First publishedon www.AggBusiness.com
Volvo Construction Equipment has posted a 24% net sales rise in Q3 2018
Strong growth in South America, China and Russia, coupled with healthy profitability, fuelled healthy sales in Volvo
Construction Equipment’s third quarter of 2018.
Helping parent company The Volvo Group to its best ever third quarter results, Volvo Construction Equipment posted a net sales rise of 24% to SEK 18,598 million (€1.798bn) during the period. Operating income was also up, rising to SEK 2,587 million (€250.23mn), up from SEK 2,023 million (€195.67mn) in the corresponding period in 2017. This again delivered a yet stronger operating margin of 13.9% (13.4%). Profitability was positively impacted by higher equipment and service sales, improved capacity utilization in the industrial system and good cost control.
Net order intake in the third quarter increased by 22% compared with the same quarter of 2017. This increase was largely driven by higher intake from China and particularly Europe, which saw order intake jump by 53%, thanks in part to large rental orders for compact machines. North American orders also grew strongly, rising 47%, propelled by medium and large machine sales, and South America also saw order intake rise by a fifth.
Up to the end of August the European market was up 11%, driven by growth in Russia and stable demand in Germany, the UK, France and Italy. North America saw an increase of 19% over last year, thanks to demand for excavators, haulers, large wheel loaders and road equipment. The South American market was up a quarter from the low levels of last year, buoyed by stronger equipment demand in Brazil. In Asia (excluding China) the total market was 13% above last year. The Chinese market was 42% above last year, albeit with a slowing trend as the year progresses.
“It is encouraging that we have been able to sustain the strong development of recent quarters, with both sales and profitability being above the levels of last year,” said Melker Jernberg, president of Volvo Construction Equipment. “Good demand in most markets for our range of competitive products helped to deliver yet another strong set of figures.”