Volvo Construction Equipment (Volvo CE) ended 2016 strongly, with market share gains in the larger, more profitable machine segments and net order intake up by 35%. The Swedish giant’s deliveries were also up by 19% to 10,639 machines. Volvo CE said its order intake increased in all markets, most notably in China and Europe. In Q4 2016, Volvo CE net sales increased by 20% to SEK 13,110 million (€1.387 billion). Adjusted operating income amounted to SEK 494 million (€52.28 million), corresponding to an o
Volvo Construction Equipment ( Volvo CE) ended 2016 strongly, with market share gains in the larger, more profitable machine segments and net order intake up by 35%. The Swedish giant’s deliveries were also up by 19% to 10,639 machines. Volvo CE said its order intake increased in all markets, most notably in China and Europe.
In Q4 2016, Volvo CE net sales increased by 20% to SEK 13,110 million (€1.387 billion). Adjusted operating income amounted to SEK 494 million (€52.28 million), corresponding to an operating margin of 3.8%. Earnings were said to be positively impacted by a favourable product mix, higher sales volumes, lower costs for credit losses in China and reduced operating expenses. Earnings were also positively impacted by improved capacity utilisation.
For the full 2016 year sales decreased by 1% to SEK 50,731 million (€5.368 billion). Adjusted operating income increased to SEK 2,246 million (€237.69 million), corresponding to an operating margin of 4.4%.
Europe recorded a 46% order increase, with improvements in most countries, including Russia, and for all product segments. North America saw a 35% order intake increase from low levels in 2015. In Asia (including China), order intake increased by 29%. This was driven by an increased order intake in China, where the excavator market continues to recover, and in India, where strong market growth continued, as well as from increased sales of SDLG branded products in China and Southeast Asia.
The increase in total Volvo CE deliveries in Q4 2016 was a result of higher volumes in Europe and Asia, where China, India and Southeast Asia contributed to the growth.
Earnings were said by Volvo CE to be positively impacted by a favourable product mix, higher sales volumes, lower costs for credit losses in China and reduced operating expenses. Earnings were also said to be positively impacted by improved capacity utilisation.
During the fourth quarter of 2016 Volvo CE said it introduced a “new and more efficient” R&D organisation. It was also announced that the company will fit its in-house produced eight litre engine into its mid-size excavators and wheeled loaders, replacing externally sourced engines. Furthermore, Volvo CE headquarters will be transferred to Gothenburg to facilitate closer cooperation with the Group’s other business areas and operations.
