Switzerland as a business location is currently undergoing some major restructuring both outwardly and behind the scenes. This transformation is largely being shaped by digitalization, a force that not only opens up enormous opportunities for both audit and advisory services but also presents them with quite a few challenges. Against this backdrop, KPMG generated CHF 686.0 million in revenues on the Swiss market through local and multinational companies, thus increasing the Swiss firm’s gross revenues to CHF 549.0 million (+1.5%) for the past fiscal year. Net revenues came to CHF 403.8 million (+0.5%). Audit succeeded in improving its net revenues to CHF 202.0 million. At CHF 115.9 million, Tax ended the fiscal year nearly on a par with last year’s record high whereas Advisory managed to slightly exceed its previous year’s record with CHF 85.9 million.
In the past fiscal year ended 30 September 2016, KPMG Switzerland made another good showing with all functions contributing to the new record high. Gross revenues of the Swiss firm rose to CHF 549.0 million (+1.5%) and net revenues increased to CHF 403.8 million (+0.5%). Including services provided by KPMG for companies headquartered in Switzerland, the firm generated CHF 686.0 million in revenues on the Swiss market during the past fiscal year.
Today’s audit and advisory market is influenced heavily by the fundamental changes taking place throughout the Swiss economy. At the heart of these changes, however, is the growing wealth of opportunities made possible by the new digital reality, opportunities that push not just national boundaries but also those of entire industries, in particular.
Technological innovations are capable of effectively facilitating necessary transformations within businesses and industries while also greatly accelerating important developments such as identifying and satisfying future client benefits, devising and establishing new business models as well as analyzing and optimizing the entire value chain which includes sweeping measures aimed at cost optimization, centralization and outsourcing. Clients are increasingly taking a centralized approach toward designing their key organizational structures and processes with an eye to generating synergies and meeting changed needs in terms of data analytics, shared services and taxes, for instance. All in all, Switzerland has enormous potential as a location, which is explained in KPMG’s whitepaper entitled "Shaping Switzerland’s digital future".
Once again, KPMG invested heavily in its digital services portfolio during the past fiscal year. One of these offerings is "Marketplace", an innovative platform for procuring human resources at short notice which is unique in the industry. Additionally, KPMG maintains ongoing international alliances with Microsoft, McLaren and IBM Watson in the area of cognitive data analytics and is actively involved in key digital initiatives such as Digital Switzerland. Leading, innovative specialist events like the Swiss IT Conference, Digital Festival Zurich, Hack Zurich and the Swiss IT Sourcing Forum take top priority at KPMG as well.
Digitalization’s profound impact on nearly every one of KPMG’s business areas has triggered a change in the demands placed on auditors, tax advisors and business consultants: Not only do they need expertise in business, finance, auditing, tax law and other related fields, but they are increasingly expected to be proficient in information technology as well. And since demand for industry-specific knowledge and global coordination skills continues to grow, experience with international engagements and issues is encouraged.
Audit posted a good year and succeeded in growing its net revenues to CHF 202.0 million in a highly saturated market. This impressive result was driven to a large degree by high-paced decision making and project management, both of which depend heavily on reliable data analytics and other high-quality information as a decision-making basis.
The audit and advisory services performed for providers of financial services were less focused on implementing new regulations and concentrated instead on preparations for the future: This not only includes the transformation of business models and breaking up of value chains mentioned above, rather also how to deal with low and negative interest rates as well as clients’ great reluctance to invest.
What’s more, clients expect their auditors to be one step ahead of them and support both the board of directors and executive board by providing them with constructive, forward-looking information.
With net revenues at CHF 115.9 million, Tax ended the fiscal year nearly on a par with last year’s record high. A contributing factor behind this good result was clients’ need to more precisely analyze the tax-related aspects of the findings of critical examinations of their value chains and transformation processes. Demand for assistance with indirect taxes and transfer pricing remains high.
Looking ahead, since CTR III is the largest tax reform of the past 30 years and many enterprises still have not addressed the topic in any great depth, it will likely continue to be a key driver of growth in tax advisory services over the next few years.
With net revenues at CHF 85.9 million, Advisory slightly exceeded last year’s record high. KPMG succeeded in landing major new engagements in several different advisory areas including cyber, robotics and artificial intelligence and grew by 16% in the area of consulting. The main drivers of demand were reorganization and efficiency projects as well as consolidation projects in finance, IT and purchasing.
In a Swiss M&A market where the number of transactions continues to fall, KPMG’s Deal Advisory business has grown even further. Weak stock market performance early in the year, the unease this sparked and a persistently strong Swiss franc prompted restraint on the market.
In Forensics, compliance-related issues including support on matters such as setting up compliance organizations, third-party management, efforts to combat bribery and corruption as well as implementing applicable financial market regulations took center stage. Investigations in the private and not-for-profit sectors also played a large role.
© 2018 KPMG Holding AG is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.