Accenture FY 4Q14 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Marketplace is focused on digitization and rationalization

“In this fast changing environment we see the market becoming more and more polarized around two major things; Digitization to create competitive advantage and drive new sources of value, and rationalization to create productivity and efficiency gains.”

FX could shave 2% off of revenue growth

” For the full fiscal year ’15 based upon how the rates have been trending over the last few weeks we currently assume the impact of FX on our results in U.S. dollars will be negative 2% compared to fiscal ‘14. For the full fiscal ’15 we expect our net revenue to be in the range of 4% to 7% growth in local currency.”

Seeing traction in digital specifically in B2C industries

“Digital is pervasive across the patch. So it’s clearly a set of technologies and I’m talking about of course the digital consumer, the digital enterprise, the digital operations all related to analytics, of course cloud enabling technologies, usually known as SMAC in the past or [mobile] and each cloud is absolutely pervasive across the board. So we’re starting to see good traction of course with more the B2C kind of industries if you will, I’m thinking about retail, I’m thinking about consumer good, financial services, telecom, good appetite for that but certainly we see the second wave of digital impacting now more the B2C businesses, I could have mentioned Healthcare.”

B2B also strong with interest in internet of things

“nd then you move in to more the manufacturing kind of organization with what we know we call it the famous IOT, the Internet of things and we are taking step as well to move from the B2C to do B2B2C and from the B2B and from the digital consumer to the Internet of things. So the early adopters we are very pleased with them. They are the usual suspects but now we see good traction in all the parts of the business.”

Digital plant and digital operations

“e’re starting to put digital in what we are calling digital plant and digital operations and things we’re doing with some of our partners and we’ve recently created joint ventures as you might have seen with General Electric around aircraft maintenance as well as intelligent pipeline, which is the new launch we made with General Electric. And on the other side of the spectrum with Siemens around the SmartGrid.”

You really have to look at operating margin to understand our business

“ou also referenced gross margin and there is a lot of things that go into gross margin beyond just the contract delivery cost. You have for example things like training and recruiting and we typically bring a lot of people on broad in the fourth quarter and this year that was especially true as our revenue is growing, as an example…That’s why we repeatedly say that to understand our business you really have to focus on operating margin.”

Examples of Business Process Outsourcing function

“Of course from an F&A we communicated around this big win with this oil and gas company in Europe, a giant as well, we are doing all the HR, Administration of one of the largest consumer good company in the world and I can mention this and extremely recently in electronic equipment we’ve been selected to be clearly their backbone in running their Finance and Accounting, their HR, their IT and part of their sourcing operation to support them in one of their largest scale transformation program today in the industry.

So it is pretty hot and again I am coming back at the heart of our — at what I call repositioning or what I think our business is if you will from what we were and we are still famous for the more classic ERP and technology business.”

We dont’ anticipate unusual wage increases in 2015

“here are also a lot of markets around the world where there is deflation and deflationary trends for compensation and so — what we always do is we’re market relevant. And so if you’re trying to understand is there anything unusual that we anticipate in ’15 with respect to wage increases, the answer to that is no.”