Hong Kong-listed power tools manufacturer Techtronic Industries (TTI) showed strong growth in its financial results for the year ended December 31. The company, which is celebrating its 25th year, says the solid performance was observed across all businesses, resulting in excellent growth.
The good financial showing was the result of strength in new products, geographic expansion, and significant operational efficiencies in a period of rising input costs, the company said in its stock exchange announcement.
Techtronic's turnover was HK$26.4 billion for the full year, representing a 10 per cent increase over 2009. The full-year profit attributable to owners of the company was HK$740 million, an increase of 50.7 per cent over the previous year, and earnings per share increased 45.1 per cent to 46.23 HK cents over the previous year.
TTI chairman Stephan Horst Pudwill says: 'We are pleased with these results. Entering 2011, our excellent product portfolio and superior brands give us strong confidence, and the group will capitalise on the opportunities and drive further growth.' Joseph Galli, TTI's CEO, says: 'We continued to invest in developing exciting new products, building our brands, expanding global operations, and implementing cost-containment programmes. These actions have further strengthened TTI's market leadership position. Our strong growth and improvement in profit margins underscores the effectiveness of our strategies. I am very excited about TTI's future.'
TTI continued to invest in developing exciting new products, building its brands, expanding global operations, and implementing cost-containment programmes. The company says these actions have further strengthened its market leadership position and have increased demand for its brands and products.
'During the period, our gross profit margin increased to 32.2 per cent, up from 31.3 per cent in 2009. This was a result of ongoing new product introductions and efficiency gains through broad, systematic cost reduction and productivity programmes put in place that countered rising input costs,' the company said in its statement to the stock exchange.
Earnings before interest and tax increased by 33.1 per cent to HK$1.3 billion, representing a margin improvement of 80 basis points.
Additionally, Techtronic initiated the restructuring of its German power-tool manufacturing and gradual relocation to its Czech Republic and China facilities, which will further enhance profitability going forward. A non-recurring provision of HK$208 million was taken for the full year and no further charges are expected. Earnings before interest, tax and one-time charges was HK$1.51 billion, 54.4 per cent above 2009.
'We continue to manage our working capital with an improvement in inventory days. We are comfortable with our current working capital level to meet our service requirements and fund our business growth. Our gearing position improved to 72.9 per cent at the end of the year from 78.6 per cent in the first half of 2010,' the firm says. On its branding, TTI says its portfolio of leading brands continued to generate outstanding growth through brand extensions into new products and categories.
TTI's brands hold leading positions in their respective markets and have created a loyal following with end-users. The company intends to expand its brand reach into new product categories and under-represented markets. TTI says that its commitment to launching new innovative products and its leadership position in cordless technology, particularly lithium-ion, continues to drive growth. New products accounted for approximately one-third of global sales last year.
TTI's new product development process maximises speed-to-market, with a deep understanding of the customers' needs, allowing the company to deliver a continuous stream of innovative new products that help grow TTI's market share.
'Our relentless focus on cost containment has been beneficial to the group, with gross margin improvements over the past two consecutive years. Value engineering projects and supplier initiatives across the group continue to offset rising material and labour costs, building sustainable margin improvements. Product mix, volume leverage and accelerated integration of our production facilities are further improving operating performance,' the firm says. TTI's recently constructed Asia Industrial Park has absorbed the increase in production volumes from the relocation of its outdoor products manufacturing into the facility last year, and higher volume from its businesses.
At the beginning of this year, the completion of its Asia Innovation Centre will bring research and development synergies, and productivity efficiencies that will further enhance its already best-in-class, speed-to-market capabilities.
The company's directors have recommended a final dividend of 6.25 HK cents per share for the year ended December 31, payable to shareholders whose names appear on the register of members of the company on May 20. This payment, together with the interim dividend of 3.75 HK cents per share paid on September 29 last year, makes a total payment of 10 HK cents per share for 2010.