PwC Luxembourg Annual Review 2019
New world. Transforming talent and trust for a sustainable future.
- Turnover of 464.4 million euros
- Growth per LoS: Assurance: 8 %, Tax: -2%, Advisory: 5%
- Third year of our Annual Review based on GRI (Global Reporting Initiative) standards
- Workforce totals 2,764 from 75 different nationalities as of June 30, 2019
- Workforce projection for the coming year to exceed 3,000 by January
- Workforce gender breakdown of 46% women, 54% men
- Global initiative announced 1 October, 2019 —“New Skills. New World”—investment commitment of USD three billion in the next four years to transform skills of 275,000 people across the PwC Network
PwC Luxembourg has reported revenues of EUR 464.4 million for the year ended 30 June 2019, up by 4.21% from EUR 445 million last year. For the third year, PwC Luxembourg’s results are being released
based on the GRI reporting standards, which provides detailed and transparent insight into the firm’s strategy, performance and societal contribution and forms part of our vision. It also demonstrates that we are on a global journey where we are transforming talent and trust with an aim to make our business, and therefore the world in which we do business, more sustainable.
Our numbers this year reflect on the one hand, our growing ongoing investments in the upskilling of our people and technology. On the other hand, PwC suffered from its very strong positioning in certain service areas, such as German Tax reporting and Regulatory Advisory (e.g. MiFID II), which have structurally declined over the past 12 months and as such impacted negatively our global turnover in Tax and Advisory.
On the point of upskilling of our people, there is an increasing need for society to address the skills gap created by automation and an ever faster change in business requirements. Here at PwC Luxembourg, we are committed to helping bridge that gap by upskilling our own people through a variety of programmes geared towards individual needs. We recognise that our people have always been and will continue to be our biggest differentiator and asset. Therefore, we continue to invest in our talent, even in more uncertain economic times.
John Parkhouse, CEO of PwC Luxembourg commented on the performance
“From a business perspective here in Luxembourg, this year has been a tougher one, where we see the impacts of changing regulation and overall economic downturn hitting our results. In particular, the demise of German Tax Reporting for mutual funds and work related to MiFID II— both areas where we have supported our clients with great success—were, even if planned for, a significant drag on our overall performance. As such, our resulting 4.2% growth remained above budget for the year and we see a strong start for the year to come but remain cautious as to the medium term prospects with the need to ensure that Luxembourg remains competitive in an increasingly uncertain global market-place.”
“Our purpose is to build trust and to solve important problems with trust at the core of all we do. Our focus on quality in what we deliver to our clients and to society is evidenced by both our Client Satisfaction scores and the results of our distinctive quality system, especially for audit. At the same time, understanding and solving important problems—whether that’s a specific problem important to an individual client, executive or someone at PwC, or a problem we face more broadly as society— is how we can deliver real results at many different levels. With this in mind, I am particularly proud to announce our global initiative—“New Skills. New World”—whereby we commit to investing over USD 3 billion in the coming four years to transform the skills of our 275,000 people across the PwC Network and to also drive this across our various communities with the aim of upskilling over 15 million people in the coming four years.”
People in numbers
Workforce totals 2,764 from 75 different nationalities as of June 30, 2019. Workforce gender breakdown of 46% women, 54% men.
“On the people side,” commented John Parkhouse, CEO, “0ur ongoing strategy with a focus on technology and upskilling has meant our headcount is steadily evolving year on year. Our People are, and will remain, critical to our long-term future, which is why we are also investing locally in significant development of the digital and commercial skills of our workforce. Whilst we believe the growth of our personnel will become less over time as technology investment transforms our business, we are still a people business and will continue to invest in new and diverse talent at all levels with our projections for the coming year exceeding 3,000 by January.”
Our Core Business – Assurance
Our assurance business experienced an extremely strong year with over 8% growth. This is reflective of our continued success in the marketplace, especially as it relates to audit rotation, and particular growth in the Alternatives segment – Private Equity and Real Assets – which we see as a significant growth driver for Luxembourg. AWM retains strong growth based on our continued attractiveness as a center. Additionally, we have witnessed growth resulting from the increase in substance in Luxembourg resulting both from the broader BEPS agenda and, of course, restructuring due to Brexit.
Our focus on broader assurance, outside the audit of financial statements, around the risks faced by our clients witnessed a 36% growth year on year. This reflects our significant investments in capabilities linked to cyber, data and our clients’ other core processes and controls. In a world of increasing complexity and scrutiny, the demand for such broader assurance is only set to grow and is an area we will continue to heavily invest into.
Our Core Business – Tax
Overall our tax business was 2% down on prior year. This masks a year of success in many areas with the significant drop resulting from the elimination of German Tax reporting on mutual funds—a business where PwC had historically been extremely successful. Our core tax advisory services witnessed a growth of around 7% reflecting both the demand of clients to restructure their businesses to accommodate the changing fiscal landscape as well as strong growth in the Alternatives space and in transfer pricing services. Our tax compliance business similarly performed well over the year as we see the shift toward supporting our clients in the advice and execution surrounding their tax and accounting requirements as well as the growth driven by the Alternatives segment.
PwC is the leading provider of tax services in Luxembourg, in terms of the size and scope of our tax practice. Our Tax business brings together a wealth of diverse specialist services, from traditional tax advisory, technology enabled tax compliance, accounting and reporting services, to HR transformation. Combining these offerings enables us to provide deep technical, relevant expertise and judgement to allow our clients to make better informed decisions.
Our Core business - Advisory
Following an exceptional prior year, our Advisory business experienced a strong year with 5 % growth. The year was marked by continuous regulatory change, AML and technology projects.
We have invested in the development of new services around technology, process compliance and reporting to support companies in managing change and improving performance through process improvement, outsourcing of non-core tasks (i.e. managed services) and transformational deals. We invest with our clients to build proof-of-concepts to demonstrate value, efficiency and enhanced solutions-test it first approach.
Our offering evolves to adapt to client priorities, counting some 500 consultants dedicated to our local market. In addition to traditional offerings spanning consulting, corporate finance, global fund distribution and regulatory & risk advisory services, we see increasing client demand in a lot of domains such as alternatives, front-office transformation, sustainability, cybersecurity and data, as well as the upskilling of people.
We have served a very diverse portfolio of clients, represented by large multinationals in the industrial or financial sectors. Another point of focus is to leverage a strong advisory presence at the EU Commission and at other public international institutions with local government and public institutions as well as the private sector.
Following closely the evolution of the economy, our business also provides full support to new market entrants that are attracted to Luxembourg, and who are willing to develop their activities in the alternatives, fintech, payments, insurance, space and/or technology segments. This is in addition to those establishing a presence to manage the potential consequences of Brexit.
New Ventures – creating a culture of entrepreneurship
The pace of innovation is accelerating and we’re evolving with it. To respond to our clients’ changing needs on the one hand, and to create an innovative environment for our People on the other, we created New Ventures – a new model to boost innovation and come up with unique solutions by increasing technology awareness, developing new ways-of-working, innovative ideas and new concepts.
AI and data analytics – Reshaping the workforce
The market is eager to use the tools and techniques, but companies lack knowledge. 63% of the survey respondents declared that the main reason for not deploying AI in Luxembourg is due to a lack of knowledge about AI. New competencies are required. And it’s not a question of recruiting a few data scientists.
Adopting a true data-driven strategy means that data matters should not be left to a few IT experts but should be embedded in the company’s culture at all levels of the organisation (source: 2019 PwC Data analytics survey). PwC is significantly investing in the upskilling of its workforce across all its lines of services. This is where our firm transformation really starts.
PwC can now embed data and artificial intelligence at all levels and in everything we do. Clients can benefit from more impactful services and more insightful advice. We can also embark our clients in their own data-driven transformation.
Opening of PwC Luxembourg Open AI Lab
To support Luxembourg’s national AI Vision, underlining the country’s unique ability to become a living lab of real-world responsible AI applications, PwC will open beginning 2020 a unique european open AI lab. In collaboration with the PwC US and Japanese AI labs, the Luxembourg AI lab will focus on the major innovation and developments for financial services, healthcare, cybersecurity and government applications. It will provide an open responsible AI platform composed of labelled data, algorithms, technologies for companies and governments to develop and test new high quality AI applications.
Blockchain & Crypto-assets
This year, our Blockchain & Crypto-assets team focused on developing awareness in the market, building a community and stepping into the ecosystem through multiple initiatives, among others:
- Launch of our Blockchain-applied series with the first two events gathering more than 450 external people combined
- Welcoming local and international players for blockchain & crypto fairs and showcasing their products and solutions to the market
- Formalising our memberships in Letzblock and Infrachain to strengthen our involvement in the local community
- Contributing to the PwC Global Blockchain and Crypto networks
- Positioning of Luxembourg on the map
PwC Luxembourg also became the first Big Four in the EU to accept Bitcoins as payment from its client as from 1 October 2019, demonstrating our willingness to engage with the technology and provide an alternative of payment to our clients.
The team is now focused on bringing concrete solutions to the market, either through education sessions via PwC Academy, explorer Sprints via our Experience Center but also through the deployment of blockchain solutions such as Smart Trace and Smart Credentials, augmenting supply chain and credentials management, respectively.
Finance and Front-office transformation
Across all industries and in all markets, digital technologies are changing the game and Chief Financial Officers (CFOs) are under growing pressure to ensure the finance function keeps pace. In response, CFOs across the industry are taking steps to map out what a best-in-class finance function will look like in five to ten years’ time. They know that the urgency of embarking on the journey to the digital finance function of the future is increasing rapidly, as managers across the business demand more timely, accurate and forward-looking information and intelligence to support better and faster business decisions.
To meet these demands, PwC believes that the CFO goal should be to harness the full potential of new technologies to drive a historical change in how Finance operates, simultaneously meeting business needs more effectively and encouraging ever deeper embedding of digital across the organisation to increase the enterprise-wide benefits over time. And this transformation must be achieved while continuing to meet Finance’s current requirements towards the business on an ongoing basis—effectively changing the engines while in flight.
How the Global Reporting Initiative (GRI) helps deliver on our purpose
For the third year, our PwC Luxembourg Annual Review has been prepared in accordance with the GRI Standards: Core option.
We are all part of a world that is faced with a variety of sustainability challenges. To address them effectively, 196 member states of the United Nations committed to a common agenda that works towards sustainable development: the Sustainable Development Goals (SDGs). They are the world’s sustainability blueprint, providing a set of 17 ambitious goals and 169 measurable targets to tackle people, planet and prosperity related issues. The Goals and targets are all to be achieved by 2030.
At PwC Luxembourg level, we decided to progressively move towards SDGs by using them as a lens to assess opportunities and threats to our business, and to subsequently understand our risks and opportunities in the context of global change. In return, this will help us define our business goals and sustainability priorities based on external societal and global needs, and allow us to do our part in bridging the gap between current and required business performance.
As the basis of our corporate agenda, we identified together with our stakeholders a set of 15 sustainability challenges, 7 of which are the most material to us:Societal Impact, Client Satisfaction, Independence & Conflict of Interest, Legitimacy & Ethics, Employee Journey, Health and Continuous Learning.
These challenges are in our eyes very « important problems » that we can contribute to solve. Moreover, they are key for us as a service firm to remain relevant to our clients, our people and society at large.
Discover more specifics about How we deliver on our purpose.
John Parkhouse concluded
“Our commitment to driving a sustainable agenda through doing the right thing, developing our people and driving transparency and focus over the areas where we as PwC Luxembourg can make a difference, remains core to our strategy. In this vein, we have worked hard to further enhance the transparency of our reporting and hope, in our own small way, to contribute to a healthier more transparent dynamic between business and society going forward.
We believe strongly that business likes ours not only have the power, but also the duty, to play an active role in making our world change for the better. It is clear that a new system has to emerge. A system that will realign business, economy and society. At PwC Luxembourg, we are convinced that delivering on our purpose (‘Building trust in society and solving important problems’) we can contribute to this.”
The report, “New world – Transforming talent and trust for a sustainable future” is available on the PwC Luxembourg website.
If you want to continue the conversation, read our latest blog, “Quo vadis, Earth? A wake up call for sustainable business”.
1. PwC Luxembourg (pwc.lu) is the largest professional services firm in Luxembourg with 2,764 people employed from 75 different countries. PwC Luxembourg provides audit, tax and advisory services including management consulting, transaction, financing and regulatory advice. The firm provides advice to a wide variety of clients from local and middle market entrepreneurs to large multinational companies operating from Luxembourg and the Greater Region. The firm helps its clients create the value they are looking for by contributing to the smooth operation of the capital markets and providing advice through an industry-focused approach.
2. The PwC global network is the largest provider of professional services in the audit, tax and management consultancy sectors. We are a network of independent firms based in 158 countries and employing over 250,000 people. Talk to us about your concerns and find out more by visiting us at