What a shock it was when, shortly before Christmas, it suddenly said: The state would no longer pay a premium for the purchase of a new electric car. The boom in the German auto industry suddenly turned sour because the country’s budget was in limbo. It was said that the German car companies in particular were having a hard time with electromobility anyway, and that they were facing a fundamental change that couldn’t actually be managed without help from the state.
However, things are going pretty well. You could say that things are booming at Volkswagen, Mercedes and BMW. The three companies have the highest sales in Germany and take first, third and fourth place in terms of pre-tax profits. This is shown by a current analysis in which the auditors and consultants from EY compared the earnings and revenue of the country’s hundred largest stock exchange companies – excluding banks and insurers – in the first nine months of the year. Accordingly, VW and Mercedes could clearly afford to help the state with e-car funding.
But things also went pretty well for the other 98 companies in the ranking: the total sales of all companies considered fell by around nine percent. At the same time, the companies’ added pre-tax profit in the first three quarters rose by almost a third to a good 135 billion euros. A record value.
So everything is fine? Not quite. This is because growth is distributed quite unevenly across sectors. While profits in retail and the telecommunications industry increased by a third or more, the increase in the automotive industry was comparatively small at ten percent. In logistics, healthcare and the chemical industry – after all, the second largest industrial sector in the country – sales and profits fell, in some cases rapidly.
“The headwind is increasing,” said EY Germany boss Henrik Ahlers. Many companies have barely grown recently, and if they have, then “often with growth rates below the inflation rate.” He is therefore somewhat skeptical about the new year.
Uniper has put the crisis behind it
According to the evaluation, the chip company Infineon was the most profitable – another company from an industry that, in the face of rapid change, could recently hope for generous government funding. The DAX group from the Munich area converted almost a quarter of its sales directly into operating profit. Nevertheless, he received one billion euros for the expansion of one of his factories in Dresden.
The fact that total sales in the ranking have fallen so noticeably is actually due to only one company: the energy company Uniper. The business of Germany’s largest gas importer was completely unraveled in 2022. After the Russian invasion of Ukraine, gas prices skyrocketed, not only for consumers but also for suppliers. The consequence: Uniper’s sales exploded, but profits collapsed and in the end Uniper was nationalized.
The situation has apparently calmed down now. By the middle of the year, the group was again talking about an “extraordinarily strong result”. And this despite the fact that, according to the EY analysis, sales fell by almost two thirds by the end of September. The group made a pre-tax profit of almost 10.2 billion euros – after a loss of almost 45 billion euros in the previous year.