We are

2016 Annual Review

www.pwc.lu/annual-review

International

Purpose-led

People-focused

Luxembourg

Value-driven

people-focused

InternationalPurpose led

technology-enabledTechnology-enabled

ResponsibleResponsible

Value-driven

“Luxembourg”

nationalities

47% 53%

24% of partners

925

207 experienced People

437 graduates

237 trainees

44 students

new recruits57

2,700

People

Future of Tax

Commuting@PwC

Flexi CarBike

M-PassJobKaart

Company CarCarsharing

Carpooling

Flexibility@work

iFlexFlexitime

Empoweringour People

accelerandoa s s o c i a t e s

Digital Services

Strategy People &

change

Cyber Security

Analytics Technology

Experience

Experience Center

374

+11%

m euros70.3 m euros

Public contributions

Growing responsibly

Digitising our services

nationalities

47% 53%

24% of partners

925

207 experienced People

437 graduates

237 trainees

44 students

new recruits57

2,700

People

Future of Tax

Commuting@PwC

Flexi CarBike

M-PassJobKaart

Company CarCarsharing

Carpooling

Flexibility@work

iFlexFlexitime

Empoweringour People

accelerandoa s s o c i a t e s

Digital Services

Strategy People &

change

Cyber Security

Analytics Technology

Experience

Experience Center

374

+11%

m euros70.3 m euros

Public contributions

Growing responsibly

Digitising our services

Contents

In conversation with

John Parkhouse ................................. 4

Who we are ................................................. 6

What we do ................................................ 9

How we’re doing it .................. 12

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers, Société coopérative, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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In conversation with John Parkhouse, our CEO

Welcome to our 2016 Annual Review dedicated to who we are, what we do and how we make it happen.

In conversation with John Parkhouse, our CEO

We are people-focused

As the 6th largest business in Luxembourg by people, PwC has an opportunity and a responsibility to make a real difference to our clients, to our people and to the community at large. By working together with integrity we can start to reimagine the possible and to help shape the future. Our 2,700 People are our strongest asset bringing unique diversity and global acumen to solve the important problems of our clients. Today, we employ people with a vast array of backgrounds and experiences from 57 different countries representing a balanced gender diversity and a fantastic mix of different mindsets and approaches to reach the best possible solutions for our clients. Just in the past 12 months, we recruited 925 people from different horizons to enhance our impact.

We are responsible

Since coming on board as CEO, my mantra has been for responsible growth. I’m proud to be the CEO of PwC in Luxembourg and to see what we contribute every day to society, to our clients and to our people.We’re a firm driven to do the right thing; to be a catalyst for change. A firm led by a purpose to build trust and solve problems and - whilst the moral compass of society has changed direction – our commitment to bringing value, responsibly, to our stakeholders has remained steadfast.

The only thing to change is how we execute on that and maybe our increased desire to communicate more fully in this area. We work closely with our clients to provide solutions to their assurance, tax or advisory needs. In this regard, our revenues grew to 374 million euros, up over 11% showing both the continued success of our people and our solutions in the market today, but also the ongoing robustness of Luxembourg’s business environment.

We are technology-enabled

In today’s world, we need to incorporate the latest technology and – importantly – mindset to adapt and build the solutions of tomorrow.We have initiated many tech-based offerings to our clients, but this is best captured in the launch of our Experience Center in August – being the start of a process to concentrate our development and co-creation facilities for the benefit of our clients and our people. I look forward to sharing more on this with you in the coming months.

We are purpose-led

Purpose defines who we are and why we exist. To PwC, it’s a signpost to the decisions we make – a lens through which we assess everything. Now more than ever, society needs business, communities and government to work together to reconcile views and to solve the challenges we all

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5Annual Review

face. An important step for us – and one of which I’m particularly proud – is our organisation of the Future of Tax initiative together with TNS-ILRES. This is the first time ever in Luxembourg, a firm like ours has sought to debate what we do with the man in the street. We took a panel of citizens and debated on a set of principles for what the corporate tax system of the future should look like. The aim was to capture views on the purpose of corporate tax in the light of the tax reform and to help balance views and indeed served to change our position. I like to think that this is a first step where PwC can play a role – albeit modest – in building a broader constructive dialogue around the issues of today for the world of tomorrow.

We are Luxembourgers. We are international. We are citizens of the world.

Luxembourg has always offered a business-friendly environment. The collegial nature of the industry and the willingness of the industry, the government and the regulators to work together to get to the right answer are key components to continue this success story. The nation branding efforts made by the Government are important, not only in terms of attracting business but also to appeal to the people we’re going to need here. People are a key feature in our ability to continue to succeed. As for Brexit, Luxembourg and the UK

have a long history of working together to mutual benefit – that is going to continue. Solutions that work will need to include this – this is not about taking business from the UK, but about building a new way of working together.

Finally, I want to take this opportunity to thank our clients for their trust and our People for making everything possible.I look forward to a great 2017.

John Parkhouse

“The market in Luxembourg is

export-focused. Pretty much

everything we do is designed

to go across the border. That fixes our mindset and makes sure that

we look at things globally.”

Who we are

Building a great place to work

No two career paths are alike and we provide the training, coaching and client experiences that help our People build relationships and shape their career their own way.

For a multi-generational workforce like ours, flexibility is vital. We understand that everyone has a life outside work, and that people’s aspirations and expectations are changing over time. That’s why we further run our working time management programmes. These include Flexi-time, career-break, part-time, etc.

We continue to look into new ways to be as flexible as possible. We dramatically changed the way we work, giving our People the means to be even more collaborative. Crystal Park and the Experience Center nurture collaboration and co-creation. Case in point: we developed apps to allow our People to interact on the go (managing their time and absence or their business trip).

Finally, we believe that work and fun can go hand in hand. We launched the “10 small things” programme over the year to give a bit of excitement. Examples of this initiative include Friday jeans, video games in coffee corners, beauty salon, Monday at Mudam, etc.

We’re a people business, so it’s all about how we enable our People to be at their best. In 2016, we intensified our efforts, further developing an inclusive culture for both women and men to achieve their full potential.

Developing our People

200 People were promoted within our management*.

10 days on training

On average, our people spent

Our international mobility programme allows us to pull together diverse, cross-border teams to meet client needs and develop our People.

122 117PwC Luxembourg

people abroadPeople from other offices hosted in

Luxembourg

* managers, senior managers, directors and partners

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Taking pride in diversity

The essence of diversity is that everyone has their own qualities. We strive for an inclusive culture that is fair, open and safe for all. For us, diversity means valuing differences and pushing for even more inclusiveness, particularly as we think about current challenges from a societal perspective.

Making difference our forceWe’re convinced that we need diverse talent to solve important problems. That’s why we employ people with a vast array of backgrounds and experiences. We try to team up different mindsets and approaches to reach the best possible solutions.

Cultural diversity

57nationalities

Promoting gender parityAbout 40% of today’s global workforce are women, yet just 5% of global CEO positions are held by women. Is it any wonder then that there’s a growing sense of frustration around achieving greater gender parity throughout business? The need to address the gender imbalance has become a priority for us. We’re confident we’ll reach the 50:50 gender balance over the coming years. Progress doesn’t happen overnight – but we’re starting to see the fruits of our labour. This year 47% of our People are women.

Gender diversity

47%53%

Through our Women&Men@PwC committee, we supported our ongoing commitment to gender diversity through our firm-wide engagement in the UN Women’s HeforShe Campaign asking our People to make a pledge for diversity.

At the same time, as part of our ongoing efforts to empower women in the workforce and provoke thoughtful dialogue around important diversity issues, we organised various public events dedicated to businesswomen like Connected Women or Women in Private Equity.

23 May 2016

for our People

We embrace health through every aspect of our business.

Mind Your Self is a programme that promotes physical and mental health, based on four pillars: Mind, Emotions, Body and Relations. We bring in external specialists and trainers to enhance our People wellbeing.

Sport @ PwC is an inhouse infrastructure featuring ten group sessions of step, yoga, cross-training, tae-bo and many more activities every week. Our People have access to the gym, lockers and showers available in our facilities.

What we do

We offer our clients an integrated approach to our services. Our core service lines – Audit & Assurance, Advisory and Tax have all seen an acceleration in revenue growth over the past year. This was driven by increased investment in our People and infrastructure, significant client wins and new offerings.

Service line mix

23%

31.2%

39.6%

6.2%

Statutory auditAdvisory

TaxOther assurance services

“Our Assurance services continued to grow strongly,

increasing by 11% compared to the

previous year. Demand for our core audit and assurance services remained high despite fierce competition and the impact of mandatory audit firm rotation following the audit reform.”

Christophe PittieAssurance Leader

“In the tax space, we grew by nearly 17% in 2016. We saw increasing demand for tax compliance and tax

consulting from companies of all sizes particularly from the Asset & Wealth

Management and Alternative segments. The growth was also driven by VAT and personal tax.”

Wim PiotTax Leader

“Our Advisory services continued to deliver steady growth,

increasing by 5% compared to the previous

year. The growth was driven by an intensified demand from clients from Banking and Insurance, as well as the Public Sector.”

Jean-François KroonenAdvisory Leader

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Digitising our services

Digital disruption is affecting all industries at a faster pace than ever. Migrating to a digital set is both a leeway to succeed in an ever-changing landscape and a challenge for any organisation. At PwC, we are developing digital services for our clients and an ecosystem which enables us to create solutions together.

Teaming up with other companies

Creating our own Experience Center

Launching Digital services

Our Experience Center accelerates how we provide digital-centric services to our clients. It’s an ecosystem of talent, environment and solutions, combining the best of technology and advisory. The Experience Center is innovation with a sense of purpose and speed that can be elusive for many organisations. We’re pioneering a new model to help our clients build and deliver experiences, products and services to market faster than they otherwise could.

Business leaders we talk to are often unclear about how digital affects their business, as well as the challenges and opportunities it brings. That’s why we’ve assembled a digital offering that goes from strategy, through execution, to implementation.

Strategy People & change Experience Analytics TechnologyCyber Security

** Sub-contractor

What we do

Building trust in the market

Helping millenials gain investing confidence

European citizens are required, more than ever, to invest their savings in capital markets to save for their future pension, while contributing to the financing of the European economy. At the same time, financial products and financial regulation are increasingly complex, while investor education remains a challenge. In this context, we launched Buzz4Funds, an education platform dedicated to raising public understanding of financial investing. The primary goal for this programme is to arm millennial investors with the unbiased information they need to make investing decisions.

The largest audit market share in the fund industry

With an audit market share of half of the Luxembourg fund industry, we value the trust placed in our team and the importance of making the most of our leading position in asset management, to build confidence in the industry and to help solve asset managers’ challenges.

Your financial story starts now.

Supported by:

Learn more atBuzz4Funds.com

5,706sub-funds*

We audit

* Monterey Insight

11Annual Review

Believing in Europe

In this period of uncertainty, every business needs to consider what Brexit could mean. Scenario planning, taking the latest developments into account, will be vital as the landscape continues to evolve across the whole spectrum of concerns for business – from people policy to passporting of goods and services, to name but two.

We’ve been actively supporting our clients with their readiness plans as they start to digest what Brexit could mean. The impacts will vary enormously and we advise organisations in any event to continue to focus on their growth strategies while developing options to manage the challenges and opportunities ahead. The interplay between business and politics -commercial activity and the regulatory framework around it- will inevitably be made more complex by these events. Such periods of change bring opportunities as well as challenges. Careful and well informed revisions in companies’ strategy might be necessary.

At PwC Luxembourg, we have a dedicated Brexit team, plugged into our global network, with the latest strategic, operational and technical insights together with expert opinion on likely trajectories, political, legal and financial issues. Over the coming months and years, what our clients need is stability - an environment they can rely on to grow their business.

in our business

Future of Tax: In collaboration with TNS ILRES, we’ve questioned a representative panel of 60 Luxembourg residents to have their opinions on the corporate taxation reform started by the Government.

By organising training sessions and group discussions, we’ve been able to better understand their points of view and ideas. We then put together a technical comment on this topic and published the results of the survey on our website

How we’re doing it

We’ve concentrated our efforts this year to understand what sustainability means and the challenges we should prioritise and integrate in our firm’s strategy. And since sustainability can mean so many different things, it was vital for us to concentrate on our core business in tax, audit and advisory.

Our biggest achievement this year has been to perform a materiality study to identify our sustainability priorities through a comprehensive stakeholder engagement. We’re persuaded that this initial analysis, together with a continued commitment to fulfil our vision, will empower us to achieve greater responsible, profitable growth.

We started the year with the vision to embed sustainability into the core of who we are and everything we do. We’re convinced that we all have an important role to play in the sustainability agenda and we thought it was about time we properly understood ours.

Materiality analysis: how we understand our role in the sustainability agenda

What we did

How we did it

Determine potentially material sustainability challenges that surround our business.

We brought together our 130 partners and asked them to think about the added value of their activities to society at large; the challenges and societal issues that surround our services; and the expectations of society towards our business. From this, we identified 15 sustainability challenges.

Identify our stakeholders

We performed a stakeholder engagement exercise through a series of workshops bringing together different individuals within the stakeholder groups. Our stakeholders performed the same ranking exercise of the 15 sustainability challenges.

Understand the sustainability priority areas for our stakeholder.

Understand the sustainability priority challenges for our management.

We sat down with the management teams of our core services (tax, audit and advisory) as well as the Country Leadership Team, and asked them to prioritize, through a ranking exercise, the 15 sustainability challenges identified.

Through a series of workshops with some of our partners, we identified four groups of stakeholders: employees (including alumni and trainees), clients, suppliers, and a group of strategic stakeholders which included the media, regulators, NGOs, academics and politicians.

13Annual Review

for the environment

Commuting @ PwC – more mobility with less emissions!Bicycle parking: We’ve put in place 28 parking spots for bicycles and our People have showers, lockers and changing rooms at their disposal.

Car-sharing: We’ve renewed our fleet, which now features 15 electric and diesel cars, easy to book and activate through SwopCar, a mobile application. Our services had 4,000 usages during the last year.

Jobkaart: We cover 100% of our People public transport costs within Luxembourg City.

M-Pass: We cover 50% of our People public transport costs within the Grand Duchy of Luxembourg.

Our materiality matrix

Our stakeholder engagement enabled us to determine 15 topics we need to focus on as we move further in our sustainability journey.

0,00,0

1,0

1,0 2,0 3,0 4,0 5,0 6,0 7,0Importance for PwC

Transparency

Affordability

Responsible procurement

Accessibility

Community engagement

Continuous learningHealth

Adaptability

DiversityAttractiveness

Client satisfaction

Conflict of interest & independenceSocietal impact

Legitimacy & ethics

Greenhouse gas emissions

8,0 9,0 10,0 11,0 12,0 13,0 14,0 15,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

11,0

12,0

13,0

14,0

15,0

Six absolute priorities!

Our next steps will be to move to actions and embed our Corporate responsibility lens into our business operating model. This role has been allocated to each of our leaders, who are now designing a tangible action plan.

Our Management Team

Steven LibbyChief Transformation Officer

Jean-François KroonenAdvisory

Rima AdasManaging Partner, Network Business Development

Wim PiotManaging Partner, Tax

José-Benjamin LongréeClients and Markets

Anne-Sophie Preud’hommeCompliance & Risk

Catherine RückelStrategy

Christophe PittieAudit & Assurance

Marc SchernbergPeople

Patrice WaltzingFinance and Operations

John ParkhouseCEO

PwC Luxembourg (www.pwc.lu) is the largest professional services firm in Luxembourg with 2,600 people employed from 58 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.

The PwC global network is the largest provider of professional services in the audit, tax and management consultancy sectors. We’re a network of independent firms based in 157 countries and employing over 223,000 people. Talk to us about your concerns and find out more by visiting us at www.pwc.com and www.pwc.lu.

© 2016 PricewaterhouseCoopers, Société coopérative. All rights reserved. In this document, “PwC” or “PwC Luxembourg” refers to PricewaterhouseCoopers, Société coopérative which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. PwC IL cannot be held liable in any way for the acts or omissions of its member firms.

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