Grundfos’ Negative Net Balance Has Been Reduced Considerably

2009 was not exactly a great year for Grundfos. However, 2009 was an epoch-making year and, above all, a financially satisfactory year, considering the financial crisis. This is how the pump manufacturer, with HQ in Bjerringbro, Denmark, and with 16,000 employees in 45 countries, characterises the annual accounts 2009. The accounts were published yesterday and show that last year’s prediction has come true. The 2009 turnover was 17.1 billions against 19.0 billions in 2008. Nevertheless, Grundfos has maintained a nice profit, all things considered. In fact, profit was 873 millions, or 5.1 pc of the turnover.

In 2009 Grundfos managed to reduce the interest-bearing negative net balance by 2.1 billion DKK to only 62 millions at the end of the year. It has been obtained by reducing stocks considerably.

”We had seen it come and we took the necessary precautions in due time. And that is why we pulled through and achieved a reasonable and satisfying result. We are especially happy about our financial solidity which gives us freedom of action in handling future challenges. We have come well out of the first months of 2010 and we are now stronger than we were before the crisis,” said Mr Carsten Bjerg, Grundfos Group President and CEO, going on to talk about expectations to 2010:

”The consequences of the financial crisis will not disappear in 2010. But there are signs that the worst is over. Growth in the coming year will not be high; however, we expect a slight growth in both turnover and profit,” said Mr Bjerg .

On the way towards sustainable growth

Mr Bjerg points out the great challenge it has been and still is to prepare for both an entirely different and lower pace with the group’s customers and look ahead towards new growth – sustainable growth, of course. Grundfos obtained its best results on the well-established markets; especially pumps for Building Services in Germany, France, Italy and the UK. Also the Asian market had reasonable growth rates, for instance in China, which the group considers to be its second home market. The recession hit primarily on markets in which Grundfos is relatively newly established, as well as in countries that were hit by recession in machinery manufacturing, such as Japan and Taiwan.

Unfortunately, the crisis resulted in a necessary staff reduction of more than 2,000 employees in 2009; of these approximately 600 in the Danish companies.

Grundfos’ values lead the way

Grundfos management emphasises the importance of maintaining many years’ basic values in spite of the worldwide financial crisis.

”Our values will show us the way out of the crisis. We still put sustainability first in the ways we think and run our business. In our opinion our common future will need a more energy saving behaviour, new energy types and sustainable production,” the Group President stated. At the same time he regrets that UN’s climate summit, COP15, in Copenhagen did not result in a binding agreement.

Innovation is still paramount at Grundfos. Among other things it means that in the future a still larger share of the pumps will be equipped with electronics that saves energy when it adjusts the pump’s performance to the actual demand and also enables the user to communicate with the pump. At the same it will be possible to supply the pump with solar energy.

”However, all our 2010 research and development projects will be linked to products and services that contribute to making the world a more sustainable place,” Mr Bjerg emphasises.