Grundfos had continued growth in 2008, but the financial crisis has left its mark

Sales growth was according to expectations, and the position as one of the world’s leading in high-tech pumps and pump systems is still undisputed. However, business conditions in 2008 have been fluctuating, and at the end of 2008 the situation worsened dramatically, and in few months the recession extended to the whole world.

Turnover increased by DKK 2.2 bn to a total of DKK 19.0 bn. The highest turnover growth happened in the first six months of the year, and it was significantly weaker in the last six months. Profit before tax is DKK 959m, which is lower than in 2007, when profit before tax was DKK 1.4 bn. The main causes for lower profit are fluctuating demand and declining rates of the most important foreign currencies. To this must be added the sudden slowdown of the world economy that required immediate adjustment and reorganisation of some activities.

Group President, Mr Carsten Bjerg explained:
- Sales have grown in several markets. For instance, sales in Russia has 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. But now the party is over. We have to adapt ourselves to a world in serious recession, and we may not even have seen the worst yet, Mr Bjerg said.

The Group President realises that the global financial crisis is really perceptible now:
- At the end of 2008 we could feel the negative effects of the financial crisis which develops day by day. The crisis is unpredictable and changeable, resulting in disturbances when building activities come to a stop, and our customers suffer. Therefore, we now focus on a strict control of our cost development, operating capital and investment level, and this has resulted in reductions of the labour force, Mr Bjerg said.

The Group President’s prediction for 2009 is the following:
- It is difficult to set ambitious goals of turnover and profit in a time as turbulent as the present. Actually 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. In that way we shall get through the next year safe and sound. But it will be a tough job.

- In spite of the crisis we are still closely focused on the global challenges. The population of the world is growing, the urbanisation is increasing, and the nature’s resources are disappearing. We feel very strongly about the climate challenge. We are in danger of leaving a green debt to our descendants who will have to pay the price for the unsolved climate problems. The politicians hold strong cards, and when they put money into the economy it should be done with the climate in mind, the Group President stated.

The board
Group President of the TrygVesta Group, Ms Christine Bosse, will leave Grundfos’ board after four years. – It has been very exciting to be a part of Grundfos’ growth, innovation and involvement, and I am convinced that Grundfos will still contribute to a cleaner, more green and sustainable world, Ms Bosse said. She motivates her resignation with lack of time. Board members from now on are Chairman of the Board, Mr Niels Due Jensen, Grundfos, Chairman of the Board of The Poul Due Jensen Foundation, Mr Lars Kolind, Managing Director of Danish Technology, Mr Thomas Lund, and Professor at Copenhagen Business School, Mr Niels Christian Nielsen.