Table 1. Volvo Construction Equipment net sales by market area in Millions of Swedish Krona
Maintaining its growth in the Chinese market, Volvo Construction Equipment ended a successful 2011 with a 14% increase in net sales in the fourth quarter, helping the company to a full year sales increase of 21%. Amid steady growth in most markets, the company ended 2011 with a strong order book and record sales of 84,000 machines.
Announcing its fourth quarter and full-year results, Volvo Construction Equipment (Volvo CE) reported unit sales up almost a third in 2011, amid positive sales trends in most markets, with the exception of China, which had a relatively weak fourth quarter. The company produced an all-time high of 84,000 machines during 2011 (up from 66,000 in 2010), and began 2012 with an order book 51% higher than at the same point in the preceding year.
For the full year 2011, Volvo CE's sales increased by 21% to SEK 64,987 M, compared to 53,810 M in 2010. Operating income also increased, to SEK 6,653 M, up from SEK 6,180 M in the preceding year. Operating margin was down slightly in 2011, mainly due to the negative impact of currency issues, to 10.2% in 2011, down from 11.5% in 2010.
Due to good momentum in most markets, the full-year figures were bolstered by a solid set of fourth quarter results. Net sales in the last three months were up 14% and amounted to SEK 16,750 M (SEK 14,657 M in 2010). When adjusted for changes in the exchange rates, net sales rose to 15%. Operating income saw a modest decrease in the quarter, at SEK 1,649 M, down from SEK 1,758 M in the same period in the previous year. Again, much of this decrease is accountable to currency issues, a factor that also weighed on operating margin, which at 9.8% was down from the 12% reported in the same period in 2010.
The prospects for 2012 are expected to remain positive, with Europe predicted to grow by 10-20%, North America by between 15-25% and South America by between 0-10%. Asia (excluding China) is forecast to grow by between 10-20%, while China is projected to be on the same level as in 2011.