earnings

summary

The kuka Group’s capacity utilization was excellent during the 2008 financial year. Adjusted for non-operative effects, orders received were at about the same level as last year and sales revenues were up 3.6 percent from a year earlier. But the Group’s operating result (ebit) was down from € 70.4 million in 2007 to € 52.0 million, because of a one-time charge related to the cancellation of a major systems order from a North American automotive supplier. Excluding this one-time charge of € 20.8 million, the operating result (ebit) would have been € 72.8 million, and therefore higher than last year. The adjusted ebit margin was 5.7 percent, which compares to last year’s 5.5 percent. The 5.5 percent earnings target for the current financial year would therefore have been exceeded. Overall, the kuka Group’s earnings for the 2008 financial year, including the one-time charge, were satisfactory.

five-year summary of earnings

			2004*		2005*		2006*		2007		2008
Operating result (ebit)	€ millions		77.7		– 53.4		16.7		70.4		52.0
% of sales revenues			7.0		– 5.1		1.4		5.5		4.1

* Prior year’s numbers adjusted for comparison purposes.

kuka group gross margin again higher

Gross margin on sales increased while sales revenues declined slightly, going from € 258.2 million in 2007 to € 260.8 million in 2008. The kuka Group’s gross margin rose accordingly and went from 20.1 percent in 2007 to 20.6 percent in 2008. This is the result of higher sales revenues and a better product mix at kuka Robotics, as well as improved profitability at kuka Systems, despite the one-time charge for the cancellation of a large systems order from a North American automotive supplier.

Operating costs went in the opposite direction, i. e., sales and administration costs plus r&d costs plus other operating income and expenses. In 2008, they rose 21.0 million to € 208.8 million, from € 187.8 million in 2007. The increase was primarily due to the expansion of the sales force as per the overall strategy, and missing one-time earnings from the sale of properties, which had contributed € 7 million last year to the general administration costs. kuka Group’s operating result (ebit) fell accordingly and went from € 70.4 million in 2007 to € 52.0 million in 2008.

substantial profit improvement at kuka robotics

From a divisional perspective, kuka Robotics’ operating result (ebit) rose from € 33.6 million in 2007 to € 42.0 million in 2008. This was due to higher sales, particularly in the general industry and service areas, as well as better capacity utilization. ebit margin improved during the same period from 8.1 percent in 2007 to 8.9 percent in 2008. In contrast, kuka Systems’ operating result (ebit) dropped from € 37.2 million in 2007 to € 26.8 million in 2008 because of a one-time charge of € 20.8 million resulting from the cancellation of a major systems order from a North American automotive supplier. ebit margin followed during the same time frame and fell from 4.1 percent to 3.2 percent.

group income statement – summary

(in € millions)

		2007		2008
Sales revenues		1,286.4		1,266.1
Operating result (ebit)		70.4		52.0
Financial result		– 8.0		– 5.0
Taxes on income		– 13.6		– 16.4
Profit from discontinued operations		69.1		0.0
Net income for the year		117.9		30.6

The kuka Group’s financial result went from € – 8.0 million in 2007 to € – 5.0 million during the financial year just ended. This improvement is due especially to the interest earnings of € 6.2 million resulting from the redemption of the financing for the ktpo pay-on-production contract (finance lease) in the United States, which was recognized for the first time. In contrast, interest expense moved in the opposite direction, and was higher compared to last year because of outside financing. Earnings before taxes were thus € 47.0 million compared to € 62.5 million the year prior. Taxes on income in 2008 were € 16.4 million, up from € 13.6 million in 2007. The tax rate for the financial year just ended was therefore 34.9 percent, compared to 21.8 percent a year earlier. The main reasons for the higher taxes were the missing positive extraordinary items from the prior year and the impact of corporate tax reform in Germany, which became effective January 1, 2008.

Net income for the year 2008 came in at € 30.6 million, while last year € 117.9 million were reported, mainly because of the sale of the Packaging division (earnings from discontinued operations were € 69.1 million). Earnings per share in 2008 were thus € 1.18 per share, compared to € 4.43 a year earlier, of which continuing operations’ share was € 1.83.

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