Despite a steep drop in demand in the first half of the year due to the Covid-19 pandemic, Volvo Construction Equipment recovered well, delivering improvements in sales and operating income in the fourth quarter 2020.
In Q4 2020, net sales increased by 6 percent to $2.4M. Adjusted for currency movements net sales were up by 15 percent. Operating income amounted to $275,712, corresponding to an operating margin of 11.2 percent (9.8). Earnings were positively impacted by higher machine and service sales. For the full year net sales decreased by 8 percent to $9.7M.
After a steep drop at the start of the pandemic in the spring, demand started to recover in the second half of the year. Up to November both the European and North American markets were down 14 percent, while South America rose 12 percent, largely a result of an improving Brazilian market. Government stimulus measures fueled a sharp recovery in China, which was up 28 percent, although Asia as a whole was down by 6 percent.
ORDERS AND DELIVERIES
During the fourth quarter of 2020 Volvo CE saw net order intake increase by 31 percent, driven by improving activity in most markets and dealer restocking. Order intake in Europe increased by 20 percent but fell (compared to the record order intake in 2019) by 18 percent in North America. In South America order intake was up 182 percent, up from low levels in most markets. In Asia order intake was up 39 percent.
Deliveries increased by 21 percent during the fourth quarter 2020, again boosted by higher volumes in China, as well as other Asian markets and Brazil.
In the fourth quarter Volvo CE began deliveries of its electric compact wheel loaders and compact excavators, beginning the company’s electrification journey.
