2013 Mar 11 — KUKA AG

KUKA AG Small/Mid-Cap: Capital Goods & Industrial Engineering

1

Systems deconsolidation fully priced in

We increase our KUKA price target by 10.3% to EUR32 on adjusted estimates and an update to our SOTP model. However, we maintain our Hold recommendation. We believe KUKAs share price already fully reflects any initial benefit from potential deconsolidation of the systems business.

Valuation appears full: We believe the shares are fully valued for the following reasons: 1) the benefit from a potential deal with Swisslog for KUKAs systems business is fully priced in; 2) even a scenario assuming a take-out multiple leaves only 16% upside in our view; and 3) FY 2013 does not leave room for consensus upgrades while KUKA is trading at peak earnings and multiples. While a pure-play robotics KUKA would be an attractive take-over target, the likelihood and timing of such a scenario materialising are highly uncertain.

To argue for a premium to the current share price based on fundamentals, we would have to value KUKA by discounting back FY15E sales and earnings (both at peak levels) and using multiples above the current peak levels. In light of decreasing earnings visibility for a standalone robotics business (lower order book and lead times than systems), we see this as unjustified.

No earnings upgrades expected: Furthermore, we do not see room for further FY13 earnings upgrades as robotics margins are set to decrease on mix effects and upside to peak systems margins appears limited. Consensus already reflects the full margin and growth potential in our view.

Rich multiples: The KUKA share price has increased 21% year to date after rising 92% in 2012. At forward multiples of 18x P/E and 10.5x EV/EBIT, KUKA is trading at five-year (excluding the crisis) highs. Furthermore, EV/sales of 0.7x versus an EBIT margin of 6.4% does not leave further upside in our view. Based on our updated SOTP assumptions (multiples, net debt) and minor earnings adjustments, our new price target is EUR32.

Hold Rating system

Current price

EUR 34.11

Absolute

Price target

EUR 32.00 08/03/2013 XETRA Close Market cap EUR 1,126 m Reuters KU2G.DE Bloomberg KU2 GY

Changes made in this note Rating Hold (no change) Price target EUR 32.00 (29.00) Chg 2012e 2013e 2014e old % old % old % Sales 1714 - 1775 0.5 1836 0.5

EBIT 103 - 112 2.2 119 3.0

EPS 1.54 - 1.76 5.7 1.93 6.6 Source: Berenberg Bank estimates

Share data Shares outstanding (m) 34 Enterprise value (EUR m) 1,220 Daily trading volume 120,400

Performance data

High 52 weeks (EUR) 35 Low 52 weeks (EUR) 15 Relative performance to SXXP SDAX 1 month 4.2 % 5.6 % 3 months 18.0 % 5.1 % 12 months 107.9 % 101.0 %

Key data

Price/book value 3.7 Net gearing 7.4 % CAGR sales 2011-2014 8.7% CAGR EPS 2011-2014 32.2%

Business activities: Plant engineering of automated production lines () and industrial robots (1/3)

Non-institutional shareholders: Grenzebach Maschinenbau 24.4% Wyser-Pratte 4.7% Rinvest 1.8%

11 March 2013

Benjamin Glaeser Analyst +44 20 3207 7918 [email protected]

Felix Wienen Analyst +44 20 3207 7915 [email protected]

Y/E 31.12., EUR m 2009 2010 2011 2012E 2013E 2014E

Order intake 903 1,142 1,553 1,890 1,768 1,813

Book-to-bill 1.00x 1.06x 1.08x 1.09x 0.99x 0.98x

Sales 902 1,079 1,436 1,739 1,783 1,845

EBITDA -29 47 99 137 142 154

EBIT -53 25 73 110 114 122

Net profit -76 -9 30 59 63 70

Y/E net debt (net cash) 48 60 33 23 -3 -25

EPS (reported) -2.95 -0.28 0.89 1.75 1.86 2.06

EPS (recurring) -0.54 0.29 0.89 1.75 1.86 2.06

DPS 0.00 0.00 0.00 0.25 0.30 0.40

Gross margin 17.7% 18.9% 19.6% 19.4% 20.4% 20.4%

EBITDA margin -3.3% 4.4% 6.9% 7.9% 8.0% 8.3%

EBIT margin -5.8% 2.3% 5.1% 6.3% 6.4% 6.6%

Dividend yield 0.0% 0.0% 0.0% 0.8% 0.9% 1.2%

ROCE -10.8% 4.4% 13.0% 16.8% 15.4% 14.8%

EV/sales 0.4 0.5 0.4 0.7 0.7 0.6

EV/EBITDA -13.5 10.8 6.5 8.9 8.4 7.6

EV/EBIT -7.5 20.4 8.8 11.1 10.5 9.6

P/E -20.0 42.2 18.2 18.9 17.8 16.2

Cash flow RoEV -8.8% 5.2% 8.1% 6.2% 6.5% 7.3%

Source: Company data, Berenberg Bank


2

No upside left on fundamentals on a 12-month view

We have consistently highlighted the potential deconsolidation of KUKAs systems business into Swisslog, which shares its largest shareholder (Grenzebach) with KUKA. Such a deal would in our view allow KUKA to focus on growth in its robotics division, lead to a re-rating of the remaining business towards robotics multiples and make the company an attractive take-over target.

Considering the current share price, we believe most of these potential benefits have already been factored in. We use two valuation scenarios to demonstrate this: 1) a fair value valuation following deconsolidation of systems; and 2) a take-out valuation following successful deconsolidation.

The deconsolidation case

In our view, the most likely case for a deconsolidation of the systems business into Swisslog would leave KUKA with a share in the new business. This would allow KUKA to retain access to the intricate details of production set-ups at its largest OEM clients and allow it to continue to benefit from growth of the business, in which it has invested heavily in recent years (we would expect c.EU10m investment income initially). In this scenario, we arrive at a fair value of EUR33.15 per share, implying a slight discount to the current share price.

Valuation for pure-play robotics KUKA

Source: Berenberg Bank estimates

Robotics EV: The remaining robotics business would have around EUR750m in sales with a target margin of 12%. Assuming KUKA is able to achieve this margin and using a through-the-cycle EV/EBIT peer multiple of 11x (Fanuc, Yaskawa, ABB), this would imply a fair robotics EV of EUR990m.

Swisslog stake: We believe it is reasonable to assume that KUKA would hold 35% of the new Swisslog business (splitting it by recurring EBIT contribution). This would increase by c.EUR140m if the new Swisslog business were valued at 16x P/E (with a new EPS of CHF0.12).

KTPO: Furthermore, we believe KUKA would retain its KTPO business (operating body-in-white production for the Jeep Wrangler). We estimate an annual EBIT contribution of EUR15m, as currently consolidated in the systems business. Since KUKA has a contract to operate this until 2020, we calculate a simple DCF value of EUR90m for this income stream.

Net debt: While KUKA moved to a net cash position at the end of 2012 (EUR45m), we also take into account the EUR71m pension obligation and our belief that most prepayments are related to the systems business. At the end of FY 2011, these amounted to c.EUR67m but should be higher now considering systems sales growth of 22% in FY 2012 (we estimate EUR70m). Overall, we therefore arrive at a net debt position including pension liabilities of EUR96m.

Robotics EUR990m Assuming 11x EV/EBIT; EUR750m in sales and the 12% margins

Swisslog stake EUR140m based on our assumption of 35% share in new Swisslog business

KTPO EUR90m based on DCF fair value

Group EV EUR1,220m Group EV

Net debt -EUR96m ex systems prepayments and including pension provisions

Fair share price EUR33.15 Equity value per share


3

The take-out scenario

Following this deconsolidation, a pure-play robotics KUKA could be an attractive take-over target for e.g. Siemens (which uses KUKA robots in its Healthcare division and supplies a number of components) or an international industrial conglomerate looking to broaden its exposure to automation in China in particular.

As a blue sky take-out assumption, we apply a 1.6x EV/sales multiple to current robotics sales of EUR750m. KUKA currently trades at 0.7x sales with a medium-term margin target of 12% in robotics. EV/sales of 1.6x thus presents a decent premium to current levels. We would thereby arrive at a robotics EV of EUR1,170m.

Using the above assumptions for net debt and the remaining business (Swisslog stake and KTPO), we derive a take-out price of EUR39. Given the level of uncertainty attached to this scenario (whether a deal with Swisslog happens, and if and when KUKA could be taken over), we would not regard the implied 17% upside as sufficient to justify buying the share.

Valuation our actual price target, not accounting for any of the above

We slightly adjust our estimates following the FY 2012 results (see segment estimates on next page). Our Robotics margin forecast is now 11.5% for FY 2015, with Systems margins improving to 5.2%. On adjusted estimates and an update to our SOTP assumptions, our 12-month price target increases to EUR32 (weighting FY 2013 and FY 2014 results equally).

At 18x FY13 P/E and EV/sales of 0.7x compared to 6.4% EBIT margins, we believe valuation appears stretched.

SOTP model

Source: Berenberg Bank

FY13E FY14E Valuation EV/EBIT '13 EV/EBIT '14

ROBOTICS 933 1070 EV/EBIT-multiple 11.5 12.0

ADVANCED ROBOTICS EV/EBIT-multiple

SYSTEMS 266 270 EV/EBIT-multiple 7.0 7.0

KTPO 96 96 DCF - -

-108 -122 EV/EBIT-multiple 5.0 5.0

Enterprise Value KUKA 1,187 1,315

+ Liquid funds 262 278

+ Financial assets 8 8

- Interest bearing liabilities 266 265

- Pension provisions 72 73

- Prepayments 55 55

- Minorities 1 1

Fair Equity Value KUKA 1062 1206

Numbers of shares 33.9 33.9

Fair value per share 31.33 35.57

./.. Consolidation


4

Segment forecasts

Source: KUKA AG, Berenberg Bank

in EURm 2008 2009 2010 2011 2012E 2013E 2014E

ROBOTICS 2008 2009 2010 2011 2012E 2013E 2014E

Order intake 464 324 486 654 803 776 796

yoy 6.8% -30.2% 49.9% 34.6% 22.7% -3.3% 2.5%

book-to-bill 0.98x 0.98x 1.12x 1.06x 1.08x 1.01x 1.00x

Order backlog 100 100 149 184 249 256 253

yoy -3.6% 0.0% 48.7% 23.8% 34.9% 3.1% -1.4%

Revenues 474 331 436 616 743 769 799

yoy 14.9% -30.3% 31.8% 41.5% 20.5% 3.5% 4.0%

EBIT 42.0 -11.5 20.8 51.0 80.2 79.2 87.9

yoy 25.0% -127.4% -280.9% 145.2% 57.3% -1.3% 11.1%

margin 8.9% -3.5% 4.8% 8.3% 10.8% 10.3% 11.0%10.8% 11.3% 12.0%

SYSTEMS 2008 2009 2010 2011 2012E 2013E 2014E

Order intake 855 615 717 917 1,115 1,031 1,057

yoy -8.8% -28.0% 16.5% 27.9% 21.7% -7.5% 2.5%


Order backlog 450 460 500 545 666 653 634

yoy 6.0% 2.2% 8.6% 9.0% 22.2% -2.0% -2.9%

Revenues 839 606 695 851 1,025 1,045 1,076

yoy -6.8% -27.8% 14.8% 22.4% 20.5% 1.9% 3.0%

EBIT 26.8 -29.1 20.0 33.7 47.7 53.0 56.0

yoy -28.0% -208.6% -168.7% 68.5% 41.5% 11.1% 5.6%

margin 3.2% -4.8% 2.9% 4.0% 4.7% 5.1% 5.2%4.0% 5.0% 5.3% 0.055

Consolidation

Order intake 40 36 61 18 29 40 40

Revenues -47 -34 -52 -31 29 -30 -30

EBIT -16.8 -12.3 -16.0 -12.1 -18.1 -18.2 -21.6

KUKA GROUP

Order intake 1,280 903 1,142 1,553 1,890 1,768 1,813

yoy -4.8% -29.4% 26.5% 36.0% 21.7% -6.4% 2.6%


Order backlog 542 544 631 724 909 894 861

yoy 2.6% 0.2% 16.0% 14.8% 25.6% -1.7% -3.6%

Revenues 1,266 902 1,079 1,436 1,739 1,783 1,845

yoy -1.6% -28.7% 19.6% 33.1% 21.1% 2.5% 3.5%

EBITDA 78.0 -29.8 39.8 90.3 123.4 135.1 146.6

yoy -21.6% -138.2% -233.8% 126.7% 36.7% 9.5% 8.5%

margin 6.2% -3.3% 3.7% 6.3% 7.1% 7.6% 7.9%

EBIT 52.0 -52.9 24.8 72.6 109.8 114.0 122.2

yoy -26.1% -201.7% -146.9% 192.7% 51.2% 3.8% 7.2%

margin 4.1% -5.9% 2.3% 5.1% 6.3% 6.4% 6.6%

Source: KUKA AG, Berenberg Bamk


5

Financials

Profit and loss account

Year-end December (EUR m) 2009 2010 2011 2012e 2013e 2014e

Sales 902 1,079 1,436 1,739 1,783 1,845

Cost of sales 743 875 1,154 1,401 1,420 1,468

Gross profit 159 204 282 338 363 377

Sales and marketing 85 87 100 111 116 119

General and administration 78 76 79 90 95 98

Research and development 36 30 38 40 42 43

Other operating income 25 30 43 40 47 49

Other operating expenses 39 24 44 41 50 51

Unusual or infrequent items 0 7 8 7 7 7

EBITDA -29 47 99 137 142 154

Depreciation 16 15 16 17 17 18

EBITA -46 25 75 107 118 128

Amortisation of goodwill 0 0 0 0 0 0

Amortisation of intangible assets 7 7 10 11 11 13

Impairment charges 0 0 0 0 0 0

EBIT -53 25 73 110 114 122

Interest income 10 9 10 8 8 6

Interest expenses 21 31 27 20 21 21

Other financial result 0 0 -1 0 0 0

Financial result -11 -22 -18 -12 -13 -15

Income on ordinary activities before taxes -64 -5 46 91 94 100

Extraordinary income/loss 0 0 0 0 0 0

EBT -64 -5 46 91 94 100

Taxes 11 4 16 31 30 30

Net income from continuing operations -76 -9 30 59 63 70

Income from discontinued operations (net of tax) 0 0 0 0 0 0

Net income -76 -9 30 59 63 70

Minority interest 0 0 0 0 0 0

Net income (net of minority interest) -76 -9 30 59 63 70

Source: Company data, Berenberg Bank estimates


6

Balance sheet

Year-end December (EUR m) 2009 2010 2011 2012e 2013e 2014e

Intangible assets 79 77 79 93 104 109

Property, plant and equipment 90 86 88 91 97 106

Financial assets 11 10 8 8 8 8

Fixed assets 181 172 174 192 209 223

Inventories 104 158 195 238 244 256

Accounts receivable 114 126 146 181 195 215

Other current assets 223 264 359 345 332 319

Liquid assets 61 203 169 185 269 290

Deferred taxes 26 35 35 34 33 32

Other accruals 17 27 0 0 0 0

Current assets 546 812 904 984 1,074 1,113

TOTAL 726 985 1,078 1,176 1,283 1,337

Shareholders' equity 159 197 251 305 355 410

Minority interest 1 1 1 1 1 1

Long-term debt 64 193 194 194 254 254

Pensions provisions 70 70 70 71 72 73

Other provisions 127 102 90 91 92 93


Non-current liabilities 274 380 361 364 428 432

Short-term debt 46 71 7 14 12 11

Accounts payable 73 149 167 203 214 213

Advance payments 27 49 67 67 55 55

Other liabilities 126 120 203 200 197 195


Other accruals 0 0 0 0 0 0

Current liabilities 291 407 465 505 498 494

TOTAL 726 985 1,078 1,176 1,283 1,337



7

Cash flow statement

EUR m 2009 2010 2011 2012e 2013e 2014e

Net profit/loss -76 -9 30 59 63 70

Depreciation of fixed assets 16 15 16 17 17 18

Amortisation of goodwill 0 0 0 0 0 0

Amortisation of intangible assets 7 7 10 11 11 13

Other 13 -19 -13 10 10 10

Cash flow from operations before changes in w/c -39 -5 43 97 101 111

Change in inventory 48 -52 -36 -43 -6 -12

Change in accounts receivable 110 -45 -84 -36 -14 -19

Change in accounts payable -113 78 113 36 11 -1

Change in other working capital positions 0 0 0 0 -12 0

Change in working capital 44 -19 -7 -42 -22 -32

Cash flow from operating activities 5 -25 36 55 79 79

Maintenance capex 19 10 20 29 32 32

Cash flow from operating activities after maintenance -14 -35 17 26 48 46

Capex, excluding maintenance 8 5 11 16 14 14

Payments for acquisitions 0 0 0 0 0 0

Financial investments 1 0 0 0 0 0

Income from asset disposals 1 3 0 0 0 0

Cash flow from investing activities -27 -13 -30 -45 -45 -46

Cash flow before financing -22 -37 6 10 34 33

Increase/decrease in debt position 15 134 -65 7 58 -1

Purchase of own shares 0 0 0 0 0 0

Capital measures 27 43 24 0 0 0

Dividends paid 0 0 0 0 8 10

Others 0 0 0 0 0 0

Effects of exchange rate changes on cash 0 2 1 0 0 0

Cash flow from financing activities 42 177 -42 7 50 -11

Increase/decrease in liquid assets 20 142 -35 17 100 42

Liquid assets at end of period 61 203 169 185 269 290



8

Ratios

Ratios 2009 2010 2011 2012e 2013e 2014e

Asset utilisation efficiency

Capital employed turnover 1.9 1.7 2.3 2.5 2.2 2.2

Operating assets turnover 4.3 6.3 7.4 7.3 6.7 6.0

Plant turnover 10.0 12.6 16.4 19.1 18.4 17.4

Inventory turnover (sales/inventory) 8.7 6.8 7.3 7.3 7.3 7.2

Operational efficiency

Operating return -14.3% 23.2% 46.5% 51.4% 50.5% 47.4%

Total operating costs / sales 23.5% 17.3% 15.2% 13.9% 14.4% 14.2%

Sales per employee 0.2 0.2 0.2 0.3 0.3 0.3

EBITDA per employee -0.01 0.01 0.01 0.02 0.02 0.02

EBIT margin -5.8% 2.3% 5.1% 6.3% 6.4% 6.6%

Return on capital

EBIT/ Y/E capital employed -10.9% 3.8% 11.7% 16.0% 14.3% 14.3%

EBIT / avg. capital employed -10.8% 4.4% 13.0% 16.8% 15.4% 14.8%

EBITDA/ Y/E capital employed -6.1% 7.3% 15.9% 20.0% 17.8% 18.0%

EBITDA / avg. capital employed -6.0% 8.3% 17.6% 21.0% 19.2% 18.6%

Return on equity

Net profit / Y/E equity -47.5% -4.4% 11.9% 19.5% 17.8% 17.0%

Recurring net profit / Y/E equity -8.7% 4.5% 11.8% 19.5% 17.8% 17.0%

Net profit / avg. equity -40.8% -4.8% 13.3% 21.4% 19.2% 18.2%

Recurring net profit / avg. equity -7.5% 5.0% 13.3% 21.4% 19.2% 18.2%

Security

Net debt (if net cash=0) 48 60 33 23 -3 -25

Debt / equity 68.8% 134.1% 80.3% 68.2% 75.0% 64.8%

Net gearing 30.4% 30.7% 13.0% 7.4% -0.8% -6.1%

Equity ratio 22.0% 20.0% 23.3% 26.0% 27.7% 30.6%

Interest cover 0 1 4 9 9 8

EBITDA / interest paid 0 2 4 7 7 7

Book value of equity/book value of debt 1.5 0.7 1.2 1.5 1.3 1.5

Altman's z-score 2.4 1.9 2.6 3.0 2.9 3.1

Dividend payout ratio 0% 0% 0% 14% 16% 19%

Liquidity

Current ratio 1.9 2.0 1.9 2.0 2.2 2.3

Acid test ratio 1.5 1.6 1.5 1.5 1.7 1.7

Free cash flow -22.4 -40.2 6.1 9.8 34.0 32.5

Funds management

Avg. working capital / sales 22.9% 16.9% 12.4% 12.0% 13.5% 14.5%

Cash flow / sales -3.8% 2.4% 3.6% 4.3% 4.3% 4.6%

Free cash flow/sales -2.5% -3.7% 0.4% 0.6% 1.9% 1.8%

Inventory processing period (days) 51 77 94 112 112 115

Receivables collection period (days) 46 43 37 38 40 43

Payables payment period (days) 36 72 80 96 98 96

Cash conversion cycle (days) 61 47 51 54 54 62

Trade creditors / trade debtors 64.2% 118.2% 114.9% 112.4% 109.5% 99.2%

Other

Interest received / avg. cash 20.1% 6.8% 5.3% 4.5% 3.5% 2.1%

Interest paid / avg. debt 21% 17% 12% 10% 9% 8%

Capex / dep'n 122.5% 69.1% 116.1% 163.6% 161.0% 146.1%

Cost per employee 0 0 0 0 0 0

Capex / sales 3.1% 1.4% 2.1% 2.6% 2.5% 2.5%

Maint. capex / sales 2.1% 0.9% 1.4% 1.7% 1.8% 1.8%

Cash flow -34 26 51 76 77 85

Cash ROCE -6.9% 4.6% 9.2% 11.6% 10.4% 10.3%

Free cash flow yield -8.1% -10.7% 1.1% 0.9% 3.0% 2.9%



9

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LONDON

FRANKFURT Greg Swallow +44 (0) 20 3207 7833 PARIS

Michael Brauburger +49 (0) 69 91 30 90 741 Laura Cooper +44 (0) 20 3207 7806 Sylvain Granjoux +33 (0) 1 5844 9509

Nina Buechs +49 (0) 69 91 30 90 735

Andr Grosskurth +49 (0) 69 91 30 90 734 CORPORATE ACCESS EVENTS

Boris Koegel +49 (0) 69 91 30 90 740 LONDON LONDON

Joachim Kopp +49 (0) 69 91 30 90 742 Patricia Nehring +44 (0) 20 3207 7811 Natalie Meech +44 (0) 20 3207 7831

Charlotte Kilby +44 (0) 20 3207 7832

Hannah Whitehead +44 (0) 20 3207 7922

US Sales E-mail: [email protected] CAPITAL MARKETS LLC

Member FINRA & SIPC Andrew Holder +1 (617) 292 8222 Kelleigh Faldi +1 (617) 292 8288

Colin Andrade +1 (617) 292 8230 Kieran O'Sullivan +1 (617) 292 8292

Cathal Carroll +1 (646) 445 7206 Emily Mouret +1 (646) 445 7204

Burr Clark +1 (617) 292 8282 Jonathan Saxon +1 (646) 445 7202

Julie Doherty +1 (617) 292 8228


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Please note that the use of this research report is subject to the conditions and restrictions set forth in the General investment-related disclosures and the Legal disclaimer at the end of this document.

For analyst certification and remarks regarding foreign investors and country-specific disclosures, please refer to the respective paragraph at the end of this document.

Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG)

Company Disclosures KUKA AG 1, 2, 3, 5 (1) Berenberg Bank or its affiliate(s) was Lead Manager or Co-Lead Manager over the previous 12 months of a

public offering of this company. (2) Berenberg Bank acts as Designated Sponsor for this company. (3) Over the previous 12 months, Berenberg Bank and/or its affiliate(s) has effected an agreement with this

company for investment banking services or received compensation or a promise to pay from this company for investment banking services.

(4) Berenberg Bank and/or its affiliate(s) holds 5% or more of the share capital of this company. (5) Berenberg Bank holds a trading position in shares of this company. (6) Berenberg Bank and/or its affiliate(s) holds a net short position of 1% or more of the share capital of this

company, calculated by methods required by German law as of the last trading day of the past month. Historical price target and rating changes for KUKA AG in the last 12 months (full coverage)

Date Price target - EUR Rating Initiation of coverage

28 March 12 18.00 Hold 16 September 04

24 April 12 20.00 Buy

09 May 12 22.00 Buy

07 August 12 25.00 Buy

12 September 12 27.50 Buy

08 January 13 29.00 Hold

11 March 13 32.00 Hold

Berenberg distribution of ratings and in proportion to investment banking services

Buy 45.25 % 70.37 % Sell 16.77 % 3.70 % Hold 37.98 % 25.93 %

Valuation basis/rating key

The recommendations for companies analysed by Berenberg Banks equity research department are either made on an absolute basis (absolute rating system) or relative to the sector (relative rating system), which is clearly stated in the financial analysis. For both absolute and relative rating system, the three-step rating key Buy, Hold and Sell is applied. For a detailed explanation of our rating system, please refer to our website at

http://www.berenberg.de/research.html?&L=1

NB: During periods of high market, sector or stock volatility, or in special situations, the rating system criteria as described on our website may be breached temporarily.


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Competent supervisory authority

Bundesanstalt fr Finanzdienstleistungsaufsicht -BaFin- (Federal Financial Supervisory Authority), Graurheindorfer Strae 108, 53117 Bonn and Lurgiallee 12, 60439 Frankfurt am Main

General investment-related disclosures Joh. Berenberg, Gossler & Co. KG (Berenberg Bank) has made every effort to carefully research all information contained in this financial analysis. The information on which the financial analysis is based has been obtained from sources which we believe to be reliable such as, for example, Thomson Reuters, Bloomberg and the relevant specialised press as well as the company which is the subject of this financial analysis. Only that part of the research note is made available to the issuer (who is the subject of this analysis) which is necessary to properly reconcile with the facts. Should this result in considerable changes a reference is made in the research note.

Opinions expressed in this financial analysis are our current opinions as of the issuing date indicated on this document. The companies analysed by Berenberg Bank are divided into two groups: those under full coverage (regular updates provided); and those under screening coverage (updates provided as and when required at irregular intervals).

The functional job title of the person/s responsible for the recommendations contained in this report is Equity Research Analyst unless otherwise stated on the cover.

The following internet link provides further remarks on our financial analyses: http://www.berenberg.de/research.html?&L=1&no_cache=1

Legal disclaimer This document has been prepared by Berenberg Bank. This document does not claim completeness regarding all the information on the stocks, stock markets or developments referred to in it. On no account should the document be regarded as a substitute for the recipient procuring information for himself/herself or exercising his/her own judgements.

The document has been produced for information purposes for institutional clients or market professionals. Private customers, into whose possession this document comes, should discuss possible investment decisions with their customer service officer as differing views and opinions may exist with regard to the stocks referred to in this document.

This document is not a solicitation or an offer to buy or sell the mentioned stock.

The document may include certain descriptions, statements, estimates, and conclusions underlining potential market and company development. These reflect assumptions, which may turn out to be incorrect. Berenberg Bank and/or its employees accept no liability whatsoever for any direct or consequential loss or damages of any kind arising out of the use of this document or any part of its content.

Berenberg Bank and/or its employees may hold, buy or sell positions in any securities mentioned in this document, derivatives thereon or related financial products. Berenberg Bank and/or its employees may underwrite issues for any securities mentioned in this document, derivatives thereon or related financial products or seek to perform capital market or underwriting services.

Analyst certification I, Benjamin Glaeser, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein.

In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by Berenberg Bank or its affiliates.


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I, Felix Wienen, hereby certify that all of the views expressed in this report accurately reflect my personal views about any and all of the subject securities or issuers discussed herein.

In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this research report, nor is it tied to any specific investment banking transaction performed by Berenberg Bank or its affiliates.

Remarks regarding foreign investors The preparation of this document is subject to regulation by German law. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

United Kingdom This document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers.

United States of America This document has been prepared exclusively by Berenberg Bank. Although Berenberg Capital Markets LLC, an affiliate of Berenberg Bank and registered US broker-dealer, distributes this document to certain customers, Berenberg Capital Markets LLC does not provide input into its contents, nor does this document constitute research of Berenberg Capital Markets LLC. In addition, this document is meant exclusively for institutional investors and market professionals, but not for private customers. It is not for distribution to or the use of private investors or private customers.

This document is classified as objective for the purposes of FINRA rules. Please contact Berenberg Capital Markets LLC (+1 617.292.8200), if you require additional information.

Third-party research disclosures

Company Disclosures KUKA AG no disclosures (1) Berenberg Capital Markets LLC owned 1% or more of the outstanding shares of any class of the subject

company by the end of the prior month.* (2) Over the previous 12 months, Berenberg Capital Markets LLC has managed or co-managed any public

offering for the subject company.* (3) Berenberg Capital Markets LLC is making a market in the subject securities at the time of the report. (4) Berenberg Capital Markets LLC received compensation for investment banking services in the past 12 months,

or expects to receive such compensation in the next 3 months.* (5) There is another potential conflict of interest of the analyst or Berenberg Capital Markets LLC, of which the

analyst knows or has reason to know at the time of publication of this research report.

* For disclosures regarding affiliates of Berenberg Capital Markets LLC please refer to the Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) section above.

Copyright Berenberg Bank reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without Berenberg Banks prior written consent.

June 2012 Berenberg Bank

No upside left on fundamentals on a 12-month viewFinancialsContacts: Investment BankingDisclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG)

Documents

2013 Mar 11 — KUKA AG