Home » Accenture (ACN) Q4 2014 Results Earnings Call Transcript

Accenture (ACN) Q4 2014 Results Earnings Call Transcript

Free cash flow was a rounded $3.2 billion, at the upper end of our previously guided range and at the low end of the range provided at the beginning of the year.

And then finally we returned approximately $3.8 billion of cash to shareholders, more than $100 million above our initial objective through $2.6 billion in repurchases and $1.3 billion in dividend payments. In addition we reduced our weighted average diluted shares outstanding by about 3%.

So, reflecting on the business outlook we provided at the beginning of the year, we successfully managed our business and delivered on each metric with several of the metrics landing in the upper end of the range. We’re pleased with the overall improvement we saw in our results in the second half of the year, especially the acceleration in growth we signaled one year ago.

Now let me turn it back over to Pierre.

Pierre Nanterme – Chairman and CEO

Thank you, David. Our performance for the fiscal year, especially the strong revenue growth in the fourth quarter and second half of the year demonstrates that we are executing the right growth strategy. We are providing relevant and highly differentiated services that are clearly resonating with the needs of our clients. And we are gaining market share in an environment that continues to be very demanding and highly competitive.

In fiscal year 2014 we made significant investments in our business, including $740 million in acquisition and we aligned our organization to be even more relevant, differentiated and competitive in the marketplace.

We’ve created Accenture Strategy, a unique capability and the first in the market to bring together business strategy and technology strategy equally and at scale. We created Accenture Digital by combining our market leading capabilities in Accenture Interactive, Accenture Analytics and Accenture Mobility.

We now have more than 28,000 professionals working in Accenture Digital, making it the world’s largest end-to-end digital capability. We formed Accenture operations by bringing together our market leading business process capabilities with our infrastructure and cloud services, to offer our clients an even more compelling value proposition, running key operations as a service and at scale.

In Accenture Technology we further enhanced our global delivery network, recruiting significant talent and investing to build intelligent tools to increase efficiency and productivity.

We continued to harness innovation through our technology labs and to play a leading role in the technology ecosystem. And we infused even more talent into our five operating groups which together serve clients in more than 40 industries, further strengthening our management and technology consulting capabilities.

Our people in the operating groups orchestrate and bring together the very best of Accenture across the entire organization to serve our clients, helping us to continue to build long and enduring relationships with the world’s leading companies.

These investments have positioned us very well to capture new growth opportunities as our clients and the industries in which they operate continue to be transformed and reinvented every day. In this fast changing environment we see the market becoming more and more polarized around two major themes: Digitization to create competitive advantage and drive new sources of value; and rationalization to create productivity and efficiency gains.

At the same time we continue to see demand for large scale transformation programs which has always been Accenture’s sweet spot. Let me bring this to life with a few examples that demonstrate our unique position in the marketplace and the value we deliver to our clients.

Today all of our clients are facing the imperative to transform their businesses to compete in the digital world and we are partnering with them on this journey. A great example is our work with a global media and entertaining company, where we are leveraging the full range of Accenture’s capabilities, especially in mobility, supply chain and analytics to fundamentally transform the customer experience, by implementing a broad set of digital tools.

The centerpiece of this technology is a wearable device that allows customers to access their hotel room and pay for goods and services. Through our work, we are helping our clients engage millions of customers each year with a truly integrated and personalized experience.

At the same time our clients are looking to drive more efficiency and to increase productivity in their operations. At a leading commodity trading and mining company we are providing finance and accounting and procurement services to help improve business operations. We are leveraging our end-to-end sourcing, procurement and analytics capabilities, together with the full power of the global delivery network to deliver over $500 million in bottom line savings, while also providing flexibility for future growth.

The acquisition we made last year of Procurian, combined with our own sourcing and procurement capabilities make Accenture the clear market leader in procurement BPO and has been instrumental in positioning us for many recent wins in the market.

Finally, our clients continue to focus on large scale transformation programs. With our extensive industry expertise and broad global footprint as well as our skills in strategy, digital, technology and operations we have built an end-to-end capability that is second to none and as demonstrated by our strong new bookings for the year, including 39 quarterly bookings over $100 million Accenture remains the partner of choice for our clients.

A key example is our work in Texas, where we are leading the state’s effort to build a more efficient and effective Medicaid program. We are leveraging our healthcare expertise as well as our long track record of delivering claims processing systems to support 3.6 million Texas Medicaid participants and 45,000 healthcare providers while processing more than 12.5 million claims each month.

Turning to the geographic dimension of our business. We are very pleased with the strong revenue growth we’re seeing in many of the largest countries in which we operate. Taken together, these countries represent a very significant part of Accenture business.

Let me start with the United States, our largest single market where I’m particularly pleased with our 10% revenue growth for the fourth quarter and 8% revenue growth for the full year. I am even more pleased with our sustained performance in the U.S. over the last past four years, where we have consistently delivered high single digit or double digit revenue growth, clearly gaining market share in the largest economy in the world.

In Europe, despite an economic environment that continues to be difficult we are performing very well in many of our largest countries, including France, Italy, Germany and the United Kingdom. And in Asia Pacific, our growth in Japan has just been outstanding. Japan delivered very strong double digit growth for both the fourth quarter and the full year.

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