Volvo CE Enjoys 30 Percent Year-over-Year Revenue Boost in First Quarter
Volvo Construction Equipment reported strong growth with improving market conditions, increases in sales, profitability, order intake and deliveries in the first quarter of 2017. Volvo’s net sales jumped 30 percent to SEK 16,163 million (about U.S. $1,824 million), compared to SEK 12,452 million in the first quarter of 2016.
Operating income rose significantly to SEK 1,617 million compared to SEK 341 million in the first quarter of 2016. Operating margin was 10 percent, compared to 2.7 percent in Q116.
In the first quarter of 2017, Volvo CE posted an increase in order intake, which soared 34 percent to 17,487 machines, with increases in orders coming from all markets, particularly China and Europe. Deliveries leaped 34 percent to 16,369 units.
The European market increased 26 percent year over year from SEK 4,567 million in the first quarter of 2016 to SEK 5,751 in the just-concluded period. North America leapt 12 percent year over year to SEK 2,924 million. South America, which decreased on a sequential basis from the fourth quarter of 2016, hiked 64 percent compared to Q116 to SEK 404 million. Sales to Asia went up 37 percent year over year, and sales to other markets went up 68 percent.
The total market in Asia rose 10 percent excluding China, boosted by improvements in India and Korea, and strong growth in Indonesia. Demand declined in Turkey and the Middle East.
Business was strong in China (up 48 percent), driven by a 99-percent surge in demand for excavators.
“After years of tough market conditions, the Volvo CE business is growing again,” said Volvo CE president Martin Weissburg. “Higher sales volumes linked with increased internal efficiency and a lower cost base helped us deliver good profitability levels during the quarter. Volvo CE is on the right track, the improvement plan is yielding results and there are further opportunities to improve the long-term competitiveness of the company.”
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.