Annual report 2017
Clarity on KPMG
Digitalization creates new opportunities every day.
But it’s people that make a difference.
Clarity in 100 seconds
Strong revenue growth driven by a clear client focus
A year of encouraging growth has helped KPMG Switzerland surpass its results of the previous year and boost both gross and net revenues. New records were set in all business areas. This continued market success is testimony to the fact that our investments in sustainable client experiences are paying off.
Transformation projects as drivers of innovation
The growing trend toward consolidating financial and leadership processes, along with the control functions, has given rise to large-scale transformation projects. Digitalization has also emerged as one of the strongest forces of change in audit.
„International consolidation of financial and leadership processes on the rise
Lukas Marty, Head of Audit
Audit improved its results yet again and boosted its net revenues to CHF 212.1 million (+5.1%). One key innovation driver in this business can be found in clients’ large-scale transformation projects which aim to consolidate all of a company’s financial and leadership processes, along with their control functions, under one global roof.
Digitalization has emerged as one of the strongest forces of change in this area, as well, and has a major impact on the day-to-day work done in Audit. Integrated financial processes permit an approach that is heavily based on digital data analytics. Accordingly, KPMG developed cutting-edge software and tools in 2017 that will allow its clients to benefit as much as possible from this trend. Making changes to core processes harbors new risks for clients, as well, which KPMG helps identify within the scope of its assurance services and also systematically addresses in reports it prepares for boards of directors and management.
Fundamental changes in the job description and skill requirements of auditors are yet another consequence of digitalization and are reflected in corresponding changes in both the training and further development opportunities we offer as well as how we select our new recruits. Demand for change management expertise is also on the rise. This adds yet another interesting aspect to the already multifaceted work of an auditor and has become an integral part of an auditor’s skill set.
Significance of value chain growth
The financial year was characterized by tax authorities’ growing demands, the accelerated pace of legislative changes, sustained pressure to provide greater transparency and a more intense exchange of tax-related data.
„ Identification of optimization potential through comprehensive value chain analysis
Peter Uebelhart, Head of Tax
Tax succeeded in growing its net revenues to 120.6 million (+4%). This extremely good result was attributable in part to the demands of foreign and domestic tax authorities as well as the accelerated pace of changes taking place in legislation and business practices, both of which are becoming increasingly challenging for taxpayers to deal with. Multi-year trends toward greater transparency, improved comparability and a more intense exchange of tax-related data continue unabated and are taking their toll on corporate and private clients alike.
KPMG offers comprehensive value chain management advice to help its clients pinpoint and manage their key value drivers. Doing so not only allows us to identify possible optimization potential but also to address the fact that a company’s value chain is becoming increasingly significant in the international tax landscape. In the areas of tax consultancy and planning, trends toward digital automation, data analytics and the growing relevance of the entire value chain go hand in hand with a major broadening of tax advisors’ job descriptions, with this expansion in key topics and required skills making the task both more challenging and more enriching at the same time.
KPMG still sees a great need for advisory and explanatory services in response to uncertainties concerning the pending Corporate Tax Reform. Given that Swiss companies with international operations, in particular, as well as the subsidiaries of multinationals want control over their fiscal situation and are calling for an end to the current legal uncertainty as a result.
Opportunities created by continued digitalization
Growth was driven by demand for digital transformation services, mainly in the areas of digital strategies, automation solutions, change management programs, cyber security and data protection services.
„ More valuable data, rise in the number of cyber attacks and draconian penalties for data protection violations
Anne van Heerden, Head of Advisory
Advisory increased its net revenues to CHF 90.8 million (+5.7%), a new all-time high. This growth was driven by large corporations’ and SMEs’ need for help on managing risks and seizing the opportunities opened up by digital and financial transformation.
These efforts focused on defining and implementing digital strategies, automation solutions and the use of digital tools and cognitive computing, and change management programs to sharpen clients’ focus and set up both new business models and supply chain management projects. Outsourcing services, such as for moving enterprise resource planning systems to the cloud, were also in high demand, particularly in the life science industry, at banks, at insurance companies and in public administration.
The digitalization of companies and administrations, the related increase in the value of the data stored, the rise in the number of cyber attacks and the draconian penalties that will apply to data protection violations in the future, generated brisk demand for cybersecurity, data protection and certification services.
The consistently high number of deals once again underscored the competitive edge of Swiss companies in the year under review. Despite the overall decline in the value of deals transacted in the Swiss M&A market, KPMG reported continued strong growth in the deal advisory business. In terms of forensic services for financial service providers, demand was greatest for services relating to financial crimes, improvements to compliance functions, the cleaning of customer data and cases of corruption. In the other sectors, the focus was on investigating fraud, improving compliance functions, corruption and third-party management.
Tapping new business models
Audit and advisory services rendered to financial service providers performed well, in part due to an improvement in the macroeconomic environment. The focus was on measures aimed at preventing money laundering and adapting business models.
„ Low interest rate environment with persistently negative impact on business performance
Philipp Rickert, Head of Financial Services
One major driver behind this trend in all sub-segments – that is, among banks, insurance companies and asset management companies – was digitalization, which is forcing the institutions to adapt their old business models to new opportunities and risks.
The macroeconomic environment improved during the year under review. The stock markets reported further gains despite some volatility and corresponding increases were seen both in investor confidence as well as their willingness to invest. An upward shift in US dollar interest rates also boosted the earnings potential of financial institutions.
The low interest rate environment is having a persistently negative impact on the business performance of financial institutions. The interest rate arbitrage business has deteriorated yet again, and to such an extent that increases in lending volumes no longer offset the adverse situation. As a result, pressure to boost the efficiency of workflows and structures through digital distribution channels and automation has risen even further.
Cross-industry solvency discussions are still underway between insurance companies and FINMA. Given the sustained low interest rate level that is hindering growth in the life insurance business, these companies are understandably focusing on looking for products that are innovative and offer potential for diversification. Performance in the non-life sector was sound to good, however the higher claims expenditure from the above-average number of natural disasters weighed on margins.
Efforts by the asset management industry to reposition itself on the international stage are proving difficult due to the fact that the products are being managed from abroad, namely from Luxembourg and Ireland.
Positive development in the regions
KPMG also saw positive business performance in the individual market regions. Business development in Audit as well as Tax, Legal and Advisory was extremely stable and sustainable.
„ Key changes for SMEs have roots outside Switzerland
Reto Benz, Head Regional Markets Switzerland
The mid-size market segment is one of KPMG’s key mainstays and generates around 40% of the firm’s net revenues. Business development in Audit as well as Tax, Legal and Advisory was extremely stable and sustainable. Over the course of the year, KPMG also succeeded in acquiring several high-profile new clients in the regional market.
KPMG invested heavily during 2017, not only in targeted measures to promote its young talent at the individual sites, but also in efficient, automated, digitalized processes and the development of state-of-the-art software and technologies to benefit regional clients. One new package of services was specifically tailored to start-ups and initially rolled out in the regions of Basel, Zurich and French-speaking Switzerland.
The main drivers and changes affecting regional clients have their roots outside Switzerland: These include uncertainty regarding developments in international politics, mainly due to Brexit, ongoing efforts to negotiate bilateral relationships between Switzerland and the EU, the exchange rate, data protection regulations in the age of digitalization as well as Tax Proposal 17.
KPMG is actively involved in the region in a number of different ways: through cooperative efforts with key networks and local companies on specific topics like cybersecurity and taxes, through participation in trade associations and chambers of commerce and also through partnerships with regional innovation initiatives.
Our employees are the key to our success. They blend their passion for clients, outstanding expertise, top-notch innovative strength and broad-based social skills every day to help you meet your business targets.
at KPMG Switzerland
Our Board of Directors and our Executive Committee possess an extraordinary amount of expertise as well as a wealth of experience in the industry. This lays the very best foundation possible for us to manage the firm successfully and with a focus on our clients. So we can prepare you today to face the challenges of tomorrow.
Board of Directors
We wanted to know what drives the members of our Board of Directors to deliver excellence every single day. Find out what they said:
Chairperson of the Board of Directors
I enjoy interacting and working together with colleagues passionate about excellence and delivering tailored solutions to our clients’ challenges. It’s how we create excited customers, highly motivated staff and ultimately contribute to profitable growth for our clients and our firm.Contact details
Member of the Board of Directors
After so many years with KPMG, I’m still passionate about my job because it allows me to do my best for clients. And to inspire my team so that they’ve got the necessary energy and motivation to achieve their professional objectives and personal development goals.Contact details
Member of the Board of Directors
Helping our global clients enhance their businesses, working with teams in a vibrant international firm and deploying and developing our combined skills – that’s why I work at and am proud of KPMG!Contact details
Find out what drives the members of our Executive Committee to deliver excellence day after day.
Chief Executive Officer
What gets me out of bed in the morning? The exciting potential of our combined knowledge and expertise and the capacity we have at KPMG to make a considerable positive impact for our clients.Contact details
Chief Operating Officer
I like KPMG’s straight-forward culture – there’s very little red tape because we have an open-door attitude and work closely together. As a result, the people are engaged and bring an entrepreneurial mindset to challenges, turning fresh ideas into solutions and aspirations into careers.Contact details
Head of National Quality & Risk Management
I’m at KPMG because: I love working with other professionals on intellectually challenging, complex issues and helping our client service teams get to the right conclusions; because KPMG has a good culture and great people; and because we play a vital role in making capital markets work and protecting the wider public interest.Contact details
Head of Audit
I’m proud that clients turn to us when facing challenging issues and trust us to carefully look at their business and provide assurance on their financials. It’s extremely rewarding to work with outstanding people and grow teams that clearly make a difference for our clients while protecting the public interest.Contact details
Head of Financial Services
Exciting and simple. The chance to work shoulder-to-shoulder with the best and the brightest colleagues and inspiring clients in Financial Services has led to many truly memorable, challenging and magic moments in my professional life.Contact details
Head of Tax
I’m passionate about driving change in the Swiss tax landscape. This means building a leading tax practice with best-in-class tax advisory to take our clients further. It also means creating an environment where our people can grow – one that fosters a culture of collaboration among professionals to constructively challenge the status quo.Contact details
Anne van Heerden
Head of Advisory
Anne van Heerden
I’m motivated by the desire to make sure that KPMG is cutting-edge, ahead of the curve, at the forefront of the new normal. The opportunity to help prepare our clients and staff to be leaders and succeed in the new digital world is both challenging and exciting.Contact details
Your regional contacts
Head of the Market Region BaselContact details
Hans Jürg Steiner
Head of the Market Region BerneContact details
Office Head SchaanContact details
Head of the Market Region Eastern SwitzerlandContact details
Head of the Market Region TicinoContact details
Head of the Market Region Western SwitzerlandContact details
Head of the Market Region Central SwitzerlandContact details
Head of the Market Region ZurichContact details