PwC firms in the Americas continued to grow strongly with revenues from North America increasing 7% and South America a very impressive 13%. Revenues from the United States grew 6%, with strong growth across all business lines.
Our strategy over the past few years of increasing investment in Africa and the Middle East is also showing results, with revenue growth of 16% in FY 2014, up from 7% in the previous year. Africa and the Middle East will be increasingly important markets for PwC in the future; we will continue to invest in these markets and expect to significantly expand our operations there over the next five years.
Despite some continuing tough economic conditions across Europe, PwC’s operations continued to grow solidly, with revenues from Central and Eastern Europe growing 3% and revenues from Western Europe increasing by 4%. This was a particularly good result in Western Europe, with growth rising from 2% in FY 2013. The ongoing economic uncertainty in the Eurozone is having a negative impact on economic growth and we expect that uncertainty to continue in FY 2015. However, our firms in the Eurozone are seeing increased demand for services and we are experiencing particularly impressive results from Italy and France, given the difficult economic conditions in those countries – both with revenues up 8% and 5% respectively.
Revenues from PwC’s operations in Asia bounced back in FY 2014 with growth of 9%, up from just 2% in FY 2013. This was driven by solid results from right across the region, and in particular the benefits of increased investment in PwC’s operations in China, India and Japan which posted revenue growth of 11%, 24% and 10% respectively.
As anticipated last year, PwC’s revenues in Australasia and the Pacific Islands have returned to healthy growth with an increase of 4% in FY 2014, boosted by focusing on the growing advisory services market in Australia. Economic conditions in Australia continue to be uncertain, but we believe we have the right strategy in place to secure future profitable growth.
The share of PwC’s revenues from emerging markets is 20% and this is expected to grow substantially over the next five years.
In FY 2014, revenues from Assurance operations increased by 3% to US$15.1 billion, a very impressive result given the highly competitive market for assurance services. PwC is the leading Assurance business in the world as a result of very significant long-term investment in our services. We continue to have a relentless focus on quality and to make substantial investments in new technology and people.
The demand for broader forms of assurance such as reporting on internal audit and risk controls continues to grow. This trend is set to continue as new technology allows the principle of assurance to be applied to wider areas such as social and environmental reporting.
Revenues from PwC’s Advisory operations continued to grow strongly in FY 2014, increasing by 10% to break through the US$10 billion mark for the first time. Our rate of growth increased from last year, and in the last five years, PwC’s Advisory business has nearly doubled in size.
As in previous years, the growth in PwC’s Advisory revenues was mainly driven by organic growth and, in particular, a focus on complex, cross-border work involving a broad range of advisory services – from strategy through execution.
The acquisition of Booz & Company (now Strategy&) earlier in the year has greatly boosted our capability to deliver strategy-led work and we fully expect our revenues from this area to continue to grow strongly in the year ahead.
However, as the Strategy& deal was only completed three months before the end of our financial year, its full impact will not be seen until FY 2015. We also saw robust demand from clients for work in the areas of technology, deals implementation and transaction services.
PwC’s Tax operations grew strongly in FY 2014, with revenues increasing by 8% to US$8.8 billion. Growth in tax operations was driven by an increasing demand for tax compliance and tax advisory services around the world as governments continue to compete for tax revenues. This growth was supported by our strong brand position for tax services. We believe our brand position has been enhanced by our commitment to be transparent about the tax work that we undertake; we issued our first Tax Code of Conduct in 2005. PwC firms around the world have signed up to this Code of Conduct and apply it to their everyday work.
PwC’s Tax business also contains revenues from our Human Resource Services operations and our network of legal practices around the world, which are focused on providing integrated legal advice and implementation services.