Economic downturn: Dax companies make significantly less profit
The economic crisis and fierce competition are hitting Germany's largest listed companies – and with US President Trump's tariffs, the ultimate test is yet to come. One sector in particular is suffering.
Germany's largest listed companies are making lower profits and cutting thousands of jobs. The 40 companies in the leading DAX index are increasingly feeling the effects of the economic downturn and intensified international competition, according to a new analysis by the auditing and consulting firm EY, which was made available to the German Press Agency.
In the first quarter of 2025, the total revenue of DAX companies excluding banks rose by 3.3 percent to €458.9 billion. However, ten companies recorded a decline in revenue, including heavyweights BMW, Mercedes-Benz, BASF, and Bayer.
Sixteen of the DAX companies generated lower operating profits than in the previous year, including all car companies and the two reinsurers Hannover Re and Munich Re, which had to shoulder high financial burdens due to the forest fires around Los Angeles at the beginning of the year.
Overall, the operating profit before interest and taxes (EBIT) of the DAX companies shrank by 8.1 percent to 44.8 billion euros in the first quarter - compared to 48.7 billion a year earlier.
The employment trend is also downward, according to EY. According to the report, the number of employees at the 27 DAX-listed companies that provided information shrank by 1 percent to 3.17 million. This represents a year-on-year reduction of around 32,000 jobs.
In the face of economic weakness, geopolitical crises, and the tariff dispute with the US, many DAX companies have shown remarkable resilience, said Henrik Ahlers, CEO of EY. The vast majority have nevertheless managed to increase revenue.
However, the US tariffs have so far barely been reflected in the balance sheet figures. "Many companies have increased their inventories in the US in anticipation of high tariffs, and US customers have also brought forward purchases to benefit from even lower prices." A realistic picture of the situation will only become apparent in the second half of the year. The uncertainty surrounding the US tariffs is a huge challenge, especially for the export-oriented industry.
While some DAX companies grew strongly – such as Rheinmetall with a 46 percent increase in sales and the engine manufacturer MTU Aero Engines with growth of 28 percent – the car companies had to accept losses: Overall, the car manufacturers listed in the DAX recorded a 42 percent drop in profits with a 2.5 percent decline in sales.
Deutsche Telekom achieved the highest operating profit in the first quarter with almost 6.8 billion euros. Allianz (4.2 billion) and Siemens (3.1 billion) came in second and third, respectively. Only one DAX-listed company – Porsche Holding – reported an operating loss.
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