STUTTGART (dpa-AFX) - Aggregate revenues for Germany's leading blue-chip companies fell for the third consecutive year in 2025. According to a study by audit and advisory firm EY, turnover edged down by 0.6 percent. The fourth quarter proved particularly lackluster, with revenues sliding 3.3 percent and operating profits retreating by 14 percent.

The downturn was primarily driven by weakness in key international markets: sales fell by four percent in North America and nine percent in Asia. Conversely, European revenues grew by three percent. Simultaneously, the aggregate earnings before interest and taxes (EBIT) of DAX heavyweights dropped by four percent, the study shows. Deutsche Bank and Commerzbank were excluded from the revenue calculations, as turnover is not considered a representative metric for the banking sector. Banks generate income primarily through interest and commission-based business rather than the sale of goods.

"Overall, the results for the past year are extremely modest," said Henrik Ahlers, Chairman of the Executive Board at EY. He added that a near-term turnaround is not yet in sight. The weak performance reflects the current state of the German economy and highlights the significant structural challenges facing the country as a business location.

Financial Sector Posts Record Profits

However, 2025 was far from a year of crisis for all DAX constituents. Just over half of the companies (53 percent) reported rising revenues, while 58 percent posted higher profits. The financial sector achieved record earnings of 46.4 billion euros (up from 39.4 billion euros in 2024), whereas the remaining companies saw their combined profits shrink by ten percent.

Industrial firms, which have recently suffered substantial hits to both top-line growth and, more significantly, profitability, are facing a difficult year ahead, according to Jan Brorhilker, Managing Partner at EY.

Automotive Crisis vs. Defense Boom

The EY study reveals stark sectoral disparities: the strongest growth last year was recorded by Rheinmetall and MTU Aero Engines, with growth rates of 29 percent and 18 percent respectively - two companies with significant exposure to the defense industry. In contrast, the automotive sector saw declining turnover, with a combined revenue contraction of four percent.

Deutsche Telekom posted the highest operating profit in 2025 at 24.8 billion euros, followed by Allianz at 17.4 billion euros and Siemens at 11.4 billion euros.

Headcount on the Decline

The economic downturn also weighed on employment. The total workforce decreased by 0.8 percent, or approximately 32,000 positions, to around 3.95 million. However, trends varied significantly across the index: while Rheinmetall saw the strongest headcount growth at 13 percent, Mercedes-Benz recorded the sharpest contraction, with its workforce shrinking by 5.6 percent.

"On balance, we expect to see a further erosion of employment levels in 2026," Brorhilker predicted. This is attributed partly to the weak economy and cost-cutting programs at numerous industrial firms. "But even prosperous companies are now realizing significant efficiency gains, particularly in core administrative areas, through the increasing use of Artificial Intelligence - which is reducing the need for new hires."/dmo/DP/zb