Logitech 2015 Annual Report Download - page 119

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements that involve risks and uncertainties. The Company’s
actual results could differ materially from those anticipated in these statements as a result of certain
factors, including those set forth in the Company’s Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission and posted to the Company’s Investor Relations website, under
Item 1A, Risk Factors, in Item 7A, Quantitative and Qualitative Disclosures about Market Risk (which also
appears below), and elsewhere. Terms used and not otherwise defined in this Annual Report have the
meanings set forth in the Company’s Annual Report on Form 10-K.
Overview of Our Company
Logitech is a world leader in products that connect people to the digital experiences they care about.
Spanning multiple computing, communication and entertainment platforms, we develop and market
innovative hardware and software products that enable or enhance digital navigation, music and video
entertainment, gaming, social networking, audio and video communication over the Internet and home-
entertainment control. We have two reporting segments: peripherals and video conferencing.
Our peripherals segment encompasses the design, manufacturing and marketing of peripherals for
PCs, tablets and other digital platforms. Within our peripherals segment, we classify our retail product
categories as growth, profit maximization, and non-strategic. Our growth product categories are: Mobile
Speakers, Gaming, Video Collaboration and Tablet & Other Accessories. Our profit maximization
categories are: Pointing Devices, Keyboards & Combos, Audio-PC & Wearables, PC Webcams, and
Home Control.
Our brand, portfolio management, product development and engineering teams in our peripherals
segment are responsible for product strategy, technological innovation, product design and development
and to bring our products to market.
Our global marketing organization is responsible for developing and building the Logitech brand,
consumer insights, public relations, social media and digital marketing. Our regional retail sales and
marketing activities are organized into three geographic areas: Americas (North and South America),
EMEA (Europe, Middle East and Africa) and Asia Pacific (including, among other countries, China,
Taiwan, Japan and Australia).
We sell our peripherals products to a network of retailers, including direct sales to retailers and
indirect sales through distributors. Our worldwide retail network includes wholesale distributors, consumer
electronics retailers, mass merchandisers, specialty electronics, computers and telecommunications
stores, value-added resellers and online merchants. Sales of our retail peripherals were 89%, 88% and
87% of our net sales for fiscal years 2015, 2014 and 2013, respectively. The large majority of our revenues
have historically been derived from sales of our peripherals products for use by consumers. Our OEM
customers include several of the world’s largest PC manufacturers. Sales to OEM customers were 6% of
our net sales for each of fiscal years 2015, 2014 and 2013.
Our video conferencing segment encompasses the Cloud-based video conferencing solution,
design, manufacturing and marketing of Lifesize branded video conferencing products, infrastructure
and services for the enterprise, public sector and other small to medium business markets. Video
conferencing products include scalable high-definition, or HD, video communication endpoints, HD
video conferencing systems with integrated monitors, video bridges, and other infrastructure software
and hardware to support large-scale video deployments and services to support these products. The
video conferencing segment maintains a separate marketing and sales organization, which sells Lifesize
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Annual Report Fiscal Year 2015