2007 a milestone year for Volvo
A STRONG fourth quarter in 2007 helped Volvo Construction Equipment to their most successful year ever, one that saw record sales, a record number of units sold, a number of major acquisitions and over 140 machines added to the company’s product offering.
Sales exceeded SEK50 billion (c.£3.9 billion) in 2007 and operating income passed the SEK4 billion (c.£318 million) mark, while the company’s product offering increased by 100 products from acquired companies, and at the same time new generations of existing machinery were launched – adding a further 46 products. Including acquisitions, the number of machines sold last year increased by 72% to 64,000 units, up from 37,000 in 2006.
Commenting on the results, Volvo CE’s chief executive, Tony Helsham, said: ‘2007 was a year of unprecedented organic growth and acquisitions. We have succeeded in establishing a strong foothold in Asia through the acquisition of Lingong and entered into the road equipment business as one of the world’s leading manufacturers. Our focus in 2008 is on improving profitability, and to do this we will work on active price management, improving industrial productivity and cutting costs.’
For the full year to 31 December 2007, Volvo CE’s sales increased by 27% to SEK53.6 billion (2006: SEK42.1 billion), while operating income jumped by 4% to SEK4.2 billion, up from SEK4.0 billion in 2006. Volvo say these record figures were helped by a strong set of fourth-quarter results. Net sales in the fourth quarter were up 39% and amounted to SEK15.5 billion (2006: SEK11.1 billion). When adjusted for changes in exchange rates and the acquisitions of Lingong and Ingersoll Rand’s road division, net sales rose by 23%.
According to the company, the fourth quarter of 2007 saw the total world market for construction equipment within Volvo CE’s product range increase by 12% compared to the same period in 2006. The North American market was down by 7% in 2007, largely due to lower activity in the US housing construction market, however this decline was offset by rises of 4% in Europe, 24% in Asia (with China rising 76%) and 40% in other international markets.
Volvo say the outlook for 2008 is expected to remain favourable, although not as good as 2007, with the European market expected to continue to grow in the range of 0–5%, North America expected to decline between 5–10%, while the rest of the world is expected to compensate for the US downturn with growth of between 10–15%.
