Continued growth at Grundfos
The Grundfos group of pump manufacturers recorded positive sales growth even if the exchange rate and pressure on the contribution rate recorded a downward trend in profit. The group’s strategy has set a target further growth and higher profit.
In the first quarter of 2014, the group achieved a turnover of 11.1 billion Danish kroner and a growth of 8 % compared to the national currency. The turnover is equivalent to 2% increase in Danish kroner. The result included all tax amounts to 301 million Danish kroner, which is down compared to the previous year.
“Considering the world market for pumps, we have a strong position. For the moment, we have recorded a positive growth of 18 % in China. In the important North American market, we are on track with growth of 12%. But in other countries, the situation is still promising – for example, some European countries like Russia and Ukraine, where the situation is affecting our income. On all activities, we are not satisfied by the result. First of all, our profit is not rather good” according to Mr. Mads Nipper, new chairman of Grundfos group.
The half-year results were particularly lagging behind due to the depreciation of certain key currencies compared to the first half of 2013. This means that sales translated into Danish kroner increased by only 2 % over last year. Alternatively, the growth is estimated at 8%.
Mads Nipper underlined that “In addition, we try to know our source of income. It comes from a combination of factors, including the price pressure, product mix and geographical differences. We are absolutely not satisfied with this, we have to get lower costs and simultaneously mounted focus on customers throughout the organization”.
Since the beginning of the year, Grundfos has worked on an analysis process to revise the group’s strategy to develop both growth and increase profits. Mads Nipper expects that work to be completed by the end of the year.
“I am convinced that Grundfos has a huge potential despite the difficulty we are meeting in the market. We have a strong base with a strong market position and a team of dedicated and skilled employees. Together, we must be even more focused and determined in the way we set the priority for us to strengthen our core business in the right places with our energy-efficient products of superior quality and unique technologies for the benefit of customers and the environment” explains the group’s president.
Grundfos expectations for the rest of the year are modest sales growth and a total score just below the result in 2013.