Improving market conditions helped Volvo Construction Equipment (Volvo CE) report strong growth in sales, profitability, order intake and deliveries in the first quarter of 2017.
During the first three months of 2017 Volvo CE saw net sales jump by 30 percent to SEK 16,163 M (SEK 12,452 M in Q1 2016). Operating income was also positively impacted, rising to SEK 1,617 M, up significantly compared to SEK 341 M in the first quarter of 2016.
In the first quarter of 2017 Volvo CE also enjoyed an increase in order intake, which rose by 34 percent to 17,487 machines, with increases in orders coming from all markets, but particularly China and Europe. Deliveries were also up 34 percent during the period, to 16,369 machines.
Operating margin also saw good improvement, at 10 percent, compared to 2.7 percent in the same period the year before.
At Conexpo/Con-Agg in Las Vegas, Volvo CE unveiled a new generation of its largest wheel loader – the 50-ton class L350H. Among other products on display in Las Vegas was the L260H wheel loader, a 34-ton machine purpose-built to load on-highway trucks in just two even passes.
Volvo CE also launched ActiveCare Direct in North America, a telematics monitoring service supported through the company’s dealer network. Volvo CE has built a dedicated uptime center with a team of analysts who proactively monitor and report on customer fleets throughout the United States and Canada.
Volvo's market continued to improve during the quarter, with all regions (with the exception of South America) showing growth. The European market was up 17 percent, driven by increased demand in Germany, the UK and France. North America was up 1 percent, with improvements in compact equipment and large excavators offsetting lower demand in other product areas. South America saw further declines, while the total market in Asia (excluding China) was 10 percent above the same period last year, boosted by improvements in India and Korea. There was also strong growth in Indonesia, driven by a recovering mining sector, while demand shrank in both Turkey and the Middle East. China, meanwhile, continues to recover, with the market growing by 48 percent during the first quarter, compared to the same point the previous year; driven by a surge in demand for excavators, which increased by 99 percent during the period.
“After years of tough market conditions, the Volvo CE business is growing again,” commented Volvo CE’s 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.”