Half Year Results 2020/21
1 April 2020 to 30 September 2020

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

03.11.2020

2

lifeenergymotion

Encouraging performance
Business resilient, rebounded from the first Covid-19 wave

Revenues down only 4.4% in constant currencies
Driven by China, in particular renewable energy

Balanced risk across businesses and geographies
Improvements in order book Q2
Little long-term visibility on how Covid-19 may impact customer
confidence and operations

03.11.2020

4Covid-19 impact to dateThree priorities•Safety of employees, taking care of families•Reliability and responsiveness to customers and suppliers•Focus on strategic projects and opportunities

China and Bulgaria running at full capacity throughout H1
Switzerland production working at 70% since beginning August
Sanitary measures for all sites, home-office experience successful
Supply chain bottlenecks are improving
Orders down 15.6% H1 on H1, but up 5.4% Q2 on Q2
03.11.2020

5

Global activity indicators
Global trade and industrial production picked up as
lockdowns were eased(IMF, World Economic Outlook, October 2020)03.11.2020

6

Appointment of Chief HR Officer,Rodolphe Boschet, 21.09.2020• Member of the ExCo, reporting directly to CEO• Responsible for global HR function, cultural transformation,
talent development, and hiring new talent• Masters in Political Science University Paris III Sorbonne,
Masters in International HR Management ENS Cachan• Fluent in English and French
Year

Company/PositionLocation

2019 - 2020

Danaher Corporation
VP Human Resources Integration

France2016 - 2020

Beckman Coulter (a Danaher company)
Chief Human Resources OfficerUSA

2013 - 2016

Radiometer (a Danaher company)
Chief Human Resources Officer

Denmark

2006 - 2013

Beckman Coulter
Various positions in HR

USA, Switzerland, France

2002 - 2006

Datascope Corporation
Manager International Human Resources

France03.11.2020

7

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

03.11.2020

8

A leading company inelectrical measurement
Core applications

Motor
DrivesSegments

AutomotiveMotor
control

Batterymanagement

Power Storage,Generation, Conversion

Charging
systems

EnergyMeasurement

Industry
Drives &Welding

Renewableenergies

H1 2020/21 Sales
CHF m

31.5

112.6

Δ CHF

-10.4%-9.1%

Δ constant currency

-5.0%

-4.2%

Traction

High-Precision

03.11.2020

9

Global sales spread
Growth23%
37%

10%

30%

Sales

HY 20/21

Q2 20/21

CHF mvs 19/20

vs 19/20

China

54.2

-0.9%

+5.5%

Europe42.7-11.4%-12.2%

North America

14.2-26.9%-24.0%

RoW

33.0-10.2%-15.5%

Total

144.1

-9.4%*-8.7%* -4.4% at constant currency rates•

China further increasing its share•

Balanced geopolitical and economic exposure•

Close to customers on the ground in all key markets
03.11.2020

10Industry segmentIndustry segment
Sales performance
CHF mBusinesses

2020/212019/20

ChangeCommentsDrives

46.8

51.2

-8.7%

•
•

Longer-term investment cycles
Asia recovering, USA weak

Renewable Energy

41.4

40.7

+1.7%

••
•

Solar growth with short-term cycles
China growth continues
Europe flatTraction

20.8

26.5

-21.5%•••

Longer-term investment cycles
India and China lockdown impact
Very strong traction sales last year

High precision

3.7

5.6

-34.2%•

Lack of investment confidence for test
benches & medical equipment

Total Industry

112.6

123.9

-9.1%

03.11.2020

12

Industry segment
Regional markets
Growth18%
37%10%

35%

Sales

HY 20/21

Q2 20/21

CHF mvs 19/20

vs 19/20

China

41.8

+4.6%

+6.3%

Europe39.1-14.3%-18.0%

North America

10.9-20.4%-21.4%

RoW

20.8-15.8%-18.5%

Total

112.6

-9.1%*-11.0%* -4.2% at constant currency rates•

Largest market China continues to grow due to renewable energy•

Strong FX effect on reported sales from China and North America

03.11.202013

Industry next generation products

For solar panels

HMSRFor EV-chargers

CDSR 007 MPDC Energy Meter

03.11.2020

14

Industry next generation products

Milestones on DC Meter
March 2017
Opening of R&D center Lyon, FranceApril 2017- Sep 2018
Start recruitment & development of DC BM concept
May 2020
Production line in Geneva installed
June 2020
First customer orders and deliveries
October 2020
Certification of DC BM400

03.11.2020

15

Automotive segment

Automotive segment
Sales performance
CHF mBusinesses

2020/212019/20

ChangeComments

BatteryManagement

18.9

22.7

-16.6%••US reduction in 12V demand
Demand for High Voltage products
broadly stable

Motor Control

11.3

11.3

+0.2%

•Production ramp-up in Q2 offsetting
shutdown in Q1

Charging Systems

1.3

1.2

+10.1%•Continued momentum for battery electricand hybrid vehicles

Total Automotive

31.5

35.1

-10.4%

03.11.2020

17

Automotive segment
Regional markets
Growth

39%

39%

10%

12%

Sales

HY 20/21

Q2 20/21

CHF m

vs 19/20

vs 19/20

China

12.4

-16.0%+3.4%

Europe3.7+38.2%+108.3%

North America

3.3-42.4%-29.5%

RoW

12.2

+1.1%

-9.7%

Total

31.5

-10.4%*-0.8%* -5.0% at constant currency rates•

China recovered in Q2, down H1 on H1, as consumers are postponing
purchases with new extension of electric vehicle subsidy programs to 2022•

Europe grew due to OEMs ramping-up production operations in Q2•

North America impacted by reduced sales of 12V products•

RoW sales up due to Korea
03.11.2020

18

Auto sector transformation
Miniaturization: Integrated Current Sensors•

15-years experience in developing ASICs, established team focusing ondeveloping Integrated Current Sensors•Solid portfolio, covering both Industry and Automotive•

Further portfolio development to meet new market requirements

Complex solutions: Modules•

Automotive safety levels•

Intelligence•

Integration of measurement sensoric into complex modules•

Adjacent applications, e.g. EPS

03.11.2020

19

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

03.11.202020

Performance at a glance

CHF m

HY 2020/21

HY 2020/21 Q2 2020/21
vs 2019/20

vs 2019/20

Orders received

135.3-15.6%

+5.4%

Sales

144.1

-9.4%*-8.7%

EBIT

28.3

-10.8%-0.3%

Net profit

23.4

-6.8%

+9.3%

* -4.4% at constant currency rates•

Orders recovered in Q2, but H1 down 15.6% at CHF 135.3 million•

Sales down 4.4% at constant currencies, benefit of diverse footprint•

Profitability holds up well, with vigilance over SG&A costs

03.11.2020

21

Gross margin
HYCHF m160

50%14048%
120

HYQ2

Q2

2020/21 2019/20 2020/21 2019/20
In CHF m

65.5

74.3

32.5

35.9

In % of sales

45.5%

46.7%

46.5%

47.0%

46%
100

Gross margin declined by 120 basis pts:

8044%

•Higher air freight costs due to Covid-1942%•

Partially compensated by efficiency
programs

40%•

83% of sales produced in China andBulgaria

60

40

20038%
16/17

17/18

18/19

Full year GM in % of sales

19/20

20/21

Half year GM in % of sales

03.11.2020

22SG&A
CHF m

HY

60

30%

Q2

Q2

2020/21 2019/20 2020/21 2019/20

50

40

HYIn CHF m

25.3

28.3

12.1

13.6

In % of sales

17.6%

17.8%

17.3%

17.8%

20%

•

Remained vigilant with overheads•Kept SG&A costs flat in % of sales•Sanitary crisis effects (eg. limited travel,government subsidies)

30

2010%

1000%

16/17

17/18

18/19

Full year SG&A in % of sales

19/20

20/21

Half year SG&A in % of sales

03.11.2020

23

R&D
CHF m

HY

30

10%

25HYQ2Q2

2020/21 2019/20 2020/21 2019/20
In CHF m

13.0

14.3

6.3

7.2

In % of sales

9.0%

9.0%

9.0%

9.4%

8%

206%
15

•

Reduced R&D outsourcing•

Products such as HMSR and DC Meterin early launch phase•

Continued long-term investment infuture applications

4%
102%

500%
16/17

17/18

18/19

Full year R&D in % of sales

19/20

20/21

Half year R&D in % of sales

03.11.2020

24

Financial expense
HYHYQ2Q2

2020/212019/20

2020/212019/20

Exchange effect0.1(1.2)

(0.1)

(1.4)

Other financial expense & income

(0.1)

(0.2)

(0.0)

(0.1)

Total

0.0

(1.4)

(0.2)

(1.5)

CHF m•

No major foreign exchange impacts•

USD, EUR and JPY cash flows are hedged•

Interest costs relate mainly to expenses on lease liabilities

03.11.2020

25

Income taxes
HY
2020/21HY
2019/20

Expected income tax rate

15.5

16.3

Expected withholding tax rate

1.60.7

Expected tax rate

17.1

17.0

Other differences

0.4

0.3

Effective tax rate

17.5

17.3%

•Effective tax rate in line with last year•

LEM China benefits from the HNTE (High & New-Technology Enterprise)
reduced tax rate of 15%•Withholding taxes mainly on dividends paid from China to Switzerland

03.11.2020

26

Income statement
HYHYQ2Q2

CHF m

2020/212019/20

Change2020/212019/20

Sales

144.1

159.1

-9.4%

69.8

76.4

Gross margin %

45.5%

46.7%

-1.3%pt

46.5%

47.0%

Operating expenses(37.2)(42.6)-12.7%(17.4)(20.8)

EBIT

28.3

31.8

-10.8%

15.0

15.1

19.7%

20.0%

-0.3%pt

21.6%

19.8%

Net financial expenses

0.0

(1.4)

n/a

(0.2)

(1.5)

Income tax

(5.0)

(5.2)

-5.3%

(2.6)

(2.4)

Net profit

23.4

25.1

-6.8%

12.3

11.2

16.2%

15.8%

+0.5%pt

17.6%

14.7%

EBIT margin %Net profit margin %03.11.202027

Balance sheet
CHF m

30.9.2020

31.3.2020

Net working capital

25.0

7.2

Fixed assets

115.2

114.9

Noncurrent liabilities(19.5)(15.0)Net operating assets

120.7

107.1

Net cash/(debt)(28.6)

10.2

Equity

92.1

117.4

39.8%

51.0%

Days of sales outstanding

7567

Days of inventory outstanding

9886

Days of payables outstanding

36

43

Equity ratio•

Equity ratio dropped to 40% due to the dividend payments in June 2020, but remained
basically stable compared to 30 September 2019•

Net debt increased to CHF 28.6m mainly due to the dividend financing
03.11.202028

Cash flow
HY
2020/21HY
2019/20

Profit before taxes

28.4

30.3

Adjustment for non-cash items and taxes paid

(1.9)

4.9

Cash flow from changes in net working capital(12.0)(5.3)

Cash flow from operating activities

14.4

29.9

Cash flow from investing activities

(6.6)

(6.5)

Free cash flow

7.8

23.5

Cash flow from financing activities(10.5)(18.1)

Change in cash and cash equivalents

(2.7)

5.3

Cash and cash equivalents at the end of the period

16.4

17.1

CHF m• Free cash flow dropped by CHF 15.7m due to net working capital deteriorationand first tax payment of CHF 6.4m linked to last year’s IP transfer• Additional CHF 28m taxes on IP transfer to be paid within the next 12 months
03.11.2020

29

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

03.11.2020

30

Uncertain outlook – Full Year 2020-21
Little visibility on how Covid-19 impact may play out
Both US-China tensions as well as Covid pandemic will accelerate relevant
mega-trends for LEM (electrification, automation, renewable energy)
For FY 2020/21, we remain cautious, as there are many unknowns beyond ourcontrol
Sales expected to decline by around 10% to CHF 275 - 280 million (CHF 307.9
million for 2019/20)

EBIT margin not far off 20%

LEM Headquarters
Geneva, Switzerland

03.11.2020

31

Q&A

03.11.2020

32

lifeenergy
motionFinancial calendar and contact details
The financial year runs from 1 April to 31 March

For further information

4 February 2021

Third-quarter results 2020/21

Andrea Borla, CFO

19 May 2021

Year-end results 2020/21

Phone: +41 22 706 12 50

24 June 2021

Annual General Meeting 2020/21

E-mail: investor@lem.com

1 July 2021

Dividend ex-date

6 July 2021

Dividend payment date

03.11.202034