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The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

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Page 1: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,
Page 2: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

The State of the Industry - Australia

Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets, and video audio, home entertainment, domestic appliances and gaming products, is projected to be worth around US$12.2bn.

In 2009, with the government stimulus handouts and lower interest rates is having a positive effect on driving growth.

Retailers predict continued sales growth but with margins under pressure.

Page 3: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Australian Economy Coupled to Asia

Australia's Top Ten Export Markets

Japan23%

China15%

Republic of Korea9%India

6%

Other26%

United States6%

New Zealand4%

United Kingdom4%

Taiwan4%

Singapore3%

Japan

China

Republic of Korea

India

United States

New Zealand

United Kingdom

Taiwan

Singapore

Other

Japan, China South Korea & India account for >50% of AUST exports

Page 4: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Harvey Norman – 98 stores

Harvey Norman retail sales for the three months up to 30 September 2009 rose 4.3 per cent,

Mr Harvey, the chairman, said that Harvey Norman would have a "positive future" and added that it was increasing market share in “all key product categories”.

Management said there was a "significant improvement" in net profit from underlying operations in the second half of the year.

IG Markets analyst Cameron Peacock said: "The Harvey Norman result, while slightly down on last year, is clear confirmation that analysts became too pessimistic about the health of consumers and certainly underestimated their

resilience.”

Harvey Norman's franchisee sales revenue was $5.06 billion, up from $4.86bn, while company-owned sales revenue was $1.44bn, compared with $1.43bn in fiscal 2008.

Despite the growth in sales, full-year earnings before interest and taxes from continuing operations fell 31 per cent to $383m, from $555.1m last year.

Management said margins at Harvey Norman, franchisees in Australia remained under pressure.

Page 5: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

JB Hi FI – 130 storesHOME entertainment retail chain JB Hi-Fi has reported a surge in consumer spending and is tipping a strong

Christmas trading season as shoppers shrug off the impact of higher interest rates.

Sales growth for existing JB stores had increased over the past six weeks from 3.8 per cent in mid-August to average 8.4 per cent for the whole of the first quarter

The company expected another year of sales and earnings growth and said fiscal 2010 sales should be around $2.8 billion, up 20 per cent on year

Government stimulus cheques helped support consumer spending in the first half of the year but that money had largely worked its way through the system by July, so positive sales trends in recent weeks were an

encouraging sign for the retailer.

Home entertainment continues to become more of a staple category as consumers embrace technology."

Home entertainment products continued to be popular with consumers, despite the broader economic slowdown, JB Hi-Fi said. For the most part, retailers in the clothing, department store and supermarket

sectors have been reporting sales growth for the year.

The company raised its target payout ratio to 50 per cent of earnings to reflect "continued strong cash flows from existing stores" as well as "overall company growth".

Page 6: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Expected timing for improvement in business conditions

0

5

10

15

20

25

30

Alreadyunderway

Thirdquarter2009

Fourthquarter2009

Firstquarter2010

Secondquarter2010

Thirdquarter2010

Fourthquarter2010

Per

cent

age

of c

omp

anie

s

Total Services

Around 40 per cent of businesses expected an improvement in business conditions before the end of the year.

Services firms were the most likely to believe an improvement in conditions was already underway.

Fiscal and monetary policy stimulus appears to have had an impact in the sector.

Page 7: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Sector Performance & Trends

Data for some key CE product sectors

Product sales and market trends:> Small Kitchen Appliances> Air Conditioners> Flat Panels, DVDs & Set Top Boxes> Vacuum Cleaners> Personal Care> Cordless Phones> Interactive Games

Page 8: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Small Kitchen Appliances + 5.1%

Small Kitchen Appliances

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

Units

2008

2009

Page 9: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Air Conditioners + 4.1%

Air Conditioners

0

100,000

200,000

300,000

400,000

500,000

600,000

Portable SingleWindow Type

Split WallMounted

Other Types TOTAL

Units

2008

2009

Page 10: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Flat Panels, DVDs & Set Top Boxes + 141%

Digital TV Panels & Receivers

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

LCD Plasma PVR DVD-PVR

Blu-RayPVR

SD-STB HD-STB TOTAL

Units

2008

2009

Page 11: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Vacuum Cleaners + 6.7%

Vacuum Cleaners

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

Units

2008

2009

Page 12: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Vacuums - Bagged vs Bagless + 4%

Vacuums - Bagged vs Bagless

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Bagged Both Bagless TOTAL

Units

2008

2009

Page 13: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Personal Care + 9.4%

Personal Care

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000Units

2008

2009

Page 14: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Cordless Phones - 4%

Cordless Phones

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

DECT DSS WDECT WLAN Analogue Others TOTAL

Units

2008

2009

Page 15: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Interactive Games

In 2007-08 Sales of Video & Computer games is worth $1.5 Billion (AUD) an increase of 53% on the previous financial year

The Interactive Entertainment Association of Australia:

Page 16: The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets,

Ai Group’s Strategic Position

The strategic objectives of Ai Group’s electronics industry development agenda are to:

identify, improve and develop the capability of the electronics industry; promote a high level of communication, networking and cooperation in the electronics industry;

optimise the interaction and cooperation between government and the electronics industry;

promote greater involvement in national and global markets and increase the level of technology diffusion through global alliances; and

identify industry skills requirements and improve training and education programs.