Lenovo is accelerating its revenue with double-digit earnings growth in the first quarter



The intelligent transformation of the company places Lenovo with confidence in the role of global technology leader; strong business performance reinforces the effect of the "3 waves" strategy on the results

Lenovo Group publishes its operating results in the first financial quarter of the year ended June 30, 2018. For the second consecutive quarter, Lenovo achieved strong two-digit revenue growth year-over-year. They reached $ 11.91 billion or 19% above the result reported a year ago.

The company also recorded strong pre-tax profit for the quarter of $ 113 million or $ 182 million in the previous year, against the background of higher profits in all operating activities.

In the first quarter, Lenovo's share in the share capital increased to $ 77 million or $ 149 million compared to the year-on-year result. The basic earnings per share for the period amounted to $ 0.65.

"Against the background of the ongoing implementation of the 3 Wave strategy, all of our operations are experiencing solid improvements, both in terms of revenue and profit." Lenovo has overtaken the turning point and entered the "accelerated phase" – accelerating our strategy to drive growth. transform and accelerate our business performance, "said Jan Lenin, president and CEO of Lenovo.

"In the future, we will continue to maintain our leading profitability and results in the personal computing market, consolidate the positions of our smartphone business, transform the data center into a sustainable growth and profit machine, and we will continue to invest in Smart IoT + Cloud and Infrastructure + Cloud to ensure long-term sustainable revenues ".

Overview of business presentations

With this revenue report for the first quarter of fiscal year 2018/2019, Lenovo has overcome a key moment in the transformation and has begun a growth phase thanks to steady progress in the strategy and focus on smart transformation & # 39; during the reporting period. Lenovo's decisive steps to consolidate key business operations into a well-organized and integrated business, together with a focus on dynamic auxiliary source generators, are rapidly gaining profits.

In the past quarter, Lenovo announced that it will make its new version Intelligent Devices Group (IDG)that combines Division for personal computers and smart devices (Personal Computer and Smart Devices Group) and Mobile business group. The reason for the two-digit growth in IDG's quarterly sales is rooted in a reconsideration of how these subsidiaries and their devices deal with and impact on customers, while the share of the PC market in all regions grows.

At the same time, Lenovo not only financially but also financially benefits from global growth trends in both software and services.

Each of Lenovo's major divisions reported strong growth and market positions throughout the quarter:

Intelligent Devices Division (IDG) draws energy from synergies on shared platforms and resources, generating strong sales growth of 14% yoy to $ 9.95 billion.

During the quarter, Personal computers and smart devicesoperating below the IDG limit, the company posted strong double-digit earnings growth for the second consecutive quarter, up 19% year-on-year and maintained a 5% leading profitability for the industry. Lenovo is the fastest growing player in the top 5 of the world's PC maker and, according to Gartner, leads this benchmark. In addition to its core activities on PC, Lenovo continues to invest in the expansion of its portfolio of smart devices, including Smart Homes, Smart Offices and AR / VR.

The Mobile Business Group (MBG), which operates below the IDG limit, reported a significant improvement over the quarter thanks to three key measures

First, the group reduced its operating expenses by more than $ 100 million; secondly, it presented an improved portfolio; and thirdly, it focuses on selected markets where the company can compete successfully and profitably. Thanks to this goal, the company focused its efforts on leading segments and successfully launched the new Moto G and E families in the quarter.

Sales and sales volumes continued to grow, especially in Latin America, where they were ahead of the growth rate of the market for the seventh consecutive quarter. In North America, Lenovo's mobile sector volumes are almost doubled due to the right growth strategy and the expansion of positions with the four major mobile operators.

After the strong fourth quarter The Data Center division (DCG) further increases its growth rate, accounting for record revenue for the $ 1.6 billion period – third consecutive quarter of double-digit revenue growth and an increase of 67.8% compared to the same quarter last year

The reason for the record turnover is the growth of Software Defined Instrastructure, High Performance Computing and Artificial Intelligence, as well as Hyperscale.

Lenovo brand products from the ThinkAgile brand, led by the ThinkAgile brand, once again reported three-year annual growth amidst the announcement of the next generation ThinkAgile CP for cloud infrastructure. Hyperscale business also recorded an annual growth of three figures, amid an increase in gross profit and diversification of the customer base. Traditional infrastructure continues to grow with a positive trend, while Flash-based storage solutions show strong growth of 42% year-on-year. In the quarter, Lenovo surpassed HPE and became the # 1 supercomputer supercomputer manufacturer for supercomputers for the first time in 117 delivery systems.

Looking to the future Lenovo Capital Incubator Group (LCIG) and Incubator Group (LCIG) continues to invest and build the IT capabilities of the Next Generation Group in the field of artificial intelligence, large data and VR / AR in various sectors, such as production, healthcare and transport.


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