01—Abstract
Summary
Summary of the 10-K filed October 24, 2018. Cited figures are marked; the original filing is the authoritative source.
Accenture plc's 2018 10-K filing reveals a strong financial performance, with net revenues reaching $39.6 billiona, 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%b 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.
02—Key points
Key Highlights
- Net revenues grew by 13.5% to $39.6 billion in fiscal year 2018, demonstrating strong market demand.
- Growth 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).
- Consulting net revenues increased 15% and outsourcing net revenues increased 12% in U.S. dollars, showcasing strength in both service types.
- The company reported strong operating cash flow of $6.03 billion, an increase of $1.05 billion from fiscal year 2017.
- Accenture's workforce expanded to approximately 459,000 employees globally as of August 31, 2018, reflecting increased business activity.
- The 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.
- Fiscal year 2018 saw favorable currency translation impacts, contributing approximately 3% more to U.S. dollar revenue growth than local currency growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Accenture plc kept $0.10.
- Revenue$40.99B100.0%
- Cost of revenue−$28.50B69.5%
- Gross profit$12.49B30.5%
- Operating costs−$6.59B16.1%
- Operating income$5.90B14.4%
- Interest, other & tax−$1.84B4.5%
- Net income$4.06B9.9%
Where FY2018 revenue went
$40.99B- Cost of revenue: $28.50B, 70% of revenue
- Other operating costs: $5.80B, 14% of revenue
- Net income: $4.06B, 9.9% of revenue
- R&D: $790.8M, 1.9% of revenue
- Interest, other & tax: $1.84B, 4.5% of revenue
Kept 9.9% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed October 24, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $40.99B$36.18B | +13.3% |
| Cost of Revenue | $28.50B$25.11B | +13.5% |
| Gross Profit | $12.49B$11.07B | +12.8% |
| R&D Expenses | $790.78M$704.32M | +12.3% |
| Operating Expenses | $35.09B$30.99B | +13.3% |
| Operating Income | $5.90B$5.19B | +13.6% |
| Interest Expense | $19.54M$15.54M | +25.7% |
| Net Income | $4.06B$3.45B | +17.8% |
| EPS (Basic) | $6.46$5.56 | +16.2% |
| EPS (Diluted) | $6.34$5.44 | +16.5% |
| Shares Outstanding (Basic) | 628.45M620.10M | +1.3% |
| Shares Outstanding (Diluted) | 655.30M660.46M | −0.8% |
05—Questions
Frequently Asked Questions
What were Accenture's primary revenue drivers in fiscal year 2018?
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.
How did the company manage its operating expenses and profitability?
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.
What is Accenture's strategy for growth and competitive advantage?
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.
How is Accenture managing foreign currency exchange rate fluctuations?
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.
06—Continue