• ISG continues to invest in a comprehensive portfolio and in innovation, particularly in Edge, Cloud, and Services.
• ISG will continue to balance scale and profitability as it focuses on being one of the fastest growing end-to-end infrastructure providers.

Intelligent Devices Group (IDG): market leader driving innovation and diversification

Opportunity:

While the PC market is currently experiencing short-term challenges, PCs are still recognized as a necessity and key productivity tool. The total available market for PCs is expected to remain higher than pre-pandemic levels in the long term. Alongside PCs, the scenario-based solutions market is growing fast, with the smart collaboration market expected to surpass US$80 billion by 2025.

Q1 FY22/23 performance:

• IDG maintained industry-leading profitability, with operating profit of over US$1 billion, outgrowing the market to not only retain but also strengthen its global position as the world’s #1 PC company. This success was driven by strong growth in premium segments such as gaming and workstations.
• Smartphone revenue increased by more than 20% year on year, with growth coming not only from the traditional stronghold markets of Latin America and North America, but also expansion markets of Europe and Asia Pacific.
• Expansion beyond PCs continues, with 22% of IDG revenue coming from non-PC smart devices, embedded computing/IoT, and scenario-based solutions such as smart home and smart collaboration.

Sustainable Growth:

• Lenovo continues to focus on innovation across its portfolio – from smart devices to smart collaboration, and ultimately to smart spaces.
• The focus for smart devices is around innovative form factors, extreme performance, adaptive intelligence, and security. For digital workspaces the focus is on seamless connection and integration, allowing for the best possible mix of physical and virtual collaboration.

Operational highlights and investing for the future

Corporate Investment - Lenovo recently completed an inaugural offering of green notes as part of a US$1.25 billion dual-trance Rule 144A/Regulation S bond offering. The offering is the largest debut technology sector Environmental, Social, and Governance (“ESG”) bond globally so far in 2022[2], and marks an important milestone in Lenovo’s ESG journey and supports its vision to achieve Net-Zero by 2050. This is a key development as the Company continues to drive its integrated climate and sustainability objectives and ambitions, enabling the company to finance projects and initiatives that support its ESG commitments, and build a smarter and more sustainable future for all. More information can be found in the Group’s Green Finance Framework.

Global Supply Chain – In June 2022 Lenovo officially opened the doors to its first in-house manufacturing facility in Europe. Based in Ullo, Hungary, the factory focuses primarily on building server infrastructure, storage systems and high-end PC workstations used by customers throughout the Europe, Middle East, and Africa region, and further extends Lenovo’s global manufacturing footprint.

The annual Gartner Global Supply Chain Top 25 listing for 2022 saw Lenovo reach its highest ranking ever, up seven places from 2021 to rank #9. The Gartner Supply Chain Top 25 identifies, celebrates, and profiles companies that demonstrate excellence in supply chain management amid high-risk supply chain disruption.

[1] non-HKFRS measure was adjusted by adding back net fair value changes on financial assets at fair value through profit or loss, amortization of intangible assets resulting from mergers and acquisitions, mergers and acquisitions related charges; and the corresponding income tax effects, if any. [2] Source: Dealogic, Asia excluding Japan, jumbo deals in excess of US$1 billion (equivalent).

About Lenovo

Lenovo (HKSE: 992) (ADR: LNVGY) is a US$70 billion revenue global technology powerhouse, ranked #171 in the Fortune Global 500, employing 75,000 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 leading PC player by expanding into new growth areas of infrastructure, mobile, solutions and services. This transformation together with Lenovo’s world-changing innovation is building a more inclusive, trustworthy, and sustainable digital society for everyone, everywhere. To find out more visit https://www.lenovo.com,and read about the latest news via our StoryHub.