Quanta Computer Inc. Annual Report 2016 - 廣達電腦

1 Quanta Computer Inc. Annual Report 2016 - 2 - Report to Shareholders Enterprise operation faces tougher challenges as Internet access becomes more widely adopted and changes in the market continues to accelerate. Facing new competition and dynamic market condition, Quanta believes firmly in our ideology of Innovation, Change and Transcend , leveraging our positive attitude to tackle challenges ahead through continuous exploration and strong desire to excel. We believe doing so would inspire better product design ideas and deliver stronger business performance.

2 In recent years, Quanta continues to focus on advancing our core business, aside from introducing light-weight and fully equipped notebook computers, the Company also introduces more advanced high performance servers in response to the increasing needs in cloud computing industry. Moreover, the Company further invests in Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR) areas to capture new market opportunities. Furthermore, Quanta begins to develop solutions leveraging advanced technology in medical field in order to explore new business potentials.

3 Building on the superior corporate value of Truthfulness, Kindness and Beauty , Quanta Computer continues to move forward step by step in order to realize our Corporate vision in creating greater value for our shareholders. Quanta s performance for FY2016 and outlook for FY2017 are as follow: I. Revenue and Income FY2016 was a tough year filled with harsh challenges for Quanta as industry competition intensified and global market faced greater uncertainties. Although consolidated revenue of NT$894BN in FY2016 was weaker than the previous year, gross margin and operating margin of and were both stronger than the previous year margins of and respectively.

4 Despite harsh environment the Company faced in 2016 , core business profitability remained steady. Net income after tax in FY2016 and FY2015 was NT$ and NT$ respectively. Net income attributable to owners of parent in FY2016 and FY2015 was NT$ and NT$ respectively. EPS in FY2016 was NT$ , while non-operating income was NT$ Facing the ever-changing challenges ahead, Quanta leverages its four principals of Superior Quality, Superior Technology, Detailed Management, and Brighten Future to continue to innovate and to excel ourselves.

5 In terms of business operation, Quanta responds to new market trend towards greater product variety at lesser volume by investing more resources in new technology advancement and new product introduction. Doing so enables ourselves to tackle the challenge of different technologies integration and to ensure the Company s sustainability and growth. II. Outlook in 2017 Year 2017 is the year that Quanta continues to push for automation in overall manufacturing process.

6 Manufacturing techniques are expected to further advance and accelerate with upgraded equipment. Quanta is aggressively reaching for the target of Industrial and pushing for company-wide detailed management. Quanta is able to effectively control cost structure through shortened manufacturing process and simplified work flow. Specific action plans include the following: - 3 - Solidify Industrial Target Through simplified new product design, smart manufacturing management, increased material and shipment process efficiency, as well as instant feedback system implementation.

7 The Company further develops smart system to manage material and schedule, as well as implements smart system and equipment to realize smart management and smart manufacturing process. Increase strategy flexibility and responsiveness In response to fast changes in the market, Quanta maintains its leadership position through responsive manufacturing, development and management process. We proactively identify problems, take actions and maintain high flexibility to respond to changes.

8 Maintain speedy R&D capability Cultivate a sense of judgment that accurately reflects current market condition, be responsible and accountable even under the pressure of shortened product life cycle in order to maintain speedy R&D capability. Strict cost control Production costs continue to hike year after year, making cost control a much tougher challenge. At Quanta , we focus on deepened detail management, perfection in quality control, attention to details in production management, detailed calculation in cost control and express caring in man power management.

9 There s no limit in operation improvement. Innovative thinking and demand creation Facing the ever-changing industry and intensified competition, we continue to focus on innovation and strengthening our R&D expertise. Not only do we aim to sustain our leadership position, talents development and advancement are also crucial to our success. In terms of talents management, we focus on professional knowledge enhancement and deepened positive work attitude. Leverage innovative thinking as the fundamental to sustain our leadership position in the market.

10 Maintain strong bond with customers Market share allocation concentrated towards tier one companies has been a key market trend in the technology industry, thus maintaining high customer satisfaction in our products and services are crucial to our success. Quanta has launched a company-wide exercise entitled 2B- To Be The propose of the 2B exercise is to encourage employees To Be The Owners and for managers To Be The Leaders. Through the 2B exercise, we hope to cultivate a work atmosphere that encourages employees to act proactively and to have high self-discipline.