ACN - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to Accenture's Fourth quarter Fiscal 2019 Earnings Call.

Now, at this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today's call is being recorded.

the Angie to Park. turn of Director, now Relations, Investor would call Managing over Head I Please ahead. go

Angie Park

Thank you, fiscal Kevin. today on And thanks everyone fourth and for quarter full year XXXX announcement. our earnings joining us

operator Investor of the Director, Relations. just Park, Angie As Managing I'm Head mentioned,

and hope news call, Officer, ago. you've short opportunity review will the had we Chief you Chief issued time our today's from Julie an McClure, On our Financial release a Sweet, hear Executive KC Officer. We to

agenda today's call. the outline quickly me Let for

Julie before the the our full fourth outlook provide along Julie business brief you and and will metrics KC for fiscal overview KC results. of the sheet operational begin then with financial first an positioning for will fiscal will take provides year. both quarter with balance year XXXX. quarter our income through update some and a full market key on including the details our statement

take questions wrap will We provides the the end a at up your of then call. before Julie

Some to forth matters forward-looking are quarterly those Form from those annual expressed our on not set release discussed results materially business differ and actual and to, such our and to today's These risks as this outlook, news in subject on of limited uncertainties call, in we'll and uncertainties including, are XX-Q SEC risks call. unknown Form factors reports XX-K filings. and report but the other in known including and on and could discuss cause this

financial website news Relations in GAAP We include Investor believe section or non-GAAP measures measures non-GAAP we investors. useful we'll the of provide information certain reference our of to release for accenture.com. our in where appropriate today, at financial call During our reconciliations which

no assumes call. obligation information Accenture conference always, to on the this presented update As

over call the turn to Julie. me let Now,

Julie Sweet

and joining you, Thank thanks us. everyone for Angie,

to announce we today, in As XXXX the each value that outstanding of creating results, laid of exceeding delivering proud day another business objectives delivered clients. we for our And our our a have leadership and on we every year the fiscal outlook. commitments are company financial focus or initial team, on and meeting we out

And accomplishments proud of and XXX,XXX than who year January CEO, our our the people, very directors. of would've in X,XXX that know been this including I nearly passed managing Pierre, outstanding Chairman more away

I our would like also exceptional a incredible and you David's was past to that for leadership several who which inspiring the under together Accenture. thank and ensure to months Committee during commitments these add our to and to Pierre David contribution to leadership special and Global to delivered ultimate on his way Management came we his entire Rowland honor

for including billion, few record Let QX. me of our new the $XX.X a bookings billion share bookings We in highest highlights generated of quarterly ever year. $XX.X

We an billion, earnings adjusted of $XX.X were year per local in the for on currency. an a $X.XX, share Revenues delivered basis. increase X.X% X% increase

was XX.X%, an basis points. margin Operating XX expansion of

$X.XX repurchases per just of over outstanding rate reflects equivalent We billion we first flow $X.X increase share, cash $X returned XX% year. We which dividends, to billion. generated cash the and cash quarterly our shareholders share through announced of free last and in a dividend quarterly

well demonstrated our strong services again XXXX. of the demand have resilience for the for us and and We business positions once our very durability fiscal

to greater in Now, KC? review the let detail. over numbers will me who hand KC

KC McClure

Accenture. today's the you outstanding for in results were taking Thank pleased year us with you, to We Julie. quarter, which And thanks call. on time very to for join completes all of fourth another our

deliver dynamic our our people, to all and business provide in environment, strong our Our our leadership to to continue significant our marketplace, the position to and validation our ability of in relevance our clients, shareholders. a value results to clients, manage

three our deliver fourth-quarter strong our results our key imperatives shareholder reflect superior again, to focus constant consistent driving results for Once across and value. financial

me the into details. let few important summarize get So, I before highlights a

growth X.X% Growth in continued high-single continued all our vast broad double-digit based of to to currency double-digit be New, three to by services. growth be areas cloud, strong levels. with highlighted in including local digital, the security-related of industries and majority Revenue of at growth the

We with extend growth our continue the at times leadership about to position X market.

was margin year. points resulting basis an XX.X% Operating the XX the quarter, full XX for increase basis for in points, of expansion

for our long-term Importantly, and we at levels to position record while people investing expansion our business market in delivered this leadership. in us

very $X.XX, of FX which of headwind with strong an represents EPS XX% growth X%. We delivered about even

our and which by And finally, surpassed superior we strong profitability delivered management. free of expectations in DSO billion, our continued $X.X driven growth flow cash

Now, details. the let me turn of to some

New over $X a previous by of strong billion very $XX.X high for X.X. record bookings quarter billion. our the all-time book-to-bill surpassed were had overall We and

were dimensions Consolidated many of billion, billion, this with to We business. $X.X bookings of $X.X a a to bill X.X. Outsourcing book broad were strong and extremely book based of which were X.X. bill across with pleased with bookings bookings quarter, our our were

to be digital, high security-related dominated more bookings. we our XX% represented services of cloud, continue They and demand than new by estimate for which

as fiscal reflect bookings. partner. trust the $XX.X clients record level our of For we their These delivered the relevance bookings our services high and of full year, billion new place in the in us

$XX.X Outsourcing the dollars revenues billion, X% dollars local dollars up in currency. $X.X currency. the a $X.X to up and quarter local increase in for X% X% now for revenues US US and Consulting billion, were in were X% quarter and Turning billion, in local X.X% currency. revenues. X% in Revenues in were US

of high-single-digit digits, and technology operations services Looking at strong continued grew and its revenue growth double-digit in the estimated mid-single business trend growth. trends strategy consulting services our across growth, dimensions, posted

resources Growth revenue strong closer of eighth and growth operating industries consecutive a at currency. in be at three geographies. delivered look Taking XX% all local across quarter all to double-digit its three groups, our continued

sciences. growth our Products three grew We group. life reflecting all strong and largest growth in strength had continued very X%, across operating strong in geographies double-digit

strong strong growth markets growth the US with business. growth especially X% both North federal America North quarter, We with continued strong America, reflecting our growth in grew from growth and in were this public and H&PS pleased in benefiting service. health double-digit in

grew Communications, platforms. and in double-digit X%, we reflecting growth growth markets. strong Media, Technology growth in in saw double-digit software And growth Europe overall, and &

Finally, grew delivered Financial saw by double-digit delivered Insurance in offset markets, double-digits, and growth, our in Europe. in growth banking Financial in growth Services Services Overall, line improvement again capital we with globally. expectations. America, in continued North contraction X% partially and markets growth strong

well. of dimensions the I diversity our business our all very pleased of continued with illustrates demand us Turning to continues of am to the geographic regions, that which three across the business, geographic serve

revenue and in United driven currency, strong continued revenues local growth local In in grew Europe, double-digit Netherlands. In in in growth the by with growth in the Italy North X% currency, high-single-digit Ireland America, we and growth States. delivered X%

growth. And had very Japan another double-digit very by strong high-single-digit in growth which and in led had we strong as in growth quarter markets, growth delivered currency well China Singapore, again XX% double-digit local with in We Brazil. growth as

gross the XX.X% the quarter last margin down for with income the for Moving compared XX.X% was statement, period year. same

for quarter fourth Sales last was and marketing expense quarter for year. XX.X% the compared with the XX.X%

expense year. X.X% administrative X.X% last for same quarter General to and the compared was

quarter XX.X% operating compared was in $X.X with four reflecting margin, up last quarter, billion income basis XX year. fourth Operating a the points

was the fourth tax effective an quarter the for XX.X% tax quarter XX.X% for compared last with rate of year. Our effective rate

last with of share EPS were in year. $X.XX fourth $X.XX per the compared earnings Diluted quarter

compared XX were quarter to outstanding XX of service days last in Days last days XX the and days quarter year. fourth

additions for equipment billion the cash $XXX of Free net and resulting generated cash billion, activities of flow $X.X of quarter property $X.X was from by operating million.

XX last cash Our at compared August balance billion at year. was $X.X billion XX with August $X.X

regards paid average per ongoing increase With objective of And of over price rate to million of $XXX.XX million to X.X share. declared year. quarterly fourth November on quarterly the our in redeemed a repurchased Board to an return last cash the we to XX, $X.XX or $XXX equivalent per Directors a at quarter, share cash for shares dividend XX% be our shareholders,

exceed our like I we all minutes pleased take or summarize as mentioned, original few we to year. meet last that of Julie aspects we our Now, successfully And September. extremely executed were to that outlook provided outstanding business our would to up

achieving of approximately full lead to we of guided our growth scale across of Revenue growth by fiscal a currency services. beginning our is of on industries, model, year revenues key of above the focus in top market-leading and resilience represents year. for This geographic that for result which the and markets focus new, the our is the which the durability indication strong XX% at of end strategic was underpinned This our in X.X% includes range provided year. the local the

Operating XXXX original and reflected a outlook. FY point basis expansion margin of aligned our with was XX XX.X% over

original our adjusted $X.XX, reflecting was The XXXX diluted was earnings X% range. per EPS FY and above over growth share guided

law As impact XXXX, exclude adjusted changes. a to was year tax in reminder, the fiscal EPS of

a cash flow cash was income profitability driven of our well free to DSOs. billion X.X, strong reflecting above industry-leading more net and flow by ratio than Free $X.X continued of guided original range,

we while acquire in of $X.X to And capabilities shareholders, XX critical areas investing cash market. roughly across the our allocation by and finally, billion objectives of to for returning $X.X exceeded strategic acquisitions capital billion skills high-growth

outstanding about truly really feel our XXXX. fiscal we again, So, good and as head we into year a positioning had we

Now, it Julie. turn let me back to

Julie Sweet

KC. you, Thank

our results strong power of Our the growth strategy. reflect

entire with enterprise. transform clients what our their need. And clients Our strategy our starts need to

journeys. in early of What points starting The stages consistently and company, are clients we scope the their and still by the is see different is our that ambition industry of most the but transformation of broad. by are very speed

growth fiscal results reflect Our our for front and in demand strong the us. the of significant services XXXX opportunities

year most pleased many the extremely we companies. with largest of that which am I relationships world's the XXX clients, our finished with diamond iconic represents

significant you $XX Interactive also over milestone, revenue. proud to share achieved a I'm year XXXX, fiscal in Accenture reaching that, billion in with

quarter, over had clients with finally, $XXX we this million. XX new bookings And

unparalleled they focus expertise, Accenture their by complex value to uniquely are choose know industry create most Clients and privileged ecosystem because on our broad combining our innovation depth. relationships, we programs for our technology transformation our positioned and largest

of our scale, record strategy proven coupled operations, clients. capabilities value from create with to Our at significant our track for implementations global

our a important technology of elements Let our and expertise few me double-click privileged on with our these deep relationships. starting business, ecosystem of

us for is to to they turn our begins their that with core understanding our core clients Transformation because technology business. their to technology is business. And

where all we of breath partner client's depth, a power The with and partner key are our leading ecosystem the to critical with being deep relationships technology players, of the of our is expertise, our scale choice. combined

XX highlight our want our I to breath is provided us our durability in This broad industry expertise resilience and business. element deep across diverse industry and groups. Another always has

And benchmark for us to best our CEOs are to of has created it today, regardless expertise. themselves are competitive cross-industry looking against companies turning they the industry increasingly another advantage. and

drive help even for Because we value bring well as their both at deep industry across speed more in can industry industries, expertise clients. other as our we

Let other accelerate originally industry this life example me using a an to that value solution of and industries. the are in with communication bring for to we developed now

providing the companies, industry, create building intelligence, all XX% that at the We comms Verizon's customer biggest out assistant their understanding coupled network address deep with of of and excellent channels calls. can helped our more service are For Verizon artificial experiences now scale than use imperatives. to digital across

reduced calls, In been a improving work. customer a complex enhanced most has their Verizon's agents many the cases, interaction, the significantly digital time to now to most XX-minute and is experience. the agent skills have X X-minute interesting more also an have call with which handle to

were many clients centers industries. utilities service. a to As to in in to value public imagine, tailor both needs able can our of unique call you we our significant represent Recognizing solution and this, opportunity the drive

the changes, a billing in address global to questions as operations utility experience. similar Enbridge, solution their service implemented to we At inquiries energy to improve customer company, their Verizon's, and such gas

customer up are able Now callers and digitally many satisfaction transactions to significantly. complete is

questions Mexico using and Department our faster answer to And solution Services help the more New accurately. Human Medicaid employees is about

focus has the babies state takes up time and enhancing Medicaid the to coverage complex the providing reduced our of to has complete their more employees experience on by freed example, up well. solution For to as tasks, it XX% newborn process to

people talking a of by and about up bit Let our culture. more me wrap the our inclusiveness

our culture advantage unwavering perform unleashes diversity competitive markets. and biggest enables environment us our people our an our are their best. recruit at to very people creates in and to the This allows which inclusion Our innovation to commitment people most and and talented

as a path Today, by With people the we our on XXXX. are nearly I to another yet around gender am and powerhouse, milestone women. XX% XXX,XXX equality world announcing technology now

ranked in number on world inclusion for produced and a traded from companies addition to we been and row, proud areas and and the inclusive Index, the with and are year gender, most leading previously focused more Inclusion in have one publicly In companies. we social Reuters, on XXX workplaces all to and around was based of X,XXX than second diversity, which Diversity the announce on I'm by the Thomson that, data diverse identifies governance environmental, Refinitiv's

business that, I'll fiscal over KC XXXX it outlook. turn With KC? provide our to to

KC McClure

Julie. Thanks,

Now, let me turn to our outlook. business

first This FX X% about of $XX.X fiscal of to assumes local revenues we the XXXX in be fiscal of reflects currency. billion. range For quarter quarter the compared in be an expect of first $XX.X will the million growth negative to impact to X% the estimated XXXX, to X% and

approximately weeks, FX fiscal negative full the how the on last year XXXX, trending to the results fiscal US the on X% XXXX. currently impact rates our in For been be over dollars of few based have compared will we assume

expect of to we growth over local fiscal X% revenue XXXX, to in year our the fiscal full X% in the XXXX. range be currency For

we XX expansion expect XXXX fiscal results. be to a XX to basis fiscal XX.X%, margins, XXXX XX.X% operating over basis point year to For point

annual We be tax fiscal our range XXXX. XX.X% of effective XX.X% expect This effective compares an of to to rate rate in in tax XX.X%. the to

X% share, we expect range the results. EPS to in diluted XXXX for fiscal growth XXXX For earnings $X.XX or $X.XX of year be to fiscal to over per full X%

full range of billion., cash in cash the $X.X $X.XX approximately in billion. billion operating to free the to flow equipment $X.X to be expect we For to billion range and $X.XX million flow our additions $XXX property to the XXXX, be of be and fiscal

guidance flow free of income strong ratio to flow very reflects cash cash X.X. a net free to Our X.X

to to expect a least cash purchases returning return share we billion dividends and our at Finally, we committed remain portion $X.X through to as of shareholders. substantial

it open let's questions. that, so your we with can Angie? And up, take

Angie Park

question. call? allow possible Thanks, question each to as you to would KC. for many those follow-up participants instructions that and a you one keep I would the Kevin, provide to a would ask as ask on

Operator

Instructions]. [Operator you. Thank

Tien-tsin Huang, Please from go First ahead. is of the question line JP Morgan.

Tien-tsin Huang

thanks. on Good morning. ask here. the want on outlook. No to Okay, bookings surprises I But the do

were bookings strong. outsourcing So,

deals said You that did large come through.

suggested that can flattish You half bookings looking your side, consulting we into XXXX? second at it the for guess, on the – maybe outsourcing on expect fiscal perhaps in Can outsourcing But views fiscal is I’m looking XXXX? bookings, so and which us great. at was consulting I would, here the that a the rotation versus your more revenue of give growth maybe you year,

Julie Sweet

Sure.

Tien-tsin, for start thanks, I'll last the your question. question. with the So, of Maybe, part

that outsourcing, In terms of year. to how expect guidance full the we're thinking about growth in mid-to-high, fiscal baked and XXXX be for for we year that's consulting our and for range, both X% outsourcing, within for the single-digit consulting X% and growth they'll the in

booking billion that our highest we And it you And X.X had quarter, our and at one we or taking of of your peel out target book-to-bill of higher. quarters $X.X for mentioned, booking record billion. look $XX.X as bookings consulting that's at this if you work, ever, had bookings, bookings was our type back of in questions, and and consulting also

think good parts that importantly, Tien-tsin, fiscal as of business. feel about on as base pipeline And that the have we we aspects enter overall our we terms and really all XXXX, I in of broad the beginning of say we in an well,

billion, fourth the see back overall bookings And overall across record, – as XXXX, terms our see so, head in a balanced we fiscal at pipeline look when we of you at bookings growth and well quarter both what for done we've of our consulting, still into that strong our work. you we as peel as types in $XX.X

Operator

Okay.

Bryan the Cowen. question Bergin go line of Please next from ahead. Our of is

Bryan Bergin

It that more quarter I question. is booking to continue XXXX? variability to the become like Can expect that the and seems has should we quarter you. that just follow-up talk to on about fiscal volatile. just of wanted you that major Thank Hi. drivers in something

Julie Sweet

for think in position looking of can terms what said I quarterly And of quarter. in is historically, bookings this be over we've we're Yeah, anything a booking bookings or meet outsourcing take if our to and kind at terms and of we prolonged you did which how bookings, prolonged on we at did that really and and look this a X.X X.X quarter from our overall to for period consulting which In from which lumpy a a and of this be period. year it and tends targets, our basis, above they from quarter, think we we this quarter, above X.X.

be will expect variability. that we there So, some

that bit it we full had quarter that based indeed signal little rest three, strong where saw the the year pipeline, we QX, on to and this thought quarter very We You certainly we as did. we really in we strong and in bookings of a lighter have year had relates it would that our and bookings two.

very So, that's to. something that used we're

very that be FY off very to might As a the this in the be case we about feel sometimes well for bit a year, little year, into particularly lighter very a XXXX. feel again rest strong strong coming – of have we but we as – quarter, enter relation we this pipeline strong but to think of XXXX, quarter the may four, in we about good as bookings tend – our QX

Bryan Bergin

disclosed around a reduce the here can Okay, resourcing your as just you efforts and your on group. operations talent employees, thanks. you then doing or within what model, manual automated you're you the follow-up in talk I think FTE approach And about work? XXX,XXX effort to past,

of the saw the comfort provide uptick we there? can and your you there? update any that XX% to So, levels attrition in it's in just And context Thanks.

Julie Sweet

but perspective a let attrition, specific look at me KC broader address uptick how we let the on give around talent. I'll the you

manage greatest our how is we right, So, talent and strengths, one of people.

always of business it use the time, we at hire. in look then given are we you if talent that technology to at any adjusting the and so, And our need

our have help the And you our when technology using ago, with and think it work clients, about was years people. artificial to talked we intelligence in latest so, about that business. we the our context of we're five analytics platform But do used where work the in myWizard in operations we that that,

strategy do don't given X, talent, we as at services for quarter are about but quarter then we that this to to time, innovating how continuously our we to of giving are what particular and and a year so, seamlessly and year. we any that sort And means think adjusting that really do

KC McClure

just your actual this quarter we a on and answer that have about feel consulting. as to about we strategy rates Bryan, retention the And, but areas number, slight our of our business, question as areas strategic in digital as have the uptick practice we includes attrition X%, did and good by key strong well that such

know, strong issues in really to because does of no people and that and provide the experience and you innovation, need, build our training people financial our to people, amount our and make the places Accenture we As attracting of in one it best of make have performance, we strategy, learning, investments continuous we that really the Accenture choose we career. the a

Operator

And Please next we Evercore. ahead. have Togut of David go

David Togut

strength and stage in especially and with new more to in I'd like strength. bookings an the bookings operating bigger you. seeing see a evolution possibly contract lot average ongoing to outsourcing in length, of – of you about you're ask any shift clients? Thank given changes are in your the the of run the Good to

KC McClure

the of change change. duration our and bookings. our no really contract to There's David. Hi, No

Julie Sweet

bookings drive And capabilities you working those using this really costs. down our at to is I enterprise-wide is same HR business operations And over quarter Global competitive bring – those are million. retirement because clients about Fortune the saw seeing this is strategic large market really are our would time, from products that with transform clients the are And give is was to in XXX capabilities really to on had able company, of transforming we transformation. in hiring the to to who bring one of just last we a what from we're seeing all boards and programs really we're that an capabilities example, – think operations. what from deliver. on is David, are which $XXX in our of requires the you to we the XX with our strategy advantage what products And about everything that that experience what to strategy together, we're transformation enterprise-wide focusing and, all our CEOs very which we and of means uniquely that focusing And positioned capabilities. think on

David Togut

Understood.

quick over Products changes change the a a as largest at follow-up, group. we Products operating group, What Just taking of Simon your should head Tuesday you expect leadership? your with leadership Eaves announced

Julie Sweet

deep – working a be very Simon. career to in both most been expertise. operational and going seamless to brings He's of for transition sales That's industry, his Products and the

that So, be seamless. very should

David Togut

we Please next, line Keane, from ahead. Bryan the questions of Bank. go And have Deutsche

Bryan Keane

XXXX. Hi, security. If guys. I wanted in high digital. and more growth year look inside the I bit to be slowing than fiscal ask cloud about to appeared little It's a off new, digital rate its

So, getting it just still of the know is previously. competitive growing I robustly looks was XX%, maybe more growing thinking inside at, or that at like, more about low growth it but teens, high it, penetrated off rate is it's digital there?

questions we there. about Thanks. So, penetration get always

KC McClure

over digital hand questions what's the talk Bryan. Sure, I'll business. within growth Julie rate. happening it the about on I'll to answer Yeah. to the

terms estimate we be about in digital $XX digital, we business. for what billion So, the estimate full of to year,

XX% of our overall revenue So, It's it's scale. XX%, very significant about pushing almost base. terms in of

with teens the in growth, So, we of in at you terms scale, terms high rate. that growth mentioned are as of very

look into in in high-teen digital. growth XXXX. which digital, have double-digit So, the we're in very to that, new, we'll we the as overall year, we're seeing what really next that continue, double-digit – continued, we have FY strong, we have pleased growth will overall that expect And we in includes with

Julie Sweet

about again, where think, look important at, when we what growth is I are our we Bryan, to our clients it think strategy. are in doing

the very transformation. their early clients earlier, we said As stages do at see our of I

is really buckets. And in happening three think about so, what

establishing technology is, first is out core, building the which are their right, they foundation. digital The

services, all fuel about new And next double-digits XX% foundation the that's so, the of – business in business, is our clients platform today the our going to need parts intelligence our that's platform, scale because of enterprise that which transformation. establish they gen need growing to

we're scaling stages At data, think in early areas and right, you able of the core, beginning to the to about $X.X same which like the how time then just cloud. there clients is, still billion in is move find only the much are how our at that going to curate data data really when digital be security the which is and

have digital intelligent like So, double-digits growing building plays scale are the the have and platform within then core, plays we double-digit. also which scale services growing next we

what are area connected That's hit big is having fueling right, second which driving agenda is which is which but is growth $XX and billion this it's the services the customer stages, on better about. new products is the very year, Accenture at and on fueling experiences all Then creating focus about X.O products which our Interactive, early clients focused services. also

And the the so, that be will area agenda. we really on focused next in growth scaling are that

they accessing are our because operations in transformation technologies learning in the growing do other through clients but double-digit, those have and our then, optimizing it so forms also operations, to because machine our our to and part enables which capacity, is and again, increase invested investment that's third it use operations. their clients And right, in And emerging scale is of costs reduce their the to area business, operations. helps platform of technologies, we

the will right, we are digitizing have at same X.O next early manufacturing where right? the connected play we're scaling, then, be you that the But again of the and stages plant, time, creating which seeing

time, space we we're scale But innovation looking are we're then the And of next then, that growing what of double-digits clients that emerging we're any have and the areas today scaling. growth. and have the fuel each our plays will of we technologies at doing, at given course, in in the

Bryan Keane

looks terms about rates to pieces helpful. just rate. points of tax some rate, basis for That's moving up, know KC. going On XXX I and like, follow-up tax points see one I I basis tax there's in XXX had

we fiscal there So, are this year? can be what about you talk should tax the considering just in factors for

KC McClure

Bryan. Sure,

So, fiscal maybe the up for our compared the XXXX to range so to just to year last is is about tax primarily range, increase fiscal XXXX. where XXXX X.X US where point starting for due phased from two fiscal geographic we're anchor years. our fiscal And as reform to just we might to I there started with, probably the XXXX well, any of repeating, are factors but can provision And one our a that rate first given in income. know our over think in four is reminder, that And year. that tax you influence bear mix our to

liability. the changes is tax Second in our prior-year

on The And equity tax the impacts third is the fourth compensation. our final determinations. is our

Operator

Thanks.

Our of line next question is from the of Harshita Rawat Bernstein. Please ahead. go

Harshita Rawat

taking for my Julie. is question Good you, Thank My for you morning. Hi. question.

to the in done you've tuck-ins historically? expect look happening now what's marketplace, and should M&A larger Accenture the in potentially we deals at background your versus Given

that And of last then, acquisitions a lot on you've over as a question, done couple follow-up the of to Interactive. years, Accenture

what the we activity? focus should forward, So, expect going of your M&A we is

Julie Sweet

the strategy it Harshita, us served to acquisitions around while overall and Thanks start in to well three do with me things, extremely is, acquisitions, scale hot we areas which for question. about the let the think market.

So, acquisitions growth particular scale talked already around them this need we about, our seeing for we're to capabilities. six wanted – example, year, of I've three in technology, where platform we services about and help to intelligent we did in double-digit

you of a particularly capabilities. as our new out in Accenture to the new, the and has which lot acquisitions in about XX been pointed And add this The is in of digital security, Interactive. acquisitions has been second that been have

about is new capabilities. adding And all so, that

deeper getting really is third the then, And and expertise. industry functional

year, of industry services acquisitions. financial this did our where expertise area so, the we through in really we expanded these four And that in

is to those that you it that around areas, growth. So, meant should three fuel to is our organic our expect always going strategy and

what with for we whether in make we would to acquisitions, respect to need do a larger of Now, would the it we look always do. but really that a us do said context could acquisition, to larger sense acquisitions to we've

plans made have that So, the there sense. that, if capability to certainly do are we obviously, ever but, no

going And and we've of there. as about think then, finally, a focus Accenture an Interactive we lot done certainly, is acquisitions forward, important well, point

As you think should about as that well. to see like in where area we're expect the we're scaling, to you right, plays, focus next so X.O, going that scale

add available. at to we're at look year, to it'll the scale, or so, market need and where going industry expertise. really on change capabilities what's we And based each in we're And what seeing add either new

Harshita Rawat

very That's helpful. you Thank very much.

Operator

go Bachman, And next Keith question of Please Montréal. of ahead. line Bank is from

Keith Bachman

that the and Hi. if, me business Thank in question it I'd economic tougher. think look is direct declined one you pretty the first question, context Julie, when and you. put the seem to is on a to got related fact, line you like And really strategy to more back to strategy economy challenging to this would I to And XXXX I do more that's, And how consulting The very the Accenture's about cycles? operations element resilient little one much. tough, economy got rather. if double-digits. consulting

or different the And so, from how difficult economic follow-up economic times, and cycles? I two, quick year at strategy less consulting if might out KC. more next if or it And that we be today more for look we have is immune hit

Julie Sweet

focusing of the has and sort rotation need achieve transform businesses. our over we that back to what if their the our that meaning last Well, to five clients to on new, we Sure. have step and services about been trying most a been relevant the years, take think

a so downturn fact the in digital to think, scenario, clients of their during use Services, their even to it on that and and our – these drive believe in fact, services, use So, create today, and business skills to customer deep you how insights of experience. And an consulting it the in and still build apply and, these still optimize our we how Interactive is operations customer new Accenture core. our we different take do strategy you focused to data agenda, relevance need course, combine comes a that and, blockchain in with to to the Financial right, do time, that, capabilities that use they have order we going growth are more

so, model. our where see And current we business resilience that's the of

Keith Bachman

one thank for you. KC, And, Okay. just All you. quick a right,

there cash flow, that flow, or an it comparisons Thank on out year-over-year. And year-over-year a I on the if to On metrics you're flow, less but a or call more that's more almost I is the operating me. cash challenging flow cash focus output, are anything your flow? minuses being up operating either is operating pluses little little cash would cash guiding And guidance unusual you. cash on while flow on to or you the but that particularly looks it like understand CapEx flattish operating bit, wanted be make for as

KC McClure

Thanks, Keith.

in operating of flow, expenditures. flow free in overall terms minor In there's cash million uptick, capital $XX cash a our

is we different. So, better at X really not very the flow or our to have free that's But income. really, for cash in be the of we look – percentages, goal it to terms the way that net is at over ratio

X.X. to we're this year, actually guidance so, X.Xt with at And our

that's So, outstanding.

year Another cash outstanding of free flow.

FY And we or the would in other? can out. the items outstanding XXXX, in Now, in our particular, why what even in influences we really I that put one And with did And to us point has place It we that significant do had did this are better? X.X. year performance do year, couple above continuing a this DSO.

DSO, free our to it's give for about flow. day or of every take, cash And XXX, so,

would outstanding at our that assume still of to be the in the of the always we little room within a give year that we business. low because bit So, beginning stay ourselves XXs

quarter, And influence can – that things of timing next change timing operate just our to for are fourth the we continue tax The couple things flow. maybe cash free those and another payments our baked into performance stellar very proud in And of X.X as cash I'll of to be that But accounts how really year, we payable, we out at example. have of overall cash X.X. just our the timing such business that of other flow just guidance our respect. a for point free things

Keith Bachman

thanks. Many

Operator

go next question Bourgeois, DeepDive from Equity. is Please of ahead. the The line Rod

Rod Bourgeois

priorities Hey, you helm? big ask picture plan changes or I to to major as Julie, there. have wanted take Do just any And welcome, the you question implement that Julie. strategic you a here.

Julie Sweet

with strategy our starts clients. Rod, our

to are we going our so, clients. to stay focused And continue on

major a clients. – change doesn't because change change no there's in so, strategy And no our our new CEO

So…

Rod Bourgeois

significant range the narrowed it. move of into has looks like happening in there you year? any outcomes that getting some. is the verticals as It the change you're anything vertical your Got And that may mix next of verticals growth across

improved. performers the slowed has and performers the has really some of high Some weaker of

more parity So, prone performances to year could spread the next or widen? vertical be the are

KC McClure

within that range perform our certainly, for you're is terms our would exists the within above in of This opportunity I say Rod. if range. to talking be of X:XX:XX] the to particular all X%, also see some them And, obviously range. in about groups, operating ability our of them X% that [indiscernible resources that Thanks, of KC. that, we have to verticals,

Operator

you. Thank

Jamie from Next go question Susquehanna. the Friedman, is Please line of ahead.

Jamie Friedman

for to I these clients, all The million, of the dimension They consulting. want $XXX disclosures. just diamond helpful. observation the are the you very you growth, all First, business strategy ask thank about appreciated. of it's the briefly incremental the about decomposition

for can potentially about expectation growth for And know was So, helpful? that any QX, year. growth that I the the dimension in be bottom left digit lumpy, here grid, quarter contemplated guidance would flipside, high-single the did at staying which be just looking digit dimension, the trend below the for so that's the the mid-single each I'm that the purple or so but accelerating QX corner,

KC McClure

question. Yeah, the sure. Thanks for

scale, year when mentioned, – that of we're really billion to bit in that our of and fiscal the have you XXXX. high a $XX is terms overall growth what as consulting range. less we been digits And that pleased little to we closed, just it's than business. In business strategy a right it's estimate It's have in single we our at third mid around business,

the $XXX only strategy it drive us But helps the and the delivering range. digit entire and their it's see to was suite, to pure Accenture's that as not digits we happy mid-to-high-single to to in it will the strategy, saw And on Julie technology, as picking saw because it's high-single advisory and scale. that some clients and value lap we in this our it's really when with talked capability quarter. in know, capabilities, important at for transformation it scope shape as really the we examples across on evidence that important this well. role clients all transformation of QX the – for work year, put bring mid. of think full was we're million, so, C that quarter including a as XX and as a But at about, Julie agenda, that And quarter also And industry, you mentioned, consulting that just of you from things Julie as I but as well her up over quarter global it

portion well-positioned advisory in overall, consulting this bookings for of in bit that the that purpose strategy, had we're in And within dual XXXX. work QX, and with in it's performance that we of a we regard year, feel in in really with And our billion feel but a was So, our a obviously type consolidating which the and pleased we fiscal the that, $X.X – overall of have strategy consulting in work. we quarter. performance

Jamie Friedman

about incredible And above ask average, Okay. wanted then, so just to the operation, company Thanks, growth KC. above I industry. again double-digit

shared we guide? And contemplated up? So, is the that that there but some already, any would Thank know I you keep texture Can you. be helpful. in

KC McClure

Yeah.

of what been where have we're to double-digit do really they the So, continue last able growth. in Jamie, over years the we Debbie proud have operations and – to what team do probably in year, in see And high range single next the we see what operations. will double-digit the for continue operations, to low maybe we that and growth is for that yes,

Julie Sweet

is on and it two really to clients, and our operations is for for minute for a us take to expand strategic why so just reasons. And

market. helping areas so I even So, are important to the doing hundreds well, a these me in think costs, often, across artificial we're the my functions, think capabilities products, different we we you of five say, going doing is can great platform, do in transformation. that SynOps. or call because growth drive emerging around way of those places with but equation differentiate today if our that's And why technologies. Accenture to transform more And the for to to how first proven value technologies capacity, have even reduce I a enterprise really order And going bring in enterprise-wide expertise the Or differentiate CEO about very them do into my are own I that to you we it great that's finance that to clients and ago want go built of see invested going that is to be helps marketing we platform is other is investment all, want these And want build put technology investments this as for deep Do don't business wave to because to which it that clients and long that to terms intelligence do have more is create of operations access and to we to the than, operations. create us truly the example? that or are the do that in my for to backbone? and transform HR in years next I and where operations

Operator

question line from Kupferberg next of Jason of of And America. Bank the go our ahead. is Please

Jason Kupferberg

contribution in XXXX guys. tax the Hey, in that changes? about the with thinking can how XXXX? the should on us it, M&A And Can normal good also just just tax be morning, medium the tell law call follow-up you term just in, rate phase we revenue comment fiscal new expecting we the of growth? increase in get on the based much you're Is a

KC McClure

Thanks, Yeah. Jason.

which to terms our guidance range, XXXX. in In that we around XXXX FY inorganic FY we land as is same X% in X% the of the have contribution about X% in it's assumed

maybe our I again, answer tax just rates, that. of terms will In

up various only from can is the year that the range things and there's we rate XX points started throughout where impact Our year. our tax basis

the phased that you're not XXXX, US So, But years. this that have two in FY in last in very provision in different tax is space we reform over started a phased where really – from we right year.

work year. our I'm out you – So, we years XXXX, other that's be second-year then think know our to our rate we to have, guide in where to factors the not phasing that reform. do will can but our will going we on the XXXX overall, influence tax US rate But we tax four do that to of don't really guide this rate. for tax

Jason Kupferberg

I ZIP should you high guys On talent digital of any attrition, tight this new labor sort the want/need, a expect for normal? that kind of markets, that know come we but just code that, back issue just is just teens of generally aren't to you especially to light attracting having talent, in the

KC McClure

Yeah.

we we've So, you to can don't should think we level that's in manage you've in expect long That's the higher how Jason, followed attrition. seen, feel what that there's time, build anything our you've teens past. than I different had mid-teens that's than the a that, and for and in a historically, business. We're we

as about. that expect concerned should So, there's nothing and that you nothing we're different very

Angie Park

Okay, great. have the then we up Julie more Kevin, one time will wrap call. question for and

Operator

ahead. of that Ellis of line you. Lisa is go question MoffettNathanson. from And Thank Please

Lisa Ellis

morning, A bookings outsourcing on again. question Good guys. Hi.

follow-up, from not call. didn't The now. decompose Is business always what this sense you. of Accenture digital clouds is of on question at of Can bit being it whatnot, Just that outsourcing like things a underneath this clearly point? behalf I opening what's and of give like ERP what managing marketing little this up Thank old, think, heavily Accenture's think is we'd the Just Tien-tsin's management? clients? management outsourcing for a a lot makes you Is there. ongoing but

Julie Sweet

breadth actually interesting it. is we're it's doing different. there do we the Lisa, just It's that how what of is not

outsourcing application for our living their to that's ops example, different call doing doing clients we way So, do of and a because application outsourcing that something it's outsourcing, Agile but dev transformations. using help for systems and application it we we're business allowing still the doing drive we're

doing different and It billion we've We added couple labor last are functions very, similar, XX course, about we're of we're the although years. it. operations. doing But, scaled business And in marketing now. $X have, how arbitrage that used ago. be marketing in the of over again, years kinds it's very a It's of again, to

the that of terms in makes we're is after we've that it. how successful it so, activities for has us And so going not do changed. What the we breadth evolved

application drive see things because helping techniques Agile can is to at our you using, their we're and of able so, outsourcing, to like scale differently. help get the business dev ops be And now clients and

Lisa Ellis

Thanks. XXXX enough on that you're more for is quick then, that visibility still Thank what Can you And year then, next September, guidance Terrific. into macro guidance? outlooks budget realizing for are you stuff confidence articulate follow-up question. macro it's seeing – for in KC your outlook guide. what's the One embedded feeling around level And the and you. outlook?

KC McClure

our Thanks, this Lisa. you with same XXXX. contemplates beginning about giving But in And the as point. year. that range outlook. for we we obvious the that, as that time know, of X% an has we're At see And a done growing you that of as next mentioned, longest growth obviously, year, the market X% to guided is is, to it this

year. for our for next probably overall us, X% for it's the think market, in to range X% So, somewhere addressable we

Julie Sweet

of ahead joining see on value opportunity are today's the our delivering fiscal all team I excellent entire extremely and significant call. So, thanks on KC us again for and for we focused XXXX. performance are our We and with for pleased stakeholders. laser

and, ecosystem our our our thanking clients, by all our team for continued around in people of stakeholders, the shared for placing investors exceptional end their world. commitment our thanking me finally, for leadership trust our confidence, partners their us, let their And to our clients

special. You are Accenture so what makes

I'll the road. Thanks. see everyone on

Operator

Ladies your conclude you. joining Executive for you gentlemen, &T for that TeleConference. conference. and and do using does Thank We thank

You may now disconnect.

Accenture (ACN) 26 Sep 192019 Q4 Earnings call transcript