Deloitte records double-digit growth

Network says priority markets contributed nearly one-fifth of revenue; Nearly 30 strategic acquisitions were made in the fiscal year ending 31 May 2013…

In FY14 the Deloitte network plans to continue to drive growth through investments in technology-enabled services.

INCREASED DEMAND for a broad range of client services saw Deloitte grow for the fourth consecutive year, with Deloitte member firm network revenues of $32.4 billion for the fiscal year ending 31 May 2013.

The network experienced healthy growth across all businesses and regions – in local currency – due to strong demand for Deloitte’s capabilities and services, as clients manage complexity and uncertainty while investing in growth. The strengthening of the US dollar towards the end of Deloitte’s fiscal year meant the network’s 3.5 per cent growth was higher in local currency at 5.6 per cent.

“Our continued growth globally and in the Middle East is a true testament to Deloitte’s client-centric approach. Deloitte has made strategic investments in important markets, the right businesses and talented people. As a result, Deloitte is helping many more clients navigate the changing business environment.” said Omar Fahoum, chairman and chief executive, Deloitte Middle East.

“Despite major economic fluctuations in some regions, clients are seeking the full range of Deloitte’s services and advice as they invest in innovation and other catalysts of growth. Deloitte is making large investments in talent to provide clients with quality services as they navigate a challenging environment. In FY14, we will build on these distinctive strengths to help clients continue to succeed,” he added.

Promoting reforms

According to Fahoum, “Deloitte has a relentless focus on quality — in our solutions, advice and people—to ensure the highest standards are maintained.”

“Nowhere is quality more important than the independent audit – key to protecting the investing public and capital markets, and Deloitte takes pride in the important role we play. As such, we are focused in two important arenas: engaging with regulators and other stakeholders worldwide to promote reforms that improve quality for all parties; and, innovating a wide range of measures and programmes to maintain and build our professional excellence.”

An integral component to this is the latest generation of Deloitte’s audit platform, Deloitte Audit. This comprehensive suite of capabilities delivers an insightful, customised audit approach focusing on the most important issues and risks. This helps ensure a consistent execution of high quality audits, leveraging scalable content and technology, while providing quality service to the firm’s clients worldwide.

In FY13, Deloitte’s continued focus on priority markets resulted in nearly 7 per cent growth of these markets in local currency, thus outpacing the rest of the network. Priority markets’ accounted for nearly one-fifth of Deloitte network revenues and are expected to increase that share in the near future.

Growth by regions

The firm made nearly 30 strategic acquisitions in key capability areas and geographies, marking a significant investment in the future to better serve its clients. Notably, Deloitte acquired the majority of Monitor, one of the world’s leading strategy consulting firms, positioning the network as a worldwide leader in strategy consulting. Monitor’s talent and assets joined with Deloitte’s world class strategy capabilities to operate under the Monitor Deloitte brand. The firm says that acquisitions will remain a priority to its business strategy in FY14.

The Americas led growth by regions with a growth rate of 6.3 per cent in local currency, with strongest growth experienced in Chile (18.1 per cent) and LATCO (14.3 per cent). The United States, the largest member firm in the network, produced particularly strong growth, contributing more than 80 per cent of the network’s total revenue increase. The majority of advisory and technology services grew in double digits.

Europe, Middle East and Africa (EMEA) grew by 5.6 per cent with the UK member firm experiencing solid growth of 8 per cent, despite a challenging economic climate. The Middle East and Turkey firms posted strong double-digit growth, largely driven by their tax and advisory businesses. Together, the Southern and East African member firms grew by a solid 8.3 per cent.

Asia Pacific experienced growth of 3.1 per cent in local currency with India, Mauritius, Southeast Asia, Korea and Japan registering solid growth, each at or above 6.5 per cent.

Business opportunities

Consulting growth in FY 13 was particularly strong across all regions, 8.7 per cent in local currency. The growth signals a willingness by companies to explore and invest in business opportunities. Within Consulting, demand for Human Capital and Strategy and Operations services was strongest.

Financial Advisory grew by a total of 6.7 per cent. Market led demand resulted in strong growth for Forensic and Restructuring services, while further investments in strategic acquisitions were made across all regions.

Audit and Enterprise Risk Services grew by an aggregate 2.9 per cent. ERS experienced double digit growth in the Asia Pacific region and strong growth in EMEA and the Americas. Tax and Legal grew by a total of 5.6 per cent, experiencing solid growth in each region and sub-function.

Most notably, a majority of Asia Pacific member firms were strong, led by Japan, India, Mauritius and Korea. In FY14 the network plans to continue to drive growth through investments in technology-enabled services, globally integrated market offerings, and services that assist clients in addressing challenges stemming from rapid changes related to globalisation, technology advances, and regulatory developments.

Life Sciences and Health Care led growth among industries posting 12.9 per cent growth, followed by Public Sector, which grew by 7.7 per cent and Manufacturing, which grew by 5.5 per cent. Energy and Resources also posted strong growth at 5.1 per cent.

Leadership and development

Building on the success of the US Member Firm’s investment in Deloitte University (DU), which opened in Westlake, Texas in the fall of 2011, Deloitte University EMEA was launched over the summer to offer programmes uniquely tailored to the region’s needs. This continued investment in leadership and development ensures that Deloitte professionals have the most advanced training and skills to help clients navigate an evolving world. More than 50,000 Deloitte professionals from 70 countries have attended DU at the Westlake location.

“Delivering superior service to our clients is at the heart of what we do. Deloitte University EMEA is an investment in the professional development of our people, and providing an environment which creates a compelling learning environment is key to that growth,” said Fahoum.

“DU EMEA will be a place where firms can share their diverse perspectives and experiences, and create a consistent standard of excellence that will be reflected in the work we do every day,” the executive added.

Deloitte continued its focus on hiring, developing, and retaining top talent as a driver of business activity. In FY13, the network hired 51,400 professionals; its total workforce now exceeds 200,000 professionals, which marks a significant milestone for the organisation.

According to Deloitte, the firm “understands the fundamental and positive role business plays in shaping and creating the society of the future, and this year committed record amounts of skills and expertise to tackling challenging social issues through two new ground-breaking initiatives that reflect our purposed-based business model.”

The network invested more than $170 million in communities in FY13 through a combination of skills-based volunteering, pro bono work and donations and over 800,000 volunteer hours.

Innovative approaches

In April 2013, Deloitte worked with The Social Progress Imperative (SPI) along with other organisations to introduce The Social Progress Index. The Index originated with the belief that a country’s progress and competitiveness has to be measured beyond economic factors, and through extensive research and methodologies, provides the social and environmental indicators that affect a country’s performance. Deloitte is collaborating with SPI in deploying the Index worldwide by helping to establish the right networks of experts from government, civil society as well as businesses that will contribute to the discussion, drive change and work to solve some of our biggest societal issues.

In July 2013, as part of an effort to help strengthen the humanitarian sector and create innovative approaches to humanitarian preparedness and responsiveness, Deloitte launched the Humanitarian Innovation Programme. The programme is a collaboration with local, national, and international humanitarian leaders and leverages Deloitte’s own diverse skills and expertise to deliver a globally coordinated approach to supporting crises around the world.

“Businesses increasingly recognise that their continued success is inextricably linked with social progress. But many challenges facing society today are so complex and far-reaching that no organisation can solve them alone. Governments, community organisations and business must collaborate to drive positive change,” said Fahoum.

“At Deloitte, we’re confident that our investments and contributions will continue to make a difference in 2014,” he added. 

Deloitte Fiscal Year 2013 Regional and Function Revenue Breakdown (aggregate)

Percentages may not add to 100 due to rounding up