KPMG Germany records double-digit growth

• ESG, digital transformation and regulatory requirements drive growth
• Growth in Audit significantly offsets rotation effects
• Total operating revenue in Advisory exceeds the one billion euro mark for the first time
• Significant increase in growth in Tax
• KPMG's status as a top employer underlined by its recruitment of more than 3,000 new employees
• Very favourable start to the 2024 financial year

KPMG Germany closed the 2023 financial year (1 October 2022 - 30 September 2023) with strong growth. Total operating revenue increased by 10.1% to EUR 2.39 billion. All Services contributed to this growth. As a result, the firm clearly exceeded its ambitious targets.

Audit generated total operating revenue of EUR 715 million, with the growth rate of 7.2% exceeding that of the prior year. It was possible to more than offset the significant rotation-related effects on total operating revenue.

With regard to audits of financial statements, Audit is on a strong growth path. KPMG has won significant DAX audit clients and has expanded its business in other economic segments and the public sector. New clients include Zalando from the German DAX 40 index, Lanxess from the MDAX, and Heidelberger Druckmaschinen from the SDAX. Furthermore, Deutsche Bahn (one of the largest state-owned enterprises) selected KPMG as its global auditor. Other client acquisitions included Asklepios, Heraeus, LBS NordWest, KGAL and Südzucker.

Audit-related advisory also performed extremely well. Business also benefited from the growing demand for advice on non-financial reporting, for instance in the context of the EU Taxonomy and the Corporate Sustainability Reporting Directive (CSRD), and also from the continued high demand for advice on issues relating to accounting and forensic services. In organisational terms, over the past financial year, Audit also established itself as a provider of integrated audit services for financial and sustainability information with a view to providing holistic support to clients for the audit of their annual financial statements.

Advisory once again recorded above-average growth. Total operating revenue increased by 13.5%, exceeding the one billion mark for the first time at EUR 1,028 million.

Consulting saw particularly strong growth driven by the continued high pressure placed on companies and the public sector in terms of becoming more sustainable, digital and resilient. This Service achieved significant growth with its support with financial transformations, particularly in connection with the migration to SAP S/4HANA. Other growth drivers included consulting services for cloud computing, cyber security and ESG.

Despite the challenging transaction environment, Deal Advisory also recorded significant growth. This development was mainly due to the Service's clear focus on advising international companies that are in the process of adapting their business models to meet the challenging market conditions. Demand for restructuring and turnaround advice also increased significantly. 

Total operating revenue in Tax, which also comprises KPMG's legal advisory services, rose by 8.4% to EUR 630 million. As a result, this Service significantly boosted its growth over the previous year.

Growth in tax advisory was once again driven by projects relating to the digitalisation of tax departments. In this context, KPMG implemented projects involving generative AI for the first time. The Service also benefited from high demand for advice brought about by new regulatory requirements, including the planned implementation of the global minimum tax and the EU's carbon border adjustment mechanism. Demand was also strong for the implementation of compliance management systems and services in the area of managed services.

KPMG Law succeeded in further expanding its position as leading legal consultancy among the Big Four companies in terms of revenue. Growth drivers included legal advice for digitalisation and ESG. A substantial portion of business was again contributed by Legal Managed Services, an area in which KPMG Law provides support in dealing with matters that involve a large number of cases. The high degree of trust demonstrated by clients was once again reflected in this year's "Kanzleimonitor", which saw KPMG Law rank first in the categories "corporate law" and "M&A".

Demand for services relating to ESG, digital transformation and regulatory requirements increased significantly across all Services in the past financial year. "Nowadays, clients require all competences from a single source. There is no ESG transformation without digitalisation, and vice versa. At the same time, both issues entail a high level of regulatory requirements," says Mattias Schmelzer. 

KPMG supports its clients in matters relating to ESG through comprehensive auditing and advisory services with a view to managing the effects on their business and leveraging ESG as a value driver. In the past financial year, KPMG again succeeded in achieving an above-average rise in total operating revenue in this area. The firm profited, among other things, from the expansion of its ESG expertise by bringing in experts from various sectors and for specialised topics.

In the field of digital transformation, KPMG is a leading technology consultant and provides its clients with support that is holistic and independent of technology. This covers the entire value chain ranging from strategy and organisational consulting to risk management and regulatory consulting. KPMG supplements its own specialist expertise using technologies from alliance partners. This enables the firm to provide successful and regulatory-compliant support when it comes to digital transformations of all levels of complexity as well as all ESG projects. 

KPMG continued to grow its strong ecosystem of alliance partners over the past financial year, most importantly by expanding its global partnership with Microsoft in the fields of cloud and AI services. KPMG will also enter into additional partnerships in areas with promising growth potential, for instance in the fields of AI, cloud transformation, data & analytics, cyber security and ESG. The objective is to expand market reach and continue to drive forward the disproportionately strong growth in business with alliances.

KPMG is also integrating technologies like AI into its own services in order to improve quality and efficiency across all Services. For instance, KPMG was the first audit firm to launch a generative AI-based chatbot throughout the organisation. "KPMG AI Chat" satisfies the highest data security requirements and is already proving successful among the first clients. In the field of auditing, KPMG has been working with Mindbridge, a leading provider of AI-based solutions for auditing purposes, since last financial year. The aim is to automatically analyse accounting data, identify suspicious transactions and ensure the highest level of audit quality. 

As of the reporting date of 30 September 2023, KPMG had 14,080 employees in Germany. In the past financial year, the firm hired over 3,000 employees. "We continued to invest heavily in our employees in the past financial year. Our level of remuneration is now more attractive than ever. We have also hired a large number of new employees. From a total of more than 100,000 applicants, we hired over 3,000 new colleagues. This shows that we are perceived to be one of the top places for young talent and experienced professionals," says Mattias Schmelzer.

Through a variety of initiatives, KPMG has advanced employee training and development. The firm introduced a new AI-based learning platform that supports employees in their personal development. With a newly designed rotation programme “Discover KPMG”, KPMG also encourages employees to work in different departments. This enables employees to expand their expertise outside their usual business area as part of our multidisciplinary business model. 

KPMG enjoyed an excellent start to the current financial year: in the first two months double-digit growth was achieved. "We are very confident about the new financial year. Despite the challenging market conditions, we expect to see further growth across all Services," says Mattias Schmelzer. "The demand for consulting from our clients is considerable. They have rarely been exposed to this many challenges at once. This environment calls for a trustworthy partner to assist in all situations. We consider ourselves to be that partner. We want to be the first place our customers turn to when they wish to navigate their way securely and reliably through change."

In order to exploit growth opportunities, KPMG is focusing on further integrating competencies as part of its multidisciplinary business model. The firm intends to further expand its comprehensive spectrum of services and to utilise all technological possibilities such as artificial intelligence in doing so. KPMG also aims to consistently leverage international market potential, for instance by developing innovative consulting solutions in its global network. In order to do so, the firm will continue to invest primarily in employees, technologies and ESG. On a global level, investments totalling USD 4.2 billion are planned over the next three years.

Clemens Reisbeck

Deputy Head Corporate Communications
KPMG AG Wirtschaftsprüfungsgesellschaft

T +49 89 9282 1722
creisbeck@kpmg.com