tcl comm 09q3 ppt eng－091023ec2 v2 final q3...to bode well amid fierce competition for 3g...

Results PresentationResults Presentation3Q 20093Q 2009

TCL Communication Technology Holdings LimitedTCL Communication Technology Holdings Limited

Agenda

Business Overview & Outlook

Q&A

Appendix: Corporate Information

Financial Highlights

Oversea Market

The global economy rejuvenated in the third quarter of 2009 as a result of loose monetary policies.

The global handset industry reversed its downtrend of the previous two quarters and resumed growth momentum.

Sales performance in emerging markets remained brisk.

Business Overview

PRC Market

Performance in China market remained brisk and steady growth.

Development of 3G services in China propelled the growth of the domestic handset industry

Business Review

Overview• During the first nine months in 2009, the Group sold 9.3 million units of handsets and accessories, down 9% from the

corresponding period of last year. It was mainly due to lower sales volume in the first two quarters resulting from weak demand in overseas markets amid the financial tsunami.

• Sales performance in the third quarter showed clear signs of improvement and returned to the levels before the financial tsunami. The Group’s sales volume for 3Q amounted to 4.24 million units, an increase of 20% over the corresponding period of 2008.

Europe, Middle East and Africa• 3Q shipments to EMEA totaled 1.81 million units, up 26% from the same period last year. Sales performance in Britain and

Russia was better than expected and drove a remarkable growth in sales volume in the European market.• Overall average selling price remained flat.

Americas• 3Q sales of 1.54 million units in the Americas market, up 12% from the same period last year.• Response of the market to the OT-708 (“One Touch Mini”) and OT-800 (“Jade”) series was very positive, giving rise to

satisfactory sales growth in Mexico.

The PRC• 3Q sales volume in the PRC market made a remarkable improvement and increased by 16% to 750,000 units from the

same period last year.• The Group is gearing up to strengthen research on 3G terminals and cooperation with major domestic operators.

Sales Volume and Revenue (Handset and Others)

Sales Revenue for Handset and Other Products in 3Q and first 9 months in 2008 and 2009Sales Revenue for Handset and Other Products in 3Q and first 9 months in 2008 and 2009

‘000 Units 3Q 2009 3Q 2008 Change Y2009 Y2008 ChangeTotal 4,240 3,547 +20% 9,298 10,264 -9%

Overseas 3,493 2,905 +20% 7,448 8,991 -17%

The PRC 747 642 +16% 1,850 1,273 +45%

Sales Volume for Handset and Other Products for 3Q and first 9 months in 2008 and 2009Sales Volume for Handset and Other Products for 3Q and first 9 months in 2008 and 2009

HK $ Million 3Q 2009 3Q 2008 Change Y2009 Y2008 ChangeTotal 1,073 1,119 -4% 2,401 3,459 -31%

Overseas 947 943 0% 2,067 3,059 -32%

The PRC 126 176 -28% 334 400 -17%

Jan Feb Mar Apr May Jun Jul Aug Sep

400

600

800

1,000

1,200

1,400

1,600

ALCATEL TCL

Sales volume (Jan 2009 – Sep 2009)

‘000 Units

Sales volume for 3Q increased remarkably and returned to the levels before the financial tsunami. The Group reported biggest single monthly sales volume in July.

A total of 4.24 million units of handsets and accessories were sold in the third quarter of 2009, an increase of 51% over the sales volume of 2.8 million units for the second period in 2009. The annual sales target for 2009 is likely to be achieved.

Product Research & Development

During the third quarter 2009, the Group launched 4 models of Alcatel brand mobile phones, including OT-106, OT-206, OT-222 and OT-203E series, and a TCL brand mobile phone V300.

The Group continued to extend the sales of OT-800 (“Jade”) and OT-708 (“One Touch Mini”).

The OT-800 (“Jade”) series was very popular and we had orders from various major telecommunications operators.

OT-708 (“One Touch Mini”) series, an entry-level touch screen handset, received an enthusiastic response in market.

Hit Product – OT 800 ( “JADE” )

Full Qwerty keypad, unique navigation keyPOP3/IMAP4 E-mail sending capability Instant messaging , easily log into Windows Live Messenger, Google Talk and other messaging toolsSocial networks for Facebook, MySpace, Bebo, Friendster and Flickr 2 MPxl camera, taking pictures as well as shooting videos and playing Music player capable for 1,000 songsFM Radio RDSBlue tooth ear phone

Hit Product – OT 708 ( “One Touch Mini” )

Full touch screen displayFashion outlook and handy design, only 82g in weightSide widget bar on idle screen, easy entry to media player, radio, calling history, calendar, background picture and alarm clock without multi-choice1.3 MPxl cameraMicro-SD slot up to 4 GBFM Radio RDSBlue tooth ear phone

Future Outlook

The Group’s sales volume in the fourth quarter will stay at levels achieved before the financial tsunami as the global economy continues to improve. The Europe and Americasmarkets will continue to recover gradually, while the Asia Pacific region will also be one of the important driver of our business growth. At the same time, the PRC market is expected to bode well amid fierce competition for 3G handsets.

The Group will stick to our “3G + 4C” strategy, actively strengthen efforts in research and development, enhance the cooperation with key operators, and offer users more value added services by providing them with competitive and innovative products.

New products with high potential have been already approved by operators.

Although 2009 is a challenging year for the handset industry, the management is confident to achieve our annual sales target with the efforts of all staff members and a stabilizing global economy.

Agenda


Q&A



Income Statement Highlights

Income Statement HighlightsIncome Statement Highlights

-

50

0.3

(24)

24

18%

198

42

1,119

3,547

3Q 2008

-9%10,2649,298+20%4,240Sales Volume (‘000 Units)

-31%3,4592,401-4%1,073Revenue

-19%4335-17%35Average Selling Price (US$)

(HK$ Million) 3Q 2009 Change Y2009 Y2008 Change

Gross profit 236 +19% 433 636 -32%

Gross profit （%) 22% +4% 18% 18% 0%

Profit/(loss) before effect of convertible bonds 14 -42% (26) 40 N/A

Effects of convertible bonds - N/A (65) 72 N/A

Profit/(loss) after effect of convertible bonds 14 +4,533% (91) 112 N/A

EBITDA before effect of convertible bonds (as restated) 30 -39% 27 111 -76%

EPS (HK$ Cents) (as restated) 2 N/A (13) 16 N/A

Balance Sheet Highlights

Balance Sheet HighlightsBalance Sheet Highlights

-19%599483-Other current assets

+159%230596-Inventory-2%684668-Cash and bank

-22%854662-Trade receivable-40%1,670994-Pledged deposit

N/A(142)--Convertible bonds

-43%(1,867)(1,061)-Interest bearing bank borrowings

+41%(591)(836)-Trade and notes payable

+15%(891)(1,027)-Other current liabilities

(HK$ Million) 2009-9-30 2008-12-31 ChangeNon-current assets 511 528 -3%

Current assets 3,403 4,037 -16%

Current liabilities (2,924) (3,349) -13%

Net current assets 479 688 -30%

Non-current liabilities (7) (151) -95%

-Other non-current liabilities (7) (9) -22%Net assets 983 1,065 -8%

Net assets value per share (HK$) (after share consolidation) 1.4 1.5 -7%

Key Financial Indicators

+13%2326Inventory turnover (Days)(Finished goods)

+21%7186Trade receivable turnover (Days)

2009-9-30 2008-9-30 Change

Cash balance (HK$ Million) 668 961 -30%

Key Financial IndicatorsKey Financial Indicators

Agenda


Q&A



Q & A

For further enquiries:

Mr. Andrew YipTel: (86) 755 3331 3019

Ms. Cherry PangTel: (86) 755 3331 3171

Email: [email protected]

Agenda


Q&A



Company Overview

Principal Business

Research & Development, manufacturing and global sales of cell phones and 3G data card of two key brands - ”TCL” and ”ALCATEL”

CoreProducts

Cell phones --- Two key brands

TCL (in China)

ALCATEL (in Europe, Middle East, Africa, Americas, Asia-Pacific and China)

Production

Facilities

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 centres, over 50 offices and more than 4,000 employees around the world

Listing Status Listed on the Hong Kong Stock Exchange in Sep. 2004 (stock code: 02618 HK)

TCL Communication Technology Holdings Limited (TCL Communication)

Shareholding Structure

Public

52%

TCL Communication Technology Holdings Limited( 02618 HK )

46%

TCL Group(000100 SZ)

Mr. Li Dongsheng

2%

Investment Highlights

1

2

5

6

Strong relationship with worldwide operators

Experienced management team

Strong portfolio of brands with high consumer recognition

TCL Communication: Chinese leading global manufacturers of consumer electronics products

3 Leading manufacturing capacity and experienced global logistics

management

Innovative business model

Strong R&D capability with wide series of products

4

Highly Experienced Senior Management Team and Company Structure

Board ChairmanMr. Li Dongsheng

CEO Charles Yang

TCL BusinessCharles Yang

TCL executive committee

GSMWang Jiyang

AmericasNicolas Zibell

EMEAYves Morel

APACAlbert Wong

CDMALi Bing

BDLVittorio

Di Mauro

ChinaInterface

Zhang Yongjun

Alcatel BusinessGeorge Guo

Alcatel executive committee

CMDChun Lau

HQ & OperationCharles Yang

George Guo, Thomas Liu

HR,IS/IT,AuditGeorge Guo

FinanceThomas Liu

QMS&GCSLaurent Labbe

LegalStephen Chiang

CEO OfficeNiu Haizhen

GMCLv Xiaobin

BPS

Products design center

Xu Jinhong

R&D centerWang Kailong

Sales centerChen Qihui

Operator center

Xie Feng

Operationcenter

Xiao Feng

FinanceHu Lihua

Brief Introduction of Senior Management

Chairman of TCL CommunicationMr. LI Dongsheng

Born in July 1957, Tomson Li graduated from South China University of Technology with a major in wireless technology. Li had taken the position of the general manager of TCL Communication Group, general manager of TCL Corporation and now acts as the chairman of the board and president of TCL Corporation. “Special contributor to the development of China electronic home appliance industry” 1994."CCTV Annual Economic Contributor of China" 2002, 2004“Asia Businessman of the Year" by Fortune magazine 2004 Conferred medal of national honor by French president Jacques Chirac 2004“The Most Influential Enterprise Leader" by China Entrepreneur magazine 2005“Deloitte prize entrepreneurs” (in Barcelona), 2008“Outstanding Contribution Award of Chinese Brand”, 2009Delegate of 16th Party Congress and 10th and 11th National People’s Congress

Executive Director, CEODr. Yang Xingping Charles

Dr. Yang Xingping Charles, obtained a Bachelor's degree in 1982 and a Master's degree in 1985, both in Engineering from Xian Jiao tong University. He obtained a M.S. in 1987 and Ph.D. in 1989 from the University of California, Los Angeles (UCLA). Before joining the Group, he established Dopod Communication Corporation in 2001 and served as the CEO and President between 2001 and 2006 and the Honorary Chairman between 2006 and 2008.He joined TCL Corporation as the Vice President and TCL Communication as President in charge of TCL brand business in January 2009. Dr. Yang has been appointed as an executive director and the CEO of TCL Communication with effect from 1 April 2009.

Brief Introduction of Senior Management

Strong Portfolio of Brands with High Consumer Recognition

TCL & ALCATEL have strong brand awareness with consumers in China and Europe respectively

TCL Brand established since 1981 as a leading electronics brand in PRCNo.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 1898World widely accepted by its fame and great reputationTypical brand in Europe’s telecommunication industry

Leading Independent Production Capacity

Production capacity of 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

Strong R&D Capability

More than 700 highly skilled and experienced research engineers distributed in Shanghai, Shenzhen and Huizhou

The ownership of GSM core technological patents obtained throughacquisition of ALCATEL mobile phone business

One of the few companies who own 2G, 2.5G, 2.75G core patents inthe world, excellent tradition of research and development

Able to provide solutions to GSM, GPRS, EDGE, CDMA, WCDMA, TD-SCDMA independently

Start to work on 3G, projects already run for TD-SCDMA products

Focus on innovation as well as the high quality of our products

Full Series of Products and Product Strategy

Low-end Products in Emerging MarketsQuality

Entry-level Camera PhoneProducts Design and Competitiveness

Mobile Music ExperienceInnovation

Mobile Internet Features

High-end Devices

and Services

2007 2008 2009 2010 2011

28

Matured Cooperation with Oversea Telecommunication Operators

EMEAUSA

LATAM

China

APAC

HQ, R&D and ManufactureMexico CitySales centre

ParisSales centre

ShanghaiShenzhen & Hong Kong

Huizhou

Innovative Profitability

4C Convergence

Business Model

Computer

Consumer electronic

Communication

Contents Year One of 3G

3 Core Competences

Products Innovation Ability

Sales and Marketing

Operator Collaboration

Innovative ProfitabilityQuality guaranteed products and services based on good operator collaboration

To provide 3G experience by integrating cell phone and 4C model

To achieve the progression of average revenue by retaining and expanding customers

Thank you!

tcl comm 09q3 ppt eng－091023ec2 v2 final q3...to bode well amid fierce competition for 3g...

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