Vtech Holdings Limited · HKEX:303
Vtech — H1 FY2015 Earnings Presentation
24 slides from Vtech's earnings presentation, Nov 11, 2014
Slide 1: 2014/2015 Interim Results Announcement
VTech Holdings Limited 2014/2015 Interim Results Announcement 11 November 2014
Slide 2: Shereen Tong, Group Chief Financial Officer
Shereen Tong Group Chief Financial Officer 2
Slide 3: Financial Highlights
Financial Highlights For the six months ended 30 September (US$ million) 2014 2013 Change Revenue 900.8 892.4 0.9% Gross Profit 290.2 282.5 2.7% Gross Profit Margin % 32.2% 31.7% 0.5% pts Operating Profit 113.2 105.3 7.5% Operating Profit Margin % 12.6% 11.8% 0.8% pts Profit Attributable to Sharehol
Slide 4: Revenue by Region
Revenue by Region For the six months ended 30 September (US$ million) 2014 % 2013 Change North America 450.6 50.0 455.8 -1.1% Europe 359.9 40.0 352.7 2.0% Asia Pacific 61.6 6.8 52.7 16.9% Other Regions 28.7 3.2 31.2 -8.0% Total 900.8 100.0 892.4 0.9% 4
Slide 5: Working Capital
Working Capital (US$ million) 30/09/14 31/03/14 30/09/13 Stocks 357.4 265.9 399.3 Stocks Turnover Days 114 days 87 days 126 days Trade Debtors 387.4 208.6 380.2 Trade Debtors Turnover Days 59 days 54 days 59 days 5
Slide 6: Liquidity Position
Liquidity Position (US$ million) 30/09/14 31/03/14 30/09/13 Deposits and Cash 106.4 322.9 94.7 Total Borrowings ‒ ‒ ‒ Net Cash Position 106.4 322.9 94.7 6
Slide 7: King Pang, Group President
vtech King Pang Group President >> > >> >INNOVATION BEYOND TECHNOLOGY 7
Slide 8: Operations Review - Costs
Operations Review - Costs Cost pressures eased slightly in 1HFY15: • Cost of materials was lower on falling component prices • Labour costs and manufacturing overheads remained largely stable due to efficiency gains 8
Slide 9: North America
North America Revenue by Product Line (US$ million) • Revenue down 1.1% to US$450.6 million, due to lower revenue from ELPs and CMS ELPs 141.2 (-10.5%) • 50.0% of Group revenue • ELPs revenue declined by 10.5% to US$141.2 million Lower sales of platform products only partially offset by higher sal
Slide 10: North America (continued)
North America (continued) Revenue by Product Line (US$ million) • TEL products revenue increased by 6.8% to US$215.3 million, driven by: ELPs 141.2 Higher sales of residential phones, (-10.5%) commercial phones and other telecommunication products Residential phones: Market share gain Other te
Slide 11: Europe
Europe Revenue by Product Line (US$ million) • Revenue up 2.0% to US$359.9 million, mainly due to higher sales of CMS ELPs 141.5 • 40.0% of Group revenue (-) • ELPs revenue unchanged at US$141.5 million Higher sales of standalone products offset lower sales of platform products No. 1 infant toy
Slide 12: Europe (continued)
Europe (continued) Revenue by Product Line (US$ million) • TEL products revenue declined by 2.0% to US$77.6 million ELPs 141.5 Sales of residential phones were lower (-) due to weak economies and a declining market Sales of commercial phones and other telecommunication products were higher, driv
Slide 13: Asia Pacific
Asia Pacific Revenue by Product Line (US$ million) • Revenue increased by 16.9% to US$61.6 million, 6.8% of Group ELPs 12.7 revenue (+6.7%) • ELPs revenue up 6.7% to US$12.7 million, driven by growth in mainland China and Hong Kong SAR • TEL products revenue rose 16.1% to US$22.3 million, mainly due
Slide 14: Other Regions
Other Regions Revenue by Product Line (US$ million) • Revenue down 8.0% to US$28.7 ELPs million, 3.2% of Group revenue 10.0 (-5.7%) • Other Regions comprise Latin America, the Middle East and Africa • ELPs revenue declined by 5.7% to US$10.0 million, as growth in Africa was offset by lower sales in
Slide 15: Allan Wong, Chairman and Group CEO
Allan Wong Chairman and Group CEO 15
Slide 16: Outlook
vtech Outlook >> > >> >INNOVATION BEYOND TECHNOLOGY 46
Slide 17: Outlook - Overview
Outlook - Overview • US recovery expected to continue • Economies of Western Europe will remain weak Targeting modest revenue growth for full financial year 2015, with stable gross margin 17
Slide 18: Outlook: ELPs
Outlook ELPs • Expect a slight decline in sales in FY15 • Platform products continue to be challenging, but: InnoTab MAX aims to recapture some market share lost to commoditised CE tablets Strong performance expected from Kidizoom Smartwatch 18
Slide 19: Outlook: ELPs standalone products
Outlook ELPs • Standalone products continue to perform well: Momentum behind infant products, Go! Go! Smart Wheels and Go! Go! Smart Animals to carry into 2H Strong line-up of new products for Spring 2015, including Go! Go! Smart Friends 19
Slide 20: Outlook: TEL products
Outlook TEL products • Positive momentum expected to carry into 2H • Residential phones: Sales are forecast to hold steady Continue to gain market share and expand geographically 20
Slide 21: Outlook: TEL commercial phones
Outlook TEL products • Commercial phones and other telecommunication products: Shipment will be higher New products include baby monitors, connected home devices based on DECT ULE standard, CAT-iq handsets and IADs 21
Slide 22: Outlook: CMS
Outlook CMS • Expected to achieve growth in FY15 • Professional audio: Reduction in orders from one customer will be partially offset by higher orders from others in this category • Sales to existing customers in switching mode power supplies, wireless headsets and solid-state lighting will increase
Slide 23: Conclusion
Conclusion “It has been a solid start to the financial year… …the Group will continue to focus on the development of innovative products, gains in market share, expanding our presence geographically and achieving operational excellence to generate sustainable returns for shareholders.” 23
Slide 24: Thank You
vtech Thank You >> > >> >INNOVATION BEYOND TECHNOLOGY 94