Maintaining its ascendancy in the all-important Chinese market, Volvo Construction Equipment ended 2011 with a 14 percent increase in net sales in the fourth quarter, helping the company to a full year sales increase of 15 percent. Amid steady growth in most markets, the company ended 2011 with a strong order book and having sold a record 84,000 machines.
Announcing its fourth quarter and full year results, Volvo Construction Equipment (Volvo CE) reported unit sales up almost a third in 2011, amid positive sales trends in most markets, with the exception of China, which had a relatively weak fourth quarter. The company produced an all-time high of 84,000 machines during 2011 (up from 66,000 in 2010), and began 2012 with an order book 51 percent higher than at the same point in the preceding year.
Thanks to good momentum in most markets, these full year figures were bolstered by a solid set of fourth quarter results. Net sales in the last three months were up 14 percent and amounted to 16.75 billion kronor ($2.5 billion). When adjusted for changes in the exchange rates, net sales rose to 15 percent. Operating income saw a modest decrease in the quarter, at 1.65 billion kronor ($244 million), down from 1.75 billion kronor in the same period in the previous year. Again, much of this decrease is accountable to currency issues, a factor that also weighed on operating margin, which at 9.8 percent was down from the 12 percent reported in the same period in 2010.
For the full year 2011, Volvo CE’s sales increased by 21 percent to 65 billion kronor, compared to 54 billion kronor in 2010. Operating income also increased, to 6.6 billion kronor, up from 6.1 billion kronor in the preceding year. Operating margin was down slightly in 2011, mainly due to the negative impact of currency issues, to 10.2% in 2011, down from 11.5% in 2010.
Growth set to continue in 2012
The prospects for 2012 are expected to remain positive, with Europe expected to grow by 10-20 percent, North America by between 15-25 percent and South America by between 0-10 percent. Asia (excluding China) is forecast to grow by between 10-20 percent, while China itself is projected to be on the same level as in 2011.