Results
Year 2008/09
Media & Analyst Conference
Zurich, 4 June 2009

Agenda1. Highlights and Business Review

Paul Van Iseghem

2. Business Development“

3. Recession Management“

4. Financial Review

Heinz Stübi

5. Strategy and Outlook

Paul Van Iseghem

6. Proposals Shareholders’ Meeting

Felix Bagdasarjanz

2LEM Business Card
• LEM is the global market leader in providing innovative and highquality solutions for measuring electrical parameters• Its current and voltage transducers are used in a broad range ofapplications in industry, traction, energy & automation and automotivemarkets• LEM is a high growth global company with approximately 900
employees. It has production plants in Geneva (Switzerland), Machida(Japan), Beijing (China) and regional sales offices close to its clientslocations• LEM is listed on the SIX Swiss Exchange since 1986
34 June 2009

LEM Production & Logistics World-Wide

44 June 2009

1. Highlights and Business Review

Paul Van Iseghem
President & CEO

5

1. Highlights
Sales of CHF 196.8 million for the year•••

Decrease of 3.1% from CHF 203.0 million last year
Operational EBIT decreased by 16.3% to CHF 29.2 million
EBIT (after accounting for the stock option plans) increased by 10.7% toCHF 33.8 million• Net earnings increased by 9.1% to CHF 23.9 million• Free cash flow increased to CHF 21.8 million (+24%)

Operations••

Recession Management program was announced in November 2008
Continuation of transfer of production to China, increase in productionof 65%
64 June 2009

1. Business Review
CHF Millions

 Sales decreased by 3.1%
 5 years CAGR of 12.8%

250

200

150

10050

Industrial Segment003/044 June 2008
2009

04/05

05/06

06/07

07/08

08/09Automotive Segment

71. Business Review – Sales by Segment

Sales
IndustrialAutomotive

CHF millions
181.9
14.9

Sales growth YoY:
IndustrialAutomotive-0.5%-26.5%

Growth at constant exchange rates:
Industrial
2.9%
Automotive-25.4%

Total Sales CHF 196.8 million
84 June 2009

1. Business Review – Industrial Segment
Regional Markets
Sales growth YoY: Europe Asia North America
 ROW

1.5%
- 3.3%- 0.8%-14.9%

Sales 2007/08

94 June 2009

1. Business Review – Industrial Segment
CHF millions

Op. EBIT in % of sales

20025%

Market and Applications
16020%

12015%

8010%

405%

00%
03/04

4 June 2009

04/05

05/06

06/07

07/08

08/09

Each market was impacted differently by
the recession:
Industry: declined by 6.5% - speciallyin the areas of welding, power supplies
and wind energy. Market share gained indrives and photovoltaics
Traction: increased by 20.2% due toinfrastructure investment in developed
and developing countries
Energy & Automation: growth of
35.9% still from a small basis by value
added transducers like Wi-LEM wireless
local energy meter and Sentinel tomonitor the health of standby batteries101. Business Review – Automotive Segment
Regional Markets
Sales growth YoY: Europe North America Asia-10.7%- 40.9%-2.4 %

Sales 2007/08

114 June 2009

1. Business Review – Automotive Segment
CHF millions

Op. EBIT in % of sales

Market20%

2515%
20
10%

155%

0%

10‐5%

Sales declined by 26.5% as severely hit
by the recession mostly in the Americanand Japanese markets

Applications
Concentration of efforts in two mainareas:
Battery management now for sedans(formerly SUVs) with standard products
Motor controls for hybrid and electricvehicles

5‐10%0‐15%
03/04

4 June 2009

04/05

05/06

06/07

07/08

08/09

12

2. Business Development

Paul Van Iseghem
President & CEO13

2. Business Development – Results for Industry Market
New Business> CHF 0.5 million

RegionSoP
2009/10

Photovoltaic, Wind

China

Q1

Photovoltaic

Japan

Q4

Photovoltaic, Drives

Germany

Q3, Q4Wind

Scandinavia

Drives, Air conditioning

Scandinavia

Photovoltaic, Wind

Spain

Drives, Air conditioning

N. America

SoP
2010/11

Q3
Q4
Q1
Q3
14

4 June 2009

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

Application

involume

SoP
2009/10China

BM, EV, HEVx

Japan

EV, HEV

Q1JapanBM

Q4JapanBMJapanEPSKorea

EV, HEVEurope

BMEurope

EV, HEVUSA

EV, HEV, BMx

Global F1BMx

SoP
2010/11
Q2
Q2
Q2x
Q1x

Q3
Q4

Q1, Q2

Q4

EV = electric vehicle, HEV = hybrid electric vehicle, BM = battery management, EPS = Electric Power Steering
4 June 200915

2. Business Development - ChinaSales• Sales growth 4.3%
• Market share now over 40%

CHF MillionsProduction• Continued transfer of key products• “Made by LEM” quality• Production to start in new leased buildingin July 2009
CHF Millions
60205015403010205100002/03 03/04 04/05 05/06 06/07 07/08 08/09
4 June 200902/03 03/04 04/05 05/06 06/07 07/08 08/09

16

2. Business Development – Innovation
Two major products were launched in 2008/09• The CAS, CASR and CKSR family of current transducers
using a new closed loop Fluxgate technology– For high performance applications in the Industry market• The DV voltage transducer compatible with all standards
in the Traction market– Class 1 certified for measurement of AC and DC energyconsumption

17
4 June 2009

3. Recession Management

Paul Van Iseghem
President & CEO18

3. Recession Management
Bookings started to decline in September 08• LEM tends to be in the early part of the business cycle• On November 19, 2008 we announced a headcount reduction of 10%
to adapt to the ww economic downturn• On Feb 10, 2009 we announced a further adaptation of capacity byintroducing short time work in LGVA, like before in LJP• We have adapted capacities to the needs of today, allowing a fastreaction to new markets and opportunities194 June 2009

3. Recession ManagementCosts:• We drastically improved the cost base, mostly the external and internal
indirect costs, to lower the break-even point.
• SG&A to remain in the same % range to sales as before
New business opportunities are developed aggressively:• New products for the mainstream Industry market• Automotive expansion in the Asian markets• E&A market with the good progress of the Wi-LEM energy meteringand Battery management components
LEM considers the recession to be longer than one year, but expects tostay profitable and ready for a new growth phase204 June 2009

3. Recession Management•Our multiple markets approach is helping us to reduce the impact of therecession

FY to FY
growth*Traction

Energy &Automation

Industry

Automotive+20.2%+35.9%-0.5%-26.5%* Comparing FY 2008/09 to FY 2007/08
4 June 200921

3. Recession Management
Q4 was profitable
CHF millions

Q1 2008/09

Q2 2008/09

Q3 2008/09

Q4 2008/09

Ordersreceived

58.1

53.3

39.2

34.4

Sales

55.5

55.5

45.1

40.7

OperationalEBIT

12.0

9.4

4.1

3.7

22
4 June 2009

4. Financial Review

Heinz Stübi
Interim CFO

Due to the introduction of the revised IFRS standard IFRIC 14 the results
2007/08 were restated, for details refer to page 27 of the annual report.
23

4. Income Statement
TCHF

2007/08

2008/09%

Sales

203’033

196’813-3.1%

Gross margin %

45.1

43.7

Operating costs(56’684)(56’806)

Operational EBIT*

34’90429’219-16.3%

EBIT

30’572

33’841

10.7%

Net financial expenses(1’413)(990)

Income taxes(7’248)(8’926)Net earnings

21’911

23’9259.2%

 Share price development resulted in a reversal of provisions of CHF 4.6 million (PY CHF -4.3 million)* Before revaluation of provisions for the stock option plans
4 June 200924

4. Gross Margin Development
CHF millions

EBIT % of sales

50%

100
9045%

80
70

40%

60

CHFmillions

2007/08

2008/09

Gr. M

91.6

86.0

Gr. M
%Sales

45.1%

43.7%

35%

50
4030%

30
20

25%

10

 Lower sales volume led to leveraging
effect (unabsorbed capacity costs)
 Ramp-up costs China

20%004/05 05/06 06/07 07/08 08/09
4 June 200925

4. Operating Expenses
CHF millions% of sales

7050%

60

45%5040%CHF
millions

2007/08

2008/09

Opex

56.7

56.8

Opex% Sales

27.9%

28.9%

4035%
3030%

20
1025%

020%
04/05 05/06 06/07 07/08 08/09

4 June 2009

 Operating expenses stayed in line with theprevious year Costs for International transfer pricing projects

26

4. R&D Expenses
CHF millions% of sales

12%

15CHF
millions

2007/08

2008/09

R&D

11.1

10.8

R&D%Sales

5.5%

5.5%

129%
96%
63%
30 R&D expenses were maintained at constantratio to sales

0%
04/05 05/06 06/07 07/08 08/09
4 June 2009274. Operational EBIT *CHF millions

Op. EBIT % of sales

CHFmillions

2007/08

2008/09

30%

Op. EBIT

34.9

29.2

3025%

Op. EBIT%Sales

17.1%

14.8%

2520%

40
352015%
1510%
105%

500%
04/05

4 June 2009

05/06

06/07

07/08

08/09

* Before SOP revaluation28

4. EBITCHF millions% of sales

4030%

353025%

2520%

20

CHF
millions

2007/08

2008/09

EBIT

30.6

33.8

EBIT%Sales

15.1%

17.2%

15%

1510%
10 Constant EBIT growth continues
5%500%
04/05 05/06 06/07 07/08 08/09

4 June 200929

4. Taxes
2007/08

2008/09

Expected tax rate

28.2%

25.0%

One-time effects(3.3%)

2.2%

Effective tax rate

24.9%

27.1%

 Expected tax rate reduced as a consequence of optimization of international tradingflows One-time effects due to withholding tax on repatriation of profits from previousperiods
4 June 200930

4. Net Profit
CHF millions% of sales

CHF millions
25

2007/08

2008/09

14%

Net profit

21.9

23.9

12%

Net profit% sales

10.8%

12.1%

2010%
158%
6%

104%
52%
0%

004/05 05/06 06/07 07/08 08/094 June 2009

 Net earnings increase 9.2%
compared to previous year
 EPS increases from CHF 18.6
to CHF 20.931

4. Consolidated Balance Sheet
TCHF

31.03.2008

31.03.2009

Cash and cash equivalents

25’78727’951

Accounts receivable

41’16931’920

Other current assets

2’051

2’834

Inventories

22’411

23’728

Total non-current assets

24’54029’778

Total assets

115’958

116’211

Accounts payables

17’034

12’614

Other short-term liabilities

20’590

16’187

Total non-current liabilities

7’125

3’918

Equity71’20983’492

Total liability and equity

115’958

116’211

Avg. net working capital % sales

21.2%

20.6%

 Inventory turns

5.0

4.7

 Equity ratio

61%

72%

 Net financial assets (CHF millions)

23.7

27.9

4 June 200932

4. Cash Flow Statement
TCHF

2007/08

2008/09

Net profit

21’911

23’925

Cash flow before changes in NWC

26’40127’286

Changes in net working capital (NWC)(2’279)3’651

Cash flow from investing activities(6’507)(9’052)

Free cash flow

17’61521’85533
4 June 2009

4. Summary Financial Results• Continuous EBIT growth despite impact of economic downturn in thesecond half of 2008/09• Recession Management programs show effect as of Q4• Positive impact of outstanding SOP programs• Strong net profit of CHF 23.9 million (+9.2%)• Solid balance sheet– Net financial assets of CHF 27.9 million (+18%)– Equity ratio of 72%• Strong free cash flow of CHF 21.8 million (+24%)

34
4 June 2009

5. Strategy and Outlook

Paul Van Iseghem
President & CEO35

5. Market Factors and Strategy

The present recession challenges our growth strategy:– Weakness in important Industry market– Very weak market situation in Automotive– Weakness in energy savings and renewable energy
We firmly believe in our Strategic Direction• The underlying market trends continue to provide
tailwind• Our multi-market and global reach are clear benefits
36
4 June 2009

5. Outlook
Our fast and firm reaction to the recession will enable us to be stronger
coming out of the downturn.
• We will maintain our focus on cost control and operational priorities• We will continue our investments in the new businesses• We believe that the market downturn has bottomed out
However at this time we can not judge the timing and extent of theupturn37
4 June 2009

6. Proposals for the Shareholders’ Meeting

Felix Bagdasarjanz
Chairman of theBoard of Directors38

6. Proposals for the Shareholders’ Meeting
In view of the strong performance and solid balance sheet the Board ofDirectors has decided to propose:• Ordinary dividend payment of CHF 10.00 per share, which represents
a payout ratio of 48 %.

39
4 June 2009

6. Summary• Recession Management is effective• Strong balance sheet• Outlook is difficult but we are confident to have the right strategy
in place

404 June 2009

6. Financial Calendar and Contact Details
Financial calendar
26 June6 August
5 November
9 February
3 June2009200920092010
2010

For further information
Paul Van Iseghem
President and CEO
Tel.: +41 22 706 14 09
E-mail: pvi@lem.com

Ordinary Shareholders’ MeetingQ1 2009/10 results
Q2 2009/10 results
Q3 2009/10 results
Full year 2009/10 results

Heinz Stübi
Interim CFO
Tel: +41 22 706 12 20
Email: hst@lem.com

414 June 2009