Ladies and gentlemen, thank you for standing by and welcome to Accenture's Third Quarter Fiscal 2017 Earnings Call. At this time all lines are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions]. And as a reminder, today's conference is being recorded. I would now like to turn the conference over to Managing Director, Head of Investor Relations, Angie Park. Please go ahead.

Thank you, Ryan and thanks everyone for joining us today on our third quarter fiscal 2017 earnings announcement. As Ryan just mentioned, I'm Angie Park, Managing Director, Head of Investor Relations. With me today are Pierre Nanterme, our Chairman and Chief Executive Officer; and David Rowland, our Chief Financial Officer. We hope you've had an opportunity to review the News Release we issued a short time ago. Let me quickly outline the agenda for today's call. Pierre will begin with an overview of our results. David will take you through the financial details, including the income statement and balance sheet for the third quarter. Pierre will then provide a brief update on our market positioning before David provides our business outlook for the fourth quarter and full fiscal year 2017. We will then take your questions before Pierre provides a wrap up at the end of the call. As a reminder, when we discuss revenues during today's call, we're talking about revenues before reimbursements or net revenues. Some of the matters we’ll discuss on this call, including our business outlook are forward-looking and as such, are subject to known and unknown risks and uncertainties, including but not limited to those factors set forth in today's News Release and discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other SEC filings. These risks and uncertainties could cause actual results to differ materially from those expressed on this call. During today's call, we will reference certain non-GAAP financial measures which we believe provide useful information for investors. We include reconciliations of non-GAAP financial measures where appropriate to GAAP in our News Release or in the Investor Relations section of our website at accenture.com. As always, Accenture assumes no obligation to update the information presented on this conference call. Now let me turn the call over to Pierre.

Thank you Angie and thanks everyone for joining us today. This was not a strong quarter for Accenture. We delivered revenue growth in the upper end of our guided range and again gained significant market share. I am particularly pleased with our very strong new bookings for the quarter and year-to-date which demonstrates that our services and capabilities continue to be both highly relevant to our clients and very differentiated in the marketplace. We generated very strong cash flow for the quarter and returned substantial cash to shareholders all the while continuing to make significant investments to drive future growth. Here are a few highlights for the quarter. We delivered excellent new bookings of $9.8 billion. We grew revenues of 7% in local currency to $8.9 billion with broad based growth once again across the different dimensions of our business. We delivered earnings per share of $1.52 on an adjusted basis, an 8% increase. Operating margin was 15.5% on an adjusted basis, consistent with the third quarter last year. We generated strong free cash flow $1.7 billion, and we returned approximately $1.4 billion in cash to shareholders through share repurchases and the payment of our semiannual dividend. So we had another good quarter, and as we enter the fourth quarter I feel very confident that we are well positioned to deliver our business outlook for the year. Now let me hand over to David who will review the numbers in greater detail. David, over to you.

Thanks Pierre and thanks to all of you for joining us on today's call. As Pierre mentioned, we were pleased with our third quarter results which were in the range we expected and position us very well to achieve our full year financial guidance. Before I get into the details of the quarter, I thought it would be useful to highlight how we're delivering on an essential aspect of our growth strategy and our model for driving superior shareholder value. You have heard me saying many times previously that our growth strategy was conceived with an important objective in mind, which is to create durability in our revenue growth at a level which is consistently above market thereby taking share and strengthening our position as a market leader. And against that objective, we've created a diverse business that spans 13 industry groups, 15 geographic markets, 5 businesses which has created a powerful growth model in both scale and durability. Our third quarter and year-to-date results are good illustration of our growth model in action where being a market leader across many dimensions of the market has resulted in consistent growth levels that we estimate are more than two times the rate of growth of the basket of publicly traded companies. And importantly, we delivered these results in a highly dynamic environment which is exactly the way our growth strategy is intended to work. With that said, we will also comment on a few of the highlights and the context of our three financial imperatives for driving shareholder value. Net revenue growth of 7% in local currency in the third quarter continued to be highlighted by strong double-digit growth in all three areas of The New including digital cloud and security related services. We continued to see positive growth in most…

Thank you, David. Our strong results for the quarter and year-to-date demonstrate that we continue to execute very well against our growth strategy. We are successfully driving the business transformation at Accenture while at the same time consistently delivering above market performance. Today the breadth of capabilities we provide end to end is truly unique in the marketplace and we are well positioned to compete at scale in each of our five businesses driving synergies across them to deliver value and business outcomes for our clients. We continue to rotate our business to The New, digital, cloud, and security related services which again grew at a very strong double-digit rate in the quarter and now accounts for 50% of total revenue. I am absolutely delighted that we have achieved this significant milestone for our business so rapidly. Our ascension to these new high growth areas, the differentiation of our capabilities in the market, and the diversity of our business have enabled us to continue to gain significant market share. The need to go digital remains a top priority for clients and we are investing aggressively to drive innovation and deliver digital transformation. A great example is the capability we have [indiscernible] Accenture Interactive and I am again delighted that for the second year in a row Advertising Age has named Accenture Interactive the largest provider of digital marketing services both globally and in the U.S. Accenture Interactive is working with many of the world's leading brands to transform the customer experience. As an illustration with Carnival, the cruise operator we are helping develop a new platform using wearable technology, the Internet of Things and analytics to transform the guest experience with intelligent customerization. Carnival will be able to anticipate every passengers preferences, likes, and needs. And we continue to broaden…

Thank you Pierre. Let me now turn to our business outlook. For the fourth quarter of fiscal 2017 we expect revenues to be in the range of $8.85 billion to $9.10 billion. This assumes the impact of FX will be negative 1.5% compared to the fourth quarter of fiscal 2016 and reflects an estimated 5% to 8% growth in local currency. For the full fiscal year 2017 based upon how the rates have been trending over the last few weeks we now assume the impact of FX on our results in U.S. dollars will be negative 1% compared to fiscal 2016. For the full fiscal 2017 we now expect our net revenues to be in the range of 6% to 7% growth in local currency over fiscal 2016. For operating margin on an adjusted basis we now expect fiscal year 2017 to be 14.8%, a 20 basis point expansion over fiscal 2016 results. We now expect our annual effective tax rate on an adjusted basis to be in the range of 22.5% to 23.5%. Our earnings per share on an adjusted basis we now expect full year diluted EPS for fiscal 2017 to be in the range of $5.84 to $5.91 or 9% to 11% growth over adjusted fiscal 2016 results. For the full fiscal 2017 we continue to expect operating cash flow to be in the range of $4.6 billion to $4.9 billion, property and equipment additions to be in the range of 600 million, and free cash flow to be in the range of $4 billion to $4.3 billion. We continue to expect to return at least 4.2 billion through dividends and share repurchases and also continue to expect to reduce the weighted average diluted shares outstanding by slightly more than 1% as we remain committed to returning substantial portion of the cash to shareholders. And finally for the full year we now expect to invest in the range of $1.8 billion in acquisitions. With that let's open it up so we can take your questions. Angie.

Thanks David. I would ask that you each stick to one question and a follow-up to allow as many participants as possible to ask a question. Ryan would you provide instructions for those on the call.

[Operator Instructions]. Our first question will come from the line of Tien-Tsin Huang with JPMorgan. Please go ahead.

Hey, good morning, thanks. Just let me start by asking about bookings. Bookings were good and in line with where we were at, you said it would improve in the second half, it did in the third quarter, do you expect that momentum to carry into the fourth quarter, have you replenished the pipeline, etc. going into 4Q?

Yeah we still hate tension by the way. We feel good about our bookings position in the fourth quarter and we expect to have another very good quarter of bookings. So we think that momentum does continue.

Okay and then on just The New revenue here versus the, I guess you want to call it legacy or The Not New, any surprise in the trend there, just thinking about the math and if there's been any change in momentum in either?

Well, I would say on that front it's really been more of the same. Our growth in The New continues to go at very, very high levels, well above 30% growth in the quarter which is what we've seen pretty consistently this year. The market demand is tremendous and it plays extremely well to the investments that we've made over the last several years now and building capabilities to be the leader in that part of the marketplace. So we're extremely pleased it is broad based literally across our operating groups, our 15 geographic units. And if you look at the three components of digital, cloud, and security again, very strong double-digit growth really across the board. So we couldn't be more pleased with what we see in that part of our business.

Thank you.

Thank you. Our next question comes from the line Edward Caso with Wells Fargo. Please go ahead.

Hi, good morning. I was curious about your efforts on the acquisition front. Obviously you're providing all your cash flow back to investors and therefore using the cash on your balance sheet to fund your fairly aggressive acquisition program. At what point do you hit a level where you desire to have your cash?

Well I think -- and we've talked about this before and we are fortunate in that with the strength of our overall financials including our balance sheet we have a lot of levers at our disposal as we manage our business really for many years to come. When we look out our need to acquire critical skills and capabilities in important growth areas in the market, we don't see that changing certainly over the next three years. And so we think that's going to continue to be an important part of our investment strategy. We think it will be an important part of an engine for growth overall and ultimately for us. As you know, this is all about quickly assimilating these capabilities and driving organic growth over time. So we really see more of the same with our acquisition strategy going forward, and we think we have the financial flexibility to accommodate that while also returning cash to shareholders.

Yeah, not much to add, I think we have an extremely clear strategy at Accenture, which is all about rotating to The New, and in order to enable this strategy, we have set very clear financial context we shared with all of you on how we are going to locate our cash and our free cash flow with this rate, at the same time investing more than ever to the transformation of Accenture to give the relevant services of the future and create durable performance over the next cycle of change and at the same time continuing with very, I guess very good return to shareholder approach, both in term of share buyback and in terms of dividends. So we believe that this strategy is playing very well, and as David mentioned we still have opportunities to invest even more should that be required leveraging more our balance sheets one way or the other. So I feel extremely good with where we are from an investment standpoint, from a financial standpoint, and from our strategic allocation of cash.

My other related question is around the assimilation of these employees, these are generally smaller, more entrepreneurial firms that generally have a different character of employee than a traditional Accenture trained and developed person. Can you give us any sense for the attrition at these acquired companies that are relative to the base and how you're managing that? Thank you.

Thanks for the question because it was -- when we decided our new strategy of rotating to The New that was clearly a big question we had in front of us. We benefit from Accenture from a very strong culture, you know, very well based on what we've been doing for multiple decades. And when you are rotating to The New and The New is still different in terms of you mentioned digital, we are talking about the millennium, but again in terms of disciplines such as design-led thinking such as experience driven projects such as prototyping, such as being more Agile, DevOps, no doubt you need to attract people who are going to be different from where you are. And simply said, we make what I think is a very profound and important evolution in our industry which is creating this concept of Accenture, we have a culture of cultures. So we celebrate the diversity of the cultures, so we are extremely respectful of the cultural field which is our design, digital marketing organization with now thousand people. We have the largest digital design studio in the world. We are extremely respectful of the people we are hiring from security. As you know that well and I would not elaborate these people are different in the security specs and they're walking like a tribe around their own discipline and we are extremely respectful to keep that culture. That's why we created end-to-end Accenture Security under the leadership of Kelly Bissell, an incredibly strong security leader on the side by Omar Abbosh our Chief Strategy Officer. So we developed this culture, this concept of culture of cultures, very different from this old and I think outdated concept of one culture. On the other end we are extremely stringent on our values and we are making a big difference around cultures. They have to be different which is what is bringing richness in our company and innovation but the values shouldn’t be compromised and are not for negotiation. And the values at Accenture we will never negotiate with respect for individual inclusion and diversity, ethics, compliance, client first, stewardship, and all of this has nothing to do with culture. It's just the appropriate business and personnel behavior you and I and everybody on the planet should develop. And I think we have been very good in creating and developing this culture of cultures concept and right David, all the integration we made, all but I am not saying that's likely been successful.

Yeah, are we carefully manage the retention of the people in these companies that we acquire and our performance have really over the last three years in terms of retaining talent has been very good.

Thank you.

Thank you.

And our next question comes from the line of Bryan Bergin with Cowen. Please go ahead.

Good morning Bryan.

Thank you. As the number comes from majority share of your business how should we think about potential changes and corporate revenue trajectory or particularly margin expansion, do you foresee any inflection in item over the medium-term?

You know, again I will stop short of saying anything that would imply guidance for next year or beyond. But I would say that broadly speaking if you look at two of our three overriding financial objectives the first one being to drop durable growth which is consistently above the market, as I said taking share and extending our position as a market leader. And in the second overriding objective which is consistent, modest margin expansion while investing in increasing scale in our business and driving EPS growth faster than revenue growth we remain committed to those as kind of multi-year objectives that we work very hard to achieve. And I think the rotation to the new creates more opportunity for achieving those as opposed to a threat. So that is -- I think it gives us better positioning and a better opportunity to continue to deliver on those overtime.

Okay, and just a follow up then, just as far as expanding into some of our markets, interactive business I thought was a great example of getting you access into an area within the same office. Are there other areas that you're potentially looking at within client wallets that are logical extensions that you might be targeting?

Security is another one with the business resulting with Accenture Security. Clearly we are expanding our access to new leaders. Given the depth and breadth of all services you are absolutely right, it is our ambition to increase the coverage of the leaders we might serve with clients from the CEO, the CFO, the COO, the CIO. Now the Chief Digital Officer with the launch of Accenture Digital, you know, there are new leaders under this terminology and we want to be the top choice for the newly appointed CDOs which should be a quite a natural act. You mentioned the CMOs with what we are doing with Accenture Interactive. And we have all the business in the different parts of the business. So if I am looking at Accenture we have now settled with the five businesses. We have in this businesses you have all the activities such as analytics, interactive, mobility, cloud, security. I could mention Accenture Credit services. We are in the U.S. which is providing access in banks to credit part of the organization and I mentioned a lot. So I guess and I would claim that we are settling the organization in professional services which today broader access to any client leadership group.

Thank you.

Thank you.

Our next question comes from the line of Lisa Ellis with Bernstein. Please go ahead.

Hi, good morning guys. I am good. So question just around the mix of business. So I noticed GDN mix down ticked slightly this quarter that's quite unusual. I think that's the first time in years that's happened. And at the same time you had a really strong headcount growth quarter at over 10% but then David in your comments you called out that you're seeing very strong growth in The New in areas like application and services which suggests more like build related activities which I would associate with offshore. So kind of two part question coming out of that; one, are you with the strong headcount growth and GDN mix that are stabilizing are we going to see an acceleration in revenue per head that might cause some break in the linearly in the business? And then also just secondarily can you just talk a little bit about the mix of the type of work you're seeing in The New as it gets to be over 50% of the business and if that's sort of fundamentally different in terms of mix of service lines relative to the core?

Yeah maybe I get a start with our strategic direction on this. We are working extremely hard as you know at Accenture on robotic automation and bringing intelligent capabilities to significantly improve our productivity especially where we have large-scale operations so with technology and in operations. So we are working hard on what you said how we are moving forward we're going to have less direct correlation between revenue and headcount. And clearly the big game on this is to accelerate our investments in robotic automation and intelligent services which is exactly [indiscernible] for Accenture Technology and Debbie Polyshoot [ph] for Accenture Operation are working extremely hard. And we are starting to see some very encouraging results where we could drive more revenues with a bit less people in some part of Accenture Operations and in some part of our BPO. We are starting to feel the support of inflection. Certainly we need another year or 18 months to see whether this trend might accelerate and change the dynamic between revenue and headcount growth which is something of course we are pursuing systematically. On the second question what is the complexion of our work in term with The New. I mean the good news is we were taking everything to The New, strategy, consulting, digital of course, technology, and operations. And all our services in The New are going very well. Strategy and consulting growth in The New is double-digit. But as well it is driving significant growth in Accenture Technology and in our platforms if I am looking at the business with driving analytics through SAP Hana and tomorrow with SAP Leonardo is driving significant growth in the new SAP, in the new Microsoft, in the new Oracle. And I can mention -- and I could mention others but as well it is creating activities in operations. I am thinking about what we're doing in customer analytics leading to Accenture Analytics or to Accenture Interactive it is driving business with platform as a service in terms of analytics what we are calling Accenture Analytics insight platform. This is a service which is directly linked to the new services we are providing from an analytical standpoint. So it's really The New is driving growth in each of our five business in a very meaningful way. And we love that.

Yeah, and Lisa I would say that you may remember that it was the third quarter of last year and then again in the fourth quarter where I had made comments that we were starting to see an improving trend and the progression of revenue per billable head. And so you asked will we start to see that, I think we have seen instances of that if you look over the last three or four quarters. The other thing just to remind you and others who are looking at the headcount numbers GDN includes our locations around the world including GDN headcount and let's say the more mature markets. And so GDN is in the United States as an example it's not just India and the Philippines.

Terrific, thanks. And just one quick follow up Pierre I think on your comment there on The New. So would you characterize at this point if you just compared this year versus maybe like this time last year or two years ago that the mix of work in The New now is much more diverse across your service lines, you're fully into what I'd call more like build and run activities?

Absolutely right, and I think we see and I'm pleased with that we see this new maturing. So as all services you have a kind of maturity curve where you are starting with more pioneering strategy consulting rich programs, kind of prototyping in the early phase of the maturity curve. What we see is now all these New capabilities, I'm thinking about interactivity, mobility, identity, cloud, security soon come into traffic artificial intelligent block chain and immersive reality and certainly in the near future quantum computing. All of this new capabilities are getting more mature, are driving on balance bigger programs, and as we are moving from small prototyping to bigger programs suddenly it is expanding in several service lines from strategy to consulting but as well to technology and to operations. So we -- this business is maturing very well at Accenture with a positive effect in all our five businesses if you will and indeed we see more bigger deals which is a sign of the market maturing.

Thank you Lisa.

Our next question comes on of Bryan Keane with Deutsche Bank. Please go ahead.

Hi guys, wanted to ask about the Accenture business dimensions, the growth rates there have surprised me. I guess on one hand app services which grew mid single-digits in fiscal year 2016 has gone up to high single-digits and I know there's a lot of worries in the marketplace about a secular decline in that business so that's been a surprise on the positive end. And then on the other strategy and consulting which grew double-digits in fiscal year 2016 is kind of hovering below kind of my expectations at low single-digits. So just trying to understand the strength in app services versus the weakness in strategy and consulting?

Yeah, I think when you -- I will make a few comments and Pierre may have some as well. But first of all when you look at app services it's important to focus on the point that our growth is coming from the higher value application engineering, systems integration type work that is driven by the adoption of new IT in this rotations of The New. And so to some extent it kind of ties back to Lisa's question and Pierre's answer is that what you're starting to see is the adoption rate of new IT and digital broadly is increasing. You're starting in our business to see more systems integration application work associated with the implementation of digital technologies, new IP, etc and I think that is really what's driving our application services. We've said before, Pierre has said many times that our strategy in app services is to rapidly grow and expand in the SI space. The application outsourcing is a different marketplace, it is largely commoditized, and we will continue to have an application maintenance footprint but our application services business is really all about the systems integration, application engineering, enabling the adoption of new IT and digital technologies for our clients. And that's reflected in the pickup in growth rates. Maybe just one more comment on the strategy and consulting combined again that can ebb and flow. Pierre also eluded earlier and it's worth noting again is that you really have to decompose the strategy consulting number to really understand what's going on. And if you look at our strategy and consulting business that is related to projects in The New that part of strategy and consulting is growing mid teens. So let's say in the 15% kind range. So it's a very, very strong growth for those services related to enabling The New with our clients. The area that is not as robust right now let's say is the more traditional strategy and consulting that is not specifically tied to this rotation to The New.

Okay, that's helpful and then just as a follow up on contributions of acquisitions. How much did acquisitions contribute to the quarterly revenue growth and I know we talked about 2.5 points for the back half of the year, I don't know since you took up the amount that you were going to spend on acquisitions I think it went up to a little bit to 1.8 billion from 1.5 billion, if that changed anything for the outlook? Thanks so much.

You know that does have materially changed the number because obviously we're acquiring these -- let's say that increases more in the back of the last three months of the year. So that has more of an impact on 2018 than it does this year. Having said that we still think we're going to be at roughly in the ballpark of 2% for the full year. Previously I have said the back half of the year would be 2.5%. It will be just incrementally kind of above that but not materially above that. So clearly it is consistent with what I have said before, a slightly higher in the back half of the year than the 2.5%.

Okay, thanks so much. I'm just curious on the third quarter itself, was it up to 2.5 points so far or not quite yet?

Yeah, in that zone.

Okay, thanks so much.

Thank you.

Next question comes on of Jim Schneider with Goldman Sachs. Please go ahead.

Good morning Jim.

Hello, good morning. Thank you for taking my question. I was wondering if you could maybe comment on the North America piece of the business, what are you hearing from clients just broadly speaking, can you maybe just kind of give us a sense about whether the North America slowdown was purely isolated to the health and public service area or what you are hearing from clients generally and what you expect that to be kind of like a one off one quarter thing or something that could continue for a couple of quarters?

First of all as it relates to our expectations and then Pierre may add some comments as well. But let me just deal with the results relative to our expectations. So we had seen slower growth in H&PS in quarter one and quarter two. You will remember quarter two was a 2% which is where we ended up and not in quarter three. We had expected not based on hope but based on what we felt was kind of tangible evidence in the second quarter that we were going to see an uptick in growth in the third quarter in the second half of the year and that's what I called out 90 days ago. What we saw was that, that uptick if you will or that freeing up of the initiation of new projects and let's say a return to more normal decision making patterns on contracting new work, that just simply did not improve as we had expected. And so if you look at North America and the difference between where we landed and where we expected to land, the difference is the vast majority of that is in health and public service for the reasons I mentioned in the script. It's the difference between North America growth being at 3% and 5% order of magnitude. And it was the difference -- it was probably a point of growth, it was a point of growth at the expense level in total. So it was meaningful. Having said that we have a very strong health and public service practice and at some point the logjam will break and work will be initiated and we will be right there and again when that happens. And of course broadly in North America we feel that way as well.

Yes, absolutely right and I understand you are asking this question on North America. For me on the positive side we continue to grow more than the market and gaining significant market share in North America despite the fact that the level of growth is lower at the level of growth of the market as we are analyzing it as well as slowing down. Secondly our rotation to The New in North America is excellent and we're going to get close to 50% as with the rest of Accenture. So we have zero issues in terms of executing our strategy. And three, we continue to invest. So we are not changing our investment profile and we believe it's the right time to invest, to be prepared for the future and to be prepared when the market will be good again. Now what is the situation and indeed a big difference from what we expected three months ago, these annual, you should probably know, when you are in the U.S. and French you are probably have a certainly better informed point of view on this but there is an expectation that indeed the new administration will launch critical reforms in order to boost the business and economy growth. And this economic reform probably I would say the one which are the most important, the healthcare reform, the tax reform, the trade reform and anything linked to the infrastructure investments. And all of these four were the ones supposed to indeed unleash more growth for the business so the business could invest and drive more growth. And by driving more growth and driving more investment we would have a positive impact. Fact of the matter of is that we don't do this to be honest, three months ago because just rating the observers and all the analytics we believe that these four reforms would happen reasonably rapidly in the U.S. And fact of the matter they are not yet being announced or executed and so we are in this zone where the business is still waiting, it's still positive but waiting for these reforms to happen, to invest and so which has a negative effect especially on H&PS which has been the vertical more impacted by this kind of wait and see mode on what could happen with the reform. And we are ready to in fact in these couple of quarters the overall profit for services market in the U.S. been slowing down. And so to some extent we are moderating with the market while continuing to do much better than the market. And so I am positive that when the market will be back because that will happen we are in better position than anyone else given the investment and the positioning we are taking. So I'm looking that with my French glasses and I would encourage the U.S. to accelerate their reforms.

And as I said it's a perfect illustration though of the power of the diversity of our model where Europe and the growth markets combined in the third quarter and grew double-digits 10%. And so that is intentionally the way our business is constructed for this exact reason. And so it is working as designed.

And it's interesting to see, sorry to elaborate, but I think it's important for all the people listening to the call because you might wonder is why things are doing so well in Europe. We have 9% growth and you know it is -- but I think in Europe you have less uncertainties now. I think we had good prospect that probably Germany might re-elect Angela Merkel so it's a poll of stability. I guess, the election of Emmanuel Macron in France has been recognized and celebrated by the market because he is pro-European which has created a very positive impact around whether Europe will disappear or not. I think Germany and France are being extraordinary for business is recreating a very solid coalition and the Brexit thing is moving at its pace but the place we know it is going to happen. So it's not an uncertainty. The uncertainty is what exactly, is it going to be hard, soft, gentle probably the European will figure out as a -- or we can figure it out over centuries. But it's interesting if you take China. China I guess not much uncertainty. The credibility is very clear on what it wants to achieve, it's driving these five years of reform program. So you see what I mean. It's interesting that there is one place, it is a big place in the world where you have this kind of wait for the reforms to happen it is currently in the United States. But I am personally feeling very good that these reforms will happen and the business will pick up again.

That that's helpful, thank you for the color. And just as a quick follow up going back to the M&A question for a second, if you look at the run rate of M&A that you are doing in Q4 this year, would you expect that to accelerate incrementally from here getting into fiscal 2018? And then I think Pierre you made an allusion to using the balance sheet for M&A, does that imply you're willing to put some debt on the balance sheet to finance more M&A at this point?

I think as it relates to your last question we said consistently for as long as I can remember that we always I mean we're well aware of that being an option and given the right circumstances we would have no concern about doing that. And we would as we always do we would make very smart decisions as to when and at what level we do that. But that is certainly an option that is open to us and we have no concerns at all about using that option given the right circumstances.

I mean so far we said, I mean David and I we are extremely disciplined. And our financial model is extremely clear and has been communicated to all of you. We expect 20% to 30% of our annual growth to be driven by acquisitions. Our growth is 70% to 80% organic. Let's be clear and frequent from that and 20% to 30% of annual growth my counter acquisitions depending on the opportunities. These things are lumpy so about that we expect that anything between 20% to 35% every year of free cash flow will be dedicated to acquisition and the right as we do would be a return to our shareholders in a program which I think is extremely attractive to all of you with the mix share buyback and dividend. So this is our ongoing thesis from a financial algorithm if you will. Now we have opportunities by leveraging more to balance it to if we have any relevant opportunities that would bring differentiation that would be more transformation, more leadership in The New. In some spaces it could be artificial intelligence, factoring immersive realities, quantum computing, would say what to make some significant steps. But so far we are with our ongoing thesis I just mentioned before and we are very pleased with where we are and I'm very pleased that we have what we need if we have for good reasons to move faster or make different transactions.

Thank you.

Great, thank you.

Our next question will come from the line of David Koning with Baird. Please go ahead.

Yeah, hey guys, thank you. I guess first of all just when we think of The New I think you said about 50% of revs now when we looked back a year ago was about 40% of revs. So it's growing like 25% to 30%, something like that whereas the rest the business is declining high single-digits it looks like. Is that just existing clients are just shifting their preferences rather than really some of that old stuff just going away, it's just a shift? And then I guess second, to that overall growth has decelerated a little bit, is that because of the yield on some of the new projects are a little less than some of the legacy?

You know first of all when you look at overall growth, when we provide a guidance of 5 to 8 at the beginning of the year and of course we're going to land very solidly within that range we have said that growing double-digits each and every year is just an unrealistic expectation. We worked hard to drive as much growth as we can but each and every year we're not going to drop double-digit growth. And we think that we look at our growth rate against what the market is growing and in a market that lets say generally has grown let's say anywhere in the 2.5% to 4% range, let's say if you looked over the last two to three years if we're growing 7% as we are this year we're growing two times the rate of the market growth. And so are we lower than where we were double-digit growth, the last two years, we are but we're growing two times the rate of overall market growth which is clearly the indicator of a leader in the sector. And so that's what we're all about and growth in the 5% to 8% range where we've got to 6% to 7% growth is actually quite strong growth in the market.

Yeah, I mean we are just reflecting on when I'm looking at the performance of the company and we are in the right place or not I mean summarizing what we are really doing at Accenture we said our revenue would be in the range of 5% to 8%, right David, I mean so far we are at 7%, right in the zone. Then the question might be is 7 good or not. The only way to understand whether 7 is good or not is to compare with the rest of the market. And we believe that at 7% we're growing twice the market and growing twice the market for a company of our size is an incredible positive results. Second, part of our philosophy as well, at the same time our revenues are growing 7%, our EPS is growing 10%. We're growing the EPS more than our revenues and again I think it's a sign of good financial performance. I remember that it said we want to grow EPS at the same rate as our revenues. We are growing EPS even slightly higher than the revenue which is of course an exceptional performance from David. And then for me David is taking care of the numbers and I am taking care of the strategy that's why we have -- we are a good duo. For me if there is a highlight for this quarter and I hope that's the one you're going to take, is this 50%. There are all sorts of metrics, all sort of numbers there which I think are all landing in the right place. We are probably beating our guidance, we said three months ago on each and every dimension and providing extraordinary good financial. But then what's important I think for all of you…

So that being said thanks again for joining us on today's call. I mean needless to say and with a few words I just said before the conclusion that I and the leadership team of Accenture we feel good about where we are. We feel good about where we are because we continue to build on our strong position in the marketplace, I mean what we have said. We are rotating our business to The New which is now 50% of our revenues and again I would like to pound that because for me it's exceptional. We are gaining significant market share growing in average twice as fast as the market and I think this is very noticeable in each and every market if you look at this. North America, Europe, and the gross market, the minimum is twice the market. In some markets we're growing much more than twice, sometimes four times the market and we continue to gain market share. And we continue and this is where I'm delighted with what we're doing, we continue to invest in new capabilities to drive future growth and to create the future of that company while delivering value for all of you but as well for all our stakeholders including 4000 people who are working every day very hard to transform the company and make Accenture the partner of choice for many of our clients. We look forward to talking with you again next quarter. In the meantime if you have any questions please feel free to call Angie and the team. All the best and talk to you very soon.

And ladies and gentlemen that does conclude today's conference. I want to thank you for your participation. You may now disconnect.