Financial Performance - Revenue for the fiscal year ended December 31, 2020, was $4,314.66 million, a slight decrease of 1.3% from $4,372.38 million in 2019[9] - Gross profit for 2020 was $579.77 million, resulting in a gross margin of 13.4%, down from 17.2% in 2019[9] - Operating profit decreased to $124.76 million, with an operating margin of 2.9%, compared to 6.3% in the previous year[9] - Profit attributable to owners of the company was $42.51 million, a significant decline of 81.9% from $235.41 million in 2019[9] - In 2020, the company's revenue was $4,315 million, a decrease of 1.3% compared to 2019, while profit dropped by 81.5% to $43 million[22] - Gross profit decreased by 23.1% from $754 million in 2019 to $580 million in 2020, with gross margin dropping from 17.2% to 13.4%[33] - Operating profit fell by 54.5% from $275 million in 2019 to $125 million in 2020, leading to a decrease in operating margin from 6.3% to 2.9%[37] - Net profit for the year decreased by 81.5% from $233 million in 2019 to $43 million in 2020, with profit margin dropping from 5.3% to 1.0%[39] Asset and Equity Management - Current assets increased to $2,848.11 million from $2,741.91 million in 2019, while total assets rose to $4,638.94 million[10] - Total equity reached $2,190.38 million, up from $2,077.35 million in 2019, indicating a strengthening balance sheet[10] - Cash and cash equivalents decreased from $892 million at the end of 2019 to $766 million at the end of 2020[40] - Trade receivables decreased from $930 million at the end of 2019 to $872 million at the end of 2020, due to improved management of overdue receivables[46] - Trade payables decreased from $691 million as of December 31, 2019, to $674 million as of December 31, 2020, with an average turnover days of 67 days compared to 71 days in 2019[47] - The debt-to-equity ratio as of December 31, 2020, was 11.6%, a significant increase from 2.7% as of December 31, 2019[48] Revenue Segmentation - The mobile devices segment was the largest revenue source, with a 4.9% decrease in revenue due to the removal of wired headphone jacks in new smartphones[22] - The communications infrastructure segment saw a 9.4% decline in revenue, impacted by U.S.-China trade conflicts and changes in optical module demand[22] - The computer and consumer electronics segment experienced a 10.1% increase in revenue, driven by the rise in demand for laptops and tablets during the pandemic[22] - The automotive, industrial, and medical segment grew by 11.7% in revenue, reflecting increased applications in these areas[22] - The smart home segment's revenue increased by 12.4%, benefiting from the demand for routers and network products during the pandemic[22] - Revenue from the mobile device segment decreased by 4.9% to $1,653 million, primarily due to the removal of wired headphone jacks in new smartphones[29] - The communication infrastructure segment saw a revenue decline of 9.4%, generating $802 million, impacted by changes in optical module business and trade conflicts[30] - The computer and consumer electronics segment experienced a revenue increase of 10.1%, reaching $875 million, driven by the demand for remote work and online learning during the pandemic[30] - The automotive, industrial, and medical segment's revenue increased by 11.7% to $145 million, benefiting from rising electric vehicle demand[28] - The smart home segment's revenue grew by 12.4% to $298 million, supported by the trend of interconnected home appliances[28] - Revenue from smart accessories decreased by 3.1% to $542 million, reflecting a growing market but facing challenges[28] Strategic Initiatives and Market Focus - The company emphasized advancements in technology sectors such as 5G, automotive electronics, smart accessories, IoT, and smart home solutions[14] - Despite challenges from the COVID-19 pandemic, the company aims to expand market share in rapidly growing industries[14] - The company remains committed to creating sustainable and long-term value for shareholders through strategic innovation and manufacturing advantages[14] - The company is focusing on developing next-generation connectivity solutions, including 5G mobile antennas and WiFi 6 Mesh technology[15] - A strategic alliance was formed with Fortinet to enhance the product portfolio under the Linksys brand, addressing the growing demand for secure remote work solutions[18] - The company is expanding production capacity in Vietnam to improve operational efficiency and profitability[15] - The company plans to strategically focus on mobile devices and automotive, industrial, and medical markets for future growth[26] - The company aims to enhance smart product development for home living, with new product launches at CES 2020[26] - The company will continue to seek emerging application opportunities in interconnect solutions, particularly in electric vehicles and automotive electronics[26] Corporate Governance and Leadership - Sidney Lu has been appointed as the Executive Director and CEO since December 30, 2013, with over 20 years of experience in connector technology business[60] - Lu Boqing has been the Global COO and CFO since March 16, 2015, providing strategic guidance for business development[61] - Chester John Pipkin has been an Executive Director since April 1, 2019, and is responsible for the smart home and smart accessories business[62] - The company has a strong leadership team with significant experience in their respective fields, enhancing operational efficiency and strategic direction[63] - The company is committed to maintaining high standards of corporate governance and financial transparency[61] - The board consists of three executive directors and four independent non-executive directors, complying with listing rules regarding board composition[155] - The independent non-executive directors have confirmed their independence, and the board has complied with relevant listing rules regarding their appointment[155] - The company has established an internal audit department with dedicated personnel to ensure the effectiveness of internal control systems and operational efficiency[199] Shareholder and Market Information - Sales to the top five customers accounted for 57.6% of total revenue for the year ended December 31, 2020, down from 66.1% in 2019[78] - The largest single customer represented 33.2% of total revenue for the year ended December 31, 2020, compared to 33.0% in 2019[78] - Purchases from the top five suppliers accounted for 37.4% of total procurement for the year ended December 31, 2020, down from 39.5% in 2019[79] - The largest single supplier accounted for 17.5% of total procurement for the year ended December 31, 2020, compared to 17.1% in 2019[79] - The company reported a distributable reserve of approximately $1,673 million as of December 31, 2020[82] - The company did not recommend a final dividend for the year ended December 31, 2020[75] Risk Management and Compliance - The company has adopted a prudent foreign exchange hedging policy, with a nominal amount of $440 million in forward foreign exchange contracts as of December 31, 2020[56] - The company has established arrangements for employees to confidentially report any misconduct related to financial reporting or internal controls[174] - The board is responsible for monitoring compliance with legal and regulatory requirements[169] - The internal audit department completed the 2020 risk management report, which was reviewed by the audit committee and the board[198] - The risk management framework includes a supervisory layer (the board and audit committee), an executive layer (functional departments), and a management layer (management team) to ensure effective risk management[198] Employee and Compensation Information - As of December 31, 2020, the company had approximately 55,402 employees, up from 47,163 employees in 2019, with total employee benefits expenses amounting to $750 million compared to $622 million in 2019[55] - The compensation committee reviews the compensation policy and overall compensation structure for directors and senior management based on the group's operating performance and market practices[89] - The company is committed to ensuring that no director participates in determining their own compensation[189] - The compensation committee is tasked with establishing transparent procedures for the remuneration of all directors and senior management[189] Environmental, Social, and Governance (ESG) Initiatives - The company is committed to environmental, social, and governance (ESG) initiatives, establishing a committee to enhance accountability in risk management and reporting[15] - The environmental, social, and governance committee held 1 meeting to review the revised ESG policies and related work for 2021[192]
FIT HON TENG(06088) - 2020 - 年度财报