Lenovo outperforms market in Q4 and full year

Geographic overview

· Lenovo China improved its fourth quarter operating margin by 0.8 points to 5.5 percent. With $3.1 billion in consolidated sales in the fourth fiscal quarter, China accounted for 33 percent of the Company's worldwide sales. Lenovo protected its PC leadership with 32.6 percent share, with PC margins improving 1.1 points with stabilizing shipments and increased average sales price. China continues to invest in the push into Smart Connected Devices to capture opportunities from 4G and Smart TVs.

· In the Asia Pacific region, Lenovo achieved 15.6 percent PC market share in the fourth fiscal quarter, up2.1points year-on-year. While the regional PC market improved, only down slightly at 1.5 percent year-on-year, the Company grew its PC shipments across the region by 14 percent. Lenovo remained number one in Japan with tremendous shipment growth of 35 percent. Consolidated sales across the region totaled $1.7 billion or 19 percent of Lenovo's worldwide sales, while operating margins went up 1.3 points to 2.7 percent.

· Lenovo in Europe, Middle East & Africagrew PC shipments during the fourth quarter by33.3percent and building even stronger momentum across the region. EMEA achieved a 15.8 percent market share, increasing shipments 4 share points year-on-year or a nearly34point premium to the market. The region had consolidated sales in the fourth quarter of $2.6 billion, a year-on-year improvement of 39 percent, good for 27 percent of Lenovo's total worldwide sales. Operating profit margin was healthy at 2.9 percent, 1.0 point increase year-on-year.

· Lenovo's PC shipments inthe Americasin thefourthfiscal quarter increased 18 percent year-on-year, in a market that fell by about 8 percent. In this environment, the company gained 2.5 share points to a record high market share of 11.4 percent. Consolidated sales grew 23 percent year-on-year to approximately $2 billion in the fourth quarter, driven by strong growth across all products. This represented 21 percent of Lenovo's total worldwide sales. In the US, during the fourth quarter, Lenovo surpassed Apple in PC units, while achieving the number 3 position for the first time in this critical market with record share at 10.8 percent. The company continued to invest in its fast growing Brazil and Latin America businesses.

Product overview

· Consolidated sales for Lenovo's laptop PC business worldwide in the fourth fiscal quarter increased 16 percent year-on-year to $4.8 billion, accounting for 51 percent of the company's overall sales. During the same period, Lenovo's worldwide laptop PC shipments increased 12.9 percent, against the backdrop of an overall industry decrease of 5.8 percent. In the fourth fiscal quarter, Lenovo announced its newest version of the popular ThinkPad X1 Carbon, the world's lightest 14-inch ultrabook.

· During the fourth fiscal quarter, Lenovo's desktop PC shipment grew 6.8 percent worldwide year-on-year, against an industry decline of 3.1 percent worldwide. Lenovo's desktop PC consolidated sales for the same period increased 14 percent to $2.7 billion, or 29 percent of the company's overall sales worldwide. In the fourth fiscal quarter, Lenovo announced the C560 all-in-one (AIO) desktop PC, as well as the ThinkVision Pro2840m.

· Lenovo had solid shipments of smartphones, staying China's number two smartphone maker, with rapid growth across all its Mobile Internet and Digital Home (MIDH) product lines. During the fourth fiscal quarter, consolidated sales of MIDH rose 71 percent to $1.3 billion year-on-year, or 13 percent of the company's overall sales. The company's worldwide smartphone shipments grew 59.4 percent in the fourth quarter, outpacing the worldwide market by 28 percent. The company also outgrew the market in China as it worked to capture 4G/LTE opportunities by expanding its own Lenovo App store ecosystem. So far the store has delivered 6 billion downloads. It is averaging 25 million downloads daily. Lenovo's own SHAREit App won the Mobile World Congress award for best app and was the first app developed by Lenovo to reach 100 million users.

In the fourth fiscal quarter, Lenovo introduced several smartphones, including its first LTE smartphone, the Lenovo Vibe Z. The company also announced the new Yoga Tablet 10-inch HD+.