BDO registered 10.7% year-on-year growth for the year ended 30 September 2018, as revenues jumped to US$8.99bn for the period.
Headcount broke the 80,000 mark (reaching 80,087) after 8.4% growth over the same period.
When asked which segment powered this growth, BDO Global CEO, Keith Farlinger told the International Accounting Bulletin (IAB): “Audit continues to perform very well, despite all of the challenges to it right now. It actually performed the best. Then secondly tax is really starting to pick up. Advisory I would say we still have a ways to go, it is the third strongest of those three main practises.”
2019 will likely to be the year of advisory for BDO, however. The network completed a number of advisory M&A deals over the year – including the acquisition of two firms active in robotic process automation and process mining optimisation in Belgium, as well as acquisitions of advisory practises in France and Jersey – however these are not reflected on the 2018 results.
Farlinger noted: “For sure that will affect our advisory practise going forward.”
Strong EMEA growth
Growth came from across the globe, with the Asia Pacific Region growing 6.6%, the Americas growing 7.8%. The EMEA region grew by 17% in this period.
According to Farlinger, this could be viewed as the region catching up with the Americas and Asia Pacific. He told the IAB: “The EMEA region over the last couple of years had fallen behind the other regions, where the growth was largely coming from North America and Asia, specifically China and India. So it is good to see the EMEA starting to catch up.”
He specifically highlighted the mergers the network did in South Africa, as well as the performance of the Dutch and British firms as examples of BDO posting strong results for the year.
Another reason for the double digit EMEA growth Farlinger pointed was the state of flux much of the EMEA region finds itself in. This, he said, caused more businesses to need help from their advisors: “When there is disruption and confusion in the market place, our practises tend to grow. As you know, there are lots of challenges in the EMEA market place, with the likes of Brexit. So clients are naturally looking for more help and advice.”
This uncertainty is by no means limited to just the EMEA region. Between Canada’s recent arrest of the CFO of Huawei, Meng Wangzhou, Trump’s policy of making major announcements and diplomatic statements on Twitter and the various woes of a number of South American economies, The general mood of the planet could not be described as ‘certain’ currently.
Farlinger said: “There is just so much going on right now that they [businesses] need advice, they need help. So our business is positive as a result of people needing help.”
While this has helped BDO and other accounting networks and associations grow, some of these developments have the potential to seriously damage the world economy. Farlinger noted: “There are always dark clouds that come with change. There are obviously dark clouds in the UK – not only Brexit but the examination of the profession with the Kingman review and the CMA review. That is a dark cloud; we don't know what is going to happen.
“Coming from China, the continued trade war between China and the US, which has the potential to throw the world into recession. That would not be good for anybody. Because of the uncertainty we just don't know where these are going to end up.”
Despite these dark clouds, Farlinger remains optimistic for 2019: “I'm really positive about next year. We saw the Moore Stephens thing. It's going to happen for sure. There is a lot of other merger activities that is going on through EMEA and the US. The uncertainty will continue so I think our advisory practise will pick up.
“One of the keys to our success going forward will be to attract the people. All of us need great people to be successful. So we will continue to focus on the people side to continue to grow growing forward.”