Revenues of Big Four in Australia pass $9 billion threshold

01 September 2020 Consultancy.com.au

Over the past five years, the revenues of the Big Four in Australia have boomed, leading to the aggregate revenues of the quartet surpassing the $9 billion mark for the first time in their history. PwC remains the largest firm in the country by revenue, however Deloitte, EY and KPMG are all making ground on the market leader.

Following years of consistent growth, Australia’s management consulting market has boomed since 2016 in particular. The market was then estimated to be worth a total of AU$5 billion – a historic high which the Australian market has majorly eclipsed in the years since.

Illustrating just how rapidly Australian consulting has expanded its revenues, new analysis from Consultancy.org shows that the Big Four alone are now worth more than AU$9 billion in the country. The world’s largest professional services firms of Deloitte, PwCKPMG and EY have each grown their revenues at a rate of more than 30% over the following years.

Despite the impact of the coronavirus lockdown on the global economy – which has been so drastic that Australia has entered its first technical recession in 29 years – the quartet of advisory and audit companies have even seen a boost to their expansion in 2020. Looking at the financial statements of the Big Four, while PwC remains the largest group in Australia, this meteoric improvement has been most pronounced at Deloitte.

Revenue of the Big Four in Australia 2016-2020

With PwC’s revenue currently totally AU$2.6 billion per year, it has enjoyed a 35% increase on its figures from 2016. In comparison, Deloitte – which only enjoyed a narrow lead over its other Big Four rivals in the market – has seen revenues explode by 62%, drawing it to within AU$0.5 billion of PwC’s annual haul. EY and KPMG have also gained ground on PwC – the former in particular growing at 43% since 2016 – with an especially strong performance in the latest financial year – to hit revenues of AU$2.13 billion in the last financial year. KPMG meanwhile grew its Australian revenues by 7% in the last year.

However, the strong economic performance of the Big Four does not seem to have insulated them from the impacts of Covid-19. In June, just days after PwC announced it was slashing 700 jobs in Australia, Deloitte followed suit – axing 700 of its own staff. The news followed KPMG’s announcement in May that 99% of staff had accepted a 20% pay cut to stave off job losses.

Commenting on his firm’s latest results, Australia CEO Tom Seymour said he was confident PwC would be resilient enough to emerge in a stronger position once the Covid-19 pandemic has passed. He noted that in particular, financial advisory services – including deals, private clients and tax business – was “was growing pretty well through to February but was probably the most impacted business by Covid.” He added he did think “deals will come back strongly in the new calendar year.”

Deloitte’s Australian Chief Operating Officer Andrew Griffiths reported that the firm’s utilisation of 65% was five percentage points behind planned levels – though audit and assurance work remained strong, with the division working at 77%. EY Australia CEO Tony Johnson meanwhile ceded that his firm was liable to see a downturn in performance on a bumper year before – but still remained optimistic.

“We’re certainly modifying downwards our growth expectations for FY21,” Johnson said. “It’s going to be a really different year because rather than setting an annual budget… so we’ll probably stop every quarter and say, ‘where do we go for the next quarter?’ So I think we’ll be less than 10% this year. Pick a number: 6% or 7% would be our target. The first half will be slower than the second half.”

KPMG Australia CEO Gary Wingrove remained similarly upbeat, stating, “I remain positive in terms of this financial year. But we do expect conditions to be pretty difficult from a trading perspective for the first half of [FY21], so through to about Christmas.”


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