VTech Holdings Limited · HKEX:303
VTech — H1 FY2013 Earnings Presentation
25 slides from VTech's earnings presentation, Nov 14, 2012
Slide 1: VTech Holdings Ltd 2012/2013 Interim Results Announcement
VTech Holdings Ltd 2012/2013 Interim Results Announcement 14 November 2012
Slide 2: Financial Review
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Slide 3: Financial Highlights
Financial Highlights For the six months ended 30 September (US$ M) 2012 2011 Change Revenue 876.1 858.1 2.1% Gross Profit 266.3 261.0 2.0% Gross Profit Margin % 30.4% 30.4% ‒ Operating Profit 99.3 96.3 3.1% Operating Profit Margin % 11.3% 11.2% 0.1% pts Profit Attributable to Shareholders of the Com
Slide 4: Revenue by Region
Revenue by Region For the six months ended 30 September (US$ M) 2012 % 2011 Change North America 439.0 50.1 431.2 1.8% Europe 352.0 40.2 336.5 4.6% Asia Pacific 51.0 5.8 47.7 6.9% Other Regions 34.1 3.9 42.7 -20.1% Total 876.1 100.0 858.1 2.1% 4
Slide 5: Working Capital
Working Capital (US$ M) 30/09/12 31/03/12 30/09/11 Stocks 340.0 239.2 320.2 Stocks Turnover Days 111 days 82 days 108 days Trade Debtors 377.3 210.6 339.5 Trade Debtors Turnover Days 61 days 56 days 58 days 5
Slide 6: Liquidity Position
Liquidity Position (US$ M) 30/09/12 31/03/12 30/09/11 Deposits and Cash 108.9 326.5 128.5 Total Borrowings ‒ ‒ ‒ Net Cash Position 108.9 326.5 128.5 6
Slide 7: Operations Review
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Slide 8: Operations Review - Costs
Operations Review - Costs Labour cost and manufacturing overhead in China have continued to rise in 1H: • Raised workers’ compensation • Stepped up investment in factory improvements Gross margin stayed flat 8
Slide 9: North America
North America • Revenue grew 1.8% to US$439.0 Revenue by Product Line (US$ million) million, 50.1% of Group revenue TEL 197.4 (-10.4%) • Higher revenue from ELPs and CMS offset lower revenue from TEL products • TEL revenue declined by 10.4% to US$197.4 million Residential phone sales affected by m
Slide 10: North America (continued)
North America (continued) Revenue by Product Line (US$ million) • ELP revenue rose by 26.0% to TEL US$145.4 million 197.4 (-10.4%) Both platform and standalone products recorded growth InnoTab, InnoTab 2 and MobiGo 2 were growth drivers Standalone products performed well. Switch & Go Dinos mad
Slide 11: Europe
Europe Revenue by Product Line (US$ million) • Revenue rose by 4.6% to US$352.0 million, 40.2% of Group revenue TEL 106.0 • Higher revenue from ELPs and (-8.1%) CMS offset lower revenue from TEL products • TEL revenue decreased by 8.1% to US$106.0 million Weak economies caused customers to reduce
Slide 12: Europe (continued)
Europe (continued) Revenue by Product Line (US$ million) • ELP revenue increased by 3.0% to US$128.3 million TEL 106.0 Growth somewhat hampered by a weaker (-8.1%) Euro-US Dollar exchange rate Main growth drivers were InnoTab, InnoTab 2 and Switch & Go Dinos UK and France performed best, with
Slide 13: Asia Pacific
Asia Pacific Revenue by Product Line (US$ million) • Revenue increased by 6.9% to US$51.0 million, 5.8% of Group TEL ELP revenue 18.7 11.2 (+31.7%) (+6.7%) • TEL revenue rose by 31.7% to US$18.7 million due to increased orders from Japanese customer, further expansion in Taiwan and entry to new mark
Slide 14: Other Regions
Other Regions Revenue by Product Line (US$ million) • Revenue down 20.1% to US$34.1 million, 3.9% of Group revenue TEL 19.5 (-27.8%) • Other regions include Latin America, the Middle East and Africa • Growth in Africa and the Middle East was more than offset by a decline in Latin America • Revenue f
Slide 15: Growth Strategy
vtech | Growth Strategy RO GROWTH DRIVERS EXCELLENCE >> > >> > INNOVATION BEYOND TECHNOLOGY 45
Slide 16: Growth Strategy
Growth Strategy Product Gains in Geographic Operational Innovation Market Share Expansion Excellence Operating Cost • New SMB phone, • World’s No. 1 • AP + other regions = • Tight cost control CareLine, Retro phone cordless phone 9.7% of Group sales manufacturer • Efficient operations • Platform pro
Slide 17: Outlook
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Slide 18: Outlook - Overview
Outlook - Overview • Global economic environment remains challenging • Growth is uncertain in the US, with a lingering high level of unemployment • In Europe, austerity measures are depressing consumer demand 18
Slide 19: Outlook - Overview
Outlook - Overview • Remain cautiously optimistic of achieving overall top line growth in FY2013 • Do not expect gross margin to improve, while bottom line growth will be modest Labour cost and manufacturing overhead will increase further from 1H Continue to invest in CSR to achieve sustainable
Slide 20: Outlook
Outlook • Build on the success in SMB and hotel phones and bring further innovation to residential phones in difficult operating environment • North America – Sales of SMB and hotel phones expected to increase. Expect to outperform the market in residential phones. Sales of TEL products via online r
Slide 21: Outlook
Outlook • Expect positive momentum to continue despite challenging global economic environment • North America – Platform products will lead the way in 2H on full impact of MobiGo 2 and InnoTab 2, joined by new InnoTab 2S. Switch & Go Dinos will continue as growth driver • Europe – Expect continuati
Slide 22: Outlook
Outlook • CMS will continue to outperform the VTech CMS global EMS market Global EMS Market • Professional audio – Will see growth for the full year, as sales in North America will return to normal and sales in Europe will rise • Switching mode power supplies – Solid growth expected for the full yea
Slide 23: Outlook
Outlook VTech • Wireless products – Sales will CMS continue to increase, led by wireless Global headsets and marine radio EMS Market • Enhanced manufacturing facility will also help drive growth Supports continued expansion in China business Enables CMS to grow in medical and health products, as
Slide 24: Conclusion
Conclusion “Our ability to deliver growth in the face of difficult market conditions testifies to the strength of the Group… …We will continue to focus on product innovation and geographical expansion to drive growth, while managing costs and risks to enhance profitability.” 24
Slide 25: Thank You
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