LENOVO-GROUP-LIMITED
22.2.2024 05:27:32 CET | Business Wire | Press release
Lenovo Group Limited (HKSE: 992) (ADR: LNVGY), together with its subsidiaries (‘the Group’), today announced third quarter results reporting Group revenue increasing 3% year-on-year to US$15.7 billion, and Group profitability improving quarter-to-quarter for the second time in a row. Net income was US$357 million on a non-Hong Kong Financial Reporting Standards (non-HKFRS)[1] basis, with net income margin up 0.4% quarter-to-quarter to 2.3%. The Group’s diversified growth engines continued to deliver strong performance, with revenue from non-PC businesses accounting for 42% of Group revenue, up 1.3 points year-on-year.
The consistent quarter-to-quarter improvements over past quarters have been driven by the resilience of the Group’s core businesses and the wider effectiveness of its ongoing transformation. The SSG business hit an important milestone of passing the US$2 billion revenue threshold, achieved a record high operating profit with operating margin of over 20% and grew revenue from managed services and project and solution services year-on-year for 11 straight quarters. The ISG business delivered quarter-to-quarter revenue growth and reached a record high US$1 billion revenue for its storage, software, and services businesses. Overall, the IDG business resumed revenue growth, outperformed the market and achieved year-on-year shipment growth for PCs, and maintained its industry-leading profitability.
Financial Highlights:
|
Q3 FY 23/24 US$ millions |
Q3 FY 22/23 US$ millions |
Change
|
Group Revenue |
15,721 |
15,267 |
3% |
Pre-tax income |
471 |
605 |
(22%) |
Net Income (profit attributable to equity holders) |
337 |
437 |
(23%) |
Net Income (profit attributable to equity holders – non-HKFRS) [1] |
357 |
447 |
(20%) |
|
|
|
|
Basic earnings per share (US cents) |
2.81 |
3.65 |
(23%) |
Chairman and CEO quote – Yuanqing Yang:
“Last quarter, we delivered on our promise and resumed year-on-year revenue growth, driven by both the resilience of our core businesses and the effectiveness of the service-led transformation. Looking ahead, our commitment to AI innovation, our pocket-to-cloud computing capabilities, full stack portfolio of smart devices, smart infrastructure, smart solutions and services, combined with our partnerships with other key leaders in AI, will ensure that we are well-positioned to capture the tremendous opportunities in AI.”
Accelerating AI leadership
The Group is capitalizing on the significant growth opportunities afforded by the AI-era. In particular, the emerging trend of hybrid AI is directly driving the demand for AI PCs, a trend that will stimulate another industry refresh cycle as users require devices designed for more creativity and productivity. Alongside devices, hybrid AI is driving increased demand for hybrid infrastructure and customer demand for AI-native applications, solutions and services such as advisory, design, development and maintenance – fueling growth across multiple customer verticals.
To further build its unique position in the AI-era, Lenovo is continuing its investment commitments in innovation. R&D headcount is up year-to-year at more than 25% of Group headcount, with R&D expenses-to-revenue ratio for the full fiscal year on track to hit an all-time high. This ongoing investment, together with a full portfolio of AI-enabled, AI-ready, and AI-optimized devices, infrastructure, solutions and services, is the foundation of Lenovo’s vision of ‘AI for All’ - changing the way individuals and enterprises live and work and will fuel future sustainable growth for the Group.
Recent AI announcements from the Group include a partnership with Anaconda to accelerate AI development and deployment of Lenovo’s high-performance data science workstations, a suite of AI-powered devices and solutions announced at the annual CES show, an expansion of its hybrid cloud platform for AI with new ThinkAgile hyperconverged solutions and ThinkSystem servers, and a newly launched cyber-resiliency as a service (CRaaS) offering.
Solutions and Services Group (SSG): Record revenue, record operating profit, driving AI solutions
Q3 FY23/24 performance:
- Record revenue of US$2.0 billion, with double digit year-on-year growth. Record high operating profit with operating margin of over 20%.
- Protected support services and software as the core profit engines for SSG.
- Further expanded managed services and project and solutions services, together now making up 55% of SSG’s revenue, up 1.5 points year-on-year and growing consecutively year-on-year for 11 straight quarters.
Opportunities and Sustainable Growth:
- SSG has strong momentum for its hero offerings, including Digital Workplace Solutions (DWS), Hybrid Cloud, and sustainability solutions and services.
- SSG focused its hero offerings to support specific vertical industries with smart solutions, winning major customer deals.
- Increasing customer demand of AI technology used in industry use cases - with accompanying services such as advisory, design, and deployment - fueling AI services growth across different verticals.
Infrastructure Solutions Group (ISG): Capturing opportunities in AI infrastructure
Q3 FY23/24 performance:
- ISG delivered quarter-to-quarter revenue growth for the second consecutive quarter.
- Combined revenue from storage, software, and services reached a record high of US$1 billion.
- ISG expects to remain a solid #3 globally for both storage and AI infrastructure.
Opportunities and Sustainable Growth:
- AI server is expected to grow nearly twice as fast as the total server market.
- ISG is growing key strategic partnerships to strengthen its portfolio competitiveness.
- The rise of AI is driving higher demand for smart infrastructure (better performance, smarter management, and lower energy consumption). Lenovo is unique with its comprehensive Edge to Cloud portfolio, AI Innovators program, and AI Innovation Centers delivering vertical and horizontal pre-validated solutions to the industry.
Intelligent Devices Group (IDG): Resumed growth and solidified leadership
Q3 FY23/24 performance:
- IDG delivered a strong quarter with revenue resuming growth thanks to a clear strategy, consistent investment in innovation, and operational excellence.
- Continued PC market recovery saw IDG outperforming the market and returning to year-on-year shipment growth with the highest market share since Covid at nearly 24%. North America excelled with year-on-year PC revenue growth of 20%.
- The non-PC devices business made encouraging progress. The smartphone and tablet businesses returned to high double-digit year-on-year shipment growth with a significant premium to the market of more than 20 points. Smartphone shipments were up 32% year-to-year – with hypergrowth in Asia Pacific, EMEA and North America.
Opportunities and Sustainable Growth:
- The trend of hybrid AI will drive the demand for client devices and another refreshment cycle, creating growth potential and margin improvements.
- Lenovo has a unique opportunity to develop a fully unified AI experience that spans users’ digital ecosystems, including PC, tablets, and smartphones.
ESG highlights
Lenovo has been recognized for several ESG achievements over the past quarter, including:
- Maintaining the highest possible score in the annual MSCI ESG ratings with a AAA rating.
- Being honored with a Gold award in the annual Best Corporate Governance and ESG awards by the Hong Kong Institute of Certified Public Accountants.
- Included in the Human Rights Campaign Foundation’s 2023-2024 Corporate Equality Index for the 6th consecutive year.
- Receiving its highest score in the annual Workplace Pride Global Benchmark.
[1] non-HKFRS measure was adjusted by excluding net fair value changes on financial assets at fair value through profit or loss, amortization of intangible assets resulting from mergers and acquisitions, mergers and acquisitions related charges; and the corresponding income tax effects, if any. |
About Lenovo
Lenovo is a US$62 billion revenue global technology powerhouse, ranked #217 in the Fortune Global 500, employing 77,000 people around the world, and serving millions of customers every day in 180 markets. Focused on a bold vision to deliver smarter technology for all, Lenovo has built on its success as the world’s largest PC company by further expanding into growth areas that fuel the advancement of ‘New IT’ technologies (client, edge, cloud, network, and intelligence) including server, storage, mobile, software, solutions, and services. This transformation together with Lenovo’s world-changing innovation is building a more inclusive, trustworthy, and smarter future for everyone, everywhere. Lenovo is listed on the stock exchange of Hong Kong under Lenovo Group Limited (HKSE: 992)(ADR: LNVGY). To find out more visit https://www.lenovo.com, and read about the latest news via our StoryHub.
LENOVO GROUP |
||||
|
||||
FINANCIAL SUMMARY For the quarter ended December 31, 2023 (in US$ millions, except per share data) |
||||
|
|
|
||
|
|
|
|
|
Revenue |
|
15,721 |
15,267 |
3% |
Gross profit |
|
2,601 |
2,612 |
(0)% |
Gross profit margin |
|
16.5% |
17.1% |
(0.6) pts |
Operating expenses |
|
(1,988) |
(1,862) |
7% |
R&D expenses |
|
(547) |
(579) |
(6)% |
(included in operating expenses) |
|
|
|
|
Expenses-to-revenue ratio |
|
12.6% |
12.2% |
0.4 pts |
Operating profit |
|
613 |
750 |
(18)% |
Other non-operating income/(expenses) - net |
|
(142) |
(145) |
(2)% |
Pre-tax income |
|
471 |
605 |
(22)% |
Taxation |
|
(94) |
(123) |
(23)% |
Profit for the period |
|
377 |
482 |
(22)% |
Non-controlling interests |
|
(40) |
(45) |
(11)% |
Profit attributable to equity holders |
|
337 |
437 |
(23)% |
Profit attributable to equity holders- non-HKFRS [1] |
|
357 |
447 |
(20)% |
EPS (US cents) |
|
|
|
|
Basic |
2.81 |
3.65 |
(0.84) |
|
Diluted |
2.64 |
3.44 |
(0.80) |
|
To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240221855723/en/
About Business Wire
Subscribe to releases from Business Wire
Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Business Wire
Ant International Secures Payment Institution Licence from the Central Bank of Brazil4.9.2026 16:41:00 CEST | Press release
Expanding the company’s capability to support local partners with FinAI solutions Ant International, the leading global digital payment, digitisation, and FinAI solutions provider, today announced that it has received a Payment Institution (PI) licence from the Central Bank of Brazil. “With the Central Bank's invaluable support, we are ready to step up more reliable and comprehensive global payment and account services to enterprises, platforms and SMEs in the country's dynamic digital economy, in ever deeper collaboration with its highly developed payments ecosystem and financial services industry,” said Rodrigo Reif, General Manager, Ant International Brazil. Ant International provides cross-border payments and account services, embedded credit and treasury services, and other finAI and blockchain solutions to clients across Asia, Europe and the Americas. The company processes over 20 million transactions daily, connecting 2 billion consumer accounts to 150 million global merchants v
Bending Spoons completes the acquisition of Airtable4.9.2026 14:30:00 CEST | Press release
Bending Spoons S.p.A. (NASDAQ: BSP) has completed the previously announced acquisition of Airtable, the platform used by more than 500,000 organizations to reshape how teams organize data and manage critical workflows. “Airtable continues to grow because customers value its best-in-class flexibility,” said Luca Ferrari, Bending Spoons CEO and co-founder. “Teams can bring all their data, context, and AI agents together in one place, shape their workflows around their specific needs, and progressively expand their use of the platform over time. As we take the reins, our focus will be on sustaining that growth by investing heavily in Airtable’s product, customer support, and go-to-market capabilities.” “I’m proud of what the Airtable team has built and excited to see the business enter this next chapter,” said Howie Liu, co-founder of Airtable. “I’m confident Bending Spoons has the resources and long-term perspective to help Airtable continue delivering exceptional value to its customers
EQT to acquire McGill and Partners, a leading specialty (re)insurance broker for USD 2.0 billion, from Warburg Pincus4.9.2026 13:48:00 CEST | Press release
Warburg Pincus and McGill and Partners have reached an agreement with EQT that will see Warburg Pincus sell its majority stake to EQT McGill and Partners founders, management team and colleagues will re-invest alongside EQT, retaining a meaningful ownership stake in the firm going forward as they continue to serve clients globally Maintains commitment to firm’s independent model and culture of ownership, developed organically since its founding in 2019 EQT will partner with Steve McGill and the management team to accelerate organic growth, including via talent recruitment, further development of technology and data capabilities, and expansion of innovative digital solutions EQT and McGill and Partners are pleased to announce that EQT X ("EQT") has entered into a definitive agreement to acquire a majority stake in McGill and Partners from Warburg Pincus for USD 2.0bn. Founder and Chief Executive Officer Steve McGill will continue to lead the firm, while Chairman John Lloyd will remain a
A Race Is Never Won Alone: With La Tavolata, Barilla Brings the Paddock Family Together on the Monza Grid4.9.2026 12:18:00 CEST | Press release
A nearly 100-meter-long dinner table hosted more than 200 guests for an evening celebrating collaboration, trust and the bonds built beyond competition. On Thursday evening ahead of the Formula 1® Italian Grand Prix, Barilla transformed one of the sport’s fastest and most competitive environments into a place where the Paddock Family took center stage. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260902463001/en/ La Tavolata by Barilla on the starting grid of the Monza circuit. More than two hundred people gathered around a single table: drivers, Team Principals, mechanics, engineers, strategists, safety and medical car drivers, personal trainers, tire technicians. The individuals whose collaboration, precision and trust shape every race, every decision and every performance. A nearly 100-meter table set with plates and pasta. With the first-ever Tavolata organized by Barilla and F1, people from across the Formula 1® ecosy
Aqara Showcases The New Smart Lighting Series and Immersive Smart Home Experience at IFA 20264.9.2026 11:30:00 CEST | Press release
Aqara, a global leader in IoT, today announced a new lineup of smart lighting products and a global community platform for smart space creators, at IFA 2026 in Berlin. The announcements reflect Aqara's ongoing vision for AI-driven spatial intelligence — spaces that understand their users and adapt to how people actually live in them. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260904365343/en/ Aqara Showcases The New Smart Lighting Series and Immersive Smart Home Experience at IFA 2026 The new lighting series — spanning indoor and outdoor use — integrates seamlessly with Aqara's existing ecosystem of sensors, switches, and hubs, bringing complete whole-space lighting scenarios and automated controls to life. The new Aqara products showcased include the Floor Lamp T1, LED Downlight T2, LED Strip T2, Outdoor String Lights H1, and Permanent Outdoor Lights H1. In addition, the company will present Aqara Builder, a platform fo
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.
Visit our pressroom