Clear mission, strategy and performance bring Lenovo a third consecutive quarter of double-digit revenue growth
Lenovo announced its financial results for the second fiscal quarter ending September 30, 2018. In the third quarter, Lenovo recorded strong double-digit revenue growth each year. They reached $ 13.4 billion, up 14% year-on-year (18% if currency fluctuations were not taken into account).
The announcement of the results coincided with our participation in the Lenovo Intelligent Futures conference held in Budapest on 8 November. The results of current journalists were presented by Ivan Bozev – CEO of Central and South-Eastern Europe.
This is the highest quarterly sales of almost four years
The company also reports a second consecutive quarter of high pre-tax profits of $ 213 million or six times more than in the same period last year (+ $ 178 million) against the background of increased profits in all business activities.
In the second quarter, Lenovo's share of profit rose to $ 168 million, or $ 91 million in the previous quarter and $ 29 million in the previous year. Basic earnings per share for the period were 1.41 US cents or 11.06 HK cents. The Lenovo Board of Directors distributed a preliminary dividend of HKK 6.0 per share.
"Today's results show that Lenovo's" Intelligent Transformation "continues to support our growth – both revenue and profits, but financial ratios only reveal a portion of the image, and I am proud of implementing the transformation strategy and our promise of radical change. sustainable growth, and I believe our ability to monitor our clear mission, strategy and performance will continue to deliver even stronger results in the coming quarters. "
This is commented by Jan Yenzenz, CEO of Lenovo Group.
In the second quarter of the financial year 2018/19, Lenovo, through financial intelligence and outstanding performance, continued to expand its new growth phase based on intelligent transformation. The company is also expanding its list of technological innovations in all key areas of its business. The decisive steps for restructuring operations and implementing new effective improvements over previous quarters have already produced significant results. Each of Lenovo's key business units records strong growth and strong market positions over the period:
Intelligent Business Devices
Boosted by the synergies of shared platforms and resources, it reports a strong revenue growth of 10% a year and costs $ 11.84 billion.
Business personal computers and intelligent devices (PC and Smart Devices / PCSD)
As part of the direction of smart devices, it recorded revenue of $ 10.2 billion, a year-on-year increase of 18%. This is the first time it exceeds the $ 10 billion psychological limit. At present, Lenovo is not only an undeniable global leader in personal computer sales with a record market share of 23.7%, but is still a leader in industry profitability – 5%. Quarterly strong growth of rapidly growing segments, including Legion, ThinkStation and Thin and Light Yoga workstations, ThinkPad and IdeaPad, continues. Businesses are continuing to implement their Smart Transformation vision of introducing Smart IoT (Lenovo Smart Home Essentials) innovations after the release of Lenovo Smart Display software earlier this year.
The company continues its good market performance and in the second quarter of the fiscal year 2018/2019, the company pursues its strategic goals of reducing costs, optimizing the product portfolio and focusing on leading profit markets. The result is a key business goal – a reduction in operating costs of $ 175 million for the same quarter of the previous year and profit. Specific markets show impressive growth. In North America, supplies grew by 53.4% over the same quarter of the previous year. Growth is also on the edge. The company ranks second in the market in Latin America. Businesses in China recorded significant revenue growth, volumes and profitability – 84.6%, 279.4% and 25.2%.
Data Center Store
(Group Data Center / DCG) recorded a fifth consecutive quarter of profit growth (9.5% before tax yearly) and 58% revenue growth to $ 1.5 billion. Lenovo is not only an innovator in solutions that it represents for consumers – it is proof of the strong growth of Hyperscale and Software Defined Infrastructure (SDI) infrastructure – but also the way in which these technologies are marketed.
Key strategic partnerships such as NetApp announced in September significantly expanded Lenovo's storage and data storage market.
Hyperscale continues in the third consecutive quarter with a threefold growth trend on an annual basis; SDI records strong revenue growth of 150% and the seventh consecutive quarter of growth by more than 100% +. The positive performance of the division over this period is backed by threefold growth in North America and two-digit growth in Europe, the Middle East, Asia and the Pacific. Every year, profitability also increases in all regions.
- Second quarter earnings grew 14% to $ 13.4 billion – the highest value of almost four years; Lenovo annually reports a third-digit revenue growth
- Profit before tax reached $ 213 million in the second quarter, an increase of 89% over previous and more than $ 503 (+ $ 178 million) on an annual basis; profit growth in all activities
- Key indicators improve in all areas of society:
- Smart Devices computing and device revenue reaches a $ 10 billion psychological limit and returns to PC World No. 1 with a market share of 23.7%
- The Mobile Business Group has achieved serious strategic success and has made profits after record investments for the past 2 years
- Data Center Group is the fastest growing market among top 3 x86 server vendors **