The business landscape today is continuously changing and companiesneed to constantly grow and evolve to remain relevant.
At Cyient we try to continuously redefine what it means to be astrategic partner for our clients. While at the core we strive to deliver more value toour clients the challenge remains on how we leverage the opportunities in front of us todeliver on that value proposition. Vision 2030 and the AGILE Framework To leverage theopportunities ahead we laid out our Vision 2030 and the AGILE framework. Vision 2030defines our growth aspiration and our larger purpose i.e. "Apply technologyimaginatively to solve problems that matter."
Breaking this down further implies:
Apply technology (LEVERAGE our competence)
Imaginatively (GROW through intellect and innovation)
To solve problems that matter (THRIVE by creating impact)
To guide us through ourjourney and to achieve our wider purpose wehave created the AGILE framework. This framework drives focus on five key strategicpillars:
Ambition: Move from services to solutions
Growth: Deliver industry-leading earnings growth
Investment: Prioritize investments
Leadership: Develop talent for 2030
Execution: Develop a winning culture
Our S3 strategy drives our ambition to move from services to solutions.We follow a twopronged approach to drive S3 transformation across our value chain. Thefirst focuses on
building capability across product life cycle of Design-Build-Maintain.The second focuses on leveraging key technological drivers to move up the businessoffering stack from services to solutions.
In FY18 we worked across all the five strategic pillars to progresstowards our vision. Strengthened by the achievements of the year we are confident that wehave a well laid out and sustainable strategy that is supported throughout ourorganization and is aligned with the overall vision. In line with our strategy in FY18 wetook two noteworthy decisions. The first was to start a new business group named the"New Business Accelerator (NBA)." This group will focus on identifying andcommercializing new solutions with an emphasis on emerging technology and innovation. Aportion of our revenue has been budgeted for the NBA and we are currently developingsolutions as part of this initiative. While this involves a significant cost in theshort-term we are confident that this will help us accelerate our revenues in the future.
The second decision was to roll out a Diversity and Inclusion (D&I)initiative to strengthen Cyient's culture and steer us towards developing a "winningculture."
D&I is an important theme to enhance our values further and is astrong enabler for innovation. We have taken a number of actions on D&I and will bestrengthening our focus in this area in the coming year with more concrete actions todrive significant change.
Our Progress and Results
From a financial perspective FY18 was a good year. We delivered astrong performance and recorded our highest ever revenue at $607 milliona growth of12.9% YoY. This growth was led by the Communications Transportation and Aerospace andDefense business units. Our operating margin grew by 60 bps at 14% and net profit grew by16.1% over FY18. Our DLM business grew by 13.2% over the year with broad-based growthacross customers. This year we recorded the highest-ever cash balance at $168 milliondespite an acquisition and enhanced dividend payout with continued healthy cashgeneration.
We recognize the importance of stakeholder engagement in driving growthand innovation and hence focus on continuously improving our stakeholder satisfaction. ForFY18 our Customer Satisfaction score was 58.1 against the industry average of 55.2. Whilewe fared well on the services side we have an opportunity to improve the score for ourDLM business.
Overall our associate engagement score saw a dip from 63% last year to60% this year. However despite the drop it continues to remain within the industrybenchmark range. We witnessed a positive shift across key parameters of customer focus andHR practices but faired lower on other key metrics of rewards and recognition talent andstaffing.
Acquisitions are a key enabler for us to drive growth by buildingdomain capabilities and strengthening our presence in emerging technology areas. As acompany we have a well laid out M&A strategy. We continue to focus on buildingcapabilities through M&A. In line with our strategy to strengthen our capabilityaround Design-Build-Maintain we made two key acquisitions through the yearB&FDesign Inc. and AnSem N.V.
B&F Design Inc. is a Connecticut- based tooling and precisionengineering company with a focus on the aerospace and defense industry. Their expertise indesign and manufacturing of engine assembly equipment repair and tooling engine factorymodernization and automation equipment will help us create a differentiated valueproposition centered on tooling and precision engineering.
AnSem N.V. specializes in advanced analog radio frequency andmixed-signal integrated circuit design. The company provides custom ASICs for globalclients across key industries including automotive medical industrial smart home andsmart grid with long-life applications of five to ten years. Their capability allows usto offer turnkey ICs from concept circuit to final production. With thisacquisition Cyient can help clients develop smart analog sensors to capture data whileleveraging our IoT and analytics capabilities.
We also signed a definitive agreement to acquire 100% ownership ofCyient Insights Private Limited (Cyient Insights) a data science company whose 51% stakewas acquired by us in 2014. The complete integration of Cyient Insights will allow us tocreate a unique ecosystem of engineering services IoT and analytics and providecomplete system solutions to our clients.
This year we also formed a joint venture named Cyient Solutions &Systems Private Limited with Israel-based BlueBird Aero Systems. BlueBird Aero Systems isa leader in design development and production of micro mini and small tacticalUnmanned Aerial Systems (UAS). Cyient Solutions & Systems will indigenizemanufacture assemble integrate and test advanced UAV systems at our productionfacilities in Hyderabad by leveraging BlueBird's technology and manufacturing know-how.
We also signed a partnership with Xynteo an international advisoryfirm as a partner organization in India2022 a business-led coalition committed tocreating a new model of growth by the 75th year of India's independence. As part of thiscoalition Cyient will lead the healthcare impact track with focus on incubating andscaling projects aimed at delivering technology-enabled healthcare solutions primarilyfocused on the diagnostics space in India.
We also signed an agreement to sell our 49% stake in Infotech AerospaceServices Inc. (IASI) to Pratt & Whitney a division of United TechnologiesCorporation. The divestment of IASI will enable us to sharpen the focus on ourDesign-Build-Maintain strategy by exiting non-core minority investments.
Awards and accolades are a reflection of our commitment to drive valuefor our clients. This year we were awarded the prestigious Golden Peacock Award for RiskManagement (GPARM) by the Institute of Directors. The award is a recognition of ourcommitment towards taking proactive risk- mitigating measures to safeguard the interestof our business and stakeholders.
During the year we also won two prestigious awards from Pratt &Whitney: the "Productivity Savings and Cost Avoidance Award" and the"Supplier Productivity Innovation Award." This is the fifth year in a row thatCyient has won the Supplier Productivity Innovation Award. We also won the Boeing"Supplier of the Year" award for the fourth time in six years. Both the awardsare a testimony to our focus on nurturing an innovation-driven culture and developingdisruptive cutting-edge solutions. This year we were also recognized as a "Leaderin Corporate Innovation" at the 13th Indo-American Corporate Excellence Awards.
The award was given for our ability to apply innovative techniques tooptimize cost and operations and for promoting the concept of innovation among employees.We also received the CII Industrial Innovation Awards 2017 for being one of the "Top26 Innovative Organizations" in India.
An Expansive Opportunity
Technology has the potential to solve some of the biggest problems thatmatter in the world today. As we look to fiscal 2019 and beyond we will remain focused onleveraging technology to drive innovation and deliver value to our clients. We will investin technology and innovation in areas where we see the greatest opportunity for growth.
We are excited to build on our momentum from the past year and willcontinue to focus on our S3 strategy execution with a focus on moving from services tosolutions and building capability across the Design-Build-Maintain value chain. We areconfident that our S3 strategy will help us move closer to our aspirations and achieve thelarger purpose we envision for Cyient.
Managing Director & CEO