Automation giant struggles with economic turbulence and intensifying competition, as new leadership prepares to chart a course beyond the era of ‘easy’ automation
Kuka, one of the world’s oldest robotics and automation companies, established in Germany in 1898, has reported a sharp decline in both revenue and earnings for 2024, marking a turbulent year of transition.
The Augsburg-based firm closed the year with a €43.5 million net loss (listed in the annual report as “earnings after taxes and after loss from discontinued operations”), which is down from a €85.6 million profit in 2023, even as it reported record-high free cash flow and a growing backlog of orders.
The company also confirmed a leadership change, with CEO Peter Mohnen stepping down, to be replaced by Christoph Schell. Mohnen’s departure caps a year in which Kuka launched a new digital division, faced tough economic conditions, and found itself under intensifying competitive pressure in core markets like intralogistics and automotive automation.
A digital pivot during turbulent times
Despite the downturn, Kuka has made a significant strategic move with the creation of Kuka Digital, a new division aimed at bundling software, AI, and simulation efforts to meet rising global demand for intelligent automation.
The new unit is tasked with delivering full digitalization of production systems – offering 3D simulation, data analysis, and integration of artificial intelligence across product lifecycles.
The initiative reflects a broader pivot for Kuka as the industry shifts from heavy hardware to software-led automation – a space that is increasingly crowded and fast-moving.
‘Easy’ automation and the Mohnen legacy
In his final CEO letter, Peter Mohnen hinted at a strategic emphasis on so-called “easy automation” opportunities.
Though he didn’t elaborate, the phrase appears to reference Kuka’s pursuit of simpler, lower-cost solutions to attract small and medium-sized enterprises – traditionally underserved in automation.
It remains unclear whether the incoming leadership will follow through on that path. As competitive pressure mounts from agile rivals offering modular, user-friendly systems, the market for entry-level automation could represent both a threat and an opportunity.
The Midea era and lingering questions
Kuka was acquired in 2016 by Chinese appliance giant Midea, which now owns nearly 95 percent of the company. Once a proudly independent German engineering champion, Kuka became a test case for China’s industrial ambitions in Europe.
While Midea has provided financial stability, questions remain about whether Kuka’s integration into a conglomerate structure has restricted its strategic agility or diluted its identity.
With Kuka now facing operational challenges and executive turnover, some observers are asking whether the company might have fared better as an independent entity.
Orders rise, but profits tumble
Kuka managed to increase orders received by 1.3 percent to €4.08 billion, but sales dropped 7.9 percent and EBIT fell more than 50 percent to €76.5 million. The company’s Swisslog division, focused on warehouse automation, and its China segment were particular areas of weakness.
One bright spot was free cash flow, which reached a record €223.7 million, indicating effective working capital management despite revenue pressure.
Swisslog’s struggles and rising rivals
Swisslog, which builds automated storage and retrieval systems (ASRS) and intralogistics platforms, may be facing strong headwinds from new entrants.
Companies like Geekplus, a Chinese startup specializing in warehouse robots and lately ASRS technology, are offering scalable, fast-deployable systems that appeal to a broader range of customers, especially in the fast-growing e-commerce sector.
These nimble competitors may be outpacing Swisslog in both innovation cycles and pricing – further eroding Kuka’s position in a space it once helped define.
Global uncertainty bites
The annual report cites a mix of geopolitical tensions, sluggish economies in Germany and China, and a fading EV boom as major drags on customer investment.
Sales in the automotive sector – a cornerstone of Kuka’s traditional business – are under pressure as the shift to electromobility slows and cost pressures increase.
At the same time, Kuka faces a price war in industrial automation, with aggressive challengers driving down margins, particularly in China.
What’s next for Kuka?
Kuka’s strategic future appears to rest on its ability to deliver intelligent, software-centric automation while defending its legacy businesses.
The company’s order backlog of €3.2 billion and strong cash position provide a cushion, but leadership transition and competitive disruption suggest a period of deep introspection – and possibly reinvention.
The upcoming year will test whether Kuka can balance its heritage in German engineering with the demands of a hypercompetitive, digitally-driven global market.
