For the year ending 30 June 2013, PwC’s gross revenues were US$32.1 billion, up 4%, a strong performance in the face of some challenging circumstances. This lower rate of growth than in recent previous years reflects difficult economic conditions in some parts of the world, the mix of our business and our focus on the pursuit of profitable work.
For the third consecutive year PwC firms in the Americas grew strongly with revenues from North America increasing by 7% and South America by 9%, buoyed by PwC’s increasing shares of the market for advisory and consulting services in the region.
PwC firms in the Middle East and Africa also continued to grow well with revenues in that region up by 7%, following further investment in the region and the benefits of a consolidation of PwC firms across Africa.
PwC firms also continued to grow across Europe with revenues in Central and Eastern Europe increasing by 3% and in Western Europe by 2%. The continuing very tough economic climate in many European countries has had a dampening effect on growth. However, we anticipate that the conditions in the Eurozone, which are showing signs of stabilising, will mean a return to better economic growth across much of the region in 2014.
Revenues from Asia were up by 2%, a good result considering the increasingly competitive market for assurance services in China and the slowdown in economic growth, particularly in China and India. Tougher economic conditions also impacted on PwC firms in Australasia and the Pacific where revenues declined by 1%. We expect economic conditions to remain challenging in this region in 2014, but we also anticipate a return to revenue growth following an increased emphasis on the growing consulting market by PwC Australia.
At a country level, PwC’s largest firms around the world all continued to grow. In the Americas revenues continued to grow strongly, with revenues in the US up by 8% and Brazil and Mexico both enjoying revenue growth of 10%. In Europe and Asia conditions were more difficult and growth was more modest with revenues in the UK up by 2%, Russia by 3% and China by 3%.
In FY 2013, 20% of PwC’s global revenues came from emerging markets.
In FY 2013, revenues from PwC’s Assurance operations -the largest in the world- grew by 1% to US$14.8 billion. This rate of growth was achieved despite very tough competition and a mature market for traditional audit services.
We anticipate that the market for audit services around the world will remain very competitive in 2014. However, the increasing focus on additional forms of assurance such as risk reporting and total impact measurement will provide a future foundation for the continued growth of PwC’s assurance revenues around the world. PwC will continue to invest in improving the quality of our services.
PwC’s Advisory operations continued to grow strongly around the world, increasing by 8% to US$9.2 billion, surpassing US$9 billion for the first time. Advisory revenues now account for 29% of PwC’s total global sales.
This continued growth in advisory revenues is driven by the increasing strength of the PwC brand in the area of strategy consulting and implementation, and a strong performance by PwC’s deals practice, despite the relatively low levels of merger and acquisition activity around the world.
The vast majority of the increase in PwC’s Advisory revenues is the result of the successful implementation of an organic growth strategy. While PwC does make selective acquisitions in the Advisory market, these are only pursued where they will make a significant impact on our capabilities at a sensible price.
Revenues from PwC’s Tax operations continued to grow well for the third consecutive year, increasing by 5% to US$8.2 billion and exceeding US$8 billion for the first time. Demand for tax services is expected to remain strong in the year ahead, driven by increasing needs for both tax compliance and tax advisory services around the world.