ANNUAL REPORT 2015 3

CONTENTS5 WELL-PREPARED FOR THE FUTURE

6 75 YEARS SERVING TECHNOLOGY

8 TECHNOLOGICAL FOUNDATION

10 THE FOURTH INDUSTRIAL REVOLUTION

12 COMPETENCIES

14 FROM KNOWLEDGE TO VALUE

16 KNOWLEDGE IS SOMETHING WE SHARE

18 MANAGEMENT AND ORGANISATION

20 KEY FIGURES

22 QUALITY AND ENVIRONMENT

4 DELTA ANNUAL REPORT 2015 5

10 YEARS OF ECONOMIC DEVELOPMENT

Net revenue Investments

20142013 2015 B201620122011201020092008200720062005

14

7

2321

18 21 18

35

43

9 7

1723

18

2831

2427 31

20

2

19

29 28

210

235

261271

252

290

327308

296316 312 309

EBITDA

> DKK 1.3 million net revenue per full-time employee

> DKK 120,000 EBITDA per full-time employee

DELTA is a self-governing company, which for 75 years has played a central role in the Danish innovation infrastructure. DELTA helps Danish and international clients within a wide range of competencies and services, with roots in electronics, light and acoustics.

Today, DELTA has developed into a well-run, profitable and sound business, which has a clearly focussed strategy, and is well-prepared to fully realise its potential. 2015 was a positive year for DELTA, when three years of unsatisfactory results were turned around and the organisation made a good profit. In the last two years, DELTA has also divested its non-core activities, which were both investment heavy and loss-making.

Today, DELTA has a sound competency base, and a particularly robust organisation, and an economy that has made it possible to make the biggest investments in its core activities in ten years. Over 60 % of revenue is generated by international activities; evidence of the quality and relevance of our work. DELTA is one of eight GTS institutes in Denmark that ensure technological services and infrastructure for the benefit of society and industry through activities like national and international R&D projects and the comprehensive sharing of knowledge.

DELTA is the result of 75 years of technological inquisitiveness and innovative thinking among employees and partners. We stand on the shoulders of visionaries and leading technical specialists, whose work today enables us to put together the best solution for our clients’ technological challenges or society’s needs.

With unique competencies, facilities and an impartial position in the innovation infrastructure, DELTA is well-prepared, but also has huge potential waiting to be exploited. As part of a careful strategy process, DELTA has therefore decided to merge with FORCE Technology. This is because together, by combining our unique professional competencies, we can realise our consolidated potential. The goal of the new company is to be the Nordic countries’s preferred impartial service and knowledge partner in a select group of technological sectors. Together, we have even stronger shoulders to build the future on.

Jesper Haugaard Juan FarréChairman CEOBoard of directors

WELL-PREPARED FOR THE FUTURE

DELTA Danish Electronics, Light & Acoustics(1993)

DELTA – a part of FORCE Technology (2016)

Danish Acoustical Institute(1983)

Light & Optics(1990)

Elektronik-Centralen(1967)

Jyske EMC (1985)

Technological Institute (1990)

Jutland Technological Institute (1977)

Danish Acoustical Laboratory (1941)

Technical-Audiological Laboratory (1964)

Technological Institute - Dept. for Acoustical Engineering (1946)

Building Acoustics Mobile Laboratory (BAM) (1967)

Radio Technical Research Laboratory (1944)

Institute for Reliability of Electronic Materials (1962)

Microwave Laboratory (1955)

Electronical Documentation and Patient Agency (1941)

The Danish Illuminating Engineering Laboratory (1964)

The Danish Laboratory for Technical Optics (1944)

75 YEARS OF DEVELOPMENT

6 DELTA ANNUAL REPORT 2015 7

75 YEARS SERVING TECHNOLOGYFrom the beginning of the 1940s, professor P. O. Pedersen, chairman of the Danish Academy of Technical Sciences (ATV), was godfather of the creation of independent technological institutions.

Danish Acoustical Laboratory starts operating. Under the leadership of engineer and later professor Fritz Ingerslev, the Danish Acoustical Laboratory builds up a strong group of acoustic engineers and lays the foundation for a major part of the Danish audio industry. Sound and acoustics continue to be some of the cornerstones of the institute’s professional capability.

The Danish Laboratory for Technical Optics and Radio Technical Research Laboratory are established. The Danish Laboratory for Technical Optics and later, The Danish Illuminating Engineering Laboratory (1964) shape and develop the Danish light industry. From the beginning, the Radio Technical Research Laboratory focuses on the radio industry, but gradually starts to focus more on the verification of electromagnetic interference and later becomes ElektronikCentralen (1967). Today, light and electronics continue to be core professional competencies at the institute.

LIGHTELECTRONICS

ACOUSTICS

Danish Acoustical Laboratory starts operating in 1941 and is thus the oldest existing ATV institute in Denmark. This is why DELTA turns 75 in 2016. Throughout the organisation’s existence, the task has remained the same: Serve industry and society through new technological opportunities.

Our history rests on a bedrock of professional integrity and impartiality. We are a self-governing organisation, whose most important goal is,

on a professional and commercial basis, to be available to industry and society in the face of changing technological opportunities and market challenges. We have been there for different technological eras, and will be there in the future, when breakthroughs in research need to be transformed into practical solutions.

DELTA is established by the merger of three institutes – Danish Acoustical Institute, Light & Optics, and ElektronikCentralen. From then on new technological areas are developed, based on the same basic disciplines and strengthening interdisciplinarity within, e.g. sensors and the development of intelligent systems.

With 75 years of experience, we continue as a self-governing, and independent GTS institute to help industry and society to go forward into the future. Through our expertise in electronics, microelectronics, software technology, light, acoustics, vibrations and sensor systems, we help our clients by providing consultancy, testing, and product development of high-tech solutions.

ACOUSTICSLIGHT ELECTRONICS

TEST PRODUCT DEVELOPMENTHIGH TECHNOLOGY

8 DELTA ANNUAL REPORT 2015 9

TECHNOLOGICAL FOUNDATIONOur purpose is to promote and communicate scientific methods and results at international level – with professional focus on electronics, information technology, micro and nano technology, sensor systems, sound and vibration technology, light technology and optics. The words come from our articles of association, which define both an origin and a guiding principle for the future.

We are present in 6 different locations, in Denmark, Sweden and Wales. This means we are close to our clients and ensures access to unique technical environments.

6

We are 236 engaged and competent employees. Each of us has unique competencies within a niche technical field, for example EMC, ASIC, light and noise or has process expertise, such as testing, approvals, certification, logistics, development or consultancy.

236

Regardless of the merger of institutes, light, sound and electronics continue to be the basic components in our competency base. When technologies converge, it puts the development of new products under pressure. This means that the technological merger is much stronger than the organisational merger. If we are able to combine our unique professional competencies, the whole becomes greater than the single parts.

It is the combination of talented employees, advanced facilities and deep competencies, that makes a difference for our clients. We provide our clients with access to the latest knowledge from Denmark and abroad, by among other things, participating in research and development projects and in standardisation committees. We expand and maintain an infrastructure of facilities, laboratories and technological platforms, which ensure our clients’ access to global markets.

We have 53 research and development projects in collaboration with companies and/or other knowledge institutions in Denmark and abroad. Our knowledge becomes highly unique, when it is combined with others’ corresponding unique competencies.

We have more than 120 unique facilities and continue to invest in new equipment, test facilities and laboratories, to be able to service our clients in the best possible way in relation to international trends, and quality and regulatory requirements.

120

53

10 DELTA ANNUAL REPORT 2015 11

The development points towards greater automation in larger and more intelligent systems, which do not just generate countless amounts of data – but also use this data to self-regulate. Every single company will be affected by new technologies and so will user behaviour. We are ready to help industry and society, when the revolution unfolds with unprecedented power and speed.

Digitalisation creates many new opportunities but also many challenges for industry and society.

When every product must be smart, this of course places demands on competencies, such as sensors, wireless technology and RFID – but at the same time demands security, robustness, standards and approvals. And it requires knowledge about new technologies, possibilities and user experiences, to be able to help our clients differentiate themselves in the future.

THE FOURTH INDUSTRIAL REVOLUTIONThe whole world is talking about the fourth industrial revolution, Industry 4.0 and re-industrialisation. In many sectors it is already underway, and for others, it is just around the corner.

In 2015 alone, 1.4 billion new smartphones were sold, filled with new technology, sensors and processing power. By 2020, more than six billion people will own a smartphone. All with equal access to knowledge and information.

1.4

Every week the urban population of the Earth increases by 1.5 million people. Today, over half of the world's popu-lation live in cities. Even though urban environments constitute only 0.5 % of the earth’ surface, they account for 75 % of the consumption of resources.

1.5

Development within the Internet of Things means that by 2020, more than 50 billion smart and communi-cating machines and products will be linked together and operating. Even though 90 % of all of the world’s data has been generated in the last two years, it continues to be the case that only 0.5 % has actually been analysed and used.

50

Only a small fraction of new knowledge and technology is developed in Denmark. 99 % of all new knowledge is created outside Denmark. This places very stringent requirements on Danish companies’ ability to navigate to the latest knowledge in the correct form and at the right time.

99

12 DELTA ANNUAL REPORT 2015 13

We help by providing consultancy, from the first idea and development phase, testing among users, to consultancy about standards and requirements. We develop new solutions, from the first feasibility check, through development and verification, to the final component.

We ensure that the solution complies with standards, regulatory and quality requirements, through accredited testing, calibration and certification. We do it all, by combining our unique competencies adapted to suit the client’s needs.

COMPETENCIES We help our clients with advanced technology and knowledge from idea to solution – regardless of where they are in the process.

Acoustics, noise and annoyance Perception and sensory evaluation

Radio noise (EMC/EMI)

Accelerated lifetime (limit)(HALT, HASS, HACT)

Mechanical and climatic conditions

Energy Harvesting and Low Power

VibrationAir sampling

LAN cables Audiology

Internet of Things

Integrated circuits (ASIC) Humidity and corrosion Wireless technology Electrical safety ElectronicsContext and technology validation

Legal metrologyRFID Light and optics

Sensors and sensor network

14 DELTA ANNUAL REPORT 2015 15

FROM KNOWLEDGE TO VALUEIn the Oslo manual (OECD), innovation is defined as the introduction of a new and significantly improved product. In other words, a new idea must become something in practice to have value as innovation. In that sense, we have helped industry and society with innovation for 75 years.

Danfoss RAC develops tomorrow’s solutions for the cooling industry. Quality products for the global market require that well-documented choices are made early on in the development process. In that way, faster lead times are achieved. Danfoss uses our test facilities and knowledge to verify components and concepts, and whether these meet the product requirements.

The Road Directorate

Danfoss

When the Danish Road Directorate plans new roads and road modernisation around the country, there is a distinct need for explaining to citizens, politicians, compulsory purchase of property commissioners and technicians, how the noise from the new road will sound. We help by listening to the roads of tomorrow using auralisation models.

Every year, almost 1,500 Danish and international clients trust us with their latest product, idea or challenge. We help global, market-leading technology groups with niche knowledge, and help start-ups by ensuring their disruptive business

models have a technological foundation. Public authorities and agencies use our knowledge for professional and impartial advice or as a reference laboratory.

English Gooee is underway with the launch of the Internet of Things ecosystem based on smart lighting. Gooee integrates sensors, automation and communication using the world’s smallest sensor for LED light sources in a cloud-based solution. The technology creates new and scalable business models for the traditional lighting industry. Through the development of a ‘smart eye’, we ensure that Gooee gains a multi-sensor ASIC component, implemented from idea to component.

Start-up company Haystack, had an idea about providing children with a financial understanding in today’s cashless families. The solution was ERNIT™, the world’s first smart piggy bank, which consists of an App that is connected with an electronic piggy bank in the child’s room. During the idea phase, they asked for our help to create electronic sketches of the product, and then to test and validate the concept both among users and design experts within development and production.

Haystack

Gooee

16 DELTA ANNUAL REPORT 2015 17

KNOWLEDGE IS SOMETHING WE SHAREFor decades we have helped industry and society by transforming the latest research into practical, useable knowledge in the development of technological solutions.

Our research and development are centralised around 16 themes, e.g. the Internet of Things, Energy Harvesting and Smart Products, which draw from all of our competencies, and around vertical themes where we build special niches within for example, perception, noise annoyance, smart lights and veterinary diagnostics. At the same time, we develop our infrastructure for the testing and certification of robust and reliable products.

We participate in more than 60 Danish and international standardisation committees, e.g. in ISO, IEC, IEEE, ITU and ETSI. Standardisation is a central part of the work to ensure the companies’ international competitiveness and give them the opportunity to sell their products across markets and legislation.

We work with all of the 8 Danish universities and more than 25 international knowledge institutions related to acquiring and spreading the newest knowledge. This is achieved through shared projects, PhD collaborations as well as shared facilities. Partnerships like these are crucial, when we want to be technically deep and unique, and to be able to make a difference for our clients.

Every year we carry out more than 100 events, theme days and seminars related to new knowledge and technology. We host five different technical clubs with a number of working groups within e.g. EMC, wireless technology, audio, reliable electronics and medical products. We are active in a number of Danish and international innovation networks and clusters, from which we acquire knowledge.

16

32

60

100

Technological and societal development changes the companies’ product development: Components are part of products, which shall be the core in an overall service concept – and the product seldom is alone, but is part of a network of linked and communicating products. The products’ success is not solely based on their functional properties. It also depends on the quality experienced by the users. This means that we too must change with development through new and integrated R&D projects.

We are one of the institutes in Advanced Technology Group (GTS). We collaborate with the other seven institutes, together forming a central part of the innovation infrastructure. Together, we have more than 4,000 competent employees and we provide services to nearly 30,000 clients from around the world every year.

18 DELTA ANNUAL REPORT 2015 19

MANAGEMENT AND ORGANISATION

Jesper HaugaardChairman CEO, Con-Wise

Conni Edith SimonsenBoard MemberDirector Aarhus University School of Engineering

Jukka PertolaVice chairmanCEO, Siemens A/S

Anders P. MynsterElected by the employeesSenior Consultant, Test & Consultancy

Jørgen DrejerBoard MemberCEO, Saniona A/S

Martin R. VilladsenElected by the employeesHead of Department, Aarhus Centre of Test Excellence

1

1

4

4

2

2

5

5

3

3

6

6

THE BOARD OF DIRECTORS

1

2

4

3

4

5

5

6

3

6

Juan FarréCEO

Bo ChristensenExecutive Vice PresidentFinance

Per ØlundExecutive Vice PresidentMicroelectronics

Thomas B. HansenExecutive Vice PresidentBusiness development

MANAGEMENT MANAGERIAL STAFF

DELTA Danish Electronics, Light & AcousticsHeadquarters:Venlighedsvej 42970 Hørsholm, DenmarkTel. +45 72 19 40 00Fax +45 72 19 40 01delta@delta.dkmadebydelta.com

DELTA The Technical Audiological-Laboratory (TAL)Edisonsvej 245000 Odense C, DenmarkTel. +45 72 19 41 00Fax +45 72 19 41 01

DELTAAgro Food Park 138200 Aarhus N, DenmarkTel. +45 72 19 40 00

DELTANordborgvej 81, L7-S146430 Nordborg, DenmarkTel. +45 72 19 40 00

DELTA Development Technology ABFinnslättenElektronikgatan 47721 36 Västerås SwedenTel. +46 21 31 44 80Fax +46 21 31 44 81info@delta-dt.semadebydelta.se

DELTA Microelectronics Ltd.Tredomen Business & Tech. CentreTredomen Business ParkYstrad MynachHengoed CF82 7FN United KingdomTel. +44 14 43 86 63 22Fax +44 14 43 86 63 24mawahab@delta-asic.co.uk

1

2

20 DELTA ANNUAL REPORT 2015 21

KEY FIGURES

KEY FIGURESGroup (DKK million)

2015 2014 2013 2012 2011

Net revenue 312 316 296 308 327

Production costs 264 269 238 235 233

Gross result 48 47 58 73 94

EBITDA 29 19 2 20 31

Operating profit 8 (2) (8) (5) 13

Net financials 0 (2) (2) (2) (1)

Profit before tax 9 (4) (10) (4) 12

Profit for the year, after minority interests 9 (4) (8) (5) 11

Balance sheet total 188 199 217 207 202

Equity 104 96 100 108 113

Cash flow from operations 22 27 (4) 25 34

Cash flow from investment (17) (7) (9) (43) (35)

Cash flow from financing 3 (7) (5) (3) 6

Total cash flow 8 13 (18) (21) 6

Profit margin 3% -1% -3% -1% 4%

Solidity 55% 48% 45% 51% 54%

Return on equity (avg.) 9% -4% -8% -4% 10%

Average number of full-time employees 236 261 276 286 273

Net revenue per full-time employee, DKK (in thousands) 1,322 1,213 1,073 1,079 1,197

EBITDA per full-time employee, DKK (in thousands) 123 73 7 70 114

FINANCIAL RATIOS

Key figure calculationsCalculated in accordance with the Association of Danish Financial Analysts’ latest Recommendations and Key Figures.

Return on equity Result after tax x 100 / average equity excl. minority interests

Net revenue per full-time employee

Net revenue x 100 / average number off full-time employees

EBITDA per full-time employee EBITDA x 100 / average number off full-time employees

Profit margin Operating profit x 100 / net revenue

Solidity Equity excl. minority interests, end of period x 100 / assets in total, end of period

EBITDA AND INVESTMENTS, DKK (IN MILLIONS)

2011 2012 2013 2014 2015

3135

20

43

2

9

19

7

29

17

EBITDA Investments

NET REVENUE PER FULLTIME EMPLOYEE, DKK 1,000

1,1971,079 1,073

1,2131,322

2011 2012 2013 2014 2015

DISTRIBUTION OF REVENUE

Danish revenue

International revenue

33%

67%

NET REVENUE, DKK (IN MILLIONS)

2011 2012 2013 2014 2015

327

308

296

316312

CLIENTS DIVIDED ACROSS SECTORSTotal number clients in 2015: 1,272

42%

18%

12%

10%

9%

9%

Public administration, education and health

Manufacturing, mining and quarrying, and utility services

Information and communication

Trade and transport

Other business services

Other commercial areas

Doctorate and PhD

Other technical personnel

Master's degree

Other non-technical personnel

EMPLOYEES 236

6%

30%

30%

34%

RESULT, DKK (IN MILLIONS)

11

-5-8

-4

9

2011 2015

2012 2013 2014

22 DELTA

QUALITY AND ENVIRONMENT

Accreditations Topic and application area Quality management system

DANAK 19 Equipment Testing - including Environmental Testing - of Electrical, Electronic and Telecommunication

ISO 17025

DANAK 73 Photometric testing and calibration.

ISO 17025

DANAK 100 Testing in the Field of Acoustics and Vibration and EMC.

ISO 17025

SWEDAC 1688 EMC Testing of Electrical, Electronic and Telecommunication Products.

ISO 17025

DANAK 3003 Certification of personnel: Environmental Noise Measurement

ISO 17024

DANAK 7026 Product Certification: Weighing Instruments and volume measuring instruments

ISO 17065

Certifications Topic and application area Certification body

ISO 9001 Design, Manufacture and Testing of Microelectronics

Bureau Veritas

ISO 14001 Design, manufacture and testing of microelectronics; design and manufacture of optical equipment.

Bureau Veritas

Reference laboratories

National Reference Laboratory for Humidity

Danish Safety Technology Authority

National Reference Laboratory for Acoustics

Danish Environmental Protection Agency

Notifications Topic and application area

Danish Safety Technology AuthorityDanish Safety Agency

Notified body according to EU Directive 2014/32/EU of 26 February 2014 on measuring instruments (recast)EU Notified body no. 0199

Danish Safety Technology AuthorityDanish Safety Agency

Notified body according to Directive 2014/31/EU of 26 February 2014 on non-automatic weighing instruments (recast)EU Notified body no. 0199

DANAK Notified body according to EU EMC-directive 2014/30/EU regarding Electromagnetic Compatibility – Applied for 26th February 2016EU Notified body no. 0199

DANAK Notified body according to Directive 2000/14/EC Noise emission

DANAK Notified body according to Regulation (EU) No 305/2011 - Construction productsEU Notified body no. 0199

The Danish Environmental Protection AgencyDanish Environment Agency

Notified body according to Directive 2000/14/EC Noise emission in the environment by equipment for use outdoors and Executive Order 29 of 11. January 2016 on noise from machinery in the open.

Recognitions Topic and application area

JQS Achilles Joint Qualification System – Achilles

US Coast Guard Maritime Testing, Navigation Light, Ballast Water Management

VCCI Registration Testing EMC, VCCI council recognition

UL Testing Agreement Medical Testing

Canadian Industry Testing EMC

Swedish Transport Agency (STA) Technical Service

Kraftfahrt Bundes Amt (KBA) Technical Service

Federal Communications Commission FCC)

Conformity Assessment Body (CAB) - EMC

Federal Communications Commission (FCC) 90529

Testing EMC

International Safe Transit Association (ISTA)

Testing of Enclosures

Korean Radio research Agency - RRA Registration EU0038

EMC Hearing Aids – Korean Acceptance

Korean Radio Research Agency - RRA Registration EU0039

EMC Electronics – Korean Acceptance

International Software Testing Qualifications Board (ISTQB)

Training. Software Testing. Foundation

DELTA Venlighedsvej 42970 HørsholmDenmarkTel. +45 72 19 40 00Fax +45 72 19 40 01delta@delta.dkmadebydelta.com