The growth of both sales and earnings continues in the Grundfos Group. Compared to the first half of 2006 where profit before tax amounted to DKK 544m.
There has been a 12 per cent increase in 2007 where it reached DKK 610m. This is mainly due to the considerable sales growth during the same period – from DKK 7.295 billion to DKK 8.099 billion. The earnings share in sales remains 7.5 per cent.
Sales have grown in all regions, but the development has been particularly positive in Eastern Europe and the Far East with growth rates of 31 and 16 per cent respectively. In Germany, sales have grown by 8 per cent, while the growth in the rest of Western Europe reached 14 per cent. In North America, Grundfos sold 9 per cent more than in the first half of 2006.
With a sales growth of 31 per cent, the large Russian market is at the same level as the growth in the Eastern European region overall, while China and India, with growth rates of 46 and 38 per cent respectively, are considerably above the 16 per cent growth in the Far East overall.
Group President Carsten Bjerg describes the interim result as extremely satisfactory.
“We are in a period of continued very high material prices, recession in North America and other important markets and a weak US dollar. Especially on this background, it is remarkable that we have been able to continue to achieve significant sales growth in so many markets and at the same time maintain the high level of earnings,” says Carsten Bjerg.
He is expecting the good interim rates to continue when the result for 2007 as a whole is calculated. He regards it as likely that the total sales figure for 2007 will reach DKK 16.5 billion and that the pre-tax profits will be at the same level as in 2006 at around DKK 1.5 billion.
In 2006, Grundfos achieved its financial target of a turnover of DKK 15 billion a year early. If 2007 meets the current expectations, a major step will have been taken towards Grundfos’ new, ambitious financial target of achieving sales of DKK 20 billion by 2010.
“As things are developing, it looks at the moment as though we may meet our financial target early. However, much can happen in 42 months and the big challenge will undoubtedly be to maintain the high earnings level at the same time,” says Carsten Bjerg.
New business ideas tested
The future growth will among other things be secured through completely new business areas that supplement Grundfos’ core business – development, production and sales of pumps and pump systems.
The business opportunities are tested at Grundfos New Business which, with annual investments of DKK 150m, develops projects which, in addition to significant business potential, can add competences, synergy and significant business potential to the Grundfos Group.
The potential of the future business areas lies in the challenge associated with stretching Earth’s limited resources to satisfy the increasing purchasing power of a rapidly growing population without destroying the environment and they all have sustainability in one form or another as a common denominator.
Several of the projects initiated by Grundfos New Business are already making a positive contribution to the Group’s sales growth. Grundfos Sensor Division has made a good start in selling its micro-sensors and Grundfos NoNox’ urea dosing systems for the purification of exhaust are purchased by some of the world’s largest manufacturers of diesel engines. Grundfos BioBooster, the flexible and mobile high-performance wastewater treatment plants, are also being commercialised.