VTech Broadcasts 2024/2025 Intervening time Effects

Upper rude benefit regardless of decrease earnings

HONG KONG, Nov. 12, 2024 /PRNewswire/ —

Staff earnings reduced 4.5% to US$1,089.7 million
Improper benefit margin advanced from 28.5% to 31.5%
Benefit resulting from shareholders of the Corporate declined 6.6% to US$87.4 million
Intervening time dividend of US17.0 cents consistent with regular proportion, unchanged
Gigaset integration not off course for complete crowning glory by means of finish of calendar 12 months 2024
Monetary place extra sturdy

VTech Holdings Restricted (HKSE: 303) as of late introduced its effects for the six months ended 30 September 2024.

“VTech reported lower revenue and profit in the first half of the financial year 2025. A decline in sales of contract manufacturing services offset growth in electronic learning products and telecommunication products. Profit attributable to shareholders of the Company decreased owing to lower Group revenue and higher operating expenses arising from the integration of the assets of GST Communications GmbH (formerly known as Gigaset Communications GmbH), despite an improvement in gross profit,” mentioned Mr. Allan Wong, Chairman and Staff CEO of VTech Holdings Restricted.

Effects and Dividend

Staff earnings for the six months ended 30 September 2024 reduced by means of 4.5% to US$1,089.7 million, from US$1,140.9 million within the corresponding duration endmost 12 months. Decrease gross sales in North The us, Europe and Asia Pacific offset upper gross sales in Alternative Areas.

Benefit resulting from shareholders of the Corporate declined by means of 6.6% to US$87.4 million. The scale down in benefit was once principally resulting from decrease earnings and better working bills coming up from the mixing of the property of GST Communications GmbH, which offset an growth in rude benefit.

Ordinary profits consistent with proportion reduced by means of 6.5% to US34.6 cents, in comparison to US37.0 cents in the similar duration of the former monetary 12 months.

The Board of Administrators has declared an meantime dividend of US17.0 cents consistent with regular proportion, unchanged from the meantime dividend declared within the first part of the monetary 12 months 2024.

Prices

The Staff’s rude benefit margin within the first six months of the monetary 12 months 2025 was once 31.5%, as when compared with 28.5% in the similar duration of the former monetary 12 months. This was once principally because of the cheaper price of fabrics coming up from the subside in subject matter costs and a transformation in product combine, in addition to the rude benefit contributed by means of Gigaset Applied sciences GmbH (“Gigaset”) following the purchase of the property of GST Communications GmbH on 5 April 2024. Those offset upper direct labour prices, production overheads and freight fees as percentages of Staff earnings.

The will increase in direct labour prices and production overheads as percentages of Staff earnings when compared with the similar duration endmost 12 months have been principally because of an building up in manufacturing quantity, with an related building up within the manufacturing unit personnel, in addition to the inclusion of employees on the Gigaset manufacturing unit in Germany following the purchase. Those offset the sure affect of the depreciation of the Renminbi in opposition to the USA greenback and an growth in productiveness. The rise in freight fees, in the meantime, was once principally because of upper container freight charges when compared with the similar duration endmost 12 months.

Integration of Property of GST Communications GmbH (previously referred to as Gigaset Communications GmbH)

On 5 April 2024, VTech finished the purchase of the property of GST Communications GmbH, a world chief in communications era founded in Bocholt, Germany. Its operations in DECT (Virtual Enhanced Cordless Telecommunications) cordless telephones, industry telephony answers for endeavor consumers and Android-based smartphones at the moment are controlled and operated by means of the untouched VTech entity Gigaset Applied sciences GmbH.

The Staff took rapid and environment friendly motion to combine the property into its international operations all the way through the six months following the purchase. The availability chain was once restored and adjustments to procurement have been instituted to decrease prices. By means of September, manufacturing and product provide had returned to customary.

VTech has additionally been re-establishing the gross sales pressure in all main Ecu international locations. Communications and interactions were enhanced to hurry up decision-making within the inauguration of untouched merchandise.

To release synergies within the building of untouched merchandise and their assemble, VTech’s engineering groups at the moment are running carefully with the product building groups in Germany to toughen the product roadmap, leave product prices and boost up untouched product creation.

Department Effects

North The us

Staff earnings in North The us reduced by means of 7.4% to US$453.1 million within the first six months of the monetary 12 months 2025. Upper gross sales of digital finding out merchandise (ELPs) have been offset by means of decrease gross sales of telecommunication (TEL) merchandise and pledge production services and products (CMS). North The us was VTech’s 2nd biggest marketplace, accounting for 41.6% of Staff earnings.

ELPs earnings in North The us higher by means of 7.4% to US$223.8 million. The expansion was once pushed by means of upper gross sales in each the USA and Canada. In the USA, the toy marketplace started to stabilise, nearest contracting within the calendar 12 months 2023. The untouched management staff additional capitalised at the upturn with a a hit revitalised gross sales and business plan. Standalone merchandise have been the primary enlargement driving force, with each the VTech and LeapFrog manufacturers recording upper gross sales. In consequence, VTech retained its management in digital finding out toys from infancy by way of infant to preschool in the USA and Canada within the first 9 months of the calendar 12 months 2024^{^[1]}.

In standalone merchandise, VTech noticed upper gross sales of toddler, infant and preschool merchandise, the Kidi fold and digital finding out aids. Those offset declines for the Journey! Journey! Sly public of goods, Transfer & Journey^® Dinos, Marble Scurry^® and eco-friendly toys. In the meantime, gross sales of KidiZoom^® cameras held secure. LeapFrog controlled to reach enlargement in toddler, infant and preschool merchandise, in addition to eco-friendly toys. The Charm Adventures^™ form additionally completed upper gross sales, because the a hit roll-out of Charm Adventures Binoculars contributed alternative earnings. Then again, those have been in part offset by means of decrease gross sales of LeapLand Adventures^™.

Platform merchandise noticed gross sales building up, principally pushed by means of LeapFrog merchandise. LeapFrog noticed upper gross sales of instructional capsules, interactive studying techniques and Charm Adventures Globe. Then again, subscriptions to LeapFrog Academy^™ reported a subside. For VTech, gross sales of platform merchandise held secure all the way through the duration. Gross sales of Contact & Be told Process Table^™ noticed an building up, offsetting declines in KidiZoom Smartwatches and KidiBuzz^™.

In September, LeapFrog introduced its “Everything Starts with Reading” marketing campaign, designed to encourage youngsters to reach luck in studying. Showcasing a territory of the emblem’s best-selling instructional equipment, all adapted to other building levels, the marketing campaign options partnerships with a numerous workforce of influential voices, who discuss how studying helped their lives.

The Staff’s ELPs gained diverse awards in North The us all the way through the primary six months of the monetary 12 months 2025 for his or her component and inventiveness. In the USA, VTech Kind & Uncover Process Wagon^™ was once named in Walmart’s “2024 Top Toys List”. KidiZoom Smartwatch DX4 was once incorporated in Goal’s “2024 Bullseye’s Top Toys”, in addition to in Amazon’s “2024 Toys We Love” listing along two extra untouched merchandise, 5-in-1 Form-a-Bot^™ and Kidi Big name^™ Drum Residence. 3 VTech and two LeapFrog merchandise received “The National Parenting Center Seal of Approval” for Spring 2024, time seven VTech and 3 LeapFrog merchandise made the “2024 National Parenting Product Awards”. In Canada, KidiZoom Smartwatch DX4 and Kind & Uncover Process Wagon have been winners of the “Parent Tested Parent Approved Seal of Approval”, along with LeapStart^® Studying Luck Gather^™.

TEL merchandise earnings in North The us fell by means of 11.3% to US$92.2 million within the first part of the monetary 12 months 2025, with declines in each the USA and Canada. This incorporated a miniature gross sales contribution from Gigaset within the patch.

In residential telephones, regardless of outperforming the marketplace in North The us and gaining additional marketplace proportion, gross sales have been decrease because the marketplace endured to say no. All through the primary six months of the monetary 12 months 2025, VTech maintained its management place in the USA residential telephones marketplace.

Business telephones gross sales reduced regardless of enlargement in lodge telephones and headsets. There have been just right gross sales of the actual form of lodge telephones, time the untouched thermostats for the lodge channel made additional go in expanding marketplace penetration. Gross sales of headsets grew as a buyer higher orders. Those have been, on the other hand, inadequate to offset decrease gross sales of SIP (Consultation Foundation Protocol) telephones, as a buyer decreased orders. Gross sales of multi-line analogue telephones additionally posted a subside.

Gross sales of alternative telecommunication merchandise additionally declined. Child screens noticed gross sales scale down owing to prepared pageant. A discount in orders resulted in decrease gross sales of CareLine^® residential telephones time gross sales of IADs (built-in get entry to units) remained strong. Within the first part of the monetary 12 months 2025, the Staff retained its place as the #1 child observe emblem in the USA and Canada^{^[2]}. In Canada, the VTech BC8213 V-Silence^™ Young Pleasure Coaching Soother Speaker and RM5754HD Child Track each and every earned a “Parent Tested Parent Approved Seal of Approval”.

CMS earnings in North The us reduced by means of 22.6% to US$137.1 million within the first six months of the monetary 12 months 2025. Within the first part of the former monetary 12 months, advanced fabrics provide cleared orders backlogs, boosting enlargement in skilled audio apparatus. In contrast, within the first six months of the monetary 12 months 2025, end-market call for was once subdued and plenty of consumers as a result confronted over-inventory problems. This ended in fewer orders in lots of key product divisions all the way through the duration. In skilled audio apparatus, gross sales of energy amplifiers and audio mixers have been ailing as end-user call for dropped, time the ones {of professional} loudspeakers have been suffering from a buyer dealing with plenty stock. Gross sales of business merchandise reduced, pushed by means of decrease orders for coin and be aware reputation machines. Cast-state lighting fixtures posted decrease gross sales as tasks have been scale down again because of the unsure financial situations. Web-of-Issues (IoT) merchandise noticed gross sales subside as a buyer skilled a monetary factor. Globally, VTech has maintained its place as the sector’s primary pledge producer {of professional} audio apparatus^[3].

Europe

Staff earnings in Europe reduced by means of 1.4% to US$462.1 million within the first six months of the monetary 12 months 2025, as upper gross sales of TEL merchandise have been offset by means of decrease gross sales of ELPs and CMS. Europe was VTech’s biggest marketplace, accounting for 42.4% of Staff earnings.

ELPs earnings in Europe reduced by means of 6.3% to US$137.0 million, with declines for each standalone and platform merchandise. The toy markets within the main Ecu international locations endured to revel in declines as a result of susceptible monetary expansion. Prime rates of interest and the amassed affect of inflation have decreased expendable earning, in flip inflicting shops to workout warning when hanging orders. Moreover, the sturdy US greenback has endured to drive shops. Gross sales reduced in France, Germany and the Benelux international locations, offsetting enlargement in the United Kingdom and Spain. Within the first 9 months of the calendar 12 months 2024, VTech remained the #1 toddler and infant toys producer in France, the United Kingdom, Germany, Spain and the Benelux international locations^[4].

For standalone merchandise, enlargement within the LeapFrog emblem was once offset by means of a gross sales subside of VTech merchandise. At LeapFrog, toddler and infant merchandise noticed upper gross sales, offsetting decreases in preschool merchandise and LeapLand Adventures. The a hit inauguration of Charm Adventures Binoculars in key Ecu markets added incremental earnings within the Charm Adventures form. Gross sales of eco-friendly toys, in the meantime, remained strong. At VTech, toddler, infant and preschool merchandise recorded upper gross sales. Those positive aspects, on the other hand, have been inadequate to offset decrease gross sales of the Journey! Journey! Sly public of goods, KidiZoom digital camera, the Kidi fold, digital finding out aids, Transfer & Journey Dinos, Marble Scurry and eco-friendly toys.

Platform merchandise noticed decrease gross sales of each VTech and LeapFrog merchandise. At VTech, gross sales of youngsters’s instructional capsules, KidiZoom Smartwatches, the KidiCom^® territory of goods and Contact & Be told Process Table all declined. At LeapFrog, each Charm Adventures Globe and interactive studying techniques recorded gross sales decreases.

All through the primary six months of the monetary 12 months 2025, VTech V-Bot Explorer, Mon robotic 5 en 1 (5-in-1 Form-a-Bot) was once named “Best Robot” and VTech Sharp XL – Jumelles vidéo interactives (Charm Adventures Binoculars) was once named “Best Discovery Toy” within the “Grand Prix du Jouet 2024” awards from France’s Los angeles Revue du Jouet book. In Spain, Charm Adventures Binoculars was once awarded “Best Toy of the Year 2024” within the section of “Electronic Toys” and “Best Toy Chosen by the Jury” by means of the Spanish Affiliation of Toy Producers. As well as, VTech Marble Scurry Storagefacility Field (Tremendous Journey Storagefacility Poised^™) was once named “Best Toy of the Year 2024” within the “Construction” section.

Income from TEL merchandise in Europe higher by means of 93.4% to US$84.5 million within the first six months of the monetary 12 months 2025. Gross sales of residential telephones and business telephones rose as Gigaset gross sales have been consolidated into VTech.

Regardless of marketplace subside and decrease shipments to ODM (actual design production) consumers, gross sales of residential telephones in Europe rose on account of the consolidation of Gigaset earnings.

Gross sales of business telephones additionally higher as Gigaset gross sales offset declines in Snom branded SIP telephones and lodge telephones. Vulnerable financial situations in Europe and the ensuing aid in company spending affected call for for SIP telephones, time lodge telephones have been suffering from monetary constraints at a distributor. Snom and its merchandise picked up 3 awards in Europe within the first part of the monetary 12 months 2025. In Germany, Snom Generation GmbH was once named one of the vital “Most Trustworthy Companies 2024” by means of the F.A.Z. Institut, time the Snom SP800 IP (Web Protocol) desktop telephony gadget made 2nd park within the “Products of the Year 2024” awards given by means of era writer tie skilled. In the United Kingdom, the M500 DECT form received “Best Comms Device” within the “2024 Comms Council UK Awards”.

Gross sales of alternative telecommunication merchandise reduced, in large part resulting from decrease gross sales of CAT-iq handsets and CareLine residential telephones, as ODM consumers decreased orders as a result of over-inventory. This offset upper gross sales of child screens as VTech endured to assemble go in main Ecu international locations. In the United Kingdom, the Staff maintained its place as the #1 child observe emblem^[5]. One VTech and two LeapFrog child screens and the BC8213 V-Silence Young Pleasure Coaching Soother Speaker scooped “Dadsnet Awards 2024” all the way through the duration, with the RM7768HD Child Track being named the “Gold Winner (Best Technology Product)”. The last product was once additionally a “Silver Winner (Best Baby Monitor)” within the “Project Baby Awards 2024”, along the BC8213 V-Silence Young Pleasure Coaching Soother Speaker, which was once a “Silver Winner (Best Sleep Accessory)”.

CMS earnings in Europe reduced by means of 13.7% to US$240.6 million, once more as a result of susceptible end-market call for and plenty stock amongst consumers. Gross sales {of professional} audio apparatus, hearables and canny power storehouse techniques have been all decrease. The subside in those divisions offset emerging gross sales of clinical and condition merchandise, IoT merchandise and car merchandise. In skilled audio apparatus, house audio interface merchandise noticed decrease gross sales owing to a behind schedule product inauguration and over-inventory at a buyer. Hearables posted a subside as one buyer’s product reached the top of its lifecycle and any other confronted plenty stock. Sly power storehouse techniques additionally reported decrease gross sales. The buyer confronted prepared pageant and was once negatively impacted by means of the cancellation of set up subsidies by means of the Swedish govt. Scientific and condition merchandise grew as listening to aids and hair removing merchandise reported upper gross sales. In IoT merchandise, orders for web attached thermostats and air-conditioning controls higher as the buyer effectively grew gross sales by means of promoting without delay to companies. Enlargement in car merchandise was once pushed by means of higher gross sales of auto battery chargers as VTech received marketplace proportion. Gross sales of house home equipment and communique merchandise, in the meantime, held secure.

Asia Pacific

Staff earnings in Asia Pacific reduced by means of 7.1% to US$159.4 million within the first six months of the monetary 12 months 2025. Enlargement in ELPs was once inadequate to catch up on declines in TEL merchandise and CMS. The patch represented 14.6% of Staff earnings.

Income from ELPs in Asia Pacific higher by means of 1.1% to US$35.4 million, principally because of upper gross sales in Australia and mainland China. In Australia, enlargement principally got here from the VTech emblem. Gross sales recovered because the native toy marketplace stabilised, regardless of endured difficult financial situations owing to top rates of interest. Launches of untouched merchandise have been properly supported by means of efficient advertising actions, make happen just right sell-through at main shops. Gross sales of LeapFrog merchandise within the nation have been in large part strong. All through the primary 9 months of the calendar 12 months 2024, VTech maintained its place as the #1 producer of digital finding out toys from infancy by way of infant and preschool within the nation^[6]. In mainland China, each on-line and offline channels posted gross sales will increase. VTech higher in-store advertising and vending, make happen upper gross sales of the core finding out merchandise, the Journey! Journey! Sly public of goods and Marble Scurry. All through the duration, VTech’s Turbo Edge Riders^™ received a “Sustainability Award”, time Marble Scurry Sky Elevator Poised^™ was once given an “Innovative Design Award” in mainland China’s “2024 CBME (Children Baby Maternity Expo) Awards”.

TEL merchandise earnings in Asia Pacific reduced by means of 16.4% to US$9.7 million. This was once resulting from decrease gross sales of residential telephones and alternative telecommunication merchandise in Australia and Japan. This offset enlargement in business telephones because the Staff higher its gross sales of SIP telephones.

CMS earnings in Asia Pacific fell by means of 8.5% to US$114.3 million. This was once because of decrease gross sales {of professional} audio apparatus, clinical and condition merchandise, and communique merchandise. Skilled audio apparatus posted decrease gross sales as orders for DJ apparatus declined. Scientific and condition merchandise additionally noticed gross sales scale down. Orders for diagnostic ultrasound techniques fell as the buyer misplaced marketplace proportion in mainland China. In communique merchandise, orders for marine radios fell because the depreciation of the Jap yen noticed a buyer advance manufacturing again in-house to Japan.

Alternative Areas

Staff earnings in Alternative Areas, comprising Latin The us, the Heart East and Africa, rose by means of 33.6% to US$15.1 million within the first six months of the monetary 12 months 2025. Each ELPs and TEL merchandise reported enlargement. Alternative Areas accounted for 1.4% of Staff earnings.

ELPs earnings in Alternative Areas higher by means of 15.2% to US$7.6 million, as upper gross sales in Latin The us and the Heart East offset decrease gross sales in Africa.

TEL merchandise earnings in Alternative Areas grew by means of 59.6% to US$7.5 million. The rise was once resulting from gross sales enlargement in Latin The us and the Heart East, offsetting a subside in Africa. This incorporated a gross sales contribution from Gigaset.

CMS earnings in Alternative Areas was once immaterial within the first six months of the monetary 12 months 2025.

Outlook

Regardless of a fall in inflation, international rates of interest stay top and geopolitical tensions are expanding. That is weighing on self belief in all markets, and each companies and customers proceed to rein in spending. Regardless of the difficult financial circumstance, Staff earnings for the total monetary 12 months 2025 is forecast to extend, pushed by means of upper ELPs gross sales in the USA and higher earnings from TEL merchandise following the mixing of Gigaset. Profitability, in the meantime, is not off course to turn growth for the total monetary 12 months, as price of fabrics continues to development ailing and the Staff advantages from a transformation in product combine, with higher gross sales from its branded companies.

For ELPs, earnings is forecast to extend for the total monetary 12 months 2025. The expansion is predicted to come back principally from the USA, the place the untouched management staff is deploying a revitalised gross sales and business plan this is reaching just right effects. Standalone merchandise will proceed to top the gross sales building up, with approved preschool merchandise acting in particular properly. In Europe, gross sales within the main markets are projected to pick out up in the second one part, as untouched merchandise collision the cabinets and extra advertising actions roll out. In Asia Pacific, enlargement in Australia and mainland China is predicted to proceed.

TEL merchandise earnings is predicted to look enlargement year-on-year, pushed by means of upper gross sales of residential telephones and business telephones. Gross sales are anticipated to enhance in the second one part, because the manufacturing and provide of Gigaset’s merchandise have now returned to customary. VTech is not off course to finish the mixing procedure by means of the top of the calendar 12 months 2024. The Staff is specializing in rising Gigaset’s business telephones and home telephones. The second one part of the monetary 12 months 2025 will see the inauguration of Gigaset’s first desktop telephones to enrich its well-recognised multi-cell techniques. It’ll thus be in a position to bring seamless, complete answers to skilled customers in place of business, carrier and business environments. As well as, VTech goals to extend its proportion of the residential telephones marketplace in Europe by means of broadening Gigaset’s product territory throughout other value issues. For alternative telecommunication merchandise, gross sales of child screens are expected to scale down for the total monetary 12 months 2025.

CMS earnings is now anticipated to scale down for the total monetary 12 months 2025 because of geopolitical hesitancy and the most often susceptible international financial system. Gross sales in the second one part, on the other hand, are forecast to stabilise. VTech CMS is definitely situated for the rising call for of businesses searching for to diversify their supply of provide clear of mainland China, because the Staff strengthens its international production footprint. In Malaysia, the Staff is construction a untouched storagefacility to isolated up production territory and can building up manufacturing capability by means of 30% by means of the primary quarter of the calendar 12 months 2025. As well as, the amenities in Mexico at the moment are totally operational and in a position to fulfil the on-shoring necessities of US consumers.

“VTech has taken steps to maintain competitiveness in the face of the rapidly changing political and economic environment by increasing its global footprint. Our solid balance sheet, reputable brands, strong product innovation and operational excellence underpin our consistent performance. We look forward to the opportunities that lie ahead,” mentioned Mr. Wong.

Notes:

[1] Circana, Retail Monitoring Provider. Rating according to general retail gross sales of VTech and LeapFrog merchandise within the mixed toy divisions of Early Digital Studying, Infant Figures/Playsets & Equipment, Preschool Digital Studying, Digital Leisure (except Capsules) and Walkers for the calendar 12 months ended September 2024

[2] Circana, LLC, Retail Monitoring Provider, US & CA, Tech, Child Displays, Greenback and Unit Gross sales, April 2024 – September 2024 Blended vs. April 2023 – September 2023 Blended

[3] Track Trades Brochure, September 2024 Version, In keeping with estimated earnings for the calendar 12 months 2023

[4] Circana, Retail Monitoring Provider, January – September 2024

[5] GfK Retail and Generation UK Restricted. In keeping with duration October 2023 – September 2024

[6] Circana, Retail Monitoring Provider. Rating according to general retail gross sales of VTech and LeapFrog merchandise within the mixed toy divisions of Early Digital Studying, Infant Figures/Playsets & Equipment, Preschool Digital Studying, Digital Leisure (except Capsules) and Walkers for the calendar 12 months ended September 2024

About VTech

VTech is the worldwide chief in digital finding out merchandise from infancy by way of infant and preschool and the sector’s biggest provider of residential telephones. It additionally supplies extremely sought-after pledge production services and products. Its tradition of integrity, duty and innovation guides the corporate against a sustainable age.

Established in 1976, VTech has been the pioneer within the digital finding out toy section and its merchandise incorporate complex instructional experience and state of the art innovation. The Staff’s telecommunication merchandise carry house and industry customers’ revel in during the actual in era and design. As a important digital production carrier supplier, VTech deals complete turnkey services and products in amenities which are shifting against Business 4.0 production.

With a world personnel of over 20,000 workers in 15 international locations and areas, VTech maintains R&D centres, production operations and gross sales subsidiaries around the Americas, Europe and Asia. Its merchandise are bought in over 80 international locations, by way of partnerships with important shops, e-commerce corporations and vendors.

Stocks of VTech Holdings Restricted are indexed on The Accumulation Change of Hong Kong Restricted (HKSE: 303).

Observe: Creation from 22:00, 12 November (HKT), the webcast of the effects announcement can also be accessed by way of VTech website online by means of this hyperlink https://www.vtech.com/en/investors/results-reports/.

SOURCE VTech