Gideon Spanier
Sep 29, 2018

Accenture Interactive reveals 'very strong' revenue growth

Estimated revenues would make Accenture Interactive about the same size as Interpublic.

Nanterme: Accenture chairman and chief executive
Nanterme: Accenture chairman and chief executive

Accenture Interactive's revenues grew by "more than 20%" in the past 12 months despite the company cutting back on M&A activity.

It means consulting giant Accenture generated more than $7.8bn in revenues from marketing services in the year to August 2018, making Accenture Interactive about the same size as Interpublic, the world’s fourth-largest advertising group.

Accenture Interactive did not disclose financial numbers or an organic revenue growth rate (which excludes the impact of acquisitions) in its annual results.

However, the parent company previously told investors that Accenture Interactive made $6.5bn in revenues in the year to August 2017, so a 20% increase would push turnover to at least $7.8bn.

David Rowland, the chief financial officer at Accenture, said on an earnings call that revenue growth in the year to August 2018 was "very strong double digits" and "well north of 20%".

Pierre Nanterme, the chairman and chief executive, added that he was "especially pleased with the success we have had in growing Accenture Interactive", claiming that "today, we are the market leader operating at scale for many of the world's leading brands", such as Radisson Hotel Group and Maserati.

The company's M&A outlay fell by nearly two-thirds compared with the previous year, but it still spent $658m in the year to August 2018, with additions including Irish creative shop Rothco and German visual effects company Mackevision.

Accenture splashed out $1.7bn during the year to August 2017, when the consulting giant made a major move into agency services, buying Karmarama, SinnerSchrader, The Monkeys, Maud and Brand Learning.

The company told shareholders that it has a war chest of $1.5bn for acquisitions for the next 12 months but "as always, given the right opportunities and the right circumstances, we could certainly spend more than that".

Accenture said in May that it plans to expand in programmatic media buying, setting up Accenture Interactive Programmatic Services to help brands manage it in-house and serve as an agency to plan and buy on the client’s behalf – a move that was widely seen as a threat to traditional media agencies.

Sir Martin Sorrell’s new marketing services group, S4 Capital, warned in its stock market prospectus earlier this month that consultants such as Accenture and Deloitte were "moving more directly to compete" with creative businesses.

Accenture Interactive has been the most aggressive of the consulting groups to enter marketing services and employed 25,000 people by the end of the 2017 financial year – a number that is likely to have risen significantly since then.

Accenture's total revenues rose 10.5% to $40bn on a local currency basis in the year to August 2018.

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