Interim Report to September 30, 2008

Taking into consideration adjusted purchases of input materials at the US subsidiary KTPO (EUR 35.0 million), the redemption of the financing of the company in April 2008 (EUR 10.1 million), and the altered EUR/USD exchange rates for orders received (EUR 29.4 million), there is an increase in total orders received (+4.8 percent) compared to last year. 

Orders received in the Robotics division rose by 15.8 percent to EUR 375.2 million in the first nine months compared to the same period last year (EUR 324.1 million). Services and general industry orders were up considerably by 24.4 percent and 30.5 percent respectively. Overall, orders received from the automotive industry were at last year's level - despite the worsening environment. 

At the end of September cumulative orders received in the Systems division of EUR 685.4 million were 10.1 percent below the comparable volume in 2007 (EUR 762.1 million). Taking the above non-operational effects, which refer almost exclusively to this division, into consideration, the order volume for Systems was in line with last year's figure. At the same time, this division was put under pressure in the third quarter by a decrease in the automotive industry sales which resulted in postponements of orders and occasional reductions to order volumes. 

At the end of September 2008 the order backlog was EUR 656.2 million and significantly exceeded last year's figure of EUR 610.0 million. Thus the Group's order backlog at the end of the third quarter stood at 5.9 months. This increase in the order backlog relates to both divisions. Robotics achieved an order backlog of EUR 139.2 million and Systems EUR 526.5 million at the end of September 2008. The high level of the order backlog secures the Group's capacity utilization well into next year.

In the first nine months of the current year, sales revenues came in at EUR 924.0 million and were therefore 1.0 percent below last year (EUR 933.0 million). Taking into account the non-operational effects at KTPO (input materials EUR 35.0 million and redemption of financing EUR 10.1 million) as well as the effects of EUR/USD exchange rates (EUR 23.0 million), sales revenues rose by 6.8 percent compared to last year. The Robotics division was able to increase not only its orders received but also its sales volume significantly to EUR 344.8 million compared to last year, thereby exceeding last year's figure of EUR 298.7 million by 15.4 percent. All three sectors of business (automotive, general industry and service) contributed to this gratifying result. The Systems division reported sales of EUR 615.5 million in the first nine months; a decline of about EUR 46 million compared to last year (EUR 661.2 million), which occurred solely within the first six months. Allowing for non-operational effects, sales revenues for Systems were 3.4 percent above last year's level. 

Group's orders received in the third quarter came in at EUR 292.1 million (third quarter 2007: EUR 331.2 million). The Robotics and Systems divisions contributed EUR 131.2 million and EUR 171.4 million respectively to this result. Compared to last year, Robotics recorded a considerable increase in orders received of 34.0 percent (previous year: EUR 97.9 million), although Systems fell well below last year's figure of EUR 242.3 million as a result of the downturn in the automotive industry.

Group's sales revenues of EUR 343.1 million in the third quarter 2008 were 7.9 percent above last year's figure (EUR 317.9 million). The Robotics division reported a clear increase of 18.3 percent from EUR 101.9 million to EUR 120.5 million, while Systems achieved a turnover of EUR 234.9 million and exceeded last year's figures (EUR 223.9 million).

Uncertainty regarding the development of future demand has increased as a result of the crisis in the financial market and the global economic downswing.

In order to stabilize the earnings situation, rationalization investments will play an important role - even in a period of economic downswing. With its flexible, robot-based automation technology, KUKA is well established in this area; especially with customers in general industry, e.g. the solar and aircraft industries. Based on this, KUKA can anticipate a continued, stable growth of this business.

The automotive industry is one of the first sectors in the real economy to be affected by the global economic crisis and is seriously considering the implementation of savings measures. At the same time, global competition is increasing as a result of reduced demand. The market introduction of new lower-consumption and cheaper models will therefore continue to have priority. In the short-term, however, demand can be expected to decline due to the postponement of orders and isolated reductions to order volumes, particularly in the area of major investment orders.

For the current financial year 2008, the Executive Board of KUKA AG therefore anticipates that overall orders received - adjusted for non-operational effects in connection with the US subsidiary KTPO – will now be at the same level as the prior year. The EBIT margin of 5.5 percent has already been achieved in the first nine months of 2008 and will also be confirmed for the total financial year 2008.