Lenovo Delivers 10ᵗʰ Straight Quarter of Improved Profitability Year-On-Year, as Operational Resilience and Diversified Growth Engines Continue to Drive Performance

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3 November 2022– Lenovo Group (HKSE: 992) (ADR: LNVGY) today announced second quarter results for the Group, with profitability improving year-on-year for the 10th consecutive quarter. Second quarter net income grew 6% year-on-year to US$541 million and Group revenue grew to US$17.1 billion, up 3% year-on-year in constant currency.

All main businesses contributed positive operating profit, demonstrating further progress towards the Group’s goal of doubling profitability in the medium-term. Additionally, the diversified growth engines continued to drive strong performance with both the solutions and services business, as well as the infrastructure business, seeing high double-digit year-on-year growth. Non-PC businesses now make up more than 37% of total group revenue. The Group’s healthy cash balance means it remains committed to doubling investments in Research and Development (R&D) in the medium-term, having grown R&D spending 15% year-on-year in the quarter.

While current external challenges persist, Lenovo remains agile and focused on pursuing its strategy and ensuring ongoing profitability by rebalancing resources towards its diversified growth engines and driving efficiencies and expense reduction through the business. It sees long-term opportunities built on its foundation of New IT – client, edge, cloud, network, and intelligence – as the global trends of digitalization and intelligent transformation accelerate. Last quarter’s results, as well as the past three years, have demonstrated that the combination of Lenovo’s strategy, strong execution, and resilient operations are enabling it to transcend the industry cycle. This, combined with its high-quality and innovative portfolio, unique hybrid manufacturing and supply chain, global/local principle and capability, as well as healthy liquidity will help drive further opportunities to deliver sustainable growth, and improve profitability.

Financial Highlights:

Earnings table

Lenovo’s Board of Directors declared an interim dividend of 8.0 HK cents per share.

Chairman and CEO quote – Yuanqing Yang: 

“Lenovo once again delivered solid results, even in a challenging global market, achieving year-on-year profitability improvement for the tenth straight quarter and increasing revenue by nearly 3% (in constant currency) year on year.  Our non-PC businesses are gaining momentum and now represent more than 37% of our revenue.  Both solutions and services business and infrastructure business saw high double-digit revenue growth year on year,” says Yuanqing Yang, Chairman and CEO of Lenovo. “For Lenovo, these results prove that our strategic foresight, operational resilience, and consistent investment in diversified growth engines, have prepared us well for challenging times. Whether our traditional markets are booming or contracting, Lenovo consistently delivers on its commitments and outperforms market expectations.”

Solutions and Services Group (SSG): continued momentum, delivering…

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