Volvo 2013 Annual Report Download - page 83

Volvo Penta generates signifi cant syner-
gies for the Volvo Group’s total volumes
of diesel engines. Approximately 10% of total
production in the Group’s European diesel-
engine plants and more than half of the Group’s
global volumes of 16-liter engines are delivered
to Volvo Penta’s customers.
The Industrial business segment, accounting
for about half of sales, is the part of Volvo Penta’s
operation that generates the largest strategic
engine volumes for the Volvo Group. Featuring
unique performance, installation benefi ts and
minimized environmental footprint, Volvo Penta’s
engines strengthen the competitiveness of
world-leading industrial customers, such as
Sandvik, Cargotec and Konecranes. By leverag-
ing the strength of the Volvo Group’s combined
service offering, Volvo Penta is able to offer
effi cient support in the form of global service
and aftermarket services.
To the greater public, Volvo Penta is best
known for its globally leading marine drive sys-
tems – for both leisure and commercial boats.
Over the decades, products such as the Aqua-
matic sterndrive and Duoprop have given Volvo
Penta a global reputation as an innovative engine
supplier to most of the strongest brands in the
leisure boat industry. This year, the D4/D6 engine
range is celebrating its ten-year anniversary in
the market and has helped to progressively
strengthen Volvo Penta’s market-leading posi-
tions in Marine Leisure. As electronics make in -
roads into the marine industry, recent years have
seen Volvo Penta increasingly move toward de -
liveries of complete boat-driver environments with
a strong focus on comfort and user-friendliness.
In the Marine Commercial business segment,
Volvo Penta delivers diesel engines for use
under the toughest possible offshore condi-
tions. Coast guards and sea-rescue organiza-
tions, ferry companies, port authorities and
shipyards worldwide install Volvo Penta’s relia-
ble engines in boats for sea rescue, patrol, pas-
senger transport, security and maintenance of
offshore wind turbines, among other purposes.
Volvo Penta’s marine customers have access
to one of the world’s strongest service support
organizations comprising approximately 4,000
dealerships worldwide.
Continued weak leisure boat market
2013 marked the sixth consecutive year with-
out growth in the European leisure boat market
and, in the wake of the unchanged weak global
demand for leisure boats, the consolidation
trend in the boat industry continued. During the
year, several leading boat brands underwent
ownership changes, at the same time as large
parts of the boat industry were forced to con-
tinue cutbacks and rationalization measures.
Reduced demand in the Chinese construc-
tion sector was one of the underlying factors
putting pressure on the global market for off-
road industrial engines. In Europe, demand was
upheld to a certain extent by pre-buy effects
ahead of new emissions legislation that came
into effect at year-end 2013.
The total market for diesel engine gensets,
Volvo Penta’s largest industrial engines seg-
ment, remained stable.
Positive earnings trend
Volvo Penta’s net sales declined by 1% to SEK
7,550 M compared with SEK 7,631 M in 2012.
Adjusted for changes in exchange rates, net sales
increased by 2%.
Operating income totaled SEK 626 M, com-
pared with SEK 549 M in the preceding year. The
operating margin was 8.3% (7.2). Earnings were
positively impacted primarily by good cost con-
trol and negatviely impacted by currency in an
amount of SEK 101 M.
Extensive range of new products
Volvo Penta’s new Glass Cockpit System is an
integrated control and monitoring system that
fundamentally changes the design of the boat
driver’s environment. The new system gathers
all relevant information for the boat driver and
presents it on one or more displays, enabling a
common, ergonomic design – and interface –
for the entire dashboard of the boat.
In the industrial engine segment, Volvo Penta
launched a complete and entirely new range of
fi ve to 16-liter engines during the year that will
meet the new and more stringent legal require-
ments on emissions. The new engines, which
signifi cantly strengthen Volvo Penta’s product
offering in the off-road segment, are fuel effi -
cient, easy to install and offer highly competitive
properties in terms of total running costs.
In the Marine Commercial segment, Volvo
Penta launched new versions of its Inboard Per-
formance System (IPS). As a result of the unpar-
alleled effi ciency of its forward-facing propellers,
IPS has had a strong impact on the leisure boat
market. The continued expansion of the range
allows the system’s unique environmental prop-
erties to feature on a growing number of boat
models, also within commercial shipping.
Net sales
SEK bn
13
12
111009
7.6
7.6 7.68.48.78.2
Operating income (loss)
and operating margin
SEK M
%
626
12
549
7.2
13
626
8.3
11
825
9.8
10
578
6.6
09
(230)
(2.8)
Net sales by market
Mkr 2013 2012
Europe 3,714 3,620
North America 1,491 1,486
South America 297 306
Asia 1,692 1,867
Other markets 356 352
Total 7,550 7,631
Engine volumes
Number of units 2013 2012
Marine engines117,427 17,24 0
Industrial engines 17,651 17,584
Total 35,078 34,824
1 Excluding outboard engines.
Volvo Penta is the Volvo Group’s
marine specialist and acts as an inde-
pendent supplier, supporting customers
from the design stage to
installation and after-
market service.
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