Announcing its fourth quarter and full year results, Volvo Construction Equipment (Volvo CE) reported that net sales for 2012 remained at the same level as the previous year, despite a dramatic drop in global demand in the second half. The company also reinforced its strong position as market leader in the all-important Chinese wheel loader and excavator segment, extending its share in 2012 to an unprecedented 15%. The company also produced its second best ever output, selling 78,491 machines during the year.
For the full year 2012, Volvo CE’s sales increased by less than 1% to compared to 2011. Operating income reduced during the year, a result of lower sales and negative product mix. Operating margin was also affected, retreating to 9.1% in 2012 from 10.7% in 2011, as was the value of the order book, which on December 31st was 36% lower than a year earlier.
Sharp correction in Q4
These reasonable full year figures mask a significant slowdown in demand in the fourth quarter results of 2012. A softer world market, in particular mining, saw net sales in the last three months down by almost a quarter (23 When adjusted for changes in the exchange rates, net sales fell by 22%. Operating income was also down in the same period in the previous year. However, despite the dramatic fall in sales operating margin remained positive, at 2.9%, thanks to rapid and significant cuts in production and a consequent reduction in inventories.
“Taken as a whole 2012 was a reasonable year,” commented Pat Olney, president of Volvo Construction Equipment.