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2009/10 Annual Report Lenovo Group Limited
14
BUSINESS
REVIEW
During the 2009/10 fiscal year, worldwide PC
shipments showed improvement in growth from the
beginning of the year with momentum gaining pace
towards the year-end, benefiting from an improved
macro economic environment aided by worldwide
government stimulus spending. The consumer PC
market continued to show strong growth while
commercial PC demand remained relatively weak as
enterprises remained conservative and deferred IT
spending. The China market recovered earlier and
quicker than most of the markets, with momentum
continuing towards the year-end, due largely to strong
performance in consumer segment.
Lenovo outperformed the worldwide PC market in
each of the last four quarters, and recorded the fastest
growth rates among the key competitors in the last two
quarters of the fiscal year. Lenovo’s strong performance
was a result of its leadership position in China where
it has outperformed the market consistently in each
of the last four quarters, together with its continued
expansion in transactional business and emerging
markets. The Group recorded approximately 28.2
percent year-on-year growth in unit shipments during
the year, and reached the historic high of 8.8 percent
market share for the fiscal year.
In the fiscal year ended March 31, 2010, the Group’s
sales increased by approximately 11.4 percent year-
on-year to US$16,605 million, as its growth in unit
shipments was offset by industry-wide product mix
shift to lower price points, aggressive competition and
increased component costs. Gross profit (excluding the
restructuring costs and one-off items) decreased 2.4
percent year-on-year, amounting to US$1,790 million,
while gross margin declined from 12.3 percent in last
year to 10.8 percent.
In January 2009, Lenovo announced a global resource
restructuring plan aimed at reducing costs and
enhancing operational efficiency. The plan is on track to
generate expected savings. The Group also delivered
MANAGEMENT’S DISCUSSION & ANALYSIS