Volvo CE Sales Jump 22.8 Percent in First Quarter

Volvo Construction Equipment posted SEK 24.742 billion in sales in the first quarter of 2021 (about U.S. $2.967 billion) compared to SEK 20.148 billion in the first quarter of 2020, a 22.8-percent increase. Volvo enjoyed a strong recovery in the second half of last year driven by high activity level in the infrastructure segment and improved construction activity. Order intake increased 73 percent for Volvo CE in the first quarter.

Demand in China, the world’s largest construction equipment market, was strong because of governmental infrastructure investments. Together with an increase in sales across all global markets and segments, China’s investment helped Volvo CE reverse the negative impact shaped by Covid-19 last year for the first quarter 2021 financial results. Deliveries also increased by 53 percent in Q1, driven by higher sales in all regions with the largest increase in China. Sales in Asia, including China, were SEK 11.319 billion, compared to SEK 8.403 billion, a 34.7-percent jump.

At SEK 3,822 M operating income also rose, up from SEK 2,678 M in the same period of 2020. Earnings were positively impacted by higher machine volumes and capacity utilization in the industrial system, cost reductions and increased service earnings, which were partly offset by negative mix effects.

As well as strong infrastructure investment, low inventory levels at dealers and their need to restock also contributed to the increase in order intake to 73 percent for the quarter. In comparison to the expected slowdown and uncertainty created by the outbreak of Covid-19 of last year, deliveries across all regions increased. Demand for large and medium sized machines were stronger than those for compact machines.

In North America, sales were SEK 4.297 million compared to SEK 3.711 million a year ago, a 15.7-percent increase. In Europe, sales jumped from SEK 6.477 billion a year ago to SEK 7.263 billion, a 12.1-percent leap. Sales in South America increased 21 percent and sales in Africa and Oceania leapt 19 percent.

“It is heartening to see demand increasing in the first quarter of this year, with sales up across all regions and markets,” said Volvo CE president Melker Jernberg. “We can take confidence that we have weathered a tough period for our customers, our employees and the wider industry and are beginning to now see higher activity. In many countries, we have seen increased investment in an aging infrastructure, something which we expect to continue for the future. Together with a high level of construction activity in several other sectors, this is driving demand for both new machines and services, reflected in both deliveries and order intake rising sharply for the first quarter.”