Lenovo Reports First Quarter 2009/10 Results
(Thomson Reuters ONE) - HONG KONG--(Marketwire - August 06, 2009) - Lenovo (HKSE: 992) (ADR:LNVGY)-- Quarterly sales of US$3.5 billion-- Operating profit of US$16 million, pre-tax income of US$322K (excluding restructuring costs/one-off items)-- Restructuring charge of US$3 million-- Loss attributable to equity holders of US$16 million-- Basic EPS of (0.18) US cents, or (1.40) HK cents-- Net cash reserves of US$1.4 billion (as of June 30, 2009)Lenovo Group today reported results for its first fiscal quarterended June 30, 2009. During the first quarter, Lenovo's worldwide PCshipments grew 1.1 percent year over year. Comparatively, industry PCshipments declined 3.3 percent worldwide for the same period.Consolidated sales for the first fiscal quarter decreased 17.9percent year over year to US$3.5 billion. The Company's gross profitfor the quarter declined 37 percent year over year, with gross marginat 11 percent.Operating profit for the first fiscal quarter was US$16 million(excluding restructuring costs/one-off items) an improvement over theprevious fiscal quarter loss of US$76 million. Lenovo reported abreakeven first quarter pre-tax income of US$322K (excludingrestructuring costs/one-off items) compared to the Company's previousquarterly loss of US$81 million. The loss attributable to equityholders for the quarter was US$16 million, compared to the Company'sprevious fiscal quarter's loss attributable to equity holders ofUS$264 million.During the first fiscal quarter, Lenovo continued its previouslyannounced worldwide restructuring program, designed to make theCompany more cost competitive and operationally efficient. As aresult of the restructuring, Lenovo expects to save approximatelyUS$300 million on an annual run-rate basis. The Company incurred arestructuring cost of US$3 million in the first quarter.Basic loss per share for the first fiscal quarter was (0.18) UScents, or (1.40) HK cents. Net cash reserves as of June 30, 2009,totaled US$1.4 billion."There was little doubt that this year was going to be a challenge toour industry, but we are encouraged that some of the recent actionswe have taken are helping our business get off to a hopeful startduring the first quarter," said Lenovo Chairman Liu Chuanzhi. "Ourexpectations for growing our business profitably worldwide remainsolidly in place, and while there is a tremendous amount of work yetto be done to get our business to where it needs to be, the changeswe are making will help strengthen our ability to go after newmarkets as global economic conditions improve.""The decisive actions we took last quarter to align our business withchanging market conditions and extend our transactional businessmodel globally have started to pay off. As a result, Lenovo achievedits highest quarterly global market share since the acquisition ofIBM's PC division," said Yang Yuanqing, Lenovo CEO. "With the globaleconomic environment still unstable, we will continue to extend ourleadership in China, strive to restore profitability in maturemarkets, and also seize opportunities in emerging markets and thetransactional space. Furthermore, we will continue to optimize ourcost structure and diligently implement our strategies, designed todrive long-term profit growth and development of Lenovo."GEOGRAPHIC OVERVIEW-- Lenovo China posted US$1.7 billion in consolidated sales in thefirst fiscal quarter, accounting for 48 percent of the Company'sworldwide sales. During the quarter, Lenovo further strengthened itsnumber-one position in China by 0.3 percentage point, which resultedin an industry-leading market share in China of 28.6 percent.Lenovo's PC shipments in China increased 15 percent year over year inthe quarter, exceeding the increase of PC industry shipments in Chinaof 14 percent overall.-- In Emerging Markets* Lenovo's consolidated sales totaled US$474million for the first fiscal quarter, or 14 percent of the Company'sworldwide sales. Lenovo's PC shipments across the region decreasedsix percent year over year in the quarter. Sales growth in the regionwas stalled by Lenovo's lack of penetration in the consumer market.Notably, Lenovo showed improvement in some Southeast Asian andPacific Rim countries, and grew market share in Latin America, Russiaand Turkey.-- Mature Markets** accounted for US$1.3 billion in consolidatedsales, or 38 percent of the Company's worldwide sales during thefirst fiscal quarter. Sluggish demand in commercial PC opportunitiesacross Western Europe and North America resulted in a year over yeardecrease of 17 percent in Lenovo's PC shipments in mature marketsduring the quarter. However, Lenovo made significant progress inrestoring profitability by reducing its losses in North America,Australia/New Zealand and Japan.PRODUCT OVERVIEW-- Lenovo's Notebook computers continued to be the largestcontributor to the Company's sales worldwide, generating 64 percentof Lenovo's total sales revenue. Consolidated sales for Lenovo'snotebook PC business worldwide in the first fiscal quarter totaledUS$2.2 billion, down nine percent year over year. The Company'snotebook shipments worldwide in the quarter were up 21 percent yearover year. Lenovo is well placed to take advantage of the industryshift to lower-priced notebook PCs and continued to roll out newIdeaPad netbooks such as the S10-2. Also announced in the firstquarter was the new ThinkPad T400s, with its well-received 'shift'and 'delete' keys redesign.-- Consolidated sales of Lenovo Desktop computers worldwide decreased32 percent year over year in the first fiscal quarter to US$1.2billion, or 34 percent of Lenovo's total sales revenue. Desktopshipments for the same period declined 15 percent. Across the world,the market continued to shift from desktops to notebooks, and Lenovocontinued to simplify its desktop product portfolio to driveoperational efficiencies and reduce cost. During the first quarterLenovo introduced the all-in-one IdeaCentre C300, a value net-top PC.ABOUT LENOVOLenovo (HKSE: 992) (ADR: LNVGY) is dedicated to buildingexceptionally engineered PCs. Lenovo's business model is built oninnovation, operational efficiency, and customer satisfaction as wellas a focus on investment in emerging markets. Formed by LenovoGroup's acquisition of the former IBM Personal Computing Division,the Company develops manufactures and markets reliable, high-quality,secure, and easy-to-use technology products and services worldwide.Lenovo has major research centers in Yamato, Japan; Beijing, Shanghaiand Shenzhen, China; and Raleigh, North Carolina. For moreinformation, see www.lenovo.com.* includes Africa, Asia Pacific, Central/Eastern Europe, Hong Kong,India, Korea, Latin America, Mexico, Middle East, Pakistan, Russia,Taiwan, Turkey** includes Australia/New Zealand, Israel, Japan, North America,Western Europe and global accounts LENOVO GROUP FINANCIAL SUMMARY For the fiscal quarter ended June 30, 2009 (in US$ millions, except per share data) Q109/10 Q108/09 Y/Y%CHG --------- --------- ---------Sales 3,457 4,213 (17.9%) --------- --------- ---------Gross Profit 380 601 (36.7%) --------- --------- ---------Gross Profit Margin 11.0% 14.3% (3.3 pts) --------- --------- ---------Operating Expenses(1) (366) (469) (21.9%) --------- --------- ---------Operating Expense Margin(1) 10.6% 11.1% (0.5 pt) --------- --------- ---------Other Income, net 2 1 48.8% --------- --------- ---------Operating Profit(1) 16 133 (88.2%) --------- --------- ---------Other Non-Operating (Expenses) / Income (15) 4 n/a --------- --------- ---------Pre-tax Income(1) 0 137 n/a --------- --------- ---------Restructuring Cost (3) - n/a --------- --------- ---------One-off Items - - n/a --------- --------- ---------Pre-Tax (Loss)/Income (2) 137 n/a --------- --------- ---------(Loss)/Profit Attributable to Equity Holders (16) 110 n/a --------- --------- ---------EPS (US cents) Basic (0.18) 1.25 Diluted (0.18) 1.15 --------- --------- ---------(1) Excludes restructuring costs & one-off itemsContacts:Hong KongAngela Lee(852) 2516-4810angelalee(at)lenovo.comBeijingJay Chen(8610) 5886-2552chenji(at)lenovo.comU.S.Ray Gorman(919) 257-6325rgorman(at)lenovo.comThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 06.08.2009 - 03:56 Uhr
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