“We are extremely proud and happy to announce that we have had a very, very good year, especially in light of the general context,” said , country managing partner of EY Luxembourg, during a press conference on 29 November 2023 dedicated to the company’s annual results. Despite global economic uncertainty, inflation, high interest rates, geopolitical events and the time spent on the “aborted” project Everest, which was meant to , the 13.3% growth in turnover was the “historically highest growth rate we have ever had,” he added, bringing the Big 4 firm’s combined total growth to 40.4% over the last three financial years.

“We are now halfway through our ambition 2026 plan, which was launched in 2020 when the current management and I took office. My partners and I had set ourselves the very ambitious target of increasing sales from €260m in 2020 to €500m in 2026. We're on track to achieve this,” Coekelbergs commented in a press release.

During the briefing, he elaborated further on this point. “It means that the strategic plan we have established is the right now,” Coekelbergs added. “All the investments that we have decided to make are bringing tangible results.” These investments were “predominantly” in the area of managed services, in the M&A real estate business and digitalisation, both for the firm’s purposes and for clients. The results “show the resilience and the unity of our partnership in Luxembourg, something I’m particularly proud of.”

In an inflationary environment, it was also key to find the “right balance” between reflecting inflation in the pricing of services to clients and compensation of staff members. “We have not systematically tried to apply inflation to the pricing of our services to our clients; we understand their journey to absorb inflation, we are facing exactly the same,” he said. “Overall, we do not want to be an active contributor to the level of inflation.”

This is on the contrary to what PwC Luxembourg’s managing partner François Mousel noted during the presentation of PwC’s annual results, during which he noted that the firm had .

Audit sees 16% increase

EY Luxembourg’s audit practice saw a 16% increase in revenue, noted , partner and assurance leader, in the press release. “We are very excited about the launch of our EY Digital Fund Audit tool, a game-changer in how we bring innovation and technology to the core of our wealth and asset management audit delivery.”

Coekelbergs had more information during the press conference. The assurance practice brought in €215m and passed the 1,000-employee mark this year, he added, and has continued to “invest massively in technology” for digital solutions. The two main drivers of growth are the alternative investment space and the connections between Luxembourg and the US.

Tax is “continuously evolving”

EY Luxembourg’s tax activities saw a revenue increase of 4.2%, thanks to growing accounting, compliance and reporting practice, as well compliance reporting, indirect tax and operational tax services. “The introduction of the Beps Pillar Two Directive has brought profound changes to the international tax environment which we have been guiding our clients through, delivering leading-edge tax advice through our highly specialised team of experts,” noted , partner and tax leader, in the firm’s press release.

The tax business brought in around €110m, noted Coekelbergs during the briefing, and the “tax landscape has continued to evolve.” The first way is from a regulation standpoint; the second is that tax is becoming more and more digital. To address this second aspect, EY is “actively engaged with [its] clients to answer to the need to digitalise the tax function.”

Consulting and AI as “driver of growth”

The firm’s consulting practice reported 10.7% growth for the fiscal year ending 30 June. “All pillars of the consulting activities have progressed, with particularly great results in technology consulting and in the regulatory support provided to our clients,” said , partner and consulting leader, in the written communiqué.

“One of the areas in which we’ve invested a lot is managed services, and it has continued this year with lots of investment in talent and technology,” said Coekelbergs at the press conference. “We have also entered into the artificial intelligence space--for our own purposes, of course, but also together with our clients. It’s going to clearly be a driver of growth for the future.” This line of business brought in €35m.

“Exceptional year” for strategy & transactions

The strategy & transactions practice saw growth of 43.8% and brought in €11m. Despite a “challenging” M&A market, “our valuation, modelling and restructuring services delivered to the investment fund industry have been thriving on the back of valuation transparency needs,” , partner and strategy & transactions leader, commented in the press release, adding that the size of the team had almost doubled. Three partners were integrated during the year.

There’s been “very strong performance,” especially in the area of real estate, said Coekelbergs during the briefing. Valuation for alternative investment funds is also bringing opportunities, and the firm has also been active in M&A projects in the grand duchy. “It has been an exceptional year.”

People and sustainability

EY Luxembourg, which  this year,  has growth plans that focus on three pillars: value proposition for its people, impact and technology.

, partner and people leader, talked about the firm’s emphasis on ongoing learning and development, investment in diversity and gender balance (six of the 18 people promoted to partner in the past year were women).

Regarding sustainability, partner and sustainability leader  mentioned that the firm is “on track on [its] 2025 journey to use 100% renewable energy buildings for its offices around the world,” including in Luxembourg. EY is also aiming to reduce its carbon emissions in terms of procurement and suppliers, travel and transport, such as by integrating electric vehicles into its car fleet or encouraging public transport. Sustainability is a “mindset” that needs to be “embedded” in day-to-day activities.

“Attaching technology to our people”

EY Luxembourg has invested €25m in digital developments over the past three years, noted , partner and COO, and this will continue. “The key message on technology is we transform our business by attaching technology to our people,” allowing them to get the “full value” out of the technology and for clients. An example includes the launch of the digital fund audit platform, which sees 15,000 investment funds served by digital audit technology.

What’s next in terms of developments? “We work on the adoption of AI, the use cases of artificial intelligence for our clients, but also in our day-to-day client service delivery,” said Denis. It’s not a danger, but rather an “enabler,” he added, allowing people to focus on more value-added activities. It will also be key to help clients develop governance around the responsible use of artificial intelligence.

Another element is data, which Denis described as “the new oil.” Getting data to clients “in a usable manner is critical to the market.” The firm also aims to boost its innovation and investment in digital transformation.

Status quo “not an option”

The press conference concluded with a reference to Luxembourg’s newly installed government. “We’ve seen very good developments recently with the new coalition agreement and the government, which makes us very, I would say, optimistic in the way this government intends to create economic growth and additional opportunities for us, for our people and, of course, for the market,” said Coekelbergs.

Asked about EY’s aborted split plans, Coekelbergs replied that Project Everest would have been a “major enabler for us to raise additional capital and invest even more in technology,” he said. “There’s a clear expectation from the market that we will invest more in technology.”

“So what’s going to happen in the future? I cannot tell you,” he said. “There will be evolution. What kind of evolution? I cannot tell you now, because I don’t know.”

“But the status quo is not an option, long-term, for any of the Big 4.”