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Chairman's Statement
 
 
 
Dear Shareholders, Thanks to the strong commitment and efforts from all Delta team members, we are pleased to report that Delta has successfully delivered good business results with growth in both revenues and earnings in 2016, despite of uncertain global economic outlooks and weak market sentiment. The consolidated revenues increased 5% from previous year to NT$214.4 billion in 2016. Gross profits amounted to NT$59.5 billion, 7% higher than last year, with 27.8% gross margin. Net operating profits also increased 2% from 2015 to NT$20.8 billion with 9.7% net operating margin. Our net income after tax also grew slightly from previous year to NT$18.8 billion, which represented 8.8% of revenues. Delta's 2016 earnings per share (EPS) was NT$7.24 and the return on equity (ROE) ratio was 15.1%. In addition to overall satisfactory financial performances, Delta also achieved significant business progress in developing energy-saving technologies and commercializing new energy-efficient products and solutions. Below summarizes our 2016 business results and prospect for the future.

 
 
Power Electronics:

Founded on the core value to pursue technology advancement and continuous innovation, Delta has been the global leader in switching power supply, brushless DC fan, thermal management and miniaturized component businesses along with the prosperity of IT, communications and consumer electronics industries. With our efforts and rich experiences from past decades to enhance the business platforms Delta has built for technology development and operations excellence, we are able to gauge market trends and provide customers with new products to address their needs in new areas such as automotive electronics, electric cars, medical care, cloud applications, data analytics, and smart home requirements. Our solid foundation and agility helped to expand Delta's business horizon and create higher added value to customers, making Delta an indispensable strategic partner to many global industry leaders. For instance, Delta outperformed thousands of vendors and earned the Vendor Innovation Award from General Motors last year as a strong recognition for our 96.5% high energy conversion efficiency, smaller in size yet more reliable on board charger for its next-generation hybrid electric vehicles. With the trend of increasing awareness of the need for energy conservation and environmental protection, along with the wide-spreading IoT applications and maturity of cloud technologies, we believe Delta's power electronics business will continue to generate significant revenues and profits, and its technologies and operations platforms will be a strong backbone to support and expedite the progress of Delta's new business development initiatives.

Energy Management:

Industrial automation is an area that Delta has been devoting to for over two decades. Today Delta offers a wide spectrum of products ranging from control and drive to motion and sensing technologies. In addition, our advanced system integration service capabilities, professional technical engineering resources and global service networks enable Delta to not only penetrate aggressively into targeted verticals but also develop smart manufacturing solutions that have been implemented in our own manufacturing premises to validate design concept and continuously fine-tune for optimal human-machine collaboration in preparation for upcoming digital manufacturing era that requires high safety, flexibility, productivity and quality, yet low manpower as well as energy consumption level. Our in-house Delta Smart Manufacturing (DSM) solutions will become one of the most powerful tools for Delta to help its customers adapt to the inevitable requirements for high mix low volume local manufacturing requirements in the future.

Besides industrial automation, Delta is the world's number one telecom power provider with state-of-the-art technologies and complete product offerings to serve customers all over the world. We are also highly recognized in UPS (uninterruptible power systems), data center solutions, renewable energies as well as electric vehicles charging solutions. With our relentless dedication to Delta's corporate mission of providing clean, innovative and energy efficient solutions for a better tomorrow, we have full confidence in our capabilities in energy management businesses from which we will build up to become another cornerstone to Delta's enduring business growth.

Smart Green Life:

Display solutions and networking business are the two major areas where Delta is active in Smart Green Life. By integrating smart control systems and visualization display technologies, Delta offers real-time visualized information for decision making which has been widely adopted by key applications such as grid, civil security and transportation management. Delta Network Inc., or DNI which is Delta's arm in networking business, specializes in network communication technologies and has established long-term partnership with world-class telecom operators, big data service providers, corporate accounts and data center builders. DNI is a valuable stand-alone business contributor as well as an internal expert in networking communication technologies which are essential to our system and solution business. In light of the ever-increasing demand for visualized information and networking communications, the importance of smart green life business to Delta and its enormous business potential are self-evident.

Delta takes our corporate mission into action and has been working hard to promote public awareness on issues arising from environment and climate change. As buildings are interconnected with our everyday life and has tremendous potential for energy saving and business opportunities, Delta established a new business team years ago to focus on building energy management and energy conservation technologies in addition to constructing green buildings since ten years ago. Last year Delta acquired two well-known building automation companies, Delta Controls headquartered in Canada and LOYTEC from Austria, to enhance our capabilities and competitiveness in building automation business. By integrating the unique technologies, product portfolio and channel coverage among three of us to create synergies in HVAC, lighting, energy monitoring/management and building automation management systems, we aim to make future buildings greener and more intelligent to provide a better living environment for us all.

Corporate social responsibility and governance mechanism are as important as business growth at Delta. Delta was ranked on top by CommonWealth Magazine CSR Award in 2016 to recognize our outstanding achievements in social participation. Delta was also ranked in the first place by Global Views CSR Award for the fourth consecutive year. In addition, Delta continued to be listed on DJSI (Dow Jones Sustainability Indices) World for the sixth consecutive year, and we earned four major recognitions in 2016 Taiwan Corporate Sustainability Award by Taiwan Institute for Sustainable Energy. Delta was also certified by Taiwan Stock Exchange on top 5% among all listed companies with best CSR practice for the second consecutive year. With regard to branding, Delta remained Taiwan's top 20 international brands for the sixth consecutive year, and our brand value increased by 13% to US$225 million in 2016. Delta was the only brand in Taiwan with double-digit increase in brand value for four consecutive years, which demonstrated the strong recognition from the general public on Delta's effort to best serve our role as a responsible social citizen.

On behalf of all management team members, we are grateful to all customers, suppliers, shareholders and all stakeholders for your support to Delta, and to all Delta colleagues for your dedication and endeavor, enabling Delta to outperform competitors and achieve consistent, stable operation performances. We will continue to enhance our organizational capability and operational results while at the same time act on our corporate mission to contribute back to the society. Delta is fully committed to become a respectable world-class enterprise and bring positive and long-lasting impact to the society. We will make every effort possible to achieve this goal in return for your support to Delta.

Sincerely yours,
Chairman  
 
 
 
 
 
 
 
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