Ernst & Young posts highest UK revenue growth in six years at 11%
Combined global revenues US$24.4 billion
London 2 October 2012: Ernst & Young has posted an 11% increase in revenue for its UK business, the highest in six years. Revenues now stand at £1.6bn – growth is largely due to the success of the firm’s globalisation strategy, investment in top talent across the country and some significant new client wins.
Steve Varley, UK Chairman and Managing Partner of Ernst & Young, says, “I am very proud of what we have achieved in an uncertain market. We have posted our highest revenue growth since 2006, which in large part was driven by bold ambitions to go beyond the UK to look for growth opportunities.”
EY growing across the UK – a global gateway for clients
Ernst & Young’s UK firm has invested heavily in working with cross-border businesses on a range of issues from post-deal integration, to assisting multinationals with moving their international operations to the UK. However, Varley stresses that opportunities on home soil are still driving growth, and says the firm is winning and investing in all the major markets in which it operates across the UK.
“Our firm’s global structure and scale in the emerging markets mean that our UK offices provide a global gateway for our local clients. We’ve seen some exceptional growth across our business from advising UK companies on exporting, particularly to the BRICs, where we have long-established dedicated UK based trade teams for each country. We continue to expand the trade teams and now support seven fast growth markets, with further plans to add Korea, Nigeria and South Africa.”
He adds, “Through our participation in the UK Government’s trade missions to Brazil, Russia, Japan, Indonesia and Malaysia, to strengthen bilateral trade between the UK and the rest of the world, I have seen first-hand the enthusiasm for Britain and British business.”
Ernst & Young has also seen a surge in demand from UK companies that had previously re-located offshore to return to Britain, following favourable changes to the tax system. Advising clients on improving their performance; becoming more tax efficient; divesting their non-core assets; better managing their people; and monitoring and managing fraud and corruption, also contributed significantly to the firm’s growth in the UK.
Varley says the business took the decision to continue with its strategy to invest for growth, even through the downturn. He cites the more than 10% increase (1,200 jobs) in headcount to meet client demand for services and increased investment in establishing deeper international trade links, as examples. The challenges of the business environment and the continued focus on investment have resulted in a slight drop in partner profits. “We have built some strong momentum and are keen to build on our many successes this year," he says.
All four service lines post revenue growth for the first time in three years
For the first time in three years, Ernst & Young in the UK has posted revenue growth across all four of its service lines. Transaction Advisory Services (TAS) revenue growth was 10% (£306m) boosted by pre and post-deal integration activity. While Advisory grew steadily at 12% (£416m) and Tax posted the highest growth of all the service lines at 16% (£431m).
Ernst & Young is winning in audit...
A groundswell of audit retenders across industry in the last 12 months provided a positive uplift, with the UK Assurance business posting healthy revenue growth of 8% (£478m).
Varley comments, “We continue to win in the UK audit market and have had some very significant new clients choose us this year. I am very proud that in the last six months we have won audits with the Audit Commission and Dyson, to name a few. We have had some losses too, but this just demonstrates that we live in a highly competitive market.”
Financial service continues to grow
Its financial services business continued to grow strongly this year, achieving double digit growth despite a volatile market backdrop. The firm has undertaken a number of large-scale transformational projects, helping clients to address the biggest issues they face. This includes the regulatory reform agenda; the downward shift on returns on equity; the balance between shareholder return and employee return; the need for customer remediation and cultural change; and the necessity of winning new customers.
Ernst & Young’s combined global revenues are US$24.4 billion compared with US$22.9 billion in fiscal 2011.
Making a significant contribution to the UK economy
Varley states, “Our commitment to driving successful growth and at the same time making the difference to our clients, our people, the wider economy and society, continues to underpin everything we do.”
Ernst & Young was responsible for creating 1,200 new jobs in the UK this year and continues to invest in infrastructure across its regional hubs, moving into new offices in Cambridge and Glasgow. It also made a significant contribution to the UK economy through its work with clients, its investments, and key initiatives to positively impact social business issues from NEETs (not in education, employment or training); to diversity and inclusiveness.
These include its ongoing work as founders of the Social Business Trust, which invests in UK social enterprises; establishing ThinkForward with the Private Equity Foundation, an organisation set up to reduce the number of school children at risk of becoming NEETS; the launch of a business-led UK National Equality Standard in collaboration with the Equality & Human Rights Commission; and Accelerate, a programme of free workshops for new business leaders and social entrepreneurs.
EY entrepreneur programme finalists created over 60,000 jobs
Ernst & Young also continues its unwavering investment in and support of the UK’s leading entrepreneurs through its highly respected Entrepreneur Of the Year (EOY) programme, which has a global footprint.
Varley says, “I believe the best way out of the recession and key to the UK’s long term economic strength is business-led growth. Entrepreneurs create many of the UK’s most dynamic and successful companies. We are passionate about helping such high-potential businesses grow their operations, both in the UK and overseas. This year’s UK finalists of our EOY programme had combined revenues of £18bn and created jobs for over 60,000 people.”
Best of British around the world
A long-time investor in the arts – which Varley believes are essential to Britain’s heritage and building brand GB overseas – Ernst & Young sponsored the Best of British Design exhibition at the V&A this summer.
The firm is also winning new assignments in sport at home and overseas. It is official adviser to the 2014 Commonwealth Games in Glasgow, and its UK business will play a key role in contributing to the success of the Rio 2014 World Cup and Rio 2016 Olympic Games – the firm’s Americas partnership is official supporter and adviser to both.
New partners – 30% female 10% from black, minority ethnic (BME) background by 2015
Varley remains staunch on the firm’s commitment to being the most diverse and inclusive employer in its industry, seeing it as an opportunity for its business, clients and people. He cites the firm being named Employer of the Year 2012 in Stonewall’s Workplace Equality Index as one of his key highlights this year. He also feels very strongly about greater gender diversity in business and is an active member of the 30% Club.
“Continuing to lead on gender diversity among the Big Four is something I am very passionate about – 28% of our UK leadership team and 18% of our partners are female. I know we can do more and I know we need to move forward so that we focus not just on gender, but also on the ethnic diversity of our people and partners.
“So we have been bold, setting an aspirational goal that at least 30% of all our new UK partners are women and at least 10% are BME by 2015. We’re clearly not there yet and aspirations alone won’t drive change, but we believe diversity and inclusiveness is a business imperative.”
Varley concludes, “We’ve had a good year in challenging economic times. I am optimistic that we can continue to shape and positively support the future direction of our clients’ growth, the way that our people work, and the social and business issues that impact on the growth of the UK economy.”