Stefan Pfister talks in an interview about the strong annual results of KPMG Switzerland, future-oriented investments as well as his own personal highlights of the past year.
Increasingly intense digital transformation in business unquestionably played a central role. It impacts all three of our functions, letting us perform comprehensive analyses of client data in Audit, automate standardized processes in Tax, and create innovative process optimization platforms in Advisory. Persistently low interest rates were another positive driver. They created fertile ground for a great many mergers and acquisitions. These, of course, also come hand in hand with a heightened risk of overleveraging. Uncertainty in the geopolitical environment very clearly had the biggest dampening effect and prompted export-oriented clients, in particular, to at least delay planned investments, both in Switzerland and abroad. The success of the work we performed for clients is reflected in our net revenues, which we boosted by 6% to around CHF 450 million – with record earnings in all three functions. Gross revenues even rose by more than 8% to over CHF 600 million.
Absolutely. Technological innovations, both on the clients’ side and on KPMG’s end, were partly responsible for the positive trend in Audit. Clients were able to completely redesign their financial and leadership processes. On our end, new technologies open up opportunities to standardize, automate and centralize key audit tasks. That, in turn, enhances both the reliability of our audit results as well as the relevance of our reporting.
Demand for compliance and outsourcing services were one factor behind the good results in Tax. When it comes to blockchain and initial coin offerings, we’re among the leaders: We offer our clients a one-stop-shop for support on all types of fiscal and regulatory matters. We also advise more traditional companies and help them deal with the new tax rules for digital goods. Unfortunately, the pending Corporate Tax Reform negatively impacted our tax advisory business again in 2018, since companies willing to invest and relocate to Switzerland are waiting for legal certainty on the matter.
Growth in Advisory was propelled by the large number of major transactions with Swiss involvement, and we provided comprehensive advisory services for many deals. In the industrial sector, clients mainly sought our forensic services to get help with corruption, mismanagement and fraud, but also for dealing with third-party risks and compliance management systems. The digitalization occurring in many business and administrative units, as I already mentioned, plus the uptick in cyber attacks led to strong demand for cyber security, data protection and certification services, as well.
Predominantly in staff development, in technological innovations and in key partnerships. We invested some 6% of our revenue in software and technology development plus more than CHF 7 million in training and further development opportunities. Those are enormous sums! We hired nearly 700 new specialists during that same period of time.
One high point was the grand opening of our digital Insight Center in Zurich. This pioneering innovation center opens up an entirely new way for us to analyze and visualize company data for our clients. Thanks to a blend of state-of-the-art technology, predictive analytics and expertise, our clients discover not only new correlations and opportunities but also looming threats.
Our efforts to position Switzerland as an attractive, sustainable and trustworthy business location also saw us getting actively involved in many different areas, including commitments at economiesuisse, digitalswitzerland and at the Digital Festival in Zurich. KPMG has also continued its close collaboration with universities. Plus we launched the Digital Cyber Academy in collaboration with the UK-based cyber security firm Immersive Labs, which I consider a game changer. It can be accessed by students at all Swiss universities at no charge and makes a positive contribution to Switzerland’s standing as a center of education and a business location.
I was greatly honored by the Partners’ decision last summer to appoint me for a second four-year term as CEO. That was definitely my personal highlight!