TCS Financial Results

Transcription

1 TCS Financial Results Quarter IV & Year Ended FY April 19, Copyright 2018 Tata Consultancy Services Limited

2 Disclaimer Certain statements in this release concerning our future prospects are forward-looking statements. Forward-looking statements by their nature involve a number of risks and uncertainties that could cause actual results to differ materially from market expectations. These risks and uncertainties include, but are not limited to our ability to manage growth, intense competition among Indian and overseas IT services companies, various factors which may affect our cost advantage, such as wage increases or an appreciating Rupee, 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, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which TCS has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. TCS may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. These forward-looking statements represent only the Company s current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forwardlooking statements. 2

3 Click Quarterly to edit Financial Master Performance title style 3

4 Q4 FY18 Performance Highlights Revenue: - INR Revenue of ` 320,750 Mn, 3.8% QoQ and 8.2% YoY - USD Revenue of $ 4,972 Mn, 3.9% QoQ and 11.7% YoY - Constant currency revenue growth of 7.2% YoY, Volume growth of 8.5% YoY Profit: - Operating Income at ` 81,470 Mn, Operating Margin of 25.4% - Net Income at ` 69,040 Mn, $ 1,070 Mn, Net Margin of 21.5% Demand: - Clients $100M+ up by 1; $50M+ up by 3; $20M+ up by 4, $10M+ up by 13, & $5M+ up by 10 People: - Net addition of 4,118 associates, closing headcount: 394,998 - LTM attrition down further QoQ to 11.0% in IT Services 4

5 Growth Summary (INR) ` Million Revenue 320, , , , ,840 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Y-0-Y Growth Q-0-Q Growth 8.2% 4.2% 4.3% 3.2% 3.9% 3.8% 1.0% -0.2% -0.3% 1.2% Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Operating Income Operating margin (%) ` Million 76,270 69,140 76,600 77,810 81, % 23.4% 25.1% 25.2% 25.4% Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 ` Million 66,080 59,450 Net Income 64,460 65,310 69, % Net margin (%) 20.1% 21.1% 21.1% 21.5% Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 5

6 Growth Summary (USD) $ Million Revenue 4,972 4,739 4,787 4,591 4,452 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Y-o-Y Growth Q-o-Q Growth 11.7% 8.3% 9.1% 5.8% 5.2% 3.1% 3.9% 1.5% 3.2% 1.0% Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Operating Income Operating margin (%) $ Million 1,146 1,073 1,188 1,205 1, % 23.4% 25.1% 25.2% 25.4% Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 $ Million Net Income 1,000 1,012 1, % Net margin (%) 20.1% 21.1% 21.1% 21.5% Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 6

7 Annual Financial Performance 7

8 FY18 Performance Highlights Revenue: - INR Revenue of ` 1.23 Tn, growth of 4.4% YoY - USD Revenue of $ 19,089 Mn, growth of 8.6% YoY - Constant currency revenue growth of 6.7% Profit: - Operating Income at ` 305,020 Mn, Operating Margin of 24.8% - Net Income at ` 258,260 Mn, $ 4,005 Mn, Net Margin of 21.0% Demand: - Clients $100M+ up by 3; $50M+ up by 13; $20M+ up by 17, $10M+ up by 40, & $5M+ up by 36 People: - Net addition of 7,775, Closing headcount: 394, Mn Learning days, 247,000+ associates trained in Digital, 208,000+ associates trained in Agile. - Women constitute 35.3% of total employee strength 8

9 Growth Summary Summary ` Summary $ ` Million 1,179,660, 8.6% Revenue & Growth % 1,231,040, 4.4% $ Million 17,576, 6.2% Revenue & Growth % 19,089, 8.6% FY17 FY18 FY17 FY18 Operating Income & Margin % Operating Income & Margin % ` Million 303,240, 25.7% 305,020, 24.8% $ Million 4,518, 25.7% 4,730, 24.8% FY17 FY18 FY17 FY18 Net Income & Margin % Net Income & Margin % ` Million 262,890, 22.3% 258,260, 21.0% $ Million 3,917, 22.3% 4,005, 21.0% FY17 FY18 FY17 FY18 9

10 Operational Parameters 10

11 Growth by Market Geography (%) Q4 FY17 Q3 FY18 Q4 FY18 Q-o-Q CC Growth Y-o-Y CC Growth FY17 FY18 YoY CC Growth Americas North America Latin America Europe UK Continental Europe India Asia Pacific MEA Total

12 Growth by Domain Vertical (%) Q4 FY17 Q3 FY18 Q4 FY18 Q-o-Q CC Growth Y-o-Y CC Growth FY17 FY18 YoY CC Growth BFSI Retail & CPG Communication & Media Manufacturing Life Sciences & Healthcare Energy & Utilities Travel & Hospitality Technology & Services Regional Markets & Others Total Digital Revenue (%)

13 Service Lines Commentary Cloud & Cyber Security Services saw strong double digit growth led by Cloud Migration & Modernisation, Identity & Access Management, IoT Security, and Managed Security Services. We provide cloud services to 200+ customers across public cloud / private cloud infrastructure & application services. Machine First Delivery Model TM saw strong adoption in IT Ops and Process Automation (20+ clients during Q4) powered by ignio TM and third party solutions. TCS positioned in the Winners Circle in HfS Blueprint for Enterprise AI enabled services. TCS was ranked a Leader in 6 analyst surveys during the quarter, and in 43 surveys during the year. A strong quarter with several Large Multi-practice wins. Our pipeline is robust and new Digital offerings are seeing strong traction. Digital Transformation Services Cloud Services Analytics & Insights Internet of Things Cloud migration continued to be a top customer priority. Our application modernization services saw strong demand with high double digit growth. Advanced Analytics solutions such as the Connected Clinical Trials launched recently are seeing robust pipeline build up. More such contextual industry solutions backed by TCS assets in the pipeline for launch in FY19. Our solutions covering Energy management, Remote Diagnostics, Connected Car, Industry 4.0 and Smart City, backed by our assets saw strong recognition from customers & analysts. TCS Interactive Enterprise Application Services Digital Assurance Consulting & Services Integration Excellent double digit growth powered by customer experience transformation and product/service design offerings. TCS positioned as a Leader in Digital Marketing Services by Nelson Hall. Adoption of new Digital offerings from Enterprise ISVs accelerated during the quarter driving strong growth. Positioned as a Leader in Magic Quadrant for SAP Application Services. Engineering for delivering first time right quality for the Agile & DevOps led Digital Business is driving strong demand across geographies and industries. We are investing in new platform offerings. Consulting & Services Integration practice saw near double digit growth as it continues to secure our position as a trusted advisor to our clients, being instrumental in winning large multi-practice deals of strategic significance for customers. 13

14 Client Parameters Clients Contribution Q4 FY17 Q3 FY18 Q4 FY18 FY17 FY18 US$ 1m+ Clients US$ 5m+ Clients US$ 10m+ Clients US$ 20m+ Clients US$ 50m+ Clients US$ 100m+ Clients

15 Key Highlights Consulting & Services Integration Selected by a global biopharmaceutical company to use artificial intelligence to scan through unstructured information to provide an improved understanding of stakeholder sentiment and fully automate their tolling process to eliminate discrepancies between physical material flow and financial flow of funds. Chosen by an American confectionary and food products major for a consulting engagement to rationalize their application portfolio and streamline processes impacting Business resilience and Disaster Recovery. Engaged by a European telecom company to lead their Digital Transformation program re-imagining the customer engagement model and to provide advanced analytics and seamless unified user experience across web and mobile applications. Analytics, Intelligent Automation Selected by a global Financial Services organization, to perform data discovery and formulate a global data strategy to overhaul the existing data landscape enabling it to cater to the increasing risk and regulatory needs. Selected by a Canadian life insurance firm to provide the strategy blueprint and roadmap for Intelligent Automation. Cloud Services & Cyber Security Engaged with Mesosphere, a leading software firm from USA, as a Co-Development partner to drive efficiency and accelerate innovation for end customers managing modern data-intensive enterprise applications. Engaged by a leading global pharma company to divest the vegetable seeds business as a part of the strategic divestiture factory capability with a hybrid cloud solution stack. Engaged by a workforce solutions and services firm for GDPR compliance consulting engagement to outline, blueprint and implement consistent GDPR policies and principles across all its Group operations. Signed an extended multi-year partnership with Sainsbury s, a leading UK grocery retailer, to enable their strategy of differentiation and efficiency through digital transformation, focusing on excellence in systems support, agile first solution delivery and innovation. Internet of Things Chosen by a leading automobile major from Japan to establish a connected supply chain solution to provide more visibility for its component movements across global suppliers. Engaged by a North American agricultural products & services company to enhance security and safety of its plant operations by providing an IoT based remote monitoring solution. 15 TCS Interactive Selected by a Finnish Insurance firm as a strategic partner to envision, strategize and provide digital customer experience based solutions using Interactive technologies. Selected by a large retail bookseller company to enhance the in-store employee experience using interactive technologies. Cognitive Business Operations Chosen by Bonnier AB, a leading Swedish multichannel media conglomerate, to digitally transform their pan- Nordics infrastructure landscape through extensive adoption of cloud, re-designing the operating model guided by TCS machine-first delivery model MFDM and instituting cognitive intelligence based automation powered by ignio Signed a multi-year deal with a global pharmaceutical company to manage their core functions across Research, Development and Commercial areas by leveraging TCS services in Digital, Analytics & Insights, and Cognitive Business Operations.

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17 Total Employee Base 378,497 Total Employees : 394, , , , , ,998 Attrition * : 11.0% (LTM), IT Services 11.8% (LTM), including BPS Diversity: Women employees: 35.3% Nationalities: 131 * Excluding Subsidiaries Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Talent Development: 5.6 M Learning days 247k employees Digital Trained 208k employees Agile Trained 17

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19 IFRS Income Statement Consolidated IFRS Q4 FY17 ` Million Q3 FY18 % of Revenue Q4 FY18 Q4 FY17 Q3 FY18 Q4 FY18 Revenue 296, , , Cost of revenue 166, , , Gross margin 129, , , SG & A expenses 53,420 52,610 54, Operating income 76,270 77,810 81, Other income (expense), net 9,890 8,640 9, Income before income taxes 86,160 86,450 91, Income taxes 19,940 21,000 22, Income after income taxes 66,220 65,450 69, Minority interest Net income 66,080 65,310 69, Earnings per share in `

20 COR SG&A Details COR Q4 FY17 ` Million Q3 FY18 Q4 FY18 Q4 FY17 % of Revenue Q3 FY18 Q4 FY18 Employee cost 117, , , Fees to external consultants 19,200 20,870 22, Equipment and software 7,050 7,490 5, Facility expenses 5,510 6,670 6, Depreciation 3,710 4,000 4, Travel 4,330 4,510 4, Communication 1,810 1,940 2, Other expenses 7,720 7,580 7, Cost of Revenue 166, , , SGA Q4 FY17 ` Million Q3 FY18 Q4 FY18 Q4 FY17 % of Revenue Q3 FY18 Q4 FY18 Employee cost 39,530 39,020 40, Fees to external consultants 1,480 1,460 1, Facility expenses 3,590 3,220 3, Depreciation 1,350 1,060 1, Travel 2,600 2,230 2, Communication Provision for Doubtful Debts Other expenses 3,930 4,260 4, S G & A expenses 53,420 52,610 54,

21 Cash Flow Summary IFRS in ` Mn Q4 FY17 Q3 FY18 Q4 FY18 Net Cash from Operations 77,330 77,880 83,990 Capital Expenditure 5,100 3,770 3,590 Free Cash Flow 72,230 74,110 80,400 Dividends Paid 15,260 16,110 14,610 Operating Cash Flow to Sales (%) Operating Cash Flow to Net Profit (%) Total Cash and Investments 484, , ,860 21

22 IFRS Income Statement Consolidated IFRS Revenue Cost of revenue Gross margin SG & A expenses Operating income Other income (expense), net Income before income taxes Income taxes Income after income taxes Minority interest Net income Earnings per share in ` ` Million % of Revenue FY17 FY18 FY17 FY18 1,179,660 1,231, , , , , , , , , ,890 35, , , ,560 82, , , , ,

23 COR SG&A Details COR FY17 ` Million FY18 % of Revenue FY17 FY18 Employee cost Fees to external consultants Equipment and software Facility expenses Depreciation Travel Communication Other expenses Cost of Revenue SGA Employee cost Fees to external consultants Facility expenses Depreciation Travel Communication Provision for Doubtful Debts Other expenses S G & A expenses 462, , ,450 84, ,080 27, ,010 26, ,570 15, ,990 18, ,750 7, ,000 29, , , ` Million % of Revenue FY17 FY18 FY17 FY18 154, , ,090 5, ,850 12, ,300 4, ,880 9, ,910 2, ,260 2, ,060 15, , ,

24 Cash Flow Summary IFRS in ` Mn FY17 FY18 Net Cash from Operations 276, ,660 Capital Expenditure 19,530 18,040 Free Cash Flow 256, ,620 Dividends Paid 109, ,600 Buy Back (Incl. expenses) - 160,420 Operating Cash Flow to Sales (%) Operating Cash Flow to Net Profit (%) Total Cash and Investments 484, ,860 24

25 IFRS Statement of Financial Position Consolidated IFRS 31-Mar Mar-18 ` Million % ` Million % Assets Property and equipment 117, , Intangible assets and Goodwill 37, , Accounts Receivable 226, , Unbilled Revenues 53, , Investments 419, , Cash and Cash equivalents 35, , Other current assets 72, , Other non current assets 89, , Total assets 1,053, ,084, Liabilities and Shareholders' Equity Shareholders' Funds 883, , Long term borrowings Short term borrowings 2, , Other current liabilities 142, , Other non-current liabilities 20, , Minority Interest 3, , Total Liabilities 1,053, ,084,

26 IFRS Income Statement In USD Consolidated IFRS $ Million % of Revenue Q4 FY17 Q3 FY18 Q4 FY18 Q4 FY17 Q3 FY18 Q4 FY18 Revenue 4,452 4,787 4, Cost of revenue 2,504 2,767 2, Gross margin 1,948 2,020 2, SG & A expenses Operating income 1,146 1,205 1, Other income (expense), net Income before income taxes 1,294 1,339 1, Income taxes Income after income taxes 994 1,014 1, Minority interest Net income 992 1,012 1, Earnings per share in $

27 COR SG&A Details In USD COR Q4 FY17 $ Million % of Revenue Q3 FY18 Q4 FY18 Q4 FY17 Q3 FY18 Q4 FY18 Employee cost 1,763 1,945 2, Fees to external consultants Equipment and software Facility expenses Depreciation Travel Communication Other expenses Cost of Revenue 2,504 2,767 2, SGA $ Million % of Revenue Q4 FY17 Q3 FY18 Q4 FY18 Q4 FY17 Q3 FY18 Q4 FY18 Employee cost Fees to external consultants Facility expenses Depreciation Travel Communication Provision for Doubtful Debts Other expenses SG&A expenses

28 IFRS Income Statement In USD Consolidated IFRS Revenue Cost of revenue Gross margin SG & A expenses Operating income Other income (expense), net Income before income taxes Income taxes Income after income taxes Minority interest Net income Earnings per share in $ $ Million % of Revenue FY17 FY18 FY17 FY18 17,576 19, ,965 11, ,611 8, ,093 3, ,518 4, ,142 5, ,215 1, ,927 4, ,917 4,

29 COR SG&A Details In USD COR FY17 $ Million FY18 % of Revenue FY17 FY18 Employee cost Fees to external consultants Equipment and software Facility expenses Depreciation Travel Communication Other expenses Cost of Revenue 6,884 7, ,243 1, ,965 11, SGA FY17 $ Million FY18 % of Revenue FY17 FY18 Employee cost Fees to external consultants Facility expenses Depreciation Travel Communication Provision for Doubtful Debts Other expenses SG&A expenses 2,297 2, ,093 3,

30 IFRS Statement of Financial Position in USD Consolidated IFRS 31-Mar Mar-18 $ Million % $ Million % Assets Property and equipment 1, , Intangible assets and Goodwill Accounts Receivable 3, , Unbilled Revenues , Investments 6, , Cash and Cash equivalents Other current assets 1, , Other non current assets 1, , Total assets 16, , Liabilities and Shareholders' Equity Shareholders' Funds 13, , Long term borrowings Short term borrowings Other current liabilities 2, , Other non-current liabilities Minority Interest Total Liabilities 16, ,

31 Ind AS Income Statement - Consolidated Consolidated Ind AS ` Crore % of Revenue Q4 FY17 Q3 FY18 Q4 FY18 Q4 FY17 Q3 FY18 Q4 FY18 Revenue 29,642 30,904 32, Expenditure a) Employee Costs 15,692 16,458 17, b) Cost of equipment and software licences c) Other Operating expenses 5,113 5,410 5, d) Depreciation Total Expenditure 22,015 23,123 23, Profit Before Taxes & Other Income 7,627 7,781 8, Other income (expense), net Profit Before Taxes & Exceptional Items 8,616 8,645 9, Provision For Taxes 1,994 2,100 2, Profit After Taxes & Before Minority Interest 6,622 6,545 6, Minority Interest Net Profit 6,608 6,531 6, Earnings per share in `

32 Ind AS Income Statement - Consolidated Consolidated Ind AS FY17 ` Crore FY18 % of Revenue FY17 FY18 Revenue Expenditure a) Employee Costs b) Cost of equipment and software licences c) Other Operating expenses d) Depreciation Total Expenditure Profit Before Taxes & Other Income Other income (expense), net Profit Before Taxes & Exceptional Items Provision For Taxes Profit After Taxes & Before Minority Interest Minority Interest Net Profit Earnings per share in ` 117, , ,621 66, ,808 2, ,226 21, ,987 2, ,642 92, ,324 30, ,189 3, ,513 34, ,156 8, ,357 25, ,289 25,

33 Ind AS Balance Sheet - Consolidated Consolidated Ind AS ` Crore 31-Mar Mar-18 % 31-Mar Mar-18 ASSETS Property, plant and equipment 11,645 11, Investments 41,980 36, Deferred tax assets (net) 2,828 3, Goodwill (on consolidation) 1,597 1, Cash and Bank Balance 4,149 7, Current Assets, Loans and Advances 34,531 38, Non-current assets, Loans and advances 6,522 8, Total Assets 103, , EQUITY AND LIABILITIES Shareholders' Funds 86,214 85, Minority Interest Short term and long term borrowings Deferred tax liabilities (net) 919 1, Current liabilities and provisions 14,312 17, Non-current liabilities and provisions 1,170 1, Total Liabilities 103, ,

34 Currency mix and average realized rates in INR Currency Average rates % of Revenue Q3 FY18 Q4 FY18 QoQ Q3 FY18 Q4 FY18 USD % 54.79% 53.32% GBP % 12.28% 13.10% EUR % 9.52% 10.21% Others 23.41% 23.37% Total % % 34

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