JOURNAL 13 Management’s report T he Grundfos Group is a global company with its headquarters situated in Bjerringbro, Denmark. Grundfos delivers pump solutions worldwide through 15 production companies and 66 sales companies, which are mapped out in the regions EUREG for Europe, NAMREG for North America, APREG for Asia and the Pacific, CHINA for China and finally STAR, which covers growth markets as for instance India, the Middle East, Africa and the South American countries. We deliver solutions for domestic and commercial buildings and for the industry and the water sector. The Group has had a year with a modest growth in turnover of 4,5 per cent, constituting a total of DKK 23.3bn against DKK 22.6bn in 2012. However in DKK the growth is 2,9 per cent due to a negative impact of 1.6 points as a result of currency depreciations on all major currencies outside the Eurozone. The result before taxes comes to DKK 1.5bn against DKK 1.8bn in 2012, which is less than expected. We maintain our ambitions of investing in research and development. At the same time we have focused on our composition of costs in order to reduce these during the year under review. An important value for us is independence, for instance created through a solid financial strength with an interest-bearing net positive liquidity position of DKK 2.9bn against DKK 2.6bn in 2012. In 2014, an important development process has been initiated, which is to determine the business strategy for the years to come, with reference to being better at using the great potential that Grundfos has for increasing both top and bottom line. This will help realise our long term ambitions and at the same time maintain focus on operations and we expect a continued growth both in turnover and profit in 2014 compared to 2013. Necessary switch to energy friendly pumps Grundfos has always been a great supporter of higher and stricter demands for pumps and motors which can promote energy efficiency and sustainability. It creates a healthy competition within energy friendly technologies. This now happens in the EU which also inspires other parts of the world. Unfortunately, the expected conversion to more energy efficient pumps, in connection with the so-called EuP directive, Energy-using Products, which makes demands on for example the energy efficiency of circulator pumps in the EU, has not happened as quickly as we could have hoped for. We have noted somewhat of an exhaustion regarding the switch to the energy efficient pumps in some of the markets in Europe, but vital markets such as Russia and Germany have grown with respectively 13 and 6 per cent. North America has unfortunately not been moving in the positive growth direction that we had hoped for. The US, Canada and Mexico have bigger potential for Grundfos which we are currently exploring and acting on. We have especially been occupied with a better execution of our plans and strategies in the world’s largest pump market, the US. During the year, a new regional head office has been established in Chicago. China is exhibiting solid and strong growth and is meeting our goal of becoming our second home market. Turnover has increased by 19 per cent, and the potential for further growth is there, particularly in western China, where we also opened a new sales company this year, already presenting impressive growth rates. In parts of Asia we expected to see better growth rates, but here, the machining industry, in “A certain exhaustion has been noted regarding the switch to the energy efficient pumps we offered the market. Grundfos has has always been a great supporter of higher and stricter demands for pumps and motors which can promote energy efficiency and sustainability.”
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