Management’s report 2018 in brief Grundfos is a global leader in advanced pump solutions and a trendsetter in water technology. Our sales developed very positively in 2018. Measured in local currencies, we grew our sales organically by 6.6%. Our growth was higher than we expected going into 2018 and, based on available market data, Grundfos has again in 2018 taken market share globally. Growth fuels motivation among our people. Growth is a prerequisite for sustained financial value creation. When we sell more of our energy-efficient pump solutions, we make a positive impact on the world. We make a positive impact by securing reliable and safe supply of clean water and by efficiently disposing of wastewater. And we make a positive impact by reducing electricity consumption and thereby taking away causes for climate change. In our annual customer satisfaction and loyalty survey, we received feedback from more than 9,000 customers globally. In all of the years we have conducted customer satisfaction and loyalty surveys, we have never received as positive a scoring from our customers as we did in 2018. This puts our customer loyalty score among the best in a global benchmark. We will do our very best to live up to the confidence shown by our customers. “We saw growth in by far most of our markets and in most of the applications we Also, our employee motivation and satisfaction rating increased significantly. We are happy to see a stronger motivation among our employees, however, we remain determined to do even better in creating a work space where our colleagues thrive. serve.” Sales and market development Net turnover reached DKK 26.7bn compared to DKK 25.6bn in 2017 representing growth of 4.2% measured in DKK. Measured in local currencies, sales grew 6.6% We had growth in by far most of our markets and in most of the applications we serve. Currency developments worked against us in most of 2018. On net turnover, currency development had a negative 2.4%-point impact, meaning that growth in DKK landed at 4.2%, equalling a net turnover of DKK 26.7bn. Our earnings remain solid, although we only to a limited extent converted top line growth into increased profits. Earnings Before Interest and Tax (EBIT) grew to DKK 2,400m, which is an increase of DKK 54m over 2017. The EBIT/net turnover ratio ended at 9.0% compared to 9.2% in 2017. We saw growth in by far most of our markets and in most of the applications we serve. Based on available market data, we estimate global market growth in 2018 of approximately 5%, which means that Grundfos has gained further global market share. We want to strengthen our position in China and the USA. In China we continue showing annual double-digit growth rates as we have done in the past years. And in the USA, we grew solidly in 2018. As part of our 2020 strategy, we have also invested in our global service business. It has paid off with a satisfactory double-digit growth. It is part of our core values to keep our customers satisfied and loyal and keep our employees highly motivated. These two objectives are important in themselves and not only because they are the foundation for growth, innovation and future profitability. In our European core markets, where we still maintain the larger share of our global sales, we have across all the main regions and in our European HVAC OEM business delivered solid growth. The same goes for the Asia-Pacific region and Africa. JOURNAL18
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