Volvo CE’s improved revenues and profits in Q2 2015

Volvo Construction Equipment Q2 2015 revenues rose by 5% and profitability by 80% compared to the same period of 2014, despite significant declines in major markets.

Favourable currency developments and product mix, combined with ongoing efficiency measures have helped bolster the manufacturing giant’s second quarter 2015 financial results, with the company posting a 5% improvement in sales and its best profit margin for three years. This was despite continued strong economic headwinds in many of its principle markets, which saw deliveries decrease by 24% in the second quarter, mainly driven by lower demand in China and Russia, impacting both the Volvo and 5453 SDLG brands.

Net sales in the second quarter increased by 5%, amounting to €1.656 billion (SEK 15,419 million) -  (€1.571 billion (SEK 14,624 million) in Q2 2014). Operating income increased by 80%, to €145.3 million (SEK 1,353 million), from €80.67 million (SEK 751 million) in the same period during 2014. Operating margin, at 8.8%, was significantly up compared to the 5.1% achieved in same period last year, marking a three year high. Currency exchange rates had a positive impact of €45.87 million (SEK 427 million) on operating income compared to the second quarter in 2014.

“The second quarter saw 3573 Volvo CE continue its targeted sales activities and the implementation of the restructuring program we launched in 2014,” said Martin Weissburg, president of Volvo CE. “With the exception of North America, demand was down across-the-board, resulting in a decline in equipment deliveries by almost a quarter. That said, our products are well received by the market and operating margin improved significantly during the quarter, to 8.8%, thanks to the efficiency program, favourable product mix and positive currency effects.”