KUKA achieves adjusted targets and implements efficiency measures

28 March 2019

  • Orders received down 8.5% to €3.3 billion

  • Sales revenues down 6.8% to €3.2 billion

  • EBIT before purchase price allocations, growth investment and reorganization expenditure stands at €96.4 million (EBIT margin: 3.0%)

  • Earnings after taxes amount to €16.6 million

  • Efficiency enhancement measures started

  • KUKA is planning to cut a total of 350 full-time jobs in Augsburg in the current year

  • Guidance 2019: sales revenues of more than €3.3 billion and EBIT margin of around 3.5% before final evaluation of current reorganization expenditure

     

    The 2018 financial year presented KUKA with many challenges. From the fourth quarter onwards, the economic slowdown was increasingly perceptible and our customers were more restrained in their investment decisions. In addition, there were negative influences from the project business. KUKA therefore adjusted its forecast for the past financial year and initiated an immediate action package.

    “We are working hard on our efficiency, maintaining strict cost discipline and will be sharpening our focus on the specific needs of our customers in their regional markets,” explains Peter Mohnen, CEO of KUKA AG. “To achieve this, we will be systematically implementing the initiated action plan.”

    During the past financial year KUKA Group generated orders received worth €3,305.3 million and thus 8.5% below the previous year’s result (2017: €3,614.3 million). A major factor here was the increasingly noticeable general economic slowdown, which affected two of our focus markets: the automotive industry and the electronics industry. Orders received were generated primarily in Europe.

     

    KUKA Group’s sales revenues amounted to €3,242.1 million in 2018. Revenues were thus down 6.8% on the previous year’s result of €3,479.1 million. A decline in our focus markets made itself felt here too. KUKA achieves more than half of its sales revenues with the automotive industry and the electronics industry. Another factor was the slower growth in China, one of our most important sales markets.

     

    At Group level, the book-to-bill ratio, in other words orders received in relation to sales revenues, stood above 1 at 1.02 in the 2018 financial year (2017: 1.04), thus indicating good capacity utilization.

     

    KUKA Group’s order backlog amounted to €2,055.7 million at year-end 2018. This is a slight decrease of 4.7% compared to the prior-year value (2017: €2,157.9 million) and indicates good capacity utilization in 2019.

     

    Before purchase price allocations, growth investments and reorganization expenditure, KUKA Group generated earnings before interest and taxes (EBIT) of €96.4 million (2017: €148.3 million). This corresponds to an EBIT margin of 3.0% (2017: 4.3%). Taking into consideration all expenditure in 2018, the earnings before interest and taxes for KUKA Group totaled €34.3 million (2017: €102.7 million). Accordingly, the EBIT margin was 1.1% (2017: 3.0%). The decline was additionally attributable to project deteriorations and measures for increasing profitability.

     

    In the 2018 financial year, the free cash flow in KUKA Group was -€213.7 million. The corresponding figure in the previous year was -€135.7 million. Factors affecting the free cash flow included the increased capital expenditure on new production buildings, the conversion of a production facility and also the rise in trade working capital.

     

    In the year under review, KUKA Group had a workforce of 14,235 employees. The number of employees was thus at the same level as in the previous year (2017: 14,256).

     

    Action package being implemented

    KUKA is adapting to the changed framework conditions and is systematically implementing the action plan already initiated in January. An efficiency program was additionally set up with the goal of saving €300 million by 2021. For 2019, savings in the high double-digit million euro range have already been identified. The savings also include job cuts at the Augsburg headquarters which cannot be avoided in the present situation.

    KUKA is planning to cut a total of 350 full-time jobs in Augsburg in the current year. The cuts will be concentrated primarily on so-called indirect areas and are to be carried out in a socially acceptable manner wherever possible.

    “We are well aware that this will not be an easy process,” says Peter Mohnen, CEO. “That is why we will be taking decisions with the greatest of care and in consultation with the employee representatives. We are aware of our responsibility, and our prime concern is KUKA’s future.”

    In China, the company is concentrating on establishing the joint ventures and will develop new products for the local market there. 

    KUKA has set clear priorities and global focuses in the research and development sector. Our organizational structure has been fine-tuned with the aim of improving global collaboration and placing an even stronger focus on our customers.

     

    Guidance 2019

    Given the current economic forecasts and general conditions and taking into consideration the existing risk and opportunity potential, KUKA anticipates a slight increase in demand in the 2019 financial year. Growth is expected primarily in Asia, and there especially in China. A slightly positive development is anticipated in Europe and the Americas. From a sector perspective, KUKA expects an increase on the previous year for the sales markets in general industry. Demand in the automotive industry is expected to remain stable. Uncertainties are due primarily to current political and global economic developments. This also affects the world’s largest robotics markets, such as the automotive and electronics industries, where we shall keep a close eye on developments.

     

    On the basis of the current general conditions and exchange rates, KUKA is expecting a slight increase in sales revenues to around €3.3 billion for the full year 2019. Given the current economic environment and anticipated business development, KUKA Group expects to achieve an EBIT margin of approximately 3.5% before final evaluation of the current reorganization expenditure.

     

     

    The complete annual report for 2018 is available here:
    www.kuka.com/en-de/investor-relations/reports-and-presentations

Key figures KUKA Group

in € millions

2014

2015

2016

2017

2018

Orders received

2,229.0

2,838.9

3,422.3

3,614.3

3,305.3

Oder backlog

1,702.5

1,639.0

2,048.9

2,157.9

2,055.7

Sales revenues

2,095.7

2,965.9

2,948.9

3,479.1

3,242.1

EBIT

141.8

135.6

127.2

102.7

34.3

in % of revenues

6.8

4.6

4.3

3.0

1.1

in % of capital employed (ROCE)

28.8

20.0

16.2

10.9

2.9

Extraordinary expenses*

-

28.0

31.9

48.7

EBIT adjusted*

141.8

135.6

155.2

134.6

83

EBIT adjusted* in % of revenues

6.8

4.6

5.3

3.9

2.6

EBIT adjusted* in % of capital employed (ROCE)

28.8

20.0

19.8

14.2

7

EBITDA

185.3

259.1

205.3

180.2

121.2

in % of revenues

8.9

8.7

7.0

5.2

3.7

Extraordinary expenses*

-

28.0

31.9

48.7

EBITDA adjusted*

185.3

259.1

233.3

212.1

169.9

EBITDA adjusted* in % of revenues

8.9

8.7

7.9

6.1

5.2

(average) capital employed

492.0

676.8

783.0

950.4

1,185.0

Employees (31.,12.)**

12,102

12,300

13,188

14,256

14,235

* 2016: one-off effect due to the takeover bid by Midea Group; 2017: one-off effect due to growth investments; 2018: one-off effects due to growth investments and reorganization expenditure
** Figures for employees are based on the full-time equivalent throughout the annual report. 
 

Key figures Robotics

in € millions

2014

2015

2016

2017

2018

Orders received

805.5

891.2

1,088.8

1,223.3

1,202.9

Order backlog

241.5

233.4

316.1

331.2

332.8

Sales revenues

834.6

909.6

993.5

1,200.6

1,182.4

EBIT

88.9

100.2

100.7

133.1

134.4

in % of revenues

10.7

11.0

10.1

11.1

11.4

in % of capital employed (ROCE)

53.1

56.6

51.7

56.4

40.6

EBITDA

112.0

126.1

123.2

157.2

162.8

in % of revenues

13.4

13.9

12.4

13.1

13.8

Capital Employed

167.3

177.1

194.9

235.9

330.8

Employees (Dec. 31)

3,644

4,232

4,726

5,010

5,399

Key figures Systems

in € millions

2014

2015

2016

2017

2018

Orders received

1,456.0

1,428.1

1,644.6

1,530.2

1,313.7

Order backlog

955.4

923.2

1,139.3

1,073.4

1,001.9

Sales revenues

1,285.6

1,471.7

1,395.5

1,579.2

1,301.5

EBIT

80.2

114.7

91.3

17.8

-32.8

in % of revenues

6.2

7.8

6.5

1.1

-2.5

in % of capital employed (ROCE)

67.9

87.9

42.8

6.3

-9.9

EBITDA

97.4

135.6

113.5

34.5

-17.0

in % of revenues

7.6

9.2

8.1

2.2

-1.3

Capital Employed

118.1

130.5

213.1

281.9

331.5

Employees (Dec. 31)

5,81

5,146

5,189

5,459

4,811

Key figures Swisslog

in € millions

2014*

2015

2016

2017

2018

Orders received

551.8

742.6

926.2

835.5

Order backlog

517.2

491.0

624.7

768.3

747.5

Sales revenues

620.8

593.5

763.7

819.3

EBIT

-45.9

4.8

10.4

-16.3

in % of revenues

-7.4

0.8

1.4

-2.0

in % of capital employed (ROCE)

-14.5

1.5

3.0

-4.3

EBITDA

24.5

28.2

36.8

9.2

in % of revenues z

3.9

4.8

4.8

1.1

Capital Employed

154.6

315.9

317.4

346.8

383.5

Employees (Dec. 31)

2,369

2,555

2,679

2,904

3,075

* 1 Swisslog was consolidated for the first time as of December 31, 2014.
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