Advantech Co., Ltd. (TAIDEX: 2395), a leading global IPC and Industrial Automation service provider, publicized their annual report for 2007. The annual consolidated revenue of Advantech in 2007 was NT$ 16 billion and the annual after-tax net profit was NT$ 2.98 billion, an increase of 9% and 2% respectively compared to 2006. Furthermore, the gross income was NT$ 3.18 billion and the net income was NT$ 3.63 billion, including NT$ 0.45 billion of non-operating income. In 2007, Advantech's annual after-tax average Earnings Per Share (EPS) was NT$ 6.10. Most of its global revenue growth was from the greater China region, which occupied 30% of the consolidated revenue. Furthermore, regarding the new policy for employee profit sharing, Advantech temporarily set the percentage to 15% of net income before tax.

Advantech CEO KC Liu said, "Industrial computing has gradually focused on sustainable development of specific application fields, an area where Advantech has already operated in segmented markets. Within the context of Globally Integrated Enterprise (GIE) strategy, we have integrated logistics resources to service platforms across front-line sales units. All units will evolve from focused units to distinctly separate dedicated units. Advantech will change its organization strategy by replacing the sales quota oriented model to a service oriented model so as to better serve the basic market. At the same time, we are initiating a new growth engine called "Advantech 4+1". The "4" represents the organizations of Embedded ePlatform Group, eService & Applied Computing Group, Industrial Automation Group, and the newly built Design & Manufacturing Service (DMS) model. The "+1" means to create a “win-win” situation with the group purchase of Advansus and the strategic integration of industrial mother boards and the Asus alliance. Through promotion and careful sales development, the 4+1 growth engine will become the key driver of Advantech sales growth in 2008.”

Since the implementation of the GIE strategy last year, Advantech has re-allocated many enterprise resources. It re-organized the product departments of Embedded Computing Group (ECG) and Industrial & Network Computing Group (INCG) into a larger Embedded ePlatform Organization. In addition to combining the core platform value of ECG with the advantages of INCG in system technology, plus, by reducing customer system integration difficulties, it also reduced the development time of star products. What's more, the DMS “Awaken Lion Plan”, which is considered a key development of Advantech, will form a separate organization this year. Kunshan, China will be the primary manufacturing center focusing on major markets such as global telecommunication, medical, and gaming and provide the best product and service for the customer through cross-industry collaboration and deepen application and software integration. The revenue of DMS increased by 84% last year. It is estimated that the DMS model will increase to US$ 200 million of total income sales in 2010.

Advantech has gradually transformed from a provider of general computing platforms to a provider of application ready platforms and service ready platforms; it conducted the transformation under the new organizational architecture of eService & Applied Computing Group (SAG). Through global direct selling and customer-oriented service, Advantech promotes sales growth by utilizing the opportunities of various application businesses such as medical treatment and intelligent transportation management. Also, eService & Applied Computing Group will build up Advantech Intelligent Services Group which aims at vertical application fields such as real estate intelligence and self-service & retail intelligence. The new operational mode will also promote the continuous growth of the whole industry.

The Industrial Automation Group (IAG), which concentrates on industrial control, was the first group of Advantech. With stackable modular architectures and open system product designs, the IAG group will concentrate on vertical application markets such as building automation, machine automation, power & energy, and intelligent transportation systems. At the same time, it will provide the most complete marketing and service by combining global resources (e.g. building up groups with subsidiary companies such as NetStar and Broadwin) through specific global eAutomation focused channels and independent sales & marketing systems.

Advansus computing, the company founded by Advantech and Asus in 2006, has turned loss into gain in 2007. After its initial orientation into the Industrial Motherboard (IMB) industry, it now plans to set up industrial server product lines and develop industrial computing Design & Manufacturing Services (DMS) and Electronics Manufacturing Services (EMS) with the core value service of Component Allied Procurement Service (CAPS). This kind of open development strategy not only satisfies medium and large economic demands of customers on productivity, but also actively purchases components together in alliance, which effectively reduces the cost and raises production and sales benefits to provide the customer with more competitive products and service. As for marketing strategies, it will implement a marketing channel outsourcing strategy and form vertical upstream and downstream integration relationship chains via resources such as Advantech and strategy alliance partners. It is estimated that the scale of operation will be NT$ 2 billion in 2008. The revenue goal for 2010 is NT$ 5 billion.

In the future, based on the 4+1 growth engine, Advantech will promote sales growth, combine integrated resources, and utilize upstream and downstream cooperation value chains to form a more complete solution to fully develop the industrial computing open business model.

Courtesy of  Advantech