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VTech Holdings Ltd Annual Report 2011 3
Basic earnings per share consequently decreased by
2.6% to US81.5 cents, compared to US83.7 cents in the
financial year 2010. The Board of Directors (the Board) has
proposed a final dividend of US62.0 cents per ordinary
share. Together with the interim dividend of US16.0 cents
per ordinary share, this gives a total dividend for the
year of US78.0 cents per ordinary share, the same as the
previous financial year.
Segment Results
In North America, which remains our largest market,
higher sales of ELPs and CMS offset lower revenue from
TEL products. For ELPs, sales of our platform products
recorded strong growth during the financial year, driven
by the successful launch of MobiGo® and V.Reader®.
Standalone products also delivered good sales increases,
as our infant and pre-school products sold well. CMS
posted the strongest growth in North America, as
the economy recovered and we gained additional
business from existing customers due to our customer
focused approach.
All three product lines recorded revenue growth in
Europe, despite the economic uncertainties in some
countries. Sales of TEL products were boosted by
increasing sales to existing customers. Standalone
products, particularly the infant category and the Kidi
line, led the growth in ELPs. CMS grew across all key
product categories, as we secured more business from
existing customers.
The Group continued to expand in Asia Pacific and other
regions, mainly through increasing sales in Australia,
Japan, Latin America and the Middle East. Our TEL
products have made good inroads into the Asia Pacific
market, where we increased our market share in Australia
and ramped up orders for a Japanese customer. ELP sales
grew modestly in this region during the financial year,
led by Latin America and the Middle East. Our CMS sales
also rose in Asia Pacific, driven by an increase in sales of
medical equipment.
Outlook
The global economy is continuing its recovery, but
the situation is fragile. Unemployment is high in most
developed countries and the oil price remains elevated,
which threatens to undermine consumer sentiment.
We are nonetheless planning for top line growth in
the financial year 2012. Our product innovations,
market leadership and growing reputation in the EMS
industry position us well to achieve sales growth across
our markets.
Profitability, however, is difficult to gauge as we expect to
face stronger headwind from rising costs. Cost of materials
may rise further as commodity prices remain high and
volatile. The disruption of the Japanese supply chain
may also lead to a tightening of the supply of certain
components, which may result in price escalation. Wages
in China are forecast to rise further, while the appreciation
of the Renminbi is likely to continue.
We will continue to exercise tight cost control and
improve our productivity, striving to minimise margin
impacts. Programmes are in place to speed up the
automation of our processes and re-engineer our
products for lower cost. In addition, we have taken
appropriate actions to pass on certain cost increases to
our customers. With our product innovations, efficient
operations and economies of scale, we will remain
competitive in our markets.
North America
Even though the US cordless phone market is maturing,
our goal is to deliver overall growth for TEL products in
North America in the financial year 2012.
To achieve this, we will introduce feature-rich products at
competitive prices to maintain our market lead in the US
corded and cordless consumer phone market. Our new
products include enhanced features, such as push-to-talk
“walkie-talkie” capability for immediate communication
throughout the house and HD audio for the clearest
call experience. We have also revamped our successful
Bluetooth® line of products that allow consumers to
connect their cellular phones to our cordless phones.
Tech’s Hot Growth Companies 2010
VTech was ranked 8th on Bloomberg
Businessweek’s 2010 list of “Tech’s Hot
Growth Companies”. Most importantly, the
Group is the only Hong Kong company to
make the list.