Vtech 2013 Annual Report Download - page 6

4VTech Holdings Ltd Annual Report 2013
Letter to Shareholders
we became the largest infant toy manufacturer in our main
European markets 5. The new products we plan to launch in
the financial year 2014 will allow us to strengthen our market
leadership in the core learning area and beyond.
CMSwillcontinuetoincreaseitsmarketshareglobally.Our
quality products, service excellence and strong reputation
are enabling us to increase sales to existing customers and
add new customers. According to Manufacturing Market
Insider, VTech CMS ranked 27th among the world’s top 50 EMS
providers in the calendar year 2012, up from 29th in calendar
year 2010 and 37th in calendar year 2009.
Geographic Expansion
OurstrategyofgrowingoutsideourcoreNorthAmerican
and European markets, where we already enjoy leadership
positions, is making inroads gradually. It offers tremendous
growthpotential,asAsiaPacificandOtherRegionsaccounted
for less than 10% of total Group revenue in the financial year
2013. In Asia Pacific, China will continue to be our focus. We are
also increasing our presence in Australia, our largest market in
theregion,andJapan.OureffortsinOtherRegionswillcentre
on key markets in Latin America and the Middle East.
Operational Excellence
The ability to offer innovative, feature-rich products at
affordable prices underpins VTech’s success. Rising labour
costs, together with higher manufacturing overheads, will pose
continual challenges to the Group in the financial year 2014.
VTech will continue to mitigate cost pressure through further
automation, product optimisation and process improvement.
As always, we will manage our operating cost diligently and
maintain a lean company structure.
Outlook
The macro-economic environment will remain challenging in
the financial year 2014. The US economic recovery is expected
to continue, but it is likely to remain slow. In Europe, the picture
is mixed and uncertain.
Despite these challenges, we are optimistic of achieving
revenue growth across all product lines in the financial year
2014. Material costs are forecast to be steady, while labour costs
and manufacturing overheads are expected to increase further.
With efficiency gains through higher automation, product
optimisation and process improvement, gross profit margin is
expected to remain stable.
The growth in TEL products is expected to be driven by market
consolidation in the US, and higher sales in Asia Pacific and
OtherRegions.TheprospectforEurope,however,remains
uncertain. Revenue growth in ELPs will be supported by a
strong base of continued products, as well as new platform
and standalone products to be launched worldwide. A special
focus for this financial year is to drive a strong increase in sales
of our software cartridges and download apps. The increase in
CMS revenue will be driven by new customers, while business
with existing customers will remain stable. CMS will continue to
expand in Japan and Germany, while adding the new business
area of testing and measurement equipment.
In closing, I wish to extend my appreciation to all our
employees worldwide for their loyalty and hard work during
the year, to our fellow directors for their sound contribution,
and to our shareholders, customers and suppliers for their
continued support.
VTech has an enviable track record in product development, a
strong balance sheet, market leadership position and efficient
operations. The solid, executable plans we have in place should
enable us to seize growth opportunities and generate higher
returns for shareholders.
Allan Wong Chi Yun
Chairman
Hong Kong, 15 May 2013
VTech has an enviable track record
in product development, a strong
balance sheet, market leadership
position and efficient operations. The
solid, executable plans we have in
place should enable us to seize growth
opportunities and generate higher
returns for shareholders.
5 Source: NPD Group, Retail Tracking Service. Ranking based on total retail sales in the Infant Toys category for the combined market of UK, France, Germany and Spain
vtech.indb 4 13年5月29日 上午3:17