Accenture - Amazon Web Servicesedupristine.s3.amazonaws.com/Courses/PGCFR_ACFM/Part_Time/Acc… · Trefis price estimate. — SOURCES OF VALUE — Market Leader in Outsourcing The

Accenture

ANALYSIS for NYSE : ACN OCTOBER 9, 2012

$73.56$46.8 B MKT CAP

Trefis Estimate

$70.40$44.8 B MKT CAP

Market Price

See the Full Analysis for Accenture on Trefis

— CORPORATE SNAPSHOT —

Accenture offers outsourcing and consulting services primarily to Fortune 500

companies. It helps its clients improve their business processes by leveraging

technology and utilizing outsourced service providers wherever appropriate.

For instance Accenture may help the IT department of a client to outsource

the development and maintenance of software applications used by company

employees. The clients benefit through long term IT cost savings and

improved processes for application development.

In Technology Consulting, Accenture competes with IBM at the top of

the heap. Accenture's expertise in the technology space includes IT Strategy,

Enterprise IT Architecture and Infrastructure, Management of Data

(Security, Privacy and Storage), and the entire spectrum of Application

Software, ranging from development to maintenance.

Accenture is one of the best positioned companies in IT Services in

today's economic context because of three reasons:

It has a very resilient business model with a healthy mix of outsourcing

and consulting at a ~45/55 revenue ratio.

1.

The firm is a market leader in outsourcing and is the growth engine of

IT Services along with IBM and HP, supported by its extensive Global

Delivery Network (GDN)

2.

It has a strong consulting practice along with IBM in the IT space and

supported by its ability to leverage specialized industry expertise through

its group of management consultants.

3.

— VALUATION HIGHLIGHTS —

Outsourcing (Technology Outsourcing, Business Outsourcing)

constitutes 31% of the Trefis price estimate for Accenture's stock.

1.

Management Consulting constitutes 25% of the Trefis price estimate for

Accenture's stock.

2.

Technology Consulting constitutes 22% of the Trefis price estimate for

Accenture's stock.

3.

MANAGEMENT CONSULTING 4Consultant Bill Rate per Hour

5

Annual Billable Hours per

Consultant

5Consultant Headcount

6Consultant Utilization

7

Management Consulting EBITDA

Margin

TECHNOLOGY CONSULTING 9Consultant Bill Rate per Hour

10Billable Hours per Year

10Technology Consultant Headcount

11Technology Consultant Utilization

12

Technology Consulting EBITDA

Margin

TECHNOLOGY OUTSOURCING

14

Bill Rate per Hour for Accenture

Software Application Outsourcing

Professionals

15

Annual Billable Hours per Accenture

Professional

15

Number of Accenture Software

Application Outsourcing

Professionals

17

Utilization Rate for Accenture


Professionals

18

Technology Outsourcing EBITDA

Profit Margin

BUSINESS OUTSOURCING

19


Business Process Outsourcing

Professionals

20

Number of Accenture Business Process

Outsourcing Professionals

22

Utilization Rate of Accenture Business

Process Outsourcing Professionals

23

Business Process Outsourcing EBITDA

Profit Margin

SYSTEMS INTEGRATION 24Professional Bill Rate per Hour

25Systems Integration Headcount

26

Systems Integration EBITDA Profit

Margin

APPENDICES 29Summary P&L for Accenture

30

Detailed Management Consulting

P&L

31

Detailed Technology Consulting

P&L

32

Detailed Technology Outsourcing

P&L

Detailed Business Outsourcing

http://www.trefis.com/company?hm=ACN.trefis&from=pdf

See the Interactive Valuation Breakdown on Trefis

Our share price estimate and the overall company value is derived by

summing-up the values of individual divisions/businesses in a sum-of-the-

parts analysis. The value of each division is calculated using a discounted cash

flow (DCF) methodology.

We forecast fundamental drivers like pricing, market share, and profit

margins for different businesses in estimating the division’s value within the

DCF framework. The analysis below primarily focuses on those important

forecasts that drive our share price and value estimate.

Our complete analysis, including sources of historical data, underlying

equations and additional discussion are available on www.trefis.com.

— POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE —

Below are key drivers of Accentures's value that present opportunities for

upside or downside to the current Trefis price estimate for Accenture

Outsourcing

Technology Outsourcing Revenue: We currently estimate that

Technology outsourcing revenues will grow at nearly 7% per year till the

end of our forecast period. Currently, we estimate that revenues are $7.1

billion in 2011. If revenues were to grow at a much slower rate of ~1% due

to competition and Europe slowdown concerns, we can expect a 10%

downside to the current Trefis Price estimate. If outsourcing revenues

grow at a rate of 15%, we can expect an upside of 15% to the current

Trefis Price estimate.

•

Management Consulting

Management Consulting EBITDA Margins: We forecast that

Management Consulting EBITDA profit margins will remain flat at its

2011-2012 level of ~20% for the rest of the Trefis forecast period. If

EBITDA margins were to increase to 25% by the end of the forecast

period, we can expect a 10% upside to the current Trefis price estimate. If

margins fall due to a slowly recovering economy and Europe slowdown

concerns, and reach 15%, we can expect a ~5% downside to the current

•

33P&L

34Detailed Systems Integration P&L

TREFIS ANALYSIS for ACCENTURE [email protected] + 1 617 394 8763 •2

http://www.trefis.com/company#/ACN?from=pdf


http://www.trefis.com

http://www.trefis.com/company?hm=ACN.trefis&driver=0279&from=pdf

http://www.trefis.com/company?hm=ACN.trefis&driver=0024&from=pdf

Trefis price estimate.

— SOURCES OF VALUE —

Market Leader in OutsourcingThe share of outsourcing in Accenture's revenues has gradually increased

from ~ 35% in 2005 to ~42% in 2011. We expect it to stabilize around the

current level going forward. Outsourcing is the growth engine of IT Services

and Accenture is among the leaders in the space. Accenture is a market leader

in 'Application Outsourcing' and among the top players in 'Business Process

Outsourcing' and 'Infrastructure Outsourcing' along with IBM, HP and the

top Indian players.

— KEY TRENDS —

Growing Demand for Software Application OutsourcingSince software development and maintenance is easier to outsource as

compared to outsourcing complete processes or IT infrastructure (given the

increased complexity), Application Outsourcing is growing faster than BPO

and Infrastructure Outsourcing.

See the Full Analysis for Accenture on Trefis



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Management Consulting The Management Consulting division constitutes 25.1% of our $73.56 price estimate for this stock, based on our sum of the

parts analysis.The most important drivers for the Management Consulting business are:

Consultant Bill Rate per Hour

Annual Billable Hours per Consultant

Consultant Headcount

Consultant Utilization

Management Consulting EBITDA Margin

— CONSULTANT BILL RATE PER HOUR —

This refers to the average rate per hour that Accenture charges its clients for its consultants working on a project.

Historically, the average bill rate has increased by about 15% from 2005 to 2008. In 2009, the Consultant Bill Rate per

Hour decreased by 15% as the consulting industry was hit hard by the economic recession forcing Accenture to cut down

on bill rates. The rates remained almost flat in 2010 before increasing slightly in 2011 to $175. Going forward we expect

Consultant Bill Rate per Hour to increase gradually as economic conditions improve and reach $250 by the end of our

forecast period.

Forecast Rationale

AS ECONOMIC CONDITIONS IMPROVE THE BILL RATE SHOULD INCREASE – As US economy went into recession, several

firms deferred decisions to seek consulting and put a hold on existing projects. With the economic environment

improving the firms will once again look for advice in order to compete better in a fast changing environment. This

will result in a greater demand for management consulting solutions allowing Accenture to charge higher Consultant

Bill Rate per Hour in the future. According to the firm, its Management Consulting as a business has held up

relatively to lesser firms even in during the economic recession and, hence, pricing should go up again once the

Consultant Bill Rate per Hour ($)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

5 0

100

150

200

250


http://www.trefis.com//company?hm=ACN.trefis&division=0008&driver=0018&from=pdf

business environment improves. Accenture Management Consulting competes with other top leagues players such as

Mckinsey, Boston Consulting Group in terms of expertise. With experience varying from strategic consulting to the

optimization of processes ranging from operations to finance, Accenture covers a wide variety of fields making it one

of the more sought after firms.

Sources for historical data and explanations can be found on the Trefis.com website (link)

— ANNUAL BILLABLE HOURS PER CONSULTANT —

This refers to the total number of hours than an Accenture consultant works on various projects for which the clients are

charged for the work.

Total number of billable hours per year is calculated based on an average of 20 working days for a month comprising 9

hours each day.


— CONSULTANT HEADCOUNT —

This refers to the total number of employees available in a particular division for projects.

Annual Billable Hours per Consultant (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

0.5

1.0

1.5

2.0


http://www.trefis.com/company?hm=ACN.trefis&division=0008&driver=0018&from=pdf&scroll=1



Consultant headcount has increased by almost 20% from 2005 to 2008 as Accenture ramped up its headcount owing to an

increase in business demand. In 2009 the headcount decreased by more than 5% as the global economy went into recession

and significantly decreased the demand for technology consulting. In 2010 as the economic environment showed some

signs of improvement, Accenture increased its headcount by as much as 15% expecting a surge in future demand.

Headcount grew another 10% in 2011 to reach ~19K. We expect headcount to increase slowly till the end of the forecast

period. For a services firm like Accenture, the demand for a particular business drives the headcount numbers and

utilization during the given year. Going forward we expect the headcount to grow very slowly.

Forecast RationaleAs the economy showed signs of improvement in 2010 - 2011, Accenture increased its headcount anticipating a surge in

business in the future.

The firm has made extensive hiring taking advantage of the economic situation, hiring best-in-class talent at cheap

rates, and we expect the growth in the headcount in the future to be minimal.

However, given the fact that the firm's management consulting business has held up well even during the touch

economic times, we expect an increase in headcount as business conditions improve.


— CONSULTANT UTILIZATION —

Consultant Utilization is the average ratio of headcount working on a project at a given time, i.e. being utilized versus

the total headcount available to Accenture.

Consultant Headcount (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

5

1 0

1 5

2 0

2 5




The utilization rate has historically remained high at around 80%, growing at a slow rate rate each year. In 2008 it dipped

briefly as the business environment declined. In 2009 the utilization rate jumped back as Accenture laid off employees

during the economic recession which led to a higher utilization of existing consultants despite a decline in business. In

2010 the rate remained constant despite a significant increase of 15% in Accenture's headcount as the demand for

consulting services surged with an improvement in the economic environment. Consultant utilization increased in 2011 to

87%. Going forward we expect the rate to remain constant as firms like to maintain the utilization at a certain maximum

and keep bench strength for upcoming new projects. If the demand increases then instead of increasing utilization the

company hires more consultants.

Forecast RationaleFor a services firm like Accenture the demand for a particular business drives the headcount numbers and utilization

during the given year.

Accenture Management Consulting claims to belong in the top league with firms like Mckinsey, Boston Consulting

Group and Bain & Company in terms of its expertise.

With expertise varying from Strategic Consulting, M&A to Optimal Supply Chain Management, and optimization

of processes ranging from operations to finance to HR, Accenture covers a wide gamut of fields making it one of the more

sought after firms by its clients.

The fact that firm's management consulting business has held up even during the tough economic times lead us to

believe that it will be able to maintain its utilization rates going forward despite the uptick in consultant headcount.


— MANAGEMENT CONSULTING EBITDA MARGIN —

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) are profits after factoring in typical

expenses such as Cost of Goods and Services Sold, SG&A Expense and R&D Expense. EBITDA Margin represents

divisional EBITDA as a percentage of divisional revenues. We adjust EBITDA figures to exclude non-recurring charges

and non-cash charges such as Stock-Based Compensation Expense.

Consultant Utilization (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

2 5

5 0

7 5




Historically, Management Consulting EBITDA Margin improved from 15.3% in 2006 to 19.7% in 2011.

Accenture has been able to manage a marginal decline in administrative costs but the sales and marketing costs

continue to rise for Accenture as they focus on trying to make their presence felt among their clients and win new clients

especially during these tough times.

The firm, however has managed to cut their cost of services and general and administrative costs as a percentage of

sales, thereby driving margins up during the tough economic environment of 2008-09.

We forecast Management Consulting EBITDA Margin to remain constant going forward.

Forecast RationaleWe believe Accenture will continue to strive to expand its margin by containing its costs. However as businesses around

the globe tighten their spending in the wake of uncertain macroeconomic factors, the margins can be expected to remain

constant at best.


In addition, you can see the detailed P&L for the Management Consulting business in the Appendix (link)

Management Consulting EBITDA Margin (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Revenue (Bil $) 5.74 4.78 5.04 6.03 6.67 7.14 7.87 8.68 9.57 10.6 11.6 12.8

Direct Expense (Bil $) 4.65 3.85 4.05 4.84 5.35 5.73 6.32 6.97 7.68 8.47 9.34 10.3

Indirect Expense (Bil $) 0.43 0.02 0.26 0.37 0.53 0.55 0.66 0.85 0.86 0.96 1.19 1.20

Adjusted EBITDA (Bil $) 1.09 0.93 0.99 1.19 1.31 1.41 1.55 1.71 1.89 2.08 2.29 2.53

Free Cash Flow (Bil $) n/a n/a n/a n/a 0.79 0.85 0.89 0.86 1.02 1.12 1.11 1.32




http://www.google.com

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2.

Technology Consulting The most important drivers for the Technology Consulting business are:

Consultant Bill Rate per Hour

Billable Hours per Year

Technology Consultant Headcount

Technology Consultant Utilization

Technology Consulting EBITDA Margin

— CONSULTANT BILL RATE PER HOUR —


Historically, the average bill rate increased by about 15% from 2005 to 2008. In 2009, the bill rate declined by 10% as the

consulting industry was hit hard by the economic recession forcing Accenture to cut down on bill rates. The rates

remained almost flat in 2010 before increasing slightly in 2011 to reach $124. Going forward we expect the bill rate to

increase gradually as economic conditions improve.

Forecast Rationale

CONTINUED INCREASES IN DEMAND – According to the firm technology consulting is continuing to show growth as

clients avail the services offered by Accenture. This should help the average bill rate recover as the business

environment recovers and firms increasingly rely on consulting services to sustain growth in a competitive and fast

changing environment.

IT SPEND TO INCREASE GOING FORWARD – Firms hire consultants in order to help improve their business. This is

purely a discretionary and not necessary spend which can be cut back immediately if a firm has to cut costs. As US

economy went into recession several firms deferred decisions about new work and put a hold on extensions in current

projects. With the economic environment improving, the IT spend is expected to increase in going forward. This will

result in a greater demand for technology consulting solutions allowing Accenture to charge higher in the future.

Consultant Bill Rate per Hour ($)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

2 5

5 0

7 5

100

125

150




— BILLABLE HOURS PER YEAR —



Total number of billable hours per year is calculated based on an average of 20 working days for a month, comprising 9

hours each day.


— TECHNOLOGY CONSULTANT HEADCOUNT —


Billable Hours per Year (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

0.5

1.0

1.5

2.0





1.

Headcount has increased by almost 30% from 2005 to 2008 as Accenture has ramped up its headcount owing to increase in

business demand. For a services firm like Accenture the demand for a particular business drives the headcount numbers

and utilization during the given year. In 2009 headcount decreased by more than 5% as the global economy went into

recession and significantly decreased the demand for technology consulting with firms around the world looking to cut

costs. In 2010 as the economic environment showed some signs of improvement, Accenture increased its headcount by as

much as 15% expecting a surge in future demand. Headcount increased by another 10% in 2011 to reach ~29K and going

forward we expect the headcount to grow very slowly.

Forecast Rationale

TECHNOLOGY CONSULTANT HEADCOUNT – As the economy showed signs of improvement in 2010 - 2011, Accenture

increased its headcount, anticipating a surge in business in the future. The firm has made extensive hiring taking

advantage of the economic situation, hiring best-in-class talent at cheap rates, and we expect the growth in the

headcount in the future to be minimal. As the business environment recovers, Accenture's leadership in the field of

Technology Consulting along with IBM should help it drive demand for business which will prompt an increase in

consulting demand and consequently headcount.


— TECHNOLOGY CONSULTANT UTILIZATION —

Technology Consultant Utilization is the average ratio of headcount working on a project at a given time.

Technology Consultant Headcount (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

5

1 0

1 5

2 0

2 5

3 0

3 5

4 0




1.

2.

Utilization has remained at around the 80% level historically. It dipped slightly in 2008 as the business environment

declined.

During 2009, utilization increase as Accenture laid off employees during the economic recession which led to a

higher utilization of existing consultants despite a decline in business.

In 2010 utilization remained constant despite a significant increase of 15% in Accenture's headcount as the demand for

technology consulting surged with an improvement in the economic environment. 2011 saw a slight improvement in

utilization and it grew 3 percentage points to reach 87%. Going forward we expect utilization to remain constant as firms

like to maintain headcount to meet the need for new projects.

Forecast Rationale

GROWING DEMAND FROM ORGANIZATIONS – For a services firm like Accenture the demand for a particular business

drives the headcount numbers and utilization during the given year. Demand for Technology Consulting is growing

with firms looking for IT infrastructure cost reduction, data security and privacy and this has kept the utilization up

even in tough times. We believe the following factor will help Accenture maintain a high utilization rate despite a

significant increase in its headcount.

IT SPEND TO INCREASE GOING FORWARD – Firms hire consultants in order to help improve their business. This is

purely a discretionary and not necessary spend which can be cut back immediately if a firm has to cut costs. As US

economy went into recession several firms deferred decisions about new work and put a hold on extensions in current

projects. With the economic environment improving, the IT spend is expected to increase going forward. This will

result in a greater demand for technology consulting solutions allowing Accenture to maintain its optimum utilization

rate in the future.


— TECHNOLOGY CONSULTING EBITDA MARGIN —

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) are profits after factoring in typical expenses

such as Cost of Goods and Services Sold, SG&A Expense and R&D Expense. EBITDA Margin represents divisional

EBITDA as a percentage of divisional revenues. We adjust EBITDA figures to exclude non-recurring charges and non-

Technology Consultant Utilization (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

2 5

5 0

7 5




cash charges such as Stock-Based Compensation Expense.

Historically, margins improved gradually from 14.7% in 2006 to 18% in 2011.


continue to rise for Accenture as they focus on trying to make their presence felt among their clients and win new clients .

Accenture has also managed to cut their cost of services and general and administrative costs driving up margins even

during the tough economic environment of 2008-09.

We forecast Technology Consulting EBITDA Margin to remain steady going forward.



constant at best.


Technology Consulting EBITDA Margin (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019



Indirect Expense (Bil $) 0.39 0.02 0.25 0.35 0.50 0.53 0.62 0.78 0.77 0.84 1.02 1.02






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In addition, you can see the detailed P&L for the Technology Consulting business in the Appendix (link)

Technology Outsourcing The Technology Outsourcing division is part of the Outsourcing business, and constitutes 20.2% of our $73.56 price

estimate for the stock, based on our sum of the parts analysis.The most important drivers for the Technology Outsourcing

business are:

Bill Rate per Hour for Accenture Software Application Outsourcing Professionals

Annual Billable Hours per Accenture Professional

Number of Accenture Software Application Outsourcing Professionals

Utilization Rate for Accenture Application Outsourcing Professionals

Technology Outsourcing EBITDA Profit Margin

— BILL RATE PER HOUR FOR ACCENTURE SOFTWARE APPLICATION OUTSOURCING PROFESSIONALS

—


The average bill rate has declined by about 19% from 2005 to 2011 due to the following factors:

Indian outsourcing firms have jumped into the competition, thus lowering the rates

The economic slowdown led to clients demand for cost-cutting resulting in further decrease in bill rate

Going forward we expect the bill rate to increase gradually, though it will remain much below historical levels.

Forecast RationaleSupporting

Bill Rate per Hour for Accenture Software Application Outsourcing Professionals ($)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

1 0

2 0

3 0

4 0

5 0




1.

2.

3.

ACCENTURE REMAINS THE LEADER IN THE SPACE – Despite the competition from the Indian players, Accenture holds

an edge in its knowledge house through its pool of management and technology consultants who have far more

experience than the Indian players. We expect the company to continue to leverage this knowledge and technical

know-how and hence expect it to be able to increase their bill rates in the future, but we do not expect it to recover to

the historical high as competitive pricing of Indian factors will continue to weigh.

BILL RATES WILL IMPROVE ALONG WITH THE ECONOMY – A recovery in the economy should help the bill rates to

recover from the levels of 2008-09

Mitigating

COMPETITION TO WEIGH ON BILL RATES – Indian players such as Infosys operate on a lower billing rate and hence

despite low rates compared to Consulting and Systems Integration, we do expect a slight decline in pricing in order to

stay competitive in the market.


— ANNUAL BILLABLE HOURS PER ACCENTURE PROFESSIONAL —



Total number of billable hours per year is calculated based on an average of 20 working days for a month comprising 9

hours each day.


— NUMBER OF ACCENTURE SOFTWARE APPLICATION OUTSOURCING PROFESSIONALS —


Annual Billable Hours per Accenture Professional (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

0.5

1.0

1.5

2.0





1.

2.

1.

2.

The Number of Accenture Software Application Outsourcing Professionals increased by more then 75% from 2005 to

2008 as Accenture ramped up its headcount owing to increase in business demand.

In 2009 the number of professionals decreased by more than 5% as the global economy went into recession and

significantly decreased the demand for technology consulting with firms around the world looking to cut cost.

In 2010 as the economic environment showed some signs of improvement, Accenture increased its headcount by as

much as 15% expecting a surge in future demand. This trend continued into 2011 as headcount increased by another 10% to

reach 67K. For a services firm like Accenture the demand for a particular business drives the headcount numbers and

utilization during the given year.

We expect Accenture's Application Outsourcing headcount to grow at a steady rate in the long run because of the

following two reasons:

Demand for Application Outsourcing across industries is growing faster than Business Process Outsourcing and

Infrastructure Outsourcing

Accenture's leadership in the field

Forecast Rationale

INCREASED DEMAND FOR APPLICATION OUTSOURCING – Pressure to reduce IT expenses in times when companies are

trying to cut on IT budgets is forcing firms to outsource these services. Firms are realizing that the cost of ownership

of this is pretty high and resorting to

Software as a Service (SaaS) model. As software development and maintenance is easier to outsource as against

outsourcing complete processes or IT infrastructure given the increased complexity, Application Outsourcing is

growing faster than BPO and Infrastructure Outsourcing.

ACCENTURE'S LEADERSHIP IN APPLICATION OUTSOURCING – Accenture is a market leader along with IBM in the

Application Outsourcing field with close to half of its outsourcing revenues coming from this area.

Resources available - Accenture's Global delivery network in more than 40 locations worldwide allows it to offer

clients 24/7 services, making it one of the most competitive firms in this field.

Industry expertise - Accenture is able to leverage its wide industry knowledge through its experts in Management and

Technology Consulting and thus add strategic value to a client's business.

Scope - Accenture offers a breadth of services from management of a single application to application portfolios and

Number of Accenture Software Application Outsourcing Professionals (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

2 5

5 0

7 5

100



specialises in Enterprise softwares such as SAP, Oracle etc.

Breadth of services - Accenture covers a breadth of services from development to testing, and maintenance to

enhancements/upgrades.

Bundling - Accenture is able to bundle its Application Outsourcing services along with its BPO and Infrastructure

Outsourcing Services thereby offering the complete IT solution to its clients.


— UTILIZATION RATE FOR ACCENTURE APPLICATION OUTSOURCING PROFESSIONALS —

This is is the average ratio of headcount working on a project at a given time.

The utilization rate has historically remained high at 80%. with a slow increase each year. It dipped in 2008 as the business

environment declined.

In 2009 the utilization rate jumped back as Accenture laid off employee during the economic recession which led to a

higher utilization of existing employees despite a decline in business.

As the economy showed signs of improvement in 2010, Accenture increased its AO headcount by ~15% in order to

meet the expected increase in demand. Since this increase in headcount was significant and occurred throughout the year

it led to a decrease in average annual billable hours per professional in 2010. We decreased our Utilization Rate for

Accenture Application Outsourcing Professionals in 2010 to account for fewer billable hours (keeping annual billable

hours per professional constant for consistency). Utilization improved by 6 percentage points in 2011 and reached 86% in

2011.

Outsourcing usually experiences a higher utilization rate than consulting or systems integration and given that the

demand for outsourcing is only growing we expect the utilization to increase back to historical levels going forward.

For a services firm like Accenture, the demand for a particular business drives the headcount numbers and utilization


Forecast Rationale

Utilization Rate for Accenture Application Outsourcing Professionals (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

2 5

5 0

7 5




We expect the utilization levels to go back up to optimum historical level because firms like to maintain the utilization at a

certain maximum and keep bench strength for upcoming new projects. If the demand increases, then instead of increasing

utilization they hire more.


— TECHNOLOGY OUTSOURCING EBITDA PROFIT MARGIN —





Accenture, historically has seen an increase in margins, going from 12.9% in 2005 to 16.1% in 2011.

The firm has been able to manage a marginal decline in administrative costs. However, the sales and marketing costs

continue to rise for Accenture as it focuses in trying to make its presence felt among its clients and win new clients.

The firm has however have managed to cut their cost of services and general and administrative costs in the tough

economic times which has led to an increase in margins.

We forecast Technology Outsourcing EBITDA Profit Margin to remain steady going forward.



constant at best.


Technology Outsourcing EBITDA Profit Margin (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

2.5

5.0

7.5

10.0

12.5

15.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Application Outsourcing (AO) 80.7 80.7 80.7 80.7 80.9 81.2 81.5 81.8 82.1 82.3 82.6 82.9





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•

In addition, you can see the detailed P&L for the Technology Outsourcing business in the Appendix (link)

Business Outsourcing The Business Outsourcing division is part of the Outsourcing business, and constitutes 10.9% of our $73.56 price estimate

for the stock, based on our sum of the parts analysis.The most important drivers for the Business Outsourcing business

are:

Bill Rate per Hour for Accenture Business Process Outsourcing Professionals

Number of Accenture Business Process Outsourcing Professionals

Utilization Rate of Accenture Business Process Outsourcing Professionals

Business Process Outsourcing EBITDA Profit Margin

— BILL RATE PER HOUR FOR ACCENTURE BUSINESS PROCESS OUTSOURCING PROFESSIONALS —

Bill Rate per Hour for Accenture Business Process Outsourcing Professionals is the average rate per hour that

Accenture charges its clients for its consultants working on a project.

The average bill rate has declined by about 22% from 2005 to 2009 owing to following two factors:

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Infrastructure Outsourcing (ITO) 19.3 19.3 19.3 19.3 19.1 18.8 18.5 18.2 17.9 17.7 17.4 17.1


Indirect Expense (Mil $) 345 21.5 253 354 494 518 599 744 731 788 942 924



Bill Rate per Hour for Accenture Business Process Outsourcing Professionals ($)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

1 0

2 0

3 0

4 0

5 0




1.

2.

1.

2.

3.

Indian outsourcing firms have jumped into the competition thus lowering the rates

The economic slowdown led to clients demand for cost cutting resulting in further decrease in Bill Rate per Hour for

Accenture Business Process Outsourcing Professionals

In 2011, the bill rate remained flat as the economic conditions remained uncertain. It stood at $46 per hour. Going forward

we expect the bill rate to increase gradually, though it will remain much below historical levels.

Forecast Rationale

Supporting

ACCENTURE REMAINS THE LEADER IN THE SPACE AND HAS AN EDGE OVER LOWER PRICE INDIAN PLAYERS – Despite

the competition from the Indian Players, Accenture holds an edge in its knowledge house through its pool of

management and technology consultants who have far more experience than the Indian players. We expect the

company to continue to leverage this knowledge and technical know-how and hence expect it to be able to increase

their bill rates in the future, but we do not expect it to recover to the historical high as the competitive pricing of

Indian factors will continue to weigh.

BILL RATES WILL IMPROVE ALONG WITH THE ECONOMY – As the economy recovers, it will help the bill rates to

increase back from the levels of 2008-09.

Mitigating

COMPETITION TO IMPACT BILL RATES – Indian players such as Infosys operate on a lower billing rate and hence

despite low rates compared to Consulting and Systems Integration, we do not expect the bill rate to increase much in

order to stay competitive in the market.


— NUMBER OF ACCENTURE BUSINESS PROCESS OUTSOURCING PROFESSIONALS —

Number of Accenture Business Process Outsourcing Professionals is the total number of employees available in a

particular division for projects.



1.

2.

1.

2.

Number of Accenture Business Process Outsourcing Professionals increased by nearly 70% from 2005 to 2008 as

Accenture ramped up its headcount owing to an increase in business demand. In 2009 the number declined by more than

5% as the global economy went into recession and significantly decreased the demand for technology consulting with firms

around the world looking to cut costs. In 2010 as the economic environment showed some signs of improvement,

Accenture increased its headcount by as much as 15% expecting a surge in future demand. In 2011 Accenture increased its

headcount by 10% expecting a surge in future demand. For a services firm like Accenture, the demand for a particular

business drives the headcount numbers and utilization during the given year. We expect Accenture's Business Process

Outsourcing (BPO) headcount to grow at a steady rate in the long run because of the following two reasons:

Growing demand for Business Process Outsourcing across industries albeit at a slower rate than Application

Outsourcing

Accenture is among the top players in the field and a leader in HR and F&A BPO

Forecast RationaleTrefis considered following factors for its forecast:

STRONG DEMAND FOR OUTSOURCING – Outsourcing processes that are more of a support function rather than a

business critical function helps firms reduce costs and allows them to focus on their core competency. Firms are

typically looking at outsourcing support functions such as HR (recruitment and talent management), Procurement

functions (procuring material for business operations), Finance and Accounting (Order management, Billing,

Transaction processing, etc.) which help run businesses but are not their actual business. Given that these processes

require a more detailed understanding of a company's operations and are not as easy to outsource as software, this

market is going slower than Application Outsourcing.

ACCENTURE'S LEADERSHIP IN BUSINESS PROCESS OUTSOURCING – Accenture is among the top players in this field and

competes with the Indian IT services players. However, in certain fields such as HR, F&A, BPO, etc. it is among the

market leaders.

Resources available - Accenture's global delivery network around the world allows it to leverage its resources 24/7

making it best suited for global companies and one of the most competitive firms in this aspect.

Industry Expertise - Accenture is able to leverage its wide industry knowledge through its experts in Management

and Technology Consulting and thus adds strategic value to a client thereby giving it excellent market understanding.

Number of Accenture Business Process Outsourcing Professionals (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

1 0

2 0

3 0

4 0

5 0

6 0



Experience - Accenture has more than 15 years of experience in providing BPO services making it one of the most

mature organizations in the field.

Scope & Breadth of Services - Accenture offers customized services in each of its service offerings, tailor-made for its

client from HR to F&A, and customer management to procurement and even specialized offerings for companies in

the field of insurance, pharmaceuticals and utilities.

Bundling - Accenture is able to bundle its BPO Offerings along with its Application and Infrastructure Outsourcing

Services thereby offering an end-to-end solution to its clients.


— UTILIZATION RATE OF ACCENTURE BUSINESS PROCESS OUTSOURCING PROFESSIONALS —

Utilization Rate of Accenture Business Process Outsourcing Professionals is the average ratio of headcount working on a

project at a given time or being utilized versus the total headcount available to Accenture.

The utilization rate, historically has been quite high with a slow increase each year except for the dip in 2008 as the

business environment declined.

In 2009 the utilization rate jumped back as Accenture laid off employees during the economic recession which led to

a higher utilization of existing employees despite a decline in business. Utilization rate was ~86% in 2011.

As the economy showed signs of improvement in 2010-11, Accenture increased its BPO professional headcount by

~15% in order to meet the expected increase in demand. Since this increase in headcount was significant and occurred

throughout the year, we decreased the utilization rate in 2010 to account for fewer billable hours for new hires (keeping

annual billable hours per professional constant for consistency).

Outsourcing usually experiences a higher utilization rate than consulting or systems integration and given that the

demand for outsourcing is only growing, we expect the utilization to increase slowly back to historical levels.

For a services firm like Accenture the demand for a particular business drives the headcount numbers and utilization


Utilization Rate of Accenture Business Process Outsourcing Professionals (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

2 5

5 0

7 5




Forecast RationaleWe expect the utilization levels to go back up to optimum historical levels because firms like to maintain the utilization at

a certain maximum and keep bench strength for upcoming new projects. If the demand increases then instead of

increasing utilization rates they hire more.


— BUSINESS PROCESS OUTSOURCING EBITDA PROFIT MARGIN —





Historically, Accenture has witnessed an increase in margins going from 12.7% in 2005 to 16.1% in 2011.


continue to rise for Accenture as they focus in trying to make their presence felt among their clients and win new clients

especially during these tough times.

The firm has however managed to cut their cost of services and general and administrative costs as a percentage of

sales even during tough times of 2008-09.

We forecast Business Process Outsourcing EBITDA Profit Margin to remain steady going forward.



constant at best.


Business Process Outsourcing EBITDA Profit Margin (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

2.5

5.0

7.5

10.0

12.5

15.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019





•

•

•

1.

2.

In addition, you can see the detailed P&L for the Business Outsourcing business in the Appendix (link)

Systems Integration The most important drivers for the Systems Integration business are:

Professional Bill Rate per Hour

Systems Integration Headcount

Systems Integration EBITDA Profit Margin

— PROFESSIONAL BILL RATE PER HOUR —

This is the average rate per hour that Accenture charges its clients for its consultants working on a project.

The average bill rate has declined by about 21% from 2005 to 2010 due to the following factors:

Indian outsourcing firms have jumped into the competition thus lowering the rates

The economic slowdown led to clients demand for cost-cutting resulting in further decrease in the bill rate

In 2011 it increased slightly by 3% to reach $52. Going forward we expect the bill rate to increase gradually, though it will

remain much below historical levels.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019





Free Cash Flow (Mil $) n/a n/a n/a n/a 413 443 444 413 473 498 473 546

Professional Bill Rate per Hour ($)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

1 0

2 0

3 0

4 0

5 0

6 0




1.

2.

Forecast RationaleSupporting:

BILL RATES WILL IMPROVE ALONG WITH THE ECONOMY – As the economy recovers, it will help the bill rates to

increase back from the levels of 2008-09.

Mitigating:

COMPETITION TO PRESSURIZE RATES – Indian players such as Infosys operate on a lower billing rate, and hence

despite low rates compared to Consulting, we do not expect the bill rate to increase much in order to stay competitive

in the market.


— SYSTEMS INTEGRATION HEADCOUNT —


Systems Integration Headcount increased by 50% from 2005 to 2008 as Accenture ramped up its headcount owing to an

increase in business demand. For a services firm like Accenture the demand for a particular business drives the headcount

numbers and utilization during the given year. In 2009 Systems Integration Headcount decreased by more than 5% as the

global economy went into recession and significantly decreased the demand for technology consulting with firms around

the world looking to cut cost. In 2010 as the economic environment showed some signs of improvement, Accenture

increased its headcount by as much as 15% expecting a surge in future demand. In 2011 it increased to ~30K and going

forward we expect the headcount figure to increase gradually.

Forecast RationaleAs the economy showed signs of improvement in 2010 and 2011, Accenture increased its headcount by anticipating a surge

in business in the future.

Systems Integration Headcount (K )

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90

5

1 0

1 5

2 0

2 5

3 0

3 5




The firm has made extensive hiring taking advantage of the economic situation, hiring best-in-class talent at cheap

rates. We expect the headcount growth in the future to be very gradual.


— SYSTEMS INTEGRATION EBITDA PROFIT MARGIN —





Historically, Systems Integration EBITDA Profit Margin has increased gradually from 13% in 2006 to 16.1% in 2011.

Accenture has been able to manage a marginal decline in administrative costs but sales and marketing costs continue

to rise for Accenture as they focus on expanding relations with their current clients as well as new ones.

The firm also has managed to cut their cost of services and general and administrative costs as a percentage of sales in

these tough times thereby leading to an increase in margins.

We forecast Systems Integration EBITDA Profit Margin to remain steady at current levels going forward.



constant at best.


Systems Integration EBITDA Profit Margin (%)

2008 0 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 90.0

2.5

5.0

7.5

10.0

12.5

15.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019








In addition, you can see the detailed P&L for the Systems Integration business in the Appendix (link)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Adjusted EBITDA (Mil $) 419 369 414 487 501 527 559 593 629 667 708 751




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Appendix

Summary P&L for Accenture

Summary P&L for Accenture

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Revenues (Bil $) 23.4 20.9 22.2 26.5 28.7 30.5 32.9 35.4 38.2 41.1 44.4 47.8

Management Consulting (% of total) 24.5 22.8 22.7 22.7 23.3 23.4 24.0 24.5 25.1 25.6 26.2 26.8

Technology Consulting (% of total) 24.5 24.1 24.0 24.1 24.4 24.3 24.4 24.5 24.6 24.7 24.7 24.8

Technology Outsourcing (% of total) 25.3 27.1 26.8 26.9 26.6 26.7 26.5 26.2 25.9 25.7 25.4 25.2

Business Outsourcing (% of total) 14.0 15.0 15.0 15.0 14.9 14.9 14.6 14.4 14.2 13.9 13.7 13.5

Systems Integration (% of total) 11.6 11.1 11.6 11.4 10.8 10.7 10.5 10.4 10.2 10.1 9.90 9.73

Direct Expenses (Bil $) 19.5 17.4 18.3 21.9 23.7 25.2 27.1 29.2 31.5 33.9 36.6 39.4












Indirect Expenses (Bil $) 1.51 0.09 1.01 1.42 2.00 2.10 2.45 3.08 3.05 3.33 4.03 4.00







Management Consulting (% of total) n/a n/a n/a n/a 26.3 26.5 27.1 27.6 28.2 28.8 29.5 30.1

Technology Consulting (% of total) n/a n/a n/a n/a 25.2 25.1 25.2 25.2 25.3 25.3 25.4 25.4

Technology Outsourcing (% of total) n/a n/a n/a n/a 24.7 24.7 24.5 24.2 23.9 23.7 23.4 23.1

Business Outsourcing (% of total) n/a n/a n/a n/a 13.8 13.8 13.5 13.3 13.1 12.9 12.6 12.4

Systems Integration (% of total) n/a n/a n/a n/a 10.0 9.92 9.75 9.59 9.43 9.27 9.11 8.95


Detailed P&L for the ManagementConsulting business The most important drivers for the Management Consulting business are discussed above, here is the detailed P&L.

Management Consulting: Detailed P&L

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenues

Management Consulting (Bil $) 5.74 4.78 5.04 6.03 6.67 7.14 7.87 8.68 9.57 10.6 11.6 12.8

Consultant Headcount (K ) 16.0 15.2 17.5 19.3 19.8 20.6 21.7 22.7 23.9 25.1 26.3 27.6

Consultant Utilization (%) 83.0 84.0 84.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0

Consultant Bill Rate per Hour ($) 200 170 170 175 178 184 193 203 213 223 235 246


Consultant (K )2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16


Expenses


Management Consulting

EBITDA Margin (%)19.0 19.5 19.7 19.7 19.7 19.7 19.7 19.7 19.7 19.7 19.7 19.7


Effective Tax Rate (%) 29.2 29.0 28.6 27.3 29.3 31.3 33.3 35.3 35.6 35.6 35.6 35.6

Capex as % of Sales (%) 1.29 1.13 1.13 1.63 2.13 2.33 2.53 2.63 2.73 2.83 2.93 3.03

Change in Working Capital as %

of Sales (%)1.99 -3.26 -0.44 -0.80 -0.50 -0.41 -0.27 -0.25 -0.24 -0.22 -0.20 -0.18

Increase in NOA % of Revenue

(%)-0.54 -1.05 0.05 0.92 0.63 -0.00 0.02 0.91 0.10 0.10 0.99 0.17

Total Expenses (Bil $) 5.08 3.87 4.30 5.21 5.88 6.29 6.98 7.82 8.55 9.43 10.5 11.5




Detailed P&L for the Technology Consultingbusiness The most important drivers for the Technology Consulting business are discussed above, here is the detailed P&L.

Technology Consulting: Detailed P&L

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenues

Technology Consulting (Bil $) 5.74 5.04 5.34 6.38 6.99 7.42 8.02 8.67 9.38 10.1 11.0 11.9

Technology Consultant

Headcount (K )24.0 22.7 26.2 28.9 29.5 30.4 31.9 33.5 35.1 36.9 38.7 40.7

Technology Consultant

Utilization (%)83.0 84.0 84.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0

Consultant Bill Rate per Hour ($) 133 120 120 123 126 130 133 137 142 146 150 155

Billable Hours per Year (K ) 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16


Expenses


Technology Consulting EBITDA

Margin (%)17.3 17.8 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0



Capex as % of Sales (%) 1.29 1.13 1.13 1.63 2.13 2.33 2.53 2.63 2.73 2.83 2.93 3.03


of Sales (%)1.99 -3.26 -0.44 -0.80 -0.50 -0.41 -0.27 -0.25 -0.24 -0.22 -0.20 -0.18


(%)-0.54 -1.05 0.05 0.92 0.63 -0.00 0.02 0.91 0.10 0.10 0.99 0.17





Detailed P&L for the TechnologyOutsourcing business The most important drivers for the Technology Outsourcing business are discussed above, here is the detailed P&L.

Technology Outsourcing: Detailed P&L

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenues

Application Outsourcing (AO) 4.78 4.58 4.80 5.75 6.17 6.61 7.08 7.59 8.12 8.70 9.32 9.98

Number of Accenture Software


Professionals (K )56.0 53.1 61.2 67.5 70.2 73.7 77.4 81.2 85.3 89.6 94.1 98.8

Utilization Rate for Accenture


Professionals (%)86.0 87.0 80.0 86.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0


Software Application Outsourcing

Professionals ($)45.9 45.9 45.4 45.9 46.8 47.7 48.7 49.7 50.7 51.7 52.7 53.8


Accenture Professional (K )2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16

Infrastructure Outsourcing (ITO) 1.14 1.09 1.15 1.37 1.46 1.53 1.61 1.69 1.78 1.87 1.96 2.06

ITO Headcount (K ) 13.4 12.7 14.6 16.1 16.6 17.1 17.6 18.1 18.7 19.2 19.8 20.4

ITO Utilization (%) 86.0 87.0 80.0 86.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0


(ITO)45.9 45.9 45.4 45.9 46.8 47.7 48.7 49.7 50.7 51.7 52.7 53.8


Professional (K )2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16


Expenses


Technology Outsourcing

EBITDA Profit Margin (%)15.0 15.2 16.4 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16.1

Indirect Expenses (Mil $) 345 21.5 253 354 494 518 599 744 731 788 942 924


Capex as % of Sales (%) 1.29 1.13 1.13 1.63 2.13 2.33 2.53 2.63 2.73 2.83 2.93 3.03


of Sales (%)1.99 -3.26 -0.44 -0.80 -0.50 -0.41 -0.27 -0.25 -0.24 -0.22 -0.20 -0.18


(%)-0.54 -1.05 0.05 0.92 0.63 -0.00 0.02 0.91 0.10 0.10 0.99 0.17





Detailed P&L for the Business Outsourcingbusiness The most important drivers for the Business Outsourcing business are discussed above, here is the detailed P&L.

Business Outsourcing: Detailed P&L

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenues

Business Process Outsourcing (BPO) 3.27 3.13 3.32 3.98 4.27 4.53 4.80 5.10 5.41 5.74 6.08 6.45

Number of Accenture Business

Process Outsourcing Professionals

(K )38.4 36.3 41.9 46.2 48.1 50.0 52.0 54.0 56.2 58.5 60.8 63.2

Utilization Rate of Accenture


Professionals (%)86.0 87.0 80.0 86.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0 87.0



Professionals ($)45.9 45.9 45.9 46.4 47.3 48.2 49.2 50.2 51.2 52.2 53.3 54.3


Professional (K )2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16


Expenses



EBITDA Profit Margin (%)15.0 15.2 16.4 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16.1



Capex as % of Sales (%) 1.29 1.13 1.13 1.63 2.13 2.33 2.53 2.63 2.73 2.83 2.93 3.03


of Sales (%)1.99 -3.26 -0.44 -0.80 -0.50 -0.41 -0.27 -0.25 -0.24 -0.22 -0.20 -0.18


(%)-0.54 -1.05 0.05 0.92 0.63 -0.00 0.02 0.91 0.10 0.10 0.99 0.17





Detailed P&L for the Systems Integrationbusiness The most important drivers for the Systems Integration business are discussed above, here is the detailed P&L.

Systems Integration: Detailed P&L

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenues

Systems Integration (Bil $) 2.72 2.32 2.57 3.02 3.11 3.27 3.47 3.68 3.90 4.14 4.39 4.66

Systems Integration Headcount (K)

25.2 23.9 27.5 30.3 30.6 31.3 32.2 33.2 34.2 35.2 36.2 37.3

Systems Integration Utilization

(%)85.0 85.0 85.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0 88.0


($)58.8 52.9 50.8 52.3 53.4 55.0 56.6 58.3 60.1 61.9 63.7 65.7


Professional (K )2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16 2.16


Expenses


Systems Integration EBITDA

Profit Margin (%)15.4 15.9 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16.1 16.1



Capex as % of Sales (%) 1.29 1.13 1.13 1.63 2.13 2.33 2.53 2.63 2.73 2.83 2.93 3.03


of Sales (%)1.99 -3.26 -0.44 -0.80 -0.50 -0.41 -0.27 -0.25 -0.24 -0.22 -0.20 -0.18


(%)-0.54 -1.05 0.05 0.92 0.63 -0.00 0.02 0.91 0.10 0.10 0.99 0.17


Adjusted EBITDA (Mil $) 419 369 414 487 501 527 559 593 629 667 708 751



Documents

Accenture - Amazon Web Servicesedupristine.s3.amazonaws.com/Courses/PGCFR_ACFM/Part_Time/Acc… · Trefis price estimate. — SOURCES OF VALUE — Market Leader in Outsourcing The