Lenovo delivers another record year – crossing the US$70 billion revenue milestone and reaching US$2 billion in net income
HONG KONG — (BUSINESS WIRE) — May 25, 2022 — Lenovo Group (HKSE: 992) (ADR: LNVGY) today announced record fiscal year results for the Group, with historic highs for both profit and revenue. Annual net income reached the US$2 billion mark, up 72% year on year, with revenue growing by US$10 billion for the second year running to over US$71 billion. All main business groups were profitable for the full fiscal year - with strong growth momentum in mobile, infrastructure, and solutions and services businesses.
Lenovo successfully overcame macro-environmental challenges and demonstrated both agility and resilience as it navigated industry-wide supply shortages, pandemic disruption, geopolitical uncertainties, and higher inflation to deliver a record year.
The digital and intelligent transformation trend continues to accelerate, presenting the Group with strong growth opportunities. More than 50% of companies now have digitalization as part of their corporate strategy, up from just over one third two years ago. The hybrid work model is a long-term change that will continue to drive strong demand not only for smart devices and data center infrastructure, but also for scenario-driven solutions such as smart collaboration, smart home, and smart office.
Lenovo continued to strengthen its competitiveness to drive sustainable profitable growth. It has already made strong progress toward doubling R&D investments within three years from fiscal year 2021/2022, up 43% year on year to US$2 billion. And will continue to realize its ESG goals and commitments. The company is confident that by leveraging its clear strategy, competing with its unique competitive advantage of global-local model, and the right balance between innovation and efficiency, it can overcome any challenges to capture opportunities.
Lenovo’s Board of Directors declared a final dividend of 3.8 US cents or 30.0 HK cents per share for the fiscal year ended March 31, 2022.
Financial Highlights:
|
FY 21/22 US$ millions |
FY 20/21 US$ millions |
Change
|
|
Q4 21/22 US$ millions |
Q4 20/21 US$ millions |
Change
|
Group Revenue |
71,618 |
60,742 |
18% |
16,694 |
15,630 |
7% |
|
Pre-tax income |
2,768 |
1,774 |
56% |
520 |
380 |
37% |
|
Net Income (profit attributable to equity holders) |
2,030 |
1,178 |
72% |
412 |
260 |
58% |
|
|
|
||||||
Basic earnings per share (US cents) |
17.45 |
9.54 |
7.91 |
3.52 |
2.19 |
1.33 |
Chairman and CEO quote – Yuanqing Yang:
“Although last year was challenging for the world, with the accelerated global digital and intelligent transformation, Lenovo delivered a record year of profit and revenue,” said Yuanqing Yang, Lenovo Chairman and CEO. “All our main businesses are now profitable for the full year, and our new growth engines – SSG, ISG and Mobile – are showing strong momentum. We will capture this window of opportunity, double our R&D investment, drive service-led transformation, realize our ESG goals, and stay flexible and resilient to bring the entire company to new heights.”
Solutions and Services Group (SSG): delivering strong growth and high margins - driving higher overall profitability for the Group
Opportunity:
The trillion-dollar IT services market continues to expand. With the hybrid work model, the demand for digital workplace services is expected to reach US$93 billion by 2025. Equally, research is showing that more than 90% of CIOs are willing to consider adopting as-a-service offerings.
FY21/22 performance:
- In the last year SSG delivered high profitability and high growth, with revenue reaching an all-time high of US$5.4 billion, up almost 30% year on year. Operating margin was 22%.
- There was strong double-digit growth across all segments, in particular for managed services where revenue grew more than 60% year on year, with strong growth from the TruScale as-a-service business. Project and solution services saw revenue grow 28% year on year, as vertical solutions more than doubled on the previous year.
- Revenue from managed services and project and solution services now accounts for almost half of SSG’s business.