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of Accenture’s 2000 Business Results
Accenture Accents 2000
…Returns to Double Digit Growth, But Remains in Fourth Place for 2000
PHOENIX, Apr. 5 - Accenture, formerly known as Andersen Consulting, accented its 2000 business results by returning to double digit growth, albeit barely. Revenues were $10.3 billion, up 10% over the restated 1999 figure ($9.4 billion), while the estimated net profit surged more than three-fold to about $665 million.
Accenture’s 2000 revenue growth rate is still far below the company’s 25% surge two years ago, and its 17% compound annual increase during the 1990-2000 period, but it is up from an anemic 8% rise in 1999.
“Particularly gratifying was the upward trend in our revenues during the second half of 2000, as the demand for our services increased,” said Joe Forehand, Accenture’s managing partner and CEO, in a statement released March 21.
Accenture’s 2000 business volume fell just short of our estimated FY01 revenues for Computer Sciences Corp. (CSC - $10.5 billion), an Accenture rival with which the Chicago-based competitor has been vying for and swapping the third place in the global IT services rankings for several years now (see Annex Bulletin 2000-07, Mar. 26, 2001, for the latest CSC results). Which means that for a second year in a row, Accenture, as the fourth largest IT services company in the world, will be shut out of the medals for top revenue results in our upcoming Heptathlon 2000.
Accenture adopted its new name in late 2000, following a successful legal separation from Arthur Andersen in August 2000. The arbitrator in the dispute of erstwhile partners which lasted nearly a decade ordered Accenture, then known as Andersen Consulting, to change its name and to pay about $1 billion to its former parent.
Accenture’s 1,200 partners celebrated the ruling as victory for their cause. And no wonder… Most of the $1 billion had been set aside since 1997 in an escrow account. So the Paris-based International Court of Arbitration decision might have added about $200,000 to the annual pay of each Accenture partner, according to a New York Times Aug. 8, 2000 story.
Accenture also changed its accounting policy in 2000 which resulted in higher restated revenues for the prior fiscal year. The change, related to treatment of subcontractor billings, boosted the 1999 revenue from the originally reported $8,941 million, to $9,265 million. The Annex Research analysis in Tables 1 and 2 reflects this accounting change.
Geographies. After adjusting for such accounting factors, Accenture’s Asia/Pacific region reported the highest business growth in 2000. Revenues were up 21% to $759 million (or 22% if adjusted for currency translations).
Revenues in Accenture’s largest geographic region - the U.S. and the Americas - also grew in double digits (11%). The U.S. market, which at $5.2 billion accounts for just over 50% of the company’s business, was also one of the two places in the world in which Accenture established “mobile commerce labs,” centers for rapid development of applications for its Mobile Corporate Portal platform.
The second region in which such labs were established - Europe/Middle East/Africa and India - didn’t fare so well last year, thanks to the strength of the U.S. dollar. Revenues in this geographic area grew at only 6% in 2000 (19% in constant currency) to $3.9 billion.
Industries. Accenture’s “Products” industry segment, which consists of retail, consumer, automotive and pharmaceutical industries, among others, recorded the fastest growth in 2000, increasing by 21% to just over $2 billion.
Communications and High Tech sector, the company’s largest vertical with revenues of $3 billion, reported an 18% increase over the 1999 results.
But the financial services and government sectors’ growth lagged behind, rising only three percent each. This put the 2000 revenues for these two verticals at $2.7 billion and $811 million respectively.
Despite the price increases in the energy sector, Accenture’s revenues for the Resources sector were merely flat last year, at $1.7 billion.
Happy bargain hunting!
Volume XVII, No. 2001-07
Editor: Bob Djurdjevic
P.O. Box 97100, Phoenix, Arizona
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