10-KPeriod: FY2018

Accenture plc Annual Report, Year Ended Aug 31, 2018

Filed October 24, 2018For Securities:ACN

Summary

Accenture plc's 2018 10-K filing reveals a strong financial performance, with net revenues reaching $39.6 billion, representing a 13.5% increase in U.S. dollars and 10.5% in local currency over the prior year. This growth was broad-based, with significant contributions from all operating groups and geographic regions, highlighting robust demand for consulting and outsourcing services, particularly in digital, cloud, and security-related areas. The company continues to invest strategically in acquisitions, talent, and innovation to maintain its competitive edge. While gross margins saw a slight decrease to 31.4% due to higher labor costs, operating margins improved to 14.8%, excluding a significant pension settlement charge in the prior year. The company's financial health is further supported by strong operating cash flow generation and a substantial cash balance, enabling continued investment and shareholder returns through share repurchases and dividends.

Financial Highlights

56 data points
Beta

Revenue

$40.99B

30.5% Gross Margin

Net Income

$4.06B

9.9% Net Margin

EPS (Diluted)

$6.34

Total Assets

$24.45B

Cash & Equivalents

$5.06B

Free Cash Flow

$5.41B

Financial Statements
Beta
Revenue$40.99B
Cost of Revenue$28.50B
Gross Profit$12.49B
R&D Expenses$790.78M
Operating Expenses$35.09B
Operating Income$5.90B
Interest Expense$19.54M
Net Income$4.06B
EPS (Basic)$6.46
EPS (Diluted)$6.34
Shares Outstanding (Basic)628.45M
Shares Outstanding (Diluted)655.30M

Key Highlights

  • 1Net revenues grew by 13.5% to $39.6 billion in fiscal year 2018, demonstrating strong market demand.
  • 2Growth was observed across all five operating groups (Communications, Media & Technology; Financial Services; Health & Public Service; Products; Resources) and geographic regions (North America, Europe, Growth Markets).
  • 3Consulting net revenues increased 15% and outsourcing net revenues increased 12% in U.S. dollars, showcasing strength in both service types.
  • 4The company reported strong operating cash flow of $6.03 billion, an increase of $1.05 billion from fiscal year 2017.
  • 5Accenture's workforce expanded to approximately 459,000 employees globally as of August 31, 2018, reflecting increased business activity.
  • 6The company maintained a significant share repurchase program, with $3.05 billion bought back under publicly announced plans in Q4 FY18, indicating a commitment to returning capital to shareholders.
  • 7Fiscal year 2018 saw favorable currency translation impacts, contributing approximately 3% more to U.S. dollar revenue growth than local currency growth.

Frequently Asked Questions

Accenture's primary revenue drivers in fiscal year 2018 were strong demand across all its operating groups and geographic regions, with particular strength in digital, cloud, and security-related services. Both consulting and outsourcing services experienced significant growth.

While gross margins slightly decreased due to higher labor costs, operating income increased significantly, leading to an improved operating margin of 14.8% (excluding a prior year pension settlement charge). The company managed its sales and marketing and general and administrative costs effectively as a percentage of net revenues.

Accenture's growth strategy in fiscal year 2018 focused on industry and technology differentiation, employing an innovation-led approach. This involved significant investments in strategic acquisitions, assets and offerings, branding, thought leadership, and talent development to enhance competitiveness.

Accenture is exposed to foreign currency risk as a majority of its net revenues are denominated in currencies other than the U.S. dollar. The company uses currency hedging programs and contract provisions to mitigate these risks, although unfavorable fluctuations can still impact financial results.