The Grundfos Group made a small profit in the first half year of 2009 in spite of a turnover decline of 11 % compared to the first half year of 2008. Turnover was 8.2 billion DKK, and profit before tax is 87 million DKK. Group President Carsten Bjerg states that under the present circumstances the result is acceptable.
”As many others we have been hit by the general economic recession in connection with the global financial crisis. But by means of targeted and careful efforts in the whole group we have succeeded in getting through the crisis in a reasonable way. Of course, profit is far from the group’s long-term aims, and although our profit usually is higher in the second half year than in the first half year, we do not expect to reach the growth results of previous years. However, I am glad that the decisions we took at the beginning of crisis have been effective”, Carsten Bjerg says.
At the end of the first half year Group Management estimates that the result of the second half year will be at least on level with the first half year. However, due to the uncertain market situation this estimate is more uncertain than it uses to be.
The turnover decline has hit all the Group’s sales regions. The new markets in Eastern Europe and in parts of the Far East have been hit the hardest, whereas the decline on the more mature pump markets in Western Europe has been less than average. In the first months of 2009 sales have declined each month, but now turnover seems to have stabilized at a level 10 or 12 % below 2008.
”We think we have reached the bottom But it will take some time before we will have high growth again. We must still be very careful and concentrate on the things we do the best. Nothing or nobody will help us. We must fend for ourselves” the Group President says.
Debt has been reduced
In spite of a decline in sales and profit Grundfos has succeeded in reducing the interest-bearing debt by approx. 300 million DKK in the first half year. The group’s cash flow has been most satisfactory. This positive development is a result of a strong focus on control of the group’s operating capital – including the initiatives that have resulted in a reduction of stock by 600 million DKK.
”It has been decisive for us to remain sound before, under and after the crisis; in that way we can still make our own decisions and invest targeted in the future”, Carsten Bjerg explains.
The declining turnover resulted in extensive initiatives in all the Group’s companies in the first half year of 2009, among other things it was necessary to dismiss employees in several companies. Today Grundfos has 17,000 employees.