Volvo Penta

Profitable on low sales levels

  • Signs of some market improvements
  • Launch of new range of industrial engines
  • Operating margin of 5.4% (5.9)

Signs of markets improving from low levels
Global sales of marine engines remained weak during the first quarter of the year, although signs of increased activity were noted in certain parts of the leisure-boat market in Europe. In the US, boat sales in the quarter gradually improved, primarily in the outboard segment, but also other parts of the market reported a positive trend from low levels.

The total market for industrial engines strengthened slightly in Europe, while demand in many other major industrial engine markets, such as China and the Middle East, was stable to increasing.

Launch of new industrial engines
In conjunction with the Bauma International Trade Fair in Munich in April, Volvo Penta presented a complete product program comprising off-road industrial engines that meet legal requirements on emissions for 2014. Prototype deliveries of these high-technology five to 16-liter diesel engines are in progress and will contribute to strengthening positions for Volvo Penta within the strategically important off-road segment.

The volume in the order book as at March 31, 2013 was 16% higher than the year-earlier period.

Stable operating margin on low sales levels
Net sales for the first quarter of 2013 fell 5% year-on-year to SEK 1,839 M (1,933). Adjusted for currency fluctuations, sales were on the same level as last year. Sales were distributed between both business segments as follows: Marine SEK 1,029 M (1,103) and Industrial SEK 808 M (830).

The operating income amounted to SEK 100 M, compared with SEK 114 M in the year-earlier period. Earnings were negatively impacted by SEK 29 M in currency fluctuations, which were offset by a more favorable product mix. Costs for research and development remained at a high level to meet the expansion of the product program. The operating margin was 5.4% (5.9).