Vtech 2006 Annual Report Download - page 13

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Review of
Operations
The TEL business returned to profitability in
the financial year 2006, as a result of the
successful implementation of the US
rationalisation plan. The business also
achieved continuous growth in Europe.
TEL Revenue by Region
North America 68.5
407.3
Europe 28.3 168.5
Others 2.0 12.0
Asia Pacific 1.2 6.9
Total 100.0 594.7
2006
%US$ million
10
The TEL business continued to execute
its plan to rationalise its US operations
during the financial year 2006. As a
result of the successful implementation,
the business returned to profitability,
although revenue declined slightly by
2.9% over the financial year 2005 to
US$594.7 million. For the financial year
2006, the business accounted for
49.4% of Group revenue, as compared
to 59.9% in the previous financial year.
The rationalisation of the US business
during the financial year saw a further
reduction in overheads and operating
expenses. A comprehensive
improvement programme was put in
place to re-engineer all processes
worldwide to increase efficiency. As a
result, profitability of the US business
was successfully turned around.
Revenue was lower, however, as we
streamlined our product lines and
exited unprofitable businesses. In the
financial year 2006, revenue in North
America declined by 14.3% to
US$407.3 million.
Telecommunication Products