ASPAC region sees the fastest growth for the firm’s global network, and KPMG China continues to grow
Through a year of economic and social turbulence, KPMG International today announced KPMG firms’ annual aggregated revenues of $29.22 billion for the fiscal year ended 30 September 2020. FY20 growth had a strong start with gross revenue growth slowing in the second half of the year. Net sales increased throughout the financial year as firms continued to support clients in their response to the COVID-19 crisis.
“I’m tremendously proud of our global organization and how we have supported each other and clients through this very turbulent year. The health and safety of our people has been our top priority, and at the same time, we have stayed laser focused on executing against our ambition and strategy. First and foremost, this means delivering excellence, and maintaining the highest levels of quality and integrity in all areas of our work. It also means investing in our talent and the digital capabilities that will drive our growth,” said Bill Thomas, Global Chairman & CEO.
“In this time of transformative change, we continue with our multi-year $5 billion investment in technology, innovation and people to deliver quality and global consistency in everything we do to create powerful solutions for clients. The trend to digitalization has been accelerated by the pandemic. This is the case for our clients’ businesses as well as all of our services across Audit, Tax and Legal, and Advisory. We are innovating and working closely with our strategic alliances to help clients digitally transform their businesses as well as continuing to develop and roll out our own digital platforms.”
Digital is driving increasing demand for services, as we align our business to support all aspects of the digital journey. Our management and risk consulting services have experienced growth as clients seek insights on structuring a digitally-enabled enterprise. Notable is our suite of Powered Enterprise solutions, designed to transform legacy business processes to help enterprises achieve top 10% functional performance. Our Cyber Security services continue to experience strong demand as trust becomes an ever more valuable commodity in a digital world.
Our global alliances, with leaders such as Alibaba, Amazon Web Services, Google Cloud, IBM, Microsoft, Oracle, Salesforce, SAS, ServiceNow and Workday, are vital in delivering our growth ambition, and revenues experienced as a result of our alliance relationships continue to see a significant increase.
Technology is making the regulatory and legal environment more complex and is increasing demand for our Regulatory Driven Transformation services as clients seek to automate compliance programs and better manage risk. Legal complexity is also rising, leading to increased demand for KPMG Legal services which is now realizing 6% growth. Our investments to bring greater digital capabilities and enhanced quality execution to Audit, especially with our KPMG Clara smart audit platform, are continuing to strengthen demand for our Audit services.
KPMG firms delivered resilient performance across all three geographic regions, with the Asia-Pacific region being the fastest growing:
Asia Pacific and China Chairman Honson To said: “I am pleased to report that in the financial year ending September 2020, KPMG Asia Pacific was the fastest growing region in our network, delivering positive growth. This is particularly notable as we had been hit by Covid-19 earlier than the other regions but managed to come back and deliver very credible results. The centre of gravity is shifting to Asia Pacific. Increasingly we see very large engagements being awarded and our member firms are working together more closely than ever on delivering for our clients.”
KPMG professionals have worked alongside organizations around the world in taking on the challenges posed by COVID-19. We’ve contributed expertise and resources to public health initiatives, both on the front line and broader operations, helping organizations respond to the overwhelming demand on health systems. Around the world, we are involved in initiatives from improving the efficiency of COVID-19 testing to developing and assessing government ‘track and trace’ apps.
When financial institutions were inundated with requests from businesses for emergency government funding to stay afloat during the pandemic, thousands of KPMG people stepped in to help manage programs and process applications, so funds could be distributed more quickly.
Across all services and lines of business, KPMG professionals bring deep industry expertise together with tailored global resources to help clients address the specific challenges facing their organization. In the past year, our industry focus has driven growth in key sectors, including: Financial Services; Infrastructure, Government & Healthcare; and Technology, Media & Telecommunications.
“Having a deep understanding of our client’s business, is fundamental to every service that our firms around the world provide. Each industry is being impacted differently by the pandemic. The focused industry expertise of KPMG professionals delivers greater value and efficiency in meeting the immediate needs of clients as well as their longer-term, strategic challenges,” said Gary Reader, Global Head of Clients & Markets.
Audit revenues for the year globally reached a total of $11.07 billion in FY20.
Our relentless focus on audit quality is at the heart of our business and who we are. It is more critical than ever in these uncertain times for enhancing trust and confidence among investors, regulators, our clients, our people, capital markets and the communities in which we work and live.
We are investing across the business in our processes, methodologies and systems to make sure every audit and every piece of work we do consistently meets the standards expected of us and our profession.
“There is no status quo when it comes to quality. We are on a continuous mission to drive sustainable improvements to uphold the highest levels of quality and trust in all areas of our work. We have rolled out KPMG Clara, our smart audit platform, to our professionals in over 100 countries and territories which continues to be a market differentiator. This is the future of audit technology – a cloud-based system and web-enabled audit workflow that promotes global consistency while enabling more and deeper data-driven insights into potential risks and anomalies,” said Larry Bradley, Global Head of Audit.
Tax and Legal services
Tax and Legal services for FY20 achieved total global revenues of $6.48 billion, driven by demand for Tax services, particularly as clients seek help in managing increasingly complex, cross-border tax obligations, and work to transform their compliance processes and implement new technologies to address current challenges.
KPMG’s Global Legal services continued its strong growth at a rate of 6% in FY20. Our network now has more than 2,700 legal professionals across 81 jurisdictions with the capability to advise on a much broader range of business issues than traditional law firms. We launched a Global Legal Operations Transformation services offering to help clients as they move to transform operations and digitize and automate their legal function processes for the new reality.
“The global tax landscape has evolved considerably, and more changes are expected as jurisdictions work to recover from the economic impact of COVID-19. With our Tax Reimagined platform and Digital Tax Gateway we are equipping our teams with the resources to help clients transform for the new reality through consistent methodologies that are still nimble enough to enable us to address their unique needs. We can help them transform through in-house solutions or through outsourcing or co-sourcing approaches, through robotic process automation and other technology solutions, or a mix of these,” said David Linke, Global Head of Tax and Legal Services.
Advisory achieved global total revenues of $11.67 billion in FY20.
Our clients need to adapt to an ever-changing digital world. We’re investing in a suite of solutions that combine our multidisciplinary expertise and technology capabilities to meet clients’ most pressing needs. Our Connected Enterprise capabilities help our clients rebuild around their customers to create borderless organizations, where people and technology interact to create new levels of productivity and value. Our Powered Enterprise framework helps businesses become more nimble and scalable, enabling clients to harness the latest technologies, leading business practices and tested solutions for a smarter path to the right operating model.
Our innovative technologies include building predictive analytics and intelligent automation into our tools and methodologies.
We continue to work with our ecosystem of strategic alliances to deliver the most advanced solutions to meet the needs of our clients. In the past year, we celebrated many achievements and to name a few:
“Our clients are adapting to an ever-changing digital world. Security is critical and we continued to see strong demand for our suite of cyber security solutions this past year. We also experienced strong demand for Regulatory Driven Transformation services as clients face a much more complex regulatory environment. Together with our alliances, we are helping transform our clients’ businesses into future-focused enterprises ready to support growth,” said Carl Carande, Global Head of Advisory.
KPMG is attracting more highly-skilled and motivated talent than ever before and in FY20 we employed more than 219,000 people globally.
“Our people across the organization have taken on the challenges of 2020 in an inspiring way,” said Nhlamu Dlomu, Global Head of People. “Our first priority has been helping them to maintain their physical and mental health through this period, and through our strategic technology investments and by embracing flexible working arrangements, they have responded to the needs of clients as well as our communities in a manner that reflects our Values and culture and shows remarkable skill and resilience in the face of adversity.”
In 2020, we refreshed our Values to make sure they fully reflect our aspirations and beliefs as an organization. We continue to foster communication across KPMG to share, discuss and reinforce our Values with all of our people. In a global, virtual event, ‘Courageous Conversations,’ more than 17,000 of our people provided their perspective on their lived experience at work and thoughtful ideas on how we can more effectively progress toward our goal of improved racial equity within KPMG. This is an integral part of our continued commitment to inclusion and diversity (I&D) and we will report further on this commitment in May 2021.
Delivering on environmental, social and corporate governance (ESG) commitments is a global imperative and at the top of the agenda for our people and clients. In 2020, we launched KPMG IMPACT, our new ESG and sustainability initiative, dedicated to supporting clients in building a more sustainable and resilient future. We also collaborated with the World Economic Forum and came together across the Big Four to agree upon a set of universal ESG metrics and disclosures that can be adopted by companies.
In addition to our support for communities and businesses through the pandemic, we have strengthened our global focus on SDG4: lifelong learning and literacy. At the height of the pandemic in March, KPMG became a founding partner of UNESCO’s Global Education Coalition to support countries and territories in scaling up their best distance-learning practices and reaching the youth who are most at risk during this time.
In early 2021, for the first time, we will share ‘Our Impact Plan’, detailing our strategy and targets against ESG themes, including: committing to net-zero carbon emissions by 2030; adopting science-based targets in line with the 1.5 degree Paris Agreement; moving to 100% renewable electricity; and investing in Gold Standard carbon removal projects.
The financial information set forth represents combined information of the independent KPMG member firms, affiliated with KPMG International Limited, that perform professional services for clients. The information is combined here solely for presentation purposes. KPMG International Limited performs no services for clients nor, concomitantly, generates any client revenue.
FY20 revenues, throughout this press release, reflect KPMG’s financial year between 1 October 2019 and 30 September 2020 and are expressed in US dollars.
Local growth percentages are based on maintaining consistent FY20 exchange rates within the prior year and are based on gross revenues, including travel and other client reimbursable expenses, which are excluded from the net revenues growth calculation.
Headcount figures are expressed as FTE (full-time equivalent) and are based on average headcount for the financial year.
Legal services may not be offered to SEC registrant audit clients or where otherwise prohibited by law.
Throughout this press release, “we”, “KPMG”, “us” and “our” refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity.
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