Volvo CE Revenue Drops 19 Percent in Second Quarter

July 26, 2013

Volvo Construction Equipment posted better operating margins in the second quarter compared to the first quarter, despite revenue dropping 19 percent compared to the second quarter of 2012. Volvo’s net second-quarter sales were SEK 16 billion (about U.S. $2.5 billion), compared to SEK 19.7 billion in the year-ago quarter. Adjusted for currency movements, the net sales decline was 14 percent.

Operating income also plunged from SEK 2.74 million to SEK 1.32 million. Operating margin, at 8.3 percent, decreased from 13.9 percent in the year-ago quarter, but more than doubled compared to the first quarter. Despite the weaker market conditions, the value of Volvo CE’s order book at the end of the second quarter was nearly at the same level as the end of Q212.

For the first six months of the year, Volvo posted SEK 28.2 billion (about U.S. $4.4 billion), compared to SEK 37.7 billion a year ago, a 25.3-percent decline.

Volvo’s largest second-quarter decline was in North America where sales plunged 42 percent, followed by 17.5 percent in South America, 14.8 percent in Asia, and 8 percent in Europe.

The company also announced the launching of two wheel loaders from its SDLG brand (see accompanying story at http://rermag.com/headline-news/sdlg-market-wheel-loaders-north-america). Its second-quarter highlights included the introduction of new compact excavators and an asphalt paver at the Bauma show in Munich and the opening of its new excavator plant in Kaluga, Russia. Also in the second quarter, Volvo CE’s remote telematics system CareTrack reached a milestone, with more than 50,000 machines worldwide installed with the telematics portal.

Looking ahead in its outlook for the full year, Volvo expects North America, South America, China and the rest of Asia to post unit sales in the range of minus 5 percent to plus 5 percent, while it expects a 5- to 15-percent drop in Europe.