It was left to CFO, Pamela Craig, to comment on the key trends driving Accenture's Q2 results, while new CEO Pierre Nanterme (see Accenture tops off in French) stuck to the safe ‘motherhood and apple pie’ script on his maiden outing. No change in what’s driving technology outsourcing: “cost optimisation remains paramount”. But definite signs of retuning discretionary spend in web/mobile projects, though the resurgence in ERP work seems primarily driven by cost reduction, along with ‘globalisation’ and compliance.
As for our local shores, Craig said that business “returned nicely” in the UK, with double-digit growth, primarily in private sector. She said that Accenture is “repositioning” its UK public sector business. My sense is that they’d like to get public sector growing in line with the private sector once they have worked out precisely where they can best play.
It was a cracking quarter (to 28 Feb.) for Accenture, with headline growth at 17% to $6.05b, an 18% increase at constant exchange rates (CER). Profitability took a hit, mainly due to higher salary and subcontractor costs. Gross margins lost a point yoy to 31.7%, but smart cost management set operating margins 10bps higher yoy at 12.7%, though a full point down on the prior quarter. Management substantially raised FY revenue guidance (CER), from 8-11% up to 11-14%, with higher EPS too.
I guess we’ll have to wait till next quarter for Nanterme to stamp his style on the results - and perhaps reveal his ‘vision’ for the business. Meanwhile, other players in the UK market will need to look closely at their growth plans for 2011. If Accenture does indeed grow double-digits in a market we still see as declining in real terms (i.e. excluding inflation) – then there’s going to be rather a lot of players who will lose share!