Global accounting network Mazars has reported a significant fee income increase of 7.8% to €1.9bn (£1.6bn) in 2019/20 as partner profits drop
The increase in fee income comprises strong organic growth (5.9%), complemented by positive external growth (1.8%). While profitability was hit due to the impact of the covid-19 pandemic during the second half of the year, the group reported post tax profit of €86,000.
The group reported growth across a number of service lines including audit, accounting services, legal and taxation during the year, while financial advisory revenue fell. Consulting proved resilient, developing responses to the crisis for clients, and creating opportunities for the network.
The strongest service line was audit with reported revenue of €754m, up 6.8% from €706m the previous year, accounting services grew to €319m, up 4.5% from €290m while tax revenue was also up 9.2% at €316m from €289m year on year.
The consulting arm also performed well, with revenue at €208m, up 4.5% from €199m.
Building on its powerful audit base, 2019/20 saw Mazars continue to develop its position as a leading audit firm internationally, taking advantage of the ongoing international focus on the issues relating to the audit reform. Over the year, the network secured a number of significant audits including Steinhof, CapGemini, AIG and the PSA Group.
As for many companies, Mazars experienced a slowdown of its activities in the second half of the year negatively impacting its revenues by around €65m versus the original forecast. This negative hit was mitigated by savings of around €47m, of which government subsidies represented €11m or around 1% of staff costs. This in turn hit the level of distributable pay-outs to partners, which were negatively impacted by €19m versus the mid-year forecast, with €299m shared between the global cohort of 1,012 partners.
Hervé Hélias, CEO and chairman of Mazars Group says: ‘For people, businesses and society, 2020 has been a year like no other. Amid a global pandemic, with our focus on keeping our people safe and continuing to deliver top quality services to our clients, Mazars has shown remarkable resilience achieving 7.8% growth, most of it organic. Our people’s remarkable efforts to continue serving our clients and carry out their assignments enabled us to do more than just weather the storm in 2020.’
The group has set out a four-year roadmap and strategic plan, called One24, capitalising on Mazars’ strengths and distinctive attributes: quality services, cross-border operational integration, international consistency, dedication and care for clients and teams.
The new plan seeks to continue the group’s transformation and to secure Mazars’ position as an international audit, tax and advisory leader, by continuously improving talent and client experience and innovating services and ways to work. Over the coming four-year period the firm will continue to focus on its priorities: client-centricity, quality and risk management, international growth, operational integration, talent development, and contributing to building a fair and prosperous world.
Hélias said: “The pandemic and related economic crisis certainly bring a challenging period, but we are looking beyond that, investing in our organisation and in our people to deliver what our clients need and what they expect from us. We have set a strategy that both secures our place in the market and continues to create the firm of the future, ensuring we attract and grow outstanding talent, deliver high-quality experiences to our clients of all types, and above all, build confidence and trust by acting in a responsible way.’
To support the One24 programme, Mazars has reviewed and reinforced its governance structure, which comprises the Group Executive Board (GEB) chaired by Hélias and Group Governance Council (GGC). The new governance team was elected during the firm’s virtual partner conference in December 2020.
Of the 23 elected members in the GEB and GGC, 10 are female: this means 44% of Mazars’ governance positions are held by women, representing strong gender diversity in the firm’s leadership.
‘Having a long-term perspective is critical, as is having the right team to execute our strategy. As we look to implement our four-year plan, we have evolved our governance team to ensure it has the right leaders with a diversity of backgrounds and styles, to make our strategy happen,’ said Hélias.
‘Our new four-year strategic plan outlines our intention to accelerate our transformation and further establish Mazars as an international leader. Financial transparency and trust are the essence of a fair and prosperous economy, and auditors are a central piece of this ecosystem. It is time to collectively rethink how the profession operates. We believe it is our responsibility to help shape a healthier market and we will play our full part in this transformation in the coming years.’
In 2020 Mazars welcomed 78 new international partners from 30 countries. The new partners represent varied areas of services - audit (54%), tax (17%) and outsourcing (12%) – as well as regional diversity.
In October 2020 Mazars launched its new brand identity which reaffirmed its purpose and long-standing values of integrity, responsibility and accountability. This included a new logo and rebranding of corporate collateral and the group’s website.