EY is the first of the Big Four to report global results. Revenues for the year to end-June 2019 rose by 4.6 per cent across the firm. Notably, global chairman and CEO Carmine Di Sibio said EY had done ‘zero’ contingency planning against the threat of a forcible hiving off of the audit business in the UK. Speaking to CNBC about the danger of recession in the US, he said: “Sometimes when a recession is coming, you start hearing that projects are put on hold. We’re not hearing that. There’s a lot of transformation going on.”
EY said it had seen strong revenue growth in FY19 across all service lines, geographies and key industries, adding that a focus on high-quality, digital audit services sparked a high number of significant audit mandates at major global corporations like Bosch, Deutsche Bank, Zurich Insurance and others. That said, growth in audit fees of 4.4% was the slowest of all revenue lines
Overall, FY 2019 revenues grew by 8.0% in local currency (versus 7.4% in FY18). Over the last six years, EY has recorded 8.3% compound annual growth and at local currency rates has added nearly $15bn in combined revenue and grown its workforce globally by more than 100,000.
In FY19, headcount increased by 8.6% to more than 284,000 people globally. Also, 1,163 people were promoted to partner or admitted into EY member firms – Assurance accounted for 33% of the FY19 promoted partner class, emerging markets accounted for 33% and women represented nearly 30%. The gender diversity on the EY Global Executive also increased, with women now representing more than 31%.
All EY service lines delivered growth in FY19: in local currency Assurance grew 4.4%; Advisory 9.2%; Tax 8.6%; and Transaction Advisory Services (TAS) 15.5%. Revenue also increased across all four of the EY geographic areas: the Americas 8.5%; Europe, Middle East, India and Africa (EMEIA) 7.1%; Asia-Pacific 9.1%; and Japan more than doubled its growth to 7.5%.
Across the developed markets, the US achieved another impressive year, with $15.3bn in revenue, a 9.1% increase over FY18 (up from 7.3% in FY18). Growth was led by TAS due to a strong US capital and M&A market. The US Advisory business also had double-digit growth supported by performance improvement services. Strong demand for transaction tax and international tax services and a steady flow of new audit engagements also contributed to revenue growth.
The emerging markets continue their growth trend, delivering 10.7% revenue growth (vs 10% in FY18). Greater China recorded its fourth year of double-digit growth, up by 13.2% (vs 11.6% in FY18), led by strong growth across all EY service lines. India continues its ninth consecutive year of double-digit growth, up by 19.1% (vs 16.3% in FY18).