tcl communication technology holdings limited …...1,650 1,900 2,150 2,400 2,650 alcatel tcl sales...
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TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED
TCL通訊科技控股有限公司
(02618.HK)2009 Annual Results Presentation 2009 Annual Results Presentation
3
Business Review
Business Recovery after the financial crisisTotal sales volume of 16.1 million units in 2009, an increase of 18% over 2008 and significantly exceeding the sales target of 10 million units for the year.Sales performance in both of overseas and China markets resumed to the levels seen before the financial tsunami.
Successful new product launch in mid to high-end segmentWhile solidified the existing low-end handsets business, successfully explored the mid to high-end product segments.QWERTY keypad OT-800 and touch screen OT-708 received favorable response from the market and in great demand.
Successful CB buyback and the rights issueGreatly strengthened the financial position with sufficient cash flow.
4
Business Review (Cont’d)
Europe, Middle East and Africa (“EMEA”) • Shipments to Europe, the Middle East and Africa (“EMEA”) totaled 6.4 million units in
2009, a 19% increase over 2008.• The overwhelming market response to the OT-708 (“One Touch MINI”) series
predominately drove business growth in these areas.
Latin America (“LATAM”)• Sales volume in Latin America (“LATAM”) for 2009 reached 6.4 million units, an
increase of 7% over 2008.• the OT-800 (“Jade”) and OT-708 (“One Touch MINI”) handsets were the best-selling
products in the region and appealed to customers. They were particularly successful in Mexico.
The PRC• During the period under review, the Group achieved a satisfactory sales performance
in China. A total of 2.8 million units of handsets and accessories were sold last year, an increase of 61% over 2008.
• Positively enhanced efforts in R&D of 3G, and a series of projects already run for TD-SCDMA products.
5
Sales Volume and Revenue (Handset and accessories)
Sales Revenue for Handset and Accessories in 2009 and 2008Sales Revenue for Handset and Accessories in 2009 and 2008
‘000 Units Y2009 Y2008 ChangeTotal 16,123 13,695 +18%
Overseas 13,351 11,969 +12%
The PRC 2,772 1,726 +61%
Sales Volume for Handset and Accessories in 2009 and 2008Sales Volume for Handset and Accessories in 2009 and 2008
HK $ Million Y2009 Y2008 ChangeTotal 4,361 4,538 -4%
Overseas 3,880 4,017 -3%
The PRC 481 521 -8%
6
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
400
650
900
1,150
1,400
1,650
1,900
2,150
2,400
2,650
ALCATEL TCL
Sales Volume in Y2009
’000 Units
Sales volume grew remarkably in the fourth quarter, increasing by 100% to 6.8 million units from the same period of 2008.
Sales volume of December 2009 hit single-month record high to 2.6 million units.
7
Product Research & Development
In 2009, The Group launched a series of low to mid-end handsets to address the different needs of the low to mid-end market. The enriched product mix gave a boost to the Group’s overall sales volume.
The Group introduced a total of 17 models of Alcatel handsets and 2 models of TCL handsets in 2009.
Through cooperation with famous brands of fashions & accessories, it enriched handset design and made its product mix more diversified and competitive.
OT-708 (“One Touch MINI”) and OT-800 (“Jade”) series. These two models were very popular among customers and in great demand, and they have received an enthusiastic response from the market and were warmly accepted by a number of major telecommunications operators.
Positively enhanced efforts in R&D of 3G, and a number of 3G data cards were well received by customers; a series of projects already run for TD-SCDMA products.
13
Future Outlook
The Group will further strengthen and extend cooperation with major telecommunications operators.
While consolidating the low-end handset and accessory business, we will steadily explore mid to high-end markets.
The Group envisage stepping up efforts to receive more orders for the ODM business, which is forecast to experience robust growth in 2010 and hence drive overall sales volume and operating efficiency for the Group.
The Group will enhance efforts in R&D of 3G handsets and accessories, with the intention of launching Android-based and touch screen handsets. Meanwhile, we will continue to diversify our product line by stepping up efforts in developing products like data cards and multifunctional phones, etc.
In 2010, we will continue to raise our operating efficiency and to invigorate cost control and risk management, laying a solid foundation for sustainable business growth.
15
Income Statement Highlights
Income Statement HighlightsIncome Statement Highlights
(HK$ Million) Y2009 Y2008 Change
Sales Volume (‘000 Units) 16,123 13,695 +18%
EPS (HK$ Cents) (as restated) 2.51 3.11 -19%
Proposed final dividends per ordinary share (HK$ Cents) * 3.5 - N/A
Revenue 4,361 4,538 -4%
Average Selling Price (US$)
Gross profit 949 812 +17%
Gross profit (%) 22% 18% +4%
Profit/(loss) before effect of convertible bonds 88 0.4 +21,900%
Effects of convertible bonds (65) 28 N/A
Profit/(loss) after effect of convertible bonds 23 28 -18%
EBITDA before effect of convertible bonds 163 91 +80%
35 43 -19%
* The proposed final dividend for the year is subject to the approval of the Company's shareholders at the forthcoming AGM.
16
Financial Position Highlights
Financial Position HighlightsFinancial Position Highlights(HK$ Million) 2009-12-31 2008-12-31 Change
Non-current assets 488 528 -8%
Current assets 6,278 4,037 +56%
-Inventory 448 230 +95%
-Restricted deposits received from rights issue excess application 1,604 - N/A
-Other payable arising from rights issue excess application (1,604) - N/A
-Other current assets 565 616 -8%
-Cash and cash equivalents 1,170 684 +71%
-Trade receivable 1,304 837 +56%-Pledged deposit 1,187 1,670 -29%
-Interest bearing bank borrowings (1,461) (1,867) -22%
-Convertible bonds - (142) N/A
-Trade and notes payable (1,074) (591) +82%
-Other current liabilities (1,171) (891) +31%
Current liabilities (5,310) (3,349) +59%
Net current assets 968 688 +41%
Non-current liabilities (361) (151) +139%
-Other non-current liabilities (361) (9) +3,900%Net assets 1,095 1,065 +3%
1717
Key Sales Figures
Sales Volume by Geographic Segments
in Y2009 & Y2008
Revenue by Geographic Segments
in Y2009 & Y2008
Y2009
The PRC 11%
Overseas 89%
Y2008
The PRC 11%
Overseas 89%
The PRC 17%
Overseas 83%
Y2009
The PRC 13%
Overseas 87%
Y2008
1818
Sales Volume Recovery
Despite the negative effect from global financial tsunami in the 1H 2009, company’s recovery started in Jun 2009 and immediately turn into significant growth mode.
FY 2009 sales volume significantly increased by 18% over 2008, to 16.1million units.
Sales Volume (’000 units)
3,374 3,342 3,547 3,432
2,2762,782
4,240
6,825
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009
2020
Turnaround in Profitability
Profit before tax and effect of CB (HK$ million)Gross Profit (HK$ million)
85112
236
516
-
100
200
300
400
500
600
09Q1 09Q2 09Q3 09Q4(42)
314
124
(60)
(40)
(20)
0
20
40
60
80
100
120
140
09Q1 09Q2 09Q3 09Q4
HK$ Million HK$ Million
2121
Key Financial Ratios
Successfully completed the early buyback of all outstanding CB in mid 2009, eliminated the dilution effect and improved the financial position.
Successfully improved the company’s cash position by raising HK$358 million in January 2010 through rights issue.
2009 2008
Current Ratio 1.18 1.21
Account Receivable Turnover Days 81 85
Inventory Turnover Days* 18 19
Cash and cash equivalents (HK$ million) 1,170 684
Convertible Bonds (HK$ million) - 142
* Finished goods only
23
Q & A
For further enquiries:
Mr. Andrew YipTel: (86) 755 3331 3019
Ms. Cherry PangTel: (86) 755 3331 3171
Email: [email protected]
2525
Company Overview
Principal Business
Research & Development, manufacturing and global sales of mobile phones and accessories of two key brands:
– ”TCL” (in China)– ”ALCATEL” (in Europe, Middle East, Africa, Americas, Asia-Pacific and China)
BackgroundA member of TCL Corporation
Listed on the Hong Kong Stock Exchange in Sep. 2004 (02618 HK)
TCL COMMUNICATION TECHNOLOGY HOLDINGS LIMITED(02618. HK)
Mr. LI DongshengChairman & ED
Public Shareholders
2.53% 50.70%
TCL Corporation
46.63%
Mr. GUO AipingCEO & ED
Huizhou Investment Holding Ltd
PhilipsTCL Employee
CommitteeOther & PublicMr. LI Dongsheng
0.14%
*The above information was updated to 28 February 2010.
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Strong Brands Power
TCL Brand established since 1981 as a leading electronics brand in PRC
No.1 of 2002 Deloitte Technology Fast 500 Asia Pacific Winners
Total estimated brand value of RMB40.1bn and ranked the 3rd Most Valuable Brand in China according to China Most Valuable Brand survey in 2007
Established in France since 1898
World widely accepted by its fame and great reputation
Typical brand in Europe’s telecommunication industry
2727
Global Presence
ProductionFacilities, R&D Centers, Sales Offices
Headquartered in Shenzhen, China
Global research facilities located in Shenzhen, Shanghai and Huizhou
Global factory located in Huizhou
Global presence across over 80 countries and regions
65 repair centers, over 50 offices, over 4,000 employees around the world
Shenzhen:- Headquarter- R&D Center
Huizhou:- Global factory- R&D Center
Shanghai:- R&D Center
Paris:- Sales Center
Mexico City:- Sales Center
2828
Product Mix
Market segments
GP Margin
High end
Mid end
Low end
HighMidLow
Existing
3030
Strong R&D Capability
More than 700 highly skilled and experienced research engineers distributed in Shanghai, Shenzhen and HuizhouThe ownership of GSM core technological patents obtained through acquisition of ALCATEL mobile phone businessOne of the few companies who own 2G, 2.5G, 2.75G core patents in the world, excellent tradition of research and developmentAble to provide solutions to GSM, GPRS, EDGE, CDMA, WCDMA, TD-SCDMA independentlyStart to work on 3G, projects already run for TD-SCDMA productsFocus on innovation as well as the high quality of our products
3131
High efficient Production Facilities
Production capacity of approximately 30 million units annually
World-class SMT production lines and supporting facilities
Experience of efficient global logistics
Strict tests by key telecommunication operators in the world
ISO9001 and ISO14001 qualified
Testing & manufacturing capability for platform TI, MTK, ADI & QUALCOMM
Manufacture center in Huizhou, China
SMT production line Testing centre
3232
Alliances with Major Operators
USA
LATAM
China
APAC
EMEA
3333
Experienced Senior Management Team
Chairman
Mr. Li Dongsheng
CEO George Guo
GSMJiyang Wang
GMCXiaobin Lv
AmericasNicolas Zibell
APACAlbert Wong
EMEAYves Morel
CDMABing Li
BDLVittorio
Di Mauro
ChinaWanquan
Huang
QMS & GCSLaurent Labbe
CMDRonald Hu
LegalStephen Chiang
PLM BPS Sales HQOperation
TD-SCDMAKailong
Wang
GAMEric Vallet
E-CommerceFeng Xiao
PSMMichael Chen
PlanningAnnie Tang
Global Product Marketing
Violetta Jovanovic
GSJames Zhang
ODMHaizhen Niu
ACERichard Yan
KASGeorge Guo
SWLHarry Au
NO.2 Creative Center
Davy Xu
CEO OfficeWubin Sun
IS/ITWanquan
Huang
HRVanessa Wang
FinanceThomas Liu
NO.3Creative Center
EXCOM
*The above information was updated to 28 February 2010.