In the face of a reduction in the size of the total market for construction equipment, Volvo Construction Equipment (Volvo CE) bucked the trend in the second quarter of 2012, posting a solid set of financial results that saw sales in the three months up 15%, operating income up 35% and an operating margin of 13.3%. The period also saw the company strengthen its market position in wheel loader and excavator sales in China, taking a 14.7% share of this all-important market.
Despite a downturn in the Chinese market, which declined by 38% during the quarter, sales at Volvo CE were positively impacted by strong momentum in most other markets, particularly North America, and a favorable product and geographic mix. Net sales in the second quarter rose by 15%, amounting to SEK 19,715 M (SEK 17,153 M in Q2 2011). Operating income, meanwhile, increased by 35% and amounted to SEK 2,629 M, up from 1,945 M in 2011. This had a positive impact on operating margin, which jumped to 13.3%, up from 11.3% in the same period in 2011. The value of Volvo CE’s order book at the end of the second quarter was also higher, up 14% compared to the same date in 2011.
Commenting on the results, Mr. Pat Olney, the president of Volvo CE said: “Sales growth continued to be robust during the quarter, most notably in North America where sales were up 89% compared to the same period last year. In Asia we managed to offset a sharp decline in the overall market in China by continuing to gain market share, while demand in Southeast Asia remained strong.”
Construction began in April of a new 20,660m2 facility in Kaluga that will, when completed in 2013, produce six models of excavators for the Russian market. This was followed in May by the ground breaking of a $100 million expansion of Volvo CE’s facility in Shippensburg, US, creating a new Americas headquarters, demonstration center and the ability to localize production of larger machines. The quarter also saw Volvo CE attend the Intermat exhibition, in Paris, France, where it launched its ECR145D/ECR235D reduced radius excavators, heavy duty EC380/480D excavators, DD25 double drum compactor and P7820C ABG asphalt paver.
The company also picked up a number of important honors during the period, not least taking gold in the Intermat Innovation Award for its On Board Weighing System for haulers, and the prestigious Red Dot ‘best of the best’ accolade for the A40F articulated hauler.
Table 1. Volvo Construction Equipment, net sales by market area, in Millions of Swedish Krona (SEK).
| Net sales by market area | Second quarter | First six months | ||
| SEK M | 2012 | 2011 | 2012 | 2011 |
| Europe | 5,019 | 4,905 | 8,853 | 8,587 |
| North America | 4,052 | 2,140 | 7,370 | 3,712 |
| South America | 1,103 | 1,101 | 2,096 | 2,005 |
| Asia | 8,223 | 8,195 | 17,172 | 16,598 |
| Other markets | 1,318 | 811 | 2,223 | 1,674 |
| Total | 19,715 | 17,153 | 37,714 | 32,575 |
Ends.
July 2012
For further information, please visit: www.volvoce.com/press
Or contact:
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: clare.gittins@volvo.com Email: osullivan@se10.com
Twitter: http://twitter.com/VolvoCEGlobal
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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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