KUKA AG — Interim / Quarterly Report 2013

Nov 12, 2013

InterIm report for the 3rd quarter

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.

Content

OVERVIEW	04
KUKA GROUP, KEY FIGURES	04
FOREWORD	05
KUKA AND THE C APITAL MARKET	06
CO NSO LIDATE D MANAGEME NT r eport	08
Economic environment	08
Demand for cars	08
Robotics and automation	09
Business performance	09
Divisions	11
Earnings, financial and assets	15
Research and development	18
Employees	20
Risk and opportunity report	20
Outlook	20
iNteRim FiNANciAL stAtemeNts	22
FiNANciAL cALeNDAR, DiscLAimeR, coNtAct	33

OVERVIEW

_ Orders received at €1.44 billion on a high level in 9M/13

• Q3/13: up 13.2 percent to € 427.7 million

_ Sales revenues grow 1.6 percent in 9M/13 to € 1.33 billion

_ EBIT margin rises from 6.3 percent in 9M/12 to 6.6 percent in 9M/13

• Q3/13: Systems' EBIT margin up sharply to 5.9 percent

_ Earnings after taxes reach € 41.7 million and free cash flow €79.3 million in 9M/13

_ Guidance confirmed

KUKA GROUP, KEY FIGURES

in €millions	9 months 2012	9 months 2013	Change
Orders received	1,486.5	1,435.8	-3.4%
Order backlog (09/30)	952.6	1,003.7	5.4%
Sales revenues	1,306.5	1,327.6	1.6%
Gross profit	271.4	314.9	16.0%
in % of sales revenues	20.8%	23.7%	–
Earnings before interest and taxes (EBIT) *	82.2	87.5	6.4%
in % of sales revenues	6.3%	6.6%	–
Earnings before interest, taxes, depreciation and amortization (EBITDA)	103.1	114.8	11.3%
in % of sales revenues	7.9%	8.6%	–
Net result	42.4	41.7	-1.7%
Earnings per share in €	1.25	1.23	-1.6%
Capital expenditure	30.4	33.8	11.2%
Equity ratio in % (09/30)	25.4%	25.8%	–
Net debt (–) /Net liquidity (+) (09/30)	-67.4	135.8	–
Employees (09/30)	7,242	7,842	8.3%

	3rd Quarter	3rd Quarter
in €millions	2012	2013	Change
Orders received	377.7	427.7	13.2%
Order backlog (09/30)	952.6	1,003.7	5.4%
Sales revenues	490.5	454.1	-7.4%
Gross profit	97.7	105.6	8.1%
in % of sales revenues	19.9%	23.3%	–
Earnings before interest and taxes (EBIT) *	31.7	30.1	-5.0%
in % of sales revenues	6.5%	6.6%	–
Earnings before interest, taxes, depreciation and amortization (EBITDA)	38.7	41.2	6.5%
in % of sales revenues	7.9%	9.1%	–
Net result	16.8	14.7	-12.5%
Earnings per share in €	0.50	0.43	-14.0%
Capital expenditure	7.6	14.9	96.1%

* Adjusted for financing costs included in operating result (IAS 23 R)

Foreword

D ear shareholders ,

KUKA is benefiting from the global trend toward automation. We have had another good third quarter with excellent results.

Orders received in the past nine months remained steady at a high €1.44 billion. During this period we were able to boost sales revenues to €1.33 billion, up 1.6 percent from last year. EBIT margin grew from 6.3 percent after nine months in 2012 to 6.6 percent at the end of nine months in 2013. Orders received for the quarter were up 13.2 percent year over year to € 427.7 million. KUKA Group was able to generate sales of €454.1 million to the end of the quarter, in part because of the high orders received in previous quarters.

Both divisions contributed to this result. Our automotive customers are investing in automation made by KUKA, in Europe and especially in Asia. We are also seeing rising demand from general industry sectors. Our products are specifically designed to suit these markets. For example, KR AGILUS has become one of KUKA's hottest products. Just recently we unveiled a water-proof version of this small robot for use in wet areas when we attended the EMO trade show in Hanover. It is suitable for use wherever oil and lubricants are present, such as when it is used in conjunction with machine tools.

At our operating companies, the third quarter was dominated by industry trade shows. In total, KUKA took part in more than ten trade shows worldwide. At the Motek exhibition, the LBR iiwa was one of the products showcased in an application featuring sensitive robotic assembly.

KUKA is on the way to becoming a globally active automation company. We have an international team that creates robot-based solutions for the future all over the world. But the best people need the right environment, which is why we are investing in the locations in our growth markets. We are about to open our factory in Shanghai, where work is proceeding at full speed so that about 300 employees will be able to offer our Asian customers excellent products and even better and faster local service.

We are also expanding our head office in Augsburg. The aim of building a new technology and development center is to give our employees the environment they need to continue to offer their best.

Sincerely,

Till Reuter

CEO

KUKA AND THE CAPITAL MARKET

Stock markets set new records

Over the past few months, German stock markets have continued to trend higher thanks to a favorable economic outlook and the steady easing of the state debt crisis in Europe. The DAX rose about 10.5 percent in the first nine months and almost 8 percent in the third quarter. On September 19, 2013, it closed at a new record of 8,694.18. The US Federal Reserve (Fed) had announced shortly before that it would extend its quantitative easing policy.

The MDAX added almost another 9 percent in the third quarter and closed at a record 15,077.81 on September 27, 2013. The MDAX is up 24 percent since January.

KUKA's share price has risen 15.7 percent since the beginning of the year

KUKA's share price began 2013 at € 28.6 and closed at €32.03 on September 30, 2013, the end of the third quarter. The stock has risen 15.7 percent since the beginning of the year. The price change of shares of comparable companies in the mechanical engineering and automotive industry supplier segment in the first nine months of the year ranged between +15.7 percent and +61.7 percent. In the first quarter, KUKA's shares began to outperform the MDAX and continued to do so until the end of July. The average target price for KUKA shares quoted by analysts is currently €34.

Free float remains high

The free float of KUKA's shares to the end of the third quarter remains at 75.6 percent of total share capital. The following investors hold more than 3 percent of total share capital: Grenzebach Group, Asbach-Bäumenheim (24.4 percent), Oppenheim Asset Management Services S.a.r.l. (5.2 percent), BlackRock Group (5 percent), AXA S.A., Paris (3.2 percent) and Franklin Mutual Advisors LLC (3.0 percent).

kuka'S Share prIce performance January 1 to September 30, 2013 *

CONSOLIDATEDMANAGEMENTREPORT

ECONOMIC EN VIRONMENT

World economic situation remains uncertain, but German economy strong

For the sixth time in a row, the International Monetary Fund (IMF) has revised its growth forecast for the world economy downward. It is now forecasting that the world economy will grow only 2.9 percent in 2013 and 3.6 percent in 2014. The situation in the eurozone is expected to ease slightly with a decline of -0.4 percent (previously -0.6 percent) in 2013 and growth is projected at +1.0 percent in 2014 (previously +0.9 percent). The rebound in Europe will continue, but initially growth rates will be moderate. Risks are currently seen as higher in emerging and developing countries, whose economies will grow more slowly than previously thought. The main countries affected are the major emerging nations of China, Brazil, Russia and India. Among other things, this is due to the potential end of the US Federal Reserve's loose monetary policy. If interest rates start to rise again, investors could begin to withdraw capital from the emerging nations. Still, growth forecasts for China, an important robotics market for KUKA, are still relatively strong, coming in at +7.6 percent in 2013 and +7.3 percent in 2014. The IMF lowered its growth forecast for the United States to 1.6 percent for 2013 because of uncertainty surrounding the outcome of the US budget dispute and the potential inability to pay its debtors. However, excellent progress made in the recovery of consumer demand, as well as the real estate and financial sectors had a positive impact. According to the IMF, positive indicators and a growth rate of 2.6 percent are expected from the United States in 2014. The forecast for Germany is growth of +0.5 percent in 2013 and +1.4 percent in 2014. The ifo Business Survey outcome was also better for the fifth consecutive time in September. It reached 107.7, its highest for the year. The surveyed companies were more optimistic that their businesses would continue to grow.

Sources:

IMF – World economic outlook (October 2013) Ifo Business Survey (September 2013)

Demand for cars

EASING IN WESTERN EUROPE AND STRONG GROWTH IN CHINA According to VDA, the German auto industry association, the Western European car market continues to recover. The European crisis countries in particular reported positive results. In the third quarter, new car sales in Portugal were on average +15 percent higher than a year earlier and in Spain they were up +8.5 percent. In Spain, sales in September were even +28.5 percent higher year over year. Average new car sales growth in Great Britain of +12 percent in the third quarter also drew attention. In Germany, new car registrations in the third quarter were down slightly, declining -1 percent. According to VDA, the continuing reticence shown in Germany will have a positive impact over the next few years as consumers begin to catch up. Overall, the Western European market grew about +1.5 percent in the third quarter. One positive indicator for German carmakers is that every other new car registered in Western Europe is a German brand. These manufacturers are some of KUKA's largest customers. While new registrations in the Western European car market were about -4 percent below last year's level in the first nine months, expansion in the Chinese market continued to be excellent with average growth reported at +20 percent in the third quarter. German carmakers continue to hold a stable and high market share of just under 22 percent. The US market grew almost 9 percent year over year.

Sources:

VDA: Western Europe continues to recover in September (October 16, 2013) VDA: First half year conference (July 2, 2013)

SALES OF CARS AND LIGHT COMMERCIAL VEHICLES JAN. – Sep. 2013 WORLDWIDE

Robotics and automation

GROWTH POTENTIAL MAINLY IN CHINA 900

According to the latest studies of the International Federation of Robotics Statistical Department (IFR), robot sales in 2012 were almost the same as in 2011 at about 160,000 units. The average growth rate to 2016 is forecast at 6 percent, while Asian growth rates will be above-average at about 8 percent. Sales in the market relevant to KUKA, the articulated robot market, rose from 40,000 units in 2009 to about 108,000 robots in 2012. The market grew 3 percent year over year, stronger than the overall market. The growth was driven mainly by the high demand from the automotive industry. In 2012, the number of robots installed around the world by the automotive industry reached 63,200, a new record. Growth numbers in terms of robot density (number of robots per 10,000 workers) in the Chinese market also stood out. Average annual growth in China between 2005 and 2012 was high at 25 percent. The number of robots sold in China alone was about 23,000 in 2012. The Chinese market is one of the most important robot markets in the world and continues to hold considerable potential for robot-based automation solutions. 0 300

High growth rates have also been forecast for the general industry market. According to IFR, robot density in general industry markets in industrialized countries such as Japan, Korea and Germany is between 150 and 300 robots. In China it is even lower at eleven robots. The highest robot densities have been measured in the automotive industry in industrial countries: over 1,500 robots per 10,000 workers.

Source: IFR study 2013

Business performanc e

Our customers continued their strong capital spending during the first nine months. General industry especially continues to invest heavily. Although business demand in the automotive segment continued to be strong, it was affected by the investment cycle for car models, independent of the economic situation. Total orders received by KUKA Group in the first nine months of 2013 came in at €1,435.8 million. UTICA Enterprises and CMA TECHNOLOGY contributed about € 40 million. Total orders were thus about 3.4 percent lower than the € 1,486.5 million posted after the first nine months of 2012, the reduction was mainly driven by the development in the first quarter of 2013. Demand for robot-based automation was particularly strong in the first quarter of 2012. In the robotics business, releases from new blanket orders from European carmakers were concentrated in this quarter. The KUKA Systems division booked a large number of major orders in the first quarter of 2012.

At the Group level, consolidated orders received in the third quarter of 2013 reached €427.7 million, up 13.2 percent and significantly higher than the € 377.7 million posted in Q3/12.

in € millions 0 1,486.5 1,435.8 9M 2012 9M 2013

KUKA GROUP – CONSOLIDATED ORDERS RECEIVED

In general, demand from the automotive industry remains unabated at a high level for KUKA Group. It is driven by the relatively strong customer base in this segment, which is boosting investment in new, flexible assembly lines, capacity expansions in growth markets such as China and in new car models. General industry orders received are growing at a faster pace than automotive, driven by customers' quality and efficiency requirements. The Robotics division's orders received for the quarter just ended came in at € 178.7 million, 3.5 percent under the € 185.1 million posted in Q3/12. The Systems division posted orders received of € 252.9 million, up 26.3 percent from the €200.3 million generated in Q3/12.

KUKA Group was able to generate consolidated sales of €454.1 million (including €16.7 million from UTICA Enterprises / CMA TECHNOLOGY) to the end of the third quarter, in part because of the high orders received in previous quarters. Results for the quarter just ended were thus higher than those of the two previous quarters in 2013. Compared to the same quarter a year earlier, the numbers were down 7.4 percent, as projected. It should be noted that in the previous year's quarter, Robotics benefited from major releases from blanket orders and Systems from large project launches due to an accumulation of assembly line construction starts for new car models. 600 800 1000 1200

The Systems division generated sales of € 281.7 million in the third quarter of 2013 versus €301.6 million in Q3/12. This is the division's second-best quarterly result ever, supported in part by UTICA Enterprises and CMA TECHNOLOGY. Robotics' sales totaled € 179.2 million, 10.4 percent less than the €199.9 million reported in Q3/12. KUKA Group's total consolidated sales revenues for the first nine months of this year reached € 1,327.6 million (including € 23.1 million from UTICA Enterprises / CMA TECHNOLOGY). This is 1.6 percent higher than a year earlier, when the total after nine months was € 1,306.5 million.

The book-to-bill ratio for the first nine months of 2013 was 1.05 for Robotics and 1.10 for Systems, both above 1. At the Group level the number is 1.08, which compares to 1.14 after nine months in 2012. For the quarter just ended, it was 0.94, versus 0.77 for Q3/12.

KUKA Group's consolidated sales revenues in the third quarter of 2013 were slightly higher than orders received. Order backlog as of September 30, 2013 was thus down slightly compared to the end of the prior quarter, but was above the €1 billion threshold, still quite high. As of September 30, 2013, KUKA had an order backlog of € 1,003.7 million (not counting the Robotics division's blanket orders). This is up 5.4 percent from the €952.6 million reported on September 30, 2012, and down only 1.8 percent from the €1,022.4 million reported at the end of the prior quarter on June 30, 2013. In comparison to the prior quarter, Systems' backlog declined 2.5 percent to €738.7 million, while Robotics' remained nearly constant at €271.2 million (not including blanket orders). KUKA Group will therefore continue to have excellent loading in the next few quarters.

KUKA Group's earnings before interest and taxes (EBIT) in the first nine months of 2013 came in at €87.5 million, versus €82.2 million after the first nine months of 2012. EBIT margin was 6.6 percent, compared to 6.3 percent after nine months in 2012. The Robotics division's EBIT was €57.7 million, which compares to €61.4 million at the same time in 2012. EBIT margin during this period went from 11.1 percent after nine months in 2012 to 10.1 percent after nine months in 2013, due mainly to higher spending on research and development, but also because of new hiring in service and sales. The Systems division's EBIT in the first nine months of 2013 was €43.6 million, compared to €35.2 million in the first nine months of 2012. EBIT margin was thus up sharply to 5.6 percent from 4.6 percent after nine months in 2012. The strong improvement in profitability was driven by the successful implementation of efficiency improvements, especially in the area of process management, as well as the excellent market demand, which had a positive impact on capacity utilization.

In the third quarter of 2013, KUKA Group generated earnings before interest and taxes (EBIT) of € 30.1 million, versus € 31.7 million in Q3/2012. The decline is primarily due to lower sales. Robotics' EBIT in Q3 was € 18.1 million, compared to € 21.6 million in the third quarter of 2012. EBIT margin was 10.1 percent, versus 10.8 percent in Q3/12. The division has thus exceeded its target margin of 10 percent for seven quarters in a row. The Systems division's earnings before interest and taxes (EBIT) in the third quarter were almost the same as the Robotics division's. EBIT came in at € 16.7 million. The division's EBIT margin hit a new record, improving from 5.0 percent in Q3/12 to 5.9 percent in Q3/13. 20 40 60 80 100

KUKA GROUP – CONSOLIDATED EBIT

DIVISIONS

Robotics

KEY FIGURES

in €millions	9 months 2012	9 months 2013	Change
Orders received	660.1	599.2	-9.2%
Order backlog (09/30)	294.2	271.2	-7.8%
Sales revenues	554.7	570.3	2.8%
Gross profit	171.2	197.7	15.5%
in % of sales revenues	30.9%	34.7%	–
Earnings before interest and taxes (EBIT)	61.4	57.7	-6.0%
in % of sales revenues	11.1%	10.1%	–
Earnings before interest, taxes, depreciation and amortization (EBITDA)	72.3	75.1	3.9%
in % of sales revenues	13.0%	13.2%	-
Employees (09/30)	3,155	3,313	5.0%

Kennzahlen

in €millions	3rd Quarter 2012	3rd Quarter 2013	Change
Orders received	185.1	178.7	-3.5%
Order backlog (09/30)	294.2	271.2	-7.8%
Sales revenues	199.9	179.2	-10.4%
Gross profit	62.1	64.4	3.7%
in % of sales revenues	31.1%	35.9%	–
Earnings before interest
and taxes (EBIT)	21.6	18.1	-16.2%
in % of sales revenues	10.8%	10.1%	–
Earnings before interest,
taxes, depreciation and
amortization (EBITDA)	25.5	25.5	0.0%
in % of sales revenues	12.8%	14.2%	–

Since the beginning of the year, the impact of the automotive and general industry customer segments on Robotics' business growth has been quite different. Orders from automotive did not reach the levels they did last year, when they were impacted by quite large call-offs. In contrast, general industry growth was good, supported by new products such as the Agilus, as well as the Tier 1 customer segment and major successes in Asia. However, overall the general industry business was not yet able to compensate for the model and customer-driven fluctuations in automotive.

Orders received by Robotics in the first nine months of 2013 came in at €599.2 million, below the € 660.1 million posted after the first nine months of 2012, as forecast. This represents a decline of 9.2 percent. Automotive orders were down 28.1 percent, while general industry and service bookings grew 8.5 percent and 6.8 percent respectively. Particularly satisfactory is the fact that the share of orders from general industry and service rose from 52 percent after nine months in 2012 to 62 percent after nine months in 2013. Orders received per segment for the first nine months are shown below. The Robotics division's orders received for the quarter just ended were down slightly from the year before. They totaled € 178.7 million, 3.5 percent less than the € 185.1 million posted in Q3/12.

The strong demand in Europe and Asia in the quarter just ended led to an improvement in orders, especially from the general industry segment. The division's orders received from this market segment in the third quarter of 2013 came in at € 77.8 million, up 34.1 percent from the € 58.0 million generated in Q3/12. Orders received from service also rose during this period, coming in at €34.6 million, up 3.3 percent from the € 33.5 million posted in Q3/12. Orders received from automotive in Q3/13 were reported at €66.3 million, versus €93.6 million in Q3/12.

ORDERS RECEIVED BY SEGMENT

Robotics had sales revenues of € 179.2 million in the third quarter of 2013, about € 20 million less than the € 199.9 million generated in the same quarter last year. This development is exclusively resulting from automotive. In the third quarter of 2012, the segment generated one of the highest quarterly results in the company's history, driven by large call-offs from frame contracts with European carmakers. On the other hand, the general industry segment's numbers not only exceeded automotive's in absolute terms, but also set a new quarterly record in the quarter just ended. In the first nine months the division's cumulative sales revenues reached €570.3 million, up 2.8 percent from the € 554.7 million reported after the first nine months of 2012. The book-to-bill ratio also remained quite satisfactory at 1.05. Last year at this time it was 1.19. For the quarter just ended, it was 1.00, versus 0.93 for Q3/12.

Because third-quarter 2013 sales revenues were almost the same as orders received, order backlog was relatively constant compared to the prior quarter's €274.1 million, coming in at a high € 271.2 million. This is 7.8 percent less than the €294.2 million posted on September 30, 2012.

The Robotics division's earnings before interest and taxes (EBIT) in the first nine months of 2013 came in at €57.7 million, versus € 61.4 million after the first nine months of 2012. During this period, EBIT margin was 10.1 percent versus 11.1 percent after nine months in 2012. EBIT reached €18.1 million in the third quarter versus € 21.6 million for Q3/12. EBIT margin was thus 10.1 percent versus 10.8 percent in Q3/12. The higher share of sales from general industry and service had a positive impact on earnings. However, this was offset by higher spending on research and development and personnel additions, for example in service and sales, which had a stronger impact. The division has exceeded its target margin of 10 percent in each of the past seven quarters.

Siemens and KUKA Robotics announce cooperation agreement (September 17, 2013)

The Siemens Drive Technologies division and KUKA Roboter GmbH announced a comprehensive cooperation agreement at the EMO trade fair in Hanover. The focus of the collaboration will be on integrating KUKA robots and Siemens solutions to control machine tools (CNC). A highly flexible, fully automated production line in today's world requires complete integration of robots into the manufacturing flow and the automation architecture. Driven by new specifications and technical advancements, applications are merging ever closer, especially for robots and machine tools. Given this situation, Siemens and KUKA are strengthening their cooperation in the field of industrial robot based automation. The aim is to be better able to meet the needs of industrial sectors that require sophisticated automation solutions for loading and machining applications. The joint development project will offer customers new products and solutions that are optimally coordinated throughout their entire life cycle – from the design through manufacturing simulation to engineering and the factory floor. Both companies also agreed to integrate future aspects of robotic automation in conjunction with Industry 4.0 into their joint activities.

KUKA Robotics receives orders for 20 omniMove vehicles (September 23, 2013)

The Robotics division received orders from general industry for 20 omniMove vehicles in the first half of fiscal 2013. The vehicles were ordered by both German companies and customers outside Germany, such as in Russia and the Arab region. The platforms, which feature omnidirectional wheel systems, will be used in a wide variety of industrial areas. They have been purchased by customers in aerospace, aircraft manufacturing, rail systems and logistics.

Systems

KEY FIGURES

in €millions	9 months 2012	9 months 2013	Change
Orders received	849.6	856.2	0.8%
Order backlog (09/30)	665.5	738.7	11.0%
Sales revenues	773.4	776.4	0.4%
Gross profit	87.9	103.6	17.9%
in % of sales revenues	11.4%	13.3%	–
Earnings before interest and taxes (EBIT)	35.2	43.6	23.9%
in % of sales revenues	4.6%	5.6%	–
Earnings before interest, taxes, depreciation and amortization (EBITDA)	43.0	51.6	20.0%
in % of sales revenues	5.6%	6.6%	–
Employees (09/30)	3,907	4,322	10.6%

Kennzahlen

in €millions	3rd Quarter 2012	3rd Quarter 2013	Change
Orders received	200.3	252.9	26.3%
Order backlog (09/30)	665.5	738.7	11.0%
Sales revenues	301.6	281.7	-6.6%
Gross profit	31.6	37.0	17.1%
in % of sales revenues	10.5%	13.1%	–
Earnings before interest and taxes (EBIT)	15.2	16.7	9.9%
in % of sales revenues	5.0%	5.9%	–
Earnings before interest, taxes, depreciation and amortization (EBITDA)	17.6	19.8	12.5%
in % of sales revenues	5.8%	7.0%	–

Systems has benefited from excellent demand from its automotive customers since the beginning of 2013, the same as it did last year. This is reflected in the relatively high number of major orders.

In the first nine months Systems reported orders received of €856.2 million, 0.8 percent more than the €849.6 million reported after nine months in 2012. Systems also benefited from the consolidation of UTICA Enterprises and CMA TECHNOLOGY. The latters' orders received and order backlog contributed about €40 million to this result.

SYSTEMS – ORDERS RECEIVED

Systems' results were boosted by a new customer in the United States and a large order from VW. The division reported orders received of €252.9 million for the quarter just ended, up 26.3 percent from the €200.3 million posted in Q3/12.

Helped by high orders received in previous quarters, the division posted its highest quarterly sales to date. They came in at € 281.7 million (including € 16.7 million from UTICA Enterprises / CMA TECHNOLOGY). This was down 6.6 percent from the unusually strong quarter the year prior at this time, when sales reached €301.6 million. The prior year's quarter was marked by the start of a number of large projects and from the general special project business revenue recognition, which can lead to order-driven quarterly fluctuations. Total consolidated sales revenues for the first nine months of 2013 reached €776.4 million (including €23.1 million from UTICA Enterprises/CMA TECHNOLOGY), 0.4 percent higher than a year earlier, when the total after nine months was € 773.4 million.

Order backlog on September 30, 2013 was €738.7 million, down 2.5 percent compared to the end of the prior quarter and up 11.0 percent compared to the end of the third quarter 2012. In spite of the high billings, the book-to-bill ratio in the first nine months of 2013 was 1.10, exactly the same high ratio as it was after nine months in 2012. On a quarterly basis, it was 0.90, compared to 0.66 in Q3/12. The Systems division thus has an excellent order backlog for the next few quarters.

Systems' earnings before interest and taxes (EBIT) in the third quarter of 2013 came in at € 16.7 million, a new quarterly record. In Q3/12 the number was €15.2 million. EBIT margin also improved substantially, rising to 5.9 percent from 5.0 percent in Q3/12. This sharp improvement was mainly due to improved process management and solid customer demand. Higher value added from countries with lower cost structures is also beginning to bear fruit. The Asian systems business is being supported by procurement and assembly in China, the American business by Mexico and the European business by Romania. Systems' EBIT in the first nine months of 2013 was € 43.6 million, compared to €35.2 million in the first nine months of 2012. EBIT margin was 5.6 percent versus 4.6 percent after nine months in 2012.

KUKA Systems boosts North American business with major systems job (August 7, 2013)

KUKA Systems has for the first time received a large order from one of the world's leading automakers in the United States. The job is worth over 250 million US dollars. The project, which is scheduled to run over three years, is of key strategic importance to KUKA Systems and will further boost the company's market share in North America. Last April, KUKA acquired UTICA Companies' systems business, elevating it to the number one ranked automotive industry systems supplier in the United States.

The order is one of the largest KUKA Systems has ever received from a single customer in North America. Under the terms of the contract, the company will supply underbody assembly lines and handle projects at various manufacturing locations in the United States, Canada and Mexico. The job makes KUKA one of the customer's key strategic partners.

KUKA's assembly lines will make underbody parts for various types of vehicles. Most of the systems will be fully automated and equipped with innovative KUKA Systems welding solutions.

KUKA Systems wins large order from VW (September 23, 2013)

KUKA Systems has won a new large order in the mid-double-digit million euro range from VW. The project entails installing new assembly lines for subfloors for Volkswagen's modular transverse matrix (MQB) in various factories. MQB is a key component of the carmaker's efficiency improvement program. The new lines will use KUKA robots for standard assembly tasks such as spot welding, gluing and material handling.

EARNIN GS, F INANCIA L AND ASSETS

Earnings

The steady high demand for KUKA's products and solutions was further reinforced in the third quarter of 2013. KUKA's orders received of € 427.7 million were relatively high for a third fiscal quarter. Sales growth tracked this orders received growth. The company generated sales of €454.1 million in the third quarter of 2013, second highest quarter after € 490.5 million posted in the third quarter of 2012. It is the sixth consecutive time quarterly sales have surpassed the €400 million threshold. Overall, KUKA generated sales of €1,327.6 in the first nine months of 2013, the highest ever achievement for a nine month result. In 2012 reveived €1,306.5 million after the first nine months. The successful integration of UTICA Enterprises into the KUKA organization contributed to the Systems division's growth. UTICA was purchased in the second quarter of 2013.

Gross margin on sales improved 8.1 percent last quarter to €105.6 million from €97.7 million in Q3/12. Overall gross margin rose accordingly, and was also up sharply, from 19.9 percent in Q3/12 to 23.3 percent in Q3/13, in part also because of a lower share of material costs. In the first nine months of 2013, gross margin also rose faster than sales, up 16.0 percent or €43.5 million to €314.9 million, which compares to € 271.4 million after the first three quarters of 2012. Consolidated gross margin is now 23.7 percent, up 2.9 percent from the 20.8 percent reported at the nine month mark of 2012. The increase was driven by both divisions. While Robotics was able to boost gross margin in the first nine months from 30.9 percent to 34.7 percent, Systems' gross margin rose 1.9 percent to 13.3 percent.

Overhead costs (sales, research and development and administration) totaled € 216.1 million versus last year's € 187.9 million after nine months. Overhead costs were 16.3 percent of sales, higher than last year's 14.4 percent. The higher sales costs, both in absolute terms (€84.3 million after nine months in 2012 versus €93.7 million after nine months in 2013) and in relative terms (6.5 percent after nine months in 2012 versus 7.1 percent after nine months in 2013) is in part due to the stronger focus on general industry and the associated budgeted expansion of the sales force. Research and development expenses included in the income statement are now €42.1 million, up from € 30.3 million last year at the same time. The research and development division had 344 employees as of September 30, 2013, up from 309 on September 30, 2012. KUKA is working hard on continuing to enhance the company's technology focus. Current KUKA products and product platforms were and continue to be systematically optimized. Developers are pressing ahead with new fields of application for KUKA lightweight robots based on the LBR iiwa. Some LBR model series have been completed and have already been sold, which means that the capitalizations recognized in previous periods are now being amortized in expenses for research and development. Other 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. R&D is continuously improving the current control software. Developers are also working intensively on various development stages of the new Sunrise control software. However, the rollout of various development stages, which were originally planned for the entire robotics market and the entire product portfolio, will be postponed for strategic reasons. In the first nine months, €6.9 million was capitalized for internally generated intangible assets. This compares to €9.8 million after nine months in 2012. General administration costs as a percentage of sales were up 0.4 percent to 6.0 percent. This was due in part to preparatory work in connection with the new development and technology center constructed in Augsburg, maintenance programs and share-price-related performance-based compensation. The net result of other operating expenses and income of €-15.4 million, which compares to €-6.7 million after three quarters in 2012, 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 nine months of this year was €83.4 million, which compares to € 76.8 million at this time last year. Adjusted for financing charges of €4.1 million included in operating profit, down from € 5.4 million after nine months in 2012, earnings before interest and taxes (EBIT) came in at € 87.5 million, up from € 82.2 million on September 30, 2012. EBIT margin for the period January to September 2013 was 6.6 percent, the same as at the halfway mark of fiscal 2013. At the same time last year, it was 6.3 percent. The company again posted a high 6.6 percent EBIT margin for the quarter just ended. In Q3/12 it was 6.5 percent. KUKA Group's consolidated EBIT margin is thus higher than it has ever been over the past five years.

					Q1 /12 Q2/12 Q3 / 12 Q4 /12 Q1 / 13 Q2/13		Q3 / 13
EBIT (in
€mil
lions)	21.9	28.6	31.7	27.6	28.4	29.0	30.1
EBIT
margin
(in %)	6.0	6.4	6.5	6.4	6.5	6.6	6.6

The higher EBIT margin is primarily attributable to the Systems division, where EBIT margin rose from 4.6 percent in the first nine months of 2012 to now 5.6 percent, a new record. The Robotics division's EBIT in the third quarter of 2013 was 10.1 percent, down slightly from the 10.8 percent posted in Q3/12, but higher than the minimum target EBIT margin of 10 percent for the seventh consecutive quarter. The 0.7 percent decline from the third quarter of 2012 was due to higher spending on research and development and expenses related to expanding the general industry business. EBITDA (earnings before interest, taxes, depreciation and amortization) growth tracked the EBIT increase, going from €103.1 million last year to currently € 114.8 million. EBITDA in relation to sales was a record 8.6 percent, up from 7.9 percent after nine months in 2012. Total depreciation for the first three quarters of 2013 was €27.5 million, versus € 20.9 million after nine months in 2012. Of this total, €17.4 million is attributable to Robotics (vs. € 10.9 million in 2012), € 8.0 million to Systems (vs. 7.8 million in 2012), and €1.9 million to other (vs. €2.2 million in 2012).

Net interest expense was € -16.0 million, down from € -8.2 million after nine months in 2012. It was allocated to the individual accounts as shown in the following table.

in €millions	9 months 2012	9 months 2013
Interest income from finance lease	5.4	5.0
Returns on pension plan assets	0.2	–
Remaining interest and similar income	1.7	1.4
Other interest and similar income	7.3	6.4
Interest component for allocations to pension provisions	2.5	2.0
Guarantee commission	2.2	0.8
Interest expense for the convertible bond	–	2.4
Interest expense for the corporate bond	14.1	18.1
Financing costs reclassified to operating results	-5.8	-4.4
Remaining interest and similar expenses	2.5	3.5
Other interest and similar expenses	15.5	22.4
Financial result	-8.2	-16.0

Systematically implemented improvements in guarantee conditions reduced expenses related to guarantee commissions. Of the maximum available guarantee credit lines of € 245.0 million, € 132.6 million had been utilized as of September 30, 2013. This compares to € 144.6 million on September 30, 2012. The net interest item includes € 2.4 million for interest on the convertible bond valued at € 150.0 million placed in February and July 2013. The net interest expense item includes €4.5 million as an one time effect related to the early buyback of the €28.5 million corporate bond. The buyback will result in significantly lower interest charges in future periods.

Earnings before taxes (EBT) in the first nine months of the fiscal year totaled € 67.4 million, which compares to € 68.6 million last year. Taxes paid during the first nine months of fiscal 2013 totaled € 25.7 million, versus € 26.2 million after nine months in 2012. The tax rate is thus 38.1 percent, almost the same as the 38.2 percent after nine months in 2012.

KUKA Group's earnings after taxes for the first three quarters of fiscal 2013 came in at € 41.7 million compared to €42.4 million after nine months in 2012. Earnings per share are € 1.23 versus €1.25 on September 30, 2012.

GROUP CONSOLIDATED INCOME STATEMENT (CONDENSED)

in €millions	9 months 2012	9 months 2013
Sales revenues	1,306.5	1,327.6
EBIT	82.2	87.5
EBITDA	103.1	114.8
Financial results	-8.2	-16.0
Taxes on income	-26.2	-25.7
Net result	42.4	41.7

Financial position

The stable high earnings 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 € 77.2 million, comparable to the prior year's €77.7 million.

Despite the high business volume, trade working capital (net total of inventories minus advances received, receivables and liabilities) during the fiscal year was nearly the same as at the beginning of the year thanks to active management. It was reported at € 228.9 million on September 30, 2013, which compares to € 235.8 million on December 31, 2012. The increase in trade receivables, including receivables from construction contracts of € 59.4 million, plus inventories, minus advances received of € 16.8 million, was offset by an increase in trade payables including liabilities from construction contracts of € 83.1 million. Trade receivables were especially up in North America and China, while trade payables and liabilities for manufacturing orders, as well as receivables from construction contracts, were also up, especially in Europe and North America. Compared to the previous year, there had been a significant increase in trade working capital to September 30, 2012. It was up €113.7 million to €321.2 million. The increase in provisions and accruals compared to December 31, 2012 is mainly due to guarantees and outstanding order costs. Cash flow from operating activities rose €0.5 million to €129.2 million.

Cash flow from investment activities for the first nine months of the fiscal year was € -49.9 million, € 19.9 million less than the € -30.0 million on September 30, 2012. Capital spending on fixed assets after nine months of 2013 was reported that € 33.8 million versus € 30.4 million after nine months in 2012. Of this amount, the largest share, €21.8 million, is attributable to property plant and equipment, mainly technical systems and advance receivables for work in progress. Payments for the acquisition of consolidated companies and other business units totaled €16.6 million. The expenses in 2013 relate to the acquisition of UTICA Enterprises, which has significantly expanded Systems' market share in the United States, and the Romanian company CMA Technology, which is an attractive manufacturing location for Systems.

The sharply improved cash flow from operating activities plus cash flow from investment activities resulted in the highest free cash flow since 2007. It was € 79.3 million on September 30, 2012, compared to € -29.5 million at the same time in 2012.

Cash flow from financing activities was dominated by the convertible bond with a nominal value of €150.0 million placed last February and July. Taking into account the premium for the second tranche plus transaction costs, the net cash injection for KUKA totaled €158.7 million. Some of these funds were used to buy back the € 28.5 million corporate bond. This will result in significant interest payment savings in future quarters. The € 6.8 million dividend payment for 2012 is included. Total cash flow from financing activities was €123.0 million, compared to €-1.1 million after nine months in 2012.

KUKA Group had disposable funds for financing of €445.2 million as of September 30, 2013, more than three times the €138.1 million available at the same time last year.

KUKA Group's net debt consisting of of cash and cash equivalents minus current and non-current financial liabilities of €67.4 million as of September 30, 2012 has thus been converted to a net liquidity position of € 135.8 million in only one year.

CONSOLIDATED CASH FLOW (CONDENSED)

in €millions	9 months 2012	9 months 2013
Cash Earnings	77.7	77.2
Cashflow from operating activities	0.5	129.2
Cashflow from investing activities	-30.0	-49.9
Free Cashflow	-29.5	79.3

Net worth

Non-current assets came in at € 308.5 million, € 8.1 million higher than on December 31, 2012. Intangible assets were up € 12.4 million because of investment activities, especially due to the goodwill that had to be capitalized following the purchase of consolidated companies, and fixed assets rose €8.9 million. This was offset by scheduled payments on the financing lease and tax receivables, which resulted in a reduction of €7.2 million. A total of €30.4 million was capitalized for deferred tax assets. The comparable number on December 31, 2012 was €36.3 million.

Receivables and especially cash and cash equivalents drove current assets sharply higher. This was mainly due to the cash inflow from operating activities and the convertible bond issue. Further details are provided in the "Financial position" section. Current assets totaled €1,089.9 million as of September 30, 2013, € 252.9 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 €1,398.4 million, up 22.9 percent.

Equity increased from € 297.5 million to € 360.1 million in the first three quarters of 2013 as a result of earnings after taxes of €41.7 million and the convertible bond placement. Accounting-wise, the convertible bond has both an equity and the debt component, so equity rose € 27.0 million. The dividend payment of € 6.8 million and a foreign currency exchange impact of €1.8 million, especially due to the changed exchange rate to the US dollar, drove equity lower. The equity ratio is now 25.8 percent, compared to 25.4 percent on September 30, 2012.

Financial debt consists mainly of the € 173.5 million (residual value after buy backs) corporate bond maturing in November 2017 and the €150.0 million convertible bond maturing in February 2018.

Current liabilities rose from € 523.4 million on December 31, 2012 to € 625.2 million as of September 30, 2013, mainly due to the aforementioned increase in liabilities, the seasonal increase in personnel liabilities (such as liabilities for vacation days and Christmas bonuses) as well as the recognition of contingent liabilities in connection with the company acquisitions.

KUKA Group's working capital declined sharply during the first half of fiscal 2013. Working capital fell €48.5 million, from € 90.5 million at the end of 2012 to €42.0 million on September 30, 2013. Further information hereto is outlined in the "Financial position" section.

GROUP ASSETS

in €millions	12/31/2012	09/30/2013
Total assets	1,137.4	1,398.4
Equity	297.5	360.1
in % of total assets	26.2%	25.8%
Net debts	42.8	135.8

RESEA RCH & DEVE LOPMENT

Research and development spending at KUKA Group totaled €17.8 million in the third quarter of 2013, which compares to €12.3 million in Q3/12. In the first nine months of 2013 and 2012, the numbers were €42.1 million and €30.3 million respectively. Capital spending was higher than during the same period last year as budgeted.

R&D expenses are attributable almost exclusively to the Robotics division. Systems conducts most of its R&D in conjunction with customer projects.

New versions of the KR AGILUS developed

KUKA Robotics has developed new versions of the KR AGI-LUS in order to meet the requirements of various general industry sectors.

Particularly worth mentioning are two types with a longer reach: One is the KR 10 R1100, with a payload of 10 kg and a reach of 1,100 mm, the other is the KR 6 R700 with a payload of 6 kg and a reach of 700 mm. Both of these robot types are also available with five axes. This means that the fast small robot with four degrees of freedom is even faster and is now suitable for pick and place tasks.

Two waterproof versions of the KR AGILUS were also developed in the third quarter of 2013. These robots are designed for applications in wet environments, such as for machine tool applications. 6000 7000

KUKA navigation onboard omniMove 3000

KUKA Laboratories has equipped the mobile KUKA omni-Move platform with autonomous navigation software as part of a customer project. 2000

The project was launched in the first half of this fiscal year and by the third quarter, the customer had already evaluated and approved some of the software features. Among other things, tests confirm that an average absolute positioning accuracy of 1.3 mm has been achieved.

The platform was also able to navigate along a virtual line, which makes it able to follow a predefined path with an accuracy of +/– 10 cm. This was implemented in both individual omniMove vehicles and a thirty meter vehicle train consisting of three coupled vehicles.

Market introduction of LBR iiwa continues

KUKA Systems' Advanced Technology Solutions unit is working hard on developing applications for the lightweight LBR iiwa robot. 5000 6000

At Motek, the international trade fair for manufacturing and assembly automation in Stuttgart, Systems showcased an engineering process that can be used to implement leaner and more flexible robot cells for complex assembly processes. It is being developed in conjunction with customer projects and development alliances. 0 1000 2000

EMP LOYEES

KUKA Group had 7,842 employees in its core workforce at the close of September 30, 2013. This represents an increase of 600 persons or 8 percent from the 7,242 persons employed a year earlier. The Robotics division's total headcount to the end of the third quarter was 3,313 employees, 5 percent or 158 persons more than at the same time last year. The division continued to add to its workforce in the quarter just ended, mainly in service and research and development. The Systems division had 4,322 employees as of September 30, 2013. This represents an increase of 415 persons, or about 11 percent more than on the record date a year ago. The increase was driven in part by the acquisitions of UTICA Enterprises in the United States and CMA Technology in Romania, which resulted in 350 additional persons being brought on board. Additional staff was also hired for the location in China. KUKA AG had 207 employees as of September 30, 2013, which compares to 180 at the end of third quarter of 2012. The increase is primarily attributable to the administration area, which focuses on the entire corporation. The number of temporary workers employed at the Group level declined from 1,580 last year to 1,567 as of September 30, 2013. The decline is mainly attributable to the Robotics division. After expanding the manufacturing capacity in Augsburg at the end of 2012, KUKA was able to switch from a three-shift operation to a more efficient two-shift operation. Some former temporary workers were no longer required as a result.

KUKA GROUP EMPLOYEES

RISK AND OP PORTUNITY REPORT

From an overall risk perspective, KUKA Group is primarily exposed to business performance and financial risks. The Executive Board is not aware of any individual or combined risks that could threaten the company's existence. Strategically and also financially, the company is positioned to be able of taking 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 world economic growth to vary between regions, with an overall positive trend in 2013. The key automotive and general industry markets continue to be robust to slightly rising. However, growth rates will be significantly lower following the high capital spending seen between 2010 and 2012. From a regional perspective, demand from Asia and North and South America will be stronger, with Europe damping the overall trend amid volatility.

Based on these conditions, KUKA Group's overall sales revenues in 2013 should be slightly higher and reach around € 1.8 billion. Based on these sales revenue, we expect to generate an EBIT margin of around 6.5 percent. KUKA thus confirms its guidance.

21 Management report

INTERIM REPORT (CONDENSED)

G ROU P CONSOL IDATED INCOME STATEMENT

in €millions	3rd Quarter 2012	3rd Quarter 2013	9 months 2012	9 months 2013
Sales revenues	490.5	454.1	1,306.5	1,327.6
Cost of sales	-392.8	-348.5	-1,035.1	-1,012.7
Gross profit	97.7	105.6	271.4	314.9
Selling expenses	-28.5	-30.6	-84.3	-93.7
Research and development expenses	-12.3	-17.8	-30.3	-42.1
General and administrative expenses	-24.6	-25.5	-73.3	-80.3
Other operating income	5.2	5.3	23.6	22.8
Other operating expenses	-7.8	-8.7	-30.3	-38.2
Result from operating activities	29.7	28.3	76.8	83.4
Reconciliation to earnings before interest and taxes (EBIT)
Financing costs included in cost of sales	2.0	1.7	5.4	4.1
Earnings before interest and taxes (EBIT)	31.7	30.0	82.2	87.5
Net interest income	2.2	2.0	7.3	6.4
Net interest expense	-4.8	-7.4	-15.5	-22.4
Financial results	-2.6	-5.4	-8.2	-16.0
Earnings before tax	27.1	22.9	68.6	67.4
Taxes on income	-10.3	-8.3	-26.2	-25.7
Net result	16.8	14.6	42.4	41.7
thereof minority interests in profits	0.0	0.0	0.0	0.0
thereof shareholders of KUKA AG	16.8	14.6	42.4	41.7
Earnings per share (diluted/undiluted) in €	0.50	0.43	1.25	1.23

Statement of comprehensive income

in €millions	3rd Quarter 2012	3rd Quarter 2013	9 months 2012	9 months 2013
Earnings after taxes	16.8	14.6	42.4	41.7
Translation adjustments	-1.9	-2.3	2.7	-1.8
Changes of actuarial gains and losses	-6.0	0.2	-7.5	2.7
Deferred taxes on changes of acturial gains and losses	1.2	-0.1	1.6	-0.7
Other comprehensive income	-6.7	-2.2	-3.2	0.2
Comprehensive income	10.1	12.4	39.2	41.9
of which: attributable to minority interests	0.0	0.0	0.0	0.0
of which: attributable to shareholders of KUKA AG	10.1	12.4	39.2	41.9

CONSOL IDATED CASH F LOW STATEMENT

in €millions	9 months 2012	9 months 2013
Net result	42.4	41.7
Depreciation/ amortization on intangible assets	8.2	14.3
Depreciation/ amortization on tangible assets	12.7	13.2
Other non-payment-related income	-1.6	-1.5
Other non-payment-related expenses	16.0	9.5
Cash Earnings	77.7	77.2
Result on the disposal of assets	0.0	0.2
Changes in provisions	2.2	22.3
Changes in current assets and liabilities:
Changes in inventories	-30.1	10.3
Changes in receivables and deferred charges	-68.6	-52.4
Changes in liabilities and deferred charges (without debts)	19.3	71.6
Cash flow from operating activities	0.5	129.2
Payments from disposals of fixed assets	0.4	0.5
Payments for capital expenditure on intangible assets	-13.4	-12.0
Payments for investments on tangible assets	-17.0	-21.8
Payments for investments in consolidated companies	0.0	-16.6
Cash flow from investing activities	-30.0	-49.9
Free cash flow	-29.5	79.3
Dividend payments to KUKA AG shareholders	0.0	-6.8
Payment from issuing the convertible bond	0.0	131.1
Payment for repaying liabilities due to banks and liabilities similiar to bonds	-1.1	-1.3
Cash flow from financing activities	-1.1	123.0
Payment-related change in cash and cash equivalents	-30.6	202.3
Exchange-rate-related and other changes in cash and cash equivalents	-0.1	-1.4
Change in cash and cash equivalents	-30.7	200.9
Cash and cash equivalents at the beginning of the period	168.8	244.3
Cash and cash equivalents at the end of the period	138.1	445.2

Consol idat ed BALANCE SHEET

Assets

in €millions	12/31/2012	09/30/2013
Non-Current assets
Fixed assets
Intangible assets	82.9	95.3
Tangible assets	94.9	103.8
Financial investments and investments in associates	0.2	0.2
	178.0	199.3
Long-term finance lease receivables	70.2	64.6
Long term tax receivables	6.3	4.7
Other long-term receivables and other assets	9.6	9.5
Deferred taxes	36.3	30.4
	300.4	308.5
Current assets
Inventories	213.4	203.6
Receivables and other assets
Trade receivables	141.7	160.4
Receivables from construction contracts	198.9	239.6
Current finance lease receivables	5.0	5.3
Current tax receivables	6.8	4.0
Other assets, prepaid expenses and deferred charges	26.9	31.8
	379.3	441.1
Cash and cash equivalents	244.3	445.2
	837.0	1,089.9
	1,137.4	1,398.4

EQUITY AND LIABILITIES

in €millions	12/31/2012	09/30/2013
Equity	297.5	360.1
Non-current liabilities, provisions and accruals
Non-current financial liabilities	194.9	300.4
Other non-current liabilities	13.4	13.9
Pensions and similiar obligations	82.0	76.9
Deferred taxes	26.2	21.9
	316.5	413.1
Current liabilities
Current financial liabilities	6.6	9.1
Trade payables	136.2	180.7
Advances received	86.5	59.9
Liabilities from construction contracts	95.5	134.1
Accounts payable to affiliated companies	0.1	0.1
Other current liabilities and deferred income	9.2	11.0
Provision for taxes	109.1	126.0
Other provisions	80.2	104.3
	523.4	625.2

1,137.4	1,398.4

CHANGES TO G ROU P 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				-1.8	2.0	41.7	41.9	0.0	41.9
Dividend payments to KUKA AG
shareholders						-6.8	-6.8		-6.8
Employee share program						-0.1	-0.1		-0.1
Other changes			27.0		0.6		27.6		27.6
09/30/2013	33,915,431	88.2	94.5	-1.9	-7.6	185.5	358.7	1.4	360.1

					Revenues reserves
Number of shares out Subscribed in €millions standing 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				2.7	-5.9	42.4	39.2	0.0	39.2
Dividend payments to KUKA AG
shareholders							0.0		0.0
Employee share program							0.0		0.0
Other changes							0.0	-0.1	-0.1
09/30/2012	33,915,431	88.2	67.5	2.5	-5.7	137.6	290.1	1.4	291.5

noteS on the quarterly report (condenSed)

GRoUP seGmeNt RePoRtiNG

	Robotics		Systems		kuka ag and other companies		Reconciliation and consilidation		Group
in €millions	9 months 2012	9 months 2013	9 months 2012	9 months 2013	9 months 2012	9 months 2013	9 months 2012	9 months 2013	9 months 2012	9 months 2013
Group external sales revenues	535.3	553.5	771.1	774.2	0.0	0.0	–	–	1,306.5	1,327.6
as a % of Group sales revenues	41.0%	41.7%	59.0%	58.3%	0.0%	0.0%	–	–	100.0%	100.0%
Intra-Group sales	19.4	16.8	2.2	2.2	0.0	0.0	-21.6	-19.0	–	–
Sales revenue by division	554.7	570.3	773.3	776.4	0.0	0.0	-21.6	-19.0	1,306.5	1,327.6
Result from operating activities	61.1	57.4	30.1	39.8	-11.9	-15.3	-2.5	1.5	76.8	83.4
Financing costs included in cost of sales	0.3	0.3	5.1	3.8	–	–	–	–	5.4	4.1
Earnings before interest and taxes (EBIT)	61.4	57.7	35.2	43.6	-11.9	-15.3	-2.5	1.5	82.2	87.5
as a % of sales revenues of the division	11.1%	10.1%	4.6%	5.6%	–	–	–	–	6.3%	6.6%
as a % of Group exter nal sales revenues	11.5%	10.4%	4.6%	5.6%	–	–	–	–	6.3%	6.6%
EBITDA	72.3	75.1	43.0	51.6	-9.6	-13.3	-2.6	1.4	103.1	114.8
as a % of sales revenues of the division	13.0%	13.2%	5.6%	6.6%	–	–	–	–	7.9%	8.6%
as a % of Group exter nal sales revenues	13.5%	13.6%	5.6%	6.7%	–	–	–	–	7.9%	8.6%
Assets (12/31/2012/ 09/30/2013)	343.8	341.0	508.6	577.7	173.5	175.6	-175.9	-176.0	850.0	918.3
Payroll (09/30)	3,155	3,313	3,907	4,322	180	207	–	–	7,242	7,842

I F RS /IAS ACCOUNTIN G STANDARDS

KUKA Aktiengesellschaft, headquartered in Augsburg, prepared its interim financial statements for the period ending September 30, 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 50 companies. In addition to KUKA Aktiengesellschaft, it includes six companies registered inside Germany and 43 firms domiciled outside Germany, for which KUKA Aktiengesellschaft either directly or indirectly holds majority voting rights.

In comparison to December 31, 2012, CMA TECHNOLOGY SRL, based in Sibiu, Romania, has been added to the group of consolidated companies. The company is part of the Systems division.

ACQUISITIONS

The Systems division undertook two acquisitions to strengthen its market presence and to expand its vertical manufacturing depth. Preliminary numbers for these entities have been included in the Group financial statements. On April 14, 2013, the division concluded an asset deal for the systems business of UTICA Enterprises, based in Shelby Township, Michigan. The acquired company builds assembly lines for car bodies and subassemblies. The company also makes laser welding systems, as well as joining and stamping systems.

On June 28, 2013, the division acquired 100 percent ownership of CMA TECHNOLOGY SRL, based in Sibiu, Romania. CMA specializes in manufacturing of metal parts for plant engineering projects.

Of the purchase price of € 28.7 million, € 16.6 million were immediately paid in cash. The rest of the purchase price is divided into a fixed payment of € 0.4 million and sales and profit-related components of € 1.0 million and €10.7 million. Cash and cash equivalents of € 0.1 million were transferred as part of the deal. Additional shares of fully consolidated companies were not acquired.

As of September 30, 2013, sales of 23.1 million and net earnings of 0.9 million were attributable to the acquisitions. If UTICA Enterprises and CMA TECHNOLOGY SRL had already been consolidated at the beginning of 2013, they would have contributed € 39.7 million to sales and € 3.1 million to net earnings.

The following table shows the carrying amounts assumed as a result of the purchase of the divisions immediately prior to the acquisition as well as the opening balance sheet in fair values.

in €millions	Carrying amounts assumed	Opening balance sheet at fair value
Intangible assets	1.6	3.8
Tangible assets	2.0	2.0
Receivables	11.3	11.3
Inventories and other assets	1.1	1.1
Liabilities	0.6	0.6

In addition to software licenses, the acquired intangible assets consist mainly of customer lists and orders on hand. Receivables and inventories relate mainly to the orders in house at the time of the acquisitions. Contingent liabilities were not assumed. No deferred tax liabilities were recognized.

The transaction resulted in a total goodwill of € 11.2 million, which has been allocated to the cash generating unit Body Structure and Engineering. The goodwill reflects expectations of business growth from the stronger market presence and synergies resulting from the vertical integration of semifinished goods.

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 or losses. 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 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 adjust previous periods.

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

The remaining new standards and interpretations are not applicable to or have little impact on KUKA's consolidated statements.

EARNIN GS PER SHARE

Undiluted/diluted earnings per share break down as follows:

		9 months 2012	9 months 2013
Net result attributable to shareholders of KUKA AG	in €millions	42.4	41.7
Weighted average number of shares outstanding	shares	33,915,431	33,915,431
Earnings per share	in €	1.25	1.23

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 nine 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 nine months of fiscal 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 and July 2013.

On September 30, 2013, a total of 33,915,431 shares were in circulation.

IAS 1 9 EMP LOYEE BENE F ITS

The balance sheet employee benefits account rate of return as of September 30, 2013 and as per IAS 19 for German companies is 3.25 percent per annum and 4.70 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 € 3.0 million. Investment income growth from external pension funds exceeded expectations, resulting in actuarial gains of €0.3 million.

The balance sheet employee benefits account rate of return as of September 30, 2013 and as per IAS 19 was 1.35 percent. On December 31, 2012 it was 3.98 percent. This resulted in actuarial losses for the defined benefit obligation of €0.6 million.

The actuarial result was reported under equity as an incomeneutral sum of €2.0 million in consideration of deferred taxes.

CON VERTIBL E BON D

Last February, KUKA Aktiengesellschaft issued a convertible bond with a face value of €58.8 million maturing in February 2018 (tranche 1) and increased the size by €91.2 million in July 2013 (tranche 2). The convertible bond thus now has a total face value of €150.0 million. The bond was issued in denominations of €100,000. The initial conversion price is €36.8067 per share. The conversion ratio is thus 2,716.8967 shares for each €100,000 bond. In total, the bond entitles bondholders to convert their holdings into up to 4,075,344 new bearer shares of KUKA AG (of which 1,597,535 are for the tranche in February 2013 and 2,477,809 for the tranche in July 2013. The conversion rights are valid for the entire term of the convertible 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. The first payment was made 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 €131.7 million, of which €50.2 million applies to the first tranche and €81.5 million to the second. 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 at the same time it issued each of convertible instruments (5.03 percent for tranche 1 and 4.80 percent for tranche 2). The resulting value of the equity component is €27.0 million (EUR 7.5 million for tranche 1 and €19.5 million for tranche 2, including transaction costs of €10.5 million). It is recognized as part of the capital reserve taking into consideration deferred taxes and will not be changed until the due date of the conversion. The interest expense recognized for the bond for the first nine months of fiscal 2013 was €2.4 million.

BON D

In the second and third quarters, KUKA Aktiengesellschaft bought back €28.5 million worth of the €202 million issued by KUKA Aktiengesellschaft in November 2010 at market prices, which ranged between 112.20 and 112.55. The buybacks aim to adjust the company's financing portfolio.

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 €76.4 million as of the balance sheet date versus €109.4 on December 31, 2012; the existing operating line of credit was split for KUKA Systems (India) and utilized in the amount of €2.8 million compared to €4.2 million on December 31, 2012, as well as on €11.5 million for LCs.

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 COMPA-NIES

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. As of the record date, the company had utilized €44.7 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 €17.7 million were utilized as of September 30, 2013, which compares to €13.8 million on December 31, 2012. One ABS program was terminated by KUKA in June 2013, effective the first quarter of 2014.

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. This item comprises all funds recognized on the balance sheet as cash and cash equivalents; i.e. 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 COMMERCIA 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 nine months of the financial year was €4.3 million. The goods and services received by the Group from related parties were worth €14.8 million. As of September 30, 2013, receivables totaled €0.3 million and liabilities €0.9 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.

Augsburg, November 6, 2013

The Executive Board

Dr. Till Reuter Peter Mohnen

FINANCIAL CALENDAR 2014

12. FEbruar 2014	RELEASE OF PRELIMINAR Y FIGUR ES FOR 2013
26. März 2014	PRESS CONFERENCE PRESENTING THE ANNUA L FINANCIAL STATEMENTS
7. Mai 2014	REPORT ON THE FIRST QUAR TER OF 2014
28. Mai 2014	ANNUA L GENERA L MEETING
6. AUg ust 2014	REPORT ON THE FIRST HALF OF FISCAL 2014
5. No vem ber 2014	REPORT ON THE FIRST NINE MONTHS OF 2014

This quarterly report was published on November 6, 2013 and is available in German and English from KUKA AG's Public / Investor 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.

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