Eye-Opening Decline: Top 100 German Companies Struggle Amid Economic Shift - 30,000 Jobs Eliminated
Decreased Revenues and Layoffs Prevail Among Leading German Corporations
The financial landscape for Germany's top revenue-generating companies painted an unsettling picture in the first nine months of 2024, according to consulting firm EY. While the outline of the economic storm isn't complete, 2025 data suggests a mix of sector-specific resilience and vulnerability. A hearty 4% revenue drop overall, with a staggering 19% decrease in operating profits, shows the grim reality of the challenging economy. To accommodate this decline, more than 30,000 jobs were axed, marking the first decrease since 2021.
dpa-afx/kro Frankfurt
Germany's key stock market players felt the economic pinch in 2024, with the top 100 corporations registering a 4% decline in revenue overall. This is the second consecutive revenue drop. Operating profit (EBIT) plummeted by an average of 19%. Despite a shortage of skilled workers, job cuts totaled more than 30,000.
The automotive industry continued to take the lead in terms of revenue and profit, even as it weakened. Remarkably, energy sector revenue dropped a hefty 26% due to falling electricity and gas prices. The chemical and automotive industries also saw declines of 5% and 2%, respectively. On the other hand, the transport sector saw a boost of 3%, and the IT industry climbed 2%.
Despite the challenges, automotive manufacturers ruled the revenue roost. Volkswagen, Mercedes-Benz, and BMW claimed the top three spots, with Volkswagen earning €237.2 billion in revenue in the opening nine months. Deutsche Telekom claimed the title for the highest operating profit, with €17.8 billion in the first nine months, followed by VW and Mercedes-Benz.
The ongoing geopolitical tensions, political volatility, and economic stagnation in Europe likely spell continuing challenges for these companies in the new year, according to Jan Brorhilker, Managing Partner at EY. With employment figures likely to continue their downward trend, unemployment may return as a pressing concern. However, the shortage of skilled workers is unlikely to abate. Companies must navigate the challenges ahead, refraining from falling into a crisis mindset, and seize opportunities offered by new technologies. Brorhilker called for increased risk-taking and a greater willingness to confidently shape the future for Germany.
The performance of various sectors offers deeper insight into the dynamics of 2024. For instance, the defense and industrial sectors showed strength, with Rheinmetall outperforming. In contrast, tech firms faced headwinds, and the energy sector was hit hard by plummeting prices. Export-heavy industries experienced pressure, while infrastructure-based firms may have seen some support from government packages. The 2025 outlook shows room for growth as analysts predicted double-digit EPS growth for some companies, signaling some companies in the top 100 weathered the storm through cost optimization and sectoral advantages.
In conclusion, the 2024 economic challenges left their mark on Germany's top 100 companies, with defense and industrials partially offsetting the decline through government spending. The full impact of tariffs unfolded more sharply in early 2025, complicating the transition period from 2024 to 2025.
The ongoing economic challenges have led to a 4% decline in revenue for Germany's top 100 corporations as of 2024, with an average decrease of 19% in operating profits (EBIT). In response, over 30,000 jobs have been cut, with the unemployment rate potentially returning as a pressing concern due to these job cuts.
Despite these challenges, some sectors, such as the transport and IT industries, managed to increase revenue by 3% and 2%, respectively. However, the energy sector faced a significant drop of 26% due to falling electricity and gas prices.
EY's Managing Partner, Jan Brorhilker, predicted that the ongoing geopolitical tensions, political volatility, and economic stagnation in Europe will continue to present challenges for these companies in the new year. To navigate these challenges, companies must avoid a crisis mindset, seize opportunities offered by new technologies, increase risk-taking, and confidently shape the future for Germany.
According to analysts, the 2025 outlook shows some potential for growth, with double-digit EPS growth predicted for some companies, indicating that some companies in the top 100 have managed to weather the storm through cost optimization and sectoral advantages.
