EY (No. 1 on the DiversityInc Top 50 Companies list) today announces combined global revenues of US$31.4b for the financial year ended 30 June 2017. Overall, financial year (FY) 2017 revenue grew by 7.8% in local currency (versus FY16). All EY service lines delivered strong growth in FY17: Assurance grew 4%; Advisory 10.4%; Tax 7.9% and Transaction Advisory Services (TAS) 15.5%.
With the launch of its Vision 2020 plan in 2013, EY has been on a journey to adapt and transform to respond to the trends shaping the world: globalization and the rise of the emerging markets; demographic shifts; advancing technology; and increased regulation. Since the Vision 2020 launch, EY has recorded strong 8.8% compound annual growth.
Mark Weinberger, EY Global Chairman and CEO, says:
“We have once again achieved strong revenue growth in what continues to be a complex business environment. In this disrupted and fast-paced world, clients are increasingly turning to EY for advice and insights on how to better manage risk, where to seek growth and how to weave digital into their strategies and operations. EY has a holistic approach to digital transformation and innovation, which is embedded across all service lines and sectors. Significant investment in people and new technologies have allowed us to respond to the dynamic environment.
“While remaining focused on providing high-quality services, we are embracing these changes and utilizing technologies like robotic process automation (RPA), artificial intelligence (AI) and analytics to support clients as they work their way through these changing times.”
Driving growth through innovation and digital
EY has made a commitment to embed digital transformation and innovation opportunities across all service lines and sectors. In FY17, it increased the number of globally connected EY wavespace innovation centers to 15, where clients achieve radical breakthroughs and create new business models by working with EY and using its latest methodologies, thinking and technical innovation. It also grew its Global Innovation group based in Silicon Valley, which champions innovation across all EY businesses and initiates new innovative ventures and pilots specifically in the areas of RPA, AI and blockchain. EY is now one of the leading users of RPA technology and it is using more than 1,100 robots to support EY businesses and clients.
In FY17, EY initiated a number of innovative proofs of concepts, which are currently under way. For example, EY is seeking to expand the use of drones in inventory observations, as part of digital audit capabilities focused on enhancing audit quality.
Targeted strategic acquisitions and alliances also support EY’s innovation efforts. In FY17, 13 strategic acquisitions expanded its professional skills and capabilities particularly in the areas of RPA, digital, cyber, analytics, supply chain and strategy. Alliances, including six new agreements like ones signed with John Hopkins Armstrong Institute for Patient Safety and Quality and Pivotal (part of Dell EMC) in FY17, continue to play an important role bringing EY clients preferential access to products and skills.
Carmine Di Sibio, EY Global Managing Partner Client Service, says:
“There is only one way to respond to this level of digital disruption and that is to embrace it. We have focused on investments in emerging technologies and we are developing new solutions in collaboration with EY clients and alliances. As all businesses are challenged to evolve, we are bringing together the best talent and latest technology to drive truly transformative innovation in all our services.”
Developing the workforce of the future
With globalization, regulatory changes and advances in technology impacting the working world, EY is embracing technological disruption and changing work patterns to help ensure it has the diverse talent to better serve its clients. EY continues to be a leader in recruiting and developing strong talent from around the world. In FY17, more than 65,000 people were hired into EY and more than two million people applied to work in the organization. While EY continues to seek traditional business skills, the organization now includes 18,000 data and analytics professionals with 2,100 data scientists.
Overall, headcount increased by 7.3% over FY16, reaching 250,000 people globally. It saw 669 people promoted to partner and more than 385 new lateral partners in FY17. The diversity of EY senior leaders also increased, with 36% of new partners coming from emerging markets and women representing nearly 30%.
EY has been transforming its approach to talent development and giving more people the opportunity to develop “hot” skills, particularly as it introduces more robotics and AI. In FY17, EY invested approximately US$500m and more than 12m hours in learning to best serve clients and support the continued development of EY people.
In addition to adding and developing full-time professionals, in FY17 EY launched GigNow, a global marketplace for talent that is embracing the “gig economy” and providing opportunities within EY to people seeking more flexibility or short-term assignments. GigNow is currently live in the US, the UK, Ireland, Australia and New Zealand and matches qualified contractors with projects, bringing critical skills to EY teams and clients, such as those in the areas of digital, cyber, robotics and blockchain. Since GigNow launched, it has registered 3,000 contractors and matched close to 500 with EY projects.
EY is proud to have been named on several prestigious lists recognizing its outstanding people culture. For the second year in a row, EY has been voted the world’s most attractive professional services employer and the fourth most attractive employer overall in Universum’s annual “World’s Most Attractive Employer” ranking. In addition to the global ranking, EY firms in the US, Canada, France, China and Australia were also once again ranked the number one professional services employer in those countries. EY also made its second consecutive appearance on the global “Great Places to Work” list, the only professional services organization on this list. In the US, EY was named #1 on DiversityInc’s Top 50 Companies for Diversity list.
Nancy Altobello, EY Global Vice Chair Talent, says:
“At EY, we are committed to developing and attracting the best talent by delivering an exceptional experience for each and every one of our people. Investments and focus on our people and workplace are allowing us to attract and retain diverse, high-performing individuals who gain world-class learning and the leadership skills necessary to solve complex problems in a rapidly changing world.”
Commitment to inclusive capitalism
EY’s purpose of building a better working world extends beyond client work and into its commitment to promote inclusive capitalism and support the development of reporting measurements that go beyond revenue and include the value that corporations create for their stakeholders.
EY and the Coalition for Inclusive Capitalism are running a proof of concept to help measure long-term value creation an industry first. As part of “The Embankment Project for Inclusive Capitalism,” EY will develop and test a new framework to better reflect the full value companies create through human, physical, financial and intellectual capital deployment.
Continued growth across geographies, key industries and markets
EY’s largest geographic areas achieved strong growth, with Asia-Pacific achieving the highest growth rate of 11.3%. Europe, Middle East, India and Africa (EMEIA) achieved 8.6%; the Americas 7%; while Japan was marginally down by 2% over FY16.
By country, the US has had another solid year, recording more than US$13b in revenue, a 6.7% increase over FY16. The Transaction Advisory Services business led the US growth with 5 of the top 10 global M&A deals originating from US-headquartered businesses. Assurance continued to secure new audit engagements, while Advisory recorded near double-digit growth buoyed by the strength of its Performance Improvement services. Elsewhere in the developed markets, the UK recorded near double-digit growth balanced across all service lines, sectors and regions despite Brexit and other geopolitical events adding new dimensions to the business environment. EY also saw strong growth across Australia, Canada, France, Germany, Italy and the Netherlands.
EY emerging market practices were again a growth source for the organization, up almost 9%. This follows several years of strong growth in this area, as EY continues its commitment to these markets. This growth was once again led by India, which grew an impressive 19.6%. Mexico performed strongly, with 14.8% growth, while Greater China once again achieved double digit-growth (13%).
EY recorded strong revenues across various industry sectors with its Consumer Products & Retail and Wealth & Asset Management both achieving double-digit growth. Consumer Products & Retail growth was driven by strong demand for M&A transaction services, digital supply chain reinvention services and SAP transformation advisory services; and Wealth & Asset Management was led by digital transformation, customer experience innovation and operational efficiency initiatives and robust levels of M&A.
Investments and growth in the business
Assurance: With its unrelenting focus on providing high-quality audit services, Assurance continued to transform its service delivery model through digital and innovation. Technologies such as AI and RPA played a larger role in supporting sustainable audit quality, enhancing confidence in the capital markets and meeting the evolving needs of business, regulators and investors. Major milestones include the launch of the EY Canvas Client Portal linking clients directly to their audit teams, supporting real-time audit status information and improving transparency and communication. Its strong market share continued to grow over the year, winning major new accounts with China Southern Power Grid, Commerzbank, Kia Motors, and Schroders. Financial Accounting Advisory Services once again delivered impressive double-digit growth, supporting organizations through regulatory and accounting change, while Fraud Investigation & Dispute Services continues to grow by supporting businesses in managing the critical risks of fraud and cybersecurity.
Advisory: Strong client demand for advisory services for digital, business transformation, risk management and cybersecurity contributed largely to Advisory’s seventh year of double-digit growth. Advisory’s growth has been supported by investments in RPA, blockchain, IoT, AI, cybersecurity, analytics and business transformation. EY continued to leverage and expand its global strategic alliances: it launched four new joint solutions with Microsoft in FY17 and teamed up with enterprise information management leader OpenText to expand digital and analytical services. Strategic acquisitions are supporting Advisory services in the areas of digital and data analysis, such as Society Consulting, which is bringing EY new ways to aggregate, organize and visualize company data to improve the customer experience. In FY17, EY achieved Blue Prism’s Gold certification, its highest accreditation for the implementation of RPA for organizations at scale and speed.
Tax: Tax reform, new reporting requirements and the drive toward greater transparency continued to support the growth of the Tax service line in FY17, as clients sought more support in indirect tax and transfer pricing services. Client demand for the management of tax technology, tax “big data” and digital tax administration were also strong contributors of revenue growth. Additionally, demand for EY legal services fueled its expansion to more than 2,100 law practitioners in more than 80 countries around the world. EY People Advisory Services practices continued to grow by helping more clients manage mobility, organizational and compliance issues.
Transaction Advisory Services: TAS achieved its third consecutive year of double-digit growth, led by capital strategy and transaction services. The growth was supported by a resilient global M&A appetite as well as TAS-led innovative global digital solutions such as Transaction Analytics. In FY17, it advised on 7 of the top 10 global M&A deals. Overall, TAS revenue was driven by strong M&A advisory and divestiture activity, as well as advisory services for the strategic management and deployment of capital.
Building a better working world
EY’s purpose of building a better working world permeates all it does from client work to people development to participation in society and communities. The organization seeks to impart the knowledge, skills and experience it uses every day for social impact within its communities around the world. It does this by assisting governments, communities and businesses in solving their toughest issues; by asking better questions, and achieving better answers. In FY17, EY people contributed more than 700k hours of time to a variety of initiatives and value-in-kind projects and the organization invested approximately US$90m directly in community projects. Many of these projects embrace the latest innovations and EY skills to address pressing issues across the local communities in which EY people live and work.
Last year, EY professionals assisted small and growing social entrepreneurs, like Jacaranda Health with whom it worked to help improve the maternal mortality ratio in Kenya by streamlining patient management processes and improving financial forecasting, budgeting and management of working capital. With EY’s support, Jacaranda Health is already achieving astonishing results at a fifth of the cost of other local private hospitals and allowing it to bring high-quality maternity care for low-income women in East Africa.
EY is also focused on supporting the next generation of talent. It collaborated with JA Worldwide, the Network for Teaching Entrepreneurship and Enactus to help young people learn about business and social enterprise and develop the mindset, skills and confidence they need to succeed in an age of disruption.
In Germany, the organization is bringing together businesses, government bodies and social groups to help integrate the large influx of refugees with the local workforce and society.
In India, a new project is helping to empower women in a remote district, providing them with professional training, which is generating sustainable employment and dramatically improving the lives of the women and their families.
STEM Advantage, a non-for-profit program in the US, is preparing and inspiring young women and underserved minorities of all genders to pursue STEM careers through paid internships, mentorships and scholarships.
To help startups combat the complexities of raising and managing cash, a startup team in Belgium and the Netherlands created Finance Navigator, which acts like an online CFO, helping underserved diverse entrepreneurs build investor-proof financial models, foresee cash flow problems and secure funding.
Investments in people and new technologies not only help EY succeed in the market, but also position the organization to continue its role in building a better working world as it moves into FY18.