Lenovo Posts Second Quarter 2014/15 Results

The Americas geography revenue was US$2.1 billion for the second fiscal quarter, flat year-over-year, comprising 20 percent of the Company’s worldwide revenue. The Americas geography saw PC market share of 11.3 percent. Here Lenovo remained in the number three position. The North America region saw strong revenue and shipment growth and solid profit improvements, while the Company is taking action to battle a challenging macro environment Brazil.

PRODUCT OVERVIEW

During the second fiscal quarter, Lenovo’s Laptop PC sales at US$5.5 billion were the largest contributor to the Company’s revenue worldwide, generating 52 percent of Lenovo’s total revenue. Across the industry, laptop shipments were up 0.9 percent year over year, a marked improvement over the 12 percent decline one year ago. The Company gained 2.5 share points and achieved a market share of 21 percent. In the second fiscal quarter, Lenovo announced its newest edition of the popular ThinkPad Helix, an unmatched business two-in-one Ultrabook. The new ThinkPad Helix weighs only 2.98 pounds, and measures just 0.38 inches thick, 15 percent thinner than its predecessor.

Lenovo’s Desktop PC shipments grew 6.4 percent worldwide year-over-year during the second fiscal quarter, compared to an overall industry decrease of 2.3 percent. As a result, Lenovo gained 1.5 share points year-over-year and achieved a market share of 18 percent. Consolidated sales of Lenovo desktop PCs in the second quarter increased 11 percent year-over-year to US$3 billion, or 29 percent of the Company’s total revenue. In the second fiscal quarter, Lenovo announced new thinner and lighter HORIZON tabletop PCs at just 0.59 inches thick and weighing just over five pounds. The HORIZON 2S model shaves ten pounds off the original HORIZON 2, making it easier to carry from room-to-room or even outside the home.

Consolidated sales of Lenovo’s Mobile Devices**, including smartphones and tablets decreased 6 percent year-over-year during the second fiscal quarter to US$1.4 billion, representing 13 percent of the Company’s total revenue during the quarter. It had record worldwide smartphone shipments, up 38 percent, driven by sales in more than 45 markets. In China, the smartphone business remained robust, while demand outside China was even stronger. India / Southeast Asia, Russia / EMEA emerging, and Latin America were all stars, with respective unit growth of about 120 percent, 400 percent, and 150 percent.

At the 2014 IFA Consumer Electronics show in Berlin, Lenovo introduced its latest smartphones: the new VIBE X2 with a unique tri-layered design, the new VIBE Z2 with sleek trend-setting design, enhanced performance and professional-grade photography features. Also at IFA, Lenovo introduced a new tablet, the TAB S8, Lenovo’s first 8-inch Android tablet powered by an Intel processor. The TAB S8 is just 0.65 pounds and 0.31 inches thin, nearly as thin as a standard pencil.

*see Gartner and IDC data 3Q 2014

** Previously, these revenues were reported under Mobile Internet and Digital Home (MIDH), but now they were reported under the “Mobile Devices” heading.

ABOUT LENOVO

Lenovo (HKSE: 992) (ADR: LNVGY) is a $39 billion global Fortune 500 company and a leader in providing innovative consumer, commercial, and enterprise technology. Our portfolio of high-quality, secure products and services covers PCs (including the legendary Think and multimode YOGA brands), workstations, servers, storage, smart TVs and a family of mobile products like smartphones (including the Motorola brand), tablets and apps. Join us on LinkedIn, follow us on Facebook or Twitter ( @Lenovo) or visit us at www.lenovo.com.

     

LENOVO GROUP

FINANCIAL SUMMARY

For the fiscal quarter ended September 30, 2014

 

(in US$ millions, except per share data)

 
 


Q2
14/15


Q2
13/14


Y/Y
CHG

Revenue 10,475   9,774   7 %
Gross profit 1,457   1,265   15 %
Gross profit margin 13.9 % 12.9 % 1.0 pts
Operating expenses (1,092 ) (982 ) 11 %
Expenses-to-revenue ratio 10.4 % 10.0 % 0.4 pts
Operating profit 365   283   29 %
Other non-operating expenses (36 ) (18 ) 95 %
Pre-tax income 329   265   24 %
Taxation (57 ) (51 ) 11 %
Profit for the period 272   214   27 %
Non-controlling interests (10 ) 6   N/A  
Profit attributable to equity holders 262   220   19 %
EPS (US cents)
Basic 2.52 2.12 0.40
Diluted 2.49   2.10   0.39  




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