DAX Companies Face Significant Profit Decline Amid Economic Challenges

Germany's leading stock market corporations are experiencing a notable decline in profits, coupled with substantial job cuts, according to a recent analysis by the consulting firm EY, which has been shared with the press. The 40 companies listed in the DAX index are increasingly feeling the effects of an economic slowdown and intensified global competition.

In the first quarter of 2025, the total revenue of DAX companies, excluding banks, rose by 3.3% to EUR458.9 billion. However, ten of these corporations reported a drop in revenue, including major players such as BMW, Mercedes-Benz, BASF, and Bayer.

Additionally, 16 DAX companies reported a decrease in operational earnings compared to the previous year. This includes all the automotive manufacturers and both reinsurance companies, Hannover Rück and Munich Re, which incurred significant financial burdens due to wildfires in the Los Angeles area earlier this year.

Overall, the operational profit of DAX companies before interest and taxes (EBIT) fell by 8.1% to EUR44.8 billion, down from EUR48.7 billion the previous year.

Furthermore, employment figures are also on the decline. The number of employees at the 27 DAX companies that provided data shrank by 1% to 3.17 million, resulting in approximately 32,000 job losses over the past year.

Despite the economic downturn, geopolitical crises, and ongoing trade tensions with the United States, many DAX companies have demonstrated remarkable resilience, as noted by Henrik Ahlers, CEO of EY. The majority of firms managed to achieve revenue growth. However, the impact of US tariffs has yet to be reflected in the financial statements. Many companies have stockpiled inventories in the US in anticipation of higher tariffs, and US customers have accelerated purchases to benefit from lower prices before potential increases.

A more accurate assessment of the situation is expected in the second half of the year. The uncertainty surrounding US tariffs poses a significant challenge, particularly for the export-driven industries.

While some DAX companies have seen substantial growth, such as Rheinmetall with a 46% revenue increase and MTU Aero Engines with a 28% rise, the automotive sector has struggled. The DAX-listed car manufacturers reported a revenue decline of 2.5% alongside a staggering 42% drop in profits.

The Deutsche Telekom recorded the highest operational profit in the first quarter at nearly EUR6.8 billion, followed by Allianz at EUR4.2 billion and Siemens at EUR3.1 billion. Notably, only one DAX company, Porsche Holding, reported an operational loss.