Genpact Limited (NYSE: G), a global leader in business process management and technology services, today announced financial results for the fourth quarter and full year ended December 31, 2012.
Key Financial Results – Full-Year 2012
· Revenues were $1.9 billion, up 18.8% from $1.6 billion in 2011.
· Net income attributable to Genpact Limited shareholders was $178.2 million, compared to $184.3 million in 2011; net income margin for 2012 was 9.4%, compared to 11.5% in 2011.
· The effective tax rate was 30.6%, up from 27.7% in 2011.
· Diluted earnings per common share were $0.78, compared to $0.81 per share in 2011.
· Adjusted income from operations increased 18.4% to $313.1 million, up from $264.5 million in 2011.
· Adjusted income from operations margin was 16.5%, unchanged from 2011.
· Adjusted diluted earnings per share were $0.96, compared to $0.98 in 2011.
Key Financial Results – Fourth Quarter 2012
· Revenues were $507.7 million, up 14.7% from $442.7 million in the fourth quarter of 2011.
· Net income attributable to Genpact Limited shareholders was $53.4 million, compared to $61.1 million in the fourth quarter of 2011; net income margin for the fourth quarter of 2012 was 10.5%, compared to 13.8% in the fourth quarter of 2011.
· Diluted earnings per common share were $0.23, compared to $0.27 per share in the fourth quarter of 2011.
· Adjusted income from operations totaled $83.9 million, up from $77.1 million in the fourth quarter of 2011.
· Adjusted income from operations margin was 16.5%, compared to 17.4% in the fourth quarter of 2011.
· Adjusted diluted earnings per share were $0.25, compared to $0.32 in the fourth quarter of 2011.
N.V. ‘Tiger’ Tyagarajan, Genpact's president and CEO said, “Our results in the fourth quarter and full year 2012 demonstrated strong client demand and profitable growth. In 2012, we delivered robust growth in revenues and adjusted operating income. In addition, we expanded and strengthened our capabilities across our enterprise services offerings, industry vertical markets and geographies with both investment initiatives and acquisitions. We also provided our shareholders a substantial return of capital in the form of a $502 million special cash dividend. All of these accomplishments build upon our solid foundation and position us to take advantage of the large market opportunity available to us and long runway to drive sustained growth in revenues and cash flows.”
Revenues from Global Clients grew 25.8% for the full year 2012 and 19.2% in the fourth quarter. Business process management revenues from Global Clients grew 21.3% for the full year, and 21.1% in the fourth quarter and were led by growth in Smart Decision Services of 31.3% for the full year and 21.0% for the fourth quarter. Revenues from Global Clients represented approximately 73.9% of Genpact's total revenues in 2012, with the remaining 26.1% of revenues coming from GE. GE revenues increased 2.8% for the full year 2012 and 3.1% in the fourth quarter.
As of the end of 2012, 65 client relationships each contributed revenues of $5 million or more in the last 12 months, up from 56 such relationships as of December 31, 2011. As of the end of 2012, 11 client relationships each contributed revenues of $25 million or more in the last 12 months, up from nine such client relationships as of December 31, 2011.
Approximately 76.6% of Genpact's revenues for the full year 2012 and 76.8% for the fourth quarter came from business process management services, compared to 78.8% for 2011 and 75.9% for the fourth quarter of 2011. Revenues from IT services represented approximately 23.4% of total revenues for the full year 2012 and 23.2% for the fourth quarter, compared to 21.2% for 2011 and 24.1% for the fourth quarter of 2011.
Genpact generated $310.7 million of cash from operations in 2012 and $101.2 million in the fourth quarter of 2012, up from $266.6 million of cash from operations in 2011 and $89.5 million in the fourth quarter of 2011, primarily due to better working capital management resulting from lower days sales outstanding in the fourth quarter. Genpact had approximately $477.5 million in cash and cash equivalents and short-term deposits as of December 31, 2012.
In the third quarter of 2012, Genpact paid a special cash dividend of $2.24 per share, for an aggregate amount of approximately $502 million, to holders of Genpact common shares and facilitated the sale of approximately 26% of its outstanding shares to Bain Capital Partners from its original sponsors. The special dividend was funded through a combination of surplus cash on Genpact’s balance sheet and a portion of the proceeds of borrowings under a new $925 million senior credit facility. The costs and expenses associated with the above transactions are reflected in Genpact’s results for 2012, and adversely impacted net income for the year.
As of December 31, 2012, Genpact had approximately 60,200 employees worldwide, an increase from approximately 55,400 at the end of 2011. The attrition rate for the entire year, measured from day one, was 25%, down from 30% in 2011. Revenue per employee in 2012 was $34,000, compared to $34,100 in 2011.
2013 Outlook
Tyagarajan continued, “We remain cautious, as are many of our clients, about the global economy in the near term, even as we see signs of improvement, and we are bullish on the long term. For the full year 2013, we expect revenues to be in a range of $2.15 – $2.20 billion, and adjusted operating income margin in a range of 15.8% – 16.3%. This guidance reflects the revenue contribution and slight margin dilution for the year resulting from the recently-announced acquisition of JAWOOD. Without the anticipated impact of JAWOOD, we would have expected 2013 adjusted operating income margin to be in a range of 16.0% to 16.5%.”
About Genpact
Genpact Limited (NYSE: G), a global leader in business process management and technology services, leverages the power of smarter processes, smarter analytics and smarter technology to help its clients drive intelligence across their enterprise. Genpact’s Smart Enterprise Processes (SEPSM) framework, its unique science of process combined with deep domain expertise in multiple industry verticals, leads to superior business outcomes. Genpact’s Smart Decision Services deliver valuable business insights to its clients through targeted analytics, reengineering expertise, and advanced risk management. Making technology more intelligent by embedding it with process and data insights, Genpact also offers a wide range of technology services. Driven by a passion for process innovation and operational excellence built on its Lean and Six Sigma DNA and the legacy of serving GE for more than 15 years, the company’s 60,000+ professionals around the globe deliver services to its more than 600 clients from a network of 70 delivery centers across 20 countries supporting more than 30 languages. For more information, visit www.genpact.com,
