Interim results show continued growth at Grundfos

During the first six months of 2005, the Grundfos Group has registered pre-tax profits of US$71.57 million. Apart from last year's record of US$76.38 million, this is the best interim result ever. Sales have increased by 7%, and turnover reached US$1.05 billion...

BJERRINGBRO, Denmark, Aug. 16, 2005 -- During the first six months of 2005, the Grundfos Group has registered pre-tax profits of DKK 432m [US$71.57 million]. Apart from last year's record of DKK 461m [US$76.38 million], this is the best interim result ever. Sales have increased by 7%, and turnover reached DKK 6.356b [US$1.05 billion].

The past six months have fully lived up to the Group Management's expectations, and both turnover and earnings are as budgeted. This means that the expectations for the entire year of 2005 are unchanged, which entails a growth in sales of 7-8% and pre-tax profits of DKK 1b [US$165.65 billion]. Earnings for the first six months as well the entire year of 2005 are expected to be a little lower than the record-breaking result in 2004. Group President Jens Joergen Madsen explains:

"As we anticipated, the cost of materials continued to soar. The U.S. dollar and related currencies have continued their decline, and Grundfos is still investing heavily in globalisation of the production apparatus as well as product and market development. This means that turnover and profits are very much within the budget for 2005, and much to our satisfaction we are registering continued stable growth in strategically important markets such as Eastern Europe and the Far East."

In local currencies, real sales growth amounts to 8% and is distributed as follows:
-- The Far East showed the greatest sales growth of 17%
-- In Eastern Europe sales increased by 13%
-- In North America sales increased by 10%
-- In Western Europe sales increased by 2%.

"The growth is on a par with our expectations for 2005, which makes us believe that we are on course to reach our main objective: a sales turnover in 2007 of EUR 2b or approx. DKK 15b", says Jens Joergen Madsen.

During 2005, the Grundfos Group will open new factories covering a total area of 55,000 m2. Apart from factories in India and Russia, which were opened in spring, the increased production capacity also covers China and Hungary. In addition, preparations for production in Mexico are under way.

Despite increased production abroad, Grundfos (www.grundfos.com) has been able to maintain the level of employment in Denmark. The Group now employs a total of 13,000 staff, 5,000 of whom are working in Denmark. It's U.S. headquarters are in Olathe, Kan.

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