Results Presentation Results Presentation 3Q 2009 3Q 2009 TCL Communication Technology Holdings Limited TCL Communication Technology Holdings Limited
Agenda Business Overview & Outlook Financial Highlights Q&A Appendix: Corporate Information Page 2
Business Overview Oversea Market PRC Market The global economy rejuvenated in the third Performance in China market remained brisk quarter of 2009 as a result of loose monetary and steady growth. policies. Development of 3G services in China propelled The global handset industry reversed its the growth of the domestic handset industry downtrend of the previous two quarters and resumed growth momentum. Sales performance in emerging markets remained brisk. Page 3
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. Page 4
Sales Volume and Revenue (Handset and Others) Sales Volume for Handset and Other Products for 3Q and first 9 months in 2008 and 2009 Sales Volume for Handset and Other Products for 3Q and first 9 months in 2008 and 2009 ‘000 Units 3Q 2009 3Q 2008 Change Y2009 Y2008 Change Total 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 Revenue for Handset and Other Products in 3Q and first 9 months in 2008 and 2009 Sales Revenue for Handset and Other Products in 3Q and first 9 months in 2008 and 2009 HK $ Million 3Q 2009 3Q 2008 Change Y2009 Y2008 Change Total 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% Page 5
Sales volume (Jan 2009 – Sep 2009) ‘000 Units 1,600 � Sales volume for 3Q increased remarkably and 1,400 returned to the levels before the financial tsunami. The Group reported biggest single monthly sales volume in July. 1,200 1,000 � A total of 4.24 million units of handsets and accessories were sold in the third quarter of 2009, an 800 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. 600 400 Jan Feb Mar Apr May Jun Jul Aug Sep ALCATEL TCL Page 6
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. Page 7
Hit Product – OT 800 ( “JADE” ) � Full Qwerty keypad, unique navigation key � POP3/IMAP4 E-mail sending capability � Instant messaging , easily log into Windows Live Messenger, Google Talk and other messaging tools � Social 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 songs � FM Radio RDS � Blue tooth ear phone Page 8
Hit Product – OT 708 ( “One Touch Mini” ) � Full touch screen display � Fashion outlook and handy design, only 82g in weight � Side widget bar on idle screen, easy entry to media player, radio, calling history, calendar, background picture and alarm clock without multi-choice � 1.3 MPxl camera � Micro-SD slot up to 4 GB � FM Radio RDS � Blue tooth ear phone Page 9
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 Americas markets 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. Page 10
Agenda Business Overview & Outlook Financial Highlights Q&A Appendix: Corporate Information Page 11
Income Statement Highlights Income Statement Highlights Income Statement Highlights (HK$ Million) 3Q 2009 3Q 2008 Change Y2009 Y2008 Change Sales Volume (‘000 Units) 4,240 3,547 +20% 9,298 10,264 -9% Revenue 1,073 1,119 -4% 2,401 3,459 -31% Average Selling Price (US$) 35 42 -17% 35 43 -19% Gross profit 236 198 +19% 433 636 -32% Gross profit （ %) 22% 18% +4% 18% 18% 0% Profit/(loss) before effect of 24 -42% 40 N/A 14 (26) convertible bonds Effects of convertible bonds - (24) N/A (65) 72 N/A Profit/(loss) after effect of 14 0.3 +4,533% (91) 112 N/A convertible bonds EBITDA before effect of 30 50 -39% 27 111 -76% convertible bonds (as restated) EPS (HK$ Cents) (as restated) - N/A 16 N/A 2 (13) Page 12
Balance Sheet Highlights Balance Sheet Highlights Balance Sheet Highlights (HK$ Million) 2009-9-30 2008-12-31 Change Non-current assets 528 -3% 511 Current assets 3,403 4,037 -16% - Inventory 230 +159% 596 - Cash and bank 668 684 -2% - Trade receivable 854 -22% 662 - Pledged deposit 994 1,670 -40% -Other current assets 483 599 -19% Current liabilities (2,924) (3,349) -13% -Interest bearing bank borrowings (1,061) (1,867) -43% -Trade and notes payable (591) +41% (836) -Other current liabilities (1,027) (891) +15% Net current assets 688 -30% 479 Non-current liabilities (7) (151) -95% - Convertible bonds - (142) N/A -Other non-current liabilities (9) -22% (7) Net assets 983 1,065 -8% Net assets value per share (HK$) (after share consolidation) 1.5 -7% 1.4 Page 13
Key Financial Indicators Key Financial Indicators Key Financial Indicators 2009-9-30 2008-9-30 Change Trade receivable turnover (Days) 86 71 +21% Inventory turnover (Days) 26 23 +13% (Finished goods) Cash balance (HK$ Million) 668 961 -30% Page 14
Agenda Business Overview & Outlook Financial Highlights Q&A Appendix: Corporate Information Page 15
Q & A For further enquiries: Mr. Andrew Yip Tel: (86) 755 3331 3019 Ms. Cherry Pang Tel: (86) 755 3331 3171 Email: ir.tclcomm@tcl.com Page 16
Agenda Business Overview & Outlook Financial Highlights Q&A Appendix: Corporate Information Page 17
Company Overview TCL Communication Technology Holdings Limited (TCL Communication) Principal � Research & Development, manufacturing and global sales of cell phones and 3G data card of two key brands - ”TCL” and ”ALCATEL” Business � Cell phones --- Two key brands Core � TCL (in China) Products � ALCATEL (in Europe, Middle East, Africa, Americas, Asia-Pacific and China) � Headquartered in Shenzhen, China � Global research facilities located in Shenzhen, Shanghai and Huizhou Production � Global factory located in Huizhou Facilities � Global presence across over 80 countries and regions � 65 repair centres, over 50 offices and more than 4,000 employees around the world Listing � Listed on the Hong Kong Stock Exchange in Sep. 2004 (stock code: 02618 HK) Status Page 18
Shareholding Structure TCL Group Mr. Li Dongsheng Public (000100 SZ) 46% 2% 52% TCL Communication Technology Holdings Limited ( 02618 HK ) Page 19
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