We are evolving our strategic direction, working to increase share of wallet with our existing customers and broadening our customer base in new segments, adjacencies and geographies.
We have expanded the key account management programme initiated in 2018 into more of our important global accounts and continued to ramp up the programme’s account-based marketing element. We expanded channel coverage in the eastern Asia, Middle East and Central/South America regions, grew our government business and established new direct channels to enhance our coverage of the enterprise market.
Grow share of wallet with our existing customers through further expansion of our key account management and account-based marketing programme.
Broaden our reach and relevance in new segments such as cloud service providers, enterprises and government, and into new geographies.
Deliver even more value to customers through the evolution of our sales and marketing organisation and by offering more solutions/services.
Innovation for Growth
As a global leader in testing and assurance, it’s vital that we invest to stay ahead on key emerging technologies.
Our research and development investment included enhancing features, functionality and automation to expand our addressable customer base. We invested in strategic partnerships, including 5G with National Instruments, and in growing recurring revenue streams with more software. We also invested in our people, adding senior leadership with additional capabilities and experience and initiating a “Leader. Assured.” development programme.
Invest in infrastructure and talent to further expand our key account and account-based marketing programme.
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.
We are focused on cash generation and maintaining a strong balance sheet.
What we achieved
We have continued our focus on cash generation and maintaining a strong balance sheet. We began a new initiative to improve the overall efficiency and effectiveness of our sales and marketing organisations whilst starting our evolution to a more agile, collaborative organisation, adding new talent and more change agents.
Fully implement our efficiency and effectiveness initiatives for our sales and marketing organisations.
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 objective of being an agile, collaborative organisation, capable of moving quickly to capture the full range of opportunities.
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*
The increase in book to bill ratio to 106, from 99 in 2018, reflects increased activity levels, particularly in relation to Ethernet test product and US Government business, together with an increased level of multi-year support contract wins.
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 190 and 191 of the Spirent Communications plc Annual Report 2019 for more detail.