Continued strong growth Media and Analysts Conference FY 6/7 Zurich, June 7 Agenda 1 3 6 Suzanne Hochheimer Corporate Communications Ageeth Walti CFO Felix Bagdasarjanz Chairman all Welcome Agenda Highlights 6/7 Business review Financial review 6/7 Strategy Outlook Proposals for shareholders meeting Q&A 1
1. Highlights 6/7 Marketing & Sales: Broadened total available market with new miniaturized transducer and new Macro- Components, transducers for Battery monitoring and Energy metering Operations: continuous focus Expansion of low cost production site in China output more than doubled Global sourcing project to ensure smooth and lower cost supply chain Quality made by LEM is world-wide Launch of 13 new products of which 3 are flagship products Results: continued profitable growth Sales growth of % to CHF 18. million EBIT improved by 6% to CHF. million from CHF 1. million Net profit improved by 7% to CHF 1.6 million ROCE increased to % 3 1. Sales CAGR of 16.8% /3 99. 3/ 7.8 / 13.9 /6 11.7 6/7 18. In
1. Quarterly bookings and billings 3 Healthy book to bill ratio of 1.3 in the year 6/7 Continued and sustained growth over the quarters Production increase of % over the last years Q /6 Q /6 Q 6/7 Q 6/7 Bookings Billings 1. Sales by segment Automotive 1% Sales growth rates yoy: Industrial 3% Automotive % Total growth % Industry 88% Total sales CHF 18. million 6 3
1. Market factors providing strong tailwind More energy Reliable energy Better regulation Increased comfort Need for mobility 7 1. Industrial segment: Driver for success in 6/7 Asia 6% ROW % Europe 6% Sales growth rates yoy: Europe 9% N. America 1% Asia 17% ROW 39% N. America 16% Total sales CHF 163.3 million Total growth 3% BRIC countries represent 1% of total sales and yoy growth of 1% 8
1. Industrial: Business development 18 16 1 1 8 6 163.3 1.3 13. 6. 1.7 11. 11. 6. 3/ / /6 6/7 1 % Market Growth well above industry average to all time high. 9+% market share and increasing Applications Industry: motor drives and renewable energies, wind and solar Traction: products have performed exceptionally well Energy and Automation: strong ramp up of new MacroComponents products Sales EBIT margin 9 1. Automotive: Regional markets Europe % Asia 31% Sales growth rates yoy: Europe -% N. America % Asia 38% N. America 6% Total growth % Total sales CHF 1.3 million
1. Automotive: Business development 1 1.3 19. 11.7 1.6 3/ / /6 6/7 1 - % Sales EBIT-margin Market US car manufacturers with depressed production Focus on Asia and Europe, sales team strengthened Applications Battery management now also for HEVs Electronic Power Steering in Asia 11 1. LEM production & logistics world-wide Production Centers: Geneva, Switzerland Beijing, China Tokyo, Japan 38 employees 3 employees 1 employees Adaptation Centers: Milwaukee, USA employees Tver, Russia 8 employees 1 6
1. China development Sales Sales growth 31% yoy Sales team increased 16 1 1 Production Production volume more than doubled since last year 6 Transfer of key products to China Made by LEM quality 8 /3 3/ / /6 6/7 Production Sales 13 1. Flagship Products launched successfully Minisens LEM s first fully solid state integrated transducer Efficient low cost low current measurement device taking advantage of state-of-the-art Silicon technologies Target markets: white goods, HVAC systems Battery Monitoring Sentinel can measure the state of health of standby batteries used in various back-up energy systems Target markets: data centers (VAR), UPS (OEM) Energy Metering Wi-LEM is a set of components for electrical sub-metering to determine energy consumption in buildings Target markets: facilities mgmt, energy service Co (VAR) and energy mgmt equipment (OEM) 1 7
1. EBIT breakdown: Industrial and Automotive 1 /3 3/ / /6 6/7 - Industrial Automotive 1 Agenda 1 3 Ageeth Walti CFO Felix Bagdasarjanz Chairman all Highlights 6/7 Business review Financial review 6/7 Strategy Outlook Proposals for shareholders meeting Q&A 16 8
. Financial review: Highlights Results: continued profitable growth Sales growth of % to CHF 18. million EBIT improved by 6% to CHF. million from CHF 1. million Net profit improved by 7% to CHF 1.6 million ROCE increased to % 17. Key figures: Profit and loss account /6 6/7 % Sales 11.7 18.6 1.7% Gross margin in %.7. Operating costs 9.3 1.9 EBIT 1.. 6.% Net financial expenses (.8) (.7) Income taxes (1.7) (9.) Net earnings from Continuing Operations 9.1 1.6 71.6% Discontinued Operations Net earnings 1.9 Net earnings LEM Group. 1.6 18 9
. Key figures: Gross margin development Pressure of price decrease and raw material price increase 7 6 7% 6% % % 3 3% % % /3 3/ / /6 6/7 % Gross Margin % of sales 19. Key figures: Operating expenses % % 3 3% % % /3 3/ / /6 6/7 % Operating Cost % of sales
. Key figures: EBIT Increased profitability since sale of Instruments business 1 % % 1% % % /3 3/ / /6 6/7 % EBIT % of sales 1. Key figures: Financial expenses and taxes in TCHF / /6 6/7 Financial expense -1 998-1 68-1 83 Financial income 3 8 9 Exchange effect -1-3 76* 77 Net financial expenses - 176-76 -71 Taxes % 1%** 37.1% * Includes loss on financial derivatives of TCHF 7 ** Includes mainly capitalized tax losses carry forwards of 18% of earnings before taxes 11
. Key figures: Net earnings continuing ops 16 1 1 8 6 /3* 3/* / /6 6/7 Net earnings * /3 and 3/ are non-audited figures 3. Key figures: Cash flow in TCHF / /6 6/7 Cash flow statement Net earnings from operations 6 98 9 1 6 Cash flow from operating activities 1 39 1 73 18 before changes in NWC Changes in net working capital (NWC) - 3-686 - 69 Cash flow from investing activities - 31-3 8-6 96 Free cash flow 63 8 379 8 198 Cash flow from financing activities 1 96-6 6-13 117 Net cash flow from discontinued ops 1 91 Change in cash and cash 63-7 66-9 equivalents 1
. Key figures: Capital employed & ROCE 6 6% % % 3 3% % % / /6 6/7 % Capital employed ROCE % Agenda 1 3 Ageeth Walti CFO Felix Bagdasarjanz Chairman all Highlights 6/7 Business review Financial review 6/7 Strategy Outlook Proposals for shareholders meeting Q&A 6 13
Global leadership Remain the global leader in providing transducers to measure electrical parameters Continue to anticipate customer needs and deliver advanced products New technologies and applications Develop new applications in new markets using our existing and adjacent know-how Targeting of new customers with our flagship products Keeping R&D investment high and a priority Maximize value for our customers Offer global presence with seamless service and follow customers to Asia Expansion of our sales teams where the business will be BRIC countries Focus on profitable growth Achieve Operational excellence and run cost effective and service oriented production sites Further expansion of the China plant Low cost global sourcing project 7 3. Outlook 1/ Although we see NO sign of a decline in current record demands, history has taught us that recent levels of growth can not be sustained for ever We see further potential to maintain the improvement in profitability By further transfer to low cost production and sourcing By adapting our structure to the new size and roles of the various production and R&D centers Automotive Segment should see signs of upturn by end of 7/8 8 1
3. Outlook / In the mid-term, LEM is ideally positioned to take maximum advantage of fundamental growth drivers: Strong new product pipeline as engine for future growth by substantially increasing the total available market Need for more energy, more savings, more renewable energy Increasing electrical and electronic management of various functions in the car and of the (hybrid) electrical vehicle 9 Agenda 1 3 Ageeth Walti CFO Felix Bagdasarjanz Chairman all Highlights 6/7 Business review Financial review 6/7 Strategy Outlook Proposals for shareholders meeting Q&A 3 1
. Proposal to the Shareholders Meeting 1. Ordinary dividend payment of CHF. per share Totaling CHF. million which represents 33 % of net earnings Increase of 8% compared to last years ordinary dividend. Cancellation of the share bought back and reduction of the share capital from TCHF 6 to TCHF 7 3. Mr. Ueli Wampfler to be proposed for election as a new member of the Board of Directors 31. Summary Clearly defined strategy, good execution Benefit from growing markets Improved profitability and strong balance sheet Positive outlook, short and medium term 3 16
. Financial calendar and contact details Financial calendar 9 June 7 Annual Shareholders Meeting 7 August 7 1st quarter result 6 November 7 Half year results 7 February 8 3th quarter results June 8 Full year results For further information Ageeth Walti CFO Tel.: +1 76 1 9 Tel: +1 76 1 3 E-mail: pvi@lem.com Email: awa@lem.com 33 Agenda 1 3 Ageeth Walti CFO Felix Bagdasarjanz Chairman all Highlights 6/7 Business review Financial review 6/7 Strategy Outlook Proposals for shareholders meeting Q&A 3 17