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6VTech Holdings Ltd Annual Report 2012
Management Discussion and Analysis
Gross Profit/Margin
The gross profit for the financial year 2012
was US$570.8 million, an increase of
US$3.9 million or 0.7% compared to the
US$566.9 million recorded in the previous
financial year. However, gross profit margin
for the year fell from 33.1% to 32.0%.
This was mainly attributable to higher cost
of materials, further increases in labour
costs and the continuing appreciation of
the Renminbi.
Operating Profit/Margin
The operating profit for the year ended
31 March 2012 was US$209.5 million, a
decrease of US$9.2 million or 4.2% over
the previous financial year. This was mainly
due to the drop in gross profit margin
and higher selling and distribution costs.
Correspondingly, operating profit margin
dropped from 12.8% to 11.7%. The ratio
of EBITDA to revenue in the financial year
2012 also decreased from 14.7% to 13.3%.
Selling and distribution costs rose by 5.5%
from US$241.6 million in the previous
financial year to US$255.0 million in the
20
16
12
8
4
0
Operating Profit and Operating
Profit Margin in Last 5 Years
Earnings per Share in Last 5 Years Dividend per Share in Last 5 Years
250
200
150
100
50
0
100
80
60
40
20
0
100
80
60
40
20
0
Operating profit (US$ million)
Operating profit margin (%)
%US$ million US cents US cents
08 08 0809 09 0910 10 1011 11 1112 12 12
financial year 2012. The increase was mainly
attributable to the increased spending on
advertising and promotional activities by
the Group during the financial year. As a
percentage of Group revenue, selling and
distribution costs increased slightly from
14.1% to 14.3%.
Administrative and other operating
expenses decreased slightly from US$49.8
million in the previous financial year to
US$49.1 million in the financial year 2012.
This includes a net exchange gain of
US$1.6 million arising from the Group’s
global operations in the ordinary course of
business, compared with a net exchange
gain of US$1.8 million in the last financial
year. Administrative and other operating
expenses as a percentage of Group
revenue decreased from 2.9% to 2.8%.
During the financial year 2012, the
research and development expense was
US$57.2 million, an increase of 0.7% over
the previous financial year. Research and
development expense as a percentage
of Group revenue decreased from 3.3%
to 3.2%.
Profit Attributable to
Shareholders and Dividends
The profit attributable to shareholders of
the Company for the year ended 31 March
2012 was US$191.9 million, a decrease of
US$10.1 million as compared to the last
financial year.
228.9
14.7 154.3
10.7
224.1
14.6
218.7
12.8
209.5
11.7
89.4
58.5
83.7 81.5
77.0
63.0
53.0
78.0 78.0 76.0
Group R&D Expenditure
in Last 5 Years
70
60
50
40
30
20
10
0
US$ million
08 09 10 11 12
51.3
56.9 56.8 56.8 57.2