Logitech 2002 Annual Report Download - page 2

Although the past year has been challenging for the PC industry and for the global
economy in general, Logitech has emerged stronger than ever. On March 31, 2002, we completed
another record fiscal year. Sales of $944 million grew by 28 percent over fiscal 2001, while net
income of $75 million was 66 percent higher. Operating margin of 10.3 percent was 287 basis points
greater than the prior year, while net margin of 7.9 percent was 182 basis points greater. Cash flow from
operations was $113 million, an increase of over $100 million compared to the prior year.
Our retail presence continues to flourish, accounting for approximately 84 percent of our revenue, as consumers
upgrade and expand their existing systems to take advantage of new technologies such as cordless connectivity and new
applications such as video instant messaging. As a result, Logitech sold more than eight million cordless products and four
million webcams last year alone. Our OEM business has been able to partially compensate for the ongoing slump in the PC
market, realizing new opportunities for bundling higher value-added products at the system level, for example, cordless,
audio and optical devices.
We remain committed to our strategy for growth and expansion, adding new platforms and environments to our product
portfolio while continuing to enrich the PC experience. We brought to the desktop a number of award-winning products,
including Cordless Desktop®Optical, with its unique combination of cordless optical technology, Internet navigation and
great design, as well as the Z-Series of PC speakers. These high-performance speakers, which have already received
numerous industry awards in the U.S. and an enthusiastic initial reception at their recent European launch, underscore
the growth potential represented by our audio business.
In fiscal 2001, we kept our promise to move beyond the desktop and “into the living room,” with products designed for
gaming consoles, launching a force feedback steering wheel for PlayStation®2. This year, we solidified our position in this
market, with support from more than 20 publishers and 50 games for our most current PlayStation®2 racing wheel.
Recently, we announced a second PlayStation®2 product, the Logitech®Cordless Controller.
We have now extended our product line into another environment—mobile computing. In March, we
announced our first Bluetooth™product, the Logitech®Cordless Presenter,™an innovative device that
combines the functions of a cordless optical mouse and presentation controller, targeted at mobile
professionals. We also announced two PDA keyboards. The Logitech®TypeAway™Keyboard offers
full functionality at half the size and half the weight of today’s most popular folding model.
The Logitech®KeyCase™raises the bar even higher, featuring special electronic sensing
fabric that serves as both a folding keyboard and wraparound case.
In the area of operations and infrastructure, we have successfully integrated the
Labtec business into our ongoing processes and have expanded the Labtec
brand to encompass additional product categories. To meet demand for
more products than ever—over 90 million produced and sold this year—we
have added outsourced manufacturing in Europe and Mexico, closer to
our major consumer markets. This strategy has enabled us to respond
quickly to fluctuating market conditions while controlling cost and quality.
At the end of the day, what enables us to successfully execute on our
strategy, grow our company and meet the challenges of today’s
economic and societal climate, is the creativity and dedication of
our employees, the enthusiasm and trust of our customers and the
support of our industry partners and shareholders. To all of you we
owe our sincere thanks.
GUERRINO DE LUCA
President and Chief Executive Officer
DANIEL BOREL
Chairman of the Board
TO OUR Shareholders, Partners
and Employees
AR 02
BARCELONA
BEIJING
BUDAPEST
COPENHAGEN
COUNTY CORK
FREMONT