Accenture plc. (ACN)

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Accenture (ACN)

Q4 2013 Earnings Call

September 26, 2013 4:30 pm ET

Executives

KC McClure

Pierre Nanterme - Chairman and Chief Executive Officer

David P. Rowland - Chief Financial Officer

Analysts

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

Tien-tsin Huang - JP Morgan Chase & Co, Research Division

David M. Grossman - Stifel, Nicolaus & Co., Inc., Research Division

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

Kathryn L. Huberty - Morgan Stanley, Research Division

Bryan Keane - Deutsche Bank AG, Research Division

Moshe Katri - Cowen and Company, LLC, Research Division

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

David J. Koning - Robert W. Baird & Co. Incorporated, Research Division

Ashwin Shirvaikar - Citigroup Inc, Research Division

David Togut - Evercore Partners Inc., Research Division

Presentation

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Accenture's Fourth Quarter Fiscal 2013 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded. I'd now like to turn the conference over to KC McClure, Managing Director of Investor Relations. Please go ahead.

KC McClure

Thank you, Paul, and thanks, everyone, for joining us today on our fourth quarter and full year fiscal 2013 earnings announcement. As Paul just mentioned, I'm KC McClure, Managing Director of Investor Relations. With me today are Pierre Nanterme, our Chairman and Chief Executive Officer; and David Rowland, 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. David 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. Pierre will then provide a brief update on our market positioning. David will then provide our business outlook for the first quarter and full fiscal year 2014. And then we will 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 on 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 Factors 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 hand -- 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 fourth quarter and full fiscal year, which demonstrate our ability to continue to drive profitable growth in a volatile and fast-changing market environment.

For the full year, we once again increased market share, drove double-digit EPS growth and strong free cash flow and delivered value for our shareholders. David will provide more detail on both the quarter and the year in a moment, but here are a few highlights for the full year.

We delivered new bookings of $33.3 billion, an all-time high and near the top of our guided range. We generated revenues of $28.6 billion, a 4% increase in local currency. Fourth quarter revenues of $7.1 billion were above our guided range, and we were pleased with our double-digit growth in Health & Public Service and improved performance in both Resources and Communications, Media & Technology.

We delivered earnings per share of $4.93. After adjusting to exclude tax and reorganization benefits in the second and third quarters, earnings per share for the year were $4.21, a 10% increase.

We grew operating income and delivered operating margin of 15.2% for the year. After adjusting to exclude the reorganization benefits, we delivered operating margin of 14.2%, a 30 basis point expansion for the year, which was in line with our expectations.

We generated free cash flow of $2.9 billion, slightly above our guided range, and we continue to have a very strong balance sheet, ending the year with a cash balance of $5.6 billion. We continue to return cash to shareholders with $3.7 billion in share repurchases and dividend payments during the year. And we just announced a semiannual cash dividend of $0.93 per share, which is a 15% increase over our prior dividend.

In fiscal year '13, we, again, benefited from the diversity of our business, from an industry capability and geographic standpoint and made significant investments to position us well for the future.

Now let me hand over to David. David, over to you.

David P. Rowland

Thank you, Pierre, and thanks to all of you for joining us today. As I review the results on this afternoon's call, you'll see that we delivered good results in quarter 4, starting with continued strong profitability and cash flow, but also delivering solid improvement in our net revenues with local currency growth of 4.5%. We saw improvement in revenue growth in quarter 4 with 4 of our 5 operating groups, the Americas and EMEA posting stronger local currency growth in quarter 3.

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