Results
Q1 of 2015/16
1 April 2015 to 30 June 2015

Agenda1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook

HO xx-P2

1. Global Market Leader in Current and Voltage Transducers
Market Position

Performance

Perspectives

 Continued sales
growth and strong
margins
 Dividend yield >5% ineach year since 2009

 Reinforced investment in innovation
 Solid growth perspectives due to underlying trends
 Strong foothold inChina
 EBIT margin target of
15 to 20%

Source: Swissquote Global market shareof 50% in Industry
 Benchmark in service
and product quality
 4 production sites inEurope and Asia
 Sales of CHF 257.8
million in 2014/15

3

1. LEM Applications:Electric Motorcycle
The direct-drive power train of an electricmotorcycle is highly efficient andmaintenance-free, but requires a highly
accurate torque control.
A HAH1 DR
1 Direct-drive brushless motor
2 Direct-drive electronics
3 Battery charger
4 Lithium-ion battery

4A
1

32

The electricity is stored in a rechargeable
lithium-ion battery (4), which supplies thedirect-drive electronics (2). The direct-drive
electronics controls the direct-drive brushless
motor (1). The direct-drive motor requires noshifting and offers instant torque. Electricmotorcycles provide for recharging the battery
with the battery charger (3).
The HAH1 DR transducers (A) are used by
the direct-drive electronics for a dynamic andaccurate torque control.
41. LEM Applications:
Sewing Machine/Embroidery Machine47

Accuracy and speed of the table movements, aswell as the correct, accurate and regulated
rotation speed of the main axis for the needles
are directly linked to the currents provided to themotor (5) through a servo drive (1). The workingtable (7) is moving in horizontal X and Y
directions thanks to linear motors (6) controlled
by two position servo drives (1).

352

6

61

A

1 Servo drives
2 Control unit
3 Head4 Main axis
5 Motor6 Linear motors
7 Working table

Full servo control allows for speed and precision
in industrial sewing/embroidery machines.

A HLSR 10-P

Current transducers (A) are used in each servo
drive to measure two of its three phase output
AC currents. Their accuracy, high performance,high temperature working environment, lowtemperature drift contribute to a very stable,
quick, reactive, reliable and precise system.
5

1. LEM Applications:Power Generator
The diesel driven engine (1) activates analternator (2), which converts mechanicalenergy into electricity. The electricity isconducted to the network and measured at
the output of the alternator through the RT
Rogowski coil, which is connected to theenergy meter (3). The energy meter transmits
the information to the central post analysis (4)to adapt the power generation to demand.

1 Motor
2 Alternator
3 Energy meter

A RT 2000

4 Central post analysis
5 Grid1425

To measure real-time electricity production,
the RT 2000 (A) offers advantages: thetransducer installation on the generator does
not require any interruption of production, theirsize is minimal, and their robustness ensureshigh reliability and long-term service.

3A6

1. LEM Applications: Locomotive

A LTC 100

B DVL

1A
5A
31B

Additional inverters are used for heating, airconditioning and ventilation. Transducers areused to measure the motor currents in orderto optimize their efficiency.

424Inverters are used to transform the energy
into the right voltage and current to drive themotors. Voltage and current transducers areused to measure the current and the voltage
on the secondary side of the transformer andon the DC-side. Special differential
transducers are implemented at thesecondary side of the transformer to detect
any leakage current flowing in the train.

1 Pantograph
2 Transformer

43 Inverters
4 Motors
5 Auxiliary inverter71. Diverse Target Markets – Diversified Businesses
Businesses

Share of sales
Q1 of 2015/16

Green Cars
Conventional Cars

15%

High precision
TractionRenewable energies& power supplies

Cyclicality

Macro drivers

Consumer durables

Technology adoption
Fuel savings

Late cycle

Infrastructure investments

Mid cycle

Energy prices, subsidies

Early cycle

Industrial investment

85%

Drives & welding

Automotive segment
Industry segment

8Agenda
1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook

DAHBV292. Highlights: CHF appreciation weighs on sales and margins
In CHF millions, %Q1 2015/16

Q1 2015/16 vs.
Q1 2014/15

Q1 2015/16 vs.
Q4 2014/15

Orders

60.9

-6.0%

+0.4%

Sales

61.5

-5.4%

-0.0%

EBIT

10.5

-22.5%+1.7%

Net profit

8.9-17.2%-11.1%■

Continuing strong growth in China■

Appointments of new General Managers for Automotive and Industry■

One-off cost due to change of ERP systems and organizational changes■

Lower net profit due to non-renewal of positive one-off tax effects in Q4of 2014/15
10

2. Net Sales
In CHF millions

In CHF millions, %

300

Sales

Q1 vs. Q1
asreported275

Q1 vs.
Q4
at constantcurrencies

250

Industry

52.1

-7.8%

-4.5%

+1.1%

225Automotive

9.4+10.2%

+6.1%

-5.8%

200

Total sales

61.5

-5.4%

-3.1%-0.0%

175■150■

125100■Stable business development Q1 vs. Q4Strong sales growth in China across allbusinesses
Negative currency impact

7550
25
0
11/12

12/13*

13/14

14/15

Q1 15/16
11* Restatement following IAS 19R application (pensions)2. Quarterly View
In CHF millions

Book-to-bill ratio
1.2

80
70
61.8

65.0

65.1

66.5

64.7

61.1
57.6

60

1.0
61.5

61.5
0.850

 Booking increased by0.4% Q1 vs. Q4
 Currency impact onsales and bookings
 Book-to-bill ratio stable
at around 10.6

4030

0.4

200.2

100.00
Q1
13/14

Q2
13/14

Q3
13/14

Q4
13/14

Orders received

Q1
14/15

Q2
14/15

Sales

Q3
14/15

Q4
14/15

Q1
15/16

Book-to-bill ratio12

2. Industry Segment: Regional Markets
In CHF millions, %Sales

GrowthQ1 vs. Q1

GrowthQ1 vs. Q4

Europe19.6-17.2%-15.2%

N. America

6.0

+5.2%

-13.2%

Asia andRoW

26.5-2.3%+23.2%

Total

52.1

-7.8%

+1.1%

EuropeNorth America
Asia and ROW

38%

51%11%

 Strong underlying growth along withseasonal recovery in China
 Weak development in Europe, North
America and Asia excluding China
 Asia the most important sales region
 Success with recently launched products
13

2. Industry Segment: Business Development
In CHF millions

Op. EBIT in % of sales

240

25

200

20160
15120
1080

540

00
11/12

12/13*

13/14

14/15

Businesses and Applications
Drives & welding (growth QoQ: -7%)
 Strong sales in China – other regions slow
 Won projects with new products
 Maintained market share
Renewable energies & power supplies (+14%)
 Seasonal effects and growing investments inrenewable energies in China
 Investments in offshore wind projects in Europe
Traction (+5%)
 Strong performance in USA following
introduction of new locomotive standards
 Ongoing growth in China
High-precision (-17%)
 Stronger competition and new players
 All regions weak, except China

Q1 15/16
14* Restatement following IAS 19R application (pensions)2. Automotive Segment: Regional Markets
In CHF millions, %Sales

GrowthQ1 vs. Q1

GrowthQ1 vs. Q4

Europe0.8+46.3%-22.0%

N. America

4.6+6.1%-2.8%

Asia andRoW

4.0+9.6%

-5.3%

Total

9.4+10.2%-5.8%

EuropeNorth America
Asia and Rest of World8%

43%

49%

 Focus on Asian and North Americanmarkets
 Good performance in China andKorea
 Decline in Japan due to lower
volumes and foreign exchange effects15

2. Automotive Segment: Business Development
In CHF millions

Op. EBIT in % of sales
2540

35
2030

25

1520
1015

Businesses and Applications
Conventional cars (QoQ: -4%)
 Stable demand for battery managementbusiness Growth in China and Germany – decreasing
sales in in USA and Japan
Green cars (HEV, EV) (-14%)
 Weak business in Europe and Japan Won market share in China, now in all newmodels of local Chinese car manufacturers
 Won market share with Korean battery makers

105500
11/12

12/13*

13/14

14/15

Q1 15/16
16* Restatement following IAS 19R application (pensions)2. Business Development China
ProductionSales■■

Market share of over 50%
Most important market with 34% oftotal sales

LEM China increased its #1 position aslargest manufacturing site of the Group(64% of total production, compared to58% in financial year 2014/15)“Made by LEM” quality■■In CHF millions

In CHF millions

160

70

14060
120
50
100
4080

3060

2040

10

20
00
11/12

12/13

13/14

14/15

Q1 15/16

11/12

12/13

13/14

14/15

Q1 15/16
17

Agenda1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook

LA 130/150-P

18

3. Income Statement
In CHF millions

Sales

Q4
2014/15

Q1
2015/16

ChangeQ1
2014/15

Change

61.5

61.5

-0.0%

65.0

-5.4%

Gross margin

44.8%

45.0%

+0.2pt45.3%-0.3ptOperating expense

-17.2

-17.2

-0.3%

-15.9

+8.0%

EBIT10.3

10.5+1.7%

13.5-22.5%Net financial exp.

+0.5

+0.5

-10.6%+0.1+268.2%

Income tax

-0.9

-2.1

+137.8%-3.0-28.5%Net profit

10.0

8.9

-11.1%

10.7-17.2%

19

3. Results by Quarter
In CHF millions

In % of sales
30%

80
70
61.8

65.0

65.1
57.6

60

66.5

64.7

61.1

25%
61.5

61.5
20%

5015%
4010%
30

 CHF 2 million foreignexchange impact on
EBIT margin in Q4 of
2014/15
 Q1 vs. Q4 lower net
profit margin due tonon-renewal of one-offtax effects in Q4 of
2014/155%200%

100-5%
Q1
13/14

Q2
13/14

Q3
13/14

Orders received

Q4
13/14

Sales

Q1
14/15

Q2
14/15

Op. ROS

Q3
14/15

Q4
14/15

Q1
15/16

Net Profit in % of sales
20* Restatement following IAS 19R application (pensions)3. Gross Margin
In CHF millions

In % of sales
50%

14049%
120

Gross margin

Q1
2014/15

Q4
2014/15

Q1
2015/16

29.4

27.5

27.7

45.3%

44.8%

45.0%

in CHF millions
48%

10047%

Gross margin
in % of sales

46%

80

45%
60

44%
43%

4042%
2041%40%011/12

12/13*

13/14

14/15

Q1 15/16

 Adverse foreign exchange impact on grossmargin Positive impacts on gross margin due tofocus on Raw material sourcing
 Internal productivity
 Relocation to cost-competitive
manufacturing sites
21* Restatement following IAS 19R application (pensions)3. Operating Expense
In CHF millions

In % of sales
30%

70

60

25%

OperatingexpenseQ1
2014/15

Q4
2014/15

Q1
2015/16

15.9

17.2

17.2

24.4%

28.0%

27.9%

in CHF millions
5020%

Operatingexpensein % of sales

4015%
3010%

 Higher administration expense due tointroduction of new ERP system andorganizational changes

205%

100%

0
11/12

12/13*

13/14

14/15

Q1 15/16
22* Restatement following IAS 19R application (pensions)3. R&D Expense
In CHF millions

In % of sales

188%

167%

R&D expensein CHF millions

14Q1
2014/15

Q4
2014/15

Q1
2015/16

3.9

4.3

3.7

6.0%

6.9%

6.0%

6%

R&D expense

125%

in % of sales

4%

 Maintained high investment in R&D forboth segments
 Ongoing renewal of product range withfocus on optimized cost, higheraccuracy, easier integration into
customers’ systems and new functions

1083%
62%

41%

200%
11/12

12/13*

13/14

14/15

Q1 15/16
23* Restatement following IAS 19R application (pensions)3. EBITIn CHF millions

In % of sales

60

26%
24%

50

22%
20%

40

EBIT
in CHF millions

EBIT
in % of sales

Q1
2014/15

Q4
2014/15

Q1
2015/16

13.5

10.3

10.5

20.8%

16.8%

17.1%

18%
30

16%
14%

20

 Continued cost control and high grossmargins
 Adverse foreign exchange impact

12%
10%

108%
06%
11/12

12/13*

13/1414/15

Q1 15/16
24* Restatement following IAS 19R application (pensions)3. Financial Expense
In CHF millions

Q1
2014/15

Q4
2014/15

Exchange effect*+0.1+0.6+0.5

Other financial expense & income+0.0-0.0+0.0

Total+0.1+0.5+0.5

Positive exchange effect mainly driven by appreciation of USD

Foreign exchange hedge gain of CHF 1 million in Q4 of 2014/15

Foreign exchange hedging policy (unchanged)*Q1
2015/16



EUR: 100% of net exposure 12 months forward

USD: 100% of net exposure 12 months forward

The line “exchange effect” in the financial result is mainly due to currency volatility during the time between booking andsettling a receivable/payable. Over and above this line, foreign exchange rates impact every P&L line through the rate at
which each transaction is booked and at which it is consolidated into CHF.

25

3. Net Profit
In CHF millions

In % of sales

5020%

Q1
2014/15

Q4
2014/15

Q1
2015/16

10.7

10.0

8.9

16.5%

16.2%

14.4%

Net profit
in CHF millions

4518%

Net profit
in % of sales

4016%

Q1 2014/15

35+0.114%

30-3.0
13.6

25

10.7

12%

2010%

EBIT

Financial expense

Income tax

15

Q1 2015/16

8%
10+ 0.56%

5Net profit

10.5

- 2.1
8.9

4%

0
11/12

12/13*

13/14

14/15

Q1 15/16

EBIT

Financial expense

Income tax

Net profit

26* Restatement following IAS 19R application (pensions)

Agenda1. LEM at a Glance
2. Highlights and Business Review
3. Financial Review
4. Strategy and Outlook

HLSR
27

4. Market Factors and Strategy■ We firmly believe in our strategic
direction and the 4 drivers for ourbusiness remain unchanged■ We will continue to capitalize on
the drivers of LEM’s marketsthrough pure play components company
 diversification across geographiesand businesses28

4. Outlook■For 2015/16 we expect■ Volume growth (in number of transducers) in both segments■ Price pressure und foreign exchange effects may adversely
affect LEM, leading to uncertainty regarding sales growth■ EBIT margin expected to be within the target range of 15 to20%■

Swiss franc to remain strong vs. euro■

Continuous reevaluation of all processes to determine
their optimal location29Financial Calendar and Contact Details
Financial calendar
11 November 201516 February 2016
9 June 2016
30 June 2016
5 July 2016
7 July 2016

Half-year 2015/16 results
Third quarter 2015/16 results
Year-end 2015/16 results
Ordinary General Meeting of the Shareholders for the year 2015/16
Dividend ex-date
Dividend payment date

For further information
Jan Gregor, Investor Relations
Phone: +41 44 212 41 41
Email: investor@lem.com
30