Top German companies wary of economic headwinds ahead

FRANKFURT, Dec 26: Germany’s top 100 listed companies have felt the effects of the difficult business environment this year, according to a new study, reported dpa news. 

According to data from auditing firm EY, 66 of the 100 companies with the highest turnover recorded an increase in revenue in the first nine months, while 34 recorded a decline compared to the same period last year. 

In the previous year, almost all companies (93 per cent) had increased their turnover. EY does not expect any major leaps in growth in the coming year.

“The headwind is increasing,” said Henrik Ahlers, CEO of EY Germany. “Many companies have only grown slightly recently – if at all – often with growth rates below the rate of inflation.” 

The global political uncertainties and wars have led to considerable uncertainty among both companies and the population.

According to the data, the automotive industry was still the growth driver of the Top 100 this year, with turnover increasing by 11 per cent in the first nine months. However, the air is getting thinner and thinner for the industry given sluggish global new car sales, said Ahlers.

According to the figures, other industrial companies recorded an overall increase in turnover of 5 per cent in the first three quarters, while trading companies recorded an increase of 4 per cent. 

Things were worse for the healthcare industry, which recorded a 12 per cent drop in revenue following the coronavirus boom. Logistics companies shrank by 14 per cent, while the chemical industry recorded a drop of 20 per cent. The sharpest drop in turnover was recorded by energy suppliers, 44 per cent,  due to the significant fall in electricity prices.

The combined operating result (EBIT) of the companies rose sharply by 32 per cent compared to the same period last year to just over €135 billion (US$149 billion). 

However, the increase was primarily due to the record loss of almost €45 billion incurred by the energy group Uniper in the wake of the gas crisis in 2022. This pushed the overall balance sheet down at the time. 

If the effect is excluded, this would result in a decline in total profit of 8 per cent in the first three quarters of 2023.