Press release

LEM announces results for Q1 2020/21: sales, orders andprofitability impacted by Covid-19
Geneva, Switzerland, 29 July 2020 – LEM (SIX: LEHN), a leading global company in electricalmeasurement for industry and automotive applications, announces first quarter results for 2020/21(April-June) compared to 2019/20:•

Sales decreased by 10.1% to CHF 74.3 million (CHF 82.6 million); at constant exchange rates,
sales decreased by 4.6%

•The company benefits from a diverse global spread of sales:– China CHF 27.8m (37.4% of total)– Europe CHF 22.4m (30.1% of total)– North America CHF 6.8m (9.1% of total)– Rest of World CHF 17.3m (23.3% of total)•

R&D down by 6.5% to CHF 6.7 million (CHF 7.1 million), but steady at 9.0% of sales, to capture
new opportunities•

EBIT decreased by 20.2% to CHF 13.3 million (CHF 16.7 million); the EBIT margin declined to
17.9% (20.2%)•Net profit for the period was down by 19.8% at CHF 11.1 million (CHF 13.9 million)

Frank Rehfeld, Chief Executive Officer, said: “Given the extra-ordinary shock to the world economy
from Covid-19, it is no surprise that this year’s first quarter performance reflects its significant impact
on LEM’s sales, orders and profitability. Globally revenue in constant currencies was down by 4.6%
from the same quarter last year. Both North America and Europe were hardest hit in terms of absoluteand relative decline in sales, with China and Rest of World showing more resilience. The diversity of
our applications across multiple geographies and sectors does provide some balanced spread of risk.
The Automotive segment is more immediately impacted by the lockdown, while the Industry segment
has a mix of short and longer-term investment cycles.
In June the IMF downgraded its forecast for global GDP even further to –4.9% for 2020, and observedthat the global sweep of this crisis hampers recovery prospects for export-dependent economies. So
although some of our customers face a very tough year, others are less impacted. While certain factors
remain out of our control, we continue to be vigilant in monitoring risks and ensuring LEM’s businesses
are run as efficiently as possible.”
Andrea Borla, Chief Financial Officer, remarked: “Our gross margin declined to 44.5% due mainly
to the extra costs of air freight for delivering products during the Covid-19 lockdown. However weensured good control on SG&A costs and maintained our R&D investments at 9% of sales. EBIT
declined by 20.2% compared to Q1 last year, reflecting the drop in revenues and gross margin.”

LEM Holding SA

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Industry segment: Covid-19 impacts sales, orders, and investment confidence
Q1 sales in the Industry segment totalled CHF 59.8 million, down 7.4%. At constant exchange rates,
sales decreased by only 1.7%, which was pleasing given the difficult economic environment. Covid-19
is impacting our markets in two ways; short-term with physical shutdowns whereby customers cannot
receive products and longer-term due to delays in investment by customers. The full impact of Covid19 may take some time to become apparent in these B2B businesses which have different investment
cycles. Sales increased by 3.2% in China, our largest market, thanks mainly to Renewable Energy, but
decreased by 10.7% in Europe, by 19.5% in North America and by 13.1% in Rest of World. The
significant decline in orders was due mainly to the lockdown effects in Traction and increasing caution
by customers in placing long-term orders, particularly in Drives & High Precision.
2020/21in CHF millions

Businesses
Drives2019/20 Change

25.4

27.0

Renewable
Energy21.0

21.0

Traction

11.3

14.0

High precision

2.1

2.7

Total Industry

59.8

64.6

Comments-5.9% • Longer-term investment cycles• Asia recovering, Europe weak+0.2% • Solar growth with short-term cycles• China growth continues• Europe flat, US down
-18.8% • Longer-term investment cycles• India and China lockdown impact• Europe flat
-22.4% • Lack investment confidence fortest benches-7.4%

Automotive segment: Covid-19 dramatic impact on consumer demand and OEM operations
Q1 sales in the Automotive segment totalled CHF 14.5 million, a decrease of 19.5%. At constantexchange rates, sales declined by 15.0%. Historically LEM has reported Automotive sales split
between green and conventional cars. With effect from this quarter, the company will report sales split
between Battery Management, Motor Control and Charging Systems. This better reflects how ourcustomers use our products in different applications.
Covid-19 impacted sales sequentially across the world, with China first (-32.4%), Europe next (-9.2%)
and then North America (-57.6%). China is the world’s largest market for green cars and will clearlygrow in the long-term. Europe is transitioning with significant investments to launch new electric or
hybrid-electric car platforms. Rest of World grew by 12.7% thanks to Korean and Japanese sales ofMotor Control and Battery Management to meet demand from European manufacturers. Due to Covid19, many OEMs are fighting for survival and so the significant drop in orders reflects disruption toproduction where LEM products are already designed-in, plus delays to new projects.

LEM Holding SA

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2020/21

in CHF millions

2019/20 ChangeBusinesses
Battery Management

8.8

11.2

Motor ControlCharging Systems
Total Automotive

5.1
0.6
14.5

6.1
0.7
18.0

Comments-21.9% • Covid-19 impact on green cars
China and Europe• US reduction in 12v demand-15.9% • Production sites closed globally-12.2% • Long-term potential for green cars
-19.5%

Battery Management
We provide intelligent sensing solutions adapted to all battery architectures, delivering superior accuracy thatgives our customers reliable information about the state of charge and driving range
Motor Control
Our sensors equip the power modules of hybrids and e-vehicles, regulating the energy flow for the e-motor andenabling safe power usage by the driver
Charging System
This new product range offers dedicated technologies to support energy transfer from the charging station toplug-in hybrids and e-vehicles and within the different electrical components on board

Profitability impacted by Covid-19
Gross profit for the quarter fell by 14.0% to CHF 33.1 million, principally due to the impact of Covid-19
on higher air freight costs for delivering products to customers. The gross margin declined by 200 basis
points to 44.5%. We continue to execute various efficiency programs.
We remain vigilant with overheads, and kept SG&A costs essentially flat at 17.8% of sales, while they
declined in absolute terms by 9.9% to CHF 13.2 million (CHF 14.7 million).
We continue with our long-term investment in future applications with R&D at 9.0% of sales (8.6%),
although this decreased in absolute terms by 6.5% to CHF 6.7 million (CHF 7.1 million).
EBIT dropped by 20.2% to CHF 13.3 million (CHF 16.7 million), due to the decline in revenues andgross margin. Consequently our EBIT margin was down at 17.9% (20.2%).
We posted a net profit for the quarter of CHF 11.1 million, down 19.8% from CHF 13.9 million last year,
reflecting the decline in EBIT. The net profit margin was 15.0% compared with 16.8%.
Financial calendar
The financial year runs from 1 April to 31 March
3 November 2020
Half-year results 2020/21
4 February 2021
Third-quarter results 2020/21
19 May 2021
Year-end results 2020/21
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

LEM Holding SAPage 3/6

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

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Appendix
Consolidated income statement
April to June
2020/212019/20

ChangeSales

74'316

82'635-10.1%

Cost of goods sold(41'248)(44'199)

Gross margin

33'06838'435Gross margin (in %)

44.5%

46.5%

Sales expense(6'659)(7'596)

Administration expense(6'580)(7'093)

Research & development expense(6'665)(7'130)

Other expense

(0)

(0)

Other income

132

52

EBIT

13'29516'668EBIT margin (in %)

17.9%

20.2%

Financial expense

(86)

(182)

Financial income

1527

Foreign exchange effect

258

199

Profit before taxes

13'482

16'712

Income taxes(2'355)(2'846)

Net profit of the period

11'126

13'866

Net profit margin (in %)

15.0%

16.8%

In CHF tho usands

LEM Holding SA-14.0%-20.2%-19.3%-19.8%

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Key Figures
2020/21

In CHF millions

Q2

Q1

Q1

Q2Q3Q4

Industry

47.5

71.3

54.8

63.8

64.5

254.3

-33.4%-26.3%

Automotive

12.0

17.2

17.2

17.5

16.4

68.2

-30.1%-26.7%

Total LEM

59.5

88.4

72.0

81.2

80.8

322.4

-32.7%-26.4%

Q1 - Q4

Q1Q1Q2Q3

Q4FY Q1 - Q1

Q1 - Q4

0.79

1.10

0.92

1.10

1.11

1.06

-28.0%-28.3%

Automotive

0.83

0.95

1.00

0.94

1.18

1.01

-13.1%-29.5%

Total LEM

0.80

1.07

0.94

1.06

1.12

1.05

-25.2%-28.6%FY Q1 - Q1

Q1 - Q4

Sales

Q1Q1Q2Q3Q4

Industry

59.8

64.6

59.3

58.2

58.2

240.4

-7.4%

+2.8%

Automotive

14.5

18.0

17.1

18.5

13.9

67.6

-19.5%+4.0%

Total LEM

74.3

82.6

76.4

76.7

72.2

307.9

-10.1%

+3.0%

Q1

Q1

Q2

Q3

Q4

FY Q1 - Q1

Q1 - Q4

Industry

12.3

14.3

13.2

11.5

11.4

50.4

-14.4%+7.4%

Automotive

1.0

2.4

1.9

3.2

0.5

7.9

-55.7% +104.5%

Total LEM

13.3

16.7

15.1

14.6

11.9

58.3

-20.2%+11.5%

Q1

Total LEM

11.1

LEM Holding SAQ2Q3Q3Q4FYEBIT

Net profit of the period

Q2

Q4FY

FY Q1 - Q1Industry

Q3Q4FY

Book-to-bill ratio

Q2

Q3Q4ChangeOrders received

Q2Q32019/20

Q4FYFY

Q1Q2

Q3

Q4

FY Q1 - Q1

Q1 - Q4

13.9

11.2

26.9

8.7

60.7

+28.1%-19.8%

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