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Fitch Affirms Accenture's IDR at 'A+'; Outlook Stable



  Fitch Affirms Accenture's IDR at 'A+'; Outlook Stable

Business Wire

NEW YORK -- November 20, 2012

Fitch Ratings has affirmed the ratings of Accenture plc (Accenture) and
subsidiaries as follows:

Accenture

--Long-term Issuer Default Rating (IDR) at 'A+'.

Accenture International Capital SCA

--Long-term IDR at 'A+';

--Senior unsecured bank credit facility at 'A+'.

Accenture Capital Inc.

--Long-term IDR at 'A+';

--Senior unsecured bank credit facility at 'A+'.

The Rating Outlook is Stable. Approximately $1 billion of debt, consisting of
an undrawn credit facility, is affected by Fitch's action.

The Ratings and Outlook are supported by Accenture's:

--Strong balance sheet with negligible debt;

--Solid liquidity supported by significant and consistent free cash flow (FCF;
about $2 billion plus), despite cyclical demand associated with the consulting
and systems integration (C&SI) business. Fitch projects $2.5 - $3 billion of
free cash flow (post dividends) in fiscal 2013 compared with $2.9 billion in
fiscal 2012;

--Revenue stability from established, long-term client relationships and
industry expertise, resulting in a significant percentage of new contracts
awarded on a sole-sourced basis;

--Strong market position in targeted IT service groups with solid projected
long-term market growth rates, especially application and business process
outsourcing, supported by the company's significant and diversified offshore
delivery capability;

--Recurring revenue provided by longer-term outsourcing contracts (nearly 44%
of net revenue) and less capital-intensive business model relative to its
peers;

--Diversified revenue base from a customer, industry, geography and service
line offering perspective.

Ratings concerns center on:

--Potential for sizable debt-funded share repurchases and/or acquisitions.
However, Fitch believes Accenture has considerable financial flexibility at
the current rating due to its strong balance sheet and consistent FCF.

--Pricing pressures due to intense competition from multinational, offshore
(primarily India-based) and niche IT Services providers.

--Long-term effect of software as a service (SaaS) adoption on demand for
traditional systems integration services, particularly enterprise resource
planning software. Fitch believes total IT services revenue generated from
SaaS will likely be less than traditional software implementations over the
software's entire life cycle, despite initial revenue from integrating SaaS
into a client's existing systems.

--Threat of new market entrants in the traditional outsourcing market due to
increasing adoption of cloud computing.

As of Aug. 31, 2012, Accenture's liquidity was strong, consisting of $6.6
billion of cash and investments, an undrawn $1 billion revolving line of
credit maturing 2016 and $2.9 billion of FCF in the latest 12 months. The
credit facility agreement requires the company to maintain a consolidated
leverage ratio (debt/EBITDA) of less than 1.75 times (x).

Fitch believes the company maintains greater flexibility in accessing its cash
due to certain structural considerations taken as part of the 2001
reorganization that continue with Accenture's reincorporation in Ireland.
Fitch anticipates free cash flow remaining after cash dividends will continue
to be utilized primarily for share repurchases and acquisitions.

As of Aug. 31, 2012, Accenture had negligible outstanding debt as the company
generates ample cash flow to internally fund share repurchases, cash dividends
and relatively modest acquisition activity to date. Total debt was less than
$0.1 million on Aug. 31, 2011 compared with $4.4 million in the prior year.

The company does have off-balance sheet debt in the form of significant
operating lease commitments since it does not own any of its real estate as
part of its 'asset-light' strategy. In the past five fiscal years, Fitch
estimates total adjusted debt to EBITDAR ranged from 0.9x - 1x and was 0.9x in
the fiscal year ended Aug. 31, 2012.

WHAT COULD TRIGGER A RATING ACTION

Negative: Future developments that may lead to a negative rating action
include:

--Significant debt-financed acquisitions and/or share repurchases that result
in a material deterioration in credit protection measures.

Positive: Upside movement in the ratings is unlikely in the near term.

Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (Aug. 8, 2012).

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684460

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contact:

Fitch Ratings
Primary Analyst
John M. Witt, CFA
Senior Director
+1-212-908-0673
Fitch, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Jason Pompeii
Senior Director
+1-312-368-3210
or
Committee Chairperson
Jamie Rizzo, CFA
Senior Director
+1-212-908-0548
or
Media Relations
Brian Bertsch
+1-212-908-0549
brian.bertsch@fitchratings.com
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