EXCELLENT START FOR KUKA
- Group consolidated orders received rise 27.4 percent to EUR 615.2 million overall
- Sales revenues up 6.1 percent from the year prior to EUR 462.5 million
- EBIT margin at 5.9 percent, due to integration of Reis Group
- Earnings after taxes reach EUR 12.2 million
- Free cash flow up despite significantly higher capital expenditures,rising from EUR 15.5 million in Q1/13 to EUR 22.0 million in Q1/14
- 2014 guidance confirmed: sales expected to reach EUR 1.9 to 2.0 billion and EBIT margin about 6.0 percent
BUSINESS PERFORMANCE
KUKA is off to a good start in 2014. The Group reported orders received of EUR 615.2 million in the first quarter of 2014, 27.4 percent above the EUR 482.7 million generated in Q1/13 and a new record for a single quarter. Robotics' total orders received came in at EUR 235.6 million. The trend toward automation using robot-based solutions remains uninterrupted, with especially strong demand from the automotive segment and from China driving the growth. Robotics' orders received were 0.9 percent higher than in the first quarter of 2013. Orders received from the automotive segment for the quarter just ended were reported at EUR 111.9 million. The increase over last year's number was 29.7 percent. Last quarter, general industry orders came in at EUR 78.2 million, which compares to EUR 106.0
million during the same period last year, when Robotics benefited from a major health care segment order. The strong demand for industrial robots also boosted the service business unit, which booked orders received totaling EUR 45.5 million in the first quarter of 2014, compared to EUR 41.3 million in Q1/13. The Systems division's orders received in the first quarter of 2014 came in at EUR 383.6 million. This is 48.5 percent higher than the EUR 258.3 million recorded in Q1/13. Last quarter's growth was driven in part by the strong demand from automotive, with several large orders received from Ford and VW Group. Systems' solutions and assembly lines were also in demand, especially from China and the aviation industry.
KUKA Group's sales revenues in the first quarter of 2014 totaled EUR
462.5 million. Here KUKA benefited from high orders received from fiscal 2013, which could now be converted to sales. Sales were up 6.1 percent from the EUR 436.0 million reported in the first quarter of 2013. The Robotics division's sales revenues in the first quarter of 2014 were slightly higher than the average quarterly results of the two prior years. Invoices for robots and services totaled EUR 194.5 million in the first quarter of 2014, down 5.9 percent from the EUR 206.8 million billed in Q1/13. The result was driven mainly by the automotive segment, which benefited last year from a large number of frame contracts. General industry sales revenues were up year-over-year. The Systems' division's sales revenues were reported at EUR 272.1 million, which compares to EUR 234.4 million in Q1/13. Systems benefited from high orders received in prior quarters and thus had very high capacity utilization, roughly the same as in previous quarters. The book-to-bill ratio in the quarter just ended benefited from high orders received and came in at 1.33. It was 1.11 in Q1/13. Because orders received exceeded sales revenues during the quarter, the Group's order backlog rose and reached EUR 1,186.7 million as of March 31, 2014. The Robotics division's book-to-bill ratio in the first quarter was 1.21, which compares to 1.13 in the first quarter of 2013. Robotics' order backlog, excluding frame contracts, especially from automotive, was reported at EUR 317.4 million as of March 31, 2014, up 16.9 percent from the EUR 271.4 million logged on March 31, 2013 and 13.1 percent higher than the year-end number of EUR 280.7 million reported on December 31, 2013. Systems' book-to-bill ratio for the first quarter was 1.41. This is significantly higher than the 1.10 the division achieved in the same quarter last year.
KUKA Group generated earnings before interest and taxes (EBIT) of
EUR 27.1 million in the first quarter of 2014, versus EUR 28.4 million in Q1/13. EBIT margin was 5.9 percent, down from 6.5 percent in Q1/13. Although the operations' organic growth was excellent, additional costs, especially from the Reis Group integration, weighed on profits in the quarter just ended. Robotics' EBIT only declined from EUR 21.0 million in Q1/13 to EUR 19.4 million in Q1/14. EBIT margin went from 10.2 percent in the first quarter of 2013 to 10.0 percent in the first quarter of 2014. In the first quarter of 2014, Systems' EBIT was EUR 11.8 million, the same as in Q1/13. The result was driven primarily by the very strong organic growth in the Systems division's business in the quarter just ended. However, the costs of integrating the newly acquired Reis Group had a dampening effect. EBIT margin declined accordingly; from 5.0 percent in Q1/13 to 4.3 percent.
OUTLOOK
Based on current general conditions, KUKA expects sales revenues between EUR 1.9 and 2.0 billion, up from last year. The newly acquired Reis Group will contribute to the sales growth. Based on the current economic general conditions, KUKA Group is expecting an EBIT margin of about 6.0 percent for fiscal 2014. The main reason it is expected to be lower than last year is because of the first-time consolidation of Reis Group. We expect a one-time charge related to the costs of organizationally integrating and restructuring Reis.
"KUKA was able to win many orders in the first quarter and was off to a
successful start in fiscal 2014," says Dr. Till Reuter, CEO of KUKA AG. "Our growth was very satisfactory, especially in China, automotive and aviation. Our general industry and market share grew substantially thanks to the acquisition of Reis and Alema. Now it is important that we integrate the two companies and take advantage of the synergies the mergers will generate."
