Most recently, the company has established itself as the new auditor for some Dax companies.
(Photo: Reuters)
Dusseldorf The effects of the Ukraine war and the current economic crisis have so far passed accountants and consulting firms by. The results published by Deloitte on Thursday provide evidence. The fourth largest German auditing and consulting company grew by 24 percent in the past 2021/22 financial year and achieved sales of 1.92 billion euros.
Deloitte is the first major audit firm to present updated results. This only includes the figures up to the key date of May 31, 2022 – i.e. only a few weeks with the economic upheavals of the war. But the new financial year, which has been running since June, also got off to a strong start with double-digit growth, explains Deloitte Germany boss Volker Krug in an interview with the Handelsblatt: “So far there have been no noticeable effects of the crisis in the consulting business.”
Krug sees the fundamental restructuring of the German economy as the reason for this. Digital transformation is dominant in companies, and sustainability is now a second megatrend. “Even if the topicality may convey a different picture: the discussion about energy security and the expansion of renewable energies shows the urgency of the transformation in this area,” says Krug.
Even in times of crisis, companies cannot put the topic of sustainability on the back burner, because it determines their future competitiveness, he adds. In addition, the major trends are connected: Sustainability is measured and evaluated with new data analysis tools. Ecological and digital components are playing a growing role in the reorganization of supply chains.
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Third trend from which consultants benefit greatly: Many companies lack their own talents and expertise. That’s why they are increasingly booking consulting houses. They advise clients and also take on entire services. Deloitte does this, for example, in the area of IT security for companies.
Examiners and consultants themselves cannot complain about a lack of young talent. Deloitte hired 3,000 people within 12 months. Fluctuation is high throughout the industry. But Deloitte has more than 10,000 employees in Germany for the first time.
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In the new financial year that started recently, the number four of the German auditors wants to increase again, but Krug does not dare to make a concrete forecast because of the uncertain environment. He works with several scenarios for the coming year. “If the entire economy falls into a recession, that won’t stop at consultants either,” he expects.
According to Krug, however, the high need for advice on economic restructuring will counteract this. The consulting business could continue to benefit from this. This is already dominant at Deloitte. The consulting division with management consulting increased by 46 percent to sales of 863 million euros in 2020/21.
Deloitte has no plans for a demerger
If you add the services of tax and legal advice as well as financial advisory – the support of takeovers and mergers – the consulting business comes to 1.4 billion euros and thus accounts for 75 percent of the group turnover.
The head of Germany at Deloitte rejects a split like EY.
(Photo: Deloitte)
Traditional auditing accounts for only 510 million euros, but the area has also grown. On the one hand, the plus of eleven percent comes from new mandates for the final audit, which Deloitte has won. In addition, there is a growing business of checking regulatory requirements for companies, for example in banks or in cyber security.
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Most recently, Deloitte has prevailed as the new auditor for some Dax companies, such as Deutsche Telekom, Merck and Infineon. The previous goal of winning five mandates has been achieved. Krug now wants to win further Dax orders in the course of the legally tightened examiner rotation in the next few years.
The Deloitte boss once again made it clear that the company has no plans for a split – like its competitor EY intends. EY is working on separating consulting and auditing into two independent companies.
“We remain convinced of the strength of our multidisciplinary business model. Audit and advice complement each other through their respective strengths,” said Krug. Recent analyzes have also shown this to be the case. “The integrated work also offers employees more opportunities for their development.”
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