Full Year Results 2019/20
1 April 2019 to 31 March 2020

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

19.05.2020

2

life
energymotionEncouraging performance 2019/20
Steady results, given the tough economic environment
Sales and profitability in line with guidanceRobust margins, strong balance sheet, healthy cash flow
Fundamental prospects remain strong, driven by mega trends
Electric sensor market growing 8% CAGR
Continue to invest in R&D, 9.1% of sales; launched ten new products
Making our organization more agile
Covid-19 impact well managed operationally to date

19.05.2020

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 closed 3 weeks, returned full capacity end March

Switzerland, Bulgaria running at full capacity throughout
Sanitary measures for all sites, home-office experience successfulSome supply chain bottlenecks
Q4 orders -1.2%; sales -5.7% mainly due to China shut down
19.05.2020

5

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

19.05.2020

6

A leading company inelectrical measurement
Core applications

Motor
DrivesSegments

Automotive
Green
Motor
controlPower Storage,
Generation, Conversion

Industry

Conventional
Battery
management

EnergyMeasurement

Charging
systems

Drives &WeldingRenewableenergies

FY 2019/20 Sales
CHF m

67.6

240.4

Δ CHF

-5.3%

-3.9%

Δ constant currency

-3.9%

-1.3%

Traction

High-Precision

19.05.2020

7

Global sales spread balanced
by strong RoW
Growth

24%
32%

12%

32%

Sales

FY 2019/20 Q4 2019/20

CHF m

vs 2018/19 vs 2018/19

China

98.7

-7.2%

-14.6%

Europe

97.9

-4.1%

-0.4%

North America

37.4-13.5%

-9.8%

RoW

74.0

+5.8%

-0.1%

Total

307.9

-4.2%*-5.7%* -1.9% at constant currency rates•

Close to customers on the ground in all key markets•

Balanced geopolitical and economic exposure•

Better performance in Rest of the World
19.05.2020

8

Industry segment

19.05.2020

9

Industry segment
Sales performance
CHF mBusinesses

2019/20

2018/19

ChangeComments

Drives

99.5

113.3

-12.2%•••

China delay of investments
Japan & Germany weak machine tools
Interest in new products

Renewable Energy

78.7

77.0

+2.2%

•
•
•

Strong growth in China
Stable Europe & US
Driven by solar and new products

Traction

51.0

48.6

+5.1%

•
•

Growth in India
Higher investments Eastern Europe &RussiaHigh precision

11.1

11.3

-2.2%

•

Demand for EV car test benches Japan& Western Europe
New IN product family well received•
Total Industry

240.4

250.2

-3.9%

19.05.2020 10

Industry segment
Regional markets
Growth
20%
31%

11%

38%

Sales

FY 2019/20 Q4 2019/20

CHF m

vs 2018/19 vs 2018/19

China

73.2

+0.1%

-2.9%

Europe

92.2

-5.6%

-1.4%

North America

26.1

-8.9%

-7.8%

RoW

48.8

-3.8%

-6.5%

Total

240.4

-3.9%*-3.6%* -1.3% at constant currency rates•

China largest single country•

Global economic uncertainty persists, particularly in the drives business19.05.202011

Industry next generation products

HOF-Analogue

LZSR

AI-PMUL

HLSR with FeSi Core

(Smart grid)

DVC 1000-P

IN 2000-SB

DVC 1000-X

IN 550-S

19.05.2020 12

DC meter for EV fast charging station• EV roll out fast charging
growing
EV
roll
out
fast
charging••• EV
roll
out
fast
charging
EV
roll
out
fast
•
15
minutes
80% charge• EV roll out fast charging
charging• 15 minutes 80% charge
growinggrowing• Larger batteries
growing

Largerbatteries••• 15minutes
80%
15
minutes
80% charge
chargeAC/DConboardchargers• 15 minutes
80% charge
AC/DConboardchargers•• Larger
batteries
Largerbatteries
minimizedorremoved• minimized
Larger batteries
or removed•• AC/DC
AC/DC onboard
onboard chargers
chargers• AC/DC onboard chargers• DC metering
mandatoryinminimizedorminimizedor removed
removedminimized
removed• DC metering
isor
becoming

EU/US,
customers
pay for power•• DC
metering
isbecomingDCmetering
isbecoming
mandatoryintheEUand US,• loadDC metering is becoming
mandatory
in
the
EU
and
mandatoryinEUUS,
as customers
shouldonlyUS,pay
mandatory
in thetheEU and
and
US,
as
as
customers
shouldonly
payforcustomers
the power shouldload ofonly
the payascustomers
shouldonly
paysite• forDeveloped
at
new
Lyon
R&D
the
power
of
the
for
the
load
of
batteryof theload
vehicleforthe power
power
load
of thethebatteryofthebatteryofthe vehicle
vehiclebatteryofthevehicle knowledge,• Software, application•• Germany
first
for
Germany
first market
marketfor launch
launch•• partnership
Germany
marketGermany first
first
marketfor launch
launch
withearly foradopters
19.05.2020 13

Automotive segment

Automotive segment
Sales performance
CHF mBusinesses

2019/20

2018/19

ChangeComments

Green

50.2

48.6

+3.4%

•
•
•

China influenced by policies, Covid-19
Momentum Europe, Korea, Japan
New motor control, battery management,
charging system products developed

Conventional

17.4

22.8

-23.8%••

Continued switch to new technologies
US major OEMs start to electrify SUVs
and pick-ups

Total Automotive

67.6

71.4

-5.3%

Green
Motor control

Conventional
Battery management

Charging systems

19.05.2020 15

Automotive segment
Regional markets
Growth

37%
38%

17%

8%

Sales

FY 2019/20 Q4 2019/20

CHF m

vs 2018/19 vs 2018/19

China

25.5

-23.4%-43.7%

Europe5.6+29.6%+21.4%

North America

11.3-22.6%-14.1%

RoW

25.2+31.1%+14.4%

Total

67.6

-5.3%*-13.6%* -3.9% at constant currency rates•

Green car business accounts for 74.3% (up from 68.1%)•

China impacted short-term by government policies•

European manufacturers drive sales from Korean and Japanese suppliers

19.05.2020 16

Automotive next generation products
Battery management

CAB SF 500

CAB SF 1500

19.05.2020 17

Auto sector transformation
Three drivers for OEMs and suppliers•Electrification•

Connectivity/Autonomous Driving•

Mobility as a Service

Linear long-life mechanical platforms need to change to continuous
agile product development
Creativity, innovation, speed, software, and functional safety

Clear winners & losers, with new entrants
Covid-19 accelerates investment & adoption of EVs in long-term
19.05.2020 18

Auto sector transfomation

19.05.2020 19

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

19.05.2020 20

Performance at a glance

CHF m

FY 2019/20

FY 2019/20 Q4 2019/20
vs 2018/19

vs 2018/19

Orders received

322.4

+0.6%

-1.2%

Sales

307.9

-4.2%*

-5.7%

EBIT

58.3

-10.0%-15.0%Net profit

60.7+15.9%-35.2%* -1.9% at constant currency rates•

Sales down only 1.9% constant currencies, benefit of diverse footprint•

Profitability stable, with vigilance over SG&A costs•

Underlying EBIT margin 19.6% in line with guidance•

Record net profit reflects non-recurring tax impact of CHF 14.0m due to sale oftechnical IP from LEM Intellectual Property SA based in Fribourg to LEM
International SA based in Geneva and to LEM China
19.05.2020 21

Gross margin
CHF m

FY

160

50%

FY

Q4

Q4

2019/20 2018/19 2019/20 2018/19

140

In CHF m

142.7

146.5

31.9

32.8

In % of sales

46.4%

45.6%

44.2%

42.8%

48%
120
46%
100

80

Gross margin up by 80 basis pts:•

Efficiency gains in both material andlabour

•79% of sales produced in China andBulgaria•

Set up of a non recurrent inventory
provision (CHF 1.3m) for Automotive
ASICS in Q4 2019/20

44%

60

42%
40
40%
20

0

38%

15/16

16/17

17/18*

18/19

19/20

*restated

19.05.2020 22

SG&A
CHF m

FY

60

30%

FY

Q4

Q4

2019/20 2018/19 2019/20 2018/19
In CHF m

56.5

54.4

13.8

11.5

In % of sales

18.3%

16.9%

19.2%

15.1%

50

40

20%

30

20

10%

•

Remained vigilant with overheads•

Non-recurring positive items 2018/19•

Non-recurring negative items 2019/20•

Like-for-like decrease CHF 2.0m

10

0

0%
15/16

16/17

17/18*

18/19

19/20

*restated

19.05.2020 23

R&D
CHF m

FY

30

10%

25

FY

Q4

Q4

2019/20 2018/19 2019/20 2018/19

8%

In CHF m

28.0

27.6

6.1

7.3

In % of sales

9.1%

8.6%

8.5%

9.5%

20
6%

•

R&D expenses increased due to higher
headcounts and third party collaboration•

Products in early launch phase•

Continued long-term investment in
future applications

15
4%
10

2%

5

0

0%
15/16

16/17

17/18*

18/19

19/20

*restated

19.05.2020 24

Financial expense
FY

FY

Q4

Q4

2019/20

2018/192019/20

2018/19

Exchange effect

(2.4)

(2.5)

(1.5)

(1.1)

Other financial expense & income

(0.3)

(0.0)

(0.1)

0.0

Total

(2.7)

(2.5)

(1.6)

(1.1)

CHF m

•

Negative exchange effect of CHF -2.4 million mainly caused by losses on EUR
and USD•

Following IFRS 16 implementation, interest costs of financial leases areincluded (CHF 0.3m)•

Interests costs on 3rd party financing amount to CHF 0.1m only

19.05.2020 25

Income taxes
FY
2019/20

FY
2018/19

Expected income tax rate

15.8

15.0

Expected withholding tax rate

1.0

1.6

Expected tax rate

16.8

16.6

Other differences(25.9)(0.8)

Effective tax rate

(9.1)

15.9

%

•

IP re-organisation generated one-off positive tax impact of CHF 14.0 million•

Excluding effects from the IP sale and other minor non-recurrent elements, thetax rate was 17.0%, in line with our expectations

19.05.2020 26

Income statement
FY

FY

Q4

Q4

CHF m

2019/20

2018/19

Change

2019/20

2018/19

Sales

307.9

321.6

-4.2%

72.2

76.5

Gross margin %

46.4%

45.6%

+0.8%pt

44.2%

42.8%

Operating expenses(84.4)(81.7)+3.3%(19.9)(18.7)

EBIT

58.3

64.8

-10.0%

11.9

14.0

EBIT margin %

18.9%

20.1%

-1.2%pt

16.5%

18.3%

Net financial expenses

(2.7)

(2.5)

+5.9%

(1.6)

(1.1)

Income tax

5.1

(9.9)

N/A

(1.7)

0.4

Net profit

60.7

52.4

+15.9%

8.7

13.4

19.7%

16.3%

+3.4%pt

12.0%

17.5%

Net profit margin %•Excluding the effect from the IP sale, the net profit would have decreased to
CHF 46.7m, and the net margin declined to 15.2% compared to FY 2018/19
19.05.2020 27

Balance sheet

CHF m

31.3.2020

31.3.2019

7.2

56.2

Fixed assets

114.9

61.9

Noncurrent liabilities(15.0)(9.5)

Net operating assets

107.1

108.6

Net cash/(debt)

10.2

4.5

Equity

117.4

113.1

Equity ratio

51.0%

60.5%

Days of sales outstanding

67

75

Days of inventory outstanding

86

92

Days of payables outstanding

43

41

Net working capital••

Balance sheet remains strong and is essentially debt-free
Equity ratio dropped mainly due to deferred tax assets and new capitalisation of leases(IFRS 16)19.05.2020 28

Cash flow
FY
2019/20

FY
2018/19

Profit before taxes

55.6

62.3

Adjustment for non-cash items and taxes paid

8.1

0.1

Cash flow from changes in net working capital

9.9

(8.8)

Cash flow from operating activities

73.6

53.5

Cash flow from investing activities(14.7)(14.8)

Free cash flow

58.9

38.8

Cash flow from financing activities(51.3)(42.8)

Change in cash and cash equivalents

7.6

(4.0)

Cash and cash equivalents at the end of the period

19.2

12.5

CHF m

• Cash flow from operating activities was CHF 73.6 million (+37.5%), and free
cash flow was CHF 58.9 million (+51.8%)• Better net working capital management and lower taxes paid
19.05.2020 29

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

19.05.2020 30

Uncertain outlook
IMF baseline forecast -3% global GDP 2020, with aftershocks into 2022
LEM China exports dependent on demand from other markets
Complex global web of supply chains, little visibility until Q2
Benefit from steady reliability and diversity across sectors and regions

LEM Headquarters
Geneva, Switzerland

19.05.2020 31

Uncertain outlook
Robust margins, strong balance sheet, healthy cash flow
Continued investment in R&D, leveraging new technologies in electric
powertrains, smarter sensors, DC metering and charging systems
Make LEM more agile, increase speed of execution and reduce time tomarketFocus on matters under own control, ensuring efficiency

Covid-19 will mean certain drivers for short-term prospects are out of
our hands

19.05.2020 32

Accelerating the organization•

Increasing LEM’s speed and agility•

Talent and capability development•

Decentralization•

Leadership and empowerment•

Communications and branding

19.05.2020 33

Accelerating the organization
New HQ in Meyrin, Geneva, 2021
• Stronger focus on strategy, standards, innovation, and global sites
coordination• Building appropriate for modern organizational roles & technologies

19.05.2020 34

Accelerating the organization
New plant in Malaysia• New production facility of 5-10,000 sqm in Penang, Malaysia• To meet growing demand from both industry and automotive clientsworldwide; de-risk supply chain; enhance competences• Expected to open in fiscal year 2021/22, investment of CHF 5-10m

19.05.2020 35

Mega trends drive long-term growth
Mega trends drive demand for electricalsensors:
•
•
•
•
•
•

renewable energy
reliable energy
distributed energy
mobility
automation
digitization

Far from being a mature market, thecurrent sensing products are undergoingsignificant mutations, driven by new
applications and technologies.

Based on IHS Markit data and ouranalysis, the current sensor market is
expected to grow from about CHF 2.4
billion in 2019 to CHF 3.9 billion in 2025.
19.05.2020 36

R&D focus
Three main trends drive our investments
electrification
forward integration
miniaturization
Technical focus
battery management systems, integrated current sensors
embedded software, added functionalities

increased knowledge on semiconductor packaging, supply chain and testinglaunched ten products 2019/20• digital integrator product for smart grid• semi-conductor product for solar inverters and robotics• new DC meter for electric vehicle fast charging stations

19.05.2020 37

AgendaOpening Remarks

Frank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

19.05.2020 38

The long-term view• Share price development (31.03.2004 – 31.03.2020)• Distributed dividends since 2004/05: CHF 436m

19.05.2020 39

Proposal to shareholders
53,3
47,8

42,0 46,040,035,0 38,2

40,0

35,0 39,1• Dividend policy of distributing
significantly more than 50% ofconsolidated net profit• Consideration of financial
strength and difficult economic
environment• Proposed ordinary dividendof CHF 40 per share, downfrom CHF 42• Payout ratio of 75.1%, downfrom 91.4%• Represents a dividend yield of
3.8% (as per 31 March 2020)• Sign of trust in the
Company’s future
15/16

Dividend

16/17

17/18
restated

18/19

19/20

Earnings per share

19.05.2020 40

Thank you

19.05.2020 41

Q&A

19.05.2020 42

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

For further information

9 June 2020

Annual General Meeting 2019/20

Andrea Borla, CFO

16 June 2020

Dividend ex-date

Phone: +41 22 706 12 50

18 June 2020

Dividend payment dateE-mail: investor@lem.com

29 July 2020

First-quarter results 2020/21

3 November 2020

Half-year results 2020/21

4 February 2021

Third-quarter results 2020/21

19 May 2021

Year-end results 2020/21

24 June 2021

Annual General Meeting 2020/21

1 July 2021

Dividend ex-date

6 July 2021

Dividend payment date

19.05.2020 43

life
energymotion