Lenovo Group Limited (OTCPK:LNVGY) Q2 2021 Earnings Conference Call November 3, 2020 2:00 AM ET Company Participants Jenny Lai - VP of IR Yuanqing Yang - Chairman & CEO Wai Ming - Executive VP & CFO Gianfranco Lanci - Corporate President & COO Kirk Skaugen - Executive VP & President of the Data Center Group Conference Call Participants Howard Kao - Morgan Stanley Jerry Su - Crédit Suisse Sebastian Hou - CL Securities Nam Hyung Kim - Arete Research Jenny Lai Good morning and good evening. Welcome to Lenovo's ...

Smarter technology for all 2QFY20/21 Earnings Announcement Nov 3, 2020 – Hong Kong nov 2020 Lenovo Internal. All rights reserved. Forward Looking Statement This presentation contains "forward-looking statements" which are statements that refer to expectations and plans for the future and include, without limitation, statements regarding Lenovo's future results of operations, financial condition or business prospects as well as other statements based on projections, estimates and assumptions. In some cases, ...

Financial Performance - Lenovo reported a revenue of $50,716 million for the fiscal year 2019/20, a decrease of 1% compared to $51,038 million in 2018/19[7]. - Gross profit increased by 13% to $8,357 million, with a gross margin of 16.5%, up from 14.0%[7]. - Operating expenses rose by 12% to $6,918 million, resulting in an operating expense ratio of 13.6%, an increase of 1.5 percentage points[7]. - The company achieved a profit attributable to equity holders of $665 million, a 12% increase from $597 million in the previous year[7]. - For the fiscal year ending March 31, 2020, Lenovo achieved a record pre-tax profit of $1.018 billion, reflecting a 19% year-over-year growth[34]. - Total revenue slightly decreased by 0.6% year-over-year to $50.716 billion, but increased by 2.0% when adjusted for fixed exchange rates[34]. - Operating cash flow improved to $2.2 billion from $1.5 billion the previous year, attributed to stronger profits and better working capital management[34]. - The net debt decreased by 25% year-over-year to $1.2 billion, indicating a strengthened balance sheet[34]. - The personal computer and smart devices business recorded a pre-tax profit margin increase of 2.1 percentage points to 16.5%[34]. - Software and services revenue grew by 43% year-over-year, contributing nearly 7% to total revenue, marking the highest profit margin segment[37]. Business Segments and Market Position - Lenovo's PC and smart device business maintained a record market share of 24.5%[18]. - The Smart Devices Business Group achieved a record revenue of $45.216 billion, with a year-on-year growth of 0.5% and a significant increase in pre-tax profit by 25% to $2.302 billion[39]. - The Personal Computer and Smart Devices segment captured a global market share of 24.5%, growing by 1.2 percentage points year-on-year, and recorded a revenue of $39.859 billion, representing a 3.6% increase[39]. - The Mobile Business Group's revenue declined by 19.2% to $5.218 billion, with 58% of the decline attributed to supply shortages in Q4[44]. - The data center business saw double-digit growth in server sales and software-defined infrastructure, despite a slowdown in global demand[19]. Strategic Initiatives and Innovations - Lenovo launched the world's first foldable laptop, the ThinkPad X1 Fold, and the first 5G PC in January 2020[18]. - The company established three new business units to focus on data intelligence, cloud-network integration, and commercial IoT, supporting its smart transformation strategy[20]. - The company aims to deepen its transformation towards a service and solution-oriented strategy for sustainable long-term business development[22]. - Lenovo's strategy includes providing comprehensive solutions that encompass IoT devices, infrastructure, and intelligent applications to meet evolving customer needs[22]. - The company is committed to innovation and creating a rich product portfolio to differentiate itself and gain market share in a highly competitive environment[48]. Financial Position and Cash Management - Cash and cash equivalents increased by 32% to $3,617 million, while total debt rose by 11% to $4,860 million[8]. - Lenovo's net debt decreased by 25% to $1,243 million, improving its financial position[8]. - The company adopted a conservative cash management strategy, with 14.4% of cash invested in investment-grade money market funds[112]. - The company has arranged credit lines to meet seasonal cash flow needs, ensuring liquidity for ongoing operations[112]. Corporate Social Responsibility and Community Engagement - Lenovo provided nearly $15 million in donations globally to support COVID-19 relief efforts, including IT and medical supplies[23]. - The company emphasizes the importance of global cooperation in responding to crises, as highlighted by the COVID-19 pandemic[24]. - Lenovo's commitment to corporate social responsibility includes creating a diverse and inclusive workplace while driving sustainable development[24]. - Lenovo actively engages with stakeholders through surveys, direct customer interactions, employee surveys, and community service activities[76]. Governance and Management - The board of directors consists of 11 members, including 1 executive director, 2 non-executive directors, and 8 independent non-executive directors, ensuring a balanced skill set to lead the company effectively[128]. - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange, adhering to best practices in governance throughout the fiscal year ending March 31, 2020[125]. - The independent non-executive directors play a crucial role in leading the board to formulate strategies and ensure effective communication with stakeholders[128]. - The company has established formal and transparent procedures for determining the compensation of directors and senior management, detailed in the remuneration committee report[162]. Environmental and Sustainability Efforts - The company conducts annual assessments of significant environmental factors and identifies climate change-related risks that may impact operations[75]. - The company aims to improve its environmental management system (EMS) to address major environmental challenges and ensure compliance with regulations[70]. - The EMS includes monitoring progress on previously identified significant concerns and quickly identifying emerging issues[70]. - The company has set environmental goals and metrics based on key performance indicators, with progress monitored annually[75]. Challenges and Risks - The company faces risks related to the global economic downturn and geopolitical conditions, which may impact its financial performance[51]. - The COVID-19 pandemic has disrupted supply chains, production, and logistics, impacting various business operations[65]. - The company is actively monitoring changes in demand and inventory levels to address supply and capacity gaps caused by the pandemic[65]. - The company is aware of the potential impact of changing tax laws and regulations on its taxable assets and liabilities[57].

2020 Lenovo Internal. All rights reserved. May 20, 2020 – Hong Kong FY19/20 Earnings Announcement Forward Looking Statement This presentation contains "forward-looking statements" which are statements that refer to expectations and plans for the future and include, without limitation, statements regarding Lenovo's future results of operations, financial condition or business prospects as well as other statements based on projections, estimates and assumptions. In some cases, these statements can be identifi ...

Lenovo Group Limited (OTCPK:LNVGY) Q4 2020 Earnings Conference Call May 19, 2020 10:00 PM ET Company Participants Jenny Lai - Vice President, Investor Relations Yang Yuanqing - Chairman and Chief Executive Officer Gianfranco Lanci - Corporate President and Chief Operating Officer Sergio Buniac - Senior Vice President and Co-President, Mobile Business Group, Chairman and President, Motorola Kirk Skaugen - Executive Vice President and President, Data Center Group Wong Wai Ming - Executive Vice President and C ...

Lenovo Group Ltd (OTCPK:LNVGY) Q3 2020 Earnings Conference Call February 20, 2020 2:00 AM ET Company Participants Jenny Lai - Vice President, Investor Relations Yang Yuanqing - Chief Executive Officer Wong Wai Ming - Group Chief Financial Officer Gianfranco Lanci - Corporate President & Chief Operating Officer Kirk Skaugen - President, Data Center Group Sergio Buniac - President of Motorola Conference Call Participants Gokul Hariharan - JPMorgan Abel Lee - Bank of America Verena Jeng - Goldman Sachs Jenny L ...

Earnings Announcement Feb 20, 2020 – Beijing Feb 20, 2020 – Hong Kong Q3FY20 2020 Lenovo Internal. All rights reserved. Forward Looking Statement This presentation contains "forward-looking statements" which are statements that refer to expectations and plans for the future and include, without limitation, statements regarding Lenovo's future results of operations, financial condition or business prospects as well as other statements based on projections, estimates and assumptions. In some cases, these stat ...

Financial Performance - For the three months ended September 30, 2019, Lenovo reported revenue of $13,521,989 thousand, a slight increase from $13,379,809 thousand in the same period of 2018, representing a growth of approximately 1.06%[6] - The gross profit for the six months ended September 30, 2019, was $4,230,939 thousand, compared to $3,425,776 thousand for the same period in 2018, indicating a year-over-year increase of about 23.5%[6] - Operating profit for the six months ended September 30, 2019, was $784,395 thousand, up from $469,920 thousand in the same period of 2018, reflecting a growth of approximately 67%[6] - The net profit attributable to equity holders for the six months ended September 30, 2019, was $364,421 thousand, compared to $245,447 thousand in the same period of 2018, marking an increase of around 48.4%[6] - For the six months ended September 30, 2019, the total revenue was $26,034 million, an increase from $25,293 million in the same period of 2018, representing a growth of approximately 2.9%[25] - The company reported a pre-tax profit of $550 million for the six months ended September 30, 2019, compared to $326 million in the same period of 2018, reflecting an increase of approximately 68.7%[21] - The company reported a total comprehensive income of $224,707 thousand for the period, reflecting a significant decrease compared to previous periods[11] - The company reported a net loss of $272 million from unallocated items for the six months ended September 30, 2019, compared to a loss of $342 million in the same period of 2018[21] Assets and Liabilities - Lenovo's total assets as of September 30, 2019, amounted to $33,389,448 thousand, an increase from $29,988,485 thousand as of March 31, 2019, representing a growth of approximately 11.9%[8] - Total liabilities rose to $29,374,937 thousand from $25,891,422 thousand, an increase of about 13.7%[9] - The total assets of the reportable segments amounted to $26,478 million as of September 30, 2019, compared to $23,892 million as of March 31, 2019, indicating a growth of approximately 10.8%[22] - The total liabilities for the reportable segments were $23,392 million as of September 30, 2019, up from $20,501 million as of March 31, 2019, reflecting an increase of about 9.2%[23] - The company’s total liabilities increased to $10,428,998 thousand as of September 30, 2019, reflecting a significant rise in operational commitments and financial obligations[48] Cash Flow and Investments - Net cash generated from operating activities increased significantly to $1,240,000 thousand, up from $403,076 thousand, representing a growth of 207.5%[10] - The company reported a net cash outflow from investing activities of $503,802 thousand, up from $301,121 thousand, indicating a 67.3% increase in cash used for investments[10] - Cash and cash equivalents increased to $3,310,940 thousand as of September 30, 2019, from $2,662,854 thousand as of March 31, 2019, reflecting a growth of approximately 24.4%[8] - Cash and cash equivalents totaled $3.376 billion as of September 30, 2019, up from $2.733 billion as of March 31, 2019[96] Shareholder Equity and Dividends - The company declared a dividend of $96,640 thousand for the six months ended September 30, 2019, compared to $92,071 thousand in the same period of 2018, indicating a year-over-year increase of about 5.8%[6] - As of September 30, 2019, total equity attributable to equity holders was $4,014,511 thousand, a decrease from $4,097,063 thousand on April 1, 2019[11] - The company paid dividends amounting to $334,775 thousand during the period[11] - The interim dividend declared was 6.3 HK cents per ordinary share, an increase from 6.0 HK cents per share in the previous year, reflecting a positive outlook on profitability[43] Research and Development - Research and development expenses for the six months ended September 30, 2019, were $647,343 thousand, compared to $622,236 thousand in the same period of 2018, showing a slight increase of about 4%[6] - The company plans to continue investing in edge computing, cloud, big data, and AI to enhance its competitiveness as an end-to-end solution provider[111] Accounting and Compliance - The company’s financial statements were audited with an unqualified opinion, ensuring compliance with relevant regulations[12] - The company plans to continue evaluating the impact of new accounting standards that will take effect on January 1, 2020, but currently expects no significant impact on its consolidated financial statements[19] - The company’s audit committee has reviewed the unaudited interim results for the six months ending September 30, 2019, ensuring compliance with accounting standards and internal controls[133] Legal and Regulatory Matters - The company is involved in various legal proceedings, which may impact its financial performance, although no significant adverse effects are anticipated[68] Market Performance and Strategy - The company aims to maintain superior revenue growth and industry-leading profitability in the personal computer and smart device business through further expansion in high-growth and high-end sectors[110] - The company plans to optimize its focus strategy in Europe to enhance its mobile business profitability through cross-selling and expanding product lines[108] Shareholder Interests - The total equity held by Yang Yuanqing in the company is 1,074,218,674 shares, representing approximately 8.94% of the total issued shares[119] - The total equity held by Zhu Linan is 6,155,780 shares, representing approximately 0.05% of the total issued shares[119] - The total equity held by Zhao Linghuan is 5,009,195 shares, representing approximately 0.04% of the total issued shares[119] - The total equity held by Nicholas C. Allen is 5,451,882 shares, representing approximately 0.05% of the total issued shares[119] - The total equity held by William O. Grabe is 8,193,433 shares, representing approximately 0.07% of the total issued shares[119] - The total equity held by William Tudor Brown is 4,989,727 shares, representing approximately 0.04% of the total issued shares[119]

Lenovo Group Ltd (OTCPK:LNVGY) Q1 2020 Earnings Conference Call August 14, 2019 9:00 PM ET Company Participants Jenny Lai - VP, IR Yuanqing Yang - Chairman & CEO Wong Wai Ming - EVP & CFO Gianfranco Lanci - Corporate President & COO Kirk Skaugen - EVP & President, the Data Center Group Sergio Buniac - Corporate VP, Latin America, Motorola Mobility Conference Call Participants Gokul Hariharan - JPMorgan Chase & Co. Abel Lee - Bank of America Merrill Lynch Howard Kao - Morgan Stanley Sebastian Hou - CLSA Limi ...

Financial Performance - Lenovo achieved a revenue of $51,038 million for the fiscal year ending March 31, 2019, representing a 13% increase from $45,350 million in the previous year[7]. - Gross profit increased to $7,371 million, up 18% from $6,272 million, with a gross margin of 14.4%, an increase of 0.6 percentage points[7]. - Operating expenses rose to $6,193 million, a 5% increase from $5,885 million, with operating expenses as a percentage of revenue decreasing to 12.1% from 13.0%[7]. - Lenovo's pre-tax profit surged to $856 million, a 459% increase from $153 million in the previous year, with a pre-tax profit margin of 1.7%[7]. - The company reported a net profit attributable to equity holders of $597 million, a significant recovery from a loss of $189 million in the previous year[7]. - Lenovo achieved a record revenue of $51.038 billion for the fiscal year ending March 31, 2019, representing a year-on-year growth of 12.5%[19]. - The group's gross profit increased by 18% to $7.371 billion, with a gross margin improvement of 0.6 percentage points to 14.4%[19]. - The pre-tax profit for the fiscal year was $856 million, a significant improvement from a pre-tax profit of $153 million in the previous fiscal year[19]. - The Intelligent Devices Group's revenue grew by 10% to $45.013 billion, with a pre-tax profit of $1.843 billion, more than doubling from the previous year[24]. - The PC and Smart Devices business regained the global PC market leadership with a record revenue of $38.475 billion, a 14% year-on-year increase[25]. Cash Flow and Debt Management - Lenovo's cash and cash equivalents increased by 41% to $2,733 million from $1,932 million[7]. - Operating cash flow increased by $2.2 billion year-on-year, with net debt reduced to $1.6 billion, a 13% decrease[21]. - Lenovo issued $675 million in convertible bonds due in 2024, primarily to repay existing debt[22]. - The company's net debt was $(1.647) billion in 2019, compared to $(1.883) billion in 2018, indicating a stronger cash position[112]. - The loan-to-equity ratio increased to 1.07 in 2019 from 0.84 in 2018, reflecting a higher level of leverage[112]. Market Position and Strategy - Lenovo held a market share of 23.4% in the global personal computer market, making it the market leader and the fastest-growing among the top five manufacturers[11]. - The company introduced innovative products such as the dual-screen Yoga Book C930 and the world's first foldable laptop prototype, enhancing its product portfolio[11]. - Lenovo's strategic focus on transformation and innovation positions it as a leader in the intelligent transformation era, aiming to empower customers and drive industry advancements[10]. - The mobile business group achieved profitability globally for the first time since acquiring Motorola in October 2014, driven by strategic focus on key markets and cost control[12]. - Lenovo's data center business reported a historical high revenue of over 400 million RMB, marking a successful transformation from traditional server operations to a comprehensive data center business[13]. Innovation and Product Development - The company plans to continue innovating and launching exciting new products in the upcoming fiscal year[12]. - Lenovo aims to enhance its smart IoT strategy by ensuring existing devices are always connected and can easily collaborate with new smart devices[13]. - The global number of smart devices is projected to reach 20 billion by 2020, indicating a significant growth opportunity for Lenovo in the smart IoT sector[13]. - Lenovo's investment in STEM education opportunities for diverse and minority youth is part of its commitment to social responsibility[14]. Sustainability and Corporate Responsibility - The company is committed to sustainability, introducing biodegradable packaging made from bamboo and sugarcane fibers, and products made from recyclable materials[14]. - Lenovo's vision for the future includes advancing its smart strategy in three areas: smart IoT, smart infrastructure, and industry intelligence[13]. - The group is committed to responsible environmental management and compliance with applicable laws and regulations, supported by an ISO 14001 certified environmental management system[62]. - Lenovo's environmental compliance is demonstrated by zero significant environmental fines and penalties over the past five fiscal years[65]. Governance and Risk Management - The company has a clear governance structure in place to support its organizational framework and address future challenges[119]. - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange, ensuring compliance with best practices[117]. - The board consists of 12 members, including 1 executive director, 2 non-executive directors, and 9 independent non-executive directors, ensuring a clear framework of responsibilities and accountability[122]. - The company adopts a comprehensive risk management and internal control framework to actively manage risks, established by the board and the audit committee[197]. - The audit committee assists the board in reviewing and monitoring the effectiveness of the risk management and internal control systems[198]. Employee Development and Talent Management - The group emphasizes the importance of attracting, developing, retaining, and motivating core talent to ensure continued success in a competitive market[57]. - The company has implemented a comprehensive employee development program, including various leadership development initiatives and a global learning management system[72]. - Lenovo's talent management strategy emphasizes employer branding and attracting talent for intelligent transformation and new business development[71]. - The company is investing in talent and leadership development programs to cultivate capabilities and ensure the quality of future leaders[59]. Challenges and Risks - The group faces intense competition in the industry, with risks related to market trends and consumer preferences impacting performance[36]. - Economic downturns may lead to reduced consumer spending and supply chain instability, affecting product availability[42]. - The group faces various financial risks, including foreign exchange risk, cash flow risk, credit risk, and liquidity risk, due to its global operations[52]. - The group is actively monitoring political and regulatory changes to mitigate operational risks associated with global business[40].