Volvo CE’s Q4 2014 sales drop 6%
Stagnation in Europe and accelerated decline in China dampened demand during Volvo Construction Equipment’s final quarter of 2014, resulting in a 6% year-on-year in sales. For the full year 2014, sales at the company were down 1% compared to 2013.
The Q4 2014 Volvo CE sales were worth €1.354 billion (SEK 12,277 million), compared to €1.378 billion (SEK 13,005 million) in the same period of the preceding year.
Operating income decreased during the final 2014 quarter, to a loss of €16.43 million (SEK 155 million), compared to income of €28.83 million (SEK 272 million) in the same period of the previous year. Operating margin was also affected, at negative 6.6% – down from a positive 2.1% in Q4 2013. Both income and margin were said by Volvo CE to be impacted by low capacity utilization in the industrial system, as the Swedish construction equipment manufacturing giant reduced production output to adapt to declining sales volumes and in order to control inventory levels.
Volvo CE comments that an improving European market for much of 2014 – which saw growth coming from Germany, United Kingdom and France – was dampened towards the end of the year by a sharp decline, especially in Russia. With the exception of Japan, all Asian markets were below 2013 levels, as was the case in South America – with markets there hard hit by lower commodity prices and reduced mining activity. The Chinese market was especially affected, denting demand for both Volvo CE’s SDLG and Volvo branded products. One bright spot was the North American market, which continued to perform well during 2014.
“Our work towards further improving operational performance and lowering cost levels has good traction,” said Martin Weissburg, president of Volvo Construction Equipment. “There is still a lot to do, but we have a good momentum in our activities to improve efficiency and reduce costs.”