Lenovo Group Limited · HKEX:992
Lenovo — Q1 2020 Earnings Presentation
27 slides from Lenovo's earnings presentation, Aug 15, 2019
Slide 1: Q1FY20 Earnings Announcement
Q1FY20 Earnings Announcement 2019 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 2019 Lenovo Internal. All rights reserved.
Slide 4: Solid Group Performance – Revenue & Profit Growth
Solid Group Performance – Revenue & Profit Growth • Revenue: $12.5B, up YOY for 8th consecutive quarter • PTI*: $240M, up 113% YOY • Net income: $162M, up 111% YOY Revenue ($B) PTI ($M)240 Net Income ($M) +5% 12.5 11.9 162 +113% 113 +111% 77 Q1 1819 Q1 1920 Q1 1819 Q1 1920 Q1 1819 Q1 1920 * PTI: Pre
Slide 5: IDG PCSD – Exceptional Results
PCSD Revenue ($M) IDG PCSD* – Exceptional Results +11.7% • PCSD revenue: $9.6B, +11.7% YOY 9631 • Geographical balance: 4 geos all delivered over 8619 $2B revenue • Highest fiscal 1st quarter PTI with industry leading margin at 5.4% Q1 1819 Q1 1920 PCSD Revenue Mix by Geographies (%) Strong Revenue
Slide 6: IDG PC – Exceptional Results
Global PC Volume YOY Growth (%) IDG PC – Exceptional Results Lenovo Mkt 17.9% • Volume grew 18% YOY (13.2 points PtM), 4.6% revenue grew 14.3% YOY Q1 1819 Q2 1819 Q3 1819 Q4 1819 Q1 1920 • Record PC market share 24.9%, clear #1 Segment Volume YOY Growth vs Market(%) • Outgrew markets across high-gro
Slide 7: IDG PCSD - Outlook
IDG PCSD - Outlook • Focus on high-growth and premium categories • Focus on Smart IoT innovation § Smartify current devices World’s 1st Foldable PC § New smart devices § Commercial devices ThinkSmart Hub Smart Clock IoT 510C Smart Camera Yoga S940 2019 Lenovo Internal. All rights reserved. 7
Slide 8: IDG Mobile - Maintained Profitability
Mobile PTI ($M) IDG Mobile - Maintained Profitability +$103M +$146M +$126M • Profitability continued improvement: PTI improved by $100M YOY for the 4th straight quarter +$115M • Solid execution of the focused strategy: Q2 1718 Q3 1718 Q4 1718 Q1 1819 Q2 1819 Q3 1819 Q4 1819 Q1 1920 § North America:
Slide 9: IDG Mobile - Outlook
Moto One Vision IDG Mobile - Outlook • Maintain profitability • Seek opportunities to drive profitable growth 2019 Lenovo Internal. All rights reserved. 9
Slide 10: Data Center – Continued profitability improvement
DCG Segments Revenue Growth YOY(%) Data Center – Continued profitability SDI Storage improvement +18.5% +81.9% • Profit and server volume share improved. • Revenue declined due to selected customer hyperscale overbuilds and lower commodity pricing. • Correct strategy to extend full stack Data Center
Slide 11: Data Center - Outlook
Data Center - Outlook • Drive SDI, storage, networking, service & solution led sales • Strengthen in-house design & manufacturing for hyperscale • Refine route-to-market • Improve operation excellence 2018 Lenovo Internal. All rights reserved. 2019 Lenovo Internal. All rights reserved. 11
Slide 12: Intelligent Transformation – Well on Track
Intelligent Transformation – Well on Track • Established dashboard to track progress • Established Data Intelligence Business Group (DIBG); Smart Vertical revenue quadrupled • Software & Services revenue +23% YOY, reaching $732M 2019 Lenovo Internal. All rights reserved. Source: Internal Data 12
Slide 13: 2019 Lenovo Internal. All rights reserved.
2019 Lenovo Internal. All rights reserved. 13
Slide 14: Wong Wai Ming, Chief Financial Officer
Wong Wai Ming Chief Financial Officer 2019 Lenovo Internal. All rights reserved.
Slide 15: Financial Highlights
Financial Highlights Q1 Highlights 1 US$ Million Revenue 1 Delivered another quarter of revenue YTY 15,000 growth despite global uncertainty (8th 14,035 13,380 consecutive quarter of growth) 12,512 11,913 11,710 2 11,000 Pretax profit more than doubled YTY 7,000 3 Gross profit margin expanded to 16.
Slide 16: Cash and Working Capital
Cash and Working Capital Q1 Highlights 1 Despite the significant improvement in PTI Net cash (used in)/generated from operating activities and continued to improve inventory and US$ Million 1,800 1,548 1 accounts payable management, operating cash flow was temporary impact by the 1,300 transition pr
Slide 17: Intelligent Devices Business Group (IDG)
Intelligent Devices Business Group (IDG)* US$ Million Revenue 1 Q1 Highlights 15,000 12,436 11,836 11,156 12,000 10,284 10,459 9,000 11. Strong PC sales and continued share gain in Mobile’s core markets 6,000 supported the robust revenue YTY 3,000 growth of 8% for IDG 0 Q1 FY2018/19 Q2 FY2018/19 Q3
Slide 18: IDG - PC & Smart Device Business Group (PCSD)
IDG - PC & Smart Device Business Group (PCSD) US$ Million Revenue 1 12,000 10,729 Q1 Highlights 10,235 9,631 10,000 8,619 8,892 8,000 11. Double-digit revenue growth driven by strength in commercial orders and 6,000 investments to grow premium & high- 4,000 growth segments 2,000 0 Q1 FY2018/19 Q2 FY
Slide 19: IDG - Mobile Business Group (MBG)
IDG - Mobile Business Group (MBG) US$ Million Revenue Q1 Highlights 2,000 2 1,646 1,601 1,669 1,545 1,503 1,500 11. Another PTI profitable quarter; 4th consecutive quarter of $100m+ YTY 1,000 PTI improvement 500 0 22. Continued strength in core markets; NA sales benefited from strong Q1 FY2018/19 Q2
Slide 20: Data Center Business Group (DCG)
Data Center Business Group (DCG) Pretax Loss and Margin 1 US$ Million Q1 FY2018/19 Q2 FY2018/19 Q3 FY2018/19 Q4 FY2018/19 Q1 FY2019/20 Q1 Highlights 0 0.0% 1. Losses narrowed by $11 million YTY; 8th 1 -20 -1.0% consecutive quarter of PTI improvement -40 -2.0% -60 -53 -52 -3.0% 2. 2 Sector challenges
Slide 21: Outlook Statement
Outlook Statement Ø Group Mission is to be the Leader and Enabler of Intelligent Transformation Ø IDG: Deliver premium-to-market growth with strong profitability; build Smart IoT business • PCSD: target to maintain premium to market growth with industry-leading profitability; drive growth in high-gr
Slide 22: Appendix
Appendix - Financial Summary - Condensed Consolidated Income Statement - Condensed Consolidated Balance Sheet - Condensed Consolidated Cash Flow Statement 2019 Lenovo Internal. All rights reserved. 22
Slide 23: Financial Summary
Financial Summary 2019 Lenovo Internal. All rights reserved. 23
Slide 24: Condensed Consolidated Income Statement
Condensed Consolidated Income Statement 2019 Lenovo Internal. All rights reserved. 24
Slide 25: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 2019 Lenovo Internal. All rights reserved. 25
Slide 26: Condensed Consolidated Cash Flow Statement
Condensed Consolidated Cash Flow Statement 2019 Lenovo Internal. All rights reserved. 26
Slide 27: thanks.
thanks. Different is better kenovo