• Group revenue up by almost 7% year-on-year to US$13.3 billion
• Pre-tax income (PTI) of US$332 million, up 38% year-on-year
• Net income up 31% year-on-year to US$213 million
• Software and services revenue* grew 38% year-on-year, to more than
US$1 billion – now accounting for around 7.6% of Group revenue
HONG KONG-Thursday 13 August 2020 [ AETOS Wire ]
(BUSINESS WIRE)-- Lenovo Group (HKSE:
992) PINK SHEETS: LNVGY) today announced Group revenue in the first
quarter of US$13.3 billion, up almost 7% year-on-year (up 10%
year-on-year excluding currency impact). Pre-tax income grew 38%
compared to the same quarter a year earlier, to US$332 million, while
net income also increased by 31% year-on-year to US$213 million. Basic
earnings per share for the first quarter were 1.80 US cents or 13.95 HK
cents.
“Our
outstanding performance last quarter proves that Lenovo has quickly
regained momentum from the impact of the pandemic and is capturing the
new opportunities emerging from remote working, education and
accelerated digitalization,” said Yang Yuanqing, Lenovo Chairman and
CEO. “While the world continues to face challenges, Lenovo is focused on
delivering sustainable growth through our core businesses as well as
the new services and solutions opportunities presented by our
service-led intelligent transformation.”
Global economic factors
The
last quarter has presented multiple industry-wide business challenges,
including ongoing geo-political uncertainties and the COVID-19 pandemic.
To chart a path through these challenges, Lenovo continues to leverage
its core competencies of operational excellence and a ‘global sourcing,
local delivery’ approach. Looking to the geo-political landscape, Lenovo
continues to believe that cooperation in trade, technology and culture
provides significant economic benefits to all markets and will ensure
that technology can benefit and empower everyone in society.
Business Group Overview
Lenovo’s Intelligent Devices Group (IDG) continues to lead the company’s strong performance. The PC and Smart Devices Group (PCSD),
one of the two IDG business units, grew revenue by double digits
year-on-year to US$10.6 billion. Pre-tax income reached US$670 million,
up nearly 28% year-on-year, while industry-leading profitability
improved by almost 1 point to a new record of 6.3%. The PC market
significantly outperformed the industry forecast of a market decline,
with Lenovo retaining its #1 leadership position in the worldwide PC
Devices market (PC and Tablets). Similarly, there was strong
year-on-year growth (45%) in Consumer business revenue worldwide. Driven
by these successes, revenue grew 30% in EMEA and 18% in China. Volume
in high-growth and premium categories such as Gaming, Thin & Light,
Visuals, and Chromebooks all continued to grow at high double-digits.
The worldwide e-Commerce business was a notably stellar performer, with
revenue growth over 50% year-on-year.
Looking
to the future, the company expects this strong PC demand will be a
long-term trend. As a result, Lenovo will focus on innovative products
that adapt to the new global environment, further strengthen its global
supply chain to meet the fast-growing demand, continue to develop its
e-Commerce platform and focus on high-growth segments to drive
premium-to-market growth with leading profitability.
IDG’s second business unit, the Mobile Business Group (MBG),
while still impacted by COVID-19 and challenging currency exchange
rates, has improved momentum with revenue increasing by 33% over the
last quarter. Although revenue declined year-on-year, volume outgrew the
market year-on-year in key markets like Latin America, North America
and Europe, with record high market share in both Latin America and
North America. Looking forward Lenovo will continue to leverage its
strong product portfolio, innovative technology, particularly in 5G, and
expand carrier ranging to resume profitable growth.
The Data Center Group (DCG) resumed
hypergrowth, with revenue growing almost 20% to US$1.6 billion and
profitability improving year-on-year. Notable successes included Cloud
Service Provider business (previously called hyperscale), which grew
more than 30% year-on-year, setting a new revenue record by capturing
strong public cloud infrastructure demand driven by increased digital
consumption due to COVID-19 lockdowns. Meanwhile, the customer base
continues to grow thanks to customized in-house design and manufacturing
capabilities and an expanded cloud services provider salesforce. Enterprise and SMB business
(previously called non-hyperscale) delivered year-on-year revenue
growth, led by double-digit revenue growth in high-growth segments such
as Software Defined Infrastructure and Services, as well as
High-Performance Computing. Looking ahead, we expect long-term growth in
the Cloud Service Provider segment and will leverage the team’s
existing strength in public and private cloud to expand the Edge
computing business.
Lenovo’s Intelligent Transformation continues
to show strong progress as a result of determined execution of the 3S
strategy. Overall Software and Services revenue* grew 38% year-on-year
to over US$1 billion, now accounting for around 7.6% of Group revenue.
Smart IoT revenue* grew 39% year-on-year, Smart Infrastructure was up
16% and Smart Verticals* up 65%, driven by Smart City solutions in China
and Smart Healthcare solutions in North America. Attached Service* grew
32% year-on-year, Managed Service* (including fast growing Device as a
Service) grew 48% year-on-year and Solutions* grew 54% year-on-year.
* invoiced revenue
About Lenovo
Lenovo
(HKSE: 992) (ADR: LNVGY) is a US$50 billion Fortune Global 500 company,
with 63,000 employees and operating in 180 markets around the world.
Focused on a bold vision to deliver smarter technology for all, we are
developing world-changing technologies that create a more inclusive,
trustworthy and sustainable digital society. By designing, engineering
and building the world’s most complete portfolio of smart devices and
infrastructure, we are also leading an Intelligent Transformation – to
create better experiences and opportunities for millions of customers
around the world. To find out more visit https://www.lenovo.com, follow us on LinkedIn, Facebook, Twitter, YouTube, Instagram, Weibo and read about the latest news via our StoryHub.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200812005775/en/
Contacts
Hong Kong – Angela Lee, angelalee@lenovo.com, +852 2516 4810
London – Charlotte West, cwest@lenovo.com, +44 7825 605720
Zeno Group - LenovoWWcorp@zenogroup.com
