VOLVO Construction Equipment (Volvo CE) has announced its “best set of annual financial results ever” with a full-year net sales increase of 27%.
The results were attributed to growth in both machine and service businesses and an increased demand from construction, infrastructure and mining in all major markets.
Net sales for the full year climbed 27% to 84,238 million Swedish Krona (SEK). Adjusted operating income increased to SEK 11,306m, corresponding to an operating margin of 13.4%.
Q4 2018 saw net sales increase 21% to SEK 20,323m. Operating income saw a rise of 19% to SEK 3,157m, corresponding to an operating margin of 10.6%. Earnings were positively impacted by higher sales. However, these were partially offset by higher production costs and selling expenses.
Demand in Europe was said to improve in the fourth quarter, up 12% by the end of November, helped by strong growth in Russia, and moderate growth in the UK, France, Italy and Germany. North America was up 16% on the previous year’s figure for the same period, helped by an increased demand for excavators, while South America saw a gain of 20%.
Asian markets (excluding China) were up 11% compared to the previous year. The Chinese market grew by 35% above 2017, driven by greater demand for excavators and wheel loaders.
Net order intake in Q4 increased by 9%. Order intake in Europe increased 2% compared to the previous year, while North America saw a drop of 24%, due to lower orders on medium and large machines. This followed a strong demand in Q3 and a particularly strong period in the corresponding quarter in 2017, Volvo CE said. In Asia, order intake was up by 26%, while in South America it dipped by 5% and by 22% in Africa and Oceania.
Deliveries increased by 24% during the period.
Melker Jernberg, president of Volvo Construction Equipment commented, “2018 was a record year for Volvo CE, driven by good demand from all major regions in the construction, infrastructure and mining sectors. In the future, we see further potential to increase volume flexibility in the supply chain, to improve quality and to grow our service business. An even stronger service business means that we can provide better support for our customers and also better balance the cyclicality in construction equipment sales.”
