Volvo Construction Equipment Delivers Margin Improvements with Positive Product Mix

Volvo Construction Equipment (Volvo CE) opened 2026 with positive momentum, achieving growth across both machines and services with deliveries increasing by 12 percent in the first quarter. The results reflect the company's continued transformation towards a full solutions offering.

During the first quarter, the global machine market continued to grow. Volvo posted increases in South America, Africa and Oceania, as well as Asia outside of China, while North America was at the same level as the previous year. Europe and China contracted somewhat.  

In Q1 2026, net sales decreased by 13 percent to SEK 18,305 M (21,117) as a consequence of the divestment of SDLG. The organic sales growth was 14 percent, of which net sales of machines increased by 16 percent and service sales increased by 7 percent. Adjusted operating income amounted to SEK 2,491 M (2,542), corresponding to an adjusted operating margin of 13.6 percent. 

Important milestones 

In the first quarter, Volvo CE maintained positive performance and stability despite uncertain market conditions. 

“In spite of ongoing headwinds, this has been a positive start to the year, driven by increased deliveries of machines and a strong product mix that has enabled us to increase our share of the market for haulers and large excavators,” said Melker Jernberg, president of Volvo CE. “We continue to grow our parts and services businesses. We take this momentum into the second quarter, maintaining our focus on delivering a solid full-year performance and on advancing the transformation of our industry.” 

In Q1, as part of a long-term strategic shift and because of the unsustainable profitability of the Rokbak business, Volvo CE announced in March that it will close the business and concentrate resources on its portfolio of other hauling solutions. The business had revenues of SEK 1.0 billion in 2025 but was not profitable. The production of Rokbak articulated haulers is scheduled to stop in July 2026. 

On February 1, Volvo CE announced that the acquisition of Swecon had been completed, following approval from the European Commission. Volvo CE acquired Swecon’s business operations in Sweden, Germany and the Baltics including Entrack. 

Volvo CE had a strong presence at the ConExpo exhibition in Las Vegas in March. Since the last ConExpo in 2023, 35 percent of the Volvo machine portfolio has been renewed, including the launch of the EC560 excavator, the new flagship A50 articulated hauler, major wheel loader updates, and a new generation of electric machines such as the L120 Electric. Services and solutions to support customer uptime and productivity have also been expanded.  

Market development  

The market in Europe declined somewhat following a weak January, when construction activity was hampered by severe winter conditions, especially in Northern Europe. 

The North American market continued to show good resilience supported by investments in data centers, energy infrastructure and the onshoring of manufacturing. South America expanded, driven by rebounds in Brazil, Argentina, and Peru with mining and heavy infrastructure leading the way. 

In Asia, the Japanese and South Korean markets declined while Indonesia continued to grow on the back of resilient GDP growth, sustained infrastructure and food security investments. The markets in Southeast Asia, Turkey and the Middle East also grew. The Chinese market contracted slightly. There was good growth in Africa and Australia. 

In Europe, total sales increased from SEK 6,400 million to SEK 7,886, a 23.2 percent hike. North America net sales dropped from SEK 5,251 million to 4,535 million, a 13.6 percent decline. South America net sales dipped from SEK 889 million to SEK 690 million, a 22.4 percent drop. Asia not including China dropped by more than half, from SEK 7,362 million to SEK 3,426 million.