The first three months of 2014 experienced improved earnings on the back of higher sales at Volvo CE. With deliveries up and a new range of Tier-4 Final/Stage IV compliant models launched, the company reported the most growth in mature markets.
During the first three months of 2014 Volvo Construction Equipment saw net sales grow by 10 percent to SEK 13,371 M (SEK 12,136 M in Q1 2013). When adjusted for currency movements, growth increased by 11 percent. Operating income was also up during the period, increasing to SEK 647 M, compared to SEK 500 M in the first quarter of 2013, while operating margin strengthened to 4.8 percent, up from 4.1 percent. Deliveries increased by 11 percent compared to the same period a year ago, while the order intake was 9 percent higher than in the same quarter in 2013.
These results come amid a gradual improvement in the market situation. Measured in units, Europe grew by 15 percent during the first two months of 2014, while North America was up by 7 percent despite a harsh winter. South America saw demand fall, caused mainly by Brazil, where most of the large government-funded projects have been delivered, as well as reduced demand for commodities. The total Asian market, excluding China, strengthened by 4 percent compared to 2013, thanks largely to a 38 percent improvement in Japan. This was offset somewhat by further declines in India and South East Asia. Compared to the low levels seen in 2013, China saw growth in the first two months of the year; its loader and excavator segment increased by 7 percent and there was a continued shift towards compact equipment.
The prospects for the rest of the year remain modest. Measured in units, Europe and North America are both expected to grow by 0-10 percent, while South America and Asia (excluding China) are forecast to decline by up to 10 percent. China, meanwhile, is expected to develop in the region of -5 percent to +5 percent during 2014.
“The seasonally strong first quarter had a positive impact on volumes, which contributed to improved profitability compared with the weak close of 2013,” commented Volvo CE’s president Martin Weissburg. “The situation continues to be challenging, particularly for customers and dealers with large exposures to the mining industry. That said, we expect a moderate growth in Volvo CE’s mature markets.”
Notable events during the period
The construction equipment industry’s largest event of the year, Conexpo 2014 in Las Vegas, saw Volvo CE unveil an overhaul of its core product range. Some of the new machines include the H-Series wheel loaders, E-Series excavators, G-Series articulated haulers and C-Series motor graders, as well as a host of emissions-compliant road machinery introductions. All new machines meet, where necessary, the low emission requirements of Tier-4 Final/Stage IV legislation, which came into force in North America and the EU in January 2014.
For further information, please visit: www.volvoce.com/press