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3 The Global Telecommunications Market Report 2011 Edition published by MZA Ltd
The economic situation in Europe
deteriorated noticeably in the
second half of the financial year
2012, affecting orders for TEL products.
Despite this, Group revenue in the region
rose by 7.7% to US$719.3 million during the
financial year, as ELPs and CMS achieved
growth. Europe accounted for 40.3% of
Group revenue.
Revenue from TEL products declined
1.0% to US$215.4 million in the financial
year 2012, due to weak second half
sales as customers delayed orders. We
sell to customers in Europe on an ODM
basis, including via an exclusive supplier
agreement with Deutsche Telekom. As we
continued to expand our relationships with
telephone operators, major brand names
and distributors in the region, we achieved
further gains in market share. During the
financial year 2012, VTech became the
number one manufacturer of cordless
phones in Western Europe, with a 29%
market share3. We also began supplying
hotel phones in some European markets.
Revenue from ELPs in Europe was US$310.3
million in the financial year 2012, a 13.2%
increase. As in the US, sales from online
retailers in the UK showed strong growth.
Our ELPs continued to win top industry
awards across Europe, including the
prestigious Grand Prix du Jouet in five
categories in France, a first for a company
in a single year.
Both platform and standalone products
delivered solid results. For platform
products, the full launch of Storio and
MobiGo across our main European markets
in the middle of the calendar year 2011 was
a major factor. Sales were especially strong
in France, Germany and the Netherlands. In
the UK, platform sales were boosted by the
launch of InnoTab in October 2011.
Sales of standalone products were also
higher due to growth in infant products
and the Kidi-series. Toot-Toot Drivers, a line
of infant smart vehicles and accessories
launched during the financial year in
several of our main European markets,
performed especially well. Carried over
inventory, however, led to a decline in sales
of the Kidizoom range.
CMS revenue in Europe increased by
9.9% to US$193.6 million. The wireless
headset category was the best performer,
as we benefited from the process of
supplier consolidation. Professional
audio equipment also recorded higher
sales, as we saw more orders from both
existing and new customers. The demand
for switching mode power supplies for
telecommunication equipment remained
stable, while the demand for solar power
inverters was affected by oversupply and
strong price competition.
Europe
Storio
Our Storio garnered a number of top
industry awards across Europe, including
the “Grand Prix du Jouet 2011” in the
educational toy category from the
French toy industry magazine La Revue
du Jouet, “Top 10 Toys 2011” from the
German Toy Retailers Association, “Toy of
the Year 2011” in the 4-6 years category
from the Netherlands’ Toy Association
and “Toy of the Year Award 2011” in
the educational and scientific games
category by the Belgian Toy Federation.
Revenue in Europe in Last 5 Years
800
640
480
320
160
0
US$ million
08 09 10 11 12
590.0 570.5
528.9
667.6
719.3
18 VTech Holdings Ltd Annual Report 2012
Review of Operations