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Grundfos prepares to weather financial storm

The Grundfos Group has experienced both financial ups and downs in 2008. Sales growth was in line with expectations, with turnover increasing by DKK 2.2 billion to a total of DKK 19.0 billion. However, much of this growth took place in the first six months of the year. End of year results showed profit before tax at DKK 959 million against DKK 1.4 billion of the previous year. Grundfos said the main causes for the lower profits were due to fluctuating demand and declining rates of the most important foreign currencies.

Grundfos Group president, Carsten Bjerg explained:Sales have grown in several markets. For instance, sales in Russia have grown by 25%, in China by 22%, in India by 16%, and by 13% on the German market where in particular the energy saving circulation pumps have gained ground; finally the organic growth of 12% in USA is also satisfying.”

However, Bjerg went on to say that the party is now over. “We have to adapt ourselves to a world in serious recession, and we may not even have seen the worst yet. We expect the turnover and profit level of 2009 to be somewhat below 2008. We must be cost conscious, ready for adjustments and flexible in all parts of the business. Now we must focus on a strict control of our cost development, operating capital and investment level, and this has resulted in reductions of the labour force.”