VTech hits record full year results as sales in Europe grow by 22.6 per cent

Group revenue for VTech Holdings Limited has hit a record $2,372.3 million, an increase of 9.5 per cent year on year, the firm has revealed in its latest results for the financial year ended March 31st, 2021.

The company has reported record revenue and profit, with growth across all three of its product lines, with higher sales in North America, Europe and Asia Pacific off-setting lower sales in Other Regions.

North American performance

Group revenue in North America rose by 0.6 per cent to $995.1 million in the financial year 2021 as higher sales of electronic learning products and telecommunication products offset lower CMS sales. North America became VTech’s second largest market, accounting for 41.9 per cent of Group revenue.

Electronic learning products revenue in North America increased by 8.8 per cent to $536.9 million, with the company showing good growth in Canada. The overall market grew, while VTech’s sales to online retailers achieved a double-digit increase.

The Group also gained market share and strengthened its position as the number one manufacturer of electronic learning toys from infancy through toddler and preschool in the US. Meanwhile, standalone products performed well, with the pandemic spurring demand for electronic learning toys, as parents and children spend more time at home.

Growth in standalone products came from higher sales of both LeapFrog and VTech brands. The LeapFrog sales increase was especially robust. Preschool items offering overt educational values, including Learning Friends 100 Words Book, 100 Animals Book and 2-in-1 LeapTop Touch, achieved strong sell-through.

The Blue’s Clues & You! series of licensed products performed strongly, with the Really Smart Handy Dandy Notebook selling particularly well. Sales of LeapBuilders, however, registered a decline.

VTech standalone products benefited from rising sales of infant and toddler products, KidiZoom cameras, other Kidi line products and the Go! Go! Smart family of products. These increases offset a decline in preschool products.

Go! Go! Smart Wheels saw the launch of Ultimate Corkscrew Tower, while building on the success of the popular robotic toy Myla the Magical Unicorn, VTech launched Myla’s Sparkling Friends, a line of toys that brings colour play to life using fantastical characters.

Go! Go! Cory Carson vehicles and play-sets also contributed to sales in the financial year 2021, supporting growth. Seasons one, two and three of the associated animation series are now streaming globally on Netflix.

Sales of platform products in North America decreased slightly. At VTech, platform products saw sales decline, as higher sales of Touch & Learn Activity Desk were insufficient to compensate for lower sales of KidiZoom Smartwatches and KidiBuzz.

For LeapFrog, the platform products business posted an overall decline. The brand’s children’s educational tablets and Magic Adventures Globe saw sales increases, offsetting declines in interactive reading systems and RockIt Twist.

Subscriptions to the LeapFrog Academy increased substantially during the financial year 2021.

European performance

Group revenue in Europe rose by 22.6 per cent to $1,086.3 million in the financial year 2021, as higher sales of ELPs and CMS offset lower revenue of TEL products. Europe was VTech’s largest market, accounting for 45.8 per cent of Group revenue.

Electronic learning products revenue in Europe increased by 5.4 per cent to $351.2 million. Growth slowed down in the second half, however, as lockdowns in the region forced the closure of stores selling non-essential items.

Geographically, sales increased in France, the UK, Germany and the Netherlands, while Spain experienced a decline.

In standalone products, both the VTech and LeapFrog brands achieved higher sales. For the VTech brand, growth was led by electronic learning aids, KidiZoom cameras, other Kidi line products and Switch & Go Dinos. This offset declines in the Toot-Toot family of products.

Sales of infant, toddler and preschool products were largely stable during the financial year 2021. The new Go! Go! Cory Carson vehicles and play-sets were rolled out to the major European markets in September 2020 under the name Toot-Toot Cory Carson, which supported the growth in standalone products.

LeapFrog saw rising sales of infant, toddler and preschool products, with strong sell-through of Learning Friends 100 Words Book and 100 Animals Book. This offset a decline for LeapBuilders/Bla Bla Blocks.

Platform products saw lower sales, as growth of LeapFrog branded products was insufficient to offset a decline in VTech branded products. For LeapFrog, the revenue increase was driven by higher sales of Magic Adventures Globe and interactive reading systems, which offset declines in RockIt Twist and children’s educational tablets.

At VTech, higher sales of Touch & Learn Activity Desk were unable to offset lower sales of children’s educational tablets and KidiCom Max. Sales of KidiZoom Smartwatches remained steady year-on-year.

“In the financial year 2021, VTech delivered record revenue and profit, as the Group’s businesses benefited from work-from-home and stay-at-home orders during the coronavirus (COVID-19) pandemic. All three product lines reported revenue growth, while profitability was further supported by effective cost control,” said Mr Allan Wong, chairman and group CEO of VTech Holdings Limited.

“The positive result came despite global supply chain disruptions during the first half and increasing shortages of semiconductors and other electronic components in the final quarter.”