Record value achieved for orders received
During the past financial year KUKA Group recorded orders received worth €3,422.3 million, representing a significant increase of 20.6% on the previous year’s result (2015: €2,838.9 million). This record value surpassed the three billion euro mark for the first time. All three divisions profited from growth primarily in North America and China. The Robotics division in particular posted a gain of 21% in orders received on the Chinese market.
High level of sales revenues
The sales revenues of KUKA Group reached a value of €2,948.9 million in 2016 and were thus at almost the same level as the previous year, when they amounted to €2,965.9 million.
The book-to-bill ratio, i.e. orders received in relation to sales revenues, was above 1 at Group level in the 2016 financial year, coming in at 1.16. This means that an increase in revenues can be anticipated for 2017 (2015: 0.96).
KUKA Group’s order backlog amounted to €2,048.9 million at year-end 2016. This was an increase of 25.0% compared to the prior-year value (2015: €1,639.0 million). The persistently high order backlog represents around two thirds of annual sales revenues and will thus ensure good capacity utilization during fiscal 2017 and to some extent for 2018.
Earnings before interest, taxes, depreciation and amortization (EBITDA) totaled €205.3 million, after €259.1 million in the previous year. The EBITDA margin in 2016 was thus 7.0%, having been 8.7% in 2015. Not taking the purchase price allocation for Swisslog and one-off effects of the Midea Group takeover bid into account, KUKA Group achieved earnings before interest and taxes (EBIT) of €166.0 million (2015: €194.3 million). The EBIT margin stood at 5.6% (2015: 6.6%). In line with Group strategy, investments were made in the future viability of the company, and expenditure on research and development was increased 20% to €126.6 million in 2016. Taking into account all the expenditure in 2015 and 2016, KUKA achieved an EBIT of €127.2 million (margin: 4.3%) in the past financial year, compared to €135.6 million (margin: 4.6%) in the preceding year. In 2016 the extraordinary expenses relating to the Midea takeover and depreciation on the purchase price allocation for Swisslog amounted to €28.0 million and €10.8 million respectively.
Dividend recommendation €0.50 per share
At Group level, the earnings after taxes of €86.2 million (2015: €86.3 million) matched the previous year’s level. Earnings per share amounted to €2.19 in 2016 (2015: €2.39). This slight reduction results from the higher number of shares compared with 2015 due to the conversion of the convertible bonds in 2016. For this reason, the Executive Board is recommending to the Annual General Meeting a dividend of €0.50 per share for the 2016 financial year, as in the previous year.
In the past financial year, the free cash flow in KUKA Group was -€106.8 million. In the previous year the free cash flow had still been clearly positive at €95.7 million. This development is primarily attributable to the strong increase in trade working capital which was influenced substantially by the high volume of orders received. The working capital is set to improve in the coming quarters as revenue is generated from these orders with a positive impact on the free cash flow.
Equity amounted to €840.2 million as at December 31, 2016 (2015: €732.5 million). The equity ratio thus rose from the prior-year figure of 30.8% to 33.0%. Besides the net income of €86.2 million (2015: €86.3 million) and differences due to currency translation, the conversion of the remaining convertible bonds into new KUKA shares also contributed to this development. The conversions resulted in an increase of €44.6 million in equity.
Workforce expansion in growth regions
In the year under review, the Group’s workforce rose by 7.2% from a total of 12,300 at the end of 2015 to 13,188 at the end of 2016. Personnel levels were increased particularly in the strategically important regions of the USA and Asia, but primarily in China.
Further revenue growth expected
Given the current economic forecasts and general conditions, KUKA anticipates high demand in fiscal 2017, particularly from China and North America. A slight increase in demand is expected in Europe as a whole. From a sector perspective, a positive development is predicted for the general industry market. Demand in the automotive industry is expected to remain stable, now that customer investments have already risen considerably in recent years, with positive stimulus in the USA and China.
On the basis of the current general conditions and exchange rates, KUKA is anticipating sales revenues of around €3.1 billion in fiscal 2017. Based on the current economic environment and the anticipated development of sales revenues, KUKA Group expects to achieve an EBIT margin of more than 5.5% before purchase price allocation for Swisslog and also before growth investments amounting to about €45 million.
The investments relate to Group-wide issues such as digitization, Industrie 4.0, mobility, general industry and China, for example. KUKA is expecting these investments to open up additional areas of growth for the Group in the coming years, which should be reflected in higher sales revenues. The expenditure for purchase price allocation at Swisslog should amount to about €10 million in 2017 and thus remain at the level of the previous year.
The complete annual report for 2016 is available here