Volvo CE increases sales in 4Q 2017

Volvo Construction Equipment (Volvo CE), Shippensburg, Pennsylvania, says it put in a strong performance in the 4Q 2017, helping its parent company the Volvo Group, Gothenburg, Sweden, 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, the company says.

In Q4 2017, Volvo CE says net sales increased by 28 percent to $2.1 million. When adjusted for currency movements net sales were to 34 percent. Operating income amounted to $2.3 million, corresponding to an operating margin of 10.9 percent. Earnings were positively impacted by higher sales and increased use of the industrial system.

For the full year net sales increased by 31 percent, to $8.4 million. Adjusted operating income increased to an operating margin of 11.9 percent.

Demand in Europe improved during the quarter, and was up 16 percent by the end of November, helped by growth in the U.K., France, Italy, Germany and a rapidly improving Russian market, Volvo CE says. North America was up by 10 percent over last year, helped by greater demand for excavators, while South America saw a gain of 17 percent, 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 percent compared to last year, boosted by an improving mining sector. The Chinese market itself was strongly up, growing by 74 percent above last year, driven by greater demand for excavators and wheel loaders. The market for large excavators was up 121 percent, while compact excavators saw an 83 percent improvement. By the end of November, the market for wheel loaders in China was up by 50 percent.

During 4Q 2017, Volvo CE saw net order intake increase by 48 percent, largely driven by strong demand in China and North America. Deliveries increased by 49 percent during the period, again boosted by higher volumes in China.

“The performance program to strengthen Volvo CE’s competitiveness combined with increased market demand yielded good results in 2017,” Melker Jernberg, the new president of Volve CE, says. “Volvo CE improved profitability and gained market share in several of our stronghold segments of excavators, wheel loaders and haulers.”

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.