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Accenture defies gravity with record revenues, margin and bookings

Accenture 2012
Accenture-Pierre-Nanterme

New York: Accenture continues to defy the global slump, yesterday reporting Fourth-Quarter and Full-Year Fiscal 2012 financial results, with record annual revenues, EPS, operating margin, and new bookings.

  • Fourth-quarter revenues increase 2% in U.S. dollars and 9% in local currency, to $6.8 billion
  • Full year revenues increase 9% in U.S. dollars and 11% in local currency, to $27.9 billion
  • Pre-tax income up 1% in fourth quarter and 11% in the year
  • New bookings are $9.2 billion for fourth quarter and $32.2 billion for full year
  • For fiscal year 2013, Accenture expects net revenue growth of 5% to 8% in local currency
  • Revenues in Europe and from Consulting both fall in fourth quarter

For the fourth quarter to August 31 pre-tax income was $946 million, up 1%. Revenues before reimbursements ("net revenues") were $6.8 billion, an increase of 2 percent in U.S. dollars and 9 percent in local currency compared with the fourth quarter of fiscal 2011. Operating margin was 13.8 percent. New bookings were $9.2 billion, the company's highest quarterly bookings ever.

For the full fiscal year, pre-tax income was up 11% to $3.9 billion; net revenues were $27.9 billion, an increase of 9 percent in U.S. dollars and 11 percent in local currency compared with fiscal 2011. Operating margin was 13.9 percent. New bookings were $32.2 billion, an annual record, and $1.2 billion above the top of the company's guided range.

Pierre Nanterme, Accenture's chief executive officer, said, "We are very pleased with our financial results for fiscal 2012, which met or exceeded our business outlook for the year.

"Our revenue growth was strong and broad-based across the different dimensions of our business, and we increased EPS by 13 percent. Our balance sheet remains very strong, with a cash balance of $6.6 billion. We also achieved record new bookings of $9.2 billion for the fourth quarter, bringing us to $32.2 billion for the year, our highest ever.

"With our diverse portfolio of business, our industry and technology expertise, and the focused execution of our growth strategy, we are very well-positioned to continue gaining market share and delivering value to our clients and shareholders."

Financial Review

Fourth Quarter Fiscal 2012

Net revenues for the fourth quarter of fiscal 2012 were $6.84 billion, compared with $6.69 billion for the fourth quarter of fiscal 2011, an increase of 2 percent in U.S. dollars and 9 percent in local currency and at the upper end of the company's guided range of $6.6 billion to $6.85 billion. The foreign-exchange impact was a negative 7 percent for the quarter.

  • Consulting net revenues were $3.74 billion, a decrease of 4 percent in U.S. dollars and an increase of 2 percent in local currency compared with the fourth quarter of fiscal 2011.
  • Outsourcing net revenues were $3.1 billion, an increase of 10 percent in U.S. dollars and 18 percent in local currency compared with the fourth quarter of fiscal 2011.

Gross margin (gross profit as a percentage of net revenues) for the fourth quarter was 32.9 percent, compared with 33.1 percent for the fourth quarter of fiscal 2011.

Operating income for the fourth quarter of fiscal 2012 was $940 million, or 13.8 percent of net revenues, compared with $923 million, or 13.8 percent of net revenues, for the fourth quarter of fiscal 2011.

Utilization for the fourth quarter of fiscal 2012 was 87 percent, compared with 87 percent for the third quarter of fiscal 2012 and 85 percent for the fourth quarter of fiscal 2011. Attrition for the fourth quarter of fiscal 2012 was 12 percent, compared with 13 percent for the third quarter of fiscal 2012 and 14 percent for the fourth quarter of fiscal 2011.

New Bookings

New bookings for the fourth quarter were $9.2 billion and reflect a negative 9 percent foreign-currency impact compared with new bookings in the fourth quarter of fiscal 2011.

  • Consulting new bookings were $4.3 billion, or 46 percent of total new bookings.
  • Outsourcing new bookings were $4.9 billion, or 54 percent of total new bookings.

Net Revenues by Operating Group

Net revenues by operating group for the fourth quarter were:

  • Communications, Media & Technology: $1.38 billion, compared with $1.43 billion for the fourth quarter of fiscal 2011, a decrease of 3 percent in U.S. dollars and an increase of 4 percent in local currency.
  • Financial Services: $1.48 billion, compared with $1.37 billion for the fourth quarter of fiscal 2011, an increase of 8 percent in U.S. dollars and 16 percent in local currency.
  • Health & Public Service: $1.06 billion, compared with $994 million for the fourth quarter of fiscal 2011, an increase of 6 percent in U.S. dollars and 10 percent in local currency.
  • Products: $1.61 billion, compared with $1.59 billion for the fourth quarter of fiscal 2011, an increase of 1 percent in U.S. dollars and 8 percent in local currency.
  • Resources: $1.30 billion, compared with $1.30 billion for the fourth quarter of fiscal 2011, consistent in U.S. dollars and an increase of 7 percent in local currency.

Net Revenues by Geographic Region

Net revenues by geographic region for the fourth quarter were:

  • Americas: $3.2 billion, compared with $3.0 billion for the fourth quarter of fiscal 2011, an increase of 5 percent in U.S. dollars and 8 percent in local currency.
  • Europe, Middle East and Africa (EMEA): $2.6 billion, compared with $2.7 billion for the fourth quarter of fiscal 2011, a decrease of 4 percent in U.S. dollars and an increase of 8 percent in local currency.
  • Asia Pacific: $1.1 billion, compared with $957 million for the fourth quarter of fiscal 2011, an increase of 11 percent in U.S. dollars and 14 percent in local currency.

Full Year Fiscal 2012

Net revenues for the full 2012 fiscal year were $27.9 billion, compared with $25.5 billion for fiscal 2011, an increase of 9 percent in U.S. dollars and 11 percent in local currency. Net revenues for fiscal 2012 reflect a foreign-exchange impact of negative 2 percent compared with fiscal 2011.

  • Consulting net revenues were $15.6 billion, an increase of 4 percent in U.S. dollars and 6 percent in local currency compared with fiscal 2011.
  • Outsourcing net revenues were $12.3 billion, an increase of 16 percent in U.S. dollars and 19 percent in local currency compared with fiscal 2011.

Gross margin (gross profit as a percentage of net revenues) for fiscal 2012 was 32.3 percent, compared with 32.9 percent for fiscal 2011.

Operating income for the full fiscal year was $3.87 billion, or 13.9 percent of net revenues, compared with $3.47 billion, or 13.6 percent of net revenues, for fiscal 2011, an expansion of 30 basis points.

Net income for the full fiscal year was $2.82 billion, compared with $2.55 billion for fiscal 2011, an increase of 11 percent.

Utilization for the full 2012 fiscal year was 87 percent, compared with 86 percent for fiscal 2011. Attrition for the full 2012 fiscal year was 12 percent, compared with 14 percent for fiscal 2011.

New Bookings

New bookings for the full fiscal year were $32.2 billion, an increase of 12 percent in U.S. dollars and 15 percent in local currency over fiscal 2011.

  • Consulting new bookings were $16.6 billion, an increase of 8 percent in U.S. dollars and 10 percent in local currency over fiscal 2011. Consulting represented 52 percent of new bookings in fiscal 2012.
  • Outsourcing new bookings were $15.6 billion, an increase of 16 percent in U.S. dollars and 20 percent in local currency compared with fiscal 2011. Outsourcing represented 48 percent of new bookings in fiscal 2012.

Net Revenues by Operating Group

All of Accenture's operating groups grew revenues in both U.S. dollars and local currency in fiscal 2012 compared with fiscal 2011. Net revenues by operating group for the full fiscal year were:

  • Communications, Media & Technology: $5.9 billion, compared with $5.4 billion for fiscal 2011, an increase of 9 percent in U.S. dollars and 11 percent in local currency.
  • Financial Services: $5.8 billion, compared with $5.4 billion for fiscal 2011, an increase of 9 percent in U.S. dollars and 11 percent in local currency.
  • Health & Public Service: $4.3 billion, compared with $3.9 billion for fiscal 2011, an increase of 10 percent in U.S. dollars and 11 percent in local currency.
  • Products: $6.6 billion, compared with $5.9 billion for fiscal 2011, an increase of 11 percent in U.S. dollars and 13 percent in local currency.
  • Resources: $5.3 billion, compared with $4.9 billion for fiscal 2011, an increase of 8 percent in U.S. dollars and 10 percent in local currency.

Net Revenues by Geographic Region

All of Accenture's geographic regions grew revenues in both U.S. dollars and local currency in fiscal 2012 compared with fiscal 2011. Net revenues by geographic region for the full fiscal year were:

  • Americas: $12.5 billion, compared with $11.3 billion for fiscal 2011, an increase of 11 percent in U.S. dollars and 13 percent in local currency.
  • Europe, Middle East and Africa (EMEA): $11.3 billion, compared with $10.9 billion for fiscal 2011, an increase of 4 percent in U.S. dollars and 8 percent in local currency.
  • Asia Pacific: $4.0 billion, compared with $3.4 billion for fiscal 2011, an increase of 20 percent in U.S. dollars and 18 percent in local currency.

Business Outlook

First Quarter Fiscal 2013

Accenture expects net revenues for the first quarter of fiscal 2013 to be in the range of $7.1 billion to $7.35 billion, which assumes a foreign-exchange impact of negative 3 percent compared with the first quarter of fiscal 2012.

Fiscal Year 2013

Accenture's business outlook for the full 2013 fiscal year assumes a foreign-exchange impact of negative 1 percent compared with fiscal 2012.

For fiscal 2013, the company expects net revenue growth to be in the range of 5 percent to 8 percent in local currency. The company expects diluted EPS to be in the range of $4.22 to $4.30.
Accenture expects operating margin for the full fiscal year to be in the range of 14.0 percent to 14.1 percent, an expansion of 10 to 20 basis points.

Accenture is targeting new bookings for fiscal 2013 in the range of $31 billion to $34 billion.

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