Infosys: Second Consecutive Quarter of Double Digit Growth in Constant Currency

/ -- "We have completed the first year of our transformation journey with strong results on multiple dimensions including revenue growth, performance of our digital portfolio, large deal wins, and client metrics. This is a reflection of our increased client relevance stemming from our focus on digital, positioning, and long-standing client relationships," said Salil Parekh, CEO and MD. "Our planned investments have started yielding benefits. As we look ahead into fiscal 2020, we plan to deploy various measures of operational efficiencies across the business."
Infosys_Logo 41.1% YoY
33.8% FY
Digital CC growth
11.7% YoY
9.0% FY

CC growth
21.5% Q4

22.8% FY
Operating margin
2.1% CC
2.4% Reported
QoQ growth
$1.57Bn Q4
$6.28Bn FY
Large deal signings
FY 19 revenues grew by 7.9% in USD; 9.0% in constant currency FY 19 operating margin at 22.8% Q4 19 revenues grew year-on-year by 9.1% in USD; 11.7% in constant currency Q4 19 revenues grew sequentially by 2.4% in USD; 2.1% in constant currency Q4 19 Digital revenues at $1,035 million (33.8% of total revenues), year-on-year growth of 41.1% and sequential growth of 9.7% in constant currency Announces final dividend of INR 10.50 per share FY 20 revenue guidance in the range of 7.5%-9.5% in constant currency FY 20 Operating margin guidance in the range of 21%-23%

Financial Highlights -Consolidated results under International Financial Reporting Standards (IFRS)
For the Quarter ended March 31, 2019
Revenues were $3,060 million, growth of 9.1% YoY and 2.4% QoQ
Operating profit was $658 million, decline of 5.1% YoY and 2.6% QoQ#
Basic EPS was $0.13, growth of 1.6% YoY and 15.5% QoQ
For the Year ended March 31, 2019
Revenues were $11,799 million, growth of 7.9% YoY
Operating profit was $2,696 million, growth of 1.4% YoY
Basic EPS was $0.51, decline of 8.2% YoY*@
* Includes reduction in fair value and carrying value of Panaya and Skava, respectively which resulted in reduction in EPS by $0.02

"We had another quarter of over $1.5 bn large deal TCV in Q4, as a result of which FY 19 TCV doubled over FY 18. Realization per billed employee was steady which reflects increasing usage of automation in core services and faster growth in newer digital services," said Pravin Rao, COO. "Overall attrition remains high and we are continuing our focus on arresting the same."
"Cash generation in FY 19 was strong and Dividend Per Share increased by 4.5%. During the quarter, we completed the payout of special dividend in January and initiated the share buyback program," said Nilanjan Roy, CFO. "We had another quarter of forex gains thanks to our proactive hedging strategy."

Capital Allocation
During Q4 19, completed payment of special dividend of INR 4 per share announced in January, 2019. Initiated buyback from March 20, 2019 after receiving all requisite approvals. Out of total buyback size of INR 8,260 crore, the company has bought back shares worth INR 1,546 crore so far. For the Financial Year 2019, the Board has recommended a final dividend of INR 10.50 per share ($0.15 per ADR*). After including the interim dividend of INR7 per share, the total dividend for Financial Year 2019 will amount to INR17.50 per share. *US$1 = INR 69.16 as at March 31, 2019

Client wins & Testimonials
Siemens Gamesa Renewable Energy (SGRE), a world leader and a pioneer in the renewable energy industry, has signed a seven-year global partnership with Infosys to enable an end-to-end IT Transformation program towards a digital future and industry leadership. Alan Feeley, SGRE CIO, said, "Infrastructure & applications outsourcing deals are the norm in our business worlds already today. When considering our (SGRE) desired IT operating model for the future, we were looking for a partner that brings a careful balance of innovation, operational excellence and sustainable commercial viability. With Infosys, we are very confident that these attributes were at the core of their operating culture. We are very excited to partner with Infosys on this journey of modernization and were impressed by Infosys Next Generation Application & Infrastructure Management Framework, their agility & focus on delivery excellence, and a clear understanding of our business strategy."

Curtis Popp, Vice President of Customer Operations at Citizens Energy Group, said, "At Citizens Energy Group, we're excited to be working with Infosys and Oracle to implement a new CIS and accomplish our strategic goals, including improved customer satisfaction and employee engagement. The experience and expertise of Infosys employees is paramount to the success of this complex project."
"Movement Mortgage is committed to providing loan officers, real estate agents and our borrowers with technology and a digital infrastructure that delivers an innovative, user-friendly experience on every platform and in every channel, both today and in the future. We're pleased to have selected Infosys as our strategic partner across these key business functions. Infosys' expertise in Digital Transformation, Cloud Technologies and Mortgage and Retail Lending will help Movement continue to spearhead industrywide transformation that improves the mortgage experience for everyone and makes the dream of homeownership more accessible than ever before," saidCasey Crawford, CEO, Movement Mortgage

Recognition:
Infosys positioned in HFS Top 10 Healthcare Services 2019
Infosys positioned as a leader in SAP HANA and S/4 HANA Services NEAT 2019
Infosys positioned as a leader in RPA & AI in Banking NEAT 2019
Infosys positioned in Customer Experience (CX) Shortlist (Constellation ShortList Global Customer Experience (CX) Services)
Infosys positioned as a leader in Gartner's Magic Quadrant for Public Cloud Infrastructure Professional and Managed Services, Worldwide
Infosys positioned as a leader in Advanced Digital Workplace Services NEAT 2019
Infosys Lex Wingspan shortlisted in Constellation ShortList Learning Marketplaces for Q1 2019
Infosys positioned as a leader in IDC MarketScape: Worldwide IT Service Management Implementation Services 2019 Vendor Assessment

Infosys positioned in HFS Top 10 High-tech sector service providers
Infosys positioned in HFS Top 10 Microsoft AI Services 2019
Infosys positioned in HFS Top 10 Enterprise Blockchain Services 2018
About Infosys
Safe Harbor
Infosys Limited and subsidiaries
Audited Condensed Consolidated Balance Sheet as at
(Dollars in millions except equity share data)
March 31, 2019
March 31, 2018
ASSETS
Current assets
Cash and cash equivalents
2,829
3,041
Current investments
958
982
Trade receivables
2,144
2,016
Unbilled revenue
777
654
Prepayments and other current assets
827
662
Income tax assets
61
-
Derivative financial instruments
48
2
7,644
7,357
Assets held for sale(A3)(A4)

-
316
Total current assets
7,644
7,673
Non-current assets
Property, plant and equipment
1,931
1,863
Goodwill
512
339
Intangible assets
100
38
Investment in associate
-
-
Non-current investments
670
883
Deferred income tax assets
199
196
Income tax assets
914
931
Other non-current assets
282
332
Total non-current assets
4,608
4,582
Total assets
12,252
12,255
LIABILITIES AND EQUITY
Current liabilities
Trade payables
239
107
Derivative financial instruments
2
6
Current income tax liabilities
227
314
Client deposits
4
6
Unearned revenue
406
352
Employee benefit obligations
234
218
Provisions
83
75
Other current liabilities
1,498
1,036
2,693
2,114
Liabilities directly associated with assets held for sale(A3)(A4)
-
50
Total current liabilities
2,693
2,164
Non-current liabilities
Deferred income tax liabilities
98
82
Employee benefit obligations
6
7
Other non-current liabilities
55
42
Total liabilities
2,852
2,295
Equity
Share capital- INR 5 ($0.16) par value 4,800,000,000 (2,400,000,000) equity shares authorized, issued and outstanding 4,335,954,462 (2,173,312,301), net of 20,324,982 (10,801,956) treasury shares as at March 31, 2019 (March 31, 2018), respectively
339
190
Share premium
277
247
Retained earnings
11,248
11,587
Cash flow hedge reserve
3
-
Other reserves
384
244
Capital redemption reserve
10
9
Other components of equity
(2,870)
(2,317)
Total equity attributable to equity holders of the company
9,391
9,960
Non-controlling interests
9
-
Total equity
9,400
9,960
Total liabilities and equity
12,252
12,255
Infosys Limited and subsidiaries
Audited Condensed Consolidated Statement of Comprehensive Income for the
(Dollars in millions except equity share and per equity share data)
Three months ended March 31, 2019
Three months ended March 31, 2018
Year ended March 31, 2019
Year ended March 31, 2018
Revenues
3,060
2,805
11,799
10,939
Cost of sales
2,028
1,793
7,687
7,001
Gross profit
1,032
1,012
4,112
3,938
Operating expenses
Selling and marketing expenses
174
147
638
552
Administrative expenses
200
172
778
727
Total operating expenses
374
319
1,416
1,279
Operating profit
658
693
2,696
2,659
Other income, net (B3)
94
100
411
513
Reduction in the fair value of Disposal Group held for sale(A3)
-
(18)
(39)
(18)
Adjustment in respect of excess of carrying amount over recoverable amount on reclassification from "Held for Sale"(A4)
-
-
(65)
-
Share in net profit/(loss) of associate, including impairment(A2)
-
-
-
(11)
Profit before income taxes
752
775
3,003
3,143
Income tax expense(A1)(B4)
171
204
803
657
Net profit
581
571
2,200
2,486
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Re-measurements of the net defined benefit liability/asset, net
-
6
(3)
9
Equity instruments through other comprehensive income, net
-
1
10
1
Items that will be reclassified subsequently to profit or loss:
Fair valuation of investments, net
3
(2)
-
-
Fair value changes on derivatives designated as cash flow hedge, net
(2)
-
3
(6)
Foreign currency translation
74
(164)
(560)
18
Total other comprehensive income/(loss), net of tax
75
(159)
(550)
22
Total comprehensive income
656
412
1,650
2,508
Profit attributable to:
Owners of the Company
580
571
2,199
2,486
Non-controlling interests
1
-
1
-
581
571
2,200
2,486
Total comprehensive income attributable to:
Owners of the Company
655
412
1,649
2,508
Non-controlling interests
1
-
1
-
656
412
1,650
2,508
Earnings per equity share (A1) (A5)
Basic ($)
0.13
0.13
0.51
0.55
Diluted ($)
0.13
0.13
0.51
0.55
Weighted average equity shares used in computing earnings per equity share( A5)
Basic
4,347,129,592
4,346,554,120
4,347,130,157
4,510,664,644
Diluted
4,353,023,863
4,349,617,024
4,353,420,772
4,515,147,740
NOTES:
Notes pertaining to previous quarters / periods
B. Notes pertaining to the current quarter
The audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the three months and year ended March 31, 2019 have been taken on record at the Board meeting held on April 12, 2019. A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com. Other income includes $7 million for each of the quarter and year ended March 31, 2019, and $41 million for the year ended March 31, 2018 towards interest on income tax refund. During the quarter ended March 31, 2019, on account of the conclusion of an Advance Pricing Agreement ("APA") in an overseas jurisdiction, the Company has reversed income tax expense provision of $14 million which pertains to previous periods. IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/q4/Documents/IFRS-INR-press-release.pdf
Fact Sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/q4/Documents/fact-sheet.pdf