BREAKDOWN Sales 2008/09 CHF mns Change Share - by segment Industrial % 92% Automotive % 8% Total % 100%

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1 Switzerland (Old: Reduce) Electronics/Software Bloomberg:LEHN SW Reuters:LEHN.S SEDOL no:b0ldd86 CHF on Equity Research Switzerland Analysts Andreas Escher PhD +41 (0) Serge Rotzer CIIA +41 (0) At the heart of power electronics at the heart of recovery, upgrade to Hold (Reduce), PT CHF 240 (115) FY08/09 results exceeded our forecasts at all levels primarily due to a strong 1H. The relevant pro-forma EBIT, which comprises operating earnings excluding expenses for the stock option plan (SOP), was reported at CHF 29.2 mn, 7% ahead of our estimate. In view of the lower share price at the end of the fiscal year, the additional provisions set aside for the SOP were reversed with a positive impact of +10.7% (VontE +5.6%) on reported EBIT. In terms of our estimate, a CHF +10 increase in the share price impacts the P&L by CHF -0.4 mn. LEM closed the year with a gross margin of 43.7%, far above peers (e.g. 2H08/09: SAHN 22%; LEM 41%). Although the gross margin declined to 40% in 4Q and given the fact that LEM did not implement all possible cost-saving measures, we believe it will level off and carry a gradual increase from 42% to 44% until 10/11E in our forecasts. The underlying and attractive market trends continue to provide tailwind especially in the traction market in China, where LEM is gaining market share, but also in battery management, renewables as well as motor controls. Recession management: In our view, the effects of the economic downturn will most likely have less impact in the coming quarters since LEM successfully implemented swift, early and stringent measures in 2Q/3Q. Strong balance sheet would allow acquisitions: Given the high equity ratio of 72% and FY10E net cash position of CHF 28 mn, financing is not seen as an issue. Although the shares trade at low levels, the launch of a share buyback program is not an option. PERFORMANCE LEM 'R' HIGH /11/07,LOW /12/08,LAST /6/09 Source: DATASTREAM Valuation, rating, PT: Taking into account the net cash position, LEM trades at a 6% premium to the sector based on EV/EBITDA 10E. Given its diversified, multi-market reach and strong financial position, a premium of 10% would be more than justified in our view. We upgrade our rating from Reduce to Hold and lift our PT to CHF 240 (115). PER SHARE DATA Price target (CHF) Price LEHN.S on CHF No. of shares LEHN.S in '000 1,150 Market cap. LEHN.S (CHF mns) 255 Other market cap. (CHF mns) 0 Total market capitalization (CHF mns) 255 Free float % 69 Werner Weber (voting 27%) 27 Threadneedle Ltd (voting 11%) 11 Sarasin Investments (voting 10%) 10 Average daily trading volume (12 months) 729 SHARE VALUATION CHF E 2010E 2011E EPS EPS growth % P/E CEPS P/CE Dividend Dividend yield % Book value Price/Book EV/EBITDA HIGH 12-MONTH LOW EXCESS PERFORMANCE SPIX 1 SMLCPSW 2 3M 36.4% 25.0% 6M 72.7% 60.6% 12M -2.0% -1.9% 1 SPI ex Div. 2 Vontobel Small Caps Index BREAKDOWN Sales 2008/09 CHF mns Change Share - by segment Industrial % 92% Automotive % 8% Total % 100% - Industrial Segment Europe % 56% North America % 16% Asia % 26% ROW % 2% Total % KEY DATA CHF mns 2009E 2010E 2011E Sales EBIT EBIT margin % Shareholders' net profit Return on equity % Total assets Equity Equity ratio % Interest-bearing debt Cash Operating cash flow Capex The objectivity of this report may be compromised by existing or planned business relationships between the producer and the analysed company and potential conflicts of interest arising thereof. Investors should therefore on no account use this report as the sole basis on which to make a decision. Please see the end of the document for more details on potential conflicts of interest and disclaimer information.

2 Switzerland/Electronics/Software QUARTERLY ESTIMATES In CHF mn FY to Sep Q07 2Q07 1H07 3Q07 9M07 4Q07 2H Q08 2Q08 1H08 3Q08 9M08 4Q08 2H E 2010E 2011E Sales Industrial Segment Automotive Segment Industrials Segment y-o-y 12% 13% 19% 16% -7% 8% -23% -56% 0% -16% 14% 17% - Automotive y-o-y -5% -4% -18% -12% -37% -21% -47% -72% -27% -15% 14% 17% COGS Gross Margin % Sales 42.0% 46.0% 45.4% 45.7% 44.7% 45.4% 44.4% 22.9% 45.1% 47.5% 44.4% 45.9% 41.8% 44.7% 39.8% 40.8% 43.7% 42.0% 43.0% 44.0% SG&A % Sales 28% 27% 29% 28% 27% 28% 31% 15% 28% 26% 28% 27% 33% 29% 30% 32% 29% 32% 31% 30% - Sales expense Adminstration expense Research & development expense Other expense Other income EBIT Operational (pro forma) Industrial Segment % Sales 16% 21% 19% 20% 21% 21% 17% 20% 20% 24% 19% 21% 11% 18% 13% 12% 17% Automotive Segment % Sales -1% 2% 3% 3% -12% -2% -13% -4% -4% -5% -2% -3% -19% -7% -44% -30% -13% SOP EBIT (reported) Industrial Segment % Sales 16% 21% 19% 20% 10% 17% 20% 18% 18% 20% 23% 21% 22% 21% 12% 17% 19% Automotive Segment % Sales -1% 2% 3% 3% -25% -6% -11% -7% -7% -9% 2% -3% -3% -3% -44% -21% -10% Financial Result (net) EBT Taxes % tax rate 37% 34% 29% 32% 29% 31% 8% 13% 25% 29% 23% 26% 26% 26% 37% 30% 27% 26% 26% 26% Net earnings Source: Vontobel Equity Research 2 Vontobel Research

3 Switzerland/Electronics/Software YEARLY OVERVIEW, FY04/05 FY08/09 Source: LEM, Annual Report 2008/ Vontobel Research

4 Switzerland/Electronics/Software CONSOLIDATED FINANCIAL DATA (CHF MN) 1) 1) 1) E 2010E 2011E GROSS SALES change (%) TOTAL OPERATING PERFORMANCE change (%) COST OF GOODS SOLD change (%) as % of sales GROSS PROFIT change (%) as % of turnover EBITDA as % of sales EBITDA, pro forma (excluding SOP) as % of sales DEPRECIATION GOODWILL / INTANGIBLES AMORTIZATION EBIT change (%) as % of sales EBIT, pro forma (excluding SOP) change (%) as % of sales FINANCIAL RESULT PRETAX PROFIT (EBT) change (%) as % of sales TAXES tax rate (%) GROUP NET PROFIT change (%) MINORITY INTERESTS SHAREHOLDERS' NET PROFIT change (%) as % of sales as % of equity shareholder CASH FLOW FROM OPERATIONS CAPITAL EXPENDITURE year average DATA PER REGISTERED (ADJ, CHF) EARNINGS change (%) DIVIDEND PAYOUT RATIO (%) OPERATING CASH FLOW BOOK VALUE TOTAL ASSETS CASH INTEREST-BEARING DEBT NET DEBT as % of group equity EQUITY SHAREHOLDER GROUP EQUITY as % of total assets NO. OF REGISTERED (MNS) ) income/expenses for future SOP are neglected as income/expense will depend upon share price development 4 Vontobel Research

5 1. Disclaimer & Disclosures Vontobel Research 1. Analyst Declaration 2. Disclosure of conflicts of interest 3. Research rating history This Vontobel Report has been produced by the organizational unit responsible for investment research (Research unit, sell-side analysis) of Bank Vontobel AG, Gotthardstrasse 43, CH-8022 Zurich, tel. +41 (0) Bank Vontobel AG is subject to supervision by the Swiss Financial Market Supervising Authority (FINMA), Schwanengasse 12, Bern, The authors listed on page 1 confirm that this report gives a complete and precise reflection of their opinion of the analysed company and that they have neither directly nor indirectly received compensation for their assessment or opinion. The compensation of the authors of this report is not directly related to the investment banking volume generated between Vontobel Group and the analysed company. The author(s) of this document owns securities in the analysed companies None The document was not submitted to the analysed companies before publication or distribution As an internationally active company, Vontobel Group is subject to a number of provisions in drawing up and distributing its investment research documents. The maker and distributors of this financial analysis point out the following potential conflicts of interests: The author and its associated companies will or are attempting to generate investment banking business with the analysed company within the next three months, conduct transactions with securities of the analysed company from time to time, have participated in capital market transactions/the issue of securities of the analysed companies in the last 12 months: None, have been active as Market Maker in equities of the analysed companies in the last 12 months: None, have provided other publicly known Investment Banking services for companies mentioned in this report in the last 12 months: None have received compensation for products and services outside Investment Banking from analysed companies: None, hold more than 5 % of the voting rights of the analysed companies: None, and the analysed companies have executives who are members of the board of Bank Vontobel AG or affiliated companies: None have executives who are members of the board of the analysed companies None have no significant financial interest in the analysed companies and have reached no agreement with the analysed companies regarding this financial analysis. The Ratings and / or Rating Outlook of the analysed companies were last changed as follows: LEM was last changed from Reduce to Hold on Global rating breakdown Share of VT IB clients VT Research universe VT Research universe in rating category No. As % As % Buy 43 26% 35% Hold % 28% Reduce 16 9% 19% The table above is revised at the beginning of each quarter, i.e. it currently reflects the status as at 31st of March Methodology / Rating system Bank Vontobel s financial analysts apply a variety of valuation methodologies (e.g. DCF and EVA modelling, 'sum-of-the-parts', break-up and event-related analysis, peer group and market multiple comparisons) to their own financial projections for the companies they cover. Overall, our investment recommendations take into consideration an assessment of the company in its entirety and of the sector to which it belongs ("bottom-up approach"). Price target calculation is based on a number of factors, observations and assumptions, including but not limited to: key business performance indicators and ratios, public and private valuation multiples, comparison with one or more peer groups of comparable companies, overall equity market valuations, and with the company's own history and track record. The stock recommendations published by Vontobel s research team are defined as follows: Rating Large Cap Buy Hold Reduce Mid & small cap Buy Hold Reduce Definition SLI Index (inc. tolerance) / non-swiss stocks of similar market capitalisation Price target (when set) implies 10% or more upside on a 12-month horizon Price target (when set) implies 0-10% upside on a 12-month horizon Price target (when set) implies downside on a 12-month horizon Other Swiss stocks / non-swiss stocks of similar market capitalisation Price target (when set) implies 15% or more upside on a 12-month horizon Price target (when set) implies 0-15% upside on a 12-month horizon Price target (when set) downside on a 12-month horizon Analysts are required to review their recommendations under the following conditions: Buy: When upside to price target falls below 5% (all caps). Hold: When upside to price target reaches or exceeds 15% for large caps or 20% for mid & small cap; when downside to price target reaches or exceeds 5% (all caps). Reduce: When upside to price target reaches or exceeds 5% (all caps). We reserve the right to waive repeated changes of recommendation during periods of unusually high equity market or specific stock price volatility

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