Accenture FY 2Q17 Earnings Call Notes

Broad based growth outside of a few areas

” Growth continues to be broad based with positive growth in the vast majority of our industries and geographic markets more than offsetting cyclical market pressures that continue in a few concentrated areas of our business specifically energy, chemicals, and natural resources and communications and media.”

Very positive for the second half of the year

“Yes, it’s hard to be a little bit of additional very well, I mean, to put it very simply we feel very good for the second half of the year. That’s it, based on stocks. We have very good bookings, we have good pipeline. We have great momentum in most part of our business, that will give you a clue. We are covering 13 industries. We’re big if you well, 13 industries, of these 13 industries 10 are positive and on the 10, six are high single, when I say high single is one is at 9.5, that’s 1 to 10 for simplicity, six would be the double digits. So you could only be positive when you see such momentum.”

David Rowland

A lot of green shoots in slow industries

“Yes, I would say it’s a combination of the two. I mean, just to be blunt it is a combination of the two. There is a benefit from the comps getting easier and that’s just the math, but more importantly, there are really underlying fundamental improvements that we see and the business activity, the dialog that we’re having with our clients. The investment and digitization in addition to the kind of the cost rationalization focus that those industries have had for so many quarters now. And so the comps are part of it, but there is some fundamental improvement in the business, a lot of green shoots that we see that I think have a much more optimistic about the trajectory.”

Accenture (ACN) Q4 2016 Earnings Call

Accenture (ACN) CEO Pierre Nanterme said revenue growth in North America & Europe was strong 

“In North America, we delivered 11% growth in local currency, driven by the United States where we have now delivered double-digit growth of five of the last six years. In Europe, we grew even 11% in local currency, with double-digit growth in the UK, Italy, Switzerland, Spain and Germany, as well as high single-digit growth in France.”

Seeing lots of opportunities to help European banking clients drive technology initiatives in their business

“I would say the three demand drivers continue to be significant investment in digitizing the customer channels, so what we refer to, the sector refers to as distribution and marketing. There are significant investments to digitize the channel as a way to drive growth in the bank.  There’s significant focus on cost rationalization and increasing to a much higher level the cost efficiency of the bank, both to deal with, let’s say, the structural pressures of a lower interest rate environment, regulatory pressures.  We think we’re well positioned and we think that banks, in spite of these disruptive forces, continue to have the need to invest in transforming for profitability and investing for growth. And we are well positioned to help them with that.”

Accenture 4Q16 Earnings Call Notes

Accenture plc (ACN) CEO Pierre Nanterme on Q4 2016 Results

Example of digital project

“. In digital, we are working with many hotels, the European hospitality company to implement a digital transformation strategy to increase sales across all channels through data driven customer segmentation. In just one-year, direct sales were up of 27% and more than one million people have joined Meliá’s Rewards program.”

Example of cloud and security projects

“In cloud, we are helping Rio Tinto, a global mining company, transition its enterprise systems to the public cloud, including the world’s largest SAP production system migration to Microsoft Azure, delivering increased agility with an as-a-Service model.

And in security, our cyber experts are working with large U.S. based utility to define, develop and run a next-generation security operations center. We are developing a comprehensive strategy to assess risk, managed identity and enable alerts for cyber threats in real-time. ”

See strong demand for mission critical transformation programs

“We continued to see strong demand from our clients for large scale mission-critical transformation programs. The broad range of services we provide across our five businesses, together with our deep industry expertise, continues to differentiate Accenture and we remain the partner of choice for the world’s leading companies.”

Double digit growth in the US

“In North America, we delivered 11% growth in local currency, driven by the United States where we have now delivered double-digit growth of five of the last six years. In Europe, we grew even 11% in local currency, with double-digit growth in the UK, Italy, Switzerland, Spain and Germany, as well as high single-digit growth in France. And in growth markets, we grew revenue 8% in local currency, driven primarily by double-digit growth in Japan, as well as strong double-digit growth in China, India, South Africa and Mexico.”

David Rowland

Macro environment volatile but guidance assumes market growth

“Great, thank you. So, let me just take a minute and just frame how we see the environment and then how that relates to our guidance. I think, first of all, and I don’t think it’s a surprise to anyone on this call, in balance, we see the overall macro environment being more volatile, let’s say, at this time than where it was a year-ago entering fiscal 2016. So we’d see a higher level of volatility overall in the macro environment for the reasons that this group understands very well. Having said that, in that context, our guidance assumes that the market growth, and when I reference market growth, I’m talking about the basket of publicly traded companies. We expect for purposes of managing our business and the outlook that the market growth is going to be very similar in 2017 to what we saw in 2016. And in 2016, to be clear, we saw organic growth in the basket of publicly traded companies of about 2.5%.”

Financial services is a tech intensive sector

” I think, as we know, Financial Services is a very technology-intensive sector, especially if you’re thinking about banking and capital markets, specifically. Within that, I would say the three demand drivers continue to be significant investment in digitizing the customer channels, so what we refer to, the sector refers to as distribution and marketing. There are significant investments to digitize the channel as a way to drive growth in the bank.”

We don’t see anything that’s going to fundamentally change a 2.5% growth environment

“What’s driving that assumption is that we don’t see anything as we sit here today that would fundamentally change the dynamics that we see in the market, let’s say, as we look out over the next four quarters. We see more of the same. And what we see is an organic market that would continue to grow in that 2.5% range, which means that we are making our own market through our differentiation, the uniqueness of our strategy, leveraging the power of our investments to drive a level of organic growth that is meaningfully higher than that to take share. But we don’t see anything that would meaningfully change that underlying organic growth of about 2.5%. So in other words, we’re not speculating on – you pick your black swan of the day, we’re not speculating on some black swan event that would materially change the market. If that were to happen, all companies will be revisiting the impact of something like that, should it occur.”

Do see some decelerations in 2017

“In terms of the – again, I almost hate to use the word deceleration because in almost all cases, our growth ambitions for the vast majority of our verticals continue to be quite strong and well above the market, albeit at lower levels than, in many cases, the very, very strong double-digit growth we’ve had the last year, if not two years. And so deceleration, what I would say for many of our verticals, we’ve assumed lower but still strong growth is the way I would characterize it. Energy and chemicals and natural resources, we don’t see a catalyst for change. We think those industries are going to continue to be tougher, let’s say, continue to be tough as we go through the fiscal year. As I mentioned, we have seen some pressure in communications in Europe in particular. And although we are very pleased with our growth in Financial Services, in banking and capital markets specifically, I would say that is an industry that we are watching, through Richard Lumb’s leadership, we are watching very, very carefully and very closely.”

Saltzberg Miscellaneous Notes 3.31.2016

Source: United Technologies 2015 Annual Report

United Technologies (UTX) CEO Greg Hayes said the company benefits from the global trend of urbanization towards the cities

“We are well-positioned to benefit from three megatrends that are shaping the world— urbanization, an expanding middle class and extraordinary growth in commercial aviation. Every day 180,000 people move to urban areas. By 2050 cities will be home to 2.5 billion more people than today, generating a need for more apartment buildings, airports and mass-transit systems —all of which will be equipped with elevators and escalators, climate systems, and fire and security systems.”


Source: Aflac 2015 Annual Report

Aflac (AFL) CEO Dan Amos explains the power of the company’s brand

“Maintaining our powerful and respected brand is essential because it represents who we are – the spirit of our people in Japan and the United States who represent the face of our products and who build trust with businesses, policyholders, consumers, our field force and brokers. We’re pleased that the Aflac brand is also both well known and well respected. Having a trusted and compassionate brand has opened many doors for Aflac. Our brand represents who we are as a company and reflects how our constituents see us, so we’re very protective of maintaining our reputation.”


Source: ABB 2015 Annual Report

Swedish Industrical congolmerate ABB CEO Ulrich Speishoffer highlighted several trends in renewable energy affecting his industry

“There is a shift towards renewables, which is accelerating despite the low oil price – 2015 was a strong year for investment in renewables, with 121 gigawatts of capacity added. This results in unprecedented demands to manage the complexity of the “digital grid” of the future. In power generation, renewables are transforming the energy mix, putting pressure on traditional producers to rethink their business models while lessening environmental impact and dramatically increasing grid complexity. The future grid will be far more complex with multiple feed-in points from traditional power plants to large-scale renewables on the supply side, and a coexistence of traditional demand patterns and microgrids and nanogrids on the demand side. Managing this complexity will require intelligently automated, digital power grids that can anticipate demand and supply patterns, while routing and transporting power to the ever-increasing number of consumption points of electricity.”

Geographically, he expects India to be a driver of growth

“Our markets remain challenging, with slower growth in China and steady conditions in Europe and the United States. We expect India to invest in power infrastructure and industrial development, but see continuing weakness in other emerging markets.”


Source: Markel 2015 Annual Report

Markel (MKL) Co-CEO Tom Gaynor explains the company’s flexible culture and ability to adapt to the operating environment

“We are encouraged to look for a better way to do things…to challenge management. We have the ability to make decisions or alter a course quickly. The Markel approach is one of spontaneity and flexibility. This requires a respect for authority but a disdain of bureaucracy.”

Big data and analytics continue to be an area of increased emphasis to drive improved decision making in their insurance operations

“The tools and techniques of big data continue to increase in affordability and utility. Simply put, information is king. Every transaction and data point continues to become more robust and informative about what the ultimate risk and outcome will be. Technology and digitization change the tools used in the task, not the task itself.”


Source: Accenture 2015 Annual Report

Accenture (ACN) CEO Pierre Nanterme said they have long term relationships with their top clients so they focus on making the business relationship mutually beneficial

“We serve more than 80 percent of the Fortune Global 500 and 94 of the top 100. We also continue to build strong and enduring client relationships. All of our top 100 clients have been clients for at least five years, and 97 have been clients for at least 10 years. Quite simply, our client relationships are second to none, and our continued success underscores our ability to address our clients’ most complex and strategic issues.”


Source: Suncor 2015 Annual Report

Suncor (SU) CEO Steve Williams said 2915 will be the year that energy companies focused on reducing their costs in order to be able to survive the downturn in the oil sector

“Without question, 2015 was one of the most dramatic years in recent memory. It was a year of managing challenges and capturing opportunities. We were well positioned to take immediate action as oil prices fell to their lowest levels in over a decade. We responded swiftly to reduce capital and operating costs. We looked for efficiencies in every corner of our organization.”

Suncor (SU) CEO Steve Williams said the best companies are often strengthened through downturns in the industry

“The market downturn may continue to present opportunities – ones that we’re able to take advantage of because of the strong foundation we’ve built in recent years. Seeking these types of opportunities are strategic and another way we’re building shareholder value for the long term. In fact, I believe that strong companies are often built during downturns and our approach is to view this difficult period as an opportunity and a challenge.”


Source: Campbell 2015 Annual Report

Campbell (CPB) CEO Denise Morrison wants consumers to know exactly what goes into all of their products

“Our purpose has created the conditions for Campbell to become increasingly open about our food with the goal of setting the standard for transparency in the food industry. In fiscal 2015, we initiated an important project to increase consumer trust by providing greater access to information about our products, especially in our core U.S. soups, sauces and beverages.”

Intend to grow their online presence meaningfully

“Over the past several years, we have built stronger digital, social and mobile capabilities and have steadily increased our digital budget. In fiscal 2016, we plan to spend nearly 40 percent of our overall media budget on digital media. We also remain focused on growing our e-commerce capabilities, as this is becoming increasingly important to our consumers and our customers.”


Source: Torchmark 2015 Annual Report

Torchmark (TMK) CEO Gary Coleman said they have been repurchasing their own shares for nearly 30 consecutive years now

“We have been conducting our share repurchase program for thirty years now. During that time, the only year we didn’t repurchase stock was in 1995 due to the acquisition of American Income. Since 1986 we have spent $6.5 billion to repurchase 78% of the outstanding shares of the Company.”

Torchmark (TMK) CEO Gary Coleman said that as a result of “industry experts,” they expect oil to rebound to $45 per barrel

“Based on a consensus of industry expert views, we believe oil is more likely to increase to over $45 a barrel during the next 12 to 24 months than remain at the $30 a barrel level we saw in 2015. We believe the companies in our portfolio can continue to operate for a very long time with oil prices at $45 to $50 a barrel. However, even if oil was around $30 a barrel for the next 12 to 24 months, we wouldn’t expect to have significant defaults during that period.”


Source: ICICI Bank Annual Report

ICICI Bank(IBN) CEO Chanda Kochhar reiterated India’s strong demographics and strengthening growth trajectory

“As I had mentioned last year, the decisive mandate in the general elections was a very positive development for the economy. The immediate impact was felt in the form of a strong improvement in sentiment. India’s inherent strengths are well-known – the demographic dividend and the vast potential for investment. It is these strengths that propelled us on a high growth path for several years.”

The Indian government is fostering a more pro-investment environment

“Over the last year, the Government has taken a number of important steps. There has been a focus on improving governance; enhancing the ease of doing business; creating a conducive environment for investment by both international and domestic participants; and adopting a stable and prudent fiscal policy. At the same time, the Government has sought to bring about the engagement of more and more people in the economic mainstream. While the impact of these measures will be seen over the medium term, the steps taken are clearly in the right direction.”

ICICI Bank(IBN) CEO Chanda Kochhar said effectively utilizing technology allows them to reduce their cost of serving customers

“ICICI Bank has been at the forefront in leveraging technology including the current and emerging transformational trends of mobility, digitisation and rapid growth of social media, to bring value to our customers. We have leveraged our technology capabilities to facilitate faster and convenient processes, create best-in-class technology platforms and reduce transaction costs. Over 50% of all banking transactions are now done over mobile phone or on the internet.”

Accenture 2Q16 Earnings Call Notes

Accenture’s (ACN) CEO Pierre Nanterme on Q2 2016 Results

Examples of Accenture’s work

“Working with Boston Scientific, we have jointly developed a cloud-based digital health solution for hospitals, built on the Accenture Insights Platform, the new installation is designed to leverage our analytics capabilities to significantly improve patient care and reduce treatment cost.

Accenture Interactive continues to gain traction in the marketplace and has recently been named the digital agency partner for Celebrity Cruises where we are helping redesign the digital customer experience and for L’Oréal in Brazil, where we are responsible for search engine optimization and digital marketing analytics.

In Accenture Mobility, we are using the Accenture connected platform to drive digital transformation for Metro de Madrid, one of the largest transportation systems in the world. We expect to increase operating efficiency, improve the passenger experience, and enable new Internet of Things based services.”

The difference between the winners and losers has been being able to rotate with product cycles

“I believe that the main difference between the winners and the losers is coming from the one who are able to rotate to the high growth areas and to rotate at speed. When you look at the ERP, as David just said, all our strategy, I think the down cycle was to start building capabilities to rotate our ERP to new ERPs and at the time we were calling as an illustration building capabilities, strong capabilities with HANA, which is going to be the next generation and as for the next generation of ERP with SAP. I am taking that as an illustration. And guess what, as we speak, given the investments we made ahead of this HANA S/4 wave, today we are already the number one in implementing S/4 and HANA in the world. We see clearly and you see improving with the results of SAP, a pick up on this new ERP development.”

The macro is still sluggish

“When I look to the market, to be honest, I do not see much changes, as we speak. And just to be more specific, I think I always said, it was in October that the overall economic environment is sluggish, to say the least, and it is still sluggish. So, we can’t expect much regarding the environment; it’s unstable, risky, extraordinary complex. That was the case last year; it’s still the case this year. When I am looking at the budget from our plans, I am not seeing any significant change.”

Accenture FY 1Q16 Earnings Call Notes

Pierre Nanterme

Clients are clearly shifting investment from legacy systems to new

“I can characterize only the trend is clear that you see a shift from investment in the legacy, if you will, to investment of the new. I tend to believe that the shift is increasing and as reflected, growth in digital related services. Now I don’t have any market data that would characterize the percentage of the shift. There it’s getting bigger and indeed we could take advantage of this shift in term of budget, as reflected with our 20% plus growth in digital related services.”

David Rowland

Expect 6-9% local currency growth in FY 16

“For the full fiscal ‘16, we now expect our net revenue to be in the range of 6% to 9% growth in local currency over fiscal ‘15. For operating margin, we continue to expect fiscal year ‘16 to be 14.6% to 14.8%, a 10 to 30 basis points expansion over adjusted fiscal ‘15 results.”

Accenture 4Q15 Earnings Call Notes

Pierre Nanterme – Chairman and CEO

Competitive environment pretty stable

“We’ve not seen much change in the competitive environment. I think the competition is quite well established in the different businesses we’re operating in from the consulting and strategy with the usual players. Then, you have the technology with the other players and then of course operations, different part of our business. So I guess, the environment is pretty stable with some, I mean, winners and losers and we are investing and driving our business to be part of the winners. But not much to say around the competitive environment, it’s still the usual suspects.”

David Rowland – CFO

Expecting another 4% hit from FX in ’16

“Starting with the first quarter of fiscal ’16, we expect revenues to be in the range of $7.7 billion to $7.95 billion. This assumes the impact of FX will be a negative 8.5% compared to the first quarter of fiscal ’15 and reflects an estimated 6% to 9% growth in local currency. For the full fiscal year ’16, based upon how the rates have been trending over the last few weeks, we currently assume the impact of FX on our results in USD will be negative 4% compared to fiscal ’15.”

Making acquisitions for new capabilities, better expertise and more scale

” we are doing acquisitions for three reasons. I mean, the first one is to accelerate access to capabilities in the new and what we’re calling the new at Accenture is now the combination of digital services, cloud services, security services, all new technologies, if you will, such as cognitive computing, automation, or artificial intelligence. Second is to have access to very deep industry expertise, especially in consulting that is the rational for acquisition of Axia, Javelin, companies consulting deep structure iTRAK, either deep industry expertise in upstream energy in retail. That’s the reason — that’s number two. And the number three would be to scale faster to take the leadership position in the marketplace and by leadership, we mean the Number 1.”

Risk in the macro environment has clicked up a notch or two

“I think, when we look at the macro environment in general, relative to where we were 90 days ago, I would say, relative to where we were at this time last year, the volatility and risk in the macro environment has clicked up a notch or two, and so that’s a factor then.”

Accenture FY 3Q15 Earnings Call Notes

10% local currency revenue growth

“We delivered strong new bookings of $8.5 billion, bringing us to $25.5 billion year-to-date. We generated very strong revenue growth of 10% in local currency, with growth across all five operating groups and all three geographic regions.”

But only 3% eps growth

“We delivered earnings per share of $1.30 on an adjusted basis, a 3% increase. ”

FX will be a -10% to revenue in FY 4Q

” For the fourth quarter of fiscal ‘15, we expect revenues to be in the range of $7.45 billion to $7.70 billion. This assumes the impact that foreign exchange will be a negative 10% compared to the fourth quarter of fiscal ‘14. For the full fiscal ‘15, based upon how 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 7.5% compared to fiscal ‘14.”

Still going to drive 5-6% earnings growth

“For earnings per share on an adjusted basis, we now expect EPS for fiscal ‘15 to be in the range of $4.73 to $4.78 or 5% to 6% growth over fiscal ‘14 results.’

Definitely want to make acquisitions

“I mean, we all have been very clear on our acquisition strategy. Do we want to leverage our cash to make acquisition in order to further enhance our capabilities and get more differentiation, the answer is, yes.

We are looking in acquisition in some very specific areas as you know, from deep expertise in consulting and strategy for an industry standpoint to digital native organization to companies with a deep footprint in operations,”

Big headcount of highly skilled people in their digital business

” If you look in this digital space, we have now roughly 28,000 people working in that environment. And this 28 is very interesting because you will see as you might suspect extraordinary, I would call them high calibers. I’m thinking about the business scientist we are hiring. I’m thinking about the PhDs we are hiring to drive algorithm in Accenture Analytics. And I’m thinking as well about some leading edge designers, we all hiring for Fjord, our design group, at Accenture.”

One of hte largest enterprise app developers, strong in analytics

“we are now one of the largest apps, enterprise apps developer in the world. All this apps development is done in our centers from India as an illustration. And they are marvelous app developer from India and we are leveraging part of the global deliver network for digital to deliver apps services. I’m thinking about Analytics we have as well very strong people in our delivery centers, who are everyday doing analytic work from the GDN and from a lower cost location.”

Saw better performance in Brazil because positioned correctly: digital and cloud

“I guess what we see in Brazil, likewise the other markets is our strategy of rotating the Accenture business to be more digital rich and cloud services rich what we turn now to call the new if you will is paying off. So again, all the markets that have a potential issue if you find the right entry point. And today the right entry point around the world is this unique combination of digital-related services and cloud-enabled services. So if you’re digital rich and cloud rich then you have probably the right formula to drive more growth in each and every market.”

JS Conference Call Notes MON, IHS, ACN

Jeremy S., an investment analyst in Southern California, has started to contribute to Avondale’s company notes database. Below are quotes from some of the calls that Jeremy has read this week.

 

 

Monsanto (MON) CEO Hugh Grant says merging their business with competitor Syngenta would create the world’s largest agricultural seeds company and gain significant synergies

“This would give us an even more precise approach to every acre creating immediate and long-term revenue growth opportunities through a diverse range of optimized, integrated solutions. Near term by combining Syngenta’s leading crop protection portfolio with Monsanto’s leading seeds footprint we would have the unique ability to provide leading science based recommendations of integrated seeds, traits, and crop protection solutions.  This combination would also allow us to more fully participate in the value creation from our crop protection solution recommendations. “

He added that big data will play an increasing role in precision agriculture in the coming years

“Longer term and unique to Monsanto, we will be able to unlock a new data driven approach to provide farmers even more valuable real time insights about their crops with our Climate platform. The information will provide actionable crop protection recommendations to farmers to maximize productivity, while ensuring inputs are applied in a precise manner to meet society’s broad goal to preserve and protect our environment.”

Monsanto (MON) CEO Hugh Grant said he expects to double ongoing earnings per share by 2019.  This type of pledge has the potential to be dangerous as it can cause perverse incentives by the salesforce to channel stuff or it can force senior management to stick to their publically stated strategy as opposed to adapting to shifting market dynamics

“Optimized spending and the milestones that we delivered this year reinforce our confidence in our five-year plan to more than double our fiscal year 2014 ongoing earnings per share by 2019. While we believe the combination with Syngenta as optimal to several customers for the long-term and would drive even greater growth in long-term earnings per share, our current portfolio and our pipeline leads the industry and provides multiple levers to drive our long-term growth projections.”

Monsanto (MON) COO Brett Begemann said the agricultural sector remains challenged

“There is no doubt it has been a tough year with the macro pressures facing global agriculture, namely our retreat and corn acres, currency and pressured commodity prices.  We fully expect the macro environment to recover and are well positioned to participate when it does.  That said, as we develop our operational plans for next year, we are taking a clear eyed view and we expect that many of these headwinds will continue into fiscal year 2016.”

 

 

 

IHS CEO Jerre Stead said the energy market they sell their software into saw softening demand during the quarter due to the recent downturn

“In terms of our core industries and horizontal workflows , resources which includes our energy and chemicals team, continues to experience moderating subscription growth due to industry dynamics.”

And he elaborated that there is plenty of room for improvement in streamlining the company’s operations

“It’s clear that we’ve got too many cooks in the kitchen.  There is not clear simple lines of accountability or simple way to think about it is I want to be able to go to one person and get the answer everything of we need to do and will do on a global basis on the products in each of those industrial areas”

IHS CEO Jerre Stead is taking steps to reduce share dilution of the company due to employee stock option plans

In addition to improving shareholder return from planned stock buybacks, we’re also planning to reduce dilution from shares granted in our stock based compensation program. We’ve made good progress in reducing our stock based compensation expense over the last year and half. We remain committed to continuing this effort and will work to reduce our 2017 annual share purchase by approximately half of our current year level.  Due to the accounting treatment of stock based compensation expense, which would cost the expense of the underlying share grants to be recognized over the vesting period, we expect annual declines in expense over the coming years in the high single digits.”

He wants the company to remain financially disciplined on acquisitions

“I don’t want us to get fooled like I’m watching some other companies today with cheap money buying something that’s accretive because the money is cheap, that wouldn’t be long term.”

 

 

 

Accenture (ACN) CFO David Rowland said the company remains a preferred customer for some of the world’s largest corporations 

“We had 12 clients with bookings in excess of $100 million, given us 33 year-to-date, which signifies the unique and trusted relationship that we have with many of the largest companies in the world.”

And the firm saw continued strength in their technology and healthcare digital practices

“Turning to the operating groups, Communications, Media and Technology continued to lead all operating groups was 17% growth in the quarter. While growth continued to be broad-based, it was most significant in North America.  The drivers across CMT continued to be digital-related services, cost rationalization, several large transformational projects and demand for network-related services.  Clients continue to be focused on digital-related services and operational effectiveness as they position themselves to be more competitive in the marketplace.”

One area of their business that has been growing substantially over the last few years is building mobile apps for corporate clients

“With Accenture Mobility, it is now one of the world’s leading developers of mobile apps, leveraging the capabilities of our global delivery center. We have now developed over 1000 apps across nearly all industries.”

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.”