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VTech Holdings Ltd Annual Report 2009 13
Our ELPs give kids
the power to discover
while they play. They
are not just playing,
they are also learning
valuable skills for the
years ahead.
The ELP business saw revenue
decrease by 7.9% to US$566.9 million
in the financial year 2009 as compared
with the financial year 2008. This is
equivalent to 39.1% of total Group
revenue, as compared to 39.7% in the
previous financial year. After a solid
first half, the financial year witnessed
a rapid and severe deterioration of
the global economy in the second
half. This led to a softening of
consumer demand, and necessitated
aggressive retail level promotions.
North America and Europe were
the markets most affected by the
slowdown. Sales to North America
dropped 5.7%, from US$291.1 million
to US$274.6 million, while sales to
Europe declined 12.7%, from US$296.1
million to US$258.6 million. It should
be noted that results from the
European operations were further
impacted by the steep depreciation
of the Euro and Sterling against the
US dollar. Results from Asia Pacific
and other markets were more
promising, with revenues increasing
by 13.3% and 21.5%, to US$12.8
million and US$20.9 million
respectively.
As consumers flocked to value in the
weak economy, standalone products
played a significant role in our overall
business. They accounted for 64.0%
of total ELP revenue, against 57.0%
in the financial year 2008. The infant
category showed the strongest
growth. Among pre-school products,
the Kidizoom Camera, launched in
the previous financial year, continued
to sell well.
Platform products, led by the V.Smile
range, accounted for 36.0% of total
ELP revenue, compared to 43.0%
in the last financial year. Three new
members, V-Motion, Cyber Pocket
and PC Pal, were added to the
V.Smile family. As the new flagship
learning console, V-Motion met our
sales expectations in spite of a
challenging year for new platform
products. Overall, unit sales of both
consoles and handhelds across the
V.Smile range managed to hold
their ground.
VTech’s electronic learning products
again garnered a good number of
awards during the financial year.
Among the award winners, V-Motion
won the National Parenting Center
Seal of Approval and Family Fun
magazine Toy of the Year 2008
award, both in the United States. In
the United Kingdom, the Kidizoom
Camera was named Pre-School Toy
of the Year 2008 by the Toy Retailers
Association.
Among pre-school
products, the
Kidizoom Camera
continued to
sell well.