Investor Presentation, 28 August 2013

A Close Look at LEM

Agenda

1. Introduction

2. Long Term Growth

3. Business Development Q1 of 2013/14

4. Executing LEM’s Strategy

5. Outlook

2

Market Position Performance Perspectives

Global market share of 50%

Benchmark in service and product quality

4 production sites in Europe and Asia

Sales of CHF 235 and EBIT margin of 17.5% in 2012/13

Continued sales growth and margin improvements

19.2% average total share-holder return p.a. (03/2008 to 08/2013)

Dividend yield >5% in each year since 2009

Reinforced invest-ment in innovation

Solid growth perspec-tives due to under-lying trends

Strong foothold in China

EBIT margin target of 15 to 20%

Global Market Leader in Current and Voltage Transducers

3

Diverse Target Markets – Diversified Businesses

85%

15%

Automotive segmentIndustry segment

4

Drives & welding

Renewable energies & power supplies

Traction

High precision

Conventional CarsGreen Cars

Early cycle

Mid cycle

Late cycle

Consumer durables

Share of sales 2012/13 Macro drivers

Industrial investment

Infrastructure investments

Technology adoptionFuel savings

Energy prices, subsidies

Cyclicality

Products and Applications

Conventional cars■ Lead battery management■ Start-stop application

Green cars (HEV, EV)■ Battery pack management■ Electric motor control■ Embedded charger

Drives & welding■ Motor drives■ Welding■ Miscellaneous

Renewable energies & power supplies■ Solar■ Wind ■ UPS■ Battery monitoring, process

control, energy metering

Traction■ On-board applications■ Trackside■ Energy monitoring

High precision■ Medical scanner■ Test & measurement

Industry segment Automotive segment

5

LEM Applications: Elevator

The controller moves the motor in the right direction and lets it stop exactly at the right position to the floor ground, independent of the weight in the elevator car. The current transducers take care that the motor is powered with the correct current.

Elevator doors are controlled by a control unit that integrates the motors of the sliding doors. The current transducer measures the current in the motors to run the panels smoothly and to discover if something (e.g., a finger, a leg) obstructs the doors.

1

2

3

LA 150-P

Door control unit

Motor

Controller

B

A LTS 1

2

2

3

AB

6

LEM Applications: Start-Stop System for Cars

The current sensors (HAB, CAB) allow the battery management system to decide if enough energy is available in the battery to operate the accessories (such as air-conditioning, headlights, and radio) while the engine is off, and still have ample charge left to restart the engine.

The “power-control unit” will instruct the “starter generator” to restart the engine or recharge the battery, as needed, and current sensors (HC5, HAH3) used in the converters and inverter modules allow it to operate smoothly, improving the driver experience while helping the environment.

A

1

2

3

CAB

Battery

Power control unit

Internal combustion engine

B HAB

4 Starter generator

5 Rectifier

C HC5 D HAH3

1

2

34

5

AB B

CD

7

LEM Perceived as the Global Leader in Current and Voltage Transducers

2012 customer satisfaction survey conducted in all territories■ LEM rated as high as in a 2009 study■ LEM most valued for

■ Focus on customer demands and requests ■ Ease to work with ■ Trustworthiness■ Professionalism in solving issues

■ Highest ratings for reliability, performance and quality of products

8

Agenda

1. Introduction

2. Long Term Growth

3. Business Development Q1 of 2013/14

4. Executing LEM’s Strategy

5. Outlook

9

Sales Growth 1993/94 to 2012/13

10

0

50

100

150

200

250

300

In CHF millions

CAGR 10%

Comparable basis excluding the instruments business sold in 2004/05

EBIT Margin Development

11

5%

10%

15%

20%

25%

Q1

04/0

5Q

2 04

/05

Q3

04/0

5Q

4 04

/05

Q1

05/0

6Q

2 05

/06

Q3

05/0

6Q

4 05

/06

Q1

06/0

7Q

2 06

/07

Q3

06/0

7Q

4 06

/07

Q1

07/0

8Q

2 07

/08

Q3

07/0

8Q

4 07

/08

Q1

08/0

9Q

2 08

/09

Q3

08/0

9Q

4 08

/09

Q1

09/1

0Q

2 09

/10

Q3

09/1

0Q

4 09

/10

Q1

10/1

1Q

2 10

/11

Q3

10/1

1Q

4 10

/11

Q1

11/1

2Q

2 11

/12

Q3

11/1

2Q

4 11

/12

Q1

12/1

3Q

2 12

/13

Q3

12/1

3Q

4 12

/13

Q1

13/1

4

Operational EBIT in % of sales

EBIT margin target

8.9%

12.6%

5.9%

* 15.3% operating margin before restructuring provisions of CHF 1.9m booked in Q4 of 2012/13

*

Free Cashflow, Net Earnings

120

5

10

15

20

25

30

35

40

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Free Cashflow

Net earnings

In CHF millions

Shareholder Return from 2004/05 to 2012/13

0

5

10

15

20

25

30

35

40

45

50

Dividend Share buy back Par value reduction

13

In CHF millions

LEM returned CHF 213.1 million to shareholders

0

100

200

300

400

500

600

700

Market capitalization increased from CHF 92.6 million to CHF 671.5 million

In CHF millions

Cash returned to shareholders Market capitalization per 31 March

Agenda

1. Introduction

2. Long Term Growth

3. Business Development Q1 of 2013/14

4. Executing LEM’s Strategy

5. Outlook

14

Performance in Q1 of 2013/14

In CHF million,% Q1 2013/14 Q4 2012/13* Q1 vs. Q4

Orders 65.1 58.7 +10.8%

Sales 61.8 55.8 +10.8%

Book-to-bill ratio 1.05 1.05 -

Gross margin 45.4% 37.6% +7.8%pt

Operating expensein % of sales

-14.8-23.9%

-14.425.8%

+2.8%-

R&D expensein % of sales

3.96.3%

3.97.1%

--

EBIT 13.3 6.6 +101.3%EBIT margin 21.5% 11.8% -

Net earnings 9.8 3.9 +147.8%

15* Q4 including CHF 1.9m restructuring provisions. Theoretical numbers without this impact: gross margin 41.1%, EBIT 8.5m / 15.3%

44%

14%

42%

Europe

North America

Asia and ROW

Industry Segment: Regional Markets

In CHF million, % Sales Q1 vs. Q4

Europe 23.3 -3.8%N. America 7.4 +14.7%Asia and ROW 22.7 +34.9%Total 53.5 +12.4%

European business still weak Double digit growth in Asia and North

America China remains #1 Industry market

16

0

5

10

15

20

25

0

40

80

120

160

200

240

280

09/10 10/11 11/12 12/13 Q1 13/14

Industry Segment: Business Development

In CHF millions Op. EBIT in % of sales

Businesses and Applications

Drives & welding (growth QoQ: +13%) Contribution from all regions Growth and market share increase in China

Renewable energies & power supplies (+31%) Seasonal effect in solar business Renewables markets in China an Japan

benefitting from government subsidies Consolidation in solar and wind markets

Traction (-14%) Delays of projects Restrained investments in rail infrastructure

High-precision (+6%) Increased market share in US medical

applications17

7%

56%

37%

EuropeNorth AmericaAsia and ROW

Automotive Segment: Regional Markets

In CHF million, % Sales Q1 vs. Q4

Europe 0.5 -37.3%N. America 4.6 +5.1%Asia and ROW 3.1 +7.6%

Total 8.3 +1.5%

Conventional cars business driving performance

Focus on Asian and North American markets

Customers’ inventory corrections, mainly in the US

18

-10

-5

0

5

10

15

20

25

-15

-10

-5

0

5

10

15

20

25

30

09/10 10/11 11/12 12/13 Q1 13/14

Automotive Segment: Business Development

In CHF millions Op. EBIT in % of salesBusinesses and Applications

Conventional cars (growth QoQ: +8%) Growth in battery management

application Ramp-up of LEM’s new start-stop-

application faster than expected

Green cars (HEV, EV) (-32%) Market burdened by high vehicle

prices Continued technological hurdles Limited success of electrical cars

19

Sales■ Market share of over 50%■ Market share increase in some

drives & welding applications■ Biggest market with 24% of total

sales

Business Development ChinaProduction■ LEM China expands its #1 position as

largest manufacturing site of the Group (56% of total production, compared to 51% in financial year 2012/13)

■ “Made by LEM” qualityIn CHF millions In CHF millions

20

0

10

20

30

40

50

60

09/10 10/11 11/12 12/13 Q1 13/140

20

40

60

80

100

120

09/10 10/11 11/12 12/13 Q1 13/14

Agenda

1. Introduction

2. Long Term Growth

3. Business Development Q1 of 2013/14

4. Executing LEM’s Strategy

5. Outlook

21

Market Factors and Strategy

■ We firmly believe in our strategicdirection and the 4 drivers for ourbusiness remain unchanged

■ We will continue to capitalize onthe drivers of LEM’s markets through pure play components company diversification across geographies

and markets

22

Executing Strategy: Increase Technology Leadership

Key strategic initiative■ Reinforce multidisciplinary innovation team■ Increase number of product launches■ Constantly improve performance of

products■ Establish dedicated team of experts to

manage LEM’s IP

23

Achievements 2012/13■ Increased investment in R&D■ Launched 8 new products, secured 11

new patents■ Established LEM IP in Fribourg

Product Launches 2012/13 (1/2)

HLSR New ASIC with twice improved accuracy Very cost effective with new design Designed for drives and solar market

CAB Digital bus output and embedded microcontroller Highest accuracy for battery monitoring application State of charge measurement for hybrid vehicles

Customer specific transducer Communication with microcontroller / serial interface Adapted for tri-phase machine for HEV and EV

HC 20 High current range: 1’000 to 2’000 A Small size Designed for battery monitoring in conventional cars

HAH3 DR

Automotive

Automotive

Automotive

Industry24

Product Launches 2012/13 (2/2)

HO New ASIC with twice improved accuracy New functionalities: over-current detection,

stand-by mode First programmable transducer

DVL New technology to create a digital isolation Improved sensitivity to external magnetic fields Robust design for harsh environments in

traction applicationsHFWS Customer specific transducer

Communication with microcontroller and serial interface Very small size for the current measured

confidential

LA130-150 Design for cost to replace older versions Proven technology based on closed loop hall Designed for industrial applications Industry

Industry

Industry

Industry

25

Executing Strategy: Increase Efficiency

Key strategic initiative■ Improve product cost through low cost

sourcing and manufacturing■ Reduce complexity of organization

26

0%

5%

10%

15%

20%

25%

30%

35%

OPEX in % of Sales

Achievements 2012/13■ Centralized high precision business in

Geneva■ Establish LEM Bulgaria

Executing Strategy: Increase Production Flexibility

Key strategic initiative■ Develop systems to better forecast

demand fluctuations■ Improve supply chain management

27

Achievements 2012/13■ Improved S&OP ■ Improvements in cycle management

5%

10%

15%

20%

25%

Q1

04/0

5Q

3 04

/05

Q1

05/0

6Q

3 05

/06

Q1

06/0

7Q

3 06

/07

Q1

07/0

8Q

3 07

/08

Q1

08/0

9Q

3 08

/09

Q1

09/1

0Q

3 09

/10

Q1

10/1

1Q

3 10

/11

Q1

11/1

2Q

3 11

/12

Q1

12/1

3Q

3 12

/13

Q1

13/1

4

EBIT in % of Sales

Agenda

1. Introduction

2. Long Term Growth

3. Business Development Q1 of 2013/14

4. Executing LEM’s Strategy

5. Outlook

28

Outlook

■ Economic climate expected to remain volatile

■ For 2013/14 we expect■ Industry segment: progressive restart of sales in North

America and Asia, Europe to remain weak■ Automotive segment: continued growth

■ After a strong Q1 of 2013/14, we observe a stabilization of the business at the current level

■ Further implementation of key strategic initiatives

■ Operating margins to remain within target range of 15 to 20% 29

Financial Calendar and Contact Details

Financial calendar13 November 2013 Half-year results of 2013/1418 February 2014 Third quarter results of 2013/144 June 2014 Year-end results and media and analyst conference26 June 2014 Ordinary shareholders’ meeting for the year 2013/141 July 2014 Dividend ex-date4 July 2014 Dividend payment date

For further informationJulius Renk, CFOTel: +41 22 706 12 50Email: investor@lem.com

30

Shareholder Structure per 31.3.2013

Werner O. Weber & Ueli Wampfler

39.3%**

Ruth Wertheimer /7-Industries Holding

12.7%

Sarasin Investmentfonds AG

7.9%

Montanaro Asset Management

6.1%

Erwin Studer and Joraem de Chavonay

4.1%

Amerprise Financial Inc./Threadneedle

3.4%

LEM Board & Management

1.0%*

Other25.5%

31

* Excludes shareholdings of Ueli Wampfler

** Opting out clause introduced in LEM’s articles of incorporation by the shareholders' meeting on 25 June 2010