Dear Fellow Shareholders
It gives me great pleasure to share our the past year's progress to ASM's stakeholders.The trust of our customers and the perseverance of our employees has helped us makesignificant progress and despite unexpected global challenges positioned ASM for furthergrowth in the next financial year.
The world is in the midst of a health crisis so we express our gratitude to allessential workers who toil tirelessly to make our society safe. As a company we aretaking action to support our people their families and our clients. I am especiallyproud of how our team have reacted under these exceptional circumstances demonstratingresilience to support and serve our clients while in parallel protecting each other andtheir families.
It is too early to gauge the effect of COVID-19 on the global economy. As we pursue ourgrowth plans we will be mindful and focus on the expertise of ASM in Engineering ProductR&D and Digital Transformation across multiple sectors. This expertise will be mappedto the needs of our clients supporting their ability to adopt an Industry 4.0approach' reducing capital expenditure increasing digitisation and automation in anattempt to help them transform their businesses and reach a new steady state in an postCOVID landscape. We were "spot on" with our future outlook last year; avalidation of the journey on which we embarked and we will continue to harness the wideopportunities in the same areas.
Despite a Global health crisis in our final quarter we delivered strong performance toyear end. Our revenues grew by 10.2% y-o-y to 838.40 Mn due to an acceleration in ourengineering services. Our profits were 24.38 Mn a decrease of 73.6% over the previousyear. This was mainly driven by our investments in R&D and business developmentactivities in new geographies that will bear fruit in the coming financial year. Wedelivered earnings per share of 2.18 and therefore proposed a dividend of 2.50 per equityshare.
ASM launched its PATENT PENDING product SmartFix4.0'; a one of its kind for theManufacturing Industry that addresses an Industry 4.0 need. SmartFix4.0 is an IndustrialArtificial Intelligence Product with a potent combination of Hardware Software and DataAnalytics to increase yield and throughput in the manufacturing sector. With a robustglobal client base and a host of Partnerships with OEMs SmartFix4.0 is set to make wavesin the next 2 years.
ASM has made strategic investments in emerging technology companies whilst Co-Creatingproducts in the areas of Cloud Network Cyber security Electric and Autonomous Vehicles.These investments will ensure we reach our potential with cutting edge technologies tomeet future goals and address the needs of our clients.
ASM continue to invest in Product R&D Engineering Services and DigitalTransformation services to marry traditional Engineering and Manufacturing techniques withIndustry 4.0 practices Data Science Analytics and cutting edge cyber security network IPand Digital Twin simulation.
Prior to the crisis manufacturing and engineering sectors were aware of and interestedin Industry 4.0. During the recent months the focus has switched to the health andsurvival of families and business. In a post COVID world Industry 4.0 should be seen askey to the future health and success of manufacturing and engineering businesses.
Increased adoption of flexible and remote working has resulted in expansion of the needfor greater network bandwidth and data security measures with software and applicationdevelopment as enablers to collaboration.
With streamlined manufacturing and engineering there will be increase focus ondomestic supply chains and with the increase in flexible working a significantaddressable market for Engineering Product R&D and Digital Services. The investmentsin Innovation and R&D has placed ASM at the forefront of Product Development creatingproducts of the future that meet changing technologies markets and customer demands.While investment in R&D is key to the growth and future sustainability of theorganization Co-creation is one step ahead of these activities; new products and servicesare jointly developed with our customers in a "Shared Innovation and SharedDevelopment" model that addresses their specific requirements and builds closerlonger term business relationships.
While the Industry 4.0 and Smart manufacturing framework provides a roadmap businesssuccess depends on how well an enterprise innovates on the ground. ASM Technologies hasover the years been helping customers with extensive usage of Automation Robotics andDigital Transformation (Dx). This initiative has been of immense benefit for its customersin quantitatively increasing Yield and Throughput resulting in "Improved QualityHigh Precision High Repeatability and Reliability".
The thrust areas for ASM will continue to be in the Semiconductor Equipment MedicalDevices Hi Tech Automotive Mobility Telecom industries. The Internet of Things (IoT)offers quality space for new product development and ASM is creating its own products aswell as Co-Creation for its customer's products. The future looks exciting and upbeat inthe Products and Engineering Services Outsourcing (ESO) space. There are numerous driversfor our clients; reducing product development life cycle and obtaining a first moveradvantage by ring-fencing IP. Clients are equally excited to collaborate with Engineeringservice providers like ASM to leverage their capability for global regional andadjacent markets thereby optimizing R&D Operations.
We increasingly embrace businesses that are defined by technology and the shareddevelopment of technology driven solution across industries. This as well as leveragingour R & D competitive differentiation significantly increases the market opportunityfor us. We are participating aggressively in this evolution embedding ourselves deeper inour customers' ecosystems and becoming an industry staple. This is resulting in greaterprominence predictability and business sustainability. All of this will create morevalue to our stakeholders in the future.
For me despite a global downturn ASM is well positioned to support the businesstransformation of our customers due to our core skills in Digital Transformation Industry4.0 and Product R&D. These are the areas that are increasingly important in a postCovid-19 paradigm.
Businesses will review their products processes systems and components to furtherreduce cost increase efficiency and liberate talent as part of the need to acceleratetransformation and move to a "New Normal". Data Science AI and ML VR and ARRobotics Automation and Digital Twins were seen as complimentary but not essentialtechnologies in many companies. Now in a very different economic environment they will beseen as crucial enablers in the journey from survival and recovery to business success.
We are committed to working upon our long-term strategy strengthening our engineeringservice and investing for growth in new businesses and opportunities.
Our longevity in business comes from our ability to adapt to newer business ecosystemsand a continuous investment in R&D.
We are optimistic of the opportunities we will encounter in the future with respect toour engineering and co-created solutions. The steps we are taking today will make ourshareholders proud of us in the future. I would like to thank my entire team at ASM fortheir commitment and untiring e orts to achieve the best. We are at the start of a newgolden era and we look forward to your continued support.
On behalf of myself and the management of the company may I take this opportunity tothank our esteemed customers shareholders vendors business partners advisors andconsultants for their support. To the Employees of the company I am grateful for theirvaluable contribution e orts and spirit of dedication. - State Bank of India IndiaICICI Limited India Indian Bank Singapore HSBC Bank USA and First Federal Bank USAfor their support and guidance - Central and State Governments Customs Reserve Bank ofIndia Software Technology Parks (STPI) and NASSCOM.
| ||With best Wishes |
|Bengaluru ||Sincerely |
|June 2 2020 ||Rabindra Srikantan |