Accenture plc Net Income surged on 17.7% and EBITDA Margin showed almost no change
09/26/2019 • About Accenture plc (
$ACN) • By InTwits
Accenture plc reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 16.7% in FY2019 vs. 16.3% in FY2018 vs. 15.4% in FY2015
- Accenture plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: $2m in 2019, $1m in 2018, $1m in 2017, $1m in 2016, $1m in 2015
- The company has highly profitable business model: ROIC is 62.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 3.9%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.7 pp from -10.3% to -4.7% in 2019.
Gross Margin increased slightly on 0.90 pp from 29.9% to 30.8% in FY2019. SG&A as a % of Revenue showed almost no change in FY2019.
Net Income margin increased slightly on 1.3 pp from 9.8% to 11.1% in FY2019.
Investments (CAPEX, working capital and M&A)
Accenture plc's CAPEX/Revenue was 1.4% in FY2019. Accenture plc showed almost no change in CAPEX/Revenue from FY2016 to FY2019. It's average level of CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at high and attractive ROIC (62.1%) and ROE (38.6%). ROIC decreased on 4.0 pp from 66.1% to 62.1% in FY2019. ROE decreased on 3.5 pp from 42.0% to 38.6% in FY2019.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.8x and Debt / EBITDA is 0.0x. Debt decreased on 9.4% while cash jumped on 21.1%.
Accenture plc has no short term refinancing risk: cash is higher than short term debt (95,567.8%).
Valuation and dividends
The company's trades at EV/EBITDA 15.6x and P/E 24.8x.
Management team
The company's CEO is Julie Spellman Sweet. Julie Spellman Sweet is a founder and has 1 year tenure with the company. Accenture plc's CFO Kc Mcclure has spent 1 year with the company.
Financial and operational results
FY ended 08/31/2019
Accenture plc ($ACN) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 32,914 | 34,798 | 36,765 | 41,603 | 43,215 | 3.9% |
| Gross Profit | 9,809 | 10,277 | 11,030 | 12,443 | 13,315 | 7.0% |
| SG&A | 4,683 | 4,824 | 5,184 | 5,811 | 6,210 | 6.9% |
| EBITDA | 5,082 | 5,539 | 5,434 | 6,768 | 7,198 | 6.4% |
| EBIT | 4,436 | 4,810 | 4,633 | 5,841 | | |
| Interest expence | 15 | | | | | |
| Tax | 1,137 | 1,254 | 981 | 1,593 | | |
| Net Income | 3,054 | 4,112 | 3,445 | 4,060 | 4,779 | 17.7% |
| Stock Based Compensation | 680 | 758 | 795 | 977 | | |
Balance Sheet
|
|---|
| Cash | 4,361 | 4,906 | 4,127 | 5,061 | 6,127 | 21.1% |
| Accounts Receivable | 3,841 | 4,072 | 4,569 | 4,996 | | |
| Accounts Payable | 1,151 | 1,281 | 1,525 | 1,349 | | |
| Short Term Debt | 2 | 3 | 3 | 5 | 6 | 20.1% |
| Long Term Debt | 26 | 24 | 22 | 20 | 16 | -17.4% |
Cash flow
|
|---|
| Capex | 395 | 497 | 516 | 619 | 599 | -3.3% |
| Dividends | 1,353 | 1,438 | 1,568 | 1,709 | | |
| Acquisitions | 792 | 933 | 1,704 | 637 | | |
Ratios
|
|---|
| Revenue growth | 3.3% | 5.7% | 5.7% | 13.2% | 3.9% | |
| EBITDA growth | 3.3% | 9.0% | -1.9% | 24.5% | 6.4% | |
|
|---|
| Gross Margin | 29.8% | 29.5% | 30.0% | 29.9% | 30.8% | 0.9% |
| EBITDA Margin | 15.4% | 15.9% | 14.8% | 16.3% | 16.7% | 0.4% |
| EBIT Margin | 13.5% | 13.8% | 12.6% | 14.0% | |
| SG&A, % of revenue | 14.2% | 13.9% | 14.1% | 14.0% | 14.4% | 0.4% |
| SBC, % of revenue | 2.1% | 2.2% | 2.2% | 2.3% | |
| Net Income Margin | 9.3% | 11.8% | 9.4% | 9.8% | 11.1% | 1.3% |
| CAPEX, % of revenue | 1.2% | 1.4% | 1.4% | 1.5% | 1.4% | -0.1% |
|
|---|
| ROIC | 81.0% | 81.3% | 61.7% | 66.1% | 62.1% | -4.0% |
| ROE | 51.5% | 60.1% | 41.7% | 42.0% | 38.6% | -3.5% |
| Net Debt/EBITDA | -0.9x | -0.9x | -0.8x | -0.7x | -0.8x | -0.1x |
| Interest expence / Average debt | 53.1% | | | | | |
People
|
|---|
| Insider ownership | 0.2% | 0.2% | 0.2% | 0.2% | | |
| Employees | 358,498 | 384,000 | 459,000 | 459,000 | | |
| Revenue/Employee, th. $ | 92 | 91 | 80 | 91 | | |
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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Gopher Protocol Inc ($GOPH) | -25.0% | 83.3% | 5,471.1% | 461.0% | |
| CLPS Incorporation ($CLPS) | | | 8.1% | 56.0% | |
| Endava plc ($DAVA) | | | 38.1% | 36.5% | 32.3% |
| EPAM Systems, Inc. ($EPAM) | 25.2% | 26.9% | 25.0% | 27.1% | |
| Gartner, Inc. ($IT) | 7.0% | 13.0% | 35.5% | 20.1% | |
| |
|---|
| Median (36 companies) | 2.8% | 8.3% | 3.9% | 3.6% | 17.5% |
|---|
| Accenture plc ($ACN) | | | 5.7% | 13.2% | 3.9% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Inpixon ($INPX) | 28.9% | 28.1% | 68.7% | 71.4% | |
| Gartner, Inc. ($IT) | 61.2% | 61.3% | 60.1% | 63.1% | |
| InterXion Holding N.V. ($INXN) | 60.8% | 61.5% | 61.1% | 60.9% | |
| LiveRamp Holdings, Inc. ($RAMP) | 38.6% | 42.5% | 45.7% | 56.2% | |
| Booz Allen Hamilton Holding Corporation ($BAH) | 50.8% | 52.3% | 53.6% | 53.5% | |
| |
|---|
| Median (38 companies) | 32.8% | 28.8% | 29.1% | 29.9% | 31.6% |
|---|
| Accenture plc ($ACN) | | 29.5% | 30.0% | 29.9% | 30.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| InterXion Holding N.V. ($INXN) | 44.9% | 43.3% | 42.2% | 42.8% | |
| Switch, Inc. ($SWCH) | 50.7% | 37.0% | 28.5% | 39.8% | |
| Cognizant Technology Solutions Corporation ($CTSH) | 19.9% | 19.8% | 19.7% | 20.5% | |
| Taoping Inc. ($TAOP) | -237.5% | -117.7% | 13.2% | 18.7% | |
| DXC Technology Company ($DXC) | | | 8.0% | 16.3% | |
| |
|---|
| Median (37 companies) | 3.4% | 6.7% | 6.9% | 7.2% | 5.2% |
|---|
| Accenture plc ($ACN) | | 15.9% | 14.8% | 16.3% | 16.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| InterXion Holding N.V. ($INXN) | 48.1% | 57.4% | 50.5% | 78.3% | |
| Switch, Inc. ($SWCH) | 71.5% | 90.2% | 106.4% | 67.9% | |
| Taoping Inc. ($TAOP) | 29.2% | 34.0% | 20.8% | 8.7% | |
| Teradata Corporation ($TDC) | 2.1% | 2.3% | 3.6% | 7.1% | |
| ServiceSource International, Inc. ($SREV) | 4.7% | 10.4% | 7.2% | 6.5% | |
| |
|---|
| Median (36 companies) | 0.9% | 1.1% | 1.4% | 1.5% | 1.3% |
|---|
| Accenture plc ($ACN) | | 1.4% | 1.4% | 1.5% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Endava plc ($DAVA) | | | 36.0% | 29.6% | 26.1% |
| The Hackett Group, Inc. ($HCKT) | 19.5% | 31.7% | 23.8% | 24.6% | |
| Cognizant Technology Solutions Corporation ($CTSH) | 22.0% | 21.3% | 21.9% | 23.8% | |
| Booz Allen Hamilton Holding Corporation ($BAH) | 26.5% | 23.1% | 22.6% | 22.5% | |
| EPAM Systems, Inc. ($EPAM) | 18.4% | 18.2% | 18.9% | 21.2% | |
| |
|---|
| Median (45 companies) | 5.8% | 7.3% | 4.7% | 6.9% | -4.3% |
|---|
| Accenture plc ($ACN) | | 81.3% | 61.7% | 66.1% | 62.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Infinite Group Inc ($IMCI) | | 169.6x | | 10.5x | |
| InterXion Holding N.V. ($INXN) | 2.9x | 3.4x | 3.8x | 4.6x | |
| Gartner, Inc. ($IT) | 1.3x | 0.6x | 11.7x | 4.1x | |
| Switch, Inc. ($SWCH) | 2.2x | 4.0x | 3.2x | 3.3x | |
| Presidio, Inc. ($PSDO) | | 5.6x | 3.6x | 3.1x | |
| |
|---|
| Median (29 companies) | -0.2x | 0.3x | 0.6x | 0.8x | -1.7x |
|---|
| Accenture plc ($ACN) | | -0.9x | -0.8x | -0.7x | -0.8x |
