Growth driven by investments in innovation, alliances and people
December 14, 2016: KPMG International announced aggregated network revenues of $25.42 billion for the fiscal year ending September 30, 2016 (FY16), representing an 8.0% increase in local currency terms.
“KPMG’s strong FY16 results, in what remains a slow-growth global environment, are a testament to the passion and innovative thinking we bring to our work,” said John Veihmeyer, Chairman, KPMG International. “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. In FY16, thousands of extraordinary people were hired across the KPMG network, and we continued our relentless focus on providing high-quality, excellent service.
“We continued to prioritize strategic investments in new services and technologies in FY16, focusing on the areas where we see businesses facing the greatest challenge and disruption. We have taken a leadership position in key business areas such as cyber security and data & analytics (D&A). We are also working closely with a number of the world’s leading technology companies, in alliances that bring together world-class innovation, business expertise and leading edge technology.
“We are also actively engaging with regulators, tax authorities and other stakeholders, to advance the conversation around some of our industry’s most complex challenges. Our purpose has never been clearer – we inspire confidence, and our work empowers clients and the business community to explore, invest, innovate, grow and change. KPMG’s Global Brexit Centre of Excellence is an example of the quality of thinking and advice KPMG people bring to clients around the world as they prepare for what could be a potentially major shift in global trade.”
Success built on serving clients across the globe
Reflecting its vision to have clients see a difference in us, KPMG firms grew across all three geographic regions:
— Americas revenues increased by 9.6%, driven by growth in Advisory services of 12.0%, growth in Tax of 11.6% and growth in Audit of 6.4%. Strong US growth of 9.4% was driven by double-digit growth for non-Audit services. In other Americas markets, Brazil saw 12.7% growth and Mexico had 8.8% growth.
— Asia Pacific delivered stronger growth than FY15, with revenues increasing by 9.8%, versus 8.2% in the previous year, led by exceptionally strong growth of 20.7% in Advisory. Particularly strong growth was seen in Australia, which again recorded double-digit growth, Japan at 13.3%, Korea at 9.4% and China at 9.2%, which all grew faster versus FY15.
— Reflecting an improving but challenging business environment in Europe, Middle East and Africa (EMA, including India), revenues increased by 6.0%, up from a 4.0% increase in the previous year. Within the region, revenues were driven by strong performance in the Advisory business, with growth of 8.7% over the previous year. EMA saw strong growth in a number of firms, including India at 18.6%, Middle East and South Asia (MESA) at 10.7% and Ireland at 8.6%.
Growth in business lines — Audit
Total Audit revenues for the year were up by 4.5%, to $10.12 billion, building on last year’s exceptional growth of 6.1%.
KPMG firms continued to win a number of important audit appointments across the globe, particularly in Europe, where FY16 marked the first year of European Union audit reforms.
“We have a relentless focus on audit quality and 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,” said Veihmeyer.
Tax revenues grew 8.8% over the previous year, to $5.56 billion, with Tax revenues in Asia Pacific improving by 11.1%. Strong Tax 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. Now more than ever, KPMG professionals are also advising clients on how to most effectively communicate the tax they pay with stakeholders across the world. We are leading the responsible tax dialogue – a discussion about ethical tax behaviors that involves government, taxpayers and professional advisors,” said Veihmeyer.
KPMG’s strong Advisory revenues reflected a focus on innovation in the role as trusted advisors to some of the world’s largest businesses. Total Advisory revenues for the year were up 11.5%, to $9.74 billion, an increase over the growth of 9.2% in FY15, with stronger year-over-year growth seen across each of KPMG’s three Advisory service groups.
— Demand for Management Consulting services, which saw growth of 16.3%, was led in-part by technology-enabled transformation engagements.
— Risk Consulting, including Financial Risk and Regulatory Management, IT Advisory Services and Forensic, grew 10.2%.
— Deal Advisory saw growth of 12.1%, as KPMG professionals helped drive value for clients in their acquisition/disposition transactions.
— In addition, the Global Strategy Group contributed to the strong growth across Advisory.
Investing for future growth
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 D&A, Strategy, Cyber, Digital Labour and Audit. This will represent the largest ever investment in its network and will drive a transformation in its operating model and technological capability.
Leading choice for talent
In FY16, KPMG maintained its long-standing focus on being an employer of choice for extraordinary people. More than 37,000 new graduates and other entry-level professionals joined KPMG member firms, and more than 300 new external partners and more than 600 promoted KPMG partners were welcomed into the leadership ranks. KPMG’s global workforce grew by more than 8% to almost 189,000 partners and staff, the highest number of individuals ever employed across the network.
KPMG’s inclusive culture helps ensure that our teams reflect the diversity of skills, backgrounds, experiences and thought expected by clients. Led by the gender-balanced Global Management Team, our inclusion and diversity strategy continues to accelerate our progress towards achieving our inclusion and diversity goals.
Veihmeyer concluded, “KPMG gives our high-performing recruits the foundation upon which to build an exceptional career. Global Mobility assignments, collaborative working, innovative learning, and our inclusive culture, create a multi-disciplinary organisation with the skills to make KPMG the clear choice for clients.”
Other FY16 highlights
- KPMG member firms serve more than 80% of Global Fortune 500 companies.
- KPMG’s alliances with industry partners like IBM, Microsoft and Oracle extended the breadth of technology-based offerings for clients around the world.
- KPMG was named a leader in information security consulting services by Forrester Research, achieving the highest score for current offering and strategy (tied) in The Forrester Wave™: Information Security Consulting Services, Q1 2016.
- KPMG has a commitment to lifelong learning. To date, KPMG has distributed nearly 3 million books worldwide through KPMG’s Family for Literacy (KFFL), and is a proud supporter of Enactus, One Young World, and Junior Achievement, among others.