LEM (LEHN) Q4 2026 earnings summary

Executive summary

• Sales were stable at CHF 287.7 million, down 0.2% at constant currencies but declined 6.3% in Swiss Francs due to FX headwinds, with Automation as a key growth driver (+10.2% at constant currency) and signs of stabilization in Western markets.

• Bookings rebounded to CHF 295.9 million, with a Q4 book-to-bill ratio of 1.16, indicating recovery momentum, especially in Automation and Energy Distribution & High Precision.

• Strategic focus remained on leveraging global megatrends such as data center infrastructure, electrification, energy efficiency, and E-Mobility, with continued implementation of the Fit for Growth transformation program to enhance competitiveness and operational efficiency.

• Organizational restructuring included expanding R&D in Asia, consolidating shared services in Bulgaria, and strengthening production in Malaysia and Bulgaria.

• The board is reviewing potential strategic options to increase long-term value, with no decisions made yet.

Financial highlights

• Sales declined 6.3% year-over-year, but only 0.2% at constant exchange rates due to currency depreciation.

• EBIT rose 29.2% to CHF 24.4 million (margin 8.5%), and net profit increased 17.5% to CHF 9.9 million (margin 3.4%).

• Gross margin stabilized at 40.0%, with improvement in the second half due to pricing initiatives and productivity gains.

• SG&A expenses reduced by 12% year-over-year, now 21.6% of sales, driven by Fit for Growth actions; R&D spend brought below 10% of revenue, with improved alignment to end markets.

• Net financial debt reduced to CHF 59.8 million from CHF 90.1 million YoY; equity ratio improved to over 42%.

• Effective tax rate rose to 45% due to higher profits and a one-time hit from uncarried losses.

Outlook and guidance

• Sequential improvement in bookings expected, driven by data center-related demand in Automation and Energy Distribution & High Precision.

• Guidance for 2026/2027 remains cautious, expecting a sideways year before growth accelerates from 2027/2028, with 4%-7% annual growth and margin targets of 10%-15%.

• Gross margin improvement efforts focus on pricing actions, supply chain optimization, and increased capacity utilization.

• Ongoing adaptation includes expanding R&D in Asia, consolidating service centers, and strengthening production in Malaysia.