The directors present the strategic report for the year ended 31 December 2025.

The principal activity of the company are the design, manufacture and supply of solid phase welding machines (covering rotary friction welding, linear friction welding and friction stir welding) and the development and supply of specialist automation systems and robot cells, together with ancillary services. The company operates globally in a range of market sectors.

This report provides an overview of the Company's performance in the year 2025

KUKA Systems UK returned to profitability in 2025, thanks to a major restructuring effort completed in 2024 by the new leadership team. The benefits of this restructuring programme continue to be felt into the future as the business now has significantly lower operating costs, allowing improved market competitiveness and enhanced delivery of EBIT from a positive gross profit base. Order winning has accelerated, and this has allowed improved utilisation of available resources. The core business streams (the supply of market-leading rotary friction welding machines and the provision of advanced automation systems) have now returned to a viable platform and have strong future prospects. The actions taken in 2024 (exiting loss‑making activities, reshaping the cost base, and investing in new technologies) have delivered a marked improvement in both financial and operational performance. Throughout 2025, the business has returned to consistent profitability, supported by a stronger orderbook and improved project execution across all divisions.

In addition to the core business, the company has also added two new business streams in complementary areas. The first of these is the renewal and repositioning of an offering in the area of Linear Friction Welding. Rapid progress has been made in this field with multiple development projects now underway and a significant machine sale secured during 2025. Another area for growth has been the addition of a Friction Stir Welding product line, where again, strong customer interest has resulted in a number of active projects and the recent confirmation of a first machine sale in this field. This area has good potential to expand into new market sectors and applications, and such developments are being driven by several ongoing customer projects. Linear Friction Welding and Friction Stir Welding solutions now represent a growing share of total revenue and have positioned the company with enhanced competitiveness in core and adjacent sectors.

Looking ahead the business has a good foundation for a stable order book and good profitability in 2026 and 2027. Sales orders are now spread across a greater diversity of product lines and industrial sectors, which should help to mitigate market turbulence and support high levels of resource utilisation. Ongoing cost management actions and proactive market engagement will drive future success, and the business has healthy prospects book to work against. Operational performance has been improved through enhanced project governance, refined internal processes, and strengthened technical capabilities. Productivity and margin levels have steadily increased as efficiencies from the restructuring programme are realised. The company has also continued to invest in people, tools, and innovation. Management remains confident that the turnaround delivered in 2024-2025 will be sustained into the future.

The Company is exposed to certain risks and uncertainties as described below:

Contractual Risks

The company enters into long-term contracts with customers to supply designed and manufactured to order machines and automated solutions. These contracts may contain penalty clauses connected with specific performance criteria and delivery dates. Failure to meet these contractual obligations can result in the company incurring significant costs - typically 5 to 10% of a total project value. In order to minimize this risk, the company has strict project execution processes and quality control procedures. The company also seeks to mitigate the risk by applying similar conditions to its supplier base, where reasonable.

Market Risks

The Company operates in a competitive market where the key challenges are on-going price sensitivity and customer demand for continuous product innovation. The Company embraces these challenges with a range of technologically forward products and solutions that offer customers quantifiable financial advantages driven by fast payback periods. The Company also seeks to differentiate itself from its competitors via an improved customer service level.

Credit Risk

The Company operates a credit management policy in order to minimise the risk of losses should a counter party default on its obligations. This requires appropriate credit checks to be performed on potential and existing customers prior to entering into transactions. Credit limits for counterparties are established and regularly maintained from those recommended by a respected business information provider.

Foreign Currency Risks

The Company operates globally and has transactional exposure from sales or purchases that are denominated in foreign currencies. The company has a policy of hedging all significant foreign currency-based contracts via the KUKA group's treasury functions.

Liquidity Risk

In order to maintain liquidity and to ensure that sufficient funds are available for ongoing and future commitments the company uses intercompany loans from its parent, KUKA AG.

Personnel Risks

The performance of the Company depends to a great degree on having qualified technical and management staff. Personnel risks exist in respect of the potential for employee turnover in key positions within the Company. To mitigate this risk the Company invests in ongoing staff training and development and offers a comprehensive employee remuneration and benefits package. The company also operates an active and successful apprenticeships programme, for which KUKA Systems UK has recently achieved Gold standard 'Excellent Employer' status from Make UK Engineering Apprenticeships.

Key Performance Indicators (KPIs):

Company's key performance indicators as below:

Directors' statement of compliance with duty to promote success of the company

The Directors act in good faith to make decisions, the outcomes of which, they consider will be most likely to promote the success of the Company and Group for the benefit of its members as a whole, both in the current period and in the long term.

In discharging their duties above, the Directors carefully consider, amongst other matters, the impact on, and interests of, other stakeholders and factor these into their decision making process. Further information on stakeholder engagement is included in the Directors' Report.

FUTURE OUTLOOK

As noted earlier in this report, KUKA Systems UK is experiencing improved overall business performance under the direction of the new management team. The internal health of the business is much improved, with reduced operating costs and enhanced utilisation levels. External positioning has also improved thanks to enhanced customer value propositions, a focus on proactive outreach, and a wider spread of sales activities and customer sectors. Together these factors have supported a return to profitability for the business and provide a solid platform for future growth.

The financial support provided by our parent company has remained in place throughout 2025 and continues to be a key enabler of our recovery and investment strategy. This support has allowed the business to maintain and develop its technical capabilities, while giving management the stability necessary to pursue new long‑term opportunities. We remain grateful for the ongoing confidence demonstrated by the parent company board, and we extend our thanks to our loyal customers, suppliers, and stakeholders who have supported us through this period of change and renewal.

Trading conditions for the future are considered to be reasonable in most of our key markets, although headwinds are noted in relation to recent and ongoing geopolitical events. The Systems UK business now has a wider range of attractive technology offerings and qualified prospects in an expanded number of markets. This improved positioning increases our opportunities for success, although closure of machine sales remains challenging for high-cost capital equipment (due in large part to variable industrial confidence and ongoing market disruptions). Despite these challenging conditions, our products are proving attractive to the market and new orders are being won, both in our core business areas, and with our new product lines.

Looking ahead, management is confident that 2025 represents the first full year of the company’s return to stability and growth. With a healthy pipeline and a clear strategic direction, the business is well positioned to build on the positive momentum established last year. The focus moving forward will be on deepening customer relationships, expanding our presence in high‑growth technology sectors, and continuing to embed operational excellence throughout the organisation.

KUKA Systems UK remains committed to the provision of world class technical solutions and ongoing customer service excellence. These enduring company principles support our market leading reputation, and provide an important degree of differentiation between the company and its competitors.

On behalf of the board

We have audited the financial statements of KUKA Systems UK Limited (the 'company') for the year ended 31 December 2025 which comprise, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its profit for the year then ended;

• have been properly prepared in accordance with UK adopted international accounting standards; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the directors' report has been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We identify and assess risks of material misstatement of the financial statements, whether due to fraud and error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

- the nature of the industry, control environment and business performance;

- results of our enquiries of management about their own identification and assessment of the risks of irregularities;

- any matters we have identified having reviewed the company's procedures for complying with laws and regulations and whether they were aware of any instances of non-compliance. The key laws and regulations we considered in this context included the Companies Act 2006.

As a result of these procedures we considered the opportunities that may exist within the organisation for fraud resulting in material misstatement in the financial statements. We considered that any such opportunities are mitigated by the fact that the company is under the close control of its directors.

Our procedures to arrive at this conclusion included the following:

- reviewing balance sheet control accounts to ensure properly reconciled;

- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

- enquiring with management concerning actual and potential litigation claims.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The directors of the company have elected not to include a copy of the income statement within the financial statements.

KUKA Systems UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 19 Hereward Rise, Halesowen, West Midlands, England, B62 8AN. The company's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with the requirements of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The company is currently dependent for its working capital on funds provided by KUKA AG - the company's parent holding company. The ultimate parent company and controlling party of KUKA AG - and the company - is Midea Group Co Limited.true

KUKA Ag has provided the company with an undertaking for at least 12 months from the date of approval of these financial statements that it will not call upon group loan balances unless sufficient working capital is available. This should enable the company to continue in the operational existence for the foreseeable future by meeting its liabilities as they fall due for payment.

Additionally the directors have considered the company's position at the year end, reviewed forecasts or order income, turnover, expenditure and cashflows together with current orders on hand - as well as the financial strength of the group of which it is part.

Based on the above the directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result in the basis of preparation being inappropriate.    

Turnover represents sales and commission receivable, net of value added tax.

Sales are recognised once the significant risk and rewards have been transferred to the customer. Interim invoices in advance of this are credited to payment on account.

Turnover on larger projects is recognised on a percentage of completion basis over the period from the commencement of performance of the contract to customer acceptance. The degree of completion of the contract is measured using the costs incurred to date or milestones reached, depending on the nature of the individual contract and the most appropriate measure of the percentage of completion. Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments on account. Losses on contracts are recognised as soon as a loss is foreseen by reference to the estimated costs of completion.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Computer software is being amortised evenly over its estimated useful life of the four years.

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

At the year end , stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the income statement.

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable.

Derivatives, including interest swaps and forward exchange contracts, are not basic financial instruments. Derivatives are initially recognised at the fair value on the date a derivate contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit and loss. The company does not currently apply hedge accounting for interest rate and foreign exchange derivates    .

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are charged as an expense to the Statement of Income during the year that the company becomes aware of the obligation, and are measured at the best estimate at the statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently adjusted for remeasurements of the lease liability and applies the relevant cost model, fair value model or revaluation model as set out within the accounting policies for the applicable asset class. Where the cost model is applied, the asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, and is periodically reduced by impairment losses, if any.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is reassessed at each financial period end to reflect lease modifications and any changes to the factors considered at initial measurement, as set out above. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

The company's functional and presentational currency is GBP.

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the date of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction ad non-monetary items measured at fair value are measured using the exchange rate when the fair value was determined.

Research and development    

In the research phase of the internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research is recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.

If it is not possible to distinguish between the research phase ad the development phase of a internal project, the expenditure is treated as if it were all incurred in the research phase only.

Warranty

The Company provides a standard warranty coverage on products, providing labour and parts necessary to repair machinery during the warranty period. The estimated warranty costs are based on a percentage of the turnover as per group policy. The actual warranty costs may differ and in those cases warranty reserves are adjusted accordingly. Future warranty expenses may exceed initial estimates, which would lead to an increase in the reported Cost of Sales.

Long Term Contracts

Long term contracts revenues and costs are recognised on a stage-of-completion basis at the reporting date, based on estimated costs to complete each project. This estimate is calculated using management's knowledge of the expected project out-turn which is based upon both historical and future information to the Company at the time.

The average monthly number of persons (including directors) employed by the company during the year was:

Property, plant and equipment includes right-of-use assets, as follows:

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report is unqualified and includes the following:

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its profit for the year then ended;

• have been properly prepared in accordance with UK adopted international accounting standards; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

The company is not subject to any externally imposed capital requirements.