Globant Annual Report 2019

Plain-text annual report

Integrated Report Integrated Report 20192019 Index Letter from the CEO · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 3 About the Report · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 4 Globant at a Glance · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 6 Innovative Approach · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 10 High Performance · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 15 Global Talent · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 20 Unique Culture · · · · · · · · · · · · · · · · · · · ·· · · · · · · · · · · · · · · · · · · · · · · · · · · · · 25 Additional Information · · · · · · · · · · · · ·· · · · · · · · · · · · · · · · · · · · · · · · · · · · · 38 Sustainability Index · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 42 Report proﬁle · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · 50 Letter From The CEO As we start 2020, I want to take this opportunity to share 2019 was also a terriﬁc year in terms of expansion. We some thoughts with you. Every year brings us closer to our keep committed to our goal of bringing opportunities to purpose: we are here to make the world a better place by where the talent is. transforming organizations and people’s lives. We know that we want to make our mark on the world and we need to · More than 4,500 new Globers joined the company, growing continue making every eﬀort to put this vision come true. our headcount more than 40% year-over-year. As I look back at 2019, I can see that it was the year to go · We inaugurated oﬃces in Paris, Bogota, Guadalajara and beyond superﬁcial transformations and truly reinvent our- Winston-Salem, among other cities. selves. Let me do a brief recap of what happened last year · Two talented companies joined our team as we acquired and of how we are working to get closer to our purpose: Avanxo and Belatrix to reinforce our positioning as leaders in digital and cognitive transformations. The revenue for 2019 increased to $659.3 million, · We launched the “Code your Future” program where we ran a robust 26.2% year-over-year growth. 70 programs that trained over 1,000 people and additionally oﬀered 500 scholarships focusing mainly on training women. We expanded our consulting capabilities through our Business Hacking Studio to help organizations Last but not least, we introduced Be Kind. Our way to trans- rethink their businesses. form organizations and people's lives with kindness. This initia- tive commits Globant and Globers to be kind to peers, to hu- Augmented Globant was born as a way to bring AI manity and to the planet by guaranteeing diversity, gender to the whole company to increase Globant's equality, inclusion and becoming a carbon neutral company. capabilities. Our purpose calls for a disruptive company and we will keep on making our best eﬀorts as we work towards our Thanks to our customer’s trust, we were able to vision: to Reinvent the Industry and our client's businesses. provide profound transformation to a wide range Thanks for your continuous trust. It's time to go for more! of companies, redeﬁning ﬁnancial services, rede- signing travel experiences, creating new standards in manufacturing, building new forms of entertain- ment, and transforming companies inside out. Keep rocking, Martín Migoya Co-Founder, Chairman and CEO @migoya 3 About The Report This report has been prepared in accordance with the Integrated Re- porting Framework, the GRI Standards: Core option (Global Reporting Initiative), and taking as reference the SASB standards for Software and IT services. In addition, Globant’s commitment to the Sustainable Development Goals (SDG) is explained in this report which is based on the six SDG we identiﬁed related to our model: quality education; gender equality; decent work and economic growth; industry, innovation and infrastructure; envi- ronmental consciousness; and partnership for the goals. Finally, and following the general concern about the global climate crisis, we improved the mechanism for estimating our energy consumption and greenhouse emissions. As a result, we redesigned our method. We imple- mented the new approach in 2019, as the baseline to initiate ambitious projects related to a full transition to renewable energy consumption in a short period. Also, the improvement in the measuring of these environ- mental variables enables us to design a pathway for neutralisation of carbon emissions not only in our corporate boundaries but also the Scope 3 emissions related to our travel activity and individual Globers’ commuting. Globant’s Sustainability Council Sustainability Framework S L A T I P A C Y B INNOVATIVE APPROACH HIGH PE RFORMANCE GLOBAL TALE NT UNIQUE CULTURE 4 Sustainability Framework B Y C A P I T A L S I N P U T 1 I N P U T 2 I N P U T 3 I N P U T 4 INNOVATIVE APPROACH HIGH PE RFORMANCE GLOBAL TALE NT UNIQUE CULTURE Engineering, Innovation & Design Podular Structure Augmented Globant INNOVATIVE APPROACH Business Hacking Studio Augmented Retention Augmented Recruting Augmented Coding +$659.3M Revenue 2.29 Adjusted EPS +11,800 Globers Be kind by Globant 17 Countries G L O B A N T ’ S B U S I N E S S M O D E L HIGH PE RFORMANCE GLOBAL TALE NT 26.2% Revenue Growth YoY 41% Headcount Growth YoY UNIQUE CULTURE Renewable energy and carbon neutral plan Gender equality and inclusiveness AI Manifesto O U T C O M E 1 O U T C O M E 2 O U T C O M E 3 O U T C O M E 4 5 Canada United States Mexico N O R T H A T L A N T I C O C E A N N O R T H P A C I F I C O C E A N Colombia Peru Brazil Chile Uruguay S O U T H A T L A N T I C Argentina O C E A N S O U T H P A C I F I C O C E A N A R T I C O C E A N UK Belarus Luxembourg Spain France Romania Globant at Globant at a glance a glance UAE India I N D I A N O C E A N P A C I F I C O C E A N 11,855 37 17 55 Globers Cities Countries Locations S O U T H E R N O C E A N 6 Governance B O A R D O F D I R E C TO R S S E N I O R M A N A G E M E N T Martín Migoya Chairman of the Board, CEO & Co-Founder Martín Gonzalo Umaran Director, Chief of Staff & Co-Founder Guibert Andrés Englebienne Director, CTO & Co-Founder Mario Eduardo Vázquez non-executive independent Director(1)(2)(3) Francisco Álvarez-Demalde non-executive independent Director Martín Migoya Chairman of the Board, CEO & Co-Founder Martín Gonzalo Umaran Director, Chief of Staff & Co-Founder Guibert Andrés Englebienne Patricia Pomies Director, CTO & Co-Founder Chief Delivery Officer Juan Urthiague Chief Financial Officer Marcos Galperín non-executive independent Director(1)(2) Richard Haythornthwaite non-executive independent Director Philip A. Odeen Linda Rottenberg non-executive independent Director(1)(2)(3) non-executive independent Director(1) Wanda Weigert Chief Brand Officer Mercedes Mac Pherson Chief Diversity & Talent Officer Sol Mariel Noello General Counsel Gustavo Barreiro Chief Information Officer Yanina Maria Conti Chief Accounting Officer Younger than 45 Younger than 45 Between 45 & 55 Between 45 & 55 Older than 55 Older than 55 Younger than 40 Between 40 & 50 Older than 50 11% 11% 56% 56% 33% 33% 30% 40% 30% (1)Audit Committee, (2) Compensation Commitee (3) Corporate Governance anda Nominating Commitee 89% 11% 50% 50% 7 Board Practices Corporate Governance Practices The company is managed by our board of directors which is vested with the Our corporate governance practices are governed by Luxembourg law (particu- broadest powers to take any actions necessary or useful to fulﬁll our corporate pur- larly the law of August 10th, 1915, on commercial companies as amended) and our pose with the exception of actions reserved by law or our articles of association to articles of association. As a Luxembourg company listed on the NYSE, we are not the general meeting of shareholders. Our articles of association provide that our required to comply with all of the corporate governance listing standards of the board of directors must consist of at least seven members and no more than ﬁfteen NYSE for U.S. listed companies. We, however, believe that our corporate gover- members. Directors may be re-elected for one or more four-year terms. Directors nance practices meet or exceed, in all material respects, the corporate governance appointed to ﬁll vacancies remain in oﬃce until the next general meeting of share- standards that are generally required by the NYSE for U.S. listed companies. In this holders. Further considerations about practices (vote, majorities, management, con- respect, we have included a description of our corporate governance practices ﬂicts of interest, and other provisions) are included in the annual report in form 20F and we have indicated the signiﬁcant ways that these diﬀer from the corporate (board practices section). Compensation governance standards required for listed U.S. companies by the NYSE in our annual report on form 20F, in the Corporate Governance Practices section. During 2019 we have had no conﬁrmed incidents of corruption. Compensation policy for Directors and Senior Management is composed of a ﬁxed salary and share based compensation pursuant to the Equity Incentive Plan Committees which includes RSU and other equity awards. The methods and composition of the Our board of directors has established an audit committee, a compensation incentive plan are described in detail in the annual report in form 20F. Neither we committee and a corporate governance and nominating committee. Our board of nor our subsidiaries maintain any directors’ service contracts providing for beneﬁts directors may from time to time establish other committees. upon termination of service. We do not pay or set aside any amounts for pension, retirement or other similar beneﬁts for our oﬃcers or directors. Commitees Advisory Board BOARD Sustainability Council TOP MANAGEMENT More info on www.globant.com/about/management-team (1) Audit committee: Oversees our corporate accounting and ﬁnancial reporting process (2) Compensation committee: Reviews, recommends and approves policy relating to compensa- tion and beneﬁts of our oﬃcers and directors, administers our common shares option and beneﬁt plans and reviews general policy relating to compensation and beneﬁts. (3) Corporate Governance and Nominating Committee: Identiﬁes individuals qualiﬁed to become directors; recommends to our board of directors director nominees for each election of directors; develops and recommends to our board of directors criteria for selecting qualiﬁed director candidates; considers committee member qualiﬁcations, appointment and removal; recom- mends corporate governance guidelines applicable to us; and provides oversight in the evaluation of our board of directors and each committee. 8 Risks and Opportunities Our Annual Report, ﬁled with the SEC under Form 20f, covers the risks and opportunities in detail under the headline ‘Risk Factors’. A summary of risks is presented in the document available here. Detailed management approach on risks, challenges and op- portunities is developed in this report on a topic-by-topic area. Ethics and Compliance Under NYSE standards, listed companies must adopt and In the same section, we also publish our whistleblowing disclose a code of business conduct and ethics for directors, contacts where the breaches of the code of ethics can be oﬃcers and employees, and promptly disclose any waivers communicated without any risk of retaliation. Also, we pub- of the code for directors or executive oﬃcers. Eﬀective as of lish in that section, our Modern Slavery Statement issued July 23, 2014, we adopted a code of business conduct and persuant to the UK Modern Slavery Act from the primary ethics applicable to our principal executive, ﬁnancial and subsidiaries of Globant for the United Kingdom, to account accounting oﬃcers, and all persons performing similar func- for our eﬀorts to mitigate all types of modern slavery in our tions. A copy of that code is available on our website. business or supply chain. Future Outlook & Business Perspectives We are living in a fantastic moment for technology. Never before in history did we have two massive and disruptive technolo- gy revolutions are happening at the same time.The digital and cog- nitive revolutions are aﬀecting how companies connect with con- sumers and employees as well as providing opportunities to make huge gains in eﬃciency. Today's users, whereas consumers or employees, move fast and are keen to interact with their digital ecosystem anywhere and anytime, in a painless, fast, relevant, smart and restriction-free way. They demand personalized, seamless and frictionless experiences that will simplify their lives. We are also facing an abundance of demand for more intelligent and human-like behavior and tech- nology on the market. These revolutions are leveraging new tech- nologies that did not exist or were not suﬃciently mature until a few years ago, such as AI, UX, IoT, Cloud Computing and Big Data. While the traditional IT space is growing between 3% and 4% a Transforming Organizations While companies look to boost their consumer experience, they are also trying to transform them- selves internally. For many, it becomes diﬃcult to build a digitally-native culture from scratch or change the status quo of current IT departments. It is hard to be successful using old-fashioned practices. As Forrester points out, transformation starts with de- veloping the right set of strategy choices and the ability to help shape digital thinking and a digital cul- ture that supports continuous innovation. It is cemented through eﬀective change management(1). Our experience as a pure play in the digital and cognitive arena makes us an ideal partner to help year, the digital space is growing at 20%(1) a year. In comparison, the organizations with more rigid structures. cognitive space thrives at an amazing rate of more than 60%. And we are a pure-play in these two spaces. (1) January 16, 2019 - Morgan Stanley Research. IT Services | North America: "2019 Outlook: Secular and Cyclical Trends Continue". (2) Source: https://www.forrester.com/report/Now+Tech+Digital+Business+Transformation+Accelerators+Q4+2018/-/E-RES143417 9 Innovative Approach Empowering organizations for a digital and cognitive revolution We are a digitally native company where innovation, design and engi- neering meet scale. Globant is a disruptor in the professional services arena that leverages the latest technologies and methodologies in the digital and cognitive space to help organizations transform in every aspect. Through Artiﬁcial Intelligence, we have reinvented digital transforma- tion by focusing on delivering a new approach to generating real busi- ness impacts. We base our growth and diﬀerentiation around new para- digms: at Globant, a podular and autonomous company structure pushes innovation. Moreover, technology-savvy teams, entrepreneur- ship and agility drive eﬃciency to our customers through a digital and cognitive evolution. Main differentiators 1 E N G I N E E R I N G , I N N O V AT I O N & D E S I G N M E E T S C A L E 2 3 P O D U L A R S T R U C T U R E A U G M E N T E D G L O B A N T 11 1 E N G I N E E R I N G , I N N O V AT I O N & D E S I G N M E E T S C A L E We create software products that emotionally connect our customers with millions of consumers and employees, and we work with them to improve their eﬃciency. To deliver solutions for a digital and cognitive transforma- tion, you need a completely diﬀerent approach than tradi- tional IT projects. It all starts by cultural behavioral and orga- nizational change and then developing solutions like suc- cessful software companies in Silicon Valley do. For this, you need the right blend of engineering, design and innovation, and we are the ﬁrst players to deliver it at scale. We do that through our Studios, deep pockets of exper- tise on the latest technologies and trends. Our Studio model fosters creativity and innovation while allowing us to build, enhance and consolidate expertise around a variety of emerging technologies. This approach focuses ﬁrst on tech- nology; and second on industry depth. Studios deliver knowledge cross-pollinating insights from diﬀerent indus- tries to create disruptive ideas. O R G A N I Z AT I O N A L F I T N E S S P U S H I T L I V E Business Hacking Stay Relevant Future of Organizations Agile Delivery Cloud Ops Digital Content Quality Engineering Media OTT Cybersecurity B U I L D & E V O LV E A I P R O C E S S A U TO M AT I O N Scalable Platforms Continuous Evolution IOT UI Engineering Data & Analytics Intelligent Enterprise Gaming Mobile Artiﬁcial Intelligence Process Automation Blockchain Conversational Interface S T R AT E G Y Product Acceleration Design 12 2 P O D U L A R S T R U C T U R E We have mastered a unique way of organizing our teams known as the Agile Pod model. Driven by a culture of self-reg- ulated teamwork, each team—or Pod—works directly with our customers with a full maturity path that evolves as they increase speed, quality and autonomy. Each Pod deﬁnes their name, pledges to a customer-centric constitution, and sets clear goals that will drive their maturity evolution tied to our customer success. Opposed to the traditional IT services structures, Glo- bant’s podular model eliminates the need for command and control methods and provides teams with full independence in customer interaction. It is an advanced and more autono- mous structure that ultimately brings: Customer centricity Closeness to the frontline Fast decision-making abilities Improved accountability Elimination of bureaucracy and unnecesarry processes And the most important part: savings are delivered to clients due to sustained productivity boosts as Pods begin to operate at a higher maturity level. 13 3 A U G M E N T E D G L O B A N T As the digital and cognitive revolutions change the landscape of our world, it is crucial to rethink how organizations must adapt and evolve. We have launched the “Augmented Glo- bant” initiative to embrace the power of artiﬁcial intelligence to augment Globant's capabilities and reinvent the technology industry. To create and maintain an outstanding team it's neces- We are embracing artiﬁcial intelligence to better detect sary to craft a unique culture that can help recruit and retain and predict talent, performance and cultural ﬁt. Using com- the best global talent. StarMeUp OS is a system that helps us puter vision, speech recognition and natural language under- understand and visualize the human psyche within the orga- standing techniques, we are developing a tool that analyzes nization. We can discover cultural leaders, inﬂuencers, trend the videos of HR interviews, and returns an insight report. generators and even disengaged teams. This information is This report shows information about the candidate, and how useful for multiple goals: from retention to talent detection, he/she responds to Globant's Talent Manifesto, our deﬁni- from fostering a company’s growth to promoting integration tion of Core Competencies (FCI3), and our Corporate Values. between two separate countries. It helps managers make the proper decisions that will foster culture and values, align- ing large companies to pursue a uniﬁed vision. With this intelligence, we are able to better identify rising stars, nur- ture talent, and anticipate team members that are at risk. Our belief about coding is that it is both a science and an art. Through Augmented Coding, we have created AI-pow- ered tools to enhance the coding experience and augment our developers' capacity. Our augmented coding products allow our collaborators to ﬁnd code within our project repository, accelerating ramp-up times and improving quali- ty on delivery. Augmented Coding enables our developers to quickly build and deploy production-ready applications and accurately traverse complex coding environments. 14 High Performance The inner force that makes ourselves unique P E R F O R M A N C E F I N A N C I A L H I G H L I G H T S Salaries $452.9M 69% 2018 $356.8M 68% Reinvested amount $54M 8% 2018 $51.6M 10% $659.3M Economic value generated 2019 $522.3M 2018 Taxes $31.2M 5% 2018 $22.2M 4% Depreciations & interests $27.8M 2018 $26.1M 4% 5% Other costs of operations $93.4M Chile 17% 2018 $65.6M 13% R E V E N U E ( $ M ) $659 A D J U S T E D N E T I N C O M E M A R G I N ( % ) A D J U S T E D D I L U T E D E P S $2.29 $522 $413 $323 $254 13.1% 12.8% 12.0% 12.2% 11.1% $1.74 $1.28 $1.09 $0.93 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 C L I E N T S BY R E V E N U E C O N T R I B U T I O N 2 0 1 9 C L I E N T S BY V E R T I C A L 2 0 1 9 Travel & Hospitality 14.1% 39.5% 26.1% Media & Entertainment 23.7% Banks, Financial Servicies & Insurance 21.8% Technology & Telecommunications 13.4% 11.2% Top 1 Top 5 Top 10 Other verticals 2.9% Professional services 11.1% Consumer, Retail & Manufacturing 13% 50 25 0 Assets $ 687.8M Liabilities $ 249.1M Net Worth $ 438.7M $ 437.1M 2018 $ 99.2M 2018 $ 337.9M 2018 R E V E N U E BY G E O G R A P H Y 2 0 1 9 C L I E N T S BY C U R R E N C Y 2 0 1 9 Europe North America Latam & others 7.1% 75.3% 17.6% USD EUR 4.3% Other 10.2% 85.5% 16 C O N S O L I D AT E D S TAT E M E N T S O F P R O F I T O R LO S S A N D O T H E R C O M P R E H E N S I V E I N C O M E Year ended December 31 in thousands except percentages and per share data O T H E R D ATA Adjusted gross proﬁt Revenues(1) Cost of revenues(2) Gross proﬁt 2018 2019 Adjusted gross proﬁt margin percentage 522,310 (318,554) 100.0% -61.0% 659,325 (405,164) 100.0% -61.5% Adjusted selling, general and administrative expenses 203,756 39.0% 254,161 38.5% 2018 212,026 40.6% 2019 266,487 40.4% (104,485) (131,090) Selling, general and administrative expenses(3) (133,187) -25.5% (172,478) -26.2% Net impairment losses on ﬁnancial assets(4) Other operating (expenses) income, net(5) Proﬁt from operations Gain on transactions with bonds(6) Finance income Finance expense Finance (expense) income, net(7) Share of results of investments in associates(8) Other income & expense in net(9) (3,469) (306) 66,794 - 11,418 (16,968) (5,550) - 6,220 -0.7% -0.1% 12.8% 0.0% 2.2% -3.2% -1.1% 0.0% 1.2% Proﬁt before income tax 67,464 12.9% Income tax(10) Net income for the year (15,868) 51,596 -3.0% 9.9% (228) (720) 0.0% -0.1% 80,735 12,2% 1,569 13,643 (26,801) (13,158) (224) (114) 69,032 (15,017) 54,015 0.2% 2.1% -4.1% -2.0% 0.0% 0.0% -2.3% 8.2% (1) Includes transactions with related parties of $1,419 and $5,937 for the years ended December 31, 2019 and 2018, respectively. (2) Includes depreciation and amortization expense of $7,350 and $4,022 for the years ended December 31, 2019 and 2018, 2017, respectively. Also includes share based com- pensation for $4,976 and $4,248 for the years ended December 31, 2019 and 2018, respectively. (3) Includes depreciation and amortization expense of $16,905 and$16,521 for the years ended December 31, 2019 and 2018, respectively. Also includes share based compen- sation of $14,912 and $8,665 for the years ended December 31, 2019 and 2018, respectively. (4) Includes impairments of tax credits of $48 for the year ended December 31, 2018, and recoveries related to reversals of allowances for impairments of tax credits of $47 for the year ended December 31, 2019. Also includes a loss of $275 and $3,421 on impairment of trade receivables for the years ended December 31, 2019 and 2018, respectively. (5) Includes an impairment of intangibles assets of $720 and $306 for the years ended December 31, 2019 and 2018, respectively. (6) Includes a gain of $1,569 from transactions with Argentine sovereign bonds denominated in U.S. dollars acquired in the U.S. market with cash received from repayments of intercompany loans and capitalizations received by our Argentine subsidiaries for the year ended December 31, 2019. (7) Includes foreign exchange losses, net, of $8,841 and $7,437 for the years ended December 31, 2019 and 2018, respectively. (8) Includes a loss of $224 related to our share of the loss from our investment in Acamica, described in note 11.2 to our audited consolidated ﬁnancial statements. (9) Includes gains and losses explained in note 28.9.1, 28.9.2, 25.2 and 11.2 to our audited consolidated ﬁnancial statements. (10) Includes deferred tax gains of $4,310 and $7,456 for the years ended December 31, 2019 and 2018, respectively. Adjusted selling, general and administrative expenses margin percentage Adjusted proﬁt from operations Adjusted proﬁt from operations margin percentage Adjusted net income for the year Adjusted net income margin percentage for the year C A L C U L AT I O N O F A D J U S T E D D I L U T E D E P S Adjusted net income Diluted shares Adjusted diluted EPS 20.0% 84,334 16.1% 63,737 12.2% 2018 $ 63,737 36,685 $ 1.74 19.9% 111,991 17.0% 86,094 13.1% 2019 $ 86,094 37,674 $ 2.29 Please note that we follow IFRS accounting rules in our ﬁnancial statements. You will ﬁnd a reconciliation of IFRS and Non-IF- RS (or adjusted) measures in the section “Reconciliation of Non-IFRS Financial Data” included in our 20F. 17 M A R K E T C A P V S S TO C K P R I C E $ end of the year $15.62 $37.51 $33.35 $46.46 $56.32 Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 C A S H F LO W S For the year ended December 31, Net cash provided by operating activities 2018 67,197 2019 79,709 Net cash used in investing activities (46,117) (151,558) Net cash provided by ﬁnancing activities Eﬀect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of the year 4,094 (93) 56,712 252 52,525 77,606 Cash and cash equivalents at end of the year 77,606 62,721 C O N S O L I D AT E D S TAT E M E N T S O F F I N A N C I A L P O S I T I O N D ATA As of December 31 Cash and cash equivalents Investments (current & non-current) Trade receivables Other receivables (current & non-current) Other assets (current & non-current) Other ﬁnancial assets (current & non-current) Deferred tax assets Investment in associates Property and equipment Intangible assets Right-of-use asset Goodwill Total assets Trade payables (current & non-current) Payroll and social security taxes payable Borrowing (current & non-current) Other ﬁnancial liabilities (current & non-current) Net (decrease) increase in Cash and cash equivalent at end of year 25,081 (14,885) Lease Liabilities (current & non-current) C A P I TA L R E S O U R C E S For the year ended December 31, Capital Expenditures Tax liabilities Deferred tax liabilities Other liabilities and provisions Total liabilities 2018 28,506 2019 27,776 Total equity and non-controlling interest Total equity, non-controlling interest & liabilities 2018 77,606 9,162 110,898 49,538 - 895 16,916 4,000 51,460 11,778 - 104,846 437,099 17,578 58,535 - 12,765 - 7,399 - 2,906 99,183 337.916 437.099 2019 62,721 20,198 156,676 28,118 21,235 6,210 26,868 3,776 87,533 27,110 58,781 188,538 687,764 36,987 72,252 51,386 10,554 61,363 12,510 1,028 2,970 249,050 438,714 687,764 18 Operational performance +66 O V E R A L L R E S U LT C U S TO M E R S U R V E Y Q 4 - 2 0 1 9 N E T P R O M OT E R S C O R E ( N P S ) Data privacy & Security* Regarding data privacy and freedom of expression, we up- behavior regulations. We also maintain at zero the number of dated our website privacy policy, and our cookies policy. Re- law enforcement requests for user information and the garding the last one, it was a restructuring of our entire modali- number of users whose information was requested. To this ty of acceptance of Cookies to improve our "Privacy by Default" point in time our core products or services are not subject to concerning the use of Cookies on our sites. We worked in the government-required monitoring, blocking, content ﬁltering, or transparency of the purpose, and the treatment that will be censoring in any county. given to the data we receive from candidates, the press, poten- Globant had ﬁve security incidents during the year, but none tial businesses or any stakeholder in general. Both policies take of them was neither critical nor involved personally identiﬁable into account the applicable laws and regulations in the coun- information (PII). No users were aﬀected by these events. tries where we operate as well as good practices. Sustainability Accounting Standards Board (SASB) Good Excellent World Class In addition, we have designated our StarMeUp OS’ activity metrics: -100 0 +50 +70 +100 C E R T I F I C AT I O N S *CDSA (Content Delivery and Security Association) / *CMMI (Capability Maturity Model Integration) ISOISO9001:2015 ISOISO27001:2003 *CDSA *CDSA *CMMI *CMMI Argentina, Uruguay South Park, Pune and Minsk North Park, Capitalinas (CBA), Montevideo Sistemas Globales and IAHF Terms of Use, Privacy Policy and Cookie Policy for the platform. Also, we make constant eﬀorts to improve the Privacy by Design and Privacy by Default principles ap- plied to StarMeUp OS. All of our employees working in this product receive special training periodically and sign an Employee Conﬁdentiality Statement. Through the course of 2019, we increased our database up to 340,669 people around the world. StarMeUp OS counts with 343,133 subscriptions. During this past year, we did not have any ﬁnancial losses whether as a result of legal proceedings associated with user privacy nor legal proceedings associated with anticompetitive None of our processes generate licensed products or subscriptions to consumers or to business intermediaries (TC-SI-000.A) Our data processing capacity was 420 Rack Units 5% outsourced (TC-SI-000.B) The amount of data storage was 0.55 petabytes. 0,01% outsourced (TC-SI-000.C) * Other corporate risks’ analysis can be found in the Form 20-F (Item 3. Key Information - Risk Factors), available at http://investors.globant.com/sec-ﬁlings 19 Global Talent Where innovation, design and engineering meet scale During 2019 we had a tremendous growth in terms of talent. We increased our team by 41%, mainly leveraged by three reasons: or- ganic growth in every Talent Development Center, a signiﬁcant de- crease in turnover, and the acquisition of two companies: Avanxo and Belatrix. Based in LATAM both companies are strategic assets in terms of talent and reinforce Globant’s regional leadership. With an average age of 33.1 years, our people are highly qualiﬁed in the latest technologies and trends. During 2019 we accompanied their professional growth by increasing the number of training hours per capita from 27 hours to 36 hours. 21 Continuous Learning Program We dedicate signiﬁcant resources to the development and One of our main focuses is to provide transparency and professional growth of our employees through learning expe- enable our employees to enhance their professional develop- riences, career plans, mentoring, talent assessment, succes- ment within our organization. As part of our eﬀorts to accom- sion planning and performance management. plish these objectives, we host a continuous program, called Since 2015, Globant Academy has become our continuous “Keep your Career Moving". learning program in which all of our training eﬀorts are con- For our leaders, we count with a Leadership Community, solidated and formalized within ﬁve distinct schools (Tech- in which leaders can ﬁnd relevant information for their roles nology, Leadership, Corporate, Agile and Languages). and obtain training through various oﬀerings, including spe- Depending on the requirements of the particular program, ciﬁc onboardings, knowledge sharing sessions and various we employ various learning methodologies such as e-learn- resource materials. Also we launched the “LeAP” (Leadership ing, virtual learning, face-to-face and blended learning. Accelerator Program), which aims to help foster our Leaders’ We also use speciﬁc programs to recruit, train and develop development and strengthen their management skills by our employees. Bootcamps is a program to select, train and giving them all the essential tools to leap ahead in their ca- hire talented employees. Code your Future is a Junior reers. 75% of our leaders were part of LeAP during 2019. Talent program to educate young people about technolo- gies, processes and methodologies while they intern with us. This program also serves as a recruitment source for junior-level employees. 8,309 303,017 36.5 Trained Globers Training hours Annual learning hours 22 Indicators G LO B E R S T H R O U G H T H E Y E A R S 11,855 2019 8,384 6,753 2018 2017 G LO B E R S BY C O U N T RY Female Male 28.1% Younger than 25 Years old 23.5% Between 25 & 29 Years old 18.2% Between 30 & 34 Years old 21.8% Between 35 & 39 Years old 26.2% Older than 40 Years old 33.1 Years Old Global average Global average Employee engagement Performance Assessment Seniority changes 0.5% Internship 99.5% Work contract 99% 2019 98% 2018 3,322 2019 2,159 2018 Argentina Colombia Mexico India USA Peru Uruguay Chile Brazil Belarus Romania Spain UK Others 24.9% 75.1% 19.5% 80.5% 16.3% 83.7% 31.3% 68.7% 22.3% 77.7% 17.4% 82.6% 18.0% 82.0% 14.8% 85.2% 19.4% 80.6% 16.0% 84.0% 29.6% 70.4% 34.3% 65.7% 28.6% 71.4% 10% 90% 30.0% 2019 34.1% 2018 26.7% 2019 25.0% 2018 10.9% 2019 10.3% 2018 10.0% 2019 11.6% 2018 5.1% 2019 7.0% 2018 4.7% 2019 1.2% 2018 4.2% 2019 4.9% 2018 3.8% 2019 2.6% 2018 1.6% 2019 0.3% 2018 0.9% 2019 0.8% 2018 0.8% 2019 1.0% 2018 0.8% 2019 0.9% 2018 0.5% 2019 0.4% 2018 0.1% 2019 - % 2018 23 Wo m en b y Wo m en b y senio rit y senio rit y 9.4% Employees are foreign nationals 3.6% Employees are located oﬀshore 89% Local Managers vs Expatriates* * People permanently residing in the city when taking their position at Globant Wo m en Wo m en a t G lo ba nt a t G lo ba nt Manager Leader Senior Semi-Senior Junior Trainee 28.1% 23.5% 18.2% 21.8% 26.2% 35.0% T U R N O V E R 18.0 2017 % 18.2 % 2018 14.6 2019 % W O R K I N G M O O D 75 % 2017 80% 2018 80% 2019 A S S E S S E M E N T ( O V E R 5 P O I N T S ) 2019 2018 2017 4.01 4.05 3.93 22% W O M E N B Y P O S I T I O N Staﬀ Areas Production 2017 247 2018 319 2019 467 1,198 1,542 2,093 F E M A L E W A G E V S M A L E W A G E * -4.5% -3.6% -3.6% 2017 2018 2019 * The calculation is a weighted average of female/male ratio according to the number of people in each category. Some categories might show higher dispersion due to the small number of cases. Also, seniority might impact on the maximum wages in each category. 24 Unique Culture The inner force that makes ourselves unique During 2019 we launched Be Kind. Our way to transform organizations and people's lives with kind- ness. Be Kind is not a program. It's a way of life. It’s an essential part of the culture that we share with our Globers, our clients and our investors. We want to bring the person back to the center of everything we do. We encourage everybody to be kind to their peers, with the planet and with humanity as a whole. 26 to your peers The best way of being kind to our peers is to embrace diversity and learn from it. Technology challenges us to be more innovative every day, and the best way to live up to that challenge is to include every point of view and learn from it. We are kind to our peers when we learn from plurality, when we strive to promote diversity, and when we work harder to be more inclusive. 27 Diversity & inclusion “There is no innovation without “There is no innovation without diversity and there is no diversity and there is no improvement without plurality” improvement without plurality” We believe that in order for us to be kind to our peers, To emphasize the importance of fostering an integrative connect and promote activities aligned with their interests. Diversity and Inclusion have to be present as fundamental work environment, we organized our ﬁrst Diversity Week. Our ﬁrst pilot emerged in Mexico with the creation of the pillars of our conduct. This global initiative consists in the launching of a series of 12 ﬁrst LGBT+ community, which later inspired the formation of We strive to raise awareness on the importance of work- webinars condensed in one week. We covered 4 Diversity its sister community in India. Women’s communities were place diversity amongst our Globers. During 2019, we and Inclusion topics in 2 languages across three diﬀerent also created in Argentina and the US. worked hard to promote a comprehensive work environ- time zones, which allowed more than 1,000 Globers to partic- Internally, we also developed a Disability POD, with the ment, in accordance with our 2018 Diversity and Inclu- ipate all over the world. aim of promoting inclusive hiring at scale. During this year the sion Fundamentals. To do so, we created the Diversity To continue promoting diversity and fostering a plural envi- POD worked in the incorporation of inclusive practices across and Inclusion Awareness Session, a mandatory online ronment, we created the framework for the formation of multiple areas, adjusting our internal structure to be prepared training with a high level of acceptance (4.7 over 5 punctua- internal Communities. These are self-managed initiatives to better welcome Globers with disabilities to our workforce. tion), and which more than 90% of our Globers have already promoted by Globers, which aim to function as a space inside completed the six months following its release. Globant where those who share a common identity can Benefits Globant Healthy Premium medical coverage. Dental Plan Vaccination campaign. In company physician. Nutritionist. Gym discount. Cycle to Work scheme. Massage and fruit in the oﬃce. Meditation sessions. Family Extended maternity / paternity leave. Marriage and birth gifts. Life Insurance. Family days at all sites. Child care program partially funded. Have fun Surf trip to Mar del Plata, Argentina, and to Goa, India. Mini ski trip to Las Leñas, Argentina. After oﬃce events and end of the year parties. Music band contest and Photo Contest. Sports and game con- tests and tournaments. Other benefits Language classes; pension plan; graduation gifts; discounts to in educational institutions; on-site hair- dresser and manicure; discount, beneﬁt and recog- nition program, internet reimbursement for some positions. 28 Looking for Hidden Talent At Globant, we believe talent isn’t always shown in plain sight but hidden in our communities. That is why, during 2019, we continued working to bring opportunities closer to that talent, by means of initiatives carried out to promote the insertion and development of different key groups for our industry. We launched “Code Your Future” program intended to train people Chicas Programadoras, Globers volunteered to mentor secondary in technology, by granting 500 scholarships, of which 80% are aimed school girls in programming skills, inspiring more than 250 young at women with an interest in fostering skills in IT. This focus on the de- women in 10 clubs across 8 Argentinian cities. Meanwhile, in India, velopment of women in the technology workforce is part of our all-en- the Empower Her program aims at providing young women in vulner- compassing program “Women That Build”, our campaign to promote able socioeconomic contexts with technical and soft skills, capacitat- the inclusion and professional growth of women in our industry. ing them for their eventual access to the labor market. Through this initiative, we seek to mitigate the lack of female represen- We also worked with HolaCode in Mexico, providing workshops and tation in the IT ecosystem. training to migrants and deportees. In Colombia, we promoted the As part of this program, we held a series of initiatives all over the mentoring in technology of students in Bogotá and Medellín with the world in 2019. In Chile and Mexico, we organized inspirational work- SENA and Alianza Futuro Digital institutions. We’ve also been talking shops with Laboratoria, which focused on the training of young with several organizations to connect with US veterans with opportuni- women in technology. In Argentina, and in partnership with Club de ties in technology, as part of our “Veterans in IT” program. 29 Globanteers We believe being kind is a way of life. It is enrooted in the Globers’ DNA. With Globanteers, our corporate volunteer program, we believe we can foster inclusion through education. We seek to summon Globers who are willing to donate their time and know-how, providing vulnerable communities with the opportunity to learn and access the world of IT. The culture of kindness cultivated by our Globers is some- thing we are very proud of: during 2019, more than 1,600 volunteers had collaborated with external initiatives with the community. Two of these initiatives were possible thanks to the kindness and collaboration of Globers and clients. The ﬁrst initiative, All4Venezue- la, involved raising funds as an aid for the people of Venezuela, in the context of the country’s profound humanitarian crisis. With the help of over 780 Globers, we managed to raise $310,000 dollars, which allowed the purchasing of food to feed over 650 babies for a whole year. The following was our Christmas campaign, Christmas4All, throughout which funds were raised to be donated to NGOs working with children in contexts of poverty all over the world. India Peru 17% 16% 15% 10% 9% 8% 6% 4% 3% 13.5% Vo lu nteers Vo lu nteers 20 19 20 19 (% of total payroll) 30 to humanity Our mission is to transform the world, one step at the time. We help organizations thrive and change the way they relate to users and employees. We must unite with them and embrace a common vision, overcoming ethical challenges and incorporating inclusive practices: We want to do it leading the AI revolution in an ethical way, coding without biases and promoting accessibility in every piece of software. 31 I R N E S S A F S P A R E N A N T R T O C I A L S C O N T R I B U N O I T E C T P F U L S E R D A T A G M E N T E D U A I N T E L L I G E C N E Presenting our AI Manifesto At Globant we deﬁne our AI Manifesto, a set of principles that states what we believe and encourage. Moreover, our goal is to deﬁne what we do and what we don’t do with AI. Augmented Intelligence, Respectful data, Fairness, Trans- parent, and Social Contribution are the essence of what we understand as good practices of Artiﬁcial Intelligence. Con- versely, we have to be publicly against any AI applications which may contravene any law or regulation, the public order and good morals. We want to scale this manifesto worldwide during 2020, so we will invite all the companies and organizations to sign it and share it with their value chain. 32 Technology for the Community Globant Labs is a space where Globers develop their projects, experiment with new technologies, challenge themselves by taking on new roles and interact with other employees. More than 300 Globers in all our offices participated in about 35 projects proposed by them with topics linked to social responsibility, new technologies, among others. Some of these projects were: Dale! It’s a teaching game for kids of all ages, that ex- plains how to read and write correctly. This game was born from the need to do a ﬁeld of study in many schools of Mendoza-Argentina. From day one, we work together with DALE! Foundation to trans- form their experience created in pencil and paper, and turn it into a video game. Emocionario Approaches the problematic of the people with disabilities who can have diﬃculties to identify their emotions and the emotions of others, to attend to social signals and anticipate the results and conse- quences of certain actions. “Emocionario” is an appli- cation that aims to incorporate and recognize emo- tions both in themselves and in others, as well as in the context of everyday situations. Disaster Alert This initiative is an intent to respond to the ques- tion “What can we do if a disaster aﬀects any of our oﬃces? How to give help to the Globers in a risky situation?”. Using this service on the suite of StarMe- Up, we will ﬁrst communicate with them to deter- mine their situation in a simple way that will allow us to deﬁne what can we do and who needs help. 33 to the planet We live in a context of climate emergency. Due to this, there is no doubt that all eﬀorts that corporations, individuals, government and NGOs can do would not suﬃce if we do not implement measures to decarbonize the global economy. In line with this fact, Globant has reviewed during Q4 2019 its carbon footprint and energy model to estimate the eﬀorts needed to, ﬁrst, move to renewable sources of energy as soon as possible, and second, to achieve carbon neutrality in the short term. 34 As part of the Be Kind initiative, the actions taken and planned include, but are not limited to: Recalculating the Baseline Recalculate the baseline Extend the scope 3 model to data infrastructure and commuting of employees Move to 100% renewable energy Reduce carbon-intensive activities Offset the remaining emissions to achieve neutrality We also continued to work in other initiatives such as recycling, disposal of single-use plastics and migration towards the use of natural paper. Finally we continued with our server virtualization policy, the use of low consumption data centers, and invested in building improvements in order to make them more sustainable. Our goal is to achieve sustainable growth, and we encourage our ecosystem to join us in this mission. We conducted an exhaustive inventory of devices pro- We also monitored 61,319 sqm of facilities’ electricity ducing direct emissions (kitchens, heating, boilers) and fugi- consumption across these countries, which represent a tive emissions (due to air conditioning) in Argentina, Belarus, 74.61% of our workforce and overall emissions, totalling Chile, Colombia, USA, India, Mexico, Peru and Uruguay. 9,097 MWh in 2019. CH4 NF3 CO2 N2O HFC2 SF6 PFCS Scope 1 Direct GHG (greenhouse gas) emissions from sources that are property or controlled by Globant. Scope 2 Indirect emissions from elec- tricity consumption, heating or steam bought to suppliers. Scope 3 Indirect emissions not in property or non controlled by the organiza- tion but related to Globant’s activity. 35 As a result, corporate emissions totalled 11,336.76 Tn CO2e (CO2 equivalent Tonnes)*. The composition according to each scope is as follows: The estimate represents an increase from 2018 ﬁgures, although periods are not comparable since in the previous reports our model considered only electricity consumption from network (scope 2) and air travel (scope 3). In our past report, the scope 2 emissions totalled 3,561 tons of equivalent CO2. Scope 3 5,992.41 Tn CO2e 53% 37% Domestic 63% International Scope 1 1,354.36 Tn CO2e 12% 13,51% Diesel Consumption 86,18% Gas Consumption 0,31% Refrigerant Gas Scope 2 3,989,99 Tn CO2e 35% * Total energy consumed: 27,313.86 GJ (TC-SI-130a.1) As a consequence of a detailed review of our baseline and model for estimations, we introduced Scope 1 and provide separated information on short and long-haul air travel (domestic and international). Going to detail on comparable information, our Scope 2 emissions due to electricity consumption has evolved over the years, accompanying our business growth. EMISSIONS SCOPE 2 GHG Corporate Emissions Inter annual variation of emissions 3.561,37 t CO2 e 3.989,99 t CO2 e 3.347,17 t CO2 e 3.178,717t CO2 e 2.457,269 t CO2 e 2.529,99 t CO2 e 817,2 t CO2 e 72,7 t CO2 e 382,7 t CO2 e 428,6 t CO2 e -168,5 t CO2 e 2014 2015 2016 2017 2018 2019 Regarding Scope 3, we continue monitoring air travel as the most relevant source of GHG emissions. For 2020, we are developing the model to estimate emissions related to employee commuting and the outsourced infrastructure (cloud and data centers) to complete the Scope 3 inventory as the baseline for carbon neutralization strategy. Regarding our air travel related emissions, in 2019 we experienced a peak in our series, explained by the increasing demand of travel. EMISSIONS SCOPE 3 Total GHG emissions of scope 3 Total number of flights 3.157,41 t CO2 e 2.333,58 t CO2 e 2.530,67 t CO2 e 2588 6.978 4.620 5.992,41 t CO2 e 2677 2014 2164 2015 2.153,97 t CO2 e 2477 3.109,28 t CO2 e 2016 2017 2018 2019 36 Decarbonization Strategy The ﬁrst step to reduce emissions is the transition to 100% renewables an- nounced after the closure of the FY2019 (events after balance sheet date). This mea- sure will reduce about 35% of emissions, and almost 75% of Scope 1 and 2 emissions, which are the emissions directly attributable to our operations. To do so, the com- pany will acquire the certiﬁcates on a country-by-country basis, which conﬁrms the energy bought from the national networks comes from renewable stocks. In coun- tries where the REC, OI, iRECs or similar certiﬁcates are not available, the policy will consist of buying certiﬁcates from adjacent countries or connected networks. The second step has two actions which will be developed during the next few years. Action one is to reduce the emissions by replacing the heating devices to low-carbon ones. Action two consists of oﬀsetting the remaining with projects reducing emissions from the atmosphere, primarily related to our sites of operation. We will prioritise innovative projects which not only reduce emissions but also represents our values. Intensity Carbon intensity is the measure of emissions related to a speciﬁc activity metric. We have measured intensity against people for the last years. Although some companies measure against oﬃce space in square meters, we prefer to keep our intensity measure related to the workforce. In 2019, and despite the changes in the baseline, we have managed to reduce emissions per employee (Scope 1 and 2) in 2019. In 2018 we reported 0.78 tCO2e per Glober; while in 2019 our estimate results of 0.61 tCO2e per Glober. Adoption of the renewable’s plan will also impact positively on the reduction. However, to improve the accuracy of our emissions’ calculation, our intensity per Glober will be recalculated in 2020 with new components in the Scope 3 estimates, including air travel, commuting and outsourced data infrastructure. 37 Additional Information About this report In 2019 the Sustainability Council decided to conduct a process to revise the materiality analysis. The process started with an industry benchmark to identify the signiﬁcant oppor- tunities and concerns related to environmental, social and governance (ESG) issues. Also, the sustainability team researched the legislation of application in the territories we operate regarding ESG norms. Once a perimeter of candidate themes were identiﬁed, we engaged a panel of ﬁfteen individu- als representing a variety of constituencies (e.g. Globers, aca- demics, investors, corporates, suppliers, and NGOs). They were asked about the diﬀerent impacts of our approach to sustainability aspects in their relationship with Globant. The plan represents an improvement which considers the latest developments in materiality analysis, based on the review of impacts rather than the focus on ‘interests’. The review exercise was conducted in parallel with the regular dialogue with stakeholders. Although we consider it exhaustive regarding coverage of interest groups, this pro- cess is limited to the views that our team was able to collect. Under that premise, we continue to open our communication channels, listening to our stakeholders’ community. As stated in the last report, we continued using the codi- ﬁed SASB Standards to enrich our materiality approach. 38 The table below identiﬁes the results and the potential impacts in the relationship with the stakeholders. Topic Internal impact External impact Potencial impact Innovation Diversity & Inclusion Customer satisfaction Economic performance Crucial Crucial Crucial Crucial Crucial Crucial Crucial Crucial Ethics and compliance Crucial Crucial Employment and career Crucial Tech Integrity, AI ethics, privacy High Environmental stewardship High Wellbeing and work-life balance High Community engagement High High High High High High Public policy Medium Medium Indirect economic impacts Medium Medium Our goals of lead in the digital and cognitive space, make these impacts meaningful for our clients and our corporate development. Due to the size of the workforce we can be a role model in the industry and in several of the countries we operate. It impacts our relationship with the clients and the business sustainability. Our economic performance is relevant to our investors’ community, and indirectly crucial for our business sustainability. As a publicly listed company we have to adhere to the highest standards to achieve the trust from investors, communities and our people. People is one of the pillars of our sustainability strategy. Our relevance in certain markets is growing, becoming a role model for employment and career opportunity. Increasingly important, our work can aﬀect many aspects of our direct and indirect users (clients of clients), and the society as a whole. We are inmerse in a global climate crisis which forces all relevant companies to take immediate action. Our people are a key strategic component and a key stakeholder to care for. The capacity of delivery also depends on the wellbeing of our workforce. Communities are the source of talent and business. Corporations do not operate in vacuum and our stakeholders continuously demand us higher levels of involvement. The active participation in our society is quite related to participating in industry dialogue. Our governmental stakeholders also count on us to walk the talk with them. Our capacity to inﬂuence, leveraged by the investment in new ventures has every year an increasing importance in society, leading not only by example but also by investment. P U O R G T S E R E T N I R O F E C N A T R O P M I Innovation Ethics & compliance Diversity & Inclusion Environmental stewardship Economic performance Community engagement Tech integrity, ethics in AI and Privacy Customer satisfaction Wellbeing and work-life balance Employment and career Public policy Indirect economic impacts S T R A T E G I C I M P O R T A N C E 39 Further indicators This report generically refers to Globant and all its operations in the countries in which it operates as the group of linked companies, detailed in the 20F. The parent company is Globant S.A. It has not been determined the need to apply the environmental precautionary principle, under the analysis of the company’s impacts and the aspects covered by this principle. Sustainable development goals USA employees by ethnics Quality education Internal development programs (see page 24) External community programs (see page 36-37) Gender equality Equal employment opportunities (see page 21, 27, 29-30) Greater involvement of women (see page 21, 27, 29-30) Decent work & economic growth Employment quality (see pages 21-30) Company Growth at global scale (see page 6-9, 16-17) Industry, innovation and infrastructure Carbon footprint measuring and reduction (see page 39-41) Climate action Carbon footprint measuring and reduction (see page 39-41) Partnership for the goal Industry sector improvement (see page 24-25) Partnerships for community / citizenship projects (see page 35-37, 44-47) Latin White/Caucasian Black or African American Pacific Islander 52.7% 32.1% 12.5% 2.8% 0.0% Supply chain Total suppliers 2,277 2019 1,770 2018 Main suppliers 85 2019 102 2018 Critical suppliers 25 2019 31 2018 IT & related suppliers 71 2019 85 2018 40 Stakeholder engagement Our Sustainability Council coordinates participa- tion, dialogues and other types of engagement Clients Civil Society Organizations & Education Centers Interbank, YPF, Nestle Waters, Nespresso, Ubisoft, 3g Smart Alianza Futuro Digital, Arbusta, Asociación Civil Dale!, Being Volun- Group; AEP Energy, Amadeus, American Express, Aon, Bally Technolo- teer, Biblioteca Popular C. Saavedra, Caraludme, Centro de Hemoter- gies, BBVA, Cars.com, Boehringer Ingelheim, CISCO, Cloudera, apia Provincial, Colegio Fasta, Conciencia, Creer Hacer, Day School, Coca-Cola, EA, Embraer, DELL EMC, f.biz, Fox, GroupM, HortonWorks, Devs4Good, Empujar, Escuelas Públicas de Medellín, Friends of GREE, iSeats, JWT, Latam Airlines, lastminute.com, LinkedIn, Loyal3, Youth, Fundación Banco Central de Sangre, Fundación Formar, Hola Mercado Libre, MoneyGram, National Geographic Channel, NYSE Code, Hospital Garrahan, Hospital General de Medellín, Hospital Euronext, OSRAM, Pernod Ricard, Petrobras, Prisma, PR Newswire, Ramón Santamarina, Instituto de Hemoterapia, Instituto Nacional de Price Waterhouse Cooper, Puma, Rackspace, TVN, Sabre, Santander, Cancerología, Janakalyan Raktapedhi, Jóvenes PEP | Municipio MDQ, Southwest, TNS, Travelocity, Trina Turk, Viajanet, Walmart Argentina, Laboratoria, Mary's Place, MiMochi, Polo Educativo Saavedra, SENA WOBI, Zynga, among others. Tolima, Medellín, Bogotá, Sistema de Bibliotecas Públicas de Me- with our stakeholders. In 2019, the council was Governmental Oﬃces dellín, Técnica N3, TINC/Club de Chicas Programadoras, UCEMA, Fundación CIAN, Instituto Provincial de Educación Técnica N°48 responsible for selecting the stakeholders with whom to engage, and provided feedback to the comments received by interested parties. The en- tities that participated in the dialogue were: National Governments of Argentina, Uruguay, Colombia, Mexico, Presidente Roca, Asociación Ética y Economía, Asociación Coopera- Chile and India. The government of the cities of Buenos Aires, Monte- dora del Hospital de Niños Dr Ricardo Gutiérrez, Fundación de la video and Bogota. Provincial governments of Buenos Aires, Chaco, Hemoﬁlia, Fundación Misión Marianista, Asociación Civil EIRENE Tucuman, Santa Fe, Cordoba, Mendoza; municipalities of Tandil, Bahia Argentina, Servicio Integral a la Familia, Fundación Metáfora para el Blanca, Rosario, Mar del Plata, Medellin, San Francisco among others. Desarrollo Sustentable y la Cooperación Internacional, Asociación The Embassies of the United States, Uruguay, Chile, India, Colombia, Civil DAR es DAR, Escuela Javier Lezcano Colodero, Escuela Experi- Mexico, Romanina, Belarus, EAU, Spain and the United Kingdom in mental con énfasis en TIC, Escuela San Vicente de Paúl, Asociación Argentina. Argentinian embassies in other countries, Civil Sembrar Valores, Parroquia Santa María Madre del Pueblo, Chambers OPCEBA Organización Paulina Carluccio Epidermolisis Bullosa de Argentina, Federación de Centros Barriales Familia Grande Hogar de CSIS, CESSI, Argencon, ANDI, CANIETI, CUTI, ATICMA, ADVA, CEPIT, Cristo, Fundación Puerta 18 para la inserción laboral, Laboratorio de Polo Tecnologico de Bahia Blanca, Cluster Tecnologico de Cordoba, Biología Molecular del Instituto de Investigaciones Cardiológicas AMCHAM, CACE, UIA, IDEA, ACDE, AEA, among others. (ININCA) - UBA, CONICET, Escuela N° 19 D.E. 17, "Galicia", Asociación Media Cooperadora del Hospital Estévez, Centro de Ayuda Integral a la Niñez y su Familia Semillitas, Institucion Fatima Asoc. Civil, Asocia- Print, on-line, television and radio media from Argentina, Uruguay, ción Civil Red de Apoyo y Participación, Universidad del CEMA, Aso- Perú, Brazil, Colombia, Mexico, U.S.A., U.K., India and Spain. ciación Civil Educativa Escocesa. 41 Sustainability Index: GRI Content Index Standard / Framework Code Disclosure Disclosure Title Page number / Answer General Disclosures GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 102-1 102-2 102-3 102-4 102-5 102-6 102-7 102-8 102-9 102-10 102-11 102-12 102-13 102-14 102-16 Name of the organization Activities, brands, products, and services 40 12-14 Location of headquarters Location of operations Ownership and legal form Markets served Our principal corporate oﬃce is located at 37A Av. J.F. Kennedy, L-1855, Luxembourg. Globant’s headquarters are dispersed across multiple locations. In addition, because the headquarters activities are handled digitally from diﬀerent places, these cannot be solely associated to a single location or oﬃce. 6 40 6 Scale of the organization 5-6, 12-14 Information on employees and other workers Supply chain 23-24 5-40 Signiﬁcant changes to the organization and its supply chain No changes Precautionary Principle or approach External initiatives Membership of associations Statement from senior decision-maker 40 - 41 3 Values, principles, standards, and norms of behavior 8, 28, 31-32 42 Standard / Framework Code Disclosure Disclosure Title Page number / Answer General Disclosures GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 102-18 102-40 102-41 102-42 102-43 102-44 102-45 102-46 102-47 102-48 102-49 102-50 102-51 102-52 102-53 102-54 102-55 102-56 Governance structure List of stakeholder groups Collective bargaining agreements Identifying and selecting stakeholders Approach to stakeholder engagement Key topics and concerns raised Entities included in the consolidated ﬁnancial statements Deﬁning report content and topic Boundaries List of material topics Restatements of information Changes in reporting Reporting period Date of most recent report Reporting cycle Contact point for questions regarding the report Claims of reporting in accordance with the GRI Standards GRI content index External assurance 7 41 8 41 41 39 40 38-39 39 35 38-39 50 50 50 50 4 42-47 50 43 Standard / Framework Code Disclosure Disclosure Title Page number / Answer Material Aspect: Economic Performance GRI 103 GRI 103 GRI 103 GRI 201 GRI 201 Material Aspect: Market Presence GRI 103 GRI 103 GRI 103 GRI 202 103-1 103-2 103-3 201-1 201-4 103-1 103-2 103-3 202-2 Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Direct economic value generated and distributed Financial assistance received from government Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach 16-18 16-18 16-18 16-18 17 12-14 12-14 12-14 Proportion of senior management hired from the local community 24 Material Aspect: Indirect Economic Impacts GRI 103 GRI 103 GRI 103 GRI 203 103-1 103-2 103-3 203-2 Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Signiﬁcant indirect economic impacts 4-5 4-5 4-5 29, 33 44 Standard / Framework Code Disclosure Disclosure Title Page number / Answer Material Aspect: Anti-corruption GRI 103 GRI 103 GRI 103 GRI 205 GRI 205 103-1 103-2 103-3 205-2 205-3 Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Communication and training about anti-corruption policies and procedures 8 8 8 8 Conﬁrmed incidents of corruption and actions taken zero incidents Material Aspect: Anti-competitive Behavior GRI 103 GRI 103 GRI 103 GRI 206 103-1 103-2 103-3 206-1 Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Legal actions for anti-competitive behavior, anti-trust, and monopoly practices 19 19 19 19 45 Standard / Framework Code Disclosure Disclosure Title Page number / Answer Material Aspect: Emissions GRI 103 GRI 103 GRI 103 GRI 305 GRI 305 GRI 305 GRI 305 GRI 305 Material Aspect: Employment GRI 103 GRI 103 GRI 103 GRI 401 GRI 401 GRI 401 Material Aspect: Training and Education GRI 103 GRI 103 GRI 103 GRI 305 GRI 305 GRI 305 103-1 103-2 103-3 305-1 305-2 305-3 305-4 305-5 103-1 103-2 103-3 401-1 401-2 401-3 103-1 103-2 103-3 305-1 305-2 305-3 Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Energy indirect (Scope 1) GHG emissions Energy indirect (Scope 2) GHG emissions Other indirect (Scope 3) GHG emissions GHG emissions intensity Reduction of GHG emissions Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach New employee hires and employee turnover Beneﬁts provided to full-time employees that are not provided to temporary or part-time employees Parental leave Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Average hours of training per year per employee Programs for upgrading employee skills and transition assistance programs Percentage of employees receiving regular performance and career development reviews 34 34-37 34-36 36 36 36 37 37 21-24, 28 21-24, 28 21-24, 28 23 28 28 21-22 21-22 21-22 22 22 22 46 Standard / Framework Code Disclosure Disclosure Title Page number / Answer Material Aspect: Diversity and Equal Opportunity GRI 103 GRI 103 GRI 103 GRI 405 GRI 405 Material Aspect: Local Communities GRI 103 GRI 103 GRI 103 GRI 413 Material Aspect: Public Policy GRI 103 GRI 103 GRI 103 GRI 417 Material Aspect: Marketing and Labeling GRI 103 GRI 103 GRI 103 GRI 417 Material Aspect: Customer Privacy GRI 103 GRI 103 GRI 103 GRI 418 103-1 103-2 103-3 405-1 405-2 103-1 103-2 103-3 413-1 103-1 103-2 103-3 415-1 103-1 103-2 103-3 417-1 103-1 103-2 103-3 418-1 Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Diversity of governance bodies and employees Ratio of basic salary and remuneration of women to menv Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Operations with local community engagement, impact assessments, and development programs Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach 28 28 28 24 24 31, 33 31 31 29-30, 33 - - - Political contributions No political contributions were made Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Requirements for product and service information and labeling Explanation of the material topic and its Boundary The management approach and its components Evaluation of the management approach Substantiated complaints concerning breaches of customer privacy and losses of customer data 19 19 19 19 19 19 19 19 47 SASB Content Topics Accounting Metric Category Unit of Measure Code Page number Sustainability Disclosure Topics & Accounting Metrics Environmental Footprint of Hardware Infrastructure (1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable Quantitative Gigajoules (GJ), Percentage (%) TC-SI-130a.1 36 Environmental Footprint of Hardware Infrastructure (1) Total water withdrawn, (2) total water consumed, percentage of each in regions with High or Extremely High Baseline Water Stress Quantitative Thousand cubic meters (m³), Percentage (%) TC-SI-130a.2 Not material Environmental Footprint of Hardware Infrastructure Discussion of the integration of environmental considerations into strategic planning for data center needs Discussion and Analysis Data Privacy & Freedom of Expression Description of policies and practices relating to behavioral advertising and user privacy Discussion and Analysis n/a n/a Data Privacy & Freedom of Expression Number of users whose information is used for secondary purposes Quantitative Number TC-SI-130a.3 34-37 TC-SI-220a.1 TC-SI-220a.2 Data Privacy & Freedom of Expression Total amount of monetary losses as a result of legal proceedings associate with user privacy Quantitative Reporting Currency TC-SI-220a.3 Data Privacy & Freedom of Expression Data Privacy & Freedom of Expression Data Security Data Security (1) Number of law enforcement requests for user information, (2) number of users whose information was requested, (3) percentage resulting in disclosure Quantitative Number, percentage (%) TC-SI-220a.4 List of countries where core products or services are subject to government-required monitoring, blocking, content ﬁltering, or censoring Discussion and Analysis n/a TC-SI-220a.5 (1) Number of data breaches, (2) percentage involving personally identiﬁable information (PII), (3) numberof users aﬀected Quantitative Number, percentage (%) TC-SI-230a.1 Description of approach to identifying and addressing data security risks, including use of third-party cybersecurity standards Discussion and Analysis n/a Recruiting & Managing a Global, Diverse & Skilled Workforce Percentage of employees that are (1) foreign nationals and (2) located oﬀshore Quantitative Percentage (%) Recruiting & Managing a Global, Diverse & Skilled Workforce Employee engagement as a percentage Quantitative Percentage (%) Recruiting & Managing a Global, Diverse & Skilled Workforce Percentage of gender and racial/ethnic group representation for (1) management, (2) technical staﬀ, and (3) all other employees Quantitative Percentage (%) TC-SI-330a.3 Intellectual Property Protection & Competitive Behavior Total amount of monetary losses as a result of legal proceedings associated with anticompetitive behavior regulations Quantitative Reporting Currency Managing Systemic Risks from Technology Disruptions Number of (1) performance issues and (2) service disruptions; (3) total customer downtime Quantitative Number, Days Managing Systemic Risks from Technology Disruptions Description of business continuity risks related to disruptions of operations Discussion and Analysis n/a TC-SI-520a.1 TC-SI-550a.1 TC-SI-550a.2 Activity Metrics TC-SI-230a.2 TC-SI-330a.1 TC-SI-330a.2 19 19 19 19 19 19 19 23-24 23-24 40 19 19 19 Activity Metric Category Unit of Measure Code Page (1) Number of licenses or subscriptions, (2) percentage cloud based (1) Data processing capacity, (2) percentage outsourced (1) Data processing capacity, (2) percentage outsourced Quantitative Quantitative Quantitative Number, percentage (%) TC-SI-000.A See note TC-SI-000.B Petabytes, Percentage (%) TC-SI-000.C 19 19 19 48 Integrated Report Content Contents Aspects Page number Organizational overview and external environment "What does the organization do and what are the circumstances under which it operates?" Culture, ethics and values Ownership and operating structure Principal activities and markets Competitive landscape and market positioning Position within the value chain Key quantitative information Signiﬁcant factors aﬀecting the external environment Governance "How does the organization’s governance structure Leadership structure, including the skills and diversity support its ability to create value in the short, medium Speciﬁc processes used to make strategic decisions and long term?" How the organization’s culture, ethics and values are reﬂected in its use of and eﬀects on the capitals "The responsibility those charged with governance take for promoting and enabling innovation" How remuneration and incentives are linked to value creation in the short, medium and long term Business model "What is the organization’s business model?" Inputs Business Activities Outputs Outcomes Risks and opportunities "What are the speciﬁc risks and opportunities that aﬀect Key risks and opportunities that are speciﬁc to the organization the organization’s ability to create value over the short, medium and long term, and how is the organization dealing with them?" Organization’s approach to any real risks (whether they be in the short, medium or long term) that are fundamental to the ongoing ability of the organization to create value Strategy and resource allocation "Where does the organization want to go and how does it Objetctives and strategic plans intend to get there?" Performance "To what extent has the organization achieved its strategic Quantitative information objectives for the period and what are its outcomes in terms of Impact on capitals eﬀects on the capitals?" Relationships with stakeholders Outlook "What challenges and uncertainties is the organization likely Organization’s expectations about the external environment to encounter in pursuing its strategy, and what are the potential Mechanisms to address challenges and opportunities implications for its business model and future performance?" Basis of preparation and "How does the organization determine what matters to include presentation in the integrated report and how are such matters quantiﬁed or evaluated?" Materiality Boundaries Frameworks 26-27, 31-32 6-7, 40 10-14 10-14 5-7 5-6, 16-18 5 7-8 8 25-37 25-37 8 5 5 5 5 9 9 3, 5 5, 15-19 5, 15-19 41 9 9-14 38-39 38-39, 41 38-39, 41 49 Report Profile Stock Independent Audit Firm* Sustainability Advisor Globant is listed in NYSE under the ticker GLOB Deloitte * Sustainability disclosures have not been externally veriﬁed Crowe Transfer Agent 31 Date of last report American Stock Transfer & Trust Company, LLC 2018 Reporting cycle IR Contact Sustainability Contact Annual Paula Conde & Amit Singh / IRO paula.conde@globant.com a.singh@globant.com Francisco Michref Public Aﬀairs & Sustainability Manager francisco.michref@globant.com Website www.globant.com Reporting period January 1st 2019 to December 31st 2019 37A, Avenue JF Kennedy, L-1855 Luxembourg Ingeniero Butty 240 9° floor Laminar Plaza Tower 251 Park Ave S, 11th floor, 875 Howard St, 3rd floor, Of: Suite 320 BP 2501 • L-1025, Luxembourg C1001AFB, City of Buenos Aires New York, NY 10010 CA 94103, San Francisco 50

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