Accenture plc reports 24.5% EBITDA growth in 2018 and 1.5 pp EBITDA Margin growth from 14.8% to 16.3%
09/27/2018 • About Accenture plc (
$ACN) • By InTwits
Accenture plc reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 16.3% in FY2018 vs. 14.8% in FY2017 vs. 15.4% in FY2014
- Accenture plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 3.1%
- CAPEX is quite volatile: $534m in FY2018, $464m in FY2017, $710m in FY2016, $290m in FY2015, $299m in FY2014
- In the last 5 years the company invested considerably less than D&A: $2,349m vs. $3,724m. In FY2018 this situation was still the same: CAPEX was 619 while D&A was 927
- The company has highly profitable business model: ROIC is 66.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 13.2%. Revenue growth showed slowdown in FY18Q4 - it was 10.4% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.3 pp from 14.9% to 12.5% in FY2018.
Gross Margin showed almost no change in FY2018. SG&A as a % of Revenue showed almost no change in FY2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018.
Net Income margin showed almost no change in FY2018. The efficient tax rate was 28.2% in FY2018 while the average for the last five years was 25.7%.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.5%. Accenture plc showed almost no change in CAPEX/Revenue from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 1.4%. CAPEX as a % of Revenue followed a growing trend at 0.12 pp per annum in the last 5 years.
Accounts receivable as a % of Revenue showed almost no change in FY2018. Accounts payable as a % of Revenue decreased slightly on 1.3 pp from 5.9% to 4.6% in FY2018.
Accenture plc has spent
$637m on M&A in FY2018 which accounts for 1.5% of revenue.
Return on investment
The company operates at high and attractive ROIC (66.1%) and ROE (42.0%). ROIC increased on 4.4 pp from 61.7% to 66.1% in FY2018. ROE showed almost no change in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.7x and Debt / EBITDA is 0.0x. Debt showed almost no change in FY2018 while cash surged on 22.6%.
Accenture plc has no short term refinancing risk: cash is higher than short term debt (94,835.3%).
Valuation and dividends
The company's trades at EV/EBITDA 15.5x and P/E 27.1x.
The company paid 42.1% of Net Income as dividends in FY2018. Dividends grew on average at 6.4% per annum in the last 5 years).
Management team
Accenture plc's CEO David P Rowland is a founder and has spent 8 years with the company. CEO total compensation was
$22,299,174 in FY2018 which included
$1,077,050 salary.
The company has 0.18% shares owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 459,000 employees. The number of employees didn't change in 2018. Average revenue per employee in FY2018 was
$90,639 and it surged on 13.2%.
Financial and operational results
FY ended 08/31/2018
Accenture plc ($ACN) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 31,875 | 32,914 | 34,798 | 36,765 | 41,603 | 13.2% |
| Gross Profit | 9,684 | 9,809 | 10,277 | 11,030 | 12,443 | 12.8% |
| SG&A | 4,762 | 4,683 | 4,824 | 5,184 | 5,811 | 12.1% |
| EBITDA | 4,921 | 5,082 | 5,539 | 5,434 | 6,768 | 24.5% |
| EBIT | 4,301 | 4,436 | 4,810 | 4,633 | 5,841 | 26.1% |
| Interest expence | 18 | 15 | | | | |
| Tax | 1,122 | 1,137 | 1,254 | 981 | 1,593 | 62.4% |
| Net Income | 2,942 | 3,054 | 4,112 | 3,445 | 4,060 | 17.8% |
| Stock Based Compensation | 671 | 680 | 758 | 795 | 977 | 22.8% |
Balance Sheet
|
|---|
| Cash | 4,921 | 4,361 | 4,906 | 4,127 | 5,061 | 22.6% |
| Accounts Receivable | 3,860 | 3,841 | 4,072 | 4,569 | 4,996 | 9.4% |
| Accounts Payable | 1,064 | 1,151 | 1,281 | 1,525 | 1,349 | -11.6% |
| Short Term Debt | 0 | 2 | 3 | 3 | 5 | 83.6% |
| Long Term Debt | 26 | 26 | 24 | 22 | 20 | -11.2% |
Cash flow
|
|---|
| Capex | 322 | 395 | 497 | 516 | 619 | 20.0% |
| Dividends | 1,255 | 1,353 | 1,438 | 1,568 | 1,709 | 9.0% |
| Acquisitions | 740 | 792 | 933 | 1,704 | 637 | -62.6% |
Ratios
|
|---|
| Revenue growth | 4.9% | 3.3% | 5.7% | 5.7% | 13.2% | |
| EBITDA growth | -0.2% | 3.3% | 9.0% | -1.9% | 24.5% | |
|
|---|
| Gross Margin | 30.4% | 29.8% | 29.5% | 30.0% | 29.9% | -0.1% |
| EBITDA Margin | 15.4% | 15.4% | 15.9% | 14.8% | 16.3% | 1.5% |
| EBIT Margin | 13.5% | 13.5% | 13.8% | 12.6% | 14.0% | 1.4% |
| SG&A, % of revenue | 14.9% | 14.2% | 13.9% | 14.1% | 14.0% | -0.1% |
| SBC, % of revenue | 2.1% | 2.1% | 2.2% | 2.2% | 2.3% | 0.2% |
| Net Income Margin | 9.2% | 9.3% | 11.8% | 9.4% | 9.8% | 0.4% |
| CAPEX, % of revenue | 1.0% | 1.2% | 1.4% | 1.4% | 1.5% | 0.1% |
|
|---|
| ROIC | 80.5% | 81.0% | 81.3% | 61.7% | 66.1% | 4.4% |
| ROE | 55.0% | 51.5% | 60.1% | 41.7% | 42.0% | 0.3% |
| Net Debt/EBITDA | -1.0x | -0.9x | -0.9x | -0.8x | -0.7x | 0.0x |
| Interest expence / Average debt | 65.9% | 53.8% | | | | |
People
|
|---|
| Insider ownership | 0.2% | 0.2% | 0.2% | 0.2% | 0.2% | 0.0% |
| Employees | 305,000 | 358,498 | 384,000 | 459,000 | 459,000 | 0.0% |
| Revenue/Employee, th. $ | 105 | 92 | 91 | 80 | 91 | 13.2% |
Accenture plc ($ACN) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 9,884 | 9,909 | 10,695 | 10,642 | | 9.8% | 13.1% | 14.3% | 10.4% |
| EBITDA | 1,731 | 1,517 | 1,873 | 1,766 | | 13.9% | 14.3% | 76.7% | 15.6% |
| Net Income | 1,124 | 864 | 1,043 | 1,030 | | 11.9% | 3.0% | 55.8% | 10.4% |
Balance Sheet
|
|---|
| Cash | 3,682 | 3,595 | 3,929 | 5,061 | | -9.7% | 11.0% | 16.2% | 22.6% |
| Short Term Debt | 3 | 3 | 3 | 5 | | 7.4% | -1.0% | -3.5% | 83.6% |
| Long Term Debt | 22 | 26 | 26 | 20 | | -9.5% | 5.6% | 5.0% | -11.2% |
Ratios
|
|---|
| Gross Margin | 31.0% | 28.9% | 31.2% | 30.3% | | 0.7% | 0.3% | 0.1% | 0.3% |
| EBITDA Margin | 17.5% | 15.3% | 17.5% | 16.6% | | 0.6% | 0.2% | 6.2% | 0.7% |
| Net Income Margin | 11.4% | 8.7% | 9.8% | 9.7% | | 0.2% | -0.9% | 2.6% | 0.0% |
Peers in IT Consulting & Other Services
Below we provide Accenture plc benchmarking against other companies in IT Consulting & Other Services industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Gopher Protocol Inc ($GOPH) | | -25.0% | 83.3% | 5,471.1% | 461.0% |
| CLPS Incorporation ($CLPS) | | | | 8.1% | 56.0% |
| EPAM Systems, Inc. ($EPAM) | | 25.2% | 26.9% | 25.0% | 27.1% |
| Gartner, Inc. ($IT) | | 7.0% | 13.0% | 35.5% | 20.1% |
| Computer Task Group, Incorporated ($CTG) | | -6.0% | -12.1% | -7.3% | 19.1% |
| |
|---|
| Median (35 companies) | | 3.5% | 8.3% | 3.8% | 3.4% |
|---|
| Accenture plc ($ACN) | | 3.3% | 5.7% | 5.7% | 13.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inpixon ($INPX) | 29.8% | 28.9% | 28.1% | 68.7% | 71.4% |
| Gartner, Inc. ($IT) | 60.5% | 61.2% | 61.3% | 60.1% | 63.1% |
| InterXion Holding N.V. ($INXN) | 59.2% | 60.8% | 61.5% | 61.1% | 60.9% |
| LiveRamp Holdings, Inc. ($RAMP) | 25.1% | 38.6% | 42.5% | 45.7% | 56.2% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 50.4% | 50.8% | 52.3% | 53.6% | 53.5% |
| |
|---|
| Median (37 companies) | 25.8% | 32.4% | 28.1% | 27.7% | 28.9% |
|---|
| Accenture plc ($ACN) | 30.4% | 29.8% | 29.5% | 30.0% | 29.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 41.3% | 44.9% | 43.3% | 42.2% | 42.8% |
| Switch, Inc. ($SWCH) | | 50.7% | 37.0% | 28.5% | 39.8% |
| Cognizant Technology Solutions Corporation ($CTSH) | 20.4% | 19.9% | 19.8% | 19.7% | 20.5% |
| Taoping Inc. ($TAOP) | -54.0% | -237.5% | -117.7% | 13.2% | 18.7% |
| DXC Technology Company ($DXC) | | | | 8.0% | 16.3% |
| |
|---|
| Median (36 companies) | 4.8% | 3.3% | 6.7% | 6.3% | 7.2% |
|---|
| Accenture plc ($ACN) | 15.4% | 15.4% | 15.9% | 14.8% | 16.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 62.5% | 48.1% | 57.4% | 50.5% | 78.3% |
| Switch, Inc. ($SWCH) | | 71.5% | 90.2% | 106.4% | 67.9% |
| Taoping Inc. ($TAOP) | 1.4% | 29.2% | 34.0% | 20.8% | 8.7% |
| Teradata Corporation ($TDC) | 2.0% | 2.1% | 2.3% | 3.6% | 7.1% |
| ServiceSource International, Inc. ($SREV) | 3.4% | 4.7% | 10.4% | 7.2% | 6.5% |
| |
|---|
| Median (35 companies) | 0.9% | 0.8% | 1.1% | 1.2% | 1.5% |
|---|
| Accenture plc ($ACN) | 1.0% | 1.2% | 1.4% | 1.4% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| The Hackett Group, Inc. ($HCKT) | 11.2% | 19.5% | 31.7% | 23.8% | 24.6% |
| Cognizant Technology Solutions Corporation ($CTSH) | 24.7% | 22.0% | 21.3% | 21.9% | 23.8% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 25.3% | 26.5% | 23.1% | 22.6% | 22.5% |
| EPAM Systems, Inc. ($EPAM) | 19.7% | 18.4% | 18.2% | 18.9% | 21.2% |
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION ($SAIC) | 24.4% | 27.4% | 19.6% | 18.3% | 18.4% |
| |
|---|
| Median (44 companies) | 6.2% | 4.7% | 7.3% | 4.7% | 6.9% |
|---|
| Accenture plc ($ACN) | 80.5% | 81.0% | 81.3% | 61.7% | 66.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Infinite Group Inc ($IMCI) | | | 169.6x | | 10.5x |
| InterXion Holding N.V. ($INXN) | 3.3x | 2.9x | 3.4x | 3.8x | 4.6x |
| Gartner, Inc. ($IT) | 0.1x | 1.3x | 0.6x | 11.7x | 4.1x |
| Switch, Inc. ($SWCH) | | 2.2x | 4.0x | 3.2x | 3.3x |
| Presidio, Inc. ($PSDO) | 0.0x | | 5.6x | 3.6x | 3.1x |
| |
|---|
| Median (28 companies) | -0.2x | -0.2x | 0.4x | 0.8x | 1.0x |
|---|
| Accenture plc ($ACN) | -1.0x | -0.9x | -0.9x | -0.8x | -0.7x |
