Lenovo Group: Full Year Financial Results 2020/21
Lenovo Group (LNVGY) reported record results for Q4 and FY 20/21, showing significant growth across its business. Q4 revenue surged by 48% year-on-year to US$15.6 billion, while pre-tax income reached US$380 million, up 392%. Annual revenue exceeded US$60 billion, marking a 20% increase from the previous year. The company also declared a final dividend of 3.09 US cents per share. Lenovo's diversified strategy continues to drive growth, reflected in strong performances across core segments including PC and Smart Devices and Data Center Group.
- Q4 revenue grew by 48% year-on-year to US$15.6 billion.
- Net income increased by 512% to US$260 million in Q4.
- Annual revenue surpassed US$60 billion with a 20% increase.
- Mobile Business Group revenue up 86% year-on-year.
- Software and Services revenue grew nearly 40% year-on-year.
- None.
Lenovo Group (HKSE: 992) (PINK SHEETS: LNVGY) today announced record results for the Group for both its fourth quarter and fiscal year, with phenomenal growth across all parts of the business. The results demonstrate the Group’s resilience and ability to achieve balanced, consistent, and sustainable growth as it continues to diversify and transform in line with its 3S (Smart IoT, Smart Infrastructure, Smart Solutions) corporate strategy.
Fourth quarter Group revenue grew at
Lenovo’s Board of Directors declared a final dividend of 3.09 US cents or 24 HK cents per share for the fiscal year ended March 31, 2021.
Financial Highlights:
|
FY 20/21
|
FY 19/20
|
Change |
|
Q4 20/21
|
Q4 19/20
|
Change |
Group Revenue |
60,742 |
50,716 |
|
15,630 |
10,579 |
|
|
Pre-tax income |
1,774 |
1,018 |
|
380 |
77 |
|
|
Net Income (profit attributable to equity holders) |
1,178 |
665 |
|
260 |
43 |
|
|
|
|
||||||
Basic earnings per share (US cents) |
9.54 |
5.58 |
3.96 |
2.19 |
0.36 |
1.83 |
Chairman and CEO quote – Yuanqing Yang:
“Last quarter, we delivered our fastest growing quarter in almost a decade and closed the fiscal year with the new milestone of passing US
Fourth quarter record driven by simultaneous double-digit revenue growth across all core businesses
-
Best fourth quarter ever for PC and Smart Devices (PCSD) with US
$12.4 billion in revenue, up46% year-on-year and profitability at an all-time high of6.7% . - All geographies realized high double-digit growth in PCSD revenue and PC volume outgrew the market – further strengthening the company’s global #1 ranking in PCs.
-
Tablets had a breakthrough quarter, with shipments growing
157% year-on-year – around three times as fast as the market. - High growth and premium segment volumes (Gaming, Thin & Light, Chromebooks, Visuals) continue to outgrow the market and deliver strong double to triple-digit growth rates.
-
Revenue from the Mobile Business Group (MBG) achieved hyper-growth, up
86% year-on-year to US$1.54 billion – achieving pre-tax income of US$21 million – a record high since the Motorola acquisition. - Expanded carrier relationships and a strong product portfolio, including 5G products, saw smartphone volumes grow at triple digit rate in North America, Europe, and Asia Pacific.
-
Smartphone market share in our Latin America stronghold reached a record of nearly
21% . -
Revenue for the Data Center Group (DCG) was strong, growing
32% year-on-year to US$1.6 billion , the fifth straight quarter of premium-to-market growth. Profitability improved 4.4 points year-on-year. -
The Cloud Service Provider business grew
73% year-on-year and at a 61-point premium to the market. -
Record high fourth quarter revenue was achieved for Server, Storage, Software Defined Infrastructure, Software, and HPC/AI. Traditional storage was a particular highlight growing at
73% year-on-year. - Burgeoning Edge business delivering strong signs of future growth.
-
Transformation businesses also achieved record growth, fueled by ongoing strong growth in services and software revenue* up
44% year-on-year. Managed Services revenue* (DaaS, TruScale) nearly doubled, and Solutions revenue* grew65% year-on-year.
Fiscal year milestone fueled by leveraging core competencies of clear strategy, product innovation, operational excellence, and Global/Local model
-
For the first time, Group revenue surged past US
$60 billion , adding more than US$10 billion , or20% year-on-year growth in just one year. -
Intelligent Devices Group (PCSD and MBG) and Data Center Group achieved revenue growth of
20% and15% respectively. -
The Group’s Service-led transformation is forging ahead. Software and Services revenue grew twice as fast at the overall Group revenue, at almost
40% year-on-year to a record US$4.9 billion – now makes up8% * of Group revenue.
Operational highlights
- Effective April 1, 2021, the Lenovo Group brought together services and solutions teams and capabilities from across the company to form a dedicated organization - the new Solutions & Services Group (SSG). This business group will further strengthen our attached services portfolio and increase attach rates, enhance and expand managed services, and develop repeatable solutions in key vertical industries.
- The Group’s global supply chain continues to be best-in-class with the global footprint expanding to include a new in-house factory in Hungary which will be fully operational later in 2021. Most recently Gartner ranked Lenovo as one of the world’s top 25 supply chains, citing the company as a stand-out performer in customer-driven business transformation, noted for embracing the use of advanced technologies like 5G, blockchain and artificial intelligence to optimize the delivery of products and solutions to customers across 180 markets.
-
Progress and ambitions around sustainability continue at a significant pace, with Scope 1 and 2 greenhouse gas emissions reduced by
92% over the past decade and have new aggressive science-based targets for 2030 in place to drive progress even harder. The company has also been recognized by the annual Corporate Knights Index as one of the world’s 100 most sustainable companies. - The company was named as one of the world’s most innovative companies by Boston Consulting Group – ranking 25 out of the top 50.
Business outlook
The challenges of FY 20/21 continue, in varying degrees, into the new year. Nevertheless, with the permanent market changes accelerated over the past year the Group’s outlook for the rest of 2021 and the 21/22 fiscal year remains positive. The market changes over the past year are fueling three major trends that the Group is capitalizing on. Firstly, the consumption upgrade, with customers spending more time on their devices, buying more, and upgrading more often. Secondly, the infrastructure upgrade, with customers moving from buying data center products to buying total infrastructure solutions. And finally, the application upgrade, with digitalization greatly accelerated and intelligent transformation, enabled by A.I., becoming a reality. Lenovo’s proven track record for execution, its global-local operating model, and new organizational structure aligns to these trends, will further strengthen the Group’s ability to drive long-term, sustainable growth.
* invoiced revenue
About Lenovo
Lenovo (HKSE: 992) (ADR: LNVGY) is a US
LENOVO GROUP
FINANCIAL SUMMARY For the fiscal quarter and full year ended March 31, 2021 (in US$ millions, except per share data) |
||||||||
|
|
Q4
|
Q4
|
Y/Y CHG |
|
FY20/21 |
FY19/20 |
Y/Y CHG |
Revenue |
|
15,630 |
10,579 |
|
|
60,742 |
50,716 |
|
Gross profit |
|
2,688 |
1,861 |
|
|
9,768 |
8,357 |
|
Gross profit margin |
|
|
|
(0.4)pts |
|
|
|
(0.4)pts |
Operating expenses |
|
(2,209) |
(1,695) |
|
|
(7,588) |
(6,918) |
|
Expenses-to-revenue ratio |
|
|
|
(1.9)pts |
|
|
|
(1.1)pts |
Operating profit |
|
479 |
166 |
|
|
2,180 |
1,439 |
|
Other non-operating expenses - net |
|
(99) |
(89) |
|
|
(406) |
(421) |
(3)% |
Pre-tax income |
|
380 |
77 |
|
|
1,774 |
1,018 |
|
Taxation |
|
(95) |
(14) |
|
|
(461) |
(213) |
|
Profit for the period/year |
|
285 |
63 |
|
|
1,313 |
805 |
|
Non-controlling interests |
|
(25) |
(20) |
|
|
(135) |
(140) |
(3)% |
Profit attributable to equity holders |
|
|
43 |
|
|
|
|
|
Earnings per share (US cents) |
|
|
|
|
|
|
|
|
Basic |
2.19 |
0.36 |
1.83 |
9.54 |
5.58 |
3.96 |
||
Diluted |
1.94 |
0.35 |
1.59 |
8.91 |
5.43 |
3.48 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210526006195/en/
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