- Balanced growth across EY despite a more challenging business environment due to COVID-19
- EY NextWave strategy brings greater focus on long-term value creation with plans for investments of US$1.5b in EY people, technology and audits in FY21
- Two redefined service lines: Strategy and Transactions, which includes the fifth-largest strategy organization by revenue globally through EY-Parthenon, and Consulting, which focuses on transforming businesses
- Investment in diverse and skilled leadership as across EY, 600 people are promoted to partner and 462 additional partners join from outside EY
- Continued people development through virtual programs including credentials known as EY Badges and via launch of first free, fully accredited corporate MBA – EY Tech MBA by Hult International Business School
- 18 acquisitions across cyber security, strategy, change management, design and technology, including SAP digital transformation
- In Q4, introduced 38 new COVID-19-related solutions with 11 alliance organizations to support EY clients, government and communities
EY today announces combined global revenues of US$37.2b for the financial year ended June 2020, an increase of 4.1% in local currency despite the global economic impact caused by COVID-19. Over the past seven years, the global EY organization (EY) has recorded strong 7.7% compound annual growth.
Carmine Di Sibio, EY Global Chairman and CEO, says:
“The COVID-19 pandemic has affected people, businesses and communities everywhere, creating new challenges for us all. During this difficult period, our number one priority has been the safety of EY people, clients and communities.
“It is the determination and focus of EY people that enabled us to support EY clients around the world during this unprecedented time. In a matter of weeks, we had nearly 300,000 EY people working remotely and supporting EY clients’ business continuity and resilience needs. EY people also created a wide range of pandemic-related solutions for clients and provided pro-bono support to communities and governments. These efforts illustrate the strength of our culture, founded on our purpose to build a better working world.
“While the last few months have been challenging for everyone, we have remained focused on our NextWave strategy, which we initiated last October and affirms our ambition to build long-term value for all stakeholders. Now more than ever, we need to be absolutely focused on investing in EY people and services to help EY clients transform, innovate and address their most pressing issues for the long-term.”
The EY NextWave strategy and ambition: building long-term value for all stakeholders
Launched in FY20, the NextWave strategy expands on the EY purpose of building a better working world and has a clear ambition to create long-term value for all stakeholders. The elements of the NextWave strategy will be measured using the EY long-term value framework, which is built on four value dimensions: human/people value; consumer/client value; social value; and financial value.
EY continues to play an active role in supporting the wider move to long-term value creation. In FY20, it contributed to a collaborative effort convened by The World Economic Forum’s International Business Council (IBC), which brought together 120 CEOs of the world’s largest companies, to agree on a core set of metrics to help standardize disclosures around Environmental, Social and Governance factors and long-term value creation. The proposed disclosures consider a company’s impact along four pillars aligned with the UN’s Sustainable Development Goals (UN SDGs): planet, people, prosperity and principles of governance. Those core metrics are available in the Global Review 2020, published today.
As part of the NextWave strategy and to meet increasing C-suite strategy, transformation and technology needs, EY has introduced two redefined service lines on 1 July.
- Strategy and Transactions (formerly Transaction Advisory Services) has an expanded strategy consulting offering, integrating EY-Parthenon with the former Transaction Advisory Services business and strategy capabilities moved from elsewhere in EY. Upon relaunch, EY-Parthenon immediately became the world’s fifth largest strategy organization by revenue, and the new service line will focus on helping EY clients transform and execute their strategy to optimize the value of their organization and realize their potential.
- Consulting (formerly Advisory) helps EY clients transform and thrive in a market of accelerating, complex change based on three value drivers: humans at the center, technology at speed and innovation at scale. It counts on a unique ecosystem of solutions, technologies and alliances to help companies realize their transformational needs. As part of this new redefined service line, EY is significantly accelerating the expansion of Technology Consulting services through organic hiring and acquisitions.
To accelerate the digital transformation of the global organization, for FY21 there are plans to invest US$1.5b in audit quality, technology solutions, people and the wider EY ecosystem of strategic alliances. The investments will see further build out of the client technology platform which underpins EY services and enables the global organization to drive client service innovation and deliver projects across EY at scale and speed. This proprietary platform has 1m client users in addition to nearly 300,000 EY people in over 150 countries, with upwards of 500m business transactions processed per day. EY is already a top global user of cloud technology, with 80% of EY business-critical platforms hosted on cloud technology across 160 countries. The investments will prioritize four key areas:
- High-quality audits: Serving the public interest through the delivery of high-quality audits globally is a key EY priority. EY continues to build on investments of US$700m made in audit innovation and quality since 2015 through its global Sustainable Audit Quality (SAQ) program. SAQ is focused on initiatives including tone at the top, exceptional teams, accountability, technology, innovation and quality support. Priorities include EY Canvas, the global cloud-based audit technology platform which today supports 145,000 EY audit engagements in 134 countries using a single global methodology. Innovations include the auditing of crypto transactions with the EY Blockchain Analyzer and the use of AI and natural language processing to analyze business documents and contracts more efficiently via EY Document Intelligence.
- New and emerging technology: As EY has continued to use global cloud-based platforms to drive quality delivery and business solutions, EY is now a top 10 user of Azure Cloud in the world. During the COVID-19 pandemic, EY saw high demand for managed services as EY clients sought alternative ways to manage new risks, reduce costs and maintain business continuity. EY will continue to focus on AI, machine learning, predictive analytics and other disruptive technologies. Its use of these technologies is improving the quality and speed of services in assurance, tax and transactions.
- People: EY has an internal ecosystem of more than 44,000 technologists and 22,000 data scientists which it will continue to develop, advancing the digital skills of EY people and continuing recruitment in areas such as data science and digital architecture. As COVID-19 took hold, demand for virtual learning at EY increased by 40%. Today, it operates one of the largest globally integrated learning platforms on SAP’s SuccessFactors, where in FY20 EY people invested 16m hours in learning, of which more than half was virtual. It has also announced the EY Tech MBA by Hult International Business School, becoming the first organization to offer an entirely virtual MBA for free to all people irrespective of rank, location or prior qualifications. This builds on the success of the digital credentials program known as EY Badges, which has exceeded 70,000 since the launch in 2017.
- Ecosystems: Investments will help EY extend the range of digital offerings and client services through a diversified, connected and intelligent ecosystem of strategic alliances and a global innovation network. For instance, EY introduced 38 COVID-19 related solutions with 11 alliance parties to rapidly meet needs brought on by the pandemic in areas like crisis management, telehealth, case reporting and more. In FY20, EY continued to build on its alliance relationships, including expanded alliances with IBM and Procter & Gamble, to cover a range of services for start-ups through to large, complex projects. In total there were seven new alliances in FY20, including new agreements with PROS, Splunk and LeaseAccelerator, expanding the organization’s access to professional skills and capabilities in digital, cybersecurity and digital and lease accounting. FY20 also saw 18 acquisitions in areas like cyber security, strategy, change management, design and technology, including SAP digital transformation.
Andy Baldwin, EY Global Managing Partner – Client Service, says:
“At a time when businesses are being challenged to evolve, we are focused on providing innovative, high-quality services and solutions to help EY clients reframe their future. The large-scale investments we will make in FY21 will ultimately help EY clients succeed in this complex environment and bring further trust and confidence to the capital markets through high-quality audits.”
Growth across all services lines, geographies, key industries and markets in FY20
In FY20, all EY service lines delivered growth: Assurance grew 3.1%; Advisory 4.9%; Tax 5.1% and Transaction Advisory Services 2.8%, all in local currency. Revenue also increased across all three EY geographic areas: the Americas 3.4%; Europe, Middle East, India and Africa (EMEIA) 3.4%; and Asia-Pacific 8.2%.
Among the top five markets, Japan led with double-digit growth of 10.8% and Greater China delivered another strong year. Elsewhere, Australia, Brazil, Korea and Norway delivered strong growth. Emerging markets also continued their strong growth trend and are up by 6%. EY also recorded strong growth across the Technology, Consumer, Private Equity and Wealth & Asset Management sectors, driven largely by demand for digital and tech-enabled services.
As the COVID-19 pandemic’s effects impacted governments and businesses, EY teams reacted quickly to provide vital business continuity and resilience services, including:
- Assisting the Government of Chile with the setting up of digital triage tools to screen patients prior to entry in emergency rooms.
- Helping Australian Government agencies transition employees to remote working quickly during the pandemic while enabling new service delivery.
- Supporting the Canadian Government’s supply of personal protective equipment (PPE) for frontline services at a time when more than 60 countries halted exports of PPE.
- Developing a Paycheck Protection Program Loan Forgiveness Platform so banks can efficiently meet the unique requirements under the US CARES Act.
- Assisting numerous banking clients with loan origination and underwriting surge resources during a period of unprecedented demand.
Service-line investments and growth
- Assurance: Through continued investments in digital technology and global methodologies, the cornerstone of the EY organization achieved growth of 3.1% in FY20. The EY Sustainable Audit Quality program and the implementation of digital audit technologies continue to drive the delivery of high-quality audits that enhance trust in business and support long-term value creation. New audit engagements include Daiwa House Industry, Farmers Insurance Group, Jyske Bank, Kone, Nestlé and Eastman Kodak. To date the EY Digital Audit has analyzed 582b lines of client data, which brings the total to over a trillion in the past three years.
- Advisory: Through the EY solutions, technologies and ecosystem of alliances, in FY20 the service line focused on helping companies realize their digital transformation needs. Its newly created Technology Consulting service, which offers technology transformation, data and analytics, digital and emerging technology and cybersecurity services and solutions, was able to support EY client transformation and resilience needs. In FY20, it was recognised as a leader according to analyst firms, Gartner, Forrester, IDC, ALM Intelligence and HFS Research.
- Tax: In FY20, business demand for co-sourcing and managed tax services, delivered by the EY Tax and Finance Operate solution and a growing number of other EY Tax managed services offerings, including Legal Managed Services, powered revenue growth. Additionally, it also saw demand for financial tax planning, global compliance and reporting, indirect tax and global trade. In FY20, EY launched TaxChatTM, the first direct-to-consumer tax service to tackle complex individual tax filings associated with self-employment and investment portfolio changes. It also introduced a Physical Return and Work Reimagined framework to support businesses during COVID-19 and it also expanded the alliances with Microsoft, SAP, Thomson Reuters and WorldAware.
- Transaction Advisory Services: Despite a challenging geopolitical and business climate in FY20, EY advised on six of the top ten deals globally and supported numerous governments, hospitals, life sciences and financial institutions responding to the COVID-19 pandemic. The stellar growth of EY-Parthenon has helped it become the world’s fifth-largest strategy organization by combined revenue and headcount in more than 120 countries. The acquisition of Port Jackson Partners in Australia in FY20 further expands this leading-class strategy consulting offering.
An outstanding people culture
Overall, headcount increased by 5.3% to 298,965 people globally. Despite the disruption from COVID-19, EY continued its long-standing commitment to internships in FY20, with half of the 15,000 internships taking place on a remote basis.
In FY20, 600 people were promoted to partner and reflected key priorities: with 39% of the promoted partners within Assurance, 37% from emerging markets and women representing 33%. Further senior investments in priorities areas were made through an additional 462 new partners who were directly admitted into EY member firms. The EY Global Executive, the most senior body in EY, is one-third women and the 18 leaders are from nine countries, including four based in emerging markets. Demonstrating the ongoing commitment to diversity and inclusion, the EY Global Executive signed the EY Global Executive Diversity & Inclusion Statement and established a Global Social Equity Task Force.
EY continues to be recognized on prestigious lists for its outstanding people culture. It remains the world’s most attractive professional services employer in Universum’s annual “World’s Most Attractive Employer” ranking, and second overall behind Google. In the US, EY was recognized in Fortune’s “100 Best Companies to Work For®” annual list for a record 21-consecutive years.
Building a better working world
In FY20, EY set the ambitious goal of positively affecting 1b lives by 2030 through its EY Ripples corporate responsibility program. More than 1m people will be mobilized globally to drive long-term change by working with impact entrepreneurs, supporting the next generation and accelerating environmental sustainability. In FY20 more than 15.5m lives were positively affected, bringing the total to more than 34m to date.
In FY20, there were investments of a total of US$126m in projects dedicated to strengthening its communities and its people contributed 790k hours of time to a variety of initiatives and value-in-kind projects. EY people have also used their skills and knowledge to help combat COVID-19 challenges via a range of pro bono and voluntary work, including:
- EY teams helped the South African Government design and implement the Solidarity Fund to raise more than US$180m in funds from businesses to support the national health response to COVID-19.
- A crowdfunding campaign using blockchain helped to raise €100,000 in donations for Italian hospitals and a fundraising platform for EY people fund PPE for front-line healthcare professionals in Greater China.
- Grants and collaboration with NGOs in India to help provide India’s migrant and casual workers and their families with food and educational support.
At Davos, EY pledged to become carbon-neutral by the end of calendar year 2020 and appointed Steve Varley to the new position of EY Global Vice Chair — Sustainability, with a focus on helping EY and its clients achieve their sustainability goals. EY is on track to meet its carbon commitment and will continue to take action to create sustainable, inclusive growth for future generations.
In the Global Review 2020, EY today reports for the first time on its progress integrating the United Nations Global Compact (UNGC) Ten Principles and the UN SDGs into EY strategy, culture and operations. As part of its commitment to long-term value creation, EY continues to report on a broad range of financial and non-financial metrics in its Global Review.
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Notes to editors
EY is a global leader in assurance, tax, strategy, transaction and consulting services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
EY-Parthenon is a brand under which a number of EY member firms across the globe provide strategy consulting services.
To watch EY Global Chairman and CEO Carmine Di Sibio discuss its FY20 results, please visit here. For broadcast quality, downloadable b-roll video, please contact firstname.lastname@example.org.
EY FY20 global revenues
EY revenues by service line – US$ millions