- Revenues up 2% in a challenging year - with growth accelerating in the final quarter
- 90,273 new joiners - workforce grows to 295,000 people
- The New Equation strategy - US$12bn investment adding 100,000 net new jobs over five years
- US$3bn of additional investment dedicated to driving quality, including $1bn towards major audit technology efforts
For the 12 months ending 30 June 2021, PwC firms globally had gross revenues of US$45.0 billion - up 2.0% in local currency and 4.9% in US dollars. After growth was flat for most of the year, it accelerated markedly between April and June, up 18.1% compared to the same months last year. While the 18.1% growth is partly a result of a very difficult period in FY20, it also reflects accelerating client demand for services such as deals and restructuring as economies began to open up.
"I'm tremendously proud of all we achieved in a challenging year, and the way we did it, leading with our values and people-first approach. Our top priority has been safeguarding the health, safety and well-being of our colleagues. With their resilience and steadfast commitment, we have remained focused, working together to deliver quality work and innovative solutions for our stakeholders across the world."
"We also concluded on and launched our new global strategy, "The New Equation", in June which uniquely positions PwC to address the two critical, interconnected needs of every organisation - the need to build trust with stakeholders and deliver sustained outcomes. Our strategy is bold and we believe it is transformational. We will be driving it with more than US$12billion in investments over the next 5 years and the creation of over 100,000 net new jobs," said Bob Moritz, PwC's Global Chairman.
Solid results across the world and our lines of service
Across our network, PwC is focused on delivering high quality services and products to our clients as they deal with the challenges and opportunities of a rapidly changing world. Regional growth numbers for the full FY21 reflect the continuing effects of the COVID-19 pandemic and the consequent economic slowdowns. However, as the year progressed, growth returned across all major regions and countries.
- Europe, Middle East and Africa (EMEA) revenues were up by 2.0%. In the UK, revenues rose by 2.0%, in the Middle East they increased by 4.8%, and in Turkey revenues grew very strongly up by 30.0%. Across Africa our business was particularly impacted by the pandemic with revenues falling by 3.6% compared to the prior year.
- Asia Pacific revenues grew by 6.2% with a strong performance from South Korea, which posted a year-on-year revenue increase of 12.3%. After a challenging FY20 during which it saw revenues shrink by 1.2%, PwC Australia returned to growth in FY21 with revenues up by 2.4%.
- Americas revenues were flat, reflecting the significant downturn in disbursements and expenses recharged to clients, which particularly impacted PwC US where revenues were static year on year, as well as some challenging economic conditions especially across Central and South America. Revenues were more buoyant at PwC Canada where they rose by 5.1%.
Assurance: Revenues from our assurance operations grew by 1.2% to US$17.1 billion (FY20: US$16.4 billion). Audit remains the cornerstone of our brand and the key driver for growth in our assurance business. Given the central role audit plays in maintaining trust in the capital markets and the increasing financial challenges our clients faced over the year, our audit business retained its strong market position. We continue to manage other market forces such as auditor rotation and increasing competition, and project continued steady growth for our audit operations in the years ahead. We are also seeing increasing demand for our assurance services regarding non-financial information such as ESG disclosures and expect significant growth in these areas in the future.
Over the course of FY21, we saw a return to growth in risk services. In particular, organisations recognised the need for professional services to help manage risks exposed by COVID-19 and build on the increased momentum of digital transformation triggered by the pandemic. We also saw strong demand for our technology risk and transparency services, with organisations increasingly seeking external assurance over areas such as third-party relationships, sustainability-related disclosures and cybersecurity frameworks.
Advisory: Revenues grew by 3.1% to US$17 billion (FY20: US$16 billion). This growth was driven by functional and enterprise-wide transformation, where clients needed to access a broad set of capabilities from strategy to execution. Accelerated by COVID-19, we experienced particularly strong demand for technology-enabled business transformation (finance, front office, human resources, supply chain) and cloud-driven digital transformation as clients sought to build resilience into their organisations. Increased deal activity beginning in the second quarter of the year drove additional opportunities focused on value creation and preservation, with clients seeking to maximise value from their transactions and any consequent restructuring.
Despite the challenges posed by the pandemic and the inability to travel, our advisory businesses across the world were able to bring together a wide range of capabilities for clients in virtual ways, helping them create value and build sustained outcomes for their organisations and their stakeholders.
Tax & Legal: In FY21 revenues from our tax, legal and people operations grew by 1.7% to US$11 billion (FY20: US$10.6 billion), against the backdrop of an increasingly complex and challenging environment, driven by various factors including the impact of the pandemic and local and global tax policy changes.
As governments and businesses continue to negotiate the challenges of the pandemic and the resulting significant increases in country deficits, we are seeing growing demand for the PwC tax & legal network to help clients navigate an increasingly complex tax landscape. Demand in FY21 was particularly high for deals and people & organisation services. We also experienced an increasing need for transformation services as businesses reimagine their supply chains, operating models and workforce of the future. While we saw steady demand for tax reporting and strategy services - principally around compliance and managed services, in light of the challenges many businesses faced in meeting their reporting obligations remotely throughout the pandemic - the changing tax landscape has also boosted clients' need for integrated compliance services.
PwC Thailand's CEO Chanchai Chaiprasit said that the PwC network's revenue growth in the last fiscal year was the result of great efforts made to cope with the impact of the COVID-19 pandemic within the economic conditions of each country and different recovery levels.
"What we've seen over the past year is that business leaders are increasingly committed to transforming their businesses. COVID-19 has been a catalyst for the world to face the most severe of the five challenges referred to as "ADAPT" - Asymmetry of wealth, Disruption, Age disparities, Polarisation and Trust. That's the reason why we've seen many leading Thai companies adjust their business strategies to match changing consumer behaviour.
"Going forward, it's crucial for business leaders to closely monitor changing trends, whether they're linked to technologies, consumer behaviour or being eco-friendly. ESG has now become part of the new normal for worldwide business when making investment decisions. The ESG trend is no longer led by the energy, petrochemical or automotive industries but includes businesses that want to expand investment to foreign markets and foreign investors who want to invest in Thai businesses as well. ESG factors will also affect a company's credit and business valuation in the future," said Chanchai Chaiprasit.
Investing in the future
Despite the heightened economic challenges of the past year, PwC has continued to prioritise ongoing investments in the future of our people, new technologies, the quality of our work, and new products and services. Across the PwC network, we invested over US$2.6billion during FY21 following on from investments of more than US$3billion in FY20. This investment occurred despite a more cautious approach to overall spending and a smaller number of new partner admissions.
As part of our investment programme in FY21, PwC firms completed nine acquisitions (FY20: 3) and five strategic investments (FY20: 4) around the world - expanding our professional capabilities in key areas such as data analytics, tax technology and strategy consulting. Over the next five years we are committed to invest US$12billion as we implement our strategy - The New Equation.
Focus on quality
Quality is a key focus for us and the responsibility of everyone at PwC. Our relentless focus on quality is fundamental to how we build trust. PwC was the first professional services network to report its quality inspection results - and for the fourth consecutive year our audit quality inspections show an improvement. We do not always get it right on quality and there is always more we can do but when we don't get it right, we endeavour to learn the lessons. The New Equation strategy committed US$3bn to support quality across PwC including US$1bn towards major technology efforts related to audit. We are investing heavily in advanced digital skills and AI-powered tools that are transforming the way people and tech work together.
Enabling our workforce
Our more than 295,000 professionals in 156 countries around the world drive our business. Despite the challenges of the global pandemic, we welcomed 90,273 new joiners in FY21, including 24,800 interns - up 8,721 on the prior year. Our strategy calls for hiring 100,000 (net) additional professionals by 2026.
"To deliver The New Equation, we are focused on building our community of solvers - our passionate team of experts on topics ranging from tax to deals to technology to ESG that are needed to answer the big challenges facing our clients. By developing our people and investing in emerging capabilities we can mobilise the multi-disciplinary teams needed to help clients build trust and deliver sustained outcomes" said Bob Moritz.
Maintaining a positive, healthy, and engaging workplace
Critical to having a resilient foundation for the future is ensuring that we reinforce a positive workplace where our people feel empowered and supported. This means giving them the flexibility to manage the often competing demands of their professional and personal lives, learning the lessons from the pandemic and home working as we plan our return to offices around the world and providing opportunities to develop new skills, while continuing to build a diverse and inclusive workforce.
This year we launched a new People Engagement Index to better measure how our people feel about PwC. The vast majority of survey respondents told us that they are proud to work at PwC (84%), would recommend PwC as a great place to work (74%), and that they enjoy working at PwC (74%). In addition, 73% of our survey respondents stated that they felt they 'belong' at PwC, whilst 74% say their leaders are actively building a diverse and inclusive work environment.
We continue to focus on ensuring all our people have access to opportunities, regardless of their background and life experiences. At the same time, we are also taking action in wider society to support initiatives that help to build inclusion. We are investing heavily in creating opportunities for a more diverse group of people at PwC, we have made progress but there is much more to do.
Having and measuring a meaningful impact
We have made a worldwide, science-based commitment to achieve net zero greenhouse gas (GHG) emissions by 2030 and we are proud to have received validation for our emission reductions targets from The Science Based Targets initiative (SBTi). Air travel is our largest source of carbon emissions, and, as expected we saw a further reduction from last year - of 92% - due to the continuing restrictions on both domestic and international air travel. In future years we plan to reduce our emissions from business travel compared with pre pandemic levels. In FY21 our total GHG emissions reduced by 80% over the prior year and we bought 83% of our electricity from renewable sources*
We are also committed to action that improves inclusivity, and addresses the need for everyone to have the opportunity to achieve their potential. Our New world. New skills. Programme seeks to enable more people to have the skills they will need to navigate the digital world and succeed in the future. In the past year alone, the initiative reached nearly 3 million people in communities around the world. In 2018 we set an ambition to reach 15 million people, non-governmental organisations and social & micro enterprises by FY22 and we're proud to report that in FY21 we exceeded this target and have reached over 18 million beneficiaries through our community investment programmes.
We were part of an industry-wide group that worked with the World Economic Forum to help to identify a set of Stakeholder Capitalism Metrics, where we led on the climate pillar. In January 2021 we were one of the first organisations to publicly endorse the adoption of these metrics. As part of our commitment to promote transparent and comparable reporting, we are including in our Global Annual Review an overview of our disclosures based on the Stakeholder Capitalism Metrics.