Orders outpace sales as quarterly growth accelerates
LEM's first-half results, released Tuesday, showed revenue of CHF 174.6 million, a 17.7% increase from CHF 148.3 million. Excluding currency movements, sales grew 17.2%. Its operating margin widened from 7.7% to 14.7%, while net profit reached CHF 19.2 million, compared with CHF 6.8 million a year earlier.
The company booked CHF 201.7 million in orders, up from CHF 150.1 million. Automation, Renewable Energy and Energy Distribution & High Precision led the increase. Orders exceeded revenue, with a book-to-bill ratio of 1.16.
Growth in orders and sales accelerated in the July-September quarter. According to LEM's results presentation carried by MarketScreener, quarterly orders reached CHF 97.1 million, up 59.2% year over year, while revenue increased 23.3% to CHF 89.4 million. Operating profit, or EBIT, rose 84.7% to CHF 13.3 million, and net profit increased 110.9% to CHF 10.1 million.
LEM describes itself as an electrical-measurement company with about 1,779 employees in 16 countries. It has traded on the SIX Swiss Exchange under the ticker LEHN since 1986.
Data centers and battery storage support business growth
Demand for drives used to cool and ventilate data centers helped Automation lift sales by 25.8% at constant exchange rates. Data center applications also supported a 70.2% sales increase in Energy Distribution & High Precision.
Chief Executive Frank Rehfeld said, "The increasing importance of data center infrastructure demonstrates how our core current-sensing technologies are finding applications in new and rapidly evolving markets."
Renewable Energy returned to growth as demand for residential and commercial battery energy storage systems more than offset continued weakness in traditional solar. The business generated CHF 23.1 million in sales, compared with CHF 20.3 million a year earlier, an increase of 13.6%, or 12.2% at constant exchange rates.
Automotive sales reached CHF 42.4 million, up 4.3% from CHF 40.6 million, with currency-adjusted growth of 4.0%. LEM characterized the expansion as moderate and uneven across markets. Electric-vehicle demand remained challenging, while hybrid applications were steadier. Ongoing battery management projects and the ramp-up of existing customer platforms, particularly in Asia, supported growth.
Track moved in the opposite direction: sales declined 13.2% at constant exchange rates amid subdued activity in Europe.
Sales rise across all regions
China generated CHF 67.8 million in first-half revenue, a 23% increase. The rest of Asia contributed CHF 31.3 million, up 22.8% as reported and 27.3% at constant exchange rates. LEM cited demand for machine tools and robotics in Japan and data center infrastructure in India.
Revenue in Europe, the Middle East and Africa reached CHF 55.7 million, an increase of 12.0%, or 13.1% excluding currency effects. In the Americas, data center-related demand helped sales reach CHF 19.8 million, up 10.3% as reported and 11.8% at constant exchange rates.
LEM also signed a distribution agreement with AVNET Silica to expand its reach across EMEA. It expects the agreement to begin contributing in the 2027/28 financial year.
Margins and cash flow improve
Gross margin increased to 40.4% from 39.6%. LEM attributed the improvement to disciplined pricing, operating efficiencies and better absorption of fixed production costs, which together offset higher input costs.
Sales and administration expenses edged up to CHF 32.2 million from CHF 31.5 million, but their share of revenue declined from 21.3% to 18.4%. Research and development spending was 13.5% lower at CHF 12.6 million, versus CHF 14.6 million a year earlier.
With the restructuring program largely complete, related charges dropped to CHF 0.1 million from CHF 1.5 million. Free cash flow reached CHF 19.9 million, compared with CHF 5.6 million a year earlier. Net financial debt stood at CHF 44.6 million, down from CHF 59.8 million on March 31, 2026.
Full-year forecast and upcoming results
For 2026/27, LEM forecasts revenue of CHF 310 million to CHF 330 million and an operating margin in the low to mid-teens. The sales range implies that second-half revenue could be flat to lower. The company identified supply chain constraints, material availability and geopolitical developments as key uncertainties.
Its medium-term targets remain annual sales growth of 4% to 7% at constant exchange rates and an operating margin of 10% to 15%.
At the time of the half-year results, MarketScreener showed a Hold consensus based on five analysts. Their average target price was CHF 594.80, compared with the last closing price of CHF 568.00.
LEM's calendar lists nine-month results for February 5, 2027, followed by full-year results on May 27, 2027. The annual general meeting for the 2026/27 financial year is scheduled for June 24, 2027.
