Lenovo Achieves Record Revenue for FY18/19 Driven by Success of Intelligent Transformation Strategy and Strong Operational Performance

  • Lenovo posts record fiscal year results with revenue reaching all time high of US$51 billion, up  12.5% year-on-year
  • Intelligent Transformation strategy drives PTI jump to US$856 million – up more than four times at 459% YOY
  • Net income is US$597 million, an increase of US$786 million from last year
  • Strong fourth quarter performance included double-digit growth (10.1% YOY) on revenue to US$11.7 billion, revenue and profit up across all businesses for the first time since x86 and Motorola acquisitions, and improved profitability: PTI at US$180 million, up 389% YOY; net income up 261% YOY to US$118 million
  • Management highlights strong foundation positioned for future growth, based on a customer-centric, multi-business operating system that can thrive in a transforming world

HONG KONG, May
23, 2019 
– Lenovo
Group
 (HKSE: 992) (ADR: LNVGY) today announced strong results
delivering on the company’s Intelligent Transformation strategy and highlighting
its leadership across all segments. For the first time, the global company delivered
full-year revenue exceeding US$50 billion, up 12.5% to a record-breaking US$51
billion.

The significant
increase in profitability includes full-year pre-tax income up four and a half
times (459%) year-on-year at US$856 million and net income at US$597 million,
up US$786 million from negative US$189 million last year.

The full-year performance
included a notably strong fourth quarter characterized by improving revenue and
profit across all businesses. Revenue grew by 10% year-on-year and reached
US$11.7 billion. Pre-tax income was US$180 million, up almost four times year-on-year
(US$143 million, +389%) and net income was US$118 million (up US$85 million, +261%).

Basic earnings
per share for the full year were 5.01 US cents or 39.2 HK cents, and for the
fourth quarter the figure was 1.00 US cents or 7.85 HK cents. Lenovo’s Board of
Directors declared a final dividend of 2.78 US cents or 21.8 HK cents per share
for the fiscal year ended March 31, 2019.

“Lenovo’s solid
financial performance is the result of persistent execution of our
transformation strategy. At a time of great global change – economically,
socially and environmentally – we continue to focus on how we ‘intelligently
transform’ ourselves and enable our many customers around the world successfully
to do the same. I am proud of our strong results and confident in how we will
climb to new heights in the future,” said Yang Yuanqing, Lenovo Chairman and
CEO.

Business Group Overview

The Intelligent Devices Group (IDG) continues
to lead the industry. Driven by Lenovo’s Smart IoT strategy, it saw revenue
grow by almost double digits for the full year (up 9.9%) and pre-tax income
more than doubled (109%) year-on-year to US$1,843 million for the same period.

The PC and Smart Devices group (PCSD), one
of IDG’s two business units, delivered a record full year revenue of US$38.5
billion, with pre-tax income of US$1.98 billion. Through customer innovation,
Lenovo is the #1 PC company in the world (according to IDC) with record market
share of 23.4% for the fiscal year and remains the fastest growing among the
top five players (+9.5% year-on-year). Challenging the status quo and
rethinking form factors and user experiences have resulted in numerous
technology breakthroughs in the past fiscal year, notably and most recently the
May 13 announcement of the world’s first PC with a foldable screen.

The second IDG business
unit, the Mobile Business Group (MBG),
improved pre-tax income by US$464 million year-on-year and was profitable starting
from the second half of the year thanks to a clear focus on selected markets, a
competitive product portfolio and expense control.

Prioritized
regions saw rapid growth, including a record share of 17.6% in Latin America.
In North America, volume outgrew the market by 59.2 points and in China by 185.8
points premium to market. In the rest of the world inventory was cleared with
notable profit improved – paving the way for a return to growth.

The Data Center Group (DCG) achieved the fastest
year-on-year growth since the acquisition of the x86 server business, growing
37% with record full year revenue of US$6.02 billion. This was led by strong
growth of the Hyperscale and Software Defined Infrastructure, which had revenue
growth of 240% and 96% year-on-year respectively.

Lenovo remains #1
in the world in performance with 139 world records, #1 in x86 reliability and
customer satisfaction according to ITIC (Information Technology
Intelligence Consulting), TBR (Technology
Business Research) and other
industry benchmarks, and the #1 provider of supercomputers in the TOP500 list.

Additional Highlights

During the course
of the year, the Lenovo Capital and
Incubator Group
successfully divested interests in three investments and
contributed US$107 million to the group’s pre-tax income. For the full fiscal
year, revenue from Software &
Services
reached US$2.4 billion, up 18.9% year-on-year.

Q4 highlights:

  • PCSD revenue grew
    10.3% year-on-year; in PC volume grew 9% year-on-year, 12 points premium to
    market.  The business regained #1 in
    consumer and strengthened its #1 leadership position in Commercial Notebook PCs
    over the US$800 price range with 34% year-on-year growth.
  • MBG was
    profitable for the second consecutive quarter, improving pre-tax income by
    US$146 million year-on-year; revenue returned to year-on-year growth for the
    first time after five quarters, at 15.1% year-on-year and outgrew the market by
    26.8 points. The quarter also saw the company bring the world’s first 5G mobile
    product to stores.
  • DCG business
    revenue and profit continue to improve year-on-year despite tough market
    conditions. The joint venture with NetApp in China is now operational and
    showing early signs of success

About Lenovo
Lenovo (HKSE: 992) (ADR: LNVGY) is a US$50 billion Fortune Global 500 company, with 57,000 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 LinkedInFacebookTwitterYouTube, InstagramWeibo and read about the latest news via our StoryHub.



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