Germany's 40 DAX-listed companies kicked off 2026 with significant revenue declines, yet still managed to grow their profits by 4.4 percent compared to the same quarter a year ago. The profit increase was largely driven by the strong performance of the financial sector, according to an analysis published on Saturday by the auditing and consulting firm EY, based on the business and quarterly reports of the companies listed on the German stock index. Total revenue across the 40 companies shrank by 3.7 percent year-on-year.
Profits at financial companies surged by 15.9 percent, reaching a new all-time high for a first quarter. Industrial companies, by contrast, recorded a gain of just 0.5 percent, their second-lowest profit in six years.
Business was strongest for DAX companies in Europe, where revenue grew by two percent. In North America, however, revenue dropped by five percent, and in Asia it fell by as much as 14 percent.
Employment has been on a clear downward trend since last year. The number of employees fell by one percent in the first quarter, from 3.16 million to 3.13 million. That amounts to around 31,000 jobs cut compared to the previous year.
The highest profits in the first quarter were reported by Deutsche Telekom (5.8 billion euros), Allianz (4.5 billion euros), and Eon (3.9 billion euros). The strongest profit growth was achieved by Eon (up 243 percent), Siemens Energy (91 percent), and Munich Re (52 percent).
Henrik Ahlers, Chairman of the Board of Management at EY, described the quarter as a false start to the new year, though he noted that the picture was far from uniform. The financial sector was shining despite the economic downturn with very strong numbers, Ahlers explained. It was benefiting from persistently high interest rates, favourable claims trends among insurers, and elevated market volatility.
The situation for many traditional industrial companies was entirely different, Ahlers said: "The global economy is weakening, and the difficult geopolitical and trade policy environment is causing, in some cases, massive burdens and severe losses."
On top of that, there was a profound structural transformation that industrial companies in particular had to confront, added Jan Brorhilker, Managing Partner of EY's Assurance division in Germany. The business model of Germany, once the world's export champion, was no longer working. China, above all, was emerging as an aggressive competitor on the global market in an increasing number of sectors, putting pressure on German industrial corporations with low prices.
At the same time, the competitiveness of production in Germany was declining, Brorhilker stressed: "Costs in Germany are too high, and when it comes to the strength and speed of innovation, other countries have long since caught up."
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