KUKA financial results press conference for fiscal 2010

• Orders received climb 27 percent to EUR 1.14 billion
• Sales for the year overall up 20 percent to EUR 1.08 billion
• EBIT turnaround: from EUR -52.6 million to EUR 24.8 million
• Earnings after taxes improve from EUR -75.8 million to EUR -8.6 million
• Guidance 2010 exceeded
  
  

At the financial results press conference held in Munich on March 16, 2011, KUKA Aktiengesellschaft's Executive Board gave an account of the programs that were launched and executed to move the Group forward in fiscal 2010. In accordance with its strategic growth plans, KUKA focused regionally on the BRIC nations, especially China and Brazil. The Executive Board also reported on the rollout of the new QUANTEC industrial robot generation with its KR C4 controller, and the positive feedback received from the market. In order to strengthen its innovation capacity, last year KUKA bundled R&D activities surrounding service robotics and health care technology in the KUKA Laboratories business unit. KUKA was also able to secure and finalize the Group's financing by successfully placing a corporate bond and raising additional equity. Just as important was the systematic execution of its cost reduction program, which led to recurring savings of EUR 68.6 million over two years. The Executive Board thus exceeded both its sales and earnings targets for 2010.

The key 2010 business numbers are as follows:

As the world economy began to recover, KUKA benefited especially from the robust capital spending by the international automotive industry in fiscal 2010. These projects enabled KUKA Group to generate double-digit percentage growth in its orders received and sales revenues in comparison to the prior year's low levels.

KUKA Group's orders received came in at EUR 1,142.3 million, up 26.5 percent from the EUR 903.3 million posted in 2009. The Group thus approached the high levels reported in 2008, when orders came in at EUR 1.2 billion. The Robotics division in particular recovered very quickly from the prior year's market weakness and reported a new all-time high due to the strong demand from the car industry. The division's orders received were up 49.9 percent to EUR 486.2 million from EUR 324.3 million in 2009. Because the automotive business had declined more sharply last year than other sectors, orders received here almost doubled yearover- year. But general industry also recovered substantially and orders received here were back to 2008 levels. The Systems division also benefited from the high automotive sector capital spending and reported higher orders received, especially during the second half of the year. The final figure was EUR 716.8 million, up 16.5 percent from EUR 615.4 million in 2009.

KUKA Group's 2010 consolidated sales revenues rose 19.6 percent year-overyear, from EUR 902.1 million in 2009 to EUR 1,078.6 million. The Systems division's share of orders received was EUR 695.3 million, up 14.8 percent from 2009's EUR 605.5 million. The Robotics division reported sales revenues of EUR 435.7 million, up 31.8 percent from EUR 330.5 million in 2009.
KUKA Group's consolidated order backlog rose from EUR 543.5 million at the end of 2009 to EUR 630.5 million at the end of 2010, an increase of 16.0 percent from last year's record date. The Robotics division posted the strongest increase: from EUR 93.9 million to EUR 149.0 million, a jump of 58.7 percent. The Systems division's order backlog remained high and even rose 8.6 percent to EUR 500.0 million during the financial year.

Because of the high gross earnings and the elimination of special charges, KUKA achieved a turnaround in earnings before interest and taxes (EBIT). EBIT went from EUR -52.6 million in 2009 to EUR 24.8 million in 2010. KUKA Group's consolidated EBIT margin for fiscal 2010 was back to 2.3 percent from -5.8 percent the year prior.

Overall, KUKA Group's consolidated earnings after taxes went from EUR -75.8 million last year to EUR -8.6. Earnings per share improved accordingly, going from EUR –2.95 in 2009 to EUR -0.28 in 2010.

After successfully placing a corporate bond and recapitalizing, KUKA Group's cash and cash equivalents were up from EUR 61.2 million in 2009 to EUR 203.4 million as of the record date. Of this total, EUR 69.0 million have been earmarked to potentially repay the convertible bond, which comes due in November 2011.

KUKA Group's consolidated net debt went from EUR -48.5 million at the December 31, 2009 period end to EUR –60.3 million on December 31, 2010, up EUR 11.8 million.

The cash injection of EUR 40.5 million from the capital increase and the difference in exchange rates of EUR 6.9 million had a positive impact on equity. However, the loss for the year was EUR 8.6 million. Overall, equity was up EUR 37.3 million to EUR 198.1 million as of December 31, 2010.

On average, KUKA Group's capital employed for 2009 and 2010 was EUR 317.5 million and EUR 312.5 million respectively, down slightly year-over-year. The return on capital employed was positive in view of the EBIT of EUR 24.8 million and ended at 7.9 percent. Last year, the return on capital employed was negative because of the earnings situation.

KUKA Group's work force went from 5,744 at the end of 2009 to 5,990 at the end of 2010. The percentage increase of 4.3 percent or 246 persons is less than the percentage increase in orders received of 26.5 percent. Two offsetting developments impacted these numbers: KUKA added staff in Eastern Europe and the BRIC nations to keep pace with the more international focus of its customers. As a result, 351 employees were hired at the Hungarian subsidiary, where control cabinets for robots are built. In the BRIC nations, 104 employees were added. In contrast, staff cuts at KUKA Group's headquarters in Augsburg resulted in a decrease of 259 persons, leaving a total of 2,375 at the end of 2010.

Outlook

Because of the anticipated continued upward tendency in the world economy and growth in the Robotics and Systems divisions' markets, KUKA Group expects steady sales revenue growth. This should enable the company to generate sales revenues of at least EUR 1.15 billion in 2011 and EUR 1.25 billion in 2012.

Higher operational capacity utilization and an improved sales mix with a greater share of general industry business, plus a lower operational breakeven point, should lead to an EBIT margin of at least 5 percent in 2011 and about 6 percent in 2012.

The year-end result for the financial year 2010 just ended was still negative. In view of the rising operating earnings, but also higher taxes and reduced financing costs, KUKA expects a positive annual net income in the double digits for 2011 and a further improvement in 2012.

One and a half years ago, KUKA set out to become an engineering company with high innovation capacity and earnings strength. The course to achieve this has now been set. "We have demonstrated that we can systematically and quickly execute our strategy," says KUKA AG CEO Dr. Till Reuter. "KUKA is thus back on track and is growing profitably. We want to harvest the fruits of our labors in the coming years."

KUKA Group, Key figures

KUKA Robotics, Key figures 

 KUKA Systems, Key figures