Press releases

Transformation and M&A drive growth

Deloitte CEO Richard Houston announces financial results for 2021

30 September 2021

  • Revenue for the year ended 31 May 2021 increased by 4% to £4.5bn
  • Distributable Profit increased by 14% to £590m
  • Significant investments made in technology, audit quality and Deloitte Legal
  • New hybrid working model trusts people to decide how they can deliver their best work

Richard Houston, Deloitte CEO and Senior Partner, said:
“Our people and partners have shown incredible commitment in these challenging times. Their efforts have allowed us to adapt at pace to support the national response to COVID-19, contribute to our communities, and help clients navigate the disruption to markets, supply chains and the economy.

“This year we’ve seen exceptional demand for our digital transformation advice, services in supply chain, and debt advisory as clients looked for our support to overcome the impact of national lockdowns.

“Our highest profile project involved bringing together expertise from across our firm to help design the national testing programme – the largest diagnostics network in UK history. This capability has played a key part in the re-opening of the UK economy after months of national restrictions.

“We have transformed our firm through acquisitions, invested in new technology, and expanded our alliances with world-leading technology providers. We have also used our skills and resources to support schools, charities and social enterprises through the crisis.

“The UK is now in a decisive decade as it recovers from the pandemic. Our firm will play its part in addressing societal challenges from digital exclusion to the race to net zero as we help build an inclusive and sustainable recovery.”

Financial performance
Revenue1 for the year ended 31 May 2021 increased to £4.5bn, up 4% on 2020. This growth reflects a strong underlying performance from all businesses but is affected by a significant decline in billings for expenses such as travel, as the majority of the firm’s people worked remotely during the pandemic.

Across Deloitte’s UK Advisory Businesses, Consulting had a particularly strong year, working on transformation projects across multiple sectors, providing clients with specialist teams and expertise in digital technology, procurement, supply chain, logistics, real estate and project management skills, including the Government.

The healthy growth in Financial Advisory was driven by M&A transactions, protecting clients from financial crime and working on large scale insolvencies. For Risk Advisory, despite robust underlying growth, revenue contracted following a significant reduction in billable third-party costs. Tax & Legal contended with challenging markets during the first half, returning to growth in the latter part of the year - despite this, the business continued to invest heavily in new technology solutions for future growth. UK Audit & Assurance, which has already moved ahead with the majority of operational separation, continued to deliver a strong financial contribution underpinned by investment in audit quality, its people and the development of its audit product.

Distributable operating profit2 for the year ended 31 May 2021 was £590m, up 14% from £518m in the prior year, when performance was heavily impacted by COVID-19, but lower than in 2019 (£617m).

Total UK tax contribution was £1.323bn in the year ended 31 May 2021. This comprised £838m of taxes collected on behalf of HMRC (VAT, PAYE and employee national insurance) and £485m of taxes in relation to partner income taxes, national insurance, corporation tax and employer’s national insurance.

Changes to the firm
During 2021, Deloitte took a number of decisions to lead the profession in the governance of its Audit & Assurance business, and to strengthen the firm’s own market and financial resilience.

On 1 January Deloitte established an independent Audit Governance Board, comprising a majority of Audit Non-Executives, including the Chair. The firm is continuing to engage in audit and corporate governance reforms where there is an ongoing opportunity to enhance the reputation of the UK as a leading capital market and which reinforces its position in the global economy.

In May, Deloitte sold its restructuring services business to Teneo. Under the firm’s Partnership Agreement, the sale gave rise to a distributable capital profit. Deloitte also decided during the year to increase mandatory Partner capital; such increase was approximately the same amount as the distributable capital profit arising on the sale.

Recognising and supporting our people and communities
Deloitte’s rapid response to the pandemic, combined with the efforts of the firm’s 22,000 people and partners was key to this year’s strong financial performance. To recognise their commitment, Deloitte’s people were provided with a ‘Thank You’ payment in April and a significantly increased 2021 bonus.

The firm welcomed more than 3,800 new colleagues this year, and over 1,600 graduates and apprentices experienced Deloitte’s virtual induction programme. The firm invested over £30m in learning and development, including the creation of a new digital learning platform.

Through its ‘5 Million Futures’ social impact programme the firm continued to help over 356,000 people access education, employment and other opportunities, including young people in low income communities and those out of work or at risk of redundancy. The financial value of its societal impact is £7m, which includes donations, pro bono and volunteering hours.

Inclusion and diversity remain top of the firm’s agenda. Progress has been made to reduce gender and ethnicity pay gaps and increase the number of female and ethnic minority partners, but there is still more to be done.

This year Deloitte’s people overwhelmingly said they wanted the freedom to choose how they work in the future. The firm has launched a new hybrid working model, Deloitte Works, which gives them the flexibility and choice in when, where, and how they work; trusting them to decide how best to deliver for their own development, their teams and their clients.

Investing in the future
In a typical year, Deloitte seeks to invest between four and six percent of revenues in creating jobs, building skills and capabilities, developing solutions and transforming the firm’s own infrastructure and operations in support of clients, its people and society.

In FY21 Deloitte undertook two significant acquisitions in core growth areas. In October 2020, the firm acquired the SAP design and technology consultancy Keytree, bringing in over 400 employees globally and creating the UK and Europe’s largest SAP-enabled transformation practice. This significantly grows the firm’s capacity to support clients worldwide with their finance transformation programmes. In February 2021, 114 employees, including more than 80 lawyers, from leading technology and digital media law firm Kemp Little joined Deloitte Legal. The transaction doubled the size of the legal team and transformed the firm’s legal offerings.

The firm approved a transformational investment in end-to-end integrated M&A capabilities, supporting clients through the entire M&A lifecycle – from identifying the right deal and executing the transaction, to delivering the promised transformation and financial returns.

As well as investing in audit quality and the acceleration of operational separation, in tax, significant investments have been committed to develop new technology solutions to help make tax systems easier to use, including automation of declarations and tax compliance to facilitate international and online commerce.

FY21 also saw a significant investment in climate-change and broader ESG capabilities across the business, to enable Deloitte’s people to support clients through the necessary changes to develop, deliver and report on their commitments. Finally, over one third of Deloitte’s people work in UK regional offices, and during the year the firm launched three new regional hubs – focusing on Life Sciences in Cambridge, Investment Management in Edinburgh and Health Tech in Birmingham – demonstrating commitment to the regions and excitement at the prospects for regional growth.

Looking ahead
Deloitte’s growth in FY21 has continued into the current year. Looking ahead to a decade shaped not just by the recovery from COVID but also the impact of technology and the urgency to address climate change, the firm will continue to prioritise developing its people, supporting its clients transform their businesses and investing in its communities.

-End-

Notes to Editors

1 All revenue numbers presented herein, unless other noted, represent UK and Switzerland consolidated, and have been prepared in accordance with International Financial Reporting Standards and IFRS Interpretation Committee interpretations, as issued by the International Accounting Standards Board, and are audited.

2 Distributable operating profit differs from profit as reported in the Firm’s Statutory Financial Statements as a consequence of, among other things, the treatment of equity partner annuities, the Firm’s defined benefit pension schemes and distributable capital profit. Average profit per equity partner is based on distributable operating profit and was £854,000 in the year ended 31 May 2021 (up from £731,000 in the year ended 31 May 2020 and down from £882,000 in the year ended 31 May 2019).

3 Deloitte UK’s 2021 Annual Review for the year ended 31 May 2021 has been published. This Review discusses the Firm’s performance, alongside a wider review on the impact we’ve made for our people, clients and the communities we work in. Links have been provided to the Firm’s Tax Strategy, Inclusion Reports, Transparency Report and Statutory Accounts.

About Deloitte
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk.

Annual Report 2021

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