• Full-year sales of US$14.9 billion
• Full-year pre-tax profit (excluding restructuring/one-off items) of S$29 million
• Full-year restructuring charge of US$146 million
• One-off items (charges) incurred during Q4 of US$71 million
• Full-year loss attributable to shareholders (including
restructuring charge/one-off items of US$217 million) of US$226 million
• Full-year basic EPS of (2.56) US cents, or (19.91) HK cents
• Net cash reserves of US$1.18 billion (as of March 31, 2009)
HONG KONG, May 21, 2009– Lenovo Group today reported
results for its fourth fiscal quarter and full year ended March 31,
2009. During the fourth quarter, Lenovo’s worldwide PC shipments
declined 8.2 percent year over year, due to a continued decrease in
commercial PC shipments worldwide, and the Company’s
under-representation in consumer markets. Overall industry PC shipments
declined 7 percent worldwide for the same period.
Consolidated sales for the fourth fiscal quarter from continuing
operations decreased 25.8 percent year over year to US$2.8 billion.
Excluding restructuring costs and one-off items, the Company’s gross
profit for the quarter declined 49 percent year over year, with gross
margin at 10.3 percent. Lenovo reported a fourth quarter pre-tax loss
of US$268 million (including a US$116 million restructuring and US$71
million one-off items charges) from continuing operations. The loss
attributable to shareholders for the quarter was US$264 million.
As previously announced, Lenovo initiated a worldwide restructuring
program during the fourth fiscal quarter, designed to make the Company
more cost competitive and operationally efficient. As a result of the
restructuring, Lenovo expects to save approximately US$300 million in
the 2009/10 fiscal year. The Company incurred a restructuring cost of
US$116 million in the fourth fiscal quarter, and a one-off items charge
of US$71 million.
Basic loss per share for the fourth quarter was (2.98) US cents, or
(23.11) HK cents. Net cash reserves as of March 31, 2009, totaled
US$1.18 billion. Lenovo’s board of directors does not recommend the
payment of a final dividend for the fiscal year ended March 31, 2009.
“The past two quarters have been a particularly challenging time in our
industry worldwide, and we took some significant steps to get our
business back on the right path,” said Lenovo Chairman Liu Chuanzhi.
“We remain committed to growing our business profitably worldwide, and
while our performance in the fourth fiscal quarter did not meet our
expectations, we are confident that we have the right pieces in place
to hit our financial targets and be ready to take advantage as economic
“We have taken decisive actions in response to the economic downturn in
order to align our overall business with the changing marketplace, and
we are already seeing positive results from these actions,” said Yang
Yuanqing, Lenovo CEO. “Driving for growth and profitability, we will
continue to protect and strengthen our leadership position in China,
and accelerate the return of our worldwide commercial business to
profitability. At the same time, we will aggressively sharpen our focus
on the growth opportunities in emerging markets, as well as with
consumer and small and medium business customers worldwide.”
Lenovo Greater China posted US$1.2 billion
in consolidated sales in the fourth fiscal quarter, accounting for 43.6
percent of the Company’s worldwide sales. During the quarter, Lenovo
strengthened its number-one position in China by 1.1 points, which
resulted in an industry-leading market share in China of 26.7 percent.
Lenovo’s PC shipments in China increased 4.4 percent year over year in
the quarter, compared to an overall industry decrease of PC shipments
in China of 0.1 percent.
for US$682 million in consolidated sales, or 24.6 percent of the
Company’s worldwide sales during the fourth fiscal quarter. The
continued industry-wide weakness in commercial PC opportunities across
the Americas resulted in a year over year decrease of 19 percent in
Lenovo’s PC shipments in the region during the quarter. However,
Lenovo’s increased focus on emerging markets resulted in market share
gains in Brazil during the quarter.
In the Europe, Middle East and Africa region (EMEA),
Lenovo’s consolidated sales totaled US$591 million for the fourth
fiscal quarter, or 21.3 percent of the Company’s worldwide sales.
Lenovo’s PC shipments across the region decreased 13 percent year over
year in the quarter. Sales growth in the region was impacted by
limited participation in the consumer market, which the Company has
since addressed. Lenovo gained market share in France, and with the
Company’s increased focus on emerging markets, had notable market share
gains in Central and Eastern Europe, and in Turkey.
Asia Pacific (excluding
Greater China) recorded consolidated sales of US$291million in the
fourth fiscal quarter, or 10.5 percent of the Company’s worldwide
sales. Lenovo’s PC shipments in Asia Pacific decreased 32 percent year
over year in the quarter. An encouraging response to the Company’s new
netbook product line-up across the region was offset by a significant
drop in the market in India.
Lenovo’s Notebook computers continued to be
the largest contributor to the Company’s sales worldwide, generating
close to 60 percent of Lenovo’s total sales revenue. Consolidated sales
for Lenovo’s notebook PC business worldwide in the fourth fiscal
quarter totaled US$1.7 billion, down 26 percent year over year. The
Company’s notebook shipments worldwide in the quarter were up two
percent year over year. Lenovo is well placed to take advantage of the
industry shift to lower-priced notebook PCs, and introduced several new
IdeaPad netbooks, which have been well received by customers and the
Consolidated sales of Lenovo Desktop computers
worldwide decreased 26 percent year over year in the fourth fiscal
quarter to $US1.0 billion, or 38 percent of Lenovo’s total sales
revenue. Desktop shipments for the same period declined 17.6 percent.
Across the world, the market continued to shift from desktops to
notebooks, and Lenovo has simplified its desktop product portfolio to
drive operational efficiencies and reduce cost. At the same time, the
Company has introduced some exciting new IdeaCentre and ThinkCentre
desktop PCs, as well as new ThinkStation workstations and the Lenovo
FULL YEAR RESULTS
For the 2008/09 fiscal year, consolidated sales from continuing
operations decreased 8.9 percent year over year to US$14.9 billion.
Lenovo’s PC shipments grew 2.2 percent year over year. The Company’s
gross profit margin for the fiscal year was 11.9% (excluding
restructuring costs and one-off items), compared to 15.0 percent last
Including restructuring costs and one-off items, the Company’s pre-tax
loss for continuing operations was US$188 million. The full-year loss
attributable to shareholders was US$226 million.
Basic loss per share for the 2008/09 fiscal year totaled (2.56) US cents, or (19.91) HK cents.
Lenovo (HKSE: 992) (ADR: LNVGY) is dedicated to building exceptionally
engineered PCs. Lenovo’s business model is built on innovation,
operational efficiency, and customer satisfaction as well as a focus on
investment in emerging markets. Formed by Lenovo Group’s acquisition of
the former IBM Personal Computing Division, the Company develops,
manufactures and markets reliable, high-quality, secure, and
easy-to-use technology products and services worldwide. Lenovo has
major research centers in Yamato, Japan; Beijing, Shanghai and
Shenzhen, China; and Raleigh, North Carolina. For more information,
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