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Chairman’s Statement
 
 
 
Dear Shareholders,

Facing the uncertainty of a rapidly changing global economy, Delta achieved satisfactory results in 2015, while continuing to fulfill the corporate mission of providing innovative, clean and energy efficient solutions in response to climate change. Delta reported consolidated revenues of NT$203.5 billion in 2015, an increase of 7% compared to the previous year. Gross profits amounted to NT$55.4 billion with a gross margin of 27.2%, an increase of 8% compared to that in 2014. Operating profit amounted to NT$20.5 billion, 10.1% of revenues and 10% decrease compared to the previous year. Net income after tax was NT$18.7 billion, 9.2% of revenues and 10% decrease from 2014. In 2015, Delta's earnings per share (EPS) and return on equity (ROE) were NT$7.67 and 16.5% respectively. Although the overall financial performances in 2015 did not surpass those in the previous year, Delta did make visible progress in new business developments and will continue to invest in research and development. Below is a brief summary of Delta's business prospects:


 
 
Power Electronics:

Delta has long engaged in ICT industry and has been making remarkable achievements in technology and cost efficiency optimization. Delta's long-standing business partnership with industry leaders not only generates continued growth opportunities but also helps us to build solid foundations for operations and technology advancement.

Delta is a global leader in switching power supplies, brushless DC fans and thermal solutions, and has been growing rapidly in miniaturized key electronics components. In addition to maintaining a leading position in existing markets, Delta has been actively developing products for applications in automotive and electric vehicles, cloud computing, healthcare, LED lighting and smart homes. Delta's expertise in modularized design and flexible manufacturing enables us to fulfill a variety of demands from both mass production in ICT industries and high-mix-low-volume requirements from industrial and medical customers to provide them with high added-value products with extreme standards on precision and quality. We believe the increasingly strict requirements for environmental protection and energy efficiency, together with the maturity of cloud and IoT (Internet of Things) applications, will lead to strong demand for Delta's energy-efficient power electronics products to compensate for the decline in PCs and desktop markets. No doubt Power Electronics will remain a cornerstone business to Delta in the foreseeable future.

Energy Management:

With its wide spectrum of business scope, energy management has been the priority for Delta's investments and developments in recent years. We achieved many iconic milestones so far, which fully reflected our brand promise of Smarter. Greener. Together.

Having dedicated to industrial automation for over 20 years, Delta continuously develops new products and services such as SCARA robot, 5-axis Cartesian robot arm solution, machine visions, CNC controllers and SCADA systems that are widely required in industrial automation. Besides, we combine our state-of-the-art technologies and domain know-how in user scenarios to optimize our solution offerings in order to meet customers' demand for high flexibility and precision, yet low in energy consumption and labor requirement manufacturing practices. Located in Nevada US, the Crescent Dunes Solar Energy Project is the world's first utility-scale concentrating solar power plant of its kind. The plant already commenced operation and is capable of generating 500M kWh of clean electricity each year. The highly accredited sun tracking system customized by Delta, which integrates PLC (programmable logic controllers), drivers, servo-motors, power adapters and networking communications as well as system management software, controls over 10,000 heliostat mirrors to ensure each mirror collects maximum sunlight precisely based on its location and angle of sunlight and is regarded as one of the key elements to the success of the Project.

Delta's telecom power leads the industry with the highest power conversion efficiency. After successfully acquiring Norwegian power system provider, Eltek, Delta has perfected its global footprint and product lines through complementary core competencies and resources allocation. The Eltek acquisition not only enables Delta to become the world's largest player in telecom power systems but also equips Delta with more competitive product portfolio to offer to its customers. Eltek's newly launched Rectiverter, a revolutionary bi-directional power conversion module integrating rectifier, inverter and static transfer switch into one single module, significantly simplifies power architectures and is suitable for telecom, datacenters and industrial applications, which in turn greatly enhances Delta's market competitiveness. In addition, our UPS (uninterruptible power supply) and datacenter infrastructure solutions business made significant progress in 2015. We successfully implemented our solutions to several landmark customers, including German top automakers, the Savings Bank of the Russian Federation, the China aerospace industry, and the Petrovsky Stadium in St. Petersburg, to ensure continuity for their mission critical operations, while reducing energy and operating costs. Needless to say, the excellent performance demonstrated by Delta earned strong recognition from these customers.

After years of effort, Delta has also made remarkable progress in automotive electronics and EV (electric vehicle) charging systems and renewable energy. Delta has installed the first EV charging station in Taiwan, a quick charging station in Hong Kong International Airport, the first DC quick charging station in Thailand, and earned the project to install several hundreds of DC quick chargers for Ishavsveien charging network, which will have over 1,000 charging stations when completes, in Norway. Last year Delta set up the largest and fastest DC charging station in Melbourne, Australia. In China market we partnered with Ford to launch high efficiency wall-mounted chargers, and teamed up with a German leading car manufacturer for Delta-brand charger business too. In addition, Delta was granted a US$3 million funding from the US Department of Energy to develop bilateral high-density onboard chargers for plug-in electric vehicles (PEV) with target energy efficiency above 95%. All of these demonstrated Delta's determination to bring demands from utility companies, electric car manufacturers and car owners together to develop smart energy management solutions that best serve their needs. In renewable energy, Delta has inaugurated its first self-built and operated solar power plant in Ako City, Hyogo Prefecture, Japan, with a total area of 96,000 square meters. It features a distributed power generation system with medium-size solar inverters in response to the irregular terrain and to maximize overall power generation efficiency. This is the largest distributed solar power plant connecting to an extra-high voltage (33,000V) grid in Japan and is expected to generate approximately 5 million kWh electricity per year, which is equivalent to the annual consumption by approximately 1,000 local households. The Ako Energy Park is a live showcase of Delta's competence in applying in-house products and system integration technologies to build and operate a high-efficiency solar plant. Electricity generated in Ako Energy Park will be fed back to the grid in its entirety, which not only provides the most cost-effective renewable energy source to the utility company but also establishes a brand new profitable business model for Delta to pursue further.

Smart Green Life:

Technology and culture are highly interrelated with the ultimate goal to create a better life for the mankind. Display and networking are Delta's areas of pursuit in Smart Green Life initiatives. By integrating modularized display units and smart control systems, Delta's display solutions have unique capabilities in massive signals processing and data analytics, real-time smart monitoring and display for interactive decision making and operational management capability, and have been widely adopted in applications such as grid and transportation monitoring, security surveillance and scientific exploration. Delta's display solutions not only serve well in government and industrial sectors but also appear in our everyday lives from the National Center for Traditional Arts in Yilan, the Ring of Celestial Bliss at Taiwan Lantern Festival, to the Stamford Bridge Football Field fence screens, the Barcelona Lantern Festival and seamless 3D projection mapping on the facade of the National Taichung Theater. Integrating high definition display with cultural and sports events, Delta is well positioned as a premium brand that brings technology and people together.

Delta Networks, Inc. (DNI) is dedicated to networking business, serving world-class telcos, network operators, internet service providers, datacenter operators and various kinds of business entities. As a major supplier of high speed switches, DNI doubled its 10G shipments last year and launched the world's first 100G switches to meet customers' requirement for expedited data transmission speed. In addition to serving external customers, DNI acts as Delta's internal expert in network communication systems and provides unparalleled support to equip our systems and solutions business teams with necessary data transmission and communication products and expertise. Last year, DNI achieved excellent business results. With the ever-increasing demand for IoT applications and network communications, we believe the future of Delta's Smart Green Life business is ever promising and will play a bigger role in Delta's overall business portfolio.

Cross functional collaboration and interdisciplinary technology integration are essential to the success of solution business, and is therefore one of the key priorities for top management attention. The rapid development of new businesses requires new technologies and organizational capabilities which can be obtained through both in-house cultivation and external mergers and acquisitions (M&A). Besides on-the-job training programs tailored for new business development teams, Delta Research Center (DRC), established in 2013, plays an important role in materializing solution-based new business opportunities driven by business model differentiation and technology innovation. DRC aims to develop technologies and applications in IoT, life science and big data analytics as well as to enhance assessment tools and processes in new business validation and technology development. DRC also works with several world-renowned enterprises and academic institutions to continuously explore new fields of possibilities. Although young, DRC has successfully worked with business groups to accomplish several important projects. We firmly believe DRC will continue to contribute and become an indispensable contributor to Delta's success in new business development.

Delta is a veteran in advocating attention to environmental protection and climate change issues, and we have been practicing what we preach. As buildings have broad impact on our daily lives and possess great potential in energy saving, Delta enforced green buildings design concept and construction to all new facilities while systematically converted existing buildings into green buildings for better energy efficiency. The first Delta green building was completed in 2006 in Taiwan and was awarded Taiwan's first gold-rated green building certification. Since then we had commissioned the construction and renovation of 21 green buildings, including the latest Delta's Americas Headquarters building in Fremont. This new 180,000 square foot facility meets net zero standards by leveraging huge amount of Delta products and systems and using a ground source heat pump that significantly reduces the need for electricity. It becomes the landmark in Fremont City and has demonstrated Delta's capability in design and application of smart green building.

Last year, Delta joined the UN Conference on Climate Change (COP21) at the Grand Palais in Paris, and run an exhibition on 21 green buildings from Delta to share our experiences in energy saving through building design and energy management. Delta also co-organized an official side event with the German Federal Environment Agency and Leeds University in the UK to advocate the contribution from energy efficiency to reduction of carbon emissions. Delta's consistent and relentless efforts earned worldwide recognition, and has further assured Delta's leading position in global green industries.

While fulfilling its corporate social responsibility and pursuing business growth, Delta strives to perfect its corporate governance practice and investor services with outstanding results. In 2015, Delta was selected as a member of DJSI World in Dow Jones Sustainability Indices (DJSI) for the fifth consecutive year, and received the Excellence of Corporate Social Responsibility Award in Overall Performance and Sustainable Development for the third consecutive year from Global Views. In 2015 Delta was not only ranked among the highest grade A++ companies for three years in a row but also placed in the top 5% of all Taiwan listed companies in corporate governance excellence by the Taiwan Stock Exchange (TWSE). In addition, Delta was selected as one of Taiwan's Top 20 Global Brands for the fifth straight year with brand value approximately US$200 million, a 17% increase from the previous year. Delta is the only enterprise that has achieved double-digit growth in brand value for three consecutive years, which fully illustrates that Delta's well-rounded efforts and performance are highly recognized by industry and the general public.

Delta ties business development with corporate social responsibility closely together, and rides the trend to achieve stable and outstanding operating performance. Last year, Delta successfully raised NT$24 billion through capital increase to strengthen its financial structure and enable Delta to respond agilely to market dynamics and seize business opportunities. We thereby render our most sincere thank to all of our shareholders and customers for your continued support, and to our employees for the long-term dedications and contributions to Delta's business. We believe that Delta will continue to prosper and grow stronger through diligence and persistence, and we hope to bring positive and profound impact to the sustainability of the planet and mankind.

Sincerely yours,
Chairman  
 
 
 
 
 
 
 
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