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Monday, January 18, 2016
BWI: Results for the Quarter Ended December 31, 2015 Under IFRS
Source : WIPRO
Monday, January 18, 2016 10:13AM IST (4:43AM GMT)
NYSE:WIT(NYSE:WIT)
Results for the Quarter Ended December 31, 2015 Under IFRS
Gross Revenues grew 7% YoY
Bangalore, Karnataka, India and East Brunswick, New Jersey, United States
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its third quarter ended December 31, 2015.
Highlights of the Results:
Wipro Limited Gross Revenues were `128.6 billion ($1.9 billion1), an increase of 7% YoY
IT Services Segment Non-GAAP constant currency Revenue in dollar terms grew 1.4% sequentially and grew 6.3% YoY. IT Services Segment Revenue was $1,838.3 million, a sequential increase of 0.3%
IT Services Segment Revenue was `123.1 billion ($1,861 million1), an increase of 9% YoY
Net Income2 was `22.3 billion ($338 million1), an increase of 2% YoY
IT Services Segment Profit3 was `24.8 billion ($375 million1)
IT Services Segment Margins was 20.2%
Headcount increased by 2,268 to 170,664
Wipro declared an interim dividend of `5 ($0.08) per share /ADS
Performance for the quarter ended December 31, 2015
T K Kurien, Member of the Board & Chief Executive Officer of Wipro, said – “We delivered Revenues in line with our guidance. We saw a pick-up in large deal closures led by Global Infrastructure Services. It is becoming increasingly clear that customers want to simplify operations and optimize their IT spend while investing in Digital to transform their business. We are well-positioned to take advantage of this trend.”
Abidali Z. Neemuchwala, Chief Executive Officer-Designate of Wipro, said – “We are focused on driving market share growth in our core businesses through integrated domain and technology services while investing for the future in building differentiated Digital capabilities. We will leverage our strong culture of innovation and extremely talented employee pool to build compelling value propositions for our customers.”
Jatin Dalal, Chief Financial Officer of Wipro, said – “During the quarter, we have built competitive differentiation through the acquisition of two high-potential companies – cellent and Viteos. The impact on revenues from the Chennai floods were minimized significantly by strong execution of our robust Business Continuity Plans (BCP). The additional expenses incurred in deploying BCP impacted operating margins for the quarter.”
Outlook for the Quarter ending March 31, 2016
We expect Revenues from our IT Services business to be in the range of $ 1,875 million to $1,912 million*.
* Guidance is based on the following exchange rates: GBP/USD at 1.50, Euro/USD at 1.07, AUD/USD at 0.72, USD/INR at 66.13 and USD/CAD at 1.37
IT Services
The IT Services segment had a headcount of 170,664 as of December 31, 2015. We added 39 new customers during the quarter.
Effective January 1, 2016, Wipro completed the transaction announced on December 2, 2015 to acquire cellent AG, a leading IT consulting and software services company in the DACH region of Germany, Austria and Switzerland.
On December 23, 2015, Wipro announced that it has signed a definitive agreement to acquire Viteos Group, a BPaaS provider for the Alternative Investment Management Industry.
Wipro sustained its momentum in winning Large Deals globally as described below:
Wipro has entered into a multi-year global infrastructure support engagement with one of the largest medical devices companies in the world. Wipro will standardize and simplify the customer’s IT infrastructure across multiple service lines and in over 90 countries.
A leading global nutrition, health and wellness company has selected Wipro to enable the migration of a significant portion of its global IT applications estate to a hybrid cloud. As part of the engagement, Wipro will provide IaaS (Infrastructure as a Service), PaaS (Platform as a Service), an integrated hardware-software-services stack, and billing-metering-chargeback in a completely outcome-based model.
A large global retailer has selected Wipro as its quality engineering partner. Wipro will help develop a new operating and financial model that will allow the customer to accurately forecast its quality engineering spends and optimize costs while driving continuous improvements in the quality and time-to-market of its offerings.
Wipro has won a large contract from a European general insurance multinational for provisioning and managing the company’s infrastructure.
A leading security solutions manufacturer, headquartered in the Nordic region, has selected Wipro to transform its IT infrastructure. As part of the five-year agreement, Wipro will leverage its Boundaryless Datacenter offering and will consolidate the customer’s existing data centers and implement a cloud-based-services model, including IaaS (Infrastructure as a Service) and PaaS (Platform as a Service).
An Australia-headquartered manufacturing sector customer has awarded a five-year strategic, IT-as-a-service contract to Wipro. Wipro will have the end-to-end responsibility of running the customer’s IT operations and enabling the transformation of the existing IT estate to a next-generation digital-ready landscape. The new consumption-based model will enable the customer to be more agile, reliable and competitive while launching new products and services.
Digital highlights
Our Digital capability combining design, engineering, and analytics is seeing traction in the marketplace. Unique capabilities of Designit combined with Wipro’s technological prowess is driving synergistic deal wins.
Wipro has been selected to help a global bank establish and operate its new digital platform, across 50 markets. With global scale and a blend of strategy, design and engineering capabilities, Wipro’s agile teams will help support consistent customer experience, underpinned by continuous delivery across this new digital platform. Wipro will reinvent the onboarding process for customers, help improve sales conversion rates and reduce operational costs.
Wipro has won a multi-year deal from a large bank to enable omni-channel self-service by digitizing service processes and leveraging new age digital technologies. This will help the bank provide superior customer experience while reducing costs, in the form of lower call volumes.
Wipro will be augmenting the in-house team of a market leader in the automotive space, with telematics domain skills and advanced engineering expertise for their telematics program.
Designit has been selected by a leading South American bank to work on designing an entirely new banking concept and experience, targeted to create the next-generation banking experience for customers who are usually not attracted to traditional banking offerings anymore.
For a major German telecommunications brand, Designit has been assigned to create future smart Product-Service-Experiences using artificial intelligence and similar emerging technologies.
For a leading European energy provider, Designit has been selected to design an innovation process to better facilitate the company’s investments into technology start-ups and to effectively drive the integration of acquired start-ups into the client’s own organizational portfolio.
Cloud highlights
Our Cloud applications business is seeing a good traction in the market. In the quarter ending December 31, 2016 we engaged with several clients to design and deploy their enterprise processes leveraging industry-leading SaaS products. A few marquee engagements include Cloud CRM processes rationalization for a UK-based gas and utility major, simplification of lead & opportunity management processes for a leading US based equipment rental company, modernization of a B2B order management system for a leading chemicals supplier company, design and deployment of recruitment processes for a business process outsourcing enterprise, implementation of performance and goal management processes for an American satellite service provider and transforming the source-to-pay process for an global pharmaceutical and consumer packaged goods major.
Wipro has also partnered with Apttus, the category-defining Quote-to-Cash cloud solution provider, to deliver best-in-class Contract Lifecycle Management (CLM), Configure-Price-Quote (CPQ) & Revenue Management solutions to clients across industries.
Awards and accolades
Wipro continued to lead the ‘Global Engineering and R&D Service Providers (GSPR) Rating 2015’ by Zinnov Management Consulting for the sixth consecutive year. The Zinnov study evaluated more than 75 R&D service providers across the world in 15 major industry segments across key parameters like product development capabilities & innovation, client relationships, human capital, financials, ecosystem linkages, infrastructure, and business sustainability.
Wipro has been positioned as a "Leader" by Forrester Research Inc, in its report ‘The Forrester Wave™: Global Workplace Services, Q4 2015’. The report cites Wipro’s relative strength in infrastructure services delivery, well-balanced staff distribution across EMEA, North America and Asia-Pacific, highest overall customer reference scores of any supplier evaluated in the analysis, strong customer value proposition, and compelling vision for workplace services.
Wipro has been positioned as a “Leader” by in the IDC MarketScape: Worldwide Life Science Manufacturing and Supply Chain 2015 vendor assessment for services in all the 3 service categories of strategic consulting, ITO and BPO.
Wipro has been recognised as a “Leader” by leading global analyst firm Everest Group, in the Healthcare Payer Digital IT Services PEAK Matrix Assessment 2015. This reaffirms our growing capabilities in the Healthcare Digital space.
Wipro has also been featured as a “Star Performer” in the Everest Group Healthcare Provider IT Services PEAK Matrix Assessment 2015. This reflects Wipro’s large scale and deeper client relationships, technology capability and investments in tools, platforms, and a global delivery presence in the Healthcare Provider space.
Wipro has been recognised as a “Leader” in the Gartner Magic Quadrant for Application Testing Services, Worldwide for the second consecutive year.
Wipro has been positioned in the 'Winner's Circle' of HfS Blueprint Report on Trust-as-a-Service 2015. The report covers the market view of Digital Trust and Security Framework, the Digital Trust Maturity Scale, and the As-a-Service Economy.
Wipro has won 8 awards at the seventh Annual Golden Bridge Business and Innovation Awards Ceremony including the Grand Trophy Award for being the overall winner with maximum impact. Wipro was recognized for its innovations in API Management and Solutions, Information Technology (Software), Mobile Innovative Products or Services, Business Process Management and Application Development.
IT Products
Our IT Products Segment delivered Revenue of `6.5 billion ($98 million1) for the quarter ended December 31, 2015
Please refer to the table on page 7 for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.
About Non-GAAP financial measures
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.
The table on page 7 provides IT Services Revenue on a constant currency basis, which is a non-GAAP financial measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance.
This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS, and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.
Results for the quarter ended December 31, 2015, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com.
Quarterly Conference Call
We will hold an earnings conference call today at 11:00 a.m. Indian Standard Time (12:30 a.m. US Eastern Time) to discuss our performance for the quarter. An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com.
About Wipro Limited (NYSE: WIT)
Wipro Ltd. (NYSE:WIT) is a leading information technology, consulting and business process services company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of "Business through Technology.” By combining digital strategy, customer centric design, advanced analytics and product engineering approach, Wipro helps its clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship, Wipro has a dedicated workforce of over 160,000, serving clients in 175+ cities across 6 continents.
The forward-looking statements contained herein represent Wipro’s beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro’s control. Such statements include, but are not limited to, statements regarding Wipro’s growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, intense competition in IT services, our ability to maintain 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, 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 we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, and general economic conditions affecting our business and industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We 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. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.
Wipro limited and subsidiaries
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
(Rupees in millions, except share and per share data, unless otherwise stated)
As of March 31,
As of December 31,
2015
2015
2015
Convenience translation into US dollar in millions (unaudited) - Refer footnote 1 on Page 1
ASSETS
Goodwill
68,078
75,361
1,139
Intangible assets
7,931
8,274
125
Property, plant and equipment
54,206
57,360
867
Derivative assets
736
237
4
Available for sale investments
3,867
4,391
66
Non-current tax assets
11,409
11,551
175
Deferred tax assets
2,945
3,850
58
Other non-current assets
14,369
13,718
207
Total non-current assets
163,541
174,742
2,641
Inventories
4,849
6,095
92
Trade receivables
91,531
99,959
1,510
Other current assets
73,359
97,751
1,477
Unbilled revenues
42,338
45,662
690
Available for sale investments
53,908
151,651
2,291
Current tax assets
6,490
8,371
126
Derivative assets
5,077
3,486
53
Cash and cash equivalents
158,940
89,973
1,359
Total current assets
436,492
502,948
7,598
TOTAL ASSETS
600,033
677,690
10,239
EQUITY
Share capital
4,937
4,941
75
Share premium
14,031
14,532
220
Retained earnings
372,248
418,176
6,318
Share based payment reserve
1,312
1,950
29
Other components of equity
15,454
16,968
256
Equity attributable to the equity holders of the Company
407,982
456,567
6,898
Non-controlling interest
1,646
2,035
31
Total equity
409,628
458,602
6,929
LIABILITIES
Long - term loans and borrowings
12,707
16,427
248
Deferred tax liabilities
3,240
3,379
51
Derivative liabilities
71
50
1
Non-current tax liabilities
6,695
7,397
112
Other non-current liabilities
3,658
7,296
110
Provisions
5
15
-
Total non-current liabilitie
26,376
34,564
522
Loans and borrowings and bank overdrafts
66,206
81,501
1,231
Trade payables and accrued expenses
58,745
61,918
935
Unearned revenues
16,549
19,122
289
Current tax liabilities
8,036
7,209
109
Derivative liabilities
753
908
14
Other current liabilities
12,223
12,622
191
Provisions
1,517
1,244
19
Total current liabilities
164,029
184,524
2,788
TOTAL LIABILITIES
190,405
219,088
3,310
TOTAL EQUITY AND LIABILITIES
600,033
677,690
10,239
Wipro limited and subsidiaries
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
(Rupees in millions, except share and per share data, unless otherwise stated)
Three Months ended December 31,
Nine months ended December 31,
2014
2015
2015
2014
2015
2015
Convenience translation into US dollar in millions (unaudited)- Refer footnote 1 on Page 1
Convenience translation into US dollar in millions (unaudited) - Refer footnote 1 on Page 1
Gross revenues
119,929
128,605
1,943
348,125
376,116
5,682
Cost of revenues
(82,867)
(90,270)
(1,364)
(238,675)
(260,881)
(3,941)
Gross profit
37,062
38,335
579
109,450
115,235
1,741
Selling and marketing expenses
(7,524)
(8,362)
(126)
(22,709)
(25,114)
(379)
General and administrative expenses
(6,426)
(7,010)
(106)
(19,217)
(20,710)
(313)
Foreign exchange gains/(losses), net
922
911
14
3,343
2,774
42
Results from operating activities
24,034
23,874
361
70,867
72,185
1,091
Finance expenses
(810)
(1,423)
(21)
(2,687)
(4,298)
(65)
Finance and other income
5,035
6,227
94
14,383
17,663
267
Profit before tax
28,259
28,678
434
82,563
85,550
1,293
Income tax expense
(6,228)
(6,248)
(95)
(18,369)
(18,679)
(282)
Profit for the period
22,031
22,430
339
64,194
66,871
1,011
Attributable to:
Equity holders of the company
21,928
22,341
338
63,808
66,572
1,006
Non-controlling interest
103
89
1
386
299
5
Profit for the period
22,031
22,430
339
64,194
66,871
1,011
Earnings per equity share:
Attributable to equity share holders of the company
Basic
8.92
9.09
0.14
25.97
27.10
0.41
Diluted
8.88
9.07
0.14
25.85
27.05
0.41
Weighted average number of equity shares used in
computing earnings per equity share
Basic
2,457,766,859
2,457,022,905
2,457,022,905
2,457,491,867
2,456,551,992
2,456,551,992
Diluted
2,469,323,243
2,462,220,926
2,462,220,926
2,468,262,835
2,461,282,411
2,461,282,411
Additional Information
Segment Revenue
IT Services Business Units
BFSI
29,177
32,322
489
85,653
95,595
1,444
HLS
13,247
14,719
222
36,713
41,453
626
RCTG
16,005
19,158
289
45,951
54,650
826
ENU
18,637
17,708
268
53,792
52,949
800
MFG
20,718
22,683
343
59,721
66,769
1,009
GMT
15,661
16,557
250
45,933
47,932
724
IT SERVICES TOTAL
113,445
123,147
1,861
327,763
359,348
5,429
IT PRODUCTS
7,740
6,503
98
24,552
20,119
304
RECONCILING ITEMS
(334)
(134)
(2)
(847)
(577)
(9)
TOTAL
120,851
129,516
1,957
351,468
378,890
5,724
Segment Result
IT Services Business Units
BFSI
7,035
7,199
109
19,904
21,147
320
HLS
2,981
3,188
48
7,534
8,991
136
RCTG
3,255
3,809
57
9,648
10,211
154
ENU
4,262
3,436
52
13,483
10,745
162
MFG
4,228
4,142
63
12,630
13,270
201
GMT
3,438
3,093
47
10,696
8,928
135
OTHERS
-
-
-
583
-
-
UNALLOCATED
(458)
(47)
(1)
(1,606)
759
11
TOTAL IT SERVICES
24,741
24,820
375
72,872
74,051
1,119
IT PRODUCTS
89
(505)
(7)
316
(574)
(9)
RECONCILING ITEMS
(796)
(441)
(7)
(2,321)
(1,292)
(19)
TOTAL
24,034
23,874
361
70,867
72,185
1,091
FINANCE EXPENSE
(810)
(1,423)
(22)
(2,687)
(4,298)
(65)
FINANCE AND OTHER INCOME
5,035
6,227
94
14,383
17,663
267
PROFIT BEFORE TAX
28,259
28,678
433
82,563
85,550
1,293
INCOME TAX EXPENSE
(6,228)
(6,248)
(94)
(18,369)
(18,679)
(282)
PROFIT FOR THE PERIOD
22,031
22,430
339
64,194
66,871
1,011
Segment result represents operating profits of the segments and dividend income and gains or losses (net) relating to strategic investments, which are presented within “Finance and other income” in the statement of Income.
The Company is organized by the following operating segments; IT Services and IT Products.
The IT Services segment primarily consists of IT Service offerings to our customers organized by industry verticals as follows: Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), Retail, Consumer, Transport and Government (RCTG), Energy, Natural Resources and Utilities (ENU), Manufacturing (MFG), Global Media and Telecom (GMT). Starting with quarter ended September 30, 2014, it also includes Others which comprises dividend income and gains or losses (net) relating to strategic investments, which are presented within “Finance and other income” in the statement of Income. Key service offering to customers includes software application development and maintenance, research and development services for hardware and software design, business application services, analytics, consulting, infrastructure outsourcing services and business process services.
In the IT Products segment, the Company is a value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware products, software licenses and other related deliverables.
Reconciliation of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)
Three Months ended December 31, 2015
Three Months ended December 31, 2015
IT Services Revenue as per IFRS
$ 1,838.3
IT Services Revenue as per IFRS
$ 1,838.3
Effect of Foreign currency exchange movement
$ 19.8
Effect of Foreign currency exchange movement
$ 69.9
Non-GAAP Constant Currency IT Services Revenue based on exchange rates of previous quarter
$ 1,858.1
Non-GAAP Constant Currency IT Services Revenue based on exchange rates of comparable quarter in the previous year
$ 1,908.2
For the convenience of the reader, the amounts in Indian Rupees in this release have been translated into United States Dollars at the noon buying rate in New York City on December 31, 2015, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= `66.19. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2015, was US$1= `66.99
Refers to ‘Profit for the period attributable to equity holders of the company’
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