Whom You Know: LENOVO DELIVERS STRONG PERFORMANCE WITH HIGHEST QUARTERLY REVENUE IN FOUR YEARS AND RECORD PRE-TAX INCOME

Thursday, February 28, 2019

LENOVO DELIVERS STRONG PERFORMANCE WITH HIGHEST QUARTERLY REVENUE IN FOUR YEARS AND RECORD PRE-TAX INCOME

Lenovo Group (HKSE: 992) (ADR: LNVGY) today announced results for its third fiscal quarter ended December 31, 2018. Lenovo posted its highest group revenue in four years of US$14 billion, up 8.5% YOY (12.8% YOY excluding currency impact). The company reported strong pre-tax income of US$350 million (up 133% / +US$200 million over the previous year) - an all-time record for the company as all businesses continued to report profit improvements.

The Group recorded a net profit of US$233 million for the fiscal quarter, significantly improved from the net loss of US$289 million in the same quarter of last year. Basic earnings per share in the third fiscal quarter was 1.96 US cents or 15.35 HK cents.

“When we set out on our journey of Intelligent Transformation, our goal was to restore and then accelerate Lenovo’s business momentum, while providing our customers and partners with the best technologies in smart IoT, smart infrastructure and smart vertical solutions. We’ve done exactly that and more - our strength and position as the industry’s most prolific global technology organization is firmly established. What I’m most pleased to see is how Lenovo is bucking the current industry trend – we’re strong, have delivered record-breaking results this quarter and are only getting stronger”, said Yang Yuanqing, Lenovo Chairman and CEO.

Business Group Overview:

The Intelligent Devices Group (IDG) posted record revenue and profit; powered by its third straight quarter since inception of revenue growth - up 6.2% YOY to US$12.4 billion.

During the quarter, the PC and Smart Devices (PCSD) business under IDG reported US$10.7 billion in revenue, up 11.6% YOY, and sequentially extending the Group’s momentum from the previous quarter. PC revenue grew 16% YOY, outperforming the market by more than 17 points with PTI margin also improving by 1 percentage point. Lenovo maintained its position as the world’s undisputed leader in PC sales with record market share of 24.6%. A focus on high-growth and premium segments saw Workstations, Thin and Light devices, and Visuals revenue outgrow the market by more than 30 points, Gaming by 16 points and Chromebook by over 220 points.

The Mobile Business Group (MBG) under IDG posted its first worldwide profit since the Motorola acquisition in October 2014. This notable achievement came from masterful execution on Lenovo’s strategy to reduce expenses, streamline the Group’s product portfolio and focus on core markets. Notably North America saw a breakthrough quarter for the Group with volumes outgrowing the market by a staggering 40 points. Additionally, MBG’s focus on other specific geographies is also showing significant results: Lenovo retains the #2 position in Latin America, despite currency fluctuations and supply constraints. In China, thanks to a range of new products under the Lenovo brand, the Group continued to build on the momentum quadrupling revenue and reporting strong growth in PTI margin.

Lenovo’s Data Center Group (DCG) reported its fifth consecutive quarter of profit growth (PTI margin up 3.6 percentage points YOY) on a 31% YOY increase in revenue to US$1.6 billion. In fact, DCG recorded YOY revenue growth in all geographies, highlighted by triple-digit growth in North America, and double-digit growth in Asia-Pacific, EMEA and Latin America. The NetApp joint venture, which is now operational in China, will further strengthen the portfolio and expand business opportunities. Hyperscale once again served as a significant contributor with triple-digit revenue growth and Software Defined Infrastructure (SDI) revenue grew almost 70% YOY. The Group not only remained #1 on the TOP500 list of supercomputers globally, but also increased its lead. **

* IDC CY2018 Q4 Worldwide Quarterly Personal Computing Device Tracker

** Top500 List of Supercomputers, 52nd edition, Nov. 2018 https://www.top500.org/lists/2018/11/ with 140 of the top 500 supercomputers, 56 systems ahead of the nearest competitor

About Lenovo

Lenovo (HKSE: 992) (ADR: LNVGY) is a US$45 billion Fortune Global 500 company and a global technology leader in driving Intelligent Transformation through smart devices and infrastructure that create the best user experience. Lenovo manufactures one of the world’s widest portfolios of connected products, including smartphones (Motorola), tablets, PCs (ThinkPad, Yoga, Lenovo Legion) and workstations as well as AR/VR devices and smart home/office solutions. Lenovo’s data center solutions (ThinkSystem, ThinkAgile) are creating the capacity and computing power for the connections that are changing business and society. Lenovo works to inspire the difference in everyone and build a smarter future where everyone thrives. Follow us on LinkedIn, Facebook, Twitter, Instagram, Weibo, read about the latest news via our StoryHub, or visit our website at https://www. lenovo.com.

Recent Testimonials by Brand Ambassadors on their Experience with Whom You Know

"I work with Peachy Deegan because she's prolific at what she does. She's a hard worker, she's thoughtful and she's tasteful at what she writes which is very important. Peachy gets the facts correct, and just that alone is worth its weight in gold."

-Edward Tricomi, Master Stylist and Owner of Warren-Tricomi
https://warrentricomi.com/

"No one has yet to express their taste for our cuisine better than Peachy Deegan on Whom You Know. Thank you for transforming our flavor into words, unlike any other before.
Sometimes WHOM YOU KNOW, really makes a difference and Ammos Estiatorio is grateful to know Peachy Deegan!"
-
Dimitris Nakos, Founder and Owner of
Ammos Estiatorio
https://ammosnewyork.com/

“Whom You Know has done an amazing job of featuring our company over many years [seven]. Peachy has worked tirelessly to create a well-curated selection of topics and brands that are clearly of relevance to her growing audience of readers. Her articles are filled with great insights based on first-hand experience. She does her research, knows her business and is a pleasure to work with!”

-David Sasuga, Owner of Fresh Origins Microgreens
www.FreshOrigins.com

"Peachy Deegan has the pulse of the nation and highlights exceptional opinion leaders in more than 23,000 inspiring and entertaining posts. Her 100,000 twitter followers are a true testimony to Peachy’s ability to inspire, motivate and entertain. She is a feminine force to be reckoned with and an exemplary example of an influential voice in today’s world."

-Mica Mosbacher, author of the new book The Hurricane Factor: Stormside Patriots and tv political commentator

"It was an honour to be chosen for Movers and Shakers by Peachy Deegan. The questions in the interview were intelligent and insightful and I thoroughly enjoyed answering them. The reaction to the interview has been overwhelmingly positive and has helped bring my art practice to a wider audience."
-Damien Flood, Internationally Acclaimed Artist
http://www.damienflood.ie/

"We were so fortunate to hit Peachy’s radar. Her review of our Warmies was spot-on and came at a great time in our company’s early history.
Peachy has such a strong relationship with her readers. She provides honest and real comments; she is truly a trusted source in a very large circle
of consumers."
-Scott Wehrs
President
Intelex U.S.A.
http://www.intelexusallc.com/

"We at Primola love working with Whom You Know and are proud to have been a highly-ranked Manhattan restaurant by Peachy Deegan since 2012, and are featured seasonally. We appreciate the fantastic work Peachy does highlighting our cuisine with her sublime writing style and the whole neighborhood of the Upper East side. Also, we are glad that she has started a Made in Italy column! If you have the opportunity to be considered for review, we'd highly recommend working with her."
-Giuliano Zuliani, Owner of Primola Restaurant
https://www.facebook.com/Primola-Canaletto-restaurants-NYC-135616799831091

"
Peachy Deegan is a gem. She is wonderful to feature our Irish brands in 'Whom You Know'! The articles are beautifully and passionately presented, bringing products and brands to life, making both relevant and fun for her many faithful followers to read. I am immensely proud for our hand-crafted products to be included in this venue!"

-
Bill Follett
President, Belleek Group North America
www.Belleek.com

"As you know from my past features, Peachy Deegan and I were in the same class at Boston College prior to either of us becoming entrepreneurs. When we played together on the BC Alumni softball team in Central Park years ago, she mentioned she could not find a great dentist in Manhattan and could often be found networking on her phone in the outfield hiding from the ball. She was my second patient ever in 2006 when I opened my dental practice; I was one of the first sponsors on Whom You Know and the first Mover and Shaker featured in 2009 and have worked with her continuously since. She's even talked her friends that are doctors into being my patients, and they subsequently send their hospital colleagues. I don't know anyone that is as great of a networker and writer as Peachy, nevermind that she is upstanding and always good for her word. Cosmopolitan Dental is so happy to be in the company of the caliber of major brands she works with today, and although she will tell you a million ways to get your teeth dirty between Peachy's Picks, Terrific Takeout and Peachy's Pantry, Peachy Deegan will tell you there is only one way to get your teeth clean!"
-Dr. Garo Nazarian, Founder and Owner of Cosmopolitan Dental
http://cosmopolitandental.com/