Infosys: Continued Momentum in Digital Drives 11.1% YTD Growth
Infosys: Continued Momentum in Digital Drives 11.1% YTD Growth
AsiaNet 82480
BANGALORE, India, Jan. 10, 2020 /PRNewswire=KYODO JBN/--
FY 20 revenue guidance increased to 10.0%-10.5%
"Q3 results further underscore that we remain steadfast in our journey of
sustained client relevance and deepening engagement with them, as they partner
with us in navigating their next in the digital transformation era", said Salil
Parekh, CEO and MD. "For us, this has translated into double digit growth
year-to-date, leading to an increase in revenue guidance, accompanied by
expanding operating margins."
40.8% YoY 9.5% YoY 1% QoQ
21.9% $1.8 bn
Digital CC growth Cc growth CC growth Operating Margin
Large deal signings
LOGO: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg
(Caption: Infosys Logo)
Infosys
- Q3 20 revenues grew year-on-year by 8.6% in USD; 9.5% in constant currency
- Q3 20 revenues grew sequentially by 1.0% in USD and in constant currency
- Q3 20 Digital revenues at $1,318 million (40.6% of total revenues),
year-on-year growth of 40.8% and sequential growth of 6.8% in constant currency
- Q3 20 operating margin at 21.9%, 0.2% improvement over Q2 20
- Year-to-date revenues grew by 11.1% in constant currency
- Year-to-date operating margin at 21.4%, within the margin guidance for the
year
- Increased FY 20 revenue guidance; revised guidance is 10.0%-10.5% in constant
currency
Maintained FY 20 operating margin guidance range of 21%-23%
1.Financial Highlights – Consolidated results under International Financial
Reporting Standards (IFRS)
- For the quarter ended December 31, 2019
- Revenues were $3,243 million, growth of 8.6% YoY and 1% QoQ
- Operating profit was $711million, increase of 5.4% YoY and 2.2% QoQ.
Operating margin was 21.9%.
- Basic EPS was $0.15, growth of 27.7% YoY and 10.2% QoQ
- For nine months ended December 31, 2019
-Revenues were $9,583 million, growth of 9.7% YoY
- Operating profit was $2,049 million, growth of 0.6% YoY. Operating margin
was 21.4%.
- Basic EPS was $0.41, growth of 9.7% YoY
"Overall performance during the quarter was satisfactory on multiple counts –
broad-based growth, steady increase in client metrics and healthy large deal
wins", said Pravin Rao, COO. "Large deal wins continue to be robust with growth
of 56% so far this year. We had a further reduction in attrition, demonstrating
the results of our continued efforts towards strengthening employee engagement
and value proposition."
"Operating margins improved further during the quarter driven by relentless
cost optimization and operating leverage", said Nilanjan Roy, CFO. "Cash
generation was extremely strong with cumulative free cash flow crossing $ 1.5
bn. Return on Equity increased further to 25.9% driven by margin expansion and
increased shareholder payouts."
2. Update on Whistleblower Matters
The company has issued a separate press release announcing conclusion of the
independent investigation into allegations contained in the anonymous
whistleblower complaints disclosed earlier.
3. Client wins & Testimonials
- We were selected by Telenet, a Belgian telecommunication provider as its
preferred IT partner to deliver several digital and data initiatives for the
next five years. Telenet plans to leverage Infosys' ecosystem to drive
simplification of its existing landscape, build new digital and data
capabilities, extract relevant insights from data and leverage existing talent
more effectively.
- We entered a strategic long-term partnership with Siemens Gamesa Renewable
Energy (SGRE) to support its digital transformation journey. Infosys will
provide end-to-end IT infrastructure transformation of SGRE, including hybrid
cloud transformation, roll-out of a software defined network, set-up of an
intelligent service desk and digital workplace services.
- We were selected as the main supplier to deliver Volvo Cars' digital
transformation services for its Enterprise Digital Commercial Operations
Applications and Products. As part of this engagement, Infosys will offer next
generation application services leveraging its Global Delivery Model (GDM),
agile delivery, automation and other service optimization levers to deliver
effective service operations.
-Infosys entered an agreement with the Australian Federal Government's Services
Australia to transform the entitlement calculation engine for the nation's
welfare system. The project will enable Services Australia to more quickly
implement policy changes for the benefit of Australians without disrupting
services and deliver operational cost savings. The Welfare Payment
Infrastructure Transformation (WPIT) programme will replace a significant
portion of Centrelink's 30-year-old platform, modernizing the way Services
Australia calculates entitlements for Australians needing government support.
- Benjamin Kreider, Global Traceability Director, Mars Global Services, said,
"At Mars, we are delighted to enter into a partnership with Infosys for our
Digital Supply Chain initiative focused on improving the ongoing market
traceability of all of our products, across all business segments, by using
Infosys' Traceability Solution for the Food, Beverage, and CPG Industry on
their TradeEdge Market Connect Platform. The efficiency and agility of this
platform make it strongly suited to meet the unique needs of our industry,
across a variety of ERP and warehouse management systems in our factories and
third party manufacturers who service our global markets."
- Christian Bornfeld, Chief Innovation & Technology Officer (Group COO) and
Executive Board Member at ABN AMRO Bank, said, "At ABN AMRO Bank, we're excited
to be working with Infosys and accomplish our strategic goals and deliver this
very key IT transformation in the coming years. Infosys' strategic investment
in Cloud, Digital and DevOps has helped create best in class solutions and we
are confident that this partnership will help us transform our IT environment
in a timely and cost-effective way."
- Jean-Luc Galzi, CIO, GEFCO, said: "We are pleased to begin our digital
transformation journey with Infosys. Digital innovation in the supply chain
sector is key and our new partnership will help strengthen GEFCO's expertise
and bring value to our customers."
4. Recognitions
Infosys was recognized as a 2020 Top Employer in Australia, Singapore and Japan
Our flagship global internship program, Infosys InStep, has been ranked number
one in the Best Overall Internship category in 2020 Internship Rankings by
Vault.com, a career intelligence organization
Recognized as a leader in Gartner Magic Quadrant for Application Testing
Services, Worldwide
Ranked as a leader in IDC MarketScape: Asia/Pacific (Excluding Japan) Microsoft
Dynamics 365 Implementation Services 2019 Vendor Assessment
Rated as a leader by ARC Advisory for Engineering Services by Global Service
Providers in India Global Market 2018-2023
Recognized in HFS Top 10: IOT Service Providers 2019
Recognized in HFS Top 10: ServiceNow Services 2019
Recognized in HFS Top 10: Retail and CPG Services 2019
Recognized in HFS Top 10: Insurance Services Providers 2019
Recognized in HFS Top 10: Life Science Services 2019
Recognized in HFS Top 10: Industry 4.0 Services
Recognized as a leader in NelsonHall's Agile & DevOps Services – NEAT Analysis
Recognized as a leader in Enterprise Blockchain Services PEAK Matrix(TM)
Assessment 2020 by Everest Group
Recognized as a leader in Application and Digital Banking PEAK Matrix(TM)
Vendor Assessment 2020 by Everest Group
Recognized as a leader in Healthcare Payer Digital Services PEAK Matrix(TM)
2020 by Everest Group
Recognized as a leader in Application and Digital Services Capital Markets Peak
Matrix(TM) Vendor Assessment 2020 by Everest Group
Recognized as leader in Insurance Application and Digital Services Life
Insurance Peak Matrix(TM) 2020 by Everest Group
Awarded the Excellent Partner Award by Mazda
Infosys Finacle won the Juniper Research Future Digital Awards in the category
Banking Innovation for Best Banking Platform 2019
Infosys Finacle awarded the Banking Technology Awards for Best Use of Emerging
or Innovative Technology
Infosys Finacle won the IBS Global FinTech Innovation Awards 2019 for Best
Payments System implementation
Conferred with the 2019 Asia IP Elite award excellence in developing innovative
Intellectual Property (IP) functions and creating IP value
Compass – The career enablement platform at Infosys won the international
Association for Talent Development (ATD) Excellence in Practice Award
Awarded the IT Ratna of Karnataka for 2018-19 for outstanding performance in IT
Exports and being the biggest exporter and employer in the state of Karnataka
Awarded the NASSCOM Corporate Award for Excellence (2019) for the Inclusion of
Persons with Disability
About Infosys
Infosys is a global leader in next-generation digital services and consulting.
We enable clients to navigate their digital transformation, leveraging our
teams from over 46 countries. With over three 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 mentioned in this release concerning our future growth
prospects are forward-looking statements regarding our future business
expectations 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 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)
December 31, 2019 March 31, 2019
ASSETS
Current assets
Cash and cash equivalents 2,422 2,829
Current investments 431 958
Trade receivables 2,529 2,144
Unbilled revenue 914 777
Prepayments and other current assets 820 827
Income tax assets 1 61
Derivative financial instruments 5 48
Total current assets 7,122 7,644
Non-current assets
Property, plant and equipment 1,896 1,931
Right-of-use assets(B4) 540 -
Goodwill 584 512
Intangible assets 185 100
Non-current investments 594 670
Deferred income tax assets 195 199
Income tax assets 739 914
Other non-current assets 255 282
Total non-current assets 4,988 4,608
Total assets 12,110 12,252
LIABILITIES AND EQUITY
Current liabilities
Trade payables 263 239
Lease liabilities(B4) 79 -
Derivative financial instruments 13 2
Current income tax liabilities 216 227
Client deposits 2 4
Unearned revenue 438 406
Employee benefit obligations 268 234
Provisions 85 83
Other current liabilities 1,438 1,498
Total current liabilities 2,802 2,693
Non-current liabilities
Lease liabilities(B4) 501 -
Deferred income tax liabilities 88 98
Employee benefit obligations 6 6
Other non-current liabilities 136 55
Total liabilities 3,533 2,852
Equity
Share capital- `5 ($0.16) par value 4,800,000,000 (4,800,000,000) equity shares
authorized, issued and outstanding 4,239,766,436 (4,335,954,462) equity shares
fully paid up, net of 18,781,564 (20,324,982) treasury shares as at December
31,
2019 (March 31, 2019) 332 339
Share premium 300 277
Retained earnings 10,458 11,248
Cash flow hedge reserve (2) 3
Other reserves 560 384
Capital redemption reserve 17 10
Other components of equity (3,141) (2,870)
Total equity attributable to equity holders of the company 8,524 9,391
Non-controlling interests 53 9
Total equity 8,577 9,400
Total liabilities and equity 12,110 12,252
Three months ended Three months ended Nine months ended Nine months
ended
December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018
Revenues 3,243 2,987 9,583 8,740
Cost of sales 2,159 1,956 6,420 5,660
Gross profit 1,084 1,031 3,163 3,080
Operating expenses
Selling and marketing expenses 169 161 502 464
Administrative expenses 204 195 612 578
Total operating expenses 373 356 1,114 1,042
Operating profit 711 675 2,049 2,038
Other income, net (A3) (B2) 116 105 312 317
Finance cost (B4) (6) - (18) -
Reduction in the fair value of Disposal Group held for
sale(A1) - - - (39)
Adjustment in respect of excess of carrying amount over recoverable
- (65) - (65)
recoverable amount on reclassification from “Held for Sale” (A2)
Profit before income taxes 821 715 2,343 2,251
Income tax expense 194 213 597 633
Net profit 627 502 1,746 1,618
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Re-measurements of the net defined benefit liability/asset,
net (16) (4) (22) (3)
Equity instrument through other comprehensive income, net (6) 8 (5) 10
(22) 4 (27) 7
Items that will be reclassified subsequently to profit or loss:
Fair valuation of investments, net (1) 6 1 (3)
Fair value changes on derivatives designated as cash flow hedge, net
(4) 8 (5) 5
Foreign currency translation (40) 295 (247) (634)
(45) 309 (251) (632)
Total other comprehensive income/(loss), net of tax (67) 313 (278) (625)
Total comprehensive income 560 815 1,468 993
Profit attributable to:
Owners of the Company 626 502 1,741 1,618
Non-controlling interests 1 - 5 -
627 502 1,746 1,618
Total comprehensive income attributable to:
Owners of the Company 559 815 1,465 993
Non-controlling interests 1 - 3 -
560 815 1,468 993
Earnings per equity share
Basic ($) 0.15 0.12 0.41 0.37
Diluted ($) 0.15 0.12 0.41 0.37
Weighted average equity shares used in computing earnings
per equity share
Basic 4,239,607,543 4,347,673,466 4,263,569,478 4,347,130,342
Diluted 4,245,716,437 4,352,731,387 4,270,509,294 4,352,705,150
NOTES:
A. Notes pertaining to previous quarters / periods
1. In the quarter ended June 30, 2018, the Company had recorded a reduction in
the fair value amounting to $39 million in respect of its subsidiary Panaya.
2. In the quarter ended December 31, 2018, 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
3. Other income includes interest on income tax refunds amounting to $7 million
for the three and nine month ended Dec 31, 2018.
B. Notes pertaining to the current quarter
1. The audited interim condensed consolidated Balance sheet and Statement of
Comprehensive Income for the three months and nine months ended December 31,
2019 have been taken on record at the Board meeting held on January 10, 2020
2. Other income includes interest on income tax refunds amounting to $34
million for the three month ended Dec 31, 2019 and $35 million for the nine
month ended Dec 31, 2019.
3. A Fact Sheet providing the operating metrics of the Company can be
downloaded from www.infosys.com.
4. On account of adoption of IFRS 16- Leases effective April 1, 2019.
INR:
Factsheet:
Contact
Investor Relations
Sandeep Mahindroo
+91-80-3980-1018
Sandeep_Mahindroo@infosys.com
Media Relations
Mehak Chawla
+91-80-4156-3998
Mehak.Chawla@infosys.com
Source: Infosys
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