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Infosys (NYSE: INFY) Announces Results for the Quarter Ended December 31, 2015BANGALORE, January 14, 2016 /PRNewswire/ -- Q3 sequential revenue growth at 0.6% in USD terms and 1.1% in constant currency Q3 yoy revenue growth at 8.5% in USD terms and 12.5% in constant currency FY 16 revenue guidance increased to 12.8%-13.2% in constant currency and 8.9%-9.3% in USD terms on Dec 31st, 2015 exchange rates Volume growth at 3.1% quarter on quarter Attrition declined to 13.4% on standalone basis Continued adoption of grassroots innovation and Aikido offerings Financial Highlights: Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2015 Quarter ended December 31, 2015
(Logo: http://photos.prnewswire.com/prnh/20130122/589162 ) "We are starting to see creative confidence blossoming within Infosys - David Kelley's beautiful idea that innovation is not specific to one department but is an ability within all of us, waiting to unleash our full creative potential. We are seeing Infoscions becoming innovators, bringing innovation and client value to each individual project. This confidence can only come from a culture of learning and empowerment, and this is the kind of company we are endeavoring to create," said Dr. Vishal Sikka, CEO and MD. "Alongside grassroots innovation, we continue to see growing adoption of our Aikido services, bringing the power of intelligent systems, automation and software to amplify the skills and imaginations of our people. This combination helped us deliver encouraging results despite the traditional seasonality of the quarter and the additional headwinds, and will strengthen the execution of our strategy towards consistent profitable growth." "The healthy volume growth this quarter has been encouraging. The lesser working days and our investments into additional trainees resulted in softer pricing and utilization for the quarter," said U B Pravin Rao, President & COO. "Our continued focus on employee engagement is paying dividends resulting in lower attrition. We continue to simplify our policies and enable greater agility within the company, with the goal of boosting our productivity." "We have been able to navigate the quarter, better than our earlier expectations," said M.D. Ranganath, CFO. "We will continue to focus on enhancing operational efficiency through multiple levers in the coming quarters." Outlook* The Company's outlook (consolidated) for the fiscal year ending March 31, 2016, under IFRS is as follows:
*Conversion: AUD/USD - 0.73; Euro/USD - 1.09; GBP/USD - 1.48 Investments and Acquisitions:
Business Highlights: We continue to see a great opportunity to rethink the notion of services - bringing the best of human potential together with software and platforms, to drive the digital transformation of the world around us. Investing in Artificial Intelligence In December, we announced our participation in OpenAI, a non-profit organization dedicated to developing and advancing Artificial Intelligence, bringing the best AI talent in the world together in the interest of all of us. This initiative adds an important new dimension to our ongoing efforts in AI. Increasing the Depth of Client Relationships In Q3, we strengthened relationships with key clients, including renewing existing large scale contracts, opening new accounts and signing four large deals.
Delivering Grassroots Innovation through Zero Distance Zero Distance, our program to drive innovation in every project, empowering all employees to be innovators, continued to grow in Q3. By the end of Q3, 90% of our delivery organization had done something innovative in an existing project, beyond the statement of work. As recognized in many client surveys the innovation quotient of the organization has improved and zero distance has been recognized in employee surveys as the most impactful and engaging movement in the company. Matthew Pegge, Head of Service Delivery, TNT, said, "In the 12 months since we partnered with Infosys, they have consistently met or exceeded expectations. A seamless transition of over 721 applications in our complex application landscape, delivered by Infosys across 8 countries through more than 5500 SME sessions has helped establish a solid foundation for the partnership. Then as part of their Zero Distance initiative, Infosys pro-actively identified numerous opportunities to deliver additional value to TNT. For example, the non-invasive automation created for monitoring our mainframe based messaging app is enabling earlier detection and automated resolution of incidents - thus giving higher business stability. There are a number of additional developments in progress based around creating an 'interactive visibility dashboard' which will provide the business with greater insight to enable them to drive further service improvements and operational efficiencies. We are confident that our partnership with Infosys will help us deliver even more value for our business." Driving Innovation through Aikido Service Offerings We are seeing continued adoption of our Aikido service offerings across all industries, as clients look to us to help renew their IT landscapes non-disruptively (Ki); leverage new platforms and technologies to open new opportunities (Ai); and bring the power of Design Thinking to find the great problems to solve (Do).
Infosys Information Platform (IIP) surpassed 200 engagements to date, with 30 in production.
Infosys Automation Platform (IAP) surpassed 121 engagements with 47 in production.
Panaya, Skava & Edge software products continue to see strong adoption.
We have had more than 151 Design Thinking engagements with clients to date, and more than 69,000 employees have been trained in Design Thinking.
Awards and Recognition:
*Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Board Changes: On January 14, 2016, the Board appointed Dr. Punita Kumar Sinha as an Independent Director with immediate effect Ms. Carol M. Browner resigned as Member of the Board effective November 23, 2015. The Board placed on record its deep sense of appreciation for the services rendered by her during her tenure as a Director The Board recommended the reappointment of Prof. Jeffrey S. Lehman, Independent Director of the Company for a term of two years with effect from April 14, 2016 to hold office upto April 13, 2018, and not be liable to retire by rotation. Prof. Lehman's current term of office as an Independent Director expires on April 13, 2016. The appointment is subject to the approval of the shareholder Beyond Business: For this fiscal, Infosys has pledged `270 crore towards Corporate Social Responsibility (CSR) that is primarily being carried out through the Infosys Foundation, its philanthropic arm. In Q3, continuing on its mission, Infosys Foundation USA awarded several new grants that broaden access to Computer Science Education and coding across all US public schools so that students - especially women and those belonging to under-represented minorities - have equal access to acquire the digital skills needed by the workforce of tomorrow. To celebrate the Computer Science Education Week 2015, the Foundation awarded five new grants to non-profits across America and hosted 10+ computer science boot camps. On November 13, 2015, The Infosys Science Foundation (ISF) announced the winners of the Infosys Prize 2015 across six categories: Engineering and Computer Science, Humanities, Life Sciences, Mathematical Sciences, Physical Sciences and Social Sciences. About Infosys Ltd: Infosys is a global leader in consulting, technology, outsourcing and next-generation services. We enable clients, in more than 50 countries, to stay a step ahead of emerging business trends and outperform the competition. We help them transform and thrive in a changing world by co-creating breakthrough solutions that combine strategic insights and execution excellence. Visit www.infosys.com to see how Infosys (NYSE: INFY), with US$ 9.2 billion in LTM revenues and 193,000+ employees, is helping enterprises renew themselves while also creating new avenues to generate value. Safe Harbor Certain statements in this press 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, 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, 2015. 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. In addition, please note that the date of this press release is January 14, 2016, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. 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. Contact: Media Relations Pilar Elvira Wolfsteller Infosys Limited and subsidiaries Unaudited Condensed Consolidated Interim Balance Sheets as of (Dollars in millions except equity share data) December 31, 2015 March 31, 2015 ASSETS Current assets Cash and cash equivalents 4,455 4,859 Available-for-sale financial assets 68 140 Trade receivables 1,641 1,554 Unbilled revenue 450 455 Prepayments and other current assets 747 527 Derivative financial instruments 8 16 Total current assets 7,369 7,551 Non-current assets Property, plant and equipment 1,517 1,460 Goodwill 560 495 Intangible assets 157 102 Investment in Associates 16 15 Available-for-sale financial assets 255 215 Deferred income tax assets 78 85 Income tax assets 718 654 Other non-current assets 101 38 Total non-current assets 3,402 3,064 Total assets 10,771 10,615 LIABILITIES AND EQUITY Current liabilities Trade payables 20 22 Derivative Financial Instruments 1 - Current income tax liabilities 448 451 Client deposits 5 4 Unearned revenue 211 168 Employee benefit obligations 192 171 Provisions 73 77 Other current liabilities 980 927 Total current liabilities 1,930 1,820 Non-current liabilities Deferred income tax liabilities 40 25 Other non-current liabilities 24 8 Total liabilities 1,994 1,853 Equity Share capital- `5 ($0.16) par value 2,400,000,000 (1,200,000,000) equity shares authorized, issued and outstanding 2,285,619,380 (1,142,805,132), net of 11,325,284 (5,667,200) treasury shares as of December 31, 2015 (March 31, 2015), respectively 199 109 Share premium 570 659 Retained earnings 10,550 10,090 Other reserves - - Other components of equity (2,542) (2,096) Total equity attributable to equity holders of the company 8,777 8,762 Non-controlling interests - - Total equity 8,777 8,762 Total liabilities and equity 10,771 10,615 Infosys Limited and subsidiaries Unaudited Condensed Consolidated Interim Statements of Comprehensive Income (Dollars in millions except share and per equity share data) Three months Three months Nine months Nine months ended ended ended ended December 31, December 31, December 31, December 31, 2015 2014 2015 2014 Revenues 2,407 2,218 7,055 6,552 Cost of sales 1,512 1,360 4,435 4,057 Gross profit 895 858 2,620 2,495 Operating expenses: Selling and marketing expenses 130 124 388 362 Administrative expenses 166 142 482 430 Total operating expenses 296 266 870 792 Operating profit 599 592 1,750 1,703 Other income, net 121 136 362 419 Share in associate's profit / (loss) - - - - Profit before income taxes 720 728 2,112 2,122 Income tax expense 196 206 593 607 Net profit 524 522 1,519 1,515 Other comprehensive income Items that will not be reclassified to profit or loss: Re-measurement of the net defined benefit liability/(asset) 1 (2) (1) (6) Items that may be reclassified subsequently to profit or loss: Fair value changes on available-for-sale financial asset 1 8 3 16 Exchange differences on translation of foreign operations (69) (169) (448) (428) Total other comprehensive income, net of tax (67) (163) (446) (418) Total comprehensive income 457 359 1,073 1,097 Profit attributable to: Owners of the company 524 522 1,519 1,515 Non-controlling interests - - - - 524 522 1,519 1,515 Total comprehensive income attributable to: Owners of the company 457 359 1,073 1,097 Non-controlling interests - - - - 457 359 1,073 1,097 Earnings per equity share Basic ($) 0.23 0.23 0.66 0.66 Diluted ($) 0.23 0.23 0.66 0.66 Weighted average equity shares used in computing earnings per equity share Basic 2,285,619,380 2,285,610,264 2,285,614,573 2,285,610,264 Diluted 2,285,732,052 2,285,654,792 2,285,715,960 2,285,630,846 NOTE: 1. The unaudited Condensed Consolidated interim Balance sheets and Condensed Consolidated interim Statements of Comprehensive Income for the three months and nine months ended December 31, 2015 have been taken on record at the Board meeting held on January 14, 2016 2. A Fact Sheet providing the operating metrics of the company can be downloaded from www.infosys.com 3. Previous period share count and EPS has been restated due to issue of bonus shares in Jun-15 IFRS-INR Press Release: http://multivu.prnewswire.com/prnehost/Q3-2016-IFRS-INR.pdf Fact Sheet: http://multivu.prnewswire.com/prnehost/Q3-2016-fact-sheet.pdf
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