Infosys (NYSE: INFY) Announces Results for the Quarter and Year Ended March 31, 2018 (1)

BENGALURU, India, April 13, 2018 /PRNewswire/ --

- Revenues from Digital offerings at $ 2.79 billion (25.5% of total revenues) for FY 18 which grew at 3.6% sequentially in Q4 in constant currency terms - Entered into a definitive agreement to acquire WongDoody Holding Company, Inc., a US-based digital creative and consumer insights agency - FY 18 revenues grew by 7.2% in USD terms, 5.8% in constant currency terms, with operating margins at 24.3%

1. Highlights of financial results for the quarter and year ended March 31, 2018

- Q4 revenues grew year-on-year by 9.2% in USD terms; 6.4% in constant currency terms - Q4 revenues grew sequentially by 1.8% in USD terms; 0.6 % in constant currency terms - Q4 operating margin improved to 24.7% from 24.3% in Q3 18 - Q4 Basic EPS at $0.26; year-on-year growth of 10.8% - FY 18 Basic EPS at $1.10; year-on-year growth of 17.8% - FY 18 Basic EPS of $1.10 includes positive impact of $0.09 from Advance Pricing Agreement (APA) with the US IRS concluded earlier in the year - Board recommended a final dividend of INR 20.50 per share ($0.31 per ADS*) and a special dividend of INR 10 per share ($0.15 per ADS*) - FY 19 revenue guidance in constant currency at 6%-8%; FY 19 operating margin range at 22%-24%

*USD/INR exchange rate as at March 31, 13 Abr. (Logo: http://mma.prnewswire.com/media/610722/I... ) -

Financial Highlights        

Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended March 31, 2018

- Revenues were $2,805 million for the quarter ended March 31, 2018 YoY growth of 9.2%; QoQ growth of 1.8% - Operating profit was $693 million for the quarter ended March 31, 2018 YoY growth of 9.3%; QoQ growth of 3.6% - Net profit was $571 million for the quarter ended March 31, 2018 YoY growth of 5.3%; QoQ decline of 28.2%; Q3 FY 18 net profits included positive impact of $225 million on account of conclusion of an APA with the US IRS - Basic EPS at $0.26 for the quarter ended March 31, 2018

Consolidated results under International Financial Reporting Standards (IFRS) for the year ended March 31, 2018

- Revenues were $10,939 million for the year ended March 31, 2018 YoY growth of 7.2% in reported terms; 5.8% in constant currency terms - Operating profit was $2,659 million for the year ended March 31, 2018 YoY growth of 5.5% - Net profit was $2,486 million for the year ended March 31, 2018 YoY growth of 16.2%

     FY 18 net profits included impact on account of conclusion of an APA with the US IRS

"I am pleased with our healthy revenue growth, profitability, and cash generation in Q4. Our robust performance is a reflection of the strong impact we have with our clients and the dedication of our employees. 'Navigating Your Next' is our aspiration of how we will partner with each one of our clients," said Salil Parekh, CEO. "We will execute our strategy around the four pillars of Scaling our Agile Digital business which is today US$2.79 billion in revenue, Energizing our client's Core technology landscape via AI and automation, Re-skilling our employees, and Expanding our localization in markets such as US, Europe, and Australia."

"Revenue productivity per employee was stable during the year as the benefits of automation and newer services kicked in. Employee utilization remained healthy," said Pravin Rao, COO. "During the quarter, we provided highest level of variable payouts in several years. We will be rolling out compensation increases for a large part of our workforce effective April 1st."

"Our operating margins during the quarter and fiscal 2018 were resilient due to unwavering focus on productivity and operational efficiency, leading to a robust cash generation. During the year, the company implemented the capital allocation policy including the successful closure of $2 billion share buyback program in December 2017 and healthy increase in Dividend Per Share for the year," said M.D. Ranganath, CFO. "Our margin guidance reflects our emphasis on digital-led growth and focused investments in this journey."

2. Outlook for FY 2019

The Company's outlook (consolidated) for the fiscal year ending March 31, 2019, under IFRS is as follows:

- Revenues are expected to grow 6%-8% in constant currency*; - Revenues are expected to grow 7%-9% in USD terms based on the exchange rates as of March 31, 2018**

**Currency rates as of March 31, 2018 - AUD/USD - 0.77; Euro/USD - 1.24; GBP/USD - 1.42 

3. Capital Allocation

The Board, in its meeting on April 13, 2018, reviewed and approved the Capital Allocation Policy of the Company after taking into consideration the strategic and operational cash requirements of the Company in the medium term.

The key aspects of the Capital Allocation Policy are:

i) The Board has decided to retain the current policy of returning upto 70 % of the free cash flow of the corresponding Financial Year in such manner, as may be decided by the Board from time to time, 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 payout includes Dividend Distribution Tax (DDT). ii) In addition to the above, out of the cash on the Balance Sheet, the Board has identified an amount of upto INR 13,000 crores ($2 billion*) to be paid to shareholders in the following manner: iii) A special dividend of INR 10 per share ($0.15 per ADR*) resulting in a payout of approximately INR 2,600 crore (approximately $400 million*) in June 2018 iv) Identified an amount of upto approximately INR 10,400 crore (approximately $1,600 million*) to be paid out to shareholders for the Financial Year 2019, in such a manner, to be decided by the Board, subject to applicable laws and requisite approvals, if any. Further announcements in this regard will be made, as appropriate, in due course.

4. Dividend Payout

For the Financial Year 2018, the Board recommended a final dividend of INR 20.50 per share ($0.31 per ADR) amounting to INR 5,349 crore ($821 million) including DDT. After including the interim dividend of INR 13 per share, the total dividend for Financial Year 2018 will amount to INR 33.50 per share resulting in a payout of INR 8,771 crore ($1,349 million) including DDT, which will amount to approximately 70% of free cash flow for the Financial Year 2018. The total dividend of INR 33.50 per share is approximately 30% higher than total dividend of INR 25.75 per share for Financial Year 2017.

The aggregate dividend including the special dividend of INR 10 per share ($0.15 per ADR) works out to INR 43.50 per share ($0.67 per ADR) resulting in an aggregate dividend payout of approximately INR 11,371 crore (approximately $1,749 million), including DDT.

5. Lead Independent Director

The Board appointed Kiran Mazumdar-Shaw, Independent Director as the Lead Independent Director of the Board.

6. Acquisition

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