VTech Holdings Ltd FY2010 Annual Results Announcement

Transcription

1 VTech Holdings Ltd FY2010 Annual Results Announcement 14 June 2010

2 Shereen Tong Group Chief Financial Officer 2

3 Financial Highlights For the year ended 31 March (US$ M) Changes Revenue 1, , % Gross Profit % Operating Profit % Profit Attributable to Shareholders of the Company % Basic Earnings per Share (US cents) % Dividend per Share (US cents) Interim % Final % 3

4 Revenue by Region (US$ M) 2010 For the year ended 31 March % 2009 Change North America % Europe % Asia Pacific % 49.3 Others % Total 1, , % 4

5 Working Capital (US$ M) 31/03/10 31/03/09 Stocks Stocks Turnover Days 75 days 67 days Trade Debtors Trade Debtors Turnover Days 61 days 73 days 5

6 Liquidity Position (US$ M) 31/03/10 31/03/09 Deposits and Cash Currency-linked Deposits Net Cash Position

7 Allan Wong Chairman and Group CEO 7

8 North America Revenue by Product Line (US$ million) CMS (14.0%) TEL (59.1%) Revenue up 12.9% to US$872.6 million, 57.0% of Group revenue Growth was driven by higher sales of TEL products and CMS TEL revenue up 34.2% to US$515.2 million Higher sales of VTech DECT 6.0 and core AT&T range Estimated market share in the US: almost 50% ELP (26.9%) Launched SynJ, our first SMB telephony system 8

9 North America (continued) Revenue by Product Line (US$ million) CMS (14.0%) TEL (59.1%) ELP revenue down by 14.4% to US$235.0 million Revenue decrease mainly due to lower sales of platform products Standalone products sold well, led by infant category Jungle Gym line created a new avenue for growth CMS revenue increased by 7.0% to US$122.4 million Sharp rebound in 2H ELP (26.9%) Sales increase from existing and new customers in professional audio equipment 9

10 Europe Revenue by Product Line (US$ million) TEL (32.4%) Revenue down by 7.3% to US$528.9 million, 34.5% of Group revenue Sales decline in all product lines due to weak economy, despite 2H improvement TEL revenue down by 11.5% to US$171.4 million Sales rebound in 2H unable to offset decline in 1H Full range of T-Home / VTech products on shelves in Q4 FY2010 CMS (21.9%) ELP (45.7%) IAD appeared on the market in Q4 FY

11 Europe (continued) Revenue by Product Line (US$ million) TEL (32.4%) ELP revenue down by 6.5% to US$241.7 million Sales decline was due to declining consumer demand and lower ASPs Standalone products outperformed platform products CMS revenue down by 2.0% to US$115.8 million Strong 2H cannot offset sales decrease in 1H Sales of power supplies and wireless products declined CMS (21.9%) ELP (45.7%) Professional audio equipment saw sales increase 11

12 Asia Pacific Revenue by Product Line (US$ million) TEL 22.9 (28.1%) ELP 15.8 (19.4%) Revenue up 47.6% to US$81.5 million, 5.3% of Group revenue AP outperformed other markets with higher sales in all product lines TEL revenue rose strongly by 59.0% to US$22.9 million, partly due to higher sales brought by Telstra agreement ELP revenue increased by 23.4% to US$15.8 million CMS 42.8 (52.5%) CMS revenue grew by 52.9% to US$42.8 million, mainly driven by sales increase in solid state lighting 12

13 Other Regions Revenue by Product Line (US$ million) CMS 0.3 (0.6%) TEL 32.8 (66.5%) ELP 16.2 (32.9%) Revenue down by 0.8% to US$49.3 million, 3.2% of Group revenue Other regions comprise mainly markets in: - Latin America - Middle East - Africa Sales drop was due to lower sales of ELPs TEL revenue increased by 13.9% to US$32.8 million ELP revenue declined by 22.5% to US$16.2 million 13

14 King Pang Group President 14

15 Proven Strategy 15

16 Proven Strategy 16

17 Product Innovation - TEL Strong industrial design, Bluetooth connectivity, enhanced user interface Design & Tech Innovation SMB telephony systems, cordless headset New Product Categories Core Product Line Corded and cordless telephones 17

18 Product Innovation - ELP Reading Edu-gaming Platform Product Bugsby V.Reader V.Smile Motion MobiGo Infant Preschool ELA Jungle Gym & Bath Toys Standalone Product 18

19 Product Innovation - ELP V.Reader World s First Animated E-Book System for Children Age TFT screen Cartridge based (11 titles) + download library + touch screen US$59.99 Available Now MobiGo Handheld Educational Gaming System Age TFT screen Cartridge based (11 titles) + touch screen + slide open keyboard US$59.99 Available Now 19

20 Proven Strategy 20

21 Gains in Market Share - TEL 60% US Corded and Cordless Revenue Share Western Europe Cordless Manufacturing Share 50% 40% 30% 20% 10% 0% Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q % 28.8% 27.1% 19.8% 14.9% 1.0% VTech ~ 22% US US$1.2 billion market Significant market share gain in FY2010 Expect continuous market share gain in FY2011 Western Europe Market size: 32 million base units Stable market Expect market share gain in FY2011 Source: NPD & MZA 21

22 Proven Strategy 22

23 Geographic Expansion For the year ended 31 March 2010 Asia Pacific + other markets = Less than 10% of Group sales Potential to grow Other Regions 3.2% of Group sales Asia Pacific 5.3% of Group sales 23

24 Proven Strategy 24

25 Operational Excellence For the year ended 31 March % Selling & Distribution Costs as Percentage of Group Sales % Administrative & Other Operating Expenses* as Percentage of Group Sales ** * Excluding the effect of exchange differences ** Including the settlement and license fees together with the legal and professional costs of a lawsuit with Motorola Inc. related to infringement of six patents asserted against the Group 25

26 Operational Excellence For the year ended 31 March % Gross Profit Margin % Operating Profit Margin % Net Profit Margin

27 Outlook 27

28 Outlook - Overview See signs of recovery, but unsure of its sustainability Weakness of EU currencies will pressure revenue and profitability Rising costs will add to the challenges Cautiously optimistic Expect to deliver growth in FY

29 TEL products Outlook North America & Europe Growth will not be easy to achieve in NA Strong performance last year Expect further market share gains SMB telephony systems add momentum to sales Resume growth in Europe More orders from existing customers Gaining market share in Germany due to DT agreement Shipping more IADs 29

30 ELPs North America Outlook North America & Europe Platform products return to growth Standalone products continue its momentum Europe New standalone and platform products will stimulate sales Growth is difficult to achieve due to weak currencies 30

31 Outlook North America & Europe CMS Global EMS market on an uptrend VTech will continue to outperform the market Expect additional businesses in professional audio area Growth opportunities in switching mode power supplies Solar power inverters Electric vehicle chargers 31

32 Outlook Asia Pacific & Other Regions TEL products Plan to enter China market Expect increased contributions from Telstra agreement ELPs New team to develop products for China market Products to hit the shelves by the end of CY2010 Step up efforts in other AP markets, notably Australia and Japan CMS Build on the success in solid state lighting in Japan 32

33 Conclusion VTech is a company with strong R&D, market leadership position, a strong balance sheet and a highly efficient operation We will continue to pursue growth through our strategy 33

34 Thank You 34