EY revenue rises to $1.8 billion due to near double digit growth

03 September 2018 Authored by Consultancy.com.au

Big Four professional services firm Ernst & Young has revealed its revenue for the year to July 2018 has grown at a rate of 9.8%. The majority of the $1.8 billion growth was organic according to the firm and means that Oceania is one of EY’s biggest markets.

EY is one of world’s largest advisory, consulting and accounting firms with an annual revenue of US$31.4 billion globally. The firm – which was formed through a merger in 1989 – was traditionally an accounting firm with a focus on business advisory. Once merged, the firm quickly positioned itself at the leading edge of rapid globalisation, new technologies and continuous business change.

In the digital era, EY continued its momentum of constant adaption, moving into profitable new areas including digital transformation, IT consulting, robotics, AI and data analytics. However, Tony Johnson, EY Oceania’s Managing Partner puts the success down to EY’s people. “It is a credit to the smarts and work ethic of our partners and everyone of our 6000 people who have been agile, bold and confident in a demanding and disrupted environment. 

“This is an outstanding result, we’ve achieved fantastic momentum which has continued into the beginning of FY19,” the EY Oceania Managing Partner and Chief Executive said. According to the firm, all lines of service – assurance, advisory, tax, transaction advisory services – grew. A rise in demand for high-quality external audit has particularly driven the growth (to $375 million) with the firm scoring new clients including BHP, Ardent Leisure, Beach Energy, Primary Health and RACQ.

EY revenue rises to $1.8 billion due to near double digit growth

Alongside assurance, people and transaction advisory services also experienced double digit growth. “More companies recognise that investing in a strategic people agenda will drive greater profitability, particularly as teams become more global, diverse and complex, so we expect demand for leadership and culture related services to continue growing,” Johnson said.

Transaction advisory services grew due to a high level of M&A activity as well as new infrastructure projects. The firm has also been involved in a massive M&A role with Reece’s expansion into the southern United States. The Australian plumbing powerhouse invested $1.91 billion in MORSCO, the Texan-based construction supply chain.  

“We are proud of the impact our market-leading infrastructure advisory team is having on the better delivery of services to citizens, truly consistent with our purpose of building a better working world. We are currently advising on over $100 billion of new projects – in areas such as health, human services, transport, social housing, water and defence,” Johnson said. 

Whilst the recent growth has been almost totally organic, the Big Four firm has its sights set on a few acquisitions in the future. “Acquisitions absolutely have to be part of the growth strategy, but it has to be measured. We will buy in areas that have the biggest tailwinds behind them, where clients have a real hunger for those services, and where we have pent up demand,” Johnson said.

According to Johnson, the firm’s advisory and consulting business is set to experience the highest levels of growth in the coming year. “Digital and automation are embedded in all parts of our business and that is where the future lies and where the growth will come from,” he said. “With over 2000 bots enabling what we do, we’ve only just scratched the surface on the potential of data analytics and automation to undertake manual tasks.”

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