A strong Grundfos ready for continued growth

The first six months showed increasing turnover and profit and the Group is now debt-free.

The Grundfos Group’s interim accounts for 2010 showed that the company is back on the same level of turnover as in the record year of 2008. Turnover reached 1.2 billion Euro, generating a profit of 103m Euro.

Group President, Carsten Bjerg, said the interim result is extremely satisfactory:

”Like so many others we were hit by the financial crisis in 2009 and we lost turnover. However, we managed to gain a profit after all. The wheels are turning again, little by little, around the world but we are aware of the fact that it may be a temporary trend. Therefore we are hedging against future recessions to be strong in case world economy will go down once again. This attitude ensures that we prepare ourselves for increasing business. We are accelerating product development to be able to introduce new, innovative solutions in due course.”

The 1.2 billion Euro turnover is a 12 percent increase compared with the first six months of 2009. In that period in 2009 turnover decreased by 11 percent. This year turnover has increased in all our sales regions. Particularly high increases occurred in India, Russia and China. China is seeing an increase of 40 percent at the moment. Profit before tax in the first six months reached 103m Euro, which corresponds with 8.5 percent of turnover (2009: 11.5m Euro, 1.1 percent of turnover).

The strict cost management, initiated in 2009, will be maintained throughout 2010. The Group’s plans for 2010 include new strategic initiatives aiming to ensure the Group’s long term competitiveness. The development of exchange rates and prices on raw materials had a positive impact on the result.

The growth and cost management in the first six months mean that Grundfos is now debt-free, as the company could easily pay all debts and still have money for investments in the future.

”We are very pleased to be masters of our own house, not having to seek financing elsewhere. This independence suits us tremendously well. Our ambition of emerging from the crisis as a strengthened company was more than satisfied. We are winning market shares and we are very pleased that in this way we may contribute to improved sustainability due to the installation of even more energy-efficient pumps,” said Mr Bjerg.

The Group’s interest-bearing net liabilities at the beginning of 2010 were 8.2m Euro, following a reduction of 0.3 billion Euro in 2009. The positive effect of the Group’s cash-flow management continued in 2010, as the position at the end of the first six months turned into net deposits of 93.4m Euro, i.e. an improvement of about 106m Euro. On 30 June 2009 net liabilities amounted to 0.23 billion Euro. During the past 12 months this was improved by 0.33 billion Euro.

The Group’s solvency including minority shares, as per 30 June 2010, comprised 54.7 percent, whereas it was 51.2 percent after the first six months in 2009 and 54.6 percent at the end of 2009. Like previous years, the solvency ratio is influenced by the fact that, in accordance with Group policies, a supply of liquid assets and bonds is maintained, amounting to 490m Euro as per 30 June 2010. If this supply were used for the reduction of debts, the solvency ratio would be 64.9 percent.

After the completion of the first six months, Group Management expects the sales development and result of the last six months to be at least at the same level as in the first six months.
Since it’s establishment in 1945, Grundfos has never experienced deficits. Today the Group employs 16,149 staff around the world. Grundfos is still the world’s largest pump manufacturer.