[May 21, 2014] |
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Lenovo Outperforms Market in 4th Quarter and Full Year 2013/14
HONG KONG --(Business Wire)--
Lenovo (News - Alert) Group today announced results for its fourth fiscal quarter and
full-year ended March 31, 2014. With record full-year revenue of US$38.7
billion, an increase of 14 percent year-over-year, a record full-year
pre-tax income of US$1.01 billion, up 27 percent year-over-year and
record full year earnings of US$817 million, up 29 percent, Lenovo had a
truly outstanding year.
Lenovo expanded its number one position in PCs, adding 2.1 points of
market share to post a record 17.7 percent total share for the
full-year, representing five percent year-over-year growth, compared to
an overall industry decline of 8 percent during this same period. Even
while China's PC market slowed, Lenovo's operating profit in China PC
improved by 1 percentage point. Asia Pacific had record share of almost
15 percent, while improving profitability. For the first time, Lenovo's
EMEA revenue surpassed its China PC revenue in the quarter, while in the
US, Lenovo surpassed Apple (News - Alert) to take the number three position in PC
shipments in the fourth quarter. With 20 consecutive quarters of
outgrowing the PC market, Lenovo continued to show it can post rapid
growth in absolute shipment and in relative market share metrics, even
in difficult markets.
When combining Tablets and PCs together to form the "PC + Tablet"
category, Lenovo sold a record 64 million devices, up nearly 18 percent
year over year, outpacing this market by more than 13 percentage points.
Lenovo posted record total device volume of 114 million, up 37 percent
year over year. This was the 4th quarter in a row that Lenovo
sold more tablets and smartphones than PCs. These facts illustrate
Lenovo's transformation as a leader in Smart Connected Devices.
"The record sales and profits that we delivered last year prove that
Lenovo can grow and deliver its commitments, no matter the market
conditions," said Yuanqing Yang, Lenovo Chairman and CEO. "Not only did
we strengthen our leading position in PCs, but we gained three points in
tablets by quadrupling sales volume and became the fastest growing major
smartphone company in the world. This demonstrates our capability to
manage both businesses that are already mature, as well as those that
are shifting to maturity. Meanwhile, we are building new engines for
growth in the enterprise and ecosystem. Through the combination of our
existing and new businesses, Lenovo offers tremendous value to
shareholders today, and our value will be even greater in the future."
Gross profit for the full year was US$5.06 billion, an increase of 14
percent year-over-year. Gross margin was 13.1 percent, while operating
profit for the full fiscal year was US$ 1.05 billion, a 32 percent
increase year-over-year.
Lenovo had strong fourth quarter revenue of US$9.4 billion, up 19
percent year-over-year. The Company achieved pre-tax income of US$212
million during the fourth fiscal quarter, a 28 percent increase over the
same period last year. The Company's gross profit for the fourth fiscal
quarter grew to US$1.24 billion, an increase of 18 percent
year-over-year. Gross margin was 13.3 percent. Operating profit for the
fourth quarter was US$231 million, up 37 percent year-over-year, while
earnings grew 25 percent year-over-year to US$158 million. Compared to
an overall PC industry decline of 4.6 percent year-over-year in the
fourth fiscal quarter, Lenovo grew shipments at a 15 point premium to
the market.
Basic earnings per share in the fourth fiscal quarter was 1.53 US cents,
or 11.87 HK cents. Lenovo's Board of Directors declared a final dividend
of 2.32 US cents, or 18 HK cents per share for the fiscal year ended
March 31, 2014.
GEOGRAPHIC OVERVIEW
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Lenovo China improved its fourth quarter operating margin by
0.8 points to 5.5 percent. With US$3.1 billion in consolidated sales
in the fourth fiscal quarter, China accounted for 33 percent of the
Company's worldwide sales. Lenovo protected its PC leadership with
32.6 percent share, with PC margins improving 1.1 points with
stabilizing shipments and increased average sales price. China
continues to invest in the push into Smart Connected Devices to
capture opportunities from 4G and Smart TVs.
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In the Asia Pacific region, Lenovo achieved 15.6 percent PC
market share in the fourth fiscal quarter, up 2.1 points
year-over-year. While the regional PC market improved, only down
slightly at 1.5 percent year-over-year, the Company grew its PC
shipments across the region by 14 percent. Lenovo remained number one
in Japan with tremendous shipment growth of 35 percent. Consolidated
sales across the region totaled US$1.7 billion or 19 percent of
Lenovo's worldwide sales, while operating margins went up 1.3 points
to 2.7 percent.
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Lenovo in Europe, Middle East & Africa grew PC shipments
during the fourth quarter by 33.3 percent and building even stronger
momentum across the region. EMEA achieved a 15.8 percent market share,
increasing shipments 4 share points year-over-year or a nearly 34
point premium to the market. The region had consolidated sales in the
fourth quarter of US$2.6 billion, a year-over-year improvement of 39
percent, good for 27 percent of Lenovo's total worldwide sales.
Operating profit margin was healthy at 2.9 percent, 1.0 point increase
year-over-year.
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Lenovo's PC shipments in the Americas in the fourth fiscal
quarter increased 18 percent year-over-year, in a market that fell by
about 8 percent. In this environment, the Company gained 2.5 share
points to a record high market share of 11.4 percent. Consolidated
sales grew 23 percent year-over-year to approximately US$2 billion in
the fourth quarter, driven by strong growth across all products. This
represented 21 percent of Lenovo's total worldwide sales. In the US,
during the fourth quarter, Lenovo surpassed Apple in PC units, while
achieving the number 3 position for the first time in this critical
market with record share at 10.8 percent. The Company continued to
invest in its fast growing Brazil and Latin America businesses.
PRODUCT OVERVIEW
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Consolidated sales for Lenovo's laptop PC business worldwide in
the fourth fiscal quarter increased 16 percent year-over-year to
US$4.8 billion, accounting for 51 percent of the Company's overall
sales. During the same period, Lenovo's worldwide laptop PC shipments
increased 12.9 percent, against the backdrop of an overall industry
decrease of 5.8 percent. In the fourth fiscal quarter, Lenovo
announced its newest version of the popular ThinkPad X1 Carbon, the
world's lightest 14-inch ultrabook. Forged from the same strong but
light stock as aircraft and racing cars, the X1 Carbon's carbon fiber
casing weighs less than magnesium or aluminum, but is stronger than
both. The Company also announced the ThinkPad 11e series of laptops,
designed specifically for education and ruggedized for K-12 classroom
performance.
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During the fourth fiscal quarter, Lenovo's desktop PC shipment
grew 6.8 percent worldwide year-over-year, against an industry decline
of 3.1 percent worldwide. Lenovo's desktop PC consolidated sales for
the same period increased 14 percent to US$2.7 billion, or 29 percent
of the Company's overall sales worldwide. In the fourth fiscal
quarter, Lenovo announced the C560 all-in-one (AIO) desktop PC, a
family-friendly large-screen, multitouch home PC that doubles down on
work and play, as well as the ThinkVision Pro2840m, a feature-packed,
28-inch, 4K professional resolution display and the ThinkVision 28, a
smart display that is not only an ultra-high definition monitor but is
also an Android (News - Alert)-enabled entertainment center.
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Lenovo had solid shipments of smartphones, staying China's number two
smartphone maker, with rapid growth across all its Mobile Internet
and Digital Home (MIDH) product lines. During the fourth fiscal
quarter, consolidated sales of MIDH rose 71 percent to US$1.3 billion
year over year, or 13 percent of the Company's overall sales. The
Company's worldwide smartphone shipments grew 59.4 percent in the
fourth quarter, outpacing the worldwide market by 28 percent. The
Company also outgrew the market in China as it worked to capture
4G/LTE (News - Alert) opportunities by expanding its own Lenovo App store ecosystem.
So far the store has delivered 6 billion downloads. It is averaging 25
million downloads daily. Lenovo's own SHAREit App won the Mobile World
Congress award for best app and was the first app developed by Lenovo
to reach 100 million users.
In the fourth fiscal quarter, Lenovo introduced several smartphones,
including its first LTE smartphone, the Lenovo Vibe Z, a razor-thin,
blazing fast device equipped with gesture controls, photo enhancement
software and other premium technologies. The Company also announced the
new Yoga Tablet 10-inch HD+, a multimode device that infuses Lenovo's
original Yoga tablet with a full HD screen, Qualcomm Snapdragon
processor, sharp high-resolution camera and its incredible battery life
of up to approximately 18 hours under certain conditions.
ABOUT LENOVO
Lenovo (HKSE: 0992) (PINK SHEETS: LNVGY) is a US$39 billion personal
technology company, the largest PC company in the world, serving
customers in more than 160 countries. Dedicated to building
exceptionally engineered PCs and mobile internet devices, Lenovo's
business is built on product innovation, a highly-efficient global
supply chain and strong strategic execution. Formed by Lenovo Group's
acquisition of the former IBM (News - Alert) Personal Computing Division, the company
develops, manufactures and markets reliable, high-quality, secure and
easy-to-use technology products and services. Its product lines include
legendary Think-branded commercial PCs and Idea-branded consumer PCs, as
well as servers, workstations, and a family of mobile internet devices,
including tablets and smartphones. As a global Fortune 500 company,
Lenovo has major research centers in Yamato, Japan; Beijing, Shanghai
and Shenzhen, China; Sao Paulo, Brazil, and Raleigh, North Carolina. For
more information see www.lenovo.com.
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LENOVO GROUP
FINANCIAL SUMMARY
For the fiscal quarter and full year ended March 31, 2014
(in US$ millions, except per share data)
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Q4 13/14
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Q4 12/13
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Y/Y CHG
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FY13/14
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Y/Y CHG
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Revenue
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9,357
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7,832
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19%
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38,707
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14%
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Gross profit
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1,244
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1,052
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18%
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5,064
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14%
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Gross profit margin
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13.3%
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13.4%
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-0.1pts
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13.1%
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NIL
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Operating expenses
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(1,013)
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(883)
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15%
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(4,012)
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11%
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Expenses-to-revenue ratio
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10.8%
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11.3%
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-0.5pts
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10.4%
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-0.3pts
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Operating profit
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231
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169
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37%
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1,052
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32%
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Other non-operating expenses
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(19)
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(3)
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503%
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(38)
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NA
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Pre-tax income
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212
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166
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28%
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1,014
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27%
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Taxation
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(44)
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(42)
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7%
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(197)
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16%
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Profit for the period
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168
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124
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35%
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817
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29%
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Non-controlling interests
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(10)
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3
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NA
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-
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NA
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Profit attributable to equity holders
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158
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127
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25%
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817
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29%
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EPS (US cents) Basic Diluted
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1.53
1.51
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1.22
1.20
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0.31
0.31
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7.88
7.78
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1.72
1.71
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Dividend per share (HK cents)
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24
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5.5
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