• Lenovo continues transformation from single PC
hardware company into multi-business innovator in smart devices, data centers,
Internet of Things (IoT) and Artificial Intelligence
• Q4 revenue of US$10.6 billion was up 11% YTY, the first double-digit increase
in 10 quarters
• Group Q4 PTI up sharply to US$37 million versus US$15 million last year;
group operational performance improved US$255 million year-on-year
• Q4 net income was US$33 million
• Year-on-year growth with overall FY revenue up 5% to US$45.3 billion
• Personal Computer Group, Smart Devices, Mobile Business fully combine into
new, ‘Intelligent Devices Group’
HONG KONG-Thursday, May 24th 2018 [ AETOS Wire ]
(BUSINESS
WIRE)-- Lenovo Group (HKSE: 0992) (PINK SHEETS:
LNVGY) today announced results for its fourth fiscal quarter and full fiscal
year ended March 31, 2018. For its fourth fiscal quarter FY2017/18, Lenovo reported
US$10.6 billion in revenue, up 11% year-on-year - the first double digit
increase in 10 quarters - demonstrating solid performance momentum.
In the fourth fiscal quarter Lenovo’s group pre-tax income was
US$37 million, up 143% year-on-year from US$15 million. The company also
improved profitability in all three key businesses for the quarter
year-on-year, with group operational performance1improving US$255 million
year-on-year to US$76 million. Profit attributable to shareholders for Q4 was
US$33 million, lower than the same period last year due to a larger tax credit
recorded in FY2016/17.
For the full fiscal year, the company’s overall revenue was over
US$45.3 billion, up 5 % year-on-year. Group operational performance reached
US$193 million, improving US$96 million year-on-year. The company recorded a
US$189 million net loss for the full year mainly due to a one-time non-cash
write-off charge of US$400 million from deferred income tax assets in Q3
FY2017/18.
Basic earnings per share in the fourth fiscal quarter was 0.28 US
cents or 2.19 HK cents, and for the full year basic loss per share was 1.67 US
cents or 13.05 HK cents. Lenovo’s Board of Directors declared a dividend of
2.61 US cents, or 20.5 HK cents per share for the fiscal year ended March 31,
2018.
Business Group Overview
·
Personal Computers and
Smart Devices (PCSD) reported US$7.7 billion in FYQ4 revenue, up 16% from the
same period a year earlier and the highest growth in four years. For the year,
PCSD reported US$32.4 billion, up 8% from FY2016/17
·
The Data Center Group
(DCG) revenue grew 44% during the quarter compared to Q4 FY2016/17 to US$1.2
billion. For the year, DCG reported US$4.4 billion in revenue, up 8% from
FY2016/17
·
The Mobile Business
Group (MBG) revenue for Q4 FY2017/18 was US$1.3 billion and for the full year
was US$7.2 billion. Lenovo remains optimistic that aggressive cost-cutting and
exceptionally strong performances by MBG in Latin America (volume grew 40%
year-on-year for the full year), or more than 20 times the industry) and North
America (volume +57% year-on-year for the full year) are expected to yield
substantially improved results as FY2018/19 continues
“Last quarter, we resumed double-digit revenue growth with strong
profitability improvement year-on-year, closing the fiscal year with a strong
momentum and proving that Lenovo has truly entered a new phase of growth,” said
Yang Yuanqing, Lenovo Chairman and CEO. “Lenovo’s vision has long been to
become a global leader in intelligent transformation. We will focus on building
competitiveness in Smart IoT devices, data center infrastructure and vertical
intelligent solution, and we are well positioned to take advantage of smart IoT
and intelligence era.”
During the quarter Lenovo also announced the integration of
its Personal Computer and Smart Devices Group with its Mobile
Business Group, creating the Intelligent Devices Group (IDG).
This new group will further fast-track the company’s innovation leadership and
ambitions for growth across the full spectrum of smart devices. This new
structure will create a number of efficiencies by leveraging shared global
supply chain and services. IDG will also accelerate Lenovo innovation as
communications and computing technologies come together under a single platform
to better connect devices, users, applications and content.
ADDITIONAL BUSINESS GROUP HIGHLIGHTS
PC and Smart Devices (PCSD) business group: During the fourth quarter, PCSD
posted strong revenue growth of 16% compared to the same period a year earlier.
For the year, PCSD reported an 8% increase in revenue, and remained the world’s
#1 PC and Tablet maker2, with market share growing 0.2 points to 15.6%
globally. Additionally:
·
Returned to
industry-leading PTI margin of 5% in Q4 FY2017/18. All geographies continued to
be profitable with margin expansion in four out of five
·
Strong, double-digit,
year-on-year revenue growth across regions in the Americas, Asia Pacific, and
EMEA
·
Named Best Laptop Brand
2018 by LAPTOP Magazine for a second consecutive year
·
In Q4 FY2017/18
delivered second consecutive quarter of double-digit year-on-year growth and
achieved highest revenue growth (+44%) since the IBM System x acquisition in
2014 – with all geographies showing positive year-on-year revenue growth
·
North America and EMEA
posted their fourth consecutive quarter of strong year-on-year revenue growth
·
HPC solidified the
number two position globally in the top 500 Supercomputing list, fast closing
the gap to number one player
Mobile Business Group (MBG): During the quarter MBG moved with urgency to reshape the
business for future growth and to accelerate progress toward
profitability. This included the appointment of Sergio Buniac to lead the
business outside of China; a realignment of the product portfolio ahead of
forthcoming launches; overall channel inventory reduction, and a strategic
market review to identify the opportunities for most profitable growth.
·
In Q4 FY2017/18 Latin
America remained the strong core for MBG, recording double-digit (13%)
year-on-year revenue growth
·
In North America,
shipments continued to show strong, year-on-year growth as Lenovo strengthened
presence with mainstream models and carrier expansion. North America shipments
grew 54% year-on-year for Q4 and gained 1.1pts of market share to 3.8% in Q4
FY2017/18
·
Expense reduction for
the new fiscal year as part of a strategy to reduce loss and focus on
strengthening MBG’s leading position and profitability in Latin America, North
America and Western Europe by simplifying the portfolio, optimizing the cost
structure and leveraging shared platforms
Lenovo Capital and Incubator Group: Lenovo continues to be a beneficiary and driver
of some of the most robust trends in global technology innovation, notably
artificial intelligence. Lenovo’s investment arm, Lenovo Capital and Incubator
Group (LCIG), funded 85 companies during the past years, and oversaw eight
independent spin-offs.
About Lenovo
• Q4 revenue of US$10.6 billion was up 11% YTY, the first double-digit increase in 10 quarters
• Group Q4 PTI up sharply to US$37 million versus US$15 million last year; group operational performance improved US$255 million year-on-year
• Q4 net income was US$33 million
• Year-on-year growth with overall FY revenue up 5% to US$45.3 billion
• Personal Computer Group, Smart Devices, Mobile Business fully combine into new, ‘Intelligent Devices Group’
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LENOVO
GROUP
FINANCIAL
SUMMARY
For
the fiscal quarter and full year ended March 31, 2018
(in
US$ millions, except per share data)
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Q4 17/18 |
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Q4 16/17 |
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Y/Y CHG |
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FY17/18 |
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Y/Y CHG |
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Revenue
|
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10,638
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9,579
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11%
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45,350
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5%
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Gross
profit
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1,544
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1,368
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13%
|
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6,272
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3%
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Gross
profit margin
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14.5%
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14.3%
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0.2pts
|
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13.8%
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-0.4pts
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Operating
expenses
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(1,443)
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(1,294)
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11%
|
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(5,885)
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8%
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Expenses-to-revenue
ratio
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13.6%
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13.5%
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0.1pts
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13.0%
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0.4pts
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Operating
profit
|
|
101
|
|
74
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36%
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387
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-42%
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Other
non-operating expenses- net
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(64)
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(59)
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9%
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(234)
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28%
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Pre-tax
income
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37
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|
15
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143%
|
|
153
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-69%
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Taxation
|
|
12
|
|
89
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-87%
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(280)
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N/A
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Profit/(loss)
for the period/year
|
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49
|
|
104
|
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-53%
|
|
(127)
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N/A
|
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Non-controlling
interests
|
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(16)
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3
|
|
N/A
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(62)
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N/A
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Profit/(loss)
attributable to equity holders
|
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33
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|
107
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-69%
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(189)
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N/A
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Earnings/(loss)
per share (US cents)
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Basic
|
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0.28
|
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0.97
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(0.69)
|
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(1.67)
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N/A
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Diluted
|
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0.28
|
|
0.97
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(0.69)
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(1.67)
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N/A
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1 Operational performance is measured as profit before
taxation, but excluding restructuring charges and disposal gains on properties
2 Source: IDC
Quarterly Personal Computing Device Tracker, 2018Q1 Final Historical
Contacts
Lenovo Group
Hong Kong –
Angela Lee, +852 2516 4810
angelalee@lenovo.com
or
London –
Charlotte West, +44 7825 605720
cwest@lenovo.com
or
Zeno Group
LenovoWWcorp@zenogroup.com
Hong Kong –
Angela Lee, +852 2516 4810
angelalee@lenovo.com
or
London –
Charlotte West, +44 7825 605720
cwest@lenovo.com
or
Zeno Group
LenovoWWcorp@zenogroup.com
