Lenovo Group Limited · HKEX:992
Lenovo — Q4 2021 Earnings Presentation
35 slides from Lenovo's earnings presentation, May 27, 2021
Slide 1: 4Q & FY20/21 Earnings Announcement
4Q & FY20/21 Earnings Announcement May 27, 2021 2021 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 May 27, 2021 2021 Lenovo Internal. All rights reserved.
Slide 4: Q4 Group: Record Q4 Results
Q4 Group: Record Q4 Results § Revenue: $15.6B, up 48% YOY, fastest growth in almost a decade § Pre-Tax Income: $380M, up 392% YOY § Net Income: $260M, up 512% YOY § All core businesses achieved high double-digit growth at same time Revenue ($B) Pre-Tax Income ($M) Net Income ($M) +48% 380 15.6 260 +
Slide 5: Q4 IDG PCSD: Phenomenal Performance
PCSD Revenue ($B) PCSD Margin (%) Q4 IDG PCSD1: Phenomenal +46% +0.5pt Performance 8.5 12.4 6.2 6.7 • Record Q4 Revenue $12.4B, up 46% YOY • All-time record profit margin of 6.7% • High double-digit growth in all geographies Q4 1920 Q4 2021 Q4 1920 Q4 2021 • PC extended #1 market share • Tablet volu
Slide 6: Q4 IDG MBG: Hypergrowth, Record Profit
Mobile Revenue, PTI ($M) Q4 IDG MBG: Hypergrowth, +86% Record Profit 1536 +80M 21 • Revenue up 86% YOY 824 • Record pre-tax income of $21M -60 • Carrier expansion, strong products portfolio Q4 1920 Q4 2021 Q4 1920 Q4 2021 drove volume growth Volume Growth by Region YOY (%) § North America up 112% YO
Slide 7: Q4 DCG: Premium-to-Market Growth, Improved Profitability
DCG Revenue ($M), PTI Margin (%) Q4 DCG: Premium-to-Market Growth, Improved Profitability +32% +4.4pts 1606 1213 • Revenue Up 32% YOY, 5 quarters of PtM growth • Profitability up 4.4pts YOY Q4 1920 Q4 2021 • Cloud Service Provider: Revenue up 73% YOY Q4 1920 Q4 2021 • Record Q4 revenue in Storage, S
Slide 8: Q4 Intelligent Transformation: Record growth
Software & Services Revenue1 ($M), Q4 Intelligent Transformation: YOY Growth (%) Record growth 1500 1390 1300 1230 1235 1009 • Software & Services revenue1 grew 44% YOY 1100 900 856 44% § Attached Services grew 31% YOY 700 § Managed Services, including DaaS & 500 38% 38% 39% 36% TruScale, grew 91% Y
Slide 9: Fiscal Year Group: Achieved Historic Milestones
Fiscal Year Group: Achieved Historic Milestones • Historic Revenue, Pre-Tax Income, Net Income § Revenue: $60.7B, up 20% YOY, adding $10B in one year § Pre-Tax Income: $1.77B, up 74% YOY § Net Income: $1.18B, up 77% YOY Revenue ($B) Pre- Tax Income ($B) Net Income ($B) +20% 1.77 60.7 1.178 +74% +77%
Slide 10: Fiscal Year: Historic Results Across All Business Groups
Fiscal Year: Historic Results IDG Revenue ($B) Across All Business Groups +20% 54.4 45.2 Driven by Strategy, Innovation, Operational excellence, Global/local • IDG: Revenue up 20% YOY, new record FY 1920 FY 2021 • DCG: Revenue up 15% YOY, new record DCG Revenue ($B) • Software &Services1: Revenue up
Slide 11: Consumption upgrade, Infrastructure upgrade, Application upgrade
Consumption Infrastructure Application upgrade upgrade upgrade 2021 Lenovo Internal. All rights reserved. 11
Slide 12: IDG Outlook
IDG Outlook • PC and Tablet drive leadership with innovation, operational excellence • Grow in new areas § Embedded Computing § Smart Office § Smart Edge § AR/VR • Mobile profitable growth § Keep strong momentum in North America, Europe, Asia Pacific § Maintain stronghold in Latin America 2021 Lenov
Slide 13: ISG Outlook
ISG Outlook • Continue Premium-to-Market growth • Expand CSP customer base • Strengthen Channel through integrated sales platform • Improve profitability by driving Storage, SDI, Software & Service • Ramp up TruScale Infra-as-a- Service 2021 Lenovo Internal. All rights reserved. 13
Slide 14: SSG Outlook
SSG Outlook • Increase Services attach rate • Expand Managed Services, as-a- Service • Develop repeatable vertical solutions 2021 Lenovo Internal. All rights reserved. 14
Slide 15: ESG
ESG Environmental | Social | Governance 2021 Lenovo Internal. All rights reserved. 15
Slide 16: Ready for MORE
Ready for MORE 2021 Lenovo Internal. All rights reserved. 16
Slide 17: Wong Wai Ming, Chief Financial Officer
Wong Wai Ming Chief Financial Officer May 27, 2021 2021 Lenovo Internal. All rights reserved.
Slide 18: Financial Highlights
Financial Highlights 4Q HIGHLIGHTS 1 11. Fastest revenue growth in almost a decade; net income* up 5x-plus YTY with a 48% sales increase US$ Million Revenue +48% 20,000 YTY 17,245 11. High double-digit revenue growth across all three 15,630 Business Groups since acquisitions**, 16,000 14,519 undersc
Slide 19: PC & Smart Device Business Group (PCSD)
PC & Smart Device Business Group (PCSD) US$ Million Revenue +46% 1 4Q HIGHLIGHTS YTY 15,000 14,011 13,000 11,462 12,436 11. Revenue up 46% YTY to set a new fiscal Q4 10,603 record on clear strategic initiatives, 11,000 operational excellence, innovation, and 9,000 8,499 global/local franchise* 7,000
Slide 20: Mobile Business Group (MBG)
Mobile Business Group (MBG) US$ Million Revenue 1 +86% YTY 4Q HIGHLIGHTS 1,600 1,519 1,521 1,536 1. Record pre-tax profit since Moto acquisition, 1 1,200 1,093 thanks to surging revenue at 86% YTY 824 800 22. Broad-geo based market share gains supported by triple-digit shipments growth in NA, Europe
Slide 21: Data Center Business Group (DCG)
Data Center Business Group (DCG) US$ Million Revenue 4Q HIGHLIGHTS +32% YTY 1 1,800 1,612 1,634 1,606 1,479 11. Highest-ever revenue in fiscal 4Q; CSP* grew 1,500 1,213 more than 70% YTY, driven by hyperscale order 1,200 recovery and acquisition of new accounts 900 600 300 12. Record sales on HPC/AI
Slide 22: Software and Services
Software and Services Software and Services Revenue US$ Million +44% 4Q HIGHLIGHTS YTY 1,500 1,390 1,230 1,235 1,300 ü Software and Services revenue* up 44% at its 1,100 1,009 highest rate ever** to US$1.2 billion; contributing 900 856 7.9% of Group Revenue 700 500 300 ü Attached Services up 31% YTY
Slide 23: Financial Highlights
Financial Highlights 1 FY21 HIGHLIGHTS US$ Million Revenue 1 US$10bn revenue added in a record-breaking year +20% 60,742 after a 20% YTY increase, the highest growth rate 60,000 in last 9 years 51,038 50,716 50,000 45,350 2 Strong earnings trajectory with 77% net profit 40,000 FY2017/18 FY2018/19 FY
Slide 24: Cash and Working Capital
Cash and Working Capital FY21 HIGHLIGHTS US$ Million 1 Operating Cashflow 1 Operating cashflow increased US$1.4bn YTY to 4,000 3,653 US$3.7bn on strong earnings and robust working capital management 3,000 2,210 2,000 2 Reduced net debt by US$372mn YTY and repurchased US$1bn* of perpetual securities,
Slide 25: IDG - PC & Smart Device Business Group (PCSD)
IDG - PC & Smart Device Business Group (PCSD) US$ Million Revenue +22% 1 FY21 HIGHLIGHTS 48,512 50,000 11. Strong double-digit increase in sales and 39,859 profit to set new operational records; 38,475 40,000 sector-leading profitability surged to a new 33,655 level 30,000 22. PTI margin saw a new m
Slide 26: IDG - Mobile Business Group (MBG)
IDG - Mobile Business Group (MBG) US$ Million 1 FY21 HIGHLIGHTS Revenue 8,000 +9% 7,241 11. Cross-geographies recovery in 2H from a weak 7,000 6,460 yearly start on COVID-led challenges; strong 6,000 5,669 sales growth of 39% in 2H and 9% for full-year 5,218 5,000 4,000 22. Profitability improved fo
Slide 27: Data Center Business Group (DCG)
Data Center Business Group (DCG) 1 FY21 HIGHLIGHTS US$ Million Revenue +15% 7,000 6,025 6,331 11. Highest-ever revenue driven by strong cloud 6,000 5,500 demand and product strengths across segments 5,000 4,394 4,000 22. Bottom line improved by US$57mn for the fourth consecutive quarter to pre-tax l
Slide 28: Software and Services
Software and Services Software and Services Revenue US$ Million +39% FY21 HIGHLIGHTS 6,000 YTY 4,864 5,000 ü Software and Services revenue* up 39% YTY, 4,000 3,497 nearly 2x of Group average, to US$4.9 billon; 3,000 contributing to 8.0% of Group Revenue 2,443 2,054 2,000 1,000 FY2017/18 FY2018/19 FY
Slide 29: Outlook Statement to Reflect New Org Structure
Outlook Statement to Reflect New Org Structure Consumption Infrastructure Application Margin upgrade upgrade upgrade expansion IDG: Drive growth with strong profitability and penetration of new smart devices • PCSD: Maintain the undisputed No. 1 position in all customer segments while maintaining in
Slide 30: Appendix
Appendix - Financial Summary - Condensed Consolidated Income Statement - Condensed Consolidated Balance Sheet - Condensed Consolidated Cash Flow Statement 2021 Lenovo Internal. All rights reserved. 30
Slide 31: Financial Summary
Financial Summary US$ Million Q4 FY2020/21 Q4 FY2019/20 Y/Y% FY2020/21 Y/Y% Revenue 15,630 10,579 48% 60,742 20% Gross profit 2,688 1,861 44% 9,768 17% Operation expense (2,209) (1,695) 30% (7,588) 10% Operating profit 479 166 188% 2,180 52% Other non-operating expenses (99) (89) 11% (406) (3%) Pre-
Slide 32: Condensed Consolidated Income Statement
Condensed Consolidated Income Statement US$ Million Q4 FY2020/21 FY2020/21 Q4 FY2019/20 FY2019/20 Revenue 15,630 60,742 10,579 50,716 Cost of sales (12,942) (50,974) (8,718) (42,359) Gross profit 2,688 9,768 1,861 8,357 Selling and distribution expenses (824) (3,045) (615) (2,972) Administrative exp
Slide 33: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet US$ Million As at Mar 31, 2021 As at Mar 31, 2020 Non-current assets 14,655 13,395 Property, plant and equipment 1,574 1,398 Intangible assets 8,405 7,985 Others 4,676 4,012 Current assets 23,335 18,733 Bank deposits and cash 3,127 3,617 Trade, notes and other re
Slide 34: Condensed Consolidated Cash Flow Statement
Condensed Consolidated Cash Flow Statement US$ Million Q4 FY2020/21 Q4 FY2019/20 FY2020/21 FY2019/20 Net cash generated from operating activities 601 432 3,653 2,210 Net cash used in investing activities (280) (238) (976) (957) Net cash used in financing activities (1,225) (69) (3,228) (238) (Decrea
Slide 35: thanks.
thanks. Smarter technology for all Lenovo