Good afternoon, ladies and gentlemen, and welcome to all of our viewers online. Today, VTech Holdings Limited is announcing its results for the financial year end 31st March 2017. For your reference, the webcast of this announcement, accompanied by the presentation you will see shortly, will be available on VTech's website starting at 10:30 P.M. this evening, Hong Kong time. Here to present the results, on my left are Mr. King Fai Pang, Executive Director and Group President. Mr. Allan Wong, Chairman and Group CEO of VTech Holdings. Mr. Andy LEUNG, Executive Director and CEO of Contract Manufacturing Services. And Ms. Shereen TONG, Group Chief Financial Officer. First of all, Ms. TONG will present the group's financial performance. Next, Mr. LEUNG will review the group's operations. Mr. Pang will then give the management's outlook for the coming year. We will finish our presentation with a Q&A session.
May I now invite Ms. TONG to start today's presentation. Ms. TONG, please.
Thank you, Rowena. Good afternoon, ladies and gentlemen, and all viewers online. First of all, I would like to share with you the financial highlights of the group for the year end March 31st 2017, compared with the same period of the last year. As you see from the slide, the revenue of the group rose by 12% to a record revenue of $2,079.3 million. The increase in revenue was mainly driven by the higher sales in North America, Europe, and Asia Pacific, which offset the decrease in revenue in other region. The acquisition of LeapFrog on April 4th 2016, and Snom on November 21st 2016, also contribute to the sales growth compared with the last financial year. The gross profit of the group rose by 18.2% to $689.4 million, and our gross profit margin also improved from 31.4% to 33.2%.
The increase in gross profit and gross profit margin was mainly due to the gross profit contribution from LeapFrog and Snom, and the depreciation of the renminbi against the US dollar during the financial year. Cost of materials as percentage of the group revenue was also lower than the last financial year, as material costs decreased during the period. As for the direct labor cost and the manufacturing overheads as percentage of the group revenue, they were also lower than the same period last year as the group continued to reduce workforce through automations and process improvement. Our operating profit reduced by 1.1% to $200 million, and our operating profit margin also reduced from 10.9% to 9.6%. The decrease in both operating profit and operating profit margin was mainly due to the integrations of LeapFrog and the related restructuring costs incurred during the financial year 2017.
These also include the legal and professional costs associated with the investigation conducted by U.K.'s CMA from April 2016 to January 2017. The expenses related to the cyber attack occurring in November 2015 also contribute to the decrease in operating profit for the financial year. Our profit attributable to shareholder reduced by 1.3% to $179 million, and our net profit margin also reduced from 9.8% to 8.6%. As a result, our basic earnings per share reduced by 1.2% to $0.713, and our board of directors has proposed a final dividend of $0.53, bringing the total dividend per share for the year to $0.70. It also reflects an increase in dividend payout ratio from last year of 58.2% to 98.2%, a return to our historical dividend payout ratio level. Turning to the revenue by region.
North America remains the largest market of the group, accounting for 48.9% of the group's revenue. Our sales in North America rose by 13.7% to $1,016.2 million. The increase in revenue was mainly due to the increase in sales of our electronic learning products and Contract Manufacturing Services, which offset the lower sales of our telecom products. Our sales to European market rose by 9% to $867.8 million. The sales increase in Europe was mainly driven by the higher sales of our electronic learning product and Contract Manufacturing Services, which offset the lower sales of our telecom product. In Asia Pacific region, the revenue of the group rose by 13.2% to $148.6 million. The increase in revenue was due to the increase in sales of all our three product line. Other regions include Latin America, Middle East, and Africa.
The group revenue in other region reduced by 12.4% to $46.7 million. The decrease in sales in other region was mainly due to the lower sales of our telecom products, which offset the increase in revenue of our electronic learning products and Contract Manufacturing Services. Our stock balance as at March 31, 2017 increased from $285.4 million to $324.9 million. Our stock turnover days also increased from 93 days to 96 days. The higher stock level was mainly due to the acquisition of LeapFrog and Snom and the increased demand for the group's product in the first quarter of the financial year end 2018. We have also arranged early production for the group's product in order to better utilize the group's production capacity. Our trade debtor balance as at March 31, 2017 increased from $213.3 million to $275.4 million.
Our trade debtor turnover day also increased slightly from 63 days to 64 days. The higher trade debtor balance was mainly due to the increase in revenue in the fourth quarter of the financial year 2017. We also had a very tight management on our credit exposure. The overdue balance greater than 30 days only accounted for 2% of the group's gross trade debtor balance as at March 31, 2017. Our financial positions remains very strong. Our net cash balance as at March 31, 2017 was $267.1 million, reduced by 2.2% comparable to last financial year, the year-end day of $273 million. The decrease in net cash balance was mainly due to the payment for the acquisition of LeapFrog and Snom, and the reduction in cash generated from operating activities. As at March 31, 2017, we had a bank loan of $1.7 million acquired from Snom.
That's all of my presentation. I will now invite Mr. Andy LEUNG to share with you our operation review. Mr. LEUNG, please.
Thank you very much, Shereen, and sincere welcome to those who join us here and also those who are joining us online. We first take a look to the cost picture. For the fiscal year 2017, the gross profit margin of the group improved to 33.2% from 31.4% in the previous fiscal years. This was mainly due to the change in product mix, a relatively favorable cost environment, and the productivity gains. As you may know about, the group completed three strategic acquisitions during the fiscal year 2017. Our acquisition of LeapFrog, a leading developer of educational entertainment for children, was completed in April last year. LeapFrog is a strong educational brand, and its product range complement those of VTech. This acquisition allowed us to offer the broadest portfolio of products that enhance the educational and development of children around the world, and position VTech for higher growth.
The industrial leading team of LeapFrog, including content development, product marketing, consumer insight, and related infrastructure, have been retained at the office in California, where they continue to provide contribution to the group. LeapFrog's back-end operation had also been integrated into our global organization. Regarding production consolidation, majority of LeapFrog products are now being manufactured in-house in our factory in Dongguan. In November last year, we completed the acquisition of Snom Technology, a German company which is the pioneer in voice-over-IP development. There we have a strong synergy from combining Snom Technology technical expertise and well-established sales channel in Europe, together with VTech engineering and manufacturing capabilities. This acquisition will enable us to become a major player in the growing market for VoIP phone. Our third acquisition was in relation to our Contract Manufacturing Services.
In October 2015, we signed an agreement to acquire the fixed asset of a Shenzhen-based company. With the acquired fixed asset, we established our facility in Dongguan for manufacturing high-precision metal toolings and parts. This is an entirely new expertise for VTech. It not only extended our supply chain vertically to improve the group cost base, but also brought us a new product category to CMS as an additional source of revenue. The new facility had commenced the operation and started contribution to CMS revenue in the fourth quarter of fiscal year 2017. Now we look at the segment performance, beginning with North America. Group revenue in North America increased by 15.7% to slightly more than US 1 billion in the fiscal year 2017. Higher sales of ELP and CMS offset lower revenue from telecommunication product. North America remained VTech's largest market, accounting for around 48.9% of the group revenue.
ELP revenue in North America rose by 44.7% to $454.9 million. The increase was driven in part by the sale contribution from LeapFrog. Higher sales of VTech standalone product also contributed to the increase. The addition of LeapFrog strengthened VTech's position as the number one manufacturer of electronic learning toys from infancy through toddler and preschool in the U.S. In standalone product, growth was driven by higher sales of core VTech infant, toddler, and preschool products, augmented by contribution from LeapFrog standalone toys. Among our outstanding success during the year, the VTech Sit-to-Stand Learning Walker and Smart Shots Sports Center were the top two best-seller infant and toddler toys in the U.S. in the calendar year 2016. Sales of Go! Go! Smart family of product were down as growth in Go! Go! Smart Friends line was offset by lower revenue from Go! Go! Smart Wheels and Go! Go! Smart Animals.
Sales of platform product were up as a result of new VTech and LeapFrog product launch. The combined offering of children's educational tablet under both brands also contributed. VTech's Touch & Learn Activity Desk Deluxe and LeapFrog LeapStart Interactive Learning System hit U.S. retail shelf in August last year. Both of them were well received by the market. Sales of KidiZoom Smartwatch declined as the market waits for launch of the next generation of products. Telecommunications product revenue in North America decreased by 1.5% to $365.7 million. Continuous growth in commercial phone and other telecommunications product was insufficient to offset declining sales of residential phone. The drop in sale of residential phone reflected a further reduction of a landline telephone market. Nonetheless, VTech maintained its leading position in the U.S. residential phone market.
The growth in commercial phones and other telecommunications product was driven by higher sales of baby monitors, hotel phone, headsets, wireless monitoring system, conference phone, and voice-over-IP phone. Baby monitor benefited from more placement and new product launch. A new model featuring a video camera with interchangeable standard and wide-angle lenses proved very popular with consumer and sold particularly well. In hotel phone, VTech's growing reputation enabled us to win new projects and increase market share. Sales of headsets were improved by new Bluetooth model, specially designed for the professional trucker market. The VTech brand ErisStation, our conference phone with wireless microphone, and ErisTerminal, the voice-over-IP phone system, saw steady growth. CMS revenue in North America increased by 1.6% to $195.6 million, as higher sale in industrial product, solid-state lighting, and home appliance offset lower sales of professional audio equipment and communication products.
Industrial product and home appliance saw more order from existing customer, and we also gained additional business from their parent companies. Solid-state lighting increased because of the sale contribution from a new customer and an existing customer transferring a new product range to VTech. However, sales of professional audio equipment declined as a major customer placed fewer order due to excess inventory and delay to new projects. Communication product sale decreased because of lower orders from a home security system. Now returning to Europe. Group revenue in the region increased by 9.0% to $867.8 million. Higher sales of ELP and CMS offset a decline in telecommunications product. Europe was our second-largest market, accounting for 41.7% of the group revenue. ELP revenue in Europe rose by 9.8% to $357.4 million. The sale increase was as a result of growing VTech standalone product and sale contribution from LeapFrog.
Geographically, all of the group's key Western European markets, namely France, the U.K., Germany, the Netherlands, and Spain, recorded sales increase. VTech also strengthened its position as the number one infant and toddler toys manufacturer in France, the U.K., and Germany in the calendar year 2016. Growth in standalone product was driven by higher sales of core VTech infant, toddler, and preschool product, KidiZoom camera, as well as the Kidi and the Little Love. The growth was also supported by the consolidation of LeapFrog sales. However, sales of Toot-Toot family of products were down. During the fiscal year, VTech ELP won more than 30 leading industrial awards across continental Europe, including three Grand Prix du Jouet awards from France. Platform product sales in Europe improved slightly in the fiscal year 2017, mainly due to the new product launch and the sale contribution from LeapFrog.
During the financial year, the second generation of KidiZoom Smartwatch was rolled out to all European countries, and LeapStart was launched in the U.K. With LeapFrog brand tablet added to the portfolio, sales of children's educational tablet held steady. Revenue from telecommunication product in Europe decreased by 5.5% to $128.9 million. Sales of residential phone reduced because of the reduction of the fixed-line telephone market. On the other hand, commercial phone and other telecommunication product saw further growth. Sales of Voice over IP phone increased because of the contribution from Snom. Just like U.S., there were also highest sales of hotel phone as our reputation continues to grow in the market. Sales of integrated access device also increased due to new product launch by customer in the second half. Sales of CAT-iq headset were low, however, as a major customer changed sales and marketing strategy on product bundling.
Orders for baby monitor also declined due to the delayed launch of new product by some customer. CMS revenue in Europe increased by 14.2% to $381.5 million with higher sales of hearables, industrial product, and medical and health product. Hearables benefited from the increase in demand of the world's first wireless smart earphone. Other hearable product were also received well by the market. In industrial product, the sale growth was driven by smart meter for the U.K. market as utility supplier, backed up by the government regulation, encourages households to install the device to track their energy consumption pattern. Medical and health product sales increased as we started shipping hearing aids to a European customer. Sales of professional audio equipment were stable as more orders for USB audio interface product offset lower sale for audio mixer. Sales of switching mode power supply and home appliance, however, saw sales decline.
The decline in switching mode power supply was due to the change of ownership of a switching mode of customer, which ended up with decision of moving production back in-house. Lower demand from end customer affected the home appliance business of existing customer. Group revenue in Asia-Pacific increased by 15.2% to $148.6 million, with higher sales in all the three product lines. Asia-Pacific represented 7.2% of the group revenue. Revenue from ELP in Asia-Pacific was up by 28.9% to $52.7 million, as growth in Australia, South Korea, and mainland China offset a decline from Japan. We achieved significant growth and market share gain in Australia following the establishment of our own office in the country. The good performance in South Korea resulted from increased sale effort and product launch. In mainland China, sale growth was held back by the depreciation of Renminbi.
Sales in Japan were affected by excess inventory as one customer. As everywhere, LeapFrog brand products contribute to overall sales growth in the region. Telecommunication product revenue in Asia-Pacific rose by 5.8% to $38.1 million. Higher sales in Japan, Hong Kong, India, and South Korea offset lower sales in Australia. During the fiscal year, we increased sales further with a new customer in Japan. In Hong Kong, VTech's 3-in-1 connected home system was rolled out in the second half with a key broadband service provider. In India, the group won more orders for connected home from a key customer. While in South Korea, VTech started shipping voice-over-IP phone system to a new customer in the second half. Sales declined in Australia as a direct result of reduction of fixed-line telephone market. Sales of baby monitor continues to grow.
CMS revenue in Asia-Pacific rose by 10.9% to $57.8 million, driven by higher sales of home appliance, medical and health products, solid-state lighting, and professional audio equipment. Home appliance benefited from good sell-through of customer products. For medical and health products, we started producing and shipping complete diagnostic ultrasound system to a Japanese customer in the second half. Professional audio equipment and solid-state lighting recorded higher sales as existing customers sold more products to mainland China. Communication products and hearables, however, saw sales decline. Group revenue in other regions, namely Latin America, the Middle East and Africa, dropped by 12.4% to $46.7 million. Higher revenue from ELP and CMS was insufficient to offset lower revenue from telecommunication products. Other regions account for 2.2% of the total group revenue. ELP revenue in other regions increased by 15.7% to $13.3 million.
Sales to Latin America, the Middle East, and Africa improved, and the sales of these four products were consolidated. Telecommunication product revenue in other regions dropped by 20.9% to $32.6 million. The decline was because of the lower order from Latin America, the Middle East, and Africa. CMS revenue in the other region was just $0.8 million in the fiscal year 2017 as compared to $0.6 million in the prior fiscal year. Thank you. That concludes my part of the presentation. I will now hand over to King to talk about the outlook. King, please.
Thank you, Andy. Good afternoon, ladies and gentlemen. Looking ahead, we expect higher group revenue for financial year 2018, with sales increases across all three product lines. The trend for gross margin, however, is difficult to predict. Strong headwinds from foreign exchange movements are likely to continue, while cost of materials is expected to be higher. On the other hand, direct labor cost and manufacturing overheads as a percentage of group revenue are forecast to decrease slightly. Let's look at each of our product lines. First, electronic learning products. ELPs is expected to grow, driven by higher sales of both standalone and platform products. Standalone products will be boosted by the expansion of the VTech Baby, Infant, Toddler, and Preschool lines, supported by a wider range of learning toys under the LeapFrog brand. Growth in the platform category will be driven by the introduction of new products.
The VTech brand will see launches of new generations of children's communication devices and KidiZoom Smartwatch. For the LeapFrog brand, there will be two new tablets, LeapPad Ultimate for younger children, and for older children, there is a new and enhanced LeapFrog Epic called the Academy Edition. The successful LeapStart Interactive Learning System will also get an expanded library that includes licensed titles. Additionally, a new content-based product is being launched. It is called LeapFrog Academy, and it will be launched in major English-speaking countries in the second half of this calendar year. LeapFrog Academy is a subscription-based guided learning system designed by LeapFrog's industry-leading education experts and content developers. At launch, it will offer over 1,000 curriculum-based activities for children aged 3 to 6 years. Turning next to telecommunications products.
Telecoms is also expected to achieve growth in the financial year 2018, with higher sales of commercial phones and other telecommunications products. The acquisition of Snom will be a key driver. Its strong brand and extensive sales network, especially in Europe, will accelerate the group's introduction of new voice-over-IP phones into this growing market. Meanwhile, migration from traditional public switched telephone network to voice-over-IP telephony is driving adoption of CAT-iq handsets, especially via major telecoms operators. Global sales of our CAT-iq handsets are therefore expected to increase. The strong momentum of our baby monitors will continue through the introduction of new innovative models and increased placement. Hotel phones and conference phones are also expected to maintain their positive trends. Although sales of residential phones are expected to further decline, its pace will moderate as we gained more shelf space from U.S. retailers. Finally, CMS.
CMS is also well-positioned for growth. Sales will be driven by increased orders from existing customers in professional audio, hearables, industrial products, solid-state lighting, as well as medical and health products. This will offset an expected further decline in switching mode power supplies. The medical and health products category is expanding rapidly. To drive strong growth in this area, a dedicated strategic business unit has been set up within CMS. In this category, product-wise, we have started shipping complete diagnostic ultrasound systems to a Japanese customer in the second half of the financial year 2017. Orders for this product are expected to ramp up during this financial year. Meanwhile, production of hearing aids for a European customer has also begun. Finally, there will be a full-year sales contribution from the newly acquired high-precision metal parts business. Ladies and gentlemen, this concludes our