In the first quarter of 2022, the net sales of Volvo CE in all regions outside Asia increased slightly, and its overall growth momentum was affected by the decline of the Chinese market. The decline was due to the repeated COVID-19 and relatively strict prevention and control measures in China, which hindered the progress of many projects.
The continuous epidemic in China has had a significant impact on the sales of the world's largest construction machinery market, resulting in a 9.0% decline in the global total sales of Volvo Construction equipment in the first quarter of 2022. However, in the first three months, sales in all other regions increased steadily, with 62.0% in South America, 11.0% in North America, 5.0% in Africa and Oceania and 2.0% in Europe, which played an important role in mitigating the impact. At the same time, service sales also increased by 17.0%, which further illustrates the increasing importance of service solutions.
Melker jernberg, President of Volvo Construction equipment, said: "The whole industry and the whole world are in a very challenging period, but we have not escaped. We are actively facing and solving these problems: providing customers with the products and services they need, paying close attention to the ongoing global crisis and taking action against urgent climate change. In this difficult period, we maintain the speed of transformation to more sustainable engineering construction and infrastructure solutions to help Decarbonize the value chain while protecting our communities around the world. "
In the first quarter of 2022, Volvo's net sales of construction equipment decreased from SEK 24.742 billion (about RMB 16.9 billion) in the first quarter of 2021 to SEK 22.613 billion (about RMB 15.4 billion). The adjusted operating income was SEK 2.81 billion (about RMB 1.9 billion) [SEK 3.822 billion (about RMB 2.6 billion) in the first quarter of 2021], and the corresponding adjusted operating profit margin was 12.4%, lower than 15.4% of the previous year. The operating income is negatively affected by the reduction of equipment output and the increase of material cost, which is alleviated to a certain extent by the increase of price and service volume.
In the first quarter of 2022, the company's order volume decreased by 42.0%. Although it was mainly caused by the continuous decline of the Chinese market, it was also affected by the cancellation of orders and the restriction of placing a large number of orders in Russia. At the same time, the impact of supply chain tension also led to the reduction of delivery by 33.0%.
market development
Affected by infrastructure and housing investment, the European market of Volvo Construction equipment increased by 13.0% and the North American market increased by 20.0% in the first two months of 2022, thanks to the high level of housing construction and manufacturing industry in the region. Due to the strong demand for bulk commodities, the demand in the South American market continued to grow strongly, with a year-on-year increase of 45.0%. However, all this has been affected by the 33.0% decline in the Chinese market. The main reason is that the nationwide restrictions and work stoppages caused by the surge of COVID-19 cases. However, the price rise of excavators cannot be ruled out. Asia, excluding China, also fell by 8.0%.
Volvo Construction equipment has shown a steady development trend in a challenging period, and is also striving to become a leader in the sustainable development of the whole industry and society. This quarter, it successfully launched its first all electric equipment in the Asian market - ecr25 small electric excavator. Now Korean customers can also buy it locally, and launched a "carbon reduction" plan tailored to different customers to help customers achieve the goal of carbon neutrality.
