Lenovo Group Limited · HKEX:992
Lenovo — Q4 2020 Earnings Presentation
34 slides from Lenovo's earnings presentation, May 20, 2020
Slide 1: FY19/20 Earnings Announcement
FY19/20 Earnings Announcement 2020 Lenovo Internal. All rights reserved.
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains “forward-looking statements” which are statements that refer to expectations and plans for the future and include, without limitation, statements regarding Lenovo’s future results of operations, financial condition or business prospects as well as
Slide 3: Yuanqing Yang, Chairman & CEO
Yuanqing Yang Chairman & CEO 2020 Lenovo Internal. All rights reserved.
Slide 4: Fiscal Year: Group – Solid Performance
Fiscal Year: Group – Solid Performance • Revenue: $50.7B, nearly equaled historical record in FY2018/19 • Pre-Tax Income: historical high of $1.02B, up 19% YOY • Net income: $665M, up 12% YOY Revenue ($B) PTI* ($M) Net Income ($M) -0.6% 51 50.7 1018 665 +19% +12% 597 856 FY 1819 FY 1920 FY 1819 FY 1
Slide 5: FY19/20: IDG PCSD
PCSD Revenue ($B), PTI ($B), PTI Margin (%) FY19/20: IDG PCSD* 38.5 +3.6% 39.9 2 +18.3% 2.3 +0.7 pts 5.9 5.2 • Revenue: $39.9B, up 3.6% YOY • Record PTI: $2.3B, up 18.3% YOY • Record PTI margin: 5.9%, up 0.7 points YOY FY 1819 FY 1920 FY 1819 FY 1920 FY 1819 FY 1920 • Focus on high-growth segments d
Slide 6: FY19/20: IDG Mobile
Mobile Revenue of each Quarter ($M) FY19/20: IDG Mobile 1503 1510 1381 824 • On track for a breakthrough year until Q4 • Revenue down to $5.2B • Pre-tax loss $43M, improved by $96M YOY Q1 1920 Q2 1920 Q3 1920 Q4 1920 • Moto G reached 100M lifetime units Mobile PTI improvement YOY ($M) • Launched raz
Slide 7: FY19/20: Data Center
DCG Revenue ($M), Non-Hyperscale Rev FY19/20: Data Center Growth YOY (%) 6025 -8.7% 5500 +5.3% • Revenue declined YOY due to challenge in Hyperscale • Non-hyperscale revenue grew 5.3% YOY FY 1819 FY1920 FY 1819 FY1920 – Double-digit growth across key segments SDI, Storage Revenue Growth YOY(%) SDI S
Slide 8: FY19/20: Intelligent Transformation
FY19/20: Intelligent Transformation Intelligent Transformation Revenue YOY Change (%) Smart Smart Vertical Smart IoT Infrastructure • Smart IoT revenue quadrupled YOY +37% +133% • Smart Infrastructure revenue up 37% YOY +296% • Smart Vertical revenue doubled YOY • Software & Services revenue* up 43.
Slide 9: Responding to the Pandemic
Responding to the Pandemic § Protecting employees’ safety and well-being § Devices and Tech donation to hospitals and students § Supporting research into cure of COVID-19 § Total relief contribution approaching $15 million 2020 Lenovo Internal. All rights reserved. 9
Slide 10: Q4: Group – Exceeded Expectations
Q4: Group – Exceeded Expectations • Revenue: $10.6B • Pre-Tax Income: $77M • Net income: $43M Revenue ($B) PTI ($M) Net Income ($M) -9.7% 118 11.7 180 10.6 -$103M -$76M 77 43 Q4 1819 Q4 1920 Q4 1819 Q4 1920 Q4 1819 Q4 1920 2020 Lenovo Internal. All rights reserved. Source: Internal Data 10
Slide 11: Q4: IDG PCSD
PCSD Revenue ($B) Q4: IDG PCSD 8.9 -4.4% 8.5 • Strong quarter despite the challenge • One of first to resume production in China • Revenue decline contained to -4.4% • PTI of $525M, up 15% YOY • Record PTI Margin of 6.2% (+1 point YOY) Q4 1819 Q4 1920 PCSD PTI ($M), PTI Margin (%) +15% 525 458 6.2 +
Slide 12: Q4: IDG PC & Mobile
Global PC Top 3 Market Share (%) Q4: IDG PC & Mobile Lenovo HP Dell 23.7% PC: 21.7% • Outgrew the market by 4.1 points, improved share by 1 point Q4 1819 Q1 1920 Q2 1920 Q3 1920 Q4 1920 • Revenue outgrew market in all Geos PC Geo Revenue Growth YOY (%) AG 5 EMEA 9 Mobile: 3 0.4 • Produced 6M phones
Slide 13: Q4: Data Center
Server Volume Hyperscale, Non-Hyperscale Q4: Data Center Growth YOY (%) Rev Growth YOY (%) +14% +3.6% -13.5% • Total server volume grew 14% YOY • Hyperscale revenue remained a challenge • Non-hyperscale revenue grew 3.6% YOY Q4 1819 Q4 1920 Q4 1819 Q4 1920 Q4 1819 Q4 1920 SDI, Storage, Revenue Growt
Slide 14: Q4: Intelligent Transformation
Intelligent Transformation Revenue YOY Q4: Intelligent Transformation Change (%) Smart Smart Vertical Smart IoT Infrastructure +28% • Smart IoT revenue doubled YOY +26% +105% • Smart Infrastructure revenue grew 26% YOY • Smart Verticals revenue grew 28% YOY • Software & Services revenue* grew 38.2%
Slide 15: Strive for the Best
Strive for the Best • Capture opportunities from changes § PC & Smart Devices: Capture opportunities in the “new norm” and expansion PC market § Mobile: New products ready for 5G § Data Center: Address the increasing computing, storage, networking demand § Services & Solutions: Build into next core
Slide 16: Stay resilient & Fight for the best
Stay resilient & Fight for the best
Slide 17: Wong Wai Ming, Chief Financial Officer
Wong Wai Ming Chief Financial Officer 2020 Lenovo Internal. All rights reserved.
Slide 18: Financial Highlights
Financial Highlights FY20 HIGHLIGHTS 1 US$ Million Revenue 1 Maintained Group revenue stable at US$50.7B, or 51,038 -0.6% up 2% in constant currency, despite macro and 52,000 50,716 sectoral challenges 48,000 45,350 43,035 2 PTI surpassed US$1B to a new record level in 44,000 history; thanks to reco
Slide 19: Cash and Working Capital
Cash and Working Capital FY20Q4HIGHLIGHTS Highlights Net cash improved US$737M YTY on operating US$ Million 1 cashflow improvement driven mainly by strong profit Operating Cashflow performance 2,500 2,210 1 +910m 2,000 YTY 1,500 1,473 4Q HIGHLIGHTS 1,000 432 500 1 Operating cashflow showed strong YT
Slide 20: Intelligent Devices Business Group (IDG)
Intelligent Devices Business Group (IDG)* US$ Million Revenue FY20 HIGHLIGHTS 50,000 45,013 45,216 40,000 11. Stable revenue in FY20; operational excellence, 30,000 prioritization of high-growth segments and new 20,000 opportunities helped to mitigate multiple macro 10,459 9,366 and sectoral challen
Slide 21: IDG - PC & Smart Device Business Group (PCSD)
IDG - PC & Smart Device Business Group (PCSD) US$ Million Revenue 1 FY20 HIGHLIGHTS 45,000 +4% 39,859 40,000 38,475 35,000 33,655 11. Record-breaking revenue and PTI; record 31,284 shipments in PC 30,000 25,000 22. Fastest growing PC OEM in global top-5 and 20,000 highest WW market share ever; a tru
Slide 22: IDG - Mobile Business Group (MBG)
IDG - Mobile Business Group (MBG) US$ Million Revenue FY20 FY20HIGHLIGHTS Highlights 9,000 7,707 8,000 1. PTI improved US$96M YTY and turned profitable 7,000 7,241 6,460 -19% 1 on pre-tax profit level until COVID-19 hit in 4QFY 6,000 5,218 5,000 4,000 22. Full-year pre-tax loss amounted to US$43M bu
Slide 23: Data Center Business Group (DCG)
Data Center Business Group (DCG) Revenue US$ Million 1 FY20 FY20HIGHLIGHTS Highlights 8,000 7,000 -8.7% 6,000 6,025 5,500 1. 1 DCG revenue dropped 9% YTY on hyperscale 5,000 4,394 weakness 4,068 4,000 3,000 2. Non-hyperscale sales grew YTY thanks to double- 2,000 2 digit growth in storage, Software-
Slide 24: 4Q Highlights
Financial Highlights 4Q HIGHLIGHTS 1 Industry-wide COVID-19-induced supply disruption 1 US$ Million resulted in YTY decline on group revenue and PTI Revenue -10% YTY 16,000 12,512 13,522 14,103 2 Operational excellence led to strong quarter-end 11,710 12,000 10,579 recovery; Software & Services reve
Slide 25: IDG - PC & Smart Device Business Group (PCSD)
IDG - PC & Smart Device Business Group (PCSD) Revenue US$ Million 4Q HIGHLIGHTS 12,000 10,656 11,074 2 9,631 10,000 8,892 8,499 11. Reinforced global no. 1 position with consistent 8,000 premium-to-market growth; gained WW share on 6,000 WFH demand and grew 21-50% in high-growth segments, and Softwa
Slide 26: IDG - Mobile Business Group (MBG)
IDG - Mobile Business Group (MBG) US$ Million Revenue 4Q HIGHLIGHTS 1,545 1,503 1,510 1,600 1,381 1,400 1 1,200 11. Supply constraint resulted from pandemic-led 1,000 824 Wuhan factory closure for most part of the 800 quarter; revenue declined 46.7% YTY 600 400 22. Pre-tax loss contained at US$60M a
Slide 27: Data Center Business Group (DCG)
Data Center Business Group (DCG) US$ Million Revenue 4QQ4 HIGHLIGHTS Highlights 1,700 1,601 1 1,500 1,356 1. DCG server shipments grew double-digits YTY but 1,251 1,331 1 1,300 1,213 revenue declined 3.1% YTY due to lingering 1,100 commodity price erosion for hyperscale business 900 700 22. Resilien
Slide 28: Outlook Statement
Outlook Statement Ø Group Mission is to be the Leader and Enabler of Intelligent Transformation Ø We will continue to innovate to capture new opportunity of expanded PC and Smart devices market from the new normal (WFH, SAH) and increased infrastructure demand. Meanwhile, we will exercise discipline
Slide 29: Appendix
Appendix - Financial Summary - Condensed Consolidated Income Statement - Condensed Consolidated Balance Sheet - Condensed Consolidated Cash Flow Statement 2020 Lenovo Internal. All rights reserved. 29
Slide 30: Financial Summary
Financial Summary 2020 Lenovo Internal. All rights reserved. 30
Slide 31: Condensed Consolidated Income Statement
Condensed Consolidated Income Statement 2020 Lenovo Internal. All rights reserved. 31
Slide 32: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 2020 Lenovo Internal. All rights reserved. 32
Slide 33: Condensed Consolidated Cash Flow Statement
Condensed Consolidated Cash Flow Statement 2020 Lenovo Internal. All rights reserved. 33
Slide 34: thanks.
thanks. Different is better kenovo