01—Abstract
Summary
Summary of the 10-K filed October 28, 2016. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported robust growth in its fiscal year 2016, with net revenues reaching $32.9 billiona, an increase of 6% in U.S. dollars and 10% in local currency compared to fiscal year 2015.
This growth was broad-based across its operating segments, particularly strong in Products, Health & Public Service, and Financial Services. The company experienced solid demand for its consulting services, which grew 10%b in U.S. dollars and 15% in local currency, driven by digital transformation and new technology adoption. While outsourcing also saw growth, it was more modest at 1% in U.S. dollars and 6% in local currency, with increased demand for cloud enablement and digital-related services.
Accenture continued to emphasize its global delivery model, expanding its workforce to approximately 384,000 employees. The company also executed strategic divestitures of its Navitaire and Duck Creek businesses, resulting in significant gains. Despite increased labor costs and acquisition-related expenses impacting gross margin slightly, operating margin improved to 14.6%c from 14.3% (or 14.5% excluding a pension settlement charge in the prior year).
Diluted earnings per share increased significantly to $6.45d from $4.76, largely due to the gains from divestitures and a lower effective tax rate. The company maintained a strong liquidity position with $4.9 billion in cash and cash equivalents and substantial capacity under its borrowing facilities.
02—Key points
Key Highlights
- Net revenues for fiscal year 2016 reached $32.9 billion, representing a 6% increase in USD and 10% in local currency year-over-year.
- Strong growth observed across key operating groups, with Products (+15% local currency), Health & Public Service (+12% local currency), and Financial Services (+11% local currency) showing particularly robust performance.
- Consulting net revenues saw significant growth of 10% in USD and 15% in local currency, driven by demand for digital transformation and new technologies.
- The company's workforce grew to approximately 384,000 employees globally, underscoring its reliance on its Global Delivery Model.
- Accenture successfully divested its Navitaire and Duck Creek businesses, recognizing substantial gains and refining its strategic focus.
- Diluted earnings per share rose significantly to $6.45, a 35.5% increase from $4.76 in the prior year, boosted by divestiture gains and tax rate improvements.
- Operating margin improved to 14.6%, reflecting strong revenue growth and efficient cost management, despite increased labor costs.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Accenture plc kept $0.12.
- Revenue$34.80B100.0%
- Cost of revenue−$24.52B70.5%
- Gross profit$10.28B29.5%
- Operating costs−$5.47B15.7%
- Operating income$4.81B13.8%
- Interest, other & tax−$698.6M2.0%
- Net income$4.11B11.8%
Where FY2016 revenue went
$34.80B- Cost of revenue: $24.52B, 70% of revenue
- Other operating costs: $4.82B, 14% of revenue
- Net income: $4.11B, 12% of revenue
- R&D: $643.4M, 1.8% of revenue
- Interest, other & tax: $698.6M, 2.0% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed October 28, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $34.80B$32.91B | +5.7% |
| Cost of Revenue | $24.52B$23.11B | +6.1% |
| Gross Profit | $10.28B$9.81B | +4.8% |
| R&D Expenses | $643.41M$625.54M | +2.9% |
| Operating Expenses | $29.99B$28.48B | +5.3% |
| Operating Income | $4.81B$4.44B | +8.4% |
| Interest Expense | $16.26M$14.58M | +11.5% |
| Net Income | $4.11B$3.05B | +34.7% |
| EPS (Basic) | $6.58$4.87 | +35.1% |
| EPS (Diluted) | $6.45$4.76 | +35.5% |
| Shares Outstanding (Basic) | 624.80M626.80M | −0.3% |
| Shares Outstanding (Diluted) | 667.77M678.76M | −1.6% |
05—Questions
Frequently Asked Questions
What was Accenture's overall financial performance in fiscal year 2016?
Accenture demonstrated strong financial performance in fiscal year 2016, reporting net revenues of $32.9 billion, a 6% increase in U.S. dollars and a 10% increase in local currency compared to fiscal year 2015. The company achieved growth across most operating segments, with notable strength in the Products, Health & Public Service, and Financial Services groups. Diluted earnings per share also saw a substantial increase to $6.45 from $4.76 in the prior year, aided by strategic divestitures and improved operational efficiency.
Which service lines and industries contributed most to Accenture's growth in fiscal year 2016?
Consulting services were a key driver of growth, increasing by 10% in U.S. dollars and 15% in local currency, fueled by strong client demand for digital transformation and new technology adoption. Among industries, Products, Health & Public Service, and Financial Services showed the most significant revenue growth in local currency. The company also highlighted continued demand for cloud enablement and digital services within its outsourcing business.
What significant strategic actions did Accenture take in fiscal year 2016?
Accenture strategically divested its Navitaire and Duck Creek businesses, which contributed significantly to its financial results through substantial gains. The company also continued to invest in its global delivery model and expand its workforce, reaching approximately 384,000 employees worldwide, reinforcing its ability to serve clients globally.
How did Accenture manage its profitability and costs in fiscal year 2016?
Accenture's operating margin improved to 14.6% from 14.3% (or 14.5% excluding a pension settlement charge in the prior year). While gross margins were slightly impacted by higher labor and acquisition costs, the company managed its sales and marketing, and general and administrative expenses effectively as a percentage of net revenues. The effective tax rate also decreased, contributing positively to net income.
06—Continue