PwC Australia releases financial results for the year ended 30 June 2023

Friday, September 1, 2023

PwC Australia releases financial results for the year ended 30 June 2023

AUSTRALIA – New PwC Australia chief executive Kevin Burrowes today announced the Australian firm’s full-year financial results for the financial year to 30 June 2023.

PwC Australia Group’s revenue results of $3.4 billion for FY23 reflect underlying revenue growth of 11 per cent, while profit remained flat year-on-year against the backdrop of the challenges faced by the business in the last quarter due to the sharing of confidential Treasury information and past failures in professional, ethical or leadership responsibilities. 

“It has clearly been a challenging year for PwC Australia and our people. While our revenue results were pleasing, the challenges we experienced in the final quarter had an impact on our profit, which remained flat as compared with FY22,” said PwC Australia chief executive Kevin Burrowes. 

“I want to thank our people for their resilience, their continued focus on our clients and the high quality of their work in the face of what has been a difficult time for them at the firm. 

“As we look forward, we completely accept that past leadership failed to meet the standards our people, our clients, the community and the Australian government rightly expect, and for that I apologise. We didn’t get it right, but our focus has, and always will be, on our clients, as we take the necessary steps to re-earn trust with our stakeholders,” said Mr Burrowes.

Revenue growth was achieved across PwC Australia’s three businesses, Assurance (15 per cent), Financial Advisory (9 per cent) and Consulting (12 per cent) on an adjusted basis. Financial Advisory growth adjusted for the sale of our global mobility business in FY22. 

In FY23 our annualised partner pay ranged from $374,000  to $4,043,000 (former CEO). Our average partner income declined by 12 per cent. 

These results do not reflect the planned divestment of our government advisory business, which accounted for $680 million or about 20 per cent of the firm’s FY23 revenue. This divestment, along with the ongoing reputational challenges the firm faces, will impact our FY24 results. To manage this, the owners of our firm - our partners - are taking a target income reduction of up to 30 per cent in FY24. This action has been taken to ensure our staff continue to be well compensated for their exceptional client work. 

“As a firm focused on the corporate and private business sector of Australia, we will continue to deliver an exceptional quality of work and our commitment to helping our clients and growing the careers of our people will not change,” Mr Burrowes said. 

Growth in PwC Australia’s Consulting business was driven by demand in corporate and health sectors and an increase in demand for our cloud and digital capabilities, while our Assurance business generated record growth driven by our continued investment in people, technology and quality, coupled with demand for advice and audit related to cyber, risk and regulation and sustainability. 

Our Financial Advisory business experienced growth delivering integrated capabilities to corporate and private clients looking to drive value through organic growth and restructuring, while our Energy Transition business achieved double-digit growth delivering end-to-end client services for their energy transition and sustainability needs.

Our people remain at the heart of everything we do

Despite the challenging final quarter of the year, the firm continues to invest in our people. We have committed to making incentive payments to a total of $47 million for FY23, alongside an average increase of 4.5 per cent in fixed total remuneration on 1 July 2023. This meant our hard-working people were rewarded for their outstanding work with clients. In the full year, we promoted 1,513 people from our workforce of close to 10,000 people. 

During the year we also focused on our people through learning and development opportunities and maintaining a focus on diversity, inclusion and wellbeing, Our initiatives and activities included:

• Delivering the second year of our signature learning experience, The Outside, attended by 1,752 senior associates and managers;

• Launching our inaugural global LGBTIQ+ strategy at PwC’s Global Shine Summit 2023;

• Introducing Every Day Equal training, and developing an Access and Inclusion plan;

• Launching our new parental leave, miscarriage leave and career mobility policies;

• Rolling out a new mental health literacy training program, Turning Mental Health Inside Out;

• Supporting our people to provide over 100,000 hours of volunteering, pro bono and low bono time in community-based activities.

A total of 97 people were admitted to the partnership over the financial year and 79 partners retired, meaning overall the partnership grew to 882 partners at 1 July 2023. Thirty four per cent of partners are female and nearly 19 per cent are of non-European diverse cultural backgrounds. The firm made the difficult decision to defer its July 2023 partner intake, which was in no way a reflection on any of the individuals being considered, but rather a prudent decision in light of the current circumstances. These candidates will be welcomed to the partnership at a later date. 

The firm’s planned divestment of its government advisory business to Allegro Funds will see more than 1,500 partners and employees join the new standalone business - Scyne Advisory. The Scyne Advisory transaction is expected to be completed by the end of the month. 

“For those moving across to Scyne Advisory, this is an opportunity to join Australia’s first advisory practice dedicated exclusively to government engagements and be a part of an exciting new entity. We thank those moving to Scyne for their hard-work, dedication and contribution during their time at PwC Australia and wish them all the best in this next chapter,” Mr Burrowes said. 

PwC Australia’s Transparency Report to be published following the release of the report on the independent review of the firm’s governance, accountability and culture

As PwC Australia continues to take the necessary steps to enhance its governance and culture, Mr Burrowes announced the firm would release its annual Transparency Report later this year. This will follow the release of the report by Dr Ziggy Switkowski AO on the independent review of the firm’s governance, accountability and culture in late September. In addition to appointing Dr Switkowski, over the past three months the firm has taken a number of steps to rebuild trust with its stakeholders, including;

• The announcement in July that eight partners exited or are in the process of being removed from the partnership, for failing to adequately exercise their expected leadership or governance responsibilities or meet their professional responsibilities; 

• The announcement of the divestment of the government advisory business; 

• The installation of a new leadership team, including CEO Kevin Burrowes;

• The announcement of the intention to appoint two non-executive directors to our Governance Board;

• The creation of a new role of Chief Risk and Ethics Leader, and the appointment of Jan McCahey to that role; and

• The ending of political donations.

“I look forward to continuing to lead PwC Australia and work with the inspiring and motivated people at our firm, who come to work each day with a desire to deliver high-quality results for our clients,” Burrowes said. 

In the lead-up to the Transparency Report release, information regarding our progress on key sustainability priorities including our transition to net zero, progress on modern slavery and work in the community can be found on our website. 

Footnotes:

*Revenue - Overseas represents Australia’s interest in PwC’s ASEANZ Consulting business which is controlled and is consolidated in accordance with AIFRS
**Disbursements represent out-of-pocket expenses and third-party sub-consultant fees that are directly reimbursed from clients.