Volvo CE surges into 2012 with record Q1 results

Volvo CE reported record sales and profitability in Q1, 2012, with sales up 17% and higher than ever operating income and operating margin for a first quarter.

Volvo Construction Equipment (Volvo CE) experienced a strong first quarter in 2012, seeing sales rise 17% and record levels of income and operating margin for a first quarter. These positive results come despite a flat total world market for construction equipment, compared to last year, and a Chinese market that was down by 26%. Despite this decline in the Chinese market, Volvo CE maintained sales in China and reinforced its number 1 position in the Chinese wheel loader and excavator market together with its joint-venture partner, SDLG. A further highlight for Volvo CE in the quarter was an 111% increase in sales in North America.

The company’s net sales during the first three months were driven by favorable demand for construction equipment in most markets outside of China, rising by 17% to SEK 17,999 M (SEK 15,422 M in Q1 2011). Volvo Construction Equipment also demonstrated strong profitability during the period, posting a 21% increase in operating income to SEK 2,131 M, (SEK 1,755 M) and an operating margin of 11.8%, up from 11.4% in the same period last year. Both measures of profitability are records for the company in a first quarter, and are attributable to sales price realization, currency effects and internal cost reductions.

The value of Volvo CE’s order book on 31st March 2012 was also improved, being 35% higher than the previous year.

“The strong sales growth and high profitability is a combination of growth in all regions, especially in North America, and our success in achieving sales and profitability is on a par with the preceding year in China, despite the significant weakening of that market,” commented Volvo CE’s President Pat Olney. “Our success in China was due to our continued ability to capture market share, thanks to a strong product portfolio and our efforts to establish stable distribution channels.”

Market situation

These results come amid a generally flat total market situation. In Europe and North America the market increased by 16% and 35% respectively, while South America increased by 3%, Asia (excluding China) was up by 24% and China decreased by 26%.

The prospects for the rest of the year remain positive. Europe is expected to grow by 10-20%*, North America by 15-25% and South America by 0-10%. Asia (excluding China) is expected to grow by between 0-10%, while China is forecast to decline by between 15-25%.

Notable events during the period

Volvo Construction Equipment continued to invest and innovate during the quarter. The company opened a new plant in Linyi, China, that will make SDLG branded equipment, while in Bangalore, India, a new factory was inaugurated to make Volvo excavators, alongside the existing road machinery products already produced at the facility.

Table 1. Volvo Construction Equipment, net sales by market area, in Millions of Swedish Krona


Net sales by market area

First three months












North America





South America










Other markets











*Total market volumes.



April 2012

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Clare Gittins                                                          Brian O’Sullivan
Director, External Communications                           SE10
Volvo Construction Equipment                                  London
Tel: int + 32 4918 60331                                          Tel: int +44 77 333 50307
Email:                                  Email:




Volvo Construction Equipment (Volvo CE) is a major international company developing, manufacturing and marketing equipment for construction and related industries. Its products, leaders in many world markets, include a comprehensive range of wheel loaders, hydraulic excavators, articulated haulers, motor graders, soil and asphalt compactors, pavers, milling machines and compact equipment.  Volvo CE is part of the Volvo Group, one of the world’s largest manufacturers of heavy duty diesel engines (9 to 18 liter).  Volvo Group is one of the world's leading manufacturers of trucks, buses and construction equipment, drive systems for marine and industrial applications, aerospace components and services. The Group also provides complete solutions for financing and related services. The Volvo Group, which employs more than 98,000 people, has production facilities in 19 countries and sells its products in more than 180 markets. Volvo Group sales for 2011 amounted to 311bn SEK. The Volvo Group is a publicly-held company headquartered in Gothenburg, Sweden.


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