Infosys: 37.8% Growth in Digital Portfolio Leads to Strong 9.8% Growth in FY 20

PR83737

BENGALURU, India, April 20, 2020 /PRNewswire=KYODO JBN/ --

"I am proud of the Infosys team that has worked exceptionally well to achieve

93% remote working today and ensuring consistent service delivery for our

clients in this rapidly changing environment. Our focus on the health of our

employees and our commitment to our clients helped us navigate the past few

weeks," said Salil Parekh, CEO and MD. "We had an exceptional year in financial

year 2020 with growth of 9.8% and operating margin of 21.3%. While the

immediate short-term will be challenging, looking ahead, we can see that there

is a strong interest to consolidate with partners with high-quality and agile

service delivery and strong financial resilience. I am confident we will emerge

from this stronger."

Logo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg

31.7% YoY           6.4% YoY       21.1% Q4          -0.8% CC           $1.65bn Q4

37.8% FY             9.8% FY         21.3% FY          -1.4% Reported  $9.0bn FY

Digital CC growth  CC growth   Operating margin  QoQ growth        Large deal signings

         

FY20 revenues grew by 8.3% in USD, 9.8% in constant currency

FY 20 operating margin at 21.3%

FY 20 Free Cash Flow at $2.15 billion; Free Cash Flow to net profit conversion

at 92%

Q4 20 revenues grew year-on-year by 4.5% in USD; 6.4% in constant currency

Q4 20 revenues declined sequentially by 1.4% in USD; 0.8% in constant currency

Q4 20 Digital revenues at $1,341 million (41.9% of total revenues),

year-on-year growth of 31.7% and sequential growth of 2.6% in constant currency

Announces final dividend of `9.50 per share

Considering the business uncertainty emanating from COVID-19, the company is

unable to provide guidance on revenues and margins for FY 21 at this stage. The

company

will provide guidance after visibility improves

1.  Financial Highlights – Consolidated results under International Financial

Reporting Standards (IFRS)

For the quarter ended March 31, 2020         For the Year ended March 31, 2020

Revenues were $3,197 million, growth         Revenues were $12,780 million,

of 4.5% YoY and decline of 1.4% QoQ           growth of 8.3%

YoY                                   

    

Operating profit was $674 million,           Operating profit was $2,724

million, growth

increase of 2.6% YoY and decline             of 1.0% YoY. Operating margin was

21.3%.

of 5.2% QoQ. Operating margin was 21.1%.

Basic EPS was $0.14, growth of 4.2% YoY       Basic EPS was $0.55, growth of

8.3% YoY

and decline of 5.7% QoQ

"We completed a satisfying year on multiple counts – growth in all verticals

and geographies, significant increase in large deal wins, good client mining

and operational discipline", said Pravin Rao, COO. "The impact caused by

COVID-19 since last few weeks of March has led to significant displacement in

the operating model while severely testing business continuity plans of

companies. We demonstrated what a 'Live Enterprise' truly is by improving the

infrastructure and technology enablement for our employees in a short time span

and ensuring business continuity for clients."

"We continue to remain focused on execution excellence in a period of high

uncertainty. Our relentless focus on liquidity will be supported by our strong

Balance Sheet of $3.6 billion cash, backed by accelerated cost take-outs and

operational rigor", said Nilanjan Roy, CFO. "The final dividend of `9.50 per

share is a testimony of a strong free cash flow performance for FY 20."

2.  COVID-19 update

As the world comes together to manage the impact of the crisis caused by

COVID-19, Infosys is making every effort to tackle the turbulence. The company

is prioritizing employee well-being, assuring services for business continuity

and strategizing offerings to improve business resilience for its clients,

while also supporting community initiatives. Over 93% of our workforce is

enabled to work from home, in countries still under lockdown, and from the

company's offices, wherever possible – are all in sync with the company's

priorities and working tirelessly to help make sure clients are running their

businesses and preparing for a future of resilience.

(Please refer to the separate press release on our COVID-19 response released

today)

3.  Update on whistleblower matters

The Audit Committee appointed an external legal counsel to conduct an

independent investigation into the whistleblower allegations which have been

previously disclosed to stock exchanges on October 22, 2019 and to the

Securities Exchange Commission (SEC) on Form 6-K on the same date. As

previously disclosed on January 10, 2020 the outcome of the investigation has

not resulted in restatement of previously issued financial statements.

The Company cooperated with an investigation by the SEC regarding the same

matters. In March 2020, the Company received notification from the SEC that the

SEC has concluded its investigation and the Company does not anticipate any

further action by the SEC on this matter. The Company is responding to all the

inquires received from the Indian regulatory authorities and will continue to

cooperate with the authorities for any additional requests for information.

Additionally, in October 2019, a shareholder class action lawsuit was filed in

the United States District Court for the Eastern District of New York against

the Company and certain of its current and former officers for alleged

violations of the US federal Securities Laws. The Company is presently unable

to predict the scope, duration or the outcome of these matters.

4.  Board changes

DN Prahlad, Independent Director, has resigned from the company to devote more

time for his other business commitments with effect from April 20, 2020. The

Board placed on record its appreciation for the services rendered by him during

his tenure.

The Company announced the appointment of Uri Levine as an Independent Director

of the Company, effective April 20, 2020, based on the recommendations of the

Nomination and Remuneration Committee of the Board. The appointment is for a

period of three years and is subject to the approval of shareholders.

Uri Levine is a passionate serial entrepreneur and disruptor. He co-founded

Waze, the world's largest community-based driving traffic and navigation app,

with more than 500 million drivers around the globe, which was acquired by

Google on June 2013 for more than $1.1 billion. Uri has been in the high-tech

business for the last 30 years with half of them in the start-up scene.

5.  Client wins & Testimonials

"Thank you. For employing great people at Infosys. For above and beyond

service. And, for a long and prosperous relationship. Not all of our partners

were able to get their teams fully up and running. With great pride, I was able

to tell the leadership team that Infosys is fully operational for us. Thank

you! May Infosys and India weather this storm well and emerge stronger", Head

of US Operations at a global financial services firm.

"Your team has supported a historic shift of office-based employees to

work-from-home-status in record time here in the US. The planning, execution

and subsequent experience of our staff in the new work modality has been

outstanding. The CEO and our board have recognized the incredible efforts that

have taken place from the IT teams", CIO of a leading healthcare company.

Reckitt Benckiser (RB), a FTSE 100 company, has renewed its partnership with

Infosys to reimagine its infrastructure and application operations. As part of

this engagement, Infosys will bring in advanced AI and Automation to build a

Cognitive First IT Enterprise at Reckitt Benckiser, offering a seamless digital

experience for its enterprise users.

E.ON has awarded Infosys a multi-year engagement to run and transform its

future workplace services. Infosys would transition the workplace services for

the E.ON group from the existing incumbent and then continue to transform and

operate it till 2025. This expands the strategic partnership between E.ON and

Infosys and builds upon the existing contract which Infosys has with E.ON's

subsidiary innogy. Infosys would leverage its Digital Innovation Center in

Düsseldorf, Germany, to deliver services for this engagement.

Infosys has been selected by Siemens to deploy Wingspan, Infosys' Digital

Learning and Talent Transformation Platform. The company-wide deployment of

next generation, talent transformation platform will enhance learning

experience for 385,000 Siemens employees.

Infosys entered a long-term strategic partnership with GE Appliance, a Haier

company, to effectively streamline IT operations. As a part of this alliance,

Infosys will assist GE Appliances to accelerate their digital and workplace

transformation through automation-driven managed IT services support across

global command centres, service desks, end-user computing, IT infrastructure,

and applications.

A large CPG company selected Infosys to accelerate the transformation of the

company's digital technology capabilities and optimize costs. In addition to

being the strategic transformation partner Infosys will also provide end-to-end

support for enabling integrated operations across Applications, Infrastructure

and Cybersecurity.

6.  Recognitions

Infosys was positioned as a leader in IDC MarketScape: North American

Distributed Energy Resource Management Systems Strategic Consultants and

Systems Integrators 2020

Vendor Assessment

Positioned as a leader in IDC MarketScape: Worldwide Business and Industrial

IoT Consulting and Systems Integration Services 2020 Vendor Assessment

Recognized as a leader in IDC MarketScape: Worldwide Business and Industrial

IoT Engineering and Managed Services 2020 Vendor Assessment

Positioned as a Leader in the IDC MarketScape: Worldwide Integrated Payment

Platforms 2019-2020 Vendor Assessment

Ranked as a leader in NelsonHall NEAT for Cognitive and Self-Healing IT

Infrastructure Management Services

Ranked as a leader in NelsonHall NEAT for Digital Manufacturing Services

Infosys BPM has been recognized with the elite international award- Brandon

Hall Human Capital Excellence Awards, 2019 under three diverse categories.

Infosys BPM has won the Best Practices in CSR Awards 2020 for the Skill

Development Initiative of IBPM at 6th International Conference of Corporate

Social

Responsibility by Institute of Public Enterprise, Hyderabad.

About Infosys

Infosys is a global leader in next-generation digital services and consulting.

We enable clients in 46 countries to navigate their digital transformation.

With nearly four decades of experience in managing the systems and workings of

global enterprises, we expertly steer our clients through their digital

journey. We do it by enabling the enterprise with an AI-powered core that helps

prioritize the execution of change. We also empower the business with agile

digital at scale to deliver unprecedented levels of performance and customer

delight. Our always-on learning agenda drives their continuous improvement

through building and transferring digital skills, expertise, and ideas from our

innovation ecosystem.

Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise

navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects,

financial expectations and plans for navigating the COVID-19 impact on our

employees, clients and stakeholders are forward-looking statements intended to

qualify for the 'safe harbor' under the Private Securities Litigation Reform

Act of 1995, which involve a number of risks and uncertainties that could cause

actual results to differ materially from those in such forward-looking

statements. The risks and uncertainties relating to these statements include,

but are not limited to, risks and uncertainties regarding COVID-19 and the

effects of government and other measures seeking to contain its spread, risks

related to an economic downturn or recession in India, the United States and

other countries around the world, changes in political, business, and economic

conditions, fluctuations in earnings, fluctuations in foreign exchange rates,

our ability to manage growth, intense competition in IT services including

those factors which may affect our cost advantage, wage increases in India, our

ability to attract and retain highly skilled professionals, time and cost

overruns on fixed-price, fixed-time frame contracts, client concentration,

restrictions on immigration, industry segment concentration, our ability to

manage our international operations, reduced demand for technology in our key

focus areas, disruptions in telecommunication networks or system failures, our

ability to successfully complete and integrate potential acquisitions,

liability for damages on our service contracts, the success of the companies in

which Infosys has made strategic investments, withdrawal or expiration of

governmental fiscal incentives, political instability and regional conflicts,

legal restrictions on raising capital or acquiring companies outside India,

unauthorized use of our intellectual property and general economic conditions

affecting our industry and the outcome of pending litigation and government

investigation. Additional risks that could affect our future operating results

are more fully described in our United States Securities and Exchange

Commission filings including our Annual Report on Form 20-F for the fiscal year

ended March 31, 2019. These filings are available at www.sec.gov. Infosys may,

from time to time, make additional written and oral forward-looking statements,

including statements contained in the Company's filings with the Securities and

Exchange Commission and our reports to shareholders. The Company does not

undertake to update any forward-looking statements that may be made from time

to time by or on behalf of the Company unless it is required by law.

Infosys Limited and subsidiaries  

Audited Condensed Consolidated Balance Sheet as at:  

                                      (Dollars in millions except equity share data)  

                                           March 31, 2020     March 31, 2019

ASSETS   

Current assets   

Cash and cash equivalents                    2,465      2,829

Current investments             　　　　　  615        958

Trade receivables                  　　　　　 2,443 　  2,144

Unbilled revenue     　　　　　　　　　　 941        777

Prepayments and other current assets    739        827

Income tax assets    　　　　　　　　　   1           61

Derivative financial instruments    　　　  8          48

Total current assets                              7,212     7,644

Non-current assets  

Property, plant and equipment              1,810      1,931

Right-of-use assets(B3)                        551          -

Goodwill                                              699         512

Intangible assets                                  251         100

Non-current investments                      547          670

Deferred income tax assets                   231         199

Income tax assets                                711         914

Other non-current assets                      248         282

Total non-current assets                      5,048        4,608

Total assets                                       12,260       12,252

LIABILITIES AND EQUITY   

Current liabilities   

Trade payables                                    377         239

Lease liabilities(B3)                              82          -

Derivative financial instruments             65          2

Current income tax liabilities                197         227

Client deposits                                     2           4

Unearned revenue                              395         406

Employee benefit obligations               242         234

Provisions                                          76            83

Other current liabilities                       1,321       1,498

Total current liabilities                        2,757       2,693

Non-current liabilities    

Lease liabilities(B3)                            530          -

Deferred income tax liabilities             128         98

Employee benefit obligations               5            6

Other non-current liabilities                139         55

Total liabilities                                   3,559        2,852

Equity   

Share capital- `5 ($0.16) par value 4,800,000,000 (4,800,000,000)

equity shares authorized, issued and outstanding 4,240,753,210 (4,335,954,462)

equity shares fully paid up, net of 18,239,356 (20,324,982)

treasury shares as at March 31, 2020

(March 31, 2019)                               332         339

Share premium                                  305         277

Retained earnings                              11,014     11,248

Cash flow hedge reserve                     (2)          3

Other reserves                                   594         384

Capital redemption reserve                  17          10

Other components of equity               (3,614)    (2,870)

Total equity attributable to equity holders of the company    8,646    9,391

Non-controlling interests                     55           9

Total equity                                        8,701      9,400

Total liabilities and equity                   12,260     12,252

    

Infosys Limited and subsidiaries    

Consolidated Statement of Comprehensive Income for the:    

                              (Dollars in millions except equity share and per equity share data)    

       Unaudited                                        Audited

       3 months ended    3 months ended    Year ended         Year ended

       March 31, 2020     March 31, 2019     March 31, 2020   March 31, 2019

Revenues                                   3,197  3,060  12,780  11,799

Cost of sales                               2,133  2,028  8,552  7,687

Gross profit                                 1,064  1,032  4,228  4,112

Operating expenses    

   Selling and marketing expenses 161  174  664     638

   Administrative expenses            229  200  840     778

Total operating expenses              390  374  1,504  1,416

Operating profit                           674  658  2,724  2,696

Other income, net (A3) (B2)         84    94    395     411

Finance cost(B3)                         (6)    -      (24)     -

Reduction in the fair value

of Disposal Group held for sale(A1) -     -       -         (39)

Adjustment in respect of excess of

carrying amount over recoverable

amount on reclassification from

"Held for Sale" (A2)                      -       -       -        (65)

Profit before income taxes            752  752  3,095  3,003

Income tax expense (A4)             160  171  757     803

Net profit                                    592  581  2,338  2,200

    

Other comprehensive income     

Items that will not be reclassified

subsequently to profit or loss:

     

Re-measurements of the net defined

benefit liability/asset, net (B4)      (2)    -      (24)    (3)

Equity instrument through other

comprehensive income, net           -       -      (5)     10

                                                  (2)     -     (29)     7

Items that will be reclassified

subsequently to profit or loss:     

Fair valuation of investments, net    2       3       3       -

Fair value changes on derivatives

designated as cash flow hedge, net  -      (2)    (5)     3

Foreign currency translation          (473)  74  (720)  (560)

                                                  (471)  75  (722)  (557)

Total other comprehensive income/(loss),

net of tax                                    (473)  75  (751)  (550)

Total comprehensive income          119  656  1,587  1,650

    

Profit attributable to:    

Owners of the Company                 590  580  2,331  2,199

Non-controlling interests                 2     1      7        1

                                                    592  581  2,338  2,200

Total comprehensive income attributable to:    

Owners of the Company                 117  655  1,582  1,649

Non-controlling interests                 2     1      5        1

                                                   119  656  1,587  1,650

Earnings per equity share    

Basic ($)                                       0.14  0.13  0.55  0.51

Diluted ($)                                    0.14  0.13  0.55  0.51

Weighted average equity shares used in computing earnings per equity share    

Basic                        4,240,181,854    4,347,129,592    4,257,754,522    4,347,130,157

Diluted                     4,245,981,386    4,353,023,863     4,265,144,228   4,353,420,772

NOTES:

A.  Notes pertaining to previous year

During the year ended March 31, 2019, the Company had recorded a reduction in

the fair value amounting to $39 million in respect of its subsidiary Panaya.

The Company had recorded an adjustment in respect of excess of carrying amount

over recoverable amount of $65 million in respect of its subsidiary Skava

during the

year ended March 31, 2019.

Other income includes interest on income tax refunds amounting to $7 million

for the year ended March 31, 2019.

During the year ended March 31, 2019, on account of conclusion of an Advanced

Pricing Agreement (APA) in an overseas jurisdiction, the Company had reversed

income tax

expense provision of $14 million, which pertains to previous periods.

B.  Notes pertaining to the current quarter / year

The audited condensed consolidated Balance sheet and Statement of Comprehensive

Income for the year ended March 31, 2020 have been taken on record at the Board

meeting

held on April 20, 2020.

Other income includes interest on income tax refunds amounting to $2 million

for the three months ended March 31, 2020 and $37 million for the year ended

March 31,

2020.

On account of adoption of IFRS 16- Leases effective April 1, 2019.

Includes unrealized losses on certain investments carried in the PF trust for

the quarter and year ended March 31, 2020.

C.  A Fact Sheet providing the operating metrics of the Company can be

downloaded from www.infosys.com (https://www.infosys.com/)

INR-

https://www.infosys.com/investors/reports-filings/quarterly-results/2019-2020/q4/documents/ifrs-inr-press-release.pdf

Factsheet-

https://www.infosys.com/investors/reports-filings/quarterly-results/2019-2020/q4/documents/fact-sheet.pdf

  

SOURCE- Infosys