Vtech 2012 Annual Report Download - page 5

3
VTech Holdings Ltd Annual Report 2012
apps to better manage the transfer of phonebooks to our cordless
system. They have been well-received by our customers.
In Europe, the prospect for TEL products is positive as customers
will restock in the first half. Gains in market share are also expected
as we plan to market our products in Germany more aggressively,
in conjunction with our exclusive partner Deutsche Telekom.
In Asia Pacific and other regions, we expect to return to a growth
path in TEL products, as we make more inroads in Australia, and
build on the encouraging progress we have made in Latin America.
Although the retail environment in Europe remains challenging,
healthy growth for our ELPs is expected for the financial year 2013.
In North America, platform products will lead the way. InnoTab
has strong momentum and it is going to be refreshed with new
versions, offering new and innovative features. We will also expand
the range of content in both cartridge and downloadable formats.
In addition, a new generation of MobiGo with new functionalities
will lend further impetus to platform products. We will start
to roll out a new line of standalone products, Switch & Go Dinos™,
in North America in May 2012, branching out beyond the
learning aisle and adding a new avenue of growth for our
standalone products.
In Europe, we expect a continuation of the good performances
from Storio and MobiGo. This will be augmented by the
introduction of Storio 2, a multi-function educational tablet for
children. As in the US, InnoTab in UK will also be updated with a
new version. For standalone products, the Toot-Toot Drivers range
should again perform well and there will be a full year contribution
from Switch & Go Dinos, which has been on retail shelves in
Europe since February 2012. The momentum we have seen for
our standalone products in Asia Pacific and the rest of the world is
expected to continue.
Globally, we expect further expansion of ELP sales via online
retailers, as we increase our focus on these channels.
The global EMS market is forecast to grow modestly in 2012
and our CMS will continue to outperform the industry. The new
factory building we opened at our existing site in November 2011
has increased capacity by 40%. The enhanced manufacturing
facility is enabling us to support customers who target domestic
sales in China. The new set-up will also allow us to manufacture
sophisticated products with stringent safety and quality
requirements, including those requiring FDA (the US Food and
Drug Administration) approval. This will further expand our
portfolio of products in the medical and health care areas.
We expect to continue to add customers in the professional
audio segment as our reputation grows. We will also benefit from
further consolidation of the supplier base by our wireless headset
customer. Business in switching mode power supplies should
stabilise, though the market for solar power inverters may remain
under pressure.
Marine radios, a new product category we added in the financial
year 2012, will see rapid growth over the next two years as our
customer transfers more production to us. Growth in commercial
solid-state lighting will offset an anticipated further decline in
consumer LED light bulbs.
Conclusion
I wish to thank all my staff and senior management for their
dedication and effort, which is crucial to our success. My thanks are
also extended to our fellow directors, shareholders, customers and
suppliers for their continued support.
We have proven strengths in product development, a strong
balance sheet, market leadership position and efficient operations.
This should enable us to achieve further growth in revenue and
hence deliver sustainable returns to shareholders.
Allan WONG Chi Yun
Chairman
Hong Kong, 23 May 2012