SUSTAINED GROWTH SETS UP BDO TO LEAD MARKET CONSOLIDATION

• Focus on expansion sees revenues grow 7.3% to $6.45bn
• More than 20 mergers completed in past twelve months
• BDO predicts far-reaching shake up of accountancy mid-tier in 50th anniversary year

BDO today announced a total combined fee income for the year ended 30 September 2013 of US$6.45bn / €4.92 bn – a 7.3% increase in US dollars. BDO is now represented in 144 countries.

Martin Van Roekel

The growth is attributable in part to a series of strategic mergers to augment organic growth, a number of which have already delivered significant impact. BDO’s UK member firm merged with PKF in March, resulting in a firm of 3,500 people with revenues approaching £400m and is in a strong position to lead the consolidation of the profession’s mid-tier in the UK. BDO USA realised three mergers in the past year, resulting in the addition of more than 250 staff, including 24 partners.

In Australia, BDO built on last year’s East Coast practice merger by merging with PKF Business Advisers Pty Ltd in Adelaide. The combined firm brings this territory’s revenues to AUD25m, making it one of the largest accounting and advisory firms in South Australia. In New Zealand, a merger with RHB Taurunga will be consolidated in 2014 when the BDO firm merges with PKF Ross Melville in Auckland, both parties having announced their intention to merge in August this year, which will take the firm’s headcount to over 800 people, including 86 partners. BDO Denmark consolidated earlier merger activity in Scandinavia with four regional mergers adding seven offices and over €11m in revenues.

Martin van Roekel, CEO of BDO said:  “We have seen a strong twelve months, increasing turnover and delivering strategically important mergers.  Within the next five years, we anticipate that the global consolidation of our profession will gather pace, leaving only 2 or 3 substantial mid-tier networks globally. The decisions we have taken in 2013 have put us in a leading position to be among those remaining. Only those with financial reserves will break away and our growth this year creates a platform for a future programme of mergers that we believe will lead the consolidation of the mid-tier and will increase both our revenues and the number of countries in which we have a presence.”

The revenue splits per region have remained similar year on year, with standout results in key regions as follows:

• EMEA: this newly combined region grew 6.63% as a whole, with revenues in Europe and the Middle East both increasing by more than 7% year on year. Outstanding performances came from the Slovak Republic, Armenia and Norway in Europe, with Jordan and Qatar leading the way in the Middle East
• Americas: strong performances from the US, Puerto Rico and Bolivia contributed to 6.62% growth overall. Revenues in the Caribbean increased by 26% – the fastest-growing of all the sub regions – while in Latin America, their revenues grew by more than 11%
• Asia Pacific: in this region, an increase in revenues of 4.26% was driven largely by growth from Indonesia, Singapore and China.

Martin van Roekel commented: “Performance has been consistently strong in markets all over the world, with particularly impressive growth in the Americas. We expect this to continue in 2014, especially in China where BDO Li Xin continues to realise impressive growth and is the market leader in serving state-owned enterprises in China.”

Fee splits remain similar to previous years, with audit and accounting making up 59% of revenue, tax services bringing in 20% and advisory services 21%. Martin van Roekel added: “In the 50 years since BDO was founded, the operating environment for us and our clients has changed dramatically, shaped by forces including regulation and globalisation and changing client needs and expectations.

“Clients today are looking for more than numbers and standard service delivery and that’s why we are seeing consolidation – small and medium-sized companies are increasingly seizing opportunities for international expansion and so require professional services firms with the ability to invest in expertise, global infrastructure and processes to help them navigate risk across global markets. In addition, mid-sized companies have different needs – they expect a tailored approach in each market and aren’t always best served by the largest firms, whose focus is on the very largest companies. We firmly believe clients want relationships with advisers that add real value, and we’re passionate about being a partner and delivering exceptional client service for ambitious, growing businesses.”

• Focus on expansion sees revenues grow 7.3% to $6.45bn
• More than 20 mergers completed in past twelve months
• BDO predicts far-reaching shake up of accountancy mid-tier in 50th anniversary year

BDO today announced a total combined fee income for the year ended 30 September 2013 of US$6.45bn / €4.92 bn – a 7.3% increase in US dollars. BDO is now represented in 144 countries.

Martin Van Roekel

The growth is attributable in part to a series of strategic mergers to augment organic growth, a number of which have already delivered significant impact. BDO’s UK member firm merged with PKF in March, resulting in a firm of 3,500 people with revenues approaching £400m and is in a strong position to lead the consolidation of the profession’s mid-tier in the UK. BDO USA realised three mergers in the past year, resulting in the addition of more than 250 staff, including 24 partners.

In Australia, BDO built on last year’s East Coast practice merger by merging with PKF Business Advisers Pty Ltd in Adelaide. The combined firm brings this territory’s revenues to AUD25m, making it one of the largest accounting and advisory firms in South Australia. In New Zealand, a merger with RHB Taurunga will be consolidated in 2014 when the BDO firm merges with PKF Ross Melville in Auckland, both parties having announced their intention to merge in August this year, which will take the firm’s headcount to over 800 people, including 86 partners. BDO Denmark consolidated earlier merger activity in Scandinavia with four regional mergers adding seven offices and over €11m in revenues.

Martin van Roekel, CEO of BDO said:  “We have seen a strong twelve months, increasing turnover and delivering strategically important mergers.  Within the next five years, we anticipate that the global consolidation of our profession will gather pace, leaving only 2 or 3 substantial mid-tier networks globally. The decisions we have taken in 2013 have put us in a leading position to be among those remaining. Only those with financial reserves will break away and our growth this year creates a platform for a future programme of mergers that we believe will lead the consolidation of the mid-tier and will increase both our revenues and the number of countries in which we have a presence.”

The revenue splits per region have remained similar year on year, with standout results in key regions as follows:

• EMEA: this newly combined region grew 6.63% as a whole, with revenues in Europe and the Middle East both increasing by more than 7% year on year. Outstanding performances came from the Slovak Republic, Armenia and Norway in Europe, with Jordan and Qatar leading the way in the Middle East
• Americas: strong performances from the US, Puerto Rico and Bolivia contributed to 6.62% growth overall. Revenues in the Caribbean increased by 26% – the fastest-growing of all the sub regions – while in Latin America, their revenues grew by more than 11%
• Asia Pacific: in this region, an increase in revenues of 4.26% was driven largely by growth from Indonesia, Singapore and China.

Martin van Roekel commented: “Performance has been consistently strong in markets all over the world, with particularly impressive growth in the Americas. We expect this to continue in 2014, especially in China where BDO Li Xin continues to realise impressive growth and is the market leader in serving state-owned enterprises in China.”

Fee splits remain similar to previous years, with audit and accounting making up 59% of revenue, tax services bringing in 20% and advisory services 21%. Martin van Roekel added: “In the 50 years since BDO was founded, the operating environment for us and our clients has changed dramatically, shaped by forces including regulation and globalisation and changing client needs and expectations.

“Clients today are looking for more than numbers and standard service delivery and that’s why we are seeing consolidation – small and medium-sized companies are increasingly seizing opportunities for international expansion and so require professional services firms with the ability to invest in expertise, global infrastructure and processes to help them navigate risk across global markets. In addition, mid-sized companies have different needs – they expect a tailored approach in each market and aren’t always best served by the largest firms, whose focus is on the very largest companies. We firmly believe clients want relationships with advisers that add real value, and we’re passionate about being a partner and delivering exceptional client service for ambitious, growing businesses.”