Lenovo delivers file quarter, as technique and investments in innovation proceed to drive sustainable profitability

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Hong Kong, February 23, 2022, Lenovo Group (HKSE: 992) (ADR: LNVGY) at present introduced file quarterly outcomes for the Group, marking a historic excessive for each revenue and income and the Group’s first US$20 billion quarter. The corporate’s give attention to innovation and profitability backed by its operational excellence has helped it navigate broad business provide challenges and drive fast progress and profitability throughout all main enterprise teams and geographies.

Lenovo’s efficiency delivered important enhancements year-over-year. 6. Internet revenue elevated by greater than 50% forth For the quarter in a row, Q3 grew 62% year-over-year to a file US$640 million. In the direction of the group’s purpose of doubling in three years, internet revenue margins improved by almost a single level. Earnings earlier than tax have been up 45% year-on-year at a file US$855 million, and the Group’s income continued its robust progress trajectory, registering a 17% year-on-year progress of US$20.1 billion.

As a part of the corporate’s broader dedication to doubling R&D investments over three years, Lenovo continues to make important investments in innovation, with R&D bills up 38% year-over-year for the quarter. The investments are aligned to drive Lenovo’s ongoing transformation to a options and companies firm, by creating applied sciences targeted on the “New IT” full stack structure of “client-edge-cloud-network-intelligence”. Wanting forward, the corporate is specializing in its 3S technique (Sensible System/IoT, Sensible Infrastructure, Sensible Vertical), seeing steady alternatives for sustainable progress and bettering profitability throughout all segments of the enterprise, making it a double internet by the tip. Maintaining on observe of margins of FY 2023/2024.

Grasp Seng Index Co., Ltd. introduced final week that efficient March 7, 2022, Lenovo shall be included as a constituent inventory on the Grasp Seng Index – Hong Kong’s benchmark inventory gauge.

Monetary Highlights:

Q3 2021/22 Graph English

President and CEO quote – Yuanqing Yang:

“Lenovo continues to embrace alternatives pushed by accelerated digital and clever transformation, and our new IT structure positions us nicely with ‘client-edge-cloud-network-intelligence’ capabilities. With one other file quarter , we delivered 6.th Quarterly internet revenue of over 50% on a year-on-year foundation, and the primary US$20 billion income quarter in our historical past. We’re on observe to double each our internet margin and R&D investments in three years from FY 2020/21 ranges. Lenovo Chairman and CEO Yuanqing Yang mentioned. “As soon as once more, we’ve got proven that Lenovo’s innovation, transformation technique and powerful execution can ship sustainable profitability progress for the foreseeable future.”

Options and Companies Group (SSG): Delivering robust progress and excessive margins – driving increased general profitability for the group

alternative:

Options & Companies Group is driving robust profitability and progress in a quickly rising market. Because the know-how structure turns into extra advanced, clients demand extra refined IT companies, and the market is projected to exceed US$1 trillion by 2025. This features a excessive demand for key help and customised achievement from information employees, about half of whom now work. from afar.

Q3 Efficiency:

  • Practically three-point progress year-over-year, with important Q3 income progress (25% year-over-year to US$1.5 billion), 7.1% of general group income and an working margin of over 22%.
  • Assist companies noticed income progress of 21% year-over-year.
  • Powered by Lenovo TrueScale as a Service introduced final quarter, managed companies noticed a 50% year-over-year enchancment in income. Successes in Sensible Retail helped Undertaking Companies & Options obtain 23% year-over-year income progress.

trying forward:

  • Lenovo will proceed to grab the large market alternative to drive each income progress and better profitability. This begins with the rise in distant employees, the place Lenovo will leverage its international service footprint to assist remodel employee productiveness by main help, as a service, and digital office options.
  • In managed companies, Lenovo will proceed to spend money on Lenovo TrueScale choices, hybrid cloud options and extra software program and companies primarily based on the corporate’s personal IP.
  • The corporate will additional increase its sustainability options for purchasers, comparable to its asset restoration service and most lately, the growth of its carbon offset service.

Infrastructure Options Group (ISG): Reaching profitability, rising at a robust premium to market

alternative:

Alternatives for ISGs proceed to develop because the modernization of ICT infrastructure expands around the globe. The ICT infrastructure market is predicted to turn out to be a US$250 billion market by 2025. By the identical time, the sting infrastructure market alone is predicted to exceed US$41 billion.

Q3 Efficiency:

  • ISG delivered file efficiency, reaching the milestone of attaining profitability for the primary time for the reason that IBM x86 acquisition in 2014. Income grew 19% 12 months over 12 months to succeed in US$1.9 billion. This was the fourth straight quarter that market income grew at a double-digit premium.
  • The enterprise outpaced the market in nearly each section. cloud service supplier income elevated 38% year-over-year; Enterprise/SMB income improved 7% year-over-year.

trying forward:

  • Lenovo will leverage its protection of all buyer segments (totally different scale CSP, Enterprise, SMB) as a novel benefit to steadiness scale and profitability in addition to buyer calls for for safety/reliability and agility/flexibility .
  • Investments will proceed in quickly rising and increasing segments comparable to edge computing.

Clever Gadgets Group (IDG): Robust income progress and powerful profitability, with rising contributions from non-PC companies

alternative:

The marketplace for good gadgets is benefiting from the brand new regular of hybrid functioning and the PC market is anticipated to stay robust and steady to maneuver into the industrial and premium segments. In smartphones, the market reshuffle will deliver extra progress alternatives for Lenovo, and extra progress potential for rising good gadgets comparable to embedded computing/IoT with the penetration of 5G and the brand new IT improvement of “edge-cloud-network-intelligence”. will present. , powered by the AR/VR metaverse, in addition to good house and good collaboration options.

Q3 Efficiency:

  • Wonderful outcomes with income progress of US$17.6 billion on an already excessive 16% year-on-year foundation, with even stronger profitability progress – up 21% year-on-year to US$1.4 billion.
  • The premium PC section delivered excessive progress in workstation and gaming revenues with a year-on-year progress of 40% and 27%, respectively.
  • The smartphone maintained a wholesome revenue for the seventh quarter in a row, with income up a whopping 46% year-on-year and turning into the fastest-growing main vendor. Revenue is equal to final quarter’s all-time excessive of US$89 million. Main strongholds noticed fast progress, with income in Latin America up 25% year-on-year, and income in North America greater than doubling year-on-year (133%).
  • In rising good machine classes, income from good collaboration options almost doubled year-over-year.

trying forward:

  • Lenovo will spend money on innovation, premium segments and core elements to drive increased income and improve common promoting costs. In cell, we are going to additional strengthen our portfolio and make investments to increase into new markets in Europe and Asia Pacific. We can even proceed to spend money on non-PC merchandise comparable to IoT, Metaverse, good house and good collaboration options to seize rising alternatives and additional improve the non-PC enterprise combine.

Operational highlights and investments for the long run

  • Lenovo continues Considerably give attention to the ESG by all of your actions – From using progressive recycled supplies in merchandise such because the ThinkPad Z sequence, launched in January 2022, to using carbon impartial flights for cargo shipments.
  • As well as, Lenovo has lately gained important exterior recognition for its ESG actions and commitments, together with:

About Lenovo

Lenovo (HKSE: 992) (ADR: LNVGY) is a $60 billion Fortune International 500 firm with revenues that serves clients in 180 markets around the globe. Specializing in a daring imaginative and prescient to offer good know-how for all, we’re creating world-changing applied sciences that energy (by tools and infrastructure) and empower (options, companies) thousands and thousands of consumers each day. and software program) and work collectively to create a extra inclusive, reliable one. And sustainable digital societies in every single place, for all. Go to https://www.lenovo.com to be taught extra and skim concerning the newest information through our StoryHub.

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