business and business environment
kuka focuses on robot-based automation of industrial manufacturing processes and is active in the mechanical and plant engineering sector. kuka ag has been listed on the German stock market index for small cap companies (sdax) since September 21, 2009 and has a market capitalization of about € 300 million.
kuka ag’s business model is based on robots manufactured by the Robotics division and application engineering supplied by the Systems division. Regional subsidiaries in 24 countries support the divisions worldwide. These branch offices are responsible for the sale of the divisions’ products and services and do the local assembly and field service work.
The Robotics division is an innovation and technology leader.
kuka ag and its management companies kuka Roboter GmbH and kuka Systems GmbH are headquartered in Augsburg. This ensures close cooperation between all Group entities. Other European subsidiaries are located in Great Britain, Belgium, France, Spain, Italy, Sweden, Slovakia, the Czech Republic, Hungary and Russia and elsewhere. Another important business area is North and South America, with companies in greater Detroit, Michigan / usa as well as in Mexico and Brazil. In Asia, kuka has representatives in India, Malaysia, Vietnam, South Korea, Taiwan, Japan and China.
kuka robotics –
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kuka robotics –
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Source: kuka and market data
kuka robotics
The Robotics division delivers the core component, robots, which are applied to automate manufacturing processes. kuka Robotics develops, manufactures and sells industrial robots, which are used in almost all industry sectors. The division’s product portfolio comprises basic modular types with many mechanical and electrical infeed options. All new robots and applications are developed and designed centrally in Augsburg. kuka Robotics targets the automotive sector, general industry and service. Key account managers service the automotive industry. Systems partners that specialize in the various sectors look after sales and service of kuka robots in general industry.
The Robotics division is an innovation and technology leader. kuka is the market leader in the automotive industry, with a market share of 20 to 25 percent. kuka’s general industry market share is 10 to 15 percent.
kuka systems
kuka Systems is the market and technology leader.
The Systems division delivers application engineering expertise for automating manufacturing processes. kuka Systems acts as a general contractor, designing and building complete systems. In addition to utilizing its application-oriented robotics expertise, the division employs many other metal forming and joining processes in its designs. The Systems division has designated regional centers of expertise to execute systems projects: in Augsburg for Germany and Europe, in greater Detroit for North America and in Shanghai for the growing Chinese market.
In the automotive industry, kuka Systems focuses on flexible manufacturing lines for making vehicle bodies. Several different models or variants of a particular model can be built using these systems. The Jeep Wrangler is made in Toledo, Ohio under the terms of a pay-on-production contract. Other business segments include press tool manufacturing and automated assembly lines and test stands for engine and transmission components. These entities are located in Schwarzenberg / Erzgebirge, Slovakia and Bremen, as well as greater Detroit, Michigan.
kuka systems – competitive position
Source: kuka and market data
Framing – the heart of every car body assembly line.
kuka Systems’ share of orders awarded by the automotive industry is almost 20 percent, making it the market and technology leader in this sector. The division is increasingly expanding into comparable general industry sectors and offers robot-based automation solutions for the aircraft and rail vehicle manufacturing industries, solar and agricultural machinery sectors and others.
internal management system
The internal management system ensures that the Group’s key indicators are transparent, which enables them to be systematically strengthened. kuka ag’s financial targets are performance indicators that affect the value of the company.
In order to determine return on sales, the operating result (ebit); i. e., earnings from operating activities before interest and taxes, is compared to sales revenues. This is the ebit margin. To determine the return on capital employed, the operating result (ebit) is compared to the average capital employed, which gives the return on capital employed, or roce. The operating result (ebit) and roce are determined for the Group as well as the Robotics and Systems divisions. Free cash flow; that is, cash flow from operating and investment activities, shows whether the investments can be funded from cash flow, and how much cash is available for payment of dividends and debt servicing. This indicator is used at the Group level.
Orders received is an important early indicator of business growth and is continuously monitored at the divisional and regional level, while order backlog indicates the degree to which the company’s capacity will be absorbed in the coming months.
All key indicators are tracked and reviewed continuously using the internal reporting system. Any deviations from plan are analyzed by management and, if necessary, agreement is subsequently reached on the corrective actions required to achieve the targets.
non-financial performance indicators
Workforce qualification statistics are an important performance indicator. About 20 percent of kuka Group’s employees have a university or college degree and 72 percent have a diploma in a technical or accounting field. 90 percent of kuka employees thus have a degree or diploma, which is the reason for the company’s broad-based technological expertise.
In addition, kuka products and systems contribute to permanently reducing material use and energy consumption in industrial production systems. A way to quantify this is to present the expected operating costs of a system or a robot over its life cycle. This gives operators a way to ensure their system or robot installation is sustainable before purchasing or operating it. kuka Systems and kuka Robotics have been supporting their customers for many years according to the following principle: Transparency helps protect the environment and can reduce costs.
kuka also takes pains to improve the environmental soundness of its operations internally over and above complying with regulating authority specifications. The key goals of kuka’s environmental management are to
- design environmentally sound products and systems,
- optimize utilization of power and water resources,
- reduce waste and increase the use of recycled materials as well as
- optimize the work and environmental conditions in the factories.
In fiscal 2009, the accident rate at kuka in Germany and in the Hungarian factories was 11 reportable accidents per 1,000 employees. As in previous years, this was substantially less than half the government safety agency’s statistic of 35 accidents per 1,000 employees.
guidance 2009
Revised guidance for 2009 met.
kuka ag released the following outlook together with its half-year results: A breakeven operating result (ebit) and breakeven free cash flow before extraordinary restructuring expenditures are expected for the full year 2009. In view of the negative business developments in the second half year, this forecast was revised when the nine-month figures were published as follows: including the extraordinary restructuring expenditures, the operating result (ebit) is expected to be significantly negative. The revised guidance forecast for kuka Group’s fiscal 2009 consolidated operating result was between € – 10 million and € – 15 million excluding extraordinary expenditures. kuka Group’s actual consolidated operating result (ebit) for the 2009 financial year came in at € – 14.3 million. Extraordinary expenses had been forecast to be at least € 25 million depending on restructuring requirements. The actual restructuring costs totaled € 38.6 million. Free cash flow was forecast to be between € – 40 million and € – 50 million. Actual free cash flow in 2009 was € – 22.2 million supported by advanced payments from customers. Overall, kuka thus met its revised guidance targets for 2009.