Lenovo Group Limited · HKEX:992
Lenovo — Q2 2021 Earnings Presentation
27 slides from Lenovo's earnings presentation, Nov 3, 2020
Slide 1: 2QFY20/21 Earnings Announcement
2QFY20/21 Earnings Announcement Nov 3, 2020 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 Nov 3, 2020 2020 Lenovo Internal. All rights reserved.
Slide 4: Group Performance: Record Results
Group Performance: Record Results • Record Revenue, Pre-Tax Income, Net Income § Revenue: $14.5B, up 7.4% YOY; all core businesses delivered growth first time in 6 quarters § Pre-Tax Income: $470M, up 51.7% YOY § Net Income: $310M, up 53.4% YOY • Lenovo given Strong Investment-Grade rating by top-th
Slide 5: IDG PCSD: Leading the Growth
IDG PCSD*: Leading the PCSD Revenue ($B) PCSD PTI ($M) PCSD Margin (%) Growth +7.6% +18.2% 11.5 723 +0.6pt 10.7 5.7 6.3 612 • Revenue up 7.6% YOY, new record • PTI up 18.2% YOY, new record • PTI margin maintained record 6.3%, up Q2 1920 Q2 2021 Q2 1920 Q2 2021 Q2 1920 Q2 2021 0.6 points YOY PC Segme
Slide 6: IDG Mobile: Resumed Growth
IDG Mobile: Resumed Mobile Revenue YTY, QTQ ($M) Growth +0.6% +39% 1510 1519 1519 • Revenue resumed YoY growth, 1093 improved 39% quarter-to-quarter • Solidifying Latin America, North America, while driving fast growth in Europe and Asia Pacific Q2 1920 Q2 2021 Q1 2021 Q2 2021 • Launched razr 5G fol
Slide 7: Data Center: Continued Growth
Data Center: Continued DCG Revenue ($M), PTI Margin (%) Growth +11.1% 1478 1331 • Revenue grew 11.1%, profitability up 0.7pts YOY +0.7pts • Cloud Service Provider* § Continued strong revenue growth, up 34.1% YOY Q2 1920 Q2 2021 Q2 1920 Q2 2021 § Major motherboard and system design win with top cloud
Slide 8: Data Center: Continued Growth
Data Center: Continued DCG Segment Revenue Growth YOY (%) Growth SDI2 +22% Software +47% • Enterprise/SMB1 § Outgrew the market § Double-digit growth in SDI2, Software, Storage Q2 1920 Q2 2021 Q2 1920 Q2 2021 and Services Storage Services • Partnership with SAP +15% +11% § Lenovo TruScale IaaS3 + SA
Slide 9: Intelligent Transformation: Strong Progress
Intelligent Transformation Revenue YOY (%) Intelligent Transformation: Smart IoT Smart Infrastructure Smart Vertical Strong Progress +36% +21% +72% • Smart IoT revenue1 grew 36% YOY • Smart Infrastructure revenue grew 21% YOY • Smart Verticals revenue1 grew 72% YOY • Software & Services revenue1 to
Slide 10: The New Normal: One Device Per Family
The New Normal From To One Device One Device PC Market to Per Family Per Person ~300M in 2020 300 250 200 150 100 50 0 2017 2018 2019 2020 CY Q1 CY Q2 CY Q3 CY Q4 2020 Lenovo Internal. All rights reserved. Source: IDC 10
Slide 11: 2020 Lenovo Internal. All rights reserved.
2020 Lenovo Internal. All rights reserved. 11 11
Slide 12: Transforming to Thrive in the New Normal
Transforming to Thrive in the “New Normal” 2020 Lenovo Internal. All rights reserved. 12
Slide 13: Wong Wai Ming, Chief Financial Officer
Wong Wai Ming Chief Financial Officer Nov 3, 2020 2020 Lenovo Internal. All rights reserved.
Slide 14: Financial Highlights
Financial Highlights 2Q HIGHLIGHTS 1 All-time high revenue and positive YTY revenue US$ Million Revenue +7% YTY 1 growth across three Business Groups; strong growth 16000 14,519 trajectory on Software and Services 14,103 13,522 13,348 2 Gross margin improved 0.2pts QTQ thanks to strong 12000 high-gr
Slide 15: Financial Performance
Financial Performance Business groups’ total pre-tax income 2Q HIGHLIGHTS US$ Million 800 +15% YTY 1 654 700 569 641 561 1 Business groups’ pre-tax profit reached a 600 new milestone with 15% YTY growth on 500 390 record-breaking PCSD profit and DCG’s 400 improved profitability 300 200 100 2 Record-
Slide 16: Cash and Working Capital
Cash and Working Capital US$ Million Inventory and Days of Inventory* Day 1 2Q HIGHLIGHTS 6,000 60 4,947 5,127 5,242 55 1 Inventory days improved sequentially thanks to 5,000 50 robust demand; YTY increase on strategic buy-ahead 53 3,998 45 actions 3,817 4,000 43 45 40 2 35 Net debt reduced by US$31
Slide 17: PC & Smart Device Business Group (PCSD)
PC & Smart Device Business Group (PCSD) Revenue US$ Million +8% 1 2Q HIGHLIGHTS 13,000 YTY 11,462 11,074 11,000 10,656 10,603 11. Record-breaking revenue and pre-tax profit despite supply constraints 9,000 8,499 7,000 12. Revenue up 8% YTY on structural changes in PC demand including e-learning, WFH
Slide 18: Mobile Business Group (MBG)
Mobile Business Group (MBG) US$ Million Revenue 1 2Q HIGHLIGHTS +1% YTY 1,510 1,519 1,500 1,381 1,300 11. Strong rebound in revenue, up 39% QTQ and 1% 1,100 1,093 YTY, due to recovery of market demand, increase 900 824 of average selling prices and improved product 700 portfolio 500 300 12. Expansio
Slide 19: Data Center Business Group (DCG)
Data Center Business Group (DCG) Revenue US$ Million +11% YTY 1 2Q HIGHLIGHTS 1,800 1,601 1,612 1,478 11. Cloud Service Provider (CSP) revenue up 34% YTY 1,600 1,331 1,213 1,400 1,200 on demand for cloud infrastructure and market 1,000 share gain 800 600 400 12. Long-term outlook for CSP business im
Slide 20: Software and Services
Software and Services Software and Services revenue US$ Million +39% 2Q HIGHLIGHTS YTY 1,400 1,230 1,200 1,009 1,000 883 Services and Software revenue* up 39% YTY to 800 US$1.2 billon; contributing 8.5% of Group Revenue 600 400 200 - Q2FY19/20 Q1FY20/21 Q2FY20/21 ü Attached Services +25% YTY ü Manag
Slide 21: Outlook Statement
Outlook Statement Group Mission: Leader and Enabler of Intelligent Transformation IDG: Drive growth with strong profitability; accelerate services and software • PCSD: Drive premium to market growth and sales in high-growth/premium segments. Increase supply to meet strong demand. • Mobile: Protect p
Slide 22: Appendix
Appendix - Financial Summary - Condensed Consolidated Income Statement - Condensed Consolidated Balance Sheet - Condensed Consolidated Cash Flow Statement 2020 Lenovo Internal. All rights reserved. 22
Slide 23: Financial Summary
Financial Summary US$ Million Q2 FY2020/21 Q2 FY2019/20 Y/Y% 1H FY20/21 Y/Y% Revenue 14,519 13,522 7% 27,867 7% Gross profit 2,253 2,183 3% 4,294 1% Operation expense (1,688) (1,741) (3%) (3,294) (4%) Operating profit 565 442 28% 1,000 28% Other non-operating expenses (95) (132) (29%) (198) (15%) Pr
Slide 24: Condensed Consolidated Income Statement
Condensed Consolidated Income Statement US$ Million Q2 FY2020/21 Q2 FY2019/20 Revenue 14,519 13,522 Cost of sales (12,266) (11,339) Gross profit 2,253 2,183 Selling and distribution expenses (726) (778) Administrative expenses (643) (585) Research and development expenses (307) (318) Other operating
Slide 25: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet US$ Million As at Sep 30, 2020 As at Jun 30, 2020 Non-current assets 13,779 13,447 Property, plant and equipment 1,439 1,388 Intangible assets 7,980 7,992 Others 4,360 4,067 Current assets 21,305 20,048 Bank deposits and cash 3,753 3,546 Trade, notes and other re
Slide 26: Condensed Consolidated Cash Flow Statement
Condensed Consolidated Cash Flow Statement US$ Million Q2 FY2020/21 Q2 FY2019/20 Q1 FY2020/21 Net cash generated from operating activities 771 1,382 317 Net cash used in investing activities (214) (200) (285) Net cash used in financing activities (388) (524) (91) Increase/(decrease) in cash and cash
Slide 27: thanks.
thanks. Smarter technology for all