Lenovo Ppt Final Com Stg
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© 2004 IBM CorporationDecember 8, 2004 |
IBM and Lenovo
New Leadership in Global PCs
New advantages for all PC customers
2 © 2004 IBM CorporationDecember 8, 2004
Leading Productsand Brands
World Class Service& Support
Global Reach
New GrowthOpportunities
Scale
IBM and LenovoEnter into Long-term Strategic Alliance
Create Powerful New Global Leader
3 © 2004 IBM CorporationDecember 8, 2004
The New Lenovo: Overview
• $13B sales (last 12 months)
• 19,000 employees
• WW Headquarters: New York, USA
• Principal operations: Raleigh, Beijing
• Public company with ownership positions by Lenovo and IBM
• Closing date: 2Q05
• Est. combined share data: 34% in China
4 © 2004 IBM CorporationDecember 8, 2004
Customer Value
Continued IBM Sales Coverage
Global Business Partner Network
Ease of Doing Business
IBM Financing
Innovative Products /
Broader Portfolio
World Class Service and
Support
5 © 2004 IBM CorporationDecember 8, 2004
IBM IT
Transaction Summary
• Lenovo acquires IBM PC operations
• IBM: ownership stake, long-term alliances with the new Lenovo in sales, services and financing
Ownership
PublicLenovo
HoldingsIBM
45% 19%36%
IBM Sales
IBM Services
IBM FinancingThe new Lenovo
(Lenovo + IBM PC Business)
“Today’s announcement further strengthens IBM’s focus on the enterprise, while creating a new global business
that is better positioned to capture the opportunities in the PC industry going forward.” – Sam Palmisano
LenovoIBM
The new Lenovo
6 © 2004 IBM CorporationDecember 8, 2004
Lenovo Group LTD
• Founded 1984
• FY04: Revenue, $3B; Net Profit, $135M
• Approx. 9,000 employees
• #1 market share in China for seven years(27% market share, source: IDC)
• #1 PC company in Asia Pacific (excl. Japan)
• #1 IT company in China
• Small Business and Consumer market strength
• Market capitalization: approx. $2.6B Cell Phones
• Mobilehandsets
Home Products
• Desktop PCs• Tianyi notebooks • Xuri notebooks• Inkjet printers
CommercialProducts
• Desktops• Soleil notebooks• Scanners• Laser printers
Servers
• 886 Servers • Creator of
Deepcomp 6800 supercomputer
7 © 2004 IBM CorporationDecember 8, 2004
IBM Personal Computing Division
• Established in 1981, creator of personal computer
• $9B 2003 revenue; 10,000 employees in PCD and supporting operations
• #2 in WW commercial notebooks revenue• Undisputed leader in enterprise PC design,
business productivity, and lowest total cost of ownership
• Enterprise and Mid-market strength(15% share total client)
• Client, notebook and SMB double-digit growth, outpacing industry
• ThinkPad notebooks have won over 1,000 industry awards
• 100-million PCs shipped
8 © 2004 IBM CorporationDecember 8, 2004
Global PCs: Where are the opportunities?IBM focuses on the Enterprise market. As a result, PCD revenue is weighted
towards Large Enterprise/Mid-market customers. There is however, significant growth opportunity in the Small Business / Consumer market.
PC market growth opportunity of $16B* from 2004 – 2006 led by SB / Consumer
SB / Consumer
Segment Revenue Mix
LE / MM57%
LE / MM29%
SB / Consumer43%
SB / Consumer71%
0%
20%
40%
60%
80%
100%
Industry IBM
LE / MM
Source: IDC PC Tracker
Source: International Planning & Research
*Source: IDC PC Tracker
9 © 2004 IBM CorporationDecember 8, 2004
SegmentProduct Mix
Geography
Lenovo % of RevenueIBM % of Revenue
SB / Consumer
43% LE / MM, 57%
Lenovo % of Revenue
AP100%
IBM % of Revenue
AP32% Americas
42%
EMEA26%
Lenovo % of Revenue
Notebook18%
Desktop82%
IBM % of Revenue
Notebook60%
Desktop40%
The New Lenovo:Leveraging strengths to pursue opportunities
Data Source: IDC PC Tracker / Internal sources
LE / MM
17%
83%
SB / Consumer
10 © 2004 IBM CorporationDecember 8, 2004
• Top six emerging countries will represent 39% of the 2004 – 2006 growth opportunity*
• IBM is performing well on the premium product segments in these countries with the proper sales and distribution channels to reach these markets
• The new Lenovo will have a broader product portfolio to capture this opportunity
Global PCs: Where are the opportunities?
Source: International Planning & Research
11 © 2004 IBM CorporationDecember 8, 2004
A Perfect Fit between Complementary Organizations
• Premium Global PC Brand– Most recognized technology brand
globally
• Enterprise / Mid-Market Expertise– Leader in business productivity and
lowest total cost of ownership
• Notebook Leader– Leading technology enhanced
notebook product offering
• #1 IT Brand in China– Most recognized technology
brand in China
• Consumer / Small Business Expertise– Differentiated consumer/small business
and extensive retail network
• Efficient Operational Platform– Low cost infrastructure and
manufacturing scale
• Global Sales, Financing, Fulfillment and Service Network
– Global sales network with financing, fulfillment and service support
12 © 2004 IBM CorporationDecember 8, 2004
Lenovo’s Chairman Yang
.. We at Lenovo understand that people are at the core of a successful company.
.. Our two companies also share a common vision to create an undisputed global leader in the PC industry.
.. we’re both fully committed to success – success on the international stage, and success through producing the best PCs in the world for both enterprises and consumers.
.. welcome to our family. I’m honored that you will be joining us and I hope that we’ll get to know each other a lot better in the years to come.
Yuanqing Yang
13 © 2004 IBM CorporationDecember 8, 2004
Customers
Innovation
Integrity
Synergy inValues
Dedication to every client’s success
Innovation that matters – for our company and for the world
Trust and personal responsibilityin all relationships
Serving customers
Innovative and “can do” spirit
Accuracy and truth-seeking
Trustworthiness and integrity
© 2004 IBM CorporationDecember 8, 2004 |
The New Lenovo AnnouncementHR Transition
Peter HaddadVP Human Resources, PSG
15 © 2004 IBM CorporationDecember 8, 2004
The New Lenovo Value Proposition
• The new Lenovo will offer an exciting opportunity to participate in a new and expanding business venture
• The new Lenovo will offer an attractive employment package
• Lenovo and IBM are committed to make this a smooth transition that minimizes personal disruptions and loss of work productivity
The transaction is expected to be completed no later than the second quarter 2005, and requires the approval of Lenovo’s shareholders and review by relevant regulatory organizations. It is the intention of IBM and Lenovo to reach and sign local agreements after completion of additional legal requirements and industrial relations processes where applicable in some countries outside the United States.
16 © 2004 IBM CorporationDecember 8, 2004
IBM Employees Joining the new Lenovo
• Employees who are part of PCD and their primary work responsibility is in support of the PCD mission/business
• Employees in other business units whose primary work responsibility is in support of the PCD mission/business
• Additional employees deemed necessary to meet the new Lenovo’s requirements may be selected based upon business need and an assessment of their current job responsibilities
17 © 2004 IBM CorporationDecember 8, 2004
Attractive Employee Compensation & Benefit Package*
• The new Lenovo will provide total compensation and benefits that are comparable to IBM’s:
– Cash Compensation
– Same or Similar Job Responsibilities
– Comprehensive Benefit Plans
– Pension / Retirement Plan**
– Vacation
*Certain countries, generally in EMEA, require that these compensation packages undergo further legal and industrial relations review before signing local agreements. Management plans to seek packages that are comparable in value to the package currently offered to employees in those countries in accordance with applicable laws.**In Countries where these plans are offered today
18 © 2004 IBM CorporationDecember 8, 2004
Attractive Employee Compensation & Benefit Package* (continued)
• Employee Health Benefit Package– Immediate access for employee & dependents – no exclusions
– Pre-existing conditions are covered
– Credit for current year plan deductibles
• Years of service credit for:– The new Lenovo Vacation Plan will be based on combined IBM and
Lenovo years of service and will provide the same benefits as the IBM plan guidelines
– IBM accrued and unused vacation transfers with you according to country legal standards
– Other selected benefit programs (varies by geography)
19 © 2004 IBM CorporationDecember 8, 2004
US Benefits: the new Lenovo• Pension Plans with comparable benefits and service credit for purposes of determining
eligibility and vesting:– IBM Personal Pension Plan (Prior DB Plan) – new Lenovo Pension Plan (DB)– IBM Personal Pension Account (Cash Balance) – new Lenovo Defined Contribution Plan– IBM Savings Plan – the new Lenovo 401(k) Plan
• Health benefits– Continuous coverage
– Medical
– Dental
• Compensation– Same base salary
– Performance bonus targets maintained for one year
– Similar incentive and sales commission plans
• Vacation – Same as IBM plan
• More details about the new Lenovo benefits will be forthcoming
20 © 2004 IBM CorporationDecember 8, 2004
IBM / Lenovo Transition Schedule
Employees join the new Lenovo and transition based on final country closing dates
Proposed IBM/Lenovo transaction closing Second Quarter 2005
New Lenovo provides details of benefits offerings
First Quarter 2005
In-scope certification processDecember 8, 2004 – January 7, 2005
Employee Department MeetingsDecember 8 – 16, 2004
Management BriefingsDecember 8 – 9, 2004
Employee Announcement Meeting- PCD Website published with new Lenovo specifics; to be updated regularly
December 8, 2004
Note: Dates represent anticipated transition plan and may vary based on transition progress
21 © 2004 IBM CorporationDecember 8, 2004
The new Lenovo will provide:
• Attractive Employment Package– Competitive compensation– Continuity of benefits
• Smooth Employee Transition
• Career Growth opportunities as we expand our markets
• Recognition of innovation, performance and leadership
• A chance to run our own show!
HR Summary
22 © 2004 IBM CorporationDecember 8, 2004