Delivering in fiscal 2018
Accenture delivered outstanding financial results in fiscal 2018, reflecting excellent demand for our differentiated services—as well as our continued success in putting innovation at the heart of how we serve clients across industries and around the world.
I am particularly pleased that we delivered double-digit revenue growth in local currency for the third time in four years, gaining significant market share. Our performance was broad-based once again, with strong revenue growth across all operating groups and geographic regions—double-digit or high single-digit growth in each case. We also delivered excellent earnings per share and record free cash flow—enabling us to return substantial cash to shareholders while continuing to make significant investments in the business.
Here are some highlights:
- We delivered record new bookings of $42.8 billion, a 12 percent increase in local currency.
- We grew net revenues 10.5 percent in local currency to $39.6 billion—another all-time high.
- We delivered diluted earnings per share of $6.34, compared with $5.44 in fiscal 2017. After excluding $0.40 per share in charges related to tax law changes in fiscal 2018 and a $0.47 per share pension settlement charge in fiscal 2017, adjusted EPS of $6.74 in fiscal 2018 increased 14 percent.
- Operating margin was 14.8 percent, consistent with our adjusted fiscal 2017 operating margin of 14.8 percent, which excludes the 150 basis-point impact of the pension settlement charge.
- We generated very strong free cash flow of $5.4 billion and returned $4.3 billion in cash to shareholders through dividends and share repurchases.
- We announced a 10 percent increase in our semi-annual dividend, to $1.46 per share, shortly after fiscal year-end.
These excellent results enabled us to deliver significant shareholder value in fiscal 2018. Accenture shares provided a 32 percent total return for the year ended August 31—12 percentage points above the S&P 500 Index.
Over the last five fiscal years, we have delivered compound annual revenue growth of 9 percent in local currency and 10 percent compound annual growth in adjusted earnings per share. Our compound annual total return to shareholders for this five-year period was 21 percent, compared with 15 percent for the S&P 500.
Our strong and durable performance reflects the successful execution of our growth strategy. In 2013, we recognized that the technology revolution would significantly disrupt companies and entire industries globally. We began moving aggressively and strategically to further differentiate Accenture in the new digital world—to help clients disrupt rather than be disrupted, and to capture new growth opportunities in a very competitive environment.
Today, our business is focused on providing end-to-end capabilities at scale across the full spectrum of professional services—spanning strategy, consulting, digital, technology and operations. By combining our market-leading capabilities across these businesses with our deep industry expertise, Accenture is uniquely positioned to drive large-scale transformation for our clients. We are shaping strategy in the C-suite, delivering cutting-edge technology solutions and running operations for our clients—giving us an unmatched capability to integrate our services and commit to tangible client outcomes.
Accenture remains the partner of choice for many of the world’s leading companies and largest government agencies on mission-critical transformation programs. For example, we are helping DowDuPont with its post-merger preparations to separate into three new companies.
We serve more than three-quarters of the FORTUNE Global 500 and 92 of the top 100. We also continue to build strong, long-term relationships with our clients, and 97 of our top 100 clients have been with us for 10 years or more.
Another key component of our growth strategy is the significant investments we have made in new, high-growth areas to drive our differentiation and competitiveness. In particular, our rapid rotation to “the New”—digital, cloud and security services—has clearly set us apart, and we further strengthened our leadership position in these areas in fiscal 2018. Net revenues from the New grew about 25 percent in local currency to $23 billion—approximately 60 percent of total revenues—more than double the revenues just three years ago.
Innovating in the New
While the New has now become core to our business, we continue to invest and innovate to capture the next waves of growth. During fiscal 2018, we evolved Accenture Digital to be even more relevant to our clients by focusing on three key market sectors:
- To further strengthen Accenture Interactive—which was again recognized by Ad Age as the world’s leading provider of digital marketing services—we launched Intelligent Marketing Operations, combining platforms, analytics and artificial intelligence to run marketing campaigns as a seamless managed service.
- We also launched Accenture Industry X.0, which is focused on the digital reinvention of industries with smart, connected products and services using the Internet of Things, connected devices and digital platforms.
- In addition, we created Accenture Applied Intelligence by bringing together our capabilities in advanced analytics and artificial intelligence, which we are increasingly embedding at the heart of our clients’ businesses.