Vtech 2003 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2003 Vtech annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 54

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54

Annual Report 2003 5
Letter to Shareholders
We also recognized the need to get closer
to both the retailers which carry our
products and the consumers who purchase
them.To this end,two years ago we brought
in new management with extensive
marketing experience to develop a much
more customer-centric approach. Many
valuable lessons were learned and we are
continuing to build our strategies using the
same principles but with improved
execution.
Acknowledging the need for further
changes, we have devised a three-year
strategic plan to restore the business to its
normal level of revenue and profitability.
We will first focus on rebuilding the
profitability of the business, starting from
reorganizing the US operations.To improve
efficiency in product development, we
closed the R&D centre in Connecticut, USA
and consolidated the new product
development function completely in Hong
Kong and mainland China under the
leadership of our new senior management
team. Our product design teams in Hong
Kong and mainland China will be supported
by the up-to-date market intelligence
collected from our distribution networks in
major markets.Dedicated resources will also
be allocated to them to generate innovative
and creative product ideas and concepts.
We have full confidence that the quality of
the new product development process will
be much improved by this new
arrangement and the change in
management.
Stable Contract Manufacturing
Services (CMS)
VTech’s ability to provide the complete
range of Electronics Manufacturing Services
(EMS) to medium-sized companies again
provided the Group with sustainable
revenue in the financial year 2003, despite
soft conditions in the worldwide EMS
market. Our CMS business had a steady year,
with modest revenue growth of 2.0% to
US$94.7 million and a stable profit.The
business also made important
improvements during the year to its
operations, upgrading to ISO9001:2000
version, gaining TL9000 certification for
telecommunication products, introducing
lead-free soldering and establishing a new
R&D centre in Shenzhen, mainland China.
All these enhancements position VTech well
for future growth opportunities.
Outlook
The macro-economic outlook for the
financial year 2004 remains highly
uncertain, with consumer sentiment in the
United States and Europe highly contingent
on a number of factors. For VTech, however,
the financial year 2004 is a year that we
look forward to further growth in revenue
and profitability.
...to restore
revenues and
profits
A three-
year plan...