LEM with good sales growth for 9 months 2023/24 overall - slowdown in the
third quarter

LEM HOLDING SA / Key word(s): 9 Month figures
LEM with good sales growth for 9 months 2023/24 overall - slowdown in the
third quarter

02-Feb-2024 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.

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Geneva, 2 February 2024 - LEM (SIX: LEHN), a global leader in electrical
measurement for automation, e-mobility, renewable energy, power network and
railroad applications, announces its results for the first 9 months of
2023/24 (April-December):

  * Sales climbed 5.0% to CHF 316.6 million (9 months 2022/23: CHF 301.6
    million); at constant exchange rates, the increase was 12.9%.

  * LEM achieved the strongest growth in the EMEA region with 31.4%; Rest of
    Asia reached 22.8% and Americas was stable with -0.8%. China was down
    20.5% year-on-year due to the economic slowdown and destocking; at
    constant exchange rates, the decline was 10.6%.

  * Starting from the previous year's peak, bookings further normalized to
    CHF 188.0 million (CHF 362.2 million); the book-to-bill ratio was 0.59.

  * EBIT increased by 1.4% to CHF 69.3 million (CHF 68.3 million); the EBIT
    margin was maintained at a high 21.9%. Net profit climbed to CHF 55.4
    million, resulting in a net profit margin of 17.5% (CHF 55.3 million;
    18.3%).

  * Following the good first 9 months of the year, LEM is maintaining its
    cautious view for the fourth quarter. The guidance for the full
    financial year 2023/24 has been reduced to sales in the range of CHF 400
    to 420 million (previously: CHF 420 to 440 million) and an EBIT margin
    slightly above 20%.

Frank Rehfeld, Chief Executive Officer, said: "LEM achieved satisfying
business performance over the first 9 months 2023/24. We were able to
develop our businesses and benefit from fundamental, environmentally
friendly developments in electrification, renewable energies and e-mobility.
These megatrends will remain dominant in the future. LEM continues to drive
innovation to expand its technological leadership. During a period marked by
economic uncertainty, the significance of LEM's technology platform, wide
range of applications, and comprehensive product portfolio, coupled with its
global presence in research and development, production, and sales, has been
reaffirmed."

Andrea Borla, Chief Financial Officer, commented, "The third quarter, with a
decrease in sales of 9.9% and an EBIT margin of 18.9%, is below
expectations. Following a normalization of demand in the first half of the
year, sentiment deteriorated in the third quarter, with the consequence that
LEM recorded a further decline in the order intake. The measures introduced
have shown initial success, but will only have their full effect over a
longer period of time. However, the fundamental growth drivers remain
intact."


Sales by business
-----------------

  in CHF millions                                      2023/-  2022/-  Cha-
                                                       24 9M   23 9M   nge
  Business             Scope
  Automation           drives, robots, tooling         94.4    101.8   -7.-
                       machines, elevators, HVAC                       3%
  Automotive           battery (EV & CE), motor        77.1    75.3    +2.-
                       control, onboard charging                       3%
  Renewable Energy     solar, wind                     57.2    50.3    +13-
                                                                       .9%
  Energy Distribution  charging stations, smart grid,  45.1    42.8    +5.-
  & High Precision     energy storage, high precision                  3%
  Track                trains, metro, trackside        42.9    31.4    +36-
                                                                       .6%
  Total                                                316.6   301.6   +5.-
                                                                       0%

Automation

The automation business was slowed down by more challenging economic
conditions and a temporary reduction in stock levels. Considering the
negative exchange rate effects, sales were nevertheless kept almost stable.
The underlying industrial trends relevant to LEM continue.

Automotive

Automotive growth was driven by strong sales in EMEA and South Korea. In
both regions, LEM saw strong demand for products for battery management
systems, engine control and onboard chargers. In China, the most important
market, sales were down on the same period of the previous year. However,
the pricing initiatives introduced and the enhanced customer focus began to
show the first signs of success.

Renewable Energy

LEM saw good demand from EMEA, Americas, Japan and India, with a seasonal
slowdown at a high level in the third quarter. This compensated for
declining business in China, where exports of solar energy generation
equipment have declined, and destocking is currently taking place at Chinese
manufacturers and their distributors. However, domestic demand in China
remained dynamic and the fundamental growth trend for renewable energies is
continuing.

Energy Distribution & High Precision

Energy Distribution & High Precision reported robust growth. The DC meter
for EV charging stations was a strong driver, and the attractiveness of the
market was also reflected in the entry of new providers of metering systems,
charging infrastructure and services. Based on the strong position in EMEA,
LEM is now extending it focus on the emerging American market for EV
charging stations. Products for high-precision equipment and smart grid
performed well based on the favorable growth rates of these markets.

Track

Starting from a weak base in the previous year, the Rail division achieved a
significant increase in sales. The business, which is characterized by long
investment cycles, has thus returned to its usual growth path, but was
further supported by the periodic retrofit business for renewing energy
meters for locomotives in various EU countries. In China, Track benefited
from a positive market environment.

Sales by region

    in CHF                                  2023/24  2022/23  Chan-
    millions                                9M       9M       ge
    Region    Scope
    China                                   97.0     122.0    -20.-
                                                              5%
    Rest of   Japan, South Korea, India,    63.8     51.9     +22.-
    Asia      South-East Asia                                 8%
    EMEA      Europe, Middle East & Africa  119.3    90.8     +31.-
                                                              4%
    Americas  NAFTA & Latin America         36.6     36.9     -0.8-
                                                              %
    Total                                   316.6    301.6    +5.0-
                                                              %

China

The environment in China was challenging in the first 9 months of 2023/24.
This was due to slow economic growth, declining exports of solar systems,
lower sales of products for e-mobility, price pressure, and significantly
negative currency effects. LEM also saw some market share loss in the highly
competitive e-mobility and renewable energy sectors. The company uses this
phase of economic slowdown to take measures to participate in the next
upturn.

Rest of Asia

In sensors for electric and hybrid vehicles, LEM achieved growth in South
Korea and to a lesser extent in Japan. Growth in Automation solutions slowed
in Japan due to weaker exports following the economic downturn in China. In
India, there was good demand from the infrastructure sector for track and
energy distribution solutions, as well as for solar and wind power
generation products. The new production facility in Penang, Malaysia has
manufactured its first products and will continue to expand capacity in the
future. These capabilities will benefit both Europe and the Americas, and
will also align with near-shoring trends in the Rest of Asia region.

EMEA

Business in EMEA went well, driven by strong demand in all business areas
and a normalization of supply chains, but saw a considerable slowdown in the
third quarter. The Automation and Renewable Energies segments showed signs
of normalization. DC Meters saw a jump in sales due to extensive investments
in the expansion of charging infrastructure. Automotive and Track also
performed well.

Americas

The Americas region delivered a solid performance in the face of overall
subdued investment activity and a negative currency impact. One focus in the
reporting period was on expanding the sales and field service team to
broaden the customer base and accelerate growth, particularly in e-mobility.

Profitability maintained at a good level despite decline in EBIT margin in
the third quarter

Gross profit for the first 9 months of 2023/24 increased by 4.2% to CHF
148.8 million (CHF 142.8 million). The gross profit margin decreased
slightly from 47.4% to 47.0%. While the gross margin was 46.1% in the first
quarter due to higher costs for electronic components, it increased to 47.7%
in the second quarter and 47.3% in the third quarter thanks to an improved
business mix.

SG&A costs increased by 8.4% to CHF 54.1 million (CHF 49.9 million). This
increase was due to LEM's investments in digitalization projects and
build-up costs for the new production facility in Malaysia. Overall, SG&A
costs as a percentage of sales remained constant at 17.1% (16.6%). LEM
continued its investment in future applications, reflected in the 2.9%
increase in R&D costs to CHF 25.5 million or 8.0% of sales (CHF 24.8
million; 8.2%).

LEM increased EBIT by 1.4% from CHF 68.3 million to CHF 69.3 million. The
EBIT margin went down in the third quarter, but was maintained over the
first 9 months of 2023/24 at a good level with 21.9% thanks to the good
result in the first half of the year.

The effective tax rate is 11.9% due to the increase in deferred tax assets
as a result of the increase in the Canton of Geneva tax rate from 1 January
2024. Without this one-off event, the tax rate would have been 15.0%.

Net profit rose only slightly from CHF 55.3 million to CHF 55.4 million,
negatively impacted by the operating result, higher interest costs and
exchange rate effects. The lower tax rate had a positive effect. As a
result, the net profit margin decreased to 17.5% (18.3%).

Outlook

After a good first 9 months of 2023/24, LEM is maintaining its cautious view
for the fourth quarter. Following a normalization of demand in the first
half of the year, sentiment deteriorated in the third quarter, with the
consequence that LEM recorded a further decline in the order backlog.

As a result, the forecast for the full 2023/24 financial year has been
reduced to sales in the range of CHF 400 to 420 million (previously: CHF 420
to 440 million) and an EBIT margin slightly above 20%.

Financial calendar

The financial year runs from 1 April to 31 March

   28 May 2024     Full year results 2023/24
   27 June 2024    Annual General Meeting for the financial year 2023/24
   2 July 2024     Dividend ex-date
   4 July 2024     Dividend payment date

26 July 2024 3 months results 2024/25

LEM - Life Energy Motion
------------------------

A leading company in electrical measurement, LEM engineers the best
solutions for energy and mobility, ensuring that our customers' systems are
optimized, reliable and safe.

Our 1,800 people in 17 countries transform technology potential into
powerful answers. We develop and recruit the best global talent, working at
the forefront of megatrends such as renewable energy, mobility, automation
and digitization. With innovative electrical solutions, we are helping our
customers and society accelerate the transition to a more sustainable
future.

Listed on the SIX Swiss Exchange since 1986, the company's ticker symbol is
LEHN.

www.lem.com

   Investor contact Andrea    Media contact Dynamics Group Thomas Balmer,
   Borla, Chief Finance       +41 79 703 87 28, (1)tba@dynamicsgroup.ch
   Officer +41 22 706 1250    Christian Wolf, +41 79 457 72 05,
   (1)investor@lem.com  1.    (2)cwo@dynamicsgroup.ch  1.
   mailto:investor@lem.com    mailto:tba@dynamicsgroup.ch 2.
                              mailto:cwo@dynamicsgroup.ch

Appendix

ATTACHMENTS:

Press Release (pdf): LEM 9M Results 2023/24

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End of Inside Information

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   Language:       English
   Company:        LEM HOLDING SA
                   Route du Nant-d'Avril 152
                   1217 Meyrin
                   Switzerland
   E-mail:         investor@lem.com
   Internet:       www.lem.com
   ISIN:           CH0022427626
   Listed:         SIX Swiss Exchange
   EQS News ID:    1828679

End of Announcement EQS News Service
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1828679 02-Feb-2024 CET/CEST