![]() February 4, 2015 Ticker (NYSE: G) Genpact Q4 and FY 2014 Earnings Presentation Exhibit 99.2 |
![]() DESIGN • TRANSFORM • RUN 2 © 2015 Copyright Genpact. All Rights Reserved. These materials contain 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 are based on Genpact’s current expectations and beliefs, as well as a number of assumptions concerning future events. 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 and uncertainties include but are not limited to a slowdown in the economies and sectors in which our clients operate, a slowdown in the BPO and IT Services sectors, the risks and uncertainties arising from our past and future acquisitions, our ability to convert bookings to revenues, our ability to manage growth, factors which may impact our cost advantage, wage increases, our ability to attract and retain skilled professionals, risks and uncertainties regarding fluctuations in our earnings, dependence on tax legislation, general economic conditions affecting our industry as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K. These filings are available at www.sec.gov or on the investor relations section of our website, www.genpact.com. Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the SEC. The Company undertakes no obligation to update any forward- looking statements that may be made from time to time by or on behalf of the Company. These materials also include measures defined by the SEC as non-GAAP financial measures. Genpact believes that these non- GAAP measures can provide useful supplemental information to investors regarding financial and business trends relating to its financial condition and results of operations when read in conjunction with the Company’s reported results. Reconciliations of these non-GAAP measures from GAAP are available in this presentation and in our earnings release dated February 4, 2015. Forward-Looking Statements Non-GAAP Financial Measures |
![]() DESIGN • TRANSFORM • RUN 3 © 2015 Copyright Genpact. All Rights Reserved. FY 2014 – Key Financial Highlights Solid growth and strategy execution FY ‘14 versus FY ‘13 performance: Total Revenue: +7% Revenue from Global Clients (1) : +10% GE Revenue (1) : -2% FY 2014 Adjusted Income from Operations margin at 15.1%, reflecting planned strategic investments (2) Solid progress in the execution of our strategy: Realigning our resources and developing new solutions for our targeted verticals, service lines and geographies Making significant client-facing investments Adding domain and subject-matter experts to drive differentiation Notes: 1. Data adjusted for dispositions by GE of businesses that Genpact continues to serve as Global Clients. 2. Adjusted Income from Operations is a non-GAAP measure. FY ‘14 GAAP income from operations margin was 12.9%. |
![]() DESIGN • TRANSFORM • RUN 4 © 2015 Copyright Genpact. All Rights Reserved. Q4 2014 – Key Financial Highlights Q4 ‘14 versus Q4 ‘13 performance: Total Revenue: +8% Revenue from Global Clients (1) : +11% GE Revenue (1) : -5% Q4 2014 Adjusted Income from Operations margin at 13.6%, reflecting planned investments (2) Global Client growth was broad-based and led by five of our target verticals – CPG, Life Sciences, Insurance, Manufacturing and Services, and Capital Markets From a service line perspective, Finance & Accounting, Core Vertical Operations, and Consulting led growth Signed two large transformational deals, one each in the CPG and Banking verticals Notes: 1. Data adjusted for dispositions by GE of businesses that Genpact continues to serve as Global Clients 2. Adjusted Income from Operations is a non-GAAP measure. Q4 ‘14 GAAP income from operations margin was 11.8%. |
![]() DESIGN • TRANSFORM • RUN 5 © 2015 Copyright Genpact. All Rights Reserved. FY 2014 – Solid Growth and Progress on Strategy Execution Key events and accomplishments: Continued progress on converting large deal pipeline; signed six large transformational engagements, including two in the fourth quarter Continued to add depth to our client-facing teams; invested 6.6% of our revenue in sales and marketing and also made incremental investments in capability builds Built industry leading solutions that integrate new technology and data insights to solve for critical client and industry needs Launched Systems of Engagement SM (SOE) technology; combining advanced technologies with our deep domain and process expertise to drive business impact for clients Accelerated the integration of rapid robotic automation solutions with our SEP SM framework to drive increased efficiency and effectiveness and operational intelligence for our clients Made strong progress on the Know Your Customer (KYC) solution with Markit; Integration of our Life Sciences regulatory affairs acquisition on track Collaboration with Lombard Risk Management on collateral management exemplifies use of strategic partnerships and alliances to create new client solutions |
![]() DESIGN • TRANSFORM • RUN 6 © 2015 Copyright Genpact. All Rights Reserved. Bookings Up 50% Year-Over-Year ($ millions) 2014 YoY Bookings* 2,156 +50% Annual bookings up significantly over 2013 of $1,440m due to: Realignment of our strategic focus to key target verticals, service lines and geographies led to an increase in salesforce productivity 2013 bookings were broadly flat in comparison to 2012 Focus on large annuity opportunities led to six new large deal wins over the course of 2014 Notes: * New bookings means the total contract value of new contracts, and certain renewals, extensions and changes to existing contracts. Regular renewals of contracts with no change in scope are not counted as new bookings. |
![]() DESIGN • TRANSFORM • RUN 7 © 2015 Copyright Genpact. All Rights Reserved. Q4 2014 Revenue Summary Total growth at constant currency was 9.2%; excluding Pharmalink, total revenue growth was 5.6%, or 7.1% on a constant currency basis Q4 2014 Global Clients BPO revenues increased 16% and ITO revenues declined 3% Notes: 1. Data adjusted for dispositions by GE of businesses that Genpact continues to serve as Global Clients Global Clients (1) GE (1) BPO ITO 7.7% YoY Growth% 11.4% (5.0%) 7.7% (2.4%) 11.0% YoY Growth% Q4 ‘13 Q4 ‘14 Q4 ‘13 Q4 ‘14 ($ in millions) ($ in millions) $558.5 $601.5 $601.5 $558.5 |
![]() DESIGN • TRANSFORM • RUN 8 © 2015 Copyright Genpact. All Rights Reserved. Q4 Results Reflect Investments in Client-Facing Teams and Capabilities Q4‘13 Q4‘14 YoY Revenue 558.5 601.5 7.7% Cost of Revenue 345.8 359.2 3.9% Gross Profit 212.6 242.3 14.0% Gross Profit % of Revenue 38.1% 40.3% 220 bps SG&A 136.2 167.3 22.8% SG&A % of Revenue 24.4% 27.8% 340bps Adjusted Income from Operations (1) 85.7 81.8 -4.5% Adjusted Income from Operations Margin 15.3% 13.6% -170 bps ($ millions) Notes: 1. Adjusted Income from Operations is a non-GAAP measure. Income from Operations was $71.6 million in Q4 ‘13 and $70.9 million in Q4’14. Gross profit margins increase was driven by productivity and favorable foreign exchange |
![]() DESIGN • TRANSFORM • RUN 9 © 2015 Copyright Genpact. All Rights Reserved. FY 2014 Revenue Summary Notes: 1. Data adjusted for dispositions by GE of businesses that Genpact continues to serve as Global Clients Global Clients (1) GE (1) BPO ITO 6.9% YoY Growth% 9.6% (2.4%) 6.9% 3.6% 8.0% YoY Growth% 2,132 2,279 FY ‘13 FY ‘14 FY ‘13 FY ‘14 ($ in millions) ($ in millions) 2,132 2,279 Total growth at constant currency was 7.9%; excluding Pharmalink, total revenue growth was 5.7%, or 6.7% on a constant currency basis FY 2014 Global Clients Business Process Outsourcing revenues increased 12% and ITO revenues increased 3% |
![]() DESIGN • TRANSFORM • RUN 10 © 2015 Copyright Genpact. All Rights Reserved. Continue to Expand Client Relationships Notes: 1. Relationship size = Clients representing annual revenues based on last four rolling quarters |
![]() DESIGN • TRANSFORM • RUN 11 © 2015 Copyright Genpact. All Rights Reserved. FY‘13 FY’14 YoY Revenue 2,132.0 2,279.4 6.9% Cost of Revenue 1,319.6 1,378.1 4.4% Gross Profit 812.4 901.4 10.9% Gross Profit % of Revenue 38.1% 39.5% 140 bps SG&A 484.8 585.6 20.8% SG&A % of Revenue 22.7% 25.7% 300bps Adjusted Income from Operations (1) 352.6 344.2 -2.4% Adjusted Income from Operations Margin 16.5% 15.1% -140 bps ($ millions) Notes: 1. Adjusted Income from Operations is a non-GAAP measure. Income from Operations was $309.5 million in FY ‘13 and $294.0 million in FY’14. FY Results Reflect Investments in Client-Facing Teams and Capabilities Gross profit margins increase driven by incremental revenue as well as operating efficiencies and favorable foreign exchange |
![]() DESIGN • TRANSFORM • RUN 12 © 2015 Copyright Genpact. All Rights Reserved. EPS Year-Over-Year Bridge FY ‘13 FY ‘14 Adjusted Net Income ($ millions) 265.9 231.4 Diluted Shares Outstanding (millions) (2) 236 225 97 -11 FX Re- measurement Loss FY ‘13 GAAP EPS (Cents per share) Net Adjustments (1) 113 16 Net Adjustments (1) FY ‘13 Adjusted EPS FY ‘14 Adjusted EPS FY ‘14 GAAP EPS -3 Lower Adjusted Income from Operations -18 Increase Decrease Notes: 1. Adjustments primarily include amortization of acquired intangible assets, stock-based compensation expenses and acquisition-related expenses. 2. Weighted average number of diluted shares outstanding - The above bridge reflects only significant variance items year over year and is illustrative and subject to rounding. - EPS = Diluted earnings per share Share buyback net of dilution/ Others 4 85 103 |
![]() DESIGN • TRANSFORM • RUN 13 © 2015 Copyright Genpact. All Rights Reserved. Cash From Operations FY 2014 cash from operations down $40 MM Cash from operations down 13% YoY; better than our earlier outlook mainly due to the improvement in DSOs. The year over year decline was primarily driven by the impact of foreign exchange re-measurement. Lower operating income also contributed to the decline. Q4 ‘13 Q4 ‘14 19% Notes: 1) Cash and Liquid Assets = Cash and cash equivalents and short-term deposits (13%) FY ‘13 FY ‘14 YoY Change% YoY Change% ($ in millions) ($ in millions) |
![]() DESIGN • TRANSFORM • RUN 14 © 2015 Copyright Genpact. All Rights Reserved. Full Year 2015 Outlook |
![]() DESIGN • TRANSFORM • RUN 15 © 2015 Copyright Genpact. All Rights Reserved. Annexure 1: Reconciliation of Adjusted Income from Operations – Full Year 2014 (USD, in thousands) Year ended December 31 2013 2014 Income from operations per GAAP $ 309,527 $ 294,031 Add: Stock-based compensation 31,129 28,065 Add: Amortization of acquired intangible assets 18,321 22,233 Add: Acquisition related expenses - 2,772 Add/Less: Other Income (Expense), net excluding net interest (1,168) 2,112 Add/Less: Gain (Loss) on Equity-method investment activity, net 169 (4,795) Less: Net income attributable to noncontrolling interest (5,334) (169) Adjusted income from operations $ 352,644 $ 344,249 |
![]() DESIGN • TRANSFORM • RUN 16 © 2015 Copyright Genpact. All Rights Reserved. Annexure 2: Reconciliation of Adjusted Income From Operations – Q4 2014 (USD, in thousands) Quarter ended December 31 2013 2014 Income from operations per GAAP $ 71,633 $ 70,866 Add: Stock-based compensation 9,198 7,912 Add: Amortization of acquired intangible assets 4,685 6,347 Add: Acquisition related expenses - 795 Add/Less: Other Income (Expense), net excluding net interest 1,190 776 Add/Less: Gain (Loss) on Equity-method investment activity, net 30 (4,882) Less: Net income attributable to noncontrolling interest (1,064) - Adjusted income from operations $ 85,672 $ 81,814 |
![]() DESIGN • TRANSFORM • RUN 17 © 2015 Copyright Genpact. All Rights Reserved. Annexure 3: Reconciliation of Adjusted Net Income – Full Year 2014 (USD, in thousands, except per share data) Year ended December 31 2013 2014 Net income attributable to Genpact Limited shareholders per GAAP $ 229,717 $ 192,002 Add: Stock-based compensation 31,129 28,065 Add: Amortization of acquired intangible assets 18,321 22,233 Add: Acquisition related expenses - 2,772 Less: Tax impact on stock-based compensation (6,913) (6,366) Less: Tax impact on amortization of acquired intangibles (6,373) (7,154) Less: Tax impact on acquisition related expenses - (184) Adjusted net income $ 265,881 $ 231,368 Adjusted diluted earnings per share $ 1.13 $ 1.03 |
![]() DESIGN • TRANSFORM • RUN 18 © 2015 Copyright Genpact. All Rights Reserved. Annexure 4: Reconciliation of Adjusted Net Income – Q4 2014 (USD, in thousands, except per share data) Quarter ended December 31 2013 2014 Net income attributable to Genpact Limited shareholders per GAAP $ 48,842 $ 45,752 Add: Stock-based compensation 9,198 7,912 Add: Amortization of acquired intangible assets 4,685 6,347 Add: Acquisition related expenses - 795 Less: Tax impact on stock-based compensation (1,160) (1,160) Less: Tax impact on amortization of acquired intangibles (2,085) (1,997) Less: Tax impact on acquisition related expenses - (131) Adjusted net income $ 59,480 $ 57,518 Adjusted diluted earnings per share $ 0.25 $ 0.26 |
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