Strategy

What we achieved

We remained dedicated to supporting our customers during difficult times by staying connected with them. Our primary focus was on enhancing the return on investment enabled by our portfolio, ultimately saving our customers’ time, effort and money throughout their journey.

The success of our key account programme persisted, driven by major customers directing their budgets toward automation and essential investments. Our partner ecosystem demonstrated impressive performance yet again, achieving robust outcomes by strategically targeting rapidly-growing segments and regions.

In addition, we increased our share of the market among existing customers while simultaneously expanding into new target segments like hyperscalers and financial services. A significant milestone was reached with a financial services organisation, highlighting our leadership in modernising and automating labs and winning customers beyond our core base.

Our priorities

• Continue diversifying our customer base.

• Continue driving our shift from selling product features and functions to selling outcomes and value.

• Drive solutions and services that specifically tackle our customers’ existing challenges, particularly those related to productivity and efficiency objectives.

• Utilise our globally leading automation solutions to expedite the achievement of our customers’ energy-saving goals.

• Expand on our landmark services deals to win more strategic services opportunities.

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 drivers of 5G and Open RAN (O-RAN), cloud growth, digital transformation and location awareness.

Our Positioning business, with its unique end markets, achieved robust bookings with its world-class portfolio of solutions. Our extensive portfolio now emphasises multi-sensor integration, ensuring clients in emerging sectors like low earth orbit (LEO) satellites, chipsets and automotive technology can realise their positioning, navigation and timing (PNT) aspirations.

To enhance our automation portfolio, we acquired the Test Lab Automation business from NetScout®, which delivers physical layer switching capabilities, critical to configuration and connectivity in automated labs.

We introduced our Wi-Fi 7 solution to the market to address the evolving demands of the next generation in Wi-Fi testing. This cutting-edge solution not only enhances performance but also sets a new standard for reliability and speed in wireless connectivity testing.

Our priorities

• Invest in scaling and management of our services delivery capability and increasing the software content in our solutions.

• Leverage the breadth of our 5G portfolio 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.

• Focus on maximising opportunities in O-RAN and 5G private network markets.

What we achieved

Our prioritisation of operational excellence resulted in continuing diligent management of our cost base throughout 2023, ending the year with $108.1 million of cash and no debt. The adjusted operating margin decreased by 12 percentage points to 9.5 per cent. We continued to invest in our people and made significant progress in our diversity, equity and inclusion strategy.

In light of the market’s unpredictable nature, we embraced the challenging yet essential task of implementing cost-cutting measures to navigate economic headwinds. This entailed making difficult decisions and executing targeted cost-saving initiatives to secure the sustainability of our operations. Our primary objective was to preserve critical investments while grappling with the inherent challenges presented by the unpredictable business environment.

Our approach to cost optimisation demanded surgical precision, with a heightened awareness of the delicate balance between fiscal responsibility and the imperative to safeguard our capacity for growth.

We made some organisational changes to better align ourselves with the market dynamics, including reorganising our business units to better enable solutions selling. We expect it to drive more efficiency, including a single R&D organisation to drive better prioritisation, common platforms and consistent user interface/user experience across products.

Our priorities

• Continuously assess and expand our portfolio, pursuing both organic and inorganic growth to align with strategic goals and capitalise on lucrative market opportunities.

• Unwavering commitment to operational efficiency, encompassing the execution of our site strategy and optimisation of our operating model.

• Prioritise sustainability and ESG objectives to uphold our commitment as a responsible corporate citizen.

• Execute the 2024 objectives outlined in our diversity, equity and inclusion strategy.

• Sustain investments in our IT infrastructure, tools and processes, to bolster support for our ongoing growth.

• Maintain a robust balance sheet to ensure strategic flexibility and long-term viability, particularly during periods of macroeconomic uncertainty.

Note: Items with * above are non-GAAP alternative performance measures, see pages 196 and 197 of the Spirent Communications plc Annual Report 2023 for more detail.