Professional services

Biggest of Big Four breaks half billion euro mark

PWC Luxembourg executives seen during a press briefing: Rima Adas, deputy territory senior partner, John Parkhouse, CEO, Olivier Carré, financial services market leader, and François Mousel, clients and markets leader. Photo: Guy Wolff/Masion Moderne

PWC Luxembourg executives seen during a press briefing: Rima Adas, deputy territory senior partner, John Parkhouse, CEO, Olivier Carré, financial services market leader, and François Mousel, clients and markets leader. Photo: Guy Wolff/Masion Moderne

Luxembourg’s largest professional services firm, and the grand duchy’s seventh largest private sector employer, PWC, has recorded an 11% gain in total turnover and in net revenue.

PWC Luxembourg posted turnover €543m for the financial year ending 30 June 2022, up from €490m the previous 12 months and nearly €100m higher than its last full pre-pandemic year.

Net revenue jumped from €432.3m to €480m, the firm stated.

“We are particularly pleased that we crossed the half a billion threshold, which was a big step for us,” John ParkhouseJohn Parkhouse, CEO of PWC Luxembourg, said during a press briefing.

“We’re in a very fortunate position, in terms of the sector that we operate in. And we recognise that there’s other sectors that are struggling a lot more, and I think will likely struggle more as the year to come materialises.”

Parkhouse said that he was “particularly” pleased that his company’s growth came “across our business lines.”

Audit remained its largest service line, representing a bit more than half of turnover.

François MouselFrançois Mousel, clients and markets leader, said that 4 areas were driving PWC’s business growth: ESG, managed services in the asset management space, technology alliances and technology transformation.

Financial services represented about three-fourths of the company’s turnover, with nearly half in the alternative investment fund space. Its alternative funds business grew by 23%, said Olivier CarréOlivier Carré, financial services market leader. That was due to both “structural growth” (“we grew with the market”), he said. “And then on the other side, the advisory space actually developed pretty well in that particular industry. We doubled”.

Moving forward, PWC wants to increasingly focus on managed services, to “book more recurring” revenue and become “more integrated with clients.”

The firm recruited 1,100 people, more than its target of 900. That increased headcount is meant to both “to accommodate the growth, but also to over recruit, so that our people have a better sort of work-life dynamic, and have the time to develop and grow within the firm,” Parkhouse stated. “That continues to be one of our key challenges: the attraction and retention of talent.”

The company started a new recruitment programme for university graduates in September called “Career compass”. This lets newcomers cycle through the firm’s advisory, audit and tax services over 2 years, and then “they can choose the one they prefer at the end,” said Rima AdasRima Adas, deputy territory senior partner.

PWC had 200 applicants for 30 spots. While still considered a pilot project, Adas said PWC plans a fresh intake in 2023.

Parkhouse said the firm had “record levels of employee satisfaction,” pointing to a “record level of participation” in its annual “global people survey” and that its “people engagement index was the highest we’ve ever had.”

No split planned

While one of its main rivals, EY, is considering splitting up its advisory and audit businesses, Parkhouse said PWC had “no plans at all” to break up its business into separate firms. “The strategy is clear globally, and it’s clear locally. We continue to believe that the multidisciplinary model brings the best value to our clients, and it brings the best value to our people.

“I watched with interest what I read in the paper about our competitor. And we see we’ll see how that goes. But from our perspective, it’s crystal clear. We have a strategy... we’re continuing to drive that strategy.”

Parkhouse said PWC’s healthy growth in recent years has largely been based on “how we’re working together across the businesses to deliver for our clients.” So they have “zero interest” in a split up.

While the firm has done contingency planning, in case regulators force a break up, “we’ve had the discussions locally in terms of ‘is there anything that we’re seeing that is compelling to shift that way?’ And there’s a clear conclusion: no.”

An integrated entity is a recruitment and retention selling point, from Parkhouse’s point of view: “Honestly, I think one of the things that attracts people to firms like ours, is that diversity of experience” in their professional career.