While the Ukraine war is pulling the darkest clouds together, especially over the economy, the Dax companies are looking back on a record year.

According to a regular study by the auditing and management consultancy EY, the 40 companies from the leading index of the German stock exchange had the highest sales of all time in 2021.

Mark Fehr

Editor in Business.

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According to EY, the Dax members increased their sales by almost 14 percent to 1.6 trillion euros.

These are hardly imaginable dimensions: One trillion equals 1000 billion and is written as a one followed by 12 zeros.

The Dax companies even increased their profits by 122 percent.

Roughly speaking, a company's profit corresponds to the turnover minus the running costs for employees, rent, material or machines.

According to the EY accounting experts, the top league of German companies owes their strong sales growth above all to their strong commitment in Asia: The German economy – medium-sized companies as well as large corporations – is strongly export-oriented.

Last year's Dax reform was taken into account by comparing the sales of all 40 instead of the previous 30 Dax companies with the respective previous year's levels.

The five companies with the highest sales in 2021 include the car manufacturers Volkswagen, Mercedes-Benz, BMW and the insurance giant Allianz, followed by Deutsche Telekom.

Aircraft turbine manufacturers MTU Aero Engines, Hellofresh and Zalando posted the lowest sales.

These laggards are Dax newcomers who were included in the leading index after the reform in autumn.

However, the Dax newcomers are ahead if you look not at the level of sales, but at their growth in the past year.

The growth champions include the recently promoted delivery group Delivery Hero, Hellofresh, RWE and the specialty chemicals manufacturer Covestro.

Supply chains under constant stress

The strong balance sheet figures are astounding, because the conditions for companies were not all rosy in 2021 either.

"Last year, the pandemic led to constant stress among companies because disrupted supply chains, delivery bottlenecks and rising logistics and material costs had to be managed," says Henrik Ahlers, CEO of EY in Germany.

Nevertheless, most top companies were able to increase sales and profits - also because they have often succeeded in passing on increased costs to customers, says Ahlers.

However, this passing on of costs also makes everyday consumer spending more expensive and leads to inflation.

This situation has now been exacerbated by Russia's attack on Ukraine in February.

The serious consequences of the war far beyond Ukraine and Eastern Europe are not yet reflected in the sales and profits of the Dax companies for 2021 because the war only broke out after the key date for their balance sheets.

However, companies must provide information about the expected consequences in their management reports.

According to EY, the effects of the Ukraine war are hardly foreseeable.

Economists are currently trying to calculate the consequences of an energy embargo that would hit the energy-intensive German economy hard.

Such a shock would spread to almost the entire value chain via the chemical industry, which produces preliminary products for countless sectors.

Just a bitter taste

Companies have already experienced a bitter taste of such a shock with the shortage of supplier parts after the pandemic.

But that was probably just a foretaste.

After all, according to EY boss Ahlers, the pandemic and the Ukraine conflict have led to a rethink in the executive floors.

“The pandemic was the first shock, which, among other things, put a strain on supply chains to an unprecedented extent, the war in Ukraine is the second.

Now the companies would have to change course and reorganize their production and supplier networks.” The main goal is now security of supply instead of cost efficiency.

This EY assessment suggests that the goods and services available to consumers are likely to become even more expensive.

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