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LEM HOLDING SA / Key word(s): Annual Results
LEM with solid performance for full year 2023/24 in weakening markets
28-May-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.
Geneva, 28 May 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 full year of 2023/24 (April-March):
. LEM maintained sales at prior year level with CHF 405.8 million (full year 2022/23: CHF 406.4 million).
At constant exchange rates, sales increased by 7.2%.
. LEM achieved the strongest growth in the EMEA region with 22.6% and Rest of Asia reached 15.9%. Americas
decreased 5.0% while China was down 24.2% year-on-year due to the economic slowdown. At constant currencies, growth
in Rest of Asia was 26.0%, while the decline in China was only 15.3%.
. Starting from the previous year's peak, bookings further normalized to CHF 243.3 million (CHF 465.2
million); the book-to-bill ratio was 0.60.
. EBIT declined by 12.1% to CHF 81.1 million (CHF 92.2 million); the EBIT margin amounted to 20.0%. Net
profit decreased to CHF 65.3 million, resulting in a net profit margin of 16.1% (CHF 75.3 million; 18.5%).
. Operating cash flow amounted to CHF 74.4 million (CHF 87.0 million).
. The Board of Directors proposes a dividend of CHF 50 per share, representing a payout ratio of 87.3%.
. Dr. Libo Zhang proposed as new member of the Board of Directors.
. Sustainability strategy driven forward and first standalone Sustainability Report published.
. LEM expects market development to be moderate in the current financial year. The main reason for some
headwind is that it will still take time for customers to reduce their inventories, particularly in the Renewable
Energy and Automation markets. Based on forecasts from customers, LEM expects the situation to improve during the
second half of 2024/25.
Frank Rehfeld, Chief Executive Officer, said: "LEM operates in markets in which the currency was devaluated against the
CHF. The growth of more than 7% in constant currencies confirms the opportunities in our markets, however, remains
below our ambition. In 2023/24, we saw two different trends in the two half-year periods, which were characterized by
both cyclical and structural developments. We were able to successfully develop our businesses and benefit from
fundamental, environmentally friendly trends in the increasingly competitive areas of electrification, renewable
energies and e-mobility. These megatrends will remain dominant in the future. In addition to our usual high level of
investment in R&D, we further expanded our research and development capacities and opened two new R&D centers in
Munich, Germany and Sofia, Bulgaria, and expanded the site in Shanghai, China, to also host R&D activities. The
pleasing result was reflected in the launch of 11 new products from our expanded R&D pipeline."
Andrea Borla, Chief Financial Officer, commented, "The fourth quarter showed a significant decline in order intake of
46.3%, in sales of 14.8% and an EBIT margin of 13.2%, which was negatively impacted by 3-percentage-points due to
severance costs. The measures introduced to increase our agility and improve our cost positions were stepped up and
have shown initial success but will only take full effect over a longer period of time. However, the fundamental growth
drivers remain intact."
Sales by business
in CHF millions
2023/
24 2022/ Change
23 Change at constant exchange
rates
Business Scope
Automation drives, robots, tooling machines, elevators,
HVAC 120.0 136.3 -11.9% -5.5%
Automotive battery (EV & CE), motor control, onboard
charging 98.6 100.7 -2.1% +6.8%
Renewable Energy solar, wind
70.8 67.0 +5.6% +14.8%
Energy Distribution & High
Precision charging stations, smart grid, energy storage, 60.9 59.4 +2.6% +8.2%
high precision
Track trains, metro, trackside
55.5 43.0 +29.1% +35.4%
Total 405.8 406.4 -0.1% +7.2%
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Automation
The business largely developed in line with the global economic trend. The first half of the year was relatively solid. Among other factors, the automation business benefited from the trend towards sustainable and customer-oriented solutions in manufacturing, particularly in EMEA. In the second half of the year, the automation business slowed down in more difficult economic conditions as well as due to high inventories. In China, sales weakened slightly due to declining exports.
Automotive
Sales in the Automotive business showed moderate growth year-on-year with weaker momentum in the second half of the year. Growth was driven by good sales in EMEA and South Korea. In contrast, sales in China, the single most important market, declined against the backdrop of an increasingly competitive environment. However, the cost initiatives introduced, and the enhanced customer focus began to show the desired improvements.
Renewable Energy
Renewable Energy recorded a good overall business performance, albeit with regional variations. The business saw strong demand from EMEA, Americas, Japan and India in the first half of the financial year. This compensated for declining business in China, where exports of solar energy generation equipment have slowed down, and destocking was taking place at Chinese manufacturers and their distributors. Starting from this good level in EMEA, Americas, Japan and India, there was a slowdown from the third quarter onwards. Demand in domestic installations declined seasonally, while customers in Europe also had high stock levels. Price pressure was noticeable in both China and Europe.
Energy Distribution & High Precision
Energy Distribution & High Precision achieved steady growth in an increasingly competitive environment that also affected OEMs. The DC meter for charging stations continued to sell very well, although growth slowed significantly in the second half of the year. Products for smart grid developed solidly due to the favorable growth rates in these markets, although customers were rather reluctant to invest at the end of the financial year. The testing and measurement business for laboratory equipment performed well in the first half of the year due to good demand from the e-mobility sector, which invested in the development of batteries. The second half of the year was weaker, which is in line with the general slowdown in e-mobility. In medical technology, the first half of the year was also good, followed by a slowdown in the second half of the year.
Track
Starting from a weak prior-year base, the Track business achieved a jump in sales. Momentum was exceptionally high in the first half of the financial year, settling into solid growth in the second half. The renewal of energy meters for locomotives in various EU countries generated additional demand in EMEA. Track also recorded robust growth in China, supported by a positive market environment.
Sales by region
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in CHF millions
2023/24 Change
2022/23 Change at constant exchange rates
Region Scope
China 119.7 157.9 -24.2% -15.3%
Rest of Asia Japan, South Korea, India, South-East Asia 82.3 71.0 +15.9% +26.0%
EMEA Europe, Middle East & Africa 156.5 127.7 +22.6% +26.7%
Americas NAFTA & Latin America 47.3 49.8 -5.0% +1.9%
Total 405.8 406.4 -0.1% +7.2%
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China
LEM was confronted with a difficult environment on the Chinese market, which was also reflected in a significant decline in sales. This was due to slow economic growth, declining exports of solar inverters, lower sales of products for e-mobility and significantly negative currency effects. LEM also saw some market share loss in the highly competitive e-mobility and renewable energy sectors. Increased speed and competitive pressure are the biggest challenges in China. In this environment, LEM implemented measures to become more agile, focusing on greater customer proximity, increased local R&D and strengthened regional decision-making.
Rest of Asia
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