The company is currently growing mainly thanks to the consulting services.
(Photo: imago images/Michael Gstettenbauer)
Frankfurt The auditing and consulting group EY remains on a solid growth path in Germany despite the damage to its reputation in connection with the Wirecard scandal. For the 2021/22 financial year, which ended at the end of June, the group reported sales growth of almost five percent and an increase in total output by 6.5 percent to 2.3 billion euros. However, the competitors PwC and Deloitte have recently been able to show double-digit growth rates and are therefore growing faster.
After all, according to EY, the upward trend accelerated further in the first five months of the new financial year with growth of eleven percent. Head of Germany Henrik Ahlers is therefore confident for the year as a whole. “Although it is difficult to make a reliable forecast in these volatile times, we are optimistic for the current fiscal year and expect overall growth in the double-digit range – provided the economy is not shaken by further external shocks,” explained Ahlers. EY is currently planning a split into a consulting and an auditing company.
Similar to its competitors PwC and KPMG, the consulting business is growing at EY. According to EY, the management consultancy (consulting) increased last year by 19 percent to 401 million euros and by a further 16 percent in the first five months of the new financial year.
Customers have a great need for advice: Many companies are developing new sustainability strategies and digitizing their business processes. They are looking for external expertise for this. Uncertainties related to the energy crisis and an impending recession have therefore had little impact on EY’s business.
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This also applies to the other two consulting segments of the group. In transaction consulting, the WP Group grew by 14 percent in the first five months of the new financial year, after an almost 13 percent increase in performance in the previous year.
Decrease in sales in the audit business
In tax consulting, EY was able to increase overall performance in 2021/22 by seven percent and sales by almost six percent to 773 million euros. With an increase of nine percent in the first five months of the new year, the market leadership has been further expanded, they say.
>> Read about this: Auditors are benefiting from the crisis – PwC is growing significantly
In the auditing business, on the other hand, things are looking worse: Here, EY’s revenues fell by almost four percent to 659 million euros in the past financial year, while the competitors Deloitte and PwC were each able to increase their auditing revenues by around ten percent. After all, EY started the new year with growth of three percent.
EY is struggling in this area with a loss of reputation as a result of the Wirecard scandal. The auditor is accused of having approved Wirecard’s balance sheet, which is based on bogus transactions, for too long. Observers therefore assume that it has become more difficult for EY to win new mandates, especially in the financial sector.
Irrespective of this, Jean-Yves Jégourel, Co-Chairman of the Management Board of EY in Germany, also forecasts a positive development in the area of auditing and audit-related consulting for the further course of the financial year. “With our mandates in the Dax segment and in the upper medium-sized companies, we are well utilized in auditing,” he explained.
Above all, audit-related advice in connection with sustainability issues and financial reporting is a rapidly growing business area. “There are very positive prospects for the audit organization that will result from the planned spin-off,” says Jégourel.
More: Splitting of EY is delayed – IPO of the consultancy in 2024 at the earliest