Following VTech's Press Release, covering their Annual Financial Report for FY 2014, the new CMS Divisional Presentation has been published as well. Contact HTCS, LLC for further details, send us an email:
Rolf.Seichter@HTConsultingServices.com
2. About the VTech Group
2
Shenzhen 2008QingYuan 2005LiaoBu 1997HouJie 1985
• Headquartered in HKG since 1976
• Listed in HKG (HKSE:303)
• Factories in HouJie, LiaoBu & QingYuan, R&D Center in SZ
• Operations in 11 countries and regions
Locations
Employees
• 37,000 Employees Worldwide
• 1,500 R&D Professionals & Engineers
Financials
• Financially Strong & Reputation for High Quality
• 3 Divisions : Phones, Electronic Learning Products & CMS
• $1,858M in Revenue in Fiscal 2013
• $892.4M for Interim Result Fiscal 2014 (2% Growth)
4. 4
Group Financial Performance – FY14
The Group Turnover in the Past 5 Years
1,532
1,713 1,784 1,858 1,899
0
600
1,200
1,800
2,400
FY10 FY11 FY12 FY13 FY14
0
200
400
600
800
Sales by Companies US$M
Phone
ELP
CMS
FY11 FY12 FY13 FY14
Phone 727.5 706.3 666.4 626.9
ELP 594.9 657.1 731.3 778.6
CMS 390.4 421.1 460.3 493.4
Key Financial Highlights
US$M FY13 FY14
Sales 1,858.0 1,898.9
Operating Profit 224.7 226.1
Profit Before Tax 226.4 227.5
R&D Expenses 57.1 58.0
Cash on Hand 308.6 322.9
Dividend per Share (US$ Cents) 80.0 80.0
No. of Employee 34,800 30,900
Geographic Sales Distribution FY14
50.1%
41.7%
2.5%5.7% N. America
Europe
Asia Pacific
Other
5. Sustainability
5
• Product Design for the environment
• Produce products in a sustainable manner
• Deliver products in an energy-efficient manner
Workplace Quality
• Committed to provide a supportive, safety, health
and pleasant workplace for our people
• Corporate policy of human and labor rights
Community Investment
Sustainable Operating Practices
• Product Quality Assurance
• Supply Chain Management
• Code of Conduct
• As a responsible company, we use our skills and
resources to support the communities in a variety
of ways
CSR 5
Themes
Employees
Health &
Safety
Environment
Management
System
Ethics
Environmental Protection
6. Protecting Our Client’s Patents and IP
6
IP as the most valuable Asset
• We fully recognize the importance of the IP & Patent Protection
• VTech VTE & ELP have the same IP Protection Interest
• See our Web Site Statement and Details
Our Procedures to protect IP
• NDA or General Confidentiality Agreement
• Tightly Controlled Documentation and Copying of Doc’s
• Access on an “As needed Basis”
• Continuous Training of our Employees
• Return of all files after the completion of a Project
History and Forward Looking
The Result
• Our Customers and potential Clients are fully protected
• Our four Buildings as Technology Protection in Projects
• No History of any IP Violation since our Existence
• Ongoing IP & Patent Awareness Training
7. 7
a) Growth by Organic
b) Focus on Non-Consumers Type Products
c) Customers Focus
The Strategy Business Mission
Be the preferred business partner of selected
customer segment in the EMS Industry
CEO
Support Unit SBU2 SBU3SBU1
CEO
Support Unit SBU2 SBU3SBU1
Business Strategy of CMS
The Core Competence & Competitive Edge
Core Competence – Stable mid to senior level staffs with good knowledge in
EMS business with skill in how to run an efficient operation with quality.
Competitive Edges – Outstanding technology know how in manufacturing
professional audio products, strong financial backup by the Group and right size
to serve selected customers segment.
8. 8
CMS Sales Distribution – FY14
FY14A
39.3%
51.0%
6.8% 2.9%
USA Europe Japan Other
Sales Growth in CMS
FY09A $261M 5%
FY10A $281M 8%
FY11A $390M 39%
FY12A $421M 8%
FY13A $460M 9%
FY14A $493M 8%
Product Types FY13 A FY14A
Pro Audio 36% 40%
Power Supplies 16% 14%
LED 9% 8%
Wireless 17% 18%
Industrial Products 6% 3%
Home Appliances 5% 5%
Communications 6% 7%
Medical 5% 5%
Total 100% 100%
FY13A FY14A
Biggest 20.0% 21.9%
Top 5 59.0% 60.7%
Top 10 74.0% 74.6%
9. Products in VTech CMS
9
Pro Audio / MI
LED Telecom
Medical & Health
Power Supply
UK
Austria US USUK
US Japan US US US
US
Japan Norway Norway
Denmark
10. CMS Program Management
10
Material / Production
Planning Group
* PMC – MC confirm
materials status from
new order & checking
Leadtime, MOQ and
Excess.
* PMC – PC confirm
production planning and
delivery schedule.
Technical Support
Group
* Project leader from
DE who handle
technical issues
directly with
customers.
* Mechanical
engineers who
responsible for
mechanical parts of
projects and report to
project leader.
Purchasing
Group
* Handling costing,
alternative parts &
quotations directly
to PMT, material
delivery schedule
confirmation in
between PMC
department.
Quality Assurance
Group
*Handling all of quality
issues:
* Failure analysis /
corrective action
follow-up
* Reliabilities testing /
evaluation follow-up
* Incoming / Outgoing
materials quality
control
Logistics
Group
* Arrange
import and
export for
VTech and
customers.
Program Manager
PMC Material /
Production Planner
DE & ME
Engineer
PUR Sourcing
Buyer
IQC / QA
Engineer
Logistics
Supervisor
PMT Officer
PMT Group
* Preparation of
quotation.
* Order process
confirmation.
* Carry out the
procedure and co-
ordination of the
activities.
* Payment issues
between
customer.
11. CMS Manufacturing Capabilities
11
CMS
• 650K Sq. Ft. manufacturing areas
• SMT, Thru-Hole, RoHS, REACH,
• ISO9001, ISO14001, ISO13485, TS16949, ISO18001, SA8000
• ANSI ESD S20.20 for all production floors
Manufacturing Capabilities
• 19 Fuji SMT Lines, State-of-the-Art Equipment
• ICT, AOI, ATE, FAT
• Chip on Board in Class 1,000 Clean Room
• Class 10,000 Clean Room for precise products
• Burn-in Chambers, X-Ray Inspection, Automation process
Plastics in VTech
Special Processes & Testing
• Conformal Coating, Burn-In
• Reliability life tests e.g. drop test, high/low temp cycle
• In-House Mfg. and Tooling
• 400 Injection Molding Stations, Up to 850 Tons
• Over-Molding, Mechanical
12. Manufacturing Facilities
12
B6 B7
Canteen &
Entertainment
Dormitory
Production Plant –
Phones
Production Plant –
CMS
B5B8B9
FY11
Actual
FY12
Actual
FY13
Actual
FY14
Actual
FY15
Plan
Manufacturing Area (M2
) 51,000 58,000 65,000 65,000 65,000
Cell Line (lines) 198 201 280 263 263
Wave Soldering (lines) 15 16 18 18 21
SMT (lines) 17 19 19 19 21
Auto Insertion (units) 8 9 10 11 12
• B9 set up will likely happen in FY15 in view of current
business forecast
CMS Manufacturing Capacity Planning
13. Automated PCB Assembly & Test
13
Robotic VR Insertion Auto Switch Press Fitting Selective Soldering
Robotic Soldering Auto Screw Fastening Auto PCBA Testing
• Dedicated automation team
• Deployment of self-developed & off-the-shelf automation
14. Products Assembly
14
Applicability
• Mid to high volume production
• Small to mid size products
• Low product / process complexity
Benefits
• Eliminate WIP staging
• Cycled time balanced to takt time
Applicability
• Mid volume production,
• Mid to large size products
• Mid product / process complexity
Benefits
• Eliminate batch queuing
• Quick changer over
• Maintain single-piece flow on larger
products
Applicability
• Low to mid volume production,
• Mid to large size products
• High product / process complexity
Benefits
• Attention to details on sub-module
assemblies
• Simplify final assembly & increase first
pass for complicated box build
Single-Piece-Flow Line Work Cell Work Bench
• Options to apply several lean manufacturing flows
• Improvement under high mix low volume environment in labor efficiency, inventory control, floor space, cycle
time & process handling is possible
15. 15
Outgoing
Quality
Assurance
System and Process audit
Vendor Rating System &
Improvement Program
Material
planning
(MRP) &
PO release
Customer
request &
PO review
Manufacturing Process
control
Material
received
Vendors
Quality & Environment System
ISO9001 ISO14001 ANSI/ESD S20.20 TS16949
In-process
Quality
Control
IQC
Outgoing
Quality
Assurance
VTech Tracking System
Identification & Traceability
Product
barcode
system
Material
barcode
system
Customer
ISO13485
Statistical
Techniques
Equipment
Control
Customer
ISO18001
Storage,
Packaging
& Delivery
Production
Inspection & Test
Quality Management System
– Quality System Model
SA8000
16. R&D Support and Design Support
16
Our Support Includes:
• Product Design, ID Support, Cost-Down Re-design
• Electronics including Hardware & Software Design
• Mechanical, Structural & Assembly Design
• PCB Re-design, Upgrades and Re-spin
• Convert a Conceptual Product into Volume Production
Typical Applications and Competence
• HW & SW developments for MCU, MPU, ARM processors, etc.
• Drivers and Embedded System Development
• RF, Wireless, Audio, Consumer Electronics, Medical, Telecom,
Energy-Star & Saving
• Convert an Electronic Schematic to PCB Gerber Data
Resources
NPI
• Design for Manufacturability (DFM)
• Sample Production and Design Verification & Validation
• Next Generation Design, Cost Reduction, Spec Upgrades
• Design Awarded R&D Group located in Shenzhen
• Professional Audio Test Lab
• Effective & Accurate Design Simulation Software
• Approx. 40 Engineers & Technicians support design professionally
17. 17
Pro Audio Test Laboratory Facilities
Acoustic Room
Listening Room
Accreditation
• South China National Centre of Metrology
Features
• Test Frequency 200Hz-20KHz
• Background noise 28dB or below
• Sound isolation 55dB in average
• Parametric testing
• ISO3745-2003 standard
Accreditation
• South China National Centre of Metrology
Features
• Test Frequency 125Hz-8KHz
• Background noise 28dB or below
• Sound isolation 55dB in average
• Parametric, Functional & Listening testing
• ITU-R BS.11161-1 standard
• VTech R&D Center Audio Test Laboratory with its state-of-art equipments allows audio product testing to be
carried out in house with a shorter turnaround time