KUKA on successful course – Guidance confirmed

Interim report on the third quarter 2017

October 27, 2017

  • Sales revenues up 12.3% to €798.6 million in Q3/17

  • Orders received down 18.5% to €804.4 million in the third quarter, but up 5.8% in a nine-monthly comparison

  • EBIT margin reaches 5.6% before purchase price allocation and before growth investment

    • Robotics: EBIT margin at record high of 12.2%

    • Swisslog: EBIT margin before purchase price allocation increased to 3.0%

  • Earnings after taxes total €19.2 million in the third quarter and €79.4 million (9M/17)

  • Guidance targets for 2017 confirmed

 

KUKA Group has continued on its positive course in the third quarter of 2017 and completed the first nine months of the financial year with successful results. “In line with our strategy, we have continued to grow in the General Industry sectors,” states Dr. Till Reuter, CEO of KUKA AG. “In the growth market of China, we will adapt our presence to the increasing demand. We plan to double our capacities there by the end of the first quarter of 2018.”

Orders received on course in nine-monthly comparison

In the third quarter of 2017, KUKA Group’s volume of orders received was €804.4 million. Compared with the same quarter last year (Q3/16: €987.5 million), this represents a drop of 18.5%. KUKA was unable to match last year’s record figure this year, as the Systems division registered a decline in Europe. In the nine-monthly comparison, however, KUKA increased the volume of orders received by 5.8% from €2,627.4 million to
€2,779.2 million (9M/17). The cumulative volume of orders received reached a new record high.

The Robotics division generated new orders of €288.9 million in the third quarter of 2017. Compared to the prior-year quarter (Q3/16: €287.1 million), this result represents a slight increase of 0.6%, thus remaining at about the same level as last year. The General Industry customer segment and the Service segment were the drivers of this development. From a regional perspective, Asia, and particularly China, have driven this positive performance. In the first nine months of 2017, Robotics achieved orders received of €946.3 million. Compared with the reference value for the previous year, this represents growth of 21.2% (9M/16: €781.0 million) – and thus the highest cumulative value ever achieved in the first nine months.

In the Systems division, orders received totaled €301.8 million in the third quarter of 2017. This was 42.6% lower than the result of the prior-year quarter (Q3/16: €526.2 million). The volume of orders received in the Systems division depends on the time at which major contracts are awarded and thus fluctuates greatly. Furthermore, unlike last year, no orders were received from the US Aerospace business, as this division has been sold. In the first nine months of 2017, Systems generated orders received totaling €1,186.0 million (9M/16: €1,351.7 million), corresponding to a decrease of -12.3% compared with the high values last year.

At Swisslog, orders received totaled €235.3 million (Q3/16: €199.4 million), thus considerably surpassing the 200-million-euro-mark. In particular, the Logistics segment achieved strong growth. In the first nine months of 2017, orders received reached a level of €700.2 million. This is a rise of 30.8% on the same period last year (9M/16: €535.2 million).

Double-digit growth in sales

In the third quarter of 2017, KUKA Group achieved sales revenues totaling €798.6 million. This is a 12.3% increase on last year’s result for the same quarter (Q3/16: €710.9 million). In the first nine months of 2017, KUKA Group generated sales revenues of €2,597.1 million. Compared with the same period last year (9M/16: €2,044.1 million), this represents growth of 27.1%, and thus a record high.

The Robotics division reported an increase in sales revenues of 30.1% in the past quarter to €273.5 million (Q3/16: €210.3 million). In the first nine months of 2017, Robotics generated sales revenues of €895.3 million. Compared with the previous year (9M/16: €669.0 million), this represents growth of 33.8%, and thus a new record for this period.

In the third quarter, sales revenues in the Systems division amounted to €359.8 million. This represents a slight decline of -2.2% on the previous year’s result for the same quarter (Q3/16: €367.8 million). Here, again, the absence of the US Aerospace business has an impact. Moreover, development of sales during the individual quarters is highly dependent on the phases of the ongoing projects. In the first nine months of 2017, sales revenues totaled €1,209.6 million despite the lack of the US Aerospace business (9M/16: €973.6 million). This corresponds to an increase of 24.2%.

In the third quarter of 2017, the Swisslog division’s sales revenues rose from €138.9 million to €177.2 million. Between January and September 2017, Swisslog generated sales revenues of €529.9 million. This is an increase of 25.2% on the previous year’s result (9M/16: €423.4 million).

The book-to-bill ratio, i.e. orders received in relation to sales revenues, fell slightly as compared with both the prior-year quarter and the first nine months, although the figure was slightly above 1 (Q3/17: 1.01 and 9M/17: 1.07).

The order backlog grew by 1.9% to €2,210.7 million on September 30, 2017 (September 30, 2016: €2,169.5 million).

Earnings before interest and taxes (EBIT) totaled €28.3 million in the third quarter of 2017 (margin: 3.5%) compared with the previous year’s figure of €35.9 million (margin: 5.0%). Omitting the purchase price allocation for Swisslog and investment in growth for innovative solutions in the area of Industrie 4.0, the EBIT margin was 5.6%. In the first nine months of 2017, EBIT increased by 34.0% to €110.7 million (9M/16: €82.6 million) with a margin of 4.3% in the first nine months of 2017 (9M/16: 4.0%).

The EBIT at Robotics in the third quarter of 2017 amounted to €33.5 million with a new record EBIT margin of 12.2%. EBIT at 62.6% was higher than for the same period last year (Q3/16: €20.6 million) and had a positive effect on the profitability of KUKA Group. The EBIT margin for the previous year was 9.8%. EBIT at Robotics in the first nine months of 2017 totaled €97.2 million, resulting in an EBIT margin of 10.9%. EBIT in the same period last year was €67.3 million with an EBIT margin of 10.1%.

The Systems division posted an EBIT of €6.3 million in the third quarter of 2017. This is a 75.7% decline on the previous year’s result for the same quarter (Q3/16: €25.9 million). The EBIT margin was 1.8% in the third quarter of 2017 compared with 7.0% in the same period in 2016. This steep decline was caused by capacity shortages in some projects. In the first nine months of 2017, EBIT stood at €55.1 million (9M/16: €64.7 million) – a decline of 14.8%. The margin stood at 4.6% (Q3/16: 6.6%).

In the third quarter, Swisslog’s EBIT increased significantly, climbing to €3.0 million. This corresponds to a 200% increase on the third quarter of 2016 (Q3/16: €1.0 million). The EBIT margin of this division increased from 0.7% in the previous year to 1.7% in the past quarter. The EBIT margin before purchase price allocation was 3.0% compared with 2.7% in the prior-year quarter. Between January and September of this year, the EBIT rose from €0.7 million (9M/16) to €2.2 million. The EBIT margin increased in the first nine months of 2017 from 0.2% (9M/16) to 0.4%.

Increased workforce throughout the Group

The number of employees in KUKA Group grew by 7.1% from 13,056 to 13,988 in the first nine months of 2017.

Outlook: guidance for 2017 confirmed

Based on current general conditions, KUKA anticipates sales revenues of around €3.3 billion for the full year 2017, up approximately 12% on last year. Adjusted to allow for the contribution to revenues of the divested US Aerospace business in the previous year, this corresponds to growth of around 16%. Both customer segments – General Industry and Automotive – and, from a regional viewpoint, China and North America, should make a positive contribution to sales revenue development. Given the current economic environment and anticipated revenue development, KUKA Group expects to achieve an EBIT margin of more than 5.5% before purchase price allocation for Swisslog and before growth investment. The expenditure for purchase price allocation at Swisslog should amount to about €9 million in 2017 and thus be at the level of the previous year.

The complete interim report is available under the following link:
www.kuka.com/en-de/investor-relations/reports-and-presentations

Key Figures

in € millions 9M/16 9M/17 Change in %
Orders received 2,627.4
2,779.2 5.8
Order backlog (Sept. 30) 2,169.5
2,210.7 1.9
Sales revenues 2,044.1
2,597.1 27.1
Gross profit 548,6
593,2 8.1

in % of sales revenues

26.8
22.8
EBIT (earnings before interest and taxes) 82,6
110,7 34.0

in % of sales revenues

4.0
4.3
EBITDA (earnings before interest, taxes, depreciation and amortization) 
138,2
166,2 20.3

in % of sales revenues 

6,8
6,4
Earnings after taxes 78,9
79,4 0.6
Earnings per share (undiluted/diluted) in €  2,01
2,00
-0.5
Capital expenditure (annual average) 63,2
64,7 2.4
Equity ratio in % (Sept. 30) 33.5
32.9
Net liquidity / debt (Sept. 30) 85,9
-166,3 >100
Employees (Sept. 30) 13,056
13,988 7.1

 

in € millions Q3/16 Q3/17 Change in %
Orders received 987,5
804,4 -18.5
Order backlog (Sept. 30) 2,169.5
2,210.7 1.9
Sales revenues 710,9
798,6 12.3
Gross profit 186,7
188,6 1.0

in % of sales revenues

26.3
23.6
EBIT (earnings before interest and taxes)
35,9
28,3 -21.2

in % of sales revenues

5.0
3.5
EBITDA (earnings before interest, taxes, depreciation and amortization)  56,7
47,1 -16.9

in % of sales revenues 

8.0
5.9
Earnings after taxes 48,5
19,2 -60.4
Earnings per share (undiluted/diluted) in €
1,23
0,48 -61.0
Capital expenditure 22,2
23,8 7.2

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