German Corporate Conference (GCC) – German companies optimistic about 2025
Wednesday 29 January 2025
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From 21 to 23 January 2025, UniCredit and Kepler Cheuvreux jointly hosted the German Corporate Conference (GCC). This year’s event proved once again to be one of the leading equities platforms for companies, experts, and investors to exchange views on key developments, themes, and ideas that might influence the economy and markets in 2025 and beyond.
During the three-day event we were pleased to welcome 140 listed companies from Germany and Austria, 12 expert speakers and almost 400 institutional investors from around the globe, sharing their thoughts, in more than 2,500 One-on-One Meetings not only about the new financial year but also on how business models are set to evolve amid the global challenges we are facing.
The key message from the GCC is that German companies are optimistic about 2025.
At last year's GCC, Corporate Germany delivered a rather cautious message. This year, against the backdrop of geopolitical uncertainties, the energy crisis, inflation and the shortage of skilled workers, the mood among the companies and investors who met at the GCC 2025 was predominantly positive.
After two difficult years, UniCredit economists expect the German economy to grow slightly by 0.7 percent in 2025 and 1.2 percent in 2026, which represents a moderate recovery after declines in previous years. Financial markets will likely remain volatile, in particular due to the effects of heightened geopolitical uncertainty on the business cycle and central bank policies. However, in view of the abundant liquidity, markets conditions are expected to be very constructive.
'Despite the existing uncertainties in many areas, we are observing a remarkable confidence and determination among our larger corporate clients to get the German economy back on track for growth,' says Marion Bayer-Schiller, Head of Large Corporates Germany, UniCredit. 'Large companies always invest, but they haven't done so much of that in Germany in recent months. In this respect, I expect a moderate increase this year, also in the demand for credit.'
Energy costs are driving change
High energy prices, especially for electricity and natural gas, pose a major challenge to the competitiveness of German companies in all sectors. Many companies are responding to this with a combination of strategic diversification, investments in renewable energies and improvements to energy efficiency. This also applies to the corresponding value chains. This leads to high investment volumes for German companies with predominantly long-term depreciation cycles. Particularly among listed companies, large transformation financings are taking place in areas such as green steel or battery technology.
'Above all, the energy issue is still a structural problem in Europe. Companies need to address this issue - in parallel with sustainability and digitalization - even if volatility is still very high. It is important to find a balance between these priorities,' says Richard Burton, Head of Client Solutions at UniCredit. 'This is a classic example of how we at UniCredit help our clients manage their risks in the best possible way by drawing on our advisory expertise and our world-class product factories.'
SMEs have also been reluctant to make transformative investments so far.
'At the moment, small and medium-sized companies are still waiting. The investment plans are in the drawer, especially for the transformation topics of sustainability and digitalization,' says Martin Brinckmann, Head of Small & Medium Corporates Germany, UniCredit. 'However, I see the first signs that companies are ready to move forward with these plans quickly after the election.'
Private consumer spending as an important growth driver
According to UniCredit economists, the moderate recovery forecast for the German economy in 2025 will not be driven by traditional exports, but rather by rising domestic demand in the form of higher private consumer spending and a recovery in the real estate sector. In recent decades, German companies have invested more than 400 billion euros in the USA in order to produce and sell their products directly there. In addition to the approximately 500 billion euros invested in other European countries. These huge investments are expected to pay off by making German companies less vulnerable to higher U.S. tariffs. The protectionist policies that are on the rise in the US, but also in China and other countries, are also leading to further restructuring of supply chains to adapt to these changes.
'Our assessment is cautiously optimistic. There are certainly sectors that face greater challenges. In the public and in the media, this is often perceived rather negatively. But if you add up everything we learn in the individual discussions with the companies, especially at this conference, the picture is much more positive,' says Marco Iannaccone, Head of Client Solutions Germany, UniCredit. 'We therefore expect 2025 to be more of a year of growth.'
Sluggish activity over the past three years has meant that Germany has developed a well-filled pipeline of IPO and spin-off candidates that could gradually come to market. Private equity is also seen as one of the drivers of market activity, driving activity with the large amount of capital they have available to deploy.
Mergers and acquisitions will remain a major trend in 2025. Companies will rethink their capital allocation by selling non-core assets and outsourcing supply chains to invest in growth areas. The small and mid-cap market, in particular, seems to remain attractive to buyers, as valuations are at a significant discount to larger, more liquid assets.
'Understanding our clients' needs and staying ahead of these trends is a big focus for us,' says Samuel Kendall, Head of Advisory & Financing Solutions at UniCredit. 'That's why events like this, that drive meaningful conversations, are so important. They help us to stay close to our clients and be around transactional situations from the start, where we can add maximum value with our products and advisory services.'
In cooperation with Kepler Cheuvreux, UniCredit offers one of the leading pan-European equities platform with peerless investor reach, unmatched distribution capabilities, top-ranked equity research and outstanding deal flow, having successfully completed 125+ ECM transactions in Europe over the past five years. Our platform has more than 1,000 stocks under research coverage and access to 1,300+ investors in Europe.
