North America Sales Growth Paces Volvo CE in Q2

Second quarter 2015 revenues rose 5 percent for Volvo Construction Equipment and profitability surged 80 percent, despite significant declines in some major markets.

Michael Roth

July 17, 2015

2 min read

Efficiency measures improved product mix favorable currency and strong North American sales all helped Volvo CE to its most profitable quarter in three years — Efficiency measures, improved product mix, favorable currency and strong North American sales all helped Volvo CE to its most profitable quarter in three years.

Second quarter 2015 revenues rose 5 percent for Volvo Construction Equipment and profitability surged 80 percent, despite significant declines in some major markets. The company’s earnings were positively impacted by currency and a favorable product mix.

Revenue in North America jumped 29.9 percent for Volvo CE, while the company enjoyed a 4.8-percent hike in Asia. Europe was essentially flat, while sales slumped 31 percent in South America.

Ongoing efficiency measures also had an impact on the company’s improved second quarter performance. Volvo posted its best profit margin in the past three years, even though deliveries decreased by 24 percent in the second quarter, primarily driven by lower demand in China and Russia, impacting both the Volvo and SDLG brands.

Net sales in the second quarter totaled SEK 15.419 billion (about U.S. $1.78 billion), compared to SEK 14.624 billion in the same period a year ago. Operating income leapt 80 percent to SEK 1.353 billion, compared to SEK 751 million a year ago. Operating margin, 8.8 percent, was significantly improved compared to 5.1 percent a year ago.

“The second quarter saw Volvo CE continue its targeted sales activities and the implementation of the restructuring program we launched in 2014,” said Martin Weissburg, president of Volvo Construction Equipment. “With the exception of North America, demand was down across the board, resulting in a decline in equipment deliveries by almost a quarter. That said, our products are well received by the market and operating margin improved significantly during the quarter.”

About the Author

Michael Roth

Editor

Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.