What we achieved
2020 was not a year any of us could have predicted. Despite being physically separate for most of the year, our talented team remained connected and hyper-focused on our customers.
Our key account programme continued to deliver results and we expanded the programme to include a key European customer in the fourth quarter. We expanded our share of wallet with existing customers while adding new logos and expanding our geographic footprint. We enhanced our digital marketing presence with a new corporate website and blog as well as a social media programme.
Our sales team quickly innovated and adjusted in the new environment, hosting virtual webinars and demonstrations to continue selling our solutions.
Grow share of wallet with our existing customers through further expansion of our key accounts.
Continue our pivot to digital marketing as part of our overall go-to-market transformation.
Broaden our reach and relevance in new segments such as Cloud service providers, enterprises, hyperscalers, and governments and into new geographies.
Deliver even more value to customers through the continued evolution of our organisation and by offering more solutions and services.
Continue to develop live network solutions to meet our customers increasing demand.
Innovation for Growth
What we achieved
We continued to invest in our future growth, including R&D, key talent and business model innovation.
With the help of experts, we refreshed our go-to-market strategy and framework. With a solutions-based selling mindset, we continued innovating to address changing customer needs. Our services portfolio delivered landmark deals and we continued to grow our offerings in a remote environment.
Invest in growing recurring revenue through our services delivery capability and increased software content in our solutions.
Invest to make our products even easier for customers to use, improving their efficiency and reducing their time to revenue.
Key areas for investment: Cloud, PNT assurance, 6G, operational assurance, Wi-Fi 6 and 6E, 800G, SD-WAN and managed solutions.
Business model innovation: software, recurring revenue, services and solutions.
What we achieved
2020 saw continued focus on cash generation and a strong balance sheet, with $241.2 million of cash. We improved our adjusted operating margin by 1.4 percentage points to 19.8 per cent. We continued to invest in our people, onboarding skilled leaders, launching a new mentoring programme and improving our new hire experience in a remote environment.
Our supply chain was tested by the global stress on logistics and proved resilient. This was a key differentiator for us as we were able to continue delivering solutions when many others could not.
A new Corporate Development framework was implemented and is helping evaluate potential inorganic investments for growth.
Continue to review our portfolio, with a view to growing it both organically and inorganically to align with our strategic objectives and our markets.
Drive towards our sustainability and ESG objectives to continue being a responsible corporate citizen.
Implement a refreshed diversity and inclusion strategy.
Continue to invest in our IT infrastructure to support our growth.
Continue to maintain a strong balance sheet to ensure strategic flexibility and long-term viability.
Key performance indicators
Book to bill ratio*
Adjusted operating profit*
Adjusted operating margin*
Adjusted basic earnings per share* (EPS)
Product development as a percentage of revenue
Voluntary employee turnover
Free cash flow*
Order intake was greater than revenue in the year resulting in a book to bill ratio of 103. Demonstrating a good foundation for growth despite a challenging COVID-19 pandemic environment.
Relevance to strategy
The book to bill ratio is an indicator of the underpin to future revenue and whether activity levels are rising or slowing, and therefore how effective we have been in the execution of our strategy.
Note: Items with * above are non-GAAP alternative performance measures, see pages 192 and 193 of the Spirent Communications plc Annual Report 2020 for more detail.