Lenovo predicts that the PC market will begin to recover in the second half of 2023

After closing your fiscal year 2022-2023 On March 31, the Group Lenovo has announced its results of the period. In all, Lenovo entered 62,000 million of dollars and got some net profit of 1.6 billion of dollars. Its profitability remained stable during the period, and its gross and operating margins recorded 18-year highs.

Despite this, its revenues were impacted by handset market conditions, which have been posting a notable decline in handset sales for some time now. This has led to its sales of PCs and hardware equipment recording a decline that has led to a 14% drop in revenue, and a 21% drop in profits, compared to the previous year. However, the group’s non-computer revenue rose nearly 40%, thanks to the company’s diversified growth strategy.

Among the divisions that have performed better are the Solutions and Services Group and the Infrastructure Solutions Group. Both achieved record results, with revenues of $6.7 billion and $9.8 billion respectively. These figures represent an increase in year-on-year growth of 22% and 37%.

With this, and after a year of uncertainty at a global level, and also in the sector, Lenovo considers that several positive signs have already been given that indicate that the market is stabilizing. They also expect the PC and smart device market to start to recover its year-on-year growth rate in the second half of 2023.

On the other hand, they are convinced that the IT services sector will recover a notable level of growth. In this way, a scenario will be created with great growth potential for IT infrastructures in general, and for cloud infrastructures in particular.

As for liquidity, Lenovo notes that it has a solid cash reserve, noting that cash conversion cycles have improved. This has allowed them to continue to invest in R&D in areas of what they call “new computing”: client, edge, cloud, network and intelligence. In fact, its investment in annual R&D has risen to 2,200 million dollars, 6% more than the previous year.

During the last quarter of the year, that is, between January and March of this year, Lenovo carried out a specific restructuring, in addition to facing other expenses. This, added together, has had an impact on its results of 249 million dollars. This has also allowed it to reach a cost savings projection rate of 850 million.

Regarding dividends, Lenovo’s Board of Directors has set the payment per share at 3.8 cents for the year. In that period, the group’s revenues reached $12.6 billion, a figure that represents a year-on-year decrease of 24%. Of course, in the quarter the mix of revenues not related to PCs reached 43% after rising 12% year-on-year, which marks a maximum in this area for the group.

He Lenovo CEO Yang Yuanquinghas underlined from these results that the company “has delivered stable returns over the past fiscal year as our diversified growth engines have continued to reach new milestones. This momentum is driving steady growth in our services-driven transformation and our non-PC businesses’ revenue mix increased nearly 40%.«.

In addition, he has highlighted that his strategy «It is paying off and our operations are resilient, even in the face of global uncertainty. Looking ahead, we will continue to invest in R&D to capture the next wave of growth opportunities so we can be perfectly prepared for tomorrow.«.

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