KPMG Australia FY23 financial results and Impact Report

KPMG Australia today published its FY23 financial results and Impact Report, providing voluntary disclosures on progress against 21 commitments made on governance, people, planet and prosperity.

CEO Andrew Yates said: “Given the challenging economic environment, I’m pleased to report a solid financial result, reflecting the dedication of our talented people and partners. The environment reminds us that we need to double down on core priorities – delivering high-quality work, providing a great people experience, generating returns responsibly, and continuing to grow at a healthy rate to allow us to invest for the future.”

“The spotlight on our profession during the year has heightened community awareness and raised expectations on integrity, confidentiality and trust. It is crucial that we regularly review our operations to ensure they are aligned with the standards expected by the Australian community.”

“We recognise increased transparency is central to building a better understanding our business, making progress against our commitments and building trust. That’s why our Impact Report is so important. In this year’s report, we’ve continued to mature our reporting by introducing a progress scorecard and engaging Grant Thornton to undertake an independent assurance readiness assessment of key people benchmarks. We’ve also expanded the information on key metrics, including data on partner remuneration for the first time, and providing a more detailed progress report on our multi-year culture program.”

KPMG Australia’s ‘Our Impact Plan’ FY23 covers the activities of KPMG Australia, KPMG Papua New Guinea and KPMG Fiji for the financial year to 30 June 2023.

Key results include:

• Revenues of $2.553 billion (up 9.1%)
• Employed 10,173^[i] people – including 877 new graduates (graduate numbers up 17%)
• 713 partners (up 6%) – including 96 new partners
• Taxes paid – $815 million (up 18%)
• New premises openings (Geelong, Parramatta, Nadi)
• Acquisitions (Acton, Think180)

KPMG Australia posted revenue of $2.553 billion, representing year-on-year (yoy) growth of 9.1%.

Andrew Yates said: “Coming off strong growth in FY22, we maintained revenue momentum until December. Then there was a noticeable shift, with client activity and revenue slowing. While our revenue increased year on year, the slowdown resulted in equity partner incomes decreasing by 3.9% on the prior year.”

“To reflect the new landscape, we have had to adjust our business. Most recently, I announced the introduction of a new operating model, partly to address the reality of the new environment but also to ensure better alignment with the global firm.”

“Our outlook for FY24 is cautious, but optimistic. We have great people, with an innovative spirit. We’ll ensure the business is efficient, with a focus on growing responsibly.”

KPMG continued to develop capabilities for the firm, employees and clients, leveraging emerging technologies and investing in cutting-edge research and startups to help tackle complex business challenges and position the business for future growth.

• Engagement with AI was a standout achievement for the year. In March 2023 KPMG became one of a handful of companies in the world to be given access to a private version of ChatGPT – known as KymChat. The solution is directly integrated with Microsoft Teams and allows people to safely use ChatGPT’s ground-breaking technology in the workplace. In July 2023, KPMG launched an offering for clients that combines this world-class technology with bespoke AI consulting services.
• Following successful pilot programs in the US, UK and Canada, KPMG Australia also began using new AI audit technology on a small number of companies. Powered by the integration of MindBridge financial risk discovery technology with the KPMG Clara smart audit platform, there are plans to roll out the technology to around 200 audit engagements in the coming year. This represents a major investment for the Australian audit practice and a significant development to help enhance audit accuracy and efficiency.
  
• The KPMG Futures team prioritised Next Generation Internet, quantum and next gen AI – all areas the firm believes will have significant impact on itself and clients. The inaugural Head of Metaverse Futures was appointed, a first in the industry, and a specialist team now offers a unique approach to growth and innovation using metaverse technologies and is designing new business models for the firm.
• The Eclipse Academy is a multi-year learning investment in employees to deliver on the firm’s business strategy. The Academy builds critical, future-focused skills in business areas important to the growth of our firm and people, including digital and data, ESG and leadership. In its first full year of operation, the Academy focused investment on leadership development, building digital and data capability, and ESG capacity.

• Gender pay gap on a like-for-like basis (ie – the same job level and employee profile), remains less than 1%
• Employee gender pay gap – 9.9% (down from 11.4%)
• Partner gender pay gap – 11.58% (down from 12.46%)
• Target: 40% women in partnership by 2025 – 35.1% (up from 33.4%)
• Target: 20% culturally diverse partners by 2025 – 14.5% (up from 11.4%)
• Target: Hiring 135 Indigenous People across 2021-2025 – 51 (up from 32)

KPMG has committed to reducing the gender pay gap and this year results improved across all measures: a like-for-like basis, employee gender pay gap and partner gender pay gap. Positive progress was also made towards achieving the firm’s public target of 40% women in partnership by 2025, increasing to 35.1% - up from 33.4% last year.

“I’m very proud that we have continued to implement strategies to successfully reduce the gender pay gap and improve women’s participation within our firm,” commented Andrew Yates.

“We strongly support the practice of equity within our business. The number of partners identifying as culturally diverse increased this year. However, the hiring and retention of Indigenous employees remains challenging. There is more work to do against both these targets.”

Key achievements for employees included the introduction of a new People Promise (Employee Value Proposition); enhancement of the firm’s listening strategy to ensure a better understanding of people’s experiences and to act on opportunities to support and inspire them throughout their career at KPMG; and progress of our cultural change program.

Andrew Yates said: “Since undertaking a comprehensive third-party culture review three years ago, we’ve significantly invested in a culture uplift program to strengthen our ethical acumen. Having just closed out our third Ethical Culture Index survey, our people have responded positively, and we are seeing improvement in promoting a speak-up culture, encouraging discussions on ethical grey areas, and greater confidence in our investigation process. While we have seen good progress, we know we have more to do.”

In April, the firm released its new Climate Action Plan (CAP) 2023-2030, developed in consultation with employees, KPMG’s subject matter experts and leading non-governmental organisations. The CAP 2023-2030 builds on our inaugural Climate Action Plan (CAP) 2018-2022 and includes new and ambitious targets, actions and initiatives supporting Australia’s transition to a net zero future. A highlight for the year was the expansion of the KPMG Nature Positive Challenge to South Pacific ventures, including increased investment and a People’s Choice award.

We continued to support and accelerate our clients’ decarbonisation plans. Over the past 12 months this has focused on transforming organisations to enable progress to their transition to net zero; and reporting on ESG performance against commitments and meeting disclosure requirements. Several new offerings were launched into the Australian market, including Climate IQ and an ESG maturity benchmarking tool.

To support and inform client conversations, our people have accessed a firmwide program of learning on a wide range of ESG topics in addition to our flagship global ESG program with the Judge Business School at the University of Cambridge and the European Business School.

This year, we refreshed our community impact strategy to help us further progress our commitment to create a fairer, more inclusive, and more sustainable future for our communities. We have continued to support a resilient community sector through our pro bono program, deepening research into wellbeing and directly supporting over 1,300 young people through our lifelong learning and digital inclusion programs. We also released our comprehensive FY23 Reconciliation Action Plan Progress Report, against our Elevate RAP 2021-2025.

We have valued our people’s time, combined with our community investment, at $12.9 million this year.

Kristin Silva
0411 110 953
ksilva@kpmg.com.au

Ash Pritchard
0411 020 680
apritchard2@kpmg.com.au