The 40 companies in the first German stock exchange league are defying inflation, rising costs and political uncertainties. “Anyone who had expected a slump in business is wrong,” says the consulting firm EY. But this development is probably finite.
The DAX corporations took in and earned significantly more in the summer of an analysis – and this despite considerable economic and political uncertainties, record high inflation and rising energy and material costs. “At first glance, many DAX companies are currently developing extremely well,” says Henrik Ahlers, CEO at EY. “Anyone who expected business to slump is wrong: the majority of DAX companies are increasing their sales and profits, and business is booming.”
According to EY, the 40 DAX companies closed the third quarter again at a record level with sales growth totaling 23 percent – and also recorded the strongest sales growth for at least ten years. Compared to the spring with a 14 percent increase in revenue compared to the previous year, the development has accelerated again.
A new record was also reached in terms of operating profit: Operating profit climbed by 28 percent to 44.7 billion euros and was thus higher than ever before in a third quarter. In the second quarter, the bottom line was that profits fell by 19 percent. Except for one company – Qiagen – all DAX companies have increased their sales. The development of profits, however, was less uniform: 13 of the 40 DAX companies saw profits decline over the year.
“So far, most DAX companies have been able to pass on the rising costs of personnel, procurement, logistics and energy to their customers. And the feared slump in demand has not happened so far – the high order backlog also offers a comfortable buffer against falling demand.” , says Mathieu Meyer, Partner at EY. However, a recession is looming – “and sooner or later we will see that in the balance sheets of the DAX companies”.
Broken down by region, German companies are achieving disproportionately high growth rates, especially in the USA, leaving Asia and Europe behind. Positive currency effects due to the depreciation of the euro against other currencies mean that income generated abroad increases when converted into euros.
In terms of sectors, the car companies once again topped the profit league. They were able to increase their earnings by 58 percent to a good 13 billion euros compared to the previous year. Mercedes-Benz (5.2 billion euros) as the strongest DAX company pushed ahead of Volkswagen (4.3 billion euros) and Siemens (3.9 billion euros).
