Growth in North America leads to steady earnings for Volvo Construction Equipment through Q3
The third quarter of 2023 was stable financially for Volvo Construction Equipment, which saw good sales and growth in North America while continuing to focus on new solutions that support its efforts in the growing electric equipment marketplace.
Overall net sales in the third quarter of 2023 reached SEK 24,296 million, a modest increase from the same period of 2022. Net sales, when adjusted for currency movements, fell by 4 percent, of which net sales of machines decreased by 5 percent and service sales increased by 4 percent.
Adjusted operating income was SEK 3,773 million, slightly lower than Q3 of 2022, when it was SEK 3,773 million.
"We have performed well this quarter during a challenging economic environment while continuing to drive the long-term transformation towards more efficient and sustainable construction solutions. Maintaining this solid performance is essential to help us also lead the way with our industry's transformation," said Melker Jernberg, Head of Volvo CE.
Growth in North America and stable sales in Europe drove the steady earnings through the third quarter, with signs of softening towards the end of that period. North America has seen growth of 10 percent in the year to date, supported by large infrastructure projects and strong commercial construction that offsets a weaker residential sector. Europe saw a slight slowdown, due to a weakening macroeconomic outlook and increasing interest rates, but still maintained a modest 4 percent growth.
South America saw a drop of 25 percent, while China dropped by 40 percent. Other Asian markets have shown an increase in demand.
Slowdowns in China and Brazil reduced global deliveries in the quarter by 21 percent, while net order intake also declined by 27 percent. North America, however, reported a 33 percent increase in deliveries, and a 196 percent increase in orders.
Service solutions are showing growth in profitability, demonstrating their increased significance and Volvo CE's continued focus on digitalization.
Achievements in the third quarter included unveiling Volvo CE's first electric power unit for larger electric machines, such as the EC230 Electric excavator. This unit provides high-power charging of electric machines in remote locations where stable grid access is not available. Availability of the EC230 Electric also expanded into additional European markets.
A new innovation center in North America will provide technicians with training on diesel and electric heavy equipment, machine control technology, connectivity, and productivity services.
