‘Progress and milestones’ in 2023 leaves Volvo prepared for 2024 challenges

VOLVO Construction Equipment has reported ‘improved earnings and stable sales’ in Europe and North America for the final quarter of 2023.

For the full year 2023, Volvo CE achieved an increase in annual net sales from 2022, despite a drop in sales for the last quarter, after being impacted by a weaker market landscape across many regions in the world.

The manufacturer said that while global machine sales are slowing across the industry, service sales for Volvo have risen. Europe, North America, Africa and Oceania are reporting ‘steady but softening’ sales, while Asia and South America are seeing the biggest decline due to slower economic activity.

In Q4, 2023 global net sales dropped by 4% to SEK 26,578 M, of which net sales of machines decreased by 6% while service sales increased by 6%.

Adjusted operating income amounted to SEK 3,320 M corresponding to an adjusted operating margin of 12.5%. For the full year 2023, net sales rose to SEK 104,981 M. Adjusted operating income amounted to SEK 16, 993 M with an adjusted operating margin of 16.2%.

Despite an increase in orders in North and South America, overall global net order intake has declined by 26%. This, Volvo added, has been primarily caused by lower demand in China and ‘cautiousness’ among customers and dealers in Europe. Deliveries have also decreased by 27% in Q4 due to weakening demand in China and Europe, as well as the slowdown in Brazil.

Volvo has taken further steps to decarbonise construction by establishing net zero partnerships with customers such as CRH and Heidelberg Materials. The company has also continued its rollout of electric solutions and introduced zero-emission machines to new regions including Australia and UAE.

Melker Jernberg, president of Volvo CE, said, “The progress and milestones we have made in 2023 will prepare us for the challenges of 2024. There is no doubt our industry is coming into the new year faced with a weaker market landscape, but now more than ever we will show our ability to perform for today while transforming for tomorrow.”