In 2023/2024, despite a challenging economic environment - with particular impact on our consulting services - our commitment to delivering high-quality services and investing in our people and technology enabled us to achieve a solid financial performance across our business lines.
Revenue and profitability
In 2023/2024, we realized EUR 770.9 million in revenue, an 8.4% increase compared to the previous year reflecting a strong demand for our services in both Assurance and Advisory. Our operating result was EUR 128 million, presenting 45.6% year-on-year growth, mainly driven by the previous year’s costs of the answer-sharing investigation being offset by increased inflation and staff costs.
Businesses
Assurance
Revenues from Assurance grew by 10.1% to EUR 435.0 million. This growth was primarily due to increased demand for audit and other assurance services, as well as to us reaping the benefits of our investments in advanced audit technologies. We successfully recruited both experienced and new hires, locally and in our delivery center in India. We expect demand to continue to grow in the coming years, especially in relation to the new reporting and assurance requirements around CSRD.
Advisory
Despite the challenging economic and market conditions, Advisory increased its revenue by 6.4% year-on-year to EUR 335.9 million. This increase reflects higher demand in all our growth areas, but especially in Digital Transformation, Deals, and Managed Services. In the coming years, we expect to continue to grow our consulting services in these areas.
Sector performance
We see continued demand for all our sectors across Assurance and Advisory. Traditionally, KPMG N.V. has a strong profile in the financial services sector, which is heavily driven by regulatory change. Clients recognize our deep expertise, turning to KPMG N.V. for advice and assistance in the areas of compliance, risk, finance, ESG, and digital transformation.
We also have a strong position within the infrastructure, government and healthcare, owing to our in-depth knowledge of the market, our clients, and the specific dynamics within the public sector. We continuously invest in our relationships to understand the needs and challenges that our clients are facing in this dynamic and politically sensitive market.
Elsewhere, the energy transition and digital transformations are driving growth in the energy and natural resources sector, with digital transformation also a key theme in the consumer and retail sector. Meanwhile, in technology, media, and telecommunications, the further rise and development of technology platforms and related payment services continue to create demand.
Investments
We aim to invest in strategic areas in addition to our regular investments in learning and development opportunities for our people. In 2023/2024, we invested EUR 43.7 million (5.7% of revenues) across our strategic initiatives, most notably in clients, digital and innovation (enhancing our digital capabilities, including AI and our data strategy), and financial strength (transforming our business services, implementing enterprise service management and improving our IT security services). We also see the benefits of global investment programs increasingly materializing.
Capital position and funding from equity partners
Our policy is to maintain a strong capital position so that we retain the confidence of the firm’s clients and creditors, and can continue to invest in business growth. Most financing comes from mandatory contributions from our equity partners (in the form of equity contributions and mandatory loans). Partners may also provide additional financing through voluntary loans. In 2023/2024, our total funding was 21.1% higher compared to 2022/2023, as a result of higher short-term funding, including profits that are not distributed until the end of the calendar year. In addition, the firm has a combined credit and guarantee facility of EUR 20 million (2022/2023: EUR 50 million), of which a drawdown of EUR 154 thousand was made (2022/2023: no drawdown) in the form of a guarantee. We do not foresee any material changes in our financing structure.
Outlook
We believe we are well positioned to navigate the evolving market landscape. Our focus will remain on delivering an exceptional client service, driving innovation, and fostering a culture of continuous improvement. We anticipate continued growth across Assurance and Advisory, across all our sectors and especially in our key growth areas, underpinned by strategic investments.
Note on tax
Our total profit before income tax is subject to standard corporate income tax at the same rate as Coöperatie KPMG U.A., KPMG N.V., and the individual equity partners’ practice companies. Only a limited part of our total income tax expense is included in KPMG N.V.’s profit and loss account, since the majority of our tax is paid via partner practice companies. Our income tax expense includes temporary differences for which a deferred tax asset or liability has been accounted. KPMG N.V., Coöperatie KPMG U.A., and the individual equity partners pay their taxes in the Netherlands.
Responsible tax
We have a Corporate Tax Policy in which we commit to paying our fair share of taxation in the Netherlands. Under this policy, we avoid using artificial structures, particularly if they bear no relation to the company’s core business and objectives. In 2023/2024, we paid a total of EUR 2.2 million in income tax.