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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.


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


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



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


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


$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


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


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



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


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


TRANSFORMATIONAL DEVICESIncreasing R&D in and solutions.

Helping People Achieve Success Through Great Experiences with Lenovo Technologies


COLLABORATIONIt’s the Ease of

in the workplace


PERFORMANCEIt’s the Reliability of

in retail & manufacturing


CONNECTIVITYIt’s the Breadth of

in smart verticals


INTERACTIVITYIt’s the Opportunities of

in artificial intelligence


EXPERIENCEIt’s the Importance of

in work, life, and everything in between


Intelligent Transformation is Helping People Achieve Success Through Great Experiences with Lenovo Technologies

LENOVO IDG


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