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2
CREATIVE TECHNOLOGY LTD AND ITS SUBSIDIARIES
CHAIRMAN’S MESSAGE
Dear Shareholders,
Fiscal 2013 was another difcult year for Creative.
We had continued to focus on the development and introduction of new products in the key product categories, and had launched a
series of new exciting products that provide good potential growth opportunities.
However, our nancial performance continued to be adversely affected by the difcult and uncertain market conditions for our
products, which impacted sales across all regions and resulted in lower revenues. Nevertheless, despite the lower level of sales,
with a lower operating cost structure from the cost cutting actions in the previous years, we were able to achieve an improvement
in operating results in scal 2013.
Sales for scal year 2013 were US$165 million, a reduction of 14% compared to US$192 million for scal year 2012. Gross prot
as a percentage of sales was 33% in scal 2013, up from 19% in scal 2012. Net prot for scal 2013 was US$17 million, compared
to a net loss of US$84 million in scal 2012. While sales were lower in scal 2013, operating results for the year had improved due
mainly to the higher gross prot and a reduction in operating expenses of US$19 million. Gross prot was higher due mainly to a
US$20 million licensing income received for the licensing of certain technologies relating to high performance GPU technology. Net
results for the Group in scal 2013 included other gains of US$28 million, comprising mainly a US$27 million gain on the divestment
of a subsidiary. The US$20 million licensing income and the divestment gain were in relation to an agreement entered into by the
Company in November 2012 to license certain technology and patents from ZiiLABS Inc. Ltd, a wholly-owned subsidiary, as part
of a US$50 million deal which also included the divestment of a subsidiary. Further highlights of the Group’s nancial performance
are detailed in the “Financial Highlights and Review” section of the annual report.
During the year, we continued with our research and development in the key product categories that are strategic to our business. In
particular, a strong focus has been placed on the core audio technology behind the Sound Blaster brand and the applications of its
technology into the Sound Blaster family of products that includes ultra high performance sound cards, innovative intelligent wireless
sound systems and premium gaming headsets.
For Sound Blaster audio products, we have recently introduced the Sound BlasterAxx AXX 200 sound system - a game-changing
audio product that I envisage will radically transform the way the new generation of networked mobile device users interact with
music, videos, movies, games, as well as voice communications.
Powered by the built-in multi-core SB-Axx1 audio processor that enhances all audio in real time, the AXX 200 is not just a high-end
Sound Blaster and a powerful portable wireless speaker. Despite its small size, it is also packed with a host of intelligent features that
greatly empowers the user. These technologically advanced features include an integrated MP3 Player, a Super Megaphone with a
unique “karaoke anywhere” feature and a radical teleconferencing feature that delivers great clarity in conference calls with recording
capabilities. All for a game-changing price of US$149.
For Sound Blaster sound cards, during the year, we introduced the ultra high performance Sound Blaster Z Series of PCI-Express
sound cards, namely the Sound Blaster ZxR, the Sound Blaster Zx and the Sound Blaster Z. These powerful sound cards set new
standards for audio technology and performance for entertainment and gaming on the PC. More recently, we introduced three more
new high performance sound cards – the Sound Blaster Omni Surround 5.1, Sound Blaster Audigy Rx and Sound Blaster Audigy
Fx, covering both external and internal connections that provide the latest and most advanced surround sound audio performance for
an immersive listening experience with laptops, PCs or Macs.
In the area of Sound Blaster headsets, we took a big step forward in technology advancement by being the rst to incorporate a built-
in advanced audio processor into a headset for the enhancement and customization of audio quality for playback of music, movies
and games, and for voice communications with the launch of the Sound Blaster EVO series of wireless headsets.