expecting from an industry perspective that there will be a downturn going into 2023, but we do expect that there will be quite a steep ramp-up going into 2024 and 2025. So I think how I frame how it could look like for us next year. I want to kind of go back to a little bit of what I was saying before. If you look at some of the progress that was made over the past few years. We did divest ebeam. We did make the move over to Malaysia. So if you just look at those 2 things, they position us better to absorb any of the impacts going into a potential downturn next year. Now we are in an uncertain environment. We're managing the U.S.-China trade restrictions as Stephan previously answered. But we do feel that in our scenario planning right now that we are in a better position than we were during the last downturn. The other thing to keep in mind is that we believe our exposure to memory is lesser in this downturn than it was in the previous downturns. So our overall impact we should be able to absorb this one better. But again, we'll give more guidance on 2023 at our earnings release in March, and we will continue to update you, especially as we know more about the situations.

Sebastian from UBS. I've got as well two questions. The first one would be on the beta testing of the RF generator in the slide deck, you mentioned some sort of 8 testings going on. Can you add a little bit more granularity? Is that we're all with the smaller guys or some big guys in there? What's the progress there? If you can add a little bit of a couple of comments that would be helpful. The other question is with regard to the exposure to memory that you were just also alluding to. In the past, when this question popped up, you weren't 100% sure where you matchboxes and so on will end up if they really end up in memory or the non-memory side of things. Now you became quite more specific about the exposure where this additional clarity or granularity came from, that would be great to hear as well.

So the mix of that are 8 customers we said, the mix is of all -- its second tiers and first tiers. And second tier is also that's important to say important few to second-tier customers. It's not just buy the 10 generators a year. It's the second row in this industry. The second question is that has also to do, a lot to do how our customers have diversified their business into more logic business, and that exactly happened with our biggest customers. That also helped us to diversify our business a bit away from the majority of the memory business. So that helped a lot. And of course, engaging with new customers, more -- being more in the logic part of the business will help in the future as well. And now we have -- with Synertia, we have even more opportunities to diversify more into the logic sector than in memory sector because the specifications there are much higher than in the memory space.

Plus Sebastian at the UBS conference on Wolfsberg, you tortured me on that question. So I went back to the team and said, look, I understand our customers will not share the detailed ratios, but we can do better. Let's do a good guesstimate based on how they have evolved over the past 4, 5 years. And where we know on which tools we are and where they tend to go. And that's why we were able to say, look, we've been up at 70% with our biggest customer, driving our business in memory but this has gone down to probably 50% or below.

Great. Thank you, Sebastian. Then we have in back Harald, please?

Yes. Harald from ZKB. So 2 questions, more relating, I would say, to 2025. So it seems like your WFE CapEx assumption implied for 2025 is like CHF 110 million, CHF 115 billion. Would this be correct? And the second question is basically, I'm also struggling a bit to understand the revenue bridge on Page 33. You are guiding for CHF 200 million incremental sales in PCT. And at the same time, you're raising the addressable market guidance. I mean this would probably imply CHF 170 million top line from the RF generator and only CHF 30 million from the probably current business. So probably you could clarify this. And I think the same holds also true for the X-ray partner, which probably applying a 5% CAGR only would leave CHF 20 million incremental revenues from the back end, probably?

Yes. So why don't I start on the latter half of your question and then pass it over -- pass the ball over to Stephan. So I think what we're trying to do right at the moment is we're in the year 2022. Looking out towards 2025, we wanted to provide confidence that we feel good about the target model of where we're seeing. So in the CHF 830 million range for sales, we feel good about 25% EBITDA margins and the 30% ROCE. Going into -- there are uncertainties going into next year. So if you look at how the bridge was done to provide an indicative growth pattern for you, it's done based on 2022. So that's really the first thing. If you peel back the numbers, I love that the market share is 1 point -- sorry, the market is CHF 1.7 billion, that's fantastic. But we're really kind of saying, okay, we're going to be around CHF 100 million on Synertia. And if you think about it from that context, our goal is always to try to target 10% market share. But with Synertia, it's either we're really going to hit it really big or it's going to take some time. So we still feel confident about the numbers that we have put in place. And then if you peel that part out and you kind of look at the remainder of the growth for PCT and you look at what we had presented from a market share perspective, we're still expecting that we outperformed the market on the core. And that's gaining market share in Matchbox, maintaining market share in the vacuum capacitors where we already have quite a high share. So I think the numbers, they make sense in that model. And then on the X-ray side, I think what's important is that we're really targeting profitable growth opportunities, not every opportunity, profitable growth opportunities. And that's really a mindset shift that we've brought over the past couple of years to really target the X-Ray Systems business into semi electronics, where it's a better opportunity for us, and we think that we can make inroads faster than other competitors.

So I don't know which part of the questions you left to me, but...

I don't either.

That was kind of all encompassing. Maybe just to add a little bit to that. When we made our first estimates where we're going to be with Synertia in 2025, we more looked at how many slots can we fill. Back then, the market size was depending on which [ augurs ] you believe more in the area of CHF 1 billion to CHF 1.2 billion. And now that has grown to CHF 1.7 billion. It doesn't mean that the CHF 200 million are going to be CHF 170 million for the RF generators and then rather than mediocre growth on the matchboxes. So if we actually managed to get 1 point -- from 10% from CHF 1.7 billion, then we're going to surely go above CHF 830 million.

Is China included in this CHF 1.7 billion forecast? And what would be the WFE expectation for 2025, please?

So within the CHF 1.7 billion, yes, China is included. And who knows what restrictions or the market conditions in terms of export and import are going to be in 2025. We don't know. When it comes to the wafer fab equipment estimates for 2025 on top of my head, but we may have to go back and look into that, once again, it is anticipated to be in the area of about CHF 120 million.

And the next question is here.

Remo Rosenau, Helvetische. On Synertia. I mean, partly, the sales with this very good product will cannibalize your old products, right? I mean, you sold matchboxes and generators before. And part of it, of course, is designed to gain market share, to gain new customers. Have you any idea yet how much of these sales will really be new sales and how much will just replace old products?

We're not going to replace old products. We're really focusing on new projects in semi, replacing old product is one of the almost impossible thing if there are not tremendous performance and quality issues. With our OEMs, we go after the new projects, new design wins. An opportunity could be to replace all the products directly with the fabs, but that we are still evaluating how we can work on that and if it's even possible. The focus is on new projects with our OEMs, second tier and first tier.

And especially on the RF generators, I mean Synertia is not replacing what we have today, the [indiscernible] -- it is something entirely different. So Synertia generator is totally new. No replacement.

Okay. So that is really as new that you basically gain new customers?

New projects.

New projects, and it is all about share of wallet at existing customers --. and hopefully, we can convince customers that have restrained from buying from us in the past.

Okay. But you had to gain new projects the last 20 years all the time. So you know what I mean?

Now we can go together with the generator. So after the matchbox project, and we have generator to go with.

Thank you for the question. We have one more. Another question there in the back. And then it's you.

Yes. Holger Frisch [indiscernible]. We talked a lot about the Synertia product, but you also mentioned the MesoFocus, so I would be interested if you have any estimates about the sales revenue potential of the MesoFocus? And then you also mentioned share buyback program. Could you give us some flavor about how the discussions go in your company, whether to conduct a share purchase program or not? What are the criteria that have to be met.

So I'll start with the quick revenue question on the MesoFocus and then hand it over to Michael. So in general, what we have said about IXM is that new product introduction accounts for about 13% of revenue. going forward. So that's really how to think about it. We introduced new products in IXM all of the time, not just the MesoFocus. But the MesoFocus is quite strategic for us because it does address -- it can't -- it addresses many markets, but it does address battery and electric vehicles of where we see the share of electric components in automotive increasing in proportion to traditional automotive. So it's just an opportunity really for us, but you can think about overall 13% of revenue from -- in IXM comes from new products.

[indiscernible]

I'm not doing a very good job here.

You're doing a good job.

You're doing a really great job, so you answered all the questions.

Maybe I can add a little flavor to it. So MesoFocus, I mean you wonder what does that mean? Meso is what you have between micro and mini focus. It's sort of an intersectional product where today there is nothing. It's no man's land. And as such, it is sort of the answer to some of the trends that we've seen among other things in automotive and aerospace. Battery is now kind of being put on the pedestal, but equally important is that it is ideally suited to address metrology questions, so measurement questions in 3D printing. So how big is the market? I think MesoFocus as a platform as well, it's not just a product, it's a platform across sizes of resolutions that you can achieve as well as energies. So how much you can penetrate with it, probably addresses a nondestructive testing area that could be easily, in my eyes, $100 million a year. However, it will cannibalize there certain areas where we are already present, present and competing with other products from our incumbents. So it is a very interesting next step going forward. And it's difficult to really say, "Oh, that's exactly the carveout of the existing market," and it's that big. So it is a step in the world of x-ray, although it's much, much smaller than RF plasma, it is like being a Synertia.

Okay. And about the share buyback program?

Sorry. Yes. So just to follow up again on the capital allocation strategy for Comet. The first is that we will reinvest back into the business and organic growth. We will pay an annual dividend, and we will think about smaller niche M&A strategically. In addition to that, always brainstorming, whether share repurchases make sense for Comet or not. But that is a constant conversation with the Board. I would expect for 2022, it will be an annual dividend, but there's nothing else on the table at the moment.

Thanks a lot. Then we have Fabian over there.

Yes, Felix right here.

Felix.

Felix, sorry. Sorry.

Felix from [ Tech Capital ]. I have two questions on the RF Generator. Again, I mean, it was a quite enthusiastic presentation, but I skipped through all Capital Markets Day slides in 2018. A couple of the slides very similar. So we're sitting here again and have the feeling that now it's the time the generator we fly. Can you share maybe why it took longer than initially expected and like the one or two really key challenges you mastered now to be confident that it will be a success now? And the second question is, if I speak to other semi-CapEx players, when they talk about design win and until it really hits the P&L and you really see strong revenues, it takes normally 2 to 3 or even more years, so I was -- the ambition to achieve 10% market share. If you get the design wins in the first half, maybe next year, is that already enough from a time line perspective to get to this 10%?

It really depends. It's really where you are going, which node you are going. I mean in dielectric etch, I fully agree with you, there is no quick win. Even in conductor etches, no really quick win. But in all other fields, that could be and are quick wins. But what is coming to that is that the desperation is pretty high. The desperation level of the OEMs is pretty high because of the availability of RF products, simply the availability of performing RF product, and that increases the pressure to them to qualify faster. I'm not only talking about us, it's about other suppliers as well. We have to do the same in our supply chain. We have to qualify much faster new products or new supplier where it is needed. Otherwise, we die in the supply chain. And this is helping to accelerate the market entry with Synertia. There are fields that it's easier to enter. There we have to go in quickly and there are certainly fields. It's more difficult to enter. But even there, we have to try to accelerate together with our customers. What was the first question?

The delay?

The delay.

Delay.

The delay.

Why did it take so much time?

Okay. I give you a quote from one of our customers, I don't tell you who. They said, okay, you needed 5 years. It was longer than anticipated, but they also acknowledge that it is really a new development from scratch. It's not just a modification or whatever. And then they said, look, we also introduced a new product within 3 years, and now we have 2 years to solve all the problems. And this is what we really wanted to avoid. As André said, we do not -- although we're talking about better versions at the moment, but they're not far away from the serial product. They are really qualified, made to qualify the product at the customer. It's stable. It's delivering everything. And this time we took during the development, you always have surprises in the new development phase. But this time, we definitely took that we can say, we go out with this sustainable product customers can test and qualify. We still will need to improve things. That's for sure, but not basic design things. That was the target.

Does that answer your question? [indiscernible] can talk more. We got time, ample time to discuss...

Which part wasn't answered?

Yes. But did you struggle in the end? I mean, I look me the presentation of 2018, certain slides with the data and stability and what was already there. So...

So let me maybe from my perspective, put 3 things in. So I mean, the complexity of this product is very high. Maybe we underestimated some of the parts. But then -- and it has already been said, I think you mentioned it before. In 2019, we put on the brakes. Unfortunately, also, we put on the brakes in R&D. That wasn't good. Then the years of the pandemic, we didn't put on the brakes, the brakes were put on us. So that didn't help either. So I mean you have all these factors that can play into a multiyear development project. And yes, we would have loved to be out earlier. But look, this is our reality strikes you in the face from time to time.

Is that better?

Better.

All satisfied. That's great. That's great. I saw somebody raise his hand in the back. Reto, please.

I have a question on the margin ambition on the X-ray divisions. They were in 2029 -- in 2019, it was above 20% for IXS and above 25% for IXM. Is that unchanged for 2025?

So we have not guided on margin for the divisions. So I think there's -- what we're guiding on is the group. And that's what I want to make sure is very clear. We are guiding on the group. And if you want to think about margin for the divisions in particular, I think looking at the past couple of years is probably a good indicator of our performance, and we'll give you some proof points about the things that we said we were going to do, how they have translated into margin. So on the PCT side, like I said before, we've really thought about making sure the matchbox production is transitioned over to Asia and doing that on plan and on time. That's a key contributor to our margin growth going into 2025. The second thing is that we've had to realign the X-ray business. That takes -- that does take time. And we are targeting it to more profitable growth. We're continuing to invest in software applications using ORS, like Dionys said, in order to enhance yield capabilities for customers and advanced packaging. But those things take time. So overall, what we can say is that 25% from a group perspective is really the right target for the group.

Thank you, Lisa. So I'm looking at the operator. Are there any questions from the webcast? No questions. Then I saw that Michael has a follow-up. But before we answer his follow-up question, is there somebody who has not asked so we take [ Thomas Fung ] first and then we'll go to Michael.

What supports your anticipation that the ramp into 2024, 2025 of the market will be steep?

So why do we say it is steep, basically, that comes back as an indication from our Tier 1 customers, which are basically worth that going into a dip in '23 that we are not going to be prepared for what they say is going to be a very steep ramp. So in other words, we don't have any facts, but we are being asked to be ready, ready.

Good. Thank you. Michael, we take your follow-up question, please.

So you have targets on sales and margins, and I was wondering about cash flow. If you have any initiatives going on to optimize net working capital and to increase your cash conversion? And the last question would be regarding the energy crisis. You said you're confident you'll get through the winter. And I was wondering what measures have you taken? And are there any risk of disruption?

Okay, I'll talk and you get the last word, the final one. All right. So cash conversion, ultimately, I'd love to get to a point where we could guide on cash. But over the past couple of years, we've had to take positions that have -- to secure our supply chain, which means that we've had to -- prices have increased. We've had to take inventory stock. And I see it starts to soften, but it's not really softening. But so I would say, over the next couple of years, we need to continue to take positions in the supply chain that ensure our ability to deliver to customers. So that's first and foremost. Generally speaking, we're trying to talk about cash more. We're getting teams more focused on negotiating payment terms with suppliers and with customers that we do have leverage over. So it's a continued dialogue within the organization and within the company. And we are doing everything we can to increase cash conversion using the levers that we have. But I would anticipate over the next couple of years, net working capital is going to be higher than it has been in the past.

Okay. And on energy, clearly, I mean, whatever we can do in order to save energy, we're doing using excess heat for heating. It is now also allowed in Switzerland to use backup generators like continuously, if need be. We have entered into energy swapping platforms between industries, between companies. So we've done whatever we can do, unfortunately, it wasn't enough time to buy a bigger generator. Delivery times there are also kind of extended. But we're also in very close contact with the Canton as well as the federation. And the signals that we're getting back there are, I'd say, cautiously positive. And that's why we're saying probably we're going to get unharmed through the winter and seeing that Zurich has put on the Christmas lighting, what's the problem? Obviously.

Thank you, Michael. There is no urgent final question in the room, that doesn't seem to be the case. Then I would like to thank you for your participation again. Also those who followed our Capital Markets Day on the webcast. And because Stephan said he wants to have the final word...

Did I?

So I hand over to him.

Okay. All right. So again, also from my side. Thank you very much for your attention. It was a pleasure. It's always kind of stressful, but it was a pleasure to speak to all of you. And we happily invite you to an [indiscernible] outside where we can certainly continue to talk about pressing issues or other issues in general. Thank you very much. See you out there.