Press release

LEM announces robust financial results for full year 2018/19
Fribourg, Switzerland, 22 May 2019 – LEM (SIX: LEHN), a leading global company in electricalmeasurement for industry and automotive applications, announces full year results for 2018/19(April-March) compared to 2017/18:•

Sales increased by 6.8% to CHF 321.6 million (CHF 301.2 million); at constant exchange rates,
sales increased by 5.8%

•The global spread of sales remains steady across different regions:– China CHF 106.3m (33.1% of total)– Europe CHF 107.2m (33.3% of total)– North America CHF 43.2m (13.4% of total)– Rest of World CHF 64.8m (20.1% of total)•

R&D up by 29.7% to CHF 27.6 million (CHF 21.3 million), or 8.6% of sales, to capture newopportunities•

EBIT increased by 2.6% to CHF 64.8 million (CHF 63.1 million); the EBIT margin declined slightly
to 20.1% (21.0%)•

Net profit for the period was down by 3.8% at CHF 52.4 million (CHF 54.4 million)•Dividend to be increased from CHF 40 to CHF 42 per shareFrank Rehfeld, Chief Executive Officer, said: “We are pleased to report another year of robust
results, which in the context of the global economic slow-down, was a more than satisfactory
performance. 61% of our top-line growth came from Automotive customers, led by the transition togreen cars. The fundamental prospects for LEM remain strong, driven by the mega trends of energy
efficiency, mobility and automation. China is our largest market, and provides the biggest strategic
opportunity for LEM to grow in the medium-term.
Far from being a mature market, electrical sensing products are undergoing significant mutations,driven by new applications and technologies. We continue to increase our investments in R&D, now at
8.6% of sales; this is clearly bearing fruit as we launched eight new products.
This year was one of accelerating change – both for our markets, and for the way we run LEM. We aremaking our organization more agile to ensure we capture and manage significant growth opportunities.”
Andrea Borla, Chief Financial Officer, remarked: “The strength of our business is demonstrated by
our ability to significantly increase R&D investments by 29.7%, and still grow EBIT by 2.6% to CHF
64.8 million. Cash flow of CHF 53.5 million from operating activities remains strong, and our balance
sheet is essentially debt-free. With an increased dividend of CHF 42 per share, we remain confident
that LEM will deliver another solid financial performance in the coming year.”

LEM Holding SA

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Industry segment: steady performance as expected
Twelve months sales in the Industry segment totaled CHF 250.2 million, up 3.3%. At constantexchange rates, sales increased by 2.4%. Sales decreased by 3.6% in China, rose in Europe by 5.2%
and in North America by 9.6%, and increased in Rest of World by 7.3%.
in CHF millions

2018/192017/18

Businesses
Drives

113.3

113.3

Renewable
Energy77.0

74.6

Traction

48.6

45.0

High precision

11.3

9.4

Total Industry

250.2

242.2

Change Comments+0.1% •••
+3.2% •

China & Japan sluggish demand
Other markets good growth across portfolio
Strong interest in new products

Gained market share in Europe and India• Won designs with new products• China lower due to solar policy changes+8.0% • Growth in China and India• Higher investments Eastern Europe & Russia+20.2% • Strong demand for EV car test benches• New products well received+3.3%

Automotive segment: shift to green cars accelerates
Twelve months sales in the Automotive segment totaled CHF 71.4 million, an increase of 21.0%. At
constant exchange rates, sales increased by 19.6%. Sales in our green car business now accounts for
68.1% of Automotive sales. Although China remains the largest market, its economy has shown signsof slowing and the green car business is susceptible to changes in government policies. Both the USand Europe have seen announcements of factory closures, although there is increasing commitment
by manufacturers to launch new electric or hybrid vehicles. Sales increased by 46.8% in China, inEurope they were up by 21.4%, while in North America they declined by 13.3%.
in CHF millions

2018/192017/18

Businesses
Green48.6

33.1

Conventional

22.8

25.9

Change Comments+46.7% • All markets continue to grow
• China influenced by policies• New motor control and charging systemproducts developed-11.9% • US overall passenger car usage is down
• Old sensor technology being replaced asanticipatedTotal Automotive

71.4

59.0

+21.0%

Profitability on track
Gross profit rose by 5.5% to CHF 146.5 million and the gross margin reached 45.6%. This is 50 basis
points lower than in the prior year. We continued to shift production to cost-effective locations, andexecuted various efficiency programs, particularly along our supply chain. These improvements wereoffset by a non-recurring impairment loss of CHF 2.7 million on underutilized industry machinery, plus
a one-off provision of CHF 1.8 million for unused stock related to a discontinued automobile product.
We remain vigilant with overheads, and kept SG&A costs essentially flat at CHF 54.4 million(CHF 54.9 million) even while we grew revenues by 6.8%. The strength of our business isdemonstrated by our ability to significantly increase R&D investments by 29.7% to CHF 27.6 million

LEM Holding SA

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(CHF 21.3 million), or 8.6% of sales (7.1%), and still grow EBIT by 2.6% to CHF 64.8 million (CHF 63.1million). Our EBIT margin was slightly down at 20.1%, compared with 21.0%, but remains robust in thelong-term.
The Group tax rate for this year was 15.9% thanks to the confirmed status of our China operations asa High New Technology Enterprise.
We posted a net profit for the year of CHF 52.4 million, down 3.8% from CHF 54.4 million last year.
Last year’s net profit included a one-off tax related benefit of CHF 3.4 million.
Strong cash flow and balance sheet
Cash flow from operating activities was CHF 53.5 million (-1.1%) and free cash flow was CHF 38.8
million (-0.6%). This decrease is a consequence of increases in net working capital principally due toinventories.
Our balance sheet remains strong and is essentially debt-free. As at 31 March 2019, total assets
increased to CHF 187.1 million. Shareholders’ equity reached CHF 113.1 million, representing anequity ratio of 60.5% (60.0% as of 31 March 2018).
Restatement of accounts 2017/18
We have restated the financial statements for the year 2017/18 as a wrong conversion rate was applied
for the actuarial calculation of our Swiss pension plan obligation. This rate impacts the plan’s service
costs and also our balance sheet. The restatement has resulted in an increase of CHF 1.4 million toEBIT (revised to CHF 63.1 million) and an increase of CHF 1.1 million to net profit (revised to CHF
54.4 million) for the year 2017/18. These income adjustments, and those to the balance sheet, arereflected in this year’s published Financial Report, and explained in note 3 to the consolidated financialstatements.
Increased dividend
Based on the results for 2018/19 and the solid outlook, the Board of Directors proposes an increased
dividend of CHF 42 per share (CHF 40 for 2017/18), payable on 4 July 2019. The proposal follows
LEM’s dividend policy of distributing significantly more than 50% of its consolidated net profit toshareholders and corresponds to a payout ratio of 91.4%.
Solid outlook
The fundamental prospects for LEM remain strong, driven by the mega trends of energy efficiency,
mobility and automation. Thanks to our brand heritage and market leadership, top line growth in theIndustry segment will be steady, while susceptible to global economic activity. The green cars business
continues to offer the most growth potential, and will replace that of conventional cars. However,
government policies remain an important volatile factor, while increasing competition in green cars willbring mounting price pressure. Geopolitical tensions or increasing trade barriers may pose a downward
risk to global growth and our businesses.
We plan to further increase investment in R&D, leveraging new technologies for example in electric
powertrains, smarter sensors, DC metering and charging systems. We continue to improve theefficiency of production, while also empowering our global sites with full capabilities in R&D, operations,sales and quality management. This will make our organization more agile, increase speed ofexecution and reduce time to market. Taking all internal and external factors into account, we expect
another solid financial performance for LEM in the coming year.

LEM Holding SA

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Media and analyst conference and webcast
Andreas Hürlimann, Chairman of the Board of Directors, Frank Rehfeld, CEO, and Andrea Borla, CFO,
will provide a detailed presentation of the financial year 2018/19 results today at 10:30 CEST at amedia and investor community conference in Zurich.
Listen to the media and analyst conference via a live webcast
https://78449.choruscall.com/dataconf/productusers/lem/mediaframe/30339/indexl.html
The link to the webcast and the presentation slides are also available in the Investor Relations sectionof 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
Detailed information on the financial year 2018/19 results
The full Annual Review and Financial Report are available from today, 22 May 2019, on
www.lem.com/en/investors > Financial Reports.

Financial calendar
The financial year runs from 1 April to 31 March
22 May 2019Year-end results 2018/19
27 June 2019
Annual General Meeting of Shareholders for the financial year 2018/19
2 July 2019
Dividend ex-date
4 July 2019
Dividend payment date
30 July 2019
First quarter results 2019/20
5 November 2019
Half-year results 2019/20
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
For further information please contact
Andrea Borla (CFO)
Phone: +41 22 706 1250
Email: investor@lem.com

LEM Holding SA

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Appendix
Consolidated income statement
April to March2018/19

in CHF thousands

2017/18
Restated

Changes
+6.8%

Sales

321’591

301’243

Cost of goods sold(175’098)(162’383)

Gross margin146’493138’859

45.6%

46.1%

Sales expense(29’733)(30’278)

Administration expense(24’640)(24’609)

Research & development expense(27’576)(21’255)

Gross margin (in %)Other expense

00Other income

252

412

EBIT

64’796

63’129EBIT margin (in %)

20.1%

21.0%

Financial expense

(179)

(298)

Financial income

155

143(2’519)

1’345

Foreign exchange effectProfit before taxes

62’25264’320

Income taxes(9’876)(9’891)

Net profit of the period

52’37654’428Net profit margin (in %)

16.3%

18.1%

LEM Holding SA

+5.5%

+2.6%

-3.2%

-3.8%

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Key Figures
2018/19

in CHF millions

2017/18
Restated

Changes

Orders received

Q1

Q2

Q3

Q4

FYQ1

Q2

Q3

Q4

FY

Q4 - Q4

FY - FYIndustry

68.0

56.6

57.5

63.6

245.7

63.9

58.7

63.1

70.4

256.1

-9.7%

-4.1%

Automotive

17.9

23.5

15.1

18.2

74.7

14.8

19.4

15.6

13.8

63.5

+32.3%+17.6%

Total LEM

86.0

80.0

72.6

81.8

320.5

78.8

78.0

78.7

84.2

319.7

-2.8%

+0.2%

Book-to-bill ratio

Q1

Q2

Q3

Q4

FY

Q1

Q2

Q3

Q4

FY

Q4 - Q4

FY - FY

Industry

0.96

0.93

0.99

1.05

0.98

1.02

0.96

1.11

1.14

1.06

-7.8%

-7.1%

Automotive

1.04

1.16

0.85

1.13

1.05

1.111.270.98

0.94

1.08

+20.0%-2.8%

Total LEM

0.98

0.99

0.95

1.07

1.00

1.04

1.02

1.08

1.10

1.06

-3.1%

-6.1%

Sales

Q1Q2Q3

Q4

FY

Q1

Q2

Q3

Q4

FY

Q4 - Q4

FY - FY

Industry

70.8

60.8

58.3

60.4

250.2

62.6

61.1

56.9

61.6

242.2

-2.0%

+3.3%

Automotive

17.3

20.1

17.8

16.1

71.4

13.3

15.2

15.9

14.6

59.0

+10.3%+21.0%

Total LEM

88.0

80.9

76.1

76.5

321.6

75.9

76.3

72.8

76.2

301.2

+0.3%

+6.8%

EBIT

Q1Q2

Q3Q4FY

Q1Q2Q3Q4FY

Q4 - Q4

FY - FY

Industry

15.8

13.0

12.1

14.0

54.9

13.6

12.9

11.6

14.2

52.4

-1.3%

+4.9%

Automotive

2.8

4.0

3.2-0.0

9.9

2.7

3.3

3.3

1.4

10.8

-101.2%-8.2%

Total LEM

18.5

17.0

15.2

14.0

64.8

16.3

16.2

14.9

15.6

63.1

-10.2%+2.6%

Net profit

Q1Q2

Q3

Q4

FY

Q1Q2Q3Q4FY

Q4 - Q4

FY - FY

Total LEM

13.5

13.8

11.6

13.4

52.4

13.5

13.5

11.9

15.5

54.4

-13.7%-3.8%

LEM Holding SA

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