Volvo 2015 Annual Report Download - page 94

With a history dating back over 180 years
Volvo Construction Equipment (Volvo
CE) is one of the longest established
global producer of products and ser-
vices for the construction, extraction,
waste processing, forestry and materi-
als handling sectors. Principal equipment includes excavators,
wheel loaders and haulers, as well as road machinery such as
pavers and compactors. A wide range of services are also offered,
centred on the three themes of machine uptime, fuel efficiency
and increased productivity.
Marketed under the Volvo, SDLG and Terex Trucks brands, the
company’s products and services are sold and supported via a
global network of over 125 Volvo-owned and independent dealers.
Stable performance despite China fall and tough
conditions in global markets
2015 was marked by the extreme decline in the Chinese market,
which continued its sharp contraction, falling a further 48% com-
pared to 2014. Despite growth in several European markets, the
continent as a whole was also down, driven mainly by falls in Rus-
sia and France. Similarly, slow economic development in Brazil
weighed heavily on South American sales. North America, mean-
while, saw continued growth, albeit at a slowing pace.
This continued weak demand impacted Volvo CE during 2015,
with deliveries of machines totalling 44,718 units, a fall of 27%
compared to 2014. This reduced production was partly offset by
VOLVO EC250E OFFERS
BEST-IN-CLASS EFFICIENCY
The EC250E crawler excavator builds on the strong reputation of the previous D-Series model
with reduced emissions and fuel consumption, as well as enhanced power and productivity.
Volvo CE’s latest 25-ton crawler excavator, the EC250E, is fitted with an
advanced Tier 4 Final/Stage IV Volvo D6 engine that meets strict emis-
sions legislation across North America and regulated European markets
– without compromising on power. The fully optimized hydraulics sys-
tem and ECO mode deliver the precise amount of power required to
complete the task in hand, while the auto engine shutdown feature
helps further reduce fuel consumption and emissions by automati-
cally switching off after the excavator has been inactive for a pre-set
amount of time.
SHARE AND MARGIN GAINS
DESPITE MARKET UNCERTAINTY
A continued deterioration in Chinese demand was partially offset by growth in European and
North American markets. Continued efficiency measures and a focus on more profitable larger
machines have helped protect earnings and capture share in important segments.
favorable currencies and a favorable product mix and net sales
decreased by 3% to SEK 51,008 M, compared to SEK 52,855 M
in 2014. Adjusted for changes in exchange rates, net sales
decreased by 15%.
Despite the lower volumes, Volvo CE demonstrated stable
operating margins and market share gains in the segments for
larger machines. Operating income excluding restructuring
charges of amounted to SEK 2,090 M (1,231). Restructuring
charges were SEK 46 M (579). The operating margin excluding
restructuring charges amounted to 4.1%, up from 2.3% in 2014.
Changes in currency exchange rates had a positive impact on
operating income of SEK 1,188 M compared with 2014.
Order intake during 2015 totalled 45,142 units, a fall of 25%
compared to 2014.
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GROUP PERFORMANCE BOARD OF DIRECTORS’ REPORT 2015
CONSTRUCTION EQUIPMENT
Volvo CE manufactures a range of equipment for construction
applications and related industries. The offering also includes
maintenance and repair services, financing and leasing.
Position on world market Volvo CE is the world’s leading
manufacturer of rigid and articulated haulers and one of the
world’s leading manufacturers of wheel loaders, excavators, road
development machines and compact construction equipment.
Brands Volvo, SDLG (Lingong) and Terex Trucks.
Number of regular employees 13,889 (14,901)
Share of Group net sales,
16% (19)
9292