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
Sharjah Unveils Uruk: A New Generation of Sustainable Cities Built for the Post-AI Era29.10.2026 19:15:00 CET | Press release
In the presence of His Highness Sheikh Dr. Sultan bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Sharjah, and Her Highness Sheikha Bodour bint Sultan Al Qasimi, President of American University of Sharjah and Chairperson of Sharjah Research, Technology and Innovation Park, a pioneering model for a new generation of cities designed for the post-AI era called “Uruk.” This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20261029129346/en/ H.H. Sheikh Dr. Sultan bin Mohammed Al Qasimi, Ruler of Sharjah, during the inauguration of “Uruk” (Photo: AETOSWire) The project was revealed at the opening of the second edition of Sharjah Next, through a strategic partnership between Sharjah Research, Technology and Innovation Park (SPARK), American University of Sharjah (AUS) and SEE Holding, bringing together their capabilities in innovation, scientific research and sustainable urban development. Uruk introduces a new vision for urba
Motive and Vivo Brazil Win 2026 Leading Lights Award for Network API Monetization29.10.2026 17:35:00 CET | Press release
Award recognizes live GSMA Open Gateway deployment replacing SMS OTP with SIM-based silent authentication Motive, a global leader in entitlement, connected device and service management and Vivo Brazil, Brazil’s largest operator and part of the Telefónica Group, have won the 2026 Light Reading Leading Lights Award for Outstanding Use Case: Network API Monetization for the first commercial scale deployment of SIM-based silent authentication in Latin America. SMS OTP remains relevant as an authentication method due to its broad reach, working on virtually any type of mobile device. SIM-based silent authentication takes this experience a step further by eliminating the need to receive and manually enter codes. The result is a simpler, more seamless user journey that reduces friction and can help lower abandonment rates while increasing customer conversion and retention. Using Motive’s CAMARA-compliant Entitlement Server, Vivo can now verify a subscriber’s phone number directly without req
REV Ocean Appoints Paul Baribault as CEO Ahead of 2027 Global Operations29.10.2026 15:45:00 CET | Press release
Global conservation and philanthropic leader to spearhead REV Ocean's next chapter, connecting world-class science with international collaboration and ocean protection REV Ocean has appointed Paul Baribault as Chief Executive Officer as the organization moves towards the international debut of its 195-metre research vessel in Rio de Janeiro in April 2027, alongside the UN Ocean Decade Conference. One of the world's largest privately owned research and exploration vessels, REV represents a major philanthropic investment in ocean science. With nine laboratories, advanced deep-sea exploration vehicles and dedicated collaboration facilities, it is designed to give scientists access to world-class research infrastructure and connect their discoveries with the people and institutions able to drive ocean protection. Baribault joins as REV Ocean moves from a decade of engineering and construction into international operations. His mandate will be to build the international partnerships, fundi
Holder Partners Launches Strategic Communications Practice and Appoints Ali Ponte as Director and Practice Lead29.10.2026 15:15:00 CET | Press release
The new practice connects strategic communications and stakeholder engagement with Holder Partners’ capabilities in investigations, disputes, cybersecurity, due diligence and risk advisory. Holder Partners, a multidisciplinary consulting and advisory firm, today announced the launch of its Strategic Communications practice and the appointment of Ali Ponte as Director and Practice Lead. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20261027701219/en/ Ali Ponte, Director and Practice Lead of Holder Partners’ Strategic Communications practice. The practice advises leading companies and institutions, their boards, senior executives and counsel on communications, reputation and stakeholder considerations in complex matters and periods of significant change or opportunity. Each engagement is tailored to the client’s objectives and, where relevant, draws on Holder Partners’ broader advisory capabilities. Its strategic counsel, infor
Accertify Formalizes Partner Ecosystem as Fraud, Payments, and Chargebacks Converge Into a Single Risk Surface29.10.2026 15:00:00 CET | Press release
New partner program brings payment providers, orchestrators, commerce platforms, and consultancies together around the industry's largest fraud data community Accertify, a leading fraud decisioning provider whose Predictive Yes Platform helps merchants say yes to more good customers, more revenue, and more growth, today announced the launch of the Accertify Partner Program, a formalized partnership ecosystem connecting payment providers, orchestrators, commerce platforms, and consultancies to Accertify’s network-powered fraud intelligence. Partners can join through two tracks. The Referral track lets partners make a single introduction while Accertify handles the sale, implementation, and support. The Reseller track lets partners sell Accertify on their own contract and own the client relationship and margin. Partners that integrate with Accertify follow a defined certification path, so clients get a tested, supported connection from day one. Every client a partner brings joins a conso
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