A challenging but rewarding year Dear colleagues, An exciting and challenging year is coming to an end. We can soon look back on a year with many significant external challenges in important markets, stagnation in strategic core markets – and on the bright side – markets that have grown and where the local organisations have professionally managed to turn this into profitable growth. All in all, a year with sales at around last year’s level in local currencies. While this is well below our expectations, we believe that we at least defended our global market share and even gained ground in many markets. This is critically important, because we must never make difficult market conditions an excuse for not being better than our competitors. Market share gained in difficult times will pay dividends when the markets turn positive again. 2015 was the first year of our financial turnaround, where we agreed that our absolute first priority was to turn four years of declining profit. It is too early to conclude whether we will fully meet our ambitious target of almost doubling our earnings from 2014, but we will deliver a strong improvement and substantially grow our profits for the first time in five years. This is something we can all be proud of. But we are not done with our efforts to improve our ability to create competitive profits. This is a multi-year journey, and the initiatives that make us constantly improve should become a new lifestyle rather than a short-term diet. I hope and believe that in 2016 we will gain even stronger traction on our Must Win Battles 2-5 in our strategy, and thus start to make real progress on end-to-end supply chain, product leadership and service. This – together with re-shaping a collaborative and customer-centric culture – will be critical for taking Grundfos successfully into the future. Because as important and necessary as our savings, efficiency improvementsand simplifications are, no company can achieve a longterm leadership position through savings alone. I can understand those colleagues who are concerned we might be becoming more like other companies and losing some of the unique Grundfos soul and culture. Indeed, we talk and focus more on profits now – simply because it is necessary. But I do not think profit is what drives most of us out of bed each morning. I can speak for myself and say that my motivation is the privilege of being surrounded by passionate and very capable colleagues, with whom I am part of making a real and positive difference to people in the world. In other words, our purpose and values – where we create lasting value for all our stakeholders. We are looking ahead to 2016, which is guaranteed to be another unpredictable, challenging and exciting year. A year that will bring further changes and lots of hard work, but also a year where we in Group Management are confident we will take further steps to make Grundfos even more successful – together! A warm THANK YOU for all you have done and continue to do for Grundfos. Mads Nipper Group President & CEO 2 Gmagazine December 15
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