On May 24, Lenovo Group released its annual results for the fiscal year 2017-2018.
The financial report shows that as of March 31, 2018, Lenovo Group’s annual revenue was US$45.35 billion, which was a year-on-year increase of 5%. The loss attributable to equity holders of the company for the period was US$189 million. In the same period last year, Lenovo was in this financial The profit on the indicator is 535 million US dollars.
However, Lenovo Group announced that its pre-tax profit for the current fiscal year was US$153 million. The US$61 million in severance payments and sales of assets of Wuhan R&D Center were eliminated, which was before the taxation of the Group. Operating profit was US$193 million, which almost doubled from US$97 million in the same period last year.
Lenovo’s current gross profit margin was 13.8%, which was a decrease of 0.04% from the same period of last year. Lenovo stated that the decline was mainly affected by the increase in parts costs (especially the cost of parts for storage). In addition, Lenovo’s basic and diluted loss per share was 1.67 US cents. The basic and diluted earnings were 4.86 US cents.
Lenovo’s operating expenses during the year increased by 8% compared to last year. Among them, Lenovo’s R&D expenses in the current period of FY2018 was US$1.273 billion, which was 6.5% lower than the same period of last year. Sales and distribution expenses were US$2.833 billion in the current period, an increase of approximately 6% from the same period of last year. %.
The PC business still brings major cash flow to Lenovo. The financial report shows that Lenovo’s personal computer and smart device business revenue increased 8% year-on-year to US$32,279 million, accounting for 70% of the Group’s total revenue. May 8 Directors Chief Executive Officer Yang Yuanqing announced the integration of personal computer and smart device business, and set up a new smart device group (IDG). Among them, commercial computer sales and revenue during the year continued to increase. Lenovo Group in the announcement, according to industry forecast business computers accounted for Lenovo Group 60% of the personal computer portfolio was 57% last year.
The mobile business, which accounted for 16% of Lenovo’s total revenue, was US$7.241 billion, a decrease of 6% year-on-year. Its global smartphone sales fell 7% year-on-year. However, the mobile business’s current operating loss before taxation was 4.63. Billion US dollars, an improvement over the previous fiscal year.
Lenovo's mobile phone business is not focused on the Chinese market. Lenovo Group stated in the announcement that due to the Chinese market began to decline and a large number of manufacturers, the mobile business has significantly reduced the scale of operations, but still continue to improve its product and channel strategy. Committed to achieving steady growth. 'The Group has significantly reduced the size of China's smart phone business to increase its flexibility. It will adopt strategic measures in the future to capture local market opportunities.'
According to the announcement, the Chinese market is Lenovo’s third largest market, accounting for 25% of its revenue. The Americas is its largest market, accounting for 31% of Lenovo’s revenue.
On May 24, Yang Yuanqing, chairman and CEO of Lenovo Group, said in an internal letter that Lenovo will continue to invest in IoT equipment, big data and artificial intelligence technologies to establish the competitiveness of vertical industry intelligent solutions.
Yang Yuanqing also mentioned in the internal letter that Lenovo has recently been criticized by public opinion. Prior to this, Lenovo Group had plunged into a vortex of public opinion about the 5G voting and domestic operating system voting. 'Finally, we said to all employees on the Chinese platform, we recently suffered from the Internet. The attack of rumors, while the truth has become clearer and clearer, let us concentrate on business and serve our customers well. With thriving performance, we not only give the most powerful counterattacks to rumors, but also help the country's great rejuvenation! 'Yang Yuanqing said.