In the fourth quarter of 2013 Volvo Construction Equipment reported that net sales increased by 3 percent to SEK 13,005 compared to SEK 12,572 in the same period of the preceding year. When adjusted for currency movements net sales increased further — to six percent. These improved figures are due largely to higher sales of smaller equipment, helping to boost deliveries by 9 percent during the quarter. Demand for larger machines, especially in the mining segment, remains subdued, however.
Operating income was up 16 percent during the period, at SEK 272 M, compared to SEK 235 M in the same period of the previous year. Operating margin also saw improvements in the fourth quarter, at 2.1 percent — up from 1.9 percent in Q4 2012.
Late Improvement Rounds Off Challenging Year
Despite the sales increases in the final three months, for the full year 2013 Volvo CE saw sales decrease by 16 percent to SEK 53,437 M, compared to 63,558 M in 2012. Operating income also was down during the year, a result of tough price competition, weak product mix, low capacity utilization and unfavorable exchange rates, to SEK 2,592 M, down from SEK 5,667 M in the preceding year. Operating margin also was affected, slipping to 4.9 percent in 2013 from 8.9 percent in 2012.
These figures reflect the general weak market conditions experienced during the year.
Growth in 2014
The prospects for 2014 are expected to show some improvements as global markets recover. For 2014 the total markets in China and Europe are expected to increase in the range of 0 to 10 percent measured in units, while North America, South America and Asia (excluding China) are all expected to be in the range of minus 5 percent to plus 5 percent.