If you are a ‘glass half empty’ sort of chap, you’d say that Accenture expects revenue growth to halve in 2012, on the basis that they delivered 15% growth (at constant exchange rates, CER) in FY11 (to 31st August) and are ‘only’ guiding 7%-10% in FY12. On the other hand, if you were a ‘glass half full’ sort of chap, you’d point out that 7%-10% is exactly what management guided to this time last year.
Whichever sort of chap you are, there’s no denying that Accenture had a great year, with every single operating group, service line and geography delivering double-digit revenue growth (CER) bar Health & Public Service (+7%). Even EMEA – a region that management sees as “challenged” – grew by 11% CER, though they expect our region to grow slower than the Americas in 2012 too.
And what was driving all this this growth? Top of the list remains “cost take-out, both near-term and structural”. There’s also “strong demand” for ERP stimulated by “globalization, regulation and operational efficiency”. Management also referred to an “uptick” in demand for digital and social technology projects, which rather suggests going from a trickle to a stream rather than to a flood.
So does this mean we should be breaking out the champagne for 2012? We think not. What we are seeing here is substantial share gain by Accenture at the expense of lower life forms. We’ll get a better sense of Accenture’s UK revenues once the 10K is published, but we stick by our view that 2012 will be an all but flat year for the UK software and IT services market in real terms (see UK SITS Market Trends & Forecasts - July 2011), with Accenture (and a few others, mainly from far-away lands) striding even further head of the pack.
Oh, and for the record, Accenture’s headline revenues rose by 18% to $25.5b as reported, with operating margins expanding by 10bps to 13.6%. Management expects another 10-30bps next year. Need we say it again – class act!