Year in Review
Our clients experienced a mixed business environment in Fiscal 2018. In the US -domicile for the majority of our clients- the passing of the tax reform act and thepartial roll back of onerous regulatory burdens led to increased profitability andbusiness confidence. Compliance and consumer protection costs however increased across ourbroader client universe with greater responsibility placed on our clients to ensure thehighest standards of business practices. Amidst a backdrop of elevated political rhetoricsome trade tariffs job protections and visa restrictions were imposed adding further tothe cost of doing business. Automation continued to be in the forefront for clients andinvestments continued towards digitising business functions. Experiments with roboticsmachine learning block chain accelerated and utilities were once again high on discussionagendas as clients looked to reduce cost.
We felt well prepared to take advantage of these changes in the year and fiscal year2018 therefore marked a welcome return to growth for eClerx. Overall revenues grew to justunder USD 200mm and profits to just under INR 3000 mm led by growth in our FinancialMarkets and Digital businesses. Overall sales for the firm - new contracts and orders -were strongest of our history and we notably added a number of large clients across eachof our businesses. It is of some note that whilst firm revenues have increased by a thirdover the past three years the firm's risk profile is also today dramatically improved.Over this time our top ten client concentration has decreased from 87% to 70% our top 5from 67% to 60% and our largest service line now represents 15% of revenue down from overone-fifth. Today we have 6 clients over $5mm in revenue and our number of $imm clientshas increased from 14 three years ago to 23 this
year. Notably a fifth of the firm's revenue now derives from outside India deliverymaking us the most global and closest to customer we have ever been.
We have achieved good growth into new business lines this year. In Financial Marketsnotable growth came from our data and compliance services with particular focus on onshoreconsulting and managed services and from automation projects leveraging machine learningand robotics. Customer Operations offset a client loss with new client wins acrossdispatch and quality services and added new business for delivery out of our NorthCarolina centre. Digital continued strong growth with online operations being the largestdriver. Creative services - notably Computer Generated Imagery - and onshore-led advancedAnalytics witnessed strong demand both with existing clients and new logos. Clientadvocacy continued to be strong for eClerx - we won notable client awards and continued towin new business at existing clients.
The industry recognised our work. Our internal service excellence team won the NationalGolden Peacock award. Our investments in training automation were recognized at the CLOSummit for Best Customer Service Training Program'. Finally we were in the top twocompanies for investor returns and governance across all listed mid cap and large cap ITand ITeS firms at the Financial Express CFO awards. These are great accolades.
Corporate Social Responsibility
We remain deeply committed to our social responsibilities as firm and to our CSRprogram. This year we focused on increasing employee participation and on enhancingcapabilities of the charity organizations that we partner with through initiatives toteach modern technology and management skills. We also launched CSR initiatives inpartnership with some of our clients. As always the focus of our initiatives remains tohelp children obtain a better education and to develop skills to gain life independence.As a management team we take pride in the work we do in these areas.
Progress on Our Strategic Roadmap
Much of our success in this year has built on progress in our strategic initiatives.
First and the most notable was the build out of our on shore service deliverycapabilities. 2018 saw overall outside India headcount reach just over 500. This helped usaddress two large trends that we had anticipated. First the move towards more complexservices requiring greater client interaction and solutions that combine technologyanalytics and processing and second the greater demand for customer -facing support fromwithin client geographies. In 2018 we purchased the assets of 24 Consulting a New York -based onshore consulting firm focused on complementary areas of business and furtherinvested in onshore recruiting capabilities. This helped us deploy client programsspanning consulting and project management. At our Italian business CLX the transfer ofcreative capabilities to our India centres created capacity in Verona and Phuket todeliver newer services and to spur growth. In Onshore Analytics we saw a substantialincrease in the overall sophistication of services provided with a particular focus onservices co-delivered from onshore and offshore. We added Singapore to our deliverylocations and our teams in Austin and Toronto grew substantially. The successful launchof client funded programs at our North Carolina site saw delivery headcount increase andin light of strong client interest we agreed to increase delivery capacity at that site.
Second we made substantial progress across our technology efforts. We madestrategic technology hires both onshore and offshore created partnerships with emergentproduct companies and sold the highest number of technology programs into clients. Anincreasing share of new sales embedded technology platforms and tools allowing us to skewbusiness mix to productised and managed services. We embarked on a number of new roboticsand machine learning initiatives - both internal and client funded - to improve efficiencyand reduce cost. In some instances this led directly to increased profitability foreClerx. A significant portion of onshore and consulting engagements leveraged technologyskills and we found our mix of specific domain knowledge industry expertise and relevanttechnology skills of high value to clients. This drive to tech-wrapped services remainscore to differentiation relevance stickiness and long-term value for eClerx.
Finally we continued our growth in Analytics and we had a strong year leveragingclient-location delivery and technology to drive new growth. We continued to focus awayfrom 'managing' data to extracting value insights and outcomes and enjoyed early successtaking some of these services into other verticals. We are convinced that the success ofour Analytics initiative will be critical to the overall success of the firm.
Buyback and Capital Allocation
We pride ourselves as a firm focused on prudent allocation of capital to ensure highprofitability and industry-leading returns. In 2018 we completed our second successful andoversubscribed buyback maintaining our tradition of returning excess capital toinvestors whilst ensuring sufficient capital to fund strategic growth objectives.
A Decade as a Public Listed Company
This year we completed ten years as a public company. It is a remarkable fact that wehave now been a public company for more than half of our young existence and that hascertainly made us grow up quickly. As a result we have today processes systems and aculture that make us the bell weather company of our size and perhaps of any Indiancompany. 2018 leaves us stronger and better - we have a greater mix of services arecloser to customer and are more global. With our enviable list of blue-chip clients ourincreasingly relevant capabilities and comfortable capital position we can be a leader inour industry. We thank you for your belief in us and for your ongoing support.