LEM (LEHN) Q2 2025 earnings summary

Executive summary

• Sales declined 29.9% year-over-year to CHF 156.5 million due to weak demand, high inventories, and customer destocking across all regions, with China showing some stabilization and growth in automotive and renewables.

• All business segments experienced significant declines, with renewable energy and automation most affected.

• EBIT margin dropped to 9.1% from 23.1% year-over-year, mainly from under-absorption of fixed costs and unfavorable mix.

• Net profit fell 80.2% year-over-year to CHF 8.6 million, with net profit margin at 5.5%.

• The "Fit for Growth" program was launched to address cost structure and competitiveness.

Financial highlights

• Revenue: CHF 156.5 million, down 29.9% year-over-year; EBIT: CHF 14.2 million, down 72.6%; EBIT margin 9.1%.

• Net profit: CHF 8.6 million, down from CHF 43.4 million; net profit margin 5.5%.

• Gross margin fell by 2.8 percentage points to 44.1%, mainly due to unfavorable mix and under-absorption of fixed costs.

• Equity ratio decreased to 35% after dividend payout and negative free cash flow.

• Net debt increased to CHF 113 million, driven by negative free cash flow and dividend payment.

Outlook and guidance

• Full-year 2024/25 revenue guided at CHF 290–310 million, with EBIT margin expected in the high single digits.

• The CHF 600 million revenue ambition is postponed from 2026/27 to 2029/30 due to slower market recovery and increased competition.

• Free cash flow is targeted to return positive for the full year through inventory and cost measures.

• No improvement expected in the second half; subdued market conditions to persist.