Good afternoon, ladies and gentlemen, and welcome to all our viewers online. Today, VTech Holdings Limited is announcing its results for the year ended 31st of March 2015. For your reference, the webcast of this announcement, accompanied by the presentation you will see shortly, will be available on VTech websites starting at 10:30 P.M. this evening, Hong Kong time. Here to present the results, on my left are Mr. King Pang, Executive Director and Group President, Mr. Allan Wong, Chairman and Group CEO, 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 financial performance. Next, Mr. Pang will review the group's operations and talk about the group strategy. Mr. Wong will then give his outlook for the coming year. We will finish our presentation with a Q&A session.
Now may I invite Ms. Tong to open today presentation. Ms. Tong, please.
Thank you, Grace. 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 ended 31st of March 2015, compared with the same period of the last year. As you see from the slide, the revenue of the group reduced by 1% to $1,879.8 million. The decrease in revenue was mainly driven by the lower sales in North America, which offset the increase in revenue in Europe, Asia Pacific, and the other region. The gross profit of the group reduced by 3.8% to $610.5 million, and our gross profit margin also reduced from 33.4% - 32.5%. The decrease in gross profit and gross profit margin was mainly attributable to the change in product mix and the weaker-than-expected performance of our children's educational tablets.
As a result, we have a higher-than-expected trade allowance and increase in stock provision. Our labor costs and manufacturing overheads, however, reduced slightly compared with the same period of the last year as the group continued to improve productivity through automation, process improvement, and product optimization to offset the higher wages in China. Our cost of materials also remain largely stable in the financial year 2015. Our operating profit reduced by 2.9% to $220.1 million, and our operating profit margin also reduced from 11.9% - 11.7%. The decrease in operating profit and operating profit margin was mainly due to the decrease in gross profit and gross profit margin, which offset the reduction in total operating expenses of the group.
The decrease in the total operating expenses of the group was mainly due to the decreased spending on the group's advertising and promotional activities, which offset the higher administrative expenses arising from the increase in employee-related costs compared with the same period of the last year. Our profit attributable to shareholders reduced by 2.8% to $198.1 million, and our net profit margin also reduced from 10.7% - 10.5%. As a result, our basic earnings per share reduced by 3% to $0.789, and our board of director has proposed a final dividend of $0.61, bringing the total dividend per share for the year to $0.78. Turning to the revenue by region. North America remains the largest market of the group, accounting for 47.8% of the group's revenue. Our sales in North America reduced by 5.4% to $899.5 million.
The decrease in revenue was mainly due to the lower sales of our electronic learning products and the Contract Manufacturing Services business, which offset an increase in revenue of our telecom products. Our sales to European market rose by 2.6% to $812.3 million. The sales growth in Europe was driven by the higher sales of our telecom products and Contract Manufacturing Services business, which offset a decrease in revenue of our electronic learning products. In Asia Pacific region, the revenue of the group rose by 8% to $117.6 million. The increase in revenue was driven by the increase in sales of all our three product lines. Other regions include Latin America, Middle East, and Africa. The group's revenue in other regions rose by 6.1% to $13.4 million.
The increase in sales in other regions was mainly due to the higher sales of our telecom products and electronic learning products. Our stock balance as at 31st of March 2015 increased from $265.9 million to $290.2 million. Our stock turnover days also increased from 87 days to 96 days. The highest stock level was mainly to cater for the increased demand of the group's product in the first quarter of the financial year 2016, and we have also arranged early production of the group's product in order to better utilize the group's production capacities. Our trade debtors balance as at 31st of March 2015 increased from $208.6 million to $221.9 million. Our trade debtor turnover days also increased from 54 days to 57 days.
The increase in trade debtor balance was mainly due to the increase in revenue in the fourth quarter of the financial year 2015 compared with the same period of last year. Our financial positions remain fairly strong. We were debt-free, and our net cash balance as at 31st of March 2015 was $294.2 million, reduced from 8.9% compared with the last financial year-end date. The decrease in the net cash balance was mainly due to the lower operating profit compared with the same period of last year, and unfavorable foreign currency exchange movements on the group's net asset as a result of the depreciation in the foreign currency against US dollar during the financial year 2015. That's all of my presentation. I will now invite Mr. Pang to share with you our operations review. Mr. Pang, please.
Thank you, Shereen. Good afternoon, ladies and gentlemen, and welcome to our viewers online. As usual, I will first provide an update on the cost environment. Cost of materials remained largely unchanged in the financial year 2015. The weakening of the renminbi against the US dollar has also been a positive effect on our costs. Despite wage increases in China, our labor cost and manufacturing overheads were slightly lower as we continued to improve our productivity through automation, process improvement, and product optimization. Specifically, in the financial year 2015, the number of workers was further reduced by 4.7% over the previous financial year. These positive factors notwithstanding, as we heard from Shereen, gross margin declined year-on-year. This is due to a change in product mix and weaker-than-expected performance of our children's educational tablets. The latter resulted in higher-than-anticipated trade allowances and increased stock provision. I now turn to revenue.
First, North America. Group revenue in North America decreased by 5.4% to $899.5 million. Lower revenues from ELPs and CMS offset high revenue from telecommunication products. North America remains our largest market, accounting for 47.8% of group's revenue. ELP revenue in North America during this financial year decreased by 16.2% to $300 million. Sales of both platform and standalone products declined. However, despite the challenging market in the calendar year 2014, VTech became the number one manufacturer as measured by retail sales value in infant and preschool electronic learning toys in the U.S. market. In platform products, as we heard, sales of our InnoTab range of education tablets suffered a year-on-year decline. The children's tablet market in the U.S. contracted further and proved to be highly competitive. Channels were also stuffed with higher-than-expected inventory throughout most of the year.
In other platform products, in July 2014, we launched in the U.S. KidiZoom Smartwatch, the world's first smartwatch for children with a built-in camera. It achieved strong sales and was recognized in many top toy lists. Standalone products showed a slight sales decline due mainly to tightened inventory management among several retailers. There was a strong growth in the Go! Go! Smart family of products, but this was offset by lower sales of our core infant and preschool learning range. Switch & Go Dinos also recorded sales decline as the product line matured. During this financial year, new models were introduced in the successful Go! Go! Smart Wheels line. In addition, the launch of Go! Go! Smart Animals and Go! Go! Smart Friends also generated incremental sales.
The highlight of these new launches was the Go! Go! Smart Animals Zoo Explorers Playset, as you can see there, which won the prestigious 2015 Infant Toddler Toy of the Year award from the American Toy Industry Association. Telecommunication products revenue in North America rose by 4.4% to $416 million. This increase was driven by higher sales of commercial phones and other telecommunication products, offsetting a slight sales decline in residential phones. Sales of commercial phones continued to grow, driven by higher sales of small to medium-sized business phones and cordless headsets. This was augmented by the launch of ErisStation, our first conference phone with wireless microphones, and ErisTerminal, our SIP phone systems. Hotel phones also reported higher sales. In other telecommunication products, baby monitors recorded strong sales increase as we expanded distribution channels and increased placement.
Sales of residential phones, however, recorded a slight decline due to further contraction of the fixed-line market. Despite this, VTech consolidated its number one position in the U.S. residential phones market. We have also continued to gain shelf space with retailers and expanded our sales channels. Finally, CMS. CMS revenue in North America decreased by 5.4% to $183 million. Sales declines in professional audio equipment and communications products were only partially offset by higher sales of solid-state lighting, industrial products, home appliances, as well as medical and health products. Sales of professional audio products declined as an existing customer issued fewer orders in response to over-inventory. This customer also completed the in-house transfer of the manufacturing of one of its product families. Sales of communication products also decreased as one of our customer's product line reached its end of life.
In contrast, sales of solid-state lighting and industrial products grew, and we have also become the sole supplier to one of our existing industrial products customers. Home appliances and medical and health products both recorded higher sales as our customers expanded sales channels and launched new products. Moving now to Europe. Group revenue in Europe increased by 2.6% to $812 million. Higher sales of telecommunication products and CMS offset sales decline in ELPs. Europe was our second-largest market, accounting for 43.2% of group revenue. ELP revenues in Europe decreased by 6% to $362.6 million. Higher sales of standalone products were enabled to offset sales decrease in platform products. Depreciation of the euro and pound sterling against the US dollar during this financial year also negatively impacted the reported revenue.
Among our key Western European markets, sales of ELP in Germany increased, while those in the U.K., France, and Spain declined. In platform products, our educational tablet, called InnoTab in the U.K. and Storio in other European markets, faced similar challenges as in North America. Despite this, it remained the best-selling children's tablet in Europe, and significantly, it regained the number one position among all toys in the top five European markets in the calendar year 2014. KidiZoom Smartwatch was introduced to our major European markets in June 2014. It has performed well, becoming one of the top 10 best-selling new toys in the U.K. in 2014. For our standalone products, growth was driven by the Toot-Toot family. New models were added to the popular Toot-Toot Drivers range. Toot-Toot Animals was also launched in our key European markets.
In calendar year 2014, we further increased our market share and strengthened our position as the number one infant toy manufacturer in France, the U.K., and Germany. We have also overtaken our competition and became the largest infant toy manufacturer in Spain. Significant among the many recent new products introductions is the launch of KidiZoom Action Cam in our major European markets this past March. This latest addition to our popular KidiZoom range of cameras has been well-received. Another important recent launch is a new model of Little Love, a range of interactive baby dolls. They received especially good market reception in France. The Peek-a-Boo doll became the best-selling nurturing doll for the spring period in France. Revenue from telecommunication products in Europe increased by 2% to $157 million. Higher sales of commercial phones and other telecommunication products offset sales decline in residential phones.
In commercial phones, sales of SIP phone systems increased as our distribution channel continued to expand. Sales of CAT-iq handsets enjoyed strong growth as network operators continued to replace traditional PSTN with Voice over IP services. Sales of baby monitors increased as the group introduced new video models, offering an extensive range of products for the market. Sales of residential phones were lower, due mainly to the decline of the fixed-line telephony market. Despite this, we maintained our market share as one of the leading cordless phone manufacturers in the region. CMS revenue in Europe increased by 16.1% to $292.3 million. Sales increased in almost all product categories. Sales of wireless headsets grew as we secured increased orders from existing customers. Sales of switching mode power supplies were higher as orders came in for data centers and for the region's general upgrade from 3G to 4G mobile technology.
Sales of home appliances also rose, owing to increased orders from an existing customer in Italy. However, sales of professional audio equipment registered a decline as a customer transferred products that required custom configuration to in-house. Turning now to our home region, Asia Pacific. Group revenue in Asia Pacific increased by 8% to $117 million, with higher sales in all three product lines. Asia Pacific accounted for 6.3% of group revenue. Revenue from ELPs in the region increased by 21.6% to $25.9 million, driven by growth in China, Hong Kong, and Korea. The growth in China was due mainly to the continued performance of the Switch & Go Dinos, as well as driven by the launch of Go! Go! Smart Wheels and KidiZoom Smartwatch in the China market. Here in Hong Kong, growth was seen in all product categories, platform, as well as box products.
Further inroads for ELPs were also made in Korea, following the expansion of our distribution network there. Sales in Australia, however, recorded a decline as we completed the transition from the previous distribution arrangement for ELPs to our own sales office. With this investment, we are now positioned to return to growth in coming years. Telecommunication products revenue increased by 4.6% to $43 million. Sales growth was recorded in Australia and Japan. In Australia, we recorded higher sales in residential phones and gained market share as our retail shelf space increased. Sales of baby monitors also increased, supported by expanded distribution channels. Higher sales in Japan were driven by new model launches by one of our customers there. We have also made inroads in telecommunications products in Thailand, Malaysia, and Korea.
CMS revenue in Asia Pacific increased by 4.7% to $48.7 million, driven by higher sales of wireless products, medical and health products, as well as solid-state lighting. Sales of wireless products posted good growth due to increased orders of wireless headsets and sales contribution from a new customer. Sales of medical and health products increased as our customers in Japan achieved higher sales. Sales increase in solid-state lighting was driven by orders from the Youth Olympic Games in Nanjing, China, during the first half of the financial year. Finally, other regions. Other regions includes Latin America, the Middle East, and Africa. Group revenue in this region rose by 6.1% to $54 million. This region accounted for 2.7% of group's revenue. ELP revenue in other regions increased by 10.4% to $14.8 million. Sales decline in the Middle East was offset by increase in Latin America and Africa.
Telecommunication products revenue in other regions increased by 6.7% to $35 million. Higher sales were recorded in Latin America, the Middle East, and Africa. CMS revenue in other regions was $0.5 million as compared to $1.2 million in the previous financial year. I now move on to sharing an overview of our strategy. As I am sure many of you know, our time-tested strategy focuses on four areas: product innovation, market share gains, geographic expansion, and operational excellence.
Product innovation is the key driver for VTech to stay ahead of competitions in our ever-changing markets. First, ELP. We have a strong pipeline of products in ELP. In standalone products, our successful Go! Go! Smart family continues to expand with new themes, as well as with more vehicles and play sets. The Go! Go! Smart Friends range, launched exclusively with Toys" R" Us last year, will be introduced worldwide in this calendar year.
We will also enter new aisles by launching new product categories. The global launch of Flipsies, a range of transformable dolls and play sets, will drive our penetration into the girls aisle. We are also successfully breaking into the dolls aisle with our range of interactive dolls, first launched in European markets in June 2014. These are branded Little Love in Europe, and in the U.S. they are branded Baby Amaze. KidiZoom Action Cam is the latest addition to our range of cameras for children. It has been launched in Europe and will be launched globally through this calendar year. Actually, it was launched in the U.S. last week. For our core learning products, we will continue to broaden and refresh our product portfolio. As in prior years, over 100 new models will be introduced worldwide this year. Our portfolio of platform products will also become more diverse.
A new generation of the popular and successful KidiZoom Smartwatch will be rolled out. This calendar will also see the launch of new innovative platform products from VTech, and since we have not announced them, therefore, you are seeing a blank gift box. Despite recent challenges, we are set to stay in the children's tablet market as it remains a sizable business for us around the world. Market research shows that parents continue to look at VTech as a preferred tablet supplier for their children. Our tablets are designed specifically for children with content that is both educational and engaging. Moving forward, our effort will focus on bringing our tablet products that are even more compelling for both children and their parents. In telecommunication products, commercial phones and other telecommunication products will continue to be the growth drivers.
New models will be introduced for ErisStation and ErisTerminal to complete a full product range for VTech conference phones and SIP phone systems. Our highly successful baby monitor range will be expanded with new video models boasting a bigger screen, and this line will also include Wi-Fi-enabled devices. We are also planning to enter the smart home arena by launching a range of wireless monitoring devices based on a standard called ULE, which is short for ultra-low energy. These products include specially designed ULE-enabled cordless phones, IP hubs, baby monitors, and a high-definition Wi-Fi camera, all of which wirelessly connect to a range of ULE controls and sensors. In residential phones, we will continue to launch feature-rich products with superior design to strengthen our global leadership in the cordless phone market. VTech CMS enjoys an enviable reputation for service and expertise in our core product categories.
Supported by a stringent quality control system and an experienced management team, we will continue to innovate in the area of design for manufacturing, delivering flexible service, and high-quality products. Our proficiency in handling low to medium quantities with a high product mix has enabled us to grow with new customers from a small base, and this is an important factor for the continuous growth of our CMS business. Gains in market share is the second pillar of our strategy. In addition to delivering a steady stream of innovative products and breaking into new product categories, we strive to increase our market share through excellence in services and increased efforts in sales and marketing. In the calendar year 2014, we gained market share in cordless phones and consolidated our position as the number one cordless phone manufacturer worldwide.
We also strengthened our position as the global leader in ELPs from infancy to preschool. Our CMS, meanwhile, continued to be one of the world's top 50 EMS providers. Geographic expansion is the third pillar for our strategy. As markets outside North America and Europe currently account for less than 10% of Group's revenue, we strive to step up our emphasis on expansions in Asia Pacific and other regions. In Asia Pacific, we will focus on increasing our presence in China and Australia, where our products are already well-received. Recently, we have set up our own sales office for ELPs in Australia, allowing us to provide more timely support to retailer customers, as well as stepped up sales and marketing efforts. We have also started selling residential phones under the VTech brand in Australia.
This follows the expiration of our licensing agreement with Telstra in December of last year. In addition, we will step up efforts to extend our reach into Japan and Korea. In other regions, selected markets in Latin America and the Middle East will continue to be developed. Finally, operational excellence. Operational excellence is crucial for our competitiveness and for driving profitable growth. As wages in China continue to rise and worker recruitment becomes more difficult, we will increase our automation efforts. Together with continuous process improvement and product optimization for manufacturing, this will enable us to increase our factory output while continuously reducing the number of workers. This concludes my report, and I'll now ask our Chairman, Mr. Wong, to come and share our outlook for the financial year. Allan.
Thank you, King. Good afternoon, everyone, and hello to all online viewers. I now turn to our outlook for the coming year. The U.S. economy is continuing its moderate recovery. However, the prospect for Europe are uncertain, and quantitative easing by the European Central Bank has already led to a significant depreciation of the euro, which will have a negative impact on our European revenue. But despite this, we are planning for a modest revenue increase in the financial year 2016. Our ELP business is expected to be stable. Looking at the platform products, we are forecasting a decline in sales of these products as the children's tablet market remain challenging. The sales contribution of children's educational tablets will become smaller year on year. But we expect KidiZoom Smartwatch to continue to grow. Furthermore, new innovative platform products will contribute additional revenue streams.
The picture is different in standalone products, which we forecast to grow. The growth will be supported by the expansion of the Go! Go! Smart Family, the nationwide distribution of Go! Go! Smart Friends, and the launch of KidiZoom Action Cam and Flipsies worldwide. The extension of the Little Love Baby Amaze line will enable us to increase our presence in the dolls category in Europe while winning shelf space in the U.S. Our new core infant and preschool learning products will strengthen our leadership position in these categories. Telecommunication products are expected to maintain their positive sales trends, led by commercial phones and other telecommunication products. In commercial phones, we will benefit from the full deployment of CAT-iq handsets in major European countries such as France, Germany, and Switzerland. The introduction of our new conference phones and SIP phone models will further stimulate growth.
We are also stepping up our efforts on the interoperability of our SIP-based product with network operators, which will boost our market presence further. Other telecommunication products will see higher sales, which will come from the strong momentum of baby monitors as we expand the sales channels and introduce more new products. The global launch of the wireless monitoring system will add incremental sales. Despite the continued decline of the overall fixed line telephone market, we expect sales of VTech residential phones to be stable as we maintain our leadership position in North America and Europe, while growing our market share in Asia Pacific and other regions. CMS sales are expected to increase. Professional audio equipment is on track to return to a growth path. There are three reasons for this. Firstly, the customer who faced excess inventory has worked through the issue and intend to increase orders.
Secondly, business with other professional audio customers will grow as we secure more projects owing to our service excellence. Finally, we also added new clients in professional audio equipment in the last financial year who will ramp up orders gradually in this financial year. Wireless handsets will achieve further growth as existing customers launch new products, while our strong reputation in the wireless products area is enabling us to enter new product categories such as smart hearable and wearable devices. Business from solid-state lighting will remain stable. In contrast, the change of ownership of a customer in switching mode power supplies creates uncertainty. In order to cope with the growth of our CMS business, we have added a new factory building that will commence operations in July 2015. It will increase manufacturing capacity by 25%.
On gross margin, we do not anticipate any improvement year on year against the backdrop of a strong US dollar. Our cost of material is expected to be stable, and the renminbi will probably remain in a narrow range. Labor cost and manufacturing overheads in China will rise further. However, the group will continue to offset these costs through automation, process improvement, and product optimization. In summary, VTech has a culture rooted in innovation and technology. Our market leadership, strong brand name, R&D capability, strong balance sheet, and operational efficiency differentiate us from our competitors. We will continue to bring out innovative products, increase market share, expand geographically, and strive for operational excellence to generate sustainable return for our shareholders.