Even though the global pump market is essentially stagnant, the Grundfos Group has seen moderate sales growth of 0.8 per cent measured in local currencies, and has significantly increased its earnings.
Earnings before interest and taxes (EBIT) are DKK 2.0 billion, compared to DKK 861 million the year before, and the Group's profit after tax (PAT) will reach DKK 1.45 billion, compared to 503 million in 2014.
The Group's revenue has risen to DKK 24.8 billion, representing sales growth of 5 per cent in Danish kroner compared to 2014. Sales growth in Danish kroner was positively impacted by exchange rate increases in a number of key currencies.
Group Management had clear goals at the start of 2015: Achieve a significant improvement in earnings, retain global market share and get off to a good start implementing the new Grundfos Strategy 2020.
"Our earnings and cash flow have substantially improved, thanks to better focus and priorities, among other things. We are retaining or gaining market share in key strategic markets. And the Group strategy of focusing on our core business and improving customer relationships is working," says CEO Mads Nipper.
Improved and even closer relationships with customers is precisely what helped achieve the strong result. Global competition has been noticeably increasing, and despite the economic challenges faced by many customers, loyalty has been at the same high level as in the past.
"We have met our expectations, so we are satisfied with the result. That being said, I have to say that the world market has been a mixed bag. Russia – previously one of our most rapidly growing and profitable markets – is dropping sharply, and China's growth machine has come to halt. We are seeing our strongest growth in North and South America. We have achieved moderate sales growth under difficult market conditions. I attribute this to our innovative quality products and our organisation's ability to retain good customer relationships," explains CEO Mads Nipper.
In spite of a weak European economy, Grundfos is seeing advances in markets like Italy, Poland, Hungary, Turkey, the Czech Republic and the Baltics, which all show good growth figures. Sales rose by 12 per cent in USA, the world's largest pump market, while sales growth was 18 per cent in the South American markets. We also see a positive development in Japan and Vietnam.
Within the HVAC/OEM segment, where Grundfos supplies solutions to some of the world's largest boiler manufacturers, the positive effect of more stringent EU energy efficiency requirements for pumps and motors is seen. Grundfos offers the most energy-efficient solutions on the market, and OEM customers are aware of this.
Grundfos is also achieving its goals of lastingly reducing its environmental impact, for example by never emitting more CO2 than in 2008. During the year, CO2 emissions, energy consumption and water consumption have all been reduced compared to 2014 and to our benchmark in year 2008.