Interim Management Statement

    RNS Number : 5070B
  Vtech Holdings Limited
  18 August 2008
   

    VTech Holdings Limited
    *incorporated in Bermuda with limited liability*
    *stock code : VTH*

    18th August 2008

    VTech Holdings Limited - Interim Management Statement

    In compliance with the requirements of the Disclosure and Transparency Rules issued by the Financial Services Authority, VTech Holdings
Limited ("VTech") is publishing its Interim Management Statement for the three months ended 30th June 2008.

    The Group revenue for the first quarter of the financial year 2009 was higher than the same period last year. The growth was mainly
attributable to increased sales at our electronic learning products (ELP) and contract manufacturing services (CMS) businesses.
Geographically, Group revenue from Europe, Asia Pacific and other markets delivered growth year-on-year in the first quarter, despite a
decline in revenue in North America. 

    In the first quarter of the financial year 2009, the telecommunication products business recorded a decline in revenue as compared to
the corresponding period of last year. Sales at our original design manufacturing business increased year-on-year due to strong demand from
existing customers in Europe, Asia Pacific and other markets. Sales at our branded business in North America decreased year-on-year in the
first quarter as the US market slowed. Nonetheless, VTech, combining the market shares of its VTech and AT&T brands, continued to maintain
its leadership position in the US cordless phone market.

    For the ELP business, revenue for the first quarter of the financial year 2009 was higher than the same period last year. Growth was
mainly driven by increased sales of traditional ELPs. All markets recorded sales growth during the period, with particularly strong
performance in Europe. V-Motion*, one of our new V.Smile platforms, was test-marketed in selected cities in the United States in June and
July. Initial point of sales data, while of limited scope, indicate good reception from consumers. Full launch of the product has already
commenced in the United States in August 2008.  

    Revenue at the CMS business in the first quarter of the financial year 2009 rose over the same period last year. Growth mainly came from
increased sales to existing customers in the areas of switching mode power supplies, wireless products and home appliances. Geographically,
both Europe and North America recorded sales growth during the period.

    The financial position of the Group remains very strong. As at 30th June 2008, the Group remained substantially debt-free. Stock and
debtors remained at healthy levels.

    Overall, the Board is satisfied with the performance of the Group's businesses in the first quarter of financial year 2009 but remains
mindful of the economic conditions in our markets, especially the United States. High oil prices, rising labour costs and inflation in
mainland China continue to impose cost pressures on the Group. We will continue to manage costs closely and focus on our four strategic
growth drivers, namely product innovation, gains in market share, geographic expansion and operational excellence.

    The Board has proposed to delist from the London Stock Exchange and a circular has been despatched to the shareholders for a Special
General Meeting to be convened on 5th September 2008 to vote on the delisting resolution.


    For further information, please contact:

    Ms. Grace Pang
    Senior Corporate Communications Manager
    VTech Holdings Ltd
    (852) 2680-1000 (office)
    (852) 2680-1788 (fax)
    [e-mail] (email)



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