Second consecutive record quarter, with revenue, pre-tax revenue and net revenue, recording the company’s record results Lenovo
today announced the Group’s record third-quarter revenue of $ 17.2 billion, up 22% from a year earlier. This was the second consecutive record quarter, driven by strong growth across all key business groups as well as the company’s transformation companies. Profit also set new records, with pre-tax revenue in the third quarter up 52% from a year earlier to $ 591 million, while net income also up 53% year-over-year to $ 395 million. . Lenovo’s continued growth is driven by the company’s innovative product portfolio, which is rapidly adapting to the culture of working, learning and playing from home in a rapidly changing world, while investments in transformation continue to drive new opportunities for long-term growth.
Basic earnings per share for the third quarter were 3.31 US cents or 25.66 Hong Kong cents.
“The results of another record quarter are a reflection of our innovative product portfolio and operational excellence that have driven growth across all companies,” said Yuanqing Yang, President and CEO of Lenovo. “It is clear that 2020 was a challenging year that brought incredible changes to our world, but Lenovo quickly responded to the changing market driven by new trends in work and lifestyle, which resulted in exceptional results. Now that we begin to see the results of our investment in transformation, we will continue to invest in technology and innovation, drive intelligent transformation across a variety of industries, and create sustainable growth. ”
The challenges of 2020 continue, to varying degrees, in the new year. These include ongoing geopolitical uncertainties, a shortage of product supply as a result of high demand, and the global COVID-19 pandemic. Yet, as a global company operating in 180 markets and having more than 30 manufacturing sites around the world, the outlook for 2021 remains positive. The new global norm of working, learning and playing from home will continue to drive long-term and sustainable growth trends in device demand and cloud infrastructure demand.
Business Group Overview
Intelligent Devices Group (IDG) Lenovo Group continues to lead the Group ‘s growth with PC and Smart Devices Group (PCSD) a group that had another quarter of historical proportions. Revenue of $ 14 billion, up 27% from last year, is followed by PTI with an increase of 35% year-on-year resulting in $ 925 million and a record profit margin of 6.6%. The quarter’s results were achieved thanks to Lenovo’s operational excellence, which saw growing worldwide demand, and an innovative product portfolio that quickly adapted to the needs of consumers who work, learn and play from home. Lenovo’s focus on innovation and high-growth segments has allowed it to maintain its number one leadership position in PC manufacturing, with a record 25.3% global market share. All geographic regions have had outstanding results – North America has grown by 60% annually, Europe, the Middle East and Africa have reached number one in terms of market share for the first time, the Asia-Pacific region has increased profitability to a new record, and China has increased deliveries by 30% over the previous year. The Group sees its annual growth in the PC market as a long-term shift in the technology sector that is sustainable beyond the pandemic. The latest IDC data confirmed that the total market exceeded 300 million units in 2020, driven by a strong fourth quarter of the calendar year. This further substantiates Lenovo’s view that the changing life trends of working, learning and playing from home will lead to demand for one device per person and continue to increase demand for PCs, tablets and smart devices in the long run. Lenovo will continue to focus on combining innovation to meet new customer needs and operational excellence to take advantage of this high demand in the future.
The second business unit of the IDG group, Mobile Business Group (MBG), achieved double-digit revenue growth on an annual basis and recovered from the impact of the COVID-19 pandemic, not only by continuing profitability, but also by achieving the highest profitability since the beginning of Motorola’s operations. Solid performance in Latin and North America has underpinned rapid expansion in Europe and Asia, where significant double-digit and triple-digit growth has been recorded thanks to more comprehensive carrier relations and a stronger product combination. The company will continue to use its strong product portfolio and 5G innovations to drive further profitable growth in the future.
Data Center Group (DCG) the group achieved record revenue of $ 1.63 billion thanks to comprehensive growth, while increasing profitability by almost one point annually. Cloud service providers and segments of large, medium and small companies achieved annual growth with a premium in the market. Large, medium and small companies reached one billion US dollars in revenue, which is the highest amount in the last three years, while Storage had a record income and outgrew the market by 11 points. Revenue from Software Defined Infrastructure and Services also reached a new record. Lenovo’s TruScale Private Cloud Infrastructure-as-a-Service as a combination with SAP’s HANA Enterprise Cloud was well received and generated high demand, while the company maintained its number one position on the TOP500 list of supercomputers. Looking ahead, we will take advantage of the growing demand for hybrid cloud and IT infrastructure and continue to grow in the market, while improving profitability.
Intelligent Transformation Lenovo’s companies have continued their remarkable progress as total Software and Services revenues * have risen nearly 36% to a new record of nearly $ 1.4 billion – over 8% of the group’s total revenues. Revenue * from ancillary services, management services and solution services reached annual growth of almost 26%, 73% and 49%, while Device-as-a-service provided high double-digit growth (74%) compared to last year. In addition, e-commerce revenues grew by almost 45% year-on-year and continued to set new records. These outstanding results demonstrate the importance of Intelligent Transformation as a long-term growth catalyst for the Group. Looking ahead, the Group sees opportunities to leverage its experience and its capabilities to build smart manufacturing, smart education and smart health solutions.
New organizational structure for fiscal year 21/22
Today, Lenovo also announces a new organizational structure designed to take advantage of the Group’s transformational growth opportunities. From April 1, 2021, Lenovo will bring together service and solution teams and capabilities from across the company to form a separate organization – a new group. Solutions & Services Group (SSG). The SSG Group will further drive the company’s transformation through gradual operations through smart verticals, additional services, management services and our services such as DaaS and Truscale ™.
This will structure Lenovo’s business into three main business groups aligned with the company’s 3S strategy – Smart IoT, Smart Infrastructure and Smart Verticals, with IDG grupu (Intelligent Devices Group) – focused on smart internet stuff; ISG group (Infrastructure Solutions Group, renamed DCG, Data Center Group) – focused on smart infrastructure; i SSG group – focused on smart verticals and services (Smart Verticals & Services). IDG will lead globally Luca Rossi (currently Senior Vice President and President of PCSD in the EMEA region and Latin America). The ISG will continue to lead globally Kirk Skaugen. And the newly formed global Lenovo Solutions & Services Group (SSG) will lead the group Ken Wong (currently Senior Vice President and President of PCSD in the Asia-Pacific region).
In addition, Lenovo ‘s sales organizations represented in worldwide markets will be divided into GEO China i International Sales Organization, which will lead Liu Jun (currently Executive Vice President and President of IDG Group in China) i Matt Zielinski (currently Senior Vice President and President of PCSD Group in North America), to increase synergies and efficiencies between business groups. All five leaders will be directly accountable to Yuanqing Yang and will have a seat on Lenovo’s Executive Board (LEC).
Gianfranco Lanci, the corporate president and CEO of Lenovo, also announced his plans to retire from the company in September 2021. Until then, he will continue to serve as president and chief operating officer of the Lenovo Group and will be responsible for Lenovo’s global operations in all business groups. and sales.
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