KPMG adds $1 billion in revenues to global footprint in FY16

15 December 2016 Consultancy.uk

Global accounting and consulting giant KPMG has seen its revenues grow by 4% to $25.4 billion for its latest fiscal year. Advisory was for the third year in a row a strong performer, growing by 7%, compared to a 1% growth booked by Audit. KPMG’s total workforce has expanded to a record-high of 189,000 professionals. 

Founded in 1987, KPMG is one of the globe’s four largest professional services companies, along with rivals Deloitte, EY and PwC. Relatively in line with its Big Four competitors, KPMG has realised strong growth over the past decade, growing its revenues across its footprint in 150+ countries by over 50%, from $16.9 billion in 2006 to today’s $25.4 billion.

In its latest fiscal year (ending 30 September 2016), KPMG enjoyed growth in all its three functions. Advisory was the best performing function, booking 7.0% growth to $9.74 billion (9.2% last year), taking its share of the total business to 38%. Among the strongest growing services lines were Management Consulting, led in-part by technology-enabled transformation engagements; Risk Consulting, including Financial Risk and Regulatory Management, IT Advisory Services and Forensic; and Deal Advisory, which includes Corporate Finance and Transaction Services. 

Global revenue development of KPMG - 2006 | 2016

Tax revenues grew 4.7% over the previous year, to $5.56 billion. The function’s performance was driven by high demand for tax compliance services, as well as international and M&A related services, in all three regions. “In an increasingly inter-connected business world, the tax work done for clients is increasingly important and complex. Clients are looking for help with their tax compliance across multiple jurisdictions, advice on indirect tax, immigration work, and the implications of tax policy across multi-country supply chains”, says John Veihmeyer, Chairman of KPMG International. 

Audit was the slowest grower – total revenues of the arm grew by 0.9%, to $10.12 billion. The unit’s slowdown in revenue is in sync with broader market developments, which includes growing competition to win contracts (e.g. European Union audit reforms), dropping margins through the rise of automation and increased scrutiny on quality assurance. In a bid to meet the requirements of the changing market and the quality expectations set by regulators and clients, KPMG is investing heavily in bolstering its Audit capacities. “We are continuing with a several hundred million dollar, multi-year, investment program in new audit technologies. These technologies allow us to provide insight-driven advice on clients’ business risks; in addition, our investments in cognitive processing and in building the D&A skills of KPMG Audit professionals, will continue to increase confidence in the work we do,” explains Veihmeyer. 

Global revenue development of KPMG - by function

From a geographical perspective, the Americas was the fastest growing region (7.3%), driven by strong growth in the US, Brazil and Mexico. Asia Pacific delivered stronger growth than FY15, with revenues increasing by 7.1%, led by exceptionally high growth in Advisory. Australia again recorded double-digit growth, with Japan, South Korea and China all outpacing their own growth booked in FY15.

Commenting on the results, Veihmeyer says that he is pleased with the results in what “remains a slow-growth global environment”, a performance which, he adds, is testament “to the passion and innovative thinking” of KPMG’s professionals. “In today’s volatile business climate, our strategic investments in technology, alliances, and our people, are fuelling our growth across our geographies and service lines.” 

Global revenue development of KPMG - by region

The firm’s headcount grew by more than 8% to almost 189,000 professionals. More than 37,000 new graduates and other entry-level professionals joined KPMG member firms, and around 300 new external partners and 600 promoted KPMG partners were welcomed into the leadership ranks. Veihmeyer: “KPMG gives our high-performing recruits the foundation upon which to build an exceptional career: global Mobility assignments, collaborative working, innovative learning, a multi-disciplinary organisation and an inclusive culture.” 

Looking ahead, the firm’s CEO states that KPMG is planning investments of more than $2.5 billion over the next 3 years in new services, technology, alliances and acquisitions, focused particularly on Data & Analytics and Cyber (a top priority for CEO’s globally), Digital Labour and Audit. “This will represent the largest ever investment in our network and will drive a transformation in our operating model and technological capability”, he remarks. 

Across the Big Four landscape, KPMG remains the smallest of the four, with Deloitte leading the pack in terms of revenues.

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PA Consulting results reveal record 14% revenue growth

17 April 2019 Consultancy.uk

Global professional services firm PA Consulting has reported another year of strong growth, outpacing the global consulting market significantly over the duration of 2018. PA’s revenue boomed by 14%, passing £455.8 million over the course of the year.

Founded in 1943, by Englishmen Ernest Butten, Tom Kirkham and David Seymour, the firm once known as Personnel Administration has since gone on to become one of the largest consulting firms in the world. PA Consulting Group, as it is now known, has over 2,600 professionals and a global presence spanning 18 countries. While turnover took a decade to recover from a rocky spell after the global financial crisis, PA Consulting is now firmly on the upward incline.

PA has booked strong growth in recent years, following its securing of private equity investment from the Carlyle Group in 2015. While the first full year of results following that move were slightly muted, due in part to the altering of how PA measured its results, the decision has clearly paid dividends since. Revenues jumped by 6% in 2017, hitting an all-time high of £400 million in the process.

Annual consulting revenues of PA Consulting versus UK market

Now, in the latest chapter of the firm’s rapid turnaround, the innovation and transformation consultancy has revealed things only got better in 2018. A set of record results released in April have confirmed that fee income rocketed up by 14% over the course of the prior 12 months, hitting £455.8 million. Considering the UK’s consulting market saw growth slow for the second year running (just 5.6%), PA’s performance is even more pronounced, especially in its first year of full results since influential Chair Marcus Agius stood down. 

The firm is also outpacing the global consulting market. Analytics firm Statista estimates that the consulting market expanded by 4.08% in 2018. As a result of such bullish demand, PA Consulting has also bolstered its staffing, boosting its consulting team’s headcount by 10% in the space of 12 months. 

PA’s team was further strengthened with its continued acquisition campaign, which brought three new firms into the fold during 2018. Boston-based innovation company Essential Design, specialist digital service design firm We Are Friday and London-based digital insight and strategy consultancy Sparkler all became part of PA over the course of the year. PA has also announced plans to recruit 400 professionals for its new digital centre in Belfast. 

‘Not traditional’

In terms of client work, in the UK PA supported Skipping Rocks Lab to create an edible alternative to single use plastic drink packaging, and worked on a notable restructuring project at disability charity Scope. Further afield, PA helped Norwegian authorities deliver their citizen-facing digital services, while in the US and India, PA partnered with Virgin Hyperloop One to build the first new mode of transport in a century, one that hopes to revolutionise travel. It even worked with United Nations to identify the technologies most likely to contribute to the achievement of the organization's Sustainable Development Goals.

Commenting on the year’s performance, Alan Middleton, PA Consulting CEO, said, “We’re not a traditional consulting firm and we think this is key to our ongoing success and why 98% of our clients recommend us… Our people are strategists, technologists, digital experts, consultants, designers, scientists and engineers – all of whom bring real-world experience, and apply it at pace. We offer the innovation, design, digital and transformation skills that our clients need to change, fast. There’s a sense of optimism behind our purpose. And it’s a feeling that inspires our people as well as our clients.”

The existing staff of PA also enjoyed a bumper year, as it was revealed that a refinancing manoeuver at the firm was expected to land over 1,000 employee shareholders a significant pay-out. The firm’s debt, which includes vendor loan notes put in place when Carlyle purchased the firm, is set to be refinanced in a deal worth £350 million.