Volvo CE sales increase 30% in first quarter
Q1 results buoyed by improving market conditions and positive impact of company’s transformation programme
IMPROVING market conditions in all regions except South America helped Volvo Construction Equipment (Volvo CE) report strong growth in sales, profitability, order intake and deliveries in the first quarter of 2017.
During the first three months of 2017 Volvo CE saw net sales jump by 30% to SEK16,163 million, compared with SEK12,452 million in the first quarter of 2016.
Operating income was also positively impacted, rising to SEK1,617 million, up significantly compared with SEK341 million in the first quarter of 2016, and operating margin also saw good improvement, at 10%, compared with 2.7% in the same period the year before.
In the first quarter of 2017 Volvo CE also enjoyed an increase in order intake, which rose by 34% to 17,487 machines, with increases in orders coming from all markets, but particularly China and Europe. Deliveries were also up 34% during the period, to 16,369 machines.
The construction equipment market continued to improve during the quarter, with all regions, except South America, showing growth. The European market was up 17%, driven by increased demand in Germany, the UK and France.
North America was up 1%, with improvements in compact equipment and large excavators offsetting lower demand in other product areas.
South America saw further declines, while the total market in Asia (excluding China) was 10% above the same period last year, boosted by improvements in India and Korea.
There was also strong growth in Indonesia, driven by a recovering mining sector, while demand shrank in both Turkey and the Middle East.
China, meanwhile, continues to recover, with the market growing by 48% during the first quarter, compared with the same point the previous year; driven by a surge in demand for excavators, which increased by 99% during the period.
‘After years of tough market conditions, the Volvo CE business is growing again,’ commented Volvo CE’s president, Martin Weissburg (pictured). ‘Higher sales volumes linked with increased internal efficiency and a lower cost base helped us deliver good profitability levels during the quarter.
‘Volvo CE are on the right track, the improvement plan is yielding results and there are further opportunities to improve the long-term competitiveness of the company.’
