Genpact Reports Results for 2013 Full Year and Fourth Quarter
Revenues of $2.1 Billion, Up 12% for FY ‘13 and Up 10% for 4Q ‘13 Adjusted Income from Operations of $352.6 Million, Up 13% for FY ’13 and Up 2% for 4Q ‘13
NEW YORK, February 6, 2014 — Genpact Limited (NYSE: G), a global leader in transforming and running business processes and operations, today announced financial results for the fourth quarter and full year ended December 31, 2013.
Key Financial Results – Full Year 2013
- Revenues were $2.132 billion, up 12.1% from $1.902 billion in 2012.
- Income from operations was $309.5 million, up 17.1% from $264.3 million in 2012.
- Net income attributable to Genpact Limited shareholders was $229.7 million, up 28.9% from $178.2 million in 2012. Net income margin for 2013 was 10.8%, up from 9.4% in 2012.
- Diluted earnings per common share were $0.97, up from $0.78 per share in 2012.
- Adjusted income from operations was $352.6 million, up 12.6% from $313.1 million in 2012.
- Adjusted income from operations margin was 16.5%, unchanged from 2012.
- Adjusted diluted earnings per share were $1.13, up from $0.96 in 2012.
- The effective tax rate was 23.6%, down from 30.6% in 2012.
Key Financial Results – Fourth Quarter 2013
- Revenues were $558.5 million, up 10.0% from $507.7 million in the fourth quarter of 2012.
- Income from operations was $71.6 million, up 1.2% from $70.8 million in the fourth quarter of 2012.
- Net income attributable to Genpact Limited shareholders was $48.8 million, compared to $53.4 million in the fourth quarter of 2012. Net income margin for the fourth quarter of 2013 was 8.7%, compared to 10.5% in the fourth quarter of 2012.
- Diluted earnings per common share were $0.21, compared to $0.23 in the fourth quarter of 2012.
- Adjusted income from operations was $85.7 million, up 2.0% from $84.0 million in the fourth quarter of 2012.
- Adjusted income from operations margin was 15.3%, compared to 16.5% in the fourth quarter of 2012.
- Adjusted diluted earnings per share were $0.25, unchanged from the fourth quarter of 2012.
N.V. ‘Tiger’ Tyagarajan, Genpact's president and CEO, said, “For the full year 2013 Genpact revenues, operating income and earnings per share increased and we held adjusted operating income margin steady. We faced a number of revenue headwinds during the year, including reduction in our mortgage originations business related to U.S. mortgage refinancing volumes, softness in our GE business and the adverse impact of foreign exchange, as well as extended deal cycle times reflecting the increase in the value and proportion of large deals in our pipeline. Although conversion to revenue in large, transformative deals tends to be longer, these engagements are where we want to be and a positive trend for the medium-term. Despite these challenges, we continued to deliver clear, measurable business outcomes for clients, differentiate our approach by building capabilities and domain expertise, and strengthen our relationships with existing clients, as well as add many new clients.”
Revenues from Global Clients grew 16.4% for the full year 2013 and 13.3% in the fourth quarter. Business process management revenues from Global Clients grew 15.1% for the full year and 11.8% in the fourth quarter. Growth in revenues from global clients was led by growth in the banking and financial services, insurance, high-tech, consumer packaged goods, retail and life sciences verticals. Revenues from Global Clients represented approximately 77.5% of Genpact's total revenues in 2013, with the remaining 22.5% of revenues coming from GE. GE revenues decreased 0.6% for the full year 2013 and 0.1% in the fourth quarter, adjusted for dispositions by GE of businesses that Genpact continues to serve.
In the 12 months ended December 31, 2013, 52 client relationships each contributed revenues of $5 - $15 million, up from 43 such relationships as of December 31, 2012, 13 client relationships each contributed revenues of $15 - $25 million, up from 11 such client relationships as of December 31, 2012 and 13 client relationships each contributed revenues of $25 million or more, up from 11 such relationships as of December 31, 2012.
Approximately 75.4% of Genpact's revenues for the full year 2013 and 75.3% for the fourth quarter came from business process management services, compared to 76.6% for 2012 and 76.8% for the fourth quarter of 2012. Revenues from IT services represented approximately 24.6% of total revenues for the full year 2013 and 24.7% for the fourth quarter, compared to 23.4% for 2012 and 23.2% for the fourth quarter of 2012.
Genpact generated $311.6 million of cash from operations in 2013, up from $310.7 million of cash from operations in 2012, which included approximately $45 million from an up-front client payment, and $78.4 million in the fourth quarter of 2013 compared to $101.2 million in the fourth quarter of 2012. Genpact had approximately $571.3 million in cash and cash equivalents as of December 31, 2013.
As of December 31, 2013, Genpact had approximately 63,600 employees worldwide, an increase from approximately 60,200 at the end of 2012. The attrition rate for the entire year, measured from day one, was 25%, unchanged from 2012. Revenue per employee in 2013 was approximately $36,000, up 6.0% from $34,000 in 2012.
Tyagarajan continued, “The fundamentals of our business and our market opportunity have not changed and we continue to believe there is a long runway for growth where our competitive advantages are clear and compelling. In order to ensure that we are the best partner for our clients in their transformational journeys, over a year ago we commenced an extensive study of the market and our capabilities to better understand how to take Genpact to the next level and where we should focus our resources and investments. To capture the right growth opportunities, we are accelerating our investments in our client-facing teams and solutions in specific verticals and service lines.
In the near-term, we expect the revenue headwinds we faced in 2013 to continue and, as a result, our revenue guidance for 2014 is $2.22 to $2.26 billion. Our 2014 expectation for adjusted operating income margin is a range of 15.0 – 15.5%, reflecting our strategic investments for growth.”
Conference Call to Discuss Financial Results
Genpact management will host an hour-long conference call beginning at 4:30 p.m. ET on February 6, 2014 to discuss the company’s performance for the periods ended December 31, 2013. To participate, callers can dial +1 (877) 703-6107 from within the U.S. or +1 (857) 244-7306 from any other country. Thereafter, callers will be prompted to enter the participant code, 47475982.
A live webcast of the call including slides with our comments will also be made available on the Genpact Investor Relations website at http://investors.genpact.com. For those who cannot participate in the call, a replay and podcast will be available on Genpact’s website, www.genpact.com, after the end of the call. A transcript of the call as well as the presentation slides will also be made available on the website.
Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients. Genpact stands for Generating Impact – visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability. We have global critical mass – 63,600+ employees in 24 countries with key management and corporate offices in New York City – while remaining flexible and collaborative, and a management team that drives client partnerships personally. Our history is unique – behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years. Follow Genpact on Twitter, Facebook, and LinkedIn
This press release contains certain statements concerning our future growth prospects and forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. These risks, uncertainties and other factors include but are not limited to a slowdown in the economies and sectors in which our clients operate, a slowdown in the business process management and information technology services sectors, the risks and uncertainties arising from our past and future acquisitions, our ability to manage growth, factors which may impact our cost advantage, wage increases, changes in tax rates and tax legislation, our ability to attract and retain skilled professionals, risks and uncertainties regarding fluctuations in our earnings, general economic conditions affecting our industry as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission, including Genpact's Annual Report on Form 10-K. These filings are available at www.sec.gov. Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. Although Genpact believes that these forward-looking statements are based on reasonable assumptions, you are cautioned not to put undue reliance on these forward-looking statements, which reflect management's current analysis of future events and should not be relied upon as representing management's expectations or beliefs as of any date subsequent to the time they are made. Genpact does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.
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