vtech holdings ltd · 2015-11-05 · 9 north america (continued) tel 289.4 (65.5%) elp 103.6...

VTech Holdings Ltd2009/2010 Interim Results Announcement

25th November 2009

2

Shereen Tong

Group Chief Financial Officer

3

Financial Highlights

34.6%74.8100.7Operating Profit

33.0%68.891.5Profit Attributable to Equity Shareholders

31.9%28.237.2Basic Earnings per Share (US cents)

Changes20082009(US$ M)

5.2%778.5738.0Revenue

For the six months ended 30th September

3.4%263.4254.5Gross Profit

Interim Dividend per Share (US cents) 33.3%12.016.0

4

Revenue by Region

Total 738.0 100.0 778.5 5.2%

28.1Others 3.8 31.1 9.6%

Europe 30.5 298.3 24.4%225.6

North America 441.8 59.9 417.8 5.7%

Asia Pacific 42.5 5.8 31.3 35.8%

For the six months ended 30th September

% Change20082009(US$ M)

5

Working Capital

Stocks 197.8 207.3

Stocks Turnover Days 98 days 95 days

Trade Debtors 338.7

Trade Debtors Turnover Days 55 days 62 days

280.4

30/09/0830/09/09(US$ M)

128.0

67 days

154.0

73 days

31/03/09

6

Deposits and Cash 229.9 143.7

Less: Total Interest Bearing Liabilities

Net Cash Position 229.9 143.7

- -

30/09/0830/09/09(US$ M)

Liquidity Position

Currency-linked Deposits with Principal Protected - 19.3

229.9 163.0

287.2

287.2

-

31/03/09

4.9

292.1

77

Allan Wong

Chairman and Group CEO

8

North America

TEL289.4 (65.5%)

ELP103.6 (23.5%)

CMS48.8 (11.0%)

• Revenue up 5.7% to US$441.8

million, 59.9% of Group revenue

• Growth was driven by higher

TEL sales

• TEL revenue up 31.6% to

US$289.4 million, due to:

− Higher sales of branded products

− Supply chain excellence

− Market share gains, as a major

competitor exited the market

Revenue by Product Line (US$ million)

9

North America (continued)

TEL289.4 (65.5%)

ELP103.6 (23.5%)

CMS48.8 (11.0%)

• ELP revenue down by 25.1% to

US$103.6 million

− Emphasised value because of weak

economy

− Delayed the launch of a major new

platform

− Poor sentiment led to lower ASPs and

revenue

− Standalone products outperformed

platform products

• CMS revenue down by 18.0% to

US$48.8 million

− Tough comparison with strong 1HFY09

− Lower orders across the board

Revenue by Product Line (US$ million)

1010

Europe

TEL76.9 (34.1%)

ELP95.4 (42.3%)

CMS53.3 (23.6%)

• Revenue down by 24.4% to

US$225.6 million, 30.5% of Group

revenue

• Sales decline was due to lower

sales of TEL products, ELPs and

CMS

• TEL revenue down by 24.4% to

US$76.9 million, due to:

− Reduced orders from customers

− Tough comparison with strong

1HFY09

Revenue by Product Line (US$ million)

1111

Europe (continued)

TEL76.9 (34.1%)

ELP95.4 (42.3%)

CMS53.3 (23.6%)

• ELP revenue down by 26.1% to

US$95.4 million

− Declining consumer spending and lower ASPs

− Standalone products outperformed

platform products

• CMS revenue down by 21.0% to

US$53.3 million

− Lower sales in power supplies and wireless products

− Tough comparison with strong 1HFY09

Revenue by Product Line (US$ million)

121212

Asia Pacific

TEL8.1 (19.1%)

ELP10.3 (24.2%)

CMS24.1 (56.7%)

• Revenue up 35.8% to US$42.5

million, 5.8% of Group revenue

• AP outperformed other markets due

to higher sales in all product lines

• TEL revenue rose by 9.5% to

US$8.1 million

• ELP revenue increased by 18.4% to

US$10.3 million

• CMS showed strongest growth in AP,

with revenue growing by 58.6% to

US$24.1 million, due to:

− Increasing sales in solid state lighting

Revenue by Product Line (US$ million)

1313

Other Regions

TEL16.2 (57.6%)

ELP11.8 (42.0%)

CMS0.1 (0.4%)

• Revenue down by 9.6% to

US$28.1 million, 3.8% of Group

revenue

• Other regions comprise mainly

markets in:

- Latin America

- Middle East

- Africa

• Sales drop was due to lower sales

of TEL products and ELPs

• TEL revenue down by 5.8% to

US$16.2 million

• ELP revenue declined by 15.1% to

US$11.8 million

Revenue by Product Line (US$ million)

14

King Pang

Group President

15

Proven Strategy

16

Proven Strategy

17

Technology Roadmap - TEL Products

� Landline & mobile convergence

� Enterprise products� IAD

� Corded and cordless phones

� Strong industrial design

� Enhanced user interface

CY2009 CY2010

Core Product Line

Design & Tech Innovation

New Product Categories

� More enterprise products

� Corded and cordless phones

18

Technology Roadmap - ELPs

Core Product Core Product

LineLine

Design & Tech Design & Tech

InnovationInnovation

New Product New Product

CategoriesCategories

CY2009CY2009 CY2010CY2010

� Jungle Gym

� Learning & exercise� Reading

� Standalone products� Platform products

� Video technologies� Wireless technologies

New New

PlatformPlatform

ProductsProducts

ExpandedExpanded

StandaloneStandalone

LineLine

� Wireless connectivity� User interface

1919

Proven Strategy

2020

Gains in Market Share

Industry consolidation

• Major competitor exited

• Weak competition +

Market leader

• No. 1 player in the US

• Strong core product lines

• New product categories

Market VTech

Further gains in market share for TEL products Further gains in market share for TEL products

2121

Proven Strategy

2222

Asia Pacific

Geographic Expansion

Other Regions

Asia Pacific + other markets = Less than 10% of Group sales

Potential to grow

9.6%(3.8% of group sales)

35.8%(5.8% of group sales)

2323

Proven Strategy

2424

Operational Excellence

Good cost control + Efficient operations

Selling & Distribution Costsas Percentage of Group Sales%

0

5

10

15

20

25

15.114.515.115.7

13.1

2005 2006 2007 2008 2009

Administrative & Other Operating Expensesas Percentage of Group Sales*%

0

1

2

3

4

5

6

7

4.13.94.13.94.7

2005 2006 2007 2008 2009

For the six months ended 30th September

*Excluding the effect of exchange differences

2525

Outlook

2626

Outlook – Overview

• Expect consumer sentiment to remain

subdued through holiday season

• Top line growth will not be easy to

achieve

• Profitability is expected to be higher

year on year

2727

Outlook – North America & Europe

TEL products

• North American sales to perform well

− Market share gains

− Boost from recently introduced cordless, enterprise phone products

• European sales to pick up

− Orders from existing customers return to normal levels

− Full range of “T-Home / VTech”products on shelves

− Increasing shipments of IADs

2828

Outlook – North America & Europe

ELPs

• Have planned for challenging holiday season

• Rich line up of new products for CY2010

− Includes new platform products

− Received uniform enthusiastic receptions

CMS

• Economies stabilising

• Expect sales to pick up in 2H

2929

Outlook – Asia Pacific & Other Regions

TEL products

• Benefit from Telstra deal in Australia

• Expand our presence in other markets

ELPs

• Growing demand for electronic toys and

educational products

CMS

• Good opportunities in solid state lighting

3030

Conclusion

VTech is a company with market leadership position, a strong

balance sheet and a highly efficient operation…..

…We are well positioned to take advantage of the recovery

in the global economy

3131

Thank You