10-KPeriod: FY2020

Accenture plc Annual Report, Year Ended Aug 31, 2020

Filed October 22, 2020For Securities:ACN

Summary

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 billion, 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 billion 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.

Financial Highlights

56 data points
Beta

Revenue

$44.33B

31.5% Gross Margin

Net Income

$5.11B

11.5% Net Margin

EPS (Diluted)

$7.89

Total Assets

$37.08B

Cash & Equivalents

$8.42B

Free Cash Flow

$7.62B

Financial Statements
Beta
Revenue$44.33B
Cost of Revenue$30.35B
Gross Profit$13.98B
R&D Expenses$870.61M
Operating Expenses$37.81B
Operating Income$6.51B
Interest Expense$33.07M
Net Income$5.11B
EPS (Basic)$8.03
EPS (Diluted)$7.89
Shares Outstanding (Basic)636.30M
Shares Outstanding (Diluted)647.80M

Key Highlights

  • 1Revenue increased 3% year-over-year to $44.3 billion, with a 4% increase in local currency, demonstrating resilience amidst the COVID-19 pandemic.
  • 2The company successfully transitioned approximately 95% of its workforce to remote work, maintaining business continuity and client service delivery.
  • 3Invested over $1.5 billion in 34 strategic acquisitions to enhance capabilities and scale in high-growth areas.
  • 4Operating income grew 3% to $6.5 billion, with an operating margin of 14.7%, slightly improving from 14.6% in the prior year.
  • 5Diluted 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.
  • 6Bookings 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.
  • 7The company maintained a strong liquidity position with $8.4 billion in cash and cash equivalents and generated $8.2 billion in operating cash flow.

Frequently Asked Questions

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.

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.

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.

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.