`
`I
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`60-‘\
`Logitech
`
`
`
`disclosures associated with any recorded income tax uncertainties. FIN 48 is effective for fiscal years beginning
`after December 15, 2006 and is required to be adopted by the Company in the first quarter of fiscal year 2008.
`The cumulative effects, if any, of applying FIN 48 will be recorded as an adjustment to retained earnings as of
`the beginning of the period of adoption. We are evaluating the financial statement and disclosure impact of
`adopting FIN 48. In May 2007, the FASB issued FASB Staff Position FIN 48-1, “Definition of ‘Settlement’ in
`FASB Interpretation No. 48” (“FSP FIN 48-1”). FSP FIN 48-1 provides guidance on how a company should
`determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax
`benefits. FSP FIN 48—1 is effective upon initial adoption of FIN 48, which we will adopt in the first quarter of
`fiscal year 2008.
`
`In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value
`Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value
`under generally accepted accounting principles, and expands disclosures about fair value measurements.
`SFAS 157 affects other accounting pronouncements that require or permit fair value measurements where the
`FASB has previously concluded that fair value is the relevant measurement attribute. SFAS 157 does not require
`any new fair value measurements, but may change current practice in some instances. SFAS 157 is effective for
`fiscal years beginning after November 15, 2007. We will adopt SFAS 157 in the first quarter of fiscal year 2009,
`and we are evaluating the financial statement and disclosure impact.
`
`In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
`Financial Liabilities — including an amendment of FAS 115” (“SFAS 159”). SFAS 159 allows companies to
`choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not
`otherwise required to be measured at fair value. Unrealized gains and losses shall be reported on items for which
`the fair value option has been elected in earnings at each subsequent reporting date. SFAS 159 also establishes
`presentation and disclosure requirements. SFAS 159 is effective for fiscal years beginning after November 15,
`2007 and is required to be adopted by the Company in the first quarter of fiscal year 2009. SFAS 159 will be
`applied prospectively. We are currently determining whether fair value accounting is appropriate for any of our
`eligible items and cannot estimate the financial statement and disclosure impact which SFAS 159 would have, if
`any.
`
`Results of Operations
`
`Year Ended March 31, 2007 Compared with Year Ended March 31, 2006
`Net Sales
`
`Net sales by channel and product family for fiscal years 2007 and 2006 were as follows (in thousands):
`
`-mi & W
`
`Net sales by channel:
`Retail ................................
`OEM ................................
`Total net sales .....................
`
`Net sales by product family:
`Retail — Cordless .......................
`Retail — Corded ........................
`Retail — Video .........................
`Retail — Audio .........................
`Retail — Gaming .......................
`Retail — Remote Controls ................
`Retail — Other .........................
`OEM ................................
`Total net sales .....................
`
`$1,844,395
`222,174
`$2,066,569
`
`$1,588,033
`208,682
`$1,796,715
`
`$ 525,885
`332,129
`313,932
`404,069
`145,784
`91,739
`30,857
`222,174
`$2,066,569
`
`$ 448,358
`314,695
`273,340
`334,496
`136,944
`57,227
`22,973
`208,682
`$1,796,715
`
`16%
`6%
`15%
`
`17%
`6%
`15%
`21%
`6%
`60%
`34%
`6%
`15%
`
`38
`
`
`
`Logitech’s cordless and corded product families include our mice, trackballs, keyboards and desktops; video
`is comprised of PC webcams; audio includes multimedia speakers and headset products for the PC, and mobile
`entertainment and communication platforms; gaming includes console and PC peripherals; remote controls
`includes our advanced remote controls for home—entertainment systems; and other is comprised of our 3D input
`device offerings and Slim Devices wireless music systems.
`
`Net sales in fiscal year 2007 increased significantly from the prior year due to continued growth in demand
`for the Company’s retail and OEM products. Retail sales growth was largely attributable to strong demand for
`desktops and keyboards, cordless mice, video, speakers and remote control products. OEM sales also returned to
`growth based on strong demand for embedded video. Approximately 55% of the Company’s sales were
`denominated in currencies other than the US. dollar in fiscal year 2007. Although the Euro continued to
`strengthen in fiscal year 2007, any potential benefit does not consider the impact that currency fluctuations had
`on our pricing strategy, resulting in lowering or raising selling prices in one currency to avoid disparity with
`US. dollar prices and to respond to currency-driven competitive pricing actions. We believe that currency
`fluctuations did not have a material impact on our revenue growth in fiscal year 2007.
`
`Retail Cordless. Sales of the Company’s retail cordless products in fiscal year 2007 increased 17%
`compared with fiscal year 2006, while units sold increased 15%. The growth was led by sales of cordless mice,
`which increased 25% in dollars and 18% in units, based on the success of new launches such as the MXTM
`Revolution cordless laser mouse, the VX RevolutionTM cordless laser mouse for notebooks and the V450 laser
`cordless mouse for notebooks. Cordless desktop and keyboard sales grew 11% while units increased 12%,
`anchored by the new ultra-high—end diNovo EdgeTM keyboard.
`
`Retail Corded. Desktops and keyboards also boosted sales of corded products by 6% with units increasing
`7% compared with the prior year. The Logitech Alto, our portable notebook stand with an integrated keyboard,
`made a significant contribution to the growth in the category. Sales of corded mice declined 1% while units
`increased 3%, primarily due to a decline in gaming mice sales.
`
`Retail Video. Retail video sales and units increased 15% compared with the prior year. Demand for
`webcams was strong in the first three quarters of the fiscal year, but faltered in the fourth quarter due to
`significantly slower market growth and loss in market share.
`
`
`
`Retail Audio. Retail audio sales increased 21% and units increased 20% compared with the prior year. The
`growth came primarily from speakers, with sales increasing 35% and units increasing 38%, reflecting strength in
`both PC speakers and digital music speakers, including our portable speakers for iPod and the X—540 and X—230
`PC speakers. Sales of headsets increased 24% and units grew 27%.
`
`Retail Gaming. Sales in retail gaming grew 6% while units sold declined 11% compared with the prior
`year. Sales of PC gaming peripherals returned to growth, increasing 63% while units increased 24%. Demand
`was particularly strong for the G25 Racing Wheel and the G15 Gaming Keyboard, Sales of console peripherals
`decreased 38% in dollars and 36% in units, as consumers waited for the transition to Playstation 3 which
`occurred late in the fiscal year. Our peripherals for Playstation 3 were ready for the transition, resulting in an
`increase of 9% in console gaming sales in the fourth quarter.
`
`Retail Remote Controls. Sales increased 60% and units sold increased 67% compared with the prior year,
`due to growth in demand, particularly for the touch-screen Harmony 1000.
`
`Retail Other. Sales in the other retail category increased 34% compared with the prior year, primarily due
`to sales of Slim Devices products, which were acquired in fiscal year 2007. Other retail includes sales of 3D
`control devices and Slim Devices wireless music systems.
`
`Retail Regional Performance. Retail sales in the Americas region increased 18%, with strong performance
`in the cordless product line and in Harmony remote controls. European retail sales increased 16%, due to strong
`
`39
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`Logitec
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`
`Annual Report 0 8
`
`Our Products Make It Personal
`
`
`
`under SFAS 141R, changes in deferred tax asset valuation allowances and acquired income tax uncertainties
`in a business combination after the measurement period will impact income taxes. SFAS 141R is effective
`for fiscal years beginning after December 15, 2008 and, as such, we will adopt this standard for any future
`acquisitions beginning in fiscal year 2010.
`
`In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures
`about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133”
`(“SFAS 161”). This Statement requires enhanced disclosures about an entity’s derivative and hedging
`activities. SFAS 161 is effective for financial statements issued for
`fiscal years beginning after
`November 15, 2008 and interim periods within those fiscal years. We will adopt SFAS 161 in the first
`quarter of fiscal year 2010, and we are evaluating the disclosure impact.
`
`Results of Operations
`
`Year Ended March 31, 2008 Compared with Year Ended March 31, 2007 _
`Net Sales
`
`Net sales by channel and product family for fiscal years 2008 and 2007 were as follows (in thousands):
`
`2008
`
`2007
`
`Change "/0
`
`Net sales by channel:
`Retail ........................
`OEM ........................
`
`$ 2,067,288
`303,208
`
`$ 1,844,395
`222,174
`
`Total net sales .............
`
`$ 2,3 70,496
`
`$ 2,066,569
`
`Net sales by product family:
`Retail - Pointing Devices ........
`Retail - Keyboards & Desktops
`.
`.
`.
`Retail - Audio .................
`Retail - Video .................
`Retail - Gaming ................
`Retail - Remotes ...............
`OEM ........................
`
`$ 622,074
`458,434
`478,455
`238,728
`146,016
`123,581
`303,208
`
`$ 508,449
`372,266
`408,314
`314,514
`149,113
`91,739
`222,174
`
`Total net sales ..............
`
`$ 2,370,496
`
`$ 2,066,569
`
`12%
`36%
`
`15%
`
`22%
`23%
`17%
`(24%)
`(2%)
`35%
`36%
`
`15%
`
`Logitech’s Pointing Devices product family includes the Company’s mice, trackballs and other
`pointing devices. Keyboards and desktops include cordless and corded keyboards and desktops. Audio
`includes speakers and headset products for the PC, the home, and mobile entertainment platforms and
`wireless music systems; video is comprised of PC webcams and WiLife video security monitoring systems;
`gaming includes console and PC gaming peripherals; and remotes is comprised of the Company’s advanced
`remote controls.
`
`Retail sales growth in fiscal year 2008 was primarily attributable to strong contributions from
`pointing devices, keyboards, desktops, audio products and remotes. OEM sales were higher as a result of
`strong sales of gaming peripherals, keyboards and desktops. We achieved strong sales growth in spite of a
`highly promotional market that resulted in higher consumer rebates as compared with the prior fiscal year.
`Approximately 54% of the Company’s sales were denominated in currencies other than the US. dollar in
`fiscal year 2008. Net sales growth benefited from the strengthening of the Euro during fiscal year 2008;
`
`
`
`however this benefit does not consider the impact that currency fluctuations had on our pricing strategy,
`which may result in selling prices in one currency being raised or lowered to avoid disparity with U.S. dollar
`prices and to respond to currency-driven competitive pricing actions.
`
`Retail Pointing Devices. Sales of our pointing devices increased 22% and units increased 14% during
`fiscal year 2008 compared with fiscal year 2007. The growth was led by sales of our cordless mice which
`increased 30% during the year, with units increasing 40%. Our new VX Nano Cordless Laser Mouse for
`notebooks, our V220 Cordless Optical Mouse for notebooks and our V320 Cordless Mouse for notebooks
`were the primary contributors to the sales growth during the year.
`
`Retail Keyboards and Desktops. Sales of keyboards and desktops increased 23% and units increased
`17% during fiscal year 2008 compared with the prior fiscal year, primarily due to strong contributions from
`our new Cordless Desktop Wave and our MX 3200 Laser Cordless Desktop in our high-end category and
`the Cordless Desktop EX 90 in our value segment. Our notebooks stands also continued to contribute to
`our growth in this category.
`
`Retail Audio. Our retail audio sales increased 17% in dollars and 2% in units in fiscal year 2008
`compared with the prior year. The growth was primarily from sales of PC speakers, which increased 38%
`with unit growth of 26%, driven by sales of our Z-5500 Digital speakers and our X—240 and Z-2300 speakers.
`Sales of our Pure—Fi Anywhere speakers in the digital music category also contributed to the sales of our
`audio products.
`
`Retail Video. The Company’s video sales in dollars and units decreased 24% in fiscal year 2008
`compared with fiscal year 2007, primarily due to slower than expected consumer demand in the webcam
`market, particularly in our EMEA region, where video sales decreased 40% as compared with the prior
`fiscal year. The decline in video sales in comparison with the prior year began in the fourth quarter of fiscal
`year 2007.
`
`Retail Gaming. Sales of retail gaming peripherals in fiscal year 2008 decreased 2% and units
`decreased 17% compared with the prior fiscal year. PC gaming sales increased 3%, primarily driven by
`sales of our G15 Gaming Keyboard and our G25 Racing Wheel. Console gaming sales decreased 13% and
`units decreased 28% as compared with the prior fiscal year, due to a decline in sales related to peripherals
`for prior generation consoles, particularly the PlayStation 2. Sales of our cordless controllers for Play Station
`3 did not offset the decline in prior generation consoles.
`
`Retail Remotes. Remote control sales in fiscal year 2008 increased 35% and units increased 20% as
`compared with fiscal year 2007. The growth was primarily attributable to sales of our new Harmony One
`and our Harmony 1000 remote controls.
`
`Retail Regional Performance. The Company’s Americas and Asia Pacific regions achieved double-
`digit retail sales growth of 12% and 32% and unit growth of 8% and 13% compared with the prior fiscal
`year. Growth in the Americas region was driven by solid contributions from sales of pointing devices,
`remotes, keyboards and desktops. In the Asia Pacific region, all product lines except video achieved double-
`digit retail sales growth. Retail sales in the EMEA region increased 8% and units increased 2%, led by sales
`of remotes, audio products, pointing devices, keyboards and desktops. Sales in the EMEA region have been
`disproportionately impacted by the decline in video sales, which decreased 40% compared with the prior
`fiscal year. Modest sales growth in the EMEA region has hindered the Company’s overall sales growth for
`each of the four quarters of fiscal year 2008. The disparity between sales growth and unit growth in all
`regions was primarily due to product mix and currency fluctuations. In particular, the strengthening of the
`Euro in fiscal year 2008 positively impacted the sales growth in the EMEA region; however this benefit
`does not consider the impact that currency fluctuations have on the Company’s pricing strategy, which may
`result in selling prices in one currency being raised or lowered to avoid disparity with US dollar prices and
`to respond to currency-driven competitive pricing actions.
`
`10
`
`
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`‘ ’
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`\
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`Logitech
`
`RapportAnnuel 2009,
`
`Invitation et Document
`D'Information
`
`Geschaftsbericht2009,
`
`Einladung und
`Informationsmaterial
`
`2009Annual Report.
`
`Invitation and Proxy
`Statement
`
`Designed for the Digital Future
`
`
`
`In April 2008, the FASB issued FASB Staff Position No. 142-3, Determination ofthe Useful Life ofIntangible
`Assets (“FSP 142-3”). FSP 142-3 amends the factors that should be considered in developing renewal or extension
`assumptions used to determine the useful life of a recognized intangible asset under Statement of Financial
`Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). The objective of FSP 142-3 is
`to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of
`expected cash flows used to measure the fair value of the asset under SFAS 141R. FSP 142-3 is effective for financial
`statements issued for fiscal years beginning after December 15, 2008, and interim periods Within those fiscal years.
`The Company will adopt FSP 142-3 in the first quarter of fiscal year 2010 and is currently evaluating the potential
`impact that the adoption of FSP 142-3 may have on its consolidated financial statements.
`
`the FASB issued FASB Staff Position No. 132(R)-1, Employers’ Disclosures about
`In December 2008,
`Postretirement Benefit Plan Assets (“FSP l32(R)—l”). FSP l32(R)-1 requires detailed disclosures regarding the
`investment strategies, fair value measurements, and concentrations of risk ofplan assets of a defined benefit pension
`or other postretirement plan. FSP 132(R)-1 is effective for fiscal years ending after December 15, 2009. We will adopt
`FSP 132(R)-1 in fiscal year 2010, and are evaluating the disclosure impact.
`
`Results of Operations
`
`Year Ended March 31, 2009 Compared with Year Ended March 31, 2008
`Net Sales
`
`Net sales by channel and product family for fiscal years 2009 and 2008 were as follows (in thousands):
`
`2009
`
`2008
`
`Change %
`
`Net sales by channel:
`Retail .........................................
`OEM ..........................................
`
`$ 1,887,343
`321,489
`
`$2,067,288
`303,208
`
`Total net sales ................................
`
`$2,208,832
`
`$2,370,496
`
`Net sales by product family:
`Retail — Pointing Devices ........................
`Retail — Keyboards & Desktops ...................
`Retail — Audio ........................ . ........
`Retail — Video .................................
`Retail — Gaming ...............................
`Retail — Remotes ...............................
`OEM ..........................................
`
`$
`
`579,775
`384,809
`445,362
`248,339
`127,052
`102,006
`321,489
`
`$
`
`615,524
`464,984
`478,455
`238,728
`146,016
`123,581
`303,208
`
`Total net sales ................................
`
`$2,208,832
`
`$2,370,496
`
`(9)%
`6%
`
`(7)%
`
`(6)%
`(17)%
`(7)%
`4%
`(13)%
`(17)%
`6%
`
`(7)%
`
`Logitech’s Pointing Devices product family includes our micc, trackballs and other pointing devices. Keyboards
`and desktops include cordless and corded keyboards and desktops. Audio includes speakers and headset products
`for the PC, the home, and mobile entertainment platforms and wireless music systems. Our video product family is
`comprised of PC webcams and WiLife video security systems. Gaming includes console and PC gaming peripherals.
`Remotes is comprised of our advanced remote controls. Net sales reflect accruals for product returns, cooperative
`marketing arrangements, customer incentive programs and price protection.
`
`The decline in retail sales in fiscal year 2009 compared with fiscal year 2008 was attributable to the global
`economic downturn, as reflected in consumers’ reluctance to spend and their buying preference for lower-price
`products, and our channel partners’ decisions to reduce inventory levels. Retail sales declined 23% in the last six
`months of fiscal year 2009, compared with an increase of 11% in the first six months. OEM sales were higher for
`fiscal year 2009, due to demand in the first three fiscal quarters of the year for our microphones for singing games.
`
`
`
`Approximately 46% of our sales in fiscal year 2009 were denominated in currencies other than the US. dollar,
`which compares with approximately 45% in fiscal year 2008. If foreign currency exchange rates in fiscal year 2009
`had been the same as in fiscal year 2008, our total sales decrease would have been 6% instead of 7%. The negative
`impact on net sales of the strengthening of the US. dollar in the six months ended March 31, 2009 offset the positive
`effect of foreign currency exchange rate fluctuations which benefited net sales in the six months ended September 30,
`2008, resulting in an immaterial impact of exchange rates on net sales for the fiscal year considered as a whole.
`
`Retail Pointing Devices. Retail sales of our pointing devices decreased 6% and units decreased 2% in fiscal
`year 2009 compared with the prior fiscal year. Sales of corded mice declined 13%, with units decreasing 8%. Sales of
`cordless mice incrcased 4% and units increased 10%, primarily driven by sales of our notebook mice: the V450 Nano
`Cordless Mouse, the V220 Cordless Optical Mouse, and the V550 Nano Cordless Laser Mouse. The slower decline
`or higher increase in unit sales compared with dollar sales for cordless and corded mice indicates consumers’ current
`preference for the value segment of our product lines.
`
`Retail Keyboards and Desktops. Sales of keyboards and desktops decreased 17% and units decreased 10%
`during fiscal year 2009 compared with fiscal year 2008. Sales of corded keyboards and desktops decreased 5% and
`units decreased 7%. Sales of cordless keyboards and desktops decreased 21%, with a 17% decline in units, with
`strong sales of our cordless desktops EX 100 and MX 5500 more than offset by declincs in sales of the MX5000
`Laser and EX 110 cordless desktops.
`
`Retail Audio. Retail audio sales declined 7% in fiscal year 2009, with units down 2%, primarily due to lower
`PC speaker sales, which decreased 20% in dollars and 8% in units. The decline in PC speaker sales was primarily
`attributable to weakness in our product line due to product transitions, in addition to the deteriorating demand
`environment. Sales of our iPod speakers increased 22% in fiscal year 2009, with an 8% increase in units, primarily
`due to strong contributions from our PureFi Anywhere 2 speakers. PC headset sales grew 9% and units increased
`3%, driven by our new ClearChat PC Wireless and ClearChat Comfort USB headsets. Streaming Media and Ultimate
`Ears products also provided positive contributions to retail audio sales.
`
`Retail Video. Video sales increased 4% and units increased 3%, primarily attributable to sales of our WiLife
`video security products in fiscal year 2009, and depressed comparative sales in fiscal year 2008. Sales of our
`Communicate MP and QuickCam Connect webcams were also strong, but were offset by a decline in sales of our
`QuickCam Communicate STX.
`
`Retail Gaming. Retail sales of our gaming peripherals decreased 13% while units decreased 22% in fiscal
`year 2009. PC gaming sales decreased 13% with an 18% decrease in units, primarily due to lower sales of our G15
`gaming keyboard and our MOMO Racing Force Feedback steering wheel, partially offset by sales of our G25 Racing
`Wheel. Console gaming sales decreased 12% with a 28% decline in units. The growth in sales of our GT Driving
`Force steering wheel were more than offset by declines in the sale of PlayStation gamepads and the Driving Force
`Pro steering wheel.
`
`Retail Remotes. Retail remote sales decreased 17% and units increased 8% in fiscal year 2009, reflecting strong
`sales of our lower-priced Harmony One remote control, increased promotional activity and declines in the sales of
`our Harmony 880 and the higher-priced Harmony 1000.
`
`Retail Regional Performance. Sales in our Americas region decreased 15% and units decreased 5% in fiscal
`year 2009 compared with fiscal year 2008, with sales declines in all product lines except video. The lower decline in
`units compared with sales dollars reflects a higher proportion of value-segment products in the overall product mix.
`Retail sales declined 26% in the Americas region in the last six months of the fiscal year, compared with flat sales
`in the first six months. EMEA region retail sales declined 11% in US. dollars and 8% in local currency across all
`product lines in fiscal year 2009, with units decreasing 8%. Sales in Eastern Europe and other emerging markets were
`particularly depressed, reflecting the economic downturn, customers’ lack of available credit to finance purchases of
`inventory, and currency volatility. EMEA retail sales in the last six months of fiscal year 2009 decreased 26% over
`
`ANNUALREPORT
`
`
`
`@’
`
`‘\
`
`* —
`
`RapportAnnuel2010,InvitationetDocumentD'lnformation
`
`Gesch‘aftsbericht 2010, Einladung und Informationsmaterial
`
`Log ltECh
`
`2010 Annual Report, Invitation and Proxy Statement
`
`
`
`
`
`Net Retail Sales by Product Family
`
`Net retail sales by product family for fiscal years 2010, 2009 and 2008 were as follows (in thousands):
`
`
`Year Ended March 31.
`2010
`2009
`2008
`
`Change "/0
`2010 vs
`2009 vs
`2009
`2008
`
`Retail — Pointing Devices ...............
`Retail — Keyboards & Desktops ..........
`Retail — Audio ........................
`Retail — Video ........................
`Retail — Gaming ......................
`Retail — Remotes ......................
`Total net retail sales .................
`
`$
`
`528,236
`329,038
`454,957
`228,344
`107,595
`96,982
`$ 1,745,152
`
`$
`
`579,775
`384,809
`445,362
`248,339
`127,052
`102,006
`$ 1,887,343
`
`$
`
`615,524
`464,984
`478,455
`238,728
`146,016
`123,581
`$ 2,067,288
`
`(9)%
`(14)%
`2%
`(8)%
`(15)%
`(5)%
`(8)%
`
`(6)%
`(17)%
`(7)%
`4%
`(13)%
`(17)%
`(9)%
`
`trackballs and other pointing devices.
`Logitech’s Pointing Devices product family includes our mice,
`Keyboards and desktops (mouse and keyboard combined) include cordless and corded keyboards and desktops.
`Audio includes speakers and headset products for the PC, the home, and mobile entertainment platforms, and
`wireless music systems. Our video product family is comprised of PC webcams and WiLife video security systems.
`Gaming includes console and PC gaming peripherals. The Remotes product family is comprised of our advanced
`remote controls. Net sales reflect accruals for product returns, cooperative marketing arrangements, customer
`incentive programs and pricing programs.
`
`Retail — Pointing Devices
`
`Retail unit sales of our pointing devices decreased 2% in both fiscal years 2010 and 2009 compared with the
`prior fiscal years. Sales of corded mice declined 19% in fiscal year 2010 and 13% in fiscal year 2009, with units
`decreasing 11% and 8%. Sales of cordless mice decreased 3% in fiscal year 2010 and increased 4% in fiscal year
`2009. Unit sales of cordless mice increased 15% in fiscal year 2010 and 10% in fiscal year 2009, driven by sales
`of our notebook mice, including in 2010 the Performance Mouse MX and the Anywhere Mouse MX, both with
`Darkfield Laser Tracking, and in 2009 the V450 Nano Cordless Mouse and the V220 Cordless Optical Mouse. The
`slower decline or higher increase in unit sales compared with dollar sales for cordless and corded mice indicates
`consumers’ current preference for the value segment of our product lines.
`
`Retail — Keyboards and Desktops
`
`Retail unit sales of keyboards and desktops decreased 11% and 10% during fiscal years 2010 and 2009. Sales
`of corded keyboards and desktops decreased 11% and 5% in fiscal years 2010 and 2009, while units decreased 17%
`and 7%. In fiscal year 2010, cordless keyboards and desktops decreased 20% in sales and 5% in units. Sales of the
`MK300 wireless desktop and the EX 100 cordless desktop were strong, but were offset by declines in sales of the
`EX 110 cordless desktop. In fiscal year 2009, sales of cordless keyboards and desktops decreased 21%, with a 17%
`decline in units. Strong sales of our cordless desktops EX 100 and MX 5500 were offset by declines in sales of the
`MX5000 Laser and EX 110 cordless desktops.
`
`Retail Audio
`
`Retail audio unit sales increased 11% in fiscal year 2010 and decreased 2% in fiscal year 2009. PC speaker
`sales decreased 7% in dollars, but increased 7% in units in fiscal year 2010, following a decline of 20% in dollars
`and 8% in units in fiscal year 2009. The decline in PC speaker sales was primarily attributable to product transitions
`and the weak demand environment. Sales of our iPod speakers increased 1% in dollars and 8% in units in fiscal year
`2010 compared with increases of 22% and 8% in fiscal year 2009. Sales of our PureFi Anywhere 2 speakers made
`strong contributions to the increases in both fiscal years 2010 and 2009. In fiscal year 2010, the S3151 Rechargeable
`Speaker and the SZlSi Portable Speaker also made positive contributions to sales. PC headset sales grew 23%
`in fiscal year 2010 and 9% in fiscal year 2009, with units increasing 22% and 3%. Ultimate Ears products also
`provided positive contributions to retail audio sales in both fiscal years 2010 and 2009.
`
`
`
`Retail Video
`
`Video sales decreased 8% in fiscal year 2010 after increasing 4% in fiscal year 2009, compared with the
`previous years. Units sold increased 2% and 3% in fiscal years 2010 and 2009. The sales fluctuations were primarily
`attributable to our WiLife video security products, which sold well in fiscal year 2009, and were negatively affected
`in fiscal year 2010 by a planned future product transition. Strong sellers in our webcam family included the value-
`priced C250 and C200 webcams in fiscal year 2010, and our Communicate MP and QuickCam Connect webcams
`in fiscal year 2009.
`
`Retail Gaming
`
`Retail unit sales of our gaming peripherals decreased 26% in fiscal year 2010, compared with a decrease of
`22% in fiscal year 2009. PC gaming sales decreased 12% and 13% in fiscal years 2010 and 2009 compared with the
`previous year. Unit sales of PC gaming peripherals decreased 25% and 18% in fiscal years 2010 and 2009. In the
`cyclical manner typical of gaming peripherals, sales of our G25 Racing Wheel, popular in fiscal year 2009, were
`replaced by our G27 Racing Wheel, with lower sales of the 615 Gaming Keyboard in both years. Console gaming
`sales declined 27% and 12%, with unit declines of 27% and 28% in fiscal years 2010 and 2009.
`
`Retail Remotes
`
`Retail remote sales decreased 5% in fiscal year 2010 compared with the decline of 17% in fiscal year 2009.
`Unit sales decreased 14% in fiscal year 2010 compared with an 8% increase in fiscal year 2009, reflecting strong
`sales of our lower-priced Harmony One remote control and increased promotional activity in both years, and our
`newer Harmony 900 and Harmony 700 Advanced Universal Remote in fiscal year 2010.
`
`Gross Profit
`
`Gross profit for fiscal years 2010, 2009 and 2008 was as follows (in thousands):
`
`Year Ended March 31.
`2009
`
`2008
`
`2010
`
`Net sales ........................
`Cost of goods sold .................
`Gross profit ......................
`Gross margin ....................
`
`$
`
`$ 1,966,748
`'5 2,208,832
`$ 2,370,496
`
`1,339,852
`[,5 [7,606
`1,521,378
`626,896
`691,226
`B49” is
`31.9%
`31.3%
`35.8%
`
`$
`
`3
`
`Change %
`2010 vs
`2009 vs
`2009
`2008
`
`(11)%
`(12)%
`(9)%
`
`(7)%
`0%
`(19)%
`
`Gross profit consists of net sales, less cost of goods sold which includes materials, direct labor and related
`overhead costs, costs ofmanufacturing facilities, costs ofpurchasing components from outside suppliers, distribution
`costs and write-down of inventories.
`
`The improvement in the gross margin percentage in fiscal year 2010 over fiscal year 2009 was primarily
`due to operational efficiencies across our supply chain, including lower product costs as well as faster inventory
`turnover, and a favorable shift in product mix towards products with higher margins. Gross profit in fiscal year
`2009 decreased 19% in dollars and declined as a percentage of revenue compared with fiscal year 2008 primarily
`due to the decline in net sales, an increasingly promotional environment, the mix of products sold, and higher
`freight and intangible amortization costs.
`
`
`
`ANNUALREPORT
`
`
`
`Rapport Annuel 201 1. Invitation et Document d'lnformation
`
`Gesch'aiftsbericht 2011, Einladung und lnformationsmaterial
`2011 Annual Report. Invitation and Proxy Statement
`
`’
`
`‘
`Logitech
`
`
`
`
`
`management programs specific to the EMEA region that were intended to increase our visibility into channel and
`consumer trends and to increase satisfaction among our channel partners. However the implementation of these
`programs created unintended consequences, including higher-than—planned promotional spending on the sales that
`occurred, frustrated customers, and reduced order flow due to the perceived increase in complexity.
`
`Net Retail Sales by Product Family
`
`Net retail sales by product family for fiscal years 2011, 2010 and 2009 were as follows (in thousands):
`
`Change %
`
`Year Ended March 31,
`2011 vs
`2010 vs
`
`2011
`2010
`2009
`2010
`2009
`
`Net retail sales by product family:
`
`Retail — Pointing Devices ..............
`Retail 7 Keyboards & Desktops .........
`Retail e Audio .......................
`Retail — Video .......................
`Retail — Gaming ......................
`Retail — Digital Home .................
`Total net retail sales .................
`
`$ 618,404
`390,426
`466,927
`255,015
`104,459
`169,979
`$2,005,210
`
`$ 528,236
`329,038
`454,957
`228,344
`107,595
`96,982
`$1 ,745,152
`
`$
`
`579,775
`384,809
`445,362
`248,339
`127,052
`1