KUKA increases EBIT and meets earnings forecast for 2013
March 23, 2014
- Orders received by the Group steady at € 1.88 billion
- Sales revenues climb to € 1.77 billion (+2.0 percent)
- EBIT breaks the € 100 million mark for the second year in a row, rising to € 120.4 million (+9.7 percent); EBIT margin improves to 6.8 percent
- Guidance for 2013 met
- Proposed dividend of 30 cents per share for fiscal 2013
BUSINESS PERFORMANCE IN 2013
At the financial results press conference in Munich on March 26, 2014, KUKA AG’s Executive Board presented the Group’s 2013 financial statements along with important developments in 2013.
In 2013 KUKA continued to build on the success of the record year 2012. Thanks to the sustained global trend toward robot-based automation, orders received by KUKA Group in fiscal 2013 remained nearly unchanged at a high and stable level. The high volume of orders also boosted sales revenues. The guidance for 2013 – with sales revenues of € 1.8 billion and EBIT margin of at least 6.5 percent – was met.
“We continued our efforts in 2013 to strategically align KUKA so that it is in a position to help shape the trend toward automation: We acquired Utica in the United States to expand our product portfolio, opened a new plant in China and formed a partnership with Siemens,” said Dr. Till Reuter, CEO of KUKA AG.
KEY ECONOMIC FIGURES FOR THE 2013 FINANCIAL YEAR:
Orders received by the Group reached € 1,881.9 million, just shy of last year’s record level of € 1,889.6 million. Orders received remained steady and at a high level again in 2013. The Robotics division took in orders worth € 793.5 million, a mere 1.2 percent less than the € 803.1 million reported in 2012. The slight decline can be attributed to customer investment cycles for model launches in the automotive industry; customers in this segment placed orders worth € 318.3 million in total, which was 14.2 percent below last year’s € 371.0 million. Orders received from general industry were up again and came in at € 330.9 million, or 12.2 percent higher than the € 294.9 million reported last year. The Systems division received orders totaling € 1,111.6 million in fiscal 2013, just 0.3 percent below last year’s record of € 1,115.1 million. Systems gained new customers in North America, especially through the acquisition of Utica Enterprises.
KUKA Group sales revenues reflect the high order intake in previous quarters and, at € 1,774.5 million in 2013, were 2 percent higher than the € 1,739.2 million reported last year. Sales revenues in the Robotics division rose year-on-year by 1.5 percent to € 754.1 million from € 742.6 million in 2012, reaching an all-time high for the division in a given year. The Systems division reported sales revenues of € 1,045.9 million, which was 2.0 percent higher than last year’s level of € 1,025.3 million, setting another record of over € 1 billion in sales for the second consecutive year. The acquisitions of Utica Enterprises and CMA Technology helped drive this development. The book-to-bill ratio remained above 1 again in 2013, coming in at 1.06. This shows that the order backlog is rising and means that the workload will be high for KUKA in fiscal 2014.
KUKA Group’s order backlog rose by 9.0 percent to € 991.6 million at the end of 2013 from € 909.4 million on December 31, 2012. Robotics’ share of the order backlog at the end of the year (neglecting frame contracts from the automotive industry) was € 280.7 million (+12.9 percent), and Systems’ was € 714.4 million (+7.3 percent).
KUKA Group earnings before interest and taxes (EBIT) rose to € 120.4 million in the fiscal year just ended, breaking the € 100 million mark for the second year in a row. KUKA Group thus raised its profitability by 9.7 percent compared to the previous year; EBIT of € 109.8 million was reported in 2012. KUKA Group’s EBIT margin climbed to 6.8 percent from 6.3 percent in 2012. Robotics generated EBIT of € 77.1 million, which was 3.9 percent lower than last year’s record level of € 80.2 million. The EBIT margin fell slightly as a result, moving from 10.8 percent in the 2012 financial year to 10.2 percent in 2013. The main reasons for this were higher expenditures on research and development as well as on hiring staff for general industry. Systems generated EBIT of € 60.8 million in the past fiscal year, which was 27.5 percent higher than last year’s € 47.7 million. The EBIT margin rose from 4.7 percent in 2012 to 5.8 percent in 2013; The increase was primarily due to improved process structures, the expansion of centers of expertise in countries with lower cost structures and the high degree of utilization owing to the strong demand.
In total, KUKA Group’s earnings after taxes in 2013 rose to € 58.3 million from € 55.6 million in 2012, which was 4.9 percent higher than last year. Earnings per share improved accordingly, rising from € 1.64 in 2012 to € 1.72 in 2013. The Executive Board will therefore propose to shareholders at the Annual General Meeting that a dividend of € 0.30 per share be paid for fiscal 2013.
By issuing a € 150.0 million convertible bond in two tranches in February and July 2013, KUKA was able to secure sufficient liquidity reserves and an attractive interest rate. To further optimize the financing structure, the Executive Board made a decision in compliance with the regulations of the high-yield bond documentation to repurchase the high-yield corporate bond effective May 15, 2014; this decision was irrevocably announced today, March 26, 2014, through publication on the Luxembourg stock exchange. This move will have a positive impact on the financial result and thus earnings after taxes from the 2015 financial year on.
Free cash flow hit a record level of € 95.4 million in 2013 from € 77.1 million in 2012. The high, positive free cash flow made it possible to more than triple net liquidity from € 42.8 million in 2012 to € 146.5 million in fiscal 2013. The financing structure of the Group is therefore still very robust and geared toward the long term.
Equity rose by 27.4 percent to € 379.1 million as of December 31, 2013 thanks to positive net income and the share of equity from the convertible bond. The equity ratio, i.e. the ratio of equity to total assets, also rose accordingly from 26.2 percent to 27.5 percent.
KUKA Group’s capital employed was slightly lower on average, falling from € 339.8 million in 2012 to € 326.2 million in 2013. The return on capital employed (ROCE) was 36.9 percent versus 32.3 percent in 2012.
KUKA Group implemented targeted measures in the financial year just ended to hire new employees, especially in the United States and China, and reach the company’s strategic goals. In Germany, more specialists were added in research and development. The total number of employees at the company rose from 7,264 at the end of 2012 to 7,990 at the end of 2013; this corresponds to an increase of 10 percent, or 726 employees. The integration of 346 employees from Utica Enterprises and CMA Technology into KUKA Systems accounted for the largest increase in staff. The number of employees at KUKA Systems rose 11.8 percent from 3,902 in 2012 to 4,362 in 2013. The Robotics workforce grew from 3,180 to 3,416 employees, or by 7.4 percent. Research and development, sales and service saw the greatest expansion along with China following the opening of a new plant.
KUKA Group expects to see a positive impact on earnings with the recent economic trend. Based on the current IMF economic forecast, KUKA can expect strong demand in fiscal 2014, especially from America and Asia, with China taking a leading role.
KUKA therefore forecasts sales revenues of between € 1.9 and 2.0 billion for the 2014 financial year, which would be higher than 2013. The acquisition of the Reis Group will play a part in this development. It is expected that revenues will rise in both general industry and the automotive industry.
Under the current economic climate and especially due to charges from the first-time consolidation of the Reis Group, KUKA Group forecasts an EBIT margin of approximately 6.0 percent for 2014.
Dr. Till Reuter: “We have budgeted in expenses for 2014 to organizationally integrate and restructure the Reis Group, which will positively contribute to earnings in coming years. Overall, we have access to new general industry sectors through the acquisition of Reis, have strengthened our presence in China and expanded our own research and development capacities.”