Volvo Construction Equipment (CE) increased its net sales by 20% in Q4 2016 as the OEM made market share gains in the larger, more profitable machine segments and net order intake increased by 35%.
In Q4 2016, net sales increased by 20% to $1.5bn, from $1.26bn in 2015. Adjusted operating income amounted to $56.6m, corresponding to an operating margin of 3.8%, compared to a loss of 21.9m in 2015.
Volvo Construction Equipment ended 2016 with a strong performance, with deliveries up by 19% to 10,639 machines and order intake increasing in all markets.
For the full year sales decreased by 1% to $5.8bn, but adjusted operating income increased to $257m, corresponding to an operating margin of 4.4%.
Earnings were positively impacted by a favourable product mix, higher sales volumes and reduced operating expenses, including improved capacity utilisation.
“Global demand for construction equipment was largely flat in 2016,” says Martin Weissberg, president of Volvo Construction Equipment.
“However, Volvo shows positive signs of growth in our stronghold segments of excavators, wheel loaders and articulated haulers. The ongoing work to improve Volvo CE’s competitiveness is yielding results.”
During the fourth quarter a more efficient R&D organisation was also introduced. The company announced that it will fit its in-house produced eight litre engine into its mid-size excavators and wheel loaders, replacing externally sourced engines.
Furthermore, the Volvo CE headquarters will be moved to Gothenburg to facilitate closer cooperation with the Group’s other business areas and operations.