With the recovery now broad based, Volvo Construction Equipment ended 2010 having sold a record 66,000 machines, a 70-percent increase over previous-year totals, the company announced last week. Volvo CE also reported a sharp increase in sales and profitability in 2010, amid improving conditions for the industry.
Full-year 2010 Volvo CE sales increased 51 percent to SEK 53.81 billion (about U.S. $8.33 billion), compared to 35.66 billion in 2009. Operating income rose to SEK 6.18 billion (U.S. $956.6 million), up from a loss of 4.01 billion in the preceding year.
These improved full-year figures were boosted by a strong set of fourth quarter results. Net sales in the past three months were up 44 percent and amounted to SEK 14.66 billion (U.S. $2.27 billion) from SEK 10.16 billion in 4Q09. Operating income in the quarter also saw a sharp improvement at SEK 1.76 billion (U.S. $272.1 million), up from a loss of SEK 564 million in the same period of 2009. These improved results were accompanied by an operating margin of 12 percent, which was the highest ever for a fourth quarter. Volvo CE’s order bookings remain strong, the company said, with a total value of the order book on Dec. 31, 45-percent higher than on the same date in 2009.
“We ended 2010 strongly,” said Olof Persson, Volvo CE chief executive. “The gradual improvement in Europe continues and North America is now definitely recovering, at the same time as the emerging economies continue their strong growth. In addition to higher sales, the strong situation we now find ourselves in is also due to internal cost reduction activities, enhanced cost absorption in the manufacturing system and increased productivity.”
In the fourth quarter the total world market for construction equipment within Volvo CE’s product range increase by 31 percent, compared to the same period in 2009, the company said, an improvement strongly driven by the BRIC (Brazil, Russia, India and China) countries, which had an increase of 47 percent. In Europe the total market was up by 4 percent and North America was up by 31 percent during the quarter. Asia increased by 39 percent, strongly influenced by China and India, where the markets increased by 53 percent and 24 percent respectively. Other markets were up by 40 percent, helped by a rapidly recovering Russian economy, which saw a 269-percent improvement.
For the full year 2010, the total world market increased by 44 percent and conditions in 2011 are expected to remain positive. Europe is expected to grow by 5 to 15 percent, North America by between 20 to 30 percent, Brazil, India and China by 5 to 15 percent and demand in Russia is expected to double during the year. Other markets are expected to grow by between 5 to 15 percent in 2011.
Volvo CE develops, manufactures and markets equipment for the construction and related industries. Its products include a comprehensive range of wheel loaders, hydraulic excavators, articulated haulers, motor graders, soil and asphalt compactors, pavers, milling machines, compact wheel loaders and excavators, and skid steer and backhoe loaders.