The continued deceleration in global demand was partially offset in Volvo CE鈥檚 third quarter 2015 results, with operating margins stable and market share gains, despite a 6% fall in net sales during the period.
In the face of significant market headwinds that continue to see lower demand 鈥� especially in China and South America 鈥� Volvo CE鈥檚 third quarter 2015 financial results saw stable operating margin and market share growth in larger machines, despite a fall in overall sales.
Net sales in the third quarter decreased by 6%, amounting to SEK 11 884 M (SEK 12,582 M in Q3 2014). Operating income, excluding restructuring charges, decreased to SEK 576 M, from 648 M in the same period during 2014. Despite the lower demand, operating margin remained largely stable, at 4.8%, compared to 5.1% in same period last year. Earnings were assisted by favorable currency movements and gross margin improvements, as a result of better product mix and lower operating expenses.
Market contraction
During the year-to-date the European market is down 7%, mainly driven by a sharp drop in Russia and a slowdown in France. Excluding Russia, the European market is up by 3%. Growth is also present in North America, at 4%, but the rate of growth is showing signs of slowing. The decrease in South America (-36%) continues to be caused largely by Brazil (-45%), which is being affected by slow economic development and low overall business confidence. The Chinese market, meanwhile, has continued to decline sharply 鈥� falling 50% in the year-to-date.
鈥淒espite volumes being down by 25% during the period, our targeted sales activities and ongoing efficiency program helped to deliver positive operating income and market share gains in the segments for larger machines,鈥� commented Martin Weissburg, President of Volvo Construction Equipment.
Edited from press release by