Accenture Plc (ACN)
F4Q2010 Earnings Call Transcript
September 30, 2010 4:30 pm ET
Richard Clark – Managing Director, IR
Bill Green – Chairman and CEO
Pamela Craig – CFO
Tien-Tsin Huang – JPMorgan
Rod Bourgeois – Bernstein
Adam Frisch – Morgan Stanley
Bryan Keane – Credit Suisse
Julio Quinteros – Goldman Sachs
Karl Keirstead – Kaufman Brothers
Tim Fox – Deutsche Bank
Moshe Katri – Cowen
Jason Kupferberg – UBS
Ed Caso – Wells Fargo
Joseph Foresi – Janney Montgomery
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Thank you, Tammy. And thanks, everyone, for joining us today on our fourth quarter and full year fiscal 2010 earnings announcement. As the operator just mentioned, I'm Richard Clark, Managing Director of Investor Relations. With me this afternoon are Bill Green, our Chairman and Chief Executive Officer, and Pamela Craig, our Chief Financial Officer. We hope you have had an opportunity to review the news release we issued a short time ago.
Let me quickly outline the agenda for today’s call. Bill 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 both the fourth quarter and the full year. Bill will then provide insights on what we are seeing in the market and how we are positioning our business for future growth. Pam will then provide our business outlook for the first quarter and full fiscal year 2011. And then we will take your questions.
As a reminder, when we discuss revenues during today’s call, we are talking about revenues before reimbursements or net revenues. Some of the matters we will discuss in this call are forward-looking, and you should keep in mind 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.
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 Factors section of our Annual Report on Form 10-K 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 provide reconciliations of those measures 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 Bill.
Thank you, Richard. And thanks, everyone, for joining us today. I am both pleased with and proud of our performance in fiscal 2010, as we were able to deliver on the commitments we made earlier in the year. And I am particularly delighted with our strong performance in the fourth quarter, which further demonstrates not only growth, but momentum. Through the disciplined management of our business, we delivered our revenue, achieved strong profitability, and generated exceptionally strong cash flow.
Here are few of the highlights from the quarter and the full year. Quarterly revenues were $5.4 billion at the high end of our expected range even after adjusting for the actual FX impact in the quarter. And annual revenues were $21.6 billion, also within our expected range. We delivered strong new bookings of $6.5 billion for the quarter, including more than $3.5 billion in consulting bookings, and full year bookings of $25 billion were in the upper end of our guided range.
We expanded operating margin for both the quarter and the full year. We generated free cash flow of $1.2 billion for the quarter and $2.9 billion for the year, exceeding the top end of our annual range by more than $350 million. We continue to have an exceptionally strong balance sheet, with a cash balance of nearly $5 billion and no debt.
We continued to return cash to shareholders with more than 2 billion of share repurchases during the year, and we just announced the semi-annual cash dividend of $0.45, which represents a 20% increase over the semi-annual dividend we paid earlier this year. To meet increasing client demand for our services, we continued our focused and aggressive hiring of the absolute best people in the market.
This enabled us to reach an important milestone this quarter, as our global headcount passed the 200,000 mark. So we delivered very strong results in the quarter and have a great forward momentum going into fiscal 2011. More importantly, looking at our business in the market, we are better positioned for the future than at any time in our history.
With that, let me turn the call over to Pam who will provide some more detail on the numbers.
Thank you, Bill. Thank you all for joining us today. I am pleased to tell you more about Accenture’s fiscal year 2010 fourth quarter and full year financial results. We delivered strong revenues and cash flow in the fourth quarter and built further on the positive growth that we posted up in Q3.
Despite the uncertainty we saw one year ago, we met or beat all of the elements included in the original annual financial outlook we provided a year ago for our fiscal year 2010. As we look forward into our fiscal ’11, we are solidly positioned and well in line with the initial view we provided at our investor and analyst conference on April 8th, almost six months ago.
Unless I state otherwise, all figures are GAAP except the items that are not part of the financial statements or that are calculations. New bookings for the fourth quarter were $6.5 billion and reflect a negative 1% foreign exchange impact compared with new bookings in the fourth quarter last year. Consulting bookings were $3.5 billion and outsourcing bookings were $3.0 billion.