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VTech Holdings Ltd Annual Report 2009 15
CMS Revenue by Product Line (FY2009)
TOTAL US$260.6 MILLION
Professional Audio
Equipment
29.4%
US$76.6 million
Communications
Products
9.8%
US$25.5 million
Home
Appliances
17.8%
US$46.3 million
Switching Mode
Power Supplies
25.4%
US$66.1 million
Others
17.6%
US$46.1 million
The CMS business achieved a fifth
consecutive record in its revenue
in the financial year 2009 as sales
rose by 5.0% over the financial year
2008 to US$260.6 million. The
business accounted for 18.0% of
Group revenue, against 16.0% in
the previous financial year.
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 recommendation
enabled us to secure additional
orders. In the financial year 2009,
professional audio remained the
largest product category of the CMS
business, accounting for 29.4% of
total CMS revenue. This category was
followed by switching mode power
supplies at 25.4%, home appliances
at 17.8% and communications
products at 9.8%.
Geographically, Europe remained the
largest market for the CMS business,
despite North America having shown
a greater growth momentum. Sales
to Europe in the financial year 2009
rose by 4.0% to US$118.2 million,
while sales to North America increased
by 14.1% to US$114.4 million. Sales to
Asia Pacific, however, fell by 18.6%
to US$28.0 million.
VTech continued to outperform the
global EMS market in the financial
year 2009. As with other EMS
providers generally, we experienced
a reduction in business from many
existing customers in the second half
of the financial year as they scaled
back orders across the board in the
face of economic turmoil. However,
the economic slump also brought
more business from our existing
customer base, as certain companies
ceased to manufacture their own
products, instead transferring their
production to VTech in search of
cost savings.
VTech also benefited from industry
consolidation within the EMS market.
Tight credit conditions have forced
some smaller players to exit the
market. VTech, with its strong
balance sheet, economies of scale
and tradition of socially responsible
manufacturing has been able to gain
market share overall as the industry
consolidates.
An important factor in our ability to
attract business is the high quality
of service we offer, which again
resulted in a number of industry and
supplier awards. These include the
The state-of-the-art
audio laboratory
at our R&D centre
enables our customers
to design, test and
fine-tune products
on site.
Hong Kong Awards for Industries
2008 – Productivity and Quality
Award presented by the Hong Kong
Productivity Council. This recognises
the achievement of the CMS business
in continuously improving productivity
and quality. The business was also
greatly encouraged by the findings
of the latest annual customer survey,
conducted in December 2008, which
showed high levels of satisfaction,
especially in the areas of flexibility
and quality.