Press release

LEM announces results for 9 months 2019/20: performance inline with full year guidance despite challenging environment
Fribourg, Switzerland, 31 January 2020 – LEM (SIX: LEHN), a leading global company in electricalmeasurement for industry and automotive applications, announces 9 months results for 2019/20 (AprilDecember) compared to 2018/19:•Sales decreased by 3.8% to CHF 235.8 million (CHF 245.1 million); at constant exchange rates,
sales decreased by 1.9%

•The global spread of sales reflects a better performance in Rest of the World:– China CHF 80.2m (34.0% of total)– Europe CHF 71.3m (30.2% of total)– North America CHF 27.8m (11.8% of total)– Rest of World CHF 56.5m (24.0% of total)•

R&D up by 7.9% to CHF 21.9 million or 9.3% of sales (CHF 20.3 million or 8.3% of sales), driving
new product portfolio•

EBIT decreased by 8.6% to CHF 46.4 million (CHF 50.8 million); the EBIT margin declined to 19.7%(20.7%)•Net profit for the period was up by 33.5% at CHF 52.0 million (CHF 39.0 million), thanks to a nonrecurring positive tax impact of CHF 14.0 million

Frank Rehfeld, Chief Executive Officer, said: “Our sales in Q3 itself slightly increased compared tolast year, and with these 9 months results we are on track with our full year outlook. Our recent
announcement about changes to our Geneva organization, the investments in a new Geneva
headquarters and a new manufacturing facility in Malaysia, demonstrate how LEM is anticipating andadapting to changes in our markets. We have the strength of a diversified global footprint and aremaking the organization more agile to capture growth opportunities.”
Andrea Borla, Chief Financial Officer, added: “Despite the drop in sales, our business remains
strong and profitable, with improving gross margin, stable SG&A and continued growth in R&D
investments. We reiterate our full year guidance for sales around CHF 310 million and underlying EBIT
margin close to 20%, excluding a one-off restructuring charge for changes to our Geneva organization.”

LEM Holding SAPage 1/6

Industry segment: encouraging sales for renewables and traction
9 months sales in the Industry segment totaled CHF 182.1 million, down 4.1%. At constant exchange
rates, sales decreased by 1.9%. The H1 decline has flattened out during Q3. However, global
economic uncertainty persists with customers reluctant to invest, and this is particularly felt in our drives
business. Sales increased by 1.0% in China, but decreased by 7.1% in Europe, by 9.2% in North
America and by 2.9% in Rest of World.
in CHF millions

9M
2019/20

9M
2018/19

73.6

86.4

Renewable
Energy60.7

58.2

Traction

39.5

36.5

High precision8.4

8.7•+8.3% ••
-3.5% •

Total Industry

182.1

189.9

-4.1%

Businesses
DrivesChange Comments-14.9% • Global reluctance to invest in production suchas welding and robotics linked to auto sector• China, Japan, W. Europe sluggish demand+4.2% • Strongest in China, India & Japan
Driven by solar
Investments helped by government policies
Major deliveries in China, India & Asia

Market fundamentals remain good
• Adoption of new products subject toinvestment confidence

Automotive segment: continued transformation to green car technology in all markets
9 months sales in the Automotive segment totaled CHF 53.6 million, a decline of 2.9%. At constantexchange rates, sales decreased by 2.0%. The H1 decline has flattened out during Q3. Sales in ourgreen car business now accounts for 75.4% of Automotive sales, up from 68.3% a year ago. Sales in
China continued to decline due to the overall economic environment and recent changes in government
policies, but in the long run we remain confident about the world’s largest market for green cars. InEurope the transformation to new electric or hybrid vehicles is gathering momentum. Moreover,demand from European manufacturers is driving sales of motor control and battery management in
Korea and Japan. The US transition to new technology is becoming more evident. Sales dropped by
18.7% in China and by 25.2% in North America, while they performed strongly both in Europe and Restof World, up by 32.3% and 37.5% respectively.
9M
2019/20

9M
2018/19

Businesses
Green40.5

37.7

Conventional

13.2

17.5

in CHF millions

Change Comments+7.2% • China influenced by policies, weakereconomy, and insourcing by Tier 1 suppliers• New motor control, battery management andcharging system products developed-24.7% • Continued switch to new technologies• US market led by green start-ups and themajor OEMs are starting to electrify SUVs andpick-ups

Total Automotive

LEM Holding SA

53.6

55.2

-2.9%

Page 2/6

Profitability remains steadyGross profit for the 9 months fell by 2.5% to CHF 110.9 million, although the gross margin reached47.0%, which is 60 basis points higher than the same period last year, thanks to various efficiency
programs.
We remain vigilant with overheads, and maintained SG&A (CHF 42.7 million) at the same level as lastyear (CHF 42.8 million). We continue with our long-term investment in future applications andincreased R&D investments by 7.9% to CHF 21.9 million (CHF 20.3 million), or 9.3% of sales (8.3%).
EBIT dropped by 8.6% to CHF 46.4 million (CHF 50.8 million), due to the decline in revenues partially
offset by the increase in gross margin. Our EBIT margin was down at 19.7% (20.7%).
We posted a net profit for the nine months of CHF 52.0 million, up 33.5% from CHF 39.0 million lastyear. This reflects a non-recurring positive tax impact of CHF 14.0 million from the sale of technical IPfrom LEM Intellectual Property SA based in Fribourg to LEM International SA based in Geneva and to
LEM China. The net profit margin thereby increased to 22.1% compared with 15.9%. Excluding thistax impact, net profit would have slightly reduced to CHF 38.0 million, while the net profit margin would
have improved to 16.1%.
Outlook unchanged
The economic environment remains challenging and will continue to impact LEM’s top line sales
performance for the coming months. We confirm our expectation for the second half of 2019/20 to bein line with our sales performance in the same period of last year, although there may be some impact
in Q4 due to the coronavirus.
For the full financial year 2019/20, the company reiterates its guidance for sales of around CHF 310
million compared with CHF 321.6 million for last year, and for its underlying EBIT margin to remainclose to 20%. This excludes a one-off charge of CHF 1.5 million for restructuring at the Geneva HQ,
which was announced on 23 January 2020.

Webcast and conference callFrank Rehfeld, CEO, and Andrea Borla, CFO, will provide a detailed presentation of the 9 months
2019/20 results today at 10:00 am CET at a media and investor community webcast and conference
call.
Listen to live webcast
https://87399.choruscall.eu/links/lem200131.html
The webcast slides are available in the Investor Relations section of the LEM website(www.lem.com/en/investors), where the webcast will later also be archived.
Dial-In Numbers
Switzerland & Europe: +41 (0) 58 310 50 00
UK:+44 (0) 207 107 06 13
USA:+1 (1) 631 570 56 13
Other countries: https://media.choruscall.ch/documents/Attended_DI_numbers.pdf

LEM Holding SAPage 3/6

Financial calendar
The financial year runs from 1 April to 31 March
19 May 2020
Full year results 2019/20
9 June 2020
Annual General Meeting of Shareholders for the financial year 2019/20
16 June 2020
Dividend ex-date
18 June 2020
Dividend payment date
29 July 2020
First quarter results 2020/21
3 November 2020
Half year results 2020/21
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.comContact: Investment community
Andrea Borla, Chief Financial Officer
Phone: +41 22 706 1250
Email: investor@lem.com
Contact: MediaCabinet Privé de Conseils s.a. (CPC)
Nick Miles, miles@cpc-pr.com, direct +41 22 552 46 26, mobile +41 79 678 76 26
Michael Füglister, fuglister@cpc-pr.com, direct +41 22 552 46 29, mobile +41 78 839 07 62

LEM Holding SA

Page 4/6

Appendix

Consolidated income statement
April to December
2019/20

In CHF thousands

2018/19

Change-3.8%

Sales

235'789245'094

Cost of goods sold(124'902)(131'352)

Gross margin

110'887

113'742

47.0%

46.4%

Sales expense(21'693)(22'414)Administration expense(20'979)(20'426)

Research & development expense(21'925)(20'324)(0)0Gross margin (in %)Other expense
Other income

117

194

EBIT

46'40650'771

EBIT margin (in %)

19.7%

20.7%

Financial expense

(457)

(168)

Financial income

217

98

Foreign exchange effect(889)(1'411)

Profit before taxes

45'27849'290

Income taxes

6'731(10'319)

Net profit of the period

52'00838'971

Net profit margin (in %)

22.1%

15.9%

LEM Holding SA

-2.5%

-8.6%

-8.1%

+33.5%

Page 5/6

Key Figures
2019/20

In CHF millions

Q4

ChangeOrders received

Q1

Q2

Q3

Q1

Q2

Q3

Q4

FY

Q3 - Q3

9M - 9M

Industry

71.3

54.8

63.8

68.0

56.6

57.5

63.6

245.7

+10.9%+4.2%

Automotive

17.2

17.2

17.5

17.9

23.5

15.1

18.2

74.7

+15.5%-8.3%

Total LEM

88.4

72.0

81.2

86.0

80.0

72.6

81.8

320.5

+11.8%

+1.2%

Q4

FY

2018/19

Book-to-bill ratio

Q1

Q2

Q3

Q1

Q2

Q3

Q4

FY

Q3 - Q3

9M - 9M

Industry

1.10

0.92

1.10

0.96

0.93

0.99

1.05

0.98

+11.0%+8.6%

Automotive

0.95

1.00

0.94

1.04

1.16

0.85

1.13

1.05

+11.2%-5.6%

Total LEM

1.07

0.94

1.06

0.98

0.99

0.95

1.07

1.00

+10.9%

+5.2%

Q4

FY

Sales

Q1

Q2

Q3

Q1

Q2

Q3

Q4

FY

Q3 - Q3

9M - 9M

Industry

64.6

59.3

58.2

70.8

60.8

58.3

60.4

250.2

-0.1%

-4.1%

Automotive

18.0

17.1

18.5

17.3

20.1

17.8

16.1

71.4

+3.8%

-2.9%

Total LEM

82.6

76.4

76.788.080.976.176.5

321.6

+0.8%

-3.8%
9M - 9M

EBITQ1

Q2

Q3

Q1

Q2

Q3Q4

FY

Q3 - Q3Industry

14.3

13.2

11.5

15.8

13.0

12.1

14.0

54.9

-4.7%

-4.5%

Automotive

2.4

1.9

3.2

2.8

4.0

3.2

-0.0

9.9

-0.3%

-25.5%

Total LEM

16.7

15.1

14.6

18.5

17.0

15.2

14.0

64.8

-3.8%

-8.6%

Net profit of the period

Q1

Q2

Q3

Total LEM

13.9

11.2

26.9

LEM Holding SA

Q4FY

Q4

FY

FY

Q1

Q2Q3

Q4FY

Q3 - Q3

9M - 9M13.5

13.8

11.6

13.4

52.4

+131.2%+33.5%

Page 6/6