What we achieved
Our focus on staying close to our customers and addressing their larger business problems with solutions and services proved effective once again in 2022, as we accelerated our shift from selling product features and functions to selling outcomes and value. Our technology-led services portfolio helped customers across the entire lifecycle to develop, deploy and operate which resulted in larger deal sizes, and increased our relevance in customer accounts in a time of growing macroeconomic uncertainty.
Our key account programme continues to deliver, and we strategically invested to further expand the programme during 2022, adding new strategic accounts to the model, especially in the EMEA region. Our partner ecosystem once again delivered strong results as we targeted faster‑growing segments and regions.
We grew our share of wallet with existing customers while expanding in target segments such as hyperscalers and chipset developers, adding new logos and expanding our geographic footprint.
Continue driving our shift from selling product features and functions to selling outcomes and value.
Drive solutions and services that address our customers’ current pain points, including cost-saving objectives.
Apply our world-leading automation solutions to accelerating our customers’ energy-saving goals.
Focus on maximising opportunities in Open RAN and 5G private network markets.
Build on our landmark services deals to win more strategic services opportunities.
Aggressively promote our newly introduced Vantage solution to meet customer demand for a service assurance capability that addresses 5G’s complexities, while being easy to deploy and use.
Innovation for Growth
What we achieved
We continued to make smart investments in our future growth, including R&D, key talent and business model innovation, with a continuing focus on our enduring driver of 5G.
We aligned our organisational structure to enable our expanding portfolio of services offerings to scale, and we closed several new landmark services deals across the globe during 2022.
We continued to bring innovative solutions to market that address our customers’ most significant challenges. During the period, we introduced an industry-first 800G high-speed Ethernet test solution, our Vantage solution to dramatically simplify 5G service assurance, an innovative Wi-Fi Test-as-a-Service offering, as well as solutions to address emerging opportunities including Open RAN and low-earth orbit satellite systems.
Invest in scaling and management of our services delivery capability and increasing the software content in our solutions.
Build on our early successes in the telco cloud resilience and scalability space.
Leverage the breadth of our 5G portfolio, including our new Vantage and Open RAN solutions, to address evolving customer needs as 5G moves beyond the lab to deployment and production networks.
Leverage our industry leadership in Wi-Fi test and validation to address technology evolution to Wi-Fi 7 and the growing Wi-Fi market need for Test-as a-Service offerings.
Maintain and expand leadership in high-speed Ethernet with continued 800G innovation and quality/usability enhancements.
Expand PNT leadership in space, chipset and live assurance applications.
What we achieved
Our prioritisation of operational excellence resulted in continuing diligent management of our cost base throughout 2022, delivering another strong balance sheet, with $209.6 million of cash and no debt. We improved our adjusted operating margin by 0.7 percentage points to 21.3 per cent. We continued to invest in our people and made significant progress in our diversity, equity and inclusion strategy.
We focused on tools and processes to underpin our growth, on organisational alignment to enable us to scale our services delivery capacity globally, on enhancing our go-to-market capabilities, and on transfer of more R&D resource to low-cost regions. Once again, aggressive management of our supply chain by our world-class team enabled us to deliver to our customers despite ongoing global challenges.
Our unwavering commitment to sustainability delivered a major milestone in 2022 with the achievement of carbon neutral certification, and we catalogued our Scope 3 emissions to enable improved reporting clarity around our ongoing carbon emission reduction goals.
Continue to review our portfolio, with a view to growing it both organically and inorganically to align with our strategic objectives and attractive market growth opportunities.
Relentless focus on operational efficiency, including site strategy execution and organisational structure optimisation.
Focus on our sustainability and ESG objectives to ensure we remain a responsible corporate citizen.
Implement the 2023 objectives of our diversity, equity and inclusion strategy.
Continue to invest in our IT infrastructure, tools and processes to support our growth.
Maintain a strong balance sheet to ensure strategic flexibility and long-term viability through a period of macroeconomic uncertainty.
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 as we continue to win larger, longer-term contracts that improve revenue visibility and build repeatable business.
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 196 and 197 of the Spirent Communications plc Annual Report 2022 for more detail.