LEM (LEHN) Q2 2026 earnings summary

Executive summary

• Sales declined 5.3% year-over-year to CHF 148.3 million, but were stable at constant exchange rates, with growth in Automotive (+8.9%), Track (+14.9%), and Automation (+2.8%) at constant rates; FX losses fully accounted for the decline.

• 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.

• Free cash flow turned positive at CHF 5.6 million, a significant improvement from a CHF 12 million outflow a year ago, driven by tighter working capital management.

• Net profit for H1 was CHF 6.8 million, down 20.8% year-over-year, with a net profit margin of 4.6%.

• 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, mainly due to forex, price, and mix effects, but rebounded to 41.1% in Q2.

• EBIT 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 fell 13% to CHF 31.5 million, with further sequential savings in Q2; SG&A as % of sales was 21.3%.

• R&D costs reduced by over 20% through footprint alignment and prioritization, now 9.9% of sales.

• Net debt position improved, with equity ratio above 40% and financial long-term liabilities decreased to CHF 59.8 million.

Outlook and guidance

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

• Mid-term guidance updated to 4%-7% annual growth (constant currencies) and 10%-15% EBIT margin, reflecting market stabilization through 2026-2027.

• 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.

• Uncertainties persist due to US tariff policy, currency fluctuations, and geopolitical risks in the semiconductor sector.