Strong Order Book and Double Digit Growth Mark Stand-Out Year for TCS
MUMBAI, India, April 12, 2019 /PRNewswire/ -- Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading IT services, consulting and business solutions firm reported its consolidated financial results according to Ind AS and IFRS, for the quarter and the financial year ended as on March 31, 2019.
Annual Highlights for 2018-19
Q4 FY 2019 Highlights
---
Digital Revenue: 28.6% of Rev, +50.6% YoY in CC Revenue of $5.4 Bn, +8.5% YoY (+12.7% YoY and
Robust Client Additions: +2.4% QoQ in CC)
Digital
Revenue: 31% of Rev, +46.4% YoY in CC
Operating Margin: 25.1%, -31
bps YoY
Net Margin:
21.4%, -15 bps YoY
Net
Addition: 6,356 employees
Final Dividend per share (proposed) of Rs
18.00
$100M+ band: 44 (+6 YoY)
$50M+ band: 99 (+2 YoY)
$20M+ band: 215 (+8 YoY)
$10M+ band: 371 (+21 YoY)
$5M+ band: 532 (+37 YoY)
$1M+ band: 1008 (+45 YoY)
Employee Metrics:
Net addition: 29,287 employees (FY 18: 7,775)
Employee headcount: 424,285
LTM IT Services Attrition: 11.3%
Cash Conversion: Operating Cash Flow 100.6% of Net Income.
Over $ 3,863 of cash returned to shareholders in dividends and buyback
FY 19 EPS at $1.19, up 14.0% YoY
---
Commenting on the Q4 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: "This is the strongest revenue growth that we have had in the last fifteen quarters. Our order book is bigger than in the prior three quarters, and the deal pipeline is also robust. Despite macro uncertainties ahead, our strong exit positions us very well for the new fiscal."
He added: "Our full spectrum digital transformation capabilities and thought leadership is what is driving the strong demand for our services, and making us the preferred innovation and transformation partner to our customers. Our Business 4.0(TM) framework has now become the de facto model for enterprises looking to embrace new technology-enabled business models, pursue new revenue streams or deliver superior customer experiences."
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: "It is a very satisfying finish to a year marked by steady growth acceleration and order book expansion every quarter. The expanding scale and scope of our cognitive business operations engagements have been central to our growth. Our Machine First(TM) approach and location-independent Agile methods are helping our customers reimagine their processes and underlying systems, participate in ecosystems and transform themselves into Business 4.0 organizations."
V Ramakrishnan, Chief Financial Officer, said: "Double digit growth, higher quality of the incremental business, and best-in-class execution capabilities have helped us expand our operating margin year on year. Our foresight in investing very early on in building digital skills and transformational capabilities has not only gained us market share, but has also resulted in our very resilient, industry-leading margin today."
Q4 Segment Highlights
Industries: Revenue growth continued to accelerate in BFSI, crossing over into double digits (+11.6% vs +8.6% in Q3). Growth was broad-based, with most verticals showing strong growth: Life Sciences & Healthcare (+18.2%), Energy & Utilities (+11.3%), Communications & Media (+10%), Retail & CPG (+9.9%) and Manufacturing (+9.2%).
Markets: All major markets showed strong growth momentum. Growth was led by UK (+21.3%) and Europe (+17.5%). Other markets continued to grow well: North America (+9.9%), Asia Pacific (+11.5%), India (+11.3%) and Latin America +16.2%.
Services:
-- Consulting & Services Integration: Experienced strong growth in S4/HANA
transformation services. Additionally, with customers investing in new
operating models, TCS' Enterprise Agility strategic consulting offering
saw demand.
-- Digital Transformation Services: Strong growth seen in IoT and
Engineering Services, Cyber Security, and Cloud Infrastructure across
major geographies. TCS Interactive won the Adobe Experience Maker Award
(Best Digital Experience category) for the work done for T-Mobile, and a
Silver at the European Promax BDA awards.
-- Cognitive Business Operations: Continued to see strong growth, with
Machine First(TM) delivery resonating with customers looking to
transform their core, with agile teams delivering intelligent and
automated operations on the cloud, addressing the expectations of all
stake-holders.
Key Highlights
-- Selected by a major Swiss multinational pharmaceutical company, to
transform its Finance and Procurement business processes for greater
customer satisfaction and efficiency, by moving to a state of touchless
processing leveraging next gen MFDM(TM) solutions and consolidated
global operations.
-- Engaged by Ageas Insurance Limited UK, to lead end to end transformation
of its IT estate including infrastructure operations, data centre,
workplace and field services with a solution structured on niche
MFDM(TM) based automation for modernization and operational efficiency.
-- Canada's leading retailer, Loblaw, deployed TCS' ignio(TM) to transform
its IT operations.
-- Selected by Seadrill, a leading UK based deep water drilling company, to
digitally transform its IT operations.
-- Albert Heijn, a leading European retailer, is modernizing its supply
chain with intelligence, leveraging TCS' Algo retail - a set of
TCS-built AI based products, platforms and solutions to address core
retailer challenges and helps them unlock exponential value by
transforming into intelligent, responsive, autonomous enterprises.
-- A leading British pharmaceutical company has selected TCS Integrated
Patient Safety Platform, a cognitive solution powered by Decision
Fabric(TM), to accelerate its digital transformation journey and to
enhance various operational processes through automation of clinical
trial and drug discovery.
-- Selected by a leading telecommunications provider in UK, as the quality
assurance & engineering partner for B2B, B2E and group business
leveraging TCS' QET platform services.
-- Engaged by a leading Middle Eastern retailer as the strategic partner
for key initiatives to optimize the energy consumption and meet
sustainability goals by leveraging TCS' IoT-based Energy Management
Solution & services; and enhance the online ecommerce customer
experience by enabling faster check-out, automated payment, track
loyalty membership and personalized promotions.
-- Selected by a leading global pharma giant, to provide digital content
operations (multi-channel content production, deployment and measurement
services) for its global markets, to enable faster time to market and
improve marketing business operations using digital interactive and
analytics tools.
-- Selected by a leading European pharmaceutical company as the strategic
partner for transforming the data centre leveraging agile and DevOps as
part of a multi-cloud implementation initiative including TCS Enterprise
Cloud Platform. TCS will also provide cyber defence services using the
TCS Cognitive Threat Vigilance platform and support the customer in
managing risk and reducing their infrastructure vulnerabilities, helping
them achieve an enhanced security posture with greater efficiency.
-- Engaged by a major British multinational retailer to provide Security
Operations Centre services using a cloud-based platform. This cyber
defence operations centre will monitor and respond to threats and
vulnerabilities of the eCommerce business.
-- Selected by a leading Japanese pharmaceutical multinational, as the
managed services partner for S/4HANA applications to achieve continuous
innovation and automation-powered efficiency in its efforts to establish
a harmonized global enterprise landscape.
-- Selected by a leading provider of secure financial messaging services
based out of Europe, to achieve its Finance & Business Operations 2020
vision of real-time reporting, highly-automated business processes and
value-added profitability analysis for faster operations and quick
business decision making, by an end-to-end transformation of finance
processes, order management processes and IT Systems using automation
and leading enterprise application technologies.
-- Selected by VIVAT, a leading Dutch Insurance firm, as the strategic
partner to transform its CRM and BPM applications based on a leading
platform across all portfolios.
Thoughts on Key Highlights:
"Loblaw was looking for an AI tool to disrupt our IT operations. We chose ignio(TM) for its ready-to-use features and pre-built knowledge of IT and SAP operations. This enabled quick adoption of ignio within Loblaw, and laid the foundation for self-healing, machine-managed IT operations. ignio is the linchpin of our IT operations transformation program."
Ugo Orsi
Vice President
Loblaw Companies Ltd
"This is an exciting new partnership for Seadrill, and we look forward to working with TCS. Their approach to leveraging key digital technologies such as ignio(TM), and their MFDM(TM) framework, positioned them above the competition and aligns well to our overall long-term strategic digital transformation roadmap, drives continuous improvements and assists us to meet our business goals."
Eelco Ringeling
CIO, Seadrill
"Our long-term goal at VIVAT is to be a leading digital-first insurance provider in The Netherlands. In today's business environment this means adopting an ambitious digital transformation agenda to provide our customers with the personalized service they expect and deserve. TCS has been indispensable in helping us build a solid digital foundation for our business, and we look forward to working with them to develop exciting new value propositions for our customers."
Marcel van de Lustgraaf
General Manager DTC
VIVAT
"In consistency with our vision to `Be Indian in India', we are proud to be the first international automotive manufacturer to develop a family of cars in Chennai, in cooperation with our strategic partner Tata Consultancy Services (TCS). This partnership presents a unique opportunity to leverage TCS' and PSA's track record of innovation to develop right products focused on the highly demanding and fast growing Indian automotive market."
Emmanuel Delay
Executive Vice President & Head of India-Pacific,
Groupe PSA
Research and Innovation
-- Won the first prize for the paper titled, "Deep Learning algorithms for
accurate prediction of image description for e-commerce industry" in the
Artificial Intelligence & Data Analysis track at the third International
Conference on Data Management, Analytics and Innovation held in
Malaysia.
-- Won the Best Paper award at the 11th Indian Conference on Computer
Vision, Graphics and Image Processing (ICVGIP 2018) conference, for work
in embedded systems and robotics, at the International Institute of
International Technology, Hyderabad.
-- TCS tool won Gold medals in two individual categories - Bug Finding
(cover-error), Coverage (cover-branches), as well as in the Overall
category at the International Competition on Software Testing
(Test-Comp) 2019.
As on March 31, 2019, the company has applied for 4,596 patents, including 242 applied during the quarter and has been granted 946 patents.
Human Resources
With robust net addition of 29,287 employees during the year, total employee strength at the end of FY 19 stood at 424,285 on a consolidated basis.
The proportion of women in the workforce rose further to 35.9% in Q4, and the total number of nationalities represented stood at 147.
TCS' organic talent development strategy, powered by its in-house built digital learning platform, with curated, self-paced learning journeys, has been driving superior outcomes. Employees logged over 52 million learning hours in FY 19, resulting in over 311,000 employees getting trained on digital technologies, and over 348,000 trained on Agile methodologies.
These investments in workforce and workplace transformation have resulted in best in class employee retention rates, with IT Services attrition rate (LTM) at 11.3%.
"TCS continues to invest heavily in attracting the best local talent across the globe. By our own estimate, we have consistently been among the Top 3 IT recruiters in the US over the last few years. This, and our industry-leading retention rate, is a source of competitive advantage for us," said Ajoy Mukherjee, Executive Vice President and Global Head, Human Resources.
Awards and Recognition
Business Leadership:
-- Named the Fastest Growing Brand of the Decade in IT Services globally by
Brand Finance. TCS' brand value crossed $12.8 Billion this year, up 447%
over the decade.
-- Ranked #1 for Customer Satisfaction for the sixth consecutive year in
Europe's largest independent survey of IT service providers, carried out
by Whitelane Research. In the individual market rankings, TCS was placed
first in United Kingdom (81%), Germany (77%), Netherlands (80%), Nordics
(82%), BeLux (80%) and Switzerland (74%).
-- Ranked #1 in Investor Relations, #1 in ESG, and #2 in Best Managed
Company in India in FinanceAsia's 2019 Asia's Best Managed Companies
survey of portfolio managers and analysts across Asia.
-- Won the Best Risk Management Framework & Systems - IT-ITES sector award
presented by ICICI Lombard and CNBC-TV18 at the prestigious India Risk
Management Awards
-- Recognized as a Global Top Employer for the fourth consecutive year by
the Top Employers Institute, and the Number One Top Employer in four
regions - North America, Europe, Asia Pacific, and the Middle East.
-- Ranked #3 in the 17th edition of the Business Today Best Companies to
Work For survey.
Partner:
-- Named Snowflake EMEA GSI Partner of the Year for Driving the Most
Customer Value in 2018
Leadership
-- Honored with the CEO Force for Good Award by the Chief Executives for
Corporate Purpose (CECP) at its annual Board of Boards event in New
York.
IFRS Financial Statements
Consolidated Statements of Comprehensive Income
For the Year ended March 31, 2018, and March 31, 2019
(In millions of
$
, except per
share data)
Year ended Year ended
March 31, 2018 March 31, 2019
---
Revenue 19,089 20,913
---
Cost of
revenue 11,054 12,160
---
Gross margin 8,035 8,753
---
SG & A
expenses 3,305 3,406
---
Operating
income 4,730 5,347
---
Other income
(expense),
net 557 589
---
Income before
income taxes 5,287 5,936
---
Income taxes 1,273 1,428
---
Income after
income taxes 4,014 4,508
---
Minority
interest 9 14
---
Net income 4,005 4,494
---
Earnings per
share in $
1.04 1.19
---
Consolidated Statements of Comprehensive Income
For the three-month periods ended March 31, 2018, and
March 31, 2019
(In millions of
$
, except per
share data)
Three-month period Three-month period
ended ended
March 31, 2018 March 31, 2019
---
Revenue 4,972 5,397
---
Cost of
revenue 2,871 3,144
---
Gross margin 2,101 2,253
---
SG & A
expenses 838 899
---
Operating
income 1,263 1,354
---
Other income
(expense),
net 152 165
---
Income before
income taxes 1,415 1,519
---
Income taxes 342 362
---
Income after
income taxes 1,073 1,157
---
Minority
interest 3 3
---
Net income 1,070 1,154
---
Earnings per
share in $
0.28 0.31
---
Other Operating expenses for
the period Q4 FY2019 includes
a contribution of Rupees 220
Crore to an electoral trust
Consolidated Statements of Financial Position
As of March 31, 2018, and March 31, 2019
(In millions of
$
)
As of March 31, 2018 As of March 31, 2019
---
Assets
---
Property and equipment 1,784 1,685
---
Intangible assets and
Goodwill 599 581
---
Accounts Receivable 3,849 3,969
---
Unbilled Revenues 1,063 1,298
---
Investments 5,536 4,243
---
Cash and Cash equivalents 751 1,045
---
Other current assets 1,385 2,908
---
Other non-current assets 1,702 1,207
---
Total Assets 16,669 16,936
---
Shareholders' Funds 13,413 13,243
---
Long term borrowings 8 6
---
Short term borrowings 30 3
---
Other current liabilities 2,712 3,192
---
Other non-current
liabilities 443 423
---
Minority Interest 63 69
---
Total Liabilities 16,669 16,936
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About Tata Consultancy Services Ltd (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world's largest businesses in their transformation journeys for the last fifty years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile delivery model, recognized as a benchmark of excellence in software development.
A part of the Tata group, India's largest multinational business group, TCS has over 424,000 of the world's best-trained consultants in 46 countries. The company generated consolidated revenues of US $20.9 billion in the fiscal year ended March 31, 2019, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS' proactive stance on climate change and award winning work with communities across the world have earned it a place in leading sustainability indices such as the Dow Jones Sustainability Index (DJSI), MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit us at www.tcs.com.
To stay up-to-date on TCS global news, follow @TCS_News.
For more information please contact:
Media: +91 22 6778 9999
Investor Relations: 91 22 6778 9999
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arushie.sinha@tcs.com / shamala.p@tcs.com/
Kedar.shirali@tcs.com
vivek.padiyar@tcs.com
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SOURCE Tata Consultancy Services
