Accenture plc. (ACN)

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Accenture (ACN)

Q1 2013 Earnings Call

December 19, 2012 4:30 pm ET

Executives

KC McClure

Pierre Nanterme - Chief Executive Officer and Director

Pamela J. Craig - Chief Financial Officer

Analysts

Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division

Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division

Kathryn L. Huberty - Morgan Stanley, Research Division

Ashwin Shirvaikar - Citigroup Inc, Research Division

Bryan Keane - Deutsche Bank AG, Research Division

Julio C. Quinteros - Goldman Sachs Group Inc., Research Division

Jason Kupferberg - Jefferies & Company, Inc., Research Division

George A. Price - BB&T Capital Markets, Research Division

Darrin D. Peller - Barclays Capital, Research Division

Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division

Presentation

Operator

Ladies and gentlemen, good afternoon. Thank you for standing by, and welcome to Accenture's First Quarter Fiscal 2013 Earnings Conference Call. [Operator Instructions] And as a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Managing Director of Investor Relations, Ms. KC McClure. Please go ahead.

KC McClure

Thank you, Tom, and thanks, everyone, for joining us today on our first quarter fiscal 2013 earnings announcement. As Tom just mentioned, I'm KC McClure, Managing Director of Investor Relations. With me today are Pierre Nanterme, our Chief Executive Officer; and Pamela Craig, our Chief Financial Officer.

We hope you've had an opportunity to review the news release we issued a short time ago. Let me quickly outline the agenda for today's call. Pierre will begin with an overview of our results. Pam will take you through the financial details, including the income statement and balance sheet, along with some key operational metrics for the first quarter. Pierre will then provide a brief update on our market positioning. Pam will then provide our business outlook for the second quarter and full fiscal year 2013, and then we'll take your questions before Pierre provides a wrap-up at the end of the call. As a reminder, when we discuss revenues during today's call, we're talking about revenues before reimbursements or net revenues.

Some of the matters we'll discuss in this call are forward looking, including the business outlook. You should keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, and that such statements are not a guarantee of our future performance. Such risks and uncertainties include, but are not limited to, general economic conditions and those factors set forth in today's news release and discussed under the Risk Factor section of our annual report on Form 10-K and quarterly reports on Form 10-Q and other SEC filings.

During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include reconciliations of those measures where appropriate to GAAP, in our news release or on the Investor Relations section of our website at accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call.

Now let me turn the call over to Pierre.

Pierre Nanterme

Thank you, KC, and thanks, everyone, for joining us today. We are pleased with our results for the first quarter, which were in line with our expectations and demonstrate that we continue to deliver value to our clients and to run our business with discipline. This is enabling us to drive profitable growth despite a continued volatile economic environment.

Here are a few highlights. We delivered solid new bookings of $7.5 billion. Revenues were $7.2 billion, up 5% in local currency. We are particularly pleased with our double-digit revenue growth in outsourcing, up 13%. Earnings per share were $1.06, up 10%. We expanded operating margin more than 60 basis points to 14.5%.

We continue to have a very strong balance sheet, ending the quarter with a cash balance of $5.7 billion. And we continued to return cash to shareholders through share repurchases and payment of a semiannual cash dividend of $0.81 per share, a 20% increase over our prior dividend.

So we are off to a good start in fiscal year '13 and are raising our outlook for both EPS and operating margin for the full year.

Now I'll hand over to Pam, who will review the numbers in greater detail. Pam, over to you.

Pamela J. Craig

Thank you, Pierre. Happy holidays, and thank you all for joining us today. I am pleased to tell you more about Accenture's fiscal '13 first quarter financial results, which as Pierre just mentioned, are starting us off well for the year. Overall, our growth in revenues was driven by double-digit growth, both in outsourcing and geographically in the Americas. We also achieved double-digit growth in our earnings per share as we continue to drive our business with a strong focus on profitable growth.

Now let's get to the numbers for the first quarter. Unless I state otherwise, all figures are U.S. GAAP except the items that are not part of the financial statements or that are calculations. New bookings for the quarter were $7.5 billion and reflected a negative 2% foreign exchange impact compared with the new bookings in the first quarter last year. This was what we expected after Q4 bookings of $9.2 billion, and we have replenished our opportunity pipeline to be well positioned for bookings in future quarters. Consulting bookings were $4.2 billion, and outsourcing bookings were $3.3 billion.

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