Matthias Zachert couldn’t believe his eyes when he saw the numbers. The head of German special chemicals group Lanxess had rarely seen such rapid growth. He reported that demand was “abnormally high in some cases, as in Asia.” This resulted in a record quarter for Lanxess, with sales up 25 percent to €2.5 billion ($2.78 billion), while pre-tax profit soared by 72 percent to €160 million.
The Cologne-based company’s experience is similar to many other German corporations this year. Business is booming: Handelsblatt has calculated that the 30 companies listed on the blue-chip DAX stock index have recorded average sales growth of 10 percent, while pre-tax profits have risen by an average of 16 percent. If banks and insurers such as Deutsche Bank and Allianz are included, profits of DAX-listed companies were up about 10 percent on average. In total, the 30 companies on the index earned €37 billion before interest and taxes in the first quarter, an record figure.
Part of the explanation lies in some suprisingly strong growth numbers that are propping up German exporters: “DAX companies are currently benefiting from the economic recovery in Europe and the positive developments in the Chinese market,” said Mathieu Meyer, a managing partner at accounting firm EY.