Volvo CE sales up 28% in Q4 2017

Improved competitiveness and increased demand boost sales, operating income and order intake

VOLVO Construction Equipment (Volvo CE) say their strong performance in the fourth quarter (Q4) of 2017 helped parent company the Volvo Group achieve the highest sales and operating income in its history.

Improved competitiveness coupled with growing demand, especially in Asia, helped Volvo CE deliver strong improvements in sales, operating income, and order intake.

In Q4 2017, net sales increased by 28% to SEK16,733 million (2016: SEK13,110 million). When adjusted for currency movements net sales were up even more, to 34%.

Operating income amounted to SEK1,816 million (SEK494 million), corresponding to an operating margin of 10.9% (3.8).

For the full year net sales increased by 31%, to SEK66,497 million (SEK50,731 million), whilst adjusted operating income increased to SEK7,917 million (SEK2,246 million), corresponding to an operating margin of 11.9% (4.4).

Demand in Europe improved during the quarter, and was up 16% by the end of November, helped by growth in the UK, France, Italy, Germany and a rapidly improving Russian market.

North America was up by 10% over last year, helped by greater demand for excavators, while South America saw a gain of 17%, from low levels and mostly from markets outside of Brazil.

The Middle Eastern market continued to slow, weighed by weak demand from Saudi Arabia.

Excluding China, Asian markets were up 11% compared with 2016, boosted by an improving mining sector.

The Chinese market itself was strongly up, growing by 74% above 2016, driven by greater demand for excavators and wheel loaders. The market for large excavators was up 121%, while compact excavators saw an 83% improvement. By the end of November 2017, the market for wheel loaders in China was up by 50%.

During Q4 2017, Volvo CE saw net order intake increase by 48%, largely driven by strong demand in China and North America. Deliveries increased by 49% during the period, again boosted by higher volumes in China.

‘The performance programme to strengthen Volvo CE’s competitiveness combined with increased market demand yielded good results in 2017,’ said Melker Jernberg (pictured), the new president of Volvo CE. We improved profitability and gained market share in several of our stronghold segments of excavators, wheel loaders and haulers.’

Volvo CE have started 2018 in a similarly buoyant mood. In January the company took another step to further strengthening its customer offer with the announcement that the Volvo brand was entering the rigid hauler market, introducing four new models ranging from 45 to 100 tons.