Operating Profit and Operating
Profit Margin in Last 5 Years
Financial Overview
For the year ended 31 March 2014
2014
2013
(Restated)
Change
US$ million
US$ million US$ million
Revenue
1,898.9
1,858.0
40.9
Gross profit
634.3
597.8
36.5
Gross profit margin
33.4%
32.2%
Total operating expenses
(408.2)
(373.9)*
(34.3)
Total operating expenses as a percentage of revenue
21.5%
20.2% *
Operating profit
226.1
223.9 *
2.2
Operating profit margin
11.9%
12.0% *
Net finance income
1.4
1.7
(0.3)
Profit before taxation
227.5
225.6 *
1.9
Taxation
(24.2)
(24.1)
(0.1)
Effective tax rate
10.6%
10.7% *
Profit for theyear andattributable toshareholdersof theCompany
203.3
201.5 *
1.8
Net profit margin
10.7%
10.8% *
* Restated upon the adoption of IAS 19 (Revised 2011) as described in note B to the financial statements
Revenue
Group revenue for the year ended 31 March 2014 rose by 2.2% to US$1,898.9 million
over the previous financial year. The increase in revenue was largely driven by higher
sales in North America, Europe and Asia Pacific, which offset a decrease in revenue in
other regions.
2014
2013
Increase/(decrease)
US$million
%
US$ million
% US$million
%
North America
950.7 50.1%
933.4 50.2%
17.3 1.9%
Europe
791.8 41.7%
769.9 41.4%
21.9 2.8%
Asia Pacific
108.9 5.7%
99.8 5.4%
9.1 9.1%
Other regions
47.5 2.5%
54.9 3.0%
(7.4) (13.5%)
1,898.9 100.0%
1,858.0 100.0%
40.9 2.2%
Gross Profit/Margin
Gross profit for the financial year 2014
was US$634.3 million, an increase of
US$36.5 million or 6.1% compared to
the US$597.8 million recorded in the
previous financial year. Gross profit
margin for the year rose from 32.2% to
33.4%. The decline in material costs offset
higher labour costs and manufacturing
overheads arising from the increase in
wages and production capacity, as well
as Renminbi appreciation during the
financial year 2014.
Operating Profit/Margin
Operating profit for the year ended
31 March 2014 was US$226.1 million,
an increase of US$2.2 million or 1.0%
over the previous financial year. The
improvement in operating profit was
mainly due to the increase in gross profit
and gross profit margin, which offset the
increase in total operating expenses.
Operating profit margin, however,
declined from 12.0% to 11.9%. It was
mainly due to the increase in total
operating expenses as a percentage
of Group revenue, which offset the
improvement in gross profit margin. The
ratio of EBITDA to revenue was 13.6%,
same as the last financial year.
Total operating expenses were US$408.2
million, an increase of 9.2% over the last
financial year. Correspondingly, total
operating expenses as a percentage of
Group revenue rose from 20.2% to 21.5%.
US$ million
%
224.1 218.7
209.5
223.9* 226.1
0
50
100
150
200
250
0
4
8
12
16
20
14.6
10 11
12.8
12
11.7
13
12.0*
14
11.9
Operating profit (US$ million)
Operating profit margin (%)
* Restated
7
VTech Holdings Limited
Annual Report 2014
Management Discussion and Analysis
Financial Review
