Volvo CE surge into 2012 with record results

Sales up 17% and higher than ever operating income and operating margin for a first quarter

VOLVO Construction Equipment experienced a strong first quarter in 2012, seeing their sales rise 17% and reaching record levels of operating income and operating margin for a first quarter.

These positive results were achieved despite a flat total world market for construction equipment, compared to last year, and a Chinese market that was down by 26%.

The company said net sales during the first three months were driven by favorable demand for construction equipment in most markets outside of China, rising by 17% to SEK17,999 million (SEK15,422 million in the first quarter of 2011).

A particular highlight for the company during the quarter was a 111% increase in sales in North America.

Volvo CE also demonstrated strong profitability during the first three months, posting a 21% increase in operating income to SEK2,131 million (SEK1,755 million) and an operating margin of 11.8%, up from 11.4% in the same period last year.

Both measures of profitability are records for the company in a first quarter, and are attributable to sales price realization, currency effects and internal cost reductions.

The value of Volvo CE’s order book on 31 March 2012 also showed an improvement, being some 35% higher than the previous year.

The company’s results come amid a generally flat total market situation. In Europe and North America the market increased by 16% and 35% respectively, while South America increased by 3%, Asia (excluding China) was up by 24% and China decreased by 26%.

Volvo CE say the prospects for the rest of the year remain positive with Europe expected to grow by 10–20%, North America by 15–25% and South America by 0–10%. Asia (excluding China) is also expected to grow by between 0–10%, while China is forecast to decline by between 15–25%.