The top 25 auditing, tax and financial advisory firms in Germany have last year seen their revenue grow by 5.2% to nearly €6.4 billion. The Big Four hold a staggering 79% of the top 25 players, jointly employing 32,260 of the in total 44,000 workforce, reveals an analysis by Consultancy.uk.
Since 2006 Lünendonk, an analyst firm based in Kaufbeuren, explores the state of the German professionals services landscape. As part of its thought leadership series, it sheds light on the auditing, tax and financial consulting landscape, researching the size of the industry and the top 25 players, both in terms of revenue and employee workforce*.
An analysis on Lünendonk’s data reveals that last year the top 25 players jointly reaped revenues of €6.35 billion, which accounts for 54% of the entire German auditing, tax and financial advisory industry, valued at €11.8 billion. The total number of employees employed by the market leaders stands at just under 44,000, with KPMG (9,600) and PwC (9,417) the largest employers. Overall the revenue of the top 25 firms grew by 5.2%, the average firm growth amounted to 6.1%.
The growth in revenue stems from two key factors. On the one hand advisory firms enjoyed organic growth, driven by further recovery in the regional and European economic climate, as well as rising demand for new services in the field of technology, regulatory, security and sustainability. Mergers & acquisitions formed another key driver – RSM Verhülsdonk, the #14 on the list, was formed in 2014 by the merger between three local players, while earlier this year two firms agreed mergers: RBS RoeverBroennerSusat and Mazars to Roever Broenner Susat Mazars and Baker Tilly Roelfs with TPW Todt & Partner.
The Big Four continue to dominate the German accounting and tax arena, with combined revenues of more than €5 billion, which represents 79% of the top 25 and 43% of the entire industry. The average growth of the Big Four in 2014 was 5.7%, higher than in 2013 (4.4%) yet lower than in 2012 (6.3%). PwC leads the pack with revenues of €1.55 billion, €163 million more than number 2 KPMG, however realised with 183 less employees. EY follows in third spot with €1.37 billion, with Deloitte – the fastest grower of the lot – closing the top four.
In fifth place comes BDO, a position which it also holds globally. The firm’s revenue of €208 million will though in the coming months be boosted, following the acquisition of restructuring specialist dnp Depping which it completed early July 2015. The top 10 is completed by Rödl & Partner, Ebner Stolz, Baker Tilly Roelfs and Roever Broenner Susat Mazars, all with revenues above the €100 million mark, and Warth & Klein Grant Thornton.
PKF Fasselt Schlage again finds itself in eleventh place, followed at some distance by DHPG, Dornbach and newcomer RSM Verhülsdonk. MDS Möhrle booked a revenue of €32.8 million, ahead of Bansbach (€32.4 million) and Heidelberg-based Falk & Co (€30.3 million). The advisory firms in the positions between 18 and 25 all incur revenues below the €30 million threshold.
Looking ahead, the top 25 players are optimistic on the outlook, says Lünendonk. For 2015 they foresee a growth of 6.0%, while for 2016 they forecast the market to expand by 5.4%. Digital and regulatory will remain key drivers, as well large national reforms expected to be rolled out in Germany by 2016.
* To be admitted to the ranking, firms should obtain more than 60% of their revenue from auditing, tax consulting, corporate finance and/or legal advice, of which at least 15% should stem from auditing (pure audit services; excluding consultancy). Only autonomously operating companies are included in the analysis.