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
Takeda Receives U.S. FDA Approval of MIMRYLO™ (rusfertide), Marking a Potential Shift in the Treatment Paradigm for Polycythemia Vera29.8.2026 00:40:00 CEST | Press release
MIMRYLO, a First-in-Class Medicine with a Unique Mechanism of Action, is Approved for the Treatment of Erythrocytosis in Adults with Polycythemia Vera (PV)MIMRYLO Has Been Shown to Maintain Hematocrit Control, the Primary Treatment Goal in PV, as Well as Reduce Phlebotomy Burden and Improve FatigueApproval Supported by Phase 3 VERIFY Results Showing 76.9% of Patients Achieved Clinical Response During Weeks 20-32 Takeda (TSE:4502/NYSE:TAK)announced U.S. Food and Drug Administration (FDA) approval of the New Drug Application (NDA)* for MIMRYLO™ (rusfertide) for the treatment of erythrocytosis in adults with polycythemia vera (PV), a blood cancer. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260824773270/en/ MIMRYLO Logo MIMRYLO is a first-in-class hepcidin mimetic designed to regulate iron distribution in the body and red blood cell overproduction to control hematocrit levels, which is the ratio of red blood cells to the tot
Rigaku and Tohoku University Establish a New Research Institute for X-Ray Metrology28.8.2026 16:00:00 CEST | Press release
Rigaku Corporation, a group company of Rigaku Holdings and a global solutions partner for X-ray analytical systems (Head Office: Akishima, Tokyo; President and CEO: Jun Kawakami; “Rigaku”), and Tohoku University (Sendai, Miyagi; President: Teiji Tominaga; “Tohoku University”) have established the Rigaku-Tohoku University Co-Creation Research Institute for X-ray Metrology: Beyond The Limits (the “Institute”) at Tohoku University on August 1, 2026. The Institute will advance X-ray metrology technology, develop new metrology methods, and foster the next generation of researchers through an initial three-year collaboration, with the possibility of extension based on its achievements. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260828688510/en/ Inside the Institute As semiconductors become smaller, more multilayered, and incorporate a wider range of materials, manufacturing processes are becoming increasingly complex. X-ray me
BLK: Portfolio Company of Enry’s Island S.p.A., Lists on Euronext Dublin28.8.2026 15:34:00 CEST | Press release
Enry’s Island S.p.A. (WBAG:EIOS), an international venture builder with headquarters in the Tremiti Islands and the Metaverse, announces that BLK Global PLC, one of the portfolio companies within its ecosystem, has successfully completed its admission to trading on Euronext Access Dublin. Trading in the company’s shares commenced on Friday, July 31, 2026, under ticker BLKX and ISIN GB00BPSKS130. BLK was one of the thousands of applications received by Enry’s Island which, following an assessment process based on the Enry’s Model, was selected for a one-year incubation and acceleration programme. The programme supported the company through its subsequent growth stages, ultimately leading to its current stock market listing. Alessandro Pacciana, Investor Relations Manager of Enry’s Island S.p.A., said: “BLK’s listing is the second stock market listing in two years among Enry’s Island’s portfolio companies, while Enry’s Island itself is the world’s first listed venture builder. We are pro
Zambon Announces European Commission Approval of Hopledo® for Adults with Parkinson's Disease and Moderate to Severe Motor Fluctuations28.8.2026 11:00:00 CEST | Press release
Hopledo® is a first-in-class, oral, modified-release formulation of levodopa/carbidopa (LD/CD) approved for the treatment of motor fluctuations of Parkinson’s disease Zambon expects to begin the phased introduction of Hopledo® across European markets starting October 2026 The approval is based on data from the Phase 3 RISE-PD trial where Hopledo® demonstrated a significant increase in Good ON time compared with immediate-release LD/CD with fewer daily doses and a comparable safety profile Zambon today announced that the European Commission (EC) has granted marketing authorization for Hopledo® (modified-release levodopa/carbidopa) for the treatment of adult patients with Parkinson’s disease and moderate to severe motor fluctuations who have not been sufficiently stabilized with oral levodopa/dopa decarboxylase (DDC) inhibitor-based treatment regimens. Zambon expects to begin the phased introduction of Hopledo® across European markets starting October 2026. The company is working closely
MTG-I2 Safely in Orbit, Unlocking Faster and Sharper Weather Monitoring Across Europe28.8.2026 10:16:00 CEST | Press release
The Meteosat Third Generation Imager 2 satellite (MTG-I2) has successfully passed its first critical post-launch milestones, completing the first full Meteosat Third Generation constellation in orbit. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260828243790/en/ Credit: Arianespace livestream The imager satellite MTG-I2 is safely in orbit and operating as expected following its successful launch yesterday at 22:11 CEST on board an Ariane 6 rocket from Europe’s Spaceport in French Guiana. Our teams have established communication with the spacecraft, which has also deployed its solar panels to ensure its autonomous production of energy. MTG-I2 is in perfect shape to start its Launch and Early Operations Phase that will bring it to a higher orbit, 36 000km above Earth over the following two weeks, where a longer period of calibration and validation of its instruments will begin. This summer’s extreme weather and wildfires hav
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