Germany Inc offers brighter outlook as recovery gathers pace

The trains-to-industrial software company raised its profit guidance for the third time this year

  
The skyline with its financial district is photographed during sunset as the spread of the coronavirus disease (COVID-19) continues in Frankfurt, Germany, September 7, 2020,

The skyline with its financial district is photographed during sunset as the spread of the coronavirus disease (COVID-19) continues in Frankfurt, Germany, September 7, 2020,

REUTERS/Kai Pfaffenbach

FRANKFURT - Some of Germany's best-known brands and industry bellwethers lifted their full-year sales and profit expectations on Thursday, citing a broad demand recovery from the effects of the COVID-19 pandemic.

Engineering group Siemens, sportswear company Adidas, Nivea-maker Beiersdorf and agricultural and pharmaceuticals firm Bayer all upgraded forecasts for the current year, citing increasing consumer spending and economic activity.

"The strong economic recovery across all regions continued. China was once again a key growth engine, with Europe and the U.S. catching up, supported by ongoing vaccination progress," Siemens Chief Executive Roland Busch told analysts.

"We expect this favourable macro environment to continue with some growth moderation, especially in China. However, the rapid spread of new virus variants shows us that the pandemic is still not over."

The trains-to-industrial software company raised its profit guidance for the third time this year. 

Adidas CEO Kasper Rorsted, meanwhile, pointed to better than expected demand as he delivered the company's new sales and profit expectations, as did Beiersdorf after posting half-year sales above pre-crisis levels. 

Bayer, meanwhile, predicted that revenues would grow more strongly this year as sales of prescription medicines emerged from what it said was a pandemic-related slump. 

"Sales and profit growth continued across all sectors. The share of companies that exceeded expectations is at a record level both in the United States as well as in Europe," said Marc Decker, head of fund management at Merck Finck.

The string of upgrades came as German industrial orders registered the biggest increase in 10 months, driven by bookings for large industrial items, mainly from domestic clients.

Figures published by the Federal Statistics Office on Thursday showed that orders for goods made in Germany jumped by 4.1% month on month in seasonally adjusted terms, beating a Reuters forecast for a 1.9% increase.

(Reporting by Christoph Steitz Editing by David Goodman) ((christoph.steitz@thomsonreuters.com; +49 30 220 133 647;))


More From Global