Full Year Results 2021/22
1 April 2021 to 31 March 2022

Agenda50th AnniversaryFrank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

CO2 Strategy, ESG KPIs

Andrea Borla

Financial Reporting 2022/23

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

Full Year Results 2021/22

24.05.20222

Conversation with the Founder,
Chairman and CEO
Early overseas expansion into China, US and Europe wasbased on finding top quality local management close tocustomers
We work with our customers on an equal basis and withmutual respect, technical exchange, co-creation, an open
mindset, and trust in the relationship
Qualities we need are entrepreneurship, ambition, openness.
We want to attract people whohave fun shaping an organization
who see the agility we have due to our size
who love their work and have a sense of purpose

Ingenuity is a mindset, is thinking differently, listening to one’s
instincts, and working on practical solutions

Jean-Pierre Etter, Founder and CEO of
LEM 1972-1989, Board Member until 1998

Full Year Results 2021/22

24.05.2022

5

New global HQ “The Hive” in Meyrin, Geneva
Home to about 250 employees working in R&D, engineering,production, sales, and corporate functions
Symbol of our ambition and our way of working:AgilityTransparency
Collaboration

State-of-the art work environment, including spaces forinnovation
Reflects sustainability principles of our businesses
Will inspire current and future LEM people to fulfil theirpotential and continue devising ingenious solutions
Save the date 08 November 2022: H1 results and CapitalMarkets Day at new HQ for investors, analysts and media

Full Year Results 2021/22

24.05.2022

6

Talent and culture
1,500 professionals across 16 countries
Inspired by helping customers and society accelerate the transition to asustainable future
We support our employees to attend leadership and job-specific training anddevelop their personal skills. We invest in reskilling or upskilling with an increased
focus on web based / remote delivery to adapt to the new normal
All employees should aspire to embrace and enact LEM Blue Behaviors. It isclear that a Constructive Culture will help current employees achieve their fullpotential and enjoy their experiences, as well as attract the right caliber of newtalent to ensure LEM achieves its strategic goals

Full Year Results 2021/22

24.05.2022

7

Record financial results for full year 2021/22
Revenues and profitability demonstrated fundamental demand for our products
Top-line growth of 24.1% and an EBIT margin of 23.7% are impressive
In the context of post-Covid global economic recovery and the acceleration towards
decarbonization and electrification

Operational efficiency is improving profitability, while also enabling us to executesignificant R&D programs
LEM’s growth over the past 50 years is due to the quality of ingenuity
Successful launch of seven products

Short-term, we anticipate continued supply chain constraints. However, the focus onenergy supply and decarbonization bolsters our customers’ growth opportunities
Long-term prospects driven by the mega trends of renewable energy, mobility andautomation

Full Year Results 2021/22

24.05.2022

8

Agenda50th AnniversaryFrank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

CO2 Strategy, ESG KPIs

Andrea Borla

Financial Reporting 2022/23

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

Full Year Results 2021/22

24.05.2022

9

A leading company in electrical measurement
Core applications

Motor
DrivesSegments

Automotive
Motor control

FY 2021/22 Sales
CHF mPower Storage, Generation,
Conversion

Battery
management

EnergyMeasurement

Industry
Charging
systems

Drives & Welding

Renewable energies

Traction

High-Precision

Full Year Results 2021/22

24.05.2022

85.8

287.6

Δ CHF

+13.3%+27.7%Δ constant currency+10.8%+26.4%

10

Global sales spread

GrowthChina and Europe lead
growth22%

Balanced exposure
38%

Close to customers on
the ground in all key
markets

9%

31%

Sales

FY 21/22

Q4 21/22

CHF m

vs 20/21

vs 20/21

China

141.9

+25.4%+24.9%

Europe116.2+27.8%+12.3%

North America

34.8+14.5%+14.5%

RoW

80.5+21.0%+19.2%

Total

373.4

+24.1%*+18.3%* +22.5% at constant currency rates

Full Year Results 2021/22

24.05.2022

11

Industry segment
Sales performance
CHF mBusinesses

2021/222020/21

ChangeComments

Drives

130.2

98.0

+32.8%••

Small & medium power applications
Manufacturing capacity investment in semiconductors

Renewable Energy

105.0

81.6

+28.7%••

China solar driven by infrastructure
Europe boosted by DC meter

Traction

42.8

38.0

+12.8%•

Europe and India driving demandHigh precision

9.5

7.7

+24.6%•

Increasing demand for new product families in test andmeasurement

Total Industry

287.6

225.2

+27.7%

Full Year Results 2021/22

24.05.2022

13

Industry segment
Regional markets

GrowthAll regions benefited
from return of investment
confidence andcustomer demand

20%
34%
9%

Europe continues to be
our largest market
North America benefited
from demand for Drives,
but less so for
Renewables

37%

Sales

FY 21/22

Q4 21/22

CHF m

vs 20/21

vs 20/21

China

97.5

+22.8%+31.9%

Europe106.6+30.4%+14.8%

North America

26.7+22.1%+23.0%

RoW

56.8+34.6%+36.8%

Total

287.6

+27.7%*+24.8%* +26.4% at constant currency rates

Full Year Results 2021/22

24.05.2022

14

Industry next generation products
DrivesTraction

Renewables

HOB-P

LSWR

High Precision

EM4T II+

IN 200

Full Year Results 2021/22

24.05.2022

15

Solar inverter
Every house with a photovoltaic systemneeds an inverter to convert the solar DC
electricity into AC electricity
LDSR measures AC and DC leakage
currents in transformerless photovoltaic
systems to ensure the safety of people andinstallations
Primarily used on the DC side of theinverter, HMSR SMS measures AC & DC
currents with high accuracy and highimmunity to external interference

On the AC side, newly launched LWSR
supports a lower levelized cost of energy(LCOE)

Full Year Results 2021/22

24.05.2022

16

Automotive segment
Sales performance
CHF mBusinesses

2021/222020/21

ChangeComments

Battery Management

48.7

45.7

+6.7%

•
•

Significant drop in US 12V demand
Ongoing supply chain constraints

Motor Control

34.1

26.7

+27.7%•

Strong demand spurred by EV cars

Charging Systems

3.0

3.4

-11.9%•

Product allocation impacted by semiconductor shortages

Total Automotive

85.8

75.7

+13.3%

Q4 performance reflects the higher 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 other components
The strong fundamental demand for EV solutions continues, but the industry’s ongoingchallenges may take several more quarters to be resolved
Full Year Results 2021/22

24.05.2022

18

Automotive segment
Regional markets

China sales up, driven by
consumer demand for EVs,
launch of new vehicles, andability of new sector players tobetter manage supply chain
challenges
Sales in Europe and North
America reflect traditional OEMs
not adapting as quickly to newchallenges
RoW declined, reflecting higher
sales base, as these markets
had been less impacted by the
pandemic last year

Growth

28%

52%

Sales

FY 21/22

Q4 21/22

CHF m

vs 20/21

vs 20/21

China

44.4

+31.7%+13.5%

Europe

9.6

+4.8%

-9.0%

North America

8.2

-4.8%

-3.6%

RoW

23.6

-2.7%

-12.0%

Total

85.8

+13.3%*

+1.5%

9%
11%

* +10.8% at constant currency rates

Full Year Results 2021/22

24.05.2022

19

Hybrid electric vehicles /electric vehicles
Battery management
Highly accurate and Automotive Safety Integrity
Level (ASIL) ready sensors provide all the required
information to improve efficiency and safety of thecharging and discharging process of the battery
management system

Motor control
The accelerator gives the signal to the motor control
to take power from the batteries

Reliable sensors are integrated in or to the inverter
modules to provide current signals at very highspeed to assure smooth and jerk-free acceleration

Full Year Results 2021/22

24.05.2022

20

Agenda50th AnniversaryFrank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

CO2 Strategy, ESG KPIs

Andrea Borla

Financial Reporting 2022/23

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

Full Year Results 2021/22

24.05.2022

21

Performance at a glance

FY 2021/22
CHF m

FY 21/22

Q4 21/22

vs 20/21

vs 20/21

Orders received

576.4+59.2%

-0.1%

Sales

373.4

+24.1%*+18.3%

EBIT

88.4+45.1%+40.1%Net profit

72.4+30.2%-4.7%* +22.5% at constant currency rates

Bookings at record levels
Industry customers commit to orders over longer time horizons
Auto orders back to normal levels in H2

Sales at constant exchange rates increased by 22.5%
EBIT improved mainly due to the leverage effect of the improved revenues across ourestablished cost base
Net profit margin increased to 19.4% compared with 18.5%
Full Year Results 2021/22

24.05.2022

22

Gross margin
CHF m

200

50%

FY

FY

Q4

Q4

180

2021/22 2020/21 2021/22 2020/21

48%
160
140
46%
120
100

In CHF m

177.3

140.6

47.2

40.0

In % of sales

47.5%

46.7%

48.2%

48.3%

44%

80
42%

Gross margin increased by 80 basis pts:

60

Improved efficiencies from economies of scale

40
40%

Higher supply chain costs due to Covid-19

20
0

38%
17/18

18/19

19/20

20/21

21/22

80% of sales produced in China and Bulgaria

Full year GM in % of sales

Full Year Results 2021/22

24.05.2022

23

SG&A
CHF m

70

30%

FY

FY

Q4

Q4

60

2021/22 2020/21 2021/22 2020/21
50
20%

In CHF m

59.7

52.6

16.1

14.3

In % of sales

16.0%

17.5%

16.5%

17.3%

40

30
10%

Absolute increase of CHF 7.1m

20Investments in talent
Higher compensation rates

10

External consulting support
0

0%
17/18

18/19

19/20

20/21

21/22

SG&A costs fell to 16% of sales

Full year SG&A in % of sales

Full Year Results 2021/22

24.05.2022

24

R&D
CHF m

30

FY

10%

FY

Q4

Q4

2021/22 2020/21 2021/22 2020/21

25
8%

In CHF m

29.4

28.2

6.9

8.4

In % of sales

7.9%

9.4%

7.0%

10.2%

20
6%
15
4%

R&D investment up by 4.0% to CHF 29.4m

10

2%
5

0

0%
17/18

18/19

19/20

20/21

Full year R&D in % of sales

21/22

Change in accounting policy reduced R&D
expenses with tax credit of CHF 1.2m
Investment continues to bear fruit with seven
new products launched successfullyLong-term strategy ensures targeted newtechnologies and applications for customers
Full Year Results 2021/22

24.05.2022

25

Financial expense
FY

FY

Q4

Q4

2021/222020/212021/222020/21

Exchange effect

(2.7)

0.4

(0.6)

0.2

Other financial expense & income

(0.4)

(0.4)

(0.2)

(0.1)

Total

(3.1)

(0.0)

(0.8)

0.1

CHF m

Net financial income was CHF -3.1 million, mainly due to foreign currency losses
following the Euro depreciation over the last 12 months
USD, EUR and JPY cash flows are hedged
Interest costs relate mainly to expenses on lease liabilities

Full Year Results 2021/22

24.05.2022

26

Income taxes
FY
2021/22FY
2020/21

Expected income tax rate

15.2

13.7

Expected withholding tax rate

1.3

2.2

Expected tax rate

16.5

15.9

Other differences

(1.4)

(7.2)

Effective tax rate

15.1

8.7

%

The Group tax expenses of CHF 12.9 million represent a tax rate of 15.1%,
reflecting a favorable geographic profit mix
2020/21 rate of 8.7% due to non-recurring tax benefits, without which theunderlying rate was 17.4%

Full Year Results 2021/22

24.05.2022

27

Income statement
FY

FY

Q4

Q4

CHF m

2021/222020/21

Change2021/222020/21

Sales

373.4

301.0

+24.1%

97.9

82.8

Gross margin %

47.5%

46.7%

+0.8%pt

48.2%

48.3%

Operating expenses(88.9)(79.7)+11.6%(23.0)(22.7)

EBIT

88.4

60.9

+45.1%

24.2

17.3

EBIT margin %

23.7%

20.2%

+3.4%pt

24.7%

20.9%

Net financial expenses

(3.1)

(0.0)

n/a

(0.8)

0.1

Income tax(12.9)

(5.3)

n/a

(4.7)

2.1

Net profit

72.4

55.6

+30.2%

18.6

19.6

19.4%

18.5%

+0.9%pt

19.0%

23.6%

Net profit margin %Full Year Results 2021/22

24.05.2022

28

Balance sheet

CHF m

31.3.2022

31.3.2021

Net working capital

72.4

25.8

Fixed assets

147.9

122.6

Noncurrent liabilities(35.7)(14.9)Net operating assets

184.6

133.5

Net cash/(debt)(23.5)(1.6)

Equity

161.2

131.9

Equity ratio

53.5%

49.9%

Days of sales outstanding

70

74

Days of inventory outstanding

89

108

Days of payables outstanding

42

48• Balance sheet remains
strong with limited net
debt• Net working capitalincreased mainly due tothe tax IP payment andhigher receivables fromincreased sales• Equity ratio basicallystable at 53.5%

Full Year Results 2021/22

24.05.2022

29

Cash flow

CHF m

FY
2021/22FY •2020/21

Profit before taxes

85.3

60.9

Adjustment for non-cash items and taxes paid

(20.0)

5.0

Cash flow from changes in net working capital(14.9)(15.0)Cash flow from operating activities

50.4

50.9

Cash flow from investing activities(21.0)(13.5)

Free cash flow

29.4

37.4

Cash flow from financing activities(34.6)

Change in cash and cash equivalents(5.2)

Cash and cash equivalents at the end of the period

17.2

Excluding non-recurringtax payments related tothe sale of intellectual
property, cash flow fromoperating activities would
have been CHF 77.0
million compared with
CHF 50.9 million• Free cash flow was CHF(35.0)
29.4 million (CHF 37.4
2.4
million). This decrease ismainly due to higher
22.4
investments related to
the new global
headquarters in Geneva

Full Year Results 2021/22

24.05.2022

30

Agenda50th AnniversaryFrank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

CO2 Strategy, ESG KPIs

Andrea Borla

Financial Reporting 2022/23

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

Full Year Results 2021/22

24.05.2022

31

CO2 strategy
Key aspects behind our strategy:
Responsibility to mitigate the risks of climate change, for all stakeholders
Our customers expect suppliers to have a robust CO2 reduction program

Our employees expect to work for a company that is acting responsibly towards the environment

Our goal is to be CO2 neutral in all 3 scopes* by 2040, instead of 2050 (Paris commitments):
Priority is to be CO2 neutral in scope 1 and scope 2 by 2025
In parallel, we start reducing emissions in scope 3; the biggest opportunity is our supply chain

Nearly all our products help optimize and reduce energy consumption
designs of the future to come up with more “CO2 compliant” product designs*Scope 1 emissions are direct emissions from LEM's own sources that result from the combustion of fossil fuels. Scope 2 emissions refer to indirectemissions generated by our purchases of electricity. Scope 3 include a company’s upstream and downstream activities.
Full Year Results 2021/22

24.05.2022

33

ESG KPIs
We aligned our ESG reporting to the globally
recognized and standardized NASDAQ ESG
Reporting Guide 2.0, which offers us thepossibility to report more systematically on
various ESG Key Performance Indicators (KPIs)

Our ambition is to continually develop ourinternal capabilities and sustainability initiatives,
and to report transparently on our progress

Full Year Results 2021/22

24.05.2022

34

Agenda50th AnniversaryFrank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

CO2 Strategy, ESG KPIs

Andrea Borla

Financial Reporting 2022/23

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

Full Year Results 2021/22

24.05.2022

35

New financial reporting 2022/23
Rationale
With effect from 01 April 2022, the company is organized on a regional andfunctional matrix
This is designed to move decision making closer to the customer in different partsof 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 ofexpertise and development
There will no longer be a separate Industry and Automotive segment

The new financial reporting will be communicated for the first time with theQ1 2022/23 results on 28 July 2022
The company will report a single company-wide P&L every quarter and cash flow
and balance sheet twice a year

Full Year Results 2021/22

24.05.2022

36

New financial reporting 2022/23
Pro forma sales by regions

CHF in millions
Regions

Scope

China

2019/20

2020/212021/22

100.4

114.8

143.8

Rest-of-Asia

Japan, South-Korea, India,
South-East Asia

62.9

56.5

67.4

EMEA

Europe, Middle East & Africa

105.2

97.5

124.7

Americas

NAFTA & Latin America

39.4

32.4

37.5

307.9

301.0

373.4

Total

Full Year Results 2021/22

24.05.2022

37

New financial reporting 2022/23
Pro forma sales by businesses

CHF in millions
Businesses

Scope

2019/20

2020/212021/22

Automation

drives, robots, tooling machines,
elevators, HVAC

99.0

97.7

130.3

Automotive

battery (EV & CE), motor control,
onboard charging

67.6

75.7

85.8

Renewable Energy

solar, wind

54.1

56.2

66.0

Energy Distribution & High
Precision

charging stations, smart grid,energy storage, high precision

36.0

33.2

48.6

Track

trains, metro, trackside

51.3

38.1

42.8

307.9

301.0

373.4

Total

Full Year Results 2021/22

24.05.2022

38

Agenda50th AnniversaryFrank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

CO2 Strategy, ESG KPIs

Andrea Borla

Financial Reporting 2022/23

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

Full Year Results 2021/22

24.05.2022

39

Outlook – Financial Year 2022-23
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 inemerging market and developing economies (IMF)

Ongoing headwinds from supply chain constraints
Lockdowns in China are impacting supply chain,production and sales
The current geopolitical tensions may undermine
investment confidence in certain sectors

Against this backdrop, we expect sales in the first six
months of 2022/23 to be lower than 2021/22

Full Year Results 2021/22

24.05.2022

40

Long-term optimism
LEM benefits from geographic and sector diversity

Increasing trend to “onshoring” and localization of manufacturing investment which will further support
our business
Fundamental long-term prospects remain strong, driven by mega trends such as renewable energy,
mobility and automation:
demand for our new products in solar power, EVs, and E-mobility
strong demand for EV solutions continues, but the supply chain challenges may take several more quarters to
be resolved

New production plant in Malaysia with production to start by early 2024
De-risking supply chain

We continue to invest in R&D at between 8-10% of sales
Sectors in which we serve our customers are being transformed by decarbonization and electrification
We can look forward with optimism to continued long-term growth
Full Year Results 2021/22

24.05.2022

41

Agenda50th AnniversaryFrank Rehfeld

Business PerformanceFrank Rehfeld

Financial Results

Andrea Borla

CO2 Strategy, ESG KPIs

Andrea Borla

Financial Reporting 2022/23

Andrea Borla

OutlookFrank Rehfeld

Proposal to Shareholders

Andreas Hürlimann

Full Year Results 2021/22

24.05.2022

42

The long-term view

Share price development from 31 March 2012 to 31 March 2022: +353%
Distributed dividends over the last 10 years: CHF 420m
Full Year Results 2021/22

24.05.2022

43

Proposal to shareholders

63,5
50,0

53,3
47,8
40,0
35,0

38,2

42,0 46,0

40,0

42,0

48,8

35,0 39,1

Dividend policy of distributing significantly
more than 50% of consolidated net profit
Based on the excellent results for 2021/22, thelong-term fundamentals for the business andto mark the 50th anniversary
Proposed ordinary dividend of CHF 50 per
share, up from CHF 42
Pay-out ratio of 78.8%, down from 86.1%
Represents a dividend yield of 2.2% (as per 31
March 2022)
Sign of trust in the company’s future

15/16

16/17

17/18
Dividend

18/19

19/20

20/21

21/22

Earnings per share

Full Year Results 2021/22

24.05.2022

44

Q&A

Full Year Results 2021/22

24.05.2022

45

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

For further information

30 June 2022

Annual General Meeting FY 2021/22

Andrea Borla, CFO

5 July 2022

Dividend ex-date

Phone: +41 22 706 12 50

7 July 2022

Dividend payment dateE-mail: investor@lem.com

28 July 2022

First quarter results 2022/23

8 November 2022

Half year results 2022/23 and Capital Markets
Day at new LEM 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 FY 2022/23

4 July 2023

Dividend ex-date

6 July 2023

Dividend payment date
Full Year Results 2021/22

24.05.2022

46

life
energymotion