EY cracks $40 billion global revenue mark for the first time

19 September 2021 Consultancy.com.au 4 min. read
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Global professional services firm EY has cracked the $40 billion mark in global revenues for the first time, with its Asia Pacific region the fastest growing regional market.

The accounting and consulting giant managed to realise 7.3 percent growth in its past financial year, despite the Covid-19-induced economic crisis. The Asia Pacific was again the firm’s fastest growth market, recording a near 14 percent uptick in fixed currency terms to $6.6 billion, while EY’s strategy consulting wing EY-Parthenon (includes EY Port Jackson Partners in Australia) grew by a massive 19.6 percent.

“EY people have worked hard to support clients and communities in FY21, delivering an outstanding set of results, through a challenging year,” said global Chairman and CEO Carmine Di Sibio, an Italian-born American executive who has been at the helm of the company since the summer of 2019, when he succeeded Mark Weinberger.

Global revenue of EY

In announcing the results for 2021, Di Sibio laid out its plan for a $10 billion three-year investment into training, strategy and fraud detection, including $2.5 billion to be put towards improving its audit quality. The move follows a bruising few months for EY, with the firm dragged into the spotlight through the collapse of German payment company Wirecard, as well as copping a £3.5 million fine from the UK regulator for earlier failures.

“A record US$10 billion three-year investment plan in vital areas such as audit quality, strategy, and sustainability, will continue to help EY clients, our people and communities innovate and transform,” said Di Sibio. “The world is changing fast and the EY organisation is ideally placed to help stakeholders fulfil their need to succeed in a manner which is equitable and sustainable, and which respects the environment.”

Long the strong-hold, EY’s North American business remained relatively flat, contributing ~$17.6 billion to total revenues, with the 10 percent gain to $15.6 billion achieved in EMEIA (Europe, the Middle East, India and Africa) seeing the region fast closing in.

Global revenue of the Big Four 2016-2021

In part propelled by solid growth in Australia, the firm’s Asia Pacific geography added $6.6 billion to the total, growing at a compound annual growth rate of 8.9 percent over the past seven years.

In terms of lines of business, Assurance still leads the way, up by 5.8 percent to $13.5 billion, with Consulting remaining number two, bringing in over $11 billion (up by 6.4 percent for a seven-year CAGR close to double figures) compared to the $10.5 billion in revenue from EY’s Tax division. The firm’s star performer however was the Strategy & Transactions practice, up by 14.6 percent to $4.8 billion on the back of Covid-19’s impact on the business realm.

Still, EY has one eye firmly fixed on its strategy consulting practice, EY-Parthenon, as a driver of further growth, for which it holds serious expansion plans, both organic and through further acquisitions. It describes the practice as the world’s fifth-largest strategy consulting organisation in terms of revenue, with a global headcount of more than 6,500 professionals and 750 partners.

The consulting versus accounting mix

On the back of its financial results, EY has been able to grow its lead versus the fourth largest Big Four firm KPMG, which won’t report until December but has the lowest growth rate of the quartet and will not be able to close that gap in its latest financial year. PwC, the number two globally but the biggest in Australia, is yet to report, having brought in more than $42 billion prior in the FY2020 financial year.

Last week, Deloitte announced a $50 billion haul for its 2021 financial year, cementing its position as the globe’s largest accounting and consulting firm. Compared to PwC and EY, Deloitte obtains a (significantly) larger share of its revenues from advisory and consulting services, led by its Deloitte Consulting, Monitor Deloitte, Deloitte Digital and Deloitte Financial Advisory brands.

In Australia, the Big Four combined generate over AU$9 billion in revenues, up from around AU$5 billion five years ago. At all four firms, advisory and (digital) consulting were the fastest growing lines of business during this period.