01—Abstract
Summary
Summary of the 10-K filed October 22, 2020. Cited figures are marked; the original filing is the authoritative source.
Accenture plc's fiscal year 2020 performance, ending August 31, 2020, was marked by revenue growth of 3% in U.S. dollars to $44.3 billiona, despite the significant disruption caused by the COVID-19 pandemic in the latter half of the year.
The company demonstrated resilience by quickly adapting to a remote work environment for most of its employees and managing shifts in client demand, with a notable pivot towards digital, cloud, and security-related services. While the pandemic negatively impacted certain industries and consulting services, Accenture saw increased demand in others, such as Public Service and Life Sciences.
The company's strategic investments in acquisitions, research and development, and talent continued, with over $1.5 billionb invested in 34 acquisitions. Accenture's robust balance sheet is supported by strong operating cash flows and significant cash reserves, providing flexibility for ongoing investments and capital returns to shareholders, including dividends and share repurchases.
02—Key points
Key Highlights
- Revenue increased 3% year-over-year to $44.3 billion, with a 4% increase in local currency, demonstrating resilience amidst the COVID-19 pandemic.
- The company successfully transitioned approximately 95% of its workforce to remote work, maintaining business continuity and client service delivery.
- Invested over $1.5 billion in 34 strategic acquisitions to enhance capabilities and scale in high-growth areas.
- Operating income grew 3% to $6.5 billion, with an operating margin of 14.7%, slightly improving from 14.6% in the prior year.
- Diluted earnings per share rose to $7.89 from $7.36 in the prior year, benefiting from a $280 million gain on an investment in Duck Creek Technologies.
- Bookings increased to $49.6 billion from $45.5 billion, indicating strong future revenue potential, with consulting bookings at $25.8 billion and outsourcing at $23.7 billion.
- The company maintained a strong liquidity position with $8.4 billion in cash and cash equivalents and generated $8.2 billion in operating cash flow.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Accenture plc kept $0.12.
- Revenue$44.33B100.0%
- Cost of revenue−$30.35B68.5%
- Gross profit$13.98B31.5%
- Operating costs−$7.46B16.8%
- Operating income$6.51B14.7%
- Interest, other & tax−$1.41B3.2%
- Net income$5.11B11.5%
Where FY2020 revenue went
$44.33B- Cost of revenue: $30.35B, 68% of revenue
- Other operating costs: $6.59B, 15% of revenue
- Net income: $5.11B, 12% of revenue
- R&D: $870.6M, 2.0% of revenue
- Interest, other & tax: $1.41B, 3.2% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed October 22, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $44.33B$43.22B | +2.6% |
| Cost of Revenue | $30.35B$29.90B | +1.5% |
| Gross Profit | $13.98B$13.31B | +5.0% |
| R&D Expenses | $870.61M$799.73M | +8.9% |
| Operating Expenses | $37.81B$36.91B | +2.4% |
| Operating Income | $6.51B$6.31B | +3.3% |
| Interest Expense | $33.07M$22.96M | +44.0% |
| Net Income | $5.11B$4.78B | +6.9% |
| EPS (Basic) | $8.03$7.49 | +7.2% |
| EPS (Diluted) | $7.89$7.36 | +7.2% |
| Shares Outstanding (Basic) | 636.30M638.10M | −0.3% |
| Shares Outstanding (Diluted) | 647.80M650.20M | −0.4% |
05—Questions
Frequently Asked Questions
How did the COVID-19 pandemic impact Accenture's business in fiscal year 2020?
The COVID-19 pandemic significantly impacted Accenture, causing economic disruption and uncertainty. While the second half of fiscal 2020 saw a decline in revenues due to reprioritized and delayed client work in certain sectors, Accenture adapted by enabling remote work for most of its workforce and experienced increased demand for digital, cloud, and security services in other sectors. The company adjusted to changing client demand and prioritized safety measures.
What is Accenture's strategy for growth?
Accenture's growth strategy focuses on client needs, emphasizing digital transformation, cloud adoption, and operational improvements. Key enablers include investing in its people through training and development, fostering a purpose-driven culture, and leveraging its global scale and innovation capabilities. The company also actively pursues strategic acquisitions to enhance its skills and expand into new markets.
How does Accenture manage its financial performance and capital allocation?
Accenture focuses on managing operating expenses, including cost of services, sales and marketing, and general and administrative costs. The company aims to balance workforce size with client demand and proactively manages attrition. Capital is allocated towards strategic acquisitions, research and development, dividends, and significant share repurchase programs, reflecting a commitment to shareholder value creation.
What are the primary risks Accenture faces as outlined in the 10-K?
Accenture faces several risks, including the ongoing impact of the COVID-19 pandemic, economic and political volatility, intense competition, cybersecurity threats, the ability to attract and retain talent, foreign currency exchange rate fluctuations, and legal and regulatory compliance challenges across its global operations. The company also highlights risks related to its reliance on technology partners and the integration of acquired businesses.
06—Continue