Signs of recovery after COVID-19 shutdown: orders received increase in the third quarter

Interim report on the third quarter 2020

29 October 2020

  • Exceptional year and economic crisis: the pandemic led to a sharp decline in sales revenues, orders received and EBIT in 2020.

  • Stable financial position: positive free cash flow of €37 million, book-to-bill ratio rises to 1.08.

  • Significant increase in orders received from China.

  • 2021: KUKA expects higher revenues and positive EBIT.     

  • Orders received, sales revenues and EBIT up year-on-year in first quarter.

  • CEO Peter Mohnen: “The pandemic crisis will increase demand for automation. Our mission from now to 2030: KUKA will make automation available to everyone.”

The coronavirus pandemic hit industry hard last year. KUKA, like the entire industry, also felt the massive effects. While there were slight signs of recovery in the third quarter, these could not compensate for the slumps in the first half of the year and the fourth quarter. Orders received by the Group in 2020 were thus down by 12.5% year on year to €2,792.2 million. Sales revenues fell by 19.4% to €2,573.5 million.

Peter Mohnen

These figures are the fruit of a strong performance and the great dedication of our employees. In these challenging times, we have strengthened our customer focus. KUKA has performed convincingly despite extremely difficult market conditions and was able to win considerably more orders than in the same period of the previous year and in the second quarter. Even if customers are still exceedingly hesitant to invest, this also demonstrates that there is an increasing focus on automation.

Peter Mohnen, CEO of KUKA AG

“Thanks to the rapid implementation of comprehensive safety measures and sophisticated logistics planning, we were able to serve our customers around the globe without major interruptions. Nevertheless: COVID-19 impacted us globally in all areas, from production to customer service and from supply chains to day-to-day work. Thanks to strict measures, we nevertheless emerge from this fiscal year net debt-free and in a stable financial position,” said Peter Mohnen, CEO of KUKA Group. At €37 million, free cash flow in 2020 was considerably higher than in the previous years (2019: €20.7 million).

Economy and efficiency measures, investments in research and development

“More streamlined structures are necessary in order to be prepared for a market that was already difficult before the pandemic and will be slow to recover,” Mohnen said. In order to stabilize the Group in the long term, KUKA has implemented comprehensive economy and efficiency measures. CEO Mohnen expressed his appreciation: “What each and every member of the workforce has achieved deserves my utmost respect.” Special effects from the measures, together with the coronavirus-related decline in orders and sales revenues, led to a negative EBIT of -€113.2 million (2019: €47.8 million).

KUKA has made major savings, particularly in indirect areas, but also invested in research and development and thus in the Group’s future viability. Expenditure for R&D rose in 2020 to €178 million (2019: €160.5 million). The EBIT margin fell from 1.5% to -4.4%. The two KUKA segments Swisslog and Swisslog Healthcare, experts in intralogistics and hospital and pharmacy automation, were the only two KUKA divisions with a slightly positive EBIT in 2020.

Growth in China in all application areas

Robotics and automation are increasingly coming into focus – particularly after the experiences of the coronavirus pandemic. The Group’s book-to-bill ratio rose, for example, to 1.08 (2019: 1.00), indicating good capacity utilization in the medium term. Growth is particularly strong in the China business segment with a book-to-bill ratio of 1.23 (2019: 1.00). Additionally, orders received in this segment rose by 7.4% year on year to €490.4 million.

“During the economic crisis in 2020, China was the only market to record growth. Here, we were able to win orders and enter into cooperative ventures not only in traditional areas such as automotive, but also in newer sectors such as healthcare and the 3C industry,” said Peter Mohnen. “We are also expecting growth in China this year and have been pushing ahead with specific developments such as the KR SCARA and new types of small robots to achieve this. Success in this important future market will drive KUKA forward globally.”

KUKA also expects the economic recovery to continue worldwide and anticipates higher sales revenues and a positive EBIT in 2021. “Automation will come out of this crisis as a winner in the medium term,” said Peter Mohnen. This will be reflected in a considerable increase in demand. Despite the lockdown, orders received and sales revenues were higher year-on-year throughout the first quarter of 2021. In particular, EBIT is expected to be significantly better than in the prior-year period.

Mission 2030: robotics and automation for everyone

The pandemic has massively boosted digitalization and the use of new technologies in numerous sectors, such as healthcare and e-commerce. These areas, which are experiencing great demand, will continue to develop dynamically, also thanks to automation. “In the coming years, people will increasingly find themselves working together with robots in more and more new fields. They will all need to be able to work with these technologies quickly and intuitively,” said Peter Mohnen. KUKA is now laying the foundations for this by developing a user-friendly operating system that will be part of an entire ecosystem, providing access to programs, apps, services and accessories.

KUKA will be presenting an initial preview of this operating system of the future at the virtual Hannover Messe in April.

KUKA Group

in € millions 2019 2020 Δ in %

Orders received

3,190.7

2,792.2

-12.5

Sales Revenues

3,192.6

2,573.5

-19.4

Book-to-Bill ratio

1.00

1.08

EBIT

47.8

-113.2

> -100

EBIT margin in %

1.5

-4.4

Systems

in € millions 2019 2020 Δ in %

Orders received

858.0

715.3

-16.6

Sales Revenues

925.4

671.6

-27.4

Book-to-Bill ratio

0.93

1.07

EBIT

27.7

-37.4

> -100

EBIT margin in %

3.0

-5.6

Robotics

in € millions 2019 2020 Δ in %

Orders received

1,037.1

901.3

-13.1

Sales Revenues

1,159.2

899.2

-22.4

Book-to-Bill ratio

0.89

1.00

EBIT

63.2

-3.9

> -100

EBIT margin in %

5.5

-0.4

Swisslog

in € millions 2019 2020 Δ in %

Orders received

750.2

643.9

-14.2

Sales Revenues

600.0

527.7

-12.1

Book-to-Bill ratio

1.25

1.22

EBIT

18.2

2.9

-84.1

EBIT margin in %

3.0

0.5

Swisslog Healthcare

in € millions 2019 2020 Δ in %

Orders received

251.3

210.1

-16.4

Sales Revenues

222.3

217.0

-2.4

Book-to-Bill ratio

1.13

0.97

EBIT

-9.2

3.1

> 100

EBIT margin in %

-4.1

1.4

China

in € millions 2019 2020 Δ in %

Orders received

456.4

490.4

7.4

Sales Revenues

458.2

397.1

-13.3

Book-to-Bill ratio

1.00

1.23

EBIT

5.7

-4.7

> -100

EBIT margin in %

1.2

-1.2

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