Logitech 2015 Annual Report Download - page 4

A few years ago, we promised to deliver fewer, bigger
products. And we are delivering. Take the UE BOOM mobile
speaker for example. Not only was it our biggest product
in Fiscal Year 2015, it has become our best performing
product in the 34-year history of the company. The UE
MEGABOOM – UE BOOM’s big brother – immediately
became a top five selling product in Q4. And we launched
another family member, the wild child of UE BOOM, UE
ROLL, just a few weeks ago.
Another example can be found in our Video Collaboration
business. The Logitech ConferenceCam CC3000e – a
video camera, mic and speaker in a single unit – has
seen a very positive reception. It’s another top-selling
product, just like the G502 PROTEUS CORE Tunable
Gaming Mouse that quickly became our biggest gaming
mouse after launch last year.
Five of our top 13 products in the company are now
from our Growth category. And innovative products from
our traditional businesses, like the Logitech Bluetooth
Multi-Device Keyboard K480, are catching consumers’
attention too. Last quarter, six of our products were
honored with Red Dot 2015 Product Design Awards.
We were also multiple honorees at CES. Over the last
eighteen months, we’ve received over 50 prestigious
design awards – more product design awards than in any
period in our history.
This shows the power of the long-term strategies we
have put in place to transform Logitech for the future.
Looking Ahead
We closed a solid Fiscal Year 2015 with healthy
momentum. Looking ahead, however, the strong U.S.
dollar is presenting a challenge for Logitech.
The dollar’s strength has negatively affected our margins
over the last few months. We do not believe this is simply
a short-term change and we went on the offensive.
We deployed price increases in impacted markets across
most of our products and will continue to assess prices
as products launch throughout Fiscal Year 2016. We
developed new cost reduction initiatives targeting our
products, overhead and infrastructure. These build on FY
2015’s disciplined spend management – our operating
expenses were down for the second consecutive year
and fell to their lowest level in five years. We are also
undertaking a targeted realignment of resources, notably
exiting our OEM business and reorganizing Lifesize as a
cloud-based provider.
(iv)
Thanks to this price and cost management initiative, we
expect to be able to invest more deeply into the many
growth opportunities we see ahead of us. Over the last
two years, we have already reduced our R&D spend in
traditional PC Peripherals by over two thirds, reinvesting
the savings into our Growth category and future projects.
We will also invest in new capabilities, both in R&D
and in our regional go-to-market organizations. Last,
but not least, we are returning more value to you, our
shareholders, through dividends and share buybacks.
Thanks to this price and cost
management initiative, we expect to
be able to invest more deeply into the
many growth opportunities we see
ahead of us.
We thank our committed and hard-working employees.
They have helped transform Logitech into a company that
can grow again. And we thank you, our most committed
shareholders, for your loyalty over this last year. We
look forward to Fiscal Year 2016 as we accelerate our
transformation for growth.
Guerrino De Luca
Chairman of the Board
Bracken P. Darrell
President and Chief Executive Officer
Letter to Shareholders