First Half Year Results
2010/119 November 2010

1Agenda1. LEM at a Glance
2. Business Review
3. Financial Review
4. Outlook

11. About LEM■ LEM is the global market leader in providing innovative and high quality
solutions for measuring electrical parameters■ The current and voltage transducers are used in a broad range ofapplications in Industrial, Traction, Energy & Automation and Automotivemarkets■ LEM is a high growth global company with approximately 1’200 employees
Production plants are in Geneva (Switzerland), Beijing (China), Machida(Japan), Copenhagen (Denmark), and regional sales offices close to theclientslillocationsi■ LEM is listed on the SIX Swiss Exchange since 1986 and has a market capof CHF 422.9 million per 30.09.2010
3
9 November 2010

1. LEM Production & Logistics World-Wide

Production Centers (PDCs)
Adaptation Centers
Sales Offices
Agents / Distributors
4
9 November 20102

1. LEM at a Glance - Markets Served
Traditional Markets

New Markets

Industry
Motor drives, power conversion
psupplies,pp, UPS,,
AC/DC,, powerwelding, medical scanner, newenergies, leakage current■ Test & measurement

Automotive■

Traction & Trackside
On-board applications,inverters■ Trackside and energy
monitoring

Conventional Cars
B tt
BatteryManagementMt■■

Green Cars (HEV, EV)
Battery Pack
Electric Motor Control

Energy & Automation■■■

Process control

B tt
Battery
monitoring
it i■Energy metering

5
9 November 2010

2. Business Review

32. Highlights H1 2010/11 - Strong Results

GrowthIn CHF million

H1 2009/10

H1 2010/11

H1 2010/11 toH1 2009/10

Sales

78.8

141.8

80%

12%

OperationalEBIT

8.6

30.3

252%

21%

Q2 to Q1
2010/11After accounting for the stock option plans
EBIT

3.829.9688%

24%

Net profit

1.619.8

1’160%

41%
79 November 2010

2. Net Sales
In CHF millions

Sales

GrowthH1 to H1Growth
Q2 to Q1Total Sales

141.880%

12%

200

Industrial

130.880%

13%

175

Automotive

11.0

79%

10%

In CHF millions

150125
100
75
50
250
2006/07

2007/08

2008/09

2009/10

HY 10/11

8

9 November 20104

2. Industrial Segment: Regional Markets
Sales growth
rates

ROW 2%

EuropeAsia 34%

N. America
11%

H1 to H1Q2 to Q1

73%

10%

N. America

58%

8%

Asia

103%

17%

ROW

63%

76%

Total

80%

13%

Europe 53%■ Total sales CHF 130.8 million for H1 2010/11
99 November 2010

2. Industrial Segment: Business Development
In CHF millions

Op. EBIT in % of sales

Market and Applications H1 to H1
25200160

20120

1580

1040

50006/07

07/08

08/09

09/10

HY 10/11

Industry: increased by 104% speciallyin the areas of motor drives and renewableenergyTraction: increased at a pace of 11%
mainly due to energy metering andincreased demand in China
Energy & Automation: increased by66% still from a small basis
basis. Mainly due toSentinel for Battery Monitoring

109 November 201052. Automotive Segment: Regional Markets
Sales growthrates

Europe 13%

Asia 35%

H1 to H1Q2 to Q1

Europe179%-15%

N. America

100%

31%

Asia

41%-5%

Total

79%

10%

N. America
52%■ Total sales CHF 11.0 million for H1 2010/11
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9 November 2010

2. Automotive Segment: Business Development
In CHF millions

Op. EBIT in % of sales

25252020

1515

1010

550006/07

07/08

08/09

09/10

HY 10/11‐5‐5‐10‐10‐15‐15Market• Upswing of the market in general• Start of production for several HEV inEurope, USA and Asia

Applications• Conventional Cars:• Batteryy Managementg• Green Cars (HEV, EV)• Battery Pack
• Electric Motor Control
129 November 201062. Business Development - ChinaSales• Sales growth of 83% from same period
last year• Market share over 50%
70

Production• Continued transfer of key products• “Made by LEM” quality
70

In CHF millions

In CHF millions

60

60

5050

40

40

30

30

20

20

10

10

00
06/07

07/08

08/09

09/10

HY 10/11

06/07

07/08

08/09

09/10

HY 10/11

139 November 2010

3. Financial Review73. Consolidated Balance Sheet
In CHF thousands

31.03.2010

30.09.2010

Cash and cash equivalents

29’75619’387

Accounts receivable

43’45460’572Inventories

21’74432’098O
Othercurrent assets

1’989

2’ 8
2’787

Total non-current assets

35’71934’366

Total assets

132’662

149’209

Accounts payable

23’41635’347

Other current liabilities

19’77531’729Total non-current liabilities

6’092

6’389

Equity83’37975’744

Total liability
y and equity
q y132’662

149’209

14.8%

10.8%

Avg. net working capital % sales
 Inventory turns

4.85.0 Equity ratio

63%

51%

 Net financial assets (CHF millions)

29.7

11.3

159 November 2010

3. Income Statement
In CHF thousands

H1
2009/10H1
2010/11

ChangeQ1
2010/11

Q2
2010/11

ChangeSales

78’816

141’780

80%

66’78674’99412%Gross margin %

42.7

43.7

1.0%pt
p

43.6

43.8

0.2%ptp

SG&A(25’079)(31’666)(26%)(15’413)(16’253)(5%)

Operational EBIT*

8’606

30’327252%

13’735

16’59221%

Additional SOP
income / costs(4'811)

(428)

91%

(388)

(40)

90%

EBIT

3’795

29’899687%

13’347

16’552

24%

Net financialexpense(737)(2’650)(260%)(1’668)

(982)

(41%)

Income taxes(1’487)(7’439)(400%)(3’469)(3’970)(14%)

Net profit

1’571

19’8101’160%

8’210

11’60041%

169 November 20108

3. Results by Quarter100

H1 2010/1130%

9080
7020%

H1 2009/10
6050
4010%

3020

■ 5 consecutive growth quarters■ 12% sales increase vs Q1■ Advanced orders in Q1■ Q2 book-to-bill ratio 1.2

1000%
Q108/09

Q208/09

Q308/09

Q408/09

Q109/10Q209/10

Q309/10

Orders received

Q4
09/10

Sales

Q1
10/11

Q2
10/11
Op. ROS17

3. Gross Margin Development
GM % of sales In CHFmillions

In CHF millions

H1
2009/10H1
2010/11

Q1
2010/11

Q2
2010/11

Gr. margin

33.7

62.0

29.1

32.9

Gr. margin% Sales

42.7%

43.7%

43.6%

43.8%

47%
9045%
7543%
6041%
4539%

3037%

15

■ Gross margin
g stable at 43.8%■ Driven by volume leveraging■ Despite adverse exchange rate
effects

35%

006/07

07/08

08/09

09/10

HY 10/11

189 November 201093. Operational EBITOp EBIT % of sales In CHFmillions

In CHF millions

H1
2009/10H1
2010/11

Q1
2010/11

Q2
2010/11

8.6

30.3

13.7

16.6

21.4%

20.6%

22.1%

25%

Op EBIT
3020%

Op EBIT
10.9%% Sales

15%
2010%

 Excluding additional SOP
cost/income■ Exceptionally good profitability in Q2

105%

0

 Measures to strengthen the structure ofthe organization not yet fully reflected in
19
cost

0%
06/07

07/08

08/09

09/10

HY 10/11

9 November 2010

3. Additional Stock Option Plan Income / Costs
In CHF thousands

H1
2009/10H1
2010/11Add SOP Income / costs
Add.

(4’811)(4811)(428)

Additional SOP Income / Costs

 SOP costs driven by exercise and revaluation at period-end
 Valuation according to IFRS; time value of option decreases over time Reminder: SOP 5 will be closed per 31.3.2011, SOP 6 per 31.3.2012 as the last plan
 Stock price CHF 340 per 31.3.2010 Æ CHF 367.75 per 30.9.2010

340
31.3.2010

345
30.6.2010367.7530.9.201020

9 November 201010

3. Financial Expense
H1
2009/10H1
2010/11

Financial expense + income

(143)

(244)

Foreign exchange effect(594)(2’406)

Total(737)(2’650)Financial Expense (net)
In CHF thousands

 CHF 8 million bank loans generated interest expense Foreign exchange effect mainly driven by EUR devaluation

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9 November 2010

3. Income Taxes
In CHF thousands

Q1
2010/11

Q2
2010/11

H1
2009/10H1
2010/11EBT

11’67915’570

3’059

27’249

Income taxes(3’469)(3’970)(1’487)(7’439)Effective tax rate

29.7%

25.5%

48.6%

27.3%

Q1
2010/11

Q2
2010/11

H1
2009/10H1
2010/11

Expected income tax rate

26.9%

22.1%

32.7%

24.2%

Expected withholding taxrate*

2.8%

3.4%

15.9%

3.1%

Expected tax rate*

29.7%

25.5%

48.6%

27.3%

 Reduction of the expected tax rate with increasing volume in low tax entities* Including CHF 486 k adjustment on prior year WHT

22113. Net Profit
In CHF millions% of sales

2525%

In CHFmillions

H1
2009/10H1
2010/11

Q1
2010/11

Q2
2010/11

Net profit

16
1.6

19 8
19.8

82
8.2

11 6
11.6
H1 2009/10

20%

20-4.8
-0.7

8.6

15%

-1.5
1.6

1510%
-0.410-2.7-7.45%

H1 2010/11

30.3519.80%

0-5%
06/07

07/08

08/09

09/10

Op. EBIT SOP inc./costs

FinancialexpenseIncometax

Net profit

HY 10/11

23

9 November 2010

3. Share buy back■ Successfully launched 1 September 2010
■ Runs for one year
yand a half,, for a volume of up
p to CHF 15 million
on a second trading line
■ Initiated in anticipation of future growth and considering high net
cash position■ Goal is to increase financial leverage and finance the company
through a healthy mix of equity financing and loans■ As a result LEM took up bank loans of CHF 8 million and excess
cash was reduced■ On the 30 September 2010, 7’000 shares have been bought for a
total amount of CHF 2’458 thousand2412

4. Outlook

4. Key findings of the CEO after 4 months■ Excellent brand and market recognition■ Strongg technical know-how for pproducts,, technology
gy andapplications■ Broadest product portfolio in the market■ Economies of scale■ Low cost manufacturing→LEM is a strong company

2613

4. Areas of Focus
1. Strengthening the organization:■ Jean-Marc Peccoux nominated VP of R&D■ Luc Colombel to focus on the Automotive segment, increasing
importance for LEM■ Hans Dieter Huber to lead the Industrial Business maximizing thesynergies
2. Match market demands■ Secure additional sourcing volumes■ Increase capacity
3. Continued emphasis on innovation

27

4. Market Factors and Strategy■ We firmlyy believe in our Strategicg
Direction and the 4 drivers for ourbusiness remain unchanged■ We will continue to capitalize onthe drivers of LEM’s market

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9 November 201014

5. Outlook
We are confident for the rest of the year but remain alert as global
economic and currency related uncertainties could impact the results in2011.
2011■ We expect sales to reach CHF 285 to 295 million for the full year
2010/11■ This is an increase of over 50% compared to last year CHF 185.5
million29
9 November 2010

5. Financial Calendar and Contact Details
Financial calendar

9 November
15 February
9 June1 July2010
2011
2011
2011

Q2 2010/11 results
Q3 2010/11 results
Full year 2010/11 results
Shareholders’ Meeting

For further informationSuzanne Hochheimer
CCorporatet Communications
Ci tiTel.: +41 22 706 12 57
E-mail: suh@lem.com

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9 November 201015