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Intelligent Transformation
Gianfranco LanciCorporate President & Chief Operating Officer
PC & Smart Devices
2019. Internal only. All rights reserved.
18 Mar, 2019
2018 Lenovo. All rights reserved.
2019. Internal only. All rights reserved.1. Source: Morgan Stanley: The Data Era Becomes Inevitable (Apr 2018)2. Source: Gartner, Forecast Enterprise IT Spend by Vertical Worldwide (Aug 2018)3. Source : Gartner Forecast Analysis: IT Spending, Worldwide, 3Q18 Update
Performance UpdateIDG: PC & PCD (PC + Tablet)
Source: Lenovo FY19Q3 Investor Presentation; IDC PC Historical , Feb 2019
Global PC Top 3 Market Share(%)
0
100
200
300
400
500
600
700
800
-1000
1000
3000
5000
7000
9000
11000
Q31415
Q41415
Q11516
Q21516
Q31516
Q41516
Q11617
Q21617
Q31617
Q41617
Q11718
Q21718
Q31718
Q41718
Q11819
Q21819
Q31819
PC Revenue ($M) & PTI ($M)
Growth Premium to Market in PC Revenue
RecordHighRecord Revenue & Profit
• PC revenue grew by 16%
• 17-point premium to market YOY
• PC PTI margin improved by 1 point YOY (5.5%)
Undisputed #1 in PC and PCD (PC + Tablet)• PC record market share of 24.6%
• PCD market share 17%
5.9
-2.7
6.7
(5.0)
-
5.0
10.0Lenovo HP Dell
Q3 Q4 Q1 Q2 Q3FY1718 FY1718 FY1819 FY1819 FY1819
2018 Lenovo. All rights reserved. 3Source: Lenovo Finance. FY18/19 Q4 estimated by finance. Includes Fujitsu JV
Profitable Core BusinessDriving Double Digit Growth in Revenue and Profit
7,005
8,382
9,618
8,0608,619
10,23510,729
Q3Q1 FY17/18
Q4Q2 Q3 Q2Q1 FY18/19
+11.6%
291
367
430389
425
515
584
Q4Q2 Q2Q1 FY17/18
Q3 Q3Q1 FY18/19
PTI TREND ($M)
PCSD REVTREND ($M)
4.5%
5.5%
1 pt.
2019. Internal only. All rights reserved.
1 Mix Shift to High Profit Categories
2 Product Design Leadership
3 Anchored Profit Levers
4 Prudent E2E Cost Management
Sustainable Ops Driven
Winning in PCSD High Growth SegmentsSegment Revenue YoY Growth vs. Market
Source: Industry Data & Internal Data
Market Lenovo
Market Lenovo Market Lenovo
7.5%
-5.1%
Visuals
27.7%25.6%
257%
35.7%
Gaming Chromebook
Market Lenovo Market Lenovo
8.9%
23.2%
43.4% 57.8%
Workstation Thin & Light
+34.4pts+32.8pts
+18.1pts +221.3pts+34.6pts
Services
Market Lenovo
4.4%
27.2%
+22.8pts
2019. Internal only. All rights reserved.
MARKET SHARE LEADERSHIP
Geo Rank
China #1AP #1
EMEA #2NA #3LA #2
WW #1
WW Lenovo Market Share
16.9%
7.9%
32.6%
17.1%
32.3%
22.8%
7.1%
23.6%
7.3%
20.4%
Q1FY17/18
18.2%
22.7%
15.9%
Q1FY18/19
24.0%22.5%
68M
21.3%
Q2
31.5%
23.7%
7.2%
15.7%
23.4%
22.2%
Q3
33.2%
6.8%
20.4%24.6%
Q4
29.6%
6.0%
22.2%
29.1%
60M
7.8%
16.8%
22.5%
Q2
16.5%
28.0%
61M 62M
71M68M 68M
Q3
HP IncOthers LenovoDellApple
WW PC Market Trend & Lenovo Unit Market Share
Source: IDC PCD Final Tracker, Feb. 2019
FY18/19 (Q1-Q3)
Source: FY19Q3 reported financials and internal analysis
GEO PERFORMANCE
Market Share in PC Market
FY18/19 (Q1-Q3)
Revenue (TTM) Q4FY1718-Q3FY1819
$37.6BRevenue YoY (TTM)
+20.2%
Source : IDC PCSD Final Tracker 2018Q4; Lenovo earning release
Lenovo PCL Milestones (including FCCL)
Snapshot
#1 PC UnitsIn 2018Q4
#1 CommercialPC
#1 PC RevenueIn 2018Q4
#2 ConsumerPC
#112 consecutivemonths, gamingPC market
#1 Premium PC>$800. 22.5%
30%
YoY Growth.ThinkPad X1Family Shift
VLB Share39.5%#1
Company First
2018 Lenovo. All rights reserved.
2019. Internal only. All rights reserved.
Computing Experience Trends Driving Future Trends.DRIVEN BY EXPERIENCE
New technologies are rapidly evolving transforming our work and home
8
A CHANGING WORLD
Smart ConnectedSolutions
Artificial Intelligence
5G NetworksCloud to the Edge Immersive Computing-AR/VR
2019. Internal only. All rights reserved.
Significant Growth Opportunity
*Smart Speaker, Home Monitoring/Security, LightingCore includes PC, Tablet, Visuals, Workstation, Gaming
252 249 244 241 237
F19/20F18/19 F20/21
Core
F21/22 F22/23
Commercial AR/VR (HW+SW)
Consumer AR/VR (HW only)
Smart Office
DaaS (Services Only)**
Commercial IoT
Smart Connected Devices*
Digital Solution Services
Core
Note: IoT and Smart Office TAM based on FY18/19 STAMP Plan., New TAM being developed for each BU
**IDC DaaS TAM & MI will conduct a study on the TAM & other related market components
Outside Core PC Business
2019. Internal only. All rights reserved.
$B
26 35 41 47 5421
2325
2830
2630
3541
47
1318
38
5
4
12
154
2
2
3
3
3
11
8
5
81100
123
195
24.6%
10
FOCUSEDSTRATEGY
Setting the foundation for transformation &
targeting > $40B revenue in FY19/20 and 10 point
premium growth.
World class Innovation in PC
Unparalleled operational efficiency
COREExpansion in
GROWTH EMERGING
HELPING PEOPLE ACHIEVE SUCCESS THROUGH GREAT EXPERIENCES WITH LENOVO TECHNOLOGIES
PERFORMANCE ZONE INCUBATION
2019. Internal only. All rights reserved.
Thin / Light Visuals
Workstations Gaming
Accessories Services
Smart Home Smart Office
Commercial IoT AR/VR
Investment in
Establish Leadership in high Growth segments of the market
Continue PC Leadership and build solutions beyond PC
Develop & Scale Smart, Connected Solutions focused on select verticals
2019. Internal only. All rights reserved.
PC Business is the revenue & profit engine that fuels growth, and emerging businesses.
GROWTH
ServicesLenovo YoY Growth 27.2%
Thin/Light$70B 2019 TAM, CAGR +5.2%
Gaming$17B 2019 TAM, CAGR +16.2%
Workstations$9B 2019 TAM, CAGR +4.0%
AccessoriesLenovo YoY growth +17.7%
Displays$14B 2019 TAM, CAGR +1.1%
6
Source: IDC PCD/Workstation/Services Forecast, Feb. 2019; I H S market Forecast
Cultivating future growth engines.
EMERGING
Broaden Smart HomeEcosystem
$60B TAM 2022, CAGR 18%
Pioneer Innovation in AR / VR
$7B TAM 2022, 60%
CONSUMER
COMMERCIAL
VR ClassroomEducation focus
Healthcare withT Series
ThinkReality AR / VR
$36B TAM 2022CAGR 143%
Smart Office
$30B TAM 2022CAGR 10%
CommercialIoT
Scaling based on smart, connected vertical solutions.12
2019. Internal only. All rights reserved.
2019 Lenovo. All rights reserved.
Consumer
Insights
Community
3,461 Consumers
Commercial
Insights
Community
595 IT Decision Makers
311 Small-Med
Business
Partner
Insights
Community
122 Partners
Across Tiers
Research
Forums
& Tools
Research Apps
Focus Groups
Ethnographic
Studies
Big Data,
Analytics
(CID)
eCommerce Sites
Blogs & Forums
Social Media
Surveys
Closed Loop
Consumer Surveys
Commercial Surveys
customer feedback leads us to
Meaningful InsightsCustomer
Advisory
Councils
200 Customers
Across 9 Councils
13
2018 Lenovo. All rights reserved.
45
147
3
51.7
+24%
16%*INDUSTRY DESIGN AWARDS WON IN 2018**MEDIA & INNOVATION AWARDS WON AT CES, MWC, IFA 2018 ***2018 LENOVO CUSTOMER SURVEY RESULTS****LENOVO INTERNAL ANALYSIS
World Class Execution
GLOBALSUPPLY CHAIN
INNOVATIONDESIGN
CUSTOMEREXPERIENCE
PRODUCTQUALITY
“Lenovo has an award-winning supply chain and was recently ranked the #5 best tech supply chain and #26 best of any company in any industry by Gartner. Lenovo’s Heifei PCA manufacturing facility is huge and is 4X larger than the University of Michigan Stadium, aka the “Big House.” Lenovo has six assembly plants in Mexico, Whitsett (NC), China, Brazil, and Hungry.”*
*HTTPS://WWW.FORBES.COM/SITES/PATRICKMOORHEAD/2018/10/22/LENOVOS-SECRET-RECIPE-FOR-HYPERSCALE-SUCCESS-IS-CALLED-ODM/#1D50415B9B89
DESIGN AWARDS* NPS SCORE (X1 CARBON)***
MEDIA &INNOVATIONAWARDS**
YEAR TO YEARIMPROVEMENT
ON NPS***
DEVICES DELIVEREDEVERY SECOND,EVERY DAY****
PC IMPROVEMENTOVER PAST
TWO YEARS****
Workplace Collaboration
152019. Internal only. All rights reserved.
TRANSFORMATIONAL DEVICESIncreasing R&D in and solutions.
Helping People Achieve Success Through Great Experiences with Lenovo Technologies
2018 Lenovo. All rights reserved. 16
DISCOVERYIt’s the Joy of
in the classroom
2018 Lenovo. All rights reserved. 17
COLLABORATIONIt’s the Ease of
in the workplace
2018 Lenovo. All rights reserved. 18
PERFORMANCEIt’s the Reliability of
in retail & manufacturing
2018 Lenovo. All rights reserved. 19
CONNECTIVITYIt’s the Breadth of
in smart verticals
2018 Lenovo. All rights reserved. 20
INTERACTIVITYIt’s the Opportunities of
in artificial intelligence
2018 Lenovo. All rights reserved. 21
EXPERIENCEIt’s the Importance of
in work, life, and everything in between
2018 Lenovo. All rights reserved.
Intelligent Transformation is Helping People Achieve Success Through Great Experiences with Lenovo Technologies
LENOVO IDG
2019. Internal only. All rights reserved.