5 September, 2023 – S&P Global Ratings (S&P) has upgraded the long-term issuer and issue credit ratings on Lenovo (HKSE: 992) (ADR: LNVGY) to ‘BBB’ with a stable outlook, reaffirming the effectiveness of the company’s intelligent transformation strategy.
According to the S&P report, Lenovo’s credit rating upgrade demonstrates the company’s “improved operational resiliency, with solid profitability and cash flow despite declines in PC revenue”.
“Lenovo’s growing service and solutions revenue and good working capital management will contribute to steadier cash flow,” according to S&P. The credit agency is seeing a stable outlook for the company, with revenue expected to grow over the next 24 months from a gradual PC market recovery and a steady increase in non-PC and services revenues. S&P highlights the success Lenovo has had in growing revenue from services, noting that the higher margins, upfront cash payments, and recurring nature of this part of the business have contributed to the improvement of Lenovo’s overall profitability and cash flow in a weaker macroeconomic environment.
“The strong upgraded rating reaffirms the effectiveness of our transformation strategy and diversified growth engines,” said Hugh Wu, Corporate Treasurer, Vice President of Lenovo. “We are committed to continuing to drive innovation and intelligent transformation, to achieve long-term sustainable growth and profitability.”
The upgrade came after the company’s recent FY2023/24 Q1 earnings announcement which reported strong growth of its services-led business, as well a commitment to investing a further US$1 billion in AI innovation over the next three years.
In addition to S&P, Lenovo is currently rated ‘Baa2’ by Moody’s with a stable outlook; and ‘BBB’ by Fitch with a stable outlook.
About Lenovo
Lenovo (HKSE: 992) (ADR: LNVGY) is a US$62 billion revenue global technology powerhouse, ranked #217 in the Fortune Global 500, employing 77,000 people around the world, and serving millions of customers every day in 180 markets. Focused on a bold vision to deliver smarter technology for all, Lenovo has built on its success as the world’s largest PC company by further expanding into growth areas that fuel the advancement of ‘New IT’ technologies (client, edge, cloud, network, and intelligence) including server, storage, mobile, software, solutions, and services. This transformation together with Lenovo’s world-changing innovation is building a more inclusive, trustworthy, and smarter future for everyone, everywhere. To find out more visit https://www.lenovo.com, and read about the latest news via our StoryHub.
