KUKA : annual financial statements and management report for fiscal 2020 (with explanatory report of the Executive Board concerning the disclosures according to articles 289 para. 4 and para. 5 HGB)

KUKA AKTIENGESELLSCHAFT

SUPERVISORY BOARD REPORT CONSOLIDATED FINANCIAL REPORT und

ANNUAL FINANCIAL STATEMENTS 2020

SUPERVISORY BOARD REPORT

CONSOLIDATED FINANCIAL REPORT OF KUKA AKTIENGESELLSCHAFT

01 Fundamental information about the Group

1. Group structure and business activities

1. Systems division

1. Robotics division
2. Swisslog division

1. Swisslog Healthcare division

1. China division
2. Markets and competitive positions

1. Corporate strategy

1. Financial management system
2. Achievement of targets
3. Research and development

1. Procurement

12 Economic report

1. Macroeconomic and industry conditions

1. Business performance

1. Financial position and performance

1. Notes to the annual financial statements of KUKA Aktiengesellschaft

1. Sustainability at KUKA

37 Forecast, opportunity and risk report

1. Opportunity and risk report

1. Forecast

50 Internal control and risk management system

52 Disclosures in accordance with section 289a para. 1 and section 315a para. 1 of the German Commercial Code (HGB) including accompanying explanations

59 Compensation report

ANNUAL FINANCIAL STATEMENTS OF KUKA AKTIENGESELLSCHAFT

1. Balance sheet
2. Income statement
3. Notes

98 Corporate bodies

101 Schedule of shareholdings

1. Responsibility statement
2. Independent Auditor´s Report

Supervisory Board report

Dear Shareholders,

The 2020 fiscal year was a difficult one for KUKA Group. KUKA already felt the effects of the global COVID-19 pandemic in the first quarter of 2020. The pandemic-related lockdowns in virtually all countries relevant to KUKA's business rendered access to our customers more difficult. Additionally, the automotive sector, which is particularly important for KUKA, was severely impacted by the COVID-19 pandemic in 2020. In response to declining sales figures as a result of the pandemic and the general market situation, automotive manufacturers scaled back their investments and adjusted capacities. Even the signs of recovery that began to emerge in the second half of 2020 were unable to prevent KUKA Group from closing the financial year 2020 with a considerable loss overall. Based on all the information available to date, a further recovery of the global economy is to be expected for fiscal 2021. KUKA will also profit from this, as the demand for innovative automation solutions remains unbroken and should continue in the coming years.

The outstanding performance of KUKA Group employees deserves particular mention. As a result of the COVID-19 pandemic, they had to adapt very quickly to new working conditions. With great dedication, they ensured that customer orders were processed even under difficult circumstances, that supply chains were maintained and that important development projects were continued.

In the year under review, the Supervisory Board performed the duties incumbent upon it by law, the Articles of Association and the Rules of Procedure in full. The Supervisory Board and its committees monitored and advised the Management Board in its management of the company on the basis of regular and detailed reporting by the Management Board. Furthermore, there was an intensive exchange between the Chairman of the Supervisory Board and the Chairman of the Management Board as well as a regular exchange between the Chairmen of the Audit Committee and the Strategy and Technology Committee and the members of the Management Board. In this way, the Supervisory Board was always informed about the business policy, corporate planning, corporate risks and situation of the company and the Group as a whole.

Cooperation between the Supervisory Board and the Management Board was constructive.

The Supervisory Board performed its duties in plenary sessions, committee meetings, telephone and video conferences, and by means of circular resolutions. Due to the COVID-19 pandemic and the associated travel restrictions, the meetings of the Supervisory Board and its committees in the reporting period were held exclusively in virtual form by means of video conferencing.

Changes to the Management Board and Supervisory Board

The Management Board of KUKA Aktiengesellschaft currently consists of its Chairman Peter Mohnen (CEO) and Andreas Pabst (CFO). In addition, Prof. Dr. Peter Hofmann was a member of the company's Management Board until February 20, 2020.

During the reporting period, there was no cause to alter the quota for female Management Board members, which is currently set at 0%.

The Supervisory Board members representing the shareholders were elected by the Annual General Meeting on June 6, 2018. The employee representatives on the Supervisory Board were elected on April 10, 2018, in accordance with the provisions of the German Co-Determination Act (MitbestG), and with effect from the conclusion of the Annual General Meeting on June 6, 2018. The following changes have been made to the Supervisory Board since the last Supervisory Board report:

Dr. Chengmao Xu was elected as a member of the Supervisory Board by the Annual General Meeting on June 19, 2020; he had previously been appointed by court order. He resigned as a member of the Supervisory Board with effect from January 17, 2021 and took up the position of Chief Development Officer at KUKA Aktiengesellschaft with effect from January 18, 2021.

Helmut Zodl was appointed by court order to the Supervisory Board as Alexander Tan's successor with effect from January 24, 2020. The Annual General Meeting on June 19, 2020, then elected Helmut Zodl as a member of the Supervisory Board. Helmut Zodl is Chairman of the Audit Committee.

Lin (Avant) Bai was appointed by court order to the Supervisory Board as Dr. Chengmao Xu's successor with effect from February 23, 2021.

At the time the report of the Supervisory Board was submitted, the Board was thus composed of the following members:

Shareholder side:	Dr. Yanmin (Andy) Gu (Chairman)
	Lin (Avant) Bai
	Prof. Dr. Henning Kagermann
	Min (Francoise) Liu
	Dr. Myriam Meyer
	Helmut Zodl
Employee side:	Michael Leppek (Deputy Chairman)
	Wilfried Eberhardt
	Manfred Hüttenhofer
	Armin Kolb
	Carola Leitmeir
	Tanja Smolenski

With four females out of a total of twelve acting members, the proportion of women on the Supervisory Board amounted to 30% at the end of the year under review.

Supervisory Board meetings

In 2020, the year under review, five ordinary and three extraordinary Supervisory Board meetings were held. Furthermore, two resolutions were passed by written circulatory procedure.

The first extraordinary meeting of the Supervisory Board was held on January 29, 2020; it dealt with the introduction of Helmut Zodl and the composition of the Audit Committee.

Another extraordinary meeting was held on February 19, 2020, at which the termination of the employment contract of Prof. Peter Hofmann as CTO of the company was discussed and resolved.

The first ordinary meeting of the Supervisory Board took place on March 25, 2020. The Management Board first reported on the situation of the company and the Group. The Supervisory Board meeting was centered on the 2019 annual financial statements prepared for KUKA Aktiengesellschaft and the Group. In its role as auditor, KPMG presented a report and the Chairman of the Audit Committee made a statement. Both sets of annual accounts were approved by the Supervisory Board, which meant that the annual financial statements of KUKA Aktiengesellschaft were thereby adopted. The Supervisory Board also had to reach a decision on the proposal regarding appropriation of the 2019 balance sheet profit. The Supervisory Board approved both the Corporate Governance report and the Supervisory Board report for 2019. The Supervisory Board also dealt with the sustainability report pursuant to sections 315b, 315c, 289c of the German Commercial Code (HGB). The Supervisory Board reviewed this report - as the Audit Committee had done in advance - and raised no objections to it. The Board then decided on the proposed resolutions for the Annual General Meeting planned for June 19, 2020. The Supervisory Board dealt with other operational issues as well as the determination of the variable remuneration of the Management Board members for the past financial year.

On the day of the Annual General Meeting held on June 19, 2020, the Supervisory Board convened for ordinary meetings before and after the Annual General Meeting. At the meeting prior to the Annual General Meeting, the Management Board again reported on the situation of the company and the Group. The Supervisory Board then prepared itself for the Annual General Meeting. In the meeting following the Annual General Meeting, the composition of the Strategy and Technology Committee and the Audit Committee was discussed and approved. The reporting on the internal control systems (ICS report 2019) was also carried out. The Supervisory Board also addressed the restructuring of KUKA Systems EMEA and an operational issue at Swisslog Healthcare. As part of regular professional development, the attorney Dr. Christian Vogel gave a lecture on the subject of "rights and obligations of Supervisory Board members".

Another regular Supervisory Board meeting was held on September 22, 2020. The Management Board also reported on the situation of the company and the Group at the meeting. Other topics included the status of the restructuring measures that had been initiated and the report from the Strategy and Technology Committee. Additionally, the Supervisory Board was informed of a resolution deficiency action filed by several shareholders regarding the resolution of the Annual General Meeting on June 19, 2020, on the discharge of the Supervisory Board for fiscal 2019 see page 9.

The last ordinary meeting of the Supervisory Board in fiscal 2020 was held on November 12, 2020. The Management Board once again reported to the Supervisory Board on the situation of the company and the Group. Another key focus of this meeting was the budget for 2021 and the medium-term planning up to 2023. The chairs of the Supervisory Board committees then presented a summarized report on the work of the Personnel Committee, the Audit Committee and the Strategy and Technology Committee. The Supervisory Board also discussed and approved internal Group restructuring measures. Finally - in the absence of the Management Board - the Supervisory Board discussed matters pertaining to the Management Board and discussed initial proposals for a new Management Board remuneration model.

AnotherextraordinarySupervisoryBoardmeetingwasheldon December 17, 2020. At this meeting, which was held in the absence of the Management Board, the Supervisory Board set the personal targets and financial targets of the Management Board members for fiscal 2021; the Long Term Incentive Plan 2021 - 2023 for the Management Board members was also adopted. At this meeting, the Supervisory Board also adopted its new rules of procedure.

In the period leading up to the submission of this report, an extraordinary meeting of the Supervisory Board was held on March 3, 2021. At this meeting, the Supervisory Board dealt with the new compensation system for the Management Board and oher matters of the Management Board.

The first ordinary Supervisory Board meeting in 2021 took place on March 24, 2021.

Meetings of the Supervisory Board committees

The Supervisory Board has a total of five committees. The duties and members of the committees are listed in detail in the section "Declaration on corporate governance" and are also available on the company's website at www.kuka.com.

The Personnel Committee convened a total of four times in the 2020 reporting year. It dealt with all topics pertaining to Management Board matters, including the departure of Prof. Dr. Peter Hofmann, Management Board compensation and the new compensation model for the Management Board from 2021 onwards.

The Personnel Committee has held further meetings during the current fiscal year 2021 (before submission of the report). The main topics of discussion were the new compensation system for the Management Board and further matters of the Management Board.

The Audit Committee held six meetings in fiscal 2020. At the meetings, the quarterly reports of KUKA Aktiengesellschaft and KUKA Group were discussed. Other recurring topics were the current forecast, risk reporting, toxic projects, the reports of the Chief Compliance Officer and the reports of the Head of Internal Audit. Furthermore, special topics were dealt with in depth at various meetings of the Audit Committee. At the meeting on March 11, 2020, the Audit Committee focused on the 2019 financial statements of KUKA Aktiengesellschaft and KUKA Group and their audit by the auditors. The Audit Committee also discussed the invitation to tender for the audit of the annual financial statements and consolidated financial statements for 2020.

In preparation for the Supervisory Board's financial statements meeting on March 24, 2021, a regular meeting of the Audit Committee was held on March 11, 2021.

The Strategy and Technology Committee convened six times in fiscal 2020. The strategy for the Group as a whole and for the individual segments was