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    Winning with extraordinary people KPMG P/S Annual Report 1 October 2017 – 30 September 2018 kpmg.dk CVR no. 25 57 81 98 KPMG P/S Dampfærgevej 28 2100 København Ø The annual report was presented and adopted at the Company’s annual general meeting on 30 January 2019.


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    Ant�c�pate tomorrow Del�ver today


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    CONTENTS Management's review 3 Company details and financial highlights 4 Winning with extraordinary people 5 Fostering a high-performing and innovative workplace 13 Making a difference in our communities 19 Diversity and Inclusion 25 Using data to secure confidence and trust in a digital age 30 Entering the era of New Practice 39 Building the public sector of tomorrow 45 Empowering business through technology 52 Driving digital value for CFOs 55 Advanced analytics in mergers and acquisitions 58 Improving cyber security and compliance with GDPR 59 New technologies make tax transparent and responsible 61 Statement by the Board of Directors 67 and the Executive Board Independent auditor’s report 69 Financial statements 1 October 2017 – 30 September 2018 73 Income statement 74 Balance sheet 74-75 Statement of changes in equity 75 Cash flow statement 75 Notes 77 2


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    Management’s rev�ew 3 KPMG Annual report 2018


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    Company details Board of Directors KPMG P/S Anette Harritz (Chairman) Dampfærgevej 28 Anja Bjørnholt Lüthcke 2100 København Ø David Olafsson Bo Johansen Telephone: +45 70 70 77 60 Danny Golan Website: www.kpmg.dk E-mail: kpmgdanmark@kpmg.com Executive Board CVR no.: 25 57 81 98 Established: 11 December 2013 Thomas Hofman-Bang Financial year: 1 October – 30 September Auditor Redmark Statsautoriseret Revisionspartnerselskab Dirch Passers Allé 76 2000 Frederiksberg Financial highlights 2015 DKK’000 2017/18 2016/17 2015/16 2013/14 9 months Key figures KPMG in Denmark Revenue* 697,144 575,358 491,377 279,056 103,187 Revenue KPMG P/S 507,568 424,003 368,832 205,451 63,200 Profit/loss from financial income -707 993 759 -2,480 -7,912 and expenses Profit for the year 0 0 0 0 0 Total assets 202,208 239,026 257,703 275,567 215,487 Investment in equipment and 5,880 2,052 13,964 15,649 5,070 leasehold improvements Equity 627 560 560 560 500 Cash flow from operating activities 30,706 -12,388 42,677 -21,633 22,291 Cash flow from investing activities -7,353 -3,363 -13,990 -20,996 -13,025 Cash flow from financing activities -25,798 -649 -5,614 19,128 16,649 Total cash flow -2,446 -16,400 23,073 -23,501 25,915 Operating margin 0.1% -0.2% -0.2% 1.2% 12.5% Current ratio 89.3% 92.1% 92.2% 88.6% 94.5% Return on equity 0.0% 0.0% 0.0% 0.0% 0.0% *KPMG P/S and Acor Tax P/S Financial ratios are calculated in accordance with the Danish Society of Financial Analysts' guidelines on the calculation of financial ratios “Recommendations and Ratios ". For terms and definitions, please see the accounting policies. Our results for the financial year reflect our economic condition: our continued strong growth and the decreased need for provision of financial support by KPMG International. We have incurred costs in relation to our organic and continued growth, especially in regard to our hiring processes, attracting new talents and further investing in our tools and structures. These investments ensure the expanding delivery of high-quality services to our clients. This year’s revenue is in line with our goals, and our net result is as expected given the support we receive from KPMG International. 4


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    W�nn�ng w�th extraord�nary people 2018 was a strong year for Our success is points higher than the global norm KPMG in Denmark achieving a driven by our for professional services firms. total revenue growth of 21.2% extraordinary people across Audit, Advisory and Tax. Our successful journey is also We are proud that KPMG – once As the fastest growing reflected in our market activities. again – is the fastest growing professional services firm, we In 2018, KPMG made a significant professional services firm in need extraordinary people. We leap in the annual brand image Denmark among the Big Four have more than 600 passionate analysis from Berlingske Business, based on organic growth. and highly skilled specialists jumping 36 places among the within Audit, Advisory and Tax. strongest brands in Denmark to Overall revenue increased from With an average age of 34, position 56 out of 140 leading DKK 575 million in 2016/17 to most our employees are digital companies. Our talented DKK 697 million in 2017/18. natives, and as a truly international employees are mentioned as a key KPMG experienced growth organisation, our workforce strength among respondents. across all business areas with consists of over 26 nationalities. Audit accounting for 6.2%, From best practice Advisory 28.3% and Tax 25.3%. Our employees are key to our to New Practice We are grateful for being the future success. Each year, we clear choice for our clients and conduct a people survey to A global technology race is taking that our services are so well improve our efforts and make sure place with significant ramifications. received in the marketplace. our employees stay engaged. We The winners in the coming years are therefore pleased to see that are the companies that succeed in 84% are satisfied with the learning embracing a new digital mindset and development we offer. It is and understand the implications an increase from 70% in FY17 of the exponential growth of data ranking KPMG 15 percentage and the proliferation of artificial 5 KPMG Annual report 2018


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    intelligence and automation. implemented advisory services In parallel, we assisted the Companies can no longer rely globally for the Rockwool Group many growth companies across solely on best practice to stay in FY18, empowering customer Denmark, which constitute the ahead and need a fundamentally excellence and digitalising backbone of the Danish economy, different approach. We call it the full agenda of Customer from our offices in Copenhagen, New Practice and provide a Relationship Management. Aarhus, Kolding and Aalborg. We strategic business framework KPMG also helped industry- had a solid mid-market footprint and the implementation of leading hearing aid company and grew our base of national mid- the whole spectrum of AI- Widex design new efficient market clients by approximately based technologies. data management processes 25% over the past year. Our main across its global organisation. focus in the mid-market is on In FY18, we experienced a strong innovative start-up companies, demand for our New Practice Significant wins fast-growing companies and services from a wide range of across Denmark family-owned businesses. clients and industries such as Egmont, Nykredit, TDC as well During FY18, KPMG achieved We are deploying advanced as major international clients significant audit wins. In the large data and analytics tools to within the pharmaceutical, energy clients segment, we won the perform efficient audits and and financial services sectors. audit of Royal Unibrew, LM Wind provide valuable insights to our Power and Total E&P Danmark clients. By using KPMG Clara, We combine our New Practice as well as Dansk Undergrunds our data and analytics tool, our approach with our ability to work Consortium (Danish Underground audit teams are able to analyse efficiently across regions with Consortium). We expect the and apply their judgement to other KPMG member firms. trend to continue in FY19 due entire data populations and For example, we successfully to the EU audit reform, which is sets of transactions instead of delivered, rolled out and starting to gain momentum. only on selected samples. 6


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    This means that we get audit foreseeing further growth due KPMG sponsors and partners evidence, resulting in high-quality to complexity in legislation with a number of festivals audit. Furthermore, we established and continued increase in and foundations aiming at a KPMG Innovation Lab in FY18, cross-border transactions. strengthening the innovation in which we use to inspire, co- Denmark and igniting potential. create and ignite new ideas and Powerful alliances solutions together with our clients. Throughout the year, we KPMG has strong alliances with supported Danish Tech Challenge, Increased regulations Microsoft, Google and Amazon arranged by The Danish for companies Web Services. During FY18, Industry Foundation (Industriens we experienced an increased Fond), Greentech Challenge, a KPMG has several clients demand in helping clients competition for start-ups with within the financial services transform their businesses and environmental ambitions backed sector, including large insurance operating models with secure by the Confederation of Danish companies and Banks such as cloud computing, machine Industries (DI) and TechBBQ, Codan, Trygg-Hansa, If, Skandia, learning, enterprise mobility and Denmark's largest innovation Jyske Bank and Nordea. In FY18, advanced analytics technologies. summit and tech festival, bringing we assisted our clients with over 16,000 tech-interested different challenges such as The cloud is a driving force behind people to Copenhagen in 2018. the implementation of the new technological disruption affecting international financial reporting every organisation and making it Trust and quality in standards IFRS 9 and IFRS critical for businesses to commit times of uncertainty 17, performed financial due themselves to transform and diligences and provided advice remain relevant. As they adapt We have an unwavering on the new regulatory capital to change, our clients adopt the commitment to quality and know requirements, advising on anti- cloud to boost agility, increase that we must uphold the highest money-laundering, and providing speed to market, reduce costs possible standards in order to assistance in connection with and strengthen security. build and maintain public trust. change of core IT systems. Furthermore, we have impactful Our quality strategy begins with Transparent tax alliances with Blue Prism, providing a relentless focus on quality and with technology our clients with a more agile further guides us to continuously virtual workforce through the use improve quality and consistency. Together with our clients, KPMG of robotic process automation Only the best is good enough utilise the best tax technology and Coupa which enhances our – it is our duty to the public to gain significant insights by ability to help clients transform and the capital markets. leveraging tax data analytics. their Procure-to-Pay processes. We have for example developed Responsibility for quality starts tax robots to streamline Igniting growth at the top and means driving and our internal processes. among start-ups reinforcing accountability through the complete chain of command During FY18, we experienced a We recognise the importance in all our teams and service lines strong demand for our outsourcing of fostering ecosystems that so that every action helps us meet and tax consulting services and will bring us tomorrow's great our rigorous quality objectives. secured new major wins as an ideas both for companies and outsourcing partner for several society as a whole. This is why KPMG in Denmark earned trust global tax compliance and we have a strong presence in from our clients and the market, reporting services for Danish- start-up communities among who want to do more business headquartered multinationals. universities and educational with us, our skilled people who facilities offering free counselling want to work for us – and last In addition, tax dispute resolution on how to set up a business but not least – the regulators. is an area for which we are with the potential to prosper. 7 KPMG Annual report 2018


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    The Danish Business Authority Making a difference in Key focus areas are: (Erhvervsstyrelsen) published their our local communities report on quality control inspection — our ability to work at KPMG in 2017 without any At KPMG, both in Denmark seamlessly across our critical comments or improvement and globally, one of our core organisation as One Firm areas for our quality control system. values is to improve our Our Transparency Report which communities, and we are deeply — becoming the market leader will be issued on 30 January 2019 committed to achieving this by in selected market areas discloses more information about making a positive impact in our by working shoulder to our quality control system. communities and the environment shoulder with our clients and through the work we do. compiling the right teams Diversity and inclusion with diverse capabilities is a key priority Since 2002, KPMG has been a signatory to the United Nations — and last but not least, We value diversity and provide Global Compact (UNGC), reaching a revenue of DKK equal opportunities to all genders which means we monitor our 1 billion no later than 2022. regardless of background in impact on and work to create recruitment and promotion positive contributions within During FY19, Thomas Hofman- processes, which is strongly human rights, labour rights, the Bang, who has been our CEO recognised by our employees environment and anti-corruption. since 2014, will step down, and in our annual people survey. we thank him whole-heartedly for In FY18, we focused on his leadership during which he, In FY18, we increased the strengthening our partnership together with the partner group promotions of women by 10%. with Mind Your Own Business, and our extraordinary people, has Overall, 35% of all promotions where KPMG mentors help put KPMG in Denmark back on were women, which reflect teenagers of ethnic minorities the map. His successor, Henrik R. our commitment to provide from exposed areas to build Mulvad, will take over a company equal opportunities in KPMG. their own micro companies. fit for sustainable growth and continue our growth journey. Today, 38% of all our employees We also stepped up our are women, and we are proud to involvement in the KPMG Global Reaching for have supported women in their Security Day, an initiative to reach success in FY19 efforts to attain higher positions out to pupils across the world and and that they represent 40% empower them to navigate online With yet another strong year for on our Board of Directors. in a safer and more informed way. KPMG in Denmark, we take the KPMG firms from 46 countries market's positive response to our Our new Global Inclusion and including Denmark collaborated offerings as an encouragement Diversity Strategy guides us to on bringing Cyber Security to continue our successful path ensure that we put our priorities Awareness Month on the agenda working shoulder to shoulder into practice. Today, our top across the world and increasing with our clients and help them management level consists of eight cyber safety among youth. to successfully transform and people, of whom five are men and take the lead in a digital world. three are women, corresponding Accelerating to a total of 38% women. towards ONE in 22 We expect continued growth in FY19 and are looking forward to We are proud to have a balanced Last year, we launched an developing and implementing gender representation on our Board ambitious strategy called ONE new innovative solutions to meet and in top management. At the in 22. Our continued growth in our clients' key challenges. With same time, we continue to strive FY18 reflects that our strategy dedicated and extraordinary for further advancement across continues to be impactful. people as the backbone of our all management and staff levels. success, we will be reaching for continued success in FY19. 8


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    Pr�nc�pal act�v�t�es and f�nanc�al pos�t�on compliance reviews. Our Transparency Report which Principal activities of the Company will be issued on 30 January, 2019, describes the key elements of our quality control system. We are Our principal activities are the provision of committed to consistently achieving the highest professional services to Danish and foreign standard of quality, ethics and integrity in our day- businesses within the technical expertise areas of to-day activities as a responsibility we bear to our audit and advisory services. We do this across a wide clients, regulators, communities and capital markets. and growing range of services, including the audit of Find the Transparency Report on our website, financial statements, other assurance engagements, www.kpmg.dk. management consulting, risk consulting, deal advisory and tax services. Financial risk Operational risk We are exposed to credit risk though we do not have any material credit risk on individual debtors. The operational risks facing our business include those we have in common with other professional services firms. This is notably a deterioration in Events after the balance sheet market conditions, claims and reputational damage date caused by either an actual or a suspected failure to deliver services of appropriate quality, or by taking No events have occurred after the balance sheet date on inappropriate clients or engagements. We have that could significantly affect the financial statements implemented a system of quality control based for 2017/18. on KPMG International’s Quality Framework, and we regularly conduct enterprise risk assessments where we identify potential risks and their impact on our business. Based on that, we plan remediating actions as well as quality performance and risk 9 KPMG Annual report 2018


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    Increase �n revenue KPMG P/S KPMG ACOR TAX P/S 190 151 123 74 40 63 205 369 424 507 103 279 492 575 697 2014 2015 2016 2017 2018 (9 months) Combined revenue of KPMG P/S and KPMG Acor Tax P/S, DKK million 10 KPMG P/S Annual report 2017 10


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    Our Global network KPMG is a global network of professional services firms providing audit, advisory and tax services. We operate in 154 countries and have 200,000+ people working in member firms around the world. We work closely with a broad range of clients, such as business corporations, governments and public sector agencies and not-for-profit organisations. We support them in mitigating risks and exploiting business opportunities. 200,000+ Global number of employees 29 Combined global revenue USD billion 7.1% Global revenue growth rate 154 Countries in which member firms operate 11 KPMG Annual report 2018


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    About KPMG �n Denmark In Denmark, KPMG is organised in two separate legal entities that provide services through a cross- functional collaboration between KPMG P/S (licence to provide audit and advisory services) and KPMG Acor Tax P/S (licence to provide tax services). 634 Total no. of employees and partners 62% 38% Men Women 697 Combined revenue DKK million 21.2% Local revenue growth rate 224 Total no. of employees and partners onboarded 12


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    Foster�ng a h�gh-perform�ng and �nnovat�ve workplace At KPMG, our focus is at all times to attract, retain The key to our future success and develop employees who will thrive in a high- performing and fast-paced environment. With an During the past years, we have established a solid average age of 34, our employees are digital natives learning and development environment at KPMG and we embrace innovation as part of our DNA. acknowledging that the continuous development We value our employees' opinions and act to foster of our employees is key to our future success. an inclusive and stimulating work environment. Therefore, it is highly appreciated that our employees Our yearly people survey is an important tool to recognise these efforts in FY18. 84% are satisfied measure how we are progressing in relation to our with the learning and development we offer – an key priorities. Therefore, we are pleased to see increase from 70% in FY17, which ranks KPMG that our overall engagement score increased from 15 percentage points higher than the Danish norm 76% to 84% in FY18 – significantly above the global across industries. professional services norm of 76%. This year's people survey also very clearly demonstrated that people are proud to work for KPMG. 90% of respondents answered yes to this 13 KPMG Annual report 2018


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    question, and after nearly five years of hard efforts to re-establish our name and employer brand, we are extremely proud to see our employees express 26 Nationalities such a significant dedication to our firm. The result is 3 percentage points ahead of the Danish norm across industries. 72% also experience support in their efforts to balance work and personal life, which is an increase from 60% last year. Going forward, we aim to improve even further on the work-life balance 41% Increase in graduates by giving our employees a flexible work environment and the tools and structures to support this. Digital front runners in our market At KPMG, we aim to be digital front runners in our market. We have initiated numerous initiatives, 34 Average age among others a Digital Portfolio Team responsible for the KPMG Digital Strategy. We have not yet seen the full potential and result of this. However, we are pleased to see a significant increase in people saying that KPMG has established an innovative 44 Graduates on Future Focus Programme climate where one can challenge the status quo. The increase from 75% to 84% is significantly above the Danish norm across industries of 76%, and a result we expect to increase further at KPMG over the coming years. 11 Audit trainees 14


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    I like that we are challenged to be bold. When working with cutting-edge AI technologies, we are empowered to work autonomously and to find solutions that bring the most value to our clients. Arash Afsarian, Head of NewTech Strategy, Advisory I work with diverse colleagues and help them develop and thrive every day. At KPMG, we are fostering a culture where the individual is valued and respected, and it is great to be a part of that. Jane Nørgaard Jørgensen, HR Business Partner, HR 15 KPMG Annual report 2018


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    I enjoy being part of a professional services firm with a global reach and the possibilities it entails. I get to work with fun and challenging projects and collaborate with teams all around the world! Mikkel Kjærsgaard, Manager, Deal Advisory No two days are the same. KPMG is As auditors at KPMG, we are trusted such a dynamic place to work, which only with a high degree of responsibility, and I confirms my choice of staying here after can be sure that my ideas, concerns and graduating university. suggestions for improvement are always heard. Khawla El Mekkaoui, Assistant, Audit Rie Larsen, Senior Manager, Audit 16


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    Exceptional colleagues than 1,000 applications from graduates applying for can do exceptional things the Future Focus graduate programme. This year, graduates headed to Budapest in Hungary for training We want to create a learning environment where our and networking, while our trainees went to Berlin. exceptional colleagues can do exceptional things. We are actively working on the implementation of Enhancing and building current digital technologies to develop cutting-edge blended leadership abilities learning solutions through the use of artificial intelligence and robotic process automation. The Great leaders move us and inspire us to do our training curriculum for 2018 was expanded with best work. It is therefore important that we have the roll-out of new courses focusing on behavioural authentic and effective leaders that empower and change management, robotics, virtual reality and influence their staff to achieve business and team artificial intelligence. goals. In FY18, we initiated a number of development programmes to enhance and build on current In FY18, we also launched a brand new 2-year leadership abilities. Among those initiatives are a programme designed to develop our business Performance Manager Development programme and administration students to become first-class a Partner Development programme. auditors. Following hot on the heels of this, we welcomed 55 graduates and trainees, receiving more The onboard�ng programme to Berl�n was a fantast�c start to my career at KPMG. It was clear to me that I had just jo�ned an organ�sat�on that �s w�ll�ng to �nvest a lot �n my future w�th them. Patr�ck Adelsparre, Tra�nee, Aud�t 17 KPMG Annual report 2018


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    I am a b�g bel�ever �n educat�on. The Commerc�al Academy at KPMG offers courses that help me develop and grow �n my current role and support my future asp�rat�ons. It sharpens my ab�l�ty to del�ver a great cl�ent exper�ence. Nynne Bates, Manager, Adv�sory 18


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    Mak�ng a d�fference �n our commun�t�es At KPMG, both in Denmark and globally, one of our core values is to improve communities, and we For many of our green start- are deeply committed to making a positive impact in our communities and environment through the ups, KPMG's forward-th�nk�ng work we do. In 2018, KPMG's contribution to our adv�s�ng on account�ng has local communities included more than 600 pro bono hours. KPMG strives to ignite the potential within our proven v�tal for the�r bus�ness clients, but also in our communities, which we do in models and ab�l�ty to grow. numerous ways. Freder�k van Deurs, Helping green start-ups to CEO, Greentech Challenge succeed As a proud sponsor of the Greentech Challenge, Supporting young entrepreneurs KPMG is actively involved by offering pro bono auditing as well as advising on setting up business In 2018, we focused on strengthening our partnership models to sustainable start-ups that will help their with Mind Your Own Business and the KPMG ideas prosper and become financially sustainable as Global Cyber Security Day initiative. The Mind Your well. Own Business Academy supports at-risk teenagers 19 KPMG Annual report 2018


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    from vulnerable areas in building their own micro companies with support from mentors. KPMG In the role as bus�ness helped establish this programme in 2016, and is now the key corporate partner of the third season of the mentors, KPMG employees programme. In FY18, KPMG significantly increased help the boys develop both its contribution to Mind Your Own Business as 18 profess�onally and soc�ally through cooperat�on. We h�ghly KPMG mentors (compared to eight in 2017) are now supporting five micro companies (compared to three in 2017). apprec�ate the authent�c and profess�onal cooperat�on w�th The KPMG mentors are assigned to a specific micro company for a period of eight months and KPMG. help the company grow through mentoring and workshops. This includes a full-day goal-setting Mar�a Kav�ta N�elsen, session for all micro companies hosted by KPMG, CEO, M�nd Your Own Bus�ness as well as subsequent workshops tailored to each micro company. Finally, and most importantly, the programme allows for mentoring on other aspects of life besides those related exclusively to the micro companies. 20


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    Educating a new generation of commitment to the UNGC, and our pledge and internet users actions to each of the 10 principles have strong roots in our global policies and statements. As online privacy is under pressure and ethical limits are being challenged, it is important to inform Reduction in relative CO2 the new generation of internet users, so they can emissions in a period of growth become responsible and reflected online citizens that will influence the internet communities in a positive Globally, KPMG pledged to further reduce net direction. emissions per FTE by 10% against a baseline year of 2016 and aim to purchase 100 percent In 2018, we stepped up our involvement in the KPMG renewable energy for our offices by 2020. Our Global Security Day, an initiative to reach out to pupils commitment to KPMG's global ambition to reduce across the world and empower them to navigate our net greenhouse gas emissions has seen a online in a safer and more informed way. A team of steady reduction in our carbon emissions per FTE in dedicated KPMG employees engaged with students Denmark over the last three years. from grades 5-7 at a number of Danish schools, teaching and debating the threats and risks related to KPMG in Denmark reduced relative carbon emissions online activities and how to mitigate them. (CO2 per FTE) by 7% between 2017 and 2018, to 2,01 tonnes of CO2 per FTE. Compared to the KPMG firms from 46 countries including Denmark baseline year of 2016, we have reduced relative collaborated on bringing Cyber Security Awareness carbon emissions by 11%. Month on the agenda across the world and increasing cyber safety among youth, making a positive The scope covers scope one and scope two difference. emissions from: electricity use from our Copenhagen headquarters, as well as our offices in Aarhus, Aalborg and Kolding, air travel booked for business Although the ch�ldren purposes, and car travel mileage registered. KPMG employs standard energy saving initiatives such as know a lot about the Internet primarily using LED light bulbs that automatically and about the obv�ous turn off after 30 minutes of inactivity. In 2018, a new p�tfalls, they st�ll have a lot and more energy-efficient ventilation system was installed at our headquarters in Copenhagen. to learn. Through KPMG's �nvolvement, we p�cked Reducing the environmental impact of our facilities up a lot of t�ps on how we hopefully �n future can avo�d We collaborate with Meyers corporate catering, a some of the onl�ne r�sks. company that uses 40% organic fresh produce for lunches five days a week. The waste in our offices Lene Andersen, is sorted according to their type, including paper, ink Department Leder, Stenløse Pr�vatskole cartridges and used coffee grounds. Signatory to the United Nations Global Compact Since 2002, KPMG has been a signatory to the United Nations Global Compact (UNGC), and as part of this commitment, KPMG follows and reports on our progress within the 10 principles covering human rights, labour, environment and anti-corruption. KPMG in Denmark follows and complies with the global goals and objectives, as defined by our global 22


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    Honest talks at Folkemødet, the People's Political Festival 2018 Folkemødet, also known as The People's Political Festival, provides a good opportunity once a year to have an honest and direct dialogue with politicians, NGOs, business leaders and Danes in general discussing how we all can make a positive difference in our communities irrespective of background. In FY18, KPMG hosted a well-visited panel debate at Folkemødet focusing on how we can ensure that disruptive technologies like AI can benefit all of us. Our CEO, Thomas Hofman- Bang, took the discussion with Bjarne Corydon, former finance minister and current chief editor at the Danish business media Børsen, together with the CTO of the online supermarket business Nemlig.com Anne-Sofie Nielsen and associate professor Natalie Schlüter, Head of Data science at the IT University of Copenhagen. We are looking forward to returning in 2019. 23 KPMG Annual report 2018


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    Inclus�on and D�vers�ty To work at KPMG is to see the world differently, men and three are women, corresponding to through many different perspectives and with a total of 38% women. We are proud to have a truly collaborative spirit. We empower our balanced gender representation on our Board people to be themselves and respect others – it and in top management. At the same time, is core to our values and what we believe in. Our we continue to strive for further advancement commitment to being inclusive and diverse is a across all management and staff levels. celebration of difference and a moral imperative. Improving gender equality By fostering a welcoming environment for all people, we can leverage our inclusion and Part of our plan to improve gender equality starts diversity to deliver exceptional client services. with our annual graduate and trainee intake. Last We are therefore proud to count more than year, the intake matched our current gender 26 different nationalities working at KPMG in split at KPMG, and we had ambitions to improve Denmark, reflecting a truly international and further in FY18. However, we have not been able diverse workplace. Regardless of nationality, to achieve this goal yet. We onboarded the same sexual orientation, and socio-economic absolute number of women, but the growth background, we provide equal opportunities stems from increased male intake. We are not to both genders in recruitment and promotion satisfied with this development, but are affected processes, which was strongly recognised by our by, among other factors, the gender imbalance at employees in our annual people survey. the STEM educations. Increased promotions of Global inclusion and diversity women framework In FY18, we were delighted to have increased Our new Global Inclusion and Diversity the promotions of women by 10%. Overall, 35% strategic framework focuses on initiatives of all promotions were women, which reflect like inclusive leadership and unconscious bias our commitment to provide equal opportunities training, global networks and building robust in KPMG. Today, 38% of all our employees measurements and metrics. We offer maternity including partners are women, and we are proud and paternity coaching programmes, trainings to have supported women in their efforts to and talent acquisition strategies every year to attain higher positions and that women represent our employees in order to provide meaningful 40% on our Board of Directors. Our Board support to all our staff. consists of five highly skilled partners, of whom two are women, including the Chairman of the As part of our values, we respect the individual Board. and therefore do not tolerate harassment and discrimination. This is clearly reflected in our We strive to continuously improve our actions and communication to our employees. diversity targets in Management and target a gender balance ranging between 40-60% in Our global Code of Conduct sets forth our Management levels below the Board of Directors complete value set, as well as our collective (i.e. Leadership Team and other leaders reporting commitments, including business ethics. It can directly to the CEO). Today, our top management be downloaded online at www.kpmg.com. level consists of eight people, of whom five are 25 KPMG Annual report 2018


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    KPMG Serv�ces �n Denmark Financial statements audit/ reviews Assurance Services Aud�t Special purpose audit/assurance Accounting Services Mergers & Acquisitions Financial Services Global Mobility and People Services International Tax ACOR TAX 27 KPMG Annual report 2018


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    Financial Services CFO Advisory Technology Enablement Deal Advisory IT Advisory Financial Risk Adv�sory Management NewTech Advisory Infrastructure Government and Health CIO Advisory Corporate Tax Shared Services and Outsourcing Advisory (SSOA) and Procurement Transfer Pricing Indirect Taxes Tax Intelligence Solutions 28


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    KPMG as an aud�tor of Un�ty has operated �n a profess�onal, ag�le, accurate and collaborat�ve manner across our European operat�ons, ensur�ng compl�ance and prov�d�ng add�t�onal support and flex�b�l�ty when needed. Th�s approach has been extremely valuable to us and �s key to support�ng the global growth journey that Un�ty Technolog�es �s on. Jon Orpen, F�nance D�rector EMEA, Un�ty Technolog�es 29 KPMG Annual report 2018


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    Us�ng data to secure conf�dence and trust �n a d�g�tal age In today's society, we are all challenged with Expanding our service offerings regulatory complexity, evolving business models, and people's changing needs. But above all, it is the To ensure we meet our clients' expectations for a rapid technological development which is the biggest modern day audit offering, we expanded our service game changer that we all need to address, no matter offerings in FY18 by focusing more on assurance what kind of business we are operating in. of data and information. FY18 was a strong year for our audit business, which grew 6.2% across large Technological solutions based on artificial intelligence clients, mid-market and smaller clients. In the large combining data and analytics from internal and clients segment, we won the audit of Royal Unibrew, external sources are very powerful tools for any LM Wind Power and Total E&P Danmark as well as modern organisation and naturally form the basis for Dansk Undergrund Consortium (Danish Underground more and more decisions. However, one of the key Consortium). challenges when using such technologies is the data they rely on, as unreliable data may drive businesses Since the regulatory environment is constantly to make incorrect decisions. changing, we are also deeply engaged in helping clients with the challenges occurring from these We recognise that in the near future, we as auditors changes. We continued to build on our growth will not only focus on auditing financial statements from previous years by hiring more people and but on providing assurance on data and information servicing more and more businesses often in close on a continuous basis, which can be used for collaboration with colleagues from other business more effective and accurate decision-making by areas to provide the most value. We serve a wide stakeholders. Our purpose is therefore to provide range of businesses ranging from start-ups to large confidence and trust in information and data used by listed companies, and we are ready to bring value to businesses, shareholders and other stakeholders and more companies that will be subject to audit rotation by this empowering change that will benefit society in the coming years. as a whole. 30


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    Beyond traditional accounting in the mid-market segment Through a number of exciting wins in FY18, we have increased our value proposition to the mid-market segments, resulting in a solid mid-market presence. We grew our base of national mid-market clients by approximately 25% over the last year. We use KPMG for h�gh qual�ty aud�t�ng and strateg�c sparr�ng. KPMG br�ngs valuable �ns�ghts on many aspects of our bus�ness. M�chael Søgaard Rasmussen, CEO, Spangenberg & Madsen Our main focus is on innovative start-up companies, fast-growing companies and family-owned businesses. For example, we audited the innovative growth company Unity Technologies across its European operations. Unity is the creator of the world’s most widely used real-time 3D development platform, giving developers around the world the tools to create rich, interactive 2D, 3D, VR and AR experiences. As a result, we expanded our business relations with a number of fast-growing companies during the year and proved our relevance within this segment. Embracing the entrepreneurial culture We embrace the entrepreneurial culture and mindset in KPMG, and it is therefore a natural step for us to be actively involved in the start-up environment and go beyond traditional accounting to help our clients. During the year, we supported Danish Tech Challenge arranged by The Danish Industry Foundation (Industriens Fond), Greentech Challenge, a competition for start-ups with environmental ambitions backed by the Confederation of Danish Industries (DI), and TechBBQ, Denmark's largest tech and innovation summit bringing over 16,000 tech- interested people to Copenhagen in 2018. 31 KPMG Annual report 2018


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    KPMG has made a seamless trans�t�on �nto the role as new aud�tor for Royal Un�brew and demonstrated strong and exper�enced team capab�l�t�es. Lars Jensen, CFO, Royal Un�brew 32


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    Continuing transformation through a growing suite of advanced capabilities. KPMG Clara Unlock the power of 33 innovation KPMG Annual report 2018


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    Share powerful Driving quality through insights and audit innovation – KPMG Clara updates with your Audit quality is KPMG's number one priority; it clients in real time. is at the heart of everything we do, and we are compelled to constantly enhance the quality and relevance of audit. This is why we use artificial intelligence and other disruptive data and analytics tools to drive innovation at every level in KPMG. KPMG Clara leverages the data we already examine as part of the audit and turns it into insights for the benefit of businesses and key stakeholders. The insights we provide through KPMG Clara give organisations a different perspective — whether through benchmarking KPMG Clara and peer comparison, use of external and unstructured data or insights from KPMG's recognised industry expertise. Focus on data KPMG Clara helps businesses take stock of their KPMG Clara puts Data & Analytics at financial position, learn about their performance, the heart of the audit approach. understand where they could be doing better, and prepare for what the future may bring. Extensive evidence Consequently, our clients will receive greater and more actionable insights from our audits. KPMG Clara enables us to analyse KPMG Clara is the beginning of a new era for 100% of a data population, providing audit — a gateway into the digital future. more extensive audit evidence. Advanced insights KPMG Clara gives enhanced business insights enabling teams to pose Increase more meaningful questions to our customers. focus Focus on the risk areas KPMG Clara makes use of intelligent automation and non-biased algorithms that let our people focus on the higher risk areas of the audit. on higher risk 34


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    Assurance instills confidence Acceleration in the adoption of sustainability When organisations think about audit and assurance, they often exclusively focus on assurance of the Throughout 2018, we saw an acceleration in the financial statements. However, assurance can adoption of sustainability as a business priority across be applied to all of the information that is used to industry sectors. While this is partly due to sharpened manage, govern, transact with and invest in an compliance regulations, this shift is increasingly organisation as well as managing risks in disputes motivated by an understanding that sustainability and and assessing contract compliance, etc. social responsibility issues not only affect reputation, but also the financial bottom line. These factors So when the market demands more accountability are further influenced by an increased focus on and transparency from companies in all aspects Environmental, Social and Governance (ESG) by the of their business, assurance instills confidence in financial sector and the UN Sustainable Development the important decisions that management makes Goals (SDGs). on behalf of an organisation and its advisors. The discipline covers everything from non-financial In today's rapidly changing world, it is essential information such as CSR and sustainability reporting to build long-term value. We see a need for as well as other financial information such as special guidance across industry sectors through not only purpose financial reporting prepared to support compliance, but also strategic sustainability advisory claims and disputes and investigations. and assurance services. To date, we have worked with companies in industries ranging from asset In 2018, KPMG provided valuable inputs to management to industrial manufacturing to explore disputes and legal cases supporting clients, opportunities and solve complex sustainability lawyers and courts to make creditable and assured challenges. These services come out of our growing information available for decision-making. In CSR & Sustainability Services team, and include addition, we facilitated independent investigations sustainability strategy development, materiality, and assessments for private companies, public sustainable supply chain, ESG risk and due diligence, authorities, and agencies. We performed internal Task Force on Climate-related Financial Disclosures audits as well as provided assurance over compliance (TCFD) recommendations, impact assessments with regulations, including the GDPR regulation using KPMG's True Value methodology, reporting and which came into effect in May 2018. KPMG also assurance. supports internal audits and acts as an Independent Accounting Expert in restructuring processes and providing assistance for bankruptcy estates. KPMG has gone beyond trad�t�onal account�ng and adm�n�strat�ve serv�ces. Th�s has made �t eas�er for us to th�nk strateg�cally about our f�nanc�al plann�ng and growth strategy. A partner l�ke th�s enables small compan�es l�ke us who are nav�gat�ng a growth path to handle our f�nanc�al management much better. V�nay Venkatraman, CEO, Leapcraft ApS 35 KPMG Annual report 2018


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    Building a future-fit business headwinds. In short, at KPMG we help our clients in the sector to navigate these changing environments KPMG has in-depth industry knowledge across a and transform challenges into business opportunities. wide range of sectors and the financial services industry is a major priority. Business is no longer KPMG has several large insurance companies and business as usual for the finance services industry, banks as clients in both Denmark and the Nordic and there is no escaping the fact that the industry will region such as Codan, Trygg-Hansa, If, Skandia, change significantly in the coming years. Regulations Jyske Bank and Nordea. In FY18, we assisted are tightening and there are volatile macroeconomic some of these and other clients with different conditions at play. Advancement in new technologies challenges such as implementing the new accounting like robotics, machine learning, artificial intelligence standards IFRS 9 and IFRS 17, performed financial and advanced analytics among others, will due diligences and advised on regulation on capital dramatically impact the finance sector. In addition, requirements for banks and insurance companies. the sector is facing changing demographics with new In addition, advising on anti-money-laundering and preferences and consumer patterns as well as new sanctions, providing assistance in connection with entrants from other industries and Fintechs. the change of core IT systems and preparing for Brexit was also part of our portfolio with customers in In these conditions, our clients are under relentless the financial sector this year. pressure to manage compliance and costs. On top of that, players in the market need to know how These projects provide great examples of how we to innovate at scale to provide the best service to work closely with our clients and utilise our skilled their customers and to build efficient and future-fit workforce of people both locally and globally who businesses in compliance with regulation in order to have extensive knowledge of the industry and its be trusted by customers and society. Their ultimate transformation drivers. question is how to grow profitability amidst all these Aud�t qual�ty and bu�ld�ng trust are at the core of our foundat�on at KPMG. Our comm�tment to qual�ty and trust �s reflected through our people and processes, wh�le ut�l�s�ng �nnovat�ve technolog�es to del�ver h�gh-qual�ty aud�ts and �ns�ghts. Lau Bent Baun, Head of Aud�t 38


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    Enter�ng the era of New Pract�ce 39 KPMG Annual report 2018


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    Transformation is critical In order to stay ahead in the global technology race, leaders need to prepare their organisations for an era with radical digital transformations. As organisations start scaling their use of new technologies, the obvious use cases and best practices eventually run out. Outside the realm of the obvious, use cases are the high-value cases which innovate business models and generate better experiences for both businesses and its customers. To identify these and to design the solutions which can realise these benefits, KPMG has introduced the New Practice framework. Work�ng w�th cl�ents on the�r d�g�tal transformat�on journey goes beyond technology and �mplementat�on; �t �s equally �mportant to bu�ld a d�g�tal culture to dr�ve change that del�vers true value. Morten Mønster, Head of Adv�sory The New Practice framework discards the notion that automation technologies are made solely to automate human work. Instead we focus on how to empower people to deliver more value-creating work, whilst re-engineering processes to boost artificial intelligence capabilities across the entire organisation. We hereby challenge and enable organisations to make business leaps instead of using disruptive technologies to drive incremental change. 40


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    Implementing advanced our collaboration with TDC, where we helped them automation technologies upskill their local RPA team, implement a scalable robotic process automation operating model and Simple automation is being commoditised and automated several processes. TDC has since then becoming available to more types of organisations. subscribed to our automation as a service offering We see that this has enabled larger organisations to boost the development capacity to meet their to become more advanced in the solutions they ambition, leveraging our near-shore team to provide create. More advanced automation technologies quick results. such as conversational artificial intelligence and customised machine learning algorithms are Raising the bar being developed to help solve highly complex with new technology problems. This also means that more automation technologies are being combined to automate KPMG is focused on constantly pushing the complex end-to-end processes which include both boundaries of what is possible with new transactional steps, conversations and intelligent technologies. But more importantly, as the rapid pace decision-making. More and more companies are of technology gives rise to distrust of science and looking to build an artificial intelligence strategy technology, we strive to ensure that technologies are and a roadmap detailing how to deploy artificial used for the good. This not only means that we want intelligence. to prioritise the use of technologies to solve problems in our society, but also that we want to create the frameworks so that all technologies that are being developed inside and outside of our organisation are KPMG helped us of the right quality and made with the right intentions. accelerate our d�g�tal efforts KPMG expects to enter into new advisory and throughout the bus�ness technology delivery areas which are currently not and they are our preferred being offered by any other of the Big Four companies automat�on partner. Each globally today. t�me they have del�vered sol�d collaborat�on and results. Jens L��sborg, Department D�rector, Bus�ness Opt�m�zat�on, Nykred�t In many of our engagements, we drive business value and profit both through improving revenues as well as reducing costs, showcasing the value that artificial intelligence may have for our clients. We also help our clients to automate many of their time-consuming and repetitive tasks, which frees up time for their employees to focus on more value-generating activities. An example is 41 KPMG Annual report 2018


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    KPMG has establ�shed a near-shore setup of robobu�lders for TDC Bus�ness del�ver�ng compet�t�ve and qual�f�ed automat�on-development based on our needs. The setup �s governed by KPMG's h�ghly sk�lled automat�on arch�tects br�dg�ng our �n-house consultants w�th near-shore developers. Comb�ned w�th excellent project management, KPMG has overall del�vered w�th h�gh qual�ty on a very complex solut�on des�gned by us. Peter Marcker, Head of Automat�on, TDC Bus�ness 43 KPMG Annual report 2018


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    KPMG has played a key part �n accelerat�ng our journey towards becom�ng more data-dr�ven. In Egmont, be�ng data-dr�ven �s �ntegral to our strategy of grow�ng w�th the modern consumer across our med�a bus�nesses that �nclude lead�ng pos�t�ons w�th�n telev�s�on, e-commerce, c�nemas and games. To be data-dr�ven �s about us�ng data to connect w�th the �nd�v�dual consumer to offer better customer exper�ences through engag�ng products. KPMG has del�vered on the�r second-to-none offer�ngs w�th�n mach�ne learn�ng and stat�st�cs excellence �n measur�ng market feedback, wh�ch forms a sound bas�s for dr�v�ng change �n our organ�sat�ons. Thanks to the�r pragmat�c results-dr�ven approach, KPMG has del�vered, wh�ch made them the clear cho�ce for us. Freder�k Fabr�t�us, Head of Advanced Analyt�cs, Egmont 44


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    Bu�ld�ng the publ�c sector of tomorrow The public sector is already facing disruption and will data-driven decision-making tool, which increases undergo immense transformations in the coming transparency and reduces capital reinvestments and years. Our multi-disciplinary teams in KPMG assist operational costs in the entire value chain. In addition, clients on this journey, taking their starting point we supported the organisation in structuring their in strong sector expertise coupled with in-depth vast amount of asset data more efficiently, generating knowledge of technology, operational efficiency, more value for fewer resources. We experience a transformation and management. strong demand among organisations wanting to become more data-driven. During the past year, we have worked for a large number of different clients at central, regional and local government level. Our clients include Danmarks Nationalbank, Finansministeriet, Sundhedsministeriet, Forsvaret, Banedanmark, Vejdirektoratet, KPMG has proven to be Ankestyrelsen, Region Hovedstaden and Københavns a h�gh-perform�ng and very Kommune. ded�cated partner br�ng�ng To us, working with the public sector means working valuable technology �ns�ghts and with a clear purpose and a strong commitment. Our clients are each in their own way making a positive a ded�cated team. difference in society, ranging from the area of energy, transport, infrastructure and healthcare, to central M�kkel Hemm�ngsen, and local government. We recognise our societal CEO, Sund & Bælt Hold�ng AS responsibility in helping our clients implement transformational strategies efficiently and effectively Seizing the potentials of and with high quality for the benefit of our clients and digitalisation ultimately the Danish citizens. The Danish Business Authority (Erhvervsstyrelsen) Transforming infrastructure is currently working on an initiative under the services with data-driven "Digital Strategy 2016-2020" to enable automated solutions business reporting of financial data. The objective of the initiative is to reduce the administrative In 2018, KPMG supported Sund & Bælt Holding burden for businesses and create better and more A/S, one of the biggest infrastructure players in timely financial data for public authorities and other Denmark, on their journey to becoming a digital stakeholders. KPMG collaborated with and supported front runner. Sund & Bælt is currently undergoing a the Danish Business Authority by conducting a strategic transformation towards becoming a data- number of analyses using our deep sector expertise driven organisation by taking advantage of digital combined with strong analytical capabilities and an opportunities such as drones, 3D visualisation and in-depth digital know-how. artificial intelligence technologies to strengthen their growth and productivity. As a strategic partner, IGH helped Sund & Bælt develop a cutting-edge 45 KPMG Annual report 2018


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    © Per Morten Abrahamsen (Sund & Bælt) 46


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    47 KPMG Annual report 2018


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    In Erhvervsstyrelsen, we str�ve to make �t easy and attract�ve to run a bus�ness �n Denmark. Our efforts to enable automated bus�ness report�ng for bus�nesses �s an �ntegral part of these endeavours. KPMG has been a valued partner on th�s project, accompany�ng us �n our journey towards se�z�ng the potent�als of d�g�tal�sat�on and creat�ng the best poss�ble framework for bus�nesses across the country. Carsten Ingerslev, Head of Department, Erhvervsstyrelsen (The Dan�sh Bus�ness Author�ty) 48


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    Shap�ng the future of customer exper�ence Customer experience is crucial and its importance is even stronger in a digital world. Nearly a decade of research and more than 2 million individual consumer evaluations have demonstrated that every outstanding customer relationship has a universal set of qualities – what we call The Six Pillars of Customer Experience Excellence. Each year, we release the report "Customer Experience Excellence" highlighting the brands and sectors with performing best on customer experience. The brands that understand and deliver against The Six Pillars have proven to deliver enhanced outcomes, achieve faster growth and create greater shareholder value. The Six Pillars of Customer Experience Excellence: Personalisation 1 Using individualised attention to drive an emotional connection. Integrity 2 Being trustworthy and engendering trust. 49 KPMG Annual report 2018

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