Press release - Ad hoc announcement pursuant to Art. 53 LR

LEM announces record financial results for full year 2021/22
Geneva, Switzerland, 24 May 2022 – LEM (SIX: LEHN), a leading global company in electricalmeasurement for industry and automotive applications, announces full year results for 2021/22(April-March) compared to 2020/21:•

Sales increased by 24.1% to CHF 373.4 million (CHF 301.0 million); at constant exchange rates,
sales increased by 22.5%•

The company benefits from a diverse global distribution of sales, led by China and Europe:– China CHF 141.9m (38.0% of total)– Europe CHF 116.2m (31.1% of total)– North America CHF 34.8m (9.3% of total)– Rest of World CHF 80.5m (21.6% of total)•

R&D investments of CHF 29.4 million (CHF 28.2 million), or 7.9% of sales, underpinning the strong
focus on new products, with seven successfully launched in 2021/22•

EBIT increased by 45.1% to CHF 88.4 million (CHF 60.9 million); the EBIT margin improved to
23.7% (20.2%), above guidance•

Net profit for the period was up by 30.2% at CHF 72.4 million (CHF 55.6 million)•

Operating cash flow was stable at CHF 50.4 million (CHF 50.9 million)•

Proposed special dividend to mark 50th anniversary of CHF 50 per share (CHF 42 for 2020/21)

Frank Rehfeld, Chief Executive Officer, said: “We are delighted to report record annual results as
we celebrate 50 years since LEM was founded in 1972. Both our revenues and profitability
demonstrated the fundamental demand for our products and the strengths of the company
operationally, despite the challenging economic environment.
LEM’s growth over the past 50 years is due in many ways to the quality of ingenuity – thinking
differently, applying our leading expertise in electrical measurement and devising practical solutions
in collaboration with our customers. This is exemplified by our strong investment in R&D, and thesuccessful launch of another seven products this year.
Our talented teams of 1,500 professionals working across 16 countries are inspired by our core
purpose - helping our customers and society accelerate the transition to a sustainable future. LEM’s
long-term prospects are driven by the mega trends of renewable energy, mobility and automation.
Despite last year’s record performance, we remain cautious about our prospects for the first six monthsof 2022/23. In the short-term, we anticipate continued headwinds from supply chain constraints,
while the pandemic lockdowns in China are impacting our supply chain, production and sales. The
current geopolitical tensions may also undermine investment confidence in certain sectors.
Therefore, we expect our sales in the first six months of 2022/23 to be lower than those we achievedin the first six months of 2021/22.”

LEM Holding SA

Page 1/8

Andrea Borla, Chief Financial Officer, remarked: “Top-line growth of 24.1% and an EBIT margin of
23.7% are impressive, but should be seen in the context of post-Covid global economic recovery andthe acceleration towards decarbonization and electrification. Operational efficiency is improving
profitability, while also enabling us to execute significant R&D programs.
We congratulate our employees for this year’s record performance, and are proud to invest in theirdevelopment, with new skillsets and technological expertise. As we mark our 50 th anniversary, it isparticularly pleasing that we have moved into our new global headquarters in Geneva – a building
which reflects the sustainability principles of our businesses, and enables our teams to continue
devising ingenious solutions for our customers.”
Industry segment: very strong growth despite supply chain constraints
Full year sales in the Industry segment totaled CHF 287.6 million, up 27.7%. At constant exchange
rates, sales improved by 26.4%. All our businesses and regions continue to benefit from the return ofinvestment confidence and customer demand. Our sales were held back principally by supply chain
constraints. However, there is an increasing trend to “onshoring” and localization of manufacturing
investment which will further support our business. Long-term demand for our products is supported
by increasing decarbonization and electrification across the world. The Drives business is mainly driven
by the manufacturing investment cycle and benefitted from demand for small and medium power
applications, including tooling machines and HVAC (Heating, Ventilation, and Air Conditioning) as wellas end-consumer products, such as heat pumps. Renewable Energy continues to grow due togovernment policies and commercial investment, with increasing concerns about dependency on fossil
fuels. The infrastructure investment for e-mobility is driving the successful rollout of our new DC meter
and we are encouraged by growing customer interest. Demand in the test and measurement sector
for batteries and EVs as well as medical equipment increased sales of our High Precision sensors. Our
Traction business, with its project-based long investment horizons, has returned to growth mainly inEurope and India.
Europe (+30.4%), China (+22.8%) and Rest of World (+34.6%) benefited from the demand acrossDrives, Renewables, and High Precision. Europe continues to be our largest market. North America(+22.1%) benefited from the demand for Drives, but less so for Renewables. Global orders increasedby 56.2% for the full year, averaging around CHF 100 million per quarter, as customers continue tocommit to orders over longer time horizons.
in CHF millions

2021/222020/21

Businesses
Drives

130.2

98.0

Renewable
EnergyTractionHigh precision

105.0

81.6

42.8
9.5

38.0
7.7

Total Industry

287.6

225.2

LEM Holding SA

Change Comments+32.8% • Small & medium power applications• Manufacturing capacity investment
in semiconductors+28.7% • China solar driven by infrastructure• Europe boosted by DC meter+12.8% • Europe and India driving demand+24.6% • Increasing demand for new productfamilies in test and measurement+27.7%

Page 2/8

Automotive segment: EV momentum continues to be impacted by supply chain issues
Full year sales in the Automotive segment totaled CHF 85.8 million, an increase of 13.3%. At constantexchange rates, sales improved by 10.8% compared to full year last year. Q4 performance reflects thehigher baseline of last year when global production had recovered from previous shutdowns. Our
output is still constrained by the continued supply chain issues for semiconductors and othercomponents. These continue to impact the entire sector, and some manufacturers are still revisingproduction plans downwards. Bookings in the first half were exceptionally boosted by customers
committing firm orders in advance for several quarters. While second half bookings remain strong, they
have now reverted to normal levels with customers ordering for delivery one quarter at a time. The
strong fundamental demand for EV solutions continues, but the industry’s ongoing challenges may
take several more quarters to be resolved.
Our largest market China grew by 31.7%, driven by consumer appetite for EVs, the launch of several
new vehicles, and the ability of new sector players to better manage supply chain challenges. The
traditional OEMs are not adapting as quickly to these new challenges and this is reflected in our sales
in other regions, such as Europe (+4.8%) and North America (-4.8%). Moreover, Rest of World
decreased by 2.7% reflecting a higher sales base, as these markets had been less impacted by the
pandemic last year.
in CHF millions

2021/222020/21

Businesses
Battery Management

48.7

45.7

Motor Control
Charging Systems

34.1
3.0

26.7
3.4

Total Automotive

85.8

75.7

Change Comments+6.7% • Significant drop in US 12V demand• Ongoing supply chain constraints+27.7% • Strong demand spurred by EV cars
-11.9% • Product allocation impacted bysemiconductor shortages+13.3%

Profitability very strong
Gross profit was up significantly by 26.1% at CHF 177.3 million (CHF 140.6 million), while the grossmargin improved again to 47.5%. This is 80 basis points better than in the prior year, with increased
supply chain costs offset by improved efficiencies from economies of scale.
We remain vigilant with overheads, so while SG&A costs were up by 13.4% to CHF 59.7 million (CHF
52.6 million) to support the extra market demand compared with last year, they declined to 16.0% ofsales (17.5%). The absolute increase reflects our investments in talent to strengthen the organization,higher compensation rates and external consulting support for several key initiatives.
We continue with our long-term investment in future applications with R&D up in absolute terms by
4.0% to CHF 29.4 million (CHF 28.2 million), although this decreased to 7.9% of sales (9.4%). Due toa change in accounting policy, there was also a tax credit of CHF 1.2 million reflected in R&D expenses
which would previously have been recorded in the income tax line of the P&L.
Our investment continues to bear fruit with another seven new products launched successfully thisyear. This long-term strategy will ensure LEM has the right new technologies and applications forcustomers, as their businesses are increasingly driven by renewable energy, mobility, automation anddigitization.

LEM Holding SA

Page 3/8

EBIT for the year 2021/22 rose notably by 45.1% to CHF 88.4 million from CHF 60.9 million, mainly
due to the leverage effect of the improved revenues across our established cost base. Our reported
EBIT margin was up at 23.7% compared with 20.2%, above guidance.
Net financial income was CHF -3.1 million, mainly due to foreign currency losses following the Euro
depreciation over the last 12 months. The Group tax expenses of CHF 12.9 million represent a tax rateof 15.1%, reflecting a favorable geographic profit mix.
We posted a record net profit for the year of CHF 72.4 million, up from CHF 55.6 million last year. This
year’s net profit margin thereby increased to 19.4% compared with 18.5%.
Strong cash flow and balance sheet
Cash flow from operating activities was CHF 50.4 million; excluding non-recurring tax payments
related to the sale of intellectual property, it would have been CHF 77.0 million compared with CHF
50.9 million last year. Free cash flow was CHF 29.4 million (CHF 37.4 million). This decrease ismainly due to higher investments related to the new global headquarters in Geneva. Our balance
sheet remains strong with limited net debt of CHF 23.5 million. As of 31 March 2022, total assets
increased to CHF 301.4 million. Shareholders’ equity reached CHF 161.2 million, representing anequity ratio of 53.5% (49.9% as of 31 March 2021).
Special 50th anniversary dividend
Based on the excellent results for 2021/22, the long-term fundamentals for the business and to markthe 50th anniversary of the founding of the company in 1972, the Board of Directors proposes a special
dividend of CHF 50 per share (CHF 42 for 2020/21), payable on 07 July 2022. The proposal follows
LEM’s dividend policy of distributing significantly more than 50% of its consolidated net profit toshareholders and corresponds to a payout ratio of 78.8%, down from 86.1% last year.
Changes in financial reporting 2022/23
With effect from 01 April 2022, the company is now organized on a regional & functional matrix. Thisis designed to move decision making closer to the customer in different parts of the world and empower
local management. Global functional teams will support regional markets across all customer
applications and the entire LEM product portfolio, thereby providing synergies of expertise anddevelopment. Geographically, we will now report sales according to the following regions:-

China
Rest of Asia (Japan, South-Korea, India, South-East Asia)
EMEA (Europe, Middle East & Africa)
Americas (NAFTA & Latin America)

It also means the previous two segments of Industry and Automotive are no longer applicable. Rather
we will now report sales along the following five businesses:-

Automation
Automotive
Renewable Energy
Track
Energy Distribution + High Precision

The company will report a single company-wide P&L every quarter and cash flow and balance sheet
twice a year. Further details of these changes in financial reporting will be presented at today’s
conference and webcast in Zurich.

LEM Holding SA

Page 4/8

Prudent outlook
In its latest bi-annual World Economic Outlook in April 2022, the IMF reduced its estimates and now
forecasts global growth to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023.
War-induced commodity price increases and broadening price pressures have led to 2022 inflation
projections of 5.7 percent in advanced economies and 8.7 percent in emerging market and developing
economies. The IMF highlights the essential need for multilateral efforts to respond to the humanitariancrisis, prevent further economic fragmentation, maintain global liquidity, manage debt distress, tackle
climate change, and end the pandemic.
Against this backdrop, it is clear that many factors impacting economic demand over the coming year
remain out of LEM’s control. Despite last year’s record performance, we remain cautious about ourprospects for the first six months of 2022/23. This is due to ongoing headwinds from supply chain
constraints, particularly for semiconductors, while the pandemic lockdowns in China are impacting our
supply chain, production and sales. The current geopolitical tensions may also undermine investment
confidence in certain sectors. Therefore, we expect our sales in the first six months of 2022/23 to belower than those we achieved in the first six months of 2021/22.
LEM’s business does benefit from geographic and sector diversity. There is an increasing trend to“onshoring” and localization of manufacturing investment which will further support our business. Our
fundamental long-term prospects remain strong, driven by mega trends such as renewable energy,
mobility and automation. We see this particularly in the demand for our new products in solar power,
EVs and E-mobility. The strong demand for EV solutions continues, but the sector’s ongoing supply
chain challenges may take several more quarters to be resolved.
We are maintaining our key project of investing in a new production plant in Malaysia, and plan to start
production by early 2024. We continue to invest in R&D at between 8-10% of sales, ensuring LEM has
the right new technologies and applications for customers as their businesses grow.
We have been positively surprised this year by the demand for our products and are impressed by how
the organization has responded so well to multiple challenges. This 50 th anniversary year is providing
us with a great opportunity to learn from our history, and to also move forward with renewed energy
and conviction. The sectors in which we serve our customers are being transformed by decarbonizationand electrification, so while certain elements remain out of our own hands, we can look forward with
optimism to continued long-term growth.

Media, investor, and analyst conference and webcast
Andreas Hürlimann, Chairman of the Board of Directors, Frank Rehfeld, CEO, and Andrea Borla, CFO,
will present the results for the financial year 2021/22 and the outlook for the financial year 2022/23
today at 10:30 CET at a conference for investors, analysts, and media at the Widder Hotel in
Zurich.
Listen to the conference call and live webcast
https://event.choruscall.com/mediaframe/webcast.html?webcastid=Vx8RnhTP
The press release, Annual Review, Financial Report, investor presentation, and the link to thewebcast will be available from today, 24 May 2022, on the Investor Relations section of the LEM
website (http://www.lem.com/en/investors), where the webcast will later also be archived.

LEM Holding SA

Page 5/8

Dial-In Numbers+41 (0) 58 310 50 00
Switzerland & Europe+44 (0) 207 107 06 13
UK+1 (1) 631 570 56 13
USA
Other countries: https://services3.choruscall.ch/NUMBERS/Attended_Dial_In_Numbers.pdf
Annual General Meeting
The Annual General Meeting of Shareholders on 30 June will take place physically in Geneva, allowing
shareholders to attend in person. The formal invitation with proposed resolutions is published today on
the company’s website.
Financial calendar
The financial year runs from 1 April to 31 March
30 June 2022
Annual General Meeting of Shareholders for the financial year 2021/22
5 July 2022
Dividend ex-date
7 July 2022
Dividend payment date
28 July 2022
First quarter results 2022/23
8 November 2022 Half year results 2022/23 and Capital Markets Day at new HQ in Geneva
6 February 2023
9 months results 2022/23
25 May 2023
Full year results 2022/23
29 June 2023
Annual General Meeting of Shareholders for the financial year 2022/23
4 July 2023
Dividend ex-date
6 July 2023
Dividend payment date

LEM – Life Energy Motion
A leading company in electrical measurement, LEM engineers the best solutions for energy andmobility, ensuring that our customers’ systems are optimized, reliable and safe.
Our 1,500 people in over 15 countries transform technology potential into powerful answers. We
develop and recruit the best global talent, working at the forefront of mega trends such as renewableenergy, mobility, automation and digitization.
With innovative electrical solutions, we are helping our customers and society accelerate the transition
to a sustainable future.
Listed on the SIX Swiss Exchange since 1986, the company’s ticker symbol is LEHN.
www.lem.com
Contact: Investment community
Andrea Borla, Chief Financial Officer
Phone: +41 22 706 1250
Email: investor@lem.com
Contact: Media
Cabinet Privé de Conseils s.a. (CPC)
Nick Miles, miles@cpc-pr.com, mobile: +41 79 678 76 26
Michael Füglister, fuglister@cpc-pr.com, mobile: +41 78 839 07 62

LEM Holding SA

Page 6/8

Appendix
Consolidated income statement

LEM Holding SA

Page 7/8

Key Figures

LEM Holding SA

Page 8/8