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SHAREHOLDER LETTER


From Our
Chairman & CEO

2016 Letter to Shareholders

Accenture delivered outstanding financial results in fiscal 2016, demonstrating that our growth strategy is resonating with our clients and that we continue to execute very well.

We met or exceeded all of the objectives in our initial business outlook for the year. I am particularly pleased that we delivered double-digit revenue growth in local currency for the second year in a row, gaining significant market share. We also generated strong new bookings and delivered excellent earnings per share and free cash flow—enabling us to return substantial cash to shareholders while making significant investments in our business. Here are some highlights:



Our durable and balanced performance—across industries, businesses and geographic regions—is particularly impressive in the context of a global economic environment that remains volatile and uncertain. We achieved double-digit revenue growth in local currency for the year in three of our five operating groups and in both North America and Europe, our two largest geographic regions. In the United States—our largest market—we have now delivered double-digit growth in five of the last six years.
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"Accenture delivered outstanding financial results in fiscal 2016, demonstrating that our growth strategy is resonating with our clients and that we continue to execute very well."
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Our continued strong financial results, together with our focus on returning cash to shareholders, enabled us to deliver significant shareholder value in fiscal 2016. Accenture shares provided a 24 percent total return (including dividends) for the year ended August 31—11 percentage points above the S&P 500 Index. For the last five fiscal years, our compound annual total return to shareholders has been 19 percent, compared with 15 percent for the S&P 500.

Driving differentiation

We have taken bold strategic actions over the last few years to drive differentiation and make Accenture the leading professional services company in the new digital world. We have aligned Accenture around five distinct businesses, transformed the services we offer and increased our investment in new and high-growth areas.

Our five businesses—Accenture Strategy, Accenture Consulting, Accenture Digital, Accenture Technology and Accenture Operations—all operate at scale and are highly competitive, while also working together synergistically to deliver value for our clients.

Today, the breadth of capabilities we provide—end-to-end—is truly unique in the marketplace. We are highly relevant in the C-suite; we deliver cutting-edge technologies, digital solutions and innovative platforms; and we operate services on behalf of clients to drive tangible outcomes.

At the same time, we have transformed our services, rotating our business rapidly to what we call “the New”—digital-, cloud- and security-related services—which together accounted for about $13.5 billion or 40 percent of our total revenues in fiscal 2016. That is a substantial increase from approximately 30 percent of revenues just one year ago.

In digital, we bring together our market-leading capabilities in Accenture Interactive, Accenture Analytics and Accenture Mobility:


In cloud, we are focused on building strong platforms for key industries, such as our Accenture Life Sciences Cloud for R&D platform. This truly innovative solution to collect, share and analyze clinical data is now being used by seven top pharmaceutical companies—including Pfizer, Merck, GSK and Lilly—to accelerate drug development and improve patient outcomes.

And in security, our cybersecurity experts are working with many leading companies, providing them with comprehensive next-generation solutions spanning strategy development, risk management, cyber defense, digital identity, application security and managed security services.

We continue to make substantial investments across our business, particularly in acquisitions. In fiscal 2016, we invested more than $930 million of capital in acquisitions—in addition to about $800 million the prior year—and approximately 70 percent of these investments were in “the New.” Key examples in fiscal 2016 included Cloud Sherpas, a leading cloud advisory and services provider; IMJ Corporation, one of Japan’s largest digital marketing agencies; and several European digital services companies, including MOBGEN in the Netherlands, Tecnilόgica in Spain and dgroup in Germany.

We are also investing to enhance our expertise in key industries through acquisitions such as Sagacious Consultants in Health, Beacon Consulting and Formicary in Capital Markets, and Schlumberger Business Consulting and Cimation in Energy.

With our broad range of services and deep industry expertise, Accenture remains the partner of choice for many of the world’s leading companies and largest government agencies on mission-critical transformation programs. We serve more than three-quarters of the FORTUNE Global 500 and 94 of the top 100. We also continue to build strong, long-term relationships with our clients. All of our top 100 clients have been clients for at least five years, and 98 have been clients for 10 years or more.

Leading with innovation

In today’s fast-changing business environment, where companies need to continually reinvent themselves, we are increasingly leading with innovation to help clients—and Accenture itself—“imagine and invent” the future. Our unique approach, through the Accenture Innovation Architecture, enables us to combine our capabilities across the company to develop and deliver disruptive innovations—and to scale them faster. Our innovation capabilities include:



A key indicator of our innovation capabilities is our extensive intellectual property portfolio, which today includes more than 5,500 patents and pending patent applications in 44 countries, in addition to our many trade secrets. We have patented innovations in the most disruptive emerging technologies, including artificial intelligence, cybersecurity, drones, virtual agents, Internet of Things, platforms and many more. Our intellectual property is an important asset for Accenture, differentiating our services and driving value in the marketplace.

Our people and our communities

One of Accenture’s highest priorities—as a talent-led organization—is attracting, developing and inspiring the very best people in our industry. Each of our five businesses has a unique talent strategy focused on the highly specialized and differentiated skills needed to serve our clients. In fiscal 2016, we invested $941 million in training and professional development for our people, using digital learning technologies to help deepen skills and drive innovation.

We also pioneered Performance Achievement, our new approach to performance management, which is enabling us to better understand our people’s skills and aspirations, and provide real-time feedback to accelerate their career development. By moving from annual performance reviews to a digitally enabled process featuring ongoing, forward-looking conversations, we are empowering and inspiring our people to succeed professionally as well as personally.

We were very pleased to be recognized once again as one of FORTUNE's "100 Best Companies to Work For," as well as one of the "World's Most Ethical Companies" by the Ethisphere Institute. And we were proud that our work with the United Nations High Commissioner for Refugees to deliver a biometric identity management system earned us a place on FORTUNE’s “Change the World” list of the 50 best companies putting purpose at the center of their business strategies.

We are committed to making a difference in the communities where we work and live—from closing employment gaps, to advancing client sustainability, to accelerating gender equality in the workforce.

Through Skills to Succeed, Accenture and our partners have now equipped more than 1.2 million people around the world with the skills to get a job or build a business since 2010. We are increasingly leveraging technology and digital solutions to scale our impact as we strive to meet our goal of equipping more than 3 million people with workplace or entrepreneurial skills by 2020.


We also remain focused on reducing our environmental impact and have made further progress toward our goal of decreasing our per-employee carbon emissions by more than 50 percent by 2020 from our 2007 baseline. We are using collaborative technologies to connect our people and clients while reducing travel.


Accenture’s commitment to diversity, which starts at the top, makes us stronger, smarter and more innovative. We offer an inclusive environment regardless of ethnicity, religion, gender, sexual orientation, age or disability. Our more than 145,000 women make up more than one-third of our global workforce, and we were very pleased to surpass our goal of reaching 40 percent women new hires by 2017.


In closing, I want to thank all Accenture people around the world for their continued hard work and dedication to our clients and our business, which enabled us to deliver another excellent year. We have strong, ongoing momentum in our business and are very well-positioned in the marketplace. With the highly differentiated capabilities we are building, our continued rotation to “the New” and our disciplined management of the business, I am very confident in our ability to continue gaining market share and driving sustainable, profitable growth.

Pierre Nanterme
Chairman & CEO
October 28, 2016