Volvo Construction Equipment Rounds off 2013 with Sales Up 3%

Despite three-month increase based on higher compact equipment sales, full year 2013 saw sales decline 16%.

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Volvo Iron Mark

A slowly recovering global market helped Volvo Construction Equipment round off 2013 with sales up 3% in the fourth quarter, deliveries up 9% and improved market share, especially in compact equipment, while demand in the mining segment remains soft.

In the fourth quarter of 2013, Volvo Construction Equipment reported that net sales increased by 3% to SEK 13,005 compared to SEK 12,572 in the same period of the preceding year. When adjusted for currency movements, net sales increased to 6%. These improved figures are due largely to higher sales of smaller equipment, helping to boost deliveries by 9% during the quarter. Demand for larger machines, especially in the mining segment, remains subdued, however.

Operating income was up 16% during the period, at SEK 272 M, compared to SEK 235 M in the same period of the previous year. Operating margin also saw improvements in the fourth quarter, at 2.1% – up from 1.9% in Q4 2012.

Late improvement rounds off challenging year

Despite the sales increases in the final three months, for the full year 2013, Volvo CE saw sales decrease by 16% to SEK 53,437 M, compared to 63,558 M in 2012. Operating income was also down during the year, a result of tough price competition, weak product mix, low capacity utilization and unfavorable exchange rates, to SEK 2,592 M, down from SEK 5,667 M in the preceding year. Operating margin was also affected, slipping to 4.9% in 2013 from 8.9% in 2012.

These figures reflect the general weak market conditions experienced during the year.

Growth in 2014

The prospects for 2014 are expected to show some improvements as global markets recover. For 2014, the total markets in China and Europe are expected to increase in the range of 0-10% measured in units, while North America, South America and Asia (excluding China) are all expected to be in the range of minus 5% to plus 5%.

“For 2014 we expect a slight improvement in market demand, mainly driven by China and Europe,” commented Martin Weissburg, the incoming president of Volvo Construction Equipment, who joined the company on January 1, 2014.

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