PwC’s global revenues show Covid-19 impact

PwC’s global revenues totalled $43bn (£32.7bn) for the 12 months ending 30 June 2020, only just ahead of the previous year, with the firm acknowledging the protracted impact of the Covid-19 crisis on business performance

The Big Four firm said that during the first nine months of FY20 to the end of March, revenues grew by nearly 7% over the same period last year with increases across all lines of business and in every major market.

However, from April to June, revenues were significantly impacted by the lockdown and subsequent slowing economies as countries around the world fought the pandemic. Compared to the same three months in 2019, revenues were down from April to June 2020 by 6%.

As a result, the final gross revenues total of $43bn is up 3% in local currency and 1.4% in US dollars on 2019’s total of $42bn

Bob Moritz, chairman of the PwC Network, said: ‘First and foremost the COVID-19 pandemic has been a human tragedy that has deeply affected the lives of many people around the world including members of our PwC family, their relatives and friends and our heartfelt condolences go out to all those who have lost loved ones.

‘While the last few months have been very challenging for everyone, we have re-focused our business to help our clients manage the immediate impacts of the pandemic and reinvent their businesses for future success.

‘It has never been more important to provide our stakeholders with high quality services.’

Moritz said the firm’s investment in technology was borne out at the height of the lockdown when 95% of the 284,000 strong workforce were operating out of the office with no interruption to the service provided.

Revenue breakdown

The Americas represented the largest slice of revenues at $18.2bn, up by 3%, with the firm’s performance in the US and Canada particularly strong. Revenues in Western Europe were up by 2% to reach $13.9bn, while in Central and Eastern Europe, revenues grew by 4%.

Revenues from the Middle East and Africa rose by 10% with a strong result from the Middle East where revenues were up 14%.  Across Asia, revenues grew by 5% while in Australasia and the Pacific, revenues were down 1% reflecting difficult trading conditions throughout FY20.

PwC cautioned that regional growth numbers for the full year FY20 mask the impact of Covid-19, with all regions performing as anticipated up to the end of March 2020 and then feeling the full impact of the economic restrictions caused by lockdowns in the months of April, May and June.

The firm said: ‘For the last three months of FY20, in most markets around the world we experienced declines in revenues compared with the same period in FY19 with falls in revenues of up to 30% in certain countries.’

Assurance remains PwC’s largest operation across the world, with revenues up by 3% to $17.6bn, and almost 119,000 professionals working in this service line.

PwC’s advisory operations grew by 4% to $14.7bn, while tax & legal services revenues grew by 2% to $10.7bn, with demand for tax reporting and strategy, people and organisation and legal services in the first nine months of the year offset by the impact of the pandemic in the final three months.

Future prospects

Moritz said: ‘While we adapted quickly to many of the new challenges that the Covid-19 pandemic brought, there is no doubt that the next 12 months and beyond are going to be difficult.

‘Our economists are predicting that the global economy will contract by 5.5 % by the end of 2021 and while different countries will recover at different rates it is clear that the economic downturn will impact us and our clients across the world.’

Moritz reported the firm has seen some job losses in a few markets around the world, particularly in the advisory business, but said it was working hard to limit these by containing non-essential costs and investments.

‘The pandemic brought many challenges but it also brought the opportunity to reflect and to some degree rethink the future. How we work together, how we use technology, what real estate we need, whether we need to travel so much, how to innovate, how to connect with our stakeholders and how to prioritise our health and wellbeing. These are all issues that we are actively working on as we think about the PwC of tomorrow,’ he said.

The PwC Global Annual Review is due to be published in October 2020.

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