LEM (LEHN) Q2 2026 earnings summary

Executive summary

• Sales declined 5.3% year-over-year to CHF 148.3 million, but grew 0.5% at constant exchange rates, with resilience in Automation, Automotive, and Track segments offsetting currency headwinds.

• Margin recovery was achieved through the Fit for Growth program, with EBIT margin improving from 5.5% in Q1 to 9.9% in Q2, despite lower sales.

• Net profit for the period was CHF 6.8 million, down 20.8% year-over-year, with a net margin of 4.6%.

• Free cash flow improved to CHF 5.6 million from CHF -11.6 million a year earlier, driven by tighter working capital management.

• No ordinary dividend was distributed in the period, compared to CHF 56.9 million in the previous year.

Financial highlights

• Gross margin decreased to 39.6% from 44.1% year-over-year, but rebounded to 41.1% in Q2 from 38.2% in Q1.

• EBIT for the half year was CHF 11.4 million (7.7% margin), down 19.8% year-over-year; EBIT before restructuring was CHF 12.8 million (8.6% margin).

• SG&A expenses dropped 13% year-over-year, with further sequential savings in Q2; R&D expenses decreased by over 20% due to cost discipline and restructuring.

• Net working capital increased by CHF 4.6 million, mainly due to severance and vendor payments.

• Cash and cash equivalents increased to CHF 20.4 million from CHF 18.7 million at the end of March 2025.

Outlook and guidance

• Sales guidance for FY 2025-2026 set at CHF 265–290 million, with high single-digit EBIT margin.

• Mid-term ambitions updated: after a market adjustment phase through FY2026/27, targets are 4–7% average annual sales growth and EBIT margin of 10–15% at constant exchange rates.

• Market stabilization expected through 2026–2027, with growth resuming thereafter.

• Free cash flow expected to remain positive in H2, with continued focus on cost control and capital discipline.

• No major change in business development expected for the remainder of the year.