Accenture FY 2Q15 Earnings Call Notes

Digitization and rationalization

“You have heard me mention two important trends, digitization and rationalization that are driving demand for our services and contributing to our growth. We invested ahead of the curve to build a capability that will help our clients respond to these trends. Digitization is all about helping our clients tap into new sources of value and new sources of revenue to create competitive advantage. We are helping clients capitalize on these trends to become the disrupters in the new digital world, not the disruptive.”

Helping one retailer quadruple revenue through multichannel

A great example is to what we are doing with a leading retailer helping them on vision on finding new ways to attract customers and achieve that goal of quadrupling revenue. We are bringing innovative digital technology to help them move beyond the traditional store model to a multichannel digital strategy.”

11% impact of FX on revenue in 3Q, 8% for whole year

“For the third quarter of fiscal ’15, we expect revenues to be in the range of 7.35 billion to 7.6 billion. This assumes the impact of foreign exchange will be a negative 11% compared to the third quarter of fiscal ’14.”

“based upon how the rates have been trending over the last few weeks, we now assume the impact of FX on our results in U.S. dollars will be negative 8% compared to fiscal ’14. For the full fiscal ’15, we now expect our net revenues to be in the range of 8% to 10% growth in local currency over fiscal ’14.”

Now expect EPS 3-5% growth vs. 2014

” For earnings per share on an adjusted basis, we now expect EPS for fiscal ’15 to be in the range of $4.66 to $4.76 or 3% to 5% growth over fiscal ’14 results. Absent the higher FX headwind which impacts EPS by $0.14 our EPS range would have increased $0.10 to $0.14 driven by high revenue growth.”

more capital return than FCF

“free cash flow now to be in the range of 3.4 billion to 3.7 billion. Finally, we continue to expect to return at least 3.8 billion through dividends and share repurchases”

Getting ready to drive the next bifurcation between headcount and revenues

“We continue working on this to create more bifurcation between headcount and revenues. I think we may continue some good progress even if we or we feel at the beginning of this journey if you will. But I’ve been recently in India as an illustration visiting our BPO practice and looking at all the innovations we are bringing especially around automation, especially around robotics and especially around cognitive computing. And if you bring these three capabilities all together we have indeed a unique opportunity it’s happening as we speak in our operations in India to bring a level of productivity and efficiency in our business process operations where we start seeing this bifurcation between headcount growth and revenue growth and we might expect some acceleration in ’16 and beyond. So it’s still early days regarding the leading edge characteristics of these technologies. But I’m feeling extremely positive and even more important Mike Salvino is leading our Accenture Operations business, is feeling extremely confident that we have the tools and techniques to move to the next level of productivity.”