vtech holdings ltd€¦ · vtech holdings ltd fy2012 annual results announcement 23 may 2012 . 2...
TRANSCRIPT
VTech Holdings Ltd FY2012 Annual Results Announcement
23 May 2012
2
Shereen Tong
Group Chief Financial Officer
3
Financial Highlights
-4.2% 218.7 209.5 Operating Profit
-5.0% 202.0 191.9 Profit Attributable to Shareholders
of the Company
-5.5% 81.5 77.0 Basic Earnings per Share (US cents)
Changes 2011 2012 (US$ M)
4.2% 1,712.8 1,784.5 Revenue
For the year ended 31 March
0.7% 566.9 570.8 Gross Profit
Dividend per Share (US cents)
Gross Profit Margin %
Net Profit Margin %
Operating Profit Margin %
-1.0% pts 11.8% 10.8%
-1.1% pts 12.8% 11.7%
-1.1% pts 33.1% 32.0%
16.0
60.0
76.0
• Interim
• Final
• Total dividend for the year
16.0
62.0
78.0
- 2.6%
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Revenue by Region
Total 1,784.5 100.0 1,712.8 4.2%
67.6 Others 3.8 72.1 -6.2%
Europe 40.3 667.6 7.7% 719.3
North America 903.5 50.6 874.9 3.3%
Asia Pacific 94.1 5.3 98.2 -4.2%
% Change 2011 2012 (US$ M)
For the year ended 31 March
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Working Capital
Stocks 239.2
Stocks Turnover Days 82 days
Trade Debtors
Trade Debtors Turnover Days 56 days
210.6
31/03/12 (US$ M)
229.8
85 days
198.8
63 days
31/03/11
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Deposits and Cash 326.5
Net Cash Position 326.5
31/03/12 (US$ M)
Liquidity Position
Total Borrowings --
333.1
333.1
31/03/11
--
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King Pang
Group President
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Rising costs - the biggest challenge in FY2012:
• Higher raw material prices
• Rising labour costs in China
• RMB appreciation
Operations Review - Costs
Price increase + cost reduction +
efficiency enhancement
to mitigate cost pressure
9
North America
• Revenue up 3.3% to US$903.5
million, 50.6% of Group revenue
• Higher revenue from CMS and
ELPs offset a slight revenue
decrease from TEL products
• TEL revenue down 1.4% to
US$415.3 million
The decrease reflects the maturity
of the US residential phone market
Maintained No.1 position in US
Further progress in SMB and hotel
phones
Revenue by Product Line (US$ million)
TEL 415.3 (-1.4%)
ELPs 308.5 (+7.5%)
CMS 179.7 (+7.8%)
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North America (continued)
Revenue by Product Line (US$ million) • ELP revenue up 7.5% to US$308.5
million
Growth was driven by platform products
InnoTab sold well, more than offset
lower sales of MobiGo and V.Reader
Revenue from standalone products was
flat
• CMS revenue grew by 7.8% to
US$179.7 million
Professional audio equipment and
internet phones were growth drivers
Higher sales of commercial solid state
lighting also supported growth
TEL 415.3 (-1.4%)
ELPs 308.5 (+7.5%)
CMS 179.7 (+7.8%)
11 11
Europe
• Revenue up 7.7% to US$719.3
million, 40.3% of Group revenue
• Higher ELP and CMS revenue
more than offset lower sales of
TEL products
• TEL revenue down 1.0% to
US$215.4 million
Sales decline was due to weak
second half sales as customers
delayed orders
Gained market share and became
No. 1 manufacturer of cordless
phones in Western Europe
Revenue by Product Line (US$ million)
TEL 215.4 (-1.0%)
ELPs 310.3 (+13.2%)
CMS 193.6 (+9.9%)
12 12
Europe (continued)
• ELP revenue up 13.2% to US$310.3
million
Both platform and standalone products
delivered solid results
Full launches of MobiGo and Storio,
higher sales in infant products and Kidi-
series drove growth
Sales were especially strong in France,
Germany and the Netherlands
• CMS revenue up 9.9% to US$193.6
million
Wireless headset was the best
performer, benefiting from supplier
consolidation
Professional audio also recorded higher
sales
Revenue by Product Line (US$ million)
TEL 215.4 (-1.0%)
ELPs 310.3 (+13.2%)
CMS 193.6 (+9.9%)
13 13 13
Asia Pacific
• Revenue down 4.2% to US$94.1
million, 5.3% of Group revenue
• TEL revenue decreased by 16.4% to
US$29.6 million, due to weakness in the
Japanese market and lower sales in
Australia
• ELP revenue grew by 10.1% to US$17.5
million, driven by growth in China, albeit
from a low base
• CMS revenue increased by 0.2% to
US$47.0 million. Higher sales in medical
and wireless products was offset by
significantly lower orders for LED light bulbs,
as customer faced keen competition
Revenue by Product Line (US$ million)
TEL 29.6 (-16.4%)
ELPs 17.5 (+10.1%)
CMS 47.0 (+0.2%)
14 14
Other Regions
• Revenue down 6.2% to US$67.6
million, 3.8% of Group revenue
• Other regions include Latin America,
the Middle East and Africa
• Revenue decrease mainly due to sales
decline in TEL products, as customers
delayed orders
• Revenue from TEL products fell by
14.0% to US$46.0 million
• Revenue from ELPs and CMS rose by
16.2% and 14.3% to US$20.8 million
and US$0.8 million respectively
Revenue by Product Line (US$ million)
TEL 46.0 (-14.0%)
ELPs 20.8 (+16.2%)
CMS 0.8 (+14.3%)
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Growth Strategy
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Growth Strategy
Geographic
Expansion
• AP + other regions =
9.1% of Group sales
• China is our focus
• ELPs: Expanding
steadily in China
• TEL: Start selling
AT&T phones in
China since 4QFY12
Gains in
Market Share
• World’s No. 1
cordless phone
manufacturer
• World’s No. 1 ELP
supplier
• CMS growth out-
paces global EMS
market
Operational
Excellence
• Tight cost control
• Efficient operations
• SG&A: As % of Group
revenue remained
unchanged (17.1% in
FY2012 & FY2011)
Operating Cost
• Micro business
phone system
• Platform products:
New versions of
InnoTab, MobiGo 2
and Storio 2
• Standalone
products: Switch &
Go Dinos, Toot-Toot
Drivers and more
Product
Innovation
17 17
Our Strengths
Excellent R&D
Strong Balance Sheet
Market Leadership Position
TEL -No.1 Global Manufacturer Efficient Operations
18 18
Allan Wong
Chairman and Group CEO
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Outlook - Overview
• Macro-economic environment remains
challenging, with slow but continuous recovery in
the US
• In Europe, consumer demand is affected by
austerity measures and economic uncertainty
• Planning for overall top line growth in FY2013
20
Outlook - Overview
• Cautiously optimistic of profitability improvement
Lower raw material prices feeding into margin
Supported by efficiency enhancement measures
including higher automation and product design
optimisation
• Labour cost in China, however, will continue to
rise
• Continue to manage expenses very tightly
21 21
Outlook
• Foresee a rebound for TEL
products
• North America – Good momentum of
SMB and hotel phones will continue.
Sales of residential phones are expected
to recover
• Europe – Prospect is positive as
customers will restock in 1H. Gains in
market share are also expected
• Asia Pacific and Other Regions –
Expect to return to a growth path due to
further inroads in Australia and
encouraging progress in Latin America
22 22
Outlook
• Despite challenging retail environment
in Europe, healthy growth for ELPs is
expected
• North America – Platform products will
lead the way, with new versions of
InnoTab and MobiGo. New line of
standalone products, Switch & Go Dinos
will start to roll out also
• Europe – Good performances from
standalone and platform products are
expected to continue
• Asia Pacific and Other Regions –
Momentum is expected to continue
23 23
Outlook
• CMS will continue to outperform the
global EMS market
• New factory building – Raise capacity
by 40%. The enhanced facility supports
customers who target domestic sales in
China. The new set-up also allows
production of sophisticated products
• Professional audio – Will continue to
add new customers as reputation grows
• Wireless headsets – Will benefit from
further consolidation of supplier base
Global EMS
Market
VTech CMS
24 24
Outlook
• Switching mode power supplies –
Business should stabilise, though solar
power inverters may remain under
pressure
• Solid state lighting – Growth in
commercial solid state lighting will offset
an anticipated further decline in
consumer LED light bulbs
• Marine radio – A new product category
added in FY2012, will see rapid growth
over the next two years as customer
transfers more production to VTech
Global EMS
Market
VTech CMS
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Conclusion
“Our proven strengths in product
development, a strong balance sheet,
market leadership position and
efficient operations should enable us
to achieve further growth in revenue
and hence deliver sustainable returns
to shareholders.”
26 26
Thank You