Infosys (NYSE: INFY) Announces Results for the Quarter ended December 31, 2013
Q3 revenues grew by 1.7% quarter-on-quarter; 9.9% year-on-year
Net profit grew by 20.9% quarter-on-quarter; 6.7% year-on-year
Mysore, India - January 10, 2014
Financial Highlights
Consolidated results under International Financial Reporting Standards
(IFRS) for the quarter ended December 31, 2013
- Revenues were $2,100 million for the quarter ended December 31, 2013
QoQ growth was 1.7%
YoY growth was 9.9%
- Net profit was $463 million for the quarter ended December 31, 2013
QoQ growth was 20.9%*
YoY growth was 6.7%
- Earnings per American Depositary Share (EPADS) was $0.81 for the quarter
ended December 31, 2013 QoQ growth was 20.9%*
YoY growth was 6.6%
- Liquid assets including cash and cash equivalents, available-for-sale
financial assets, certificates of deposits and government bonds were $4.4
billion as on December 31, 2013 versus $4.3 billion as on September 30, 2013
* including the provision for visa related matters made in quarter ended
September 30, 2013
Other highlights:
- Infosys and its subsidiaries added 54 clients during the quarter
- Gross addition of 6,682 employees for the quarter by Infosys and its
subsidiaries
- 158,404 employees as on December 31, 2013 for Infosys and its subsidiaries
"The year ahead looks exciting for the IT services industry. We believe the
global economic environment has improved and our clients are gaining
confidence to invest in their strategic initiatives." said S. D. Shibulal, CEO
and Managing Director. "We continue to differentiate ourselves to seize growth
opportunities. The recent changes in organizational structure will enable us
to strengthen client relationships and increase market share."
"During the quarter, we saw early but promising results of our initiatives to
increase efficiency in our operations" said Rajiv Bansal, Chief Financial
Officer. "We continue to remain focused on making investments necessary to
secure and grow our future."
Outlook
The company's outlook (consolidated) for the fiscal year ending March
31, 2014, under IFRS is as follows:
- Revenues are expected to grow 11.5%-12.0%
Business Highlights
- We have partnered with a leading manufacturer, Diebold, to further its
transformation journey and streamline its service, supply chain management,
and financial operations processes.
- Our focus on Cloud and Big Data as new growth areas continues to yield
results. We have executed more than 200 engagements and have won more than 20
deals this quarter. We have been formally inducted as a member of the steering
committee of the global Open Data Center Alliance (ODCA) to help define the
next generation of enterprise-ready Cloud and Big Data implementations.
- We are partnering with clients to create innovative solutions around the
mobile device. This quarter we started more than 25 engagements across mobile
field service, device management and enterprise productivity.
- Our Engineering Services business continues to see strong growth. With over
150 active clients, we had 52 wins this quarter across industries.
- Infosys Edge continues its momentum in the market as we invest in
technologies like Social, Mobile, Analytics and Cloud. This quarter we had 14
wins - eight for platforms and six for products. We also launched TradeEdge,
an insights-driven sales platform that help brands accurately sense and
fulfill consumer demand while significantly improving sales and operational
performance.
- Infosys Finacle™ sustained its business momentum in the quarter with eight
new wins; 11 banks went live on the platform across India, Africa, Middle East
and South East Asia.
- The District of Columbia's new online health insurance marketplace, DC
Health Link, designed and implemented by Infosys Public Services Inc,
successfully went live on October 1, 2013.
- To keep pace with the business momentum in the region, we expanded our
presence in Australia with a new office in Sydney. Infosys BPO opened a new
delivery center in Eindhoven, the Netherlands to strengthen its global
footprint and reinforce its presence in Europe.
- During the third quarter, Infosys applied for 22 unique patent applications
in India and the U.S. With this, we have 533 patent applications undergoing
various stages of patent prosecution in India, the U.S. and other
jurisdictions. We have been granted 143 patents by the United States Patent
and Trademark Office, one patent by Australian Patent Office and three patents
by the Luxembourg patent office.
Awards and Recognition
- We have been positioned in the winner's circle in HfS Enterprise Analytics
Services Blueprint 2013. The report recognizes Infosys for its significant
scale in analytics, execution excellence across service areas, and
responsiveness to clients.
- Oracle has awarded us with its 2013 Oracle Excellence Award for `Specialized
Partner of the Year' -- North America in the Services Partner of the Year, and
Business Intelligence Partner of the Year categories. In addition, we were
also awarded 2013 Oracle Excellence Award Honorable Mentions for `Specialized
Partner of the Year' -- North America for Communications, Media and
Entertainment; Energy & Utilities; and Financial Services. We were also
awarded the 2013 APAC Oracle Excellence Award for `Specialized Partner of the
Year' -- Industry.
- Avivia Health from Kaiser Permanente, recognized Infosys Public Services as
a strategic partner to develop its innovative gamification platform to improve
consumer engagement.
- The National Outsourcing Association (NOA) has presented Infosys and British
Telecom with the 2013 award for excellence in telecommunication, utilities and
hi-tech outsourcing.
- The CEB TowerGroup Mobile Banking Solutions Technology Analysis report and
the Core Banking Systems for the Large Bank Market report, both recognized
Infosys Finacle™ as a `Best-in-Class' provider.
- Gartner's International Retail Core Banking report positioned Infosys
Finacle™ as a Leader in its Magic Quadrant for International Retail Core
Banking* for the seventh time in a row.
*Source: Gartner, Inc., "Magic Quadrant for International Retail
Core Banking," Don Free and Ethan Wang, October 8, 2013. 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.
- Infosys BPO has been positioned in the Leaders category in Everest Group's
Procurement Outsourcing (PO) Service Provider Landscape with PEAK Matrix
Assessment 2013 report.
- We have won the prestigious Global Most Admired Knowledge Enterprise (MAKE)
Award for the ninth time. We have also won the Asian MAKE Award eleven times
in a row.
- At Asiamoney's annual Corporate Governance Poll 2013, we were recognized as
the Best Overall for Corporate Governance, Responsibilities of Management and
the Board of Directors, Disclosure and Transparency, Shareholders' Rights and
Equitable Treatment, and Investor Relations.
- We received the `Platinum' award at `The Asset' Excellence in Management and
Corporate Awards 2013.
- The IR global rankings 2013 ranked us third globally for corporate
governance practices and second for IR website in India.
Board Changes
Induction of U.B. Pravin Rao and Kiran Mazumdar-Shaw
The Board of Directors appointed Mr. U B Pravin Rao as an Additional and
Whole-time Director and Ms. Kiran Mazumdar-Shaw as an Additional (Independent)
Director.
Mr. Pravin Rao is currently the President of the Company. He is responsible
for driving growth and differentiation across a portfolio of businesses. These
include Retail, Consumer Packaged Goods and Logistics, Life Sciences,
Resources & Utilities, Services, Growth Markets, Cloud & Mobility, and Quality
& Productivity. In addition, he is responsible for Global Delivery and Service
Innovation. Pravin is also the Director of the Infosys Leadership Institute
(ILI) globally. ILI is responsible for the selection, development, research
and succession of senior and high-potential leaders. He has over 25 years of
experience, working on engagements with clients, primarily in retail and
financial services. Since joining Infosys in 1986, he has held a number of
senior leadership roles such as Head of Infrastructure Management Services,
Delivery Head for Europe, and Head of Retail, Consumer Packaged Goods,
Logistics and Life Sciences. Pravin holds a degree in electrical engineering
from Bangalore University, India.
Ms. Kiran Mazumdar-Shaw is the Chairman & Managing Director of Biocon Limited
a biotechnology company based in Bangalore, India. Kiran is highly respected
in the corporate world and has been named among TIME magazine's 100 most
influential people in the world. Recently, Economic Times placed her at India
Inc's top 10 most powerful women CEO for the year 2012. Her pioneering efforts
in biotechnology have drawn global recognition both for Indian Industry and
Biocon. She received a graduate honors degree in Zoology from Bangalore
University (1973) and qualified as a Master Brewer from Ballarat University,
Australia (1975). Kiran has also received many honorary Doctorates in
recognition of her pre-eminent contributions to the field of biotechnology.
Retirement of David Boyles
In accordance with the retirement policy for the company's Board of Directors
(attainment of 65 years of age for Independent Directors appointed to the
Infosys Board prior to October 15, 2010), David L. Boyles, Independent
Director, will retire from the Board effective January 17, 2014. David L.
Boyles joined the Infosys Board in July 2005.
N. R. Narayana Murthy, Executive Chairman of the Board said, "David has played
an important role on the Board. His insights on Risk Management have
benefitted the Company immensely and have helped us strengthen our approach to
Risk Management. We thank David for his contribution to the Board and in
particular to the Risk Management Committee, in his capacity as the Chair of
the Committee. We will miss his knowledge and unique insights."
David L. Boyles thanked the Board and said, "I have had a rewarding
association with Infosys over the past eight years. I would like to thank the
Board of Directors for giving me an opportunity to be a part of the journey of
this iconic company. I wish the company and its leaders the very best."
David L. Boyles has held senior leadership positions at large multinational
corporations, including American Express, Bank of America and ANZ Banking
Group. He retired from the ANZ and full-time corporate life in December 2003.
David's most recent corporate position was that of Chief Operations Officer at
ANZ Banking Group where he was responsible for Technology, Payments, Property,
Strategic Sourcing and other shared services. He was also on the Board of ANZ
Bank New Zealand and chaired the ANZ Group Operating Risks Executive
Committee. Prior to ANZ, he was Senior Vice President, e-Commerce, at American
Express. In this role, he was responsible for state-of-the-art online services
and emerging technologies. His early roles with AMEXCO included Senior Vice
President, Global Systems and Operations, Travellers Cheque Group. Earlier
leadership positions include Downey Financial (Executive Vice President &
Chief Operating Officer) and Bank of America (Senior Vice President, Consumer
Markets). David has an MBA from Washington State University and an MA and BA
(summa cum laude) in Psychology from UNC, Greeley and authored a book
Maximising the Business Value of your Technology Investment (©2005, Infosys
and Microsoft).
About Infosys Ltd
Infosys is a global leader in consulting, technology and outsourcing
solutions. We enable clients, in more than 30 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$7.4 billion in
annual revenues and 158,000+ employees, is Building Tomorrow's Enterprise®
today.
Safe Harbor
Certain statements in this release concerning our future growth prospects are
forward-looking statements, 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, 2013 and on Form 6-K for the quarter
ended September 30, 2013. 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.
Contact
Investor Gargi Ray Sandeep Mahindroo
Relations +91 80 4116 7747 +91 80 3980 1018
gargi_ray@infosys.com Sandeep_Mahindroo@infosys.com
Media Sarah Vanita Gideon, Ken Montgomery, Golin Harris for
Relations India Infosys, US
+91 (80) 4156 3373 +1 (415) 318 4399
Sarah_Gideon@Infosys.com KMontgomery@GolinHarris.com
Infosys Limited and subsidiaries
Unaudited Condensed Consolidated Balance Sheets as of
(Dollars in millions except share data)
December 31, 2013 March 31, 2013
ASSETS
Current assets
Cash and cash equivalents $ 3,712 $4,021
Available-for-sale financial assets 418 320
Investment in certificates of deposit 106 -
Trade receivables 1,447 1,305
Unbilled revenue 423 449
Derivative financial instruments - 19
Prepayments and other current assets 428 391
Total current assets 6,534 6,505
Non-current assets
Property, plant and equipment 1,202 1,191
Goodwill 354 364
Intangible assets 60 68
Available-for-sale financial assets 203 72
Deferred income tax assets 98 94
Income tax assets 241 201
Other non-current assets 41 44
Total non-current assets 2,199 2,034
Total assets $8,733 $8,539
LIABILITIES AND EQUITY
Current liabilities
Derivative financial instruments $16 -
Trade payables 29 35
Current income tax liabilities 318 245
Client deposits 7 6
Unearned revenue 142 152
Employee benefit obligations 148 113
Provisions 49 39
Other current liabilities 733 568
Total current liabilities 1,442 1,158
Non-current liabilities
Deferred income tax liabilities 11 23
Other non-current liabilities 49 27
Total liabilities 1,502 1,208
Equity
Share capital- `5 ($0.16) par value 600,000,000 equity shares
authorized, issued and outstanding 571,402,566 each, net of 2,833,600
treasury shares each as of December 31, 2013 and March 31, 2013,
respectively 64 64
Share premium 704 704
Retained earnings 8,405 7,666
Other components of equity (1,942) (1,103)
Total equity attributable to equity holders of the company 7,231 7,331
Non-controlling interests - -
Total equity 7,231 7,331
Total liabilities and equity $8,733 $8,539
Infosys Limited and subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income
(Dollars in millions except share and per equity share data)
Three months Three Nine months Nine months
ended months ended ended
December 31, ended December December
2013 December 31, 2013 31, 2012
31, 2012
Revenues $2,100 $1,911 $6,157 $5,460
Cost of sales 1,341 1,203 3,974 3,376
Gross profit 759 708 2,183 2,084
Operating expenses:
Selling and marketing expenses 104 99 327 277
Administrative expenses* 129 118 411 355
Total operating expenses 233 217 738 632
Operating profit 526 491 1,445 1,452
Other income, net 117 92 301 308
Profit before income taxes 643 583 1,746 1,760
Income tax expense 180 149 482 479
Net profit $463 $434 $1,264 $1,281
Other comprehensive income
Items that will not be reclassified
to profit or loss:
Re-measurement of the net defined 4 - 10 -
benefit liability/(asset)
Items that may be reclassified
subsequently to profit or loss:
Fair value changes on (10) - (14) -
available-for-sale financial asset,
net of tax effect
Exchange differences on translating 91 (250) (844) (478)
foreign operations
Total other comprehensive income $85 ($250) ($848) ($478)
Total comprehensive income $548 $184 $416 $803
Profit attributable to:
Owners of the company $463 $434 $1,264 $1,281
Non-controlling interests - - - -
$463 $434 $1,264 $1,281
Total comprehensive income
attributable to:
Owners of the company $548 $184 $416 $803
Non-controlling interests - - - -
$548 $184 $416 $803
Earnings per equity share
Basic ($) 0.81 0.76 2.21 2.24
Diluted ($) 0.81 0.76 2.21 2.24
Weighted average equity shares used
in computing earnings per equity
share
Basic 571,402,566 571,400,086 571,402,566 571,398,129
Diluted 571,402,566 571,400,417 571,402,566 571,399,018
(*) Administrative expenses for nine months ended December 31, 2013
include a charge of $ 35 million towards visa related matters.
NOTE:
1. The unaudited Condensed Consolidated Balance sheets and
Condensed Consolidated Statements of Comprehensive Income for the three months
and nine months ended December 31, 2013 have been taken on record at the Board
meeting held on January 10, 2014
2. A Fact Sheet providing the operating metrics of the company can be
downloaded from www.infosys.com