Press release

LEM announces robust financial results for full year 2020/21
Geneva, Switzerland, 19 May 2021 – LEM (SIX: LEHN), a leading global company in electricalmeasurement for industry and automotive applications, announces full year results for 2020/21(April-March) compared to 2019/20:•

Sales decreased by 2.3% to CHF 301.0 million (CHF 307.9 million); at constant exchange rates,
sales increased by 0.4%•

The company benefits from a diverse global distribution of sales, with China further increasing its
share:– China CHF 113.1m (37.6% of total)– Europe CHF 90.9m (30.2% of total)– North America CHF 30.4m (10.1% of total)– Rest of World CHF 66.5m (22.1% of total)•

R&D investments of CHF 28.2 million (CHF 28.0 million), or 9.4% of sales, underpinning the strong
focus on new products, with ten successfully launched in 2020/21•

EBIT increased by 4.4% to CHF 60.9 million (CHF 58.3 million); the EBIT margin improved to 20.2%(18.9%), in line with guidance•

Net profit for the period was down by 8.4% at CHF 55.6 million (CHF 60.7 million), although lastyear’s result included a non-recurring positive tax impact of CHF 14.0 million•

Operating cash flow was down 30.9% at CHF 50.9 million (CHF 73.6 million), mainly due toinvestments in NWC such as safety stock built-up in anticipation of supply chain shortages•

Proposed dividend increased to CHF 42 per share (CHF 40 for 2019/20)

Frank Rehfeld, Chief Executive Officer, said: “We are pleased to report robust results, with topline revenue up 0.4% in constant currencies, and EBIT up 4.4%. At LEM we have come through thestill ongoing pandemic in better shape than we could have foreseen, thanks largely to the resilienceand agility of our employees, and the long-standing relationships with our customers and suppliers.
The past year has underlined some fundamental strengths of our company: the diversity of ourbusiness across sectors and regions, with balancing investment cycles and customer demand, andexposure to both mature industries and novel technologies. Indeed, we are leveraging newtechnologies through our strategic R&D investment rate of about 9% of sales, and for the second
consecutive year we launched ten new products which are being well-received.
Looking ahead, Covid-19 will continue to impact our customers and our business and there are also
headwinds caused by supply chain shortages and ongoing trade disputes. We do benefit from a diverse
global footprint and our pipeline of new products, but like many businesses our progress is strongly
linked to the growing markets in Asia. While much of the world’s attention has rightly been focused on
dealing with the pandemic, there remain the underlying challenges of climate change, and this is a key
area where LEM is making its mark.”

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Andrea Borla, Chief Financial Officer, remarked: “Our financial results demonstrate even in these
unprecedented times that LEM’s business is resilient, and we were able to quickly adjust our operations
and expenditures. Thanks to continued improvements in the gross margin, and reduced SG&A costs,
we achieved a highly satisfactory EBIT margin of 20.2% in line with guidance. Excluding beneficial tax
impacts, the net profit of CHF 55.6 million is up from last year.
Our teams are to be congratulated on their performance this past year – working smarter, adapting to
new ways of remote collaboration, and identifying new processes which will benefit us and ourcustomers for the future.”
Industry segment: solid performance led by China and Renewables
Full year sales in the Industry segment totalled CHF 225.2 million, down 6.3%. At constant exchange
rates, sales decreased by just 3.7%. This solid performance during the pandemic was thanks to our
broad portfolio of applications and new product launches, and we continue to maintain market
leadership in our business segments. Q4 sales improved both on Q3 and on Q4 last year, although
Covid-19 continues to impact sales and orders with customers remaining hesitant to invest in certain
areas like High Precision and Traction. Renewable Energy continues to grow due to increasing
governmental policies for sustainable economies and this drove sales up by 8.5% in China, our second
largest market. However, there were significant declines in Europe (-11.4%), North America (-16.4%)
and Rest of World (-13.5%). Orders improved significantly in Q4 and are up 5.3% for the full year, withsome encouraging signs in the Drives business.
in CHF millions

2020/212019/20

ChangeComments

Businesses
Drives

98.0

99.5

-1.5%

Renewable
EnergyTraction

81.6

78.7

+3.6%

38.0

51.0

-25.5%High precision

7.7

11.1

-31.0%• Growth in automation and energy
savings applications• Asia and USA recovering• China solar driven by infrastructure• Europe boosted by DC meter• Longer-term investment cycles• India and China rail traffic impacted
by Covid-19• Budgets switched to Covid needs• Lack of investment confidence fortest benches & medical equipment

Total Industry

225.2

240.4

-6.3%

Automotive segment: impressive growth driven by EV demand
Full year sales in the Automotive segment totalled CHF 75.7 million, an increase of 12.1%. At constantexchange rates, sales improved by 14.8%, which is significant given the shutdowns during the firstphase of the Covid-19 pandemic. With the acceleration of the deployment of EV platforms bycarmakers, our products have been designed in for several vehicles which entered production in 2020.
The Q4 sales of CHF 22.9 million (+64.5%) are the highest quarterly sales yet achieved by thebusiness. However, there are supply chain problems in semi-conductors which will impact sales going
forward.
Our largest market China grew impressively, with 12 months sales up +32.2%, driven by consumer
appetite for EVs and the launch of several new vehicles. Europe continued to accelerate (+63.5%), as
manufacturers (OEMs) ramped-up their production operations in order to achieve their CO2 emissions

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targets. North America (-23.8%) is transitioning to green cars at a slower pace than other regions,although the US Administration’s launch of a $174bn investment into EV infrastructure should boost
the market. Rest of World declined slightly by 3.7%, with strong sales in Korea offset by Japan.
in CHF millions

2020/212019/20

ChangeComments

Businesses
Battery Management

45.7

44.9

+1.7%

Motor Control
Charging Systems

26.7
3.4

19.7
2.9

+35.0%+16.1%• US reduction in 12V demand• Increased demand for High Voltage
products• Strong demand spurred by EV cars
• Continued momentum for battery
electric and hybrid vehicles

Total Automotive

75.7

67.6

+12.1%

Profitability resilient
Gross profit was down slightly by 1.5% at CHF 140.6 million, while the gross margin improved again
to 46.7%. This is 30 basis points better than in the prior year, with increased supply chain costs offset
by improved purchasing efficiencies and other improvement programs.
We remain vigilant with overheads, and managed to reduce total SG&A costs by CHF 3.9 million to
CHF 52.6 million, or 17.5% of sales compared with 18.3% last year. This decrease reflects reduced
marketing and travel expenses and changes in working practices.
We continued to maintain investment in research and development (R&D), up slightly at CHF 28.2
million, or 9.4% of sales, up from 9.1%. Our investment continues to bear fruit with another ten new
products launched successfully this year. This long-term strategy will ensure LEM has the right newtechnologies and applications for customers, as their businesses are increasingly driven by renewableenergy, mobility, automation and digitization.
EBIT for the year 2020/21 improved by 4.4% to CHF 60.9 million from CHF 58.3 million, mainly due tothe improved gross margin and reduction in SG&A discussed above. Our reported EBIT margin was
up at 20.2% compared with 18.9%, in line with guidance.
Net financial income was effectively zero, with financial expenses offset by foreign exchange gains.
The Group tax expenses of CHF 5.3 million represent a tax rate of 8.7%. This outcome was mainly
due to non-recurring tax benefits, which if excluded would result in an underlying rate of 17.4%.
We posted a net profit for the year of CHF 55.6 million, down from CHF 60.7 million last year. However
last year’s net result was largely boosted by a non-recurring positive tax impact of CHF 14.0 million
from the sale of technical IP from LEM Intellectual Property SA based in Fribourg to LEM International
SA based in Geneva and to LEM China. This year’s net profit margin thereby decreased to 18.5%
compared with 19.7%, although excluding the positive tax impacts the net profit margin last year would
have been 15.2%.
Strong balance sheet
Cash flow from operating activities was CHF 50.9 million (-30.9%) and free cash flow was CHF 37.4
million (-36.4%). This decrease is mainly due to two factors: we have higher receivables outstanding
from strong Q4 sales, and we deliberately built-up inventory (safety stock) in anticipation of supply
chain shortages.

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Our balance sheet remains strong with practically zero net debt. As of 31 March 2021, total assets
increased to CHF 264.4 million. Shareholders’ equity reached CHF 131.9 million, representing anequity ratio of 49.9% (51.0% as of 31 March 2020).
Improved dividend
Based on the results for 2020/21, our performance in adapting to the Covid-19 pandemic and the longterm fundamentals for the business, the Board of Directors proposes a dividend of CHF 42 per share(CHF 40 for 2019/20), payable on 06 July 2021. The proposal follows LEM’s dividend policy of
distributing significantly more than 50% of its consolidated net profit to shareholders and corresponds
to a payout ratio of 86.1%, up from 75.1% last year.
Cautiously optimistic outlook
The dramatic impact of Covid-19 on the world economy has been well reported, although the actual
outcome for the past year was better than many predicted. Beyond the general impact of the pandemic,
there are two specific factors which are likely to impact LEM’s business: shortages and supply chain
issues for components such as semiconductors, and the ramifications of ongoing trade disputes.
LEM’s business does benefit from geographic and sector diversity. Our operations in China (accounting
for 38% of sales and 65% of production) were back up and running nearly at full capacity by the endof March 2020. However, a substantial portion of our China production is destined for export, andtherefore is dependent on demand from other economies as they adjust to the pandemic.
Despite this challenging environment, it is important to remember the fundamental long-term prospects
for LEM 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.
We are maintaining our key projects of investing in a new production plant in Malaysia and a new global
headquarters in Geneva. We continue to invest in R&D at between 8-10% of sales, ensuring weleverage new technologies. We are improving the efficiency of production, while also empowering ourglobal sites with full capabilities in R&D, operations, sales and quality management. This is making ourorganization more agile, increasing our speed of execution and reducing the time to market.
We have been encouraged this year by the steady demand for our products and how the organization
has responded so well to such exceptional circumstances, and we are cautiously optimistic for the
future. However, we must recognize that the impacts of the pandemic will reverberate across markets
and society for many months if not years, and thus our progress is not entirely in our own hands.

Conference call and webcast
Due to the ongoing pandemic and social distancing requirements, LEM will not host a physicalmeeting as it normally does on this occasion. Rather, Andreas Hürlimann, Chairman of the Boardof Directors, Frank Rehfeld, CEO, and Andrea Borla, CFO, will host a conference call and webcast
for investors, analysts and media, to present the results for the financial year 2020/21 and theoutlook for the financial year 2021/22 today at 10:00 CET, followed by a Q&A session.
Listen to the conference call and live webcast
https://78449.choruscall.com/dataconf/productusers/lem/mediaframe/44489/indexl.html
The press release, Annual Review, Financial Report, investor presentation, and the link to thewebcast will be available from today, 19 May 2021, on http://www.lem.com/en/investors.

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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://media.choruscall.ch/documents/Attended_DI_numbers.pdf
Annual General Meeting
Given the exceptional circumstances due to the Covid-19 pandemic, the Annual General Meeting of
Shareholders on 24 June will not take place in the usual format. This means that shareholders are notpermitted to attend in person, and therefore they may only exercise their voting rights by instructing
the Independent Representative. 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
24 June 2021
Annual General Meeting of Shareholders for the financial year 2020/21
1 July 2021
Dividend ex-date
6 July 2021
Dividend payment date
28 July 2021
First-quarter results 2021/22
8 November 2021 Half-year results 2021/22
4 February 2022
Third-quarter results 2021/22
24 May 2022
Full-year results 2021/22
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
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

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Appendix
Consolidated income statement
April to March
In CHF thousands

2020/212019/20

ChangeSales

300'966

307'942-2.3%

Cost of goods sold(160'369)(165'195)

Gross margin140'597

142'747

46.7%

46.4%

Sales expense(26'343)(28'232)

Administration expense(26'306)(28'270)

Research & development expense(28'248)(28'038)

Gross margin (in %)Other income

1'196

120

EBIT

60'89658'327

EBIT margin (in %)

20.2%

18.9%

Financial expense

(510)

(505)

Financial income

148

191

Foreign exchange effect351(2'379)Profit before taxes

60'88555'634

Income taxes(5'288)5'059

Net profit

55'59760'693

Net profit margin (in %)

18.5%

19.7%

LEM Holding SA

-1.5%

+4.4%

+9.4%

-8.4%

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Key Figures

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