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12.07.2019 – 14:37

INFOSYS

Infosys: Accelerated Double Digit Growth of 12.4%; Highest Ever Large Deal TCV at $ 2.7 Bn

Bengaluru, India (ots/PRNewswire)

"We had a strong start to FY 20 with constant currency growth accelerating to 12.4% on year over year basis and digital revenue growth of 41.9%. This was achieved through our consistent client focus and investments which have strengthened our client relationships," said Salil Parekh, CEO and MD. "Consequently, we are raising our revenue guidance for the year from 7.5%-9.5% to 8.5%-10%."

41.9%   12.4%  2.8%   20.50%    $2.7 bn 
YoY     YoY    QoQ                      
Digital CC     CC     Operating Large   
CC      growth growth margin    deal    
growth                          signings 
- Q1 20 revenues grew year-on-year by 10.6% in USD; 12.4% in constant
  currency 
- Q1 20 revenues grew sequentially by 2.3% in USD; 2.8% in constant 
  currency 
- Q1 20 Digital revenues at $1,119 million (35.7% of total revenues),
  year-on-year growth of 41.9% and sequential growth of 8.6% in 
  constant currency 
- Increased FY 20 revenue growth guidance range to 8.5%-10% in 
  constant currency 
- Maintained FY 20 operating margin guidance range of 21%-23% 

1. Financial Highlights - Consolidated results under International Financial Reporting Standards (IFRS)

Revenues were $3,131 million, growth of 10.6% YoY and 2.3% QoQ

Operating profit was $642 million, decline of 4.2% YoY and 2.3% QoQ. Operating margin was 20.5%.

"We had a good quarter as we continue to leverage our digital navigation framework to help our clients build and nurture their live enterprise," said Pravin Rao, COO. "Large deal TCV was highest ever at $2.7 bn. Segment growth was robust with all large regions and most verticals growing at double digits yoy in constant currency."

"Our first quarter results and continued focus on operational efficiencies gives us the confidence on our revenue and margin guidance for the year," said Nilanjan Roy, CFO. "Continuing our objective of improving shareholder returns, we have revised our capital allocation policy upwards to distribute ~ 85% of free cash flows cumulatively over a 5-year period."

2. Capital Allocation

- The Company is on track towards completing its previously announced
  share buyback of INR 8,260 crore. The company has till date bought 
  back shares worth `INR 5,934 crore. 
- The Company's current policy is to pay up to 70% of the free cash 
  flow annually by way of dividend and/or buyback. The Board has 
  reviewed and approved a revised Capital Allocation Policy of the 
  Company after taking into consideration the strategic and 
  operational cash requirements."Effective from Financial year 2020, 
  the company expects to return approximately 85% of the free cash 
  flow cumulatively over a 5-year period through a combination of 
  semi-annual dividends and/or share buyback and/or special 
  dividends, subject to applicable laws and requisite approvals, if 
  any."Free cash flow is defined as net cash provided by operating 
  activities less capital expenditure as per the consolidated 
  statement of cash flows prepared under IFRS Dividend and buyback 
  include applicable taxes 

3. Client wins & Testimonials

- We were selected by Finnish postal service Posti as a strategic 
  partner for the digital transformation of its business and IT 
  services to drive the modernization of its IT applications and 
  infrastructure, helping it move to a flexible IT service model. 
  This will also strengthen Posti's ability to respond to changes in 
  customer needs with agility and provide a seamless customer user 
  experience through a dedicated command center. 
- We entered into long term strategic partnership with Toyota 
  Material Handling Europe to help in its digital transformation 
  journey by facilitating transformation to a scalable digital hybrid
  cloud platform, providing application services, digital workplace, 
  infrastructure management and a dedicated data center operation. 
- Infosys McCamish, a US based subsidiary of Infosys BPM entered into
  a partnership with Pan-American Life Insurance Group (PALIG), a 
  leading provider of life, accident and health insurance to provide 
  policy administration services for PALIG's new Global Assets 
  Indexed Universal Life product. 
- We have partnered with a leading consumer technology company to 
  help them localize their virtual assistant by training their AI. 
  Infosys is helping the client to define its overall global strategy
  for localization while analyzing data to identify patterns which 
  can train the AI to respond better to the user command. This will 
  improve their virtual assistant to provide a better user 
  experience.  
- Marc Schmidt, Head of SDD and GIT-ACI, BSH said, "At BSH GmbH, for 
  the software Development Platform (SDD) which is used for 
  developing thousands of micro to large scale applications, we 
  wanted to deploy an auto-scaling Infrastructure on AWS Cloud that 
  can handle millions of users across the world. Infosys leveraging 
  its Agile and DevOps methodology and expertise, automated build and
  deployment which led to an overall 70% reduction in environment 
  provisioning time, Zero downtime, 100% improvement in recovery time
  objectives." 
- One of the world leaders in the manufacturing of connectivity and 
  sensor products engaged Infosys to transform their delivery of 
  Sales solutions needed for their globally dispersed sales team, 
  leveraging Salesforce ecosystem. Infosys over the last 12 months 
  has moved to a Highly Agile Capability based delivery model and 
  helped in an estimated 40% improvement in time to market for 
  solutions, shortened release cycles from once-a-quarter to 
  on-demand releases and improvement in time to revenue of solutions 
  by upto 25% 

Recognitions

- Infosys positioned in HFS Top 10 Healthcare Services 2019 
- Recognized as a Leader in NelsonHall's SAP HANA and S/4HANA 
  services report 
- Recognized as a Leader in the Enterprise Platform IT Services in 
  BFS PEAK Matrix(TM) Assessment 2019 
- Recognized in the HFS Top 10: Managed Security Services (MSS) 
- Recognized in the HFS Top 10 Google AI Services 
- Recognized as a Leader in The Forrester Wave(TM): Global API 
  Strategy And Delivery Service Providers, Q2 2019 
- Recognized as a Leader in the NEAT on Next-Generation Software 
  Testing Services 
- Recognized as a Leader in the IDC MarketScape: Worldwide Microsoft 
  Implementation Services 2019 Vendor Assessment 
- Recognized in the NEAT on IoT in Digital Transformation 
- Recognized in the HFS Top 10 Manufacturing Service Providers 2019 
- Recognized in the HFS Top 10 Energy Services 2019 
- Recognized as a Leader in Gartner Magic Quadrant for Public Cloud 
  Infrastructure Managed Service Providers 
- Awarded the "Most Valuable Partner - Commercial Cloud" Award by 
  Oracle 
- Won the Golden Peacock Environment Management Award 
- Won the Pega partner excellence award in recognition of innovative 
  practice development and continued investment in the growth of a 
  strong delivery practice 
- Recognized with the Global Partner of the Year Award for driving 
  customer success at TIBCO NOW 
- Recognized as MuleSoft Americas Growth & Emerging Partner of the 
  Year 2019 by MuleSoft 
- Awarded 'System Integrator Partner of the year 2019 for Hybrid 
  Cloud Solutions' by HPE at HPE Discover 2019 

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 45 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 presentation 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, and unauthorized use of our intellectual property and general economic conditions affecting our industry. 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)          
                June    March  
                30,     31,    
                2019    2019   
ASSETS                         
Current assets                 
Cash and cash   2,266   2,829  
equivalents                    
Current         778     958    
investments                    
Trade           2,290   2,144  
receivables                    
Unbilled        964     777    
revenue                        
Prepayments and 851     827    
other current                  
assets                         
Income tax      38      61     
assets                         
Derivative      26      48     
financial                      
instruments                    
Total current   7,213   7,644  
assets                         
Non-current                    
assets                         
Property, plant 1,903   1,931  
and equipment                  
Right-of-use    540     -      
assets(B3)                     
Goodwill        589     512    
Intangible      207     100    
assets                         
Non-current     548     670    
investments                    
Deferred income 204     199    
tax assets                     
Income tax      917     914    
assets                         
Other           296     282    
non-current                    
assets                         
Total           5,204   4,608  
non-current                    
assets                         
Total assets    12,417  12,252 
LIABILITIES AND                
EQUITY                         
Current                        
liabilities                    
Trade payables  317     239    
Lease           72      -      
liabilities(B3)                
Derivative      3       2      
financial                      
instruments                    
Current income  305     227    
tax liabilities                
Client deposits 4       4      
Unearned        408     406    
revenue                        
Employee        248     234    
benefit                        
obligations                    
Provisions      84      83     
Other current   2,022   1,498  
liabilities                    
Total current   3,463   2,693  
liabilities                    
Non-current                    
liabilities                    
Lease           483     -      
liabilities(B3)                
Deferred income 112     98     
tax liabilities                
Employee        7       6      
benefit                        
obligations                    
Other           115     55     
non-current                    
liabilities                    
Total           4,180   2,852  
liabilities                    
Equity                         
Share capital-  334     339    
INR 5 ($0.16)                  
par value                      
4,800,000,000                  
(4,800,000,000)                
equity shares                  
authorized,                    
issued and                     
outstanding                    
4,271,404,014                  
(4,335,954,462)                
equity shares                  
fully paid up,                 
net of                         
20,094,430                     
(20,324,982)                   
treasury shares                
as at June 30,                 
2019 (March 31,                
2019)                          
Share premium   286     277    
Retained        9,969   11,248 
earnings                       
Cash flow hedge -       3      
reserve                        
Other reserves  432     384    
Capital         15      10     
redemption                     
reserve                        
Other           (2,854) (2,870)
components of                  
equity                         
Total equity    8,182   9,391  
attributable to                
equity holders                 
of the company                 
Non-controlling 55      9      
interests                      
Total equity    8,237   9,400  
Total           12,417  12,252 
liabilities and                
equity                          

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  Three months 
                 ended June    ended June   
                 30, 2019      30, 2018     
Revenues         3,131         2,831        
Cost of sales    2,122         1,819        
Gross profit     1,009         1,012        
Operating                                   
expenses                                    
Selling and      169           149          
marketing                                   
expenses                                    
                 198           193          
Administrative                              
expenses                                    
Total operating  367           342          
expenses                                    
Operating profit 642           670          
Other income,    106           107          
net                                         
Finance cost(B3) (6)           -            
Reduction in the -             (39)         
fair value of                               
Disposal Group                              
held for                                    
sale(A1)                                    
Profit before    742           738          
income taxes                                
Income tax       196           204          
expense                                     
Net profit       546           534          
Other                                       
comprehensive                               
income                                      
Items that will                             
not be                                      
reclassified                                
subsequently to                             
profit or loss:                             
Re-measurements  (3)           -            
of the net                                  
defined benefit                             
liability/asset,                            
net                                         
                 (3)           -            
Items that will                             
be reclassified                             
subsequently to                             
profit or loss:                             
Fair valuation   2             (7)          
of investments,                             
net                                         
Fair value       (3)           1            
changes on                                  
derivatives                                 
designated as                               
cash flow hedge,                            
net                                         
Foreign currency 17            (468)        
translation                                 
                 16            (474)        
Total other      13            (474)        
comprehensive                               
income/(loss),                              
net of tax                                  
Total            559           60           
comprehensive                               
income                                      
Profit                                      
attributable to:                            
Owners of the    546           534          
Company                                     
Non-controlling  -             -            
interests                                   
                 546           534          
Total                                       
comprehensive                               
income                                      
attributable to:                            
Owners of the    559           60           
Company                                     
Non-controlling  -             -            
interests                                   
                 559           60           
Earnings per                                
equity share(A2)                            
Basic ($)        0.13          0.12         
Diluted ($)      0.13          0.12         
Weighted average                            
equity shares                               
used in                                     
computing                                   
earnings per                                
equity share(A2)                            
Basic            4,302,176,860 4,346,657,242
Diluted          4,308,286,160 4,350,710,356 

NOTES:

A. Notes pertaining to previous quarters / periods

1. In the three months ended June 30, 2018, the Company had recorded 
   a reduction in the fair value amounting to $39 million in respect 
   of its subsidiary Panaya. The subsidiaries Kallidus and Skava 
   (together referred to as "Skava") and Panaya, are collectively 
   referred to as the "Disposal Group". Subsequently the company 
   reclassified these subsidiaries as they did not meet the criteria 
   for "Held for Sale". 
2. Share numbers and EPS have been adjusted for September 2018 bonus 
   issue. 

B. Notes pertaining to the current quarter

1. The audited interim condensed consolidated Balance sheet and 
   Statement of Comprehensive Income for the three months ended June 
   30, 2019 have been taken on record at the Board meeting held on 
   July 12, 2019. 
2. A Fact Sheet providing the operating metrics of the Company can be
   downloaded from www.infosys.com. 
3. On account of adoption of IFRS 16- Leases effective April 1, 2019. 

IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2019-2020/q1/Documents/IFRS-INR-press-release.pdf

Fact Sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2019-2020/q1/Documents/fact-sheet.pdf

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

Contact:

Sandeep Mahindroo
+91-80-3980-1018
Sandeep_Mahindroo@infosys.com Media Relations: Sarah Vanita Gideon
+91-80-4156-3998
Sarah_Gideon@infosys.com Chiku Somaiya
+1-71367-06752
Chiku.Somaiya@infosys.com

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