Half Year Report
2013/14At the heart of power electronics

LEM | Half Year Report 2013/14

1

Business Report
Dear Shareholders,
We have recorded an excellent first half year of 2013/14. While delivering sales growth in most businesses,
we consistently did our homework by continuing on our path to increase the efficiency and flexibility of ouroperations. As a result of our efforts we have increased our margins to record levels.
The trend of the past years has remained unchanged. Customers kept low levels of stock, issued orders
with very short lead times and in so doing required high flexibility from us. Economic uncertainty remains
widespread these days and we keep receiving cautious outlooks from our customers.
Our sales in the first half year of 2013/14 increased by 2.2% to CHF 126.9 million. At constant exchange
rates, sales increased by 4.0%. Bookings for the first six months of 2013/14 amounted to CHF 124.3 million, an increase of 3.2% compared with the same period 2012/13. The book-to-bill ratio in Q2 of 2013/14
was at 0.91, pointing to a slowing of activity. In Q1 of 2013/14 our book-to-bill ratio reached 1.05.
The gross margin increased from 42.9% in the first half year of 2012/13 to 46.5% in the first half year of
2013/14. The EBIT for the first half year of 2013/14 reached CHF 30.2 million, an increase of 27.4% compared with the same period of 2012/13. The EBIT margin for the first half year of 2013/14 was 23.8%, aclear improvement compared with the already strong 19.1% in the first half year of 2012/13.
Net profit for the first six months of 2013/14 was CHF 24.5 million, an increase of 20.2% compared withthe same period in the financial year 2012/13.
Our balance sheet remains strong. As of 30 September 2013, total assets reached CHF 125.8 million.
Shareholders’ equity stayed high, at CHF 72.1 million (CHF 84 million as of 31 March 2013), representing
an equity ratio of 57.3% (62.0% as of 31 March 2013).
Industry segment: strong growth in China
Sales in the Industry segment reached CHF 109.8 million in the first half year of 2013/14, representing an
increase of 3.6% compared with the same period in 2012/13. At constant exchange rates, sales increased
by 5.2%. Market share gains in the drives & welding and high-precision businesses and strong support
from wind applications supported our performance. In addition, we recorded a faster than expected rampup of the recently launched HLSR product for solar applications, a product launched in the second halfyear of 2012/13. The EBIT increased from CHF 20.9 million for the first half year 2012/13 by 32.7% to CHF
27.7 million for the first half of 2013/14. We recorded the strongest sales growth in China (+33%). Sales in
Europe and North America declined each by 5%, while sales in Asia excluding China grew by 5%. Still,
Europe remained LEM’s biggest market, accounting for 43% of sales, followed by Asia with 42% of sales.
__ Sales in the drives & welding business increased by 9%, driven by strong market growth in China. The
other major regions delivered stable sales performance. LEM won market share on certain applications.
__ The renewables & power supplies business recorded strong performance of solar applications in Asia.
This was an effect of continued relocation of solar production from Europe and North America to China.
The increasing activity in off-shore wind parks in China, India and Europe provided tailwind for our windapplications. Overall sales increased by 1%.
__ Sales in the traction business weakened by 7%. While we won new orders for our new energy meter(EM4TII), we continued to be adversely affected by stagnating rail investments in Europe.
__ On the back of a strengthened market share our high-precision business delivered sales growth of 14%.
We were particularly successful with new medical projects in Europe and North America as well as with
HVDC (high-voltage direct current) projects in China.
Automotive segment: strong conventional cars business – pickup in the green cars business
Sales in the Automotive segment reached CHF 17.1 million in the first half year of 2013/14, a decrease of
6.1% compared with the same period in 2012/13. At constant exchange rates, sales decreased by 3.3%.
Sales in the Automotive segment picked up in the second quarter of 2013/14 with sales growing by 5.5%
compared with the first quarter; a growth that can be attributed to increased activity in the green cars business mainly in Europe and our reinforced sales and marketing organization in Asia. In the first six monthsof 2013/14, EBIT reached CHF 2.5 million, a decrease of 11.9% compared with the first half year of 2012/13.
__ In the conventional cars business, our sales grew by 3% compared with the first half of 2012/13. We
achieved this result thanks to the consistent demand for our battery management solution. The Japanese market remained at a constant level, while we recorded solid growth in North America.

LEM | Half Year Report 2013/14

2

__ In the second quarter of 2013/14 we started to see a recovery in the green cars business. Sales in thesecond quarter of 2013/14 increased by 53% compared with the first quarter of 2013/14. Still, in the firsthalf of 2013/14 sales were 35% lower than in the first half year of 2012/13. Volumes for the new CAB,
which measures the state of the battery, strongly increased since many customers wanted to use theproduct in their new hybrid vehicle projects.
Executing our strategy__ Increase technology leadership
We continue to renew our product portfolio to offer increased performance, new functionalities andreduced cost for our customers. At the same time we design products for most efficient assembly. In
the first half of 2013/14 we have launched three new products, two of them targeted for smart grid applications: the TOP 90-S, a split-core current sensor for easy mounting, and the RT 50, a product using
Rogowski coil measurement technology with high external field immunity. The RT 50 will provide accurate measurement for e.g. billing services while the TOP 90-S is targeted to be used in industrial smart
grid management applications. The new ITL1200 is a high-precision transducer for a new generation of
MRI (Magnetic Resonance Imaging) devices, measuring higher currents at constant performance.
Based on a worldwide technology survey conducted during the past six months we have identified andvalidated interesting new technologies for the next innovation cycle. We have defined our R&D priorities
and will plan our resources based on our findings.
Driving innovation and being ahead of our competitors remains our distinct priority. In the first half yearof 2013/14 we kept a high level of investment in R&D of CHF 7.3 million, representing 5.8% of sales.
__ Increase efficiency
The formation of our new site in Sofia, Bulgaria, is on schedule and budget. We have transferred the firstline of production, and since 1 October 2013 we have been ramping up production. In the next months
we will be making additional transfers to the new site where we plan to employ up to 50 people by theend of the financial year 2013/14. The new site in Sofia will help us to diversify our low cost production
and increase the efficiency of our operations.
We are also constantly searching for new and better processes. As a result of a lean manufacturing project in China, we have reorganized the layout of the production lines and thereby further increased productivity. In Switzerland we ramped up the highly automated production of the new HLSR product.
__ Increase production flexibility
Our clients’ preference for short term orders remained a key challenge. We have achieved a high levelof flexibility as evidenced by our high and stable service level to customers. Our goal is to maintain thesehigh levels by further optimizing our supply chain and forecasting methods.
OutlookIn the second half year of 2013/14 we expect business activity in the Industry segment to ease, given thesignals we are currently receiving from market participants. We expect sales growth in the Automotive
segment to resume thanks to our strong battery management applications and a recovery in the green
cars business. Managing the economic uncertainty in most regions and ramping up production at our newsite in Sofia, Bulgaria, will be our main operational challenges for the remainder of the financial year.
For the full financial year 2013/14 we expect sales of CHF 240 to 250 million, compared with CHF 235 million in the financial year 2012/13. Given the excellent start into the financial year 2013/14, we expect fullyear EBIT margin to be above 20%.
Again, LEM has demonstrated its competitive strengths. Continuously improving the efficiency and flexibilityof our operations as well as extending our technological edge have become the DNA of the organization.
We thank you for your continued trust in LEM.

Andreas Hürlimann
Chairman of the Board of Directors

François Gabella
Chief Executive Officer

LEM | Half Year Report 2013/14

3

Key Figures, Financial Calendar,
Contacts
Key figures

First half vs. first half

Second quarter vs. first quarter2013/14
In CHF million

2012/13*
In CHF million

ChangeIn %Q2 2013/14
In CHF million

Orders received

124.3

120.5

+ 3.2

Book-to-bill ratio

0.91

0.98

– 7.1

Sales

126.9

124.2

+ 2.2

Gross profit
In % of sales

Q1 2013/14
In CHF million

Change
In %

59.3

65.1

– 8.9

0.91

1.05

65.1

61.8

+ 5.3

59.0

53.3

+ 10.7

30.9

28.1+ 10.1

46.5%

42.9%

+ 3.6pt

47.5%

45.4%

+ 2.1pt

EBIT

30.2

23.7

+ 27.417.0

13.3+ 27.9

23.8%

19.1%

+ 4.7pt

26.1%

21.5%

+ 4.6pt

Net profit for the period

24.5

20.4

+ 20.214.8

9.8+ 51.2

EPS basic

21.56

17.97

+ 20.0Operating cash flow

15.5

23.0

– 32.5Investing cash flow

– 4.6

– 7.4

– 38.330.9.1331.3.13

Change
In %

3.8

27.6

– 86.2

Shareholders’ equity

72.1

84.0

– 14.2Equity ratio (in % of total assets)

57.3

62.0

– 7.5

Market capitalization

723.9

671.5

+ 7.8

Employees (FTEs)

1'222

1'137

+ 7.5

In % of sales* Restatement following IAS19R application (pensions).

Net financial assets/ (­liabilities)

Sales per segment

Regional sales breakdown

In CHF millions

In CHF millions

70

63.1

60

61.8

61.1
55.0

65.1

70
63.1
60

55.8

50

50

40

40
30

30

20

20
10
0

85%

86%

84%

85%

87%

87%

15%

14%

16%

15%

13%

13%

61.8

61.1
55.0

37%
19%
44%

40%
20%
40%

40%
21%
39%

65.1

55.8

35%

41%

43%

20%

20%

18%

45%

39%

39%

10
0

Q1 2012/13 Q2 2012/13 Q3 2012/13 Q4 2012/13 Q1 2013/14 Q2 2013/14

Q1 2012/13 Q2 2012/13 Q3 2012/13 Q4 2012/13 Q1 2013/14 Q2 2013/14

Industry segment
Automotive segment

Asia and Rest of the World
North America
EuropeFinancial calendar
The financial year runs from 1 April to 31 March

18 February 2014

Third quarter results 2013/14

4 June 2014

Year-end results 2013/14

26 June 2014

Ordinary shareholders’ meetingfor the year 2013/14

1 July 2014

Dividend ex-date

4 July 2014

Dividend payment date

LEM | Half Year Report 2013/14

4

Media andinvestor contact
Julius Renk (CFO)
Phone: +41 22 706 1250
E-mail: investor@lem.com

Address
LEM Holding SA
Avenue Beauregard 1
CH-1700 Fribourg
Phone +41 26 460 10 30
Fax +41 26 460 10 39
www.lem.com

Interim
Consolidated
Financial
Statements

Consolidated Statement of
Financial Position
AssetsIn CHF thousands

Notes

30.9.2013

31.3.2013*

1.4.2012*

Current assets
Cash and cash equivalents

12'80427'62921'121

Accounts receivable

47'73443'08042'140Inventories

26'421

23'61926'6052'009

Income tax receivable
Other current assets

4

Total current assets

588

1'264

2'723

3'250

2'956

90'271

98'841

94'831

Non-current assets
Deferred tax assets

3'470

3'828

3'696

Property, plant and equipment

25'87825'37324'173

5'386

5'900

6'657

799

1'669

495

Total non-current assets

35'53336'77135'021

Total assets

125'804

135'613

129'852

30.9.2013

31.3.2013*

1.4.2012*

Intangible assets
Other non-current assets

4

Liabilities and equity
In CHF thousands

Current liabilities
Accounts payable

16'484

16'766

17'863

Accrued expenses

14'37314'90014'855Current income tax payable

5'076

11'3198'244

Current provisions

5

4'528

3'668

3'043

Current financial liabilities

6

9'000

Other current liabilities

7

390

1'377

632

49'851

48'03047'637

960

1'250

457

2'412

1'671

3'614

Total current liabilities

3'000

Non-current liabilities
Non-current provisions

5

Deferred tax liabilities
Other non-current liabilities

473

613

1'644

Total non-current liabilities

3'845

3'534

5'715

Total liabilities

53'69651'56453'352EquityShare capital

8

570

570

570

Treasury shares

8

(904)

(765)

(1'984)

Reserves

10'710

12'250

11'425Retained earnings

61'732

71'99366'489Equity attributable to shareholders

72'10884'04976'500Total equity

72'10884'04976'500Total liabilities and equity

125'804

135'613

129'852

Non-controlling interests* Restatement following IAS19R application (pensions).

LEM | Half Year Report 2013/14

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Consolidated Income Statement
April to September
In CHF thousands

Sales
Cost of goods sold

10

Gross margin

2013/142012/13*

126'897

124'195(67'927)(70'935)

58'96953'259

Sales expense10(11'565)(11'553)

Administration expense10(9'909)(11'058)

Research & development expense10(7'338)(6'946)

(57)

(150)

Other expense
Other income

125

173

Operating profit

30'22423'725

Financial expense

(81)

(71)

Financial income

46

51

(710)

722

29'48024'428Exchange effect11

Profit before taxes
Income taxes
Net profit for the period

12(4'937)(4'007)

24'54220'421

24'54220'421Attributable to:Shareholders
Non-controlling interests

00

Net profit for the period

24'54220'421

21.56

17.97

* Restatement following IAS19R application (pensions).

Earnings per share, in CHF

Basic and diluted earnings per share

LEM | Half Year Report 2013/14

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Consolidated Statement ofComprehensive Income
April to September
In CHF thousands

2013/142012/13*

Net profit for the period recognized in the income statement

24'54220'421

Currency translation difference(1'680)

1'264

(527)

(1)

Total comprehensive income for the period

22'33621'684Attributable to shareholders

22'33621'684Remeasurement of defined benefit obligations, net of tax* Restatement following IAS19R application (pensions).

Consolidated Statement of
Changes in Equity
Attributable to equity shareholders
In CHF thousands

Share ­capital

Treasury shares

Capital reserve

Translation
reserve

Retained­earnings

Total equity

1 April 2012570

(1'984)13'927(2'502)69'55079'561

IAS 19R adj.
1 April 2012
restated and unaudited570(1'984)13'927(2'502)

Net profit for the period
Other comprehensive
income/loss

1'264

Total comprehensive income

1'264

Dividends paid
Movement in treasury shares(3'061)(3'061)

66'48976'50020'421

20'421(1)

1'263

20'42021'684(28'374)(28'374)

1'106(1'106)

1'276

1'276

30 September 2012
restated and unaudited

570

(878)

12'821(1'238)59'811

71'086

1 April 2013
restated and unaudited

570

(765)

12'708(457)

71'99384'049Net profit for the period
Other comprehensive
income/loss(1'680)Total comprehensive income(1'680)

Dividends paid
Movement in treasury shares
30 September 2013

LEM | Half Year Report 2013/14

570

8

(139)

139

(904)

12'847(2'137)

24'542

24'542(527)(2'206)24'01522'336(34'157)(34'157)

(120)

(120)

61'73272'108

Consolidated Cash Flow Statement
April to September
In CHF thousands

Notes

2013/142012/13*29'48024'428Cash flow from operating activities
Profit before taxes
Adjustment for non-cash items and taxes paid

13

Cash flow before changes in net working capital
Cash flow from changes in net working capital

13

Cash flow from operating activities(5'387)241

24'09324'669(8'553)(1'630)

15'54023'039(4'101)(3'172)

Cash flow from investing activities
Investment in fixed assets
Investment in intangible assets(Increase) / decrease in other assets

(520)

(163)

24

(4'110)(4'597)(7'445)

13

Cash flow from investing activities
Cash flow from financing activities
Treasury shares acquired (-) /divested (+)

13

(120)

1'276

Dividends paid to the shareholders of LEM Holding SA

8(34'157)(28'374)

Increase / (decrease) in financial liabilities

13

9'000

2'000

Cash flow from financing activities(25'277)(25'098)

Change in cash and cash equivalents(14'334)(9'504)27'62921'121(491)

771

12'804

12'388Cash and cash equivalents at the beginning of the period
Exchange effect on cash and cash equivalents
Cash and cash equivalents at the end of the period

13* Restatement following IAS19R application (pensions).

LEM | Half Year Report 2013/14

9

Notes to the Interim Consolidated
Financial Statements
1 General information
LEM Group is a market leader in providing innovative and high quality solutions for measuring electrical parameters. Its coreproducts – current and voltage transducers – are used in a broad range of applications in drives & welding, renewable energies& power supplies, traction, high precision, conventional and green cars businesses.
2 Significant accounting principles
These unaudited consolidated financial statements for the six months ended on September 30, 2013 have been prepared inaccordance with International Accounting Standard (IAS) 34 “Interim Financial Reporting”. They do not include all the information and disclosures presented in the annual consolidated financial statements and should therefore be read in conjunction withthose for the year ended 31 March 2013.
The accounting and valuation policies are consistent with those applied in preparing the annual consolidated financial statements for the year 2012/13, except where noted below.
The preparation of the interim consolidated financial statements in conformity with IFRS requires management to make estimatesand assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and related disclosures at thedate of the interim financial statements. These estimates are based on management’s best knowledge of current events andactions that the Group may undertake in the future. However, actual results could differ from those estimates.
In accordance with IAS 1 ‘Presentation of Financial Statements’, the financial information is presented in thousands of CHF. The
totals are calculated with the original unit amounts, which could lead to rounding differences. These differences in thousands ofunits are not changed in order to keep the accuracy of the original data.
In 2013/14, LEM Group introduced the following revised standards and interpretations:Standard or­I nterpretation

Title

ImpactEffective date

IAS 1

Presentation of items of Other Comprehensive Income –Amendments

None

1 July 2012

IAS 19

Employee benefits – Revised

Refer to note 9

1 January 2013

IAS 27

Separate Financial Statements – Revised

None

1 January 2013

IAS 28Investments in associates and joint ventures – Revised

None

1 January 2013

IFRS 7

Disclosures – Offsetting Financial assets and Financial
liabilities – Amendments

None

1 January 2013

IFRS 10

Consolidated Financial Statements

None

1 January 2013

IFRS 11

Joint arrangements

None

1 January 2013

IFRS 12Disclosure of Interests in Other Entities

None

1 January 2013

IFRS 10, IFRS
11, IFRS 12

Amendments to Consolidated Financial Statements, Joint
arrangements and Disclosure of interests in other entities:
transition guidanceNone

1 January 2013

IFRS 13

Fair Value Measurement

None

1 January 2013

IFRIC 20

Stripping costs in the Production Phase of a Surface
Mine

None

1 January 2013

Amendments

Annual improvements to IFRS

None

1 January 2013

The new and revised standards do not have a material effect on the consolidated financial statements of LEM Group except IAS
19 Revised as disclosed in the note 9 – Application of IAS 19 (as revised in June 2011) – Impact.

LEM | Half Year Report 2013/14

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The following table summarizes the principal exchange rates that have been used in the translation process.
Period-end rate for balance sheet
30.9.1331.3.13

BGN

0.625

0.621

CNY

0.147

0.151

DKK

0.164

EUR
GBP

Period average rate for income statement

Var. in %2013/142012/13

Var. in %+ 0.6%

0.63

N/A– 2.7%

0.152

0.15

+ 1.3%

0.163+ 0.6%

0.165

0.162

+ 1.9%

1.223

1.216

+ 0.6%

1.233

1.202

+ 2.6%

1.463

1.442

+ 1.5%

1.446

1.5– 3.6%

JPY

0.00920.0101– 8.9%

0.00950.012– 20.8%

RUB

0.028

0.031

– 9.7%

0.029

0.03

– 3.3%

USD

0.905

0.949

– 4.6%

0.938

0.949

– 1.2%

3 Segment information
April to September 2012
In CHF thousands

April to September 2013
Industry

Automotive

LEM Group

In CHF thousands

Sales

105'992

18'203124'195

Operating profit

20'8852'840

23'725

Industry

Automotive

LEM Group

Sales

109'804

17'092

126'897

Operating profit

27'7232'501

30'2244 Other current and non-current assets
The decrease of the other current and non-current assets is linked to the reduction of the pension assets between 31.3.2013
as restated per IAS 19 Revised and 30.9.2013 and as detailed in note 9.
5 Current and non-current provisions
Per 30 September 2013, provisions increase compared to 31 March 2013 is mainly due to warranty provisions.
Transfer of activity follow-up
On 8 February 2013, LEM had announced the launch of a new production plant in Sofia, Bulgaria. As a continuation of a strategy
initiated in 2004, LEM will continue to relocate production lines from the plants in Machida, Japan, and Geneva, Switzerland, to
low-cost countries. Over the next years, the operations in Japan will be significantly reduced and concentrate on the local Japanese market. In Switzerland, the operations will be progressively reduced and focused on high-complexity / high-precision
products for worldwide markets. In parallel, LEM’s site in Switzerland will be reinforced with continued investment in R&D andmarketing.
In 2012/13, LEM had announced the relocations to the concerned employees in LEM Switzerland and LEM Japan following thepress release. A CHF 1’930 thousand provision had been charged to the income statement at 31.3.2013 in relation with theabove-mentioned relocations of activity. After foreign exchange effect, the provision position amounted to CHF 1’830 thousandat 31.3.2013.
On 28 August 2013, LEM individually informed its employees that the headcount at its Geneva site will be reduced through 13
layoffs. LEM has agreed with the employee representatives on a social plan and support for the affected employees. The expected
cost of the restructuring plan is in line with provisions recorded and will not lead to additional cost in financial year 2013/14.
6 Current financial liabilities
LEM Group increased financial short-term liabilities to CHF 9.0 million (CHF 0.0 million at 31 March 2013) via short-term credit
lines in order to finance the CHF 34.2 million dividend.

LEM | Half Year Report 2013/14

11

7 Other current liabilities
Other current liabilities decreased primarily due to the change in the fair value of the derivatives in relation with foreign exchange
hedging.
8 EquityAt the shareholders’ meeting held in Fribourg on 27 June 2013, the shareholders approved the distribution of an ordinary
dividend of CHF 30.00 per share. The gross dividend paid on 5 July 2013 amounted to CHF 34’157 thousand (prior year:
ordinary dividend of CHF 25.00; total CHF 28’374 thousand).
In the frame of its market-making contract, LEM has acquired a net of 191 shares for a total amount of CHF 139 thousand.
At 30 September 2013, LEM owns 1’507 treasury shares.
9 Application of IAS 19 (as revised in June 2011) – Impact
The adoption of IAS 19R – Employee benefits (revised) had significant impacts on LEM Group consolidated financial statements:__ Elimination of the corridor approach: the recognition of actuarial gains and losses must be recognized immediately in othercomprehensive income.
__ Calculation of pension costs: the net interest on the net defined benefit liability (asset) replaces the actual return on plan assets
from one side and the calculation of the interest expense on defined benefit obligation on the other side. It is now presented
in the financial result instead of included in the operating profit.
__ Risk sharing: the increased employee contributions based on the age of the employees are now taken into account in thedefined benefit obligation calculation.
This adoption led to the restatement of prior periods according to IAS 8.
The impacts on the set of consolidated financial statements are the following:
Consolidated Income Statement for the six months ended 30 September 2012
HY 2012/13
RecordedPensionadjustments

HY 2012/13
Restated

Cost of goods sold(70’892)(43)(70’935)

Sales expense(11’536)(17)(11’553)

Administration expense(11’037)(21)(11’058)

In CHF thousands

Research and d­ evelopment expense(6’923)(23)(6’946)

Operating profit

23'829(104)

23'725

Financial expenses

(58)

(13)

(71)

Profit before taxes

24'544(116)

24'428

Income taxes(4’015)8(4’007)

Net profit for the period

20'529(108)

20'421

Basic and diluted earnings per share

18.06(0.09)

17.97

Consolidated Statement of Comprehensive Income for the six months ended 30 September 2012
In CHF thousands

Net profit for the period

HY 2012/13
RecordedPensionadjustments

HY 2012/13
Restated

20'529(108)

20'421Remeasurements employee benefits

0

(74)

(74)

Taxes on other ­comprehensive income

0

72

72

Currency translation difference

1'264

0

1'264

Total comprehensive income for the period

21'793(109)

21'684

LEM | Half Year Report 2013/14

12

Consolidated Statement of Financial Position as at 1 April 2012
31.3.2012
Published

Pension adjustments

Other non-current assets \ Pension assets – Non-current

3'368(2’873)

495

Deferred tax assets

3'485

211

3'696

In CHF thousands

1.4.2012
Restated

AssetsLiabilities
Other non-current liabilities \ Pension liabilities
Deferred tax liabilities

642

1'002

1'644

4'217

(603)

3'614

69'550(3'061)

66'48931.3.2013
Published

Pension adjustments
2012/1331.3.2013
Restated

5'924(4’255)

1'669

2'647

(976)

1'671

75'272(3’279)71'993EquityRetained earnings

Consolidated Statement of Financial Position as at 31 March 2013
In CHF thousands

AssetsOther non-current assets \ Pension assets – Non-current
Liabilities
Deferred tax l­iabilities
EquityRetained earnings

Consolidated Statement of Changes in Equity for the six months ended 30 September 2012
In CHF thousands

HY 2012/13
RecordedPensionadjustments

HY 2012/13
Restated

01 April 2012

79'561(3’061)76'500Net profit of the period

20'529(108)

20'421Other comprehensive income

1'264

(1)

1'263

Total comprehensive income

21'793(109)

21'68430 September 2012

74'255(3’170)71'086

HY 2012/13
RecordedPensionadjustments

HY 2012/13
Restated

24'544(116)

24'428

125

116

241

23'0390

23'039Consolidated Cash Flow Statement for the six months ended 30 September 2012
In CHF thousands

Profit before taxes
Adjustment for non-cash items and taxes paid
Cash flow from operating activities

10 Operating profit
The gross margin increase of CHF 5.7 million can be explained by the positive impacts of price and mix, lower costs, favorable
foreign exchange rate evolution and increased volumes.
The decrease in operating expenses contributed to the increase in the operating profit of CHF 6.5 million. The decrease in administration expense of CHF 1.1 million is the main driver of the operating expenses and can mainly be explained by the liquidationof LEM Danfysik on 8 April 2013 and by lower recruitment costs than last year.
The business report further details these evolutions.

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11 Exchange effect
The foreign exchange effect is driven by the currencies’ parity versus Swiss franc.
In the first half of last year, JPY, CNY and USD were revaluating compared to CHF versus previous period. In the first half
2013/14, JPY was devaluating compared to CHF whereas CNY and USD remained fairly stable.
12 Income taxes
Income tax expense is calculated based on the best estimate of the applicable annual income tax rate expected for the full year.
Following its qualification as High/New Technology Enterprise (HNTE) in China, LEM China enjoys reduced income tax rates
from 2011 to 2013. The status will need to be confirmed for 2012 and 2013. Depending on the legal situation in the People’s
Republic of China, this status can possibly be renewed for 2014 to 2016. As per 30.9.2013, the confirmation for 2012 and 2013is still under consideration by the Chinese tax authorities. On the basis of the existing documentation, management considers
that the chance of obtaining the confirmation for 2012 and 2013 is significantly higher than the risk of losing the HNTE status.
LEM China has therefore been reported with a 15% income tax rate.
Given the stable expected tax rate, the effective tax rate at 30 September 2013 is in line with the one at 30 September 2012.
13 Consolidated cash flow statement
The adjustment for non-cash items has reduced by CHF – 5.6 million compared to 30 September 2012 mostly due to taxes paid.
The cash flow from changes in net working capital evolution is linked to the increase of the business volumes during the first halfyear 2013/14 which leads to net working capital positions increase.
Last year increase in other assets was due to an additional contribution to the pensions plan assets of CHF 4.0 million.
In the first half year 2012/13, treasury shares movements were linked to the sale of the remaining treasury shares on LEM’s own
account for a total amount of CHF 1.6 million net of the acquisitions done in the frame of the market-making. This year movements only rely on the shares acquired through the market-making.
The financial liabilities increase is linked to the CHF 34.2 million dividend financing.
The exchange effect on cash and cash equivalent is driven by the currencies’ parity versus Swiss franc, as explained in note 11.
Exchange effect.
14 Changes in scope of consolidation
On 8 April 2013, the company incorporated as LEM Danfysik A/S was liquidated without any impact on the consolidated equity.
LEM is currently in the process of simplifying the structure of its European agencies. At 30 September 2013, this has not generated any changes in the scope of consolidation.
15 Events after the balance sheet date
The Board of Directors and Senior Management are not aware of any significant events up to the date of approval of the interim
consolidated financial statements on 6 November 2013 that would require an adjustment in carrying amounts of the Group’s
assets and liabilities.

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Postal address
LEM Holding SA
P.O. BOX 785
CH-1212 Grand-Lancy 1

Visitors’ address
LEM Holding SA
8, chemin des Aulx
CH-1228 Plan-les-Ouates
Phone +41 22 706 11 11
Fax +41 22 794 94 78
www.lem.com

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