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8 VTech Holdings Ltd Annual Report 2009
BUSINESS OVERVIEW
Review of FY2009
TELECOMMUNICATION
PRODUCTS
• Revenue declined 9.8% over the
previous financial year to US$620.7
million.
• Sales to North America declined by
19.5% to US$383.8 million. The decline
in sales was attributable to slowing
demand and a reduction of inventories
by retailers, in anticipation of an
uncertain US economy.
• Sales to Europe, Asia Pacific and other
markets continued to expand as VTech’s
market share in Europe continued
to grow. We have also made good
progress in penetrating into Latin
America, Middle East, Australia
and India.
• The business continued to outperform
the global EMS market and achieved a
fifth consecutive record in its revenue.
• Sales rose by 5.0% to US$260.6 million.
• The growth in sales was mainly driven
by customers in the area of professional
audio equipment, switching mode
power supplies and solid-state lighting.
• Our high quality of service,
acknowledged expertise in the
professional audio area and word-of-
mouth recommendations enabled us
to secure additional orders.
CONTRACT
MANUFACTURING
SERVICES
ELECTRONIC
LEARNING PRODUCTS
• Revenue decreased by 7.9% to
US$566.9 million.
• After a solid first half, the financial
year witnessed a rapid and severe
deterioration of the global economy
in the second half.
• North America and Europe were
the markets most affected by the
slowdown. Sales to North America
dropped 5.7% to US$274.6 million,
while sales to Europe declined 12.7%
to US$258.6 million.
• Standalone products accounted for
64.0% of total ELP revenue, while
platform products accounted for 36.0%.
Description of Business
VTech is one of the world’s largest
suppliers of corded and cordless
telephones.
In North America, we are the largest
player in the market, selling both VTech
and AT&T branded products in major
retail stores.
Outside North America, we mainly
operate an ODM business. We supply
products to major fixed line telephone
operators in Europe and other well-
known brand names.
VTech is a pioneer in the industry and
we are currently one of the world’s
leaders in this field.
Our products cover a broad spectrum
of age groups, from infants to pre-teens,
and from standalone items to platform
products:
• Standalone products
– Infant toys
– Pre-school toys
– Electronic learning aids
– Jungle Gym
• Platform products
– V.Smile TV Learning System
– Bugsby Reading System
VTech’s CMS business provides one-stop
shop electronic manufacturing services
for medium sized customers mainly in
four areas:
• Professional audio equipment
• Switching mode power supplies
• Home appliances
• Communications products
We offer a comprehensive service from
design, R&D support to full production.