LEM HOLDING SA / Key word(s): Annual Results
* LEM adjusted its order booking system in 2025/26. Prior year bookings were restated as disclosed in Q1 2025/26.
Frank Rehfeld, Chief Executive Officer, said: "LEM delivered a solid performance in the 2025/26 financial year marked by an improvement in profitability, while market conditions remained mixed and currency headwinds persisted. Growth momentum was particularly encouraging in Automation and Energy Distribution & High Precision, supported by normalized inventory levels and rising demand linked to data center infrastructure. LEM benefited from disciplined execution of our 'Fit for Growth' efficiency improvement program, with the EBIT margin showing significant improvement to 8.5%. Our improved profitability demonstrates the resilience of our business model and provides a strong foundation to capture long-term opportunities driven by structural megatrends such as data center infrastructure, electrification, energy transition and e-mobility."
Sales by business
Automation The Automation business continued to recover, supported by improving order intake and normalized inventory levels. Growth was driven by high-value mid-power applications, including power measurement and cooling systems for data centers, as well as industrial automation. By contrast, low-power applications in consumer-oriented applications such as heat pumps showed slower development. The pricing environment remained mixed, with continued price pressure in China and more stable conditions in Western markets.
Automotive The Automotive business developed unevenly, with growth in Europe offset by a softer performance in China and the Americas. Growth in Europe was driven by battery management for EV/hybrid applications, supported by a faster ramp-up with key customers. By contrast, China recorded lower sales, reflecting increased competition from Chinese OEMs in a flattish market. In the Americas, demand remained subdued, with lower EV sales and postponed projects impacting volumes. The rest of Asia was weaker because Japanese and Korean manufacturers depend on export markets that fell short of expectations.
Renewable Energy Renewable Energy operates in a highly competitive and regulatory-driven market environment and recorded a decline in sales, with small-scale and residential installations remaining particularly weak. Demand in Western markets benefited from commercial installations, as European manufacturers were prioritized. The pricing environment remained challenging, especially in China, despite normalized inventory levels, partly due to the phase-out of feed-in tariffs for solar energy from Summer 2025.
Energy Distribution & High Precision Energy Distribution & High Precision benefited from strong demand in data center-related applications, including current sensing solutions for UPS (uninterruptible power supply) applications. Increased market activity in China and the Americas, as well as larger project wins in Europe, led to a strong order intake which will provide support going forward. By contrast, charging infrastructure and high precision applications remained weak, impacted by lower demand, pricing pressure and inventory reductions. However, Smart Grid applications declined, as completed projects were only partially replaced by follow-up business. Pricing remained under pressure in several areas.
Track The Track business remained stable, supported by continued strong performance in China. Sales in China increased, supported by solid local and retrofit business which accounted for a significant share of sales. The business also benefited from a favorable product mix and the order intake included first orders for a new high-speed platform. Sales and order intake in Europe declined due to the phasing-out of a large project, with follow-up business expected over the course of the year. Business in the Americas remained stable.
Sales by region
China Sales in China remained flat at constant exchange rates. Automation proved to be solid and resilient, with good progress across a range of customers, particularly in the areas of infrastructure and factory automation. Demand in Energy Distribution & High Precision increased, driven by current sensing solutions and data center-related applications, with both local and export activity. Track developed strongly, supported by new platform orders and retrofit activity, with a significant contribution from local business. Automotive slowed in the fourth quarter, reflecting a market with high EV penetration, while Renewable Energy operated in a highly competitive environment, supported by demand for energy storage. The pricing environment remained challenging.
Rest of Asia Demand in Rest of Asia was supported by India, which delivered solid growth overall, while Japan and Korea remained weaker, mainly reflecting Automotive-related business, with activity improving towards the end of the period. In Japan, Automation developed positively, backed by demand from Chinese customers, particularly for equipment used in humanoid robotics. In India, demand in data center applications developed positively, with India benefiting from export activity to the US.
EMEA Sales in Europe declined slightly over the period, while demand improved towards the end of the financial year. The recovery was driven by Automation, with normalized inventory levels and stronger demand in drives, while the pricing environment remained under pressure. Impulses also came from Automotive which saw growth in EV and hybrid applications as well as battery management and from data center-related applications across Energy Distribution & High Precision. In Renewable Energy, commercial installations such as solar parks and wind developed positively, with demand benefiting from the preference for European suppliers and export activity to the US, while small-scale installations remained weak. Track declined, mainly due to the phasing-out of a large retrofit project.
Americas
"Fit for Growth" increases efficiency and margins In the context of a price pressure environment, the gross margin stabilized, with the positive momentum that began in Q2 2025/26 continuing throughout the remainder of the year. This development is attributable to the successful implementation of strategic pricing initiatives and significant productivity gains in the supply chain.
The company-wide transformation and efficiency improvement program "Fit for Growth" delivered the targeted results, as evidenced by a 12.0% decrease in SG&A, while sales declined by 6.3%. SG&A costs as a percentage of sales were reduced to 21.6%. R&D costs decreased by 23.6% to CHF 27.0 million or 9.4% of sales.
The positive effects of the "Fit for Growth" program are also reflected in the 29.2% increase in EBIT to CHF 24.4 million, with the EBIT margin rising to 8.5%. Included are one-time restructuring costs of CHF 1.9 million for the "Fit for Growth" program. EBIT before restructuring costs achieved CHF 26.2 million, yielding a strong EBIT margin of 9.1%. The company has completed its restructuring initiatives, with a total of CHF 9.8 million one-time costs.
Net financial expenses increased to CHF4.8 million due to slightly higher average financial debt. Exchange rate effects from the Swiss franc appreciation had a smaller negative impact of CHF1.6 million compared to CHF3.9 million in the prior year. Income taxes rose from CHF2.1million to CHF8.0million, reflecting the higher global profitability and the temporary non-recognition of certain local operating losses for tax purposes.
Net income expanded by 17.5% to CHF 9.9 million, resulting in an improved net profit margin of 3.4%.
Strong Free Cash Flow powered by "Fit for Growth" efficiency improvements Free Cash Flow improved significantly to CHF 31.7 million, compared to CHF 14.0 million in the prior year period, supported by the higher EBIT and a better discipline managing working capital and capital expenditures, implemented through the "Fit for Growth" program. Free Cash Flow before restructuring cash disbursements reached CHF 40.1 million. The strong cash generation contributed to a reduction in net financial debt to CHF 59.8 million, thereby further strengthening the balance sheet.
Proposal to refrain from paying a dividend for the 2025/26 financial year LEM targets a payout ratio significantly above 50% of the consolidated net profit for the year. In view of the uncertainty surrounding the economic environment, the Board of Directors proposes not to declare a dividend for the 2025/26 financial year. However, LEM remains committed to resume its attractive and sustainable dividend policy in the future.
Outlook LEM sees encouraging signs of a sequential improvement in bookings, driven by increasing demand from data center-related customers in Automation and Energy Distribution & High Precision, which is expected to further support the positive momentum. At the same time, LEM remains cautious about the general business development due to the uncertain global macro-economic environment.
Mid-term financial ambitions LEM reconfirms its mid-term financial ambitions to reflect the evolving market environment and currency developments. Following a phase of market adjustment expected to last through FY2026/27, LEM targets sustainable average annual sales growth of 4 to 7% at constant exchange rates and a gradual improvement of the EBIT margin towards a 10 to 15% range.
Investor, analyst and media conference Andreas Hürlimann, Chairman of the Board of Directors, Frank Rehfeld, CEO, and Antoine Chulia, CFO, will explain the 2025/26 full-year results today at 10:30 am CET at a conference for investors, analysts and media at the Widder Hotel in Zurich.
Conference call and audio webcast The conference for investors, analysts and the media will be broadcast via conference call and audio webcast.
To participate in the conference call, please register via this link. You will then receive a confirmation e-mail with individual dial-in data. As a participant in the conference call, you can follow the presentation here (please mute the browser sound). To access the live audio webcast, please use this link. Questions can be asked via the chat function. A recording of the webcast will be available after the call from LEM's website or using the same link.
Download link The ad hoc announcement, Annual Report and presentation are available in the Investor Relations section of the LEM website (www.lem.com/en/investors), where the webcast recording will later also be archived.
Financial calendar The financial year runs from 1 April to 31 March
LEM - Life Energy MotionA 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 1,626 people in 16 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 (LEHN). www.lem.com
Disclaimer This communication does not constitute an offer or solicitation to buy or sell securities of the Company. This quarterly update contains statements regarding expected or projected earnings, results of operations or financial performance for the current or future periods. Such statements may constitute forward-looking statements and are based on management's current views, assumptions and expectations at the time of publication. Actual results or earnings may differ materially from such expectations or guidance due to a variety of risks, uncertainties and other factors. Any earnings guidance referred to in this quarterly update reflects the information available to the Company as of the date of publication and should not be interpreted as a guarantee of future performance. The Company undertakes no obligation to update or revise forward-looking statements or guidance, except as required by applicable law. The financial information contained in this quarterly update is unaudited and may be preliminary in nature.
Appendix
Consolidated income statement
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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: | 2332986 |
| End of Announcement | EQS News Service |
2332986 26-May-2026 CET/CEST
