Grundfos Exceeds Sales Budget & Increases Ambitions for the Future

”With a DKK 16.8 billion turnover and DKK 1.4 billion profit before tax, we consider 2007 to be satisfactory. We are pleased that our growth in turnover is 9% , or 11 % if regulated in relation to variations in exchange rates. This is above budget, and our profit before tax is within the budget,” said Group President, Carsten Bjerg.

The 2007 profit before tax corresponds to 8.2 % of turnover, whereas in 2006 this figure was 9.6 %. The decrease is primarily due to declining sales currencies and increased prices of raw materials. The profit is also influenced by increasing costs for product development and globalisation as well as the Group’s offer to staff of purchasing shares at a favourable price.

Global development

All the Group’s business areas had progress in 2007. ”It is particularly important for us that the strategically important markets in Eastern Europe, Russia, Asia and China expanded with growth rates up to 46 % in India, 40 % in China and 27 % in Russia. In addition the West European markets presented satisfactory sales with average growth rates of 6 %,” Mr. Bjerg continued.

Despite relatively lower growth in the American pump market, Grundfos will continue its strategic focus in North America.

”The North American market is the world’s largest pump market and so it offers great potentials for Grundfos. With a factory opening in Mexico and the purchase of Peerless pump company we still focus strongly on this market,”

The globalisation of the pump group’s activities continued in 2007. This resulted in the opening of new factories in Hungary and Mexico and a sales company in Kasakhstan. Within research and development, growth was primarily concentrated on the establishment of strategic competence centres outside Denmark for motor, software and general pump development in Hungary, India and China respectively.

Visionary ambitions for the future of Grundfos

The outlines of Grundfos’ future development have been sketched in a newly developed ”Innovation Intent”, charting the development into a much larger and even more sustainable Grundfos in 2025.

”We have created a vision for 2025. At the centre of this vision there is a fully globalised Grundfos with up to 75,000 staff members, and with environmental solutions as the driving element in our business. It will be a company delivering technical solutions that exceed the pump business, and which include new, high-technology offers of climate and environmentally friendly products. We want to use Grundfos’ unique possibility of thinking in a visionary way.”

The Asian market is a specific example of one of the greatest potentials for Grundfos in the future. Today the Asian market represents less than 8% of Grundfos’ turnover but in the course of 10 years it is expected to make up more than 50% of the global pump market.

This means there are great business potentials, especially in China, where the population figure is increasing fast and where the country’s middle class in less than 10 years will comprise 250m people.

Mr Bjerg elaborated:

”China will be our second home market in the future. In the next few years we are going to expand our activities strongly in China. We must come closer to customers and we are going to develop products aimed at meeting their increasing requests for comfort, energy efficiency and environmental solutions within water supply and waste water.”

The Group President expects a 9% growth in Group turnover in 2008. With this the Group’s strategic aim at DKK 20 billion turnover in 2010 is within reach before schedule.

About Grundfos

With an annual turnover of almost 16m pump units, Grundfos is one of the world’s leading pump manufacturers. Circulator pumps for heating and air conditioning and other centrifugal pumps for the industry, water supply, waste water and dosing are the main products.

The Grundfos Group today employs more than 17,000 staff in 78 companies in 45 countries. Group HQ is located in Denmark, where more than 5,000 staff are employed.