01—Abstract
Summary
Summary of the 10-K filed October 29, 2019. Cited figures are marked; the original filing is the authoritative source.
Accenture plc reported robust performance for the fiscal year ended August 31, 2019, with revenues reaching $43.2 billiona, an increase of 5% in U.S. dollars and 8.5% in local currency compared to the previous year.
This growth was broadly distributed across its operating groups and geographic regions, indicating strong demand for its consulting and outsourcing services, particularly in digital, cloud, and security-related areas. The company's strategic focus on innovation and talent development continues to be a key driver, supported by significant investments in acquisitions, assets, and its workforce. Despite a competitive market and fluctuating foreign currency exchange rates, Accenture demonstrated improved operating income and a slight increase in operating margin to 14.6%b.
The company's financial health remains strong, with substantial cash and cash equivalents and a consistent return of capital to shareholders through dividends and share repurchases. Investors can look to Accenture's continued emphasis on digital transformation, its global delivery capabilities, and its strategic investments as indicators of future growth, while remaining aware of the inherent risks in the professional services industry, such as economic volatility and intense talent competition.
02—Key points
Key Highlights
- Revenue growth of 5% in USD and 8.5% in local currency, reaching $43.2 billion for fiscal year 2019.
- Strong demand across all operating groups and geographic regions, with notable growth in Resources (18% local currency) and Growth Markets (14% local currency).
- Operating income increased by 7% to $6.3 billion, with operating margin improving slightly to 14.6%.
- Significant focus on digital, cloud, and security services driving demand in both consulting and outsourcing segments.
- Continued investment in talent, with headcount growing to approximately 492,000 employees.
- Shareholder returns supported by a consistent dividend payment ($0.80 per share declared for Q4 FY19) and ongoing share repurchase programs, with $3.7 billion remaining authorization as of August 31, 2019.
- Investments in innovation, including $800 million spent on research and development in fiscal year 2019.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Accenture plc kept $0.11.
- Revenue$43.22B100.0%
- Cost of revenue−$29.90B69.2%
- Gross profit$13.31B30.8%
- Operating costs−$7.01B16.2%
- Operating income$6.31B14.6%
- Interest, other & tax−$1.53B3.5%
- Net income$4.78B11.1%
Where FY2019 revenue went
$43.22B- Cost of revenue: $29.90B, 69% of revenue
- Other operating costs: $6.21B, 14% of revenue
- Net income: $4.78B, 11% of revenue
- R&D: $799.7M, 1.9% of revenue
- Interest, other & tax: $1.53B, 3.5% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed October 29, 2019Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $43.22B$40.99B | +5.4% |
| Cost of Revenue | $29.90B$28.50B | +4.9% |
| Gross Profit | $13.31B$12.49B | +6.6% |
| R&D Expenses | $799.73M$790.78M | +1.1% |
| Operating Expenses | $36.91B$35.09B | +5.2% |
| Operating Income | $6.31B$5.90B | +6.9% |
| Interest Expense | $22.96M$19.54M | +17.5% |
| Net Income | $4.78B$4.06B | +17.7% |
| EPS (Basic) | $7.49$6.46 | +15.9% |
| EPS (Diluted) | $7.36$6.34 | +16.1% |
| Shares Outstanding (Basic) | 638.10M628.45M | +1.5% |
| Shares Outstanding (Diluted) | 650.20M655.30M | −0.8% |
05—Questions
Frequently Asked Questions
What were Accenture's key revenue drivers in fiscal year 2019?
Accenture's revenue growth in fiscal year 2019 was driven by strong demand for digital-, cloud-, and security-related services across both its consulting and outsourcing businesses. The Resources operating group showed particularly strong growth (18% in local currency), alongside solid performance in Communications, Media & Technology, Products, and Health & Public Service. Geographically, Growth Markets led with 14% local currency growth, followed by North America at 9%.
How did Accenture manage its expenses and profitability?
Accenture managed its expenses through cost-management actions and by maintaining cost of services as a percentage of revenues at 69.2%, leading to a slight increase in gross margin to 30.8%. Sales and marketing, and general and administrative costs remained stable as a percentage of revenue. The company's operating margin improved to 14.6% in fiscal year 2019, demonstrating effective management despite competitive pressures and investments in talent.
What is Accenture's strategy for shareholder returns?
Accenture consistently returns capital to shareholders through dividends and share repurchases. For fiscal year 2019, the company declared a quarterly cash dividend of $0.80 per share and had approximately $3.7 billion remaining authorization for share purchases as of August 31, 2019, indicating an ongoing commitment to share buyback programs.
What are the main risks highlighted by Accenture in its 2019 10-K filing?
Key risks highlighted include the impact of volatile economic and political conditions on client spending, intense competition for talent, cybersecurity threats and data breaches, potential legal and reputational risks, foreign currency exchange rate fluctuations, and challenges in managing a large global workforce and operations. The company also notes risks related to its reliance on alliance partners and the integration of acquisitions.
06—Continue