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KUKA AG — Interim / Quarterly Report 2013
May 14, 2013
253_10-q_2013-05-14_43fc75a7-c44f-4abc-abf5-399d230c5050.pdf
Interim / Quarterly Report
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InterIm report for the 1st quarter 2013
Smart Tools meet smart people
Smart tools meet smart people
Technology
KUKA's intelligent robotics and automation solutions are always one step ahead.
Markets
KUKA gives its worldwide customers a decisive lead while conducting business sustainably.
Employees
KUKA's people work passionately and creatively. Their strong commitment and expertise is our most valuable asset. KUKA offers continuing education opportunities across the globe.
Partners
KUKA's trustworthiness and reliability is evident in all its partnerships. It's how the company ensures enduring success for all its associates.
Kuka Robotics
KUKA Robotics' core competence is in the development, manufacturing, controlling, sales and service of industrial robots suitable for any application and any industry sector, in addition to linear units, positioners and mobile platforms.
Kuka Systems
KUKA Systems offers its customers robot-based automation solutions. As general contractor, the division designs and builds customized production lines. The division has core competencies in processes such as welding, gluing, sealing, converting, assembling, testing and handling of metals, glass and other materials.
Contents
| Overview | 4 |
|---|---|
| KEY FIGURES |
4 |
| FoReWoRD | 5 |
| mANAGemeNt RePoRt | 6 |
| conomic environment E |
6 |
| Business performance | 7 |
| Divisions | 8 |
| E arnings position, assets and financial position |
11 |
| Research and development | 14 |
| E mployees |
15 |
| Risk and opportunity report | 15 |
| Outlook | 15 |
| KUKA AND tHe cAPitAL mARKet | 16 |
| iNteRim FiNANciAL stAtemeNts | 18 |
| FiNANciAL cALeNDAR, DiscLAimeR, coNtAct | 28 |
OVERVIEW
STRON G OR DERS RECEIVED AND MUCH IMP ROVED F REE CASH F LOW
_ Consolidated orders received reach € 482.7 million in Q1/13
- Q1/13: Robotics' general industry orders received hit record €106.0 million
- _ Sales revenues in Q1/13 up 18.7 percent year-over-year to € 436.0 million
- _ EBIT margin of 6.5 percent significantly outpaces prior year's 6.0 percent;
- Q1/13: Robotics 10.2 percent and Systems 5.0 percent
- _ Earnings after taxes rise disproportionately: plus 34.3 percent to €14.5 million in Q1/13
- _ Free cash flow rises to € 15.5 million in Q1/13, up from € -0.8 million in Q1/12
- _ Guidance for 2013 confirmed: Sales revenue around €1.8 billion and EBIT margin around 6.5 percent
KUKA GROUP, KEY FIGURES
| in € millions | Q1 / 12 | Q1 / 13 | Change |
|---|---|---|---|
| Orders received | 602.6 | 482.7 | -19.9% |
| Order backlog (03/31) | 981.2 | 947.2 | -3.5% |
| Sales revenues | 367.3 | 436.0 | 18.7% |
| Gross profit | 79.9 | 105.4 | 31.9% |
| in % of sales revenues | 21.8% | 24.2% | – |
| Earnings before interest and taxes (EBIT) | 21.9 | 28.4 | 29.7% |
| in % of sales revenues | 6.0% | 6.5% | – |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 28.5 | 36.2 | 27.0% |
| in % of sales revenues | 7.8% | 8.3% | – |
| Net result | 10.8 | 14.5 | 34.3% |
| Earnings per share in € | 0.32 | 0.43 | 34.4% |
| Capital expenditure | 12.8 | 9.0 | -29.7% |
| Equity ratio in % (03/31) | 23.5% | 25.4% | – |
| Net debt (–) / Net liquidity (+) (03/31) | -38.4 | 62.5 | – |
| Employees (03/31) | 6,804 | 7,240 | 6.4% |
FOREWORD
DEA R SHAREHOL DERS,
KUKA got off to a good start in the first quarter of 2013. Orders received remained steady at a high €482.7 million. The Robotics division reported record orders received from general industry of €106.0 million. Sales revenues were up sharply, rising 18.7 percent from last year to € 436.0 million. EBIT came in at € 28.4 million and free cash flow at € 15.5 million, both significantly improved.
During the first three months of the year, KUKA's activities were dominated by Hanover Fair, which the company attends every other year to present the Group and demonstrate its wide-ranging expertise. Our complete portfolio was showcased: from components and manufacturing cells to complete systems. The new LBR iiwa was a particularly strong magnet in Hanover. It was unveiled at the fair and its many demonstration applications captivated visitors. But the new lightweight robot was not the only highlight. KUKA's conceptual "KUKA moiros" demonstration received Hanover Fair's "Robotics Award" – a further testament to our innovation strength.
Products for general industry round out KUKA's portfolio. For example, KR 5 arc was developed especially for our Asian customers and KR AGILUS opens the door to a number of new sectors such as the electrical industry. We want to expand our global market share by offering a wide-ranging portfolio; everything from small robots to industry-specific machines and complex systems. Our latest acquisition in North America is part of this strategy.
The acquisition of Utica Companies' plant engineering business makes KUKA number one in the North American market for automotive industry systems. So KUKA is well-positioned. In addition to investing in innovations and expanding our global presence, we continuously strive to improve our organizational structures and processes and to always offer our employees an excellent work environment.
Even though market conditions are becoming more challenging, our guidance of about €1.8 billion and an EBIT margin of about 6.5 percent underscore our strategy to strengthen our position worldwide.
Sincerely,
Till Reuter CEO
CONSOLIDATED MANAGEMENT REPORT
ECONOMIC ENVIRONMENT
Regional disparities in global economic growth
According to the International Monetary Fund (IMF), the global economy will grow at an average rate of 3.3 percent this year. However, the recovery will not be the same everywhere. While the developing and emerging nations will report strong growth and the United States start expanding slowly again, the situation in Europe will continue to be difficult.
According to the IMF, Germany's economy is expected to grow 0.6 percent this year, with a better development to be expected in the second half of the year. An economic upswing is, however, forecasted for 2014, when GDP is expected to expand by 1.9 percent.
Automotive industry demand runs parallel to global economic performance
There are regional disparities in the year-over-year change in demand for automobiles, similar to those in the global economy. In the first quarter of 2013, demand in Europe was again lower according to the German Association of the Automotive Industry (VDA). Demand dropped almost 10 percent; 3 million cars and light commercial vehicles were sold. In contrast, the number of new vehicles sold in the United States last quarter jumped 6.3 percent to almost 3.7 million. German carmakers' sales rose even faster and were up over 8 percent according to VDA. The world's largest car market is now China, where almost 4 million new vehicles were sold. The Chinese market expanded more than 25 percent year-over-year. The main beneficiaries of the sales numbers were German premium carmakers, whose market share in China climbed to over 20 percent. Their share has now quadrupled since 2008. Thanks to this growth, German automakers are planning new investments in Asia and prioritizing expansion of their Chinese facilities.
SALES OF CARS AND LIGHT COMMERCIAL VEHICLES JAN. – MAR. 2013 WORLDWIDE
Year-over-year change (in percent) Source: VDA and ACEA
Global automation trend continues
Because of the very high demand in the first quarter of 2012, driven primarily by high capital spending by the automotive industry, the Robotics and Automation Sector shrank 22 percent in the first quarter of 2013, according to VDMA reports. Still, the trend toward automation continues worldwide, with China soon to become one of the most important markets in the world for robot-based automation. According to International Federation of Robotics (IFR) forecasts, China's robot market growth will be above average in the coming years. It will be driven by higher productivity, improved products, better work environments and pressure to reduce costs.
BUSINESS PER FORMANCE
Basically, the strong demand for capital goods for robotbased automation of industrial processes seen last year continued in the first quarter of 2013. KUKA Group reported consolidated orders received of € 482.7 million in the first quarter of 2013, the third highest number in the company's history. However, it is 19.9 percent less than the € 602.6 million posted in Q1/12. Partially this is due to the fact that Q1/12 was a record quarter because of the numerous major orders booked by the Systems division. Most of the large orders placed in 2012 came in the first half of the year. Additionally the Robotics division's orders received included call-offs from frame contracts the division had already received in 2011. The majority were booked at the beginning of fiscal 2012. 100 200 300
Robotics' orders received for the quarter just ended came in at €233.6 million. Although this is 11.7 percent less than the € 264.7 million posted in the same quarter last year, orders received in Q1/13 where the second highest Robotics has ever generated in a single quarter.
The Systems division's operations benefited from the excellent demand from the automotive sector, in which the uninterrupted trend to new models, efficiency improvements (for example, by reducing cycle times) and capital spending in emerging nations continues. Systems was able to generate orders received of € 258.3 million in the first quarter of 2013. This is 25.0 percent lower than the Q1/12 record quarterly result of €344.3 million.
KUKA GROUP – CONSOLIDATED ORDERS RECEIVED
in € millions
KUKA Group's consolidated sales revenues in the first quarter of 2013 totaled € 436.0 million. Here KUKA benefited from the overall high orders received in fiscal 2012. Sales were up 18.7 percent from the € 367.3 million reported in the first quarter of 2012. Both business divisions contributed to this growth. Capacity utilization was high for both Robotics and Systems. In the first quarter of 2013, Robotics sent out invoices totaling € 206.8 million, a new record. The result is 35.3 percent higher than the €152.8 million billed in Q1/12. Systems' sales came in at € 234.4 million, up 6.6 percent from the € 219.8 million reported in Q1/12. The book-to-bill ratio, orders received devided by sales revenues, in the quarter just ended came in at 1.11. It was 1.64 in Q1/12.
in € millions 367.3 436.0 Q1 2012 Q1 2013
At the same time, the company's order backlog again rose substantially in the first quarter of 2013. Order backlog as of March 31, 2013 totaled € 947.2 million, down 3.5 percent from the €981.2 million reported on March 31, 2012, but 4.2 percent higher than last quarter. On December 31, 2012 they stood at € 909.4 million. This growth in the consolidated result is reflected in both divisions' numbers.
KUKA GROUP – CONSOLIDATED ORDER BACKLOG
in € millions
Overall, KUKA Group generated earnings before interest and taxes (EBIT) of € 28.4 million in the first quarter of 2013, versus € 21.9 million in Q1/12. EBIT margin was 6.5 percent, significantly higher than the 6.0 percent generated the same time last year. Both divisions contributed to this very satisfactory EBIT improvement. Robotics' EBIT in the first quarter of 2012 came in at €21.0 million compared to €15.9 million in Q1/12. Despite higher capital spending on research and development, expenses related to expanding in general industry and a higher share of sales from the automotive sector, Robotics was able to generate a quite respectable EBIT margin of 10.2 percent. The Systems division contributed € 11.8 million to the consolidated result versus € 9.6 million in Q1/12. Systems improved its EBIT margin from 4.4 percent in Q1/12 to 5.0 percent in Q1/13, primarily thanks to better process management. 0 5 10 15 20 25 30
DIVISIONS
Robotics
KEY FIGURES in € millions Q1/12 Q1/13 Change Orders received 264.7 233.6 -11.7% Order backlog (03/31) 299.4 271.4 -9.4% Sales revenues 152.8 206.8 35.3% Gross profit 51.0 68.6 34.5% in % of sales revenues 33.4% 33.2% – Earnings before interest and taxes (EBIT) 15.9 21.0 32.1% in % of sales revenues 10.4% 10.2% – Earnings before interest, taxes, depreciation and amortization (EBITDA) 19.4 26.0 34.0% in % of sales revenues 12.7% 12.6% – Employees (03/31) 2,913 3,180 9.2%
The Robotics division was again able to generate very high orders received in the first quarter of 2013; significantly above the €200 million threshold. Orders in the first quarter of 2013 totaled € 233.6 million, 11.7 percent less than the €264.7 million posted in the first quarter of 2012. During last year's first quarter, Robotics benefited from unusually high demand from automotive and there were order releases from a major order from Daimler AG, both of which elevated orders received in the first quarter of 2012. Most of the growth in the first quarter of 2013 came from Europe and Asia, especially China.
ROBOTICS – ORDERS RECEIVED
Orders received from the automotive segment for the quarter just ended were quite high at € 86.3 million. Orders were received mainly from core customers in the segment; that is, Daimler, Volkswagen Group and BMW. The result is 37.1 percent less than during the prior year's same quarter, but up 54.1 percent from last quarter.
General industry orders set a new record at €106.0 million, €12 million above the previous high reached in the second quarter of 2012. The result was driven primarily by a frame contract from the medical industry that extends over a number of years. Negotiations were completely finalized and the order awarded in the first quarter of 2013.
The strong demand for industrial robots also boosted the service business, which was able to book orders totaling € 41.3 million in the first quarter of 2013, compared to €39.1 million in Q1/12. During last year's first quarter, the service business benefited from high demand, especially from the automotive sector.
The service share of the division's total orders received was about 18 percent, while general industry rose from 33 percent to 45 percent and automotive declined from 52 percent to 37 percent year-over-year.
The Robotics division's sales revenues in the first quarter set a new record and were driven primarily by the automotive segment and service. Overall, Robotics' invoices for robots and services totaled € 206.8 million in the first quarter of 2013, 35.3 percent more than the €152.8 million billed in Q1/12. Robotics' order backlog, excluding the frame contract, was reported at €271.4 million as of March 31, 2013, down 9.4 percent from the €299.4 million posted for March 31, 2012 and up 9.1 percent from the year-end number of €248.7 million reported for December 31, 2012.
Driven by sales growth, Robotics' earnings before interest and taxes (EBIT) came in at €21.0 million in the first quarter of 2013, versus € 15.9 million in Q1/12. Despite a higher share of sales from automotive, higher costs for research and development and expenses associated with expanding in the general industry segment, the division generated an EBIT margin of 10.2 percent.
KUKA's "moiros" concept vehicle wins Robotics Award
KUKA's conceptual exhibit "moiros" captured the coveted Robotics Award presented by Hanover Fair organizers. Olaf Lies, Minister of Economic Affairs, Labor and Transport for Lower Saxony, presented the Robotics Award in the mobile robotics category to the KUKA team. KUKA's impressive conceptual exhibit, consisting of a KR QUANTEC robot, a KUKA omniMove platform and autonomous navigation software, is very flexible and practically relevant (www.kuka-robotics. com/res/sps/a737ee03-5832-4c95-9d91-84e0de80c664_ moiros_DE.pdf).
The prize is awarded to German and foreign companies and institutions for the most suitable robotics solutions for practical applications. The project was judged according to five criteria: degree of technological innovation; benefits for industry, the environment and society; economic aspects; appearance and method of presentation; and a reality test in real-world industrial applications.
ORDERS RECEIVED BY SEGMENT
Systems
Key figures in € millions Q1/12 Q1/13 Change Orders received 344.3 258.3 -25.0% Order backlog (03/31) 688.7 685.3 -0.5% Sales revenues 219.8 234.4 6.6% Gross profit 24.6 31.9 29.7% in % of sales revenues 11.2% 13.6% – Earnings before interest and taxes (EBIT) 9.6 11.8 22.9% in % of sales revenues 4.4% 5.0% – Earnings before interest, taxes, depreciation and amortization (EBITDA) 12.0 14.0 16.7% in % of sales revenues 5.5% 6.0% – Employees (03/31) 3,697 3,877 4.9%
The Systems division's orders in the first quarter of 2013 came in at €258.3 million. The growth was mainly driven by the automotive industry, including large orders from Ford, VW Group and BMW. In the first quarter of 2012, orders received were reported at € 344.3 million, the highest number in the history of the Systems division. The number was driven by unusually large orders that were formally awarded in the first half of last fiscal year.
The division's sales revenues were reported at €234.4 million, which compares to € 219.8 million in Q1/12. Systems continued to report very high capacity utilization, roughly the same level as in prior quarters. Since orders received were higher than sales revenues in the first quarter 2013, the Systems division's order backlog rose and reached €685.3 million as of March 31, 2012, almost the same as the € 688.7 million reported on March 31, 2012, and 2.9 percent higher than the €666.1 million posted on December 31, 2012.
SYSTEMS – SALES REVENUES
The Systems division achieved an EBIT of11.8 million in the first quarter of 2013, up from €9.6 million in Q1/12. The resulting EBIT margin was 5.0 percent, compared to 4.4 percent in Q1/12. EBIT margin thus improved substantially year-over-year.
KUKA Systems exhibits lightweight applications at Hanover Fair
KUKA Systems' show concept focused on the growing lightweight manufacturing sector. The division staged manufacturing processes for the many trade show booth visitors, some of them live. They included aluminum welding, metal alloy joining and an induction welding process for joining carbon-fiber composites. Another highlight was the presentation of the results of the joint research project on energy-efficient car body assembly. Here Systems showed how manufacturing systems and solutions will in future be automated in a sustainable and resource-conserving manner. The machine tools subsegment presented its forming technology expertise and the impact of lightweight construction techniques such as processing CFRPs or fiberreinforced composites.
EARNIN GS, F INANCIA L AND ASSETS
Earnings
Sales generally continued to grow in the first quarter of 2013. KUKA Group's consolidated sales of € 436.0 million for the quarter just ended surpassed the strong fourthquarter 2012 results of € 432.7 million. The number is also a substantial 18.7 percent higher than the €367.3 million reported for the first quarter of 2012. The Robotics division reported its highest ever quarterly sales. The Group's consolidated orders received of € 482.7 million were also substantially higher than the €403.1 million reported in Q1/12. Gross profit on sales rose even faster in the first three months, up 31.9 percent or € 25.5 million from the prior year's same quarter to € 105.4 million. The Group's gross margin rose accordingly and was up 240 basis points to now 24.2 percent. This increase was driven especially by the Systems division, which improved its gross margin 240 basis points year-over-year, from 11.2 percent to 13.6 percent. The Robotics division was able to maintain its gross margin at the same high level as last year. The final number was 33.2 percent versus 33.4 percent in Q1/12.
Overhead costs (sales, research and development and administration) totaled € 69.3 million versus last year's €56.7 million. Overhead costs were 15.9 percent of sales, slightly higher than last year's 15.4 percent. Sales and administration costs rose in parallel with sales. Research and development expenses included in the income statement were higher than in the same quarter last year as budgeted, and have now reached € 12.3 million, up from €8.8 million in Q1/12. KUKA continues to invest heavily in the Group's technology focus. Strong emphasis has been placed on pressing ahead with lightweight robot development, and the control software is being continuously enhanced. Important projects and applications that are key to future growth are at the development stage and as a result the associated costs are being capitalized. They will only impact earnings when they are amortized in subsequent periods. In the first three months, € 2.4 million were capitalized for internally generated intangible assets. This compares to €4.6 million in Q1/12. Overall, more R&D was planned for this year than last. The net result of other operating expenses and income of € -8.9 million, which compares to €-3.1 million in Q1/12, was driven by currency exchange effects, especially related to the Japanese yen, Chinese yuan and US dollar, in addition to other factors.
Overall operating profit for the first three months of this year was € 27.2 million, which compares to €20.1 million in Q1/12. Adjusted for financing charges of € 1.2 million included in operating profit, down from € 1.8 million in Q1/12, earnings before interest and taxes (EBIT) came in at € 28.4 million, up from € 21.9 million in Q1/12. EBIT margin for the first quarter of 2013 was 6.5 percent versus 6.0 percent during the same period last year. This result is the highest quarterly EBIT KUKA Group has generated in the past five years. Only in the third quarter of 2012 was the EBIT margin also 6.5 percent.
| Q1 / 12 | Q2 / 12 | Q3 / 12 | Q4 / 12 | Q1 / 13 | |
|---|---|---|---|---|---|
| EBIT (in € millions) | 21.9 | 28.6 | 31.7 | 27.6 | 28.4 |
| EBIT-margin (in %) | 6.0 | 6.4 | 6.5 | 6.4 | 6.5 |
The higher EBIT margin is primarily attributable to the Systems division, where EBIT margin rose from 4.4 percent in the first quarter of 2012 to now 5.0 percent. The Robotics division also maintained a high EBIT of 10.2 percent, down only slightly from the 10.4 percent recorded in Q1/12.
EBITDA (earnings before interest, taxes, depreciation and amortization) growth tracked the EBIT increase, going from € 28.5 million last year to currently € 36.2 million. Total depreciation for the first quarter of 2013 was € 7.8 million, versus € 6.6 million in Q1/12. Of this total, 5.0 million is attributable to Robotics (Q1/12: 3.5 million), 2.2 to Systems (Q1/12:2.4 million), and 0.6 million to other (Q1/120.7 million).
Net interest expense was € -4.1 million, up from € -3.1 million in Q1/12. The net interest item includes €4.7 million for interest on the convertible bond placed in November 2010, the same as in Q1/12. It includes € 0.4 million for the convertible bond placed in February 2013. The improved guarantee conditions successfully negotiated last year reduced the cost of credit lines by € 0.5 million year-over-year, even though they were utilized almost to the same extent (March 31, 2013: € 152.5 million; March 31, 2012: EUR158.9 million). Accounting-related reclassification of financing charges into operating profit had a positive impact on the net interest result; in Q1/13 it came in at €1.2 million versus €1.8 million in Q1/12. The share of interest for pensions was € 0.6 million compared to € 0.8 million in Q1/12. Also included is interest income associated with the financing lease for the KTPO pay-onproduction contract in the United States.
Earnings before taxes (EBT) in the first three months of 2013 totaled € 23.1 million, up 35.9 percent from the € 17.0 million earned in the same period last year. Tax expenses during the first quarter totaled € 8.6 million, versus €6.2 million in Q1/12. The tax rate is thus 37.2 percent, compared to 36.5 percent in Q1/12.
KUKA Group's earnings after taxes for the first quarter of 2013 rose to € 14.5 million from € 10.8 million in Q1/12. Earnings per share improved accordingly, going from € 0.32 to €0.43.
GROUP CONSOLIDATED INCOME STATEMENT (CONDENSED)
| in € millions | Q1/12 | Q1/13 |
|---|---|---|
| Sales revenues | 367.3 | 436.0 |
| EBIT | 21.9 | 28.4 |
| EBITDA | 28.5 | 36.2 |
| Financial results | -3.1 | -4.1 |
| Taxes on income | -6.2 | -8.6 |
| Net result | 10.8 | 14.5 |
Financial position
The significant improvement in the company's financial position is reflected in cash earnings, which consist of earnings after taxes adjusted for cash-neutral depreciation on fixed assets and intangible assets and other income and expenses impacting cash. These came in at € 30.2 million, 8.1 million higher than the comparable prior year's number of €22.1 million.
Cash flow from operating activities rose to € 24.4 million despite the € 12.7 million business-volume-driven increase in working capital from €11.7 million in Q1/12. On December 31, 2012, tightened trade working capital was €235.8 million. It rose €23.8 million to €259.6 million as of March 31, 2013. Receivables were up €+60.7 million, inventories less down payments up €+9.9 million and offsetting liabilities totaled €+46.8 million. Trade receivables were up mainly in Germany, whereas receivables from production orders were higher in both North America and Germany. The increase in other liabilities is primarily due to the seasonal increase in personnel liabilities (liabilities related to vacation days, as well as vacation and Christmas bonuses).
The company invested € 9.0 million in the first three months of 2013 compared to €12.8 million in Q1/12. The capital spending related to property plant and equipment (€5.6 million) and technical systems (for example, painting fixtures, spot welding machines), as well as €3.4 million for intangible assets. Income from asset retirement during the reporting period was €0.1 million versus €0.3 million in Q1/12. Cash flow from investments was thus € -8.9 million, compared to € -12.5 million in Q1/12.
The improved cash flow from operating activities plus cash flow from investment activities resulted in a free cash flow of €15.5 million, which compares to €-0.8 million in Q1/12. This is another first-quarter record for KUKA Group.
Cash flow from financing activities was dominated by the convertible bond with a face value of € 58.8 million placed in February. Total cash flow from financing activities was reported at € 57.2 million, compared to € -0.7 million in Q1/12.
KUKA Group now has disposable funds for financing of € 318.8 million as of March 31, 2013, 90.9 percent more than the €167.0 million reported at the end of Q1/12.
KUKA Group's net debt consisting of liquid assets minus current and non-current financial liabilities of € 38.4 million as of March 31, 2012 has thus been converted to a net liquidity of €62.5 million in only one year.
CONSOLIDATED CASH FLOW (CONDENSED)
| in € millions | Q1/12 | Q1/13 |
|---|---|---|
| Cash Earnings | 22.1 | 30.2 |
| Cashflow from operating activities | 11.7 | 24.4 |
| Cashflow from investing activities | -12.5 | -8.9 |
| Free Cashflow | -0.8 | 15.5 |
Net worth
Non-current assets of € 300.5 million were virtually the same as the € 300.4 million reported on December 31, 2012. Fixed assets increased € 1.7 million while deferred taxes were lower.
Current assets were sharply higher, especially receivables and cash and cash equivalents. Further details are provided in the Financial position section. Current assets totaled €968.6 million as of March 31, 2013, €131.6 million higher than on December 31, 2012.
As of the record date, KUKA Group's balance sheet total rose from € 1,137.4 million on December 31, 2012 to €1,269.1 million, up 11.6 percent.
Equity increased from € 297.5 million to € 322.2 million in the first quarter of 2013 as a the result of earnings after taxes of €14.5 million and the convertible bond placement. Accounting-wise, the convertible bond has both an equity and the debt component, so equity rose €7.6 million. Foreign currency effects, particularly related to the US dollar, increased equity by € 1.7 million. The equity ratio is now 25.4 percent, compared to 23.5 percent on March 31, 2012.
Financial debt consists mainly of the €202.0 million corporate bond maturing in November 2017 and the €58.8 million convertible bond maturing in February 2018.
Non-current liabilities rose from € 523.4 million on December 31, 2012 to €579.9 million as of March 31, 2013, driven mainly by the aforementioned increase in liabilities.
KUKA Group's working capital rose slightly during the period under review. Working capital rose € 4.9 million, from € 90.5 million at the end of 2012 to €95.4 million on March 31, 2013. Further information hereto is outlined in the Financial position section.
GROUP ASSETS
| in € millions | 12/31/2012 | 03/31/2013 |
|---|---|---|
| Total assets | 1,137.4 | 1,269.1 |
| Equity | 297.5 | 322.2 |
| in % of total assets | 26.2% | 25.4% |
| Net debts | 42.8 | 62.5 |
EVENTS A F TER THE BALANCE SHEET
KUKA Systems strengthens its market position in the U.S.
KUKA Systems has purchased the plant engineering business of welding equipment maker Utica Companies based in Shelby Township, Michigan. This transaction supports KUKA Systems to strengthen its market position among the North American automotive industry systems suppliers and gives it access to new automotive customers and additional technologies. Utica's core market is car assembly. The company builds mainly car body assembly lines and subsystems. Additional products include laser welding systems, as well as joining and self-pierce riveting technology, all of which are capable of precisely joining car body parts. The company also makes press automation systems and assembly systems for subassemblies, doors, engine hoods and other parts. Utica Companies will be fully consolidated effective mid-April 2013.
RESEA RCH & DEVE LOPMENT
KUKA Group spent €12.3 million on research and development in the first quarter of 2013, which, as planned, is higher than the € 8.8 million spent during the prior year's same quarter.
Most of the spending on research and development is attributable to the Robotics division, since the Systems division's R&D is mainly conducted in conjunction with customer orders. KUKA Group presented its innovations and product portfolio at Hanover Fair from April 8 to 12. One of the highlights was a conceptual manufacturing cell that won a prize. The LBR iiwa, the first sensitive robot for industrial manufacturing, also debuted at the international trade show.
LBR iiwa – sensitive robot for industrial applications
KUKA robotics has unveiled its LBR iiwa. It has seven axes and was designed to replicate a human arm. It can be operated in position and yield control mode, and thanks to integrated sensors, the robot's sensitivity is configurable. LBR iiwa was made for tasks such as delicate joining processes thanks to built-in high-performance collision detection algorithms and torque sensors integrated into the joints of all seven of its axes. Low weight, seven axes and a slim profile make the robot ideal for tight spaces and easy to integrate into manufacturing lines. LBR iiwa is designed to handle payloads up to seven or fourteen kilograms. The entire Group participated in its development. KUKA Systems is developing applications in close cooperation with KUKA Laboratories, which provides the basic technology, while KUKA Robotics is pressing ahead with market introduction.
Hanover Fair presents Robotics Award for conceptual exhibit 100
KUKA Robotics has developed a mobile robotic system that was unveiled to the public at Hanover Fair and won Hanover Fair's Robotics Award. The "KUKA moiros" conceptual vehicle consists of a KUKA omniMove mobile platform and a KR QUANTEC console robot with KR C4 controller. The whole system is powered by conventional lead-acid batteries and a converter. With the help of autonomous navigation software developed in-house by KUKA, the technology showpiece moves around freely in the room without being tethered by any cables and simulates a surface treatment process on extra-large workpieces. The unit comprises an omnidirectional mobile heavy load platform, a standard industrial robot, a robot controller, which is powered by an uninterruptible power supply via conventional lead-acid batteries, and autonomous navigation software. Together, these components provide the basic functionalities required for a mobile robot system for industrial applications. 0 20 40 60 6000 7000 8000
KUKA Robospin – spot welding aluminum components
Systems integrator KUKA Systems is already the leader when it comes to joining steel parts. There is a clear trend in industrial manufacturing to use more lightweight materials such as aluminum. This in turn presents an entirely new set of challenges to existing processes. KUKA Systems has answered the call with a welding system called KUKA RoboSpin, an enhanced version of its classic resistance welding system. The secret to welding aluminum as quickly and easily as steel is to keep the welding robot continuously moving.
EMP LOYEES
KUKA Group's workforce expanded 6.4 percent year-overyear, from 6,804 in Q1/12 to now 7,240. The Robotics division's headcount went from 2,913 in Q1/12 to 3,180 in Q1/13, an increase of 9.2 percent. Most of the new workers were hired for research and development, for service and to support the business location in China. The Systems division's new hires were mainly in the Body Structures unit and its Chinese subsidiary. Its workforce worldwide thus grew 4.9 percent, from 3,697 in Q1/12 to now 3,877. The Systems division hired most of the new contract workers. Group-wide, the number of temporary staff rose 12.4 percent, from 1,189 in Q1/12 to now 1,337. The headcount in the non-operative departments went from 194 to 183.
KUKA GROUP EMPLOYEES
RISKS AND OP PORTUNITIES
From an overall risk perspective, KUKA Group is primarily exposed to business performance and fiscal risks. The executive board is not aware of any individual or aggregated risks that could threaten the company's existence. Strategically and financially, the company is positioned to be able to take advantage of business opportunities.
Please refer also to the detailed report on pages 81 and following of the 2012 annual report.
OUT LOOK
In general, KUKA expects a positive development of the world economy in 2013. The company's key markets, automotive and general industry, should also continue to expand in fiscal 2013, even though growth rates are expected to be significantly lower after the strong capital spending by customers in 2010–2012. From a regional perspective, demand from Asia and North and South America will be stronger, with Europe damping the overall trend.
Based on these expectations, KUKA Group's overall sales revenues in 2013 should be slightly higher and reach around €1.8 billion. Based on this sales forecast, we expect to generate an EBIT margin of around 6.5 percent. KUKA thus confirms its guidance.
KUKA AND THE CAPITAL MARKET
Stock markets rally
In the first quarter, the capital markets were focused on the uncertain political and economic situation in the southern European countries, but in spite of the difficult economic environment in Europe, stocks on the MDAX rallied almost 10 percent on average. This situation is partly due to the low interest policies in the eurozone and the resulting benefits of investing in equities. KUKA's share price was up sharply in the first quarter, rising from €27.67 to €34.03 on March 28, 2013 and outperforming the MDAX. The shares of comparable companies in the mechanical engineering and automotive industry supplier segment during the same period rose between 1 percent and 24 percent. The DAX was up only 0.2 percent.
KUKA's share price up 23 percent in the first quarter of 2013
During the first quarter, KUKA's share price caught up with the MDAX and reached its highest ever value of € 35.40 on February 20, 2013. Since mid-2012, the stock price has been driven by excellent market prospects for robot-based automation. KUKA also benefited from the excellent market environment and share price increase when it placed a convertible bond with a face value of €58.8 million on February 12, 2013. KUKA was able to secure its financing for the next five years at an attractive rate of 2 percent. The convertible bond issue was oversubscribed and was placed in a matter of hours.
Free float remains high
The free float of KUKA's shares to the end of the quarter remains at 75.6 percent of total share capital. There is no change in the investors holding more than 3 percent of KUKA's shares: Grenzebach Group, Asbach-Bäumenheim (24.4 percent, Oppenheim Asset Management Services S.a.r.l. (5.2 percent, Wyser-Pratte (4.7 percent) and Franklin Mutual Advisors LLC (3.0 percent).
kuka'S Share prIce performance January 1 to March 31, 2013 *
InterIm report (cumulatIve)
GRoUP coNsoLiDAteD iNcome stAtemeNt
| in € millions | Q1/12 | Q1/13 |
|---|---|---|
| Sales revenues | 367.3 | 436.0 |
| Cost of sales | -287.4 | -330.6 |
| Gross profit | 79.9 | 105.4 |
| Selling expenses | -25.9 | -30.6 |
| Research and development expenses | -8.8 | -12.3 |
| General and administrative expenses | -22.0 | -26.4 |
| Other operating income | 12.5 | 11.7 |
| Other operating expenses | -15.6 | -20.6 |
| Result from operating activities | 20.1 | 27.2 |
| Reconciliation to earnings before interest and taxes (EBIT) | ||
| Financing costs included in cost of sales | 1.8 | 1.2 |
| Earnings before interest and taxes (EBIT) | 21.9 | 28.4 |
| Net interest income | 2.8 | 2.1 |
| Net interest expense | -5.9 | -6.2 |
| Financial results | -3.1 | -4.1 |
| Earnings before tax | 17.0 | 23.1 |
| Taxes on income | -6.2 | -8.6 |
| Net result | 10.8 | 14.5 |
| thereof minority interests in profits | 0.0 | 0.0 |
| thereof shareholders of KUKA AG | 10.8 | 14.5 |
| Earnings per share (diluted/undiluted) in € | 0.32 | 0.43 |
Statement of comprehensive income
| in € millions | Q1/12 | Q1/13 |
|---|---|---|
| Earnings after taxes | 10.8 | 14.5 |
| Translation adjustments | -0.9 | 1.7 |
| Changes of actuarial gains and losses | -1.0 | 0.5 |
| Deferred taxes on changes of acturial gains and losses | 0.2 | -0.2 |
| Other comprehensive income | -1.7 | 2.0 |
| Comprehensive income | 9.1 | 16.5 |
| of which: attributable to minority interests | 0.0 | 0.0 |
| of which: attributable to shareholders of KUKA AG | 9.1 | 16.5 |
CONSOLIDATED CASH FLOW STATEMENT
| in € millions | Q1/12 | Q1/13 | |
|---|---|---|---|
| Net result | 10.8 2.5 4.1 -1.4 6.1 22.1 0.0 -1.6 -25.8 -12.6 29.6 11.7 0.3 -6.0 -6.8 -12.5 -0.8 0.0 |
||
| Depreciation/amortization on intangible assets | 3.6 | ||
| Depreciation/amortization on tangible assets | 4.2 | ||
| Other non-payment-related income | -0.9 | ||
| Other non-payment-related expenses | 8.8 | ||
| Cash Earnings | 30.2 | ||
| Result on the disposal of assets | 0.0 | ||
| Changes in provisions | -1.9 | ||
| Changes in current assets and liabilities: | |||
| Changes in inventories | 5.8 | ||
| Changes in receivables and deferred charges | -54.9 | ||
| Changes in liabilities and deferred charges (without debts) | 45.2 | ||
| Cash flow from operating activities | 24.4 | ||
| Payments from disposals of fixed assets | 0.1 | ||
| Payments for capital expenditure on intangible assets | -3.4 | ||
| Payments for investments on tangible assets | -5.6 | ||
| Cash flow from investing activities | -8.9 | ||
| Free cash flow | 15.5 | ||
| Payment from issuing the convertible bond | 57.7 | ||
| Payment for repaying liabilities due to banks and liabilities similiar to bonds | -0.7 | -0.5 | |
| Cash flow from financing activities | -0.7 | 57.2 | |
| Payment-related change in cash and cash equivalents | -1.5 | 72.7 | |
| Exchange-rate-related and other changes in cash and cash equivalents | -0.3 | 1.8 | |
| Change in cash and cash equivalents | -1.8 | 74.5 | |
| Cash and cash equivalents at the beginning of the period | 168.8 | 244.3 | |
| Cash and cash equivalents at the end of the period | 167.0 | 318.8 |
GROUP BALANCE SHEET
Assets
| in € millions | 12/31/2012 | 03/31/2013 |
|---|---|---|
| Non-Current assets | ||
| Fixed assets | ||
| Intangible assets | 82.9 | 83.2 |
| Tangible assets | 94.9 | 96.3 |
| Financial investments and investments in associates | 0.2 | 0.2 |
| 178.0 | 179.7 | |
| Long-term finance lease receivables | 70.2 | 71.0 |
| Long term tax receivables | 6.3 | 6.3 |
| Other long-term receivables and other assets | 9.6 | 8.9 |
| Deferred taxes | 36.3 | 34.6 |
| 300.4 | 300.5 | |
| Current assets | ||
| Inventories | 213.4 | 207.5 |
| Receivables and other assets | ||
| Trade receivables | 141.7 | 170.6 |
| Receivables from construction contracts | 198.9 | 230.7 |
| Current finance lease receivables | 5.0 | 5.3 |
| Current tax receivables | 6.8 | 7.2 |
| Other assets, prepaid expenses and deferred charges | 26.9 | 28.5 |
| 379.3 | 442.3 | |
| Cash and cash equivalents | 244.3 | 318.8 |
| 837.0 | 968.6 | |
| 1,137.4 | 1,269.1 |
EQUITY AND LIABILITIES
| in € millions | 12/31/2012 | 03/31/2013 |
|---|---|---|
| Equity | 297.5 | 322.2 |
| Non-current liabilities, provisions and accruals | ||
| Non-current financial liabilities | 194.9 | 245.5 |
| Other non-current liabilities | 13.4 | 13.2 |
| Pensions and similiar obligations | 82.0 | 81.0 |
| Deferred taxes | 26.2 | 27.3 |
| 316.5 | 367.0 | |
| Current liabilities | ||
| Current financial liabilities | 6.6 | 10.8 |
| Trade payables | 136.2 | 154.9 |
| Advances received | 86.5 | 70.7 |
| Liabilities from construction contracts | 95.5 | 123.6 |
| Accounts payable to affiliated companies | 0.1 | 0.1 |
| Other current liabilities and deferred income | 9.2 | 12.0 |
| Provision for taxes | 109.1 | 127.7 |
| Other provisions | 80.2 | 80.1 |
| 523.4 | 579.9 |
| 1,137.4 | 1,269.1 |
|---|---|
CHANGES TO GROUP EQUITY
| Revenues reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| in € millions | Number of shares out standing |
Subscribed Capital capital reserve |
Translation gains /losses |
Actuarial gains and losses |
Annual net income and other revenue reserves |
Equity to shareholders |
Minority interests |
Total | |
| 01/01/2013 | 33,915,431 | 88.2 | 67.5 | -0.1 | -10.2 | 150.7 | 296.1 | 1.4 | 297.5 |
| Comprehensive income |
1.7 | 0.3 | 14.5 | 16.5 | 0.0 | 16.5 | |||
| Other changes | 7.6 | 0.8 | -0.2 | 8.2 | 8.2 | ||||
| 03/31/2013 | 33,915,431 | 88.2 | 75.1 | 1.6 | -9.1 | 165.0 | 320.8 | 1.4 | 322.2 |
| Revenues reserves | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| in € millions | Number of shares out standing |
Subscribed capital |
Capital reserve |
Translation gains /losses |
Actuarial gains and losses |
Annual net income and other revenue reserves |
Equity to shareholders |
Minority interests |
Total |
| 01/01/2012 | 33,915,431 | 88.2 | 67.5 | -0.2 | 0.2 | 95.2 | 250.9 | 1.5 | 252.4 |
| Comprehensive income |
-0.9 | -0.8 | 10.8 | 9.1 | 0.0 | 9.1 | |||
| Other changes | 0.0 | 0.0 | |||||||
| 03/31/2012 | 33,915,431 | 88.2 | 67.5 | - 1.1 | -0.6 | 106.0 | 260.0 | 1.5 | 261.5 |
noteS on the quarterly report (condenSed)
GRoUP seGmeNt RePoRtiNG
| Robotics | Systems | kuka ag and other companies |
Reconciliation and consilidation |
Group | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| in € millions | Q1/12 | Q1/13 | Q1/12 | Q1/13 | Q1/12 | Q1/13 | Q1/12 | Q1/13 | Q1/12 | Q1/13 |
| Group external sales revenues |
147.7 | 202.5 | 219.5 | 233.5 | 0.0 | 0.0 | - | - | 367.3 | 436.0 |
| as a % of Group sales revenues |
40.2% | 46.4% | 59.8% | 53.6% | 0.0% | 0.0% | - | - | 100.0% | 100.0% |
| Intra-Group sales | 5.1 | 4.3 | 0.3 | 0.9 | 0.0 | 0.0 | -5.4 | -5.2 | - | - |
| Sales revenue by division | 152.8 | 206.8 | 219.8 | 234.4 | 0.0 | 0.0 | -5.4 | -5.2 | 367.3 | 436.0 |
| Result from operating activities |
15.8 | 20.9 | 7.9 | 10.7 | -5.1 | -5.0 | 1.5 | 0.6 | 20.1 | 27.2 |
| Financing costs included in cost of sales |
0.1 | 0.1 | 1.7 | 1.1 | - | - | - | - | 1.8 | 1.2 |
| Earnings before interest and taxes (EBIT) |
15.9 | 21.0 | 9.6 | 11.8 | -5.1 | -5.0 | 1.5 | 0.6 | 21.9 | 28.4 |
| as a % of sales revenues of the division |
10.4% | 10.2% | 4.4% | 5.0% | - | - | - | - | 6.0% | 6.5% |
| as a % of Group exter nal sales revenues |
10.8% | 10.4% | 4.4% | 5.1% | - | - | - | - | 6.0% | 6.5% |
| EBITDA | 19.4 | 26.0 | 12.0 | 14.0 | -4.4 | -4.4 | 1.5 | 0.6 | 28.5 | 36.2 |
| as a % of sales rev enues of the division |
12.7% | 12.6% | 5.5% | 6.0% | - | - | - | - | 7.8% | 8.3% |
| as a % of Group exter nal sales revenues |
13.1% | 12.8% | 5.5% | 6.0% | - | - | - | - | 7.8% | 8.3% |
| Assets (03/31/2013/ 12/31/2012) |
343.8 | 361.6 | 508.6 | 545.8 | 173.5 | 175.0 | -175.9 | -173.3 | 850.0 | 909.1 |
| Payroll (03/31) | 2,913 | 3,180 | 3,697 | 3,877 | 194 | 183 | - | - | 6,804 | 7,240 |
I F RS /IAS ACCOUNTIN G STANDARDS
KUKA Aktiengesellschaft, headquartered in Augsburg, prepared its interim financial statements for the period ending March 31, 2013 in line with the IAS 34 Interim Financial Reporting guidelines as adopted by the European Union. The company elected to prepare a condensed version in accordance with this standard. The condensed interim report should be read in conjunction with the Group's consolidated financial statements to December 31, 2012.
The consolidated financial statements for 2012 were prepared according to the International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS) of the International Accounting Standards Board (IASB), the interpretations of the Standing Interpretation Committee (SIC) as well as the International Financial Reporting Interpretation Committee (IFRIC), as approved by the European Union, supplemented by the guidelines stipulated in article 315a, paragraph 1 of the German Commercial Code (HGB).
G ROU P OF CONSOL IDATED COMPANIES
The Group interim report contains forty-nine companies, the same as on the December 31, 2012 period end. In addition to KUKA Aktiengesellschaft, it includes six companies registered inside Germany and forty-two firms domiciled outside Germany, for which KUKA Aktiengesellschaft either directly or indirectly holds majority voting rights.
ACCOUNTIN G AND VALUATION METHODS
The same valuation methodology and accounting principles as those used for the consolidated financial statements for the business year ending 2012 were applied in preparing this consolidated interim report, with the exception of the changes described in the following. For further information, please refer to the consolidated financial statements dated December 31, 2012, which form the basis of the interim report presented here. The latter are also available on the Internet at www.KUKA.com.
CHANGES TO ACCOUNTIN G AND VALUATION POL ICIES
The following new standards and interpretations have come become mandatory since the start of the 2013 financial year:
- _ IAS 19 (revised 2011), Employee Benefits
- _ IFRS 13, Fair Value Measurement
- _ Amendments to IFRS 7, Financial Instruments: Disclosures in the Notes Regarding Offsetting of Financial Assets and Financial Debt
- _ Amendments to IFRS 1, Loans Granted by the State
- _ Improvements to IFRS (2009 2011)
- _ IFIC 20, Stripping Costs During the Production Phase of a Surface Mine
Amendments to IAS 19 (revised 2011), Employee Benefits, eliminated the optional handling of actuarial gains. Gains are now to be reported in the period in which they are generated under Other Comprehensive Income. This has already been KUKA's practice to date. In addition, earnings from the plan assets are to be recognized as income based on the returns of corporate bonds – independent of the actual portfolio structure. Past service costs resulting from plan changes are to be recognized immediately in the period the changes occur. In addition, the standard return on plan assets applied is now to match the discount rate applied to pension obligations.
Effective 2013, administration costs for the plan assets are to be recognized as a part of the revaluation component in Other Comprehensive Income, while other administration costs are to be itemized under Operating Profit at the time they are incurred. Overall, the changes have no material impact on KUKA Group's pension obligations.
IAS 19 (revised 2011) also has an impact on accounting-related partial retirement obligations according to the block model. Insurers hold reinsurance covers for excess obligations. These are now recognized using the same interest rate as the corresponding liability. The amount added for partial retirement liabilities will now be proportional to the amounts in the applicable collective bargaining agreements.
IAS 19 (revised 2011) is to be applied retroactively. However, since there will be no material impact on KUKA Group's earnings, KUKA will not use IAS 8.
In detail, the changes to IAS 19 (revised 2011) will have the following impact on equity, before accounting for deferred taxes, for pension accruals and liabilities related to partial retirement:
| in € millions | 01/01/2012 | 01/01/ – 12/31/2012 |
|---|---|---|
| Pension accruals | 0.1 | 0.1 |
| Liabilities related to partial retirement | 1.1 | -0.2 |
EARNIN GS PER SHARE
Undiluted/diluted earnings per share break down as follows:
| Earnings per share | in € | 0.32 | 0.43 |
|---|---|---|---|
| Weighted average number of shares outstanding | shares | 33,915,431 | 33,915,431 |
| Net result attributable to shareholders of KUKA AG | in € millions | 10.8 | 14.5 |
| Q1/12 | Q1/13 |
Undiluted earnings per share due to shareholders of KUKA Aktiengesellschaft were calculated as per IAS 33 on the basis of Group consolidated earnings after taxes and the weighted average number of shares outstanding for the year.
In the first three months of 2013, the weighted average number of shares in circulation was 33.9 million. Some stock dilution could arise in the future if bondholders convert their convertible bonds issued in February 2013 to shares, because capital was conditionally increased. In the first quarter of 2013, the average price of the shares on the stock market was below the conversion price. This would have resulted in a loss if bondholders had converted, so there was no dilution.
SHAREHOL DERS' EQUITY
The subscribed share capital of KUKA Aktiengesellschaft of €88,180,120.60 is subclassified into 33,915,431 no par value bearer shares. Each share entitles its holder to one vote.
The capital reserve applies to KUKA Aktiengesellschaft. The change compared to December 31, 2012 resulted from the issue of the convertible bond in February 2013.
On March 31, 2013, a total of 33,915,431 million shares were in circulation.
IAS 1 9 EMP LOYEE BENE F ITS
The balance sheet employee benefits account rate of return as of March 31, 2013 and as per IAS 19 for German companies is 3.00 percent per annum and 4.15 percent per annum in North America. On December 31, 2012 it was 3.00 percent for German companies and 3.90 percent in North America. This resulted in actuarial gains for the defined benefit obligation of €0.3 million. Investment income growth from external pension funds exceeded expectations, resulting in actuarial gains of €0.2 million. The actuarial result was reported under equity as an income-neutral sum of €0.3 million in consideration of deferred taxes.
CONVERTIBL E BON D
In February KUKA issued a convertible bond with a face value of €58.8 million maturing in February 2018. The bond was issued in denominations of €100,000 and grants rights for conversion into up to 1,597,535 new no par value bearer shares of KUKA AG. The initial conversion price is €36.8067 per share. The conversion ratio is thus 2,716.8967 shares for each €100,000 bond. The conversion right can be exercised until the maturity date of the bond. The bond carries an interest coupon of 2.0 percent p.a. Interest is paid twice a year, on February 12 and August 12, with the first payment due on August 12, 2013.
Accounting-wise, the convertible bond is broken down into an equity and a debt component. The market value of the debt component including issue costs is €50.1 million. As a result of the attractive market interest rate from a risk perspective, the company also issued a fixed interest bond with no conversion rights paying 5.03 percent at the same time it issued the convertible instrument. The resulting value of the equity component is 7.6 million and is recognized as part of the capital reserve taking into consideration latent taxes and will not be changed until the due date or conversion. The interest expense recognized for the bond in the first quarter of 2013 was €0.4 million.
SYN DICATED SENIOR FACI L ITIES AGREEMENT
The Syndicated Senior Facilities Agreement signed in November 2010 comprises a total of € 200.0 million (of which €50.0 million is a cash credit line and €150.0 million a line of credit for LCs) and matures at the end of March 2014. According to an amendment to the Syndicated Senior Facilities Agreement in the second quarter of 2012, the company can now elect to use the cash credit line as a line of credit for LCs.
Line of credit utilization totaled €115.6 million as of the balance sheet date versus €109.4 on December 31, 2012; the existing operating line of credit was split for KUKA Robotics (India) and utilized in the amount of €3.8 million compared to €4.2 million on December 31, 2012.
For additional information about the Syndicated Senior Facilities Agreement, please refer to the December 31, 2012 annual report.
CREDIT L INES F ROM SU RETY COMPANIES
Additional approved credit lines totaling €62.0 million exist with surety companies, similar to the situation on December 31, 2012. According to the Syndicated Senior Facilities Agreement, the amount that may be drawn on these credit lines shall be no more than €45.0 million. At the end of the first quarter, the company had utilized €36.9 million versus €39.5 million on December 31, 2012.
ASSET-BACKED SECU RITIES ( ABS ) P ROGRAM
As outlined in the 2012 annual report, KUKA has two ABS programs (Asset-Backed Securities) totaling €50.0 million. A total of €23.3 million were utilized as of March 31, 2013, which compares to €13.8 million on December 31, 2012.
For additional information about the ABS programs, please refer to the annual report dated December 31, 2012.
SEGMENT REPORTIN G
The internal reporting and organizational structure subdivides KUKA into the KUKA Robotics and KUKA Systems segments. Key financial indicators are determined for both segments. Earnings before interest and taxes (EBIT) is used as the key indicator in regard to managing segment profits.
The main elements of the segment reports are contained in the management report on the operating business divisions, Robotics and Systems, as well as in the tables at the beginning of the notes to the quarterly report.
CASH F LOW STATEMENT
The cash flow statement shows changes to KUKA Group's liquidity position in accordance with IAS 7. These cash holdings consist of funds recognized on the balance sheet as cash and cash equivalents; that is, cash in hand, checks and cash balances with financial institutions, provided that they are available within three months. None of the cash is subject to restrictions related to disposal.
CONTINUED OBL IG ATIONS AND COM-MERCIA L COMMITMENTS
There has been no material change in other financial obligations and contingent liabilities since December 31, 2012.
RE L ATED PARTIES
There have been no changes in dealings with related persons or companies since December 31, 2012.
In total, the value of goods and services supplied to related parties in the first three months of the fiscal year was €1.3 million. The goods and services received by the Group from related parties were worth €6.1 million. As of March 31, 2013, receivables totaled € 1.8 million and liabilities € 0.7 million. The market oriented transfer prices are in accordance with the "dealing at arm's length" principle.
EVENTS OF MATERIA L IMPORTANCE A F TER THE EN D OF THE REPORTIN G PERIOD
There were no events of material significance after the close of the reporting period.
For details about the acquisition of the engineering business of Utica, please refer to the information provided in the Management report/Events after the reporting period section.
Augsburg, May 8, 2013
The Executive Board
Dr. Till Reuter Peter Mohnen
FINANCIAL CALENDAR 2013
| MAY 8, 2013 | FIRST-QUARTER INTERIM REPORT |
|---|---|
| JUNE 5, 2013 | ANNUAL GENERAL MEETING, AUGSBURG |
| AUGUST 7, 2013 | ANNUAL REPORT TO MID-YEAR |
| NOVEMBER 6, 2013 | INTERIM REPORT FOR THE FIRST NINE MONTHS |
This quarterly report was published on May 8, 2013 and is available in German and English from KUKA AG's Investor/ Public relations department. In the event of doubt, the German version applies.
Disclaimer
The Group interim report contains forward-looking statements based on assumptions and estimates made by the management of KUKA Aktiengesellschaft. Although management is of the opinion that these assumptions and estimates are accurate, future actual developments and future actual results could deviate significantly from these assumptions and estimates due to a variety of different factors. Some of these factors could, for example, include a change in the overall economic climate, exchange rates and interest rates, as well as changed conditions in the markets themselves. KUKA Aktiengesellschaft makes no guarantees that future developments and actual future results will align with the assumptions and estimates contained in this report, nor does it accept any liability for same.
contact and ImprInt
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