D-Link 2007 Annual Report Download - page 5

His vision and determined guidance of D-Link, from its founding in
1986 to its undisputed leadership position of today, leaves a large void
that more than humbles me to fill. With his legacy in mind, we are
committed towards continuing D-Link’s success and building upon it.
In FY2007, D-Link increased its revenues, developing the same trend
for this year. Our aggressive push into lucrative budding markets has
proven fruitful as we continue to strengthen our leading market
position in Russia, Latin America, the Middle East, and Southeast Asia
with a YoY growth rate surpassing 25%.
According to industry analyst In-Stat, D-Link in FY2007 remained the
global connectivity leader in the small and medium sized business
(SMB), small office-home office (SOHO) and consumer segments,
commanding 24.4% of global market share.
In-Stat also reported that in FY2007, D-Link led in global market share
for 802.11n shipments. Our initiative in bringing 802.11n to market for
consumers and business has been rewarded as those markets
continue to grow.
Corresponding to our corporate social responsibility (CSR) policy,
FY2007 also saw the launch of D-Link Green Ethernet after years of
product development efforts. We were the first networking company
to introduce networking hardware designed to save energy at
affordable, competitive price points without sacrificing performance.
D-Link showed tremendous foresight into consumer needs with the
launch of shared network storage solutions. The home network
storage market has more than doubled in the last two years. By 2009,
the 500GB and above segment will see significant demand where
enclosure-only products will be particularly strong.
Reflecting on Mr. Kao’s legacy and vision, we remain highly optimistic
that D-Link will continue to be the world’s leading networking company
in FY2008 and beyond, offering highly innovative, cost-efficient solutions
for both business applications and for the digital home.
Our FY2007 report no longer includes Alpha Network’s ODM/OEM
financials, yet D-Link once again reached the annual revenue
milestone of $1 billion (USD). While consumer expenditures in North
America remained slow in 2007, we reorganized our retail and SMB
channels to increase our emphasis on wireless 802.11n Wi-Fi
networking, smart switches and storage products to cope with the
economic challenges. In Europe, we avoided low-margin ADSL
projects and focused our image as a value player by engaging in
more switch, wireless 11n, and IAD (triple-play) business. In the
lucrative emerging markets, we continued to gain market share from
our competitors, especially with switch products.
Financial Highlights
Maintaining our healthy financial track record, we saw revenue and
gross profit grow approximately 11.2% and 15.7%, respectively for
FY2007. Operating profit amounted to NT$2.3 billion, a 1.1% increase
from the previous year, and net profit margin increased from 8.4% to
10%, or up 32% in absolute dollar value mainly due to the capital gain
from disposal of Alpha Network shares. Annual EPS went up by 32%,
increasing from NT$4.61 to NT$6.10 based on the 2007 year-end
capital of NT$5.471 million.
2 D-Link 2007 Annual Report
John Lee
Chairman
D-Link Group
Letter to Shareholders,
Customers, Partners and
Employees
As we embark on a new and exciting journey into FY2008, let us
first take a moment to honor and pay tribute to my predecessor,
the late Mr. Ken Kao.