Half Year Results
Year 2009/10
1
5 November 2009

Agenda1. LEM at a Glance
2. Business Review
3. Financial Review
4. Outlook

2
5 November 2009

1. About LEM•

LEM is the global market leader in providing innovative and high quality
solutions for measuring electrical parameters•

The current and voltage transducers are used in a broad range of applicationsin industrial, traction, energy & automation and automotive markets•

LEM is a high growth global company with approximately 950 employees
Production plants are in Geneva (Switzerland), Copenhagen (Denmark),
Machida (Japan), Beijing (China) and regional sales offices close to the clientslocations•LEM is listed on the SIX Swiss Exchange since 1986
Market cap of CHF 300 million (as per 30.09.2009)3

5 November 2009

1. LEM Sales and Operations

4
5 November 2009

1. LEM at a Glance - Markets Served
Traditional Markets

New Markets•

Industry– All areas of reliable current
measurement– Motor drives, power conversion
AC/DC, power supplies, UPS, welding,
medical scanners, new energies,
leakage current, test & measurement•Automotive– Battery Management (all car types)– Electric Motor Control (HEV-EV)•Traction & Trackside– on-board applications, inverters– Trackside and energy monitoring•Energy & Automation– Process control– Battery Monitoring,Energy Metering

55 November 2009

2. Business Review

5 November 2009

2. Highlights H1 2009/10• Sales decreased to CHF 78.8 million, -29.0% to the prior year
• On the road to recovery– Q2 to Q1 up 21%– Positive book to bill ratio in H1 2009/10 of 1.09
– Upturn in all 4 markets• Operational EBIT of CHF 8.6 million, or 10.9% of sales,-60% to prior year
• Net profit decreased to CHF 1.6 million due to the provisions for the stock
option plans of CHF 4.8 million• Market share growth in Industrial segment• LEM Danfysik integration progressing well, earnings for the Group• Opening of a new plant in Beijing, China

7
5 November 2009

2. Net Sales
In CHF Millions

In CHF millions

Sales

GrowthH1 to H1

GrowthQ2 to Q1

Total Sales

78.8

-29%

21%

Industrial

72.7

-29%

21%

Automotive

6.1

-33%

22%

200
175

150
125
100
755025‐
2005/06
5 November 20092006/07

2007/08

2008/09

2009/108

2. Industrial Segment: Regional Markets
Sales
growth rates

ROW 2%

Asia 30%

N. America
12%

H1 to H1Q2 to Q1

Europe-35%

17%

N. America

-27%

16%

Asia-12%

29%

ROW

-48%

79%

Total-29%

21%

Europe 56%

Total sales CHF 72.7 million for H1 2009/10

Strong recovery in Asia
China Q2 to Q1

46%

China H1 to H1

9%95 November 2009

2. Industrial Segment: Business Development
In CHF millions

Op. EBIT in % of sales
25.0

200.0

160.0

20.0

120.0

15.0

80.0

10.0

40.0

5.0

0.0

0.0
2005/06

2006/07

5 November 20092007/08

2008/09

2009/10Markets and Applications
Industry: declined by 32% - howeverstrong recovery of solar, wind anddrives in the last quarter
Traction: decreased by 12% due todecline in Russian business and somefreight train project cancellations
Energy & Automation: decreased by
34% still from a small basis mainly due
to less demand in factory automation

10

2. Industrial Segment: Business Development
Results for Industry Market
New Business> CHF 0.5 millions

RegionSoP*
2009/10

Photovoltaic, Wind

ChinaStarted in Q1

Photovoltaic

Japan

Q4

Photovoltaic, Drives

GermanyQ4

Wind

Scandinavia

Q3Drives, Air conditioning

Scandinavia

Q4

Photovoltaic, Wind

SpainDrives, Air conditioning

N. America

SoP*
2010/11

Q1
Q1Q4

Q1

*SOP= Start Of Production
115 November 2009

2. Industrial Segment: Business Development
LEM Danfysik• Acquired retroactively 1 July 2009
• Total purchase price of CHF 7.4 million• Sales in Q2 of CHF 1.5 million• Strategic bolt-on acquisition to strengthen the position of LEM in thearea of high precision current and voltage measurements• Main applications for these new products: medical scanners, precisionindustrial motor controls, test & measurement• Integration within LEM in good progress and initially focused on theCommercial side
• Profitability in Q2, after costs of depreciation of the IPR, is positive
12
5 November 2009

2. Industrial Segment: Business Development
Increase in Market Share• LEM’s continued focus on commercial strengths and operational
excellence have proven to be rewarding in the market, especiallyduring the economic crisis• We estimate that our market share has improved by more than 2
percentage points in the Industry market and even more in theTraction market

13
5 November 2009

2. Automotive Segment: Regional Markets
Salesgrowth rates

Europe 8%

Asia 46%

H1 to H1Q2 to Q1

Europe11%-16%

N. America

-38%

16%

Asia-32%

42%

Total-33%

22%

Strong recovery in Asia and N. America
N. America
46%

Total sales CHF 6.1 million for H1 2009/10
145 November 2009

2. Automotive Segment: Business Development
In CHF millions

Op. EBIT in % of sales

25.0

25.0

20.0

20.0

15.0

15.0

10.0

10.0

5.0

5.0

0.00.02005/06

2006/07

2007/08

2008/09

2009/10

‐5.0

‐5.0

‐10.0

‐10.0

‐15.0

‐15.0

Market• Start of production for two key
customers in USA and Japan• More new starts of production later in2009/10

Applications• Battery management• Motor Controls

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5 November 2009

2. Automotive Segment: Business Development
Results for Automotive Market
New Business> CHF 0.5 million

Applicationin volume

China

BM, EV, HEVx

Japan

EV, HEVJapan

BMJapan

EPS

Korea

EV, HEVEurope

BMEurope

EV, HEVUSA

EV, HEV, BM

SoP
2009/10

SoP
2010/11
Q2

started in Q2
Q3

Q2x
Q1x

Q3
Q4x

Q1, Q2

Q4

EV = electric vehicle, HEV = hybrid electric vehicle, BM = battery management, EPS = Electric Power Steering
5 November 200916

2. Business Development China
Sales• Sales growth back to 2008/09 level• Market share now close to 50%

Production• Opening of new 10’000 m2 facility

60

25

In CHF millions

In CHF millions

5020

40
15
30
10
20

5
1000
2005/06

5 November 20092006/07

2007/08

2008/09

2009/10

2005/06

2006/07

2007/08

2008/09

2009/1017

2. Recession Management – Q2 Shows Upturnin CHF millions

Q1
2008/09

Q2
2008/09

Q3
2008/09

Q4
2008/09

Q1
2009/10Q2
2009/10

Ordersreceived

58.1

53.3

39.2

34.4

36.4

47.1

Sales

55.5

55.545.1

40.7

35.6

43.2

Operational

12.0

9.4

4.1

3.7

3.2

5.4

EBIT

 The recovery started in all 4 markets as of May 2009
 ROS in Q2 2009/10 of +12.5%, leveraged by the higher sales volume
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5 November 2009

2. Gross Margin and Operational EBIT Development
In CHF millions

GM % of sales

In CHF millions

GM % of sales

90%
90
75%

30%
30

75
60%
60
45%

20%

20

45

30%
30

10

10%

00%

15%

1500%
2005/06

2006/07

2007/08

2008/09

 GM remains stable
5 November 20092009/10

2005/06

2006/07

2007/08

2008/09

2009/10

 Operational EBIT of 10.9% of sales

193. Financial Review

5 November 2009

3. Income Statement
Q2
2009/10

Change%Q1
2009/10-29%

35’64443’172

+21%

42.7

42.4

43.0

(29’646)(25’079)(11’932)(13’147)

Operational EBIT*

21’385

8’605

3’187

5’418

SOP costs(102)(4’810)(4’312)

(497)

EBIT

21’283

3’796(1’125)

4’921

Financial expense
(net)

252

(737)

(233)

(504)

Income taxes(5’541)(1’487)71(1’558)Net profit

15’994

1’571(1’286)

2’857

in CHF thousands

H12008/09

H12009/10

ChangeSales

111’04078’816

45.9SG&A

Gross margin %-60%-90%%+70%

N/A* Before revaluation of provisions for the stock option plans
Share price development from CHF 149.90 to CHF 260.00 resulted in an additional provision of CHF 4.8 million
5 November 200921

3. Income Taxes & Financial Expense
In CHF thousands

Q1
2009/10Q2
2009/10

H1
2009/10EBT(1’357)

4’416

3’059

Income taxes

71(1’558)*(1’487)*

Effective tax rate

(5.2%)

35.3%

48.6%

* Including CHF 0.5 million provisions for withholding taxes on distributable dividends from prior years.

H1
2008/09

H1
2009/10

Financial expense + income(65)(143)

Foreign exchange effect**317(594)

Total

252

(737)

Financial Expense (net)
In CHF thousands** The Foreign exchange effect is mainly the result of the devaluation of the USD and the CNY, i.e. thetiming difference between booking a receivable/payable and its settlement.
5 November 200922

3. Net Profit (including provision on SOP)

In CHF millions% of sales

2525%

2020%

1515%

1010%

55%

00%
2005/06

5 November 20092006/07

2007/08

2008/09

2009/10 Negative effect of revaluationof cash settled stock option planof CHF 4.8 million, share pricedevelopment of CHF149 to CHF260

23

3. Consolidated Balance Sheet
In CHF thousands

30.09.2008

31.03.2009

30.09.2009

Cash and cash equivalents

19’172

27’951

20’379Accounts receivable

49’44231’92036’237

Other current assets

2’786

2’834

1’963

Inventories

32’847

23’72822’729Total non-current assets

26’96029’77836’978

Total assets

131’207

116’211118’286

Accounts payable

23’215

12’61415’712Other short-term liabilities

27’797

16’18727’479Total non-current liabilities

7’749

3’918

3’778

Equity72’446

83’492

71’316

Total liability and equity

131’207

116’211118’286

Avg. net working capital % sales

20.7%

20.6%

15.7%

 Inventory turns

3.7

4.7

4.0

 Equity ratio

55%

72%

60%
24

5 November 2009

3. Cash Flow Statement
In CHF thousands

H1
2008/09

H1
2009/10

Net profit
Non-cash items

15’994
3’293

1’571
2’177

Cash flow before changes in NWC
Cash flow from changes in net working capital

19’287(8’007)

3’748
3’469

Cash flow from operating activities
Cash flow from investing activities

11’280(4’232)

7’217(10’542)*

Free cash flow

7’048

(3’325)

Cash flow from financing activities(14’197)(3’760)Change in cash and cash equivalents
Cash and cash equivalents at the end of the period(7’150)
19’172(7’085)20’379* Including LEM Danfysik acquisition of CHF 7.4 million
5 November 200925

4. Outlook

5 November 2009

4. Market Factors and Strategy
The strategic drivers for our business remain intact:• Need for more energy and renewable energy• Need for reliable energy, more controls and standby
battery management• Need for better energy efficiencies, increasing
demand for more efficient motor controls• Need for more mobility, public transport andautomotive with a shift to energy friendly solutions

27
5 November 2009

4. Outlook• We will maintain our focus on cost control and operational priorities• We will continue our investments in the new businesses, including thefast integration of LEM Danfysik• All 4 markets will benefit from the upturn, Traction market maybe to alesser extent• Sales for the year of about CHF 170 to 180 million

28
5 November 2009

4. Financial Calendar and Contact Details
Financial calendar

5 November
9 February
3 June25 June2009
2010
2010
2010

Q2 2009/10 results
Q3 2009/10 results
Full year 2009/10 results
Ordinary Shareholders Meeting

For further information

Paul Van Iseghem
President & CEO
Tel: +41 22 706 1409
E-mail: pvi@lem.com

Julius Renk
CFO
Tel: +41 22 706 1250
E-mail: jrk@lem.com

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5 November 2009